Archive for 2006

Spreadsheet Up!

Much thanks to Metaphysician from all of us for giving me a quick spot to put the spreadsheet up at. This is a list of all closed positions for the month – a list of open positions will follow, hopefully in the morning. Once we get the pro site up and running, this should all be included and, although I doubt we’ll be that fancy in the beginning, we can send out email alerts and such. An image of the sheet is at but you can download the actual sheet from Please use this post for comments on the sheet and what we can do to make it as useful as possible, it’s a work in progress and I think this is just the right group of people to create a seriously useful tool! Thanks, – Phil

Weekend Wrap-Up

What a month we are having! It’s very funny that I started the month complaining about not getting a pullback but that’s the beauty of admitting you are wrong – you get to make new and improved decisions with your new information (see the “Microwave Oven Theory” ™). Because the market kept going up we kept finding new positions and had little reason to sell against my trading policies (see above). So, although I am very nervous about next week, we still have 106 open positions – too many to fully list! Not counting our September plays, which we mostly summarized last week, we closed 78 positions so far this month with an average gain of 117%. If we throw out that ridiculous Google gain of 1,975% we get an almost believable 94% average return on an average hold of 8 days. There were 16 losers and 70 winners with just 2 trades closed between –5 and + 5% (neutral). People, this is not normal in the extreme! Like I said last week, it’s time to retire because it just doesn’t get any better than this (although this week was better than last week so go figure!). 27 of our winners were doubles or better and our lowest (closed) winner of the month was a CHK day trade that returned 31% in 5 hours. Not normal at all! Just be happy we were there to take advantage of it. For my new readers, usually we close a week out with perhaps 20-30 plays. Please go back through the archives to view some more typical months as I really, really don’t want people to think this is what we do every day. Our job is to keep liquid and make fairly regular returns so we are in position to take advantage of runs like this (and also to be skeptical enough to not overdo it when the market inevitably corrects). Currently I am a little bearish BECAUSE we didn’t pull back much. I wanted a healthy consolidation and this is not it yet so let’s tread carefully into the end of the quarter next week! ===================================== Three of our biggest losers of the week were rolls from previously successful trades. We roll our profits so that we can feel good about exiting still hot positions once we extend past the 100-200% level of returns on the original play. A good
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Google Plays – Round 2 Update

It usually doesn’t go this well… We came in right at the bottom, made so much money we took half off the table and we cashed out on top – this was very good timing indeed! As I said in the 9/19 post: “not being greedy saved us a lot of pain. Let’s make very cautious entries here, especially as we move on to test $400 again. I’ve taken half off the table to guard against a pullback, and will take the rest off to reposition shortly.” After taking half of our original play off the table, we set tight stops and got out on Monday. Tuesday morning, in comments, we called for puts at 10:11 and we got a nice volume sell-off at 11:35 due to poor guidance from rival Yahoo, which I took to be overdone (for Google). There was much discussion and, Wolf made a bottom call at 12:13, Chris pointed out at 12:21 that the sell-off made a nice Fibonacci retracement and I had a new set of plays posted for the new levels by 12:57 – a great team effort! In Wednesday’s comments at 1:17 I said: “YHOO and GOOG moving down – another chance to get Google plays for the brave! Tom, I agree with the $394 comment but I’m looking for bounce at $396.25 so I will take a few there… If I’m wrong, I’ll know fast!” We filled on our new tartget at 3:15. So far, our calls have not given us the instant gratification of the originals, although the Thursday morning run-up to $408 would have been plenty for most, if not for the comparative performance of our previous set of calls. We have a lot more fear of the downside here and are ready to stop out even on the call side if we have to as I still have general concerns about the market this week but, with earnings coming up, these positions may hold up well as demand for the options increases. So, lets see how our new picks are doing, obviously we got better entries because we waited but let’s just go with the original numbers selected on Tuesday: The Safe(ish) Play: A) Buy the stock for $397 and sell the outrageously expensive Oct $400s for $17 This reduces your basis to $380. You can roll the calls if the stock…
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The Snowballing Oil Crisis

