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Tempting Tuesday Morning

Once again the markets will lead us to temptation.

According to Bloomberg, Zhang Shibao covers 12 Chinese stocks and recommends investors buy all of them, even after they've more than tripled on average in the past year. “We are still in the middle of the bull market and the uptrend is irreversible,'' said Zhang, a steel analyst at China Merchants Securities Co. in Shenzhen.

Oh, the IRREVERSABLE uptrend – that's the missing piece of the puzzle!  Now I can BUYBUYBUY with confidence!  Foreign investors certainly jumped back into the Shanghai B-shares with confidence as they bought that market up over 5.6% on the day while the A side of the market held flat, perhaps waiting for them to catch up (yesterday we noted a 20% disparity between the two).  Despite the irrational exuberance over in China, Asian markets were flat to lower yesterday but  it was a strange day as the Hang Seng reversed an opening 150-point gain while the Nikkei reversed an opening 100-point loss.

Much of Shanghai's standout performance can be attributed to the debut of shipping firm Cosco Holdings' 93% gain in its first trading day.  Gosh, a shipping company doing well based in the World's largest exporter – who'd have thunk it?  Also from our "Duh File" (any Chinese stock with an obvious name), Huangshi Dongbei Electrical Appliance went limit up (10%) for the day.  In reason #114 of why I hate to play ADRs, SNP's stock fell 5.7% as the Chairman suddenly resigned for "personal reasons."

The leaders of China's top state-owned companies are all appointed by the government, and changes often are made suddenly with little or no explanation. Because the government owns controlling stakes in companies such as Sinopec, outside investors generally have no say in such decisions.  The Sinopec chairman has been a leading advocate of easing government controls on fuel prices in China. Goldman Sachs said Mr. Chen's departure, two years before his expected retirement date, could slow the pace of fuel-price restructuring in China and hurt the company's expansion plans.

Meanwhile the most significant news in Asia is conspicuously absent from the WSJ today, the Yen carry trade is starting to really unwind after Japan's Finance Minister warned that this was no longer going to be a safe bet for investors.  It was the fear of the unwinding carry trade that led to the Feb 27th market correction so you'd think it would rate a mention in the Journal (or did Murdoch already buy it?).

Over in Europe (where Mr. Murdoch already controls the media and one of his British papers, The Sun, has NO business section), the markets are coming off a poor open to recover into the afternoon.  As we noted in yesterday's wrap-up, it's the FTSE we are most concerned with as it hovers around to 6,000 mark.  Europe got some good news from MO, who are shutting down a plant in North Carolina and moving 25,000 production jobs to Europe and despite all that pesky free health care, government oversight and higher taxes they still expect to save about $335M a year by 2011.

For our part, we're going to worry about the Dow and the Nasdaq confirming the breaks below the 50 dmas (red lines) made by the NYSE and the S&P yesterday.  Until the S&P gets firmly back over 1,510 we shall not be tempted to go long and I will want to a couple of these blue lines broken before I look for anything other than an upside momentum play:

US Markets 

Happy Trading has analysis of both the Nasdaq and the S&P over at Wang's World and we'll be watching his buy recommendations of GOOG $540s, WFR $60s (I hope not because I sold these!) and BUCY $70s as our best upside targets if we really start to rally.  Of course we still have our reverse mattress plays on the DIA and the Qs but with oil holding over $69, I don't think we're in danger of the markets running away on us.

We have new home sales and consumer sentiment numbers coming today and Fed Gov Moskow is making a speech so anything can happen after the market opens.  We do not want to see gold going up as it's an inflationary sign but if it turns sharply down it may mean the dollar is rallying and that can be a worry for commodities, which would include US housing and securities. In short: lots of ways to get hurt + not too many ways to win = a good time to watch and wait.

I'm hearing rumors that Mac notebook sales are through the roof this quarter and we already know that Quanta, their main supplier, is gearing up for a record 2007.  The Apple bashing is fast and furious ahead of the IPhone release, just like it was ahead of the IPhone announcement around Thanksgiving (remember when Jobs was going to be arrested for options fraud or whatever they were saying?).  There was a great "sell on the news" move in December, pushed by the options scandal but all the people who jumped out as the stock fell from $93 to $77 might be just a bit sorry with the stock at $123 if they've been waiting for it to pull back a little more.

My current Apple strategy is accumulate on the dips but the dips have been few and far between so I have open calls protected by October puts but I see $125 forming up as a  pretty solid floor for future advancement once they make it through.

While we may get another rally today, let's make sure we see the other side of our levels before we start chasing rainbows today.  13,500 or bust is my new rally cry (my S&P 1,540 or bust last week was dead on) so let's not kid ourselves.  Home values in 20 metropolitan areas fell the most in 6 years with home values down 2.1% amid record supplies of properties for sale.  The average home fell .2% in April after falling .3% in March.  While that may not sound like much that's effectively $200 per $100,000 in home value you are spending per month to hold onto your house and this is the 17th consecutive month of declines.

Reality is far worse for cities like Detroit, where home prices fell 9.3% from last year.

 


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  1. Good morning Phil, I hope you are on the road to recovery.


  2. can’t log in to post on the zman tab. Today’s post is here:

    http://zmansenergybrain.com/


  3. Morning, Phil.

    Hope all is well.


  4. QQQQ possibly fading the opening gap.


  5. BBBY

    There was a Morgan Keegan analyst on bloomberg who was trashing BBBY, because of housing and other problems. She thought it might take year to turn around and that the current miss was just a start. I am looking at Feb 08 puts. Any thoughts?


  6. Great cartoon picture….


  7. Phil

    Your thoughts om MBIA. Lots of leverage in many places.


  8. Phil, your thoughts on FLIR and NILE, and is BW oversold?

    Jazz


  9. Phil, In Europe (where Mr. Murdoch already controls the media and one of his British papers, The Sun, has NO business section)”
    The Sun is a working man’s paper with a fantastic sports section and always a “nudie” on page 3. They have their priorities which is not “A Financial section”
    It is not a Murdoch conspiracy!


  10. GOOG
    1/2 out with +16%!


  11. I see that IV of GOOG options has increased since yesterday afternoon or this morning


  12. Making money should be a good cure Phil!


  13. Market energy seems very low. Looking for an excuse to sell off?


  14. POT looks good to go any thoughts?


  15. DOW- getting a second wind


  16. POT
    does look good!


  17. head fake?


  18. BX below offering price !


  19. Thanks Happy! I like them too just looking for an entry. July 80 calls


  20. APPL is red!! wow


  21. Headfake- looks like it!!!! Good call Dibert
    OIL- FTO MRO VLO SUN don’t seem to know that it is down a $1


  22. Much better thanks all.

    Can’t say the same for home sales (down 1.6%, was up 12% last month) or consumer confidence (103 vs. 108% last month) but the new home numbers are skewed by the equally rated midwest which has the least amount of homes and had a 30% increase.

    LEN’s earnings were a disaster and I can not imagine what is putting this market up right now.

    BBBY – I don’t buy into that premise. When I tell my wife we can’t move she buys a ton of stuff to fix up the house. Usually it’s cheaper to move – at least you can get a mortgage!

    MBIA?

    FLIR/NILE/BW – see above, nothing is oversold until the market shows us that the bears are wrong. Bullish sentiment was close to 55% last week, that means there’s a ton of people who see every dip as “finally” a chance to get back into the market they missed since March. These people are called “bagholders” but they never know they are bagholders until it’s way too late and the sack is empty.

    Sun Business – LOL Jamie! I actually enjoy the Times Business section and that is Murdoch’s too so I realize it’s an editorail choice – just a strange one for a man who thinks the WSJ is worth $5Bn. Page 3 girls were the highlight of my childhood trips to England and I never even noticed the lack of a business section back then…

    Oil down nicely at least (for as long as it lasts).


  23. Apple getting eaten alive. Am I the last one here still truly long this name? My legacy deep ITM calls are killing me this morning, as dollar for dollar moves hurt.


  24. MTU – time to DD with the price at ~0.50?


  25. AAPL – First Authorized iPhone Reviews Due Today
    http://blogs.business2.com/apple/2007/06/first-authorize.html
    with a bit of a preview/guess as to what the reviews will say. Might explain why AAPL is down


  26. Sorry Phil

    MBIA inc = MBI


  27. Wall Street Loves Shrillary ?

    Puhleeze.

    What is with this bozo on CNBC John Harwood. Fire this clown !


