by phil - February 20th, 2015 8:18 am
Wheeeee, what a ride!
As you can see from the chart, Greece has been up and down 10% 4 times in 5 days and last week we gave you a Trade Idea for Greece long using the GREK Feb (expires today) $11/12 bull call spread at 0.50 to make 100% in 5 days (today) if GREK finishes over $12.
Unfortunately, GREK had a strong open on Thursday and, by the time people could buy it, the spread was 0.60 so, at $12, the gain will only be 66% but those who played the momentum game during the week had several opportunities to engineer a 0.50 spread as the ETF ran up and down the ladder with each new statement by pretty much anyone in Europe with an opinion.
Our other trade idea from that day, that IYT would fall and the Feb $159 puts at $1.20 would double, however, was off by a mile and IYT tested $165 yesterday before calming down to $163.08 despite the now week-long port strike on the West Coast. I can't explain that one, other than maybe we were too far ahead of the curve. If you want to go for it next month, the premise is still valid (our timing was off) and the March $161 puts are now $2 and a trip back to support at $155 would make them $6 – up 200% would take the edge of this week's loss.
Our CSCO spread we discussed that day is up the 4,000% we expected and our UNG March $13/14 bull call spread is on track for a 100% gain so all is not lost. These are your last free trade ideas for the quarter – so try to enjoy them! If you want more trade ideas, you can join us here like our new Member, Verreaul recently did (and thanks for the kind words!):
I have been reading the "free" PSW for about a year and have always liked Phil's style as it closely resembled the way I like to trade (mostly naked put options). I have been a paid subscriber for about 5 weeks and I have been learning a lot from Phil
by phil - February 19th, 2015 8:30 am
What a great morning we're having!
We were having a discussion in our Live Member Chat Room this morning about why we were staying short-term bearish despite the low-volume rally of the last few days when the market began to spike higher, so I immediately put out a note to our Members saying:
Wow, Futures flying straight up now, about 0.3% the other way now – nice morning swing. /NQ testing 4,400 for a fun short with tight stops and /ES 2,099.50 and /YM 18,030 (no short above 18,000) and /TF 1,230. As long as /TF and either /ES or /NQ are below their lines – I'm for shorting any of those 3.
The Russell hit 1,222 (up $700 per contract) and the S&P hit 2,091 (up $425 per contract) and the Dow paid $250 at 17,950 – so the Egg McMuffins are paid for and we can start our trading day.
Of course that's nothing compared to the Trade Idea we gave you yesterday morning (and these newsletters come to you pre-market, every day by SUBSCRIBING HERE) to short Oil Futures (/CLJ5) at $53.50, which are up $3,000 PER CONTRACT this morning at $50.50. That's not bad for a day's work and it keeps our hourly profit rate well over $500 for the day (we had a good start yesterday morning too).
What gave us a quick round-trip this morning was, of coruse, yet another Greece fire. This time it was Germany saying "Nein!" to giving Greece a 6-month loan extension saying Greece's proposal was "not substantial" – meaning it didn't guarantee the Banksters who really run the Government would get paid. "In its rejection, Germany argued that the Greek request doesn't meet the bailout requirements and said the proposal only aims at getting bridging financing without fulfilling its commitments."
by phil - February 18th, 2015 8:03 am
Yay, S&P 2,100! Now what?
As we predicted yesterday morning, nothing was going to stop the S&P from banging up to that 2,100 line. Not for lack of trying, either as we had a 22% decline in the Empire State Manufacturing Index and a 2% decline in the Housing Market Index but none of that matters because Greece is going to be fixed again so the markets flew higher – albeit only at the last minute on no volume. Still – it's a pretty picture, isn't it?.
We demonstrated the idiocy of the markets yesterday for our Members in our Live Webinar by scaling into a short position on March Oil Futures (/CLH5), which ran up while we were doing a demonstration on scaling in. We decided to stay short overnight and, this morning, we were rewarded with a $4,000 gain. Now we've flipped to the April Futures (/CLJ5) in our Live Member Chat Room, which we're shorting at $53.50 in anticipation of another nice dip today.
