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Thursday Morning

The CPI is out today.

I expect it to be not as tame as the PPI because consumers don’t have departments whose sole job is to make sure they don’t overpay for things, but we should get some trickle down improvement, at least as a slowing of inflation.  Anything else will be a big disappointment although I don’t see how anyone can complain about sub 3% inflation.

Asia was fairly flat, taking a well-deserved rest today and the BOJ held rates steady at .25% which should boost the buck a bit.  It’s very tricky for Japan, who have to double the rates in order to raise them a quarter point…

Europe has no idea what to do ahead of our CPI report so we will ignore them but we do want to see if the FTSE can break 6,250.

I should really wait 90 minutes as it will all change but let’s see if I get this right:

The Dow needs to break 12,300 TODAY in order to really bring in some new money.  Falling all the way to 12,100 would still be fine if we hold it but will sideline new money for quite a while.

The S&P tested 1,400 yesterday and it will be amazing if they break it and 1.390 is a very soft floor.  The NYSE is at 8,901 and holding that level will be huge – let’s look for them for early inidcations of trouble.  The Nasdaq touched 2,450 yesterday and now it has to buy it or get out.

The SOX broke 480, which was a huge barrier last fall and led to the mega semi rally in January.  We are still 75 points (15%) below those highs.  Transports are looking to take out 2,700, on their way to a retest of 2,800 – which may mark a top for now.

[Crude Oil]

Oil is going to try to hold $59 again as traders are stunned by the possibility of cold weather may hit the US in the winter.  There’s a gas inventory report today that is sure to make XOM move up whether it’s a build or a draw or a steep decline.

Ticker Sense has a nice gas chartand postulates that, even if we have the biggest drawdown in gas ever this winter, we will still hit the spring with above average inventories.

I wish I could tell you that makes for a good trade but nothing makes for a good energy trade as long as roaches keep entering the trap at a rate of $11Bn a day (since 10/25).

Since I called a top on oil prices on 9/25, crude has indeed gone down 5% but oil companies have gone crazy!

Gold will firm up on any small sign of inflation but may also do well if the CPI comes in low as we will be back to thinking maybe the Fed will have to ease off.  $620 has been holding up with our $615 target providing a firm floor.

Ah, now we have the CPI and things look good!  Down .5% and up just .1% on the core – very good stuff.  Now we can concetrate on making new highs!

If we can’t break our upside levels on this news, then the market may be getting a little tired.


Earnings were not thrilling and DELL was scary but the CPI makes up for it all as the future is looking brighter again.

BKS was in-line, BIG had a huge beat, IFX was so-so, REP is down, WTSLA beat,  

WSM missed and warned!  I forgot about the damned Pottery Barn, which drags them down every time!

SHLD “onlytripled profits and beat so, as I predicted in yesterday’s comments, it will sell-off!  Actually sales were weak, again confirming that consumers are buying upscale.

Later we get: GPS, HPQ (might save Dell), INTU, MRVL, SBUX

AMAT missed as expected but they are guiding revenues further down on a decline in display panel making equipment so let’s watch TXN and GLW carefully! 

We might get another crack at AMX, a winner last month, as they are bidding on Brazillian phone co. TIM.  The way that company grows they could buy Vonage and I’d still love them!

In a headline that writes itself, DWA will see profits “Flushed Away” by their latest box office bust, costing the company $25M.  This was their second disaster in the partnership that gave us “Wallace and Gromit.”

If anyone knows a good way to play canola oil, please let me know!  YUM has now switched Taco Bell as well as KFC to canola – that’s a lot of oil!

Now I know why the airlines are rallying – they managed to associate themselves with Ipods!  6 major airlines will provide Ipod connections in business class that even let you watch stored videos on the big(er) screen.  Anyone who want’s to invest in an airport based IPod download and accessory story give me a call!

GYMB had great earnigns but guided down.  Profit was up 56% on a 22% increase in revenue and same-store sales were up 16%.  BUT (and this is why retail is so annoying to invest in) Q4 is projected to be .63 vs .70 expected but the full year is still a beat so I will be liking them on a pullback.

It took them 6 months but GM finally found someone to cook keep their books!  Congrats and GOOD LUCK to former T controller Nicholas Cyprus!  Just remember, in the event of a crash, your chair may be used as a floatation device…

Speaking of Cypress (I know, the stream of consciousness is running wild!), CYis a trade I want to make as they still own 70% of SPWR, which is now worth more than they are.  It’s a proxy trade but I like CY long-term with the  Jan $17.50s at .95.

PRU is buying back 10% of their stock and the company only trades $150M worth of stock a day.  This is an Exxon sized buyback that will take all of next year to complete.  This is very different from XOM though as PRU is sitting on $15B in cash while XOM, by comparison, used 80% of their income to buy stock last quarter (oh, and the other 20% went to dividends).

