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Monday Morning

Well the dollar is starting to matter.

We talked about this back in Augustand it has always cast a shadow on our trading as I’ve never been able to get all gung-ho while ignoring this pressing issue.

While we were all out having turkey, the rest of the world took a long, hard look at our balance sheets and downgraded us. 

As our debt is looking riskier to foreigners, the rumors that the Fed will LOWER rates to boost a slowing economy make no sense at all to buyers of international paper (or to anyone who actually understands economics).

So let’s be very, very careful out there as things may LOOK good over here but to other countries we look a lot more like this:

   

And that is not good in any language! 

I don’t want to make things sound dire but, since Wednesday, the dollar is down 2.3%.  That means that a European or Asian investor who has a virtual portfolio of US stocks lost 2.3% of his value across the board in just 3 days.  That’s the equivelant of a 250-point Dow drop!

We are going to be needing some pretty exceptional retail numbers to convince foreign investors that our economy still has legs…

Let’s not forget that we asked for this when we told China to strengthen the Yuan.  Currencies don’t strengthen in a vacuum and for the Yuan to rise, something had to fall and it’s no surprise to my readers that the dollar would end up suffering.

All of this is right in line with my Inflation Nation policy but it’s a fine line between a steady devaluation and a total meltdown so let’s watch our gauges!  Asian markets were up, except for the Hang Seng as investors there become concerned that the government will have to take action to curb the dollar’s fall.  Japan has already made noises about keeping a rate raise off the table to keep speculators out of the Yen and to maintain the ”carry trade” where investors borrow Yen to buy Dollars, taking advantage of the interest spreads.

Europe is having a 1% sell-off and companies that get paid in dollars are being hit hard, a strong indicator that European investors don’t see any great fixes ahead for our currency.

You would think Europe would be in a good mood as crude prices have slipped 2.5% in the past 3 days, something we are blissfully unaware of as the contracts are priced in dollars that are falling just as rapidly.

I need to go home tonight and get back to my spreadsheets to figure out new targets on oil but just realize that, from a foreign trader’s perspective, oil has dropped $1.40 (2.3%) and is trading at our magic $58.56 watch level which is now $59.96 at these dollar levels.

With the whole planet on the short side of the dollar it may be a heck of a time to go contrarian but let’s be very careful about that!   We’ll keep an eye on gold which has moved a very UNIPRESSIVE 2% since last week, meaning it mirrored the dollar but picked up no fear premium on dollar weakness.

Let’s also keep an eye on our market levels, which held up so well last week!  Will international investors see a 2.5% drop in US equities as a buying opportunity or a sell signal?  Either way I’m very glad I moved to mainly cash last week!

We are just .3% away from breaking below the 2.5% rule (halfway to the 5% rule) on the international scene so it’s bounce here or take our lumps:

  • The Dow needs to retake 12,300 early or we will be testing 12,200 in very short order.  As soon as we lose 12,250 I will be sell, sell, selling!
    • TRANQ 2,650 is the companion line here.
  • The S&P is holding 1,400 but there’s a fiery pit just below and things are not looking good for our hero.
  • NYSE will give us the earliest trouble sign if they break below 8,900 but we are still hoping for the great escape over 9,000.
  • The Nasdaq will open below 2,450 and needs to retake it to give us hope.
    • SOX 490 should not be a dream as we are so close and Vista ships today (to major corps) but 480 will be a nightmare!

It’s been a while since I pointed out some petty, juvenile, stupid thing that the Bush and his pals are doing as I hate to kick an administration while it’s down, but this one ticks me off.

Bush has renominated the same group of judges that were rejected by the Republican controlled Senate last year as being too conservative. 

This is a pointless waste of everyone’s time and accomplishes nothing other than telling the new Congress that Bush hasn’t got the slightest interest in working with them. In addition to clogging up the courts with doomed appointments he is also jamming through some that are 100% opposed to “the spirit of compromise.”

  • He’s putting up Andrew Biggs, who wants to privatize Social Security (the Dems have already said no) to a six-year term as the deputy of that agency.
  • He’s appointing Eric Keroack as chief of family planning at the Dept. of Health and Human Services.  Eric belongs to a Christian group that is opposed to contraception for women but he will control the $283M budget that is supposed to grant women access to supplies, services and information.

So it’ll be business as usual in Washington for the next couple of years – at least the markets seem to like gridlock!

================================

I’m traveling today and I’m glad I don’t have to sweat the day out as it is likely to be something better viewed in retrospect but if the markets turn up there may be a few good plays to make!

Sometimes I’m right so fast I can’t take advantage of it!  Retail sales are really, really good and we might have a hard time picking up bargains if all we get is positive news.

ShopperTrak says US retail sales rose 6% vs. last year’s “Black Friday” and they are projecting a 5% increase for the season to $457Bn.

But ShopperTrack does not measure on-line purchases which are up 109%, according to payment processor Retail Decisions.

If this data bears out it will be a very interesting holiday shopping season indeed! 

WMT is looking a little disappointing but that plays in with the Consolation Prize Theorythat people are simply moving upscale in their purchases.  We need to keep a close eye on TGT, who should benifit, as well as our old pals at BBY, FD, JWN and SKS to see how far this trend is trending.

Of this group, all but FD look short-term overbought so any additional strength from this group will bode well for the retail sector. FD is looking good, although not as good as they looked earlier in the month when they sold off to $39 but I still like the Jan $45s for $1.05as long as they can hold the 50 dma at $43 – right where they are!

TGT is also right on the 50 dma at $57.50 and I was hoping for some reason they would test the 200 dma at $52 but it’s not looking likely so I will be keeping an eye on the Jan $60s.

In comments, Optionstrader1 made a few suggestions I thought I would address here as they are all good choices (but again, only if the others are heading up and the markets are holding our levels as we still have a dollar crisis to overcome):

  • SHLD – I just sold it so I’m not ready to go back in and I see no compelling reason for them to break $185.
  • GES (and other clothes) will likely be slow out of the gate as people try to grab electronics and other things they think will be sold out first.
  • I would love MA on a pullback but AXP is more likely to pop with the Jan $60s at $1.50.
  • Another credit card company I like is MS (Discover) if they pull back a little.
  •  ANF we are already in and I would buy more on a pullback if we get so lucky.
  • BBY is very stretched and needs to test out $55 but it’s hard to resist the Jan $55s for $3 when I can sell the Dec $55s for $2 at the first sign of trouble!

Let’s not forget CC (12/19), BBY’s very ugly cousin, where I go to get away from the crowds.  They have beat and beat and beat again this year but are getting no respect with 17 holds and a sell against 10 buys. I’m playing CC for a long-term reversal on the Jan ’08 $22.50s for $5.50 and selling the Jan $25s for $1.40, a spread I can live with!