Amaranth lives! Quote of the day: “We lost a lot of our own money this month, we lost more of your money. We feel bad about losing our own money. We feel worse about losing your money” Only the money that was “their own” used to be yours too as the fund charged fees of 1.4% of the assets ($126M) plus 20% of the profits against the $9Bn dollar fund. But wait, there’s more… According to Business Week: “In 2003, for instance, Amaranth Advisors of Greenwich, Conn., logged charges on its Amaranth Partners fund of about 1.4% of net assets for “bonus compensation to designated traders” and about 2.3% for “operating expenses.” Although Amaranth does not have a traditional management fee, the filing reveals that when an investor’s account shows a net profit over the previous 12 months, the manager is entitled to a “management allocation of income” of up to 1.5% of each member’s account balance per year. The manager also receives a 20% cut of each investor’s net profits. This 20% is reduced by the amount paid to the traders, as well as by the amount of the operating expenses. If the fund is losing money, investors remain on the hook — certainly for the operating expenses and possibly for any trader bonuses, too. Amaranth declined to comment.I think a hedge fund should be run more like a corporation, my 1.5% should be a salary, perhaps another .5% for expenses and the rest is paid out in stock bonuses which I can only redeem 1:1 with my shareholders. So when I make 20%, for the fund, you make 16% and I hold 4% in restricted stock – when I lose 20% for the fund, I lose 20% of my stock right along with you. When I overspend on a Christmas party, 20% of that money is mine too! Think that would make me think twice about betting half the assets on red? Another domino that may suffer some fallout from the Amaranth scandal is the ICE, where many hedge funds trade. As I mentioned at the beginning of the month, the unregulated trading that runs rampant at this “UK rules” exchange, allows for shenanigans that would never be tolerated, even under a Republican SEC! Dominos lined up to date include (according to NYTimes DealBook): MS, GS, CSR and DB, who had direct investments in…
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Freaky Friday

Tight stops – cash out – have a nice weekend… - – That’s it, really! Until we get the ISM report to counter a very scary Philadelphia Fed Manufacturing Index, which went negative for the first time since April 2003. Scary huh? Not if you look at the S&P chart from April 2003 it isn’t! Shhhhh. This will be our little secret – let everyone else panic while we sit on our cash and get ready to BUY BUY BUY! Again we are back in a situation where leading economists are not as good at statistics as drunken bowlers – who know that last month’s measure of 18.5 may have been a little out of whack against our one-year average of 10 (and the July number of 6) and a correction to the downside was to be expected. Also, new orders fell as pricing remained high, as savvy buyers are waiting for manufacturers to reduce their “energy surcharges” before whipping out their charge cards. The Index of Leading Indicators is trending down as well, showing the economy slowing to 2.9% GDP in Q3 vs. 5.6% in Q2. Sounds pretty dire right? NO! The predictions were for a 2.8% third quarter, we have a 3% beat! The employment index actually improved, up 3 points from the August level with 20% reporting increased employment vs. 10% reporting layoffs in addition to total number of hours worked increasing. Wow! Sounds like a heck of a crisis! Prices paid index (cost of manufacturing) fell from 45 to 38 (that’s 20% folks!) but prices received increased. So they are getting lower costs but charging more and the buyers are resisting the increases by cutting back on orders – Shocking!!! Someone exhume Adam Smith, the world has gone crazy! It is just not that bad! This will not stop a parade of analysts predicting the end of the world as we know it based on a wiggle on a graph. ANY number above zero indicates expansion, -0.4 down in a single month (lowest ever was –10) vs. highs that have been in the 50s and 60s this decade is hardly a reason to panic. Nonetheless, we take our stops and go home for the weekend, as it will take new information to get the sheep herded off into another direction. FDX profits were up 40%, somebody’s buying something somewhere! “I’m very
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Thursday Wrap-Up

Glad I missed today! Very glad I cashed out of oil yesterday, as I was worried about pretty much exactly what happened. We finally triggered our stops on another set of options and I’m relieved to be back with a good supply of cash coming into the weekend. Getting out of the index options was very lucky too! We had plenty of reasons to sell today and were lucky to get a big early sell signal from the NYSE which broke down at 9:45, made a half hearted recovery and gave up at noon: NYSE CHART Painful as it may be to sit through, we are simply in a healthy consolidation under 8,400: NYSE PERSPECTIVE All the other indices followed suit so we will have a whole new set of up and downside levels to worry about tomorrow, which I am not going to be missing! Congrats to the whole gang for running a very informative chat room in my absence! If it weren’t my site I would certainly visit it, as the level of intelligent conversation is about as good as any I’ve been to. We’re developing a very nice synergistic groupthink that I am very proud to be a part of! Now it is time for a trip into the Wayback Machine, set all the way to — Monday! On Monday I said: “I expect a bit of a pullback today and ahead of the Fed, how we handle the pullbacks will tell the tale for the next two weeks.” “Back at home, we are so far above levels all we can do is look at psychological barriers:

  • The Dow is sitting between 11,600 (wow!) and 11,500.
  • The S&P is just under 1,320 – this will be a contest to watch. Breaking untested support at 1,310 is a nice cash-out signal for us!
  • The NYSE is, as we have mentioned, far ahead long-term and is probably going to be the first to pull back so let’s watch 8,300 for bullish support but holding the 50 dma at 8,250 would be just fine. A break above 8,400 will shock the bears.
  • The Nasdaq punched through the 40 wma last week and is sitting just above the 200 dma of 2,222. We need to watch the SOX as they will have a big test at 480 above which we may need to start

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Thursday Morning

How much does a coup cost? Well, in Thailand, it only dropped their market about a point – food for thought… Asia was strong across the board as a Fed pause was considered good news for exporters. Only commodity king Australia (also with close trade ties to Thailand) was down along with the Thai exchange. Europe seems to be expressing cautious optimism ahead of the US open. Today it’s all about whether we can hold our new levels:

  • Dow Jones 11,600
  • S&P 1,325
  • NYSE 8,400
  • Nasdaq 2,250
  • SOX 460

I’d like to see the TRANQ break and hold 2,500 because there are still a lot of naysayers regarding the holiday season so it will be interesting to see what view wins out. Distillate (heating oil) inventories are at their highest level since 1999, when oil averaged $16.56/barrel. How fast can oil fall? In 1985, oil was trailing gradually down from its 1980 high of $37 to $27 but in 1986 prices plunged to $14.44 (averages) and stayed below $18 until 1990. In 1998 (and I will refrain from tying this in to who was in office) a barrel of oil averaged $11.91, climbing back to $16.56 during the economic boom of 1999. After starting 2000 at $24, oil spiked from $25 to $35 during the 2000 election, peaking in November but dropping back to $26 (27%) in just 30 days on speculator concerns in December as the Supreme Court decided who would be President. The rest is, of course history! Again, this is not a political statement, just using time markers we can all relate to… The gold market is being buoyed by strong jewelry demand in India but there should be some offsetting pressure as commodity funds are all lightening up in light of the Amaranth scandal. Gold has very strong support at $570 but $550 is the next leg down and there is still a looming concern of Central Bank sales driving prices further down. Just like silly airlines, who hedged oil at $70 a barrel, silly jewelers are hedging gold around $570. Should the retail buyers not actually show up for the holidays, gold may take a power dive in Q4. It is time to play Amaranth dominos! Who is linked to a $5Bn (it gets bigger every day) evaporation of assets? I said yesterday, and I will repeat: “According to the
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Wednesday Wrap-Up

Every time I try to get out – they pull me back in! I tried to cash out yesterday, really I did but the darn market just keeps going up! Well, we gotta go with the flow at times like this and just keep raising our stops, although it seems odd to have to set a stop at 220% doesn’t it? Did we break our technicals?

  • Dow Jones 11,600 – Check!
  • S&P 1,325 – Check!
  • NYSE 8,400 – Oops, 8,391 with a brief trip above 8,400
  • Nasdaq 2,250 – Check

3 out of 4 and the one miss was on a 45 point gain for the day – not bad! We need to watch out for breakdowns tomorrow and we will be looking for the NYSE to lead the way. Last night I said that the transports did not worry me and here’s why: While it would have been nice for them to break 2,500, we’ll make due with a 1.3% gain on the day. The SOX put on a subdued performance but did close above 460 so we have nothing to complain about. Unless of course you are an oil bull, in which case I don’t know why you come to this site as you get little affirmation here. The oil chart is downright ugly and we are not expecting any relief in tomorrows natural gas report, where another 90Bcf injection is expected. Gold is also looking bearish but not the crash and burn sort of bearish we have in the oil patch. It held $580 today and may make a consolidating move unless traders decide the economy is cooling on a global basis (and CAT traders seem to think so). The news of the day was, of course the Fed, which left rates the same and followed my speech to the letter (see comments) saying they see moderate growth, “cooling” housing, rising wages with price pressure abated by falling energy prices. They move on to say that they remain ever vigilant (which sent gold to the day’s low after the release) and Jeff Lacker continues to dissent and call for an increase of .25, a good move to show people they are serious about containing inflation.


