Archive for 2006

Weekly Wrap-Up

Yahoo is slow today. Makes you realize how fragile the whole on-line economy really is. We had a day off-line (9/11) but what if it were a couple, a few, a week?

Do you even have a backup plan for your banking, stocks, contacts etc.?

Anyway, not to dwell on it but I notice a lot of companies freaking out about security all of a sudden and it gets me thinking maybe something is up and I like to be a boy scout about such things…

The other day we talked about how many times you can jump on a bed and bang your head into the ceiling (Dow 11,100, S&P 1,300, Nasdaq 2,300) before you decide you’ve taken enough lumps. Well on Friday, another bunch of rowdy kids in the form of retail investors sparked a broad based rally on employment numbers that usually cause a drop.

Now the numbers weren’t too bad, a little over in jobs gained but overall unemployment went up as more people entered the work force and wages remained tame. Best of all they revised the previous forecast down so on the whole it looks like workers will remain underpaid for a while which we investors all love to see because those darn workers are just so expensive! Where are the robots they promised us?

With job growth at boom levels (I know, tell that to the moms working 2 jobs) we can expect the analysts to come out with more rate hike predictions by Tuesday to sour the markets. Usually we can count on Greenspan to purposely murder the party but I don’t think Bernanke is comfortable enough to step into the role of the guy next door who always tells you to turn down the music yet.

So we end the week in safer(ish) territory than we thought but only the Dow is above the 50 dma while the S&P is on it and the Nasdaq is 20 points below. So we keep our eye on the S&P for direction and confirm a re-rally if the Nasdaq can break back above 2,290 (remember when they said the Nasdaq would make 15,000 before the Dow?) this week.

The Nasdaq will not, can not rally without AAPL, MSFT, INTC, Semis in general and, Lord help us, Google and Yahoo. Maybe one can sit out but I’m pretty sure two will sink us for…
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Google Alert!!!

Well, my obsessive Columbo/Monk side has paid off again as I have been digging and digging to figure out what to do with Google next week. Sell it! Get out! Run away! Yes that’s right I am off the fence on this one for sure. Why? Sergey, that’s why. Sergey made the Fortune 500 list of Billionaires at #26 this week with $12.8Bn dollars. While a lot of that is Google stock, he has cashed in 6M of his 35M shares already for a cool $1.8Bn. Now I have no issue with someone who is rich in one company diversifying his holding (it’s crazy not to) but it’s the recent trades that bother me. Keeping in mind that we are in pre-earnings, Sergey has sold off $300M worth of stock since 2/1, while it was down $75-130 from its highs. Now I know gas is expensive in California but if he didn’t believe the company should be going down in price, why would he take a $100M haircut selling it just before earnings? Even a guy with $1.7Bn in cash (I figure he blew $100M on something nice for himself by now) should care about wasting $100,000,000. These are not options he was forced to exercise, these were conversions of his Class B owners shares into class A common shares that were sold on the open market. If you bought 200 shares of Google stock in the past month, then one of those shares was Sergeys! Here is what he started with in the first filing I could find on 2/25/05: Here is the filing from 3/8: While schmucks like me were buying up the stock as Google assured us everything was great, a man with a net worth of $12,90,000,000 felt it necessary to sell $300,000,000 after an earnings miss, a CEO gaff and an errant slide consecutively dropped the price. Notice Sergey loaded up another 130,000 shares (Conversion) for sale yesterday, thats another 1% push down on Monday as he dumps them on the open market (LVS watchers take note!). If you can think of a scenario where you wouldn’t wait until the company you have faith in rebounds, please leave me a comment because both companies I’ve owned you had to pry my stock out of my cold, dead fingers before I would sell it during a rough patch for a discount! This…
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Finally Friday

Yeah, let’s bury this week and move on!

It hasn’t been that bad, just a 100 point Dow drop – Jan 12-22 we had a 500 point drop so things could certainly have been worse…

It’s more that we had such high hopes in February and this was a very sad downturn but realistically, if we hold 11,000 on the Dow we are still in very good shape.

Asia is mixed but strong and Europe looks weak, probably waiting for our jobs report…

Unless something very odd happens, I will be pretty much 100% cash at the end of the day. The global situation is way too uncertain and I really don’t think I will be missing much by waiting out the weekend. We need a goldilocks number in the jobs report at 8:30, perhaps 185-220 with no less than 4.7% unemployment (no more than 4.9%) and, most importantly, wages no more than .3% up. This will be tough since the economy is hot (no, really, it is), hiring is robust and layoffs have been tame but the data doesn’t always reflect reality so we will have to see.

Oil may look calm today but I’m hard pressed to think of a Monday where I said “Gee I wish I had shorted oil on Friday” but I think the reverse happens at least once a month.

