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What Will Happen Wednesday? – in progress

What will happen today? 

I don't know – I'm asking you!  Really, I have no clue the way this market's been acting.  It didn't like $70 oil but it doesn't seem to like $55 oil either. 

I am wondering if the larger trading community is so unsophisticated that they can be spooked out of the whole market by a correction (long overdue) in the commodities sector.  Last I read, most businesses make stuff out of commodities and tend to do well when those prices drop but maybe I'm just getting old and out of touch with the new-fangled economy…

Cap sent me an interesting article by David Nichols who makes a somewhat disturbing point that perhaps stocks are a commodity too and are subject to the same bubble deflation as oil, gold and copper as the money supply tightens up and the dollar rises.  I have thought about this in the past and we have discussed the market movement relative to foreign currencies but REALLY thinking about it as just another commodity (with M&A taking $1.3T out of circulation this year accounting for the bulk of the move) makes this whole thing seem a little tenuous.

Of course nothing is as disturbing as the report we discussed yesterday by perma-bear Marc Faber entitled "Irreparable Cracks in the Financial System" which you should force yourself to read even though it's depressing as he makes a lot of good points.  I'm saying this today as I see several disturbing market trends while I also see a lot of irrational exhuberance on our member site and like Uncle Greenspan, I may feel the need to take away the puch bowl if the party starts getting out of hand!

Asia was getting out of hand and China is tightening up on the money supply in conjunction (or related to) the rapid decline in commodity stocks.  Apple had a VERY interesting effect on Japanes electronics manufacturers as they sold off on concerns that they have lost their innovative edge to the Americans.  When did you think you would ever hear those words again?  If you think about it, it's true – while it's been many, many years since we held the title, America used to lead the world in new and cool technology while Asia used to mainly refine and miniaturize.

The IPhone literally changes everything by creating a device that is so useful and so powerful that is will actually cause people to "Think Different" just like the Macintosh did way back in 1984.

As I write this right now you are reading this article, which I published myself (unheard of) in a window (which we didn't have then) on the Internet (we didn't even have modems) and I instantly get feedback from Brazil, Jakara, London and Taiwan from readers who immediately fill me in on the local gossip.  In short, we have better access to "information at our fingertips" now than the entire CIA did in 1984.

 

Forget the fact that we use it to look at pictures of Paris Hilton going commando – it is still a Brave New World we have all become a part of and I, for one am excited to be here!

Asian investors were not too excited with the Hang Seng down another 329 points and the Nikkei playing catch-up by dropping 295 points.  Are you prepared for a down 295 point day?  Let's remember I am a bull with a short-term target of Dow 11,500!  I would like to say I would be pleasantly surprised to be wrong but I will not be able to really enjoy additional advances unless we get a long-overdue correction out of the way.  As I said yesterday, if the IPhone can't inspire people to get back into tech, then we really do have to lighten up at this point.

Europe is selling off as well but this started at their close yesterday as they panicked about our weak open and will continue until/unless we can turn things around, which will be difficult as they are bidding our futures down sharply in the pre-market!

So, on the whole I am going to play this week close to the vest until we see next week's economic data.  While I would welcome a correction this may also be the early stage of a massive global rotation out of commodities and Asian stocks and back to the good old US equity market – it could happen but don't hold your breath!

 

Wasn't it just yesterday that I accused major oil comanies of being as bad as OPEC.  Well, I've done a little more reading and I will have to apologize – they are worse than OPEC!  BP is now reporting that, unlike OPEC, who failed to enforce a 3% production cut, they did manage to reduce oil and gas output by 5% in Q4.  CVX also did their share by cutting back 2% – very suspicious interesting considering the quarter they are comparing it to came after we got hit with 2 major hurricanes!

On the whole, international oil production is off about 3% from last year's hurricane constrained flow – and we still have too much oil!  ROFL!!!  Oh I hate to say I told you so but – oh, who am I kidding – I TOLD YOU SO!!!

The dollar is looking stronger and will really confuse everybody by breaking over 85, where it should retest a nasty descending 200 dma at 85.5A breakout over that and my global rotation theory will come into direct competition with Mr. Nichols' stocks are a commodity theory and I would love to see how that turns out!

Gold will do whatever the dollar doesn't and its complacency indicated just how calm the geopolitical situation has become of late.  $620 is still the line to watch but I think we're loking at a weak bounce on the way to $575.

The trade deficit "unexpectedly" narrowed to 58.2Bn – unexpectedly to economists who don't understand that oil is something we buy.  Try to remember this next time you are reading their "economic forecasts."

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

No picks today – let's just be careful out there!

AA reminded everyone that they do, indeed use tin to make planes.  I never include them as a Boeing Buddy ™ as they do so much other stuff but it was, in fact, aircraft orders that made their quarter.  Our Apr $30s ($1.20) should be in exceptional shape and we are finally getting the value recognition I expected last quarter.


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  1. Phil, GS recommended last night the SBUX Febs. Your thoughts?


  2. Any tech savvy folk have an update on the companies that will benefit from the iPhone (makers of components, for example)?


  3. good morning phil. in the wake of CVX warning, do you have any oil put plays ?


  4. AAPL to open strong. With all the excitement in the past few days, one thing I have not
    heard much talk about is a stock split. I think there is a good chance that AAPL will
    announce a stock split next week when they report earnings.


  5. Rock, they gotta get their hands on an iPhone first and do a stripdown b4 we can know that. Apple is not saying anything, except that Intel makes the cpu.
    But we are looking at wifi, bluetooth, nice screen, tons of memory. Phil already mentioned GLW as a possible beneficiary.


  6. Rock, I have the same question. There is apparently a bunch of misinformation about who got what.

    For example, I posted on yesterday’s blog that INTC will supply the processor for the iphone but then someone said:

    There’s a Reuters story out early this AM indicating that, based on comments from an Apple-Germany exec (why there?), INTC is supplying the CPU for the new iPhone. A couple of points of explanation are necessary here: handsets don’t have CPUs in the traditional sense. They have a digital baseband (DBB) which is the handset equivalent of a CPU in your PC. And INTC doesn’t make DBBs anymore, that’s what they sold to MRVL. Some handsets use a separate applications processor, but INTCs apps business went with the MRVL sale also. I certainly wouldn’t mind it being long the stock but the reality is that this story doesn’t make a lot of sense.

    Same is true about a report that Samsung will provide the processors.


  7. AAPL (oh no, not more AAPL)

    1) If the Germany quote is correct, MRVL is going to be rightly pissed seeing as how they thought they bought that division. I’m all but certain that the Apple TV is Intel (probably Viiv) and possibly the updated Airport Extreme Base Station, but if the iPhone is INTC has got some ‘splaining to do ’cause they’ve not announced a chipset suitable to the task.

    2) But albo, I predicted a possible stock split a month or two back. Hopefully we’ll get it.

    3) Lots of stuff that Apple has to announce over the next several months. Earnings will probably be blowout, but April has the potential to be scarily higher than now (if you’re feeling particularly bullish). But I’ve got to get out of my January positions before opening more April ones.

    reinharden


  8. One more comment on the possible INTC chip in the iPhone. If this person is at Apple Germany, I’d give you odds that they’d never seen or heard of the phone until yesterday (with the exception of what they read on the web). Apple holds these kinds of products really, really close to the vest.

    reinharden


  9. Good morning all, new member here. What is the most efficient way to keep up with the new comments, just keep hitting refresh all the time?


  10. PHIL,

    The Toyota Jan 09 130′s are under 15. Still interested?


  11. f5 = refresh


  12. Hi Phil
    Mkt in japan did not like MC news to open new plasma plants…
    AA should we buy or jan caller out at BE?


  13. Pitch – yes I do have an idea – I will publish a very very partial first thing in the morning so we can move to the new post early – it doesn’t effect my editing.

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

    I hope GS recommended the SBUX Feb puts because the stock is falling off the table this morning!

    Don’t know why, possibly the snag they hit in India but it’s minor.

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

    AA – someone is exiting a position, not a sell-off but we have a double so take half off here.


  14. Bought QQQOR march 44 puts @ $1.25


  15. Out of LM Jan 100 call with small profit. Will roll to FEB. Thank you, Lord


  16. What about ATI, based on AA’s earnings?


  17. Hey, when is apple earnings?


  18. AA – scratch that, I was looking at July! I’m just going to hold it but stopping out even if it drops that far.


  19. Good idea Phil. Thanks.


  20. Phil, what about EBAY Feb30s now?


  21. What are the projected inventories numbers?


  22. Dilemma,
    AAPL are reporting on Jan 17th


  23. AAPL reports after hours Wednesday, January 17, 2007.

    INTC, by the by, the day before.

    reinharden


  24. It is getting very spooky to be long this market. Markets are falling in the face of declining commodities just seems a little concerning to me.


  25. I’m skeptical of over-exhuberance over I-phone. Cost is high ($500 +) – for now and there is/will be comptetition. And what effect will it have on I-pod? Not to throw cold water. Just keeping it all in perspective. Not a need – a want. But this technology is the future.


  26. QAA AT, TLT NK, GOP BO


  27. adding VTS to my list of must have puts on an interday bounce.

    Nice to see the stocks reacting negatively despite the Bastardi Weather Effect on Natural Gas. The guys’ calling for one of the coldest mid Jan to mid Feb periods in hisotry and it’s got gas traders salivating.


  28. Looking at AKAM. Anyone trading it? Thoughts?


  29. RIMM seems to be stepping out of gate.


  30. AKAM still tired from leader’s roll on the last run, need to rest a little moe…


  31. Bill, have you looked at the demonstrations of how the iPhone works. If so, you’ll better understand the hysteria.

    AAPL really didn’t bring any new technology to the iPhone. As Apple is wont to do, they simply integrated a bunch of technology, threw out that which didn’t make sense, and then worked for two years until they got something that they thought was right. Anyone could have built this hardware. It’s the integration with the software that makes it something revolutionary.

    That having been said, the iPod Shuffle is still $79, the iPod nano is still $149/$199/$249, and the iPod is still $249/$349. At $499 and $599 the iPhone isn’t going to kill the iPod terribly much. Although some people will start saving rather than buy one now. But, in any case, fiscal Q2 is by far AAPL’s weakest and Q3 second weakest generally, so best to take the hit then.

    You know, it’s possible that the 6 month pre-announcement helps in the long run because college students might have to save a while to able to afford this thing. ;-)

    Depending upon how fast costs come down as units grow (and 160 dpi 3.5″ screens become available), I’d imagine that eventually a phone free version might become available to replace the current iPod (video); however, I suspect that there’s not all that much savings simply from dropping the phone *and* you’d have to add a hard drive.

    reinharden


  32. Ok, please make comments on my buy. I’m buying AAPL Feb $100′s….I hope i made the right decision.


  33. Phil your VLO indicator is a kicker…Thanks


  34. AKAM kind of in no mans land right now. Not low enough to buy, not high enough to sell. IMO


  35. At this point, any AAPL call is good, not to make a killing, but to hitch a safe ride for a while…(my thought, that is…)


  36. CVX/Oil – let’s wait for inventory but everything I listed yesterday is good if you can get a deal on it. If you are in the CVX Mar $70 puts, you can now sell the Febs for more than we paid ($2) but I’m not going to unless the Valero Rule gives us a strong indication.

    All the oil stocks on our list are companies I feel are weaker than average based on a lot of screening that I do. The only ones I would add (should have added) were BP and TOT but I’ll be updating it all after inventories, probably tonight – we still have a LOT of open oil puts and right now most of them would be chasing. If this sector is going down, there is another 20% or so to play out easy.

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

    Apple splits if they feel they will sustain $100 – so expect them to announce a split along with earnings when they blow the doors out on Mac numbers.

    I will admit I’m terrible with area conversions but 10M IPhone screens need to be conservatively cut from 8.5 x 6 inch panels of max quality glass which is 510,000,000 square inches which, if converted into sqare yards would be A LOT!

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

    Welcome Adrian (and all others!). You can change your nickname by clicking on your name on the top left of the comment box. Best for comments is to copy the URL for this post (permalink) into the address bar and hit F5 to refresh once in a while, although yesterday you had to do it ever couple of seconds to keep up!

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

    TM – veri interested if we hold our levels but we may see a pullback all the way to $115 if Asia can’t pull out of today’s dive and that will only happen if we post a strong day.

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

    MC – same as TM – NOW I’m getting interested!

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

    AA – no, I missed selling the calls but I think that AA will flatline here and you have a .40 premium to earn. Even if it does run up on you, you still make .40 at expiration and your call is in the money and will pretty much gain penny for penny (that’s why it was such a good idea to sell that one).

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

    Be careful with index puts, we could still get a buy program that slams the market up.

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

    LM – good discipline Albo!

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

    ATI – I like our TIE leaps better. We’re in the June $25s at $4.90, a reduced basis from selling Dec and Jan calls against but it’s only $5.50 now and you can sell the Feb $30s for $1.30 and wipe out your premium entirely or just wait at a pretty safe spot for a hopeful upturn. You can also do the same with the June $30s for just $3

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

    Apple earnings are on expriation day – the 19th

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

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


  37. OOPS – 17th for Apple earnings is correct. I was thinking of someone else!


  38. Anyone have any thoughts on CROX? Up very nicely the last two days


  39. Thanks Louis


  40. Anytime


  41. Phil
    SLB took a big spike down early today -Did you say you wanted some calls before earnings Jan 19th??
    Also thinking of spread play for FDX buy july calls 120 sell april 115 against?? Earnings March 21


  42. Bill P, you may be right, but keep the timeframe in perspective and trade on it. If there was an iPhone Killer available, you would have heard about it at CES this week ! Besides, I have a lot of toys that I spent $500 bucks at the time, now just laying around. I should charge them up, LOL.