  28. MCO rebounding nicely from yesterday’s dump.

    My timing on this is less than ideal, but I am confident it is a winning play.


  29. OIL down
    RBOB down

    XOM up – not for long


  30. Does anyone know if this is true – brcm chips in iphone

    http://blogs.ocregister.com/gadgetress/archives/2007/02/its_official_br_1.html


  31. S&P negative for the most part and pulling the other indices down. QQQQs looking weak also.


  32. Page 3 girls in the WSJ might entice me to subscribe !


  33. VIX
    shooting up!! be careful!!


  34. Those XLF puts from yesterday are going to start looking good soon.

    Greg


  35. Lithium- We were just analyzing MBI and we like it! It is now on our watch list!


  36. BSC getting creamed again today


  37. Cap – which MCO’s do you like?


  38. SIRI options for Jul & Aug at the 3, 4 & 5 strikes are now available according to the CBOE.

    http://www.cboe.com/DelayedQuote/QuoteTable.aspx?ticker=siri


  39. Definitely looks like a double top for RBOB. Refiners of course do not care.

    END conference call at 11:30 EST, probably upgrade production guidance but they may also have news on another exploratory well (good / bad only they know) so playing pre call is a gamble.

    Here’s the decision tree. I’d say to wait until the PR hits and:
    1) If there is upped guidance (old range was 8,800 to 9,200 BOEpd) and no well news then I’d go long for a trade.
    2) If you get upped guide but bad well news probably stay away unless the guide is just that good.
    3) Obviously good guide and good well it’s a buy as this puppy (dog) is dirt cheap trading at below 2x NTM CFPS.


  40. optiondragon

    MON earnings thursday morning should give POT a boost


  41. Cookid- nice call
    NOV- bought some down $6 in two days.


  42. BBD

    NOV – Aug or Nov’s? Thanks


  43. Nice call on the LFG a week or so ago, Phil. Looked for a couple of days like it wasn’t going to come in but it’s well on it’s way now.


  44. FTO – $45 puts are not a bad play at $1.77, doing a very slow fade.

    CVX holding up a little too well. $80 puts just .45 could be fun if it breaks down but inventory is tomorrow.

    AAPL – if -.84 is killing you then you REALLY are risking too much in your positions! Deep ITM calls rarely make any sense exactly for this reason, you get almost 100% of a pullbacks detriment and less than 100% of the gain.

    MTU/Any DD – I’m very neutral right now and this insane bouncing up and down 50 points every 10 minutes does not instill me with the confidence to put fresh money to work in either direction. I’m very close to going another half cash, bringing me to around 80% cash.

    LOL – I got up for a 5 min phone call and it’s down again – what a joke!


  45. TSO nice — $2 down. Room to fall all the way to $30.

    oil stocks still look strong.


  46. XOM and XLF leading indicators.
    Phil’s right don’t try to save the market. I’ve been building a Leman short, LEH buying July 75 puts.

    PIMCO’s Gross says “subprime crisis” not isolated

    NEW YORK, June 26 (Reuters) – Bill Gross, manager of the world’s largest bond fund, on Tuesday said the subprime mortgage crisis gripping U.S. financial markets was not an isolated event and will eventually take a toll on the economy.

    Gross, the chief investment officer for Pacific Investment Management Co. (Pimco), also said in his July investment outlook newsletter that the crisis would prompt the Federal Reserve to lower the benchmark interest rate by year end.

    Gross said in an interview that he had spoken with former Fed Chairman Alan Greenspan on Monday, but declined to say what had been discussed. Greenspan is an economic consultant for Pimco.

    In the newsletter, posted at the company’s Web site, he said the recent Bear Stearns Cos. (BSC.N: Quote, Profile , Research) hedge fund rescue was reminiscent of the Long-Term Capital Management episode nearly a decade ago.

    He was referring to the August 1998 collapse of the steeply leveraged hedge fund Long-Term Capital Management, which triggered worldwide panic and ultimately led the U.S. Federal Reserve Bank of New York to broker a $3.6 billion bailout to keep financial markets stable.

    “Shame on you Mr. Stearns, or whoever you were, for scaring us investors like that and moving the Blackstone IPO to the second page of the WSJ,” writes Gross, about The Wall Street Journal. “We should have had a week of revelry and celebration of levered risk-taking.”

    Gross said there are hundreds of billions of dollars of subprime residential mortgage-backed securities (RMBS), derivatives on subprime RMBS and collateralized debt obligations (CDOs) that buy subprime RMBS and/or the derivatives on the RMBS — all of which he considers “toxic waste.”

    “Whether or not they’re in CDOs or Bear Stearns hedge funds matter only to the extent of the timing of the unwind,” said Gross, who manages the $104 billion Pimco Total Return Fund. “To death and taxes you can add this to your list of inevitabilities: the subprime crisis is not an isolated event and it won’t be contained by a few days of headlines in The New York Times.”

    He said the subprime crisis “may be just what the Fed has been looking for: easy credit becoming less easy; excessive liquidity returning to more rational levels.”

    Nonetheless, Gross said he expects the Fed to issue an “insurance” policy in the form of a lower short-term interest rate over the next six months.

    Reuters Pictures

    Editors Choice: Best pictures
    from the last 24 hours.
    View Slideshow

    The Fed is expected to keep the benchmark fed funds rate steady at 5.25 percent at its next policy meeting this week.

    Gross added that the subprime crisis will reduce consumption and new home building in the next 12-18 months.


  47. Wow that head fake at 10:30 totally fooled me. I thought the market might bounce, tricky today. I think I’m gonna run and hide away for a while…


  48. phil
    any thoughs on the GM positions?
    thanks


  49. Phil,
    The news on MO is astounding re the projected savings. Any idea how the poor folks in NC are so non-competitive that this kind of savings can be realized? Or is it the fact that EU is so much less anti-smoking in general also a motive?


  50. JBL- I bought the Aug 105′s, now I wish I didn’t LOL
    JOSB- getting smoked
    EDU- back below $50. I might take a look. Sold at over $52.5 to $53 twice last week.
    FCX- Another one getting hit hard


  51. whenever mkt bounces up & down it is likely they are killing a bit of premium on both sides. Most likely it always ends up lower than higher at EOD barring any news.

    Anyone has any historical evidence how market ends up on a day where there is some bouncing? thoughts?


  52. MBI – They insure collateral against credit default – who knows what they are on the hook for. On the other hand business may be booming but more likely busting…

    Everyone loves Hillary Cap! Just practice saying “Madame President” and you’ll be fine! 8-)

    BRCM – yes but how much diff to BRCM is 10M of anything? If it’s a $35 chip that’s $350M in sales and now way does apple let them make more than their average 10% net so that’s a 10% boost to the bottom line at best. At worst it’s a lower than average margin $10 chip that drops 2% at best to net and, with ramp-up costs and harsh production schedules (all vendors face serious penalties for missing deadlines) it’s possible they don’t even expect to turn a profit until the phone goes into wide release. Remember PLAY? They shot to fame on the IPod and lost 66% within a quarter of Apple changing vendors.

    SIRI – ROFL! See – mission accomplished, they got the options to print, sold them and let the stock drop – what an amazing scam!

    LFG – I’d be pleased but that is the death of the home market there!


  53. Anyone playing qcom earnings?


  54. MCO … I have been buying stock and selling covered calls.

    If looking at options, I probably would buy the Feb 08 65′s and sell the July 65′s.


  55. JSDA getting flattened


  56. Phil:

    Thanks for the AAPL comments. My deep ITM AAPL calls were all far OTM calls when I bought them a couple months ago. I just got greedy this morning and didn’t want to sell anything against them again on the nice bounce up at the open, so a $3+ move down on still a lot of contracts really does hurt (but I would not have just bought them that way). I felt the same way last Friday (not smart). When AAPL is back at $127 tomorrow (or whenever) I’ll probably think myself really smart :)


  57. Z, no volume on END in advance of the call. Bad sign?

    Jazz


  58. Dreamssssss: RIMM tanks 30$, OIH tanks 10$, xle tanks another 1$ then…
    OIH goes back to 185, xle hits 75 :-P


  59. Thanks for brcm headsup phil.


  60. Madame President- if this happens my bags are packed
    JOSB- fogot to say I bought some OCT’s As stock is down over 10%.
    AAPL- Boy I am finally starting to see the light. CNBC hates AAPL


  61. Hey gang,
    I’ve noticed that there are some folks that can create a lot of positive response and envy with a simple 3-4 word post. As a newbie, it will likely be years before I can do that with advice on picks…so let me just try this to see if I get any takers on the envy scale…

    Good morning from Maui :-)

    Have a great day.


