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Thirteen Thousand Three Hundred Thursday?

A nice open seems virtually guaranteed this morning and we should blow past my 13,250 target.

As long as we hold it I will be very happy and the Big Chart lists 13,300 as our "Comfort Zone" for the Dow, who had been our leader on this leg of the recovery but was leapfrogged by the Nasdaq, who shot right over 2,550 with a mighty 31-point jump, led by 3 of Cramer's 4 Horsemen; AAPL (+3.9%), AMZN (+1.3%), GOOG (+1.2%) with RIMM holding steady at a ridiculous post-split $81.81.

As Option Sage mentioned in his excellent post on the Horsemen last month: "The bargain of the group based on P/E multiples and projected EPS growth would seem to be Google.  Google trades at a multiple of 45 and a forward multiple of just 27 despite EPS growth projections of 30%."   That was July 24th and Sage predicted further pullback but we've been picking up Google calls as our 2nd favorite tech play (no points for guessing our favorite – too easy!).

There can be no real rally with Google below $525.  I won't get into all the reasons here, it's a whole article in itself, but 2008 gives us a Presidential election, the World Cup, Winter and Summer Olympics – it's the Superbowl of advertising, which is where Google derives the majority of their revenues and they have been firing on all cylinders lately so we can expect a string of record numbers going forward.  Also, I was fascinated last night by the World Clock (thanks to Windywheel), which shows an absolutely astounding minute by minute increase in Internet Access Points as they are added 15 times faster than people are being born!  In a single minute over 2.000 new web connections are formed and that bodes (or should I say "nodes") very well for the on-line marketplace.

[Toshihiko Fukui]I've been talking about how the CB's have stepped up to bail out the rich folks before they suffer the anguish of  a market pullback and the BOJ stepped up to the plate today and reversed their decision to hike rates at this meeting.  Japan's Governor (who's name you will never hear on TV or Radio) had previously stated that the bank was determined gradually to close the gap between Japan's extremely low interest rates and those of the rest of the world, which was unwinding the carry trade ahead of this meeting.  Now Mr. F says: "It may be too late if we wait until every piece fits into a jigsaw puzzle to conduct policy,"  He added that if expectations for an easy policy were prolonged, economic and financial activities could be over-stimulated, resulting in big swings in the economy.

Gee, do you think he means big swings like the Nikkei falling from 18,268 on July 13th to 15,273 on Friday and back to 16,316 today?

I have already warned that if our government pursues Asian-style Central Banking policies they will subject our markets to Asian-style market swings but they continue to exert pressure on the Fed and I can assure you, after listening to Chris Dodd's interpretation of his meeting with Paulson and Bernanke, that the government is CLEARLY playing with forces that they DO NOT understand! 

The Fed can not, MUST NOT lower rates.  There are two excellent articles on the subject; one by James Picerno relating to the meeting and on by Barry Ritholtz, who lists "5 Reasons the Fed Won't Cut Rates".  I strongly suggest reading those and it has the added benefit of letting me move on with the morning post..

So – Woo Hoo!  Party time in Asia (although not India, as forecast by Msquare yesterday!).

The Nikkei jumped 415 points as the BOJ held off a much anticipated rate increase and the Hang Seng amazingly added yet another 620 points, both indices finishing up at the 2.5% rule which indicates follow through tomorrow (hence my FXI roll).  The BSE took a mild 84-point dip but held our 14,100 comfort level so it's "party on" in the Far East wing of the planet.

Europe seems to be adopting a slightly more reserved attitude this morning, up a little over half a point but coming off their opening highs.  It is disturbing that the DAX was rejected near our comfort zone of 7,600.  As I said last night, both the CAC and the FTSE have a long way to go to regain our confidence and we have to be VERY concerned about a rejection of the DJ World Index at this level!  We'll make the call in intraday comments but I may want to take some more profits off the table and shore up our defenses if we don't get the follow through we need from the World's leading economy.

The ECB is NOT looking to forestall their planned rate increase on Sept 6th as they are still much more concerned about inflation than bailing out people who bought at the top – damn socialists!  In a statement, the central bank said "the position of the Governing Council of the ECB on its monetary policy stance was expressed by its President on 2 August 2007." At that time, ECB President Jean-Claude Trichet said the bank would exercise "strong vigilance" against inflation risks. The phrase is the bank's standard expression to indicate a rate rise in a month. 

So it's up to us to carry the torch.

ANF had good earnings but is getting a warm reception at best while HOTT had a miss and is getting the cold shoulder.

We would hate to see $70 oil and we would hate to see gold running up and the dollar falling today.  We want to see money going into stocks, not stuff…  Dow 13,250 is a critical hold while 13,300 will let us put a little more cash to work but not without confirming with AT LEAST 1,470 on the S&P, 2,550 on the Nasdaq, 490 on the SOX, 800 (and that's being generous) on the Russell and 9,400 on the NYSE.

If we cannot make these levels and if Europe starts to weaken then this party may be an early bust so let's be very careful out there!


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  1. ZUMZ in that brutal lose/lose range.

  2. RIMM options fixed on etrade

  3. Chem,

    I wouldnt get too worried yet, the shorts will push it up later

  4. ETrade cost me a lot when they screwed up the FIZZ options on their split – seems to be a pattern with them. It is an absolute disaster not to be able to trade options after a split and they just don’t seem to get that concept!

  5. I disagree with the fed not cutting rates. I think there’s a lot that’s being withheld from the market, and the market is geared for a cut.

    Side; look at tech this morning.

  6. Back into CFC for a quick ride down – at least; tight TS again!

  7. CFC puts that is!!

  8. Getting some ZUMZ puts.

  9. where is everybody

  10. NOV- 2 for 1 split
    GME- totally out
    VMW- quick $2 from yesterday.
    CFC- if you are in trouble you do what you need buy some relief

  11. ZUMZ-IV dropped to 50% this morning. Good to know for next plays.

  12. CFC – Just so you know, I am going to pull CFC down to fill the gap by sheer will power!

  13. holy shit jdsu

  14. Phil, how does RIMM put look?

  15. Thanks, mrn, appreciate it.

  16. BBD – so how will you trade the NOV 2-1 split? Still have over a month for it to happen? Thanks

    BTW – I sent you a note on the other post, so let’s meet up on Tues

  17. Phil, still bearish on SU?? Looking to buy some Oct puts, which ones would you recommend??

  18. dragon- when you post earnings strangles, you provide your recommended long/short weighting. What tool/process do you use to figure out the right weighting?

  19. RIMM put – very good I think, I sold the $80s to some nudnick for $7. ROFL – 10%!

    Nice willpower mrn!

    JDSU – I’m worried this is going to happen a lot. Irrational gains being pulled back quickly…

  20. JBL- remember I bought last Thursday at $98 with Feb 100′s so I am probably needing to move up.
    GRMN- out from buy at $90. Actually kind of crappy gain for $13 stock move as I bought Jan’s 95′s

  21. CVX and SU $85 puts are XXX up here.

    DD on my DIA $132 puts and adding back $130 puts at $1.75 as pre-roll. Just a little nervous looking at the internals..

  22. phil does a call on NOV seem wise?

  23. sahaida
    Phil hates NOV. LOL

  24. NOV – chart looks great, they’re splitting the stock on Sept 7th which has not been a winning move lately (if it was a good idea then Jobs would have done it).

    Oops, turning red on Nas and Russell…

    This is an energy sector rally – not a good way to recover. Whenever GM leads the Dow higher I tend to want to go the other way…

  25. Not a good market.

  26. I don’t hate NOV – I hate TSO! I despise XOM and CHK. I can’t stand BP but I’m giving new management a chance… See, fair AND balanced. 8-)

  27. Bill- I’ve always had a problem with NOV too, don’t watch it enough to get in rhythm. Then the premiums are just lovely!

  28. CROX-This double top on the chart is not looking good.

  29. Phil.. At what point does it make sense to buy out your caller early & possibly roll to the next month..

    Example.. SNDK sept 60s.. sold for 2.55 about a month ago.. now worth .50.. So about 80% gain so far, with a month to go..

    To me it seems that I’ve used up most of the time value already, and I’ll do better off rolling the caller to Oct’s now.. As the theta for oct is larger than for sept now.. -Peter

  30. dragon,

    are you still in zumz or are you all out??

  31. GOOG/AAPL/BXK (GOAX!) down…..Thurs-Fri critical for this rally

  32. NOV- Phil you have mellow since your trip. LOL. Optiondragon just leave it alone and let me make all the $$$$. LOL. Oh by the way you are back to oweing me a drink on ZUMZ.

  33. Darn Bill i owe you a drink.

    K1- Multitude of factors but the main ones are of course techincals, fundamentals, and more importantly sentiment to earnings and expectations. The stronger your bias the more levered direction you put on but if you think it is just going to be volatile do a 1:1.
    It also has to do with my future price projections based on the stock criteria of short interest and float and past gap techincals. I usually like to have some inkling of a bias so the gains will be larger with an educated high probability bet.

  34. Phil,

    Would you consider CCJ and UTX breaking and if so is it time to cover the UTX and CCJ LEAPS?

  35. ZUMZ all out short a dollar on yesterdays close on the 45 calls from a buy on Tuesday morning. Not bad but i felt it should have popped.
    If you are still holding the 50 calls I would still hold on unless it breaks below 46 and get out of the puts.

