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Just Another Manic Monday

OK – fun time is over…

Everyone is back from vacation, the big boys have had their strategy meetings and they've captured Paulson (just kidding about that but the article is great – thanks JB!) so it's time for us to get serious about 2007.


It's been a while since we had some data but it's coming in spades this week.  Nothing of note today but tomorrow we get the NY Fed Mfg. Index, which was 23 last month and CAN'T get worse (one would think) followed by the Consumer Confidence number at 5pm which can't get better (I think it was 108 last time).

Wednesday morning we will be assaulted by data:

7:45a.m. MBA Refinancing Index.
7:45a.m. ICSC Store Sales Index.For Jan 13.
8:30a.m. Dec Producer Price Index. Previous: +2.0%.
8:30a.m. Dec Producer Price Index, Ex-Food & Energy. Previous: +1.3%.
8:55a.m. Redbook Retail Sales Index. For Jan 12. Previous: -1.6%.
9:15a.m. Dec Industrial Production. Previous: +0.2%.
9:15a.m. Dec Capacity Utilization. Previous: Unch.
1:00p.m. Jan NAHB Housing Market Index. Previous: 32.


Thursday brings us Jobless Claims, the CPI, Housing Starts (which were up 6.7% on warm weather), Consumer Confidence and the and the Philly Fed AND the EU's GDP report followed byt  a rate decision from the ECB .  Busy, busy, busy!!!

There's not much going on today but Asia took a dive in the morning as those markets are looking toppy and our sell-off on Friday really spooked them.  Japan was closed but the Hang Seng dropped 200 points but held 20,000 and boy am I mad we never took those FXI puts!  China is officially on inflation watch and China Mobil and China Telcom are moving from the madly profitable phase of their business to the "needing to spend $30Bn building next generation infrastructure phase" that our phone companies are just coming out of.

Oh yeah – just for the sake of nostalgia – some kid got bird flu in Jakarta.  Remember when that was our biggest worry?  I bet you don't hear a word about it all week!  Good thing to remember next time they tell us to panic about something…

Europe is in a good mood ahead of their GDP report, and they probably should be!  Unemployment there fell to 7.6%, the lowest level since EU measurement began in 1993 – just another example of how ridiculous it is to say our economy isn't strong!

Do we look up or down today?  Sadly, down as anything up is great today but there is no way we're breaking out to the upside ahead of all this data so let's just make sure we stand our ground.  We are actually a hair below many of the levels I set Friday and we must hold today or we face EXTREME danger of a major drop if we drop a data point tomorrow!!!

Oil is getting as pushed as it can be and the dollar is weakening in response to China's tightening and Europe's anticipated strength this week.  We're looking to see if $57.21 holds to the upside.  I think I'll be pleased with my XOM Apr $80 covers for today but inventories are shaping up to be a disaster for oil bulls this week.  See Zman's excellent wrap-up on last week's crude data.

A responsible analyst would calculate the next upside target for crude so he'd be able to point to it later and say he did cover all the basis but I will tell you right now that there is no upside for crude right now and any upward movement today is engineered nonsense!

We're going to watch our bounce levels on the majors today, notably: XOM – $74.50, OIIH – $136, XLE – $57 and VLO – $50.  If we get above these AND oil is above $58 then a rebel attack is on the way, otherwise it's just a desperate pump job rushing headlong into disaster.

You know an industry is in trouble when the big boys jump in and start snapping up small fish to create excitement…  Last week we discussed how GE has hundreds of Billions of dollars riding on high oil prices and today they ponied up $1.9Bn for Vetco Gray, an E&P equipment supplier.  The company is private but they take in $1.6Bn in revenues and, with an industry average 18% operating income, they sure didn't pay a premium!

FST also came through and is going to buy THX for $1.5Bn in a half-cash, half stock deal, just a 7.8% premium to THX's closing price and still 10% lower than they were on November 15th ($57.75) and WELL below last year's high of $71.47 or this year's high o f $66.21.  When two companies who have lost 1/3 of their value start doing cash and stock deals you know THE PARTY IS OVER!  Where's Dandy Don Meredith when you need him?

Gold is just sad at the moment and NEM (not very hedged) took a downgrade from someone (I don't see it but I heard it) but should get a little support as the dollar retests its own 50 dma at 84.25Should the dollar fail there, gold may test $320 but, if the dollar bounces up, we'll see if shiny bits of metal you find in the dirt really are worth $600 an ounce.

You know gold is in trouble when the gold bugs start talking about "protecting yourself against inflation."  What inflation?  Inflation is 5%, 8%, 10% – not 2 or 3%!!!  Damn, these "analysts" must think this is a country full of undereducated yokels who have no sense of historical perspective and believe any crap they hear from "experts" on TV as long as they take the trouble to draw a chart!  Not on my watch….

Here's a chart for you.  The price of gold vs. the price of the inflation protecting IMF fund.  If you roll it back to 2 years we get a score of gold up 62%, IMF down 10%.  That's a little bit of overhedging against inflation my friends!

It's a shifting global paradigm and they're still trying to tell you that governments may collapse and we'll all be gathered around the big black monolith again making bone weapons and trading our women for gold (I know a lot of you are already wondering how much gold for which women!). 

I've got news for you, the monolith is the Internet and the knowledge of making fire is already being distributed around the world at the speed of light.  There are over 2Bn humans on-line every day and that number is growing at a rate of 40M people per month – the genie is not going back in the bottle and soon there will be more people on the astronaut side than the monkey side.

An educated global populace will be a wonderful thing for our global economy and it is only too bad that the US is one of the few countries on the planet that is heading the other way in terms of education with an actual decline in the proportion of workers with advanced degreesThere is indeed no child left behind other than the 40 million who are projected to go through high school with 70% or less grades.  Well, at least we taught them 70% of what an average 18 year-old should know – have a fun life in the information age kids!

I guess this is what we can expect from a President who pushes an education policy that denies we ever came from monkeys in the first place….


Next week is a short week (MLK day) and expirations are closer than you think! 

Frankly I find picks a little distracting on a day we should be minding our positions so let's concentrate on that.  We'll see which way things break and perhaps pick up some DIA or QQQQ plays in comments (and if you're not hedged you need to be!) but let's watch carefully as we get our first real market test with the big boys back in the saddle.


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  1. Prudential cut NEM to underweight.

  2. Was looking at the spreadsheet for Jan and didn’t see the UPL put trade. Are we still in this? Also I took the PBR and PTR put trades of the table on Friday. (Both really nice returns) Do you have a thought where to get back in?

  3. Just checking in, I’m in and out today, but I will be around quite a bit tomorrow to watch the AAPL Macworld fireworks.

    I still think overall markets are poised for an eventual melt-up…but who knows if it’ll come to pass. The problem with melt-downs and melt-ups is that you hardly ever know a priori which piece of data is going to ignite the danged thing…

    One random F/MSFT/AAPL note: This weekend’s press included a statement that MSFT had licensed technology to let it play iTunes AAC files. See for one such story. Hmm…I see that that story has been “updated”. Never mind.


  4. This morning JP Morgan comments that Apple’s (Nasdaq:AAPL) “. . . iPhone may not be ready until at least the end of this quarter.”

  5. LOL Phil on the “intelligent design” slam!

  6. Phil:

    Love the blog, not a big fan of the Democrat agenda speeches. It isn’t lack of money that is hurting education. (The Duke 88 professors come to mind….Libs all, defenders of civil rights for innocent white ‘men’s civil rights, NOT.) In MY humble opinion, the worst offenders in education are the PC teachers unions…and they decidedly vote democrat.

    I know many graduates of formerly great Ive League colleges who are deciding to withhold their yearly donations…all because of the leftist, and in my opinion, anti-American hate speech they generate.

    Sorry to get off topic…I need APPL to do well today and tomorrow!


  7. UPL – Sorry I never ended up with that one… We need to watch today’s levels and take the money and run on oil trades – there will be plenty of time to get back in if we get more weakness.

    On UPL – if they get back over $47 it’s a problem and I suppose they will this morning so be careful! Of course, if they don’t – then that means the big boys are dumping those oil positions big time!

  8. Ivy, sorry about the typo in post.

  9. STX – I see that Seagate has countered Hitachi’s 1 terabyte disk announcement and raised them. Hitachi is reaching one terabyte by slipping 5×200 gigabyte platters in their drive. Seagate is going with 4×250 gigabyte platters. In theory this will make Seagate smaller, lighter, slightly more energy efficient, and have better price efficiencies (assuming that their platter yields are similar).