Same goes for gold, this can be a huge play in the next two weeks as people may fly to it if the Euro goes crazy and the dollar collapses (or, on the other hand, money may start flowing into Euros and out of other commodities). We don’t tend to think of the dollar as a commodity but it is (or was) as the inherent stability and controlled supply made it something you would want to have in your safe. My grandpa Max in England always had dollars in the safe. He was born in 1906 and was a savvy businessman who had seen it all and he preferred dollars to gold. Imagine the chaos if 100M people (1.5%) around the world decide they don’t want just 10,000 of their dollars laying around in their safes anymore…

Remember the M3 and why it is being eliminated. This is the measure of global dollar float!

First sign of economic apocalypse could be an Arab state canceling a Boeing order in retaliation for the Port debacle.…
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Thursday Wrap-Up

Another bad day in the markets, and that’s with GM up 4.5% (what are we in bizzaro world?) and oil staying below $61 all day. Those technical barriers are getting to be a very solid ceiling and that may be all she wrote folks! There are only so many times you bump your head on the ceiling before you stop jumping up on the bed… The only thing uglier than the S&P’s intraday chart was Google’s! One of the driving factors is that the European and Japanese investors did not buy our stocks today, even though they bought their own and each other’s because they think this Dubai deal makes us look like some banana republic that is closing itself off to foreign investment. You can say “no, no, that’s not the case at all, this is totally different” but no one in Europe cares, especially as it’s a European company that is getting screwed by our Congress’ fear of Arabs. Add that to the image of Bush slapping the Indians on the back and telling them what nice reactors they have and if they need to borrow a cup of uranium just give us a call vs. Condi saying that there is no way in hell that Iran will be allowed to benefit from “safe, clean, nuclear energy” (Bush’s words) and you have us looking pretty capricious to a third party. Quote of the day from an Iranian “Diplomat:” “The United States may have the power to cause harm and pain but it is also susceptible to harm and pain. So if the United States wishes to choose that path, let the ball roll.” I’ve said it before and I’ll say it again. Cash, cash and more cash. I am very unlikely to hold anything other than a really great leap into this weekend! ===================================== Boy, I really outsmarted myself on Google today! I got greedy and kept sticking to the premise that it was going back up but it never did so I sold my puts too early and held my calls too long. Had I just kept my initial position the $350 puts finished at $13.70 (+5.50) and the $360 calls finished at $4.10 (-3.30) I would have been even, even taking into account my $470s, which wasn’t part of that spread. I was greedy and I suffered for it. I could have taken $2.20…
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Thursday Morning

Big day today in Asia! The Bank of Japan didn’t raise rates, yet, which was good enough for the markets out there to fly up. The Nikkei jumped 400 points and all of Asia and Europe are looking very strong today. This is another one of those days where we are being given an opportunity to prove that we are at the top of a range, not a new bottom.

Since the BOJ didn’t raise rates the BOE is going to leave rates alone as well and *poof* just like that, the interest rate arms race comes to a halt. Now the button has moved to Bernanke and it is his call to hold or raise. A low jobs number tomorrow could really send up back to the top of our range but I don’t see it turning down so easily.

We should get an early relief rally as well but we still have the March 20th Iran Oil Exchange looming so we need to keep that in the back of our mind. Judging from the noise I’m hearing out of Washington and the International rumor mill it is now an outside possibility that we may be backing off on the nuclear issue in exchange for Iran backing off the monetary attack. Meanwhile, expect the rhetoric to be hardball (bad for markets) on both sides as the real negotiations drag on behind closed doors. Interesting World we live in isn’t it?

We will be back to watching our technicals to see if there is any chance we can really get back to rally mode. I’m flashing back to my boyhood at Shea Stadium where we always felt like we had a good team – The Mets won in ’69 (although we knew that was a fluke) and made the series again in ’73 and we still had great pitchers and decent hitting but we just couldn’t get it together for the next 13 annoying years, always on the verge of a rally that never quite happened… So you could say I am well prepared for this!

All this good market news plus Iran causes oil to move back up in its own relief rally so watch out for that today! Today is the natural gas inventory, any build will send oil and gas lower at 10:30.

No one likes to short gold into the weekend either so expect a bounce…
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Gagged by Google!!!