  36. bcsi

  37. Foto – with this much time to go absolutely take an 80% profit off the table. Your risk/reward is totally upside down as the most you can gain in 30 days is .50 vs. $2.05 at risk. I wouldn’t roll to October though, I’d just take him off the table and consider rolling myself down to a tighter contract – you may end up selling the $52.50s, now $3.10 or the $55s, now $1.83 for a much better return.

  38. Nadir,
    I got out of ZUMZ a couple of days ago, but I agree, will get squeezed later.

  39. Rolling, XXX, Buy out the Caller, 10%, euh, for a stock trader all this option stuff sounds like code :/.

  40. BCSI- running again after small pullback $$$
    SLB-moving in slowly
    VMW- moving in very very slowing on Oct 70′s

  41. CCJ/UTX – both are plays I think are at bottoms so I am not anxious to cover down here. Of the two, UTX makes me more nervous but $72.50 has been rock solid support and I can always sell the $70s on the way down and pick up more than the $1.15 currently being offered for the $75s so that’s my current attitude. At about $2 I would get interested in selling the $75s.

  42. Chem,

    Yeah, I got in ZUMZ early, and took some profits out. I’m playng with the houses money. I have short 50 puts (oct) against long sept 45′s. I sold puts to take advantage of the voltility crush, whick worked out. The stock is down 1.5 but my position is up 1. A short squeeze can only help me.

  43. Thanks for walking me through this with your insight.

  44. Can someone explain why some stocks have closer strikes only some of the time? For example, BWLD has strikes every $2.50 in Sep but only every $5 in Oct. Makes the roll hard to do for a credit.

  45. Phil I just read your comment on CCJ and UTX, and I’m not too sure on what you said. Sell the 70 put options, Buy the 75 calls?

  46. Crud, left my monitor for a cup of coffee and lost my downward pull on CFC – back to work!

  47. Late morning all. Had serious connection problems yesterday.

  48. hi phil,
    just read your morning post, very glad you liked the world clock. funny, but as soon as i saw it i thought to myself that this is something you would like.

  49. V bottom in BMY?…. Nah I don’t think so.

  50. phil – can’t trade anything new for sept any more (30 day rule with employer.. argh!) but am out of the sept 60s for an 20% of what I orig sold them for

    So my next options have to be oct or longer.. these are being sold against jan10 60s by the way..

    Either way, I’m up 2x on the short call what I’ve lost on the long one. I’ll take an 6% monthly return, on a losing stock, and be happy about it!

  51. CCJ – I said wait, it was a response to another question not an XXX pick!

    I know what you mean mrn, I think the fate of the market depends on me staying in this chair today…

    WB Ddday!

  52. slow day so far; will Angelo Mozillo crash or rally the markets with what he has to say at 11 ?

    I’m just about done … off to the Hamptons.

    GL all.

    BTW, AHR to issue SR. unsecured convertible notes and buy back $20 M in stock.

  53. AMD- anyone follow this one. Chart looks really weak

  54. K1, available strike prices has to do with the market makers and demand. since there’s more demand for the closest month, they will more often have tighter strikes.. if they did 2.5 strikes all the way out, the volume on each individual strike would be lower & spreads would likely be wider (not good for us)..

    if you look at bwld, they also have 2.50 strikes for dec.. aaah.. second reason. stock split.. they were 5$ increments, but the stock split in june.. as of june, the seps and decs were probably available.. since then, oct and mar’8 are new.. thus oct and mar don’t have the 2.50 increments.. -Peter

  55. the dude sitting behind Angelo should really turn on his screens :D

  56. I wanna go to the hamptons…. Hmmmm one of the disadvantages of being poor.

  57. Why does CFC feel the need to come on TV and give their spin? If things were fine, why the need to explain anything?

  58. ….
    hold on, he’s booting up now…..

    bet he loads up youtube now ;)

  59. Phil – please stay in the chair; things are going the right direction for me since you got back; I sent a catheter and a leg bag by expedited air!!!!! :) Sit boy; sit!!!!!!!!!!! :)

  60. I’m seeing action in the builder sector, that indicates pointless bargain hunting is driving the market…

    Good attitude on 6% Foto, same deal, you can always sell the lower Octobers if you have the margin for it or spend/bank your $2 profit to roll down to the ’10 $55s. The obvious logic here is that you are spending $2.30 to gain $5 in position and the next $2.20 you spend to roll down to the $50s puts you (currently) $3.82 in the money and wipes out any margin requirements (and gives you a higher delta to your caller so you have less chance of being burned in a big run).

    MCO getting crushed, kind of unfairly but there is a huge overhang as people (congresspeople that is) question their role in allowing this sub-prime mess to escalate by handing triple-A ratings to what turned out to be junk bonds. Still the Jan ’09 $60s are just $9.20 and you can sell 1/2 the Sept $45s for $4.10 ($2.20 premium) and 1/2 the $50s ($1.50 and $3 out of the money) for a nice first month return as I really doubt they will recover soon. XXX

    Bye bye oil patch – gas inventories weren’t very exciting and these guys have nothing to hang their hats on. If the NYMEX turns red, this could get nice and ugly. I’ve been waiting for an excuse to press my XOM ’09 $75 puts, now $2.15 back up and this is it! XXX

  61. Demetrius- Poor – I’m with you dude.

  62. Ask him why he’s not turning off his automatic stock sale program! If the stock is a buy, then buy it!

  63. MCO Phil you are right, except they can move / recover quicker. The stock was $51 on Friday and $57 about 10 days ago after earnings.

    All the congress stuff is noise. That said, no idea when it will rebound or why, only that its cheap at this point and they are buying back stock like crazy.

  64. Stopped out of DIA calls, will reset them if we turn back up but not likely I think. Will take profits off the table on uncovered short-term calls but not many of them left anyway.

    For fun I am shorting GS with the $175 puts, now $5.80 as a mo play with a stop at $5 ($1 trail) and also the FXI $133 puts, now $5, which were $19 on the 16th – kind of the reverse of the ones we came up on…

  65. Magic words “I don’t see a light here” “we have a long ways to go”. Not good for financials today.

  66. MRN – that’s good stuff!!!

  67. ROFL?? What does it stand for ?? Can someone explain?

  68. LTP – selling against uncovereds:

    SBUX $27.50s at .72
    TXN $32.50s for $1.98 as a mo play
    WFR $60s at $2
    M $30s at $2.30
    JNJ $60s at $2.30 as a mo play
    COF $65s for $3.80

  69. CFC CEO, says he cant see the housing bust NOT taking the US into a recession. This guy shoots from the hip, i have to believe him.

  70. Cman

    ROFL- Rolling on floor laughing

  71. ROFL – rolling on the floor laughing

  72. are those calls or puts phil?

  73. Phil,

    Your comment regarding pressing your XOM ’09 75 puts I don’t see that these are in the LTP. You have the ’08 75 puts. What are you thinking on this? Rolling from ’08 to ’09?

  74. LTP sells – more:

    GE $37.50s at $2 against half
    C $47.50s for $2.08
    CAT $75s at $3
    CHK $32.50s for $1.05

    Side note – SCI is on a tear. I have the Jan $7.50s but the Jan $12.50s are very attractive at .90 and the ’09 $10s for $2.95 are a great deal but it’s very thinly traded.

  75. ZUMZ – Sorry, little late here. Is anyone who went with Phil’s play closing? Or are we supposed to hold on?
    If (IF!) I can somehow finagle a price between the bid/asks, I’m looking at a 20% gain after commissions…

  76. O no, Pimco CEO Bill Gross coming on CNBC.

  77. Phil,

    The XOM 75 Puts 08 not 09, correct? Are you DD on them at 2.15. Yesterday, you didn’t expect them to drop below 80.

    I have the 08′s at a much higher cost, but have sold the 80′s against last month and this. Just curious if you are DD here.


  78. Phil,
    What RIMM puts did you sell for $7 ???

  79. Phil, let me make sure I’m following.. (SNDK…)

    A) I can take my 2$ and roll the jan’10s from 60s to 55s.. and sell against them..
    B) I can sell the oct 55′s (@3.5) and use that + the 2$ from the sep’s to roll my jan’10 from 60′s to 50′s, putting me in the money, and keeping my delta (73%) higher than the caller’s delta (50%)

    sounds like B is the better plan? (assuming a long term desire to be long sndk..) -Peter

  80. nevermind i get it, Long Term Portfolio against the covered, didn’t read it right… mo means momentum?

  81. Speaking of thinly traded – congrats to those of you who took the BSEGs at .075 (7/2). It hit .16 while I was away so of course I sold a bunch at .15! I’m still holding a ton but got rid of 100K.

    XOM – my bad, I thought they were ’09s – they used to be but I cashed those out…

    Thanks Mr. CFC! Put me back in the black on those puts…

    Calls or puts? Do you mean the LTP plays? They are Sept calls sold agains existing leaps.

  82. I feel like Homer Simpson – I’ve been over on the wed wrap up thread all morning, been wondering for the last hour wondering where everyone was. I must have Adult ADD or something.


  83. Phil,
    Are u still holding FAF or it is gone?

  84. kustomz
    I thought he said WOULD!
    VMW- another $2

  85. Phil,
    cool on the FXI puts!!!

  86. Phil,

    On XOM I have the Jan ’08 75 puts at 3.4 basis and sold the Sept 85′s at 3.4 basis. There is still about $1.5 in premium left in the Sept 85′s would you keep with these or sell and roll down to the Sept 80′s for $1.25?