    Personally, I like STX in this race. But I wonder what Toshiba is doing…they used to be one of the up-and-coming HD vendors. It looks like they’ve completely dropped out of the 3.5″ market and are focusing on 0.85″, 1.8″, and 2.5″.

    Nevertheless, Seagate is looking like the likely winner in the desktop market. Now…all we have to figure out is whether there is going to be a desktop market in 5 years?


  10. I know where are they putting all that extra gas.
    We have so much gas that it is leaking all over Manhattan

  11. Click on the word president – more fun stuff!


    Kays – I’m sure you wouldn’t I rather hide my beliefs as they are sure to color my trading to some extent so I decided quite some time ago to be very honest about all of my positions…

  12. Phil, How do I track gold intraday? Stockcharts gives only EOD. Thanks in advance.

  13. Phil, Zmann -Did you get the MRO puts?

  14. BJS down the most of OIH components lately. Winter has started late this year. Nibbling at some calls here on OIL rebound.

  15. Copper sector is looking bad. Puts on fcx, pd,pcu, bhp anyone?

  16. LOL – UPL turning into a good daytrade to the upside!

    GLD is an ETF that tracks gold and you can also log into the NYMEX for a 15min delayed view of the various contracts. I generally just check CNBC who roll is ever 4th time or so at the top of the screen.

  17. With Apple rumored to not be coming out with Iphone at Macworld, this should be good for RIMM correct?
    Looks like it also bounced off 50 day. Thoughts?

  18. If the dollar holds up all the copper puts are winners. I want to see what the EU report is before I short commodities.

  19. EBAY takin from notable calls, not good

    Piper Jaffray is surprisingly negative on eBay (NASDAQ:EBAY) saying their proprietary count of worldwide eBay listings suggests total Q4 listings of between 578M-590M. These results are between 8%-11% below their 639M listing estimate for the quarter and could potentially be sequentially down in the seasonally strongest quarter (listings were up sequentially 19% in 4Q05 and 17% in 4Q04). While listings were expected to be weaker than in previous years due to the changes to Store listings, a second sequential quarterly decline, and listings below expectations, estimates are likely to come down.

    Assuming firm’s range of a listing miss of 8%-11% is accurate, eBay would need a corresponding increase in revenue per listing of 8%-11% in order to match their $1,052M estimate for Q4 auction-based revenue. Firm notes that their estimate for total revenue is near the mid-point of company guidance and $21M below the Street consensus. Without any improvement in revenue per listings, the shortfall could be near $100M.

    Current Street consensus estimates for 2008 assume growth accelerating from 21% in 2007 to 22% in 2008, despite the marked slowdown in growth eBay is seeing across its core properties. Considering that slower listings growth indicate that 4Q06 overall growth will likely only be between 21%-23% (down from 42% in 4Q05), PJ believes that expectations of over 20% growth for ’07 or ’08 are unrealistic. Firm’s newly released 2008 revenue estimate of $8,142M is $568M below current Street expectations and assumes 16% growth in 2008.

  20. Phil,

    I’m still in several oil put plays, rolled several into Feb., but have quite a few here in Jan. that are now under water. Do I think about DD or just eat the losses and get in again later.

  21. do you think the buy of stz in the sp will help this stock

  22. DRUDGE: Gas Smelled Over Large Area Of Manhattan

  23. Phil:

    Can we consider to make the format of the postings left-justified?

    There is a big chunk of space on the left hand side which is a waste and I have to scroll right and left
    often to read the whole thing. I have only one monitor and several windows on the desktop. Can not afford to maximize any one of the windows.

    What’s everyone’s experience and feel about this?

    Thx, Edgar

  24. RIMM – trying to buy out my putter for .50 – then wait for bounce back from $145 and sell it again around $142

  25. IBM upgraded this is great for HPQ. I will be careful near term but i like HPQ

  26. I’m in a Midtown Manhattan office building and there is strong gas odor

  27. EBAY below $30

    MOT below $18.50

    Phil, any plays here?

  28. Picking up SNDK last Friday was a great move. Markets look lost this morning. With CES going on and MacW tom, i think the markets should end higher today.

    Soccer what ever you do, do not light up! KABOOM!!

  29. EBAY – this is year 2 of the same nonsense – they raised prices and lost listings – I’m buying if they hold $29 for the day on all that negative spin.



    We have no way of knowing what these guys will pull but so far, so weak witht he pump (other than OII, which jumped 6% and forced me out of my April puts!


    STZ – sure those Aprils are just sitting there!


    Gas story is confirmed – when you physically can’t fit anymore in the pipes, you have to bleed it out somewhere.


    Left – justified. I’m not sure if we have that kind of control but I’ll pass it along to Jared.

  30. NEW YORK — People over a large part of New York City are smelling a gas, but no cause has been identified.

    Numerous people have called 911 concerned about the odor. Con Edison, the Fire Department and the U.S. Coast Guard are investigating.

    The Fire Department began getting calls about the odor around 9 a.m., said spokesman Tim Hinchey.

    PATH service has been suspended into the 33rd Street station. Service is still going into the World Trade Center station.

    People between Midtown and Battery Park are reported to be smelling the odor. There also are unconfirmed reports of a similar smell across the river in New Jersey.

    At NBC headquarters in Rockefeller Plaza, the odor is very strong. One person who works on the sixth floor at 30 Rockefeller Center said it was so strong that people are leaving the building.

    At one major office building at 37th and 7th, employees have been told that Con Edison is looking into a smell, and they should remain inside until they hear otherwise.

    Mayor Bloomberg is expected to be asked about it at a briefing with the media.

    Hopefully this is just a gas main break . . .

  31. IBM, HPQ, MOT, EBAY – patience!!!

    Holy cow guys the Dow is down 30, 32, 34…. don’t buy things!!!

    Let’s make sure we find a floor..

  32. There you go. It is coming from New Jersey! Phil, you have something to confess? You have a big storage tank underneath your house! LOL

  33. Evacuating buildings in midtown NY. Stopping subway service into midtown. Natural gas smells all over NYC.

    That’s one way to get the inventory levels down.

  34. Oil back at $57.20 – Mu ha ha…

  35. Local news attributes this to the warm weather trapping gas in the atmosphere; sounds kinda BS to me. Never heard of this type of problem.

  36. Gas line ruptured by construction company at 10th & Bleeker. news report.

  37. Were they Nigerian?

  38. Nigerian Cabbies?

  39. Ebay- Calls soon? Seems like another overreaction to BS analyst at PJC

  40. Pitch my Grandmothers fathers sisters brothers cousins aunts stepfather was Nigerian, Please refrain from making such comments.

    Phil im getting the life rafts ready this baby may sink!!

  41. Some interesting links while we wait for EBAY and MOT: Jeff stewart research site. very interesting

  42. Sold my Jan AMZN at 2.5 thks
    Am not in the Feb yet -Phil is this still worth it to get the Feb on a spike up?

  43. Phil:

    I would like to get into AAPL upside position.

    My thinking is if AAPL goes up close to 90 after Steve Job’s presentation tomorrow,

    I will add $95 call Jan/Feb spread. If AAPL only goes up mildly or stays put after Job’s presentation,

    I will add $90 call Jan/Feb spread.

    What do you think?

    Thx, Edgar

  44. Look for some BP employees walking around NYC with a jackhammer!

  45. Con-Ed claims no leaks.


    Phil, why haven’t the Democrats done anything about this yet? Why do they hate New Yorkers? LOL

  46. TXN This is news i have been waiting for, DLP getting thin enough to wall mount but price competition from plasma and LCD is scary

  47. Nigerian Cabbies lol!

  48. Never mind – the DEP sent out air monitor vehicles and HAZMAT teams.

  49. Can somebody explain to me about Rimm putter Phil is talking about? Is it buy Jan 145 puts? Thanks.


  50. O MY SHLD LOOKS WHEEL Scairee…watch your SHLD


    Someone find out what the volume looks like today for the indicies.

  51. ALERT ALERT! – CNBC reports that we may get ” a couple of cold snaps between now and march.”

  52. CC – Showing a little stability in a down market, have we bottomed?

  53. Phil having a “left” justifying problem……that is rich. We are talking about a formatting issue and not something else ???? LOLLOLLOLLOLOLOL

  54. Bloomberg says small gas leak normal happens all the time, so get used it Already and if you smell natural gas then your crazy, but they do add mercaptan to let you know if there is a leak so thats what your smelling not the natural gas. Grow UP PEOPLE!!
    ALL of NY is a now a NON SMOKING area

  55. Holy cow AA is already reporting on Tuesday! I’m so not mentally prepared for another earnings season..

    AA will finish the year with just under $3 in earnings vs. last year’s $1.54 but the stock is trading below last year’s average and just over the 2004 low when they earned about the same ($1.3Bn vs. $1.9Bn in the first 3 quarters of this year alone).