My adsense account got suspended today with this notice sent to me by Email:

[[[ It has come to our attention that invalid clicks have been generated on
the Google ads on your site(s). We have therefore disabled your Google
AdSense account. Please understand that this step was taken in an
effort to protect the interest of the AdWords advertisers.
A publisher's site may not have invalid clicks on any ad(s), including
but not limited to clicks generated by:
- a publisher on his own web pages
- a publisher encouraging others to click on his ads
- automated clicking programs or any other deceptive software
- a publisher altering any portion of the ad code or changing the
layout, behavior, targeting, or delivery of ads for any reason
Practices such as these are in violation of the Google AdSense Terms
and Conditions and program polices, which can be viewed at:
Publishers disabled for invalid click activity are not allowed further
participation in AdSense and do not receive any further payment. The
earnings on your account will be properly returned to the affected
The Google AdSense Team ]]]

LMOL! Well they can keep their $5 a day the stupid thing generates but what the hell?

I suppose I do encourage others to click when I say (tongue in cheek) “please visit our sponsors” but isn’t that what Google (and the advertisers) want? As an AdWords customer I am baffled that Google would rather just charge for the ads that are ignored thousands of times a day than the 10 that actually get clicked on.

It’s possible that they make more money off the views than the clicks and they don’t want you to waste time clicking and reading some other web site when you could be ignoring 10 ads at a time that they get to charge for.

I certainly don’t use a clicking program nor do I have the expertise to change the layout etc. but I have, on occasion, checked out people who advertised on my page – in fact I have banned some as I found them to be particularly sleezy, perhaps this is how I came to Google’s attention as I just started banning ads this weekend after seeing some real scams…
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Wednesday Wrap-Up

What a wild day that was!

I ended up with a spread on Google, see today’s comments for the play by play.

The markets made a dramatic recovery for no reason I could see except, perhaps $59 oil but ended up basically flat – still much better than way down! Tomorrow is Bank of Japan’s rate decision but a hike there is already well priced in so the next big mover (planned anyway) is payrolls on Friday.

Gosh I hate to be an optimist but I smell rotation!!! Oil and commodities are being sold off in droves but we are in the awkward stage where people think they are getting a bargain in dead sectors so money is being misdirected. It will take some leadership to move things forward.

Oil went through the $60 floor and is settling at $59.90 in the overnights. For some reason SUN thought that was good news but we’ll go over those plays later.


This was a terrible day not to sit on your positions but a great day to day trade as you could have made money both ways on oil today. I was too busy fooling around with Google to pay enough attention to oil but:

VLO opened down 2% and went up 4% from the open, turned down at 10:45 after the mandatory head fake on the oil report, dropped 3.5%, turned again at 12:30 and went up another 3% where it ended the day technically flat.

XOM did the same at 10:45 and also at 12:30 but not as extreme (that’s why it’s not called the XOM Rule).

Had yo been nimble enough to trade on the Valero rule, you would have made a boatload of money on all our issues but, as far as full day’s go, they were mainly flat.

Longs – very dull except
HYDL Apr $65s ended at $5.40 (up 30%)
UPL was mistake proof as it rocked up all day, the $50 calls ran to $3.40 (up 65%).

Shorts – also dull in general, the April time frame buffered any serious losses
RDSA opened so high the $60 puts opened at .40 and stayed there.

You could have made money on both sides of the spreads today but this crazy market is just what you want with a spread. COP is a good example of having…
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Wednesday Mourning

Yes the u is intentional – this is not looking good at all! Please, please read the below post and give me feedback if you are so inclined, we are going to have to get very nimble to survive this market! Japan continues down and Europe is selling off both led by declines in oil, steel and other commodities. This is despite a very positive OPEC meeting, declining oil prices and progress with Iran… The Russian markets lost 6% today and the Middle East and even India got hit very hard. This is primarily on interest rate worries but the housing and retail numbers have not been good either and people are simply losing confidence in the markets. If we somehow survive today, we will be in amazing shape but treat your virtual portfolio like its New Orleans before Katrina or you may be standing neck deep in water waiting for FEMA to bail you out next week! We could be in the second stage of a serious rotation cycle but that could just be me clinging to my old happy theory so I’m taking it with a big grain of salt unless I am proven correct (not looking likely in the pre-markets). Today is our last chance to turn this puppy around before we enter technical hell and establish the dreaded triple top that will likely send up back to the previous ranges: Dow: 10,700-11,000 Nasdaq: 2,000-2,200 S&P: 1,175-1,250 These are, I’m sad to say, optimistic numbers as last March – April we had the following drops: Dow: 10,984-10,000 Nasdaq: 2,100-1,889 S&P: 1,229-1,136 The ides of March are certainly upon us. Don’t forget we are less than 2 weeks away from the Iranian oil exchange opening up oil trading in Euros for the first time. This could still be a destabalizing event for the Dollar of biblical proportions, no on knows for certain what will happen but I know I will be at least 75% in cash for most of this month!!! ===================================== I will not be shocked if the Iran situation is escalated in order to derail this major monetary event. Yes, I know it sound like a Grisham novel but there are actually Trillions of dollars at stake here, wars have been started for less – it’s just hard to imagine our that our own Government would manipulate the media and lie to the American people…
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My Trading Policies

I’m making this a first draft of a perma-post (like the Valero Rule) as I am concerned about people making trades like mine for long term holds when they generally are not…

Entering a position:

I do not enter a position when it is moving the wrong direction or if the market/sector is moving the wrong direction. The items I post are watch items and I do not initiate every trade (who could keep track?), and I rarely take a full position right away.