  62. AAPL just pierced down through long term uptrend support line (did it 2 wednesdays ago, too). It bounced $9 from there, let’s see if we get that again or if it really crashes…


  63. TSO – do you expect TSO to go lower with inventories tomorrow? Contemplating selling Jul60 puts against my Aug60s. Thanks.


  64. SWN- down big. ZZZ below $45 tempting?


  65. I think I have my answer already, AAPL really crashing. :(


  66. Bill Gross – well that statement makes me want to cash out my portfolio, sell the house, auction the art and have a garage sale!

    GM – not ready to roll my putter to $37.50 yet but I with I did yesterday. At this point my next roll would be neutral as I need to move my long puts to $35s too so I may just wait and see as I am currently just a wee bit ahead. No shame in getting out even from a position that isn’t working.

    MO – yes, as near as I can tell US consumption is down, exports are up so moving closer to the consumer must be part of the savings – probably just another way that high energy/transportation costs come back to cost us jobs.

    Meanwhile – is that market up again? That’s down 50, up 50, down 50, up 50 in 2 hours! Down volume way ahead of up and ahead of the Fed I doubt anyone has the nerve to really go anywhere today.

    Gold getting crushed oil staying down at the moment… Putting my Fed hat on I’ve got an orderly deflating housing bubble but commodities are still out of controil. The cheap dollar is flooding the country with foreign currency funded by the low interest yen but I need foreigners to buy dollars themselves, not stuff. That means I need to keep rates relatively tight but an increase would trigger a panic so I have to put out a neutral statement but telegraph a more hawkish inflation position so I can ease people into a tightening mode by the next meeting.


  67. KeyserSoze,
    Where on Maui do you live? I spend about 2 to 3 months out there. Wailea Kai for me


  68. QCOM – weird thought earnings was today – looks like it is not

    AApl likely to head back to 102. If GOOG follows it by breaking down, mkt is going to get ugly.


  69. BigD -
    For the next couple weeks…Wailea Four Seasons…then it’s back to the midwest. I’m probably still a couple years away from spending 2-3 months out here at a time.


  70. Oil stuff – watch VLO to hold $75, that’s the key to the sector. If they break down, others will follow but if they bounce up, TSO $60s, now $1.83 will make a good mo play.

    They are looking for huge builds tomorrow: 2M Crude, 1.4M gasoline, 700K distillates – going to be hard to hit that mark.


  71. PHIL: They are looking for huge builds tomorrow: 2M Crude, 1.4M gasoline, 700K distillates – going to be hard to hit that mark. – Do you expect a bullish move tomoorw then?


  72. AAPL

    Sold my July 120 puts for a nice return. Good time to accumulate the Aug. 130′s for 4.6


  73. AAPL – Phil, is there a nice entry here ? Thanks


  74. WOW: oil sector down XOM holding up & Green


  75. “Everybody Loves Hilary” … isn’t that a long running TV sitcom ?


  76. Keyer,

    I unfortunately had my wedding (now ex) at the Ritz Carlton, that was a three week stay. Played alot of golf right around there. Met Roy Taboara, the wave landscape guy there – I wish I had went long one of his paintings then – and hedged it against the ex….oh well


  77. Wow AAPL time and sales is like a buzz saw – wish i could guess which way it was going to end up.


  78. END – just got through the slides. It’s a pitchbook update, not a news driven conf call.

    NO change to guidance or other news other than they’re EMU prospect spud on the 11th of June (I think that’s a 45 day well but I’ll have to check).

    Demonstrates why they should be priced higher but I don’t think there’s much new there. No Action. Yawn.


  79. LNG tanking, it turned down right at $42 where you called it Phil. Too bad I bought my Jan 08 $35 puts earlier when it was around $39-40 and I am still not even back to break even yet. Still, I have faith that this will turn out fine, so I continue to hold the puts. I am very bearish on the markets in general right now.

    Greg


  80. KeyserSoze,
    Fourseasons- THE BEST! The poolside burger is great. Also try the whole fish in Spagos. Both are pricey but quite good. Have you tried DUO? It wasn’t open last time I was there.
    BUCY- Good call Happy I would like $72


  81. Love Four Seasons! Go get pampered! I love Wailea as well and spend about a month out of a year out there.
    Going to Grand Wailea at the end of October. Can’t wait.


  82. what’s with rimm? mkt up 80 pts, rimm red!!!


  83. AAPL – iPhone Pricing from AT&T & AAPL

    http://tinyurl.com/3267ea
    WASHINGTON (MarketWatch) — AT&T Inc. and Apple Inc. on Tuesday unveiled prices for iPhone service, which would start at $59.99 a month and require customers to pay for Internet access.

    The music-capable iPhone comes in two versions, a 4-gigabyte model priced at $499 and an 8-gigabyte model that will cost $599.

    In addition, customers would have to pay monthly fees ranging from $59.99 to $99.99, compared with regular AT&T plans that cost from $39.99 to $79.99 for the same amount of airtime.

    The cheapest iPhone plan is priced at $59.99 for 450 minutes of talking time — $20 more than a similar plan for non-Apple phones.


  84. POT- As we speak Maui goes green. LOL Maui Ritz doing a big re-do needed it as it was getting worn out.
    DECK- roaring back


  85. Crack spread page updated.

    http://zmansenergybrain.com/?page_id=60

    The second set of graphs is through the 22 and shows a very minor recover in cracks.

    Overall cracks have fallen 30 to 40% depending on which region of the country you’re looking at. Distillate cracks are mostly off as well but not nearly so much.


  86. Rarely post because I never get caught up on the comments. But, as someone who has 90% of their portfolio in GOOG and AAPL, (and doing very well trading them, TYVM) take this with a grain of salt.

    AAPL is forming a bullish continuation flag and will continue climb next week. You are within $1 of the lows.

    GOOG is breaking out of a 2 year base and is the cheapest uber-growth stock on the planet. Don’t get in its way on a very volatile climb to $650 by Labor Day.

    And Phil, back me up here, don’t bull markets end with panic buying, not a soft deflating top.


  87. y would oil/OIH be coming back?


  88. Very weird. Almost everything on my screen is red and market is up 80 points.


  89. Nice SPY run from 11-12 noon today.
    Just missed the 150 calls at 2.35; didn’t chase; now at 2.90.
    Dang !


  90. BBD – I did not know that – I was there in 96 and it was beautiful – but they will do a great job – just like the one they are doing in BigD – time for a Phils happy hour…..


  91. You’ve got all reds OPtrader? As of 12:08 I’ve got greens – T, TM, MSFT, DIS, SBUX, MOT – of course, that could all change momentarily…


  92. More & more convinced that *this* iteration of the iPhone will be a flop.

    They will struggle to sell many here in Europe anyway – what’s the point of having a “great browser” when you have a slow internet connection that you’ve got to pay through the nose for? Combined with the (reputedly) poor texting capability – I think it’s success is far from certain.


  93. APPL – maybe the Oct $125s for $9.40 and sell the $120s for $5, which is risky on a big pop but at least you won’t feel like an idiot if it goes to $110, where you can roll your calls to for another $7 less the $5 you won’t have to give your caller. So if the answer to the question of “Would you like to own the Apple Oct $110s, now $17, for $13?” is yes AND you answer to the quesiton “Would you pay $20 to have $5 in the money October 125s at the end of this month?” is also yes ($5 in the money Oct $115s are just $14) then this is a good entry.

    Everybody Loves Hillary – I hear it’s scheduled for 8 seasons!

    4 Seasons? That was my honeymoon hotel. I’m ashamed to say I’m still married to her though – kind of makes me an outcast on this site apparently… 8-)

    Uh oh – Pisani looks concerned again.

    RIMM – of course their p/e should be 50% higher than Apple’s. They are so multi-faceted: They have the Blackberry AND the Blackberry Pearl!

    My take on the inventory expectations is they know another tanker came in from the gulf so they may have been running refineries much faster to try to get product out the door to avoid an embarrassing build like last week so the +6M barrels is now spread across the product mix. The trick will be to see if they can get away with that as there are about 5 weeks worth of tankers that have to be laid off before the end of hurricane season.


  94. Big D,
    Duo is up and running. Had dinner there last night…absolutely fantastic fillet and their wine list is to die for. Highly recommended. The sun is up and it’s time to hit the waves. Have a great day.