    I like the Apr $30s for $1.25, selling the Jan $30s for .35 or .40

  56. Juliet,
    Here is the Rimm trade Phil was talking about.
    RIMM Mar $130 puts were closed at $8.60 (up 213%) but we jumped back in yesterday at $4.90 (net after selling the Jan $130s for $1.80). He was trying to buy back the Jan #130 for .50.
    I was a little confused also
    Happy trading

  57. DNA- almost same situation as AA. stock is down 10% over the past year. Earnings play on this one?

  58. Thanks for explaining BillBigD.


  59. EBAY – dying to pull the trigger! Waiting….

    Watch the NYSE – if it breaks we are going DOWN!

    Feb AMZN? No, leave it be as I think we rebound this week.

    LOL Oill by the way! Especially the Exxontanic

    Apple, the way to initiate a flat calendar spread is while the stock is going up as the Vol paid by the closer caller will exceed yours. Then, once it calms down, you will maintain more value. Beware Apple here as this is mac world excitement and there is little they are likely to say to satisfy the fantasies of the faithful at this point!

    TXN – ’09s are not February – patience!!!

    LOL – RIMM was my existing position where I had sold the $130 puts against my March $130 puts – how was that for a call of a bounce off $142? (and you guys think I just make these numbers up!)

    Cold in the winter – Ahhhhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!!

    BBY down a touch but BBBY up 2.5%

  60. DNA – I’d like them to come back to $82 before I get in but we could initiate here with a light entry on the Jan ’08 $85s for $10, sell the Jan $85s for $1.75 – I mean what kind of idiot pays that premium?

  61. OIL – red after all that CNBC hype -LMAO!

  62. Just saw that OIL is now in the RED. Right around $56

  63. Line in sand gone, NYSE. . .

  64. Phil
    you like the software company -your thoughts on SMSI
    A Budy of mine is currently buying shares to then sell call when price will rise up

  65. Phil – I’d say XOM has looked at the numbers and as of Jan 1 , told their buyback broker he’s got less to spend in the first quarter. This action looks completely different than the 4Q and everyone can see it.

  66. Phil,

    Any plays on INFY? They report on Wednesday.

  67. DNA – I take it back, they do at least have earnings coming out as some excuse but the Apple $85s are $4.40 for taking a peek at earnings – amazing!

    It’s a little risky but what a way to make some money playing the spread between the Apple Feb $85s for $6 and the Jan $85s for $4.50. If it shoots up on you you can roll your caller to a Feb that is over your head as the stock has to hit $89.50 before you have to take a dime out of your pocket for the caller.

  68. XOM – Sweet revenge! I really do think this is funny, and I hope the fellow that sold me his puts is feeling every bit as shitty as I did for months.

    That’s not very nice of me, is it?

  69. I also hope he has a wife that ask about his trades – everyday!

  70. No, did not get MRO…got back putter (feb 35) on BTU sub $1. Also took some $42.50 Ps on APC… UPL still abusing me.

  71. INFY – Indian call centers are running into labor costs of all things and companies are already getting better deals in other countries. Magic 8-ball says “situation unclear – ask again later.”

    Ah but now we can go back to blaming the NYSE on commodities so I’m going to fight the urge to panic a bit longer!

    SMSI – slowing growth so be careful but all software should do well this year.

    XOM – I’ve been saying, they simply can’t sustain that level of buyback anymore. They made a very poor decision to buy $30Bn worth of XOM stock at the top. I don’t care what kind of accounting tricks you play or how you shuffle it off but you bought a stock for $30B at an average price of $67 and every dollar under $67 is $500M out the window.

  72. have no oil puts and just got cash selling my AMZN
    what oil play do you recomend?

  73. Thoughts on LVS March puts? I missed the first DD in at $3.8

  74. OII giving back half it’s gains already! That was the only one I cashed as it gapped up on me…

    $55.66 is our downside oil level – I forgot to say that this morning.

    Game on for Ebay Feb $30s – $1.75, get out at $1.50 though

  75. LVS puts – not if we’re having a big rally. SOX look good, transports taking off, time to buy DIA calls actually!

    Selling DIA Jan $123. 75 for $1 puts against my June puts.

    Buying DIA $124s for .90 if I can get them, just looking for .30

  76. Thanks Phil – bought EBAY Febr30 calls at $1.70

  77. Oops, we already broke downside resistance on oil – how very silly of me to think there would be any strength left! Next stop $54.34…

  78. I theorized on my site that we may be moving from a buy the dips mentaility on oil to a sell the bumps one. Guess we’re getting there. Even oil sold off and you had the rebels take soldiers hostage yesterday and the price hawks in Opec squawking up a storm. It got you 30 minutes of rally. Big deal. Die USO, die.

  79. WSJ mentioned that Skype is developing a version of its software for a wireless device from Nokia, called the N800 Internet tablet.

  80. will ebay make money off this skype/nokia deal?

  81. On XOMs buyback, could they not insure their huge position by selling calls or buying puts to fix their max risk on any given stock holding? Would make sense to me, but then I have little info if corporate stock plans do use the whole scale of investment options.

  82. Phil, Zmann- thanks for the MRO short idea- made my day!:)

  83. bought some ebay feb 30 @ 1.65

  84. Skype is an eyeball deal which means google will ultimately pay Ebay $3Bn for it…

    XOM – it is not legal (which is not to say it isn’t done) for companies to “speculate” in their own stock. They can announce a buyback and a timeframed and move within the timeframe but that’s all they’re supposed to do.

    Oooh!!!! Sharp 108″ LCD – it’s not too late to get me a Christmas present guys!

  85. Phil, you really need to go teach William Trent about things like timelines and such. His most recent article:

    I swear I’ve not seen an article out of that man in the last year that didn’t say something about a chip glut.

    He does touch upon some things we’ve discussed in the past. Namely, that it’s going to take $5 billion to bring this new fab up.

    Anyway, the building will be done Q4 2007. Equipment starts getting installed Q1 2008. It’ll be 3 to 4 quarters after that before the fab is up to speed which really means that they’re looking at coming completely on line in Q1 2009. Which, miraculously, is right about the time that the chip market is supposed to be in the midst of another boom cycle.

    One big reason that INTC will eventually erode AMD away is that INTC can invest their way out of each downturn and be prepared to take advantage of each upturn. AMD doesn’t have the financial depth to do that.


  86. JB – Not sure what the terms are.

    “Nokia said its new N800 Internet Tablet will permit wireless phone connections through eBay Inc.’s Skype service. The model is available immediately in the United States and selected European countries, and Nokia said the Skype features will be available for download by June.”

    I assume Skype would get a cut of whatever Nokia sells the service for.

  87. EU traders covering oil shorts into Europe close, let’s see if US traders can keep upside mo going after 12 or if we have another breakdown into the 2pm pump. $55 SHOULD hold…

    OII sneaking back up to $39, nice place to buy the $40 puts if they let you.

  88. They are now putting 75-80% of their pumping energy into supporting Nat gas because it’s a much smalller market and can be held up more easily.

  89. Phil – true for XOM but definitely done for smaller companies. They would have to do so much that it wouldn’t go unnoticed for more than a day. The percent of the daily volume attributable to the company is falling as Phil has pointed out over the last several weeks.

    I much prefer to put MUR though since it’s: 1) in all the same buiness lines (especially R&M which will be down sequentially, 2) has even less buyback power, 3) is more expensive on fwd earnings (which continue to slide), 4) won’t be bought out tomorrow or the next day despite the speculation, and 5) because they’re failing critical levels technically.

  90. Holy Cow! Arnie breaks his leg and decides to provide universal health care for all CA residents, legal or not – I love that guy!!!

  91. MUR- point #6 – they’re not the energy sector’s safety stock that XOM is.

  92. Dont care what anyone says Arnold Shwauszenaggeerr is planning a coup, that man will be president by any means.

    One big reason that INTC will eventually erode AMD away is that INTC can invest their way out of each downturn and be prepared to take advantage of each upturn. AMD doesn’t have the financial depth to do that
    Rein im surprised your riding on that train considering your posts have revealed that you are tech savvy.

  93. not me!!

  94. hey phil – which is a good time to pull trigger on EBAY JAN 32.5 calls. They are available at 10 cents now !!!
    Thanks !

  95. 10 blocks shut in Austin over dead birds. Those rebels are getting creative! Next it’ll be zombies.