Generally, out of the list I share with you, I look for ones that go the WRONG way and then (after I check news and other factors to make sure my assumptions weren’t wrong) see if there is an opportunity to jump in as a contrarian, getting my options cheaper than I planned.

Entering a position I generally have a goal, say 100 contracts that I want to buy for my watch price or less. I usually put in a bid a dime under the ask and hope for a pullback on my first 10 contracts then wait to see which way they go. If it takes off the way I thought, I buy 10 to 30 more (depending on confidence, my target price, why it is moving (news)…) at which point I usually will wait a day to see where it shakes out.

If a position goes my way quickly, this method means I only get 1/2 or less of what I intended but the profits usually make up for it. If it goes my way slowly, I build into a full position over the next few sessions.

If a position goes against me quickly, I only lose say 20% of 10-30% of what I intended to bet so I’m not devastated. At this point it gets complicated because I rechart, recheck and generally rethink but sometimes I will wait a bit (an hour, a day, a week) and add to my position at the lower price, reducing my base cost.

As a rule of thumb, if I’m not willing to put in more money when I am 20% down then I kill the trade entirely. At that point, I either move on or target a new entry, perhaps at 50% down but with options I often need to move into the next bracket by then (like the LVS trade where I started with $50…
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Testing Tuesday

Well, that was interesting!

On the whole, the 50 dmas held on all the indices (although I couldn’t believe the NYSE tested 8,000). Only the Nasdaq didn’t hold it’s mark and only off by a bit at 2,268. If we make an allowance for TXN’s little drop and the chippies taking a dive – It’s not so bad!

Fear, panic, doom, gloom – analysts pulling out charts with red arrows pointing down – this smells like a rally to me!!! I am not kidding, although I will still be trading very cautiously, I think we may get a great day tomorrow, especially if nothing bad happens in the Middle East.

We’ve been wanting to test the 50 dmas for some time now and how odd is it that every index did it today? Huge sell-off in oil, housing, chips, retail… (in fact 3 out of 4 stocks were down today) and all we get is a little drop? Even the Dow tested, up and down 60 pts twice today.

While we are not going to expect a rally tomorrow, if we can just roll along these resistance lines and consolidate for a week or so, we could be setting a major floor at this level. On the other hand, we may punch through all this tomorrow on the way to a 5% drop!

Exciting isn’t it?

Oil performed as expected today and shame on you if you didn’t get the hint from VLO to sell before it all started coming back. I was frantically dumping my oil put around 2:30 as they had all made more than enough money for me to happily take them off the table the second VLO flinched. XOM confirmed the move with a sharp turn as well.

If all goes well we can reenter oil shorts tomorrow but there is no reason to leave this to chance overnight.

GOOG is dropping in the aftermarket as they inadvertantly included a slide in their presentation that was for internal use only and, in doing so, gave an actual projection for AdSense revenue! Aside from making the CFO look dumb (again), the projection is for $3Bn in growth this year which is lighter than analysts were expecting (see my live comments where I pointed this out at the time). I’m not that smart though, I sold my puts today 8-(


I want to start…
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Zero Hedge

Will The US Slap Sanctions On Nord Stream 2?

Courtesy of ZeroHedge. View original post here.

Authored by Nick Cunningham via,

There is a growing push in the U.S. Congress to slap sanctions on the Nord Stream 2 pipeline.

The pipeline under construction would carry Russian natural gas to Germany, and has been a lightning rod of controversy both in Europe and across the Atlantic. Many governments and officials from Eastern Europe fear deeper dependence on Russia for gas supplies, a sentiment echoed by the U.S. government. Meanwhile, many in Western Europe are less concerned,...

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Phil's Favorites

US is already fighting a conflict with Iran - an economic war that is hurting the wrong people


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US is already fighting a conflict with Iran – an economic war that is hurting the wrong people

Courtesy of David Cortright, University of Notre Dame

Many are worried about the risk of war with Iran after the Trump administration leaked discussions of a troop deployment in response to claimed threats to U.S. warships in the region.

And in r...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control


Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...

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DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.


DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University


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More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...

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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism


The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>