Of course we told you, right in yesterday's morning post (which you can have delivered to you pre-market daily by clicking here) that we were shorting oil at $53.50 and they fell all the way to $51 at 10 am, for a lovely $2,500 per contract gain. By all means though – SAVE your money and DON'T subscribe to the newsletter – I'm sure everyone you read gives you trade ideas that make $2,500 per contract in 95 minutes, so there's no need to read our little ideas.
Of course, $2,500 per contract is nothing compared to Premium Articles, like our "Secret Santa's Inflation Hedges for 2015," which had 4 great trade ideas, two of which are still playable but XHB (Home Builder ETF) isn't, as the 20 2016 $28 puts we sold for $2.25 ($4,500) on 12/21 are already down to 0.70 ($1,400), for a very nice 68.8% gain in just 2 months ($3,100) good thing you didn't waste money on a subscription in December, right?
by phil - February 17th, 2015 8:25 am
Holy cow, look at those indexes go!
With the NYSE finally above our Must Hold line at 11,000 – it may be time to give up on our bearish positions and just "go with the flow" BUT we still have S&P 1,100 and Nasdaq 5,000 to punch through and THEN we can use them as stop lines for more bullish betting.
Not that we haven't made plenty of bullish bets. Our Long-Term Portfolio closed Friday up a whopping 31.4% with $156,886 in gains over the past 14 months. Of course our Long-Term Portfolio is ALL bullish – it's our Short-Term Portfolio that holds our hedges but, fortunately, we also make some nice short-term bullish bets in there as well and that portfolio is up 103.1% since 11/26/13 – a gain of $103,065 off our original $100,000 virtual investment.
We made some aggressive bearish adjustments to the STP on Friday as we anticipated a sell-off after the holidays but, so far – despite Greece being broken again this morning – we're still holding up in the Futures. We did, however, manage to scratch out some Egg McMuffin money this morning in our Live Member Chat Room, picking up oil shorts (/CL) early at $53.50. We just (7:35) exited a round at $52.75 for a $750 per contract gain to start our day.
Not that it's easy money, by the way: We initiated that trade at 4:57 am and it took two and a half hours to make that $750 (and we took entries and exits in between) so certainly this kind of labor isn't for everyone at $250/hr. We also laid out some nice index shorts for our Members, so hopefully we can give ourselves a raise over the course of the day.
Of course, Futures trading is just what we do for fun while we're waiting to see if our Long-Term trades work out. After all, it's taken 14 months to make 31.4% in our LTP – we have to find a hobby to keep us from over-trading our Long-Term positions, right?
As GMO noted in their White Paper this weekend, skill (as in investing skill)…
by phil - February 13th, 2015 8:51 am
We are partying like it's 1999!
The Nasdaq is up over 20% from it's October low, addine $1.5 TRILLION in "value" in less than 4 months. Of course, AAPL contributed 10% of that $181Bn with it's own 32% run from $95 to $126 but we're not here to be skeptical today – we're going to let Dave Fry do it for us:
I noted the other day the Atlantic article asserting the above number is the amount corporations spent buying back stocks since 2004.
It makes QE look like a sideshow. This represents the ongoing bid under the market thanks to ZIRP which makes being anything other than long stocks and bonds wrong.
There’s no question this didn’t have much effect on commodity, currency and some single country markets. But for U.S. investors the message is clear: buy, buy, buy.
Thursday markets belonged to “bad news bulls” since key economic data both sucked and blowed. Jobless Claims jumped to 304K vs 288K expected & prior 279K as finally lost jobs in the energy sector are starting to show up. And, Retail Sales dropped for the second month in a row to -0.8% vs -0.4% expected and prior -0.9%.
Greece seems to be coming to grips with a deal that changes some conditions around
by phil - February 12th, 2015 8:37 am
Want to make 100% in 5 days?
The GREK Feb $11/12 bull call spread is 0.50 and, if GREK finishes over $12 next Friday, you get $1 back. Each 100 option contract is $50 so, if you need to make $500, you buy 10 of them and come back next Friday for your $1,000.
