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Hopefully we can end the week on a high note! 

We ended last week on a sour note, with our first big pullback in over a month while this week marked the biggest pullback since, as I mentioned Wednesday, the Dow broke 11,000 back in early August.  

Asia was positive across the board other than Pakistan, who can’t get it together.  Australia, Hong Kong and India set new records on word that China’s GDP should grow another 10.5% next year.

China is bringing North Korea back to the table with the US for negotiations (yay) but is refusing to sanction Iran (boo) – both moves put downward pressure on oil prices (yay)!

Europe, as usual, has no idea what to do ahead of the US open.  The ECB left rates alone but made a hawkish statement that should keep the dollar in check.

6 am: We’ll see what kind of mood Mrs. Jones is in once she sees the jobs report.  There are 125K jobs expected with 4.9% unemployment and, at this point, I think we want to see something a little stronger, rather than weaker.

8:30 am: Well, we got a little of both as the jobs were lighter (92K) but there were huge upward revisions to previous months.  September was revised up to 148K from 51K – why do we even look at this statistic if it can be so innaccurate?

The numbers are truly spectacular considering how many consruction jobs were lost!

We held our market levels yesterday (barely) but the SOX and the transports both fell below so let’s just say any index in the red is a bad sign while we need to see the SOX retake 453 and the TRANQ retake 2,567 or it is time for cash once again.

Defying all logic, oil is being pumped up in Europe after trading flat in Asia overnight.  We are still watching the $58.56 upside level and, if it sustains a break over that, I don’t think I want to hold November puts into the weekend.

Oil is down 10% for the month of October, following a 10% drop in September which followed a 10% drop in August – I’m not even going to bother discussing how ridiculous it is for energy companies to be near their highs!

It’s not just oil – despite a falling dollar, commodities are simply crashing (actually the dollar is sort of a commodity as well but that just complicates things endlessly).  Notice on the upswings, the CPI takes the lead.

What’s giving gold its glitter this week is a global loss of confidence in the US dollar owing, in large part, to the $1T China holdings of US currency we discussed as a problem last month (when I thought it would matter!).

How did we get in this mess?  Aside from the usual suspects, Fed Prez Fisher blames bad data collection by the Fed leading them to worry too much about deflation and not enough about the housing bubble. 

Speaking of commodities, it seems that crazy Al Gore was right about another thing – the oceans are in imminent danger of collapsing with 2048 now the date on which you will no longer be able to eat fish!  6 more years of laissez-faire capitalism have accellerated the problem by 20 years!

On October 3rd, I accurately predicted the SOX rally stating:

I am starting to see a lot of quad processor machines and you would think that once the number of processors in a computer catches up to the number of blades in a razor that tech should be hopping again!

Well, now the reason for recent SOX weakness has become clear, as it seems Gillette has once again leapfrogged Intel by coming out with a 6 blade razor!  Gee, and it seems like only yesterday James Kilts announced the Mach 3.

Speaking of the usual suspects, I thought this comparison was a little extreme (and I’m no Bush fan) but I just saw this actual background that Bush is using!


Will all these terrible things matter or will the Rocky economy take its licking and keep on ticking (or is that the Timex economy)? 

6 am: Jobs, jobs, jobs today but how can we get a good number when the last two reports carried big downward revisions?  We’ve had massive housing layoffs and some very negative manufacturing reports so I don’t think a 90K number will surprise anyone but it will be very easy to get an upside surprise which will shift the focuse to the unit labor cost and inflation concerns.

Can’t win or can’t lose?  Hard to say…

8:30 Well, I was dead on with that prediction but I still can’t tell how the markets will take it – should give us a nice dollar bounce today.  You have to wonder if a 200% upward revision might be a little pre-election manipulation.

How is it possible, in the United States of America, in the year 2006, that we have no idea how many people are actually working???

I’ve made my bet on a little Nasdaq bounce this morning but I’m not going to ride out a dip.  ERTS showed some real strength in the electronic sector which indicates that people want more power.

The VIX is coming on strong, up 10% for the week.  If you scroll down to the weekly chart you will see how jumpy things are getting.  We need a real change in sentiment because you don’t want the barrel of the trend gun pointing down when this thing decides to explode!

Unless we get a good turn in the market, I will spend today getting back to cash as the risks currently outweigh the potential rewards!

That being said, I strongly feel the risks far outweigh the rewards for owners of BP stock and, providing oil holds my $58.56 mark, I will be adding the Dec $65 puts for .90.

Microsoft’s year-old XBox 360 accounted for 21% of sales vs. 35% on the 6-year old PS2 platform. 

We discussed WFMI last night and I’m not going to chase it, my opinion hasn’t changed since we first shorted it last November.

As we suspected, QCOM had nice earnings but not nice enough for worried investors.

Be careful out there today – it looks good (and unfortunately may give oil stocks a boost) but we need to see if the giddiness lasts through lunch!

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  1. test. Haven’t seen any comments yet

  2. For those of you trading energy stocks, Zman has a nice daily summary up at

  3. Iran is firing more nuclear capable missiles and Nigerian “rebels” are threatening to blow up production facilities.

    Rather than saying “what’s the difference Nigeria already pledged to cut production” the oil bulls are on the march.

    So you’re a Nigerian rebel and you want to hurt the Governernment’s money flow. You are savvy enough to use the Web to send threats by Email but not smart enough to know that the price of oil has been dropping for 3 months and one of the last remaining factors keeping it up is the threat of Nigerian rebel attacks???

    This is one of those things that make you go hmmmm….

    If you really wanted to make some impact you would announce that nothing will be done to interrupt the production of oil but you will be attacking governerment tax offices and any oil companies offices that send money to the Nigerian government.

  4. Ok, just something off topic here. Have the AMTD guys done anything right
    in their lifetime?

    The new site sucks and they removed the only good feature (chart) from the oldsite, boy am I pissed or what?

    Sorry, had to get that out of my mind. I’ll start actively to look for a good broker.

  5. CAT taking it on the chin today — may drop below $60

    Phil — time to DD on oil puts?

  6. For us on the sidelines who can’t keep up with the trades and changes can you please advise where we can find your spreadsheet showing the current open and closed positions. It would be especially helpful if update were available during weekend when there’s more free time to check things out.

    Thanks, the blog is much appreciated.

