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Fabulous Friday Finish – Ramping or Camping into EOQ?

We have broken on through to the other side!  

We chased our pleasures here, dug our treasures there but can you still recall the time we cried?  (See Tuesday's title if you are confused)  Apparently, no one remembers the time we cried as it's now been 10 sessions since the Dow had a down day and forget the Dow – look at the Russell – almost at our 20% line.  

Our 20% line would still be breaking over the range of our new Big Chart levels (again, Tuesday's post explains it all) before we even get a chance to draw them.  Actually the new goal would be 1,000 so 5% higher from here but certainly within reach at this point.  

Yesterday was the first day in a long time that we didn't like the market action – it had the real feel of a pump and dump with new highs being made on very low volume during the day and then massive dumping of share on Mutual Fund suckers at the end of the day.  

We couldn't even get our dip in oil and today we only caught a very small move down before the diving Dollar (82.50) pumped oil all the way back to $93.50, where it's a tough short into the weekend (but we still like the USO ($33.60) puts and SCO ($39.30) longs).  Gasoline, on the other hand, was our bull play in the morning Alert to Members for the energy complex and the /RB futures flew up from our early morning from my projected $3.12 floor, all the way back to $3.15 at the close and now $3.167 at $420 per penny per contract!  

AAPL is flying pre-market as the new Samsung phone may not be the iPhone killer it's been hyped up to be.  Not only that but it's not even going to be delivered until May at the soonest – an old Microsoft trick we used to call "vaporware" and the staged demo left many feeling that a lot of the "features" were not ready enough to even be shown to reporters on an actual phone

We had a big discussion this morning about Samsung, AAPL, TA vs FA and the eternal search for the TRUTH in early morning Member Chat so I'm not sure what's left to cover actually… 

Let's see, the CPI is up 0.7% – what are we, China?  That's pretty high but the core CPI, for all you people the Fed believes don't consume any food or energy, is steady at 0.2%.  Gasoline is down from $3.34 last month to $3.14 this month (-6%) and that offset the fact that not only does MCD's now charge $1.19 for small fries (up 19% on the "Dollar Menu" but they no longer sell those big chicken pieces at all!  I'll admit I don't go to MCD very often but that was the only thing I liked there but apparently chicken is too expensive and the margins aren't there any more.  The woman at the drive-through had the nerve to tell me McNuggets were "the same thing" but I asked her what part of the chicken a McNugget is and she agreed I could just get the now-expensive fries and go.  

Gold is already flying on the CPI news ($1,593, up 1% from yesterday's lows) and silver (another great commodity futures pick from earlier this week) is testing $29 and copper is back to $3.55 in absence of new bad news out of China today.  In fact, rebar finally bounced as China's repeated attempts to kill their runaway housing market are already failing, with Shanghai apartments now at 45 times the average worker's salary.  That would be like NYC apartments averaging $3M!  

Interestingly, the picture on the right is not of the UK but the newly-constructed (and still empty) Thamestown, about 30 km from Shanghai, which is very cool (right on the Yangtze) but not solving the problem for people who want to live IN Shanghai, rather than 20 miles out and, of course, those homes aren't affordable either (but, as a speculator, I sure want one!).  

Not that Wen has called me yet (it's his first week on the job) but they're doing it all wrong if they want to bring prices down.  China's moves are all aimed to curb speculation, as they don't want investors snapping up apartments in bidding wars and that's fine but they are also curbing construction, which is madness when people have to pay 45x salaries for apartments.  Also, you have to strain the definition of apartments in Shanghai as 47,000 "households" occupy "houses" of 2.5 square meters or LESS!  So I'll give the one to Wen for free:  What you need to do in ENCOURAGE investors to build MORE housing and, if they won't do it – do it yourself!  

Anyway, this will be good for our FCX and CLF plays, of course and our gold plays are still in place and AAPL is on the march so all is well – so far.  I don't expect us to fall off until the end of the quarter but we will be a little cautious over this weekend – just in case today (options expiration day) is just a prop job but it would seem odd for "THEM" to push the market this high, only to turn Q1 from spectacular to "very good" before Fund Managers have a chance to print up sales brochures so they can spend the rest of the year telling you how great they performed and what a fool you are for missing the rally, etc, etc.  

Open in new windowMost of our banks passed their latest stress tests (I know, what a shocker) but we expect that to be another "sell on the news event" as we don't see XLF popping $18.50 without a pullback.  Notable on probation by the Fed are both GS and JPM, who were asked to fix their capital planning and BBT and Ally Financial were outright rejected but everyone else passed with flying colors.  

In our "Crime of the Day by JPM" section, the bank was caught hiding trades that are banned by the Volcker Rule.  Hopefully, all this Senate nonsense knocks JPM back off those all-time highs as we'd love a chance to get back in on the cheap (no one can beat them, so may as well join them).  

So we're looking to lean just a touch bearish into the weekend to protect our ill-gotten gains but we don't expect a proper sell-off until April starts.  The low Dollar is goosing the Futures as it's back at 82.29 but that's Euro $1.31 and not too likely to hold and over 82.50 is bearish (and a good reason to short oil futures again – /CL – but always worth it at the $93.50 line anyway).

Have a great weekend, 

- Phil


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  1. stjeanluc

    Oil Lines

    R3 – 95.03
    R2 – 94.19
    R1 – 93.69
    PP – 92.85
    S1 – 92.35
    S2 – 91.51
    S3 – 91.01

    Yesterday's high and low – 93.35 / 92.01

  2. stjeanluc

    AAPL looks to break through the dreaded $435 line at the open… 

  3. stjeanluc

    Good list of people we would be better off if they just stayed away:

    http://www.salon.com/2013/03/13/the_10_worst_people_on_forbes_2013_billionaire_list_partner/

    For example:

    Famed for the assholic mantra “You’re fired!” from his reality show venture, Trump is as shallow and thuggish a 1 percenter as you’re likely to find anywhere. He is a congenital liar, having delivered whoppers on his net worth, his business deals, and, well, just about anything else he talks about for more than five minutes. He used the 2012 election cycle as a forum for personal ego boosting and the spreading of lies, including the idiotic notion that Obama is not a natural-born citizen. Fun fact: Trump used deferrments to avoid service in the Vietnam War, but lied and said it was because he had a high draft number.

  4. dawnr

    on DD…I guess a way I could look at it is to say if I am gonna get in early because I am afraid of missing it altogether identify BEFORE you hit the initial sell put button how many shares I ULTIMATELY want so that the DD is more a planned layering in strategy ultimately getting you the shares you want in total…knowing you will suffer some heat as you made the choice to get in early. With that in mind, also need to keep an eye on your free cash to be able to support the margin calls while taking the heat…
    This morning you mentioned not doing these aggressive plays any longer and only do for the HNW people.  Instead of that, can you still post them and make very clear (like stand on the rooftop screaming clear) that this is not a trade for everyone, blah, blah, blah?  I like these ideas and if I believe the price too rich for my blood I keep on my watchlist and wait for a price I like…I don't want to lose those opportunities!
    More Cramer Dribble…this time on COH…I post it here as we were talking about COH this morning…
    http://seekingalpha.com/article/1275891-cramer-s-mad-money-coach-is-a-dog-that-will-have-its-day-3-14-13

  5. 1020

    Good Morning!

  6. samz3700

    AAPL is just insane – what other mega cap trades up or down 2% pre-market.

  7. Opesbridge

    Great post this morning Phil. Here it is for anyone who possibly missed it.

  8. yodi

    Dawnr
    Sorry I am not to good on abbreviations what could be a  HNW people be ???

  9. diamond

    High Net Worth

  10. diamond

    The Ides of March (Latin: Idus Martii or Idus Martiae)

  11. stjeanluc

  12. samz3700

    aapl up on huge volume 3 million shares in first five minutes of trading – for comparison it traded under 1 million shares in the last thirty minutes of trading yesterday

  13. stjeanluc

  14. phil

    Good morning! 

    Nice dip at the open – good for our rolls. 

    AAPL once again demonstrating why it's not worth collecting $5 for a $5 out of the money call when they're this low.  

    WFR still going down, those Chinese solar failures are killing them.  

    X below $20 – that's ugly.  

    JPM off 3%.  TSLA barely holding $36.  ISRG getting hammered (some important guy said not appropriate for something). 

    I think the bank sell-off will last but I doubt the indexes stay red today.  

    Oil a good short below the $93.50 line (/CL) – I'll keep saying it because it keeps being true.  Dollar over 82.25 is key and over 82.50 should really slap oil down.  

  15. stjeanluc

  16. diamond

    Phil – Logically, with the Chinese solar failures, would that not ultimately benefit WFR by reducing their competition?

  17. jromeha

    Pgnx!!!!!! Pharm- I love you.:) 

  18. Burrben

    Alright guys, I shorted oil again at 93.45.  Time to go long as I'm a perfect contrairan indication!
    PS: I hate how the box doesn't allow my chrome spell check to work

  19. stjeanluc

  20. stjeanluc

    Oil / Burrben – Actually, that S1 line at 93.69 has worked well….

  21. samz3700

    Phil -
    Any strategies for selling weeklies on AAPL in this environment – I need to burn some premium.
    My strategy has been to take profits really quickly on moves down in the weeklies so I have less exposure but some of that is just luck. 

  22. Burrben

    AAPL from T3Live
    Nice little chart:
    http://stocktwits.com/message/12569100
    And his trade:
    to take some gap risk off the table and get it identified – for a trade- bought $435 $aapl calls 6ish and sold $445 for 3ish- cost 3 to make 7

  23. 1020

    IN CASE OF UNEVENTFUL DAY – OPEN THIS:
    http://www.gamesclub.com/whack-a-banker.htm

  24. phil

    LOL StJ – Good article!  I still love The Apprentice though – so much fun to watch.  

    AAPL testing $440 – I feel like we'll get a nose-bleed! 

    DD/Dawn – That's the gist of it.  The strategy section has a whole article on scaling in and out of positions and then that has massive amounts of comments on the topic below it – very good reading if you are bored.  As to HNW plays, as an HNW trader it's simply your responsibility to bring them up and I'm happy to talk about them, I'm just going to be less inclined to put them into any of our Portfolios in future as many people simply don't get the time and money management aspects (and how can they if they don't have a few million to practice with?).  

    COH/Dawn – Doesn't sound very negative to me but funny as the usual Cramer double-speak leaves it open for him to say he was right, no matter which way COH actually goes.  

    COH trades at a modest 12 times earnings with a 2.4% yield. There is talk that COH might take itself private or be bought. Based on similar acquisitions, KORS might fetch a premium in the range of 26%-56%. CEO Lew Frankfort is stepping down, and while the CEO has created value for Coach and masterminded its Asian expansion, Cramer thinks there needs to be a change at the helm, because there is a wide perception that the Coach brand is stale. The company is expanding its footwear division and is diversifying its offerings. Menswear, which generates only 8% of sales may grow to 20%. While there are worries about the Chinese economy, Coach should see at last a 15% growth there. Management has bought back stock aggressively. While Coach is 30 points off its high and only 3 points from the bottom, Cramer thinks it is a good trade in the $45-50 range.

    That's confusing with the stock at $50.43 (was $50 last night).   Also interesting coincidence how our plays (COH, CLF) end up on his show the same evening.  Anyway, prior to yesterday, my last call on COH was super well-timed on 2/25 – in fact, that comment was a 2-for-1:  

     

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

    CROX is mid-channel so not my favorite place to enter and they are having a rough time with the 200 dma BUT, the VIX is up and you can sell Jan $15 puts for $2.20 for a net $12.80 entry, so 16% off in the first year is a nice 1x entry (out of 4x at least) where you'd be happy to DD if they crash (the 2015 $10 puts are $1.30, so a 2x roll to net $8.90ish should be something you HOPE would happen, rather than "just" making $2.20).  

    How did the TA look on 2/25, I ask you? 

    AAPL up almost 2.5%.   Who was it who said just yesterday:

    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. 

    Thanks Opes. 

    Ides/Diamond – Beware!  

    Woops, sentiment came in terrible.  I wonder why?  That's going to knock us back. Should save TLT, though and good for Dawn's VIX trade.  

    Mar. Reuters/UofM Consumer Sentiment: 71.8 vs. 77.5 expected and 77.6 prior.

  25. angelcur

    PHIL? there are about 132 pints in a keg, so thats 98.5M kegs, and there are 15.5 gals in a keg, so that is 1.5B gals of Guiness.
    maybe 13M pints?

  26. stjeanluc

  27. angelcur

    AND BURRRRP

  28. phil

    WFR/Diamond – Correct!  But don't try to apply logic to a stock story this early.  Let the suckers run and then we can "be greedy when others are fearful."  

    PGNX/Pharm – Wow, BRILLIANT!  

    And a little whee on oil – always nice to have a few downside bets to take the sting off a dip.  Sorry if it broke your streak Burr but don't forget we've been happy to cash out at $93.15! 

  29. wappler

    JPM/Phil,
    At which level would you be interested in scaling into JPM?

  30. Pharmboy

    PGNX….well that is a pop on earnings?  Wow….we will take it and sell into the excitement.  1/2 Cover.  Aug 5s. 

  31. angelcur

    THAT JOHNNY MAC IS SOO INSIGHTFUL
    McCain"JPM has developed a business model on the notion they are too big to fail" bingo

  32. dawnr

    VXX making beautiful music today! may be short lived if SPY holds weekly low 155.13.  I am loving the 'Island Reversal' on the Spy today…for us techies…
    On AAPL—not soooo fast Phil…right now it filled the gap (with about a $1.50 overshoot of level I said it would test) and the real test is if it can hold 425.14 weekly low…if it does, or continues to hold strength today (such as not even filling today's gap) then I am DD. Otherwise I am waiting for $400…

  33. diamond

    Looks as if GOOG is getting "Samsunged" today!

  34. angelcur

    apples-suppliers-have-started-mass-producing-ipad-mini-2-retina-displays-rumor/

  35. yodi

    Diamond Thanks on HNW could have been a new stock on the board aswell which is Pioneer Diversified High  trading for 21.35 paying 8.99 Div. I know Americans love abbreviations

  36. scottmi

    WFR down to 50MA.. BTFD!

  37. phil

    Vietnam/1020 – Well, he was a JAG so it's not like he is totally clueless, frankly.  I'd have to say he's making his point badly but it's the same point Rodney and Kinneson made so eloquently.  

    AAPL/Samz – See above, you don't sell weeklies (the next week $445s are $5) on a stock that could pop $20 in the week.  If we don't believe AAPL is worth more, we shouldn't be in the positions we're in on the long side but, since we're willing to ride out long-term positions that are way against us, then covering them and limiting their upside doesn't make much sense here.  At $450, maybe, we'll want to a partial cover (depending how fast it comes) but $440?  No thanks.  If you are really good at day-trading, it's fine to play with but it's too volatile to make official calls like that in the small portfolios every time AAPL options move a buck or two.  

    Good chart of the triangle sqeezy thingy, Burr:

    Guiness/Angel – That's what the guy on TV said (I did not independently verify).  13Bn is kind of too much to be likely and 13M seems more realistic.  I'm a Guiness drinker too and I pretty much dink as many as you give me when I'm in Europe – way better than the US stuff.

    When you walk into a bar in Ireland you could shout across at the barman and ask for a pint of plain, the good stuff, your best or Irish Mother’s milk.

    You could even just walk up to the bar and hold your forefinger in the air, any barman worth his salt would know that you were asking for a pint of Guinness

    It was not so long ago in Ireland that pregnant women were told to drink a glass of Guinness every day to fortify themselves and their baby.

    JPM/Wappler – I would love them at $40 (200 dma) but would settle for a buy/write that takes us down to net $40 from $45. 

    Thank goodness Levin is still on the committee – those Bankster's can't pull one over on him – he knows their business better than they do.  

    AAPL TA/Dawn – Yawnnnnn….

    AMZN still heading down.  GOOG calming down.  

    Other than the quick spike to $93, $93.15 held again on oil.  Dollar 82.31.  Indexes recovering as expected.  VIX barely up, TLT 115.73 (no panic) but Dow volume is – get this – 194M – quite the massive dump and that means we actually held up very well so far.  

  38. angelcur

    Just listened to a bit of the JPM Senate hearing and the two from JPM Head of CIO and CIO Head of Risk didnt look to good. JPM conveniently didnt report to OCC for 4 months on the portfolio leading up to April 2012, and they could even answer who was responsible for reporting to OCC

  39. stjeanluc

    Phil – Some help for Jackie…

    http://www.engadget.com/2013/03/15/researcher-breaks-pi-record-with-nvidia/

    Yesterday's self-congratulatory pat on the back to anyone reciting Pi to ten digits might feel a bit inadequate compared to Santa Clara University's Ed Karrels. The researcher has broken the record for calculating Darren Aronofsky's favorite number, taking the ratio to eight quadrillion places right of the decimal.

  40. Pharmboy

    Dawn……u go!

    Phil – LOL…

  41. bai2r

    Today expirations:
    Income portfolio has INTC $21 long call expiring today. 
    25KP has QQQ $68 call expiring today too.
    Roll or exit out?
    Thanks

  42. stjeanluc

    Apparently you don't have to pay your employees slave wages to actually make money. Not a lesson learned everywhere though.

    http://www.huffingtonpost.com/2013/03/12/costco-profit_n_2859250.html

     

    Costco reported a profit of $537 million last quarter, up from $394 million during the same period last year, according to the Wall Street Journal. The healthy earnings report comes just six days after Jelinik urged lawmakers to raise the minimum wage to $10.10 an hour.

    “At Costco, we know that paying employees good wages makes good sense for business,” Jelinik said in a statement last week. “Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”

    Costco is known for paying its workers wages that are generally above average for the retail industry. An average Costco worker made about $45,000 in 2011, according to Fortune. That’s compared to an average of about $17,486 per year for a worker at comparable Walmart-owned Sam’s Club.

  43. stjeanluc

    But let's not forget the important criticism:

    Some analysts have complained in the past that Costco’s worker-friendly policies aren’t so friendly to shareholders.

  44. Pharmboy

    Costco – yep, when I shop there, I note the same people have been at our store since I can remember joining.

    Meanwhile….shhh….SGEN!

  45. Pharmboy

    VRTX….buying back March 50s for 5c in TOS (it is free)…and not worth messing around with.