    Over the last three weeks, I flew 12 flight segments on United (I love my friends at holiday-time), where I connected through Chicago, SFO, DEN – anyone with more than 90 minutes between flights was using one of a laptop, cellphone, DVD player, or MP3 player during their wait. If they weren’t using them, they were charging them. I now carry a three outlet tap when I travel so that I can charge up when faced with limited AC outlets, and a bevy of people web surfing in the gate waiting area. I have used it a lot ! You can bet that another $500 toy in a few months isn’t going to be a problem for these guys – most of them flying coach, like me.

    A lot of money is made on want and lust – and college kids. Come along for the ride and while the train is near the station, and jump on another train when this one slows down.

    Phil, you gotta FAQ that train analogy.


  43. Round number; 100, 200,…is a major mental block, so expect reaction anytime, any stock pops thru, even mighty AAPL… Bright side is, it will eventually reclaim, probably after the correction, there is a magnetic pull, no can resist…..


  44. Are people playing the weakness on DNA before earnings? Option prices seem reasonable for a potential upside.


  45. Haapy Trader Just added to Bidu this morning


  46. Phil, I’m considering some foreign ETF puts: FXI, ADRA, ADRE, EEM. what’s your opinion? thanks.


  47. NEM picking up speed(down that is…)


  48. Analyst updates (who are much better at reporting the past than predicting the future):
    AAPL has been reiterated by Bear Stearns as a outperform at 120.0.
    AAPL has been reiterated by Credit Suisse as a outperform at 120.0.
    AAPL has been reiterated by Deutsche Securities as a buy at 125.0.
    AAPL has been reiterated by Prudential as a neutral at 90.0.

    Dang, and I bet my girlfriend that no one would have a target beneath $100. ;-)

    Of course, I said after Macworld and earnings, so I’m probably still safe. ;-)

    #####

    Heck, we were round numbering at $95.

    Phil, AAPL’s announcements have actually normally been at lower price. For example, last time, AAPL bounced from around $78 to perhaps $81 last time they announced a split (which was in early to mid February…so perhaps it’ll be after earnings).

    reinharden


  49. BillBigD, Yes, I’m on the same “channel”!


  50. Fear striking the oil futures 10 minutes prior to numbers.


  51. EBAY $30s – current month no – many things are going to be pinned for expiration. You really shouldn’t have any Jans in your folder right now unless they are specifically a mo play.

    I do like picking up the Feb $30s for $1.50 and selling the Jan $30s for .45 – if it breaks $30 by next week you’ll be fine and if it doesn’t, you’ll be damn glad you sold! I’m doing that one if Ebay can retake $29.50.

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

    Inventory: -1.7M crude and about a +2M on both gasoline and distillates. You would think that’s ridiculously bearish for winter but they might actually be right this time!

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

    IPhone – with 50M of the top 200M richest people on the planet living in this country (yes it’s you!) want is all it takes. The IPhone will have no trouble getting that price. People paid $499 for the higher ram IPods when they first came out and those “only” played music.

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

    Louis, QAA AT, TLT NK, GOP BO to you to!

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

    VTS – LOL, that’s funny as I watched them go up yesterday scratching my head!

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

    AAPL Feb $100s – I was just thinking of selling those! We took the July $100s yesterday as it allows me several outs in case of catastrophe, the Febs don’t give you that luxury. So far so good as the July $100s are up to $10 from $7.75 yesterday as I have 7 months for the stock to gain 15% to put me in the money while you have 40 days for the stock to gain 10%. You need to think this way when buying options because many many (almost all) options are a terrible deal!

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

    7 minutes to inventory!


  52. If DNA reports well, it might ignite the biotechs. That’s one additional thruster we’ve been waiting for!


  53. ICE just popped, again!


  54. I’m getting out of AAPL, for now. Time to take profits!


  55. Phil,

    I was just reading your previous post and here what I was wondering, do you have a checklist that you go thru everytime you consider buying options?

    You say “You need to think this way when buying options because many many (almost all) options are a terrible deal!”. What else do you look at?

    Yev


  56. EIA- refiners op at 91.5% last week


  57. CROX looks like it’s just getting started – I hate to chase things though…

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

    SLB – yes thanks. They will be good to take something long like August $55s for $7.80 and sell the Jan $55s for $3 which lets you ride out a dip very happily and get $1 no matter what happens. Obviously if the earnings are good you can just roll with no new investment.

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

    I like DNA a lot as a leap to sell calls as the close options are outrageous. This goes back to my problem that I have too many working postions and it’s hard to take more.

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

    OMG – A bigger than expected build 3.8Mb gasoline and 5.4Mb distillates! Crude down 5M but the net is a disaster. Wait, did I say a disaster – I meant DISASTER!!!

    Oil spiked down to $54.24 before the pump crew sprang into action but that’s a pretty realistic number for the day.


  58. AKAM waking up, slowly but surely…


  59. ICE up another 5 today


  60. Bad news for the refining crowd. Especially if they spike or hold oil here on that crude draw.


  61. Why are the oil stocks going higher?


  62. Watching GOOG to break 490!


  63. XOM – Green? After those numbers?


  64. All foreign ETF puts are a good idea per my global rotation theory.

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

    Getting out of Apple – hey that’s what I said at $60!

    Nonetheless I am selling the Feb $100s for no less than $3 if it turns down, that will be plenty of money for me to make on my July’s if they cap out.

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

    Checklist – sadly no, I tried to work with a fund guy to “program” what I look at but it turned out to be too big a project. I kind of have a “butterfly effect” view of the markets so I look at hundreds of things, but mostly fundamentals – I only use options for leverage so what I do isn’t a math trick (as most option strategies are), it’s a fundamentals play that takes into account option movement.

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

    Speaking of fundamentals – I guess XOM got the concession to sell IPhone chargers… No other explanation for this pump on that inventory report!

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

    Refiners at 91.5 is just .5 over last week, that only accounts for 3.5Mb of the build, but accounts for ALL 3.5Mb of the additional draw in crude – the rest is demand destruction!


  65. HD on the comeback trail.

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

    Rick Santelli makes a good point. Imagine the devestation for the commodity based economies as oil plunges and copper and gold follow. Even Australia derives about 1/3 of their revenues from this!

    Middle Eastern countries – devastating!


  66. GOOG!! GOGO!!

    Phil,
    What are your plays on GOOG?

    AAPL
    Yaks!

    ICE
    TOO HOT!!


  67. >Phil, you gotta FAQ that train analogy.

    and where your canary ref is derived from! i’m picking up on your lingo but some of us newbies are just now finding a nice foothold in the whirlwind of fun.


  68. Kwan, canaries were used in coal mines to detect a reduction in oxygen supply, if they die, get the hell out, kind of a leading indicator with feathers.


  69. Phil, what’s your current opinion about IYR puts? I have REIT mutual funds, thinking about puts protection.


  70. Thanks size123! That makes perfect sense now that you’ve explained it.


  71. Phil, CHKP trading all around 22.50. Could it be getting pinned already. When does pinning
    usually start? I imagine it depends on open interest, etc. But as a general rule.


  72. Crude testing today’s lows.
    T is looking pretty good.
    AAPL, I haven’t seen such a nice cup and handle in a long time…


  73. Canaries – “Canaries are especially sensitive to methane and carbon monoxide, which made them ideal for detecting any dangerous gas build-ups. As long as the canary in a coal mine kept singing, the miners knew their air supply was safe. A dead canary in a coal mine signaled an immediate evacuation.”

    Not quite the same as a reduction in oxygen because CO in particular binds better to blood than O2 which means you could have tons of O2 and still suffocate.

    I spent too much time caving in places with occasional bad air when I was younger…

    Now if only we could get BKX moving up…

    reinharden


  74. Phil, what’s your take on MOT (now at $18.10)

    What’s the iPhone impact on MOT?


  75. digger, just a head fake… VLO now with a 47 handle and decent volume- they may want to clear “all altitudes below”.


  76. Well after all the input received on AAPL (thanks all), I’ve settled on FXI puts for now. Still can’t convince myself of AAPL at current prices. Probably missed the boat. Waiting for a pull back – if it ever comes. Still learning – still a novice. Thankfully its a big market out there.


  77. Thanks Rein, amazing what you can learn here.


  78. CNBC reported that AAPL might be close to signing a deal with Beatles Music. They said deal be worth a 1B in Rev the first year!


  79. CNBC saying “Hedge funds driving oil prices down”

    HaHaHaHa


  80. Let’s remember our oil resistance levels of $54.34 (likely) and $52.88 on the way to a possible test of the $50 mark! Upside is $55.66…


  81. Geeee Phil
    Is the market going to turn green or what!!!
    My DIA 124 are hovering at BE or lower and the days are going by….


  82. Does anyone have a summary of the Wall Street Journal article on Apple and options backdating that was apparently on page A16.

    One can only imagine from the placement that it most have been positive. ;-)

    reinharden


  83. CNBC: 2 guest just blamed the decline on oil and gas on hedge funds…not the weather. they cited the CFTC reports. It’s about time they found someone worth interviewing! ROFLMAO!


  84. Morning Phil and all,

    if you say “there are STILL 293M barrels of oil slated for February delivery to Cushing”, are you refering to the number of open contracts, since each contract represents 1000 barrels of sweet crude, and from the current table at nymex you get 293,000 open contracts X 1000?
    http://www.nymex.com/lsco_fut_csf.aspx?product=CL

    —-

    What causes me some confusion, is this: if someone BUYS a contract, someone else has to SELL it, right?

    After that transaction we have one open contract?

    And if someone sells an already open contract in his port to someone who already has a sold contract open, this would reduce the number of open contracts by two.

    If this is the correct way to see it, pls give me a nod sometime when you are not to busy, tia.

    If this is correct, then a lot of trades must be unwound. And if you look at the numbers from day to day, you can tell from the change in open contracts, what actually happened, if it was just changing hands between holders, not reducing the open interest, or otherwise.

    —--

    Second related question, it´s kind of hard to imagine 293M barrels of oil physically. Is this actually barrels or could is also be the corresponding amount in tanker loads?


  85. reinharden – here it is:

    “By Holman W. Jenkins, Jr.
    The Wall Street Journal
    January 10, 2007
    We can only wonder what Al Gore is making of his experience as the No. 1 defender of today’s No. 1 backdating miscreant.
    Mr. Gore, an Apple director, was a member of the special two-man committee that investigated and exonerated Steve Jobs in the backdating matter. By now, we presume he is well-versed in what backdating is and isn’t. But how easily Mr. Gore — the scourge of Big Pharma, etc. — could have been the one braying about greed, CEO theft, the defrauding of shareholders.
    Mr. Jobs’s famed marketing magic was on display yesterday at the Macworld Expo in San Francisco. In another way, his case has performed a magical feat in prompting a few more voices to question whether backdating is really the crime of the century, or merely a business curiosity blown way out of proportion by poorly reasoned coverage.
    Here and there, in the New Yorker, at the Fortune magazine Web site, in the bloggings of law Prof. Larry Ribstein and journalist John Carney, the intellectual fallacies that have permeated the coverage are gradually poked away. Asks Business Week: “Is the world ready to see one of its greatest innovators sacrificed at the altar of the good-governance gods — especially when it’s not clear how [Mr. Jobs] was enriched or his shareholders damaged?”
    No such understanding was emoted for Brocade’s Greg Reyes or Comverse’s Kobi Alexander, CEOs indicted in backdating scandals much like Apple’s. But this is still progress.
    Much reporting has made it sound like backdating was the equivalent of executives taking erasers and white-out to their paychecks to add a couple of zeroes — and public understanding still suffers from this bum steer. But all that backdating comes down to is a nonmaterial accounting irregularity (yes, readers, accounting rules should be obeyed!) involving a defective judgment about whether “in the money” options needed to undergo expensing.
    We’re still at the beginning of the so-called scandal, and many executives will likely end up paying a price for this poor decision. But in no way does it implicate theft of shareholder money or even substantive accounting fraud. Here, we propose to violate a cardinal newspaper ordinance that logic should never be discussed in a newspaper. The beginning of all error was the media’s unwarranted assumption, to put a fine point on it, that backdating was somebody’s way of paying an employee more than, um, er, that same somebody intended (er, sputter, gurgle).
    You see the problem: Whether options are backdated or not, they must reflect the intentions of whoever designed them. If I’m designing the package, how can I intentionally design it to pay more than I intend?
    So the claim that backdating was used to “inflate” pay (compared to what?) can only be nonsense. In any case, if companies wanted to increase executive wages, backdating was a needlessly baroque way of doing it. They could just have handed out more options. Backdating’s appeal had to lie elsewhere. The likeliest (even self-evident) explanation is that managements discovered that employees’ eyes light up when “in the money” options are put before them. Indeed, if employees are as prone to fallacious thinking as the media in valuing options packages, their delight in “in the money” options allowed them to be taken to the cleaners compared to what they would have received in “at the money” options.
    But, you ask, wasn’t the purpose to conceal from shareholders how much employees were being paid? Your error is forgivable if you’ve been getting your information from the press: The entire substance of backdating was to allow the details of these “in the money” options to be accurately reported, albeit without taking an accounting charge for them (remember, companies at the time could pay an employee the GNP of France in “at the money” options without taking a charge).
    Blessed is the editor who can say to a writer, “Make sense of Subject X for me,” and hope to receive back something more than a distillation of tropes already in the media. Most editors are not so blessed, a factor just now reaching critical mass. On Sunday, a lagging commentator in the New York Times likened backdating to “getting to pick lottery numbers after the winning numbers are drawn.” A confused Washington Post editorial called on Mr. Jobs to reimburse Apple for the compensation he stole.
    Against this (who would have thunk it) stands Mr. Gore, yelling stop to the lynch mob. In Apple’s own backyard, the San Jose Mercury News delivered a critic’s delectable complaint that the Gore investigation had “tried to preserve the company’s No. 1 asset” in Mr. Jobs. Isn’t that exactly what a shareholder wants from the Apple board right now? The Apple case is a marvelous example of why corporate governance reformers do shareholders no favor even as they expand their own bailiwicks by making governance reform a never-ending end in itself. Indeed, Mr. Gore deserves credit for putting himself in the line of fire at all. And worse is surely coming: Mr. Jobs is starting to face insinuations of insider trading for stock sales after the first backdating cases broke but before Apple was implicated.
    Mr. Gore might have waved off the special committee assignment and sought to cover his own hindquarters from the lawsuits and criticism aimed at Apple. That’s been the tendency of directors since Sarbanes-Oxley enacted greater individual liability for accounting scandals: head for the high grass and hire a lawyer to point fingers at somebody else.
    It’s no accident that in the last 25 years, the value of America’s corporations rose 12-fold, and the corporate reform industry grew right in step to tell us how badly and corruptly our companies are governed. The more successful the stock market is at cultivating strong businesses, the more we’re told the whole system is rotten, in need of reform.
    We just wonder what Mr. Gore thinks about all this now.
    Mr. Jenkins edits “Political Diary,” the editorial page’s daily e-mail newsletter with commentary analysis and gossip on Washington, D.C. and state politics. With John Fund. Subscribe at http://www.politicaldiary.com.