Possible presidential combo Barack Obama and John Edwardshave gone anti-WMT and, interestingly, pro-COSTas Obama points out that Costco has the same prices yet pays employees 60% more than Wal-Mart.  I wont’ short WMT in a strong market but I like the COST Dec $55s for .90.

I feel like the guys in Seinfeld, watching a robbery being committed and commenting on it, but that’s what I see over at AAUK.  On Sunday Larry Yung (one of the richest men in China) bought $800M worth of AAUK in a private saleOn Wednesday AAUK announces a $4Bn investment in a China coal project that “may” give them up to 60% as partners with the Chinese geology bureau.  Nothin’ says lovin’ like handing $4Bn (the entire market cap of ACI) to your “development partners.”

The US has something else in common with China – we have made the list of countries with corporations that Norway has blacklisted for being involved in “weapons production, human rights abuses, environmental damage or corruption.”

Speaking of human rights abuses – is this good or bad publicity for Taser?  UCLA campus police are caught on tape tasering an Arab student over and over!  What impresses me most is the quality and length of the cell phone video.  The LA Times report makes an interesting read after seeing it for yourself!

Like I said back before Google even bought YouTube, this technology will have a profound impact on society!

We need a big boost today to achieve critical escape velocity as there is not much news fuel left to move the markets higher until Tuesday’s retail sales but, other than that, next week is a dead week heading into the holiday.

There is no shame in profit taking on this morning’s rise and be very, very careful if we can’t hold our breakouts because this is what happens when you chase things and don’t watch your levels!

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  1. GM Phil, like AMZN is it worth waiting before buying some puts on these airlines like CAL.

  2. If anyone knows a good way to play canola oil, please let me know! YUM has now switched Taco Bell as well as KFC to canola – that’s a lot of oil!

    How about BG, NMX?

  3. I am so amazed with GM – we caught it last month but it needs a news catalyst to go down. Maybe up a buck from here I would start to like a short but too dangerous now as people think the Dems will save them with trade tarrifs or health care or bailing out the pensions… Just like the oil cos, the fact that they sell less stuff for less money has no effect.

    KBR is going to open $20 or higher – it’s a very strange market.

  4. Thanks Charles!

    I’m seeing Dow “created” the seeds they are using now, that might be the smarter play but they look weak and BG looks stretched. ADM may also be involved. The timing doesn’t look too good for any of these guys just now.

  5. AMAT is killing the SOX which is holding the Nasdaq, which is pulling the others down…

  6. Got the COST Dec $55s for .75!

  7. Phil, are you still getting the SNDK spread you spotted last night?

  8. Wow, they are just giving things away this morning (or maybe they know something) CY Jan $17.50s for .80!

  9. SNDK, yes I’m watching the for a pullback so I can get the Aprils, hopefully I’ll get my price…

  10. Oh I’m so relieved! I thought I still had my DELL calls!

    I’m looking at the Dec $25s as a new entry ahead of HPQ earnings but it’s a big gamble. .75-.50 would make me feel better about it but only if Dell holds $24.50 – kind of hard to have it both ways….


    ANF coming back nicely!

  11. Oh that is not fair! Someone is grabbing all the SNDK’s at my target!

  12. SNDK Apr $42.50s – Way more bids than there should be!

    Size Quote Quote Size
    ISE 2392 8.5 8.7 617 CBOE
    CBOE 2025 8.5 8.7 350 ISE
    PHLX 1566 8.5 8.7 268 PHLX
    AMEX 465 8.5 8.7 169 PSE
    BOX 259 8.5 8.7 99 AMEX
    PSE 220 8.5 8.7 96 BOX

    Now if all you people turn around and try to sell the same contract that will get bid down too and wreck the trade so I’m going to bow out against 7,000 bids on a contract that currently has just 401 open slots!

  13. RIMM- UBS reiterates Buy. Target $125 to $160

  14. Israeli Court OKs SanDisk Acquisition Of Msystems

  15. Anybody see Liz on CNBC say the expectation is for a 1.5 Bcf draw. How do you get a 1.5 Bcf draw? Has she done this before? Can’t she question the teleprompter?

    As to trades, this Russian thing is not good for LNG (the company). Increased competition for LNG (the frozen stuff) has already reduced shipments in 2006 relative to 2005 so there is less need to add the 3 facilities these guys are building/planning. The stock is up 3 bucks this week (15%) with nat gas prices and a naive Lehman overwight initiation so a disappointment today in gas, if that’s what you can call it could kill this little run. Just went long the Dec 30 puts for $2.20

  16. Dell Dec $25 stuck at .9 with stock at $24.50 I’m going to take a few here but I’m mad about it!

  17. Good call there Z! I’m taking the Dec $25 puts for fun at .20.

  18. Gas delayed for some reason – must be shocking!

  19. Oh sure! Now Dell comes down to .85!

    Still waiting on Gas – never saw this before…

  20. The gas number usuaully comes out on time but has come out at late as 15 minutes befrore,… these guys on TV haven’t been watching it that long I guess.