  7. This morning CAT was below $60….no idea….but sign of bad times perhaps

  8. Is it time to dd on oil puts for XOM, MRO, CVX?

  9. Phil, you’re better at reading the VLO rule than we are — could you please give us entry points today?

  10. Not touching oil puts just yet. I’d really like to see them test $58.56 again but it looks like they are already running out of steam.

    XOM will be doing us a favor by getting rejected at $72 so I’m rooting for them and will likely DD for .45 if it gets over and heads back down – other than that, I’ve lost interest in CVX and just hope to get my .35 back.

    XLE needs to get down to .50 (maybe $57) before I want to buy more but, if it gets that high – I am likely to be too worried to buy more of it!

    The oil traders are jumping on the Iran/Nigeria news but they are not getting a broader rally started, failure to break my level here will be a huge problem for them and they will actually have to blow something up over the weekned or the trend will not be their friend…

  11. Someone from CAT made comments that housing is a drag and will limit CAT’s growth next year. Basically the same as their guidance a few weeks ago.

  12. I’m looking at XOM Dec 72.50 puts

    Crude is below $60 and below $59 — makes no sense for XOM to be near all-time highs.

  13. Barclays put out a report this morning suggesting that oil will test $55 in the near term ..

  14. VLO may go to $51.50, needs to go below $51 to start a downtrend

    XOM is out of control but $71.20 is where we want to see it going back down below. Like I said, the bold move is to buy the $70 puts up here for .45 but we still have the noon and closing pumps to look forward to.

    SU is off in some fantasy land where math does not matter. They have the highest base cost of any oil producer – any threat to prices impacts their margins more than any other company. There is no safety for them under $60 at all! We’re in a real decline if they break below $75

    SLB should be the strongest of the group, there is no reason to think that services will suffer – so why aren’t they anywhere near their high of $74? Below $62 is a problem for them.

    XLE is a good group indicator and $55.50 is the level to watch there.

    OIH has had a lot of trouble with $134 – like XOM, I hope they test it. They have to break $131 for us to feel really good and that will be a very tough trick from the E&P group.

    USO is just oil so watch $52 (a litttle under our target but psychological)

    CVX I’m giving up on, someone is buying them big-time, probably something up with them – if they break $68.30 we might really see something there.

  15. sano, pti securities might be worth a look .most of their brokers were floor traders so great fullservice .not sure about online platform or fees

  16. Hey Jim, for some reason you get marked as spam…

    I will try to get a spreadsheet back up this weekend, it has been a bad week with losing the old site and trying to get this working…

  17. bidding xom 70n @ .45. doubt i’ll get it.

  18. AMAT under 17

  19. This comment from Caylon provides some explanation for the perceived disconnect between the price of crude, and the price of the oil and gas stocks:

    Oil & Gas Exploration: Key trends emerging from Q3 conf calls – Calyon

    Calyon notes a number of cos either missed Q3 production guidance or lowered expectations for Q4 citing wet weather in Canada (ECA, EOG, KWK, PPP, TLM), unexpected or longer-than-anticipated maintenance/repair downtime (APA, COG, PPP, TLM), delays in obtaining rigs/equipment/services (DNR, NFX, SM, SWN), along with some voluntary natural gas and crude oil shut-ins (COG, CHK, NFX, STR) and cutbacks in drilling activity (DVN, ECA, KWK, TLM, STR) due to low prices. Firm says this highlights the ongoing difficulty in growing production, and supports their view that the “floor” for natural gas/crude oil prices has moved up in recent years due to rising costs.
    In spite of the bearish trend for the price of crude, it maybe a cautionary tale.

  20. U.S. Oct. ISM services 57.1% vs 52.9% in Sept.
    U.S. Oct. ISM services above consensus 54.6%
    U.S. Oct. ISM services prices 51.9% vs 56.7% in Sept.
    U.S. Oct. ISM services new orders 56.5% vs 57.2% in Sept.

  21. Barklays – they should pay me for that!


    Cramer’s boy – Wow! Check out the BS. While Cramer is still saying SELLSELLSELL on oil his guys are talking it up – you can’t go wrong with that kind of editorial policy!

    I like his statement: “Worldwide reserves are declining by about 15% per year. ” Wow, just 6.5 years of oil left – I guess I’d better get buying.

    If that figure were true I’d be better off with SPWR than SU as by the time I retire there will be nothing to pump out of the ground. What is the 7 year out value of 600,000 dry holes?

    This is why they might win – how can you fight a PR machine that could care less about facts and people who are willing to manipulate governments and media to drive up prices.

    It’s not just Bush – Putin is the only world leader who stands up to these guys (and probably China but who can figure out what they are doing?) so they just run amok all across the globe.

    Like I said at the beginning of the week, we are betting against Trillionaire roaches who are more than happy to squash us like bugs to save themselves.

  22. Putin a nice guy? Putin ex KGB has his own agenda to manipulate/consolidate oil companies under his regime.

  23. Good find Jacox.The funadmental don’t justify current prices but its good to see the what the research grunts are coming up with to support the stocks.

  24. I got the XOMs – hope I don’t regret it!

    Can’t get the CVX $65 puts for .15 (just trying a few).


    Ceylon – so the “ongoing difficulty” that creates a floor includes “voluntary shut-ins”

    OK so we have:

    Lower production
    Longer repair downtime
    Delays in obtaining rigs

    Even with all this going on they have to have cutbacks in drilling activity and voluntary shut-ins!

    That’s what a glut is. You don’t even produce as much as you can and it’s still too much…

    This is just incredible – as in something that just is not credible!!!


    Nice facts MJ – so jobs move out of energy intensive manufacturing into energy neutral services – yet another indication of demand destruction.


    Oil is killing the rally right now… I’m getting my tests – hope we pass!

  25. CAT back up over $60 again….whats going on with these wild swings …

  26. Like I said at the beginning of the week, we are betting against Trillionaire roaches who are more than happy to squash us like bugs to save themselves.

    Phil, I like this new site, it’s so fast and no problems! Re. the above statement, is this a good idea to bet against them, or wouldn’t you want a reason to determine that this manipulation and “squashing” cannot continue? Thanks! Ilene

  27. Phil, any thoughts on ADM? What’s the next support? I hold Nov 35 puts, should I keep it over the weekend?

  28. Just went through that piece. ROFLMFAO and deleting the bookmark to their web page. The only petroleum products that guy knows anything about are on his bedside table. Please.