  46. yodi

    Pharmboy
    like that comic

  47. jelutuck

    Phil, thanks for the help with taking profits on HPQ last week.  I have another question about how to handle success.  I have the RRD buy write (stock at $9, selling $10 Jan14 puts and calls).  The call now has only $.25 of premium, but the next strike is $13.  I could roll to the jan15 $12 for about $.25 more but that doesn't give me much downside protection and doesn't really seem worth it.  Close out the trade and look for something else?

  48. angelcur

     example #1,156 of how screwed we are long-term that one of the ONLY things most conservatives and liberals agree on (banks need to be broken up) and still nothing gets done.

  49. wappler

    IRSG/Phil,
    What's your take on the ISRG situation?  Is is really serious or just a pre-earnings scare?

  50. Opesbridge

    Phil/Futures – On a dollar break above 82.50 are we good for a short on /TF under 948?

  51. phil

    FAS Money – OK, NOW we have to roll.  FAS at $168.22 bottomed out at $166 but popped right back up so too strong to play with.  The 6 today $155s are $13.50 ($8,100) and the $159.50s are $9.35 but we sold them for $5 so we're just going to roll that loss (5 x $4.35 = $2,175), not the whole call and that makes $10,275 and the April $164s are $9 so 12 of those is our new short position and that means we need to buy 20 more of the 2015 $16 calls here ($3.10) to help cover and we can put a stop on 20 of the 2015 $15s at $3.50 (now $3.90).  

    AAPL Money – We just need another 12 days like today and we're golden!  

    $25KPM – OK, gotta make moves:

    • QQQ – March $68s are .53 and we're more bearish now so let's roll to 20 April $68s at $1.32 and we'll see how earnings look to maybe lighten up on the short calls.  
    • IBM – July artificial buy/write is a home run.  Short April $205 puts are just good protection – nothing to change (we sold them for $10.50 and IBM is at $215!).  
    • SQQQ – Let's buy back the short April $34s for $1.35 (and no, I would not pay $1.40) and that little nudge puts us bearish over the weekend. 
    • XOM – Tempting to push it but SQQQ is already aggressive.
    • TLT – Also would be great in a crash but I'd take $3 if they offer it. 
    • JNJ – Dividend holds them up but base is eroding and $80 is a very hard line for them to cross so I feel good about this one. 
    • USO – Not getting the really good fall but certainly willing to hold through rollover on Weds.  98,000 open contracts is just 19,000 less than yesterday and now 280,000 stuffed into May puts the front 3 months very close to 600,000 with another 75,000 (at least) that need to be jammed in from April – could get nice and ugly!  

    $25KPA – Wow, $40,000+ improvement this week!  As I said – Imagine if we have 2 good days in a row.  Now we just need 5 good days over the course of the rest of the year and we're up $50K or more!  And how many times have I said that the best play you can make is to wait until we're down on our positions and THEN come in after we decide to DD or roll – would have been a very quick double+ on this lot!  

    • AAPL – My precioussssss!   
    • SQQQ – Dies today
    • GOOG – Ow, my head!  OK, next week we're going to consolidate this into no more than 4 legs.  Nothing to roll today, thank goodness.  
    • IBM – Same as above. 
    • VMW – I think we got out at the right time yesterday ($85). 
    • FB – More bother than it's worth, let's kill it. 
    • EXPE – Got our .50 back today.  No need to roll the March caller, we made nice money and we leave the short July caller and that's that.  
    • AKAM – Waiting on that one. 
    • SQQQ – As above, we buy back the short calls to get more bearish (but nothing will save us if AAPL falls, of course). 
    • XOM – Fine
    • TLT – Out if $3
    • JNJ – Fine
    • USO – Fine
    • COH – New and fine.   
  52. jabobeast

    Phil—your articles and early in the morning commentary have been amazing all week, month, year, etc..
    AAPL may be frustrating but the work you do and time you spend on it is MUCH appreciated!

  53. Pharmboy

    angel – no, the real issue is that when they talk, they spew out words that sound good.  When it comes to voting or making a difference, neither side will stick their necks out. 

    I did like Feinstein yesterday in the senate going after that moron from Texas…..regarding gun legislation

    I guarantee that if anyone walked into one of the schools or even the McDs next to the capital, and opened fire with a Bushmaster, legislation would pass tomorrow…but it is a sad state that these morons (mostly Repubs), won't admit they are in the wrong and they are protecting our 'rights'.  F*ckers.

  54. kinkistyle

    WFR/Phil:  Looks like the old Income Portfolio WFR position might be back in play again: selling the 2015 3.5 Puts to finance the 2015 3.5/7 Bull Call Spread for around $1.  Still a good idea?

  55. 1020

    stjeanluc/ANALysts   Yeah, thats why the COST chart looks so bad – held upside down….

  56. 1020

    Pharm/Feinstein   Classy Lady. Showed more respect to the a**clown than he deserved….
     
    Can you tell my side of the 5 has been in the fog all week?….. :)

  57. stjeanluc

    COST / 1020 – Matches nicely to the WMT chart where employees get 2/3 less money and no benefits.

    As far as DiFi is concerned, she could have gone for the jugular:

    NONE of the Bill of Rights' protections are absolute. NONE of the Bill of Rights' protections are UNLIMITED. The First Amendment to free speech has all sorts of limits (slander, libel, "fire in a crowded theater"), yet Cruz claims that they are. The Fourth Amendment protection against search and seizure isn't absolute either. He's a simpleton. Unfortunately, DiFi got swept up in the emotion of the moment and failed to make this simple, true, and devastating response to Cruz.

  58. phil

    JPM/Angel – No big surprise – they are pretty much holding $50 as investors give it all a big "so what?"  

    Pi/StJ – I wouldn't want to diminish her achievement.  She's so funny, this morning she asked why people think magnets are bad for computers so I told her that the magnetic head on a hard drive changes the magnetized bits to 1s and 0s and that they are meant to be writeable so a magnet can accidentally re-write the the… and she stops me and says "you could have just said it only works on old computers."  

    CZR is flying!   You're welcome conference people.  At this point we can skip the conference and just enjoy our CZR winnings for the weekend…

    BA also flying.  There's another one where we ignored TA and bought a great company on sale.  

    Income Portfolio/Bai – Thanks, forgot about them, but that's the OLD Income Portfolio so please do remind me on those!  Other old income adjustments are:

    • INTC was 20 short March $21s at .48 against 50 long and we're a bit more bearish now so I'd roll to 35 April $21s at .79. 
    • CMG short $320s at $9 are now $3.25 and we're fine cashing those for a nice profit
    • TSLA short $34 calls at $1.80 are now $1.70 and those we can roll to the short April $35s ($1.60) but I see we already had short April $13s and, if that's the case, then we can just kill the $34s entirely.  
    • GE short $22 calls at .50 are now $1.50 but they were 15 of 30 (longs) so we can roll those to 30 April $23 calls at .77 for better than even with GE at $23.47.  
    • TUMI short $25 calls at .60 should expire worthless 
    • TUMI short $22.50 puts at $1.60 also should expire worthless.  

    I don't know about you guys but I'm still amazed at how well this thing cranks out profits!  

  59. Pharmboy

    Fog/1020 – well, if you stayed where you were, the sun would be shining upon you about 10 am every single day….but, oh well!  You can come up and take a dip in my 55'C pool….Ice Bears!

  60. Pharmboy

    And house values in North County appear to have kept up, and those on the west side of the 5 are rockin'.  Gotta love that walk to the Pacific, even though it is as cold as my pool!!!!!

  61. wombat

    WFR / /
    Yes, I'm still holding the short puts from the old IPort – good call. I see support @ $4.60, but if they crack that, theres no support until $3.26. I'm inclined to wait and watch, or DD on the puts ( that were $1, and now $1.50 ) – Phil ?
    albo //
    Read your post – really dont know how you got that out of what i said. I assume Phil reads everything, but it wasn't about Phil or AAPL. It was a simple 'hang in there' for dawnr – that's all. I appreciate Phil just  as much as anyone. Closed loop.
    Guinness // Did you know what the biggest market for Guinness is in the world ( by like x4 ) ?? Malaysia. 
    Phil // 60% in 3 months ? wow, I'm doin pretty well. I love you picked up on the Mini form factor. A good chunk of my buds are all old AAPL guys, and they have special pants made with just slightly larger back pockets – Mini slides right in. If they initiate carrier services – game over.

  62. stjeanluc

    TA / Phil – Reading you this morning, we could conclude that you don't rely on TA much… Saves me the work of posting charts I guess.   :-)

  63. hextra8

    Phil,
    CMG in the OLD Income Portfolio. I still have the Jan 2014 $235/$315 bull call spread. It's showing a nice profit so do you recommend cashing out or holding?  Thank You. 

  64. Pharmboy

    Oh, and GO KU (not dreaded UK)!  March Madness is upon us.  I am going to set up a PSW pool for it, and bragging rights can go to the winner from the board.

    If you want to play, send me an email at pharmboy123 gmail

  65. 1020

    Pharm – I'm fine with the fog and the hop/skip/jump to the water is great. The rents here are off-the-chart and Fallbrook is calling: no mortgage…room to stretch…temps in the seventies…… :)

  66. Pharmboy

    ROFLMAO StJ…..

  67. Pharmboy

    Rents…..yes, they are mighty fine for landlords!

  68. phil

    COST/StJ – Great company all around.  That 2nd note is a critique of Capitalism.  COST is up 1,000% since 1997 (15 years) while providing good jobs and great prices – THAT'S a business that should get Government subsidies, not XOM!  To "complain" about the way they run that business for shareholders is sick!

    RRD/Jet – Man, you keep buying your stocks too cheap, that's the problem!  Why change it though?  The dividend is just .26 so if your caller exercises, you make the same on the premium he gives up as you would have on the dividend and, meanwhile, you are well-protected.  I see no reason to change it at all.  

    Banks/Angel – Good point. 

    ISRG/Wappler – Under attack, like AAPL.  Now all the bears need to do is encourage doctor pals to say this and that surgery is not appropriate for robots and then have someone start a lawsuit, etc and down they go so I'd stay away until the storm blows over.  

    /TF/Opes – With the Dollar over 82.25, you can use 950 for a shorting line on the RUT or 14,450 on the Dow (/YM) or, as I said yesterday, 12,500 on the Nikkei (/NKD), now 12,450.

    Speaking of shorts – of course oil is at $93.50 again and today I bet we sell off into NYMEX close (2:35)

    Thanks Jabob.  Been a nice, exciting week in the markets. 

    Rights/Pharm – Yes, why don't I have the right to reasonably expect not to be hit by automatic weapons fire in the middle of my own town or at the mall?  Is that really too much to ask of my Government?  

    WFR/Kinki – Tempting but I need to get through next week first.  

    WFR/Wombat – The cheaper they get, the more I like them but, you are right, not too much support under $4.50 but you can always sell April $4 calls for .72 to cover if they break below and buy them back if we head back over.   I knew I liked Malaysia for some reason.  Please tell your AAPL friends to hurry with new design (and make sure I get credit, maybe the iPhil?) 

    TA/StJ – Still need to paint pictures for the masses.  Also, point is I do use it but low weighting compared to fundies.   TA very good for entries or exits but useless for telling you where a stock will go in the long term.  

    CMG/Old Income Portfolio, Hex – Well, as we had made a general call to cash out the whole thing, I'd say yes but, CMG is at $320 and I consider that a fair price for them and you can sell the April $320 calls for $13 against your $80 spread that's 100% in the money but only cashable for $56 at the moment so I think if I still had that open, that I'd go for the sale as you have $24 (50%) of upside coming to you and another $13 for the short calls and 8 more months to roll your caller.

    Damn, that could have been our one trade for 2013 – what a great money-maker!  In fact, I still like it as a new trade.

  69. Pharmboy

    15yrs, Cost is up 1000%, SGEN 1 yr 100%.   You do the math…..GO SGEN! 

  70. Opesbridge

    FAS/Phil – As a side note, I forgot to mention that we have the 2014 $14 XLF Calls bought for net $2.49. Since we don't have the 2015 $15 calls, I'm assuming that we want to put a stop on the $14's at say $4.50 and take profit at XLF $18.50

  71. 1020

    Landlord – I feel bad for our future tenant……wife will make the call on the 2nd of month…. :)

  72. Pharmboy

    NUVA….lookie there, over 20.  Now, one can take the stock, I would, and sell the June 20s which is in the middle of our BCS. 

    Happy Friday…Ain’t Life Grand…..

  73. harip

    Phil,
    What is your opinion on bidu at these levels for IRA portfolio?
    thanks

  74. hextra8

    Phil,
    Please clarify on your CMG comment. You say "I'd go for the sale". Do you mean selling the April $320 calls for $13 or cashing out?

  75. stjeanluc

    $444 would be constructive for AAPL… And it looks like they are going for it now!

  76. Pharmboy

    Every dip is buying every dip.

  77. phil

    SGEN/Pharm – Well, 1,000% is 100% ten times (using the first year).  

    XLF/Opes – Are they ALL 2014?  That's better for leverage but not the long-term point so yes, I'd look to add the 2015 $16 calls at $3.10 and stop the 2014 $14s at $4.50 as that whips $2 off the table and leaves you net $1.10 on the 2015s – hard to get in trouble with that basis.

    Oil range getting narrower and narrower.  $93.15 again at 12:30 and back to $93.50 again – boring but we'll take the dimes, right?

  78. jabobeast

    Love that tune Pharm!!!!

  79. Pharmboy

    PGNX post over from Opts – We already sold Aug $4s, but I would do it now if one has not already.  My reasoning is….they fall back to previous 5dMA, and then you can buy them back and sell puts.  Now they could go to fill the gap up to about $7, but there is no 'motivation' for that right now…..Valuation remains a bit on the low side, but with all biotechs….$$ is going to be raised.  recently they did do a dilution, but they are going through about 10M/q, and have about 60M on hand.  1 yr runway, so they will raise money this summer/fall.  Just my thoughts.

  80. Pharmboy

    – for Phil's math!  LOL.

  81. phil

    BIDU/Harip – The first thing you need to do in an IRA portfolio is ask yourself "can I see myself proudly leaving this stock to my kids when I die?"  Will BIDU be around in 30 years?  20 years?  10 years even?  Web Crawler, Alta-Vista, Magellen, HotBot, GoTo, WikiSeek and many others say it's very iffy, at best.  Plus, they are in China – there is no rational way to value a Chinese company – even if you are Chinese.  

    CMG/Hex – Yes, I mean I'd go for the sale of the short puts and keep the long position as it's not yet mature but we don't see any reason it won't and we're being paid 20% per month to wait.  

    $444/StJ – Now you are getting greedy. 
     

  82. Pharmboy

  83. stjeanluc

    AAPL 444 / Phil – Not, just looking at my charts   :-)

  84. phil

     

    Bankistan Vanquishes America

     
    By Barry Ritholtz – March 15th, 2013, 7:30AM

    Is there a single doubt left in your mind?

    Are you still a believer in Rufus T. Firefly Jamie Dimon as the world’s smartest banker?

    Is there a scintilla of wonder left in your mind that the giant banks are legitimate?

    Have you come around to understanding — finally — what some of us have long understood about banks?

    Are you willing to accept the truth about these corporate behemoths — that they are a horrific combination of economically dangerous, criminally inept, led by pathologically lying CEOs?

    Do you harbor any doubts that the giant banks are anything less than ruthlessly efficient criminal enterprises?

    Can you — finally — admit that our bank-created financial crisis of 2008-09 has led us to where we are today?

    Do you understand the only options presented as a result of that — either corporate bankruptcy and nationalization or a completely artificial Fed driven recovery? (The third option was a Japan-like multi decade recession). Do you realize that the feeble recovery, the slow, deleveraging-driven process of gradual economic healing was the result of how our policy makers chose?

    Do you recognize that the world of banking is divided into two camps?

    On one side, there are those who understand that the giant banks must be broken up. They are dismayed at the large banks  under-capitalization, over-leverage and opacity. These folks have figured out that these banks are not only too big to fail, but are so large that they are too big to succeed, and that the best route is to let insolvent banks fail. They are unhappy that our finance sector is a trillion dollar black box. They know that the majority of giant banks’ profits come from bailouts, and subsidies. This group is dismayed at thecorruption of our political system by financiers. They understands huge banks are anti-competitive, ablaspheme against capitalism. They are shocked about  corruption of even the most fundamental measures of interest rates such as LIBOR. They are stunned that bankers have overturned a bedrock, fundamental principle of our society — the rule of law rule — with the threat of disrupting the world’s economy if prosecuted for their crimes.

    On the other side lay the bank apologists, corrupted politicians, and crony capitalists. They advocate the Big Lie of the financial crisis. They choose to ignore the facts and data that disprove their narrative. They continue to push the lies that the bailouts were a good investment. (They weren’t). They work against the Bipartisan consensus that the giant banks should be broken up. They ignore the many former bank CEOs who call for the break up of “Too Big to Fail” banks. They mandated that GSEs were banned from Lobbying, but they made sure that the big banks retained their influence peddling and hold on Washington DC.

    They no longer represent the voters of their districts, but instead are the elected representatives of Bankistan.

    And unless we do something — and soon — they will vanquish America.

  85. wombat

    444 // you guys crack me up
    Phil // CLF
    Phil // CLF
    Since we have our bearish googles on – can you talk to me on this? 
    I got a good fill on the Jan14 $23 PUTS @3.60, ( with a $23/30 BLCS ) so no crisis, but a bit curious about the money leaving the stock ( CMF + Volume ) . They're in a freefall basically. You were remarking that it was artificially produced by the Chinese govt holding down the housing market ( unsuccessfully ) and your last post to Dawn was possibly DDx2 rolling out and down to the Jan15 $20's.
    Would the wiser move long-term be the roll or holding the $23's for a recovery or possible assignment?
    Copying your last two posts for convenience // 
     
    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.
    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. 

  86. stjeanluc

    AAPL / Wombat – I could say the next level would be 555 but then that leads to 666 and that would doom that company for good!

    But seriously, 444 is one of my lines and then 451! We'll see.

  87. hemas03

    Phil,
    in 
    CMG/Hex – Yes, I mean I'd go for the sale of the short puts and keep the long position as it's not yet mature but we don't see any reason it won't and we're being paid 20% per month to wait.  
    I suppose you meant to say selling the APR $320 calls? TIA

  88. dawnr

    CLF-I got in yesterday $20 Jan 2015's for $4.30.