  86. CY Mar 17.50′s making a nice move up.


  87. My broker shows that the feb oil contract can last be traded on Jan 19, that leaves only about 6 days for this huge amount of contracts to be closed.

    Of course, this is not the global amount of contracts, or is it? ICE also trades oil contracts and in Asia probably too, and these also have to be taken in account to get a real picture of everything since those who are really into futures probably trade anywhere, if it serves their purpose. Although I read somewhere that floor trading at NYMEX is the heaviest volume on global theatre.


  88. XOM Feb 70 puts up nicely today!

    Just placed a stop order at 1.60 [+23%] for my 1.30 cost basis.

    Am I following the trading rules correctly?


  89. IYR – no puts. We just got a huge uptick in mortgage applications, might just be refis but may be a sign of a sooner than expected turnaround. In the very least make sure they break $82.50 on the way down.

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

    There’s no rule for pinning but usually you’ll see things forming up within 10 days of expiry (7 sessions). As next is a short week, today is 7

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

    MOT sells 66M phones a quarter – IPhone hopes to sell 10M phones over the next 6.

    This is a good sign that MOT has found a bottom and I am looking at the Jan ’09 $17.50s for $4 as my most likely entry although the spread between the ’08 $20s at $1.60 and the Apr $20s at .55 are a very good play if we assume it will take longer than 1 quarter for MOT to et moving again.

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

    FXI puts are safe(ish) until the US rallies – then get the heck out! Talk about getting away from you – on the day they hit $118 I said we should short them at $120… 8-(

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

    Oh, it’s those darn hedge funds… Anything but the fact that we’ve been getting ripped off for the past 2 years as they pumped the price of one of the world’s most plentiful natural resources.

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


  90. Thanks soccer. Finally somebody is publishing what I’ve been saying (and writing to editors and journalists) for months.

    And, for what it’s worth, not just about Apple.

    Although I am now somewhat dedicated to finding out the truth behind DELL and it’s 180 subsidiaries and “mysterious” 12 billion dollar internal transactions for “tax efficiencies”. At least once I get less busy with AAPL after January options expiration.

    reinharden


  91. hello phil – you suggested to short FXI at 120 and hence I did not short at 118 :)
    lol


  92. Phil:

    New, so some basic questions

    I have spread on AAPL 90 calls (Jan and Feb). I bought the spread for around 1.50. What do you suggest … the spread will increase or decrease and when can i close.

    Thanks


  93. Out for a bit, back shortly. I concur with Phil that MOT is undervalued long-term and I’ve been accumulating Jan 08 options at various strike prices as well.

    I also plan to start rolling up a position in INTC for a similar timeframe if I can find some reasonable positions. STX and TXN are also appealing from a somewhat value-oriented perspective. But not necessarily the best short-term trades.

    reinharden


  94. Nat gas finally starting to at least stop climbing. The Bastardi Effect has shot gas prices up 10% in the last 3 days so it better get pretty f-ing cold or no one will ever listen to the guy again. I even saw one accuweather meterologist blooger who said he didn’t want any part of that forecast of a 30 day mini Ice Age.

    APC and EOG breaking down nicely. MUR continues to fall. UPL rolling over now. Majors gettng slammed for 2nd day. They never recovered yesterday with oil.

    XOI pounded through support at 1,100 and really has no more support until 1,045. Lots of broken looking charts.


  95. Phil,

    Is it time to sell calls against the XOM 72.5 Jan 08? I also have COP Jan 08 65s. Should I sell Jan 62.5 against them?


  96. Oil bounced at noon, a penny above yesterday’s low of $53.88.


  97. Phil,

    I have the XOM Apr 70 Puts. Should I sell the Jan 70 puts?


  98. Took some ICE off the table hoping for a pullback. Got a triple


  99. DIA – like I said this morning, it would be amazing if we can buck this trend. The Chicago PMI just revised downward a touch which makes people think the Fed might ease again (they won’t).

    I’m hoping we hold this level as I sold puts against my Junes and I”m waiting to see how today shakes out before making a short index play either way.

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

    I’m taking a DD on the GOOG Mar $470 puts at $15 if I can – that’s my main naked plunge protector right now.

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

    Open contracts, all contracts work kind of like that. When you buy an option you “create” an open contract and when you sell it, your buyer “cancells” your contract. The exchange keeps track of the net amount that remain open at the end of the day and yes, technically scheduled for delivery.

    The oil comes to you in tanker loads via pipeline – how you actually store it and move it about the country is your problem but, with inventorys pretty high, finding empty tankers is scarce so barrels pile up in warehouses but there just aren’t that many barrels in the world so – at some point – if people stop using the oil the whole thing starts to look like a multi-car collision on the highway as one buyer rear-ends into the other.

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

    I never bought the CYs as I was worried SPWR would get hit. Hasn’t happened yet. CY is an amazing bargain at this price.

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

    NYMEX still rules but I wish there were a site that tracked the combined exchanges.

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

    XOM puts – absolutely but XOM is a jumpy little devil so you may want to take half off, apply it to your basis which would give you a new margin of 60% on the remainder and then set a stop at about $1.40 for a low-risk high return trade that is less likely to get stopped out on a meaningless spike.

    I will say though that we are very unlikely to break $54.34 for the close as the dollar is likely to hit a lot of resistance at 85 and $71 is a defendable level for XOM pumpers (including the company’s own buyer) who don’t even want to risk a test of $70 today as gas inventories are likely to be another disaster tomorrow.


  100. Does anyone have a take on COF? Perhaps I’m missing something.

    COF looks really cheap, even to the point of being a seemingly potential takeover targer with a market cap at around 50% of its enterprise value. And with earnings growth this year looking to be over 20% and a P/E of under 10?

    I bought a position in them at around 77 and have thought of adding to my position but would like to get others’ feedback first.


  101. panterei, LOL, they don’t just keep those individually wrapped 42 gallon (US) barrels laying on trucks. It’s the equivalent in whatever way they can transport it, and is usually measured as flow through somebody’s valve at the delivery point. Not all the oil actually flows through Cushing, OK USA either — European fuel prices are high enough, thanks — but if you look at the “Delivery” section of the following page, you can see that they can “book out” the transfer:

    http://www.nymex.com/CL_spec.aspx

    Here’s a cute brochure on an oil tanker that move 300K barrels:

    http://www.exmaroffshore.com/wahoo_tanker.pdf

    You would need about a 1000 of those tankers to come to the required delivery volume for those open contracts mentioned for this month. Tanker sizes vary by destination market (draft of the harbor/channel). Lots of what we see on the California coast has a capacity of 400K barrels. We have to avoid them when we’re racing our sailboats in the San Pedro harbor.

    The oil contracts are just like the equities and optons we buy and sell and talk about here. Somebody has the actual oil and sells it by offering a standard contract, which the ultimate refiner wants to buy. In between, speculators calculate value risk and trade on it. As Phil has been saying, at the contract expiration, if you have no need for the oil represented by the contract, you gotta dump the contract.


  102. Rein – notice the phrase “who would have thunk it” it’s very likely we’re both being taken seriously in that article.

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

    FXI – I know I’m kicking myself every morning since! I really thought it would test $120… Greedy – should have opened a small position as 20K was a logical top for a China pullback. I will try to be smarter next time.

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

    AAPL – wait a few days and collect your buck (the premium your caller still carries) although you might want to close out ahead of earnings unless you are looking to risk it. Of course you are 20% ahead so you can take 90% off the table, pocket 10% and leave a few open for a free ride into earnings.

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

    XOM/COP – selling the Jans against them is good discipline as long as you don’t mind limiting your upside somewhat but you are scalping the premium and, if you do nothing but that EVERY last week of the month, that alone will give you a great return.

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

    ICE = nice!


  103. Phil, TM is down quite a bit today, do you think it’s a good time to start small position?

    j


  104. APL 12:10

    AAPL Apple reaches extension targets (97.02 +4.45) -Update- -Technical-

    The stock has run nearly 15% off of yesterday’s low and roughly 27% off late Dec low. Clearly momentum is on its side but Fib extension targets, used by technical traders when no obvious resistance is available for potential profit taking, have been met in recent action today at 97.60/97.77 — session high 97.80.
    JB


  105. Sold out of COP FEB 65 puts at avg of 2.73 for 87% from my basis of 1.45.
    Hoping to buy back cheaper at EOD

    Sold 1/2 of my AAPL calls at the 97.00 plus level as the position was gwtting way too large. Still holding significant positions in APR 90′s and 105′s into earnings.


  106. COF – LOL, $75 was my price target – I sold my poor caller a Jan $75 for $5.20! If he expires worthless and COF is over $70 I will be one very happy camper!

    This spike down is a gift though and I need to stop out my caller at $2 (.50 trailing stop) if it bounces. I can always sell the Feb into earnings or just get out with almost a double.

    I hate to tell you MA fans but they may make a good put into COF’s earnings (18th). The Apr $90 puts are only $3 and they will fly down if COF has problems with their credit numbers and we can get out quick if COF has good news as MA is unlikely to fly through $105

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

    Cool tanker brochure! While you can make alternate arrangements, you are required by NYMEX to pay for oil FOB at Cushing. Of course not many people actually take barrels but I had some cool pictures of barrel storage facilities last month and it’s amazing looking.

    Point being, as you said, you need more tankers than there are on the planet to offload oil at the rate of 30 per day to service 298K open contracts so it’s simply not going to happen. They’ve already rolled March up to 200K open and it’s all going to hit the fan somewhere.


  107. TM
    Technicals are still heading down, MACD and STO on a six month daily.
    Good support at 125.
    JB


  108. Seeking Alpha article iPhone Component Suppliers – Cypress and Marvell? (Rock this might be something you’re interested in….)

    http://chip.seekingalpha.com/article/23847


  109. Okay, I better be patient to buy TM. Thanks.

    j


  110. *** Chapter 7 and 11 filings startng to show up from private drillers in the Barnett Shale

    *** Rigs starting to free up

    *** Day rates starting to fall

    *** Got this from the CEO of a private but sizable E&P company

    Not a good sign for PTEN, PKD, PDE etc


  111. got some mrvl 08 20s earlier based on iphone news


  112. TM – Asia won”t turn until we do so don’t try to be the hero and save TM.

    We have a very important mantra: “It is not my job to save the markets (or any stock)” You need to post this up on all the mirrors of your home! When they are dying, let them die – we don’t try to raise the dead, we just jump on the backs of the healthy, living ones!

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

    Apple – the problem with all charters is that they love their charts too much. Obviously, if they didn’t believe in all the squiggles there would be no point would there so we can forgive them for that.

    On November 27th, Apple was unjustly attacked by a PR smear campaign aimed at taking the stock down as it broke through prior resistance of $90. The stock traded down on fear and uncertainty all the way to $77 before the reality of the fundamentals reasserted themselves.

    I think you need to redraw the chart and throw out the data points from 11/27 – yesterday (when we stopped at exactly the 11/27 level) and redraw the chart from there if you want to figure out where this is likely to go.

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

    Fed gov Moskow says inflation risks remain – hard on the market, great for the dollar, bad fro oil (yes, even badder!).