  21. inected 5

  22. Still waiting for gas but a big VRule sell just hit!

  23. it’s out it’s an injection of 5 – above the expected withdrawal of 1.5 to 2 bcf. Does that mean it’s much “more bearish”? Let’s see how CNBC responds after the break.

  24. Well they went crazy to the upside on that much last week, let’s see if it evens out!

  25. stunner she says

  26. Notice on the main page of that site there’s a graph of consumer and commercial gas prices and it turns out consumers are paying 50% ($16) more and Industrial users are paying under $8

    It’s amazing how many ways they find to screw you!

  27. Residential customers are still paying for last year’s gas prices because the utilities all filed rate hikes to cover the bump. Now they’re in the process of (some already have) filed for rate reductions. The gas utilities may be an interesting play as yields fall next spring.

  28. XOM taking a beating now. Market looks like its tired.

  29. Well those BTU’s were a wasted of .20!


    Markets very disappointing – I’m lightening up!

  30. Bet you CNBC doesn’t harp on the gas number every half hour like last week. GE hedge funds are long natural gas. The simple talking point for the anchors is “we like natural gas, so smile when you mention it, play up the bullish, hide the bearish”

  31. HAL looking tired post KBR rally

  32. MSFT fighting the market – if they go, it all goes!

  33. Actually the minute chart on MSFT looks like it is being held down by a seller, not up…

    Very interesting…

  34. It there some problem making comments today – very quiet…

  35. took some xom 75 CALLS for $0.15. That ought to kill the energy stocks!

  36. Could this be the beginning of a downward trend for XOM that will get back some of my put money?

  37. I wanted to take the XOM $75 puts but I am just so done with these stupid things, even now I’m wondering if I should pick up the VLO calls if it falls close to $52.50!

  38. Thanks Z, I hope it works.

  39. I’m starting to think really short term on things like XOM. Wait for a dip buy it, wait for a spike and DON’T buy puts on it. Pretty simple really. Even if the funadamentals of the commodities deteriorate the other stocks get sold and fund managers use the cash to buy XOM. It’s a win win.

    Notice CNBC hasn’t mentioned natural gas again. They’re so conflicted!!!

  40. Hi Phil.

    (There’s another comment for ya’) :-) .

  41. Anyone have a feel where aluminum’s going?

  42. Anyone have thoughts on SBUX tomorrow?

  43. off topic.. does anyone using wordpress know how to add timestamps to comments on my site. sorry for the spam phil.

    BTW, Phil, did you take the LNG Dec 25s for $0.20 or the BTU’s

  44. Thanks Ku! Seems like an odd day for no low levels of chat, hits are big so I guess everyone must be calling a top and dumping but the Dow is holding up and MSFT just broke up, not down…


    Aluminum as a trade or AA?


    SBUX I’m in but if it goes up much further I’ll be taking some off the table .

  45. Just was able to stop laughing enough to post. A little laughter is good for us. I watched the UCLA video and agree the length and quality was amazing. It is almost hard to believe was from a phone and not a camera, had to be a unit with at least a 1 gig card in it. Poor work on the part of the operator though but at gives you the idea. Crazy California, keep me away from that wacko place. I will say that I think this is a devastating piece for TASR. What a side show. All they needed to do is have 4 officers just grab the idiot and carry him out. Instead they put on this scene with the guy screaming and the TASR being used over and over. What a joke. Thanks for the link to the show Phil, it allowed me to laugh while my calls are being wiped out on that POS stock AMX. Lightened up the day a little. :)


  46. AA as a trade, aluminum itself in a broader sense.

  47. Boeing’s on fire! Waiting to get in on a pullback, but it never comes. Phil, are you still holding your Jan08′s? Is it too lofty or is it going higher?

  48. AA – beware the global slowdown. A lot of this economic exuberance was a bet on oil going back to $55 or less – the message is the same one I had in the summer – the Fed is not going to keep rates low to finance a commodity rally and the markets aren’t going to take it anymore.

    There has got to be a major commodity correction which, since commodities are 20% of the S&P, will be a painful market correction but at least we can afford a 10% drop from these levels!

  49. BA – they’re still too cheap but now I made too much money and may have to stop out on a pullback. Had I actually expected them to hit $90 in a month I would have taken the .85 calls for 50 cents at the time!

  50. What has gotten into HAL, it is actually going down.

  51. What massive manipulation – are we supposed to belive that a 5Bcf build in gas is what killed the entire energy market?

    It is such a game, now they are killing all the calls into options but this drop is as fake as the rally until XOM confirms with big volume.

  52. OT
    Glenn-- I don’t understand the laughing in watching such horrible video. It just came to mind if I reversed the situation and this video was shot in Iran or any other country with their local police tasering one of us.

    Phil-- I don’t think the video would affect Taser price, if it was misused, it is not the maker’s fault.

  53. See a message is being sent – oil goes down, stocks go up. The OPEC boys own stock and now they have to decide if they are willing to play hardball with the International Equity Community – one of the only guys with more money than them!