    AAPL- My next line is also $444-446.  Just sold out of my 2 in trading account 38.2 ($250 loss) sick of looking at it.  Still have my $360's in Roth and will add 2 more back on the retrace.  Will NOT go short as think $400 sticks. 
    Phil—so maybe that 'wedge' was a squiggly squeezzy thing afterall!  But I look at it this way…it was a no lose proposition for me as I was long!  so I will take my bitch slapping now ! ;-0

  89. stjeanluc

    Krugman being Krugman:

    http://krugman.blogs.nytimes.com/2013/03/15/delusions-at-the-european-commission/

     

    I see that Vox has posted a self-justifying piece on fiscal austerity from the European Commission, declaring that the Commission is pursuing a “delicate balance”. Actually, that’s kind of awesome: how does that “delicate balance” feel in countries with 15, 20, 25 percent unemployment?

    And in general, it’s quite a spectacle to see officials patting themselves on the back over an economic strategy that, let’s not forget, has tipped Europe back into recession, and keeps pushing overall euro area unemployment to new highs.

  90. mjjwo9b

    Phil, just gaining interest in the Futures Trading…  Can you share the issues you follow on your screen?  I'm trying to set up my TOS to better follow along.  I've got about 2 hours in of the 10,000 required….Thanks.

  91. stjeanluc

    Hey, hey…. $444 on the nose!

  92. wombat

    StJ // For you oldies
    I just had this vision of dialing 444 on the phone and deep throat on the other end

  93. jasu1

    Phil,
    An hour to go into the NYMEX close…./CL still a short into the close….Thanks 

  94. stjeanluc

    Some AAPL shorts might be squeezed ahead of the weekend. Or some could take some profit on a good run today. The last 1/2 hour could be interesting.

  95. wombat

    OMFG – I just posted the last reference to DEEEEEP THROOOOOAT and WordPress put a big (Your comment is awaiting moderation)
    This is just as bad as the AAPL screening/censoring —  totally out of context
    ?????!!!!!!!

  96. phil

    Putting the 2012 Rally In Perspective (Marketbeat)

    The Importance of Printing Your Own Currency (Economist’s View)

    "Irrational exuberance" is the last term Alan Greenspan says he would use to describe today's market, but he believes stocks are "significantly undervalued" by historical standards. On banks and the concept of too big to fail, the former Fed head says it's the most important regulatory issue of the time; the problem is "getting worse, not better," but he does not favor a big-bank breakup. 

    Inflation is *Not* What We Should Be Worried About (Economist’s View)

    Four Big Flaws in Progressive Attacks on Keynesianism (Next New Deal)

    GIs Were Fighting Nazis Last Time Factory Workers Toiled Longer (Bloomberg)

    Inflated Salaries: Merkel Joins Battle against Executive Pay (Spiegel)

    Huge Flight of Rich after French Tax Hikes? Nope. (Economist’s View)

    Dallas Fed Cap Seen Shrinking U.S. Banking Units by Half (Bloomberg)

    CapitalOne (COF) reports continued improvement in itscredit card metrics: February U.S. charge-off rate slipped to 4.27% from 4.36 in January, and its U.S. delinquency rate was 3.68% vs. 3.72% in the prior month. Shares +1.2% on the large dividend increase announced yesterday.

    J.P. Morgan's Thomas Lee sees two distinctive style attributes that will help stocks outperform after the recent run-up: high free cash flow yields and – surprisingly – low dividend yields. Lee's screen produces 15 stocks investors can buy nowCAGIBMGPC,MMMPAYXUTXSYYPPGPXUNPFISVSIALXRAYLDIS.

    Elevated bank capital requirements mean banks are holding much lower inventories of bonds than before the financial crisis compared with mutual fund bond holdings. That’s OK while investors keep pouring money into bonds, but WSJ's Richard Barley warns if sentiment turns because investors lose confidence in central bank and government policies, "then the situation could be ugly." (also)

    "The workers did it" is becoming the new "I can't recall." Former JPMorgan (JPM -2%) CIO Ina Drew blames traders and managers who reported to her for bets that led to $6B in losses, telling senators that her team changed projected losses and hid information from her. Drew defends her oversight as "reasonable and diligent" and says she shouldn't be held personally responsible for the losses.

    Financial groups lobby over ‘too big to fail’ (FT.com)

    Oil and gas production is shut at the Oseberg field in the North Sea after mulitple power failures yesterday, and the situation is still unstable, Statoil (STO +0.3%) says. The company plans to airlift some workers from the area out of ~700 working on the facilities during a period of high activity. Oseberg gas output today was cut by ~21M cubic meters/day.

    Chesapeake (CHK +1%goes ahead with its plan to buy back $1.3B of notes early, despite failing yesterday to persuade a U.S. district judge to force bond trustee BNY Mellon (BK) to accept the plan. Although the judge denied a request for a preliminary injunction, CHK noted he granted "comparable relief" and said CHK was "overwhelmingly" likely to win on the legal merits of its claim.

    Peabody Energy (BTUdefends itself after being accused of trying to duck liability for its retirees by dumping the obligations on Patriot Coal (PCXCQ.OB), which was formed in 2007 from assets split from BTU and Arch Coal: "These are Patriot's obligations and, to the extent they are reduced, we will meet our agreement with Patriot to fund the new lower levels."

    At its Investor Day, ArcelorMittal (MT -0.5%) sets out a new$3B plan to save money from production and confirms its target of reducing debt sharply this year. The new target is aimed at increasing its core profit per metric ton of steel produced to $150 after it fell to $85/ton in 2012 from $118 a year earlier. MT says it is on course to have iron ore mining capacity of 84M metric tons by 2015.

    Automobile prices on new vehicles once again lagged overall consumer inflation, down 0.3% M/M in February and only up 1.1% compared to a year ago. Though automakers have been making a big deal on their earnings conference calls about being less promotional in recent quarters, today's CPI report showed the largest monthly drop in new car prices since 2010.

    Raymond James has seen about enough out of the recent rally in airline stocks, downgrading both Delta Air Lines (DAL -1.4%) and US Airways (LCC +0.4%) to Market Perform from Outperform.

    How Monsanto outfoxed the Obama administration (Salon)

    A trend to watch: The sale of organic food at supermarkets in the U.K. rose 8.4% during a February tracking period as the impact of the horsemeat scandal in Europe directly altered consumer choices. Sales of frozen hamburgers plunged, while sales of frozen ready meals slipped at a double-digit rate. The issue hasn't crossed over the pond to create a ripple in the U.S., but food industry insiders think a long-term trend toward a higher percentage of organic grocery purchases is in play. Whole Foods Market (WFM -1.3%) and The Fresh Market (TFM -0.5%) wouldn't mind.

    Intuitive Surgical (ISRG -5.5%) continues its fall again today, adding further downside to yesterday's sell off after the American Congress of OB/GYNs questioned the cost-benefit of using robotic devices for hysterectomy surgeries. In late February, it was reported that the FDA was scrutinizing an increase in reports of complications using ISRG's da Vinci surgical robot.

    Shares of RadioShack (RSH +6.6%) shrug off this week'sdowngrade from Goldman Sachs to poke out a gain. Despite many analysts giving the retail chain little chance for a strong turnaround, the large number of top-tier financial institutions with a decent-sized stake in RSH keep some hope alive that a rabbit can be pulled out of the hat.

    More on Sony's (SNE +7.5%rally: An upgrade from Japan's Daiwa Securities is contributing to today's big gains. Also: FCC docs indicate AT&T will soon launch the Xperia ZL, a thicker, less rugged version of the flagship Xperia Z.

    GameStop (GME), Electronic Arts (EA), and Activision Blizzard (ATVI) are on watch after NPD reports videogame sales fell 25% Y/Y in February to extend a long downward trend in sales. Physical games only account for 50% of the market now. 

    An upgrade to Buy from Jefferies sends ARM (ARMH+2.9%) to $43. Jefferies' move follows a string of January downgradesthat failed halt the CPU core giant's rise. ARM now trades at 38x 2014E EPS.

    Universal Display (PANL+5.2% after Goldman sings the company's praises in the wake of Samsung's Galaxy S IV launch. The firm thinks PANL's revenue opportunity with the S IV, which (as expected) sports a 5" 1080p OLED display using green host emitter materials, could be 3x-4x greater than its opportunity with the S III. It might also help that initial S IV reviews generally praise the phone's display, though not everything else about it. 

    Coinstar's (CSTR -0.8%) Redbox Instant is out in the wildnow as the highly-anticipated streaming service moves out of a testing phase to full functionality. A key point to watch: Can Redbox Instantdraw customers away from Netflix and Amazon with its library limited and the service missing many exclusive titles which would make it a must-have. Many of the titles come from Epix, whose library is also found on Netflix and Amazon Prime.

    Believe it or not, a heavy short interest and the words "online gambling" can fuel a big rally in a small-cap stock. Glu Mobile (GLUU+11.5%) is soaring today on volume that's already over 3x its daily average, and is now up 34% since it announced plans to launch a mobile slot game in partnership with U.K. online gambling firm Probability. 23.1% of the float was shorted as of Feb. 28.

    The Suntech (STP +22.3%) roller-coaster takes a turn higher after the nearly insolvent solar module maker says it "plans to continue to work" with bondholders even as it states (to no surprise) it "does not plan" to make a principal payment due today. Maxim's Aaron Chew continues to expect a default, but some still expect a bailout from the Wuxi municipal government. LDK Solar (LDK+13.6%) is also winning back some of these week's big losses. (yesterday)

  97. phil


    MEMC (
    WFR -4%) adds to the big losses it saw on Wednesday in response to its soft 2013 guidance after Jefferiesslashes its PT to $4 from $4.50. Declaring MEMC's solar system business "a 2014+ story," the firm expects shares to be range-bound, with chip industry trends determining their fate. Goldman provided a more positive take yesterday, forecasting "a robust 2H13 buoyed by cyclical strength in semis."

    With its cable spectrum purchases on the books, Verizon Wireless (VZVOD) is planning to build 5K 4G cell sites this year in the AWS band, whose airwaves feature less range but more bandwidth than those in the 700 MHz. band where Verizon's 4G buildout has taken place. The expansion suggests Verizon is now focused on improving 4G capacity/speeds rather than coverage (where it has an edge). Separately, Wells Fargo says checks indicate Verizon is taking share from AT&T (T), that both are taking share from Sprint (S), and that Sprint is taking share from T-Mobile. 

    Mexico's telecom reform bill continues to plow ahead. The bill, which would create an independent regulator that could weaken America Movil's (AMX) and Grupo Televisa's (TV) dominant positions in the local telecom and TV broadcasting landscapes, has been approved by a Congressional committee without any changes. Mexico's lower house is expected to vote on it next week. America Movil currently has ~70% of the Mexican mobile phone market.

    Yahoo (YHOO -1.9%) and AOL (AOL -3.2%), two once-dominant Internet names who have seen big rallies over the last 12 months, are seeing profit-taking today. comScore recently estimatedYahoo's share of the U.S. search market (larger than its global share) fell to 11.6% in February, -50 bps Q/Q and -220 bps Y/Y. Yahoo'sweak mobile search position has been taking a toll on its search ops.

     If You Wear Google’s New Glasses You Are An Asshole (Gawker)

    If You Wear Google's New Glasses You Are An Asshole

    Samsung's Galaxy S IV contains several RF Micro (RFMD+5.2%) components, RF Micro effectively brags in an PR that's lifting shares. Though RF Micro doesn't mention the S IV by name, the fact the PR (which follows yesterday's S IV launch) states the chips – a 3G/4G power amplifier, multiple standalone 4G amplifiers, and an antenna control chip – will go into a "fourth-generation smartphone platform" from a leading manufacturer leaves little doubt as what device is being discussed. Skyworks (SWKS -1.5%), an important S III supplier (and perhaps an S IV supplier as well), is lower.

    Apple (AAPL +1.7%) rallies as the Street takes the launch of Samsung's (SSNLF.PK) Galaxy S IV, which has an impressive spec sheet but has seen mixed early reviews, in stride. Apple's sell-side fans are circling the wagons, with Gene Munster comparing the S IV to an 'S' iPhone launch. Nomura is less sanguine: noting the popularity of bigger displays and stating its checks indicate a bigger iPhone won't arrive in 2013, it thinks Samsung could overtake Apple in high-end smartphone shipments this year on the back of 35M-40M S IV and Note sales per quarter.

    More on Apple: KGI Securities' Ming-Chi Kuo, who has been pretty accurate with his iScoops, has become the latest to predict a cheaper iPhone is arriving this year. He claims the device will have a 4" display and rely on a "super-thin plastic casing mixed with glass fiber." Foxconn and Jabil (JBL) are among the companies reportedly contracted to make the phone. Sterne Agee's Shaw Wu, who has cut his PT to $630 from $715 on signs of iPhone build order cuts, also expects a less costly iPhone made of "composite material casing." (plastic iPhone patent)

    Why the NRA keeps talking about mental illness, rather than guns (The Economist)

  98. wombat

    wow – big brother.
    Gerard Damiano -vs- Mark Felt

  99. hemas03

    Phil, on Mar 5th you suggested it was early to 2X roll the short WMT $70 APR callers because we were at a top and had time (in response to Burr and Yodi).  This is part of the "old income portfolio".  Do you still think is too early?  At the time it was also suggested to roll up to $72.5.  Lookin at the charts it still looks like a crapshoot to me.  Would you mind revisiting this position?  TIA

  100. stjeanluc

    We need to cut on all these social safety net to be able to pay our debt:

    http://www.salon.com/2013/03/15/report_iraq_war_costs_u_s_more_than_2_trillion_so_far/

    A new study by the Costs of War Project by the Watson Institute for International Studies at Brown University has made strides in quantifying the Iraq War ten years after the U.S. invaded. According to the study, flagged in Reuters, the war “has cost $1.7 trillion with an additional $490 billion in benefits owed to war veterans, expenses that could grow to more than $6 trillion over the next four decades counting interest, a study released on Thursday said.”

    6 frakin' trillion dollars and of course no one will be "punished" for that either… Sometimes you just want to cry over what happened in the W. years!

  101. cturb

    Etrade just called and said they are increasing margin requirements for apple as of march 21st from 25 percent to 40. Maybe some sell off coming?

  102. dawnr

    Phil—AKA ole wise one…how do you suggest we play AAPL today—to get back long?  The OptTrader is saying maybe buy a call so I am confused…

  103. scottmi

    DIA/Phil - i'm thinking of placing a calendar spread on DIA.. something like a 144.5 Mar4/Mar5 with thought that DIA falls a bit next week, but does not stay down. I am thinking there may only be a brief and shallow 'correction' here before the end of quarter is juiced up to look good..  your thoughts?

  104. Jbur

    VIX/Burr:  Don Kaufman at this moment is discussing (in Swim Lessons)why the retail investor essentially always lose money on VIX trades. I no longer have anything to do with VIX or VXX trades b/c of getting burned, but very interesting presentation.
    If interested you can certainly listen to the replay this weekend ( the VIX discussion starts approx. 2:45-2:50 into the swim lesson session)

  105. zeroxzero

    Pharm:  CLDX, CGEN, PLX, IMGN — where are we with these?  And permit me to mention that I cracked 35% for overall gain to date in 2013 [6 weeks exactly] in the "Pharm" portfolio — a million thanks.  Well, not a million, but maybe some day……. :)

  106. zeroxzero

    Angel: Do we like NTE?

  107. phil

    CLF/Wombat – You only have to worry if the net of the roll begins to turn against you – otherwise, what's the hurry.  They're at $22 now, your puts are net $20, you're up $2 UNLESS you do something crazy like pay you short putter a fat premium for no particular reason.   Same thing as I said for the Income Portfolio – EVENTUALLY!  

    And HOV having a good day today.  

    FCX too!

    CMG/Hemas – Yes, I did means selling the April $320 calls.  I screw those up all the time.  

    AAPL/Dawn – Nothing wrong with guessing wrong – especially if you take the quick loss and get out.  I'm sure there's all kinds of history backing up what happens with a squeezy triangle thingy but the trick is, make sure you got your $250 worth and lean that patterns only tell you half the story (or more like 25%).  

    Austerity/StJ – What kills me is how the MSM simply refuses to even debate the issue.  That's because it's not debatable – there are no "facts" on the austerity side – just an endless slideshow of gloom and destruction.  

    Futures/Mjj – I know I just did that.  Please check yesterday.  Look for copper, that word would be there.  

    That's some mighty fancy chartin' StJ!  

    Deep Throat/Wombat – Was it a video phone or a time machine (very different images depending)?

    Oil/Jasu – Didn't work today – still 40 mins to go though.  

    Moderation/Wombat – I can see it just fine but sure, if it got caught in the spam filter, then it's working properly, I'd say. 

    WMT/Hemas – Well, $72.66 is high but way better than $74.20 a few days ago and the 200 dma is $71 and the 50 dma is $70 so I'd give them a chance to go lower – especially as we're a bit worried about the weekend anyway.  Here, let's reframe that question into better context:  You're not sure what WMT will do for the next 35 days so, would you like to make an arbitrary decision now that costs you money or would you like to wait until you have a chance to observe it further and gather more information?  

    War/StJ – That doesn't even include the two Trillion we spent on higher gas prices (and that's way conservative as a barrel of oil was in the low $20s when Bush took office and still in the low $20s after 9/11 so it wasn't that.  And what about the cost of spending $2Tn on war INSTEAD of spending $2Tn to pay down the Debt – that's a $4Tn swing in what the debt would be plus all the interest so maybe $5Tn.  Arrrrrrrgh – don't get me started!  

    AAPL/Cturb – That is a big change.  

    AAPL/Dawn – Today, I would not chase this move.  If it sticks next week, then it's playable.  Yesterday I would have said yes but nooooooooooooooooooo, you did not want to hear it, did you?  

    DIA/Scott – You don't give yourself any room for error with such a tight spread.  What if it flies up, stops you out, and then drops back fast (happens every other day)?  You may as well just pick a direction and day-trade it. 

    VIX/Jbur – Because the premiums are outrageous and the spreads are ridiculous?  

    Very nice ZZ (or actually, Pharm)!  