  113. Greetings all. New here as of yesterday. Very informative and busy place (especially yesterday). I hope I can learn from you guys. Do most of you use trailing stops or adjust manually ? Reason I ask is that I was stopped out of an XOM put this morning when XOM did it’s crazy thing right after inventories(was using a trailing stop). Thanks and good trading to all.


  114. Ecuador in possible default of debts!!!

    http://www.thenews.com.pk/update_detail.asp?id=15866

    More reasons to move to US equities – big boost to the dollar (in other words: See, there ARE worst people you could lend money to!)

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

    XOM – Oh no, don’t sell calls against puts! You are doubling your risk. I’m sorry I was talking about selling closer puts. Sell the $70 puts for .65 and you own that premium with a $1.10 cushion. Effectively, you are limiting your upside move to $1.75 between now and next Friday but if you think XOM will hold $70, it’s a great play – plus you get some bounce protection.

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

    EBAY buying StubHub for $300M – very cheap (too cheap) with StubHub running $400M and a 25% profit…

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

    COF – we really need to have a serious talk about stops!

    I would say hold them for a bounce or (and this is a hedgy play for rich guys) you could turn around and sell the June $85s for $1.75. You will gain faster than them and by march they will lose 1/3 of their premium (.85) and you can get out near even.

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

    NOTE TO ALL – you can’t apply the trades I suggest to any old postion or stock. I take very specific stocks for very specific reasons so please do not assume that something that works on one trade will work on another. This is all about timing the movement of each individual stock in relation to the expectations reflected in the options and every single one is different.

    Also, diversification is an imperative! Doing this without at least 10-20 positions with at least 1/3 on the short or long (whichever way you don’t think the market is going) side will almost certainly eventually wind up with you having a very bad day at some point.

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

    Z- 5 is good!


  115. iPhone components: that’s a lot of “ifs” in the seeking alpha article. Also, iPhone does not have n support, but all the new macs do, does anyone know what chipset they are using?


  116. Welcome RT – manual stops for me but I set them when I’m gone for the day. They will steal your options every time if you set hard stops, especailly volatile plays like oil. The real trick is to make light entries and build into a postion so you don’t feel pressure to make all or nothing decisions when it snaps on you.

    I wrote something about this under the strategy tab.

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

    No idea on the chipset yet and, with a June release — even the one they have may not be final.


  117. XOM

    So, I could sell Jan-08 calls against my currently profitable Feb-08 70 puts?

    e.g. sell Jan 70′s for 1.90 to take the 0.70 premium based on current 71.20 price?
    or sell Jan 72.50′s for 0.65 and take that 0.65 as income, provided these calls expire worthless?

    Just a small trade, trying to learn …


  118. Phil
    My march 85 COF calls took a beating today
    Any suggestion on what to do now…
    option 1 sell the March and buy feb 80
    option 2 DD
    option 3 sell some calls againts the March 85
    other?


  119. Oil trying to fail to new lows.

    Phil, check your email.

    Z


  120. I believe that the MacBook and MacBook Pro were reportedly using the Atheros AR5008 chipset and the iMac was using a Broadcom chipset. I don’t recall the Mac mini nor Mac Pro chipsets.

    The SeekingAlpha article is just guessing. For the iPhone previous vendor is not a factor since this represents essentially a complete redo from both the perspective of the iPod and the perspective of the MacOS X folks. A good vendor relationship will help, but the decision would have been made almost solely on the basis of technical merit.

    #####

    I’ve read a lot of speculation about “How can it take so long to get FCC approval/come to market?”

    I’ve not seen anything that indicates what this is made out of. But early speculation included some interesting pseudo-ceramic materials that were RF transparent. In order to put GSM/GPRS/EDGE + Bluetooth + WiFi (+ GPS?) in this thing without having any external antennas, it’s almost *got* to be RF transparent. That means that the entire device has to be either internally shielded or not emit RF garbage (and all devices radiate some RF garbage without emission work). Then it has to go through *4* approval processes per jurisdiction. It has to not emit just as an electronic device. It has to emit correctly with all three wireless interfaces.

    Now multiply those 4 approvals by the number of jurisdictions. The States are easy. The European Union is easier than it used to be. After that it’s pretty much on a country by country basis. The last time I was involved, we had a team of administrative people supported by a team of engineers to respond to each jurisdictions government. And it took 6 to 8 weeks per jurisdiction minimum and we were only doing 802.11 interfaces.

    Anyhow…

    As much as I hate to keep talking about nothing about Apple, it’s important from a long-term perspective to realize that this device is not a product, but a platform. There’s practically no functionality that Apple can’t bring to this. Tablet? UMPC? CDMA? 3G protocols? VoIP? Skype? All of these are just tweaks.

    Still, the devil is in the details. How long does the battery last? Does the screen smear/scratch? Does it sync via the cradle or wirelessly or both? Can I share my EDGE connection with my laptop? Blah, blah, blah.

    reinharden


  121. Hi Phil and all members, great site and an option trader’s dream! Been on board since inception but don’t have much time to post. I’ve been trading options for a few years and starting to expand my horizons a little(selling calls and spreads). Phil, I thought awhile back you mentioned the hasbro feb calls. It’s been basing for two months or so. Any thoughts? Thanks, all you guys are great and informative!


  122. Guess this clears that up:

    SAN FRANCISCO, Jan 10 (Reuters) – Intel Corp. (INTC) denied on Wednesday that it would be the supplier of the main chip inside Apple Inc.’s (AAPL) highly anticipated iPhone, but said it is supplying chips for the Apple TV.

    “We are not providing the silicon inside the iPhone,” Intel spokesman Bill Kirkus told Reuters. “We are providing the silicon inside the Apple TV.”

    Intel was responding to an earlier Reuters story that quoted an Apple spokesman in Germany as saying Intel would supply the central processing unit (CPU) for the iPhone.

    #####

    We now return you to your normal speculation.

    Was that CNBC that started the AAPL drop at 13:07? How annoying…

    reinharden


  123. RT, I see that Phil answered you; I switch to manual mode on the oil patch at 10AM. We’ve had stop-outs like you on the head fake which happens occasionally. Phil had a post (in comments) some weeks back where we bail out of the trade in the direction of the trade within a very short time of the reaction. This morning I happened to choose VLO and was in for 31 minutes, up 36%. Bailed when I saw the buy volume start back. I should point out that this was the first dip (the conventionalists say to buy the second dip, ultimately lower), but we were trading still OTM with a very high decay rate on these Jan 47.50 P… had I waited, I might have gotten that extra nickel (claiming 45%), but the tape shows that only 17 contracts traded at that price this morning, anyway. VLO appears to have support down here, but who knows what will happen if Oil crosses $53.

    Otherwise, I will use TS once something crosses my target – or when away. Pretty much in line with the Strategies Phil has posted. If you happen to choose something that is still OTM this close to expiration, you need to seriously consider how happy you are – and how much less happy you’ll get as the trading sessions grind by.


  124. Rein,

    More importantly, can you download a Google ad, then get in your car and Bluetooth the route into the nav system and have the car drive you to the store? ;-)

    Okay, maybe I need to wait for iPhone2 and a software upgrade to the Lexus…


  125. TOM2OC would say that as BKX is turning mkt is turning (green that is) as Goog and Aple on the go


  126. reinharden –

    I think you’re dead-on regarding the iPhone as a platform. I’m very curious to see the development kit for this once AAPL releases it.

    The only tarnish that worries me about this product (and is sure to become a MAJOR point of complaint from both sides of the aisle) – the battery is SEALED within the unit and is not swappable. Maybe the hardware hackers will work around this (they did with the iPod) but the idea of my 599. phone losing battery capacity over time is not something I’d like to think about.


  127. Phil – AIG Feb 75 calls – DD or ?


  128. out of AAPL at 96.80 level time to catch my breath


  129. Connecting the dots on AAPL IPHONE, i cant see any of the phone manufacturers that produce their own chips being in the IPhone, whos has the tech? Not many and im sure AAPL wanted to make the right choice the first time, someone that could meet all the criteria..Only one that comes to mind is MRVL..old articles below
    http://www.uberphones.com/2006/09/black_box_concept_handset/
    http://www.ndgold.com/2006/05/13/jobs-in-asia-choosing-iphone-manufacturer/

    TXN DLP chip in a cellphone
    http://news.com.com/TI+chip+turns+mobiles+into+movie+projectors/2100-1041_3-6148410.html


  130. Will take on fresh positions after the dust settles just a little


  131. What does DD mean. I know it means Due Diligence but when you are using it above
    Phil – AIG Feb 75 calls – DD or ?

    Do you mean buy or Due diligence?

    Phil,

    If you open a position will you clearly state that you have?

    Thanks
    Jason


  132. DD = double down


  133. Jason – in this context it means double down


  134. Phil,

    Well, that XOM advice sure makes more sense!

    Anyway, I just sold those XOM Feb 70 puts for 1.85.
    +42% one-day return was just too good to pass up!

    Thanks!


  135. If I posted frequently enough I would change my nickname to “DD = Double Down”


  136. Just sold COP JAN65 Puts against my COP FEB65′s, cost basis on Febs now .06. Almost a fee ride.


  137. SHLD
    Holding up well after the jump this morning. If it closes above 171 (open price), may be a bullish sign!

    ICE is on fire!! CME is not so bad either! But, didn’t get in.

    MO – WOOHOO!!

    BillBigD,
    Are you still in BIDU? I think there’s still room. Might hit 130 today. Oops, it just did! =D


  138. Jon, you’ve picked an excellent (facetious) example to illustrate my point.

    If you had a car whose navigation system could drive you to the store, then it’d be trivial to make the phone capable of sending it the route instructions. Telling it how to avoid the cars along the way would be trickier. ;-)

    But, take as an example, Tom-Tom. Since the iPhone apparently has GPS and it has an external speaker, it’d be trivial to select an address from either your address book or Google Maps and have the iPhone speak Tom-Tom style instructions to you to aid your in getting from here to there.

    Expanding to another vertical market – given a list of sales stops/deliveries for the days and pre-determined appointments that must be met, guide me to my list of appointments/deliveries in some kind of efficient manner.

    Silly stuff, but there are companies whose entire business is filling those niches often with more expensive equipment. The TomToms for the car are priced at $399, $499, and $599. And they don’t play music, videos, work as phones, or act as mobile Internet communication devices.

    #####

    Chipset vendors that make sense: BRCM, MRVL (formerly INTC), Philips (whatever they’re called now), Samsung, TXN, others that slip my mind.

    In particular, checkout things like Broadcom’s CellAirity product line:
    http://www.broadcom.com/press/release.php?id=815794

    MRVL (formerly INTC) is certainly a possibility:
    http://www.intel.com/design/pca/prodbref/253820.htm
    and would have a small advantage with some potential overlap in power management between this part and the Core Duo parts. AAPL would have to shop for some chips/functionality to fill some gaps with MRVL.

    CY has been mentioned. I don’t know them well enough to comment.

    And there’s always the possibility of some company none of us have heard of. Who’d heard of PLAY before AAPL used them in the iPod?

    reinharden


  139. phil,

    what are we doing with SHFL (May 30′s), they seem to be tanking a little. Also, with SNDK flying through 45…is there any rush to do anything with 08 LEAPS with the Feb 45′s sold against?

    Thanks,


  140. craig, I bought a Philips 6Gb MP3 player with a sealed battery a couple years ago, and it very much annoyed me at the time. Same price point. However, I have learned to top off the charge the night before, and now it’s just part of the routine. I can outlast most runway closures in Denver, ranging from Ravel to Artie Shaw to Styx. Or is it Bach to Bachman-Turner Overdrive ?

    I suppose that power allocation in the face of talk time when untethered is the larger issue, as someone mentioned yesterday. But we’ll get over it. I rarely worry about batteries in most of my accessories.


  141. Oil – Nice lower highs, lower lows channel today


  142. Nasdaq is behaving nicely, even as AAPL cools a bit.

    FFIV
    ready to rumble again?!

    GS
    looking good, but, I’ll wait another day.

    SINA
    UP again. Anyone know anything? I sold half of my position when it passes 32.


  143. Phil,

    About your play on MA off of the COF earnings….

    Why not get the APR’07 $100 Puts for 6.20 and sell the APR’07 $90 puts at $3.10 against them? Only costs you .10 more than your trade and would give you protection. Reward:Risk on expiration is nearly 2:1 too.


  144. HAS – thanks for keeping me on schedule Johnny!

    The game was to wait until Feb for the 50 dma to catch up to the stock price so it could form the next leg:

    http://stockcharts.com/charts/gallery.html?has

    All according to plan so far and aren’t you glad we didn’t buy it then! Earnings are Feb 9 and the flatlining has caused the Feb $27.50s to drop to .95 so that’s a definite entry point here but be prepared for a drop as low as $27 if the markets have a bad day so I’m accumulating maybe every other day into earnings between $1 (max I’d pay) and the $27 mark (hopefully .60).

    You can also sell the $27.50s for .40 against the postion which is a great idea as it’s doubtful it will take off prior to that and you’ll maintain a much better earnings premium than your caller.

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

    Go market go meanwhile!

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

    Cool – Intel statement good for Intel and good for MRVL by process of elimination!

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

    Sakiko is very wise!

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

    I think the IPhone (barring any technical advances we are unaware of) will be a bonanza for the people who make charging stands for Apple and for the people who make those external laptop batteries – so if anyone knows who that is, let’s keep an eye on them for later this year.