  54. USO getting docked but XOM will rally into once the minor selling is done. Told you I could kill the energy market by buying XOM calls!

    Updated gas chart:

    Basically states what Phil was talking about this am in that even the coldest winter only brings gas storage back into line with the 5 year average. Not too supportive of $8 gas.

  55. Hi Chris
    To each his own. The comedy is in the incompetence of the police in handling a nothing case. Nothing got hurt here except the student ???’s pride who decided to make an political statement out of a simple request to show his student ID. He got exactly what he wanted which was an embarrassing sideshow.

    Re. TASR it made very obvious the issues which will eventually cause its demise. There are some very large issues with respect to investing in this company which have been well documented over the part couple of years.

    Have a good one.

  56. TASR – you have to understand market psychology. Theres no NRA for Tasers and there’s plenty of people who will worry about a ban or regulations if they can be abused.

    Wouldn’t that video have been worse if they were shooting him with bullets or clubbing him?

    Anyway funny or no I can’t wait for the press releases, the interviews, the trial – this will keep us busy for quite a while!


    Oh! Philly Fed looking kind of weak – just came out. Low employment, not a lot of orders, this is the opposite of the NY report last week.

    Doesn’t matter because the transports just broke 2,700!

  57. CNBC just put a silver lining on nat gas down 3% and oil down a buck. These guys used to report and analyze. Now they just spin and spin and spin. They really suck.

  58. Phil or ne o u pro’s: Do you use a time of day to dump your expiring positions and take what you can get or try to ride it out til the last min? Sittin on some losers right now and is amazing how very little stock movement is occurring which has made the day so far mean little to no change from yesterday on these expiring options….oh well live and learn (the hard way!)

  59. I’M apalled by these guys!

    I guess they were always spinning but we were accepting their BS until it has now gotten to such a ridiculous level that it’s obvious that they’re doing it.

    Bloomberg is not better, I suppose you could just say they are fairly small companies without proper news experience who are deluged by PR people and lobbyists which weighs their oulook.

    You could also say that GE, a $370Bn company, has massive interests in providing global energy alternatives just like they used to control all the lighting on the planet (they are the only original remaining Dow component from 1896).

    So they really just want to get back into controlling the global energy market but I’d still rather have them in charge than XOM…

  60. Exactly, what didn’t he grasp about the words “Stand up”?

  61. Why didn’t he just “stand up”..?

  62. Options – my rule is that I’m usually out of current positions on the Thursday, 6 seesions before expiration or that Tuesday, 3 days before.

    As a rule of thumb I either like it enough to roll it into the next month or I kill the trade – those nickels add up!

    Once you get this close, you often don’t get the nickel and I find that I’d rather have 10 sure nickels than let them all ride and hope one pays off.

  63. Anybody notice the strange thing going on in XMSR?

    Holding a long term call on this I see the options are priced high now compared to where it was in the morning spike.

    Not wanting another manipulated crooks swarming stock here.

    Any ideas?

  64. Geeee
    Sold my VLO Jan CALLS in time yesterday it seems… bad news it was at BE after holding them for 4 weeks
    Still have XOM Jan 72.5 puts…. Zman keep buying calls

  65. Maybe because they just tasered him?

  66. TOL is flying! Not DHI, they pulled back a bit. I wish I would have caught TOL testing $30 into expiration this morning, that was an easy put!

  67. Phil, are you going to take the money and run on half of your SBUX position?

  68. don’t you think the dude was stunned by the frickin’ tasr….i’m sure if i got hit with one, i’d have a hard time standing up 10 seconds later….what a complete abuse of power….this is a nonviolent “crime” if you can call staying in a library a crime. they could have easily placed him i handcuffs and carried him down…then to top it off, the students at the end who were complaining about the abuse of power, and the officer says to drop it or they’d be tasered themselves….these got to be some of the dumbest “kiddie” campus cops i’ve seen.

  69. mmm TASR ,the where almost warming up to use Taser guns here in Europe.Lets hope the don’t watch YouTube ;-)

    Phil you take all SBUX of the table or just a few? I am also still holding Dec 40 (1,-)


  70. those campus guys are all going to lose their jobs.

  71. Phil at the moment which company do you prefer TXN or MOT, in a continuing rally.

  72. XOM (and most energy) could have 8 days like this and still be in an uptrend so let’s not get too excited about this stuff!

    Volume on XOM is just 9.3M atm – very slow with 3 hrs left.

  73. Interesting activity on MRVL

  74. YHOO and COF flashing on my screen as new lows….how long can the market keep its gains here….I still think it looks too tired. Sell off in the afternoon?