Can something go wrong? Sure, the deal with the EU can still derail and GREK may fall further so you are risking your $500, make no mistake about that but you can always close the spread and, since you are buying the $11 calls for $1.20 and selling the $12 calls for 0.70 and since the $12 calls are all premium and will decay over the next 7 days at 0.10 per day – you should remain in pretty good shape as long as there isn't a drastic drop.
How else can you make 100% in a week? Well, in this morning's news, in our Live Member Chat Room, we noticed the ports on the West Coast are shutting down for 4 of the next 5 days to teach those pesky workers a lesson (they dared to ask for money!!!). The West Coast handles 40% of US Trade so this is not at all insignificant. And who is affected? The Transports, of course!
IYT is pretty high at $160 and just came off $155 so let's say this strike drops them back to $155. Well the Feb $159 puts are only $1.20 and, at $155, they would be worth $4, that's up $2.80 or 250% if our premise wins out. I'd certainly take 1/2 off the table up 100% ($2.40) and put stops on the rest at $2 to lock in an 90% win and, if we hit our $4 goal, that will be $2.40 + $4 back, which is $3.20 average for a very nice 166% gain for the week. Nice work if you can get it…
Again, our premise could be wrong so we don't bet the farm on these trades but, if our farm has 20 pigs and we bet one pig on a bet that doubles – then we have 21 pigs and we're going to have a
by phil - February 11th, 2015 7:51 am
It's been an impressive rally.
But, as you can see from Dave Fry's SPY chart, the volume is total BS so here we are, back where we have been 5 times since December, at the top of a range that we never quite punch our way out of.
It's been a series of low-volume rallies followed by high-volume sell-offs with bouts of stimulus and Fed-speak talking us off the bottom of our range (S&P 2,000) while it takes nothing but gravity to pull us back from S&P 2,060-85ish.
On our Big Chart, the NYSE usually gives the game away by never quite getting over the Must Hold line at 11,000, with the broadest market index dragging far behind the others. Usually, it's the very volatile Russell 2000 that shows us the way near the tops and the bottoms, either bouncing back at 1,160 or failing at 1,200 – which is what we're looking for today:
If the rally is real, we should quickly get over 1,210 on the Russell (/TF Futures) but, if not, then 1,200 will not hold and it makes a great short line as 1,160 is $4,000 per contract away. It may be a bit early, but TZA (ultra-short on the Russell) is often a fun trade at these levels. Now at $11.68, it's low enough where we don't mind owning it as a long-term hedge so the March $11/13 bull call spread at 0.70, selling the $11 puts for 0.50 is net 0.20 on a $2 spread. You make 10x your money back if TZA is over $13 in 37 days.
When you have a 900% upside on a hedge, you don't have to commit a lot of cash to protect your portfolio – that's what we teach you at Philstockworld.
As noted yesterday, our paired portfolios (LTP and STP) were at $840,000 yesterday morning (up 40%) and they finished the day at $845,000 – up $5,000 (0.5%) on a day when the S&P went up 0.6%. That means, very simply, that we are balanced just a bit less bullish than the S&P.
by phil - February 10th, 2015 8:24 am
Thank you China, may I have another?
Another $7.2Bn that is as those Godless Communists inject another round of stimulus into their Financial System to boost the markets and stave off deflation. That's right, as you can see from the prices in this Lianyungang supermarket, everything is on sale in China as inflation falls to a 5-year low (0.8%), which is the worst since 2009 and, much more worrying to the Capitalists, Producer Prices FELL 4.3%.
Have I mentioned that we're short FXI? I'm sure I have and, if not – we are. That short is based on the pretty obvious fact that if Producers are collected 4.3% less for the goods they sell – they are screwed. FXI fell from $70 in 2007 to $24 in 2009 and, since then, has clawed back to $42, so it makes an interesting hedge on China imploding.
This is China's 7th consecutive week of cash injections (over $50Bn) and they are STILL losing ground on prices so we're not terribly impressed – especially since just last week they also did a drastic rate cut that essentially pumped ANOTHER $80Bn into the economy by lowering reserve requirements and that didn't help either.