    Oops, there goes $93.50 again.

  108. hemas03

    Thanks Phil, re WMT, I'm proud to say "That's what I thought the answer was going to be".  I'm learning!

  109. stjeanluc

    Debt / Phil – How about these $2Tn on "USA" infrastructure (not Iraqi) which would of course be a GDP multiplier in the long run… Truly maddening!

  110. stjeanluc

    It looks like 444 on AAPL was just greedy enough after all….

  111. denlundy

    USO April 33.50 put at .67 a good place to enter anticipating a dip in oil next week.

  112. denlundy

    SAC in record $614m insider settlements

    SAC Capital, the hedge fund run by Steven Cohen, paid $614m to settle civil insider trading charges, in what regulators say is the largest payment over an insider trading inquiry.

    $600m to settle allegations it profited after trading shares of Wyeth and Elan in advance of the release of negative clinical drug trial results.

    $14m to settle allegations that fund portfolio managers traded in advance of Dell earnings results.

    In both settlements with the Securities and Exchange Commission SAC did not admit or deny wrongdoing.
    http://link.ft.com/r/8P1R88/87YPZT/K9HO8/FKA5PS/6ASG9M/D5/h?a1=2013&a2=3&a3=15
     
    And of course there is no jail time mentioned.  To big to jail.

  113. scottmi

    DIA/phil – thanks. yes indeed. i surely know i don't trust these low vol, bot-owned markets.

  114. Opesbridge

    Rights / Pharm / Phil
    You can indeed reasonably expect not to be hit by automatic weapons fire in your town or at a mall.  Automatic weapons are already banned (with minor exceptions like Nevada).
    Pharm, I deeply respect your investing acumen, but do not put too much money on that guarantee.  I had lunch in January with Rep. Bob Goodlatte, the Chairman of the House Judiciary Committee.  No tragic event caused by another mentally ill murderer is going to cause him to report out of his committee a bill which bans semi-automatic firearms and thereby violates the Second Amendment.  
    Absolute Rights / stjeanluc
    Yes, it was settled long ago that the liberties guaranteed in the Bill of Rights are not absolute.  That is why a wide variety of regulations affecting firearms are Constitutional.
    Ron

  115. Pharmboy

    CLDX – holding, but one can lighten up a bit.  So, let's sell 1/2.

    PLX – nutin' honey.

    IMGN – Steady eddie.

    CGEN – High activity.  Let's move on (for now).  We can revisit later.

     

    That should lock in some gains.

  116. Pharmboy

    QQQs next week, roll to March 28 70s for 7-8c.  I also added another 1/4.

  117. 8800

    Phil,
    A little first aid request for a few ISRG puts (sold 1/15s 330 for 16/now 27ish & 350 for 20/now 34).
    Since I already have a position (not DD per your earlier guidance) what would you counsel: do nothing for now, sell calls, etc (seems  premature to roll puts lower).
    No concrete news that I have found. Co says that reporting format changes are responsible for the perception that clinical problems have increased. No substantive developments. AAPL deja vu?
    Thanks as always

  118. denlundy

     It would be a mighty trip to pull the averages up to green, but let's see them try..

  119. Pharmboy

    OK, high yield closed end funds are getting creamed this week.  Now, today should be capitulation.

     

    EXC coming back after all the hoopla…

  120. mjjwo9b

    Thanks Phil…. got it.  Looks like I am in the market for more desk top real estate….

  121. stjeanluc

    The case for gold miners:

    http://nihoncassandra.blogspot.com/2013/03/prospecting.html

     

    In a world where formerly hated assets are on fire, gold miners remain hanging from the investment equivalent of the naughty-tree. Despite the hate mail that routinely stuffs my inbox from the people offended by my occasional mocking views of gold itself, I would highlight that my views on the shiny yellow metal have never been "personal", but are on par with the same healthy skeptical treatment I give to any asset class or investment that has been touted, bought, annointed with deity-like powers, spawning an entire industry of proponents whose opinions, by nature of their conflicted interest, are more than worthless to the would-be investor. As for the relative investment thesis, Mr Buffett did a fine job of articulating the advantage of attractively-price assets with cash-flow (and growth potential) versus inert but highly conductive lumps of metal dug out of the ground only to be re-buried.    

    All of that said, the miners are cheap by any backward, forward or relative measure. Their businesses are enviable – despite rising costs, poor management and shooting themselves in the foot – insofar as costs remain low by comparison with what they sell their product for. And they are hated. Lowly-leveraged. And under-owned. All this while their natural admirers (who I have known to mock) are hoarding last-year's coins, bars and ingots. The investment non-sequitir, of course, is that the so-called great rotation into stuff, is ignoring this gold mining stuff. Now I understand the overcapacity in iron ore, and other non-ferrous things, on top of concern about the condition of their largest consumer. Yet, the market cannot have it both ways: bidding up stuff for debasement fear on hand, and avoiding it for the opposite fear on the other. Puzzling. Yet, if it be stagflation that emerges as our nemesis, it would seem to me that the spreads between certain heavy industrial cash-flow yielding assets on one-hand, and gold mining concerns on the other, would – in the medium term – be unsustainable. For you don't have to love gold to like gold miners: just not HATE (note the upper case emphasis) it. 

  122. wombat

    Phil // CLF
    Thanks – makes perfect sense.

  123. Pharmboy

    They HAVE to end the Q with a bang…..they don't want a whimper….

    CLDX – 8/12 BCS.  Order in for 2.75.  We bought it for 75c. I can live with that.

  124. Pharmboy

    That's a 1/2 sale.  Also buying back the puts, Apr 9s for 5c.

  125. Jbur

    VIX/Phil: Nicely summarized. I think you just saved Burrben a couple hours of Webinar replay.  ;)

  126. flkass

    Phil,
    What's a good entry for CAT, if any?
    Thx.

  127. scottmi

    Nihon/Stj – LOL! that guy sure likes to dress up his opinion ;-)

  128. scottmi

    Nihon – ok, that gal. !!

  129. Pharmboy

    EOQ SPY 159s for 11c (March 28).  These are all low risk, OTM trades for 'jumps' in the market.  Don't go crazy, although my QQQs are up to 300 or so contracts.  Come on AAPL.

  130. stjeanluc

    At this point I would not want to be short or long AAPL over the weekend. Could go either way now.

    And I mean with short term options, not 2015 LEAPS for cryin' out loud!

  131. Pharmboy

    I also have the June 45 GDX calls for 26c….

  132. Pharmboy

    Oh, I am teaching bad bad things here, as we are supposed to 'be' the house.  ;)

  133. Pharmboy

    Now that Mylan ($MYL) has agreed to buy Strides Arcolab's injectables unit for $1.6 billion, analysts are seeing potential injectable drug deals on every corner.

    Jordan's Hikma recently said that it has gotten some interest for its growing injectables operations. Now, analysts are sizing up the chances of a firm like Pfizer ($PFE) or Teva Pharmaceutical Industries ($TEVA) snatching the injectables unit of India's Claris Lifesciences. While it is does not come with the track record or pipeline of Stride's Agila unit, according to Bloomberg, they say it might fetch half a billion dollars.

    It is a matter of supply and demand. There are shortages of sterile injectable drugs in the U.S. and growing demand for but only a limited number of FDA-approved plants to make them. The largest producer in the U.S., Hospira ($HSP), continues to struggle to get its plants to full capacity after running into FDA compliance problems, presenting  immediate opportunity.

    I still like them in here.  They did fill the gap, and I was a bit early on my option play, the Jan14 35/40 BCS, selling the 30P for net 1.15 CREDIT….

  134. Pharmboy

    Let's do 10 of those in the income portfolio!!!!

  135. Pharmboy

    POWER 1/2 HOUR

  136. stjeanluc

    Speaking of short term options, next week's AAPL 450 in the 25KP topped at $5.20 when we hit my 444 target. Good for a 70% profit then. Now back to $3.60… 

  137. stjeanluc

    Are Phil and Pharmboy the same person?  :-)

  138. snow

    Censoring/wombat  – try mentioning any well-known PDE-5 inhibitor and low, low prices – then you'll see spam filters really spring into action. By the way, aren't you glad Dawn's here for Phil to have fun with?

  139. phil

    Very good Hemas.  

    $444/StJ – See, you jinxed it.  

    USO/Den – Yep, I do like that.  Barrels are not moving:

     

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Apr'13 93.15 93.84 93.00 93.45 14:53
    Mar 15
    93.45
    0.42 122032 93.03 98337 Call Put
    May'13 93.39 94.20 93.36 93.82 14:53
    Mar 15
    93.82
    0.44 80065 93.38 279848 Call Put
    Jun'13 93.84 94.42 93.59 94.09 14:53
    Mar 15
    94.09
    0.47 40133 93.62 171045 Call Put
    Jul'13 93.94 94.52 93.73 94.25 14:53
    Mar 15
    94.23
    0.48 20878 93.75 120022 Call Put

    668M barrels!  Over 550 in the front 3 months is usually a problem.  

    SAC/Den – Well at least they got a fine that was more than a slap on the wrist.  That's progress. 

    You're welcome Scott.  Best thing to do is observe a good holding level (like 14,400 on the Futures or $144.40 on DIA and then come up with a premise on how you expect it to hold on a test and then, IF CONDITIONS ARE RIGHT, pick a strike with a better than .50 delta to momentum trade.  Of course, today hasn't given us any pops anyway since the pre-market so nothing to miss.  

    IWM/Jabob – That's unusual.  I guess a lot of small banks in RUT but wow, that's like their on the same algo. 

    Automatic/Opes – I would amend that to say I'd be just as pissed to be killed by a semi-automatic as well!  

    ISRG/8800 – Depends what you REALLY want.  You took a net position in ISRG for $314 in Jan 2015.  ISRG is at $458 now.  If you are not THRILLED with the idea of getting an additional 33% discount and owning ISRG, a company that makes $20 a share, for $314, THEN you have a problem but, if you do like the idea of owning them that cheaply – then no worries.  There is news, they are under attack and being called unsafe and the use of the machines is being questioned on several fronts.  TRADERS are fleeing but I think they are nuts as the company is growing at about 15% and that's with a crappy Global economy.  It's totally AAPL deja vu but, not too likely it goes BK, but maybe they do drop down to $300 (as that would still be p/e 15 – miles above AAPL's 8).  

    Do you still want to be in the ISRG business if shares are put to you at $314?  If you were forced to buy them now at $457, you could sell 2015 $450 puts and callls for $150 and drop the basis 33% on the cash side so figure if the shares are put to you at $314, you sell $100 worth of puts and calls at the $300 strike and your net is $214/257.  Do you or do you not want to own the stock for that price?   If not – why would you even consider holding them at $457?  You should be thrilled you only lost $12-15 per share and run away and never come back.  

    Dow volume at 3:30 is 240M – about double a normal day lately and still the big finish to come.  

    Real estate/Mjj – You can always go up.  

    Miners/StJ – Wow, that's my premise exactly.  

    You're welcome Wombat. 

    EOQ/Pharm – Well keep in mind today is only expiration day so they don't have to do anything today.  

    VIX/JBur – Yes, I hate to waste time getting to the point – although it is amazing how some people manage to stretch a statement that can be put in a Haiku into a 2-hour seminar (and often charge for it)!

    CAT/Flkass – Are you new?   Well, I don't remember talking to you so WELCOME!  You got in just under the wire as we're closing Membership this weekend.  So, CAT – tempting around $85 and very tempting at $80 but now $88 and we're cautious into the weekend in the very least (maybe into 1st week of April) so I'd wait.  The VIX is so low (11.50) that it's not like we're getting great prices on short puts.  Feel free to remind me next week as I do love CAT and would like to add them to the Income Portfolio – IF they go on sale. 

    Bad things/Pharm – With the VIX this low, it's the best time to take those shots.  

  140. phil

    HSP/Pharm – I like that one.  

    AAPL/StJ – What we should have done is sold $440s and rolled down to the $430s for a net $3 on the $10 spread.  And yes, I am Pharmboy (now that I've stopped being JRW).  8)  

    246M on the Dow at 2:45.  

  141. albo

    dawnr et al -CSCO has a nice looking candle today; for those who believe in such things.(:-).

  142. albo

    Never did know how to make a smiley.

  143. 1020

    Hi Ron – Not to parrot Phil, but when discussing auto v. semi, what's the difference?…..

  144. phil

    Classic – AAPL being used to goose the markets but very hard to get them over 2.5% line at $443.33.

    RUT taking the bait and moving back to highs – just pennies away now.  

  145. stjeanluc

    Hey AAPL making another run….

  146. stjeanluc

    And the VIX very complacent still…. 

  147. Pharmboy

    Oh, today is filled with LMAO and just overall giddiness…..

    And, in honor of our Morpheus ways (and Tim Knight at Slope),  good weekend all!

  148. stjeanluc

    It's just unreal how they move AAPL around like that. It's $1Bn of market cap for each dollar move for f@ck sake….

  149. Pharmboy

    HSP went through for 1.10.

  150. phil

    ISRG Jan $450/500 bull call spread is $20 – not a bad way to take a chance.  If they go lower, THEN you can sell puts and roll down. 2015 $300 puts are already $20 and $330 puts are $28 so figure you get $28 for the $300 puts and spend that to roll the 2014 $450s ($60) to the 2015 $450s ($85) or lower and then you're in that spread for net $20 with ISRG put to you at net $300, worst case.  

    What's a Billion or so between friends, StJ? 

  151. Jbur

    Have a great weekend All!

  152. phil

    HOV $6 on the nose.  BIDU $85, also in the pin club, GS $155.00, IBM $215, MCD $100, PFE $28.00, WYNN $120, BBRY $15, ISRG $450, SPX 1,560….

    Dow volume 388M – about 3 normal day's worth. 

    On the whole – it was a great week.  

    Have a good weekend everyone.

    - Phil

  153. pstas

    TOS performance issue-anyone else having any problems at the start and end of the day- platform very sluggish. 
    Any fixes?

  154. yodi

    Nice weekend to all

  155. Pharmboy

    pstas – no issues here.

  156. Pharmboy

    Gonna work on ZLCS drugs and do a write up….I want this one to be our big winner this year.

  157. pstas

    MIL- Angel- any news to account for todays hit? 

  158. phil

    TOS/Pstas – Does need to be rebooted once in a while.  Also, it's a memory hog – make sure you have plenty on the PC you're using.  The more charts and stuff you run, the slower it gets.  That's why I keep my two sessions on two different computers, I got an HPQ Touch-Smart to run TOS charts on another processor to the right of my right main screen and I love it as I can just touch the screen to do most things I need (changing tabs mostly).  I think it was only $800 – not much more than just buying another monitor used to be.  

    Also, I got my new laptop that I ordered the other day so now I can play with that.  

  159. dawnr

    CSCO—the chart tells me to short but Phil a bull on this one.  Waiting for a pullback go long.
    VXX—for me, selling puts (very conservative out of the money) is good steady money with only $.01 spread.  I do scalp this one alot up and down as it follows the technicals biased short…however, sucker moves and is sooo manipulated.  I usually just do outright buys/sells as VXX so cheap with a very tight tight trailing stop.
    AAPL—you know Phil I am not quite ready to give up the battle on this one…yes, very bullish candle closing near the highs but still having trouble  getting over the hump…IF it does fall back down…I would love a bottle of Amarone 2004 or 2006 please!  All kidding aside, Your point very much taken this week and look forward to see which way the AAPL tide takes us next week. 
    A parting thought…for all the shenanigan window dressing next week…do fund managers want to yet admit they are long AAPL for Q1?  So wonder if REAL buying happens until April 1st? What do you think?
    Had fun here this week.  Made some money. Learned some things, humbled by others. Thanks for all dealing with my ramblings. That's what it is all about! Great weekend!
    Dawn

  160. 8800

    Phil,
    Thanks for the ISRG perspective. Helps to have 'what if ' numbers to grasp longer view. Only concrete cmtry that I saw was from Dr Breeden who questioned efficacy and cost of robotics relative to laproscopic appr.
    Thanks again

  161. qcmike

    pstas 


    TOS  ok

  162. jabobeast

    AMAZING WEEK — thanks Phil!

  163. jelutuck

    Pharm/High yield funds: not sure which ones you follow, but I have owned some of Calamos' funds for years like CHI, which holds convertibles and bonds with a little leverage and yields about 9%. It has been fine this week.

  164. mrmocha

    albo / smiley – enter an 8 and a ) character right next to each other, a space before and after but no spaces between them 8)

  165. mrmocha

    Okay, that's funny, it failed 8)

  166. mrmocha

    Second time's a charm!

  167. grant

    Phil – How about a photo of your setup?

  168. denlundy

    Week ago Thursday you wrote:
    “BAC was our "One Trade" for 2013 but that was at a ridiculous $5.75 (even more ridiculous than this year's One Trade with AAPL at $425) and now BAC is $11.92 and I already predicted that $15 would be about their top so hard to get excited about here BUT, through the magic of stock options, you can sell the 2015 $10 puts for $1.22 and buy the 2015 $10/15 bull call spread for $2.05 for a net 0.83 entry on the $5 spread and your worst case is being assigned the stock at net $11.83, so you have a built-in $1.09 discount – about 10% at worst.  Best case is you make $4.17 off your .83 cash commitment and that's a nice 500% return on cash so I do like it, but too risky for the Income Portfolio – just a fun way to be bullish on the Financials in general.”
     
    I am high on BAC especially as Fed has now loosened the shackles.  BOA free to buy back $5.5 billion in stock and dividend will surely be boosted in coming months.
     
    Can sell 2015 $12 put for $1.85 and buy the $10/15 bull call spread for $2.30.    Best case is you make $4.55  off your .45 cash commitment and that's a nice 1,000% return on cash.   Can be assigned the stock at $12.45.  I believe in the fundamentals of the stock.  (There was a good reason why it was your stock pick of the year in 2012, i.e. the underlying assets of the company, super low price to book value, a good company beaten down by all the legal proceedings and people had dumped it out of fear. (Doesn’t hurt either that we now  have Mr. Buffet as a shareholder.)

  169. denlundy

    Phil/Thanks     I also need to add my thanks, I have been a long time holder of positions that were all under water for a long time but they have all blossomed - HPQ, BBY, BAC, GLW,   SVU….. Now if only AAPL will make a move

  170. denlundy

    Hey if you can get AAPL to climb to $475 by April expiration, you could probably double the Atlantic City conference atendence. I for one will drive in from Dallas if that happens.