  75. SBUX – I took all the $40s on that dip for $1.55, the $37.50s I will just ride out as I sold calls against them.


    TXN or MOT – half of each! I couldn’t chose…

  76. Dow playing kissy kissy with 12,300!

  77. Phil, if xom were trading at sane levels, where do you see the reasonable pps at this time?

  78. Dow big ups: BA (2%), DIS (1%), HPQ (.6%), JPM (.75), MCD (1.5), MO (1.5), MRK (.8), MSFT (1.2), PFE (1), PG (1), UTX (1.3)

    Dow down: HD (.77), VZ (.75), XOM (1.1)

    That’s pretty good! Especially as HD is bouncing off the 200 dma after a 4% run and you can’t even call XOM a pullback as it’s up $8 since 10/10

  79. XOM – $50 assuming oil at $45-50. Exxon should always be a slight premium to the price of oil. They are all about the reserves they pump out of the ground as they do virtually nothing to find oil or improve their facilities.

    As I’ve been saying this week, they spend so much money buying their own stock back that they’ve actually incresed debt and payables ($8Bn) even while they are “making” $10Bn a quarter.

    On $40B in income in the past 4 quarters, they have “just” $3.4Bn in net cash flow.

  80. buying more XOM calls here. When was the last time it was off a buck at day’s end? The comapny just hasn’t started buying today. As long as December crude holds $57.05 (the old low), XOM should cut today’s losses in half at worst. Although, this time could be different.

  81. Thanks!

  82. rmbs “rambo” is back

  83. I’m not going to stop you Z, your first call did wonders for us!

    Just remember I said like 2 weeks ago how we’d all be much richer if we just disconnect our brain and wait for the Vrule. It hit the first real downturn in ages right on the button this morning so I’m not going against it….

  84. Who in their right mind raises a target from 125 to 160 (hell of a raise) on a stock already trading at an optimistic PE of 64, that has more than doubled in a little over 3 months? Is it possible to check the volume on a specific options contract for the previous day? My guess is someone bought a load of RIMM nov 130 calls yesterday or tuesday. Someone at UBS is gonna get a nice bonus! heh

  85. I Love Z’s last line “although this time could be different”…I agree, how many times have we seen XOM sell-off huge only to recover in the late afternoon?
    I don’t buy it this time though……..

  86. GOOG gonna break 500? Looks like that.

  87. AAPL inching up on 52 week (and all time) high ($86.40). Seemingly dragging MSFT along. Awfully nice of AAPL.


  88. wishful thinking ;-)

  89. I will be so surprised (and angry as I sold at $492) if they break $500 befrore Modnday.


    XOM 10.7M sold, just 1.4M since 12:54

    That crunching sound you hear is roaches chewing their legs off before the door closes on them!

    If there’s going to be a turn, it needs to be right about here – about 2% for most oils and, of course $57 on the button for oil.

  90. They woke up Yahoo and he said “Google is where?”

  91. time til pump: 15 minutes and cooouuuntinnnggg.

  92. down $2 to $56.75. Dow is soaring and is likely to drag XOM with it by day’s end. XOM volume only 11.4 mm now. Comapny usually buys into 2:00 pump.

  93. Do we really think Yahoo is only worth 20% of what Google is?

    If I’m MSFT or an old-line media company and I want to take on Google before they own all media on the planet – who do I go to? AOL? NWS? Start from scratch (quick – name 2 people you know with MSN Email addresses).

    GE has to be thinking about it, DIS has to consider it, so does CBS/VIA (in a weird post-breakup sort of way) even TWX would be in the running if they weren’t already burned by AOL.

    Apple could get pissed at Google and write a check!

  94. Anybody have an opinion on the exchange stocks with the Nymex IPO tomorrow?

  95. SBUX at 40

  96. Don’t know about YHOO,but I have the feeling GOOG gets catapulted after OE….


  97. Rather than watch it dumbfounded I have my finger on the trigger of the VLO $52.50s for ..80 just in case! Check out 10/31 hourly and the super mega pump from right about this kind of drop.

  98. LNG: what’s with the massive JAN call open interest all the way up to the 60s?
    A bet on winter gas prices or hedges on big short positions?

  99. So how do you make the YHOO play work best?

  100. Out XOM with a whole $50 gain to cover my comissions….NO more oil options for me for awhile….

  101. I don’t even want canola plays, too much like oil.

  102. Well, considering Cramer thinks google goes to 600 and yahoo to 12 (or was it 14?) it’s worth 10% of google!
    The problem is, you do the right thing and more often than not you lose because there are more stupid people buying RIMM at 120 and MA at 90 than there are wise ones selling. Same with oil..

  103. xom vlo setting new intraday lows – and it’s after 2 pm

  104. phil, I have been following sgp and I find it interesting. how do you like dec 22.50 for .35. thanks

  105. What, no pump?

    SU puts starting to wake up…long way to go…short time to get there. USO in free fall, $0.09 off all time low.

  106. 90M shares ($6.7Bn) were purchased at .50 to $1.25 above this price in XOM in the past 5 days.

    Like a Cramer pump, that’s a lot of very confused people wondering what happened to the great tip they got in on.

    Close to 400M shares (20 days full volume) were purchased above $70 in the past 30 days – at what point do you get out of a $70 stock that’s going the wrong way into a holiday weekend?