The problems with retailers is that there’s a million of them so I’ll be diving into the bargain bin for my main picks on Tuesday, once we get a real look at which way things are heading.


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  1. Options – Looks like you nailed the MA play. Did you get in early?


  2. LVS is getting very, very tempting now. I’ll be looking for Jan ’08 $95 puts around $11 or the $100 puts for the same if it doesn’t turn down before there.

    Once I establish them I’ll start selling closer puts against them as I can recover a good percentage of the premium on the Januarys.


  3. Phil, are you still on the short side of BTI?


  4. Man! MOT is getting dumped!


  5. XOM running up…


  6. Yes MOT is getting dumped… not good for the calls.


  7. VLO OIH turner red, XOM green?


  8. Looks like we have a 2.5% drop ahead of us across the board.

    That will take US markets down to the 5% rule from a global perspective but if we don’t get a bounce there – watch out!

    ==============================

    BTI may be considered a safety stock so I wouldn’t want to jump on that right now.

    Cash! I’m very big on having cash right now!


  9. VLO, USO, XOM all green now…


  10. Phil – I posted the response to MA in the previous Post. Thx for the caution, it paid off for me

    But then I think I did something foolish instead – went & bought xle 57 options .

    Someone convince me it is/was the right think to do


  11. FCX is having a nice rally, while PD is lagging behind. Over the past 2 weeks, the divergence closes and PD will move up too… I’m in PD 120′s and fcx 60′s.

    Thoughts?


  12. tom2oc:

    Are you there? I took profits on my SOHU shares (selling at $25.11) and bought AMD, which should touch $24.


  13. ok, got some aapl calls on the dip…hopefully did not make a mistake


  14. MA was good right from the get go but pulled a head fake with the market tanking. I didn’t buy but I a looking at the $105 here.
    The market dropped hard just now.
    biggest pullback in weeks so I’m sitting on the sidelines and waiting for market clarity.
    MA was a good scalp in the morning though


  15. Phil…any thoughts on coinstar….was recommended on seekingalpha last week…this stock seems overvalued and puts are cheap to get in


  16. btw..symbol for coinstar is CSTR


  17. Total meltdown today. What happened to MOT?
    Also at this rate doesnt look like MSFT will ever hit $30 by the end of 2006,
    Brutal.


  18. looks like AMD is bucking the trend, very bullish. We need that correction in the markets before Christmas gets any closer.


  19. BD4, congrats on those SOHU. I would have exited also. AMD not for me thank you. Daily still bearish looking to me. Especially not going long anything in this market with GOOG and BKX so bad. Just following GOAX. Shorted the hyped company (AAPL) at 93 on double top and now protecting profit. If it can go below 91.50 we might see a nice slide getting under way. Back in RRC long also on acting very nicely today.

    G/L!


  20. XLE – well you know that wasn’t me!

    Everyone but XOM heading down (safety stock) I’d be taking a look at the $72.50 puts if I was around to watch it today!

    Maybe if it can’t break $73 on this run.

    ===============================

    PD – the offer is what it is. Unless copper goes up huge there is not going to be another bidder and you have to put copper’s very weak gain ($3.07-$3.12) in the context of what is now a 2.5% drop in the dollar.

    I’m just hoping to squeeze 3 sales off my long puts on this one but I think FCX has several ways to lose here:

    Drop in Copper
    Failure to close deal
    Competition for PD driving up price
    Revelation of problems in Indonesia

    ===============================

    MA – that’s why I didn’t want to get all rah rah on the momentum stocks. It’s the same underlying logic by which I sold those Google calls last week.

    I guess it would have been better if I published my dollar views over the weekend but it involved a lot of research which I was still reading this morning but that was they underlying reason for my concern.

    We’ll see how much of a dip we get for the next hour – into the close of the European markets but I think tomorrow’s Europe open will be more telling as people who have 401Ks (or whatever) with US exposure start calling their brokers.


  21. Coinstar – you have to remind me tomorrow as I don’t watch them and I need to have more screens! This laptop is killing me…

    ===============================

    MOT is DD for me here but after this I set 20% stop.


  22. Tom

    Hope you are wrong – bought AAPL calls on dip, slightly in RED.

    Well at least one of us is going to make money whichever way it goes

    Hmm Phil wondering if i should hold on to the xle 57 PUTS I have or get rid of it


  23. oil spiking on iraq pipeline bombing. it’s a refinery supply line, not a termianl line but it and the coming cold are spiking crude.


  24. Oil back over 60


  25. Just shiv, I’m just out of the overbought hyped co on a bounce on 91.5. Will get back in when it goes back below. Nice ride. Hope it goes back for you now. G/L to you!


  26. Do u guys have any news on UARM? Considering some puts….


  27. Hard to say with XLE – XOM is holding up very well and it’s killing me not to short it around here but they’ve got the momentum to take oil up over $60.

    Even though it’s a dollar based illusion, that won’t stop automated trading programs from kicking in and buying up the majors if we cross so I’m going to wait and hope for an even bigger pump before upping my shorts.

    ===============================

    I think way too much emphasis is being placed on WMT’s numbers and there are lots of potential bargains to be had here ahead of tomorrow’s major data.

    On the whole, I’m very glad a travel day is forcing me to resist temptation and I will just have to be ready with momentum plays (like AMZN $42.50s) if the numbers bear out the trend I was seeing over the weekend.


  28. Phil, what about SBUX here? DD or sell? Entered 37.50s at your recommended $0.65


  29. Looks like the VIX has finally been awoken.


  30. XOM 72.5 seemed kinda too expensive to me. To expect xom to fall so much is unbelievable right now ..but then one never knows

    Tom – I am still holding on to the calls of AAPL, hopefully it will go up -planning to hold it till tomorrow for the retail sales


  31. SBUX, rather wait – they are not off more than the indexes, you always have to look at your positions relative to what has to be a lot of program selling.

    Oh well, airport time for me – good luck all – Like I said, I sure am glad to be mostly in cash!!!
    8-)


  32. Y are not the oil stocks down along with the market?


  33. MRO at $92.75 – I have to short it here ;)


  34. USO is up, oil up, gold up, commodity equities up too.


  35. Looks like aapl is breaking down :-(

    Walter you better be good I just went in for the mRO puts with the last of my money


  36. MOT is just taking a thrashing, so much for my 22.50 calls.


  37. Just shiv, well good luck to you on those retail sales. I’m not into funnymentals gambling so I’ll pass and continue to trade on TA only. This crooked stock went into overbought territory last week so I turned bearish on it short term and waited for entry to short it which I got today. We’ll see how those numbers come out and trade accordingly once they’re out. Show me the money first!