  29. More exciting? As analogy with the thimerosal/autism connection, the science will eventually prove that I’m right or wrong, and although it’s a slow process, the truth can’t be supressed forever…. 20 years, perhaps? It took about 20 years for research showing transfats were worse than saturated fats to become general knowledge — that’s 20 years of most people eating tons of unhealthy fats – thinking they were doing themselves a favor – because they are cheaper for the food companies.

  30. Phil, I decided to cash in the 74% gain on the AMAT puts. Thanks for YAGP

  31. At this rate XOM might set a new all-time high today

    DVN up $2 — wow

  32. guys i take full responsibility for the XOM high. I have the tendency to do that to stocks when I buy the puts……


  33. You and me both Binoy.

  34. Phil, did you get XOM Nov 70 puts? Also, the CVX Nov 65 puts?

  35. XOM 70s filled

  36. While waiting for XOM to set new all-time highs, take a few minutes to read Sir Nicholas Stern (former chief economist of the World Bank) presentation’s executive summary:

  37. If truth be told, HAL probably has the rebels on the payroll.

    Story out that this morning that after an iraq bill went to conference (out of house and sentate) it was changed to include a clause dissolving the agency set up to police corruption in iraq. Bush signed it 2 weeks ago and lawmakers on both sides say they didn’t know the change had been added. nice

  38. phil, that hacking democracy was one heck of a documentary….very scary!

  39. I can’t believe I’m doing this, but i’m buying a 2nd round of XOM 70 puts today.

  40. there goes xom 72

  41. Ilene – you would like to believe the manipulation can’t continue but apparently it can.

    That’s the problem – how far are they willing to take it. THEY includes Iran, who are firing missiles into the air to cause distress, and Nigerian “rebels” who’s timing is just amazing and BP, who’s stock goes up even while a jury is being selected to prosecute them for killing people in the name of profits…

    How long can it go on? A long time!

    This is not shaking me out of Decembers but I’m out of my Novembers at the day’s end either way.


    CAT is all over the place, reflecting the fact that half of their clients (US) are in the doldrums and half (the rest of the world) are booming.


    ADM – be careful – they are a round about energy play.


    Word is spreading that the government is messing with the jobs report!

    I knew this job report sounded familiar – the same exact thing happened last election when they had a low number but a huge (236K) upward revision just in time for the debates!

  42. XOM Yes – CVX no – $65 is getting very far away…


    Hacking Democracy – I wonder on the timing of this – Although it’s anti establishment it also gives you a sort of “oh what’s the use” feel about voting for change.

    They were just discussing today how low voter turnout is great for the Republicans as they count on the rabidly loyal faithful who vote no matter what so bad weather, lack of polling places, poor procedures etc. all benefit them.

  43. Reality Check: Oil was higher than this yesterday!

    Started going down from at 1:30.
    On Weds it was even higher and started going down at 2pm.

    The big problem is that we have the various unrest on a Friday so it might be a tough nut to crack…

  44. I’m still afraid to pull the trigger on those XOM puts. Many things can happen to today (afternoon pumps) and/or over the weekend.

    I have not seen a clear VLO signal either.

  45. Sane,
    Are you referring to the streamer chart on AMTD? Go to shortcuts and u can launch the streamer console from there.

  46. Damn

    XOM missed the all time high

  47. Phil, how do you feel about DVN and/or APC puts?

    They’re up much more today than XOM/CVX

  48. Phil-

    Seems to me that nothing will derail the neo-cons, sorry republicans, from attempting to claim what they think is there god-given right, to be in power.

    IMO this manipulation of the markets, and everything else they’ve done since early this year (there is too much to list) is all a warm-up act for the election in ’08. As soon as Paulson was confirmed at Treasury it was like handing the keys of the jail to the inmate population. Don’t forget that the way that the Gov’t reported the intervention of the treasury dept into the markets (M3 report) is now gone (march) and that little blurb about the plunge protection team in the WSJ on monday does’nt give me the best feelings going forward. Wait until ’08….the Bushies will pull some shit that will make all of our heads spin and more importantly most likely will ot allow us to vote on time. Just an opinion…back to watching the paint pull back from the wall.


  49. I just found this site and seems pretty interesting. I just bought my first option on monday. I bought two jan LOW 30 calls. I will look into the tips and tricks and try to gain more experience.

  50. Hi, Phil,

    “you would like to believe the manipulation can’t continue but apparently it can….” – yes, and also, wondering if there’s a way to predict when/if the scheme will fall apart. You seem to be thinking in terms of months, not Nov. but then maybe Dec.? But then you also acknowledge that it can go on for a long time, maybe indefinitely?

  51. Yesterday, I heard on CNBC about some bullish options purchase activity on TOL. Anyone playing TOL before earnings next week?

  52. FACT: The stock market and individual stocks move on perception, not reality.

    FACT: Every time the market indexes close in the red, perception changes

    FACT: Money inflows are still massive:


    How much longer can so much money flow into the S&P?

  53. BP: bomb threat called in to indiana refinery friday…. do you think they do this themselves?

  54. When the going to raise terror thread level to code red? Thats also very useful before elections.

  55. probably monday morning when Bush has to explain why we attacked Iran.

    I hope that is taken as the joke it is but it would’nt surprise me one bit

  56. No VLO signal yet – just me saying enough is enough.

    Probably crazy to fight the Trillionaires but with 82M barrels trading daily that’s $4.7B per day, even if it “costs” just 5% of that number to maintian the price, that’s still going to hurt eventually.

    XOM for example now needs $72 x 22M shares a day ($1.5B) of money coming in in order to maintian this level, any less and the rocket runs out of fuel.

    They are in their 6th consecutive positive week and each one has had less volume than the one before with the exception of last week’s earnings.

    Here’s an example. Coke is made out of water but what would happen to KO if the price of Coke dropped 20%?

    There’s (theoretically) not an infinate amount of time you can keep this up.