  107. Lakerjock,
    I can’t say I blame you, but I would kick myself if I bailed now, after all this time and loss, and this pullback turns out to be the real deal.

  108. Sweet revenge – I have taken my losses with xom personal.

  109. finally got my HD Dec-06 $35 Put at .35
    SNDK Apr-07 $42.5 Call at 8.3
    COF Mar-07 $85 Call at 1.5
    BZH Jan-07 $43.375 Put at 2

  110. you’ve nailed it — XOM showing a ton of buyers, no sellers !!

  111. Oil at $56.30. Think that demand story is starting to leak out. What has CNBC attributed the drop too? Profit taking? LOL ROFLMFAO. Except for those XOM calls of course :-

  112. phil,

    any thoughts on ISE calls ahead of nmx tomorrow. down today. low volume. news of countersuit regarding licenses to list options. advice is appreciated.

  113. is ISE a takeover target (NMX?)

  114. If you think this sucks for oil stocks – how would you like to be an oil country that pumps 2M barrels a day and is losing $5M a day on this drop?

    When you have 14 wives to feed where are you going to get money to pay your rebels?


    LNG – we talked about this this mornng and I was thinking that you could consider the fact that others are building terminals to be a good thing, not nec competition (you have to ship it somewhere).


    SGP – if they pulled back to the 200 dma (like PFE) I would love them but they have a high p/e and it’s a trade that could go either way. If they break above $22 then the $22.50s are a great momentum play but estimates are for a double over last year so any news that indicates they may not execute will be taken badly.

  115. why didn’t i buy those slb puts?

  116. frick, could have had a ton more on XOM….should have been a little more patient, but the 2pm oil pump scare, scared me.

  117. Well, I lied. I bailed out of my jan 72 1/2 puts, but holding on to jan 70′s

  118. Well, I lied. I bailed out of my jan 72 1/2 puts, but holding on to jan 70′s

    Did well

  119. XOM going to look like a bargain to the street once oil closes, plus everybody expects a rebound in oil after big down day and the press will talk up record driving expected over Thanksgiving. Bet XOM closes down less than $0.75.

  120. XOM pump short lived

  121. zmann, you may be right, but I don’t see the reason foe xom to trade at 75 even with oil at 60.

  122. ISE – and all echanges – there is the danger of some money being moved from one to another rather than new money coming in. If the offering goes well though, all the exchanges may benefit.

    How about the possibility that they are taking oil down today ahead of the NYMEX offering in order to depress demand so they can scoop up as many shares as possible??? Remember how easy it is to manipulate the NYMEX and how many Billions can be made grabbing this IPO into a rising oil market!

    The exchange went from $48 to $57 (so far today) and the offering went from 6 to 6.5M shares and is “way oversubscribed”.

    Cramer said yesterdya the fix is in and it could be a hell of a big one!

    I guess ICE is the real takeover candidate from a well funded NYMEX so maybe the Dec $85s for $13 as that’s just a $2 premium and there’s no real reason for it to drop and lots of reasons for it to go up.

    You can sell the $100s for $5.20 against but it’s hardly worth the bother then is it?

  123. Phil,
    Any thoughts about ISE the same group with NMX.

  124. Now you know the Dow is doing well when XOM is totally cancelling out BA’s gains and the Dow is still up 50!

    Volatility is going down today! That means this direction is virtually set in stone (I know, hard to believe).

  125. Will there be NYMEX options?

  126. I can’t believe oil blew through my $56.89 mark by .59 in one day!

    That’s a worst case scenario on the 5% rule – stoping on the wrong side!

    I’ll have to recalculate later but, if this wasn’t bs manipulaiton to allow people to swipe NYMEX shares, we could be really on to something here…

  127. D,

    me either but that’s what’s been going on of late. the late day rally. I’m still long term short several energy names. Just trading a an expected yet inexplicable daily recovery in XOM with calls. If not work out, there’s aklways my buried puts.

  128. No options for a long time. Cramer says buy NYMEX at $76 tomorrow!

    The heck with that, I talked myself into the ICE as a great proxy play and it’s already pulling back so I’m looking to buy at the day’s end.

    This will protect me from a mad oil pump tomorrow as a huge NYMEX open is bound to do something for the ICE.

    If not, they took a long time to get here so I don’t think my Decembers wil get wiped out too quickly.

  129. Phil, did you gamble yesterday with the SUN 65 put? you quintuple your money if so.
    would you gamble today with the SUN call 65 :)

  130. LNG chairman is on CNBC now. How can you not short this little french guy? His best reason for building three terminals is that the decision to build them was made long ago. So he’s saying that he’s stuck. LNG imports were down last year. How about that? Oh yes, CNBC failed to point that out. You won’t run these plants at full capacity, no where near it. The economics on the plants aren’t anywhere near were they were when Cheniere was the only new game in town. Plus Europe and China are developing markets to take gas. These Cheniere plants are receiving facilities. They won’t be shipping out any gas. As such they’re competing with the new facilities and for cargos that would have come to other facilities in the US.