We’ll just focus on our new trades today, no sense rehashing the whole thing every day – that’s what the archives are for!

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Wild Wednesday

Celebrate, run for cover, rejoice, panic, buy, sell! Must be a Fed day… There is certainly lots of reason to celebrate – Oracle, as expected, made it back-to-back great quarters as it turns out things are great in Techland (but shhh – it’s supposed to be a stealth rally!). Asia was strangely mixed after the Oracle news with the Nikkei pulling back and the Hang Seng surging ahead. The Thai markets are closed for a coup but India and Pakistan also seem to have no problem with it as their markets gain a point. TM is, of course, concerned about sales in Thailand, as they are number one pretty much everywhere, but I am now looking to buy TM on any dip until they do something silly like buy out GM or Ford. Since TM seems determined to crawl along it’s 200 dma as it slowly takes over the world, I’m accumulating the Nov $110s for $2.50 or less and the pre-roll Jan $115s for $2.50 or less. Fun Fact: This is Thailand’s 18th coup since 1932! Europe is in a merrier mood in despite DCX troubles as the EU clears Toshiba to buy Westinghouse (a deal which has good fallout for GE). Get it, fallout! That was a good one… We are back to looking for breakouts and today and I will not be too excited if we don’t hit some new levels. Fed days are very, very scary and we have plenty of time to buy if we start heading up. I’m a lot more worried about a downside than I am about missing out on something. Lets look for Dow 11,600, S&P 1,325, NYSE 8,400 and Nasdaq 2,250. Oracle alone added $10Bn in market cap in the overnights, this money has to come from somewhere so expect some real leadership movements today. Oil continued down in foreign trading as an extensive interview with Iran’s Ahmadinejad allowed him to come across as a fairly reasonable fellow. Oil may test $60 today on another inventory build but this will not stop some people from buying oil companies “on the dips” so let’s keep a look out for bargains among our usual suspects. Quote of the day: “The market can stay irrational longer than you can stay solvent.‘” Gold has no reason to go up and there will be continued demand for dollars which should…
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Tuesday Wrap-Up

Well the title of the morning report was “Testy Tuesday Morning” and we got just what we wanted today! On Monday we said: “Back at home, we are so far above levels all we can do is look at psychological barriers”:

  • The Dow is sitting between 11,600 (wow!) and 11,500. Tested 11,500 – Check!
  • The S&P is just under 1,320 – this will be a contest to watch. Breaking untested support at 1,310 is a nice cash-out signal for us! Tested 1,310 – Check!
  • The NYSE is, as we have mentioned, far ahead long-term and is probably going to be the first to pull back so let’s watch 8,300 for bullish support but holding the 50 dma at 8,250 would be just fine. A break above 8,400 will shock the bears. Tested 8,300 – Check!
  • The Nasdaq punched through the 40 wma last week and is sitting just above the 200 dma of 2,222. Tested 2,200 – back to 2,222 – Check!

Only the SOX disappointed us but held well above 450, a level we had a very hard time beating since mid-August. I was going to say the transports bothered me but they don’t – I read back my original thoughts on this and I decided to ignore the funky looking daily chart and concentrate on the wild weekly consolidation we were tracking for some time. That remains firmly on track in the rally mode that got me all bullish in the first place! Oil may seem like it has fallen off a cliff if you look at the daily movement of the October contracts, but looking at the weekly chart, you see we are just getting back down to where we were at the beginning of the year, BUT looking at the monthly chart – you can see that this correction is just getting started!!! If I were a commodity player, I would be very interested in shorting the Nov ’07 contract at $68.11, as the Nov ’08 contract is $67.47 while this November’s contract is $63.58 and falling. The dollar is just waiting for some strong Fed language to break out over 86 for the first time since July. The last time the dollar broke out of this range was July 17th when it went to 87.33, causing gold to drop $74 in just 6 sessions! Gold finished near…
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Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...

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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations


Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr /

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...

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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...

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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th... more from Insider

Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.


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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 >>