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

    AIG – I did DD already, not chasing it further as I’m halfway in and not happy with it so I’d rather wait. When they get small on you like this, when you DD at .20, you lose 25% right away as you can only sell them for .15 so now I’m taking, lets say a $1,000 loss on a $2,000 entry and turning it into a $1,250 loss on a $3,000 entry.

    With my holding down to $2,250 I still need a pretty big move to get even – say 30% so, if I assume I’m not going to get it let’s say I realistically am hoping to escape with a $500 loss after doubling down. That means I am putting $1,000 dollars into a posion where I already have $1,000 in the hopes of making 25% but I’m really better off diversifying since I already know I was wrong on the AIGs.

    With a firm belief in the fundamentals or more play in the posiition, its different but for small, out, of the money posiions, it often doesn’t pay to chase. The RE biz has been hurt by a lot of price pushback from commercial clients after an exceptionally mild year – Berkshire got hit too (down 5%) so we’ll look to see if they recover first (looks like they will but they are very diversified).


  145. LVS is doing really well!



  146. cy- chart looks good. like to see it hold above resistance($17.64). any thoughts if will fill the gap to $18.50ish?


  147. Phil,
    Would it be a time to DD on flying LVS MAR $85 puts?


  148. Along with WYNN and MPEL. The exchanges are also having a banner day. Not that I’m jumping in, but the FXI and the EWZ (Brazil) are looking pretty good (shorter term, of course).


  149. How do I get back in if I leave the site. Do i just bookmark this stie today and tomorrow it will be fine or I have to login everyday. Whats the best way?


  150. Happy Trading,
    Ran out to get some sushi to celebrate my ICE. Luckily I have still have some. I am holding BIDU still. Did you buy FFIV? I am looking at it again hard, I think it will run. NYX and NMX also adding nice gains.

    Phil,
    I guess those LVS puts are history. Are you jumping back in PBR puts


  151. D’oh! Rein you just said the magic words that brought it together for me!

    Apple is already working with major car dealers on IPod integration. An IPhone and/or dock can be a standard upgrade in a car as they currently sell the GPS systems as $1,000 upgrades anyway. The phone can double as a media center driver for the car (including powering video for kids in the back) while it integrates a mobile phone platform through the car stereo with touch screen hand-free talking that is the law in lots of places now.

    How much would all that cost? About $20 a month added to your car’s payment!

    We’ll know I’m right if the GPS software is designed to interrupt the media system to give directions.

    CW says Broadcom – touchscreen / Samsung – controller / MRVL – chipset

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

    SHFL – I never ended up buying those? When was that from? I do like them down here but I’d like to see them hold for a bit first.

    SNDK – no, we were unlucky they went up so fast, all we can do is ride them out and flip to March at some point. The only way this strategy screws you is if the stock goes straight up for 12 months (Apple did this).

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

    SINA/BIDU – any companies doing well in the China market this week are very strong contenders.

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

    COF – there is nothing wrong with that play but I’m just making a gamble on the COF earnings, not looking to keep a long position. The theory is that MA can fall $5 a lot easier than it can go up $2.

    I am not a big fan of call and put spreads, I prefer to play against the relative time values as they generally give me more flexibility if things change. The best you can do on the $90/100 spread is $7 and you are risking $3 and it has to drop to $95 for you to make $2 and even thenyou have to wait until April.

    The $90 puts are currently $10 more out of the money and $3 cheaper than the $100s so we can assume that a $5 drop will net me $1.50 instantly – a much better rate of return I can take off the table any time or start selling closer puts against.


  152. phil do you think its smart to sell feb105 nyx calls i have 08 calls now


  153. saikko –

    id agree – i don’t worry about the batteries in my mp3 player – but phones (and an internet platform as the iPhone is) are more important to the user – I’d hate to be stuck on a business trip without an outlet and a battery going dead that I cant swap for a fresh one. What happens when the batteries begin to lose charge over time? Considering the noise and complaints AAPL took regarding the iPod batteries some time back, this is likely to become something of a sticking point – and it’s this kind of point that competitors and the media in general love to exploit.

    Still, I’m such an AAPL die-hard and this thing is so sexy, I’ll prob. buy two :)


  154. I never did buy any LVS puts, seems like a good time now, no?


  155. LVS has officially been granted the right to develop in Hegqin Island


  156. I agree w/ JB, next time(probably near end of trading hours, It will spike past today’s intraday high. That is when I will sell my AAPL calls, all of them, for now…


  157. I’ll just note that the most recent design wins in iPhone article references an EETimes article that references an FBR report.

    The writer for FBR has reported, since October, that PLAY, NVID, PLAY+NVDA, BRCM, and PLAY+NVDA all had the major design wins. So value his current view accordingly.

    And see, I did forget a few candidates. Infineon has some processors that would be useful as well. See http://www.infineon.com/cgi-bin/ifx/portal/ep/channelView.do?channelId=-65340&channelPage=%2Fep%2Fchannel%2FleafNote.jsp&pageTypeId=17099

    reinharden


  158. BillBigD,
    I’m out of BIDU. 130 is high, although it might go higher; but, I watch it for other entry points. SINA seems to be up to something. Any good news may set the Chinese Internets on fire!

    Still watching FFIV, it is “thinking” very hard about going again.

    I’m holding lots of cash until 12pm. I’m in GOOG still.

    AAPL is getting caught between the 10-min-MA and 20-min-MA and Bollinger bands are narrowing on it fast, between 95.95 and 96.35. If it breaks (maybe around 12pm), it might provide the market additional fuel.

    Would very much like to see ^IXIC close above 2450 today. And, if DNA reports well, perhaps we get more fuel from Biotechs.


  159. BillBigD,
    I’m sure you’re looking at FFIV, as I was typing the last message, it moved .3. I’m trying to pick up some just in case.


  160. LVS

    FWIW, I would not go short in front of that runaway train.

    Gambling, like it or not, is a high-growth industry worldwide.

    LVS is well-positioned, and irregardless of fundamentals, the market loves growth stories.

    IMHO


  161. LVS – holy cow – there’s a place I should have set a stop!!! It blew right through the 5% rule at $97 and 2.5% more is $99.75 and I will DD if it tops out at $100 and hope to recoup a little of a terrible one day loss on a pullback.

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

    FXI – calls I hope, China can have a 400 point bounce off a good US market today.

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

    http://www.philstockworld.com/members/ – It should cookie you but why would you ever want to leave? We’re here all night!

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

    FFIV – I like them when they’re down, which they’re not.

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

    PBR – must rethink the oil plays from scratch – rising tide of market may save oil Cos from here if it gets going, certainly some oil sector buyers think they are getting some bargains right now but there is no conviction in the buying, looks more like DCA on the way down.


  162. Thanks for the analysis Phil, I’ve been trying to manage risk more rather than buying just long calls/puts and I am constantly learning from our community how to actively manage positions by selling against a position. Thanks for the short explanations when you talk about the pros/cons of positions you look at/put on.


  163. AGIX on the move again…picked super cheap calls this morning….lottery play.

    j


  164. Its only right our companies get compensation for their loss in Ven.
    http://www.amtddj.inlumen.com/bin/djstory?StoryId=CrArY0aebqLqWmdy1ntC


  165. SIRI going nuts, up 6% on 120m shares so far. More merger speculation perhaps?


  166. NYX – depends where you came in and what you made. If you’re protecting a nice profit, absolutely! I sold the COF $75s when they spiked up to $77 as I figured that was about it and boy am I happy with that decision.

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

    LVS – I wish I was just buying now! Well my strategy here for me is that I’m down $1.50 on my march $85 puts so I’m going to take the Feb $95 puts for $3.50, looking for my $1.50 back but I stop out if it breaks $101 so I’m risking about a quarter.

    The Heggin Island thing is not only old news but it means they’ve been given the right to spend $10Bn on infrastructure for the benefit of the Chinese government. They won that bid because they’re dumber than anyone else who was bidding and Shelly thinks he can BS his way though anything.

    If my current puts fail I will DD into earnings and DD and DD until this scam is uncovered. I can’t even imagine how many “favors” have been doled out on this project already.

    Prof – you of all people should know the follow of buying a whole, undeveloped Island with the intention of putting a casino on it!


  167. NEW TOPIC: “10-Bangers”

    This might be the wrong group (too short-term) to raise ideas from, but …

    I’m re-aligning my long-term portfolio and want to put 10-20% into high-growth companies.

    Does anyone here currently have any favorites that have the potential to grow 8 or 10 x over the next 3-5 years? I plan to do some DD (not to be confused with double down) on this matter over the next few weeks.

    Just thinking out loud, always dangerous …


  168. My favorite stock going up…SHLD! Go Eddie!

    j


  169. D’oh, missed the note from Citi on XMSR (up 10% too). That’s what’s going on with SIRI…


  170. AAPL-putting stop right under where it is, and closely trailing


  171. AAPL, seems that it found its first new floor in uncharted price territories at $96. It’s heading back up to attack $97 after resting and testing $96 a few times in the past hour.

    Don’t know how much of a real floor it’ll be though…


  172. Phil,

    You of all people should know the follow of “discipline over conviction” :)

    I felt the same way as you about LVS way back at 50, thank God I took a quick loss back then at the secondary offering!

    These scams can run for a while. Maybe I’m just overly influenced by reading a chapter in the book “Hedge Hogging” titled “Short Selling is not for Sissies” that tells the tale of a fund manager that lost $400 MILLION shorting a total scam casino operation with the ticker symbol RICH!

    Be careful!


  173. Oil closing the day down $1.74 at $53.90 on a strong dollar finish – this is annoying as I now have to recalculate all my targets with the dollar up 1% since the last time I worked them out.

    Of course, $53.90 is just a hair over 1% lower than the $54.34 target and I only eyeball the tenths anyway so – not too bad.

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

    WYNN in the same exact spot as LVS but a much better play. Taking my LVS’s here!

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

    SIRI – now there’s a stock that shook me out – I just couldn’t take the abuse anymore when we entered last at $3.84


  174. Prof, I can’t resist. How about AAPL? ;-)

    Most recent reported TTM revenue 19.someodd billion. If iPhone meets 10 million unit goal in 2008, add 5 billion more. If, as some early analysts are claiming, AAPL doubles that goal, they’ve jumped revenues by 50% in two years. Which is pretty impressive on top of $20B.

    #####

    iPhone – smaller than Sony Playstation Portable, but higher resolution and “larger” screen in pixels. Probably better processor as well. PSP costs minimum of $199.

    I’m envisioning the late night commercial iPhone ad. “Now how much would you pay?”

    First generation iPods were launched October, 2001 with 5 GB and 10 GB capacity at $399 and $499.

    Of course, this means the articles we’ll see next week will say “What will AAPL do in 2014 when the iPhone will have dropped to $79?”

    reinharden


  175. What WYNN puts are you buying?


  176. reinharden,

    I actually interviewed for a job at Apple way back in 2002 at their Cupertino campus. The buzz in the air there was just electric. If only I had put 10K or so in AAPL stock back then … oh well …

    out to lunch


  177. Can the speculation for YHOO’s investor conference on Thursday really be pushing it up like this ? I wish that I’d seen it earlier.

    And it would really be helpful if you guys could nudge EBAY some !


  178. I like Prof’s idea so let’s collect a list of candidates and I’ll put a post up over the weekend we can all refer to and we’ll sort some stocks into the long-term portfolio. They must have options and/or pay nice dividends and they must be potential income producers.

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

    SHLD – that was a tough one to hold onto, I was getting worried!

    That’s another case of me sticking to the fundamentals no matter how many people said I was nuts….

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

    Hey Yeah – Siri is a potential 10-bagger. You can start by buying the stock and selling the Jun $4s for .50, gives you 12% downside protection and called away with 12% profit in 6 months if it goes up.

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

    $400M —- cool!


  179. I just remembered that I forgot about one of MacOS X’s interesting technologies: Inkwell. See
    http://www.apple.com/macosx/features/inkwell/

    It’s a best-in-class “scribbles into text” feature which would mean that it’d probably be trivial to make the iPhone support a stylus for “writing” notes instead of typing. So long as the stylus works with the touch screen. The 160 dpi might complicate things there. This assumes that this is part of what they brought down into the embedded platform…but you’d sure hope that they would.

    Lots of interesting tools floating around that allow you to imagine a plethora of targets.

    Phil, by the by, time to look at IGW/SMH again. Might as well cover most of the semis. As I think was mentioned earlier on CNBC as well. SMH looks almost parabolic today on a 10 day chart.

    reinharden


  180. You can buy SIRI Jan 09 $5′s for 0.80, seems ultra-cheap to me.


  181. No WYNN puts – WYNN is a good company!

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

    ICE and NMX are up on record volumes of commodity contracts being traded – that is a bubble that is going to pop once all this settles down.

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

    Now they are saying that Russia restarting the pipeline caused the sell-off. Man, these people are looking for any excuse! I’m still blaming the Democrats – the nosey bastard! Ruining everyones fun!


  182. PBW – continues to trickle lower. One of its top10 positions fell 10% this morning and it hasn’t reacted yet. Lots of 2 and 3% drops over the last 2 weeks among its top 10 as Alt Energy sinks with real energy.


  183. Record oil trading on ICE and NMX. Should have even more contracts traded next week, correct Phil?


  184. The media is already gushing about the iPhone:
    http://www.informationweek.com/news/showArticle.jhtml?articleID=196802757


  185. BillBigD,

    Congrats on ICE! +11!! Have to have guts to play this one!