  131. LNG CEO says there are 30 LNG projects in the work and it’s too late to stop them if the price of gas goes down!

    Global capacity will double to 40Bcf by 2010 (per day I assume)

    He says only notable competitor is SRE, who are also way high.

    He sounds a little like a condo builder in vegas who says he already has the deposits and this thing is going to be built no matter what the market conditions…

  132. Phil…exactly

  133. Phil
    Should I keep the DHI Dec-06 $25 Put longer?

  134. It’s the same as if I ask you how you like your high priced girlfriend and you say, “well, we’re married, so she’s pretty good”

    SU getting popped here

  135. SUN – yes I’m very please with those of course! Out of half at day’s end though no matter what the signal is.

    I won’t do the call, it’s not a knee jerk take the other side position – I firmly believe that the oil run is baseless so I will short when overbought but I think this sell-off could be just day one of a 10% correction.

    Like I said earlier, XOM could go down to $68 and would still look like a screaming buy long-term.


    LOL Z – we should do a morning show together! Posted at the exact same time!

  136. It’s a deal but you make the stock calls and I’ll be the contrarian indicator.

  137. It’s funny but CNBC is getting this right for once. The tanker stocks have been calling BS on Opec for 2 weeks now. FOR and OMM both up when you’d think declinig volumes would hurt their business. It’s a cartel full of liars.

  138. DHI – it’s not a trade I’d keep, too risky but you may be very sorry if it takes another rejection off $25 and flies down but they make more money if commodities drop.

    I suppose if I had 20, I would keep 5 out of principal!


    Ah they are rolling to the Jan contract on Monday, that is going to confuse everyone! We may get another day of contract dumping then. I thought they were just going to let this month ride but I guess that will happen in December (they must catch up at some point).

    Jan contracts are at $58.55 (down $2.17) they are being held up as people are rolling bad positions into next month hoping for a turn around – sound familiar to anyone.

    That means we may want to take some off the talble tomorrow and see what happens over the weekend before repositioning.

  139. LNG what play do you recomend? Dec Jan put price?

  140. Go Dell! Breaking $25…

  141. Phil,
    What is your take on the new FSLR IPO? Already there are a few players in the field, do you think this will launch?


  142. what’s gold going to do now? dollar? opinions?

  143. Phil, where’s the next downside resistance for HD. Into Dec 37.5 puts at 0.65


  144. Phil, you gonna hold on to xom puts?

  145. LNG is too low here for me to like them as a short. I have this problem as we shorted them already up near $40 and did well so I just don’t like to go back to something I’m already ahead on without a really good reason.

    There’s plenty of energy plays that have gone ballistic that can be shorted for a month if we can break below $55 and hold it so I have a paitient philosophy.

    Also, we have about 8 open puts on the sheet that are stilll way behind off of 2 and 3 doubles and at each stage we could not believe the stock kept going higher so there’s a lot of room to run in those too.

  146. XOM, I’m taking half off even as I never wanted to have that much riding on it in the first place – I’m over my 20% mark on oil so I’ll sleep better with less.

    I can hardly bring myself to sell the SUNs but I have those OII’s too.

  147. Do you still have your finger on the trigger for VLO 52.50s

  148. FSLR – don’t know enough about them. Have’t heard anything special. I like Ocean Power – which is coming soon.


    Gold down a couple dollar kind of flat. Nothing going on there


    HD still above the 200 dma at $37.68 by a hair after testing below – next below that is 50 dma at $36.79 so not much upside (downside) on that trade unless you get a big breakout.

  149. Phil
    with all about oil today what do you think about XOM Dec 70 puts for .50?
    a gamble maybe?

  150. VLO – no, I think that’s over. If this is all some con to keep the NYMEX pricing down we’ll still probably have a chance tomorrow.


    XOM Dec $70 puts, I still own em! I like them a lot more now than I did at .25 but as I DD’d I’m halfing out today.

  151. It willl be funny if the guy who bought the 94,000 XLE $53 puts for $2 ends up in the money!

  152. XOM. Looks like the buyback is run by the Bush Administration. They only buy near the high.

  153. Hey XOM broke 17M today! Looks like well over 20….

    So if 4M shares above usual trading drops the stock $2 and there’s 400M shares that came in over $70 since 10/15, that’s got to be a solid 20 days of major pain in their future if things go south!

    The stock has only had 6 small down days since then and is only up 10% so probably most of those guys are still in (the last roaches).

    I think $54 oil will make this look like a run on the bank…

  154. Phil, do you think that YHOO could be remotely bought out by the big gorrilas?

  155. They took a look at the playstations and say Sony loses $225-$300 per box sold! It’s like they’re giving away computers to sell you games. Good long-term but not short.