  96. When are ebay earnings??

  97. Phil,

    GS and BSC may be turning up. Any thoughts on the brokers here?

  98. Did anybody mention that Western Europe has been cut off from Russian oil? Either Russia (accusing Belarus of stealing) or Belarus (accusing Russia of dropping pressure in the line) is causing this. No direct threat to supply, Western Europe has a lot of oil in storage, but its a main news item over here. Dependence on Russian oil is discussed, yadayada.

  99. Phil, what about MOT Apr20s for $0.70?

  100. Kustomz: Which train do my views on AMD/INTC reflect? ;-)

    My current view is that AMD is about to have an unpleasant year because I think they’ve set expectations way too high with regards to their ability to keep taking marketshare while increasing margins. I don’t think they’re going to get to the marketshare numbers they’ve advertised and I really don’t think they’re going to increase margins while doing so.

    Enthusiasts that I know say that AMD might not sell a chip in the high-end/gamer market this year. Obviously, that’s an overstatement. But AMD has a lot of catching up to do.


    PS: A reminder that I worked at AMD years ago and am perhaps negatively biased as a result. Also, it’s largely a cyclical thing. AMD is now on the tail-end of their previous best-in-class technology…whereas INTC is on the front-side of their now best-in-class technology. The current INTC chips are working in overclocked systems as high as 67% faster than the current ratings. This means that INTC has a lot of headroom and should be able to exceed their roadmap for the next several quarters. But, as always, I could be wrong and the performance of the company doesn’t always get reflected in the performance of the stock.

  101. EBAY chart breaking down a bit, let’s see if we can get it at 28.5. Tryin’ to get out flat out of my 32.5′s, I’ve suddenly lost my enthusiasm, hoping to see it bounce off 30.

  102. ebay earnings 1-24, don’t know time of day

  103. Bill Gross is wrong – I don’t like it when the markets rally on a cut that isn’t coming. Unless the Dems really reign in spending, the Fed cannot cut. Really. I mean it, they can’t.


    A coup would be soooo cool! Imagine the turmoil!

    INTC will not erode AMD simply because they need a viable competitor but AMD will never “beat” Intel, never ever ever.

    EBAY, we just took the Febs – the $32.50s are almost certainly not going to happen so you are paying a $2.90 (commis) premium to own the option for 8 days. Every day that stock doesn’t go up .36 puts you out of the running on the call and once a day is behind you, you must make up any shortfall before you have anything the next day.

    ie – today you need a .36 gain (and this is assuming it actually does give you an extra nickel since it’s still not so attractive) which is your single best shot as we were down $1.20 and a simple Fib retrace will do it. Tomorrow you need .36 again and if you don’t get it you need .72 the next day just to maintain your dime.

    The Febs $30s, on the other hand have 28 days to expiry and a 2 premium = .07 per day so 2 days of going up .36 would net you .40 real cents in profit (about). Sometimes cheap is actually worth less!


    Zombies – LOL!!! All part of the Brains for Oil program I suppose…

  104. Reinharden, your chip analysis totally makes sense. With the Dell deal, AMD will sell lots of low margin stuff, but at the high end Intel has the advantage.
    INTC chart looks hopeful and AMD chart looks like distribution to me, at least a slow bleed. Neither too exciting right now, IMO.

  105. Ding! AXP hit 58.50, its starting to look interesting.

  106. I don’t touch the brokers. I was horrifically wrong about them breaking down in the fall but I still have a gut feeling that they will get sucked down in this oil collapse (assuming it does collapse). I believe they are currently spending Billions to stop it from happening but, if it does, they will not be able to cover it up.

    I believe that but I won’t play it as they seem to have an army of fairys that just keep creating money for them.


    Russia – Yadda Yadda is right, I actually decided it didn’t rate a mention this morning – it’s market neutral IMHO and just another example of how producers are freaking out as their money supply is being cut down.


    MOT – has my blesing but I’m being patient and looking to pick up the ’08 $20s for $1.75 to sell against as we already have the sad $22.50s as a pre-roll. If you wait a while you may be able to buy your calls from me!

    NOTE – there is never urgency in these positions as the contracts you want to sell will go up faster than yours, as long as you plan on making a simultaneous buy and sell.

  107. Jim Cramer’s top stock picks for 2007:

    Top Speculative Stocks for 2007:
    1) Level 3 Communications (NASDAQ:LVLT).
    2) Rite Aid (NYSE:RAD)
    3) Savient Pharmaceuticals (NASDAQ:SVNT)

    The Cramer Growth Picks for 2007 are:
    1) New York Stock Exchange Group (NYX)
    2) Apple Computer Inc. (NASDAQ:AAPL)
    3) Cisco Systems (NASDAQ:CSCO)

    The Cramer Value Picks for 2007 are:
    1) Altria Group (NYSE:MO)
    2) Goldman Sachs Group (NYSE:GS)
    3) Halliburton Co. (NYSE:HAL)

  108. I’m pretty sure Intel has one of those rooms like in Terminator where they have the future tech already designed and locked in a safe and I think they just roll out the next gen chip as soon as someone copies the last one effectively. My estimate is they’re working out the bugs on the chips you’ll get in 2012 right now and that chips through 2010 are already just waiting for management to set a roll-out date.

  109. Hello phil – hats off to your detailed analysis. you are the best !!

  110. Thanks, Phil for comments on the brokers. Could Cramer be responsible for moving up GS?
    Don’t think so myself although I’m sure he does!

  111. Phil, thoughts on a DD on the COP Feb 65 puts? Ride, DD, Look for more pump and pop to DD?

    It’s hard to stay off the trigger at 1.35/1.40


  112. REIN i allude to this statement, INTC will eventually erode AMD away
    Seems to have been the in thing to say the last 6 years or so. I understand the cycle and admit that AMD is on the “tail-end” of that cycle, for some reason no one cares or mentions the fact that they own the number 2 video card company that has lots of potential, now i wouldn’t point this out but AMD management has proven the last few years they can make the most out of the least. Being number 2 has proven to be the driving force behind AMD and i believe ATI will strive to become number 1.

    As you know AMD is moving away from what made it great, appealing to the gamers but i like the fact that they are moving away from that niche to sell volume.
    If AMD’s success was hinged to a superior product than they would have been out of business long ago. I beleive Newton’s Three Laws
    of Motion apply here.

  113. AMD/INTC – By erode away, I don’t mean eliminate and I do mostly mean a decades long process. AMD has been in the process of being eroded away since the mid-1980s although they had a 5 year reprieve over the last several years. That having been said, INTC doesn’t like AMD’s position in the high-end and is dedicated to taking it back. That having been said. I don’t think AMD can pull off two more new fab generation on their own. So I wouldn’t be surprised if AMD is part of Samsung in the next 5 to 10 years. If not Samsung, probably one of the China/Japan/Korea/Tawain conglomerates.

    Way cheaper to sell low-end equipment in China and India and other emerging markets if you own AMD…especially now that they come with a graphics chipset as well. ;-)


  114. Cramer GS – sure, that’s very possible but he’s not helping HAL at the moment and they have 1/3 the market cap.

    LVLT gapped up. RAD flying up. SVNT up 10% so he really jams up the small caps!

  115. Also FDX and UPS are sitting in a potential make or break point. Given lowering oil price I d think they will move higher from here. Any opinions on this?

  116. Sold my SNDK holding, looking at the chart its going the wrong way and i am expecting a drop to get back in a small position. Of course fingers crossed.

  117. Thanks Phil! I really got lucky and was able to get out of GS Jan 200 for $3.8. So I went on and bought GS Feb 200 at $6.70, still thinking when to sell Jan 200 calls.


  118. My problem with AMD’s acquisition of ATI is that you don’t usually create better synergy by purchasing the number #2 player in the space, better to purchase the best player than the persistent loser. I respect that ATI has managed to get back on its feet after collapsing a couple of times; however, each time they’ve come back they’ve peaked even further from the lead.

    And, if 3DFX hadn’t blown itself up, ATI would probably be stuck in third place. ;-)

    Anyway, ATI doesn’t make me feel warm and happy when it comes to competing with NVDA. And I certainly wouldn’t have purchased ATI at the cost of driving NVDA into a closer relationship with INTC. But that’s probably just me.

    And this does mean that AMD will have to waste 12 to 18 months working on the integration of ATI…when they should be deeply focused on getting back in the game on the CPU front.


  119. BSX – 17.50′s trading ITM so close to expiration and after such nastiness, what gives?

  120. TY angar!

    COP – I have 100% confidence in that position but I’m kind of hoping for a nice pump at 2:30 to lower the put prices (not looking good at $55.90!).