    That being said I’m taking a DD off the current XOM Dec $67.50 puts in the form of the Jan $70 puts for $1.40

  57. TOL- I wouldn’t be buying calls here. Lots of HB’s crashing through key support levels today. Including TOL and DHI. This jobs report has 2 negatives for housing – one it confirms construction activity is still slowing and two, the low headline unemployment # and strong past month revisions to serice sector employment lessens the likelyhood of a rate cut and increases the possibility of further tightening which would be disatrous for housing. Even with recent lows in rates, mortgage purchase apps continue to slide. Any tightening would be disatrous… that said, I think we’ll see downward revisions and weaker reports in the coming months, but for now, I wouldn’t be playing Nov Calls. In fact, I think we are at an inflection point – the number of HB charts taking out key resistence leads me to think we will see retrenchment in the HB’s. People are too bullish on housing’s “soft landing”

  58. There is a lot of Jan XOM 75 and 80 calls out there


  59. VLO group still heading higher

    This will be interesting :)

  60. The pattern is funny. Oil starts testing lows, and BANG!!!, we have Nigerian rent-a-rebels, Iran flailing about, $100 oil pumpers, and ( Insert refinery, fire, explosion, now bomb threat ).

    If this crap isn’t manipulated then I am Santa Claus and I have a bag full of presents for you.


  61. ilene,

    the caller was probably a hedge fund.

  62. Phil,

    Agree going longer only sane way to play XOM now.

  63. The danger with XOM closing at all-time high is that some mutuals funds only invest in stocks hitting new highs. If XOM will close at a new all-time high, there will be new money pouring in on Monday.

  64. DVN/APC etc. They are all crazy but this is a very dangerous game, they could still be up 6 months from now (look at the builders). My advice is don’t go crazy, tempting as it is. I am DD ing for Jan to bring me to a 50% position and will probably extend into April in mid-Dec but at this point we need to be patient.

    That will also give me the ability to play some short calls as I will be well covered on the downside.


    Money Flows – like I said on the weekend, there are Trillions still tied up in housing, painful as it may be to sell $4T worth of homes for a 25% loss that’s still $3T that will find it’s way to other investment vehicles…

    If you believe in the conspiracies that’s just what the Wall St jokers love, crash the housing market, crash the dollar and make their pieces of paper seem more attractive than anything else you might buy. They can print as many of those certificates as you want.


    BP – Oh man! Can you believe this? Who do you call to drop the price of oil? Wow and the guy waited for Europe to close to call in the threat (or did the media just hold it until then?)…

    So this is how it works, a person can buy 1,000 calls on an oil stock, make a phone call and cash in! Maybe I won’t take any more puts…

  65. NatGas over $8!

  66. Phil, selling in the housing sector results in no net cash for the market.

    When I bought my house, I sold all my investments and mutual funds.

    The end result of any real estate transaction is a net zero.

  67. What does DDing or DD mean. Double Down? Due Dilligence doesn’t make sense in the context.

  68. XOM going for the all-time high again

  69. The call was in at 6:30 but BP held the PR until 10 minutes after Euro close. Classic.

  70. Here is an idea: Sue OPEC for price fixing.

    Why hasn’t anyone done that yet?

  71. Soccer – it may be true for you but 80% of the real estate assest in this country are owned by the wealthiest 20% of the population – they don’t cash out anything to flip homes/buildings….

    Look at the builders, they are, in the end, home buyers of a sort. Rather than put $2Bn into buying new homes this year – Bob Toll put $2Bn into buying back his own stock. One power move like that makes up for for a lot of small consumers who don’t play the market!


    DD – Double down


    Oil still not breaking $59, remember my $58.56 target is from 9/25 – there is some room for error but certainly under $59 is very importaint…

  72. I guess because you couldn’t enforce the judgement

  73. Phil,

    We know the energy fundamentals stink, we know the stocks are going against the tide b/c wallstreet is telling everyone its only a blip. If XOM is at all time highs at $58 oil, where does it go with a $5 rally in crude? I’m thinking of going to all cash on energy, waiting for the stupidity to peak adn then enetering the same stuff but Jan. This water torture (and days like to day drowning) is getting old. It’s either that or get a futures account and just trade the commodities.

  74. coz they’d raise the price for the lawyer fees ;-)

  75. Tom2oc,
    Totally agreed with you about “against TA ” on shorting oils, the best way to earn money is combine Phil’ FA anf Tom’sTA.

  76. Wow, guess I should have really held on to those OIH calls…Oh well…

    Interesting jobs number by the way…The unemployment rate falling to the lowest level in 5 years screams of GOP manipulation, but it may be worthless in the end if people just end up voting party lines with the Iraq situation as the primary driver.

  77. At least oil is finally fading a little bit

  78. I am totally respectfull about Phil’s and Zman FA on energy but short oil is another story, my observation about oils play ,I can see here more looser than winner (may be Phil is only winner). Sorry about a painfull true.

  79. “the caller was probably a hedge fund.” — thanks Zmann, I wouldn’t have thought of that.

    “I am DD ing for Jan to bring me to a 50% position and will probably extend into April in mid-Dec but at this point we need to be patient.” — maybe it makes sense to buy further out puts, it seems that once this starts to unravel, there’d be cascading effects so there’s less risk if the puts are sufficiently in the future.

    Do you think the outcome of the elections will make a difference?

    thanks again, ilene

  80. You can’t do anything to OPEC except stop buying their product and take away their pricing power. Open up drilling in the Artic refuge, offshore (without tax penalties), and you can have almost all the oil you want (yes it will take some time, but it could have been approved years ago) without relying on their collusive pricing actions. And, in the end, then you don’t have to worry about political turmoil in the region upsetting the world economy.

    Maybe the Dems argument that we should already have fuel alternatives and shouldn’t be taking the easy way out is valid, but it seems to me that American lives lost trying to stabilize an area for the obvious purpose of protecting oil interests lets those ‘apocalyptic’ environmental concerns seem very silly in my opinion.

  81. JD, earning money w/FA+TA is best done when they agree, otherwise find what works for you and keep repeating….happy trading!

  82. JD, remember that I trade the very short term timeframe so I got to follow the short term trend and I get from TA. Longer term timeframes trading is different but although you might be totally FA right on energy, you can wake up one morning and a geopolitical event can kill you to a point you would never recover. I guess the way to win with FA in this crazy manipulated market is to do what Phil does and these are the options selling and hedging. But I’m not bright enough to figure how to figure those out! :) So I stick to short term TA trading to fight the oil crooks.