    GS is starting to move also.


  186. FXI Jan ’08 $110s are $10.50 and it’s a nice income producer if the Hang Seng comes back. For example, the Jan $104s, which are $2 out of the money, cost $1.75. The Feb $110s are $2.20 and are $8 out of the money. This is a very rare opportunity on a serious sentiment change in China’s long-term prospects but you have to be willing to stop out at $8 and call it a day.

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

    IGW is a nice mo play with the Feb $65s at .90

    SMH I’m not as wild about due to high pricing of options


  187. Hi Phil

    What is your take on YHOO ? Moving nicely today – I am not sure why expect for that mention during the IPhone presentation.
    I am looking to sell some Feb30 against my Jan08 25s.
    Looking at the chart , I am hoping for some resistance at 29.


  188. Missed GS today when it was down 2. FFIV now up 1



  189. Phil, looking at ICF, IYR both look quite positive, would you buy call on them? Does it look like a turnaround point to you?


  190. SIRI jan 09 are still at .8 despite the run… bargain? oops .85 as I write


  191. More contracts next week – should be an all-time record into expiration!

    NYSE Volume today 333K contracts traded, 251K remain open (40K dumped in one day cost them $1.75, 5 days left to get down to 100K contracts).

    March contracts 40K (I think) to 238K open with 190K changing hands and they dropped $1.84. The Aug contract dropped $2, Dec dropped $2.11.

    The August contract is now $58.80, just .05 more than July!!! Where is T Boone?

    http://futures.tradingcharts.com/marketquotes/index.php3?market=CL

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

    CNBC analyst on Iphone: “Razor came out at comparable price – started out at 750,000 units and doubled every quarter.” Says “remember, they are creating a platform, not a product” This guy must be reading us!


  192. Mirror Mirror Phil
    What do you thing tomorrow’s forecats are?
    Asia should go up tonight and US tomorrow follow suit?


  193. Phil, is it possible to have a section within the comment area that would reflect the trades that are recommended during the day. For people who can not follow all the comments, the section would allow them to follow the recommendation without going through 200+ comments.


  194. Phil,

    What’s your opinion on MO. I’m still holding the Jan 85′s with a nice profit. should I sell or hold on for another day or two.


  195. iPhone platform is supposed to be locked, I wonder how long it will take “the guys” to crack it. It would be nice if Steve allowed software development…


  196. Airlines are having a great day but the trade might getting crowded. As far as UPS and FDX, did they hedge all of their fuel costs or something? They are unresponsive to the recent drop in crude (as are the chemical stocks).
    GS and the brokers just remembered that this is a very strong market.


  197. PHil, LVS is a good company as well.

    j


  198. The comments really do get to be a little overwhelming – at least the last couple of days. However, lots of green on my screen so no complaints!


  199. NMX now up 7. What a day!


  200. Phil, any thoughts on T? It has failed to sustain interest so far today.


  201. YHOO – Yippee I say! And I thought I was lucky to dump out of those $27.50s last week!

    I’m standing pat as the resistance of the moment is the 200 dma at $28.70 so stopping here is good and natural but I stand ready to sell the Jan $27.50s in case I get worried by a downspike.

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

    LVS – “Adelson said in an interview in Las Vegas that he aims to overtake Bill Gates to become the world’s richest man.” That pretty much says it all as Shelly’s no spring chicken – he will do WHATEVER it takes to pump up that stock and I’ve got a feeling a few corners may get cut along the way.

    MSFT had a defensible product that was essential for evey computer user on the planet – LVS has the same machines, the same store, etch as everyone else. That’s why they’re in Macau, they were losing business to the Asian casinos that were popping up there so Wynn and LVS are trying to muscle them out.

    “Adelson also has 50-story ambitions for Macau. He plans to spend as much as $11 billion re-creating the Las Vegas Strip on what he calls the Cotai Strip, a 1.2-kilometer-long (0.7-mile-long) isthmus of reclaimed land.”

    Like I said, buy puts, DD, lose, DD, lose, DD, make a ton of money! It may take a while though as this report is glowing!

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

    ICF /IYR – No real estate yet. The numbers are still terrible and the Fed is not done!

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

    SIRI Jan ’09 $5 is a nice set and forget if you have some money you can lose and forget about – could be $10 by then.


  202. Good idea ash, I’d like to see that as well, make tracking trades easier as well.


  203. Phil,

    I had a feeling that you might like my idea! ;)

    Another thought, perhaps we can get some volunteers to chime in with their FA, TA, etc. on the selected picks. Since this will be a long-term play, there will be ample time for discussion!

    ////////////////////////////////////////////////

    reinharden,

    You’re actually picking AAPL to be a 100-bagger!

    i.e. AAPL was trading around 8-10 in Spring 2002 when I visited there. Now it is already a 10-bagger, less than 5 short years later! This is just the kind of upside that we will be looking for in our new picks.


  204. SHLD just broke resistance!!


  205. EBAY is one sick puppy

    —————-

    XOM being “supported” at $71


  206. I’ll be more quiet soon. At least so far as AAPL is concerned. After next week’s blow-out earnings report… ;-)

    Then I’ll start in on MSFT and whether or not they’re being artificially held beneath $30 and what they’ll look like April and Jan ’08 after shipping Vista for awhile. Looks like the XBox 360 has done better than MSFT has been given credit for…and in Feb we’ll get a quick peek at what shipping Vista for enterprise meant for one month of the quarter (probably not a lot since mostly it went to organizations under maintenance agreements; however, there’s some incremental possibilities there).

    If MSFT shows some early signs of strength, we’ll have to look at DELL/GWY/HPQ/AMD/INTC/MSFT for longer-term options and a Vista-induced tech rally.

    But right now, I’m wading through hundreds of documents/reviews/etc on AAPL and making sure that I understand the impact of what they’ve unveiled instead versus what I was guessing they’d unveil. Thus my recent excessive AAPL verbosity.

    reinharden


  207. I nominate reinharden to be our Apple FA expert.


  208. T – very disappointing! I will wait for the weekend, hopefully Barrons will notice them.

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

    Asia bounce at least a point tomorrow I would think.

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

    Aah – it’s a great idea and we’re working on a whole live trade tracking system – hopefully next month

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

    MO – if you’re not sure sell half or 1/3, especially if it’s a nice profit. Why risk it so close to expiration? You can always buy Febs, which won’t get crushed on a pullback.

    If they were mine and I thought they were going to break $90, I would pick up the Mar $90s for $2.80 and set a stop at $4.30 on my existing calls so you will take at least $1.50 off the table right away and you can see if it’s worth keeping the remainder.

    If you want to get really fancy you can sell the Feb $90s against your new position for $2.40 so you are effectively taking $3.90 off the table and maintaining a 1 month spread on the Mar $90s with good protection.


  209. somebody bying big load of ebay now -spiked green suddenly


  210. T – I see the value of a trade on the announcement; however, I don’t see any intermediate term benefit.

    No shipments until June, arguably 1 million units in the following six months. That means, assuming everyone is a new customer, that Cingular gets an incremental 1 million customers added to their 60 million base. A 1.67% increase in users.

    And then there’s the problem that Cingular is now dwarfed by its Baby Bell owners. T has $60B in revenue. Let’s give them all one million for all six months @ $99/month (hopefully high). That means that the iPhone added $600 million in revenue.

    Granted, picking up 1% incremental revenue is nice. But it’s not going to move your stock very far very fast. Especially when that’s an optimistic estimate on revenue/customer and it’s 12 months away!

    reinharden


  211. Down goes 71 support for XOM!


  212. Louis Lee gets definite credit for the AAPL end-of-day rally, but it looks like it’s not making it to the intraday high. Yet?

    reinharden


  213. If we can just get XOM down to $63.50 by options expiration, I’ll break even on the last of my “been stuck at a nickel” puts from October. ;-)

    reinharden


  214. SHLD – resistance is futile!

    XOM – that is some pretty poor support!

    Rein is already our resident tech expert – right now it’s all about Apple anyway!

    Vista sales and IPhone sales, what a Q3 tech is going to have!


  215. The S&P 500 index left about 80% of mutual fund stock pickers in its dust during the last year

    http://www.chicagotribune.com/business/yourmoney/chi-0701080008jan08,0,3404410.column?coll=chi-business-hed


  216. Rein, I enjoy reading your posts re: AAPL. They are very informative.

    A/D line improved greatly near the close!


  217. T – it’s more about improving their long-term prospects. They flushed the stops at 9:30 and bounced off the 50 dma and they’ve sold off from $35 on Jan 1 for no good reason.

    They have earnings on the 25th where they will confirm that they earned $2.32 a share, which is 34% more than last year and analysts only have them targeted for 13% next year, which is off by a mile – somethng that will be very obvious with the buzz they will get starting no later than May.

    They also spent very heavy to get customers this year – that will no longer be necessary as they will get about a $Billion of free press off the Apple deal.

    Having already spent the infrastructure money they’ve done a great job of trimming costs with cost of revs up just 500M against a $2.6Bn rise in reveues in the last 4Qs. SG&A are flat over the same period and all other expenses are well controlled.

    They’ve cranked up dividends to $5Bn a year and are likely to buy back $3bn in stock this year so, as in investor you are getting back about 5% just for holding on while they consolidate the telephone industry (again). Next year’s frorward p/e works out to about 13 vs. 15 for VZ and 43 for S.

    So it has nothing to do with the IPhone, I was looking for an enty on T and the IPhone made waiting a bad idea so I grabbed an entry. As I said at the time, it’s a small entry (though now up to round 3) and I’m out if it breaks well below $34 but I think it’s just being held down into options and will fly the next week.


  218. Genentech: Q4 U.S. product sales $2.053B – MarketWatch

    Genentech Q4 Herceptin sales $322M vs $250M – MarketWatch

    Genentech Q4 Rituxan sales $560M vs $484M – MarketWatch

    Genentech Q4 Avastin sales $490M vs $359M – MarketWatch

    Genentech Q4 rev $2.714B vs $1.893B – MarketWatch


  219. SHLD
    “Resistance is futile!” Indeed! =D Looking for it to test 182? Too shy to chase today, though. It closed below resistance, but, above open price. See what happens tomorrow.

    GS
    Wow! What momemtum! Got in late (at 12pm), but, still made out beautifully at the end of market! Looking for re-entry tomorrow.

    FFIV
    Got in late; but still good. Holding!

    GOOG
    Gotta break that 492 and stay above!


  220. BRUSSELS, Belgium

    The European Union on Wednesday announced plans to lower energy consumption, develop renewable sources such as wind power and biofuels and increase research into cutting carbon emissions from fuels already in use, particularly coal. The ambitious proposals seek to deter growing dependence on oil and gas imports and curb the emissions blamed for climate change.

    http://www.businessweek.com/ap/financialnews/D8MIHOU80.htm

    ———————--

    A similar statement from the White House would drive oil prices down another $5



  221. I want to share my joy here. My daughter just got the internship job with Merrill Lynch!!! Hope she does well!

    j


  222. Wow, that’s nice Juliet!


  223. Oh congrats J!! That’s fantastic – is that in NYC?


  224. Phil, it is in Beverly Hills. She is still a business student at USC. I think she said she will be working in the Global Market. I can’t wait to talk to her to get more details but I’m so thrilled for her! Thanks for the congrats.

    j


  225. soccer,

    Is the stage FINALLY set for solar and wind power companies?

    I drove out to Palm Springs over Thanksgiving weekend – those giant windmills are amazing!

    Maybe we should consider some alternative energy picks for our 10-bagger list.


  226. great news J… Please check with her if MER is going to beat/miss upcoming earnings so that Phil can
    suggest good picks for all of us :)


  227. angar,

    I hope you’re joking!


  228. Congrats Juliet!!


  229. does anybody think dna should of had a bigger pop after there report


  230. hey prof – yes ..I am just kidding.. I am big fan of phil


  231. DNA – with a p/e of 48 it’s all about the growth prospects, which are slowing somewhat (but still good).

    XXX – I like that idea but it will take a month of reminding me for it to stick but feel free to as it’s a very sensible short term solution for trade ideas I recommend.

    I have to run but I’ll catch up later tonight!

    - Phil


  232. Prof and Phil

    Re. Potential 10 baggers over the next few years- MBLX Metabolix, they make organic biodegradeable plastics. Partnered with ADM and BP. The plastics industry is a 300 billion per year market and growing. Since plastic is oil based this could take a big bite out of oil demand.

    http://www.metabolix.com/


  233. MBLX

    Biodegradeable plastics? Sounds interesting!

    Add it to the list … actually it’s first on the list …


  234. Oil contracts…
    Phil, thanks for more info! Too busy this morning. Just catching up on reading all the posts.

    FXI
    I like your call on return of Asian markets. I’m going to watch this one.

    LVS
    Very gutsy to DD on puts here. I think it’s a great idea, although it just broke 52-week high like there’s no tomorrow. But, there is tomorrow. Hard to say that people won’t follow through a bit. Might sound equally crazy, but I’m actually thinking to chase calls early tomorrow; make some quick cash, exit, and wait. What do people think?

    CROX
    BillBigD, I just took a look. Looks interesting. But, I agree with Phil on this one. It might be a hard chase. Looks like people took profits at 48.5. It might re-tests 52-week within a few days. If it breaks, maybe 52 or 53. But, hard to see much beyond that. So, the risk/reward ratio might be a bit high. What do you think?