“Basically, domestic demand is still pretty weak,” said HSBC economist Ma Xiaoping. “We still don’t see any positive effects of the stimulus measures put through at the end of last year. Obviously, policy makers need to do more.”
Of course, like our own Fed, bad news can be good news as all those Chinese Capitalists expect to be bailed out by more QE from their Central Bank – don't these "planned economies" make you sick? When will their Governement ever learn that interferring with the Free Markets does more harm than good?
Just because their devious, greedy Banksters hold out their hands to be absolved of all their mistakes doesn't mean their Government should bow to their wishes and rob their own people to enrich the few in power
by phil - February 9th, 2015 7:56 am
Greece is a problem again.
Not that it ever stopped being a problem. I wrote about Greece in 2011 ("Greece is the Word") and recently I wrote "Greece is the Word, Again" and "The Greek Tragedy Continues" just last week because this is one of those macro market-moving events you do HAVE TO PAY ATTENTION TO.
I know it's far away and I know it's complicated and I know Fox likes you to think it's simple and the Greek people cheat on their taxes and retire at 40 after living on permanent vacations. If that were true, rather than condemning the Greeks, we should all be adopting their system!
The reality is quite a bit more complex (read my posts for an overview) and, like any Greek Tragedy – the story is replete with heroes and villains and, of course, a sacrifice. In this case it's the Greek people themselves who are being sacrificed on the Altar of Austerity to secure the terrible power of the EU over other subjugate nations.
Of course the US and EU Corporate Media are rooting for the Troika to triumph over the Greeks.
The Troika is a proxy for all of the top 0.01% and the Greeks are the downtrodden masses in the bottom 90%, who have been bled dry by interest on debts they never should have incurred. Debts which have been made unpayable by the very contracts they agreed to – in order to avoid default on the original, MUCH SMALLER, debt.
Look what the Troika is doing to Greece:
- They rolled some but not all of their debt into notes but the notes still have to be rolled over by Greece at market rates. The Greek debt is $360Bn for a nation with 11M people, so $33,000 per person.
- The Troika mandated austerity measures that cut Government Spending by 20% and the Government, in turn, cut services to meet harsh mandates for annual debt to GDP ratios.
- That caused the economy to contract and 26% of the population are unemployed without benefits.
- The Troika puts
by phil - February 6th, 2015 8:18 am
What a recovery!
It's even better than the last two recoveries last month but not quite as good as the recovery we had in December. From a Big Chart perspective, using our 5% Rule™, we're still waiting for the NYSE to finally confirm a real rally by going over 11,000 – now just 104 points away!
Still, the rally was good enough that we gave up on our March TZA hedges in the Short-Term Portfolio, which has fallen back to up just 99.7% ($199,725) – down 4.8% since Tuesday's open in our smaller portfolio. Fortunately, however, our much larger and much more bullish Long-Term Portfolio gained $19,585 over the same period, netting us a $14,785 (2%) gain for the week on our primary paired portfolios.
Those of you who followed our call last Friday to go long on the oil Futures at $44.50 (/CL) should be happy to wake up this morning at $52.50 for an $8,000 per contract gain for the week (you're welcome). We took our money and ran on those trades and now we'll see if $50 holds next week and, if it does, we may want to take some more longs.
The long Natural Gas Trade Idea from the same post is still playable with Nat Gas Futures (/NG) at $2.59 this morning. Our target for that trade is $2.70 for $11,000 per 10 contracts in gains but the trade idea we put up Friday was for UNG, the ETF that tracks Natural Gas, for those of you who haven't graduated from our Futures Trading Webinars yet.
And, of course, for the options challenged (boy do you need our help!), there's nothing wrong with just going long on UNG ($13.25 this morning). For example: One of our Members, Rustle123, played the stock on IRBT yesterday morning, when I called for a long on the earnings sell-off in our Live Member Chat Room and, just 3 hours later, he had this to say:
Bought IRBT from 28.22 – 28.55 after your call Phil, sold at 29.45 for quick trade and hoping to buy back lower tomorrow. Almost