  171. albo

    mrmocha – AHA.  So that's what 8) means !  I see.8)  

  172. albo

    Good weekend everyone !

  173. eric_s

    dawnr
    AAPL – according to option-calc.com the maximum pain for today's option expiration was $445. The max pain for next week's option expiration is $430, while the April expiration currently sits at $465. A value oriented fund manager should have no problem displaying AAPL in their holdings, while a growth oriented fund manager may feel uncomfortable. Not sure that makes much of a difference.. at this point.

  174. zeroxzero

    Weekend Paen — Thanks, Phil, it's been a great week.  For all my exuberance about my spectacular "Pharm" portfolio — fully justified, I need not add — my main and far larger portfolio is the "PSW" group, and, after years of blood and blunders, I have reached a significant milestone – I don't lose money.  Net net, I rarely have a losing week, market up, market down.  And that I owe to you. Balanced positions.  More premium sold than bought.  Fundamental criteria applied to good companies, not momentum/ news headlines/ stock du jour/ triangle squeezies. But rather earnings, P/E, dividends, competitive position — the boring stuff that takes study, thought,….and patience.  You have been a great teacher, and I have embarassed myself repeatedly day with how slowly I learn. 
     
    And it's a funny thing – if you don't lose, the gains start to pile up.  The arithmetic is cruel to the downside, and becomes a gift in the other direction.  And I'm in this for the long run, having made myself unemployable through a need for diversification.   Moreover, what I've learned here has also elided into other areas, including real estate and ex-U.S. investment.  Pretty cool.  Have a great weekend.
     
    And Wommer – Dawnr is definitely the best thing that's happened to you on this site to date.  We all remember commiting "Phil Pas"  and finding out that he doesn't suffer what he considers fools gladly.  Or at all. You get used to it, or you bail.  Not many seem to, I've noticed.

  175. dclark41

    zero
    We seem to be following the same path. It's much more easy to not have to worry about positions. And yes sell more premium than you buy.  AAPL is my only symbol of the past. Thanks Phil. Have a great weekend all!

  176. japarikh

    Phil,

      I read on Marketwatch yesterday that hedge funds have been executing a paired trade of short AAPL and long GOOG and that this trade needs to be unwound so things may reverse briefly. Is there truth to this? It would seem accurate as both seem to move in opposite directions.

  177. jfawcett

    April Expiration – Late Feb I sold Short Apr Puts on CLF and BTU.  BTU Expired, collected 1.20 in premium.  CLF will be PUT to me at 25.00.  I collected 1.20 in premium for a net 23.80.  Trading at 22.09.  Will start selling Calls on Monday.  In Mid March, Sold X for .50.  Collected that Premium.  I consider this a win * 3 since I wanted to start legging into CLF.

  178. jfawcett

    What a dumbA$$ a month ahead of time.

  179. jfawcett

    That's what I get for being away from the market for 2 days!

  180. jfawcett

    March Expiration – ABX Short Puts Sold In Feb expired worthless reducing my ABX long position by another 0.35.  But, as you know, ABX is getting KILLED.  This is a long term hold so, sell more premium.

  181. Opesbridge

    automatic / Phil
    Fair enough!  Me too!  : )
    1020
    A semi-automatic firearm requires a discrete trigger pull and release for every discharge of a bullet.  An automatic firearm discharges bullets continuously for as long as the trigger is pulled and held back.  (Automatic firearms are illegal, with limited exceptions in certain states.)  The nomenclature is confused by things like the semi-automatic .45 pistol, which is colloquially referred to, unhelpfully, as a ".45 automatic." 

  182. dawnr

    zz….oh man, so i am the rookie whipping boy now!?! i think i can handle it. lol

  183. jfawcett

    BRCM – GTC order for BRCM (Income Portfolio) filled today @3.60.  I placed that Wednesday late morning.

  184. jfawcett

    Oh, I forgot to mention…   Market down AAPL up.  Maybe APPL can buy BRCM and that short put becomes worthless :)

  185. phil

    Good morning!

    I wish the market were open today – so many fun things going on…

    AAPL/Dawn – When something is drastically undervalued, it's pretty much a little jack in the box and the little crank just keeps turning and turning until some special note pops it.  I don't mean like Friday, that's just a wriggle in the low range – I mean a $50-$100 run over a couple of days kind of thing – some event when people say "hey, those guys make a LOT of money!"  As I noted to someone the other day, with AAPL, it could be one of about 10 things – that's what makes it such a good long.  

    They've already had the kitchen sink thrown at them as far as negatives go.  And, don't forget, those negatives are being thrown at AAPL by a media that's controlled by 6 companies – all of whom hate AAPL because they have taken control of the music business and are taking control of the publishing business and trying to take control of the TV business.  There are, annually, tens of Billions on the line here and these 6 companies will do whatever it takes to keep AAPL from succeeding:

    Keep in mind that Newsweek stopped publishing it's paper edition this year – these guys are terrified about losing control of the future – especially to someone who's not even in the club.  Jobs tried to build bridges with Disney, who are the least evil of the 6, but they just wanted to get Pixar and had no real interest in giving AAPL content, which went to Hulu and NFLX as soon as Jobs died.  

    AAPL is a disruptive force and there will be all-out content wars in the future.  So the studios and the TV stations and the news media look for any way they can to keep AAPL down – the same way they work very hard to keep Americans from seeing Al Jazeera as a viable entity – even though they are Walter Kronkite compared to Fox.  Overall, it's a long game that's being played and I wouldn't want to guess WHEN something will happen and, frankly, I don't care – because I'm much more patient than that.  

    If you buy a company for a long-term hold, you should buy it BECAUSE you want to hold it long-term, like a house.  And that means you buy it once and then, 10-20 years later, maybe you have occasion to sell it.  In between, you don't obsess over the PRICE because it doesn't matter.   People know and accept this about homes but can't accept it about stocks – even though most of us in the top 1% have a lot more money in stocks than we do in homes.  

    I put up notes last week about how just keeping money in the SPX beats almost every other ETF or hedge fund over the long-haul.  Buffett is notable for beating the S&P over 50 years but what does Buffett do – buys and holds.  This is the hardest thing I try to teach because there's no substitute for experience over time here.  Only by going through the cycles – USING a buy and hold strategy (modified with our scaling and selling premium strategies, of course) does it become clear to you what nonsense all these other "systems" are.  

    Sure it's fun to make short-term trades and I love them as you need something to do while you wait for your trees to grow large and bear fruit but it's also important to keep in mind that short-term trading is just gambling – and should never be taken too seriously.  

    A guy with an apple orchid can afford to give some away but the guy who's juggling 10 apples to survive can't afford to drop even one or two but the guy with the orchard started with 10 apples worth of seeds – and a different philosophy. 

    AAPL should buy a studio:  VIA is $32Bn, NWS is $72Bn, TWX is $53Bn, DIS is $104Bn, Vivendi $22Bn (Bertelsmann is private but around Fox's size).  They haven't because, if they bought one, the others would go insane.  Jobs took Disney stock for Pixar ($7.4Bn) and I think he intended to push for a greater alliance but Disney knew all they had to do was wait and the stock would end up getting redistributed among Steve's heirs, so there was no danger giving him 10% of the company (largest shareholder at the time).  

    The problem at the moment is Steve Jobs had a Tim Cook to run the company for him so he could run around making deals and, of course, his fanatical personality allowed him to ram deals down the throats of record companies at a time when their sales were weak and they were looking for an answer anyway.  Books are more or less a done deal as well but not magazines and newspapers nor TV or Film and that's where the real money is.  

    Tim Cook doesn't need a Tim Cook to run AAPL, Tim Cook needs a Steve Jobs to get out there and make those deals but that's very hard to replicate as part of what made Steve Jobs Steve Jobs was the fact that he came into a room with his reputation glowing around his head like a halo and every word he said carried the full weight of the AAPL Corporation – because the board learned (since they fired him and wrecked the company) never to say no to Steve.  

    You can't replicate that by hiring some guy, no matter how good he is.  

    Of course, Steve Jobs has only been dead for a year and 4 months – so maybe we should give Tim a chance! 

    By the way, Cook donated $100M of his own money last year (mostly to Stanford Hospital and Project Red to fight AIDS and such) and AAPL matched employee charity donations up to $10,000 a year.  AAPL is also spending $100M to move some of it's Mac production back to the US – starting this year.  

    This is not a company (or a CEO) playing a short game and, as we are well-aware, not many investors play the long game.  That makes companies like AAPL fantastic buy opportunities for me, Buffet and the 4 other guys left who actually like to own great companies for the long-term.  

  186. phil

    ISRG/8800 – You're welcome.  That's why we played them for the quick bounce and then got back out – the jackals tend to circle back around once they get the smell of blood.  ISRG ran up from $325 to $575, so $250 over one year, then a year between $575 and $475 (40% retrace on the button) and now, just when they should have been breaking up and over, they are being spiked down back to $450 (50% retrace) and then the next Fib level is 66% at $400.  

    See, we don't need no stinkin' charts to know where the lines are, do we?  

    Now, we know where support and resistance is so what's up with ISRG?  FACT:  They made $15 a share last year.  They project $17.50 this year and $20 in 2015.  That's 15% growth so p/e 20 not out of the question and that's $400 – no wonder they were so easy to knock down from $585!  ISRG was not priced for it's current business but on the EXPECTATION that it would be expanding it's reach into other types of surgeries.  If those are thrown into question and even some of their current business is thrown into question – a p/e over 20 is very hard to sustain so ISRG was ripe for the taking and have been attacked perfectly.  

    Keep in mind, that back on 3/1, I had noted that you had to have a plan to stick with them down to $150 to do the short $300 puts ($108 was the actual point at which we expected to start losing money) – nothing that is happening now was not expected and I would say the same thing at $400 and $300.  In fact, even now, the 2015 $300 puts ($20.30) can be rolled to 2x the $240 puts ($9.80), which is another 20% lower and nearly 1/2 of the current price.  I'm not saying to do that but – as I often say in such situations – if you don't REALLY want to own ISRG for 50% of the current price – why on Earth would you have a long position at $460 – if you hate the stock that much, get out and be thrilled to take a loss!  

    Earnings are 4/17 so all these rumors and such will be over by then and maybe the CEO does get on the CC and starts crying and says "no one wants to use us anymore – I quit!" but I don't think it's likely.  In fact, just Wednesday, the company did say:

     

    In response to general inquiries regarding a recent rise in Medical Device Reports (MDR) filed by Intuitive Surgical, the company explained that the noted rise does not reflect a change in product performance but rather a change in MDR reporting practices.

    In September 2012, Intuitive Surgical revised its MDR practices, resulting in increased reports of device malfunction MDRs, the vast majority of which were related to instruments and not to systems. None of these device malfunction MDRs involved reportable injuries or deaths.

    We discussed this in detail the first time they dropped, last Fall, and, at the time there was talk of lawsuits that never materialized – probably because of exactly what ISRG is pointing out – that there's no problem on their end.  And of course you're always going to find a famous doctor who will say robots suck at surgery, the same way John Henry said no machine could ever hammer as good as a man.  100 years later – they still call the hammers Jack, in his honor but those hammers are ALL machines, aren't they?   

    Very few people are qualified to determine the merits of da Vinci devices vs. regular surgery in various procedure – but that doesn't stop most people from having an opinion anyway.  The bottom line, as it always is, is cost – does the hospital make more money using da Vinci's or standard procedures.  Clearly, with $2Bn in sales (200-300 $1.5M machines a year plus disposables that go with them) – some hospitals have done the math and decided to go this way and their sales have been expanding, not contracting – even in a bad economy – so we can assume the math does work.  

    Hysterectomies are the most common da Vinci operations so far and that's where the scandal is at the moment.  The American Congress of Obstetricians and Gynecologists, which represents 56,000 U.S. physicians, said expertise with Intuitive’s da Vinci robot system is limited and surgeons learning the new technology may have higher rates of complications.  “There is no good data proving that robotic hysterectomy is even as good as — let alone better — than existing, and far less costly, minimally invasive alternatives,” said James T. Breeden, the organization’s president.

    Keep in mind this guy is like a teamster telling you self-driving trucks are unsafe and should be banned from the roads.  

    The ACOG statement is “misguided” and “reflects a lack of desire to move the surgical field forward,” said Mario Leitao, a gynecologic oncology surgeon who uses the robot at Memorial Sloan-Kettering Cancer Center in New York. Leitao, who has consulted for Intuitive, also said that the robot has been marketed “inappropriately and aggressively” by the company, and by many hospitals that hadn’t learned how to use the device.

    So this is a "he said, she said" kind of thing and may take years to resolve as the next step is likely to be dueling studies and maybe even lawsuits.  It's not going to be a position for the feint of heart.  

  187. phil

    Wow, I'll never get through comments at this pace! 

    You're welcome Jabob.  

    BAC/Den – Not sure there was a question there but sure, I like your set-up as $15 is a reasonable target for 2 years.  Unfortunately, I'm very insulted that your decision to go to our conference is based on the performance of a single stock!  8)

    Thanks ZZ, makes me very happy to see so much progress in such a (relatively) short time.  

    You're welcome DC. 

    Pairs/Japar – I never know if that stuff is made up or not.  Sounds good but who know's what's true.  Over long periods of time, you can see what funds are doing but not monthly, weekly or daily and "polling" them is not really the best way to get an accurate picture, is it?  Still, we just so happen to be positions for AAPL up and GOOG down at the moment – so I do have to agree overall.  Why are we positioned that way?  Because AAPL is oversold and GOOG is overbought – this is not complicated stuff – we don't need special information to be way ahead of what MarketWatch "uncovers"  - we just need to understand market fundamentals.

    Speaking of AAPL, they stopped trading at $445.16 after hours.

    Good job collecting the rents, Jfaw. 

    ABX/Jfar – This is getting kind of funny as they did make $656M last year ($15/share) and even in 2010, when gold averaged $1,250, they made $380M ($9/share) so $28.50 per share is very, very silly.  The company, in fact, projects to earn $17.50 this year and $20.50 in 2015 so again, even if they blow half of that estimate and "only" make $10 per share – is that somehow a reason not to buy shares for $28.50?  It's funny how there can be such bargains still in the market while other stuff is being bought to the moon – a very strange rally so far.  

    Meanwhile, we don't have ABX in our current Income Portfolio and that's a mistake.  I'd like to sell the 2015 $25 puts for $3.50 and buy the $25/$33 bull call spread for $2.90 for a net .60 credit on let's say 15 contracts ($900 credit).  That makes $12,900 at $33 and very margin-efficient as TOS says just $250 per contract ($3,750) not on the put side plus $4,350 in cash for the spread and that's not a bad thing to do with $8,100 over two years, is it?  

    For Dawn:  

    Sometimes I feel
    Sometimes I feel
    Like I've been tied 
    To the whipping post
    Tied to the whipping post
    Tied to the whipping post 
    Good lord I feel like I'm dyin'

  188. phil
    Set-up/Grant – OK: 
     
     
    The AAPL on the far left and the HPQ on the far right are their own machines and an HPQ tower controls the three in the middle (with the main keyboard and mouse).  Since I'm left-handed, it's very easy for me to use the magic pad on the left AAPL but I prefer the track ball for my main system and the Touch-Smart mouse is way over to the right because I hardly ever need it as all I have to do is touch the tabs on the TOS screen to see more stuff. 
  189. phil

     

    Barry's Succinct Summation of Week’s Events (March 15, 2013)

     
    By Barry Ritholtz – March 15th, 2013, 3:00PM

    Week ending March 15: Succinct Summation of Weeks Events

    Positives:

    1. The Dow notched 10th straight days of gains — first time since 1996.
    2. Retail sales crush, 1.1% vs expectations of 0.5% (largest beat since December ’09).
    3. VIX falls to it’s lowest level in six years.
    4. 16 of the 18 largest fin institutions pass stress tests + capital plans approved by the Fed.
    5. Jobless claims fall to 332k, the second lowest weekly reading in the post-recession period.
    6. Euro-zone Q4 employment falls to lowest levels since Q1 2006.
    7. AAII Bulls rose to 45.4 from 31.1, 6 week high (Bears fell to 32 from 38.5, a 4 week low)
    8. DAX index is now within 1.07% away from making an all time high.
    9. Australian companies added 71.5k jobs in February, the biggest monthly gain since July 2000.
    10. Only 9th time in the history DJIA has closed at an all-time high 8 days in a row.
    11. NFIB small business optimism index was 90.8 — up 1.9 points in February.

    Negatives:

    1. Complacency? VIX falls to it’s lowest level in six years.
    2. Hollywood sweetheart Mila Kunis just bought stocks! (when she quits to become a day trader, liquidate everything and go short).
    3. Dow up only 2.85% over its 9 day win streak — weakest such streak since 1964
    4. JP Morgan and Goldman are forced to resubmit their capital plans.
    5. Gas spikes drive CPI higher, accounting for almost ¾ of the 0.7% rise, which was the biggest increase since 6. June 2009. However core CPI which excludes food and energy rose by a mere 0.2%, pretty benign.
    7. U.K mfr production declined 3% y/y for January vs -1.5%.
    8. U of M Consumer confidence plunges to 71.8 in March — biggest miss on record.
    9. Eurozone Ind Prod for Jan down -1.3% Y/Y (Greek ind prod in January fell 4.8% y/y)
    10. Empire Manufacturing comes in at 9.24 vs an expected 10
    11. U.S. January business inventories rise 1%, sales drop 0.3%
    12. PPI rose by 0.7%, mostly due to higher energy prices, which rose 3% in February.
    13. The pound is down almost 7% YTD vs Dollar.

  190. stjeanluc

    Gee, AAPL goes up $10 and Phil has a spring in his step!

    Free drinks all weekend in AC?

  191. stjeanluc

  192. phil
    Don’t forget AAPL was up 2.5% but the Nas fell 0.6% and AAPL is 20% of the Nas so that gave them a 0.5% boost (not counting any benefit AAPL suppliers also had) so it actually masked quite a bit of weakness in that index as well as the S&P, where it’s about 3%.
     
    Also, the Dollar was down over 1%, which also made performance look better than it was.
  193. phil

    Hey, it's my Birthday month, StJ – how could I not be in a good mood?  