  156. Phil
    Still buying ICE???

  157. YHOO will be bought out one day but how much and by who is a mystery.

    How can they let Goog be a $300Bn media conglomerate that controls the internet? Even if they all have to get together they have to do something.

    Comcast may even want it as they move to more of a web centric model.

  158. Man I’ve got to get the zman xom contra indicator patented. Every time I say something bullish the 400 pound gorilla falls like Kong off a building. Looking to close at low of day.

  159. Zmann, can I be a footnote, I put the curse on ICE this afternoon, now everyone else can get a better entry.

  160. Oh I’m in on the Dec $85s for $12.30!

  161. Phil, you’re welcome, glad to help.

  162. Oil down $4.75 in last 5 seesions. USO punching to new lows. This isn’t just expiry. Opec is lying bunch of thieves. CNBC says 4 week trailing average exports from Opec are up through Nov 2.

  163. In for
    ICE Dec-06 $95 Call for 6.6!!!

  164. [HPQ] H-P Q4 net earns 60c vs 14c
    [HPQ] H-P Q4 pro forma earns 68c vs 51c
    [HPQ] H-P Q4 rev $24.6B vs $22.9B
    [HPQ] H-P sees FY07 earns $2.28-$2.33
    [SBUX] Starbucks Q4 net earns 15c vs 16c
    [SBUX] Starbucks First Call Q4 earns est 17c

  165. Wow! Blatant lie on CNBC – Maria makes a big point of saying how the current contract expires tomorrow and that can cause volatility and then says that the Jan contract is “just below $60″

    It’s actually $58.57, pretty much right where the premium should be ($2.25) on a month out contract in something this volatile. A regular stock like AXP at $60 has a $1.65 premium on the Jan $60s.


    HPQ kicked ass! Looks like a .04 beat at .68 but guidance is kind of wimpy.

    Dell seems concerned by the inventory build but this is the whole problem with analysts who’ve never run a company – they are about to ship Vista, it’s almost Christmas, OF COURSE THEY HAVE INVENTORY!!!

    You can’t sell anythign if you don’t have inventory!


    SBX got killed! Thank goodness I got out of those $40s!

    I’ll have to look at that later but I feel really bad for my caller on that one!

  166. Marvell Tech Q3 sales $520.4M, up 22%

  167. TRB is a safe play for a Monday morning merger surprise …may be the last chance to get into the TRB ….up on big volume blocks today and after the market closed again…Gabelli upped his stake as well as 6 other funds …don’t get left out …TRB safe JAN .35.00′s I am in the DEC. 30′s and 35′s…every news report values TRB from a low $37 to a high of $74…anywhere in between is worth a play.

    XLK …XLF…nothing but money …ALL best play of the week besides EFUT…how do you like that chart….EFUT is why we will go down 5% in a day soon…something to do with the Chinese currency or something but the Chinese internet craziness is about to come crashing sown…GOOG peaked out at $500.00 AAPL can’t have legs til it takes a breather …the QQQQ is in trouble…Investors Intelligence is the most Bullish in years and that is not good …remember ..a bell didn’t go off at 13,000 …did it ?

    Buy some TRB


  168. Have to agree with ttt to some extent. I don’t think we’ll go down 5% in a day but I hope the market pulls back a little. I don’t like how everyone now suddenly hates those who call for a pullback. I don’t want the market to crash, I don’t want a 20% drop, I don’t even want a 10% drop, I want a realistic annual return. 16% for the dow in mid november is not sustainable with this economy. Just like european indices which are up 20-30% this year. It isn’t sustainable, and everything that isn’t sustainable is unpredictable and will crash when people least expect it. I would think it would have taken more than 5 years for people to forget the crash, but it seems we never run out of crazy people with money so I guess we have to play a crash every 5 or 6 years now.
    Btw, Phil, Cramer hates Delta! Don’t sell your calls

  169. Tom, enough with the TRB! It’s down 5% from the 1st – that’s the 5% rule, it’s resting, not bouncing.

    I’ve already said my peice on EFUT and other Chinese stocks but I am always intersted in currency information – I haven’t heard anything from China other than the normal noise about letting the Yuan float against the dollar but it hasn’t happened in 36 months (we even changed Treasury secretaries while we waited) and I don’t think it will happen before the New Year either (pick any year).


    Yes, it’s very dangerous if we do not attain escape velocity as this point because gravity will be a Bitch! If you are pro market – we’d better catch up to Europe and Asia because if we weigh them down, we could be in for a long global collapse.

    The best example of people forgetting the crash are the analysts who say “don’t forget the Nasdaq is nowhere near it’s high.” What idiots! People were giving a sock puppet with a 400 multiple $500M – those days better not come back!

    Oh wait, we’re giving people $8 for natural gas that comes flying out of the ground unless you physically stop it and $56 for the same oil we paid $15 for 5 years ago – maybe those days are back already…

    Cramer is very disturbing – I just heard him tell his minions to dump all oil except HAL. Just last week he was telling people to buy XOM, we can’t be at the bottom already can we?