    Transports consolidating for a breakout if they can stay over 2,675. SOX about to be tested (30 mins) at 473.25 very soon – blame INTC if we fail, who are testing $21 the hard way….

  121. Juliet,
    Did you notice my note from last night, around 11 PM? In Ramblings?

  122. JB,

    Yes, I left a comment there for you! Thank you again.


  123. GS – if it doesn’t break $201.50 in the next 30 minutes you should really consider selling calls as you will lose 1 day of income tomorrow. Watch $200.50 as a downside break.

    Don’t forget that you can sell, buy, sell, buy, sell, buy and pick up $1 x 3 if we stay in the channel between $198 and $202 into expiration. If it breaks up on you, you can always roll so that’s never a worry…


    BSX – the nastiness was the same kind of nastiness as Apple got – just manufactured PR meant to shake out shareholders.

  124. Phil, thank you I will do that.


  125. If CNBC’s ticker is right, oil just gapped down suddenly back to $55.50

  126. Juliet,
    Ah, this morning, I see it now. You are welcome.
    Congratulations on the GS.

  127. Still mad volume from the NYMEX with 297,000,000 barrels en route to Cushing in just 8 days!

    March is already up to 189K contracts – most I’ve seen in a month is 330K so that’s a pretty big squeeze coming for the Feb contract holders! I think the transports see it too – if they break 2,693 we can watch for a test of 2,700 again – huge if they break up….

  128. Anyone following MEDI? How on earth did that move 3 days before today’s FDA approval (nasal flu vaccine)?

    Would still like to be in long term…thoughts?

  129. Watch list:

    OII $37.50 puts are .85, down $1.20 for the day

    COP $65 pust at $1.35

    Not to chase but RDS.A is cliff diving today! This is the 200 dma ($66.80).

    CVX Mar $70 puts – $2.30!

  130. Medi is a great kind of chart to look for. The 50 dma crossed over the 200 dma around 11/20 and the stock held a line ($32) unitl the 50 dma rose up where it bumped into it – once something breaks up out of that trend, you have a really good chance for an up move – perhaps a little late for them but a textbook example for future reference!

  131. Bidding OII all morning, no sellers. We’re at 5% on the day now.

  132. YHOO positive again!

  133. Phil,

    I posted this under the “Long Term Trade Watch” but I wasn’t sure how often you look older posts so I wanted to post it here as well.

    This was great!

    A question I have is that on shorter term spreads is your “rule” to buy out the putter if you are up 50% as well? For example I bought the XOM July 72.5’s puts for $4 and sold the Jan’s for $1.15 last week. This morning the Jan’s were down to .65 so should I have pulled the trigger and bought out the putter or not? My thinking was to just let this ride out until expiration and then buy out the putter on the 19th as there is a lot of premium for this with only 2 weeks left? Your thoughts??

    Also, from above you purchased the ‘08 72.5 puts and should I roll out of my July’s and into the ’08’s to gain another 6 months for $1.40??


  134. Phil what is your opinion on exchange stocks like ICE?


  135. The Dems rein in spending ? What are the odd of that ? 0.0000000000000000000000001%

  136. XOM – like anything else, you have to go with your gut but I do follow pretty much the same rules as I do for buying contracts. As a rule of thumb – anytime you can make 30%+ on anything in one day and don’t take it off the table – shame on you!

    Also as a rule – I don’t go back more than a post so once we have new posts up you can assume I missed it…

    On the roll – sure you lower your total premium cost per month by 25% and get much less volatility in your leap so you can ride out the pumps with confidence while your putters gets killed.

    Here comes the super mega oil pump – let’s see what they can do with it…

    If anyone has any oil put suggestions, please speak up as we may want to pick up a few if they can get them back to morning levels.

  137. Phil, Thanks for strategy on GS. Cramer really does move the small caps! Have you ever back tested
    shorting his pumps? Just curious.

  138. ICE – I’m off the exchanges at the moment until we see what’s up with the Euro deals. I think they are more than fairly valued and, of course, they will fall off a cliff with the markets so, for me, it’s too much betting on the same direction.


    Cap – those odds are ? 0.0000000000000000000000001% better than Bush’s 6 year actual record!


  139. Cramer – Not a back test but I do jump on them when he really screws people over (ICE was one of those).

  140. Transports broke 2,700, SOX broke 475 – very nice!

  141. I had wondered about that myself Albo, a kind of Cramer contrarianism.

  142. Phil – do you see any put plays on RSH? They’re up 11% today because they expect a bigger 4Q profit, but sales at stores open at least 1 year declined 7.8%. Doesn’t look good to me, but then I haven’t been in a RS store in probably 10 years.

  143. Phil
    oil puts -what is your short list to get in after the oil pump?

  144. Are the COP 65 puts jan or feb??

  145. GRMN GPS that plugs into your phone for $199 and turns it into a GPS WITH real-time traffic data.

    That’s all the excuse I need to pick up the Feb $55s for $2.75 ahead of earnings possibly selling the Jan $55s if it can’t hold $54.

  146. size123,

    If I were going to do it, I would only do the overnight pumps, and would only short the stocks and
    not try to play the options. Maybe look at 5 minute chart for topping. Havn’t tried it, but would be
    interesting to monitor his picks for awhile to see how they act.

  147. I couldn’t check it sooner, but with SNDK being up 4% what are your thoughts on SNDK JAN $42.5 sold againts JAN08 $40? I think you still have the same positions.

  148. Sorry. My last question was for Phil.

  149. RSH – that’ not even a revision – what the hell stock are these people buying?

    I’m picking this one up with the Apr $17.50 puts and let’s see if it dips – if not, we can always sell the Feb $17.50 puts into 2/27 earnings as people aren’t smart enough to realize they expire before then.


    YHOO up on cell phone search system they are showing at CES.


    Oil puts – in addition to the above few, XOM is shaping up again with the $72.50 puts down at .85 – hopefully .75 or less – must wait until 2:30

    COP Feb – sorry

  150. How about another shot at MRO puts?

  151. Oil put suggestions…be very careful.

    Other than that. MUR $47.50s, APC $42.50s and $40s. BHI, OII, BTU, PBW, PBR, MRO, EOG, RDC and UPL on the very short list. Also, the refiners probably get popped and then dropped pre inventories.

  152. oh yes and EEE because the fat lady already sang and she was lame.

  153. Cramer – I don’t think you can just randomly do it. Some of his picks are based on post-market news – any idiot can do that and claim victory (and he often does, as well as claiming IPO prices as entries).

    The ones I watch are the times he just suddenly reads IBD and gets an idea (many things he says are word-for-word out of IBD) and pumps something for no other reason than it caught his fancy.

    I am convinced that he bets his friends he can get stocks to targets – it’s the only way I can figure out why he chooses some stocks…


    SNDK follows the normal rule of “Always sell into the initial excitement.

    We owe our Jan $42.50 caller $3 atm but we’re up to $12 so still up 3% on the trade overall.

    They still have a premium of .50 and we don’t really have a good reason to give it to them as we won’t be any more screwed if we wait a bit but we can get $3.50 for the Feb $45s (these were the postions I sold on my second batch of SNDKs).

    It doesn’t look like we need the protection and we get our .50, pay off current caller and move the new caller $2.50 up the ladder. I’m a little disappointed gaining just .50 for the month but we have 12 more!

  154. SNDK – oh sorry – if you have the money, take the Jan out first and keep a trigger on the sell of the Feb but wait just in case it breaks $45

  155. Phil,

    OXPS says RSH earnings are 2/16.

  156. Phil
    Have had the April 42.5 base at 7.3 and thinking of selling Feb 45 against them
    Makes sense?

  157. Buy TomTom Phil……Think the are better

  158. From Fox News:

    a Reuters survey showed on Friday that OPEC had made little further progress in December in lowering supply to bolster prices, as higher output from some members offset continuing cutbacks by Saudi Arabia and others.

    Supply from the 10 countries bound by output targets was 26.96 million bpd, up 60,000 bpd from November, the survey found on Friday. December supply was 680,000 bpd less than in October, just over half the cut OPEC pledged from Nov. 1.

  159. Yes, a big Boo for Bush on spending; but the Dems a) support Bush’s spending (perhaps not his priorities; and b) would have spent even more if they had the WH. You know its true.

    RIMM …. could entry on short side right now; stock or puts.


    Phil, could you elaborate a bit more on your thinking on a COP put short.?

  160. Oil sector is a 1:20 buy program that’s topping off – possibly timed with 2:30 Nymex close but the NYMEX side is failing….