  194. stjeanluc

    It has been a while since I posted this indicator but we are reaching some pretty lofty levels:

    Above 65% is bullish… 

    More about this here.

  195. stjeanluc

    Birthday / Phil – And a big one too… 

  196. stjeanluc

    This is not bullish for oil in the long run either:

    http://qz.com/63630/car-fuel-efficiency-jumps-to-a-record-high/

    From 2007 to 2012, fuel economy increased 16%, to 23.8 miles per gallon, while C02 emissions have fallen 13%, to 374 grams per mile driven. But automakers still have a long road to travel to hit the Obama administration mandate of average fleet fuel economy of 35.5 MPG by 2016 and 54.5 mpg by 2025.

  197. stjeanluc

    A little wonkish for me but DeLong is a very good economist:

    http://delong.typepad.com/sdj/2013/03/stock-market-valuation-jeremie-cohen-setton-gets-one-wrong-stocks-are-cheap-weblogging.html

     

    The S&P earnings yield is a real return. The 10-Year Treasury yield is a nominal return. He should be comparing the 6.7%/year equity yield to a -2%/year real return on short-term safe nominal Treasuries, or to the -0.3%/year real return on Treasury inflation-indexed securities.

    We currently have an expected equity return premium of 7%/year or 8.7%/year, depending on how you measure it. Stocks are cheap.

  198. stjeanluc

    The cause of death in the 20th century – Ginormous picture!

    http://sullydish.files.wordpress.com/2013/03/iib_death_wellcome_collection_fullsize.png

  199. stjeanluc

    Another Brad DeLong post with some great charts that go a long way to explain the problems of the last 10 years:

    http://delong.typepad.com/sdj/2013/03/in-2005-2013-the-long-run-came-first-and-the-short-run-came-later.html

    Shares of GDP

    Screenshot 3 6 13 10 06 AM

    Shares of GDP: Deviations from Mid-2005: Focus on 2008-9

    Screenshot 3 6 13 10 13 AM

    It is only in 2008-9 that shifts away from construction spending are not diverted away into boosts in other components of autonomous spending. Thus it was the financial crisis, not the collapse of the housing boom, that gave us our First Lost Half-Decade, with only government purchases counteracting the downturn.

    Shares of GDP: Deviations from Mid-2005: Focus on Post-2009

    Screenshot 3 6 13 10 13 AM 2

    Since late-2009, residential investment has flatlined, and gross exports and equipment investment have recovered to their late-2007 levels, but have grown no further. Just as there was no offset in growing other components of autonomous spending to the 2008-9 further collapse in construction, so since late 2009 there has been no offset in growing other components of autonomous spending to the collapse in government purchases.

     

    The 2008-9 downturn was something the financial crisis did to us--partially offset by the expansion in government purchases. The post-2009 stagnation in employment, production, and growth is something we have done to ourselves: cutting government purchases without a well-functioning credit channel to take up the slack was very bad mojo.

    Are there any signs we will do better in the future? Will Jack Lew be a better Treasury Secretary than Tim Geithner and get housing moving again, or ease the flow of credit to business that might want to expand?

    At least in teaching students, we now have a nice example of how the "long run" and "short run" are conceptual categories corresponding to different dynamic processes, not spans of time. That's a silver lining…

  200. stjeanluc

  201. stjeanluc

    OK, portfolio updates tomorrow!

  202. rj_jarboe

    Can anyone help me with the WIKI? I want to add some symbols to the comment search. The following instructions are on the page -
    Want to create content for a ticker you don't see listed below? Enter the ticker in the search box and click the 'create a new page' link. It'll automatically show up below from then on.
    I do not see the 'create a new page' link.
     

     

  203. rj_jarboe

    A new way for non-HNW investors to trade some expensive names.

  204. Burrben

    Wow,
    That was alot to read through!  Looking forward to the portfolio updates as I've almost lost track of the Income Port.

  205. palotay

    So much great content on here everyday. It is really amazing. 

  206. deano

    Phil/terrapin – schedule changing and an outside chance I can make AC for part of the weekend. What time will you be starting on Sunday / finishing Monday? Thanks!

  207. wombat

    jealous. have a great time guys. 
    $OEXA200R !!!! 
    Phil // Spent a few hours dumping stuff into the book pages – hope it helps.
    I also wanted you to know that I hit a milestone yesterday as well ( lookin at you zero )
    Friday close, I hit the same place I was 3 years ago. While that may sound funny, it was through purging bad trades, totally reinventing the way I trade and I actually feel quite optimistic about the future.
    Sincerely ( in a non-creepy California way ) ///  thanks.

  208. chasw

    pstas,
    TOS slow – I've had this happen twice. TOS help fixed. 1st time they reallocated disk space to RAM for TOS app, with my permission along with cleaning memory. 2nd time just cleaned memory.
    The following is what TOS help did with me the 2nd time to clean memory for speed. 
    Clean memory – close TOS and at your desktop right click TOS icon. On shortcut tab click "Open File location" lower left. Find file folder "usergui"  and delete. Click OK to close close. Now click TOS icon as usual.

  209. stjeanluc

    Seems pretty heavy handed to me:

    http://www.nakedcapitalism.com/2013/03/cyprus-bank-deposit-bail-in.html

     

    The mitigating factor in terms of preventing a loss of confidence in the European banking system is that the bail-in will happen principally via a one-time 9.9% levy on deposits over 100,000 euros. This is a bank holiday measure that means that Cypriot bank account holders with funds over 100,000 euros will have 9.9% of their account holdings deducted from their accounts when banks open on Tuesday. However, importantly, an additional 6.75% levy is going to hit deposits below that 100,000 euro level. As a bank depositor, given a one-day national holiday to decide what to do with your now shrunken savings, what would you do?

    Cyprus’ finance minister Michalis Sarris said large deposit withdrawals would be banned. Jörg Asmussen, a German member of the ECB board and a key ally of Angela Merkel, added that the part of the deposit base equivalent to the actual bail-in levies would be frozen immediately so the funds could be used to pay for the “bailout”.

    On the other hand, Cyprus is a well known tax haven for a of companies so kill 2 birds with one stone…

  210. stjeanluc

    And to confirm:

    Editor’s note: Reuters mentions that half of Cypriot savers are thought to be non-resident Russians. So this policy will definitely get a response from Russia (though it is alleged that many of these deposits are tax dodges and that the Russia state would be pleased with the policy response as it would shift deposits back to Russia.

  211. dclark41

    Phil
    Great write-up on AAPL.

  212. Burrben

    Wow, this Cyprus stuff could result in a bad ending…
    http://www.businessinsider.com/cyprus-bailout-risks-europe-bank-runs-2013-3

  213. zeroxzero

    Burrben:  I've had little doubt that Europe and it's dreadful Euro chaingang might be the poison pill in the global recovery.  Not that it will stop it, longer term.  But a collapsing Euro regime, a selective reversion to national currencies, soaring French bond rates, and desperate bank bailouts / support packages present apocalypic possibilities [emphasis on "possible"] that could cause a soaring dollar [& yen], plunging commodity prices, all of which are quite difficult to effectively hedge given its potentially widespread collateral effects. 
     
    Even massively shorting the Euro could backfire — depending on who [if anyone] drops out, the damned thing might.  I'm short the French bond, and doing nicely but I can't rationally put on a position large enough to cover everything else in my portfolio, I'll just have to assume that the worst won't happen — it usually doesn't — and apply "hope" as a strategy.  But I think the extent of the French disaster could surprise a lot of people.
     
     Spain has had an internal devaluation of @ 30% in salaries, France, zip.  And half the [employed] French working population is on the government payroll.  Germany is now powering ahead economically, and probably cares even less than usual about what happens to the rest of Europe, not to mention that a lower Euro would be lovely for German exports. I hope [back to that again] that I'm overstating the case, but I fear that ultimately only the timing is in question.

  214. zeroxzero

    Addendum/ missing word – "the damned thing [Euro] might soar."

  215. phil

    Good morning!

    Bullish/StJ – Interestingly, we are still not short-term overbought.  In fact, another flat day of two and we head towards oversold already:

    $NYMO

    $NYSI

    $VIX

    Big Birthday/StJ – Of course it's a big one – Not only does everyone get a day off as they close the markets but they even got me a new Pope! 

    I like those oil charts.  If we only got 20% in 5 years to 24 mpg, though, it will be interesting how we get to 33.5 in 3 more.  If so, you're going to see oil prices really drop off a cliff in 2016 but I think the auto companies would rather buy a Republican election and roll back the standards than do what it takes to hit the target.  Auto companies were Democrats while they needed bailouts but, not that they are making money again – they're Republicans!  

    Yes, stocks are still cheap vs. anything else you can put your money into.  I've been saying that for ages.  

    I like that cause of death "Humanity" – we should start a charity to wipe it out!  

    Did you know that Humanity kills 10x more people than lung cancer and twice as many people as all cancers combined?  Please give what you can to help us put an end to Humanity in our lifetimes…

    GDP/StJ – Imagine if the Government spent money to boost Residential housing – that would give us a huge double pop in GDP!   It's like a chart any doctor can read and clearly see what's wrong but nobody is willing to cure the patient because they may not be covered by insurance.  

    Looks like another low-data week ahead of us in the US, but the Fed on Wednesday is always a biggie and Thursday should be interesting.  PPI in Europe is usually good for a dip and I predict property prices in China are ——  higher.  

  216. phil

    OMG Barry ruined his site!  At least to me, his readers (the ones who commented) seem to like it but I hate it.  What do you guys think?  

    Wiki/RJ – I wish I knew how that thing worked.  One day I'll learn.   Functionally, I'm not sure what create a new link is supposed to do as all the Wiki does is pull recent comments from Member Chat based on if I start a comments with SYMBOL/Member Name – maybe it's the language itself that's incorrect because it's not meant to just let people add symbols and write stuff.  I'll makes sure it's looked into. 

    Mini-Options/RJ – I wonder if they'll show up under the regular option chains?  

     

    Mini?options are now available for these five securities:

    • SPY
      SPDR S&P 500
    • AAPL
      Apple Inc.
    • GLD
      SPDR Gold Trust
    • GOOG
      Google Inc.
    • AMZN
      Amazon.com Inc.
     

    Security symbols displayed list those for which mini?options are available in the market. This is not a recommendation to trade any specific security.

    Oh wait, I see them.  They say Mini but not priced yet.  Kind of makes opening TOS's option chains a real memory hog with all these new symbols.

    Content/Palotay – This was always my goal for PSW – get a lot of quality people together and have great conversations.  Group synergy has really been getting better and better this year.

    AC Conference/Deano – Hey, that would be great if you can make it.  I imagine Sunday we'll start around 10 or 11 – no hurry, and Monday we'll finish when the market does.  

    Thanks Wombat.  Congrats on rapid progress too. 

    TOS/Chasw – I'm going to try that, thanks. 

    Cyprus/StJ – That's interesting.  While it's "fair" as in their deposits were not guaranteed and the 10% confiscation prevented them from losing 100% of their money in a bank collapse – what does that say to depositors in France or Italy that the EU may sneak up on them at any moment and take away 10% (or any amount they'd like) of their money?  To me, the EU is foolish to do it like this over such a small amount as they now risk runs on other EU banks out of this brand new fear of confiscation.  The bears will have a field day floating rumors and such. 

    Some of the bailout lenders like the IMF had actually been calling for Cyprus to seize all deposits larger than 100,000 euros. So this falls well short of those demands. Nonetheless, a rubicon has been crossed. Not only are senior bank debt lenders now on the hook before a single penny of European Union loans or guarantees flow to busted eurozone countries, but so are subordinated debt holders and so are even depositors. As an EU citizen, you must now believe that any lending exposure you have to a bank whether as a bond lender or deposit lender can be seized and confiscated by government, no matter how small the exposure. The FT notes that “[e]ven Ireland, whose banking sector was about as large relative to its economy as Cyprus’ when it was forced into a bailout in 2010, never considered such a measure.”

     Should be good for gold as it's easier to hide from the tax-man than cash. 

    I agree ZZ – Land of Confusion but Same as it Ever Was.  

  217. phil

    Actually, it occurs to me, watching that Genesis video, that WE are now the people in charge and we're not really doing any better of a job than the idiots were when we were in college.  Why is that?  Because the same assholes who ran for Class President and Student Body back then are now the people in charge and the assholes who are now running for those positions in my daughter's school will also one day be in charge.  We need to stop them now – not wait until they grow up and get in charge!  

    Seriously, it's our whole concept of having this political class that's messing things up.  Politicians should be randomly selected, like juries (in theory) and you should be drafted from your regular life for 4 years and then, of those Senators and Representatives, we could pick a President for the next 4 years and that's it.  That eliminates campaigning and they can't possibly do worse than the goon squad we have now.  The only real problem would be the lack of committee expertise, which, as Carl Levin just demonstrated, does have some merit but, then again, just give him a TV show instead and let the citizens vote after he grills people. 

  218. stjeanluc

    Felix on that Cyprus deal:

    http://blogs.reuters.com/felix-salmon/2013/03/16/the-cyprus-precedent/

     

    This is more by accident than by design. As Joseph Cotterill explains, Europe dragged its feet on Cyprus for so long that it effectively missed the deadline for doing a bond restructuring. It takes time to put that kind of a deal together, and there simply isn’t enough time between now and Cyprus’s next big coupon payment to do that. As a result, the EU found itself with a massively reduced menu of options: either fund the bailout itself, in full — an option which the Germans were adamant would never happen — or force a haircut on Cyprus’s depositors. Given the balance of power in the Eurozone, it comes as no surprise that in this battle, Germany won and Cyprus lost.

    They won dirty, too: by forcing a tough all-night negotiating session in which Anastasiades was given what you might call an offer he couldn’t refuse. Either confiscate deposits wholesale, or see those deposits rendered even more worthless when the ECB cuts off its funding to Cypriot banks, a decision which would — through devaluation and insolvency — lead to depositors losing as much as 60% of their money.

    The big winner here is the ECB, which has extended a lot of credit to dubiously-solvent Cypriot banks and which is taking no losses at all. And although they might wake up bruised, the big Russian depositors are probably winners too, given that they risked losing everything and will end up losing just 10%. Finally, of course, there are all the hedge funds who have been betting that the Cypriot government won’t default: they’re all popping Champagne right now.

    The big loser are working-class Cypriots, whose elected government has proved powerless in the face of decisions driven by Germany, and who are now edging towards fury. The Eurozone has always had a democratic deficit: monetary union was imposed by the elite on unthankful and unwilling citizens. Now the citizens are revolting: just look at Beppe Grillo. Across the continent, they’ve lost their democratic right to determine their own fate at the ballot box, and instead they’re being instructed what to do by Germans. Now, in Cyprus, they’re simply and directly losing their money.

    Someone with €8,000 of life savings in the bank can ill afford to lose an arbitrary €540, but that’s exactly what is going to happen. The Cypriot parliament is probably not going to revolt this weekend, but any politician who votes for this bill is going to have a very, very hard time getting re-elected. This decision is important not only because of the precedent it sets with regard to bank depositors, but also because of the way in which it points up just how powerless all the Mediterranean countries (plus Ireland) have become. More than ever before, it’s Germany’s Europe. That’s bad for Cyprus — and it’s not even particularly good for Germany.

  219. dclark41

    Phil
    NOW YOU ARE TALKING! IT'S THE CURRENT TWO PARTY SYSTEM THAT PROVIDES US THIS MESS AND THE FECKLESS LEADERS YEAR OVER YEAR TO DO THEIR BIDDING NOT OURS!  I LIKE YOUR THOUGHTS ON RANDOMLY SELECTING OUR CANDIDATES BASED ON LIFE-ACHIEVMENT NOT SOME BULLSH!T SOMEONE ELSE MAKES UP FOR YOU TO SAY.  YOU WOULD SERVE YOUR COUNTRY, A REQUIREMENT NO ONE SHOULD OBJECT TO DOING. IN ADDITION, THEIR WOULDN'T BE ANY GREAT INCENTIVE TO HANG AROUND FOREVER!  

  220. dawnr

    Very funny Phil but 'you don't scare me' -ha.  I take the baton willingly-could not survive and succeed working with the BSD's by being a wallflower or shrinking violet! I can hold my own even when traders are screaming in my face ;-0
    Trading/gambling…I have different opinion on this one as I trade for a living full time…

    Zabo-GG love it! I know Phil a fan of ABX but for me, I have to go with what I am familiar with fundamentally and what the charts tell me…also over last 3 months GG has performed better than ABX (GG down around 12% ABX around 16% last time I looked)--inflation will float all gold boats in the end.  Just a matter of when.
    Cyprus-Marc Chandler says no big deal (in so many words) others say watch out.  Vote just got delayed until Monday morning…Wondering what this means to the Dollar AND at the same time on the Euro next week?  Phil, would love your views on this.
    So when is someone gonna play some Floyd around here!?!?

  221. dawnr

    Phil-I am thinking about a SLV trade I would love your opinion on…I am eyeing $26 or even SLV goes for its last years dip in the 22 area.  It has had a hard time breaking thru $30…
    My idea is sell 2 2015 puts at $25 or so and buying 1 call at $31.  I need to look at the premiums but the idea is the puts pay for the call--worst case I get assigned, best case I ride the breakout, neutral case SLV stays in a range and both expire worthless.  I am gonna wait for SLV to retrace some before I execute.

  222. dawnr

    Floyd favorite--http://www.youtube.com/watch?v=AYi6aVSLpQE
    AAPL-'…We're just two lost souls swimming in a fish bowl, year after year
    Running over the same old ground…'
     
    ok enough of me for today…

  223. rj_jarboe

    dawnr
    Good call on Floyd, but this is still my favorite. If you don't have the time, just fast forward to 4:30 on the clip and let her rip…

  224. Pharmboy

    Well, if they keep 'edukating' the poopulous within the schools we have….then those in Congrass will surely do the rite thing, no?

  225. Pharmboy

    4 U Dawn.

  226. rj_jarboe

    Pharm/education
    Since you are from Kansas, you would be ashamed of what the Republican Gov. is doing to education here.

  227. zeroxzero

    "Same as it ever was" — The Cyprus bank depositor haircut is not at all likely to be generalized in Europe, I'm told.  The Cyprus banks took Russian deposits and bought Greek bonds [nice]. The money went away, and the EU is not about to bail out Russian speculators, so the plan is to tax the deposits in an amount that only amounts to a year or two of interest on the bonds.  No harm, no foul, no European collapse.  For now.
     