  235. House just passed $2.10 minimum wage increase over next two years. To me this means increased inflation pressure, fewer jobs, and higher priced burgers and fries.


  236. All rightee Phil
    Last time I bother you today 8-) I promiss
    -Trailing stops -never done that – have general idea how that works – but setting an order at mkt price vs a trigger scares me.
    -SIRI JAN 09 calls -is it a good idea to sell calls against them as income producer June $4 seem a bit too far away though?
    -SNDK I had sold Feb 45 at 3.3 against April 42.5 -Feb closed today at 3.7 -should I just be patient and wait or look at an opportunity to take him out -do you have a general policy on this?
    -AA by the way I bought quickly my Jan caller this morning at .25 for a .05 profit -it works!! only 10 contracts but got to start feeling confident about the system -should I attempt to sell Jan 30 calls again?

    Thank you again


  237. Phil
    regarding the suggestions by ash, mary, jason — until you work out the tracking system you referred to why not just prefix any definite trade with the letters XXX, ZZZ, or something like that, in which case it is easy to just used the “Find” (or control F) that will locate each and every instance one after the other. That is what I do now for MOT, ADBE, etc. to find whetehr any remarks are posted reather than hunt for them. For instance I found 6 references t MO in just a few seconds amonthe more than 200 posts today.
    Just a thought – maybe you could use one of the F keys to hold the XXX or whatever.


  238. I second Jim R.’s motion.

    But, submit an addendum to use the prefix “>>>”

    ZZZ might be confused for sleep, and XXX might … well, let’s just leave it at that!


  239. LOL Prof!

    j


  240. Anyone
    when is UPS earnings -cannot find in etrade or Yhoo?
    thks


  241. Enterprise Rent-A-Car plans to add Saturn VUE Green Line Hybrid vehicles (earlier post) to its rental line-up for California renters in 2007. Enterprise is growing its alternative-fuel rental fleet, adding a variety of types of alternative fuel vehicles including flex fuel, diesel/biodiesel and hybrid units in select markets across the United States. The first wave of approximately 160 hybrid Saturn VUE SUVs will be delivered the first part of 2007 to select branch locations in the San Francisco Bay area as well as Los Angeles and Sacramento, with additional deliveries slated throughout next year.

    ————————-

    New Cargill subsidiary Emerald Renewable Energy LLC is planning to develop four 100 million-gallon-per-year corn ethanol plants in the Midwestern United States. Each plant will use nearly 40 million bushels of corn annually, produce 100 million gallons of ethanol, and more than 300,000 tons of dry distillers grains for animal feed each year.

    ————————-

    Sixty-seven contracts representing US$12.4 billion in investment for biofuels development in Indonesia were signed in a ceremony in Jakarta, Indonesia. Chinese firms took the lead with China oil major China National Offshore Oil Company (CNOOC) and Hong Kong Energy partnering with Indonesian palm oil producer PT SMART Tbk in a US$5.5 billion investment. Malaysia-based Genting Energy is investing US$3 billion

    ————————

    Democratic Sen. Christopher Dodd, a veteran lawmaker who entered Congress in the post-Watergate class of 1974, will announce his bid for the presidency, Democratic officials said Wednesday. Dodd, 62, will make the formal announcement in an interview Thursday morning on the “Imus in the Morning” radio show.

    ————————-

    WSJ: Cisco is suing Apple for trademark infringement over its use of the iPhone brand.


  242. SAN FRANCISCO (AP) — Cisco Systems Inc. said Wednesday it is suing Apple Inc. in federal court over Apple’s use of Cisco’s registered iPhone trademark for its new handheld device.

    Cisco has owned the trademark on the name “iPhone” since 2000, when it acquired InfoGear Technology Corp., which originally registered the name.


  243. AAPL: Entry point, entry point, please another entry point! :)
    http://blogs.zdnet.com/BTL/?p=4266


  244. OK, never mind, Soccer’s on the ball about Cisco…


  245. Congrats Juliet, hope she likes the job.

    I’m beginning to get a little nervous here, my portfolio in the last 8 days has grown more than it did in all of Dec. The last time i had this good was in Aug.

    Vista plays will kick in shortly, INTC Accumulate, AMD a buy,STX accu, MSFT buy
    Dell hold, HPQ buy


  246. Hey Arnie, any complaints about Etrade service? Thanks


  247. The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America’s lowest-paid workers a crucial step closer to their first raise in a decade.


  248. Re: FDX fuel hedge

    They do hedge, independent contractors in Ground operation pay the same diesel price as 3,5 yrs ago.



  249. Congratulations Juliet.


  250. Arnie,

    You have mentioned

    -SNDK I had sold Feb 45 at 3.3 against April 42.5 -Feb closed today at 3.7 -should I just be patient and wait or look at an opportunity to take him out -do you have a general policy on this?

    please clear my doubts
    >> I am thinking that since Feb 45 is @3.7 now meaning you April 42.5 should have also increased right??
    Since you have already sold Feb 45 @3.3 and now it’s increasing the price… do you have to buy to cut the loss??? Please clear my question..

    -AA by the way I bought quickly my Jan caller this morning at .25 for a .05 profit -it works!! only 10 contracts but got to start feeling confident about the system -should I attempt to sell Jan 30 calls again?

    >> Here I am thinking that you have bought Jan 30 calls which is @.65 now.
    why did you sell just for 5 cents profit??
    If you have already sold Jan Calls, then why you are trying to sell Jan 30 calls again..
    Am I missing something ..I am trying to understand your trading..

    Please explain..


  251. Kutz
    only complain I had was this day trader status they suddenly gave me which required to hold I forgot like 20K in cash despite me always uysing my money and not margin -but I was set up in margin account as I used to hold stock and bought w/ margin -now 100% options 8-)
    called and they fixed it
    now carefull not to set their trigger which is buy sell same things every day for 4 or 5 days
    other than that OK I guess but never tried optionexpress
    once you are used to a system spreadsheet (I use their powertarde software) it’s tought to move on to new


  252. Gov. Arnold Schwarzenegger this afternoon unveiled a $143.4-billion budget that restricted welfare payments for some children and denied public transit systems $1.1 billion they were expecting. Schwarzenegger’s $103-billion general fund is balanced partly with the help of gas tax revenue that is supposed to go to local bus routes, light rail lines and other public transportation projects.

    ———————-

    WASHINGTON (AP) – There were 744,000 homeless people in the United States in 2005, according to the first national estimate in a decade. A little more than half were living in shelters, and nearly a quarter were chronically homeless, according to the report Wednesday by the National Alliance to End Homelessness

    ——————-

    JOKE OF THE DAY:

    Without any paperwork, Grandpa started getting a $500 check every month. So, Grandpa and Grandma started cashing them. It turns out the government made a mistake with the address; the checks were intended for another person with the exact same name. Grandpa then received a notice that he had to pay back $6,000. Visibly upset, he complained to his grandson, an accountant. His grandson asked: “Grandpa, didn’t you wonder why you were receiving checks for doing absolutely nothing?” Grandpa answered: “I just assumed it was because the Democrats were back in power.

    ———————--


  253. mano
    SNDK -this is actually my question to Phil as I am not sure what to do
    I sold at 3.3 the feb 45 so to be in the money / BE stock will have to reach 48.3 by Feb 17th
    yes my april are moving a bit faster but as the stock is now moving up… that is the question…. cut the loss on the Feb and bank on the April or wait till Feb 17th and hope they expire at 3.3 or less

    I bet Phil will say wait as every day you wait (if stock hovers below 48) is a day in my favor

    AA -I sold Jan calls at .25 that I had bought at .3 -if I were to do same at 3.59pm I would have add to pay .65 or .35 loss. So now am just riding my April and fell good about the .5 I made (OK not so good just 50 bucks)


  254. I love BA nothing new there, i believe Airbus will continue to suffer and will not have the resources to fill these orders. In Europe the parent company of Airbus EADS was downgraded to sell. BA on the other hand continues to expand

    http://www.etravelblackboard.com/index.asp?id=60226&nav=2

    With all they have on their plate, they still have it together enough to get this former debacle off the ground
    http://www.marketwatch.com/news/story/bell-boeing-meet-delivery-goals/story.aspx?guid=%7B8E79FCFF-D8BC-40F4-BF6F-BD4EF805F7D5%7D

    Not suprised to see most raising price targets
    http://www.thestreet.com/_googlen/newsanalysis/manufacturing/10331760.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

    History and why im very bullish on BA, much better run company than the BA of old
    http://seattlepi.nwsource.com/business/213183_wichita23.html

    BA some 747′s, largest building in the world by volume, and it will be busy for years to come
    http://neoncobra.blogspot.com/2006/12/great-photos-from-boeing-factory.html


  255. What’s your opinion on buying puts on Deere (DE)?


  256. Thanks Arnie, i was just curious if you use a streamer and if you have ever experienced server problems on the busiest of trading days. I need to use 2 brokers i was locked out of trading the other day and i refuse to be at the mercy of any one broker ever again. I would not recommend AMTD to anyone as an online broker.


  257. hi


  258. Arnie, You asked about UPS earnings: According to MarketWatch 1/22/2007 Q4 2006 1.04 0.95


  259. Dr. Marc Faber certainly has all the credentials of a madman. The world economy is hard to decipher, the usual suspects will always remain the same, its the reactions we need to worry about.
    http://www.gloomboomdoom.com/public/pSTD.cfm?pageSPS_ID=6000

    This guy is gold bull, i am not surprised by his comments.


  260. any opinions on Mueller Water (MWA)? i’m getting burned with my calls


  261. michael thanks -just discovered mkt watch earning release pretty cool
    Hmmm I see my boy came in to say “hi” earlier 8-)
    Future trader I suppose -will need to close my site when I go BBQ next time!!


  262. kustomz
    don’t know what a streamer is so I suppsoe the answer is no
    etrade has this option where you can choose wich mkt you want to use but I never use do -all automatic
    but when I hear phil or other complain about trading response time most of the time my trades go through very very quickly -no issues there


  263. zachandjeff1, you didn’t say which contract you own, but if you have the Jan 12.5 C, the chart doesn’t look like you have enough time to get back to the $2.20 they were worth last week. If you still believe in this position, I’d sell for the $1.25 and roll to Feb 12.5 C for $1.60, ASAP, so that 4 weeks cost you only .35. The bid/ask spread is 20 cents. Yikes! Maybe consider the Feb 15 C for .30 with an appropriate adjustment in the number of contracts.

    I don’t believe in stuff with OpInts less than 5,000 – can’t get out fast or fair enough.

    So how’dja get into this trade ?


  264. >>> DLB (Dolby Laboratories)
    +$1.85 (5.76%), new 52 high on avg vol x 2! A bit expensive at this point though. Might need to wait a few days. Anyone knows what caused the jump? It will need an upgrade from some analyst, good news, or something, if it were to hold this level.

    ***Obviously, I’m trying out what Prof and Jim had suggested.


  265. I have the May 15 C — I like the stock on a valuation basis – the options dont expire for a while so i am more concerned with the fundamentals of the company…i like the idea of a water play…apparently i was wrong lol


  266. AAPL – Came back from dinner and such to see that CSCO had sued AAPL over the use of the name iPhone. As I dug through the press, I found this gem in the Dow Jones newsfeed:

    “Apple spokesman Steve Dowling dismissed the legal dispute. “We think Cisco’s trademark lawsuit is silly,” Dowling told Dow Jones.”

    Of course, that pretty much sums up most lawsuits…but regardless I’m curious what this means about Apple’s legal position on the suit.

    reinharden


  267. I happened to catch a spot on Newshour tonight about the AAPL options problems, will Jobs resign etc. I wonder if the AAPL-bashing is starting again.


  268. zachandjeff1, (MWA) Well, this kind of thing happens to me more than once in a while, too ! I hate that !

    It doesn’t look like a stop would have helped you on the gap down.

    If this was all I had, I’d wait a month or two to get my 60 cents back… but you can see that a lot of people commenting today got 60 cents a lot faster than that.

    I can’t help you on the sector, but the options trading is pretty dang thin on this guy.


  269. yeah, it’s one of those small positions that we have…but losing money still sucks. GS NYX and AAPL options were a little kinder to us than that little water company today lol! I cashed out a good portion of my June 105 NYX options, thinking a pull back is pretty likely…where do you guys stand on this one.


  270. MBLX – I want to set ground rules right away for potential 10-baggers:

    They have to make money.
    They have to have an income statement
    They have to have a balance sheet

    As I said earliet, optionalble stocks or, in the very least dividend payers.

    Look at SIRI or TIVO or TASR – industry leading products in brand new fields, well funded, products work in production and are mature, and in demand – all lousy stocks. No way do I tie up money in one like this!

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

    LVS – they’ve won the rights to develope an Island at a currently estimated cost of $11Bn with a projected completion date of 2018 while every other developer in the country can just build on dry land in one of the 3 surrounding cities. Any change of law during that time can make casinos far less profitable….

    The company will be lucky to make $500M this year and is projected to make $650M next year and actually has a negative cash flow. They have net tangible assets of $1.6Bn so I can’t even imagine who’s going to lend them $11Bn but I’m sure ICBC will do at as they just got a ton of money from idiot investors too!