    Just my 2 cents. Many ways to skin a cat!

  83. I have been printing out the monthly archives from the old site to keep as a reference. It is unbelievable how far this has gone. Last November there were hardly any posts, now there are over 100 per day! Also, I never realized how much Phil wrote on a monthly basis. You should make a book out of the archives. It would be much better reading than the other financial books out there. Keep up the good work, Phil.

  84. too many geopolitical interest in US + golf area to keep oil price up / at this level
    easy to spark local incidents (missile, war games, bombing,…) for those guys
    in short I’d rather increase time spam for oil calls and play day trade for put

  85. Z – I know what you mean, it’s astounding what is going on here. The problem is that usually, at some point, a few Billionaires get on our side to start taking it down and, after a while, wear down even the big boys but I guess the massively growing wealth gap has left no one on our side at all.


    TA/FA – As I said earlier in the week, the only way to win this is to take the short VRule plays (which have said buy since 2pm yesterday) but just realize that this whole thing is bogus and don’t be shocked when it all falls apart.


    LOL Jeff!


    JD is correct – the FA goes out the window when no one seems to care. I feel like Prof with the builder shorts – the facts are all there but no one pays attention….

    If the price of oil goes down then the E&P cos need to produce more to make the same money – if they produce more they flood the market and the price goes down. It’s a fact.

    What they are trying to do is have it both ways, keep producing at record levels (as if demand never, ever goes down) while keeping up record prices. Only the myth of Peak Oil keeps this alive (which is why they had a conference on it this weekend).

    Even though every nook and cranny of storage in this country is filled to the brim with oil and gas they have convinced people that they must keep them full at ANY cost.

    It takes 6 weeks for oil to get from Kuwait to the US. We import 12M barrels of oil a day. There are 500M barrels of oil on thier way here right now.

    We have a 6 month supply of oil in storage.

    All you have to do is say “No thanks” to tankers for 2 weeks and wait to see how low the prices get as they back up in the Atlantic. Clinton did it twice – oil was under $20 by the time he was done with these jokers, even 20 years after the Iranians took their first hostage and 27 years after OPEC first played their hand to drive up prices.

    We (the american taxpayers) paid for those 700M barrels in storage, they’re our barrels – I hope we don’t have to wait 2 more years for someone to take some initiative!

  86. BKX going down…

  87. tom2oc, so your sayin your oe of those “astrologers” (Cramers take yesterday). LOL

  88. Wolf, you are hired as my editor – when does the tour start?


    Arnie, the flaw in your logic is that US interests are for oil to go down. While it may be your interest and my interest, it is clearly not the interest of the people we elected.


    6 consecutive down Dow days, worst since June 2005

    Once again I point out that July 2005 was a spectacular month.


    Case in point, no one went to WMT last month and they are doing that price rollback thing already (killing the whole retail sector too).

  89. OCRich, thanks will take a look.

    Van, I was referring not to the streamer charts, but longterm charts, it is a handicap with the new version that you need to click the draw button everytime you change timeframes. With no trendlines tools it is a big drawback.

    Anybody tried Zecco?

  90. OCRich, I don’t watch his shows but I take it he’s calling TA guys astrologers! If that is the case, you can tell him I call him the WS Clown! LOL!

  91. sane,some one else recommended they liked the platform and are supposed to be low cost.

  92. anyone got an explanation for that unusal volume 15min past 12 in the xom intraday. its 1.4mio stocks wow

  93. Phil
    when people we elected + oil companies (oops same) + golf countries have common interest to keep oil up + they can orchestrate incidents when appropriate…oil will stay up (55 58 60 whatever but not 50 45 40)…this untill something changes

  94. I thought I’d found an interesting place to chat about investments. With all the Right Wing conspiracy theorist posts here, I guess I’ll trot along elsewhere. Enjoy fellas.


  95. Cramer is a big time TA guy, but always says he does not follow TA. Absolute bullshit. Cramer was never a FA guy and will never be one. I wonder if he even knows what FA is?

  96. Stick around AM. The leftists on here are FUNNY

  97. looks like the pump is over today … just about 1:30 today too

  98. Attacking Mid you should look Larry Kudlow

  99. AM….LOL :-) Stay on…its amusing…just watch them after the elections :-)

    Conservatism means having a sense of humor and to be skeptical…

    arent folks here skepti

  100. cal AM?

  101. Speaking of oil pumps…this is a fact and we have witnessed them for far too long AM…

  102. Cramer is easy. He’s no TA or FA, he just goes with what his viewers want to hear to keep and increase his audience. AAPL is going down, heck, yes, sell AAPL it’s going down. It’s bottoming and reversing strongly up. Heck, yes, buy AAPL it’s going to 100! A TOTAL WASTE!! Except that it creates opportunities for short term traders though entering after the last Cramerlite has bought or sold.

    Personal take on the WS Clow. I respect other opinions others may have on the guy.

  103. Hey Phil, i’m looking at the DEC 27.50 YAHOO CALLS @ .70 ….Because of the big drop today, i’m wondering if today is a good day to buy the calls. Is it worth it??

  104. If you were referring to me, my posts were sarcastic and I don’t particularly like either repubs or dems…but, in truth, I’m more conservative than liberal.

    Sorry to spoil the investment decision process for you, its normally not like that here, its just a slow Friday makes you write what you think.

  105. That XOM move was the Jokers trying to hit an all-time high. It was an all-out effort that fell just a touch short, tying $72.33 that was set on the 26th.

    They will try like hell to close it up there so they can run the presses over the weekend with 1,000 analysts telling you it’s the age of oil so BUYBUYBUY…

    VLO took a hard bounce off $52 as well, hope it holds!

    Notice how TSO is not playing…


    Attacking: ” It’s not paranoia if they really are out to get you”


    I have to defend Cramer there – he does sometimes dig out some gems, usually on sector observations but I think he no longer does his own homework and that’s been hurting his performance.

    I’ve said before, if I start going on book tours and visiting colleges and having my picture taken at every NY celebrity party – STOP LISTENING TO ME! There is no way I would have time for that nonesense while doing proper research…

  106. Excellent point, Phil. Not enough time in the day to be Mr. Hollywood and perform due diligence.

  107. It was a hedge fund!

    Bomb Hoax Forces Evacuation of Huge BP Refinery in Whiting, Ind

    “An unidentified caller contacted BP Friday morning and said a bomb had been placed near a unit that manufactures gasoline.”