  38. Sorry, I just probably got carried away with the hype of AAPL. I need to hang on the calls till tomorrow to avoid day trade hopefully it will stay afloat till then.

    can you explain more about the AAPL fundamentals as of now? That might help in making a decision

    Thx in advance tom


  39. Just shiv- good job on MRO, stock is down $0.50 ;)


  40. XOM turned red


  41. Thx walter, hasn’t made a dent on my options I am up by .05 c hopefully I will be richer by end of the day

    Thx for the tip


  42. Loving my VIX calls from last week. May close it shortly.


  43. Looks like a normal retracement to me with low volume. Anyone feel otherwise that it is a meaniful drop?


  44. Phil,

    dci has earnings after bell i am looking at the 40 calls
    any thoughts i think it could hit 41

    I wonder if crox can rock again after this sell off??


  45. Just Shiv, sorry, can’t help you on the FA side. Phil is FA bullish long term on aapl is all I know.

    Hey Hi Sane-trader! Follow this dollar chart to see to assess if the drop is meaningful or not. If it goes below 83 it means it’s meaningful. If it bounces, then market might stabilize. Too much foreign money invested in the US market. If the dollar keeps falling, they will bail out and cut their losses like anyone would do and this will might start something ugly for the market. If it bounces back up, then we should be ok for a while.

    http://quotes.ino.com/chart/?s=NYBOT_DX&v=w


  46. Being bearish on oil seems to be a losing battle. Tom i understand your view on AMD on the daily but longer term charts are bullish AMD heading back to 23.30 to fill gap. Seems oppurtunity will be a knockin to get into some great moment stocks, BA!, AAPL!,SHLD!,GS!,SNDK?,ERTS? Keeping eye on these stocks.


  47. kustomz, agree on the oil battle. Heck I tought last week after inventories that I would finally be turning bearish here I am again today loaded on the long side making money like I did all month and protecting profit now. Nothing more than following the money and stopping all FA arguments going into my head.

    On AMD until this prolonged bearish continuation pattern is negated I will remain with TA bearish bias on it. I looked at the longer term weekly and the moneyflows divergene is real ugly. But might change tomorrow morning we never know.

    G/L


  48. CNBC says lots of gas


  49. Tom2oc..

    Good to see you back posting here.

    Looks like AAPL is heading back toward its trend line. With all the retail hype on it it should be a good buy if it can kiss at 87 for the next leg up dont you think?

    I see WFR has broken above its trend line too…still bullish on it??


  50. Tom what is FA?

    looks like your TA seems to be solid


  51. Hi Tom!
    Thanks for the chart, pretty good point on the dollar weakness. But my
    guess is even the foreign markets wont want it fall big short term
    due to piles & piles of Tbills they are holding.

    Good to see you here.

    st.


  52. All options of mine are in RED – no matter they are CALLS or PUTs

    Damn trading


  53. Tom why is your blog not updated today?


  54. keep posting on wrong day…

    any play with COF that will be added to the S&P 100 on Nov 30 and Cramer today said it was undervalued. Others have touted the stock recently too.

    Also, MO won in Supreme Court today.


  55. Scotr451, enjoying the last moments of this site before it turns pro since I don’t plan to sign up. Yes WFR chart is quite bullish. But need to see market bouncing before I get in there. Could be something major coming if it doesn’t turn up and cut on the damages. COMP down 1.9% is very troublesome.

    Just Shiv, FA is for fundamental analysis. When you read on a board that someone is bullish on AAPL because there were 15 people in line at the cash at the AAPL store, this is FA stuff. I disregard completly these but many ways to skin a cat.

    Kustomz, until AMD negates that bearish continuation pattern on the daily I will remain bearish on it. I looked at the longer weekly timeframe and it is even worse as far as moneyflows are concerned. But might go through a TA character tomorrow, we never know but show me the money first.

    G/L


  56. kustomz, as for shorting the oil stocks, I must agree.


  57. Anyone buying any calls?


  58. Sane_trader, true but if they can invest those Tbills in other countries in non US dollar to make money, they will. Not intenting to post much on here since I’m not signing up for the pro site. The less I hear or read about FA the better it is for me but many ways to skin a cat!

    Just_shiv, FA is for fundamental analysis. My blog is no longer updated since I see no valid reason to keep spending time doing it.

    Kustomz, I will remain bearish on AMD until that bearish continuation pattern is negated. I looked at the longer term weekly and it is no better. But TA character might change tomorrow, we never know. But will wait to see the money first though. Agree on oil. Heck I thought I would be turning bearish on oil after inventory reaction of last week but it recovered by EOD so still no change.


  59. I wish I could..but all my money is locked up in RED.

    Might be a bad thing though, to adjust to the dollar & oil the DOW must drop at least 300 pts & it is down only 150

    I am off work today, was hoping to make some moeny only to see the profits wittle away


  60. fair amount of carnage on my screen today :(
    saving grace was a ton of SNE 40 calls I’d sold for 1.85 last week, they’re keeping my head above water today!


  61. might be wrong time to say “no point being bearish on oil”.

    Oil might just break down today :-)

    wishful thinking??


  62. Well, I just got in with MA Dec 110 C @ 1.20 – Hope that this won’t take too long !


  63. brb..gotta feed something to myself…will be here all trading day eating your brains.

    Hopefully by the time I come back my AAPL is up OIL is down etc etc


  64. MA $100 and 105 look good here but man, you don’t want to anticipate the market let the market do some confirming and decision making and you should respond. I’ve been shorting today buying puts but now the technicals look oversold.


  65. Tom…if you are still there….I would like to have your thoughts on LLTC (thanks)


  66. I`m out of MRO short. $0.65 gain


  67. Joe, LLTC bull flag. Might go back long in it once it’s over trigger 34. Show me the money first! With such an ugly market my strategy is to be more prudent and wait for breakouts to happen instead of getting ahead of them. If the market starts to correct, many breakout setups will disappear imo. Could go both ways, follow your system! G/L


  68. good for you walter

    me still debating … I would go into day trader status If I did too many day trades

    I have the option of doing 1 day trade & eyeing 3 different options I have. I am green on xle pUTS, likely to liquidate them since they carry higher investments, sadly will mean have to wait out on MRO

    THnks for the tip though, hopefully MRO will go RED :-)


  69. Good timing sakiko on the MA calls, unless the market badly screws up from here you might have made a good move


  70. I had an order in all day to buy BA jan 90′s for 1.30, couldn’t get it filled. I gave in an paid 1.35. I just checked back and the ask is 1.30 – figures!


  71. Tom, Haven’t signed either, havent been here in a while, tied up at work, just thought of stopping by to see how Phil is doing. Too bad he is going pro.

    I was about to turn a bull and look what the market did. LOL.

    SPY, DIA breaking the uptrend line, Qs pretty close. Gotta watch in the coming days. Any kiss of goodbyes will be perfect.

    Will be joining our old pals starting next month. Lets see.

    Good Luck to you!