    MUR – too down for my taste, APC too, BHI I think may pull it out (still watching GSF)

    OII I said I like back here

    BTU manipulated and nat gas is the focus of the pumpers

    PBW – I don’t think low oil prices will kill this market – it’s too late, people don’t trust oil anymore.

    PBR – still plenty to go good time to take Feb $90s as pre-roll or new play at $1.60

    MRO – room to fall I like the Apr $85 puts for $4.75, selling the Feb $85s for $3 or better

    EOG – hell of a comeback attempt today Feb $55 puts are still cheaper than the $1 we bought them for

    RDC – too far down for me.

    UPL – too far down

  161. zmann – OPEC lied about cuts? NO WAY!!! LOL


    On a serious note, I should sue them for my losses because their promised cuts propped up oil prices for several months. Had they originally say, 500Kbpd, prices would have dropped in Oct/Nov.

  162. SNDK – I would certainly take the 5% gain for the day and sell to cover yourself – you have to be satiisfied with a move like that and you protect half your postion (you can even take 1/6 of the fee collected and buy some Jan $47.5s for fun in case it breaks out tomorrow – worst case, you lose 1/12!

    TOMTOM – ah but the Garmin turns your phone INTO the GPS – you have no extra crap in your car and no more plugs or wires (other than from phone to antenna). Both products are cool though – James Bond can barely keep up with all the cool toys you can get nowdays!

    Dem Spending – not true at all! I wrote a lot of that stuff around the elections with many statistics. It’s a myth that Dems spend more. They spend more on social programs but the Repubs spend so much on pork it dwarfs all social spending. And I’m not even counting the $2.5T Bush “spent” in order to enrich his friends and family calling circle who recieved 80% of the tax cuts.

    COP? The Feb $65s because this company is considered a deal because Buffett a major holder but they are just a minor change in sentiment away from $50.

  163. Sue OPEC for selling us oil? BRILLIANT! I’ll book the Hague (any excuse to go to Holland!).

  164. Phil,

    what is your take on the real estate stocks (or IYR), and do you think they are shortable here?

  165. Bought 20 more COP FEB 65 puts for 1.25…

    will continue to nibble if they can be bought cheaper but my nose tells me this is the best I’m gonna do today


  166. Oil finished red by the way…. $56.12 seems to be it, down .19

    NO contracts were cancelled at the NYMEX although 250,000 were churned between $57.25 and $55.55 – how would you like to do that for a living?

    Transports failed, taking .15 and running on DIA! Same with SPY – not chancing through tomorrow.

  167. Picked up those OII puts for $0.75! Took all day but a nice deal.

  168. RIMM; I meant “good entry” not “could” entry. And I nailed it. Was 143.50 at the time.

  169. whoa, my MRO gapped down lol!

  170. Rein, Phil, AAPL thoughts? MW starts tommorrow, but PPS just channels across the charts sideways.

    Hoping fpr a pop to sell the JAN’s against but haven’t seen it.


  171. Real estate – we took some puts last week that I’m pretty happy with. IYR will be a great mo play if they fail $82.

  172. MRO – don’t you just love it when that happens – it’s a free ride if you haven’t sold the puts yet, wait out a test of $86.50…

    MacWorld – too much nervous cross chatter. I’m expecting an initial disappointment followed by analyst upgrades but I’m still leaving my Feb $85s naked (half of them anyway).

  173. If you are relived that a postion (or several) of yours turned around from doom today then I urge you to lighten up or cover a little as the data will be intense over the next 2 days.

    Any good data will give us a huge pop and I think the markets are looking for an excuse to rally.

  174. Im so pissed i have been on the phone with my online brokerage firm for the past 25 min. They tried to buy me off with 10 free trades i thought about it for a second and i could not accept as it made me feel like a cheap 2 dollar whore so i was put on hold again for 5 min and the supervisor gave me 25 free trades, i accepted but still feel like a 2 dollar whore!! I need to research some online brokers i cant take it anymore.
    When i logged back on i see all the stocks i wanted to buy went down so in a way it just may be good karma, IM SO CONFUSED.

  175. Phil,

    You bought the GOOG Mar 470 puts last week.. did you sell any Jan or Feb 470s? or are you waiting for a good entry point?


  176. Phil theres a ton of money just waiting to see what Macworld has to offer, if its good it wont be good enough but if its great, look out!

    Nice to see TOM2 still making contact, and doing well.

  177. kustomz

    At least now you are a $5 ho not a $2 one!

  178. Phil, If you think the mkts are ready to pop, what about the GE Feb $37.50′s for .90C. What else would you suggest?

  179. Kustomz – sounds like ameritrade. I moved to options express last year and could not be happier. not one issue since the move.

    APPL: I think what may move the stock tomorrow is a sales update, which I feel will be very positive. I however am waiting from a dip hopefuuly to enter before earnings. Also hoping some premium will get killed on both sides tomorrow during the swings

  180. GS BSC ICE NYX all moving nicely higher!

  181. Kustomz, what broker do you use now? I can’t get access to TD Ameritrade, right now and for the last hour…. just wondered if it was the same

  182. 25 Free trades? Don’t sell yourself short – that’s $50 whoring at least!

    GOOG – I almost sold some at $483 around lunch on that dip but I decided to wait a bit more. Sorry I didn’t as now I have to keep worrying about it…


    MacWorld – that’s pretty much how I have the 3 plays hedged, disaster unlikely, upside could be huge.

    Tom still won’t come here – says we distract him with our witty banter!

  183. Same here…. Looks like TD Ameritrade is experiencing some downtime.

  184. Phil, DIA that double down was a good call.


  185. GE – I’m happy with our June $37.50s that we entered at $1.70 but, oops, there they go!

    D’oh – Dow up 45! They were just waiting for me to sell my calls… I should have stuck to my targets!

  186. Wolf you win the prize, and yes! its a sheep! Or would you like a piggy?

    ANDY yes it is AMTD, trust me i have 30 days to use my trades then im gone!!
    If i were you ANDY and Chan and anyone else here using AMTD, complain and get your free trades at least i get to save 250 and they wont profit from my next 25 trades that’ll teachem not to upgrade!!

  187. Phil,

    real estate puts last week – sorry I missed that. we were in a State of Emergency down here in Brasil with the weather we’ve been getting. landslides, power out, etc.

    but that’s why I was asking if your plays would be emailed as “alerts” rather than trying to figure out what you are doing by reading thru all the comments.

  188. AAPL – Good question. ;-)

    At last year’s Macworld, Jobs pre-announced revenue and iPod units. If he does so tomorrow, most surprise will be removed from the earnings announcement.

    I personally think that AAPL’s expectations are light on computer units, iPod units, topline revenue, and profits. I could be totally wrong in my analysis, thus I suggest that everyone do their own, but I can conservatively support topline revenue well above 8 billion in some scenarios and expectations are back beneath 6.5 billion. My most optimistic projections actually broach 9 billion but I’m hoping that the analysts aren’t that far off.

    Now, two quick problems.

    One, Jobs might not pre-announce, and then we’re losing time value until the earnings announcement.

    Two, people might not do the math even with the big numbers and instead AAPL might get spanked if they don’t deliver the media’s various fantasies. When you’re seeing 5% froth because AAPL’s allegedly late with a product they’ve never announced, who knows what happens if it’s not under the Macworld tree.

    All available evidence suggests that AAPL had a huge quarter. But that won’t necessarily matter tomorrow.

    Conservative play would probably be to buy whatever now and buy more after the fact if it’s spanked and numbers aren’t pre-announced. Truly conservative would be not to play since it’s sheer speculation at this point. ;-)

    But Phil’s already pointed out to me that my options stuff is sometimes, um, overly aggressive. ;-)


  189. Hi all!
    I’m new here. Just signed up.
    Anyone looking at FFIV? Looks like it’s making a move, breaking out on good volume.

  190. I stepped in FFIV earlier this morning with Apr 75′s

  191. Welcome happy!! G/L FFIV hmm, not sure we like value plays here like MOT, j/k had to get that one in there.

    People getting duped into believing BA has reached a top here.

    Chavez never ceases to amaze me

  192. GS up $4.70 ! ! !

  193. I would be most unhappy if my trade system crashed more than once a year!


    Roz – I know the post’s have a feeder, we’re working on the comments.

    Real Estate was from 1/4 –


    Welcome Happy!

    Where were you this morning with FFIV??? I hate to chase things but that is one strong stock! Options pricing is insane on this one…


    Chavez is the man! He’s going to make sure no one wants to invest in that country!