  108. as tom2oc said Cramer is a tradeable event for a sharp daytrader,and as phil points out he does occasionally hit the mark.point is trade YOUR plan for best returns

  109. Phil, yesterday you mentioned MSFT and NOVL.

    For MSFT, it’s essentially a non-material event of more political significance than anything else.

    For NOVL, it’s a short-term boon; however, they’ve of late supplemented their living by suing MSFT, so in the long-term it doesn’t bode as well. I don’t follow NOVL, but they’ve got over $2/share in cash, so hopefully it’ll take them a long time to squander it all. Okay, not only do I not follow NOVL, historically, I’ve not liked the company or its leaders.

    Back to MSFT. Does this impact MSFT SQL or MSFT Server? Not substantially. The conversion from the Microsoft products to the Open Source equivalents is a relatively long and painful process. Generally, if one has got something that works, it has to not work in a pretty spectacular process to make one switch.

    So, why is MSFT promising to distribute 70k licenses/year from NOVL?

    Primarily, I suspect, to enhance virtualization cohabitation in servers, particularly as multi-core blade servers come on line. Most virtualization people currently only configure a single blade as a single OS.

    But, at the same time, they get some good FUD. MSFT has promised not to sue customers using SUSE Linux. That’s nice and all, but SUSE isn’t the most popular Linux. Ubuntu is. And, if you ask me, Ubuntu Linux is in many ways a larger threat to MSFT than even AAPL (while needing more work, my grandmother really could use it “out-of-the-box” for 90% of her computing needs). Also, as you may recall, RHAT was being used so often that ORCL decided to officially support RHAT users. Now *that* is a threat to MSFT SQL and MSFT Server in the longer term. So, by “teaming” with SUSE, MSFT damages the companies associated with two of the four most popular Linux distributions and reminds everyone else that they *might* get sued.

    Anyway, for this MSFT buys 70k of NOVL licenses per year. Assuredly at some discount from the minimum price of $349/license. That’s only $25M/year. Which doesn’t matter to MSFT. Additionally, NOVL seemingly agreed to quit suing MSFT. Given that the last NOVL win netted them $536M, $25M is a pretty cheap fee to avoid getting sued. That probably does matter to MSFT.


    So, short impression:
    MSFT – Good for MSFT, nothing to lose in this arrangement, lots of small gains possible
    NOVL – Short-term good, longer-term probably bad
    RHAT – Yet another ouch, may end up being an ORCL subsidiary if this keeps up
    ORCL – Mostly neutral, however anything that helps MSFT SQL hurts ORCL long-term
    AAPL – No impact to speak of


  110. YHOO, yes a good entry point. We are in on the Jan $27.50s and the Jan ’08 $25s


    Hey, I’m not going to another board to talk politics, this is where I spend my days and when something comes up I willl talk about it.

    I tend to be a little sarcastic too and I’ve learned that not all parts of the country get that (yet alone the global readers). I try to keep it down but I often forget as it is a New Yorker’s primary means of communication…

  111. Any thoughts on oil prices if the Dems take the House and/or Senate next wwek??


  112. Long AAPL Nov 80 Calls at 1.15 after retesting $78 and high $77s and bouncing. Will be watching market carefully, stop is AAPL taking out $77.50 on volume.

  113. My feeling is that Cramer tells his friends and family to buy a stock and then sell during the spike after he mentions it on the air.

    When you can move stocks like he does, he doesn’t need CNBC’s ratings/money. We needs the microphone to profit from the “Cramer effect”

  114. Phil, is there an updated spreadsheet out there anywhere? (Mostly interested in the open positions)

  115. How high can they pump crude before the close?

  116. Nice summary Rein – Thanks!

    Still need better news than that for my MSFT Dec $30s to kick in though…

  117. That’s pretty cheap for AAPL calls but only 10 days left (and a holiday).


    Updated sheet will be done this weekend, not too many open positions left!


    I don’t think they can hold $59 but we’ll see.

  118. OK, Phil, but don’t take time away from more important/more interesting pursuits. I was just curious.

  119. Hi Phil,

    There is at least one published report that Vista and Office ’07 will be coming out Nov 30th. I don’t know how reliable the source is though.

    Also, what are your thoughts on ANF? They sell stuff right? They’ve got earnings coming up just prior to options expiration this month…

  120. Random trivia. currently tracks 356 different Linux and BSD distributions.

    openSUSE (#2) is where NOVL “sponsors” SUSE development.
    Fedora (#3) is where RHAT “participates” in Red Hat development.

    Ubuntu (#1) is driven by South African native Mark Shuttleworth who sold his Internet company to Verisign before the crash and, among other things, founded Ubuntu and spent a year training to be one of the $20M Russian space tourists.

    Ubuntu has done so well and grown so rapidly, that this year Microsoft has countered by localizing Windows in several South African languages (at least isiZulu, Setswana, and Afrikaans) and has offered free licenses to the South African government in an attempt to slow down Ubuntu’s adaptation.


    PS: Microsoft announced plans to localize in various African languages back in the fall of 2003…but nothing happened for a *long* time. Suddenly resources were available and results achieved this year. Remarkable that.

  121. Only 13M XOM shares, need 5M to tie yesetday in next 2 hrs.

    This week looks like 80M shares vs. 108M last week (earnings) and 100M the week before that.

    The last time XOM had 6 up weeks was 1/28-4/11/05 when they made an all-time high of $64. On May 20th ’05 they were back at $54 with 8 of 10 weeks in the red.

    As if it matters, last Friday oil closed $1.50 higher…

    No buyers or sellers at NYMEX right now, just drifting – pumpers must be high fiving each other…

  122. Don’t worry Ku – I have a life, but giving up my time with family is not an option I would pursue. That’s why I like the blogging/trading thing, it’s 8-4 while my kids are in school plus reading I like to do anyway.

    It’s funny, my kids have a TV rule: Real life is more important! I guess I have the same rule for myself..

  123. Finally I bought some CVX 70 calls this morning. But still huge loss in those CVX puts

  124. funny how people read so much into comments here. So what if there are lefties and righties…isn’t that what makes us a democracy. Don’t like it? Don’t read it.