  72. Phil, I like your blog and market commentary, but when it comes to politics, I see that you are a charter BDS member, and your comments at times do border on the juvenile. So please excuse me, but I have to call you out on this one:

    It’s been a while since I pointed out some petty, juvenile, stupid thing that the Bush and his pals are doing as I hate to kick an administration while it’s down, but this one ticks me off.

    Bush has renominated the same group of judges that were rejected by the Republican controlled Senate last year as being too conservative.

    This is a pointless waste of everyone’s time and accomplishes nothing other than telling the new Congress that Bush hasn’t got the slightest interest in working with them. In addition to clogging up the courts with doomed appointments he is also jamming through some that are 100% opposed to “the spirit of compromise.”

    ———

    Now, if you weren’t being so partisan you would admit that a) it is the President’s perogative to nominate judges, not you and not Ted Kennedy and not the Senate; b) these judges have not been “rejected by the Republican Senate for being too conservative”; but rather they have been obstructed by the Liberal Democratic minority in the Senate who have continuously blocked what for the most part have been solid judicial nominees for strictly partisan reasons. There is in fact NO DOUBT that virtually all of the nominees would indeed be confirmed if it came to an “up or down” vote on the floor of the Senate.

    So, its the Dems who continue to obstruct and play games, not the Bushies. I imagine you are a fan of activist judges that legislate from the bench, but most of the country does not favor that.

    So Phil, let me keep this short and simply “Boo” you over the spin you put on your partisan political comments; but otherwise thanks for your useful market commentary and insights.

    Best, Capcube


  73. GOT out of XLE puts with some profit.

    Have to hang on MRO Puts till tomorrow, hopefully it will be reD

    Holding onto AAPl & MA Calls

    maybe both of them will go green later today!!!


  74. China’s Ministry of Information has announced that the number of mobile pone users in China is expected to reach 459 million by the end of this year.

    That is more than the US and Japan population combined!

    All told, 48 million people are expected to join the ranks of cell phone users in China this year. That is more than the population of South Korea alone.

    http://english.sina.com/business/1/2006/1124/95951.html


  75. lolllllllllllllllllllll what luck…got out of XLE puts & into MA Calls, only to see MA tank afterwards while XLE falling furthur ..

    hmm good thing i am hanging onto MRO although I have no clue to its fundamentals


  76. Cap seems your opinion has the same partisan feel as Phil’s, not to step on toes, think we all know no one wins an argument in politics, except the majority. Opportunities abound but still too early to jump in. How many believe we are headed for that 10% correction?


  77. Weird: DJIA has been stuck at the same level for about 45 minutes now, at -139.24 for the day. The Nasdaq and S&P 500 continue to fluctuate.

    Never seen this happen before, anybody know what’s going on?

    TIA


  78. looking at RIMM calls $140


  79. just shiv – so you’re the one, eh ? LOL


  80. I’m thinking 2 to 2 1/2 percent correction here, then up, then down (much later). Figure about 30 down on S&P.


  81. Prof, I do, if you are looking at Ameritrade… the DOW is wrong.


  82. Capcube, you’ve seen that OIH negatively diverging from USO in the last 30 min? Nymex close will be interesting to see. If it continues to trend up I wouldn’t be surprized to see OIH got back up flat. Let’s see.


  83. looks like it, lets see if the dip buyers come in. Probably not, Europeans will be selling again tomorrow.
    Alot of influential data on the way, don’t see big buyers yet.


  84. Cap, can you get the fuck out of this site. Last time I think we decided to take your political bull shit to some porn site.

    Please get the fuck out of this site!! Already getting screwed by the WS crooks today, cannot take your bullshit today. Go write stuff on your blog, and I will come comment there.


  85. Cap, USO strong close at HOD. Let’s see OIH now.


  86. Whats the straw that breaks this camels back? Waiting for the bears to come on CNBC, hasnt happened yet. A lot of focus on the falling dollar but was it really that unexpected with all the data thats available? Its fairly difficult to make money when the markets are so high but it seems theres a lack of shorts tooting their horns.


  87. Whats the straw that breaks this camels back? Waiting for the bears to come on CNBC, hasn’t happened yet. A lot of focus on the falling dollar but was it really that unexpected with all the data that’s available? Its fairly difficult to make money when the markets are so high but it seems there’s a lack of shorts tooting their horns. Any opinions from local Psychics


  88. hmmm..xom certainly looking to close GREEN

    tom what is HOD?


  89. HOD = High of Day

    Hey Prof – still in the home builder shorts? Holding on here, but all the talk about private equity take-overs is driving me nuts! Getting nervous and coming close to giving up on them.


  90. Tom -

    OIH went beautifully w/ me today. First short; then long at 2:15 pm.

    On the USO convergence, I did notice that, but lately there has been a lot of that. I have added a lot of the underlying tickers behind OIH to track; 1 or 2 big movers can affect OIH big time more than OIH. HAL, SLB, BHI, VLO, etc. also XLE and XOM to watch.

    I still like the short side on OIH; short anything around 140 + ; and if dollar rallies a bit; oil should tank even more.

    Unless we get some major geopolitical crap to spike oil; Oil is in a sell rallies mode IMO. Same for OIH, but you gotta watch the stocks.


  91. will they rally OIH further; or will it close at or below the low of day; I don’t know, but would lean towards the latter.


  92. Tom -

    More on the USO / OIH divergence. All the service stocks are down; maybe being sold w/ the market overall. USO up, likely on the weak dollar more than anything else. only XOM up slightly.

    Pretty aberrational day overall I guess.


  93. Tom -

    I thank you once again for turning me on to trade OIH way back when. I am still making nice $$ trading it.


  94. GOOG down due to Barrons report stating they are more skeptical than ever on it. Also mentioned the fact it has 15th largest mkt cap and might not deserve that. GOOG has a very capable and young management team who have big plans for the future of the net- and the net IS the future! Buying opportunity soon..


  95. Cap, thanks for info on OIH. The fact that OIH can’t rally on USO closing strong and at HOD migth be telling that the energy sector is tired of acting as the savior of the broad market. This seems to be a change of character and might confirm it’s time to turn bearish on the sector. Heck, if this is what happening with GOOG down $18, AAPL down $2 and BKX down $1, this market might set itself up for a nice correction. Still some people on vacation today so will and see for tomorrow to have a better picture. Still long RRC and holding nicely despite the energy slump.


  96. JB, funny and strange how Barron’s keep on coming back with bearish views on GOOG. Agree that we might have a long swing opp coming up once the dust settles on the Barron’s article like it did in the past. Will be watching closely.


  97. I am personally quite upset that Tom02C did not get enough responses to start his pro site- the best technical analyst we have here and I sure know I made money from his labors.

    I am proposing that everybody who is willing to pay what he’s asking which I think was about $30 a month ask him to launch it. This is my desperate plea because I know I sure miss his insights, especially on a day like today!

    300 subscribers is enough for him to start – puuuuleeease say you’ll do it fellow traders!!!