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

    Stops – I alwasy set soft stops, in other words, I just pick a pullback number and if I have say a $4 contract that I’ve made $1 on, I’ll set a trailing .25 stop – you can put it into the computer that way but some things are so volatile it’s better to just watch for a real move. A trailing stop means if the stock goes to $4.50 and then pulls back to $4.25 I’m out.

    The reason it’s better not to enter it into the computer is if the option spikes to $4.35 for half a second, then pulls back to $4.10 for a second, you’re out – and there are people who are actually moving the stock just trying to force you out.

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

    SIRI – When you first enter into an income producing position rule #1 is DON’T LOSE MONEY! Prof said he wanted to make 10-20% per year. Should the Jun $4s call you away you would have gotten back $4.50 on a $3.92 investment that’s 15% in 6 months!

    Meanwhile, the stock can drop down to $3.42, a level they haven’t been at since October of ’05 and you would be even – remember the idea was to identify a potential 10-bagger that was safe.

    So if it goes down you’re covered, and if it goes up you make a 30% annualized return – if that doesn’t do it for you then you are looking for a casino, not an investment.

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

    SNDK – same seller’s remorse as Apple, the play did very well and you wish you had more upside but look how thrilled you were on the 3rd when the thing was tanking and you had that cushion! If it keeps going up we flip it to the next month, no big deal, we have all year to get a pullback. If it never pulls back and we keep flipping it forward, we still gain about .50 a month against our deep in the money puts.

    Again, the minute you sell against your calls you have left the casino and gone to work at the bank where 3-5% a month should be thrilling for you…

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

    AA – it’s another .35 premium, remind me in the morning as I might sell mine too! Meanwhile $1.85 on the April’s! Not bad for a day’s work…

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

    These Dems are going to blow the White House by running 20 people – the party leadership needs to step in here before they disperse all the available cash.

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

    CSCO / AAPL – too funny! OMG, if it’s not called the IPhone no one will buy it!!!!!

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

    I would have liked DE more if it had pulled back some.

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

    MWA – I’m not to wild about spin offs until I see them stand on their own for a while…


  271. (NYX) Don’t have a position, but it looks like selling into the excitement after lunch today got you above yesterday’s open and let somebody else test 112 for you (made 20%+ on the exit and you’re essentially free ride on the balance, right ?). I can see a pullback to 101, but you guys can always come back at 98 or so if The Correction shows up.

    Trading these days is so wacky. Just keep protecting your profits. Paying more taxes from THIS activity is a good thing.


  272. MWA – if you believe in the valuation (and that seems reasonable from the documents I just read) then wait for earnings. The stock was at $16.50 in Oct and $13 in Nov and $16.50 in Dec so I’d only worry if it doesn’t bounce off $13 (obviously) or if it can’t retake $16

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

    NYX – now the exchanges look good as the commoditiy madness is spiking activity.


  273. Yawn! I’m too tired to think about the wrap-up, rather be fresh in the morning – see you guys then!


  274. At what point are you going to say the CORRECTION is not going to happen? I’m thinking we float along, perhaps up a little because of big upside earnings surprises, then float into a rate cut and then we’re golden. Also, at point do you guys think the oil stock free fall will stop and it will be time to go long the sector again?


  275. Easy – I can stop worrying when The Correction happens. I don’t actually disagree with your statement, but you’ll see lots of us protect ourselves from funny economic data-filled mornings by buying DJIA Puts for the portfolio, and buying a little time to step out of my Call positions – or double down, as appropriate.

    Remember that us option guys get crushed in a 450 Dow drop over a week ! Maybe that’s correction enough for me…

    I do not personally hedge as much as say, Phil, but it’s a relatively cheap form of insurance. I stopped trying to catch falling knives, too – and I like the idea of bailing to cash while someone else’s hair is getting cut. It doesn’t change my belief (which may be agnostic, since I’m a momo guy), just lets me keep my cool for a few weeks.

    Yeah, I agree that that losing money SUCKS. But that’s why you’re diversified. Me too. Maybe that hedging thing will work for you, especially on positions you’d lose sleep over. We are going to lose some money in the market now and then. But you can learn risk management and lose less times while keeping your profit more times.

    (I keep telling myself that, and it works.)

    Oil ? There was some guy on CNBC talking to the weather girl – I think – about sub-$50 Oil today, but Phil spends at least a third of his time here on the stuff (I remember that you joined very recently), so read from a couple days ago:

    http://www.philstockworld.com/members/?p=175

    and especially the PBR comment at http://www.philstockworld.com/members/?p=177#comment-8091

    and remember that it’s not your job to save the oil patch.


  276. Sakiko and all those who may be willing to provide some advice-

    Thanks for the responses to our questions thus far. We are pretty new to the comment board here as you pointed out so we thought we should take a second and introduce ourselves. Zach and I are students at Princeton and we have been running a joint fund for about 5 months now. We have become market addicts and we have really enjoyed following these posts so far (especially as it serves as a good diversion from exam studying now)! While we know a good amount about options (via books, classes, blogs, internships, etc…), we are very excited to learn alot from participating in this group. Zach interned at an investment bank last summer and is planning to go back and I interned on a trading desk (not natural gas) at the now infamous Amaranth last summer. So we both a good background on the markets – we are not starting from scratch.

    We are relatively risk-seeking as we are young and the money we have invested is by no means supposed to serve as income. We have about 30 options positions in our portfolio but they are all naked options which we know could be trouble. We have had massive swings in our portfolio, but we are currently doing pretty well, but it’s hard to wake up in the morning and know that our portfolio is going to be up or down 10%. We did not get approved for a margin account so we are stuck not being able to write any options. One question would be, what exactly are these online brokerages looking for when we fill out our margin forms? Clearly we did not show them what they wanted to see.

    We have recently started transforming our portfolio to both include more puts and more cash as protection for this Correction if and when it comes.

    We never have paid much attention to technical analysis thus far (as Professor Malkiel says it is a bunch of bull lol), so we would be very curious to learn a) any books you would recommend on the matter and b) what the most common indicators are that you guys look at during a given day.

    We would appreciate any advice you have for us.

    Zach and Jeff


  277. I believe AAPL will slap IPhone all over uhmm… the IPhone. They will let the cards fall where they may and let the courts decide what the price should be, its obvious AAPL believes the courts will be cheaper than what CSCO thought the brand IPhone was worth. Kind of makes me wonder what AAPL is, was thinking, brash Jobs very brash!

    IBM, its true they have some of the best engineers in the world, as i am an acquaintance with a former employee who he himself developed 30+ patented electronics.
    http://www.statesman.com/business/content/business/stories/technology/01/11/11patents.html

    The only area i think HPQ should exit or spend the cash and buy PALM, the latter being a worse case scenario. Seeing how they spent cash buying Bitfone it raises doubts as to PALM. I am curious as to which direction HPQ will go all in or all out, guess it depends on the level of frustration they are willing to endure.
    http://www.investors.com/editorial/IBDArticles.asp?artsec=17&artnum=1&issue=20070110

    Using an IPAQ from HPQ for facial recognition, now that would be NEAT!
    I think every cop in the world should have one.
    http://sev.prnewswire.com/biometrics/20070110/SFW01210012007-1.html

    It’s obvious SNDK made a great impression at CES, the stock has risen more than 6%
    since Friday, what i don’t like about SNDK is the CEO said he willing to forgo profits near term and sell these new products at a loss to gain market share, this in my view is a no win situation and once the street figures this out it may put pressure on the stock, but we all know SNDK can easily get to 50 near term as i said SNDK clearly had a positive impact at CES
    http://www.thetechlounge.com/article/359/Sandisk+Press+Conference+New+Media+Players+and+Memory+Devices/

    MOT was on my mind today and i was thinking, where will their stock be in a month, it was hard to find a reason for it to go much lower from this point then i found this article. This case was dismissed once before and the fines don’t worry me much except for the sanctions. On a positive note i think MOT will have a phone with similar technology as AAPL for a cheaper price this summer, trust me if i was Ed Zander my engineers would have their noses to the grind stone. MOT in my view is a buy when the dust settles. Again this is a case where news is bad news on an already pressured stock, lets see where this leads
    http://www.cbronline.com/article_news.asp?guid=29B0B314-8CF2-4BF5-84C3-D75E5E193500
    http://www.forbes.com/markets/feeds/afx/2007/01/09/afx3312341.html
    http://www.unstrung.com/document.asp?doc_id=114173&WT.svl=wire1_5


  278. Hey Zach and Jeff, this book was recommended by TOM2 i found it VERY informative and there is a direct correlation to this book and my recent success in trading. Good Luck to you both.
    http://www.amazon.com/Getting-Started-Technical-Analysis/dp/0471295426/ref=cm_lm_fullview_prod_12/105-8539677-6520434


  279. We all knew this was coming, this is from thestreet.com..like i said i welcome any pullback

    “Even amid the iPhone splash, however, some in the press are circling. The Wall Street Journal is already asking the question on Wednesday: “Should Steve Jobs Go to Jail?” The accompanying editorial argues “no, but that provocative headline may be a taste of what’s to follow”.

    Full article
    http://www.thestreet.com/_htmlatb/newsanalysis/techhardware/10331730.html


  280. Hi Zach and Jeff,

    If you put the word “student” anywhere on the application, it is probably a bad thing. :) Also, brokers look for income and net worth as well as experience trading stocks and/or options for several years.

    I am surprised they will not let you do covered writes at least, which is what Phil’s calendar spreads basically are.

    One book I really enjoyed is “The Electronic Day Trader” by Friedfertig and West. I have an old edition from back in the days, but I think there are newer editions. They have a lot of old school stock trading advice that I found really useful, the day trading stuff is a bit outdated.

    “Trading for a living” by Elder is a classic about technical analysis and the psychology of trading. Now that I think about it, technical analysis *is* the psychology of trading. (or is it the other way around? :)
    Call it self-fullfilling prophecy, or maybe emergent behaviour, all I know is that it sometimes works! :)
    What are you guys taking at Princeton?

    Good luck and have fun,

    Cris


  281. Kustomz, thanks for the data feed. :)
    Yes, any book by Schwager is great.


  282. Oh, how could I forget! I read it regularly: “Zen in the markets” by Edward Allan Toppel
    http://www.samuraitrader.com/

    An essential and VERY good book about trading.


  283. AAPL mania is about to rest. Take profits when it breaks 99 then settles back to 93 (if there is a God) and get ready for the break above 100. It won’t break it the first time, so that it does so convincingly the second.

    Phil, I wasn’t born this nutty. The market made me this way. When your trades are 90% positive on a stock, you start to learn that you should really just focus on that.

    I wouldn’t say it is wise, but when diversify only creates losses to offset AAPL gains, you stop diversifying. But, I am getting better. I am now 50% cash, 40% AAPL. =) I sold a chunk when I woke up to find that I was up as much today as I was the day before. And I thought that was a once in a lifetime day. My plan was on track and I was supposed to hold until 99, but I chickened out when I was already up so much. It is your fault. I could just hear your blog in my ear saying that I was being greedy. =)

    I laughed so hard when I read your posting, “I feel good about AAPL being up 10% by July.” It will probably be up 10% every month until July.

    Good call on the split. They are due. What a great time to sell. This is all working out so well. And I still think we have a crater after earnings as the price support of Jan-07 options disappears and big money gets back to normal exposure to AAPL.

    I will try to keep checking in, but I have already made more money this year in gains, than I have ever earned in any year of my life. And I am just wise enough to know that can’t last forever. Gotta go take a bath in twenties.

    Adios.

    PS – Look for a solid pop to $99.45 tomorrow or Friday and then a steep sell-off immediately to follow. The further under $100 it is on the 16th, the bigger the pop for earnings.


  284. Man i feel for our troops, i hear the argument of hey its their job. Yes and no, it is their job to protect us from the bad guys and any threats to our homeland. Its not their job to free an oppressed people of another country. I feel some what for the Iraqi’s but my hope and compassion are with our troops. I hate the way this has become such a political struggle, it over shadows what must be done. Bring our men and woman home so they can live and let the middle east sort out the mess we created, sooner or later we will be back there.

    Why say we aren’t going to stay there when the only way to keep a so called peace is to keep them there with no sign of victory anyway. Tonight’s the first time i had a chance to see what a sorry bunch the Iraqi army is and our troops have to train them and they don’t have one barracks or bullets for their weapons!!! I’m losing hope and tonight i pray they find their way home. Sorry for bringing this up here but my frustration needed an outlet. Have a good night all.


  285. Phil
    You said:
    SNDK – same seller’s remorse as Apple, the play did very well and you wish you had more upside but look how thrilled you were on the 3rd when the thing was tanking and you had that cushion! If it keeps going up we flip it to the next month, no big deal, we have all year to get a pullback. If it never pulls back and we keep flipping it forward, we still gain about .50 a month against our deep in the money puts.

    What do you mean by flipping to the next month?

    Is it I by my Feb caller out (at a loss) but sell next month calls?


  286. FYI – Oil dropped below 53 dollars in overnight trading.


  287. If any of you guys who are OptionsXpress traders want to claim me as a referral, you can get some free stuff. I was referred there by your comments, so I don’t see a problem with it.

    1st come, 1st served.


  288. OK digger, I want that shirt !!! (jstarwood@tardytrack.com) – and free trades.

    I am served. LOL


  289. sakiko, You have mail.


  290. SNDK – rolling the play into the next month. As Feb gets close to expiration we flip the caller into the March contracts that have the same value – at some point, there should be a pullback where you can take them out.