  87. Greg, it has happened to me few times before. :-)

  88. ZUMZ – which play? The 4 Feb $50s at $3.40 vs the 3 Sept $45s at $1.85? How could that possibly be a problem with the Febs at $5 and the $45s at $3.25? I didn’t play it but I’d cover the extra $50 for $3.25 and let the premium ride out as the stock doesn’t look like it’s going anywhere. You have 4 sales to go and this stock continues to carry a huge premium.

    XOM – I still don’t expect them to go below $80, I will sell puts down there! It is very important to remember that it does not matter whether or not a stock ever hits your strike, just that it heads in your direction quickly enough to make someone else want to buy your contract for more money…

    RIMM calls were sold for $7, the $80s on split day. Has anyone notices that $80 is becomming a magic number – possible because of that Cramer idiocy about stocks at $80 going to $100 and $120.

    SNDK – yeah it’s a preference. At this exact moment I don’t think it looks very bouncy so I’d do the roll to $55 and sell the Oct but NOT roll down (I’ve got the cash, I can do it anytime and the $50s will only get cheaper). You don’t want to increase your delta when the stock is heading south.

  89. k1,

    Do you practice martial arts? I ask because of your name.

  90. I’m still pullin’ down on cfc and cvx but if someone doesn’t jump on the bottom of the candle here and help I’m going to let go!

  91. ZUMZ -Thanks again, Phil.

  92. I just sold my C LEAPS at a very small profit after watching it erode w/ the VIX for days. I don’t have the heart to ride it down even covered.

  93. UNP down big time--evidence off a slow down thesis.

  94. Nadir, no martial arts for me, I’m an endurance athlete. K1s are a type of (very fast, tippy) racing kayak.

  95. DRYS – down – $2.90 to $60.39

  96. Phil – does a recession threat offset the gold bugs argument or strengthen; or is it valid in stagflation?

  97. Greg – D’oh!

    FAF – no, that was a mo (momentum) play that died on the vine with a 20% loss. I’m also done with the LFGs, I’d take the puts but not for $3.55! This is another one you could sell the $55 puts and calls against for $8, a pretty reasonable risk against a 15% move by 9/18.

    XOM – I think they’ll finish around $82.50, which is not so great for you but it could go way down so maybe take 1/4 off the table or hedge with some J $72.50 puts which you can always sell $80 puts against if it ticks back up. I’d go with buying more puts since I know I get $1.60 premium at the end of the period either way.

    Damn shame about the markets…

  98. K1,

    Its also the name of a big martial arts tournament K1 Grand Prix. I practice Jiu Jitsu. I also own a kayak, and enjoy kayaking in the winter down here

  99. Bill

    Sounds confusing you had me reading over again. thats why not was emphasized..

    CFC CEO, says he cant see the housing bust NOT taking the US into a recession. This guy shoots from the hip, i have to believe him.

    Read it again, tried to write it as a quote word for word, he thinks the housing bust sends the US into recession.

  100. Well I just lost a long message since my net went down again. So anyone interested in the club email me at Include your real name and PSW ID so I have an idea who I’m talking to. Also put Club in the title line so I don’t erase it on accident. I’ll give you the low down on the goings on since there is a lot and I don’t want to jumble up Phils space. Jared is too busy doing what he does and has a new one coming soon so again…all interested parties email me so I can start a new list…that is all.

  101. Recession – depends what kind. Not a lot of inflation in a real recession, possible deflation, which absolutely terrifies bankers. Does anyone besides me think Mozillo is talking down his own stock (and the market) because he DID have a deal on the table and he wasn’t going to get it past the shareholders with the stock on the run? He’s old and may be looking for the exits…

  102. RIMM- easing down ever so gently

  103. Kustomz,
    I think he is probably correct, I am guessing you also think this?

  104. dday97, what is this club?

  105. Nadir- didn’t know about the tournament, I’ll have to check that out. You’re in S. Florida, right? Great place for paddling.

  106. Phil- by selling CHK 32.50s in the LTP, does that mean you’re done waiting around for a hurricane? I’ve been holding off selling against mine in case of a big storm…

  107. phil, figures, I jumped the gun and rolled down the leaps before I saw your message.. one of these days I’ll get both the strategy and timing right.. But for now, I’ll take it as a win that 2 months of premium bought me 10$ better strike in a good company 877 days from now :) Thanks for your help -Peter

  108. I think we’re definitely going into a recession- the question is how soon. These people who say “the consumer is not dead” are totally blind, in my opinion. It will happen eventually. A housing bust takes far longer to play out than anyone thinks- not at all like the tech bust.

  109. Demetrius

    The Investment Club idea that’ll more or less track Phils LTP.

  110. Nadir, I have studied Isshin Ryu karate (ni dan), but it has been about ten years.

  111. SYNA looking strong, maybe even breaking out? Anyone follow or like this one?

    fotoaddict – are you familiar with SYNA’s Foveon image sensor chip? Do you think it has real potential or is it a “Betamax”?


  112. optiondragon
    I follow UNP very closely since I work there. They just released their weekly data that shows year over year that business is flat and not down. Some highlights are Intermodal containers up 4%, Grain up 3%, coal up 5%, and chemicals up 1%. UP has been doing surprising well over the last couple of months. I just wish their stock would do better.

  113. tracking LTP —
    i will be quite satisfied with a 170% return.

  114. A bit off topic, but a useful pointer for newbies (of which I’m one). Take a couple of hours and read *everything* Sage has written that’s posted in the Education section. Then take an hour a day and go back through the archives to read Phil’s posts and the comments sections from the past 12 months or so. I’ve been doing this regularly, and there’s serious gold buried back there.

    Very entertaining are the discussions from last December about whether AAPL is a good buy at $80, and where RIMM might be going. But there are fantastic explanations of technique (like rolling options) and insight into Phil’s approach.

  115. Phil or anyone, thoughts on a new MRVL LT play going into earnings. I was naked on the Jan 09 $25s at $1 and just sold out at $1.30, as I’m thinking that strike might be a bit high, other plays?

  116. Bill..

    I think when a housing decline begins it does not come to an end quickly, it usually takes several years to reverse. The US government is hell bent on spending and our currency is worthless every where but here. Oil is expensive, food prices high fake jobs numbers inciting confidence and everyone lives on credit.

    I have sold off all my commercial property and my primary residence the last 3 years, i have lots of cash and I’m worried that i may have made a mistake trading my hard assets for worthless dollars.

    I was a manufacturer for 25 years (30+ for my family), that all came to an end with free trade, Phil and i differ on free trade. He comes from a services back ground, i come from a manufacturing back ground, i can tell you this, without a manufacturing infrastructure in this country its a bleak picture for our children and our future, we will have the most highly educated burger flippers on the planet. I am disgusted and talking about the subject makes me feel ill.

  117. CHK – as long as we keep our eyes open, we can take off the caller at the first sign of a strong wind but there’s no sense in not picking up a few dimes if they’re going down from here. I said to Z last month when we were talking about record net short positions on nat gas that sometimes everyone is short on something because it IS going down…

    Foto – nothing wrong with doing it now, if I wasn’t sitting here all day I’d have better things to do than time that trade!

    $60 oil and $2 gas can save us from a recession but that depends on the oil cartel (and I don’t mean OPEC).

    Speaking of Betamax – it seems like SNE’s blue-ray group is already falling apart!

  118. kustomz
    guys moping the floor in my hospitals starting salary is 16/hr.. isn’t that amazing!!!!

  119. Size123,

    Thats great, I love all martial arts. I study traditional Gracie Jiu Jitsu, and have trained under Grandmaster Helio Gracie himself!!! I have also sparred with the best, Royce Gracie and Diego Sanchez to name a couple.


    Yes, I live in so-fla, and live right on the water in one of the best paddling areas down here, called Oleta river park. Often times I have had dolphins come check me out when I’m on my kayak.

  120. MOT, i bought shares during the recent decline and today its bringing me some joy. Chart looks bullish i like it in a stable market up to 17.50. I think Ed Zander goes soon, but not the reason i chose to make the trade.

  121. Looking at UNP it looks like it is just regular ol profit taking Happy thought that we might have a slight down day today which will probably happen, but a ho-hum day.

  122. Those floors must be spotless!! High wages = high prices in most cases.

  123. greg, from what I’ve read/seen, the Foveon sensor could go the way of the carl zeiss lenses, and any other name brand sub component.. the consumer buys the whole package though, so it’ll depend a lot on who uses the chips, and how well.. Sigma’s a good start, but it won’t take off unless a canon/nikon/sony picks it up (or there are rumors to that effect).. -peter

  124. JP – I went in about the same on MRVL @$25 b/c of heavy v buying on that option. (Since then Phil shot holes in that reasoning and cast doubt on Jon Nj’s “heat seeker” model IMO.) I’m still in as it didn’t brk under $18 ON THAT SELLING WAVE and I think someone’s going to run it into earnings. I’m definitely out before close tho @ least at even!

  125. k1, I’m definately going to do that… Phil recommended that earlier, but I was doing okay with my limited experiance in options, though now it’s starting to look like code to me, so I’ll take a gander soon.

  126. fairly new to the board. just want to say, i’m getting married in a week, going on a honeymoon for two weeks and i was pretty nervous to leave any open positions, but sage’s post on vacation proofing has been incredibly helpful… hopefully i’m well hedged now. seriously, this place has been an incredible education.

  127. Anyone subscribe to Real Money? Can you pick and choose which writers you subscribe to, or you have to get everyone? Also, how much does it cost?

  128. It would be good for me to reread the posts too, I need a bit of perspective at the moment, I am too bearish and getting my butt kicked, just cannot get in the groove of this meatball market.