  98. LOL!! Jerry! Thanks but going from 37 readers is a long way to 300! LOL!

    Nice try though! Thanks again!


  99. I am willing to commit for 6 months for Tom’s valuable service.

    Edgar


  100. foo,

    Yes, I am still in my homebuilder short positions.

    There is a fine line between conviction and stubbornness — I admit I probably have been too stubborn with sticking with these HB shorts.

    However, the way I see it, the housing market has continued to deteriorate even as HB share prices have bounced back.

    I am expecting some really bad news (for longs) with the home sales reports the next couple of days. I can’t wait to see how the spin-meisters attempt to mitigate the damage.

    Good luck,
    Not-as-frustrated-today-short


  101. WMT really bringing down the markets today. WOW. closing at low of day. Same store sales down for first time in 10 yrs!. Black friday was really dark for WMT this year.


  102. Interesting relation between CME and GOOG.


  103. BTW foo,

    All the talk about LBO’s of homebuilders is a smokescreen, IMHO. These companies are already levered up with debt. Where is the value in taking them private? Overvalued and overpaid-for land holdings?

    I don’t get it, but maybe I’m biased by my bearish view of the housing market. If I’m being over-cynical about this buyout scenario, can someone make a logical case for it?


  104. Count me in Jerry! :)

    Are you analyzing the energy sector Tom? It would be nice to see some energy and refining plays.


  105. Holy cow! Not a nice closing! COMP down 2.2% AAPL down 2.33% after being up to 93 in the morning, GOOG down $20. BKX down 1.2%. Gee, I hope the GOAX rules guided some today. When AAPL reversed on the double top, there was the GOAX-VIS signal quickly followed by a GOAX-R1S clear signal. And this depsite all the fuzz about how great the retail sales were on Friday.

    We’ll see if we bounce or have a follow-through day tomorrow. But even if it bounces, might be a dead cat going for a kiss. Takes time usually to repair such damages.

    Careful out there! Have a nice evening!


  106. I don’t care how daunting the task Tom02C – I am desperate and I am not above begging!

    We have Walter on board that’s two + 36 =38 only 262 to go.

    Let’s go folks !! Priceless info, get your fundies with Phil and you technicals with Tom!!!

    Commit here and we’ll convince Tom – I am sure of it!!


  107. I’m glad thst’s over.


  108. Walter, I’m on top of the fence or sideline if you wish on the energy since last inventory report reaction. I’ve been bullish for a full month before that event and made good money despite the bad fundies. I’m in long a small cap oil play in RRC because I like the long term chart but that’s about it. In wait and see mode now.


  109. I don’t know about the rest of you but I lost a smokin ton today because I didn’t have tom guiding me! Ok I gotta mention this before Phil gets back or he’ll kick me off the blog (maybe – Phil is very cool and I just want us to have information to make money and Tom helps A LOT!)


  110. Regarding taking tom and phils blogs private and charging, i would like to see them continue public and have a good karma system. Pay them what you can when you make money on a donation basis.


  111. Prof,

    Thanks for responding! I thought I was the lone HB short here. I think I read Chris covered his short last week.

    Just hope bad news means bad news this time. For the last six months, it’s been buy on any news, especially bad news.

    I agree that the LBO talk doesn’t make much sense.

    Good Luck to you too!


  112. I think both Phil and Tom are very good at what they do. I also think it would make a great combination if they were to cooperate on a single website. Anyone who agrees, please speak up and maybe we can make it happen.


  113. Now we’re talking, but i think we need more downside. SNDK 45.45 down from 49 just 3 days ago. AAPL up from 85 just 4 days ago but down from today’s 93 to close at 89.38. I was able to take advantage of the market the past few months but the top we reached recently is keeping me from investing enough to actually make mention of profits. I need this pullback. Lack of real volume in many of the techs makes me think this may be short lived.


  114. It’s rather disheartening that only 37 people committed to signing up for Toms site……unless those 37 people were each logging onto his site 40 distinctive times a day….it’s sad that more people don’t recognize the value.

    I would join a site headed by Tom, Phil or a combination of both any day.

    I do miss the GOAX signals and the TA charts and patterns.

    I lost my shirt today….hope I don’t lose my pants tomorrow, or my underwear the next day!

    Good luck to all.


  115. I think Phil is more long term (but offlate he has turned swing or even day trading) but Tom’s stuff is very quick short term.

    I havent done a compare of both their stock picks. But I think they have an edge in what they do and quiet unique. What JB suggests is good to
    pay them donation as and when you make money. I think ppl are honest
    atleast to that extent.

    just my 2c.


  116. I think both Phil & Tom each have great insights and expertise than can be great help, individually or together. I am surprised that a lot of people, who appreciate the value, are not prepared to contribute just a few bucks a month to continue having the opportunity to take advantage of their expertise.

    C’mon you guys


  117. Alex1 I agree it would be awesome if they joined forces – they do operate differently but as a combo team, watchout!

    I think it would be nice if they would offer their services for free forever too JB but heck why would they? I only go this way once and my time is worth something and so is theirs so I think it is reasonable to expect that we should pay for the quality of service. The time these guys put in is extraordinary.

    Please don’t hesitate to comment in favor of this proposal if you
    A/ have made money with Tom’s TA
    B/ have lost money today without it

    I am voting A/ & B/

    Phil – please don’t hate me for using the forum – I just found a legendary Technical Analyst and I can’t believe now the service might not be available!


  118. JB – the problem is that too many people don’t feel like paying ANYTHING, even when they made money off of Tom’s hard work. He had over 1500 readers/viewers a day before stopping, but now only 38 people are ready to ante up less than $400/yr ? I got that back in a single trade. I offered to pay up front, actually.

    Actionable information has to be valued, and this particular marketplace of readers seems to not be willing to meet Tom on his terms. So either these readers can’t do the math, or execute trades effectively (and can’t do math, LOL…)

    By going private, Phil can shake off some of those immature idiots signing themselves as “Cramer—-” that post here on holidays looking for a little attention.

    Good karma ? Don’t see how that pays for the market data feeds. You might think that the internet is free… it ain’t. Tom’s learned analysis helps you pick the right direction on a given day… given the quality of the product (see his public blog) – that shouldn’t be free either.


  119. As one of the 37 signers i wanted to say thanks to tom2oc and missed your insights today..

    Happy i took Phils advice and got some DIA 121puts on friday…good call on that one.

    Hope you are reconsidering the blog idea with Phils site…I’m still in !!


  120. I would be willing to fund the site with a percentage of my profits. Each person could decide their amount based on their trading volume.


  121. foo,

    I hope Chris did not cover last week! That’s just what “they” wanted!

    Although I’ve proven time and again that I’m a horrible short-term trader, I can’t see how this week’s housing reports could possibly be positive for homebuilders.