  125. I’ll bet they’ll push XOM into a record close today.

    It would make them look really good to investors who only read up on their investments on the weekends.


    DVN, CVX and APC having huge days as well

  126. MSFT Dec $30 are probably safer than Nov $30.

    We’ll get a flurry of press surrounding the Zune heading up to the Nov 14 release. MSFT will definitely sell some.

    Sony’s Playstation 3 will allegedly ship November 17 (expiration day!). They’ll likely be follow up press about shortages of the PS3 with lots of people talking about people still buying Xbox 360s for Christmas.

    At some point, MSFT will definitely ship XP SP4, um, Vista (Business Edition). But they should also ship Office 2007 and Exchange Server 2007 at the same time. I can’t promise that that press will occur before the November expiration, but it’d better occur before the December one!

    And Black Friday is after the November expiration.

    So, like I said, I like the Dec 30′s better than the Nov 30′s. But the Jan 30′s are $0.35/$0.40 Bid/Ask. So I might like them too.. But, as I’ve already got Nov and Jan 07 and Jan 08, I think I’ll go buy some of the Dec’s at $0.10/$0.15 Bid/Ask.


  127. Who thinks that the market will go up 1% on Wednesday just because the election is over and the uncertainty is removed? Regardless of who wins what?


  128. Phil, GOOG is in a short term bull flag on the 5 not too far below HOD. If it breaks above could be confirmation of the kiss. I’m in the Mar530s already since I feel it will happen. My target is 525 as you know. But could go both ways as always.

  129. And today BA is up 1% – go figure…

    AA, BA, DIS and XOM are the only Dow Components gaining more than a few pennies.

    DD (of course), GM, HPQ, MCD (?), T (again) and WMT (again) are biggest losers.


    Somehow they got a $59.20 print on the NYMEX close…

  130. I think something will happen on election day but it is possible that this frenzied pre-election buying will be left to crash so people will always remember what happened when the Democrats won.

    It’s a good excuse to take profits and it puts the Dems on notice that Wall St doesn’t like their policies.


    Goog – I hope not too soon as I didn’t buy out my caller!


    XOM 14M with an hour to go – cutting it very close, must be saving up for the big close!

  131. Rein, will depends who wins. If GWB keeps control of both sides, the market will tank. As I mentioned to Phil last week, I believe this latest bull ride is all about the street expecting gridlock. And they all bought ahead of the event. So might be a some sell-off even if the dems take control of one side. Wall Street LOVES gridlock!

  132. Tom02C is in some long Google calls following a potential kiss. Can’t help but love the Phil & Tom fundie/TA combo.

    Phil — any chance of making your trades as easy to follow as Tom’s – this blog is awesome!

  133. Ugghh…anybody else get the sinking feeling that GRMN isn’t going to sink to the $44 target.

  134. Well, I’m in cash now (except for 50 CVX 65 puts — which are not worth selling at this price)

    Have a nice weekend !

  135. Jerry, pro site will have lots of tracking elements..


    GRMN, well if they didn’t go down today they might be done…

  136. Normally, I’d agree that there’d be a difference depending upon the outcome.

    But this market doesn’t seem to be playing by normally. Most consecutive days up in god-knows-how-long followed by the most consecutive days down in god-knows-how-long. Of course, that premise of up regardless would look better if the DOW held 12k.

    I’m not sure about this election. I’m one of those fiscally conservative, socially liberal types down in Northern Virginia. And I’ve got to choose between an incumbent possibly racist fascist representing the Republicans and a known misogynist former fascist now pretending to be a Democrat.

    I’d like to see gridlock myself. But the contrarian in me wonders that if we’ve read so much about it, will it actually come to pass? Particularly if I’m having this must difficulty deciding to bounce my Republican representatives while hoping that everyone else bounces theirs…

    Anyway, aside from the MSFT Dec 30s someone else mentioned, I’m not finding much reason to trade before the election. I suspect that’s generally the case in the market as a whole.


  137. Getting slaughtered on the CVX Nov 65 puts, MRO Nov 80 puts. What’s going on with crude?

  138. Phil, What happens if Dems loose ?

  139. With the move in oil ,I am not sure if Phil is right about OIL and oil related stuffs, be careful any play base on Phil’s bearish view.

  140. tom2oc, are you long on these Mar530 GOOG calls?

  141. Dems lose?

    Hmm, good question. I think oil goes through the roof, it’ll be looting and pillaging time.

    Long on HAL for sure – SU, PEIX, lots of oil names and I WILL have a list to play both ways for next week!


    Thanks JD – I’m not sure either after today but I made my bets and I’m holding on until next inventory….

  142. CVX and VLO eyeing for whole number close, CVX – 69 and VLO 52.

  143. btw: I am out of my CVX calls for a quick buck. Will try to buy back on monday if it goes higher. Still have those worthless puts if by some dumb luck crude drops next week.

  144. Phil – WFMI, long term is this a stock whose fundies could translate into price appreciation, I just love the the WFMI concept and find it hard not to think this could be a bargain for the long run

  145. Back from a meeting
    Gee XOM did not move

    Are you keeping the XOM Nov 70 put at .45 over the week end?

  146. XOM @ $72.34 — new all-time high

  147. my guess would be this … the election would produce such a confusion and mkts will reflect that…just a thought:-)
    lets us all have profitable week next week

  148. MIke, yes long.

  149. Good article from Yahoo! Finance about the different areas affected by Democratic majority win.

  150. phil, love the new site….

    i was on vacation this week, because my wife gave birth to our first child…seems like an active week to miss!

    i should be back in action next week.

    wow…whole foods today….wow.

  151. xom…amazing…i’m still holding on to my 67.50 puts….it’s a long shot now…almost no reason to sell them anymore….i need to make some $$ back for that loss…

  152. WFMI, maybe at these prices, remind me on weekend and I’ll take a look but, as I said last year – management has a “dog ate my homework” style of making excuses that really turns me off.


    Yes I am keeping the puts – I really don’t believe they will actaully blow something up and, if they do, my faith in human nature is shot!

  153. Dow to close below 12,000

    How many headlines will that make?

  154. one year later…..

    phil can we have the next one?

  155. Great article Jeff!


    Congrats Waj!

    If you’re “back in action” next week I will salute you!