  129. rn
    next week!!! you still have a chance man or woman dont do it!!!!!

    JUST KIDDING!!! congrats may your honeymoon last a lifetime! All the best

  130. RN – you’re headed on your honeymoon and want to be worried if you’re hedged well enough?!?!?!? Warning: After 31 years of marriage I can tell you that your wife can tell when you are thinking of something other than her!!!!!!!!!!!!!! :)

  131. I subscribe to Realmoney. Its a straight shot, 34 bucks per month. Maybe cheaper annually?

  132. Thanks fotoaddict: I have held SYNA shares in the past due to hope that the Foveon chip would revolutionize digital photography, but sold when I realized it wasn’t getting any name brands interested.

    Phil/Happy – just a casual observation that volume patterns on the indexes seem to jump on any little price spike then fall off very quickly to what appears to be relatively low levels. Like buyers just itching to get back in. Does this work going the other way still or are most of the sellers already gone? Does this indicate anything of significance to you?


  133. LVS looks pretty strong

  134. Open positions when you are on your honeymoon? I’m not going there.

  135. CROX-Losing it.

  136. MRVL flying!

    170% – 50% is more normal.

    Thanks K1 – maybe someone(s) could put together a “best of” section while they’re back there.

    Holding 13,200 is not too bad. Let’s keep perspective with the Nas over 2,525 and the S&P over 1,450 we would have been thrilled to be here last week! Europe had a crap finish, giving up a full point of gains from open to close – as I said in the morning, it’s totally up to us to keep this party going but I remember from when Greenspan said it, it’s very hard to recover from the word Recession and I think Greenspan’s comments took a day to hit the fan, then there were 2 days of talking it to death. Hard to imagine everyone going long into the weekend with that concern hanging over their heads.

    I think the fear of a mortgage meltdown is somewhat overblown in that it is easy to avoid if the government steps in and commits $100Bn a year to restructure consumer debt but there will be so many idiots arguing how to admister it or if to do it that it will probably never get done. A crisis like this needs strong leadership and we sure don’t have that!

    MRVL – I suppose the Nov $20s at .62 make a possible bullish play but I don’t see anything I really like.

    CROX – on the whole, I’m glad I got out.

    Kustomz – I have to disagree with you. There is no way our burger flippers will be better educated than the average Asian or European with the state of our education system. 8-)

  137. mrn-
    MRVL- I am definitely with you on selling before the close. If they have a really good number you can always play it tomorrow. They just seem to disappoint a lot lately.

  138. RN – Cheers to you!

    I’ve been married 21 years and my wife (and kids) are definetely my most precious and valuable “assets”, with no “hedging” needed. I’d call her a “ten bagger” but I’m not sure she would understand that as high praise. ;-)


  139. What company makes “KEEN” sandals?

    This is a great product.

  140. GME flying!

    COST is falling victim to the Cramer + 2days rule. $60 puts for $1.15 are a good deal. XXX

  141. TIVO – I was going to buy one 6 months ago because the Comcast Motorola Box sucked so bad. But I waited because comcast promised they would fix the software on that box. Last week I finally got upgraded with the new software and it is embarrasing how bad it is, leading me back down the track of just buying a TIVO. Interestingly enough, comcast has been crediting me $13 per month for the last 6 months because they knew how bad their DVR software was. Yesterday when I called to get the details on compatibility with a real TIVO box, and complain how bad their box and sw is, they gave me another $85 credit for one month service. I swear they dole out these service credits like candy!

    Bottom line – I recommend taking a good look at TIVO stock because they really do have the best DVR solution, and they have good partnerships in place (dish network, amazon) to keep them from going bankrupt, and perhaps even being a buyout candidate if we ever get through the credit crunch. Plus if all of comcasts customers are as disappointed as me in the new comcast software, they will probably be selling a lot more TIVO boxes shortly. The risk of course is a recession could force many people to cut out the luxuries in life, or that the cable customers could wake up and produce some good dvr software of their own. (NOT LIKELY!)

    Disclaimer: Yes, I already own some TIVO stock, but not much. I mainly like to buy the dips and sell the highs repeatedly, and hang on to a few shares for the long haul.

  142. 30-Y bond future testing yesterday’s highs before we’ve tested yesterday’s lows on the S&P future. Could get pretty dicey after lunch, imo.

  143. The market doesn’t seem to feel an early fall run-up is imminent if you can get DIA 140′s for 0.15 and 141′s for 0.05

  144. Phil, and other Experts.
    Your meaning on BHP pls.

  145. thanks to all for the congrats. I had a feeling when I posted that open positions or hedged, it was going to come back at me. LOL.

    Not to turn this in to a travel board, but it seems like everyone here does travel a lot and have good suggestions. We’ve rented a house in Provence for a 2 weeks, near Gordes, by the Luberon, anyone have any recomendations?

  146. So if DIA is at 131.89 currently, the nickel/dime spread for the calls and puts shows up at 141 and 109 respectively.

    In order to break even on the calls the market (as in DIA) would have to run 6.9% but you’d need a 17.4% drop to go ITM with the puts.

    The betting seems to be against the house right now.

  147. rn--

    Your American? Then stay away from France :-)

  148. Phil, I actually have put together a “best of psw” notebook (on google notebook no less) … was going to ask what your thoughts on making it public would be once I finished it.. technically they’re mostly your words, so you’d have to bless any publication.. let me know.. -Peter

  149. Touche Phil

  150. Members-I am learning we really do have a lot of different ages on this board. Kind of cool

  151. Congrats RN! Glad we could help, make sure you test your thesis by noting what happens with 50 point swings – I used to print my portfolio and write down the time and Dow, SPX and Nas levels whenever the dow moved 50 points so I could see how my stuff reacted within the ranges. That gives you a pretty good picture on what’s really volatile.

    Size – don’t feel bad, I was bullish yesterday and bearish today. I’m not flip flopping, I’m in cash and following the markets. I don’t recommend a commitment to either side at the moment. If I had to make a single, long-term play for the year’s end, I’d short the Dow but I’m very glad I don’t have to make that decision and I’d rather take the electrodes to the privates than commit to any direction over the next 2 weeks!

    Volume price spikes – or it may be sharp traders selling into whatever excitement they can as they try to wriggle out of positions. I said the other day that we can expect to get in a channel between 13,000 (hopefully) and 13,250 so this is no surprise to me. The VIX doesn’t like this sell-off and is rearing it’s head back above 23.50 (no help to my 30 caller) but it’s less enthusiastic than one would expect on a 60-point drop. The worst sign we will get is when the VIX lays down while the market goes down as that will finally indicate that down is the path of least resistance.

    10-bagger – I doubt you’d even have a chance to explain what you meant! 8-)

  152. Anyone get filled @ 1.15 on cost puts? I have a hard time getting your fills – Phil.

  153. Seattle
    If or when we do go into recession i think most will stay home and watch TV, so it may be a benefit, in your case at least. ;)

  154. BBD-

    I bet that I am one of the youngest on this blog (27). That’s why I’m here because the knowledge that can be gained you can never learn in a book but from experience from others.

  155. Gordes-I am going to answer this one, as I am from Provence. Beautiful place, you are going to love it. I don’t think this is the place for this, but please feel free to contact me in private at if you have any questions about the area. If anyone here is interested as well, I own a villa in St-Tropez that I rent during the summer months.

  156. ZUMZ-Testing LOD.

  157. Yeow Phil, the electrodes to the privates visual kind of put things in perspective, a real knee-clencher.

  158. Phil, was this the goal having 2 messages boards with the paid site for Happy? It is alot more time consuming to keep up with both of them. Your thoughts?

  159. MEDX- they opened the NOV 30 calls today
    Listening to the most recent presentation listen to his words at around 7mins and on.
    Listen to the Nasdaq 19th IPHF on June 19th 2007.

    Late this year, I expect Nov data with the words “possible BLA late this year”, you need a little bit of time with the BLA and only after the data is shown or publicized. Big news and a stream of catalyst and milestone payments.

  160. I may be one of the oldest (53). I’m here because after all these years of being Phil’s caller, I realized I didn’t have a clue.

  161. The Big study that finished Phase II late last year early this year has 500 patients and is monotherapy in melanoma.

  162. Phil-the 10 bagger joke might have been your best yet. Really enjoyed it

  163. Denver, I’m 58 and every bit as clueless, just hope I can learn.

  164. COST $60 puts — no one got them @ 1.15 except the guy who bought 5 at 7:23. but there were some market orders put in @ 1.30.

  165. That patient population is good enough to push for approval from the FDA even in Phase II. Thee data will be top line with a p value.

  166. RN – one more on the “10 bagger wife:” If she doesn’t like that have her read the short story Johny Lingo’s Ten Cow Wife. She’ll well up with tears and maul you (like a stock getting squeezed in consolidation, though, you don’t know which way it will go – hoist you up or tear you down)!

  167. AAPL-50MA good support so far.

  168. TIVO – if you watch TV and you don’t have a Tivo, you are really missing something! It is very hard to explain how much this thing changes the way you interact with your telivision but it’s just one of those things that works so well that you can’t live without it. For me, the simple fact that I can watch a 1/2 hour show in 20 minutes or a whole football game in less than an hour (the clock ticks during more than 30 mins of inaction) makes this one of the most valuable items I have ever purchased. The ROI on this thing is about 1 year of my life plus it increases my satisfaction with television 1,000%. When we are away from home, my kids and I have no desire to watch Tivo-less TVs – it’s like being forced to use a Commadore 64 after running XP on a dual Pentium.