    Who knows what NAR lies we’ll see tomorrow (Tues) for existing home sales. By some miracle, median prices may not even go down that much.

    But Wednesday’s new home sales report should be more interesting. We could see median prices fall double digits vs. last year. I can see the headline now: “Housing bottom confirmed as median prices for new homes fall only 0.7%” Of course, that figure will be vs. the prior month, even though that would be -12% vs. prior year!

    It’s starting to get interesting again for us HB shorts.

    - Prof


  122. Make it 38, I’d pony up a firm or flex amount per month/year.


  123. Jerry, here are some facts for you to consider and you’ll see why the business model I thought could be working is doomed for failure. Sorry Phil to use your site but since some of your future clients are asking, I’ve got to provide service and answer. :)

    Prior to going private, the blog had over 1,800 hits a day for an average of over 500 unique visitors per day.

    It went private for a test and try-out just to see how it would go and didn’t intend to charge a dime anyway until the site had a least over 100 readers as a starting number. I thought 100 would be possible seeing the hits and the good money made left and right from my TAs and then could raise it to 250 to have justification to move to my own web site for the TA traders community I’m dreaming of opening one day with all the TA bells and whistles but that would be a full-time job almost and the goal would be to make it grow to 1,000 like Phil is shooting for and getting as per what he posted last week. I still have that dream by the way and now I have the time to work on the desing after hours and might jump to it next year without going through the private blog transition.

    Got 37 readers out of which only about 15 answered the survey to see who was interested to continue with me. Out of the 15, about 10 long term clients and 5 not sure and/or short term for a few months. Meaning that more than half of the 37 would have been gone as soon as contributions would have been requested. Leaving 10 clients! LOL! Heck, for the trouble of analyzing, thinking and making a chart and loading plus the admin I would have gotten $300 per month which is less than what I made in the first 15 minutes on the AAPL puts bought at 93 today with only $2,000 invested.

    But the funny thing is this though: Today with the site not updated at all, the site has accumulated 301 visits from 209 unique visitors. Experience tells me that by the end of the day, there will probably be 450 hits and 250 unique visitors today. And this for a inactive site! LOL! Looks like there are a lot of people happy to read my blog and profit from it as long as it is free. Where were all these guys when I launched the private blog? Heck, I’ll let them get the free information they’re getting on the net and I wish they make a ton of money with it too although usually you get what you pay for. But will not be coming from me anymore, I gave enough.

    I got many ideas on different business models for a lower customer base and I’m reviewing some options with some readers. I think this is where I might be able to be fairly compensated for the time taken away from my trading, hopefully. Just shows that are many ways to skin a cat indeed.

    And a site a donation site was about what was the new site was going to be. Pay for what you got, read and liked concept. So it wouldn’t be that different, probably the same 15 would be contributing but not much more.

    Thanks again for your efforts Jerry. I don’t want to discourage you but it’s not from 37 in reality but more like from 10.

    Cheers,


  124. kewlinla@yahoo.com

    Tom please send me an email and tell me what I would need to do to join the readers of which you spoke.:

    “…I’m reviewing some options with some readers. I think this is where I might be able to be fairly compensated for the time taken away from my trading, hopefully.”

    Thanks,

    Jeff


  125. Tom, what kind of fee base did you have in mind?


  126. I would love a “Ebert & Roeper” type of site ( which I would pay of course, nobody work for free), I love Tom’s TA and Phils’s daily market analysis every day.

    Both thumbs way up if they join force.


  127. Tom2Oc,

    If you are that good, why don’t you make money trading instead of charging people? Why so much effort in trying to find a system to get money from beginners?

    John


  128. John, you’re making my case. Was just trying to help but that is another story.

    Best,


  129. If you are trying to help, it’s easy: don’t charge.


  130. Not fully up to date on the idea of the paid service, but do either Tom or Phil publicly disclose their actual identities along with their backgrounds and experience. I have not seen anything resembling full disclosure and further do not see how one could expect to charge folks without that. Just my 2 cents, don’t mean to ruffle any feathers. I like to know who I am giving my money to.

    And what happens if / when Tom or Phil gets tired from doing this on a regular basis ? or changes methodology or focus ?

    Anyway, GL to all here.


  131. Always beware of “gurus” who want to charge you for their services.


  132. Doubled up on the QQQQ 44′s and 45′s puts ..TRB held its’ ground. ZTR up 2%…Fear should take the weak out and now we have the fun of daytrading as VIX will be up to 20 by weeks end !!!
    Traders dream…Any bounce should be sold as time will decide when the correction is over unless we go straight down in a panic / climax tomorrow. Morningstar has a new report on TRB $50 …still time !!!
    Can’t stay away from you guys ..Tom …we miss the CHARTS !!!!


  133. Tom02C I appreciate the response and I am not discouraged. Now I have to convince 290 people instead of 262. No big deal! Johntrade1 and RocketTrade I appreciate your comments but please if you don’t like what the maestro is selling don’t make it even more difficult for the rest of us. I am literally begging to pay this man money – I know from his postings and effort he’s a decent guy. He puts way too much effort in as does Phil for me to consider otherwise. This is humiliating Tom but it’s worth it. I will not rest! (Though I may rest from hogging Phil’s site before he bans me!) Love ya Phil!!


  134. options2win – quality comes with payment. If you were good would you do it for free?


  135. RocketTrade, John, and others,

    I agree 100% with what you all say. It’s not me who started the discussion anyway. My blog has always been free and hopefully it was helpful to some as it was the intent and I didn’t mind putting some work in it. Now that we might have a good market move coming I’m back at focusing full-time on trading just like you do.

    Phil, real sorry for all of this. Good luck with your pro site. I’m outta here.

    Let’s beat those WS crooks guys! G/L to all!


  136. Jerry,

    If I were good I would make a fortune trading, and would certainly not try to get money from desperate traders. Never believe people who offer a way to make money fast. If they knew how to do it, they would do it for themselves and would not need your money. Successful traders don’t have blogs.


  137. Thanks to Tom I traded GOAX today – immediately dumped all my calls and bought QQQQ and SU puts. Up day today – thanks Tom.

    BTW when are you going to reveal the “V” component in GOAX-V??

    Edro


  138. >>Unless we get some major geopolitical crap to spike oil; Oil is
    >> in a sell rallies mode IMO. Same for OIH, but you gotta watch
    >> the stocks.

    Looks like we got it. Have a look at cnn.com:

    ” Insurgents target oil sources, cause massive infernos”


  139. Heck of a day I missed!

    Will take me a while to absorb this so probably no close until morning as I just got off the plane!

    On the whole it was a little harsher than I expected for day one but still nowhere near a 5% test which we will get if retail doesn’t save us tomorrow.

    Someone still needs to save the dollar and so far no takers…

    ================================

    I think DCI will have great earnings…
    8-)
    Just kidding, they already did! They were already forming a nice bullish pennant and just needed an excuse to break out – this should do it but $39 will be printing a new high at the 5% rule so be careful.