  95. Optiondragon,

    That’s a nice hotel over there. I have a place in Ka’anapali.


  96. AAPL – Thanks, Phil


  97. Phil
    i would say that makes it truly a good investment if you re still married to the same at least expense wise. I like your apple entry and thanks for the tip on DIA this morning Got rid of them although i should have rolled them so be looking for another entry soon!


  98. Y aren’t stocks tanking $5-$10 etc – they are all in red for down 2-3$ :-(


  99. Flim – I agree 100% on Goog, Apple could go either way but I don’t think I’d ever regret buying an ’09 under $120. Bull markets do usually get a blow off top but not a correction. I don’t think anyone thinks this is a market death, just a correction and, as you certainly should have noticed in February, you don’t always get a warning on a measly 800-point drop.

    Oil – you are all very impatient! Wait for VLO to test $75 (I’m thinking bounce right now as we close in on pm trading and the VLO $75s at $2 were $3 yesterday so they will make a good mo play too).

    FTO meanwhile, like watching paint dry.

    Pretty broad Dow rally. T finally moving. Even Dis is up a bit. AA and DD only ones significantly down. AA is down with commodities but DD I don’t get.

    Rates ticking up 5 basis points on my Fed statement (who leaked it?)

    I do not hold a heavy Apple position so this is not really wishful thinking but I have to belive that Steve Jobs did not choose to align himself with AT&T so they could be locked into producing a phone with crappy performance for 5 years. It’s friggin’ AT&T, a $245Bn company with 300,000 employees that owns more than 1/2 of the US phone system – don’t you think they may have sonething up their sleeves? I bet that extra $20 for service is well justified by some kind of bandwidth boost that’s going to make any Outlook user say “Blackberry who” in 18 months. JMHO.


  100. Cap,

    MCO – Many more Puts being traded than calls. Biggest volume is Jul 60 Puts @ 1.40 – why not just sell that Put with view of owning MCO at $58.60 by July rather than buy stock now and sell covered calls against it?

    I too like MCO as a company but was burned last year buying stock/selling covered calls as that looked better at that time. When MCO dives down, it falls hard and I guess the nice $1.40 price on Jul 60 Put probably reflects the downside fear in MCO?


  101. Will OIH go down from here? what abt xom?

    I am planning to take profit on my OIH puts & buy AAPL 120 calls? Is that a good or bad trade


  102. Does anyone know why NMX, NYX are down $1 – $2 while the market is up?


  103. KC
    NMX- looking at buying back those 08 leaps LOL


  104. That’s ok Keyser – you put in a rough day, have fun!

    Wow – CNBC guy says “pretty good rally for the dow” how does a herky-jerky ride to a 50 point lower high than yesterday constitute a pretty good rally? This is what I don’t get about them – don’t they want ratings? To get ratings you need to give good information, not spin.


  105. I am planning to take profit on my OIH puts & buy AAPL 120 calls? Is that a good or bad trade
    >>>>>.nvm does not look like a good idea right now, maybe at EOD


  106. yes, 90% of the stocks on my watchlist also red, but the dow is up 60. Extremely difficult day for trading.


  107. VLO testing 75


  108. Refiners waiting out the tomorrow’s numbers. The focus on utilization is pretty stupid considering the divergence between that and production which continues to go up. Here’s a quote for you from a guy in the know:

    Kevin Saville, managing editor for the Americas energy desk at Platts, the energy research arm of the McGraw-Hill Cos., notes that refiners are getting more gasoline out of each barrel of oil they process. I’ve been saying this for weeks but all people focus on is the low utilization number. It’s a pretty sweet deal when you can run at a lower operating rate which falsely keeps gasoline prices up while producing more (quietly, quietly) which means a bigger top and even bigger bottom line and but then have CNBC and their guest trumpet the “woefully low” utilization and store numbers.

    FTO short is meant to be a long term play. Cracks had a slight (and I mean very slight recovery last week) after 6 weeks of slides. The stocks are still near their highs. Moreover, today’s move in gasoline more than takes care of last week’s slide so if we close out the week here it would mean 8 weeks of declining crack spreads, again with the stocks still running near their all time highs.


  109. Y is QCOM up today?


  110. Not sure why some of you think the “market” is so up (especially after Friday and yesterday’s selloffs). There are thousands of stocks out there and most of mine (as well as almost all of my 60+ watch list) are continuing to get killed, and like Phil, I want to short GM, but am so glad I didn’t. A tiny partial green blip on a few DJIA compnents a rally does not make.


  111. Phil – you on for mn1.com tomorrow?


  112. Is it good idea to buy some DIA put now since market is up?


  113. BillBigD:

    Thinking of playing WYNN for an oversold bounce. Am I crazy?


  114. BillBigD,

    NMX – as I said before, I wish I’d closed out my leaps when it was $146+. Excellent move on your part. I am monitoring my Jul135 caller closely to buy back if it bounces back.


  115. Last week rolled my HOV Jan 08 20 puts to 17.50 puts. Now the 17.50s are in the money. If HOV gets into the 16s, then I will roll to the Jan 08 15s. This could be the first of the major home builders to go bankrupt.


  116. Any reason y RIMM jumped?


  117. OIH –

    If you had asked me in May if it would go down from $170, I would have said yes.
    If you had asked me in April if it would go down from $160, I would have said yes.
    If you had asked me in March if it would go down from $150, I would have said yes.
    If you had asked me in February if it would go down from $140, I would have said yes.
    If you had asked me in January if it would go down from $130, I would have said yes.

    - so what are you asking me for???

    XOM – If you had asked me… oh you get the idea!

    If Oil is going to fall, it has a mile to go. Any of these guys could go 10% down without breaking an uptrend. For OIH that’s $165, XOM, maybe $75. Would I trade OIH puts for Apple calls. Not current ones. Much as I like Apple I wouldn’t take an unhedged posiiton. They were under the radar when IPod came out and had defective batteres and bad wheels etc. Anything but angels singing 24/7 on the IPhone is going to have a lynch mob heading to Cupertino so I’ll wait just a bit to go naked bullish on them. On the bright side, at least their p/e is 33% less than RIMM’s.

    Gold down $10 now.

    NMX tends to follow oil down a bit.

    VLO stopped right at $75. Oil turning up too, watch XOM to break $83. VLO $75s hit my $2 mark, stop at $1.75. Taking COP $80s for .80 as well but these are covers in lieu of selling my existing puts at what I consider a critical juncture. XXX


  118. Whats the play is VLO violates $75? Sell TSO puts? Which ones? Is this a play to hold thru tomorrows numbers?

    Thanks

    Greg


  119. Whats the play if VLO violates $75? Sell TSO puts? Which ones? Is this a play to hold thru tomorrows numbers?

    Thanks

    Greg


  120. Oil – You’re right Phil…. I was too impatient. I think I need a sticky note to remind myself. LOL
    Thanks for the suggestion to watch VLO etc.


  121. Phil, sorry I forget that I take a more medium-term horizon while you guys are generally more near-term. We very well could correct here, but I still think too many people are ready for it. I don’t think we get the 10% correction until we are well over 14,000 and people are capitulating. And then I would be betting on a 20% correction on the “sub-prime” and carry trade issues igniting something else. Don’t forget that we had large corrections in 1987 and 1997 in the middle of bull markets.

    As for the iPhone plans, I was happy to see that the prices are reasonable. A $20 increase for unlimited data seems VERY fair to me.

    But, again Phil is pointing you all in the right direction. The laptop sales are enormous. Apple’s market share in laptops increased 2% IN ONE MONTH. Sales have to be huge. Watch the iPhone headlines, but trade this stock on the massive earnings that will continue to be reported in July and after.

    AAPL will hit $160 by Labor Day is my bet, but the options are so expensive that I am barely playing it because I am making much better returns on GOOG. So, hopefully I am wrong and Steve Jobs catches the Bird Flu and drops to $102. Then we can really make some money.


  122. Looks like it just did it.

    Greg hw did u post duplicate comments? my browser did not allow me

    Phil, ok hw low will OIH go today & tomorrow? 170?


  123. VLCK movin on up


  124. CNBC went out of its way to produce a piece on why people are negative about the iPhone and should wait for a later generation to buy it. ‘Wait for the “Next generation” ‘ mentioned over and over today. I understand from reading their web site they are calloused to Apple fans “flaming” them. So they are influencers instead of newscasters. Grrr…


  125. VCLK SORRY


  126. MN1 – They said they want us every week. I nailed it last week too!

    DIA – it was a great idea 30 points ago, still a pretty good idea, not such a good idea 20 points from now the way this thing has been popping up and down.