  194. Shocked to see well educated options traders using TD Ameritrade


    Move to a brokerage geared to options trading:


    C’mon EBAY!


    WSJ: Venezuela’s Chavez said his government plans to nationalize the electricity industry and the nation’s largest telecom company.

  195. GS just as Phil said wait for 30 minutes to see if it will take out 201.50 and if it doesn’t then sell jan calls. Well, just about in 30 minutes GS took off so I still haven’t sold jan calls as of yet.

  196. juliet,

    Do you have the Feb or Mar calls

  197. Phil word has it that Dems had a hand in writing Chavez UN speech. Chavez sending oil to California for free!! All he wants in return is political advise from Arnold the Supreme leader Shwarzfignugen

  198. Does Rimm bounce off $142 again?

  199. AAPL
    Can’t really tell at this point. There sure are lots of expectations. There’s sure room to go looking at the charts. It needs to break 87.2 (or so) on good volume (IMHO). I’m in on the Feb 90 calls just in case the rumors of new phone products are correct.

    Looks like it’s holding up well. Looking for MACD (intraday, hourly) to flatten out and change directions (go up) again. Being going in and out on Jan 490 and 500 calls.

    Still going. New 52 wk hight today. Might get a big pop in the morning tomorrow.

    Watch out!! Could go much higher! It’s breaking out of the barrier at around 203.6. Got creamed on this one couple of times. So, I’m cautions. Just got in on Jan 200 calls (only 5 contracts) late this morning.

  200. Albo, I have Feb 200 and jan 08 220.

  201. juliet,

    Might not be a bad time to sell some Jan 200s against the Febs. What do you think Phil?

  202. HOLY MOLY plastic explosives found on cruise ship in MIAMI, makes me wonder what we’ve missed!

    AAPL better hit the ball out of the park tomorrow.

    SNDK pulling back nicely

  203. Albo i think so too…just for in case.

  204. Phil,


    I trade FFIV often, ’cause it’s got good momentum. I got stopped out couple of days ago when FED minutes came out. Missed the recover. I got in with JAN 75 calls this morning at $2.8 and sold it quickly at $3.4. Then, the chart held up and started to make a move (the chart reminds me of RIMM’s couple of days ago). I got back in again at $4.3 (probably not a good practice, but, I have good feelings about this). It’s at $4.5 bid/$4.6 ask, right now.


  205. Just a quick thought. If AAPL comes in high on CPU units, it might carry over to INTC (although in truth, we’d be talking about only 1/4 to 1/2 million “extra” units, so how much of that would even show up isn’t clear) in terms of optimism.

    INTC’s earnings date is Jan 16, so if you wanted to speculate, the Jan options will be pretty leveraged. $20′s are $1.20 which is only a $0.20 premium. $22.5′s are $0.15.


  206. Hello phil – If want to take fresh position in aapl, what are your recommendations on AAPL calls ?

  207. i finally pulled the trigger and sold jan 200 gs at $5.10…hope i am doing the right thing. Phil?


  208. Btw, I only did half my position at this time.


  209. Ha! All that crash talk made me crash!

    Lost my post too I guess.


    OXPS really needs to pay us a commission!


    GS – timing isn’t everything but it sure doesn’t suck! You really should take this and run though!


    RIMM – One of these times it’s going down. Options scandals + everyone on the planet selling a “Blackberry killer.” Just because it won’t actually kill the BB doesn’t mean it won’t hurt the stock – look at Apple every time someone challenges the IPod…


  210. Wenever you’re not sure – do half! It’s the most logical trade to make – most people make the mistake of treating positions as all or nothing but easing in and easing out is the key to strategic success.

  211. Glad I did that. Thank you, Phil.


  212. Hello everyone, nubie here
    AAPL/ crouching nice and steady, getting ready for a leap. And this should be the 2nd stage of upmove & substantial. GOOG looks…. doing the same thing .
    Jobs seems to know how to play the market, push, pull, loosen, tighten… If so…push is due this time…

  213. Personal opinions on GOOG from a trend standpoint, news can break trends. I do not not see any significant news at this time. Monday GOOG trade range was tight for them, spread of $7.67 of which $2.60 was up spread and down spread was $5.00. Volume was light. GOOG was supported to maintain a loss of $2 or less until 3:45 when the support collapsed and it closed down 3.61.

    Summary, based on GOOG trends today indicated pressure on the price which will carry over to tomorrow. The trend says GOOG will possibly 10 points intraday.

    The trend does not prove the stock will close down only that it will fall inter day between 7 & 13 points.

    My current position is MAR 470 puts with a cost basis of $19.70

  214. Phil, how do you feel about drawing up a GOOG earnings set up that would profit from strong ST fluctuations? Thanks.

  215. Any news on OXPS sponsored live account? That’d be awesome.

  216. In case anyone was interested following last week’s post on BBI, it closed today at $5.89 up 0.19 and set a new 52 week high at $5.95. Not an interesting stock but the returns at this time are good.

    Since DEC 22 the increase has been 0.87 cents per share or a return of 22%. Current events, low risk and future prospects are why I gained interest. The expectation is for the stock to hit $7.50 by end of March before an announced buy out.

    My current position is I own the stock at 4.80 plus bought April 07 $7.50 calls for 0.05 cents calls for

  217. Phil, I would like to short FXI by purchasing a put. Can you please suggest one. Thanks.

  218. where are positions posted????

  219. barryiblau, top of page under “portfolio” tab


  220. I mailed my signed forms and a check to OptionsXpress today. Cuttently with Scottrade.

  221. Phil,

    I know you didn’t want to play INFY this time, but what do you think of doing a Feb/Jan 55 Call and Put spread? the call spread is .8 and the put spread is .6 the Febs should be worth that much even if it stays flat.

  222. Preponderance of evidence says RSH earnings 2-27 (perhaps @ noon). Did find one place showing 2-16. Apparently they don’t know we try to make a living at this. . .

  223. What does OXPS charge for commissions on options trades ?

  224. hi phil – among MOT, C, SLB do you recommend any earning plays for January 19 ?

  225. Cap…14.95

  226. Cap, It’s cheap enough as Scott said, but you really are going there for the order types and execution. My slightly higher volume rates a discount.

    Execution on Scottrade for equity options was terrible, so I “left” them.. however, I still have fifty bucks over there so I can use the cute little java-based charting thing (“Scottrader Realtime Quotes”). OXPS also has market depth on their streaming option quotes, so you can get a pretty good idea of where the price is going at the moment – good for momo activity, I watch the volume on the Scottrader realtime chart before stepping in/out. Extra nickels, you know.

    Also, AMTD guys, if you’re considering moving to OXPS, I can be your new friend and collect a shirt or two. LOL!:

  227. Wow. Don’t know if anyone’s still following it, but look at CAKE in after hours!

  228. Interesting article in NY Post today about Goldman Sachs cutting the energy portion in some of its subindexes by as much as 50% for the widely followed Goldman Sachs Commodity Index. The index is also aped by other managers.

    This occurred as of Jan 1 and is applicable for all of 2007.

    It is probable that this move, more than anything else, contributed to the dramatic energy selloff.

    I am surprised that no one is talking about it here; I didn’t know about; just saw the article a few minutes ago.

    Goldman has too much market power.

  229. Ouch, I’ve got some naked Apr. 22.5 puts.

  230. Sorry, CAKE Apr. 22.5 puts.

  231. lucky me
    I bought today an extra slice of cake at .3 April 30 calls
    that was the good news, the bad (not so bad) my base is .6

  232. arnie,

    what do you mean by base .60??
    You mean you have bought puts also?? let me know

  233. Welcome new people!

    Just so you all know, you can click on your name above the comment box and change your nickname and info…


    Karl I’m with you, in those GOOG puts at $20 but to me it’s very simle – they were weak on a strong day – end of story. Been intending to buy calls to make that a spread play but they haven’t given me a reason to yet…


    GOOG – trade is ready to go, just need to figure out the range. I’m sorry I missed the buy down at $470 but I think we’ll get another chance before earnings.


    OXPS is all about the paperwork so far. I’ve been approached by another group with an interesting offer though…


    BBI will hurt NetFlix I think with the new system (which amounts to a rent-all you want by store or mail deal) but I only see it cannibalizing existing sales and costing them money.

    Tell me if you see it differently.


    No FXI put, if we pop they pop – the day we poop, you can put them (must be said 3 times fast).


    Positions are posted (no matter whether we poop or pop our puts) on the portfolio tab at the top of this page.


    INFY spreads – it’s a valid strategy with $1.40 invested providing you are going to be satisfied with a small gain, which is the most likely outcome. Still a small gain off $1.40 is a large prercentage and I will be very interested to see how this plays out so please let us know if you do it.