    ===============================

    AAPL – greatest company on earth but I wouldn’t buy them at this price! Next time they’re at $52.50 I’ll pay the extra nickle that I was too cheap to put in last time (kick, kick).

    ===============================

    Tom’s chart is too kind to the dollar – it’s being sucked down into the seventh circle of hell (mid 70s) if no one intervenes.

    That will effectively make us as big a joke as Canada was when it only cost 70 cents for a Canadian dollar…

    ===============================

    COF ready to rock and roll if we get some positiove news. They are cheap enough to take a long-term play like the Jan ’08 $75s for $10.50 hoping to sell the Jan $80s but will sell the $75s on any sign of trouble.

    ================================

    Shorting oil – pretty hopeless other than quickies like that XOM play this morning. MDR was also good to me as I DD’d my puts when they went nuts this morning.

    Still I pulled back a lot on my oils on that last dip and do have some money to play so I will be anxiously awaiting inventory on Wednesday!

    Tomorrow is big oil test as $60.31 is the 50 dma and pretty much back to the zero line on the 5% rule. If it breaks up, we can probably kiss the rest of the market goodbye…

    =================================

    Cap – OK, I will concede that if the Dems rolled over on the nominees they would have gone through but you do have to admit that if they didn’t pass last spring, then this slate is a complete waste of time.

    The idea of the process is to force a compromise so that the judiciary is NOT sullied by this partisan BS. The President can nominate whoever he wants but there is a reason that he needs congressional approval – that’s a part of the constitution I hope no “activist” judge ever overturns!

    By the way, thanks – someone has to call me out on this crap once in a while or I get too full of myslelf!

    ================================

    GOOG – holy cow, what was that?!?

    ================================

    Private site – Tom is very right, the amount of time we have to put in to put together a readable site (as opposed to the scrawly notes we make for ourselves) is a huge undertaking and it is simply not possible to do it for free forever as the opportunity cost of providing the service is prohibitive.

    While it would be nice to work on the Karma system, I’ve yet to see it work and, from my perspective and I think Tom’s too, there are simply too many people on the site. I’m getting shut out of trades I want at exactly the price points I set. Tom and I are both too honest to make a trade first and then talk it up but my mailbox is filled with free “advice” from people who do that every day.

    Just to move the site here and make a few improvements would never have happened without Jared, who has worked for free for 3 months in order to get the new site up and running.

    While I’m sure all you die hard capitalists think that’s just great – I have to tell you that, ultimately, you get what you pay for and, as you can see with Tom’s site, that is nothing without pay.

    Anyone who wants to know what they can have for free can go back to the old blogspot site and try to make heads or tails of that mess! Had I not been about to go private and had Jared not been around to help set this site up, it is very likely that October 31 would have been my last post as I was sick and tired of the hassle from Blogger.

    I’m a consultant, people pay me for my time. I know some stuff about stocks that I felt would be valuable and I’ve put a year of verifiable picks behind me and people can make their own decisions as to whether that has value or not on a go forward basis but to expect a talented guy like Tom to just give away advice that a smart hedge fund would kill for is just a little ridiculous.

    Motley Fool has 2M subscribers (they claim) who pay $399 for monthly subscriptions, yet they still litter their site with Ads. Yet any fool who writes an article gets “Headline” recognition in Yahoo Finance while us “Free” guys go under the bar in the “Financial Blogs” section.

    If I didn’t take enough pride in my work for that to bother me then my work would probably not be worth reading in the first place. My goal is to make a great pay service where people like Tom, Z and I can give you better information with less BS – but to do that takes a commitment from your end as well as ours because, although the best things in life are free – there’s lots of other cool stuff that isn’t!

    ===============================

    Short-term/Long term:

    I’ve been considering this and, reviewing my own trading this year indicated that I’ve gone short-term lately as I’ve gotten nervous about the market topping out.

    Back in June and July I took a ton of long-term plays that did very well (see “Forgotten Trades”) but I can see how my newer readers look at me as more of a short-term trader.

    I guess, on the whole, I do what is appropriate for the market conditions which makes me kind of hard to categorize. Seeking Alpha calls me their “Options Trader” and I guess there aren’t many guys out there who give a lot of option advice but again, it’s an appropriate respoinse to current market conditions.

    On Wednesday I thought it was appropriate to move to cash and I can tell from reading the comments that not many people followed me (nor did they in May when I hit the top on the button) and that’s fine, as I wasn’t sure either but my better safe than sorry attitude seems to have been right this time around (it did cost me a lot of opportunities in Setptember though).

    So while my trades may shift with the times I’m still pretty good at those Macro calls like Friday when I said that M2 number was going to kill the dollar which was a follow up to Wednesday’s (and a lot of other) dollar warning.

    Heck, if I ran a currency trading site I could just point to that one call and make a career out of it!

    ===============================

    It is my intention to bring my original batch of readers into the new site on a break-even basis, probably around the same as Tom was thinking of but no more than 1,000 people at that price.

    From that point forward only the daily observations will be free (although no longer available first thing in the morning) and all picks and comments will be taken private while fees for new subscribers will keep going up until they match any other typical newsletter service.

    Luckily, due to my various syndications, I will be able to hit my numbers but I think my reader to subscriber ratio is likely no better than Tom’s – I just started with a larger base of free readers.

    When you think of what it takes to put out a letter like this, the time, the effort, hosting services, web connections, a web master, an editor… and all that without getting fancy – it’s not so much that it stops being free as it is that Tom and I stop paying out of our own pockets in order to keep writing it.

    I have a crazy idea that the world is ready for a new kind of newsletter and a new style of investment reporting and I’ve put a year into it so far.

    As any good consultant will tell you, if you don’t get traction (the ability to monetize a service) at a certain point, you do need to walk away but I do hope it works because I have a lot of fun plans for the future!


  140. Phil,

    Thanks for the blog. I only discovered you about a month ago and have been reading almost daily. Last week (I think) you requested info from folks interested in paying for the pro site. I filled out the info, but I did not receive an auto-email or anything confirming, so I hope it worked.

    You seem to be an analyst worth paying for his work. I am willing to do so. I look forward to the new site.


  141. By the way, an alternate route both Tom and I are considering is an investment club:

    http://www.sec.gov/investor/pubs/invclub.htm

    But that would preclude us from giving picks to the general public and end up being run for the sole benefit of 10-20 people, not what we originally intended but a lot more profitable than a newsletter!


  142. Phil,

    I’m with you guys no matter what you decide. I’ve learned alot from you,Tom, Zmann, Soccer etc. and I sure want to continue the education, no matter what direction you go in.


  143. I’ve been making money consistently (for the first time EVER) based on Phil’s picks, and the information I get from him on a daily basis. These people complaining either aren’t paying attention, or… what? How come I’m making money with the picks, and the information, and they aren’t?