    LVS is actually heading towards 50% off it’s high. Poor Shelly, that’s gotta be about $9Bn up in smoke!

    RIMM – a low volume spike of $1 after a $7 fall is not a jump.

    Now CNBC is showing you how many people will want to wait for the IPhone. If 80% of the 30M people who said they absolutely want an IPhone absolutely don’t want one until next year, that’s still 6M people who willl be in line looking for one this week.

    LOL – MER says they feel BSC will work their problems out. And Barney Frank said he doesn’t think the problem is spreading out so today all the Republican Traders take Frank at his word!


  127. Dilbert – I hit “post comment” then say a typo and hit the stop button on my browser, fixed the typo and then hit “post comment” again. In other words, I screwed up.


  128. Wow. There goes oil up, splitting B/A on the EOG calls.


  129. Awesome dude – sorry I missed it but I couldn’t get a signal in the jungle. What just got into oil? Just a pump or some news? Anyone.


  130. Yesterdays sell off wasn’t sharp enough, and todays rebound is tepid at best. We need fireworks (up or down, I don’t care) going into the 4th of July holiday week! This fizzle into month end is boring.

    Greg


  131. VLO – I wouldn’t sell oil puts naked, tempting though it may be. Oil could snap and you would be in much pain. If they start to go, you can take you pick of companies at near ATH to grab puts on but I think VLO will make a stand here ahead of inventories.

    How low will oil go – I think this is it for the day. Time to cash in the puts and see where the calls take us into inventory. I’m going to set 20% of the profit stops on my put side and I’ll try to go into inventories either all out or a little bullish.


  132. Can I just take a quick poll of people here… who here actually keeps a trade log or journal? I mean besides for end-of-year accounting and tax purposes, but actually for checking your own performance and keeping track of what ideas worked and didn’t. And if you do keep one, what do you keep it on? pen and paper? word document? Or a more specialized software application?


  133. What got into oil? Lunch ended at the NYMEX and they have 75 minutes to get it back to $69 – that’s all. Failing to get back will be a problem. Failing $68 won’t be good either and VLO is not doing very well down here at $75.

    Bert, you’re reading my trade log!


  134. ..testing..


  135. CI, UNH

    Phil, any thoughts on why these (and other insurers) are off around 10% of ATH. My CI covers have worked beautifully, but no premium left so looking to roll. Wondering if they more downside to go or have reached bottom?

    tnx


  136. PCU- bought back July 90 calls! $1.20 gain. Finally something worked.
    WYNN- Boy sector looks really weak. If buying go out


  137. Bert:

    I use microsoft task manager (part of outlook) — you can categorize and sort — I have holdings categories, prospects categories, research categories, general ideas, etc. For each open position all the moves are in there. YOu can attach documents also.

    I wont admit that task manager runs my life – but that doesnt mean it isnt true.


  138. Just to add to the new CNBC anti-AAPL conspiracy. Has anyone noticed the conspicuous Verizon logo on the CNBC “text us” commercials? Also, CNBC just re-ran the same why I am waiting anti-AAPL commercial.


  139. DJ sale seems to be as good as done. I had sold july naked puts at 55 yesterday.
    Should I close my positon here or wait for the takeover if it happens?
    any suggestions appreciated…

    thnks


  140. Hi, all, I’m back!

    STP
    acting well today. Could start going up again.

    CYD
    loving it!! new 52-wk high!


  141. Bert:

    I don’t know about everyone else, but I keep a daily log of all my trades. I write
    down why I am making the trade, what my stop out point is, what my upside
    expectation is (which is subject to change as the trade progresses), and the
    results of the trade . I also move up my stop-out price if the stock or option
    moves up in price, and frequently sell a partial position to book some profits
    and try to let the remainder run. I do this in a notebook so that I am able to
    go back and review what went right and what went wrong. I still make the
    same mistakes over and over, but this helps quite a bit.


  142. Phil,

    Any recommendation on CCJ leap. I’m unfortunely uncovered and it’s dropping. If I cover now, I’m afraid it will just start popping back up. Should I be patient and wait for an opportunity to DD and cover later?

    Also, what DIA puts should we have now? 133′s? Or just wait?


  143. Bert,

    I put notes in my Investools charts and highlight the technical signals at that time of purchase/sell. I’m a visual person so I can see right on my graph the mistakes I made.


  144. Mediocre I-Phone review by some west coast tech guy in NY Post today. Says wait for version 2.0. Can’t read web pages. Its really a tricked up I-pod.

    No AAPL position.

    I think I phone will do well even if it sucks w/ all the hype.


  145. Ok – TIE is now down almost 10% from its last peak. Its just below its 50-day on the weekly chart after breaking the daily 200-day, and its previous bottom.

    Is it the dollar ? Commodities sympathy ?

    Anybody have any idea why this stock is so weak ? Its not being sold off hard – its just not being bought.


  146. I keep a log.
    It’s difficult, sometimes irritating and time-consuming but the change it had on my trading was simply stunning.


  147. To Cap, on AAPL,

    Name one flop that Apple has had in the past couple years. The closest I can think of is the ROKR, which was a phone partnered with iTunes and some other Apple stuff. They’ve had experience in the field already, and I honestly can’t think of any reason (based on historical knowledge) why this won’t sell.


  148. CNBC-AAPL conspiracy theory is ridiculous.
    I would also recommend waiting for version 2.0 and I have no vested interests. It’s a perfectly reasonable stance – the original iPod was, politely, a piece of crap. An unreliable mp3 player is one thing – an unreliable mobile phone is unacceptable.


  149. AAPL- Last week it was BX, today AAPL. I getting ready to turn on ESPN


  150. It looks like Erin is long AAPL puts, just like everyone else on CNBC.


  151. SU another 1.5 dollars down today. At this rate it will soon reach its fair value around $50 :-) Buying those Jan 09 90 puts last week was kind of perfect. I sold the July 85 puts and got stopped out yesterday. Waiting to sell some july puts.

    The beast XOM is still positive for the day.


  152. no position in OIH. But would be cool if this thing breaks down.

    GOOG remains strong but feels like the strength is fading out slowly. Check out the old tech giants, MSFT and CSCO strong. MSFT volume not enticing though.


  153. NMX is killing me, cant watch anymore!!!


  154. Steve,

    The ROKR was created by Motorola, not Apple. The only thing made by Apple on the ROKR was the iTunes software.

    Jack_Of_Hearts
    When the original iPod came out, the market was just emerging, no-one really knew what people wanted and Apple gave their best stab at the player, with time they improved tremendously.

    The phone market is fairly mature, however current cell-phone/smartphone offerings are mostly crap. If you watched the guided tour on Apple website you would realize there is NOTHING currently available that comes close (at least IMO).

    In addition if you look at the device itself, there are no buttons, everything is done in software, so the likelihood of v2 of the iPhone being the same form-factor is pretty good, with updates to the software providing additional features.

    In the end, this device is not for everyone, and there will always be people who are unhappy, BUT given what we have seen and who has been testing it (Steve Jobs and company) the likelihood that this device is really well executed is very high !!!


  155. re the iPhone rate plans, not sure you guys are comparing apples to apples.

    the iPhone should be compared against a PDA. The $59 iPhone plan includes unlimited data; to add unlimited data to a PDA costs $39 ON TOP of your voice plan. This make the iPhone $20 LESS than the combined total on a Windows mobile PDA voice/data plan. I’d argue that’s fair because the iPhone is limited to the lower speed EDGE network, unlike many Windows Mobile devices, so the discounted rate make sense to me.


  156. FSLR- does it ever go down


  157. Took the EOG 75 calls @ $1.45. It’s been beat down to support and trades highly correl to oil. Muey risky.

    Biggest risk is the story I just read while catching up that the 19 million barrels of GOM tanker storage is not being re-leased. This is probably part of what caused the big surge in imports last week and could again tomorrow. If anyone has greater clarity on the timing of those barrels please let me know.

    We have pump failure. Oil taking a dive now.


  158. All of us on T-Mobile ONLY have an EDGE network. AND, not a single T-Mobile phone does internet well because of windows mobile limitations. I’ve been through sidekicks and dashes, and can’t wait to have a real browsing experience. My 2000 minute plan is $100 with no data right now (can’t find a product that works). I’ve been with them for 5 years so am month-to-month. Ready to switch. Be happy AAPL did NOT have 3G chips inside this first round of phones--they’d have likely been in the list of “quarantined” patent-dispute chips like most others!