    Tivo is not a luxury, it’s a necessity but the stock is a serial underperformer and now SNE is putting DVR features into the PS3. It will probably suck compared to TIVO but people just don’t get the difference and TIVO suffers from all attacks (like TASR used to). Apple is the biggest threat if they ever get ITV tuned up properly but I like TIVO as a buy and hold. This ($6) is a fair entry and earnings are tonight but they are losing money, and will continue to lose money for another year at least so there’s no urgency and the options pay terribly which is why I don’t bother.

    BHP – I wouldn’t go there. I could kick myself on RTP as there’s a post-it right on my monitor that says “Short RTP!” that I wrote last night when they popped…

    Foto – sounds cool, drop me a note through admin and we’ll talk about it.

    Members ages – Oh and thanks for bringing up the curve BBD! 8-)

  169. rn — you lucky lucky trader! :) I was there for a belated honeymoon in June …..

    I’m assuming you’re renting a car. The best time I had in the Luberon was relaxing at the house poolside deciding what to cook for dinner, but touristy stuff:

    Pont du Gard
    Palais des Papes (fascinating! – and have lunch inside the walled city of Avignon)
    take an overnight trip to Nice and/or Monaco (couple hours drive)
    wineries galore – no Mondavi garbage either!

    Menerbes seemed to be the quietest and least tourist-traveled for a quiet cup of coffee while soaking in a territorial view of the Luberon’s ‘terra.’ The best lunch (their biggest meal) we had was in Bonnieux (sorry forgot the restaurant name…)

    We didn’t do the biking thing but if you’re into that it seemed to be unprecedented. If you go running watch the crazy drivers (no shoulders) and wild boar (not kidding).

    I could go on and on … enjoy!

  170. Sun SUNW changing name to JAVA says”that’s what everyone knows us as” Phil could this wake up Sun-Java?

  171. COST – no one is selling them so far but it’s coming up a bit now so we might get lucky (or unlucky if it keeps climbing!). I just mentioned the other day that I’d rather let them go than pay an extra nickel and this is one of them.

    2 message boards – we intend to work that out with the site redesign, coming in Sept.

  172. My portfolio is up $20 today :) , $ 20 more and I can buy half a tank of gas.

  173. TIVO-Used to have one, now I have the DVR that comes with Dishnetwork. Dish is much better, because it is perfectly integrated to my TV schedule. I don’t see much of a future for TIVO as everybody is doing it now.

  174. Beautiful country rn, hope you have a great time. I took a motorcycle trip through there a few years ago, awesome.

  175. CFC tanking!

    I’m 27. Was laid off from Prudential when they closed their equity research, sales, and trading business. Enjoying the great severance package right now-- but given my view of recession down the road, I’m starting to send out resumes now. On the other hand, when I hear of the returns like OptionDragon was talking about yesterday ($20k into $500k in a year) my eyes light up and temporarily forget about analyst jobs.

  176. if anyone cares to provide some TA on MA I would appreciate it.

  177. lol half tank. It’s okay, atleast you don’t run 104 octane….

  178. Dragon,

    What about a MRVL strangle for tonight? $17.50 calls and $20 puts? IV is not outrageous, could be a good play.

  179. Here we go CFC. Once we fill the gap I’ve fulfilled my promise and I’m may not be pulling down anymore! If it doesn’t run through I take my profits and run. Too many idiots in the market right now (like me)!

  180. Totally agree with Phil on TIVO and its stock. Held some TIVO stock in 2004 and 2005. I wouldn’t buy it now.

    Just couple of weeks back my tivo crashed after 4.5 years and it was a miserable 10 days for me. Got a replacement, some guy was selling a new one for 30 bucks on craigslist :-)


    Another good sign that a peak is in, when they announce an ETF for that sector/commodity. First it was GLD late 2005 and early 2006. This year it was Blackstone, and this iShares FTSE NAREIT Mortgage REITs Index Fund (REM). Just check the chart of REM, it was 50 around june 1st and on 08/15 went as low as 25. Thats 50% down in 2.5 months. Too bad this damn thing is not optionable.

  181. Yeah! we need a profiles section Phil.

    it would be interesting to see how old people say they are and occupations and the like.

  182. Dragon,

    MEDX – you adjusted your trade the other day on this – what is it now? Thanks

  183. foto- If you’ll share your Google notebook with me, I’ll add in the gems I’ve found that you might have missed. Then if Phil wants to make it available it’ll all be in one place.

  184. RN – If you are the romantic type and you want to score hot points you can arrange a trip to the Fragonard perfume factory, which is in a very nice village (Eze, I think) and you get a tour and she can make her own perfume working with one of their “master perfumers.”

    Another cool thing we did in France was a wine tour at Chateau Neuf Du Pape (heaven for me, one of my favorites) and we also had a great time doing somethign caller Eagles in Beaucaire, which is a bird show in a castle but totally cool for a day trip. XXX 8-)

    SUNW/JAVA – no, but it might trick some caffine addicts into buying. I should sue them as I own the URL, which I took for a cybercafe chain I’ve been planning!

  185. if CFC closes lower today after this BOA B.S. then look out below

  186. Did you guys see this Iphone youtube? Here’s the link.


  187. MRVL-In fact IV is on the lower range of historical values, and lower than last month’s average. Not much downside here.

  188. lol start a Phil’s facebook group.

  189. k1, may be we could just add this under the education tab?

  190. Phil-remember I am your age!!!!!!!!
    VMW-trade #3 for $2. Is anyone else playing this?

  191. HPQ moving on up

  192. MA – too wed to consumer spending to take a chance on. BAC deal means don’t bet against them either but it’s not like people don’t already have a MC and that BAC will help them discover this amazing new brand. I was actually hoping for more of an irrational run to short into but it doesn’t look like they’ll break $150.

    IBM decided to move today???

    K1/Foto – I’d like to make it a project, maybe a wiki. I’m not good with that kind of stuff but as long as we can keep it to the members I would be all for it. Jared can make space on the server if needed and I’m sure someone here knows a good format for compiling a group “guidebook” of some sort.

    HPQ taking off too – I’m investigating!

  193. Seems HPQ is celebrating Dells problems and there is good business spending news on servers.

  194. iphone youtube video — 35,000 text messages a month! are you kidding me?!

  195. BillBigD – are you playing VMW with stock or options?

  196. Any sign of a move up and the market sells it off..

  197. TS out of CVX puts for 15%. How does the saying go? “If you eat like a bird and leave droppings like an elephant…” O well, let’s see that for 4 hours x 6 x 365 for an annualized yield and I’ll catch up w/ dragon?!?!

  198. What an a**hole this guy is.

    Gross said the Fed could spur demand by cutting rates sharply — by 2 or 3 percentage points …

  199. Phil HPQ has been out since yest, maybe its beginning to sink in.

  200. yopauly and everyone – right there with you (27). Is the support line at 27 or can anyone break that? :)

    Also not to start a travel blog here, but if anyone has any advice for Italy (going there with the Wifey the first week in May) it would be much appreciated: Never been, I assume I should hit the majors (Venice, Florence, Rome)… but restaurants, places to stay, and any other advice would be wonderful if you have it.

    I’m proud to say since I started here about 1.5 months ago and using only 50% of my acct balance I’ve had 100% return on invested capital so far. I TRULY would not have succeeded without the wonderful advice and commentary everyone has contributed to on PSW. Thank you all.

  201. KC- I am playing the stock for the trading but I have been slowly and I mean slowly buying Oct 70′s. Just watch the stock for a day or so and see how it swings. This reminds me of ICE last summer and it was WONDERFUL.

  202. Phil- I’ll add in my collection of “Best Of” links in whatever format and whatever location you decide. Happy to coordinate foto’s content as well, or add mine into his (Peter, right?) material. The topics I saw that were solid gold were several posts on rolling options, and several posts on mattress plays. And of course Sage’s writing on vacation-proofing and saving trades. Fabulous.

    BTW, even though I’ve gone overboard hedging my port (woo hoo, I can protect against a downturn) I’m totally stoked by what I’m learning here. Yesterday’s exchanges by dragon and Phil about being successful got me just *amped* up.

  203. By the end of this year WCI stock will be worthless paper. Any put you buy on these guys is free money.

  204. BBD – do you trade NUE? It looks like it is a pretty good entry point. Thanks

  205. Sorry BBD – I thought you were older.

    IPhone Girl – Good for her! Just one of the little ways the web will change the world, 1Bn kids realizing they have the power to change things…

    Someone is buying TIVO since we started discussing it. Someone from some paper called me yesterday and said I caused the spike in LFG! I guess I have to be careful what I say on the free site…

    SU recovering but still far off the morning spike. Oil not doing well into the close but someone buying SU thinks the fix is in. VLO group is confirming something is up so be careful if you are short oil (short-term that is).

    ADM exploding today – lots of strange action going on in pockets.

  206. bill gross on bloomberg tv next hour.

  207. Isn’t Avignon and this area of France supposedly where the Popes resided for some time and the Knights Templar flourished? Then when the king of France began to persecute them they hid their treasures and relics to protect them? Isn’t that what the Da Vinci Code was about (didn’t read it)?

    Interesting stuff. Optrader, might you be a desendant of a Knight Templar?


  208. k1, foto,
    I’ve been keeping an education related journal from relevant intra-day comments as well. Would be happy to throw my pieces into the pot.

  209. Thaks Phil. That’s a great idea. I’ll definitely print my protfolio and work off it that way. Most are paper trades right now, some implemented, as I’m still learning and getting the hang of it. Diving in when I get back.