    The key to this is staying on top of the initial reaction and taking advantage, one way or the other.


    Ah, earnings on expiration day – one of the great thrills of our time! The C Jan/Feb $55 calls have a spread of just .45, that’s an interesting play right there while the put spreads are a little worse at .60 and it might be fun to take both of those postions with no other intention than to shut them down right before earnings, pocketing the time difference as, even into earnings, a 1-day option has dubious value.

    It’s not sexy but it’s heavily traded and pretty liquid and you may get a chance to take out your putters and callers on bonus fluctuations at any time.

    I think we’ll track this one as it’s early in the season but you only get to do this a few times a year – still it will be good to know for next time….

    MOT – I will be picking up the Jan ’08 $20s for $1.80(ish) and selling the Jan $22.50s for .75 – that’s a no brainer!

    SLB I’d rather listen than play as what they say will have a huge impact on our energy plays. They SHOULD earn boatloads of money and next year they should earn about 20% more than that so anything other than up would be devatatatingly bad for the whole sector.

    Depending on where they are the day before earnings, I will very likely be tempted to just take a call just for fun.


    It is all about the nickels! Execution is the only thing that matters to me…

    We should get more than T-Shirts from them as they seem to be the only consensus recommendation on the board!


    Oh nuts! I closed those CAKES out! Still a long way to go for a real comeback but I KNEW that sell-off was unfounded – same store sales are up a point and revs are 2% over consensus…


    Thanks Cap – that Goldman index is critical and we missed it, too busy with the other 100 things this time of year…

    GS has way too much power (including setting US monetary policy).

  234. FWIW I am looking at Jan-2008 puts on homebuilders.

    Many of these puts are trading at/near their lows, and are potential doubles/triples should we get another leg down on the homebuilders.

    Strategy is buying out-of-the-money puts below current book values, then just wait for the inevitable impairments.

    Favorites: KBH, CTX, RYL, BZH

    Any thoughts?

    - Prof

  235. BBI- My motivation is the story of the buyout which the source keeps confirming. Watched it for four months before jumping. So, all other information including their real value is not part of my equation.

  236. What’s your opinion on possible option plays with respect to BTU, ACI (long Jan 08 calls?) and then ATVI, GLW (long puts?) and DVN, RIG? Thx Phil

  237. Chinese Internet Portals: SINA, SOHU, NTES

    Anyone watching these? SINA’s been breaking out on high volumes. SOHU and NTES are not bad either. This might be the year that they really move, again, although short-term seems a bit saturated.

    Any thoughts? SINA made a new 52-week high today. 32 seems to see resistance.

  238. He [Cramer] also said that he was “blindsided” by the ConocoPhillips (COP – news – Cramer’s Take – Rating) disclosure of poor margins. After saying “a lot of really good things” at its meeting a few weeks ago, Cramer said he was surprised at Conoco’s news.

  239. Can’t believe no one commented on GAP today. Guess we all missed it. Cramer says sell.

    Gap shares jumped 8% Monday afternoon on reports the company hired Goldman Sachs to find a buyer. But Cramer said the problem with the stock at these levels is that “the fundamentals are so bad” that no buyer is likely to pay a premium to Monday’s prices.

    “This is a challenged company,” Cramer said. “Sell it right here.”

  240. Phil,

    On the MOT Jan’s for .75 is there something weird about these as there are (2) different sets of these? I remember you had a comment a while ago about different symbols for the same strike prices and all that. Do you know the details on the MOT’s?

  241. Phil, thoughts on this?

    Marc Faber, who predicted the U.S. stock market crash in 1987, said global assets are poised for a “severe correction” and it’s time to sell.

  242. Hey, just joined today, great site!

    Any thoughts on CEO June 07 95′s. I’m think of trying to pick up a few tomorrow around $4′ish. Out of all the china plays, this seems like the only value play (at least that I can see). It has a Forward P/E of under 11 and is expected to grow at 36%. Anyway I value this stock it’s It looks like it’s been oversold based on the current hammering crude has taken to open up the year. Even if I temper my assumptions, I still come up with a $100 + value for this company (Too good to be true?). Thanks!

  243. Now for some OT news and political entertainment:

    This is good….

    (CBS/AP) A U.S. Air Force gunship has conducted a strike against suspected members of al Qaeda in Somalia, CBS News national security correspondent David Martin reports exclusively.

    The targets included the senior al Qaeda leader in East Africa and an al Qaeda operative wanted for his involvement in the 1998 bombings of two American embassies in Africa, Martin reports. Those terror attacks killed more than 200 people.

    The AC-130 gunship is capable of firing thousands of rounds per second, and sources say a lot of bodies were seen on the ground after the strike, but there is as yet, no confirmation of the identities.

    The gunship flew from its base in Dijibouti down to the southern tip of Somalia, Martin reports, where the al Qaeda operatives had fled after being chased out of the capital of Mogadishu by Ethiopian troops backed by the United States.

    Once they started moving, the al Qaeda operatives became easier to track, and the U.S. military started preparing for an air strike, using unmanned aerial drones to keep them under surveillance and moving the aircraft carrier Eisenhower out of the Persian Gulf toward Somalia. But when the order was given, the mission was assigned to the AC-130 gunship operated by the U.S. Special Operations command.

    If the attack got the operatives it was aimed at, reports Martin, it would deal a major blow to al Qaeda in East Africa.

  244. Phil, you missed quite the gathering of your compatriots, er comrades, in San Francisco …. tinfoil hats & all …. :>)

  245. Apple could announce cell phone plans Tuesday, teaming with Cingular..WSJ
    Deal or no deal….

  246. Calch

    On selling the MOT Jan $22.50s for .75 I think this option is non-standard one. That means that single contract may contain more that 100 shares.

  247. HBs – for the sake of the overall economy I hope you’re wrong about a triple! Europe and Asia had a pretty soft landing in housing. Short-term – we’ll see how TOL handles the 50 dma at $30 and the 200 dma at $28.50 so I’d rather do a long-term covered put strategy and treat it more like a trade than an investment as I’ve heard some people can get stuck in these trades for a very long time if sentiment changes…


    BBI – ah, that’s a much better reason than the fundamentals! As long as you know it’s a scam you should do OK! As I often say – “Sure it’s a scam, but it’s our scam!”


    BTU, ACI will get crushed if nat gas slips (and it will)

    ATVI, GLW – puts in gaming and the screens they play on I do not like (we have GLW calls now)

    DVN is too strong for me to want to short it here but RIG may surprise everyone and fall back to $65 for no reason other than money flowing out of the sector.


    China, not thanks – not right now as the HSI is forming a potential nasty looking pattern. They are almost certain to fill the gap at 19,500 and, if they fail that, we could be back at 18,000 – hopefully the US market can ignore it or it will simply be part of a global rotation back to US equities.


    LOL – that’s because Cramer’s version of due dilligence is to listen to whatever BS the management tells him! You see it in his show, he’s all about who’s running the company, perpetuating the myth that CEOs are really worth what they’re paid (some are, not many).

    COP, XOM, CVX, etc. didn’t MAKE that money – they did the same exact thing they were doing for the last 20 years but suddenly the crap they sold got hot. They deserve no more respect than the people who sold Beanie Babies or Cabbage Patch Kids – less even as they sure didn’t invent oil, they just suck it out of the ground and move it around.


    GPS – yeah there was no point, jumped up 10%, did a quick pullback and GS is now manipulating it so I stay away.


    MOT – damn you’re right! Do not mess around with the VEYAX – they have weird provisions (like cash and a percentage of FSL shares) that obligate you to your caller and they are so complex I would bet you money your broker won’t have a clue until he makes 3 phone calls.

    I should have realized that was too much for a close call! Still happy with the ’08 $20s though, crazy cheap for a company that averaged $22 for the past 18 months.


    Marc Faber has predicted 24 of the past 3 stock market crashes, he’s a perma bear. That being said, I predict a correction too but I’m not going to sit on my hands while it doesn’t happen!

    The trick is not to deny it when it does…


    Welcome George!

    Waaah! CEO, I forgot about them!!! Damn, they were on my watch list last week and I totally missed it…

    I’ll be a buyer at $80 but not here, you need to run numbers based on $45 oil – then you’re safe(ish)


    LOL Cap – you don’t mean to say you walk around all day without tin foil do you? They’ll scan your brain you know! ;-)


    Yes no selling that MOT contract!!!

  248. mano
    CAKE base .6 despite buying April 30 at .35 -just means I lowered my average purchasing price of the calls
    no puts