  159. Yev,
    I understand what they’re offering and I’ve watched the videos. I am just trying to be reasonably objective about AAPL, which is rare around here. I think their is a risk (which must be considered) that the software/firmware/hardware will be buggy and unreliable. I also think that the current offering will not sell well in Europe but that later versions will address the HUGE issues v1.0 has over here. I also believe that Steve Jobs is not the messiah and that AAPL have numerous screw-ups behind them along with the iPod, which makes me wary.

    This is all post the initial hype obviously – I’m talking medium term market penetration here.


  160. NMX- took a 1/4 play on Leaps. I am done buying today. Steak Time!


  161. S&P dropping and pulling others down again!


  162. CI – Insurers are off over fears of universal health care eating into their racket. Rising costs also hurting them. If your caller/putter has no premium left then you are letting him hold your position rent free. The only time I do that is when I want to get every penny of momentum that goes against him but usually only for a very short run. I assume you sold the $55s, now .30. I’d rather have some downside protection in this market so I’d go for the $1.62 $51.62s which carry a $1 premium and offer .62 of additional downside protection. If they don’t get back over $52.50, they may be seening $47.50 soon.

    Nice confirmation if XOM breaks down here. Even better if CVX finally turns red. Glad I bought those calls rather than sell my puts (for the moment).

    DJ – Good call but you gained 60%+ in one day and you want to increase your risk to 100%+ (of the .80 you made) every day for the next 24 days to make another 35%. I guess if you think it’s the only good idea you’re likely to have you can hold it to the bitter end…

    Albo – I used to do similar in Excel. Found it useful to categorize mistakes and sort for them, looking for bad behavior patterns (winner was almost always Greed, followed by Stubborness). I think the real breakthrough for me was I finally got to the point where, at my decision juncture in the live trade, I would begin to think of how I would later categorize the mistake I was currently making…

    CCJ – what specific do you have?

    DIA – almost seems like chasing after the earlier discount prices but the July $134s and $133s are in the best spot with a slight edge to the $133s but the way we are bouncing you may be able to get the $134s for $1.80 again before the day is over so maybe scale in a bit.

    Bill Gross on CNBC – watch the Dow!


  163. VLO still strong and wants to reclaim 75.


  164. What do you guys think about oil puts right now. Sold mt FTO puts too early. Any others look good? or wait till inventories.


  165. Any IPhone review you are reading now is a scam. 6pm Pacific is the agreement and I very much doubt that one of the very few reporters given a review copy is looking to trash his reputation with manufacturers a few hours early. Walt Mossberg supposedly has had one since the 11th and nothing from him yet.

    http://www.macrumors.com/2007/06/12/mossbergs-early-iphone-impressions/

    Also, check out this cool feature:

    http://www.macrumors.com/2007/06/26/iphone-activation-and-syncing-video/

    Wow, XOM flew down – Yee haw!


  166. CCJ in a freefall


  167. Oil stock massacre in progress


  168. Phil:

    I agree with your characterization of greed and stubborness. Greed used to be
    a biggie for me. Now not as much of a problem since I began scaling out of
    profitable positions rather than selling all at once. Stubborness as it relates to
    risk management continues to be my biggest problem. I keep trying but I still
    need to stay in the 12-step loss taking program.


  169. Hey Phil, don’t take it so personally !

    First Review by Glenn Fleishman. Writes a column called Practical Macintosh from his Seattle home.
    Article today called “Dont get ‘hung up’ on buying an I-phone.

    He claims “After spenditng some time, albeit briefly, with the iphone, its clear to me that the Internet and e-mail are the parts that suffered”.

    So probably not an “official” reviewer, for whatever value being an Apple approved reviewer brings.


  170. Oil failing into the close, this could be great but I’m taking the money and running ahead of inventories – will reestablish tomorrow morning but, in the words of the great Flounder: “Oh boy is this great!”


  171. Since the article was published in the NY Post, a well known Rupert Murdoch controlled VWRC rag, it must be a scam !! :>)

    Some nefarious neo-con agenda for certain is behind it, after all the Goracle sits on the Apple board.


  172. reestablish tomorrow morning – problem is I am running out of day trade & if I did that i wouldn’t be able to cut my losses


  173. Any suggestions of which oil stock is good and safe to short?


  174. This is pretty ugly. There are plenty of buyers trying to hold this up, but the sellers are just too big -it’s like watching sumo wrestling…Commodities are getting trounced, with the SLV chart gapping down and running (about 5% total) through its 200dma. Gold is down 1.5%, resting on its 200dma. Copper down 2.3%, oil down 2%. Not pretty for those sectors and every commodity stock I can think of is getting walloped.
    Maybe they are just going to hold us down here and use the Fed Minutes to do one of the their trademark short-killer blastoff moves into the end of the quarter.


  175. holy crap! VIX at 17.5. All signs pointing to 20 soon.


  176. Steve -

    You misunderstand. I have no position in Apple and have nothing against the company.

    It doesn’t matter to me whether it succeeds or fails, I am just merely passing on a news item that might be useful to those betting on the launch.


  177. iPhone
    Recall Job’s keynote address introducing the iPhone. “It is a wide screen iPod, a phone and an internet communicator.” He repeated this mantra 3 times, and said “now, do you get it?” Maybe they shouldn’t have called it an iPhone as I suspect 6-months from now, it will seem like something quite more.


  178. The other “knock” against the iphone in the “scam” review I referenced is the $$ commitment to getting one … $600 + service contract, terms just announced today. That’s a several thousand dollar commitment for an Iphone buyer.


  179. Jack_of_Hearts,
    I don’t think Jobs is a messiah, but coming from product/software development background, I can tell you that when you have anal testers, generally a product comes out fairly clean at the end. Yes there might be issues when the end-user gets their hands on the device, simply because you cannot possibly account for every combination of usage. However given how long this device has been in development and given Apple’s screw ups in the past, it actually gives me confidence that execution will be very good.

    As far as Europe, until there is a 3G version the point is irrelevant.

    You make a point of “HUGE” issues, but I don’t see what these HUGE issues are, can you explain?


  180. only 3 more days for end of qtr window dressing. Hefty bonuses in jeopardy for the WS crooks.


  181. Phil,

    I have the CCJ Jan 55 08 leap. Down 10% +++


  182. How come market is going down before quarter end. Arnt fund managers supposed to pump up their stocks?


  183. I hear you Albo. From a risk management/discipline perspective, one of the worst things about trading options is that almost any losing position can be fixed. Of course, at the same time, one of the greatest things about trading options is that almost any losing position can be fixed. :-)

    Wondering whether the DIA will take out yesterday’s low (132.89) this afternoon . . . .


  184. Feeling like GOOG is gonna see 520.


  185. HUGE issue for Europe is Texting Yev.
    Ever texted on a touchscreen keyboard? It’s crap. And texting is HUGE in Europe. ENORMOUS even ;)
    And obviously it will have to be 3G or there’s just no point…………….

    At the moment AAPL’s cap is 100bil and GOOG is 160bil.
    I’d rather own GOOG every day of the week and then some.
    That’s kind of my point: There’s better investment opportunities with less “unknowns” than AAPL and their (niche) phone.


  186. Fleishman’s review – he’s probably right about waiting. I’m waiting myself but when I spend $75 for a Swiss Army knife I don’t sit there and go – well I could get a better screwdriver, and better scissors and a better knife and a better magnifying glass and a better pair of tweezers and a toothpick, etc… I buy it because it handles everything I want adequately in one place.

    Oh my gosh – the CNBC girl is shocked at the idea of spending $20Bn to insure 43M people. I can see where she’s upset as it’s close to 20% of the cost of our recent troop surge and we wouldn’t want to go wasting money helping our own people when there’s (a war to win/our security is at stake/WMDs must be somewhere/democracy to build/fill in your favorite reason here__________________). I mean come on, they seriously spend way more time debating this than they have on the entire war that’s costing $300Bn a year!


  187. wonder when the oil pumping will start? might double down on my hedged calls after cashing out my puts


  188. Jack,

    Your point is taken about texting, we’ll have to look at the sales numbers I guess and figure out the interest once the phone starts selling.