    It’s 6 years since my first and I still freak out sometimes…

    $67.50s? Oh that was so last week! We’re into the Jan $70 puts now…

  156. phil, will rhat be taken over?????????????

  157. Hey Guys ,

    Looks like 12150.00 was a top for awhile like we talked about 6 sessions ago ..problem is we have only lost about a percent and need 2-5% more. Still recommend DOG , QID and SH until we get some bears out there …everyone is buying calls and in a bull market that means down and even worse sideways. Good luck have a nice weekend. 200 points from the top i called on the DOW and we bounced off of $41.60 on the QQQQ’s $41.40 is the start of entry for the QQQQ long players..Dow needs another 200 points down.


  158. Phil,
    Yesterday I had a strong inclination to buy puts and calls on either side of the WFMI price ($5 on either side) so as to catch a profit if there was a big bounce/fall. I chickened out — crap! — and missed out on good profits. However, it’s hard to deny that some stocks tend to react big to earnings. ANF, coming up soon, caught my attention, but it’s already fallen quite a bit. Wish it were still up there. AEOS looks toppy so I took out a few calls/puts (with a slight edge in puts) using this same philosophy. Crazy? Other stocks that come to mind (for next earning time) include AAPL, RIMM, SNDK, ISRG. And what about PCLN, which usually is very touchy at earnings time? (It’s up an awful lot — it’s chart mirrors AEOS — and earnings are November 8.)
    BTW, gold stocks continue their way upward, as I forecast about a week ago. (Even a broken clock gets it right twice a day.) Your old MRB has gone up bigtime. Too bad I don’t have that one, but I now own kind of a small mutual fund in commodities, particularly gold, silver, zinc, and uranium. Check out CXX.V for the last few months or CZN.TO for the last week or two. Uranium’s at an all-time high, I believe.
    I still appreciate your (and your contributors’) comments, but having been burned a couple times with oil options, they just seem too irrational and manipulated to predict short term.
    Finally, according to YHOO (, SBSA had an abnormal number of May calls bought today, but Scottrade doesn’t report the same numbers. Since I don’t see the number of Hispanics going down any time ever, I thought…
    Comments, anyone?
    Thanks to all.

  159. California Prop 87

    This did not have any effect on CVX stock price this week. I assume there is bleak chance that Prop 87 will pass.

  160. 1,2150? It topped out at 12,236 and hit the 12,200 mark from the 24th-27th every day.

    Going by closing high, yes 12,163 was the top on the 26th but I will be using the 12,133 level for my 5% calculations becuase it hit resistance there 4 straight days (10/23-10/27) so you have to give it some credibility as a resistance point.

    A proper mean of prior tops is 11,257 which formed from 3/16-8/28 so 5% up from there was 11,819, which was tested from 8/5-8/12

    2.5% above 11,819 is 12,114 where we had top and bottom action from 10/23 to 11/1

    So there is nothing at all unusual about any of this…

    Now, here’s where it get’s tricky!

    Forget the past and let’s say we had a start point at 11,819 and we went from there to 12,133, that’s 314 points since 10/12

    Low Fib retracement (66%) can take us to 11,922 without danger but that’s where I would draw the line before a full retracement back to the 5% rule at 11,819.

    If we break that, we are into a 5% drop from 12,133, which is 11,526 where I would really be looking to jump in but I don’t think things will get that far.

    I think 11,922 will hold early next week at least – as long as nothing actually blows up!

  161. Phil,

    Thanks for mentioning me today! I have not been able to keep up with all the comments lately …

    Finally, finally, finally, some of my homebuilder short positions are back in the green this week! First time in two months.

    Nordstrom (JWN) looks like an enticing short near the 50 level as a secondary play on the housing bubble bust and its ramifications. JWN looks very vulnerable a la WFMI’s steep drop today. Any opinion?

    – Prof

  162. cant get rid of me you fivehead. u really suck.

  163. Gotta beat the oil crooks. A Friday full of rumors and threats worked like a charm for these crooks. Oil back down on Monday if nothing blows up.

    To you conspiracy nuts, gotta lay off the Bush / Republican conspiracy theories … they are nutty.

    Dem victory will not be good for the markets or the country. CNBC talking heads ought to ask their prognosticators who they are voting for.

    A pox on all politicians ! But especially Kerry Kennedy Hilary Rangel Reid Durbin Pelosi Conyers Dean Murtha and many other crooks liars underminers of America and Socialists.

  164. Yesterday bought in dips the followings
    xle Nov 55 puts @0.65 &.55
    DVN Nov 65 put @0.50 &0.40
    OIH Nov 130 put @1.65,1.40,1.20!!!
    Hopefully averaged prices will get atleast 0.15 profit by MondayPm or Tuesday!
    If not have to day trade APC,DVN,XLE stocks on the long side with put as a cusion om Monday to recover the basis!!

  165. Thanks MJ, you inspired me to write a post on the subject!

    I think it’s a toss-up but I will be disappointed if they can’t pull it off because, on the whole, it’s a test of the Clinton/Gore platform for ’08.


    WB Prof! Congrats on having the stones to gut this thing out – crazy market… I hope one day to be similarly rewarded on the oil puts!

    JWN is very likely to pull back a bit but I’ll be a buyer by the end of the year unless the market really tanks. They’re a very solid company and their target customes will be the last to fall.

    I think their comps were up 11% for October – way better than most and they have earnings on the 20th and guidance has been heading up with a 25% increase projected for the year.

    Last 4 quarters were beat, beat, beat, beat and I could kick myself for not picking these guys up at $32.50 where it hung out in July.

    The current $45 puts are .70 and could be a fun play but only if the markets are breaking support and, even then, remember how good this company really is!

    Are there any HBs you think still make a good short entry?


    Lol Cap – goin’ all Shakespearian on the politicos!

    I personally love a good conspiracy theory as it is a much better way to discuss complex socio-economic issues than to write 15 page dissertations on the various market forces that drive the political, corporate and consumer decision making process.

    Rather than get into a discussion about how the price of materials increases drilling costs which is passed onto the oil companies who are taxed by the Californians and pressured by their shareholders to make the quarter and have to raise prices in order to assume an acceptable risk profile to keep their clustomers adequately supplied – I prefer to say the bastards are screwing us…

    Tomato/Tomahto I guess.


    Nice strategy Sammy – good luck to both of us next week!