  144. PHIL, im in……would love to get more indepth information from you when your ideas are pretty much ready to pitch!By the way, an alternate route both Tom and I are considering is an investment club:

    http://www.sec.gov/investor/pubs/invclub.htm

    But that would preclude us from giving picks to the general public and end up being run for the sole benefit of 10-20 people, not what we originally intended but a lot more profitable than a newsletter!


  145. Will we see this “investment club” go public anytime? I would like to join if that is the long term goal


  146. Phil,
    Can you comment on CWTR as a retail play? Any sense in an April/July 07 c 30 vert spread at 1.90/2.60? Stock’s gotten whacked for 15% over the past week after a comment about a “highly promotional” fall environment sullied an otherwise beautiful quarterly report.
    Thanks,
    scobe

    PS--Glad to have to free site-good “training wheels”. I believe that the pro site will force me to be more disciplined in my approach. If I have to fork out significantly, I want to ensure a return. I also think it’ll make me more active in the forum--along the lines of “if you pay for it, then use it!” philosophy. Of course, this doesn’t apply for life insurance ;)


  147. Phil,

    Hope i can make something on dci
    these dec 40 calls were to expansive at 80
    my question is how fast wil the time decay if dci does not get past 40.

    any thoughts on aro earnings 11 28 after close?


  148. RocketTrade – no feathers to ruffle. But it’s pretty simple… I’ve been reading this blog for three months or so, and have gotten some great picks and good insight, not just from Phil, but from others that have pointed out what they felt were good opps. Luckily, after the first couple weeks of the Oil Bears fiasco, I went the other way and got my money back. I don’t need the ivory tower certificate you appear to be more comfortable in seeing from these guys. I need just good picks, mostly.

    And it’s readily verifiable experience in the archives of this blog. I can’t do what these guys do… so I’m willing to pay for that. Tom says that he scans about 970 symbols a day, looking for good trades. I’m lucky if I find a fun daytrade from 40 to 60 symbols that I look at.

    But like I said, it’s simple… you can keep your money and not step into the same trades. See you on the Yahoo boards… I suspect we’ll do better.


  149. Phil – you absolutely deserve the $$ – amazing calls and consistently reliable!

    I will pay with pleasure, can’t wait! In fact I might even cancel my realmoney subscription just to make a stand! :-) Good luck joining forces with Tom (if you go down that path) but that investment club idea is a no-no!


  150. Phil, do what ya gotta do to make it worthwhile.
    Tomorrow is going to be interesting indeed. More shorting in store?
    Or can we step in to buy with the big boys?


  151. CWTR (and other clothing retailers) – I’m concerned that the electronics boom is taking away from essentials spending. People just aren’t that flush and the warm weather isn’t helping move the Winter lines.

    Once you hit December and you haven’t felt the need for winter clothes a lot of people might make due with last year’s stuff (don’t forget we had spring in February this year).

    CWTR is testing the 200 dma at $26.25 but showed no bounciness yesterday at that level. With a p/e of 38 I would only like these guys on a significant pullback.

    ===============================

    DCI – that’s way too much to have paid for an out of the money call! You paid more than a 10% premium on the stock! Best bet is to sell into the initial run-up as that will return your best volatility premium because if this thing stalls out at all around $39, that $40 will evaporate quickly.

    Time decay isn’t your biggest problem, you paid a massive earnings premium compared to, say, PLL (12/5) where you can buy the $30s for $1.45, a .55 premium (2%) on a company with a far lower p/e.

    Just like anything else you buy, it pays to shop around before buying an option. Also, did you know the Jan $40s were just a dime more than the Dec $40s? The Feb $40s closed at $1.30, you could have bought those and sold the Decembers and had a 3 month plus .50 advantage.

    I’m not trying to make you feel bad but I do want you to think this way next time – I make a lot of those types of plays around earnings, buy the longer call and let someone pay me a crazy mark-up on the near calls.

    ARO – like I said, I’m off that space – let everyone get their IPods and Xboxes for Chrismas and I’ll wait for the girls to go spring shopping in February.

    ===============================

    Options – will the big boys be buying? It’s all about the data and I will go with the flow but my cash will be very slow coming off the sidelines today.


  152. Phil, the time and effort you put into the research and apply to your post is obvious. I don’t see how you do it and have a life.

    Like some others have said, I have learned a great deal in the short time I have been following your blog. You and others here have inspired me to do a little learning outside of this blog – thanks!

    If the price is affordable for me and my “little fish” account, I look forward to moving the game to a higher level.


  153. Phil
    Investment club
    Am in


  154. BA gets a 5.7 bln dollar order from Air Berlin. I bought jan 90′s yesterday on the sell off. Been waiting for a pullback on this one.


  155. Also; dd on those MOT Dec. 22.5 calls and dumped ALL of my XOM puts on the dip. I did add a bit on the spike before I dumped.


  156. Phil,
    The data looks bad from an overview, do you think this is just a start of the downslide? Dont wanna be calling a top or anything, with this weakening the dollar more, wonder what this holiday season is going to be!

    Thanks.


  157. Nokia cutting profit margins for next two years. This will not bode well for MOT. Looks like another thrashing is in the works for today.

    Phil, should we just cut and run?


  158. Concur with the others re info and thoughts behind potential trades you (and others) provide EOM is rapidly approaching and havent rec’d any concrete info re cost, payment methods, terms, etc. for the new venture. One suggestion I will make is: please accept PayPal or some other electronic cash clearing processor as I have gone cold turkey on credit cards……Thanks in advance (and for the past too!!)


  159. Be careful with MOT, NOK warns of lower margins. PALM warning, could put pressure on the sector including RIMM


  160. Investment club – no way, I like the site, the picks, and yes, the witty commentary just the way they are! Willing to pay for it (but not $399 per month! LOL)


  161. short OIH this morning 139.8


  162. New post is up but:

    BA – that’s 10% of their total revenue – a nice order.

    Data – not so bad but not going to call a bottom, makes for a good test though

    MOT – too late to cut and run on the short calls! I’m giving it the day. NOK news is good for MOT who weren’t playing the discount game but that’s a long-term play.

    PayPal already in the works!

    LOL – that’s $399 a year and just make sure you sign up on the pre- reg and you won’t pay that either!

    ===============================

    Arnie, clubs are $25M max but I intend to start one and roll investors out into others but we will need at least $10M to even bother starting the paperwork, which would be $1M each investor – not something to be taken lightly but I am keeping that option open for discussion.

    Big picture plan is to run a club, start a new one, make both successful and merge members into a foundation for a hedge fund with a very publc, very successful track record.


  163. Agree on OIH but let’s all move to the new post!


  164. want to know more about Cap “the neo-con nut” …. then visit his blog http://www.stopbuyingcrap.com