    Now regarding Apple’s market cap, a HUGE point that has been made many times over is that this ran-up in Apple is entirely about the phone. Meanwhile the phone is not is even on sale, while Apple is increasing their Mac marketshare and continuing to sell iPods at a very healthy rate. Anecdotal or not, Apple’s earnings have been accelerating, and there is nothing that shows a slowdown. Including the iPhone the earnings should accelerate even more. I won’t even include potential products and updates that are surely in the pipeline.

    To me, this is a fairly “safe” bet to take.


  189. damn, everything negative on my watchlist except for RSH and COH (barely). RSH sounds like they have some cool business going on there :-)


  190. Good points Yev. I generally agree, especially regarding the laptop sales which are HUGELY encouraging ;)
    Perhaps my market cap argument merely indicates an under-valued GOOG rather than over-valued AAPL!


  191. Dreams: OIH goes green, RImm gets redder


  192. Come on Cap – not everyhing is a right wing scam… I do hope they take Apple down some because $120 is not low enough to get me to buy more just yet but my July $120 puts just paid for my IPhone + 2 year’s of service! That “knock” on the IPhone ignores a very basic fact – it’s a phone! I pay that for a service contract now, it’s a non-issue for me and the several other people I know who already pay for one of those fancy cell-phone things… BS logic like that does tend to strike me as disingenuous and makes me wonder if the writer does have an agenda but then I realize if he works for a fine Murdoch publication that couldn’t possibly be the case (someone give me an Amen!)

    Reestablish – that’s the beauty of going 70% cash! It’s a self correcting system, when the market get’s too hot or too cold I cash out which gives me the flexibility to get back in but also the ability to day-trade while I wait for something to firm up one way or the other.

    Oil shorts – none are safe to short ahead of inventory. Still taking the money and running. Leaving XOM leap puts of course and TSO Aug $55 puts (almost a double).

    NOV – looks like someone shot it down with a missle on the 5 day chart.

    CCJ – no brainer, let the $50 caller pay for your roll to $50. If it goes to $55 you will owe him $5 and you will have paid about $9 to have an in-the-money Jan $50 call and if it goes lower you can do it again, keeping yourself well positioned.

    EOQ – it isn’t over yet but they’ve made plenty and flatlining this week wouldn’t be a surprise but another 200 down would be (can’t be helped if tomorrow goes badly).


  193. Phil,
    Sold the BSC jan ’08 $105 puts @ $2.20. what do we do next? the short put position is down 25% and i am getting sell alerts!!


  194. Phil, that was just a joke ….


  195. Markets
    all this volatility is just a smoke screen for the MMs to get out of commondities and gradually switch into techs. This is also why the old techs are holding strong. Also why I start to have CSCO and IBM on my watchlist.


  196. Phil, I went through all the OIHs, refiners, alternative energies and came up with these positions based on technicals, deteriorating fundamentals and good value premiums.

    Nice list for inventories tomorrow-
    HOC July 70 puts@.90, stock@73.62
    TSO July 57.50puts@2.15, stock@ 57.81
    RIG July 100 puts@1.40, stock@104.33
    MRO July 60 puts@1.55, stock @60.62
    FSLR July85 puts or 80 puts@ 1.55, stock@87.65
    SPWR July 60 puts @2.15, stock at $61.24

    My favs yet to sell off are the ethanols and Agriculture plays though!
    MON, MOS, AGU, POT, BG


  197. STP
    nibbled on some. Might get a jump tomorrow morning!


  198. BSC – you can’t do trades like that if you can’t carry them! Also I think I said early yesterday my goal was $3 but either way if you have margin issues selling naked anything is a bad idea. You need to talk to your broker about what will get you cleared up but you could buy $100 puts to cover it for $2.10 but that will still cost you $5 in margin. The idea of this position is to never buy it back as it’s virtually inconceivable that BSC will end up at $100 and (as I said in the post) if it does, then you have to be happy to buy it for that price as that’s your worst case. Obviously, if you can’t cover the $100 x 100 per contract required to buy the shares in Jan ’08, this is not a safe trade.

    Cap – so was mine.

    Good theory Happy! I hope so as it’s about damn time we get some rotation so we can get the bigger party started.

    Good list Dragon – I’ll go over them later as I’m out the door at 4.


  199. Happy, I played STP for some time. Watch out for whiplash LOL.
    The sucker CAN move though!


  200. Just to add something to the discussion: I have been having this argument with Cap about AAPL for years now. He’s always hated this company and you won’t make him change his mind LOL.


  201. CCJ getting fried
    JSDA major flattening
    XHB being bulldozed
    CFC Ceo cant sell fast enough
    CBRL crumbling my puts love it!

    SBUX up…. my puts don’t love it!


  202. Phil,
    It looks like NYX will meet your target of $70 sooner than I thought…


  203. STP
    Gordo, yes, I have been waiting for this to get above 34. Let’s see how far this can run, especially the solar plays are so popular! Btw, AMAT just bought some small foreign solar company today.


  204. NOV-I strangely recall just 3 weeks ago everyone saying the party was over. Turned out pretty well $$$
    Two days to not make me punt. I have heard the screams since I joined the blog in Sept.


  205. Bigger Party
    Phil, yes! VIX is getting higher and higher. We’ll need to get the major indices higher soon to accommodate bigger movements!


  206. FTO joining the refining party to the downside. More than double the loss on sector safety stock VLO. Note more expensive TSO down 5%, now below the split price again.


  207. TSO – I’d sold Jul60 puts when VLO held 75, but quickly bought back the putter when it reversed direction. So, I’m just sitting on my Aug60 puts with a 40% profit. What is the best way to try to protect this profit since there’s still significant time value remaining, if it’s too dangerous to short? You’d mentioned buying oil calls to cover earlier. Thanks.


  208. Or maybe I shouldn’t be so greedy and sell half/take profit, as you’ve advised before…


  209. WYNN-Guy on CNBC says it can go $200 maybe $300


  210. Still trying to buy T $40s for .50. XXX That’s my Apple play of the moment.

    TSO $60 puts for $1.50 are a reasonable risk/reward into inventory, look better than the VLO $75s. XXX

    FWLT with huge collapse, need to keep an eye on $105 puts sold in $10KP for a possible roll to the $100 puts that will cost about $2. Probably if it breaks $101 I will be concerned.


  211. Have to publicly thank my AAPL and AMZN callers. They’re getting killed, but my leaps should survive. Taking a pass on AAPL near term calls, but betting results will be positive by end of year. Now if we can just get CCJ and CROX back. Happy, we’ll see if you’re prescient. I hope so.


  212. IOC- OUCH


  213. “TSO $60 puts for $1.50″

    ?


  214. FTO – yeah but it’s take the money and run off my morning play. Up $1 in a day is plenty – you don’t want to give Nigerain rebels a crack at your gains overnight!

    KC – remember, if you don’t follow rule #1 or rule #2 then there’s really no point in asking for advice because you just never listen anyway! 8-)

    WYNN – I like them but they are laying out a lot of cash and look how LVS got punished for that strategy. If you remind me on the weekend I’ll try to find a long covered position but, at the moment, LVS is almost a better value (and I’ve been short on them for almost a year).


  215. Phil says it so much that it is ingrained in him!!!LOL
    He meant the calls. Very good swing play.


  216. Happy, I took a small entry on the STP JUL35′s (10 calls) Your calls have been pretty good lately, so let’s see how she goes. I love the company, hope the market conditions are right, because this one can fly


  217. TSO – damn sorry. That was TSO $60s!!!! I write puts by reflex on those guys (I think my body refuses to believe I’m buying calls on them).


  218. CFC CEO still trying to all means to get more time to sell all his shares. Last week he managed to get CFC mentioned in barrons. Holding a ton of Jan 08 35 puts.


  219. Well, at least I remembered it this time. Maybe I’ll even act upon it next time. LOL


  220. Later guys must run!


  221. Well lets hope for a good overnight in China


  222. Heh… now its teh SECs turn to look into the CDO issue.

    Is it just possible that window dressing was the only thing holding the market from a > 1% down day ? There are suddenly /alot/ of issues. Yen carry trade and CDO/subprime issues included.


  223. LOL … that was the old me, Opttrader. You forget that you and Ted convinced me to play it both ways, and I did for a while, but out of it now.

    I respect AAPL much more than I did then; I am not trying to bash the I-phone, seems kinda cool to me but I am too cheap to buy it.


  224. ORCL- beats by 2 cents


  225. Dow futures and DIA screaming down after closing. Took out yesterday’s low.


  226. Here is my theory for the rest of this week, barring any BSC type events.

    This type of up and down action until Thurs 2:15 pm.