    And, Stj., if you're going to bewail the fate of "working class Cypriots, "whose elected government has proved powerless in the face of decisions driven by Germany," save a few tears for the French, Spanish, Italians, Portuguese and Greeks, There's a lot more of them, and if they are in a materially different situation of Germany, I can't find a useful distinction.  This will end in tears, but perhaps not this week.

  228. dawnr

    Great tunes!
    EUR and USD--the answer to my question may seem obvious but I am not  asking about the obvious knee jerk reaction as obviously there will be a flight to 'quality' if you can even call the USD that (esp with its own march 27 debt deadline near)…then there is the Yen…hmmmm not doing so well with the dollar, what about the swissie…maybe they are the lessor of all evils…! 
    What I am more asking is after this initial reaction, I am thinking the EUR bounces because all the conglomerates begin again to repatriate their Euros from around the world…like they did with the Greece crisis (then stick them under their mattress or hide them in some other country).  Then you have the CB that will prop it all up anyway…I ask as I was actively trading FX at that time and the EUR just WOULD NOT GO DOWN (for long)!  Ponderous
    In the meantime, Monday going to be lots of fun! hoping at least a  little roar from the bears…weeeeeeee

  229. stjeanluc

    Cyprus / Zero – I highly doubt that the average voter in Cyprus understood fully all the decisions take by the government over the last 10 years or so… Although I am sure they are upset about the price of the education now!

    Plenty of people in tears in Greece, Portugal and Spain already. And not necessarily the cheaters!

  230. stjeanluc

    Just so predictable – dollar up big time, S&P futures down 12 points and Dow futures down 100 points! Tomorrow morning could be interesting in Europe.

  231. jfawcett

    Trading Setup / Just added a 3rd 27" Samsung TV to my new PC I installed last week.  This on is connected HDMI to the 1080P Monitor that I picked up for $250.00 (COSTCO).  That has 9 charts for get into the flow of /CL trading, Middle has the internet up (PSW) and the Right one runs another instance of TOS.

  232. jfawcett

    CAT Entry / Phil – I have had an alert at 87.50 for a while.  Waiting Patiently.   So, waiting on your call when you think it is right for the income portfolio.  I must be learning something!

  233. yodi

    /CL WAS DOWN TO 92.70 CREEPING UP SLITLY  sorry I can not sell my USO yet. What does Phil's nose say??

  234. silentstorm44

    Re: Cyprus-  The PERCEPTION  might be that the Cyprus banks "haircut" could spread to Greece or Spain. Will this also cause instability in Russia  ?

  235. yodi

    Cyprus. The little explosion is chasing all the sheep out of the temple! /ES down 17 pts. Good start for a Monday morning. Just sit back and pick up the pieces after a while.

  236. zeroxzero

    Cyprus:  http://www.crumbproducts.com/files/natch_giclee_lg.jpg
     
    I'd be a buyer.

  237. jabobeast

    Phil—any thoughts on the futures getting clubbed now?

  238. jfawcett

    CAT – Forgot to mention, last Wednesday (I was away from the market for a few days) I placed a GTC limit order on the JAN15 87.50 Short Puts for 14.30 (Current Bid/Ask 13.85/14.25).  Big spread, may fill if the market pulls back.  Calculates to a 87.40 theo price.

  239. zeroxzero

    http://www.thesundaytimes.co.uk/sto/news/world_news/Middle_East/article1230733.ece
     
    A very good bet for the next president of Iran.  He has a hardline background [head of the Basij, a senior Air Force, then Army, commander, was selected by Supreme Leader Khamenei to head the political police force that put down the Green Revolution [without fatalities], was a presidential candidate in 2005 [won by Ahmadi-nejad], was then elected mayor of Tehran in 2005 and has since presided over the just-finished USD $1 Billion Niyesh Tunnel through Tehran [to cut congestion], He advocated dialogue with Obama [while presidential candidate] in 2008.  I think a sea change in Iran's international relations is a decent bet.  It's a very young country, with more than 1/2 the population under 35 and literacy over 80% in 2007, and a very old country politically, and culturally, one of the world's oldest continuous major civilizations, with historical and urban settlements dating back to 4000 BC. The Medes first unified Iran as a nation and empire in 625 BC.

    There are @ 115 M Russians of Slavic origin and 28 M non-Slavic Russians, while there are 75 M Iranians, 16 M Kazakhs, 28M Uzbeks, 5M Turkmen, 9.5M Persian-speaking Azeris, 45 M Ukrainians, 9 Million Georgians on Russian borders, so a Iran that is no longer politically isolated will shake things up substantially in that region in terms of potential economic development.  I wouldn't guess at the political effects, other than to note that Russia still resembles Burkina Faso [Upper Volta] with oil and missiles, which I say having spent time there.  Their principal export after oil appears to be the foreign exchange they earn from selling the stuff.  Too bad about the Cypriot banks, then.

  240. 1020

    Cyprus – To many, what may have seemed improbable can now be considered possible….very….
     
    This could get ugly.

  241. BertII

    the TOS update shut down 2 of my computer tonight so I missed the big gap down on everything took 2 reboots to get the update to work and my TOS is finally working at 12:08 monday morning

  242. bai2r

    Jackie / Phil – chip off the old block, but with improved hardware and software 8).
    Happy ??birthday!

  243. bai2r

    oops — my chinese characters did not show up correctly.    I meant to say,  Happy 50th birthday!

  244. lionel

    StJeanLuc/
    Cyprus is just witholding 2 years of interest payments on its savings accounts (5% fixed term deposit in Euro!!)
    Call it a wealth tax or a raid on private savings account but the money has to come from somewhere.
    Actually it will hurt Cyprus economy less to tax private bank savings than income from work or to reduce social welfare payments.
    If Cyprus exempt small savers from the tax, then I will say that it was the fairest European bailout so far where the wealthy tax payers had to bail out the nation.
    If only Greece could have done the same…

  245. phil

    Good morning!

    Ended up going away for the day on Sunday but look at all this excitement over Cyprus.  What idiocy!

    You guys do realize that 20% of your own bank deposits were "confiscated" since 2008, right?  What difference does it make if they take the cash or if they just devalue the currency the cash is based on?  The whole problem with the EU is they CAN'T devalue Cyprus's currency so they MUST confiscate the currency to pay debts.  There's only 3 possible ways to pay back debt – A) Pay it back B) Pay it back with Devalued Currency C) Default.  If you want to avoid C, you must choose either A or B and the Euro makes B impossible for Member States and that leaves A and then you have austerity, higher taxes or confiscation of wealth (and France has a wealth tax now).  

    For God's sake people (of the World) grow up and stop whining!  

    Anyway, the Futures are down about 1% but our Dollar is up 1%, back at 83 and could go higher over that line.  That's not stopping gold from flying over $1,600 again ($1,605 so far) and TLT should be up nicely today and, of course, we got more aggressively bearish on Friday so we played this perfectly (oil $92.50 so far) and I doubt the US indexes suffer too much damage from this as it's just more evidence, in the end, that US equities are the best place to put your money this year.  

    I'm not even sure oil will fail $92.50, so we'll keep an eye on that line – we'll certainly look forward to taking maximum advantage of the panic of the sheeple and, in fact, we can go back long on the Nas Futures over the 2,750 line (/NQ) as we're already winning on SQQQ if the market opens this low so no harm in playing for the bounce in the Futures (with tight stops – especially if the Dollar stays over 83).  

    The Euro is right on the $1.29 line and that should hold (the whole point of this deal is to keep the Euro strong) and the Pound is testing $1.50, also should hold).  Yen at 94.69 to the Dollar  but the Nikkei fell 1.5% to 12,250 on /NKD (our short from Friday at 12,500 is good for $1,250 per contract) and now that's a good long as well, even if it's over 12,300 – using that line as a hard stop.  

    Silver not as excited at gold yet at $28.87 and, if we weren't already very long on gold I'd like that too for at least a re-test of $29.  Copper plunged to $3.44 and that should also reverse there (/HG) and Nat gas (/NG) oddly, is UP to $3.92 but gasoline, as we expected is down to $3.115 after Friday's fakery.  

    We'll see how things go into the open but this is a silly over-reaction once again by Conservative brains who can't see past the concept of confiscation of wealth to see that this is nothing that every other country hasn't done – one way or the other.  

  246. phil

    Cyprus/StJ – After reading hundreds of opinions this weekend, my own opinion is that this is all very, very silly (as noted above).  Really won't even be worth wasting time on and I'm glad I did miss all this nonsense yesterday as I'm sure the idiocy in the Financial media must have been turned up to 11.  

    Oh wait, I didn't miss anything – the idiocy continues as we speak.  

    Never have so many thought so little before speaking anyway…

    Democracy/DC – Well, I wish but my real solution is to get out of this country down the road – I just don't see it saving itself and I'm way too busy to start a revolution.  

    Holding your own/Dawn – I have no doubt.  I hope you have Pulse by Floyd – if you have a good stereo, you'll really appreciate the way that live album can bring out the best of it.  A good one for turning up to 11…

    And you run and you run 

    To catch up with the sun 

    But it's sinking 

    Racing around 

    To come up behind you again 

    The sun is the same 

    In a relative way 

    But you're older 

    Shorter of breath 

    And one day closer to death 

    SLV/Dawn – Not as exciting as gold as it's generally a tag-along trade but your logic is good on the floor.  If you want to remind me later today, I'd be happy to look over good combos but we'll have to see where it settles.  

    Speaking of perfect live music – just found a nice HD of Pete Townshend's Deep End, which I only saw once at the Ziegfeld (the best place to see concert movies since I was a kid).  Still one of my all-time favorites – of course I caught the tour but it's so rare they do a nice job of capturing a band properly on film.  2nd song on this film was our wedding song (A Little is Enough) but we did our first dance to "Your Song" as neither one of us has the moves to make Townsend work as dance music.

    Here's the Pulse HD for Comfortably Numb, RJ.  I have to admit, this song really makes me want to get a hit…

    Nice job Jfaw – soon you'll realize you just "need" one more screen with a new processor and then you'll see that that makes your workspace unbalanced so you'll "need" just one more….

    CAT/JFaw – I'd just one of those that we hope comes down but, if not, oh well.  

    USO/Yodi – They still have that contract pressure but only 76,000 still open so they ditched a ton on Friday (35,000 contracts) but still need to clear at least 20,000 a day for the next 3 days but certainly not a crisis at the NYMEX, where they trade about 200,000 front-month contracts on a typical day.  So, whatever push down we get below $92.50 – we take the money and run.  As it stands, we're set up for another sell-off in either April but not as likely in May, because of the looming Holiday weekend, which kicks off Summer Driving Season at the end of that month.  

    Very good 8:45 call Yodi! 

    And ZZ at 9:14.  And a nice rundown on Iran.  Better info there in 2 paragraphs than you get from a year of watching Fox! 

    TOS/Bert – I always ignore their updates for as long as I can, they are often problematic when first released – maybe just because of download traffic.  

    LOL Bai, yes, she's very scary.  Jackie was telling my Mom about her Pi contest on the phone and still rambled off 50 digits like it was the Pledge of Allegiance – way out of my league in memory.  

    Interest/Lionel – How can they "withhold" 2 years of interest?  They can't force people to leave money in at 0%, can they? Or are they calling the 10% confiscation a withholding?  

  247. phil

    2,763 on the Nas already so, of course, 2,760 is the stop of the moment.  Oil back to $92.95 already and Dollar calming down at 82.77.  

    Nikkei 12,345 (just rejected at 12,350) – Love that Futures contract!  

    Mercedes-Benz GLK350

    Deal of the day (and it's nationally advertised) -2013 Mercedes GLK 350 for $350 a month for 30 months ($1,999 down and only 7,500 miles a year included, but still…).  

    Jackie says buy DIS ($57.58) by the way, we were debating it this weekend and she says this is going to be a huge Easter week for them because "everyone" is going (we're going too – but on the Disney cruise) and she likes that they bought Star Wars – even though it's "old fashioned" it's still got a sort of retro-cool thing for the kids.  Full disclosure:  Jackie is a shareholder of DIS and got her first 100 shares when she was born in 2002 for about $18.50 and last added positions at $30 so this is a very bullish call from a lifetime shareholder.  8)  

    Let's see what's going on in the World:

    2:57 AM Asian shares fall sharply following news of the raid on bank deposits in Cyprus as part of the island's bailout. The planned move also sends the euro and oil lower, while the yen regains its safe-haven status. Japan -2.7%, Hong Kong -2.4%, China -1.5%, India -0.9%. Euro -1.3% vs the dollar, -1.3% vs the pound, -2.2% vs the yen and-0.6% vs the Swiss franc. The yen is also +0.9% vs the dollar. WTI-1.2%, gold +0.3%.

    4:53 AM As in Asia, shares in Europe slump on the proposed raid on bank deposits in Cyprus, while bond yields in Spain and Italy rise sharply. EU Stoxx 50 -1.7%, London -1%, Paris -1.3%, Frankfurt-1.3%, Milan -2.45%, Madrid -2.3%. Italy's 10-year yields +0.1 bps at 4.71%, Spain's +0.13 bps at 5.06%.

    European bank shares slide following news of the levy on deposits in Cyprus, which has prompted concerns of a run on banks elsewhere in the eurozone. The Stoxx Europe 600 Banks index -2.1%. In Madrid, BBVA -3.7%; in Milan, Banca Popolare di Milano -3.9%, Intesa Sanpaolo -3.3%, Mediobanca -4.6%, Banca Monte dei Paschi di Siena -3.8%. In Paris, SocGen -4.2%, Credit Agricole -2.9%, BNP Paribas -3.3%. In Frankfurt, Deutsche Bank (DB-2.8%.

    Keep in mind that just 500,000 Americans can buy Cyprus with a year's average spending ($25Bn Cyprus GDP):  The Labor Department says that 92% of households were urban and the rest rural in 2011 – the latest year for which data is available. The metropolitan group earned 32% more money and spent 18% more with outlays of $50,348 on average. Urban spending took the lead in most categories – housing was the biggest disparity – while rural households spent more on healthcare, transportation, entertainment, and, of course, pets.

    Barron's: There Are All Kinds Of Signs That The Market Is In Trouble, And Mila Kunis Is Just One. 

    The Treasury is investigating whether investors are accumulating government bonds in order to boost prices after $78.87B worth of 10-year notes used as collateral in repo market weren't returned to the loan counter-party on Monday. Over the week, the cost of borrowing Treasurys for use in the repo market or for short sales jumped more than three-fold, only easing after a government auction.

    Treasury Scrutinizes a Shortage of NotesThe U.S. Treasury Department is probing whether traders in the $11 trillion Treasury market hoarded securities to drive up the price of 10-year notes, one of the world's most-used benchmarks. Regulators are concerned that the market function smoothly and without abnormal price activity, said people familiar with the inquiry. Anyone holding $2 billion or more of 10-year notes that mature February 15, 2023 was asked by the Treasury Friday to contact the Federal Reserve Bank of New York by March 21 to address their large positions, according to a statement. Holding large positions in Treasury bonds isn't illegal.

    'Wash Trades' ScrutinizedIssue Is Whether High-Speed Firms Illegally Buy, Sell Futures in Same Deals. U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions, according to people familiar with the probes. Such transactions, known as wash trades, are banned by U.S. law because they can feed false information into the market and be used to manipulate prices. Intentionally taking both sides of a trade can minimize financial risk for the trading firm while potentially creating a false impression of higher volume in the market.

    Most Hedge Funds Underperforming The S&P 500 For Fifth Year In A Row – Full YTD Performance. (table)

    Lennar (LEN) CEO Stuart Miller is bullish on the housing market. "We are clearly in the midst of a recovery," he says. "Prices are moving up not because costs are moving up so much, but because demand is getting so strong." Just look at Nevada, one of the nation's hardest hit by the housing collapse. Despite a 334% surge in new foreclosures, builders are ramping up production. Housing starts in Las Vegas are up nearly 100% from a year ago. Miller says he wouldn't be surprised to housing starts get to 1.7M, even 2M nationwide at some point when the recovery really kicks in. 

    Homebuilder stocks are moving away from trading on the macro news and beginning to trade more on company-specific fundamentals, according to Wells Fargo. While most homebuilder shares have outperformed the S&P 500 over the last twelve months, different patterns are starting to emerge. Performance within the sector is beginning to fragment. Over the last week for example, half of the builders the firm follows outperformed while half underperformed. Similarly over the last month, only 5 of the 12 outperformed.

    Why America's 20-something's aren't destined to be poor, but its 30-somethings might be: "Today’s 30-somethings are climbing out of a deep enough hole that they may never become as wealthy as the boomers unless home values rebound dramatically, and even then, many will only be getting back to even," The Atlantic's Jordan Weissmann writes. (also) 

    Consumer wrapup: An improved jobs situation and a break upward in the value of houses seems to be trumping higher payroll taxes as consumers continue to spend more than some of the more dire forecasts for the first half of 2012 foreshadowed. By sector, Staples (XLP), Discretionary (XLY), and Retail (XRT) are all double-digit gainers for the year, while defensive-oriented plays (PGCLX,CLREVGIS) have been busy tracking higher. A couple of retail powerhouses – Wal-Mart (WMT) and TJX Companies (TJX) – haven't joined the 2013 frivolity just yet and the department store group (M,SKSDDSJWNKSSJCP) has lagged.

    15 stocks that outperformed the S&P 500 in eight of the last 11 pullbacks since 2009: CAGIBMDISGPCMMMFISVPAYX,PPGSYYSIALUNPUTXPXL, and XRAY.

    Morgan Stanley selects 20 stocks for the long term, based on "competitive advantages, business model, pricing power, cost efficiency and growth": AMZNAMTBLKCPNCPCVXCOSTEL,GILDHONJPMLTD

    MONNWSAPMRPMSBUXSYMCTMO,WMB.

    U.K. Finance Minister George Osborne is set to acknowledge in the budget on Wednesday that the government's debt will only start falling in 2017-18 at the latest rather than in the 2015-16 timeframe previously given. The new forecast is also well after the original plan of 2015. Still, Osborne intends to use any available cash to support growth and ease the burden on households.