    We do have a car. And I’m most excited to sit by the pool, cook and drink. We’ll definitely be visiting Chateau nuef du Pape, and thanks for the other ideas, they all look great.

  210. If someone can afford to buy millions of dollars worth of shares, then they can afford to be a member.

  211. Phil, I am good with “that kinda stuff”.. I’ll play with the wikimedia code (the one behind wikipedia), and see if I can get something that works..

    k1 – send me an e-mail (peter.drier@gmail) and i’ll add you to the notebook for now.. the wiki idea is a better one longer term though..

  212. NILE – If recession is in the offing, then why is this stock up +$2.35? Am I reading it wrong, Phil ?

  213. Go for it MRVL!!!

  214. I have a feeling this little rally is going to get crushed.

  215. biodeisel- Icahn’s $22 bid for WCI is the reason I think less of his investment saavy than I used to. I saw him explain his logic… that you’re supposed to buy when things look worst. That was about $14 per share ago.

  216. HPQ not bad for 5 minutes of work.. MOT saving the day if MOT can hold positive this market gains another 100 points into the close. Back to my gallon of baileys ice cream.

    Heres BG from Pimco

  217. Optrader- you posted a strangle for MRVL. Are you pulling the trigger on that?

  218. Since the volume is low, I doubt if we go down today or tomorrow.

  219. optrader, I saw that too but I am not inclined to play every earnings because sometime you can play after make as much money with greater certainty.

  220. Gross is saying just what I said, the Fed COULD do that but it won’t help. The only thing that can save the economy is direct government intervention which, as I said, requires strong leadership so we are doomed!

    Cool Mark – nothing beats a free vacation. FXI paid for mine… I loved the town of Liriche and you can’t miss the Trevi fountain in Rome, I know it seems minor but it’s magnificent. We ate in a great restaurant right across the street from the collosseum, I think it was called Gladiators – fanatstic lunch with the walls towering above you.. We got a rail pass and the trains were great for getting around but you really have to speak Italian or be an experienced traveler because few Italians speak good English (comparatively) and it was hard for us to get good directions. If we weren’t on a timetable, I wouldn’t have cared but we had to get back to the ship so it was tough.

    Pompeii was also something you shouldn’t miss and I had one of the best pizzas I ever had in my life at a little outdoor place between the train station and the entrance (last one on the right).

    Meanwhile, nice comeback in the markets! BS though it may be if we hold levels through the weekend we may have something but they have to take 13,250!

  221. MRVL is pretty nice value earnings play though.

  222. looks like COST has a chance to get filled. anyone get filled yet?

  223. JPL- Own Nov 25 and Jan 20, 22.50, 25 calls planning to buy the Jan 12.50 puts but waiting to see the trend. If it goes higher I want to buy the Jan 15, 17.50 puts.

  224. PHIL- I was at UMASS the same years you were.
    JBL- I was surprised NUE was getting smoked, as I thought I heard steel pricing was going up today.

  225. MRVL-Yes, I think I am going to do the strangle. Small position.

  226. MRVL-Might do a bullish Strangle though, as I think they did well, especially on Apple products.

  227. Phil
    I have 40 contract of SPY MAR. 148 call. I would like to sell sep. call against them. What strike price would be the safest. Thanks.

  228. HNZ making a run for it ahead of tomorrows earnings

  229. Nile – because you just can’t talk guys like RN out of getting married! Nile should do well in a downturn because people are MORE likely to turn to them in tight times as the big issue they have to fight is trust. If price becomes the bigger factor then the trust barrier gets lower (I was an advertising major).

    It’s an energy-led rally, stopped me out of GS too..

  230. chemistry
    If there arent enough shorts to squeeze on extraordinary market moving news than you may be right.

    BG says the government needs to set up a fund that could bail out the idiots that over payed for their homes… this is like the plains of Africa where some idiot tries to save a gazelle that’s in danger of being eaten by a lion…your changing the game…not good. What is it with all these old rich fogies they started this problem they certainly cant fix it. From bad to worse….im selling my entire portfolio!!

    No offence to all that are old and rich :)

  231. Thanks Phil… going down on my “what the hell am I going to do there” list. I’m going to cram a lot into 6 nights, but really want to “stop and smell the roses” too. I’m young… can go back and see more the next time! ;-)

  232. speaking of Ages,

    Erin is 31

  233. BillBigD – steel going down:
    VMW – there is quite a bit of swing; was thinking of Sep75s but that’s probably too much of a stretch. Will watch for a day or so as suggested. Thanks.

  234. Optrader- MRVL strangle…more calls than puts? Any particular ratio in mind?

  235. SPY – I don’t do “safest” but I would sell the $146s for $3.85, if the S&P breaks out to 1,500 you give the guy his money back – big deal! If it really takes off you can roll yourself up to 2x $155s and roll your caller so you have little upside worries…

  236. KC- I guess I hadn’t had my MONSTER YET so I heard it wrong. Also I was saying watch the stock in moves more than the options.

  237. K1, MRVL. I have not have had time to look at numbers yet, but yes, more calls than puts.

  238. Well my “overweight” puts are only up half as much as my long holdings are down today. Maybe I am not as overweight as I thought.


  239. Anyone following MSTR?


  240. PCLN alert!

  241. Phil, thank you.

  242. PHIL
    Phil would you consider buying MU common?

    I’m young… can go back and see more the next time!
    Leave complacency to the old, never settle for less today for no one knows what tomorrow brings.
    Ok im done going to leave the elderly alone…for now

  243. MRVL-I looked at the numbers and I like 13 calls for each 10 puts.

  244. PCLN killing me (I sold on Tues).

    I think the action represents a bit of a detente developing between bargain hunters and sellers but I still get the impression that there are plenty of sellers, they just haven’t given up and lowered their asks yet. It would take one tiny incident to drop us 500 points and I still think the SEC investigation into banks is going to find one that’s hiding something nasty on their books…

  245. MRVL lost my nerve when spiked down w/ q’s so went out @ 18.2. More birdfeed.

  246. Nile – Interesting insight. Speaking of advertising, I owned a copy of David Ogilvy’s fine book (not his autobiography) which was used as a text for communications majors. I lent it to somebody and they never gave it back to me. I tried locating it many time without success. An excellent book and Mr.Ogilvy’s writings are a great delight to read. As student of physics and mathematics, I always found other fields far more interesting :-)

  247. Travel – I never like to spend more than 3 days in a city the first time I go (one day for towns) as it leaves so much do do when I come back. I find a week sometimes makes it less fun on the return as you’ve “done” a lot of things already.

    MU – Down here, for sure. I’d also at least sell the Oct $12s for .47.

    Somebody hit the trigger on a sell program – this is a sweeping sell-off. Should have stuck to my guns on GS!

  248. Cramer just gave the go ahead to short all the home builders if the fed does not cut the interest rate. At least thats what i heard.

  249. I still read advertising age. You get a great insight as to what companies are planning by following the discussions about (and timing of) their upcoming ad campaigns. Sometimes you know about product way before they are officially announced.

  250. phil, how do you avoid being TOO SHORT the market when you are fully sold against all of your leaps in the LTP? seems like though theta is in your favor, you can get burned with delta/gamma

  251. You must have a great time management scheme, Phil, but lately I have not done barely any decent reading. LOL.

  252. Optrader

    If you have a moment, could you explain how to calculate the ratio on the MRVL strangle? Is it just a preference to be more long than short?

    Thanks much

  253. Airlines very likely to give back half their gains if oil crooks can retake $70. CAL $30 puts are $1

    Poor ZUMZ!

    CCJ keeping the V alive with a 10% drop and a 5% recovery to end up about even.

    Have to take WYNN $110 puts for $2.55 as a fun play, they were just there on Friday.. XXX

  254. kustomz – duly noted sir, and thank you. I’ve realized the past few years that sometimes I come back from vacation feeling like I need another vacation just to regroup… I’ve found in past travels that slowing down and really focusing on something… a noise, building, smell, whatever it is gives me a better memory than something I saw going 30 kmh on a tour bus. I will get up early and go to bed late every day, but I will try my hardest to be in the moment.

    My generation is in an odd spot. I was working 80+ hrs/ week killing myself for sometime before I realized that life is rather enjoyable to LIVE in. And I have a lot of friends my age who are starting to enjoy slowing down too.

    I know the kids now entering college this fall have had instant knowledge via computers / cell phones / IM since they were probably 8, and that’s crazy to me. I remember getting my first cell phone in high school and can’t imagine a time w/out my Blackberry now. Just think how those kids feel having one since they could remember! There is no more delayed gratification… no more waiting for that girl to call you at home after school… she’ll just send you a text message every 5 seconds during cheer practice!

  255. Phil,

    You should travel to where I’m from Kashmir, India. Make sure you bring a Bullet Proof Vest.

  256. Phil- the investools thing again, knowing what price an option had last week. I read on the web that it costs $2k to sign up, is that true? Anybody else know of a service that provides historical options pricing?

  257. AAPL trying to be an afternoon delight.


  258. Zinger, I just use TOS (The analyze Tab), doing different scenarios, to see what looks like a good risk/reward ratio to me. I am feeling a little bit more bullish on it for earnings. This is the way I do it, but I am sure Dragon has another method.