    Fed issues market soothing words, setting off a huge rally into the end of the 2nd Quarter portfolio markups.

    Rally continues into 4th of July.

    Let’s watch for this.


  227. Later all, off to DC for a couple of days (work no play) then heading to Missoula with the wife/kids for a couple of days (play no work).


  228. Phil

    Did you get my email last week with the attachments? Jared got them and is reviewing them, if you get a chance look them over and let me know what you think as well.


  229. Happy

    Wow I like your idea about the MM’s using this volatility to move from commodities to techs; looking at the daily charts on QQQQ and CSCO, so strong compared to SPY’s and metals…


  230. Phil or Others following IOC:

    What do you think of IOC. It crashed ~ 30 %. I had bought it near 38 and sold Jul 35 calls for 6. I was only hoping to get the $3 premium. I saw the crash panicked and bought a Jul 30 PUT for 5 which traded as high as 6.8 in the frenzy and closed at 3.5. Please help !


  231. dday, I love Missoula! Got friends out there. Take it easy.


  232. by “MM” – I presume you don’t mean Market Makers …. because that just wouldn’t make any sense?
    is it Market Movers maybe?


  233. Jack O Hearts, re M&M’s:

    Yes I assumed that Happy was referring to the Market Movers as well, Jack – I think we can eliminate all Hershey’s candies as well – the idea of the relative strength of the Q’s to the SPY’s just seems very powerful to me, and the QQQQ daily chart has not violated its support levels like the SPY – fewer red candlesticks – also on the daily chart, the Q’s could still make a higher low, whereas the Spy can only now make a lower low – pretty significant difference from a technical perspective yes?

    Also I think regarding your iPhone comments, I respect your effort at an objective analysis – but I have to agree with these guys, it’s going to be a huge hit. It’s got so much behind it, it’s the latest snazzy must have gadget. Plus CNBC is just being contrarian with their obnoxious “iPhone sucks” news stories – they do it all the time. I only watch that channel on mute to see what pretty dress Erin is wearing that day.

    Finally I hope this isn’t too personal but what’s wrong with the Jack of diamonds? Aren’t two eyes better than one?


  234. ha ha!
    The name actually comes from the Dylan song……. make of that what you will :)

    I’m certain the phone will be a hit. For a quarter. I’m thinking past that. Some publications have even speculated to the point that the iPhone will be the biggest mistake Apple has made. (TheRegister.co.uk)
    I don’t think they’re necessarily right but I will give credence to their opinion as much as I will the to the rabid and numerous Apple evangelists.
    To be totally honest I hope the phone does what they say, because I could certainly use that in my life. I just don’t believe it, yet!


  235. I-Phone “official” review in. On Commie Network Backing Clinton – A BIG HIT! Expect Apple to spike up tomorrow on this review. At least, I hope so.


  236. Wang’s World
    new post up!!

    MMs
    I meant Money “Managers”. Sorry for the confusion!


  237. IPhone getting great reviews. AT&T network issues seem to be biggest problems, slow but good with Wi-Fi. Touch typing seems to be worst feature but you have to wonder if it’s something people get used to like Palm or Blackberry.


  238. Looking good ;)


  239. Ex-execs plead guilty to Countrywide fraud
    Three of the mortgage lender’s former executives plead guilty to insider trading amounting to tens of thousands of dollars each in illegal profits.

    http://money.cnn.com/2007/06/26/news/newsmakers/bc.countrywide.reut/index.htm?source=yahoo_quote


  240. Oil, silver, Gold, and commodity[inflation] down hard — Hedge Funds are all jammed up on sub-prime problems, and the Fed (Plunge Protection Team) meets this week !

    Haven’t fully organized my thoughts on this, but it seems more than just coincidence that
    these events are converging – just suspicious of the timing — seems the Fed/PPT and the Hedgies all have something to gain from the other — call me crazy !


  241. Want to throw this out here regarding Apple and their longer term strategy. Looking at what Apple has done with the iPod, Macs, iPhone (coming up), Apple TV, OS X, Windows compatibility, iTunes. If you haven’t noticed there is a common denominator to all of these, and that’s the software.

    There are two pieces of software that are important and that drive all the hardware.
    - OS X runs Macs, iPhone, and Apple TV.
    - iTunes manages content for the iPod(s), iPhone, Apple TV
    - iTunes runs on both Windows and OS X

    iTunes interface now looks exactly the same in OS X Leopard as its Finder (File Explorer in Windows) !!! There are also common elements in the iPhone (Cover Flow), Safari (also available on Windows)

    Apple is slowly making people aware of their products and user experience and making it easy for people to switch as evident by the significant migration in the last few quarters, which seems to accelerate.

    With the iPhone, people are required to have iTunes which in fact exposes users to the Mac UI, subconsciously exposing them to the Mac !!! There won’t be any difference if you are on Windows or on a Mac from the user experience perspective.

    Wall Street still does not get this company and consistently dismisses it. There is a bigger plan at play here and will open more people’s eyes with time. Those who recognize this will benefit tremendously :) This is my 3rd year in Apple and there is plenty of growth left.


  242. Simply amazing, video worth watching, salt water can be used as fuel
    http://dabble.com/node/12427667


  243. BA 787 ready for paint
    http://seattlepi.nwsource.com/business/321458_dreamliner27ww.html

    Markets on shaky ground lately, read this on Reuters. Scary…this kind of talk needs to pass quickly…and the cause needs to pass faster but that’s the scary part, will it? Once a downturn begins in housing there is no turning back, it can take years to recover.

    CDOs trade infrequently and many investors feared that, if creditors sold CDOs seized from Bear, the market as a whole for those securities would decline. In the worst case scenario, corporate borrowing costs could increase, leveraged buyout activity could decrease and the stock market could fall.
    http://today.reuters.com/news/articleinvesting.aspx?type=etfNews&storyID=2007-06-26T225539Z_01_N26362666_RTRIDST_0_BEARSTEARNS-HEDGEFUND-WRAPUP-2.XML

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aptzWbDXOdR4&refer=home


  244. http://online.wsj.com/article/SB118289311361649057.html?mod=?mod=djemptech

    Same link for WSJ review of the iPhone, but note who reviewed from WSJ = Grossberg. Grossberg is highly regarded for his independent, educated reviews and his findings can literally make or break a product. APPL just cleared a major hurdle with this “positive” review from Grossberg.


  245. Whoda thunk BG has such a great sense of humoor
    http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+July+2007.htm

    Excerpt
    “Well prudence and rating agency standards change with the times, I suppose. What was chaste and AAA years ago may no longer be the case today. Our prim remembrance of Gidget going to Hawaii and hanging out with the beach boys seems to have been replaced in this case with an image of Heidi Fleiss setting up a floating brothel in Beverly Hills. AAA? You were wooed Mr. Moody’s and Mr. Poor’s by the makeup, those six-inch hooker heels, and a “tramp stamp.” Many of these good looking girls are not high-class assets worth 100 cents on the dollar. And sorry Ben, but derivatives are a two-edged sword. Yes, they diversify risk and direct it away from the banking system into the eventual hands of unknown buyers, but they multiply leverage like the Andromeda strain. When interest rates go up, the Petri dish turns from a benign experiment in financial engineering to a destructive virus because the cost of that leverage ultimately reduces the price of assets. Houses anyone?”


  246. You have to have a sense of humor or you start to cry! I’ve said before, once people start looking for problems they’ll find one under virtually every rock they turn over!


  247. iPhone on WSJ – You were right Phil, Mossberg did have the iPhone for last two weeks. Nice.


  248. Asia Markets : Wesdaydne, June 27, 2007

    Japan*

    17849.28
    -216.83
    -1.2%

    Hong Kong*

    21705.56
    -98.01
    -0.45%

    DJ Shanghai*

    420.27
    10.99
    2.69%

    S.Korea*

    1733.10
    -16.45
    -0.94%

    India

    14475.14
    -25.94
    -0.18%

    * at close
    Sources: Dow Jones, Reuters


  249. China Savings – Chinese Shift Bank Savings Into Frothy Stock Market

    http://tinyurl.com/2o8lvk
    SHANGHAI — The erosion of bank balances in China is creating a challenge for policy makers as the trend adds froth to the stock market without producing much fundamental benefit for the economy.

    China’s individual savers had a record $2.26 trillion in yuan squirreled away in bank accounts at the end of March. But household bank savings fell $21 billion in April and by $37 billion in May, according to data from the People’s Bank of China.