    Eurozone finmins have agreed to give Ireland and Portugalmore time to repay their bailouts as a reward for their good behavior vis-a-vis austerity. The decision comes after Ireland enjoyed a stunningly successful return to the markets last week with a sale of 10-year debt.

    German Commerzbank Suggests Wealth Tax In Italy Next.

    "The high unemployment in Spain, Italy and France is socially explosive," S&P's German head Torsten Hinrichs tells theNeue Osnabrücker Zeitung newspaper. While the Spanish and Portuguese have proven they were willing to put up with austerity, "this cannot continue forever." In Italy, the "new government may not be strong enough for the still necessary reforms to strengthen growth."

    Cyprus' government is reportedly proposing to skew the raid on bank deposits towards larger accounts, with one idea being to tax savings of under €100,000 at 3% instead of 6.7%, as initially planned. Deposits of over €100,000 would be levied at 12.5% instead of 9.9%. In return, savers would receive shares in commercial banks – whose possible collapse precipitated the need for the bailout – with equity returns guaranteed by expected income from natural gas discoveries.

    Cyprus's parliament is due to convene this afternoon to debate an astonishing eurozone demand that it tax all bank deposits at up to 10% in return for a €10B bailout. While approval is not guaranteed, Cypriots rushed to take as much money as allowed out of ATMs. And although EU Commissioner Olli Rehn ruled out a deposit raid in other eurozone countries, menacingly for savers, eurogroup chief Jeroen Dijsselbloem would not. "We are in a new world," says an economist. 

    Can't argue with a good turn of a phrase:  "This is a nuclear war on savings and wealth," writes Jefferies' David Zervos of the Cyprus bailout. "This is a policy move you expect from a dictatorial regime … not in an EU member state. If the EU governments can clandestinely expropriate 7-10% of their (citizens' savings) after the close of business on Friday night, what else are they capable of doing … Why keep your money at a Spanish or Italian bank when you can jump to Germany or France … Why even keep money in the EU banking system at all."

    17 Signs Of A Full-Blown Economic Depression Raging In Southern Europe.

  248. phil


    New Chinese Premier Li Keqiang says the economy must continue to 
    grow at 7.5% a year until 2020 and reiterates the country'scommitment to reform, including shaking up "vested interests." Li offers no new details but Bank of America economist Ting Lu says  Li's tone should please investors.

    China has kept on Zhou Xiaochuan as head of the country's central bank, an indication that the country will continue the opening up of the financial sector. The government has also filled out its economic team with what former World Bank official Yukon Huang calls a mixture of "activist reformers" and more cautious appointments.

    Told you so!  Chinese Home Prices Rose in 66 of 70 Cities Surveyed in February. (graph)

    Australia faces a "massive hit to government revenues" that "will inevitably continue to impact beyond the current year," says Treasurer Wayne Swan. The deficit increased a further A$4.6B ($4.8B) in the first four weeks of 2013 – above Swan's February estimate of A$2B – taking the total shortfall for the first seven months of the fiscal year to A$26.8B.

    HSBC (HBC) could reportedly axe up to 5,000 or more jobs as part of the desire of CEO Stuart Gulliver to lower expenses by another $1B in 2013. The cuts would add to the sharp staff and cost reductions the bank has already implemented in the past couple of years, and are set to be unveiled at an investor day in May. While the bank has slashed its outgoings, it's still far away from meeting its cost-income ratio targets.

    BP asks a federal judge to temporarily halt its ~$8.5B settlement with plaintiffs over the 2010 Gulf of Mexico spill, saying the claims administrator's decisions could give the claimants "windfalls" and that the company could be "irreparably harmed." A judge ruledMarch 5 that BP must keep paying some compensation in larger amounts and to more parties than the company had anticipated.

    Transocean (RIG -1%) is cut to Hold from Buy with a $54 price target (from $57) at Jefferies, which says the provider of offshore contract drilling services is at a crossroads after a structural recovery. RIG can accept slower growth and return cash aggressively, but total longer term returns would benefit from stronger growth; the firm thinks M&A is the best way to accelerate that growth.

    A New California 'Black Gold Rush' Could Create Nearly 3 Million Jobs.

    North Dakota's oil rush lures Chicago-area residentsFracking industry feeds explosion in population, hope for steady work and big paydays.

    Iraq to Invest $130 Billion in Upstream Oil Sector Over 5 YearsIraq plans to spend $130 billion on the country’s upstream sector over the next five years to help raise production capacity to 9 million barrels a day, Oil Minister Abdul Kareem al-Luaibi said. The country will allocate $18 billion to raise natural gas output and $25 billion to expand refinery capacity, al-Luaibi said at a conference in Basrah today. Iraq forecasts $600 billion in revenue from the oil expansion, he said.

    Oil Bulls Bank on Fed to Fuel Rally: Survey.

    Coal companies continue to flounder, and Cowen analysts think the met coal sector may not see improvement with no near-term positive catalysts on the horizon. Australia's rainy season has left met coal production relatively unscathed, and China's high inventories and weakening steel prices could pressure pricing. Among coals, the firm favors Walter Energy (WLT) for the long term.

    Pres. Obama calls for an energy fund that would spend $2B over 10 years to focus on research on green fuel sources for vehicles. The research would focus on a range of technologies and non-oil fuels such as biofuels and natural gas, and would be funded mostly from royalties the government gets from offshore drilling.

    Ballard Power Systems (BLDP +4.5%) rallies again today on continued momentum from Tuesday's news that it had sold a 175-kilowatt ClearGen fuel cell system to Azure Hydrogen Energy Science and Technology Corporation of Beijing, China, and Wednesday's announcement of the sale of fuel cell modules to power a fleet of 10 clean energy buses in Aberdeen, Scotland.

    Bullish Bets Jump Most Since July as Gold Rebounds: Commodities. Hedge funds and other large speculators raised net-long positions across 18 U.S. futures and options in the week ended March 12 by 30 percent to 528,680 contracts, the biggest gain since July and up from a four-year low the previous week, U.S. Commodity Futures Trading Commission data show. Money managers raised bullish bets on corn by 39 percent, cotton holdings were the highest since 2010, and gold wagers increased 9 percent. 

    Industrial Metals Fall on Cyprus; Copper Touches 4-Month Low. Copper declined for a second day to a four-month low as an unprecedented levy on bank deposits in Cyprus threatens to plunge Europe back into crisis, curbing demand for metals. Aluminum, nickel, tin, lead and zinc dropped. Copper for delivery in three months slumped as much as 2.7 percent to $7,545.75 a metric ton, the lowest level since Nov. 9, on the London Metal Exchange and traded at $7,617 by 10:39 a.m. in Tokyo.

    Rubber Slumps on Turmoil in Europe, High China Stockpiles. Rubber declined amid high stockpiles in China and as Europe braced for renewed turmoil over bank deposits in Cyprus, which strengthened the Japanese currency and reduced investor appetite for yen-based contracts. The contract for delivery in August on the Tokyo Commodity Exchange retreated as much as 3.5 percent to 272.9 yen a kilogram ($2,879 a metric ton), before trading at 273.9 at 10:47 a.m. Futures fell 5.1 percent last week and lost 9.5 percent this year.

    Rebar Trades Near Lowest Level in Three Months on Supply Concern. Steel reinforcement-bar futures traded near the lowest level in three months as Chinese inventory is piling up while mills continue to increase output.Rebar for delivery in October on the Shanghai Futures Exchange fell as much as 2 percent to 3,784 yuan ($609) a metric ton and was at 3,849 at 10:15 a.m. local time.

    Molycorp's (MCPdeal to distribute its cerium-based water treatment product to municipal and industrial wastewater treatment plants may have eased some investor concerns about MCP's cerium capacity, Goldman Sachs says (also). Jefferies starts coverage at Neutral but could turn more positive if customer trials on the product end well and upon a better understanding of the deal's margin profile.

     In an unusual twist, Boeing (BA) is stepping up criticism of the NTSB's characterization of battery-fire dangers aboard the 787. Last month NTSB Chairman Deborah Hersman said the incidents with the 787's lithium-ion batteries posed "unprecedented" safety concerns, ending in a so-called thermal runaway. But for the second day in a row, a high-ranking BA executive disputed the NTSB's description, saying it didn't fit the aircraft builder's view or industry-wide definitions of a thermal runaway, which entails "extensive heat and an uncontrolled fire of the battery that basically consumes the entire battery." 

    Constellation Brands (STZ+3.1% AH as AB InBev (BUD), Grupo Modelo and the Justice Department ask a federal court to allow more time for settlement talks that could resolve a government lawsuit challenging the companies' planned merger. After DoJ sued to stop the deal, BUD agreed to sell a Modelo brewery in Mexico to STZ for $2.9B and grant STZ perpetual rights for Corona and other Modelo brands in the U.S.

    3D Systems' (DDD -4.9%) consumer-focused Cube 3D printers are expected to carry a "corporate average gross margin," Gabelli's Hendi Susanto reports after talking with CFO Damon Gregoire. Consumer price points of $1K and eventually $500 are targeted, even as 3D tries to avoid a razor and blades business model. Management has a long-term goal of getting 75-80% of revenue from recurring streams (materials/services), and is interested in making additional acquisitions to expand the breadth of its platform. (earlier) 

     NPD's latest round of bleak video game sales data is leading Electronic Arts (EA -2.4%), Activision (ATVI -2.6%), and Take-Two (TTWO -1.6%) to close lower. A 27% Y/Y drop in U.S. physical retail game sales was worse than the normalized 19% dropseen in January, as demand remains tepid ahead of this fall's PlayStation (SNE) and Xbox (MSFT) refreshes. Console sales fell 36%, worse than January's normalized 17%. The Xbox was the best-selling console for the 19th straight month, and the PlayStation Vita and Nintendo's (NTDOY.PK) Wii U saw strong M/M growth off small bases.

    More on Electronic Arts: The SimCity launch has gone from bad to worse. While EA offers free game downloads to soothe customers angry about connectivity problems, users are increasingly upset about gameplay issues that lead to huge traffic jams and surreal character movements, among other things. EA says it will fix the issues. On the other hand, mobile game Real Racing 3 is proving a hit, in spite of reviewer complaints about EA's shift to a free-to-play model. The game has snagged the top spot in App Store rankings in 90 countries (it's #10 in the U.S.).

    Panasonic (PC) says it is considering what to do with its TV operations following a report that the company could withdraw from the plasma market as part of downsizing of the whole business over three years. The news follows Panasonic's acknowledgement at the weekend that it's mulling "various options" for its healthchare unit. A report had said the company could sell the operations.

    Panasonic (PC) is considering "various options" for its healthcare unit, a spokeswoman says, but she declines to comment on a report that the company could sell the business as part of its strategy of offloading non-core assets. KKR (KKR) and other private-equity funds could be interested in the operations, for which Panasonic wants up to ¥100B ($1.04B).

    This is what's spooking AMZN:  Google (GOOGacquires Talaria, a developer of Web application server software said to offer superior performance and support for more programming languages than alternatives. Talaria will be used by Google's cloud infrastructure unit as it tries to gain ground on dominant Amazon Web Services (AMZN) following a 2012 launch. News of the purchase comes shortly after startup Scalr unveiled benchmarks that showed Google's solutions often have a big performance edge over Amazon's, while admitting (much like Netflix) Amazon's offerings are more comprehensive.

    "A retailer (Amazon), an entertainment company (Netflix), an advertiser (Google), a résumé site (LinkedIn), and an address book (Facebook) have ended up shaping the future of [tech] infrastructure," writes a bemused Ashlee Vance. Unsatisfied with the solutions offered by the likes of IBMHPQEMCNTAP, and ORCL, Web giants have used home-grown hardware and open-source software projects to fulfill their needs. Their ideas and technology are already upending the server industry … and their impact stands to grow as more companies buy in.

  249. phil


    "Smartphones and tablets based on Microsoft's (
    MSFT) Windows operating system aren't selling very well … we're also seeing lackluster demand for Windows-based products," says Samsung Mobile chief JK Shin. While one could argue Samsung's commitment to Android and Tizen colors Shin's views, he's far from alone (III) in expressing such opinions. The remarks come in a week where IDC argued Microsoft is better off ditching ARM-based Windows RT and focusing on x86-based Windows 8. (Surface sales) (previous)

    Following a string of compelling Android phone launches (I,IIIII), much of the tech press is underwhelmed by Samsung's (SSNLF.PK) Galaxy S IV. Gizmodo, deeming the HTC One superior: "There's just no wow-factor here." BGR, not a fan of the plastic body: "Samsung’s latest smartphone feels as if it can be snapped in half."VentureBeat, viewing much of the S IV's software as useless and/or inferior to alternatives, predicts the phone "will mark the beginning of the end of Samsung’s smartphone dominance." Is that a fair assessment, or are Samsung's marketing and R&D skills being underestimated? (more)

    A Chinese site has already torn down a local version of Samsung's Galaxy S IV. Discovered parts include a Qualcomm (QCOM) 3G baseband chip, an Intel (INTC) baseband chip and RF transceiver, TriQuint (TQNT) and Skyworks (SWKS) power amplifiers, Synaptics (SYNA) and Atmel (ATML) controllers, and a Broadcom (BRCM) GPS receiver. A Qualcomm baseband/app processor is expected in the U.S. version. RBC thinks thinks 70M S IV units could be sold this year, and sees Broadcom (combo chip with NFC and high-speed Wi-Fi to go with the GPS chip) and Maxim (MXIM - power management and infrared chips) benefiting.

    China Central Television (CCTV) has accused Apple (AAPL) and Volkswagen of giving consumers a bad deal. It's worth taking notice, as it was CCTV allegations about chicken quality at KFC that led to a plunge in sales. 

    Apple (AAPL), America Movil (AMX) unit Telcel and Telefonica (TEF) might have to start paying damages to Mexican technology services company Ifone after the country's Supreme Courtupheld a ruling that firm owns the rights to the Ifone brand name.

     It's a good time to buy 2015 Apple (AAPL) LEAPs at a $500 strike price, thinks Bill Miller, who went on CNBC to make a bull case for the fruit company. Miller observes Apple now trades at a lower forward EV/EBITDA multiple than Safeway, Kroger, and H-P, and expects the company to "do something fairly dramatic on capital allocation." Others have also argued in favor of buying Apple LEAPs to gain leverage. The Jan. '15 $500 LEAPs currently have an ask of $45 (they rose sharply following Miller's recommendation).


  250. phil

    Now the panic selling resumes so done with Futures fun for now (although you could flip bearish off the gains we've made with upside stops now).  

  251. phil

    Oil perfect off $93, as usual.  Back to $92.50 already and, of course, maybe a bounce there (/CL) but bad for them if they fail it (and great for USO, SCO).  

    Dollar 82.87 as we'll see what holds on Euro ($1.2938) and Pound ($1.5124).  Niikei topped out at 12,375 (now 12,355) so watch if 12,350 holds as well.  

  252. jfawcett

    Funny Phil…  Unbalanced, pretty soon I will be in the middle of the room not knowing which monitor to look at. :)

  253. phil

    I prefer the swivel system to having 6 monitors in front of me (3 up, 3 down), which is what Dereck has at Opesbridge.  For me, I turn and concentrate on one or the other and I'm not distracted by the noise of everything else but I'm old and not as good at multitasking as my kids, who pretty much use laptops or desktops simultaneously with their iPhones AND iPads all at the same time.  That's where Maddie's been excelling, she's great with computers and learning programming wheras Jackie, like me, just wants them to work so we can look stuff up.  

    Man has Barry ruined his blog for me – I liked the old format so much better! 

    6:00 AM Overseas: Japan -2.71%. Hong Kong -2.00%. China-1.68%. India -0.69%. London -0.61%. Paris -1.15%. Frankfurt-1.02%

    6:11 AM Stock futures slide, but are off the lows following news of Cyprus' proposal for a one-time tax on bank deposits as part of a Troika bailout. Dow -0.5%, S&P -0.8%, Nasdaq -0.95%.

    7:00 AM On the hour: S&P -0.96%. 10-yr +0.37%. Euro -0.98% vs. dollar. Crude -1.13% to $92.39. Gold +0.56% to $1601.5.

    As stocks rise, so do the number of millionaires (The Washinton Post)

    Cyprus's government is now reportedly considering a tax-free threshold for smaller bank deposits as it attempts to win over legislators for a plan to impose a one-time levy on savings ahead of a parliamentary debate later today. At the moment, the publicized plan is to tax deposits under €100,000 at 6.7% and those above that level at 9.9%.

    "My main Cyprus contagion fear is Italy," tweets Reuters' Hugo Dixon. "It doesn't have a government and it has form grabbing deposits (Amato 0.6% in 1992)." Meanwhile, Vladimir Putin calls the proposed tax on banks savings "unjust, unprofessional and dangerous." Wealthy Russian are due to be severely hit by the levy.

    It’s Becoming Idiotic’ — the Senate’s Riveting Story of the London Whale (Bloomberg

    JPMorgan’s Follies, for All to See (NYT)

    MasterCard (MA) continues to see the number of transactions it processes in Europe soar as more consumers on the continent turn to credit and debit cards. Last year, the company's gross dollar volume improved by 9.3% and execs forecast this year will see a 11% to 14% rise. 

    South Korea lashes out at foreign automakers for allegedly colluded on prices. The accusations follow progress Toyota (TM), BMW (BAMXY.PK), Mercedes-Benz (DDAIF.PK), and Volkswagen (VLKAY.PK) have made in cutting into the market share of domestic automakers after trade agreements between South Korea and the U.S. and E.U.

    Speaking of DIS:  Disney's (DIS) Oz The Great and Powerful put in a solid second weekend at the box office. The film took in $42.2M to bring its ten-day haul to $145M.

    A group of online merchants file a lawsuit against Amazon (AMZN) in Washington over a policy by the company to withhold payments to sellers for more than 90 days. The suit contends Amazon is a "money transmitter" required by state law to disburse funds within ten business days.

     

  254. 8800

    Phil,
    Forgot to remind you, as suggested about the residential lot /homebuilding space re alternatives to JOE, HOV, .. rather late than…

  255. dawnr

    good morning!
     
    phil- 
    with copper taking it on the chin today is it time to do that april(Or may)  fcx put trade again?

  256. yodi

    Phil TZA would it be a good day to close it before the end of the month????

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