  259. Too short – well this morning I had DIA calls but I dumped those as we looked so pathetic before but that’s pretty much my solution to all imbalances – use the indexes to make a mo play by using my imbalances as a cushion, kind of the best of both world’s if you get it right. It’s important to realize that this is an ACTIVE management strategy that shifts with the markets. Yesterday I was bullish, today I’m bearish and I don’t predict tomorrow because there is too much nonsense going on. If I were not around to watch things, I would have to adopt a much more conservative mix – like I had when I went away…

    Time management – I read fast and Tina always drives. I read in restaurants, I read in bed, I read in the pool… I’m pretty much a nightmare to live with! 8-)

    TRMP returns from the dead! Oct $7.50s for .73 XXX

  260. I’ve pulled piddly profits on small trades both directions today but I feel like a kid again – running back and forth across a busy street to pick up loose change. The risk isn’t worth the return. I think I’ll go home and tell my wife she’s a ten bagger!

  261. I remember having a party line (if your under 50 you won’t even remember what that is) when I was a kid and my parents wouldn’t make a long distance phone call unless someone died.


  262. Caught a triple on GME today, I’m going to let some ride for the Halo 3 release

  263. MRVL-Bought the puts, will buy the calls before EOD.

  264. Mark “a noise, building, smell, whatever it is gives me a better memory than something I saw going 30 kmh on a tour bus”
    YES YES and YES smell is the best link to memory and my favorite

    Sometimes it takes someone to point out the obvious and you did that for me. Had enough of the market, going to the park for a run and some scenery good luck to all on the rest of the trading day. Thanks Mark.

  265. Iteresting Fact:

    Mellissa Francis was the little girl on “Little House on the Prarie”

  266. Waiting for the girl to call – as long as it’s not the chick who sends 30,000 text messages! Holy cow, I can’t imagine going through High School with a cell phone. We didn’t even have answering machines so you were only available when you felt like it. Kids growing up today don’t even have the concept of being out of touch. In high school my friend and I traveled Europe for a whole summer and called my mom about 5 times and no one else. Now I find my 7-year old in the closet talking to her friends on the phone – I don’t know if she can even imagine wanting to get away like that…

    Kashmir – next time Zepplin does a concert I’m there!

    I took a course years ago, I doubt I paid $2K, and I think I pay $600 a year for the service but they have live options grids with history and nice charts so I’m pretty happy with them.

  267. LOL, Phil. I have to learn to delegate driving to my wife. :-)

  268. LOL

  269. Optrader- Thanks for the advice on MRVL, I bought a strangle as well. Any reason you took the puts first, esp. as you’re bullish?

  270. Ramana – I’m certain you wife would be happy to drive if you could turn that time into the kind of money Phil does. ;-) Phil ought to just hire a driver, and put the whole family to work doing research!


  271. hey guys how can you do a strangle on mrvl? what is the put and call needed to strangle it?

  272. KHaaaan- GME,nice trade I sold to early today for sure. Melissa nice fun fact
    NOV-holding tough

  273. Out of ZUMZ, fortunately never got filled on calls I had to buy to get to the 4/3.. and ended up with an even ratio, so made about 30% on the iv crunch…

  274. MRVL: What about buying the Oct 17.50s and selling the Sept 17.50s against 1/2 your position?

  275. GOOG coming back – all is well!

    Crazy markets…

  276. Phil, fotoaddict, k1, et al:

    I sent Jared an e-mail to let him know that if you guys need any copyediting help with your “best of” collection project, I’d be willing to help out. I can be reached at – thanks!

  277. very good synopsis of current debt/liquidty issues. Worth your tine:

  278. draz: help always appreciated. I’ll send you an email to loop you in to our fun ‘n games.

  279. MRVL-Took the puts first because it looked toppy on the 15 min. So if it kept dropping I would buy the calls lower and if it bounced I would buy the calls on a breakout, which is an easy point. Just trying to improve my odds here.

  280. Bill aka William

  281. Phil – any options on TRMP worth a throw with more time?

  282. Optrader- thanks for the play by play. I don’t have those mad skills yet, so I simply scraped a dime off the purchase price for each leg.

    sahaida- Optrader identified an earnings strangle at 1:33 today. Further discussion about ratios followed, but the guts of it are buy 17.50c, 20p. Weighted lightly toward the calls (1.3:1 on contracts, not dollars) for upside.

  283. CFC – I think the part where he refuses to say they can avoid bankruptcy made people a little nervous!

    Whee – now we go down again!

  284. TRMP Phil I think your calls are starting to put buying pressure on your options. Stock dropped .06 & your option went up .15 and VIX went down! What gives?

  285. when doing a strangle in want the higher strike price out of the mony call and lower strike price out of the money puts? then i add up how much i paid for each call and put and add or subtract that from the stock price to find out my break even price????

  286. kustomz

  287. Out of CFC for a cool 40% gain.. thanks MRN

  288. Little House on the Prairie:

    I believe that was either Melissa Gilbert or Gilbert O’Sullivan.

  289. so the stock has to move about $3.35 to break even?

  290. kustomz – no worries! It took a car accident a few years back for me to slow down and decide the marry the girl I’d been living with for 4 years (best trade I’ve EVER made). You’re right when you say life’s too short… so slow down to enjoy it!

    Have any of you heard about / read this article? We use dark pools at work, but I didn’t know they were using / thinking about using it in options…

  291. Does anyone here use the MACD “line” and “signal” as indicators of possible trend changes using intraday charts?

    I am looking at a QQQQ 60 min chart for the month and each time the “line” has crossed down through the “signal” it has reliably indicated a down move, especially when the RSI was at overbought levels as now.

    Am I understanding this correctly or am I reading too much into it?

    Any help understanding this indicator would be appreciated. After session is fine.


  292. Hey guys, if anyone has the ability to back test a simple options spread strategy (and would like to help me), can you please contact me at

    I’ve been trading a spread strategy on the the Russell 2000 since the end of Feb. and I’m up 40% ytd. I’d like to back test it.

    Thanks in advance, Lawrence

  293. Alright folks, gotta run.. I’m photographing a wedding in Maine this weekend.. Thunderstorms predicted.. joyous.. Thanks all for your help over the past month.. my LTP is up about 10% for the month, and that’s with the restriction that I must hold things for 30 days.. So given this past month, that’s a win.. Cheers -Peter

  294. JP you pulled a little more than I did – I chickened when a whole number like 22 is enough to hold up a dog!

  295. TRMP – not really, just playing the rumor mill. He’s the DNDN of the casino biz but I do think there’s value to his properties although I wouldn’t want to assume his debt for $215M (the cap). The options only run out to April and the premium is pretty stiff but you can own the stock at $6.93 and sell the Oct $7.50s for .78, a nice return and you can stop out at $6.25 and take your lumps on the Octs if it starts to fall apart but I think it will hold.

    Very good video on Donald and the one after it is very funny…

  296. MRVL-Bought the calls. I was lucky, this is a cheap Strangle now.

  297. sorry i dont want to be a fly in the soup here but i wanst around when you guys set up the strangle. for learning purposes am i correct (roughly) about the breakeven point with mrvl?

  298. Sahaida, break even points on the Strangle are $16.30 and $17.80 (at least on mine…). That’s with the 17.50′s and the 20′s.

  299. damn thats a nice strangle

  300. TRMP – sometimes that happens, it would be nice if people wouldn’t bid them up but you can’t stop everyone all the time. Unlike Cramer, I don’t just throw up my hands and say tough luck, that’s why I always give prices. It is NOT ok to just buy at whatever price because we may just be taking .90 on a contract we bought for .75 10 mins ago. I don’t know what that annualizes to but it’s pretty good!

    Gilbert O’Sullivan – D’oh, now you got me thinking of that video again! Now you all suffer:

    Good job Pete! Maine weather doesn’t last long but I think it would be cool to take some epic “wedding in a storm” photos…

  301. Good play optrader! I would have followed you but I was in a bad play and am now glad I got out at 15.2. Those red bars going into closing make me fearful someone knows something I don’t. Hope you make a killing and I wake up envious!

  302. Greg- you’ve probably been here before, so forgive me for assuming you haven’t, but this site has great explanaitions on TA (pros/cons, uses, etc).

  303. Thanks, Nadir. Whoda thunkit? That’s three Melissas on that show.
    Melissa Gilbert, Melissa Sue Anderson, and Melissa Francis. How
    about that?

  304. Thanks Mark

  305. Implode-O-Meter has moved on to hedge funds

  306. Well that was fun to go nowhere. But, first day I’ve ever had playing both long and short where every trade made something – t00 bad the something is so piddly.

  307. Phil,

    The Gil & Sull piece was awesome, “Baby got Back” I don’t know how you nail these funnies so fast while beating the market in and out! Genius!

  308. Dow settled at 0.00% change

  309. Been out on break most of the day

    I’ve gotten 25 interest responses for the club. I hate to say it, but unless we get more interest it probably won’t be worthwhile. I’ll give it another day or two and see if we get more.

  310. Club

    dday – do we contact you regarding the club? Any idea on cost, structure, etc?


  311. Piddly is a lifestyle in a flat market. I’ve been talking to Tim Sykes as he asked me to review his upcoming book (American Hedge Fund) and it’s a great read about how he started out taking those “piddly” profits but kept his head and let them grow. It doesn’t seem like much if you take $500 here and there on a $25K portfolio but after a while it’s $50K and you can scale up the same little trades to make $1,000 and then you have $100K and those little trades pay $2K and then you have $200K and the little ticks put $4K in your pocket every day.

    It’s not hitting the trades that’s a problem for most people, it’s the discipline to take it off the table and wait for the next opportunity while people around you are screaming about doubles and triples. I would rather make 20% 6 out of 10 times and stop out with a 20% loss 4 times for (assuming 5% commitments) a gain of 2% per week than take wild shots swinging for the fences, trying to get a double… If once in a while one of my trades keeps going – who am I to stop it?

  312. any thoughts on MRVL and how the strangle will work out?

  313. Just getting the list together. I know some people sent them to Jared prior but since he’s busy doing the redesign and other things, I need them sent to me, I know it’s a pain but that’s the story. If we have enough interest I’ll email everyone on the list the Partnership Agreement and By-Laws. That way each person can read it over themselves and see if it’s for them or not. If those documents don’t answer your questions, I’ll also answer questions about it but I’d rather do it for the whole group than answer everything individually. I can tell you that the minimum will be 5 grand and max of 25 grand total investment. And to be clear, this will follow Phils LTP strategy. I won’t personnally have any stake or gain by this, this is all for you guys/gals. The structure will be that of any Investment Club with officers, accounts, voting, etc.

  314. Piddly- now you’re talking. It was the defining moment for me on PSW, when I realized that I could scrape $500 here and there on my $25k portfolio (in an IRA, no less, so no tax consequences). Haven’t been able to do it every day yet, but am happy to be doing it regularly.

  315. MRVL

    All I know is that I have the naked 2009 25 calls.

  316. Zinger, it won’t probably be a home run. Stock is pretty much unchanged AH. Let’s see what happens tomorrow after CC. Business looks strong. In any case, I don’t see much of an IV crush happening tomorrow, so we should be ahead anyway (if you got some good entry points).

  317. dday97: Thanks a million for all your work on pulling this together!

    I’m the volunteer treasurer on the BOD of a tiny little nonprofit and it is a hell of a lot of work, and I took over after someone else already set everything up.

    Really appreciate all your efforts.

    Cheers to you!

  318. Thanks Greg

    Yea, it’s a lot of work. And since I may be going to Colorado for a couple of weeks and then possibly Ottawa for a few months I want to get this started with officers in place so I don’t have to do this from Canada. That way the 4 officers can spread the workload.

  319. dday97 – can I get your email to contact you. I definitly want to partcipate as the LTP is exactly where I want to be right now.

    Seconding Greg .. thanks for your time and effort. Volunteering always takes twice the time anticipated and you get 1/2 the thanks sometimes.

    Much appreciated,

  320. Optrader

    Thanks for your insight. I executed my trades after I read your post about buying the puts first. I guess you know which side I bought first!! LOL good luck to all the stranglers!!

  321. MRVL

    Lets see what the cc says, than we’ll have a better idea on where we stand.


    The email I set up for this is

  322. Question for Optionshouse users — does Optionshouse provide a time and sales window and real time charting?

  323. My thanks too dday.

  324. size123

    As long as we get the interest it will all be worth it. I’d hate to think all this was done for nothing…I guess we’ll see.

  325. Optrader

    when setting up your strangle, do you normally leg in or initiate both sides same time? I saw where you indicated low IV on MRVL, does this give you the 1.3/1 bullish bias?

  326. thanks Greg

  327. Who Do You Want Giving You The Call?
    DealBreaker Readers Help CNBC Pick Which CNBC Lady Moves The Midday Market

  328. Jeddah, I usually leg in. Please see previous posts about ratio, it would be too long to get into everything but basically I use TOS and do different scenarios to see which one has the better risk/return (looking at greeks, potential profit/loss etc..).

  329. I sent you an email earlier. But want to throw my thanks in too.

  330. dday

    I’m interested in the club, not sure how to contact you..

  331. bmb

    Greg’s email:
    The email I set up for this is

    this looks really nice in my Risk Graph!! Very anxious to see how it plays out tomorrow. What led you to MRVL in the first place? Sorry if you already posted the answer to this. I searched but did not see anything. I have a pretty nice scanning tool and would like to set up a scan for potential strangle plays.
    Thanks -Brian

  332. bmb

    I misposted .. not Greg’s email, dday’s.

  333. jeddah- Can’t speak for Optrader’s wiley ways, but I know he brought it up due to low IV hence less danger of getting crushed. Maybe there’s a screen for IV?

    What tool do you use to run the risk graph?

  334. Phil – Thanks for the encouragement on “piddly” profits. I am trying to exercise discipline by taking less risk and settling for a more reasonable profit by entering a TS as early as possible. Last year I racked up losses by watching good profits turn into losses. This site, the education, coaching, advice, watching the good traders here, is turning it around. Thanks to all!!!

  335. k1 – I knew IV and also earnings, was wondering if there were any other criterion.

    I’m using my $34 special excel options calc I bought from

    Doesn’t do real-time, but incredible work of Excel programming. Nice graphing and what-if with probabilites.

  336. MRVL-Yes, the strangle looked really good and this is why I picked it. Unfortunately, we have the worst case scenario here with the stock unchanged, or it would have been a great play.
    k1 is right, I looked at IV. is a great site for historical value of volatility for stocks and options.
    The great thing about Strangle/Straddles is that if you pick them well you can have 6-7 losses in a row and just one big win will make it for those losses.

  337. an interesting site on strangle –
    The historical data on move after earning / expiration is pretty nice

  338. nice site Stephane. thanks!

  339. Optrader,

    When you look at a strangle like MRVL and where it seems to be heading ($16.25, -$1.60AH as I type), how do you think about exiting a wilted strangle. There’s lots of conversation here about getting in and exiting a big jumper but I haven’t seen much discussion on exiting something like MRVL (or ZUMZ this morning) when it stays between the strikes.

    How are you thinking about this if it stays in the flat zone ? Thanks.

  340. Anybody here subscribes to Najarian’s HeatSeaker/ Changewave ?

  341. Jeddah,

    Yeah, I use that one too. It’s amazing software. I couldn’t beleive how good it is for that price. I use it daily.

  342. MRVL missed – I wish I’d have not only sold my longs in the closing move but bought puts! I’d sure like to hear how the strangle turns out.

  343. jeddah62/ Lawrence,

    What do you mean by “Doesn’t do real-time” ?
    What quotes does it use? 20 minutes delayed? or yesterday’s quotes?
    Does it show current implied volatility?

  344. Thanks Optrader. I’m going to paper trade strangles for a while to get a “feel”.

    rd2.0 – yes, it uses yahoo quotes as a datasource so 20-min delayed. you can modify to another source, but never messed with it. yes, shows current and Historic IV.

    Lawrence – agree, quite a steal and I use it daily too. I learned a ton just from the calculator about options as I’ve only been serious for the last 8 months. I set up all my spreads using the calc and I was blown away at how resiliant they were in this downturn. There have been a few instances where my breakeven points didn’t match reality, but I think it had a lot with IV implosion lately. I’ve still got a ton of learning to do.

    His “links” page has some nice links to various useful sites.

  345. seriously..last 2 days of gain wiped for me + 60% of my principle, as i DD on mrvl call. Another rookie mistake..

  346. KeyserSoze, I just looked at my strangle, and at $16.25 I will probably be making some profit, even if the strangle was bullish. Anyway, if it opens like this (but who knows), I will probably sell some puts during the first 10-15 min (Always sell into the initial excitement), maybe 1/3 or 1/2 of position. Hope this helps.

  347. MRVL- I bought 30 $20 Puts at $2.20 and 39 $17.50 calls at $1.05.

    Worth case scenario, with no premium, at $16.25, the puts will be worth $3.75, the calls worthless. $3.75 is more than $2.20+$1.35 ($1.05+30%).
    Not going to make a fortune on this, but there should be some profit in there, even with no premium, which is not bad for a strangle that was bullish at the beginning.

  348. Optrader,
    That does help. Thanks. At 16.25, I’m right on the edge of getting out even including commissions. I ended up with a slightly more bullish ratio so I don’t think there’ll be any profit at the end of this rainbow but I’ll have funds to fight another day and that’s worth a lot.

    I guess part of the strategy for handling these situations is to leg out of the profitable side in increments and let the worthless side ride on the potential that things may reverse at some point before expiration.

    Thanks a bunch for the extra explanations.

  349. Nadir,
    spend a week in kashmir, in srinagar and amaranath and jammu for a week
    without a bullet proof vest,,, LOL

  350. Coolkid,

    You’ve been to Kashmir? I’m from Srinagar. How did you wind up there?

  351. Oprtrader,
    The more I looked at your numbers, the less they made sense…until I realized that I did a different strangle. I was running in & out during the day and must have missed that you were going with higher price puts and lower price calls, effectively buying a just ITM position. I did lower price puts and higher price calls, both one bracket OTM.

    As best I can tell, the breakeven points on the two positions are about the same. The main difference seems to be the amount of capital tied up and the leverage I’ve got if and when the position goes ITM.

    When you have time, could you comment on what led you to buying the ITM calls/puts versus the OTMs ? I’m trying to understand how to use straddles more effectively (I paper traded the PCLN straddle :-( and did the BCSI straddle with real money :-) ) so your rationale would be very valuable. Thanks.

  352. wonder if the index’s are just in a holding pattern now to see if the fund rate will be cut ?

  353. That sux, what a site that would have been
    Long Island Utility Scrapping Plans for $700 Million Ocean Wind Park
    It is the second offshore wind project to be scrapped in recent months. A developer in South Texas called off construction of about 170 turbines there after determining it no longer made economic sense to proceed. That developer said building an offshore farm would have been more than double the cost of one on land

    Dell consumer notebook delay may last into October-November

    Seagate Technology LLC reportedly plans to add solid-state drives based on flash memory chips to its lineup of storage products.,136317-c,harddrives/article.html

  354. HELLO