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Which Way Wednesday? Fed Edition!

OK – we did a very extensive virtual portfolio review and I'm miles behind so this will be super quick:

I AM SO GLAD WE HAVE A DOW STRANGLE!

Who know what the heck is going to happen today?  The GDP came in better than expected, the ADP jobs report looked strong, oil is calming down and the pre-markets are popping (but still not back to yesterday's open).

I wrote a couple of very long comments this morning under yesterday's post and I strongly advise people read it as they discuss rolling in detail as well as overall strategy,  I always say I will turn them into articles but I never do so thank goodness for K1's project where we will hopefully salvage some of these!

The Fed absolutely should NOT cut rates today, the economy grew at 3.9% EVEN THOUGH housing was collapsing.  All a rate cut will do is stoke inflation and IT IS THEIR MANDATE TO FIGHT INFLATION, NOT LINE SPECULATOR'S PROFITS!  A rate cut is still considered "in the bag" on the futures market as the governors are under enormous political pressure to deliver a good market into next week's elections.

All I can say about today is that I took my naked positions off the table yesterday and moved closer to cash.  I'm sure we'll find something fun to play tomorrow…

 

 

 

 


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  1. GOOG barely above 700 pre-market… MA FLYING!!

    WYNN down 10 pre, LVS down 8…


  2. via 247wallst..

    AKAM cut to Hold at Deutsche Bank.
    BEC cut to Sector Perform at RBC.
    BMS cut to Hold at Deutsche bank.
    CF cut to Neutral at B of A.
    EL cut to SELL at UBS.
    ENR raised to Peer Perform at Bear Stearns.
    GFIG started as Outperform at Bear Stearns.
    GPCB cut to Sell at Deutsche Bank.
    LCAV cut to Neutral at Oppenheimer.
    LDK cut to Mkt perform at Piper Jaffray.
    LNET cut to Peer Perform at Bear Stearns.
    LNG started as Outperform at RBC.
    LVS cut to Equal Weight at Lehman.
    MCK raised to Buy at Citigroup.
    NVAS raised to Buy at Oppenheimer.
    PACR cut to Neutral at JPMorgan.
    Q downgraded at both JPMorgan and CIBC.
    RBA raised to Outperform at RBC.
    SFLY cut to Hold at Jefferies.
    SPWR raised to Outperform at RBC.
    TAM raised to Buy at Citigroup.
    TEVA raised to Outperform at FBR.
    VTAL cut to Sector Perform at CIBC.


  3. GRMN – Down $10 pre market…yucks


  4. good luck to all today. May GOOG hit $1000 and AAPL hit $200 :)


  5. Mutual Fund Year-End Window Dressing Meets FOMC Date (MSFT, CSCO, GOOG, AAPL, RIMM, VMW, EMC, KO, YUM, MCD, BIDU, CROX, DELL, SCI, GS, STT, NYX, TXT)

    http://www.247wallst.com/2007/10/mutual-fund-yea.html

    Old Window Dressing names still likely on the list:

    * Cisco Systems (CSCO), Google (GOOG), Apple (AAPL), Research in Motion (RIMM), VMware (VMW), Baidu.com (BIDU), & Crox (CROX).

    New likely candidates for Window dressing, even though some of these should have been mentioned last time around and were left off:

    * Microsoft (MSFT), EMC (EMC), Dell (DELL), Coca-Cola (KO), Yum! Brands (YUM), McDonald’s (MCD)….
    * Intuitive Surgical (ISRG) should have made the list before, but you know it’s one of the year-end windows dressing beneficiaries.
    * Goldman Sachs (GS) or State Street (STT) would be in the few financials after recent woes, and it’s possible that NYSE Euronext (NYX) would make the list after being added to the S&P 500 Index and after a monster run.
    * Textron (TXT)would likely qualify as well.
    * Service Corp. (SCI) has had a great quarter, but it’s year has been the best in any memory at all.

    Likely booted off the list:

    * Oddly enough, a true chartist might say that the oil and gas stocks that were a definite winner of window dressing in the calendar Q3 would not be in the windows dressing names. Those go-to names would be the likes of ExxonMobil (XOM), Schlumberger (SLB), and National Oilwell Varco (NOV). Goldman Sachs oil call is adding pressure to the list today, although it is hard to imagine even if oil saw another multi-day pullback that there would be a major panic selling in the stocks (although, that axe may have a very broad swing in both directions after the monster move we’ve witnessed there). There sure appears to be a sector rotation out of energy and into tech.

    * Amazon.com (AMZN) may also be off the list since it pulled back on earnings, and if energy is pulling back then it’s likely that First Solar (FSLR) would be off the old list since it is alternative energy and leveraged to oil prices in theory.


  6. SIRF – up 19% !!!


  7. SIRF!!!!!!!!!!!!!!!!


  8. Jayhawk-I love the morning updates on downgrades and window dressing. Thanks for posting them!


  9. Very quite this morning, everyone must be checking out the portfolios. I hope that was worthwhile for you guys but I figure it’s better than going over every position one by one when everyone needs to position ahead of the fed.

    I’m not buying this rally right now, I’m just not seeing the overall strength and the SOX are already failing.

    DRYS is making a huge comeback but it was a Cramer pump last night. He told his viewers to DD so I’m not putting too much stock in it (but I sold $130 puts against my remianing positions). If they can’t take out $115 with authority, they’ve got big problems.

    POT is moving down, I like the $115 puts as a mo play, XXX


  10. Sorry that was $3


  11. Phil,

    I have the NEM March 50′s that I took off the cover yesterday at $3.3. What would you cover with now after earnings?


  12. Who needs Moral Victories? GOOG 700 pays all bets.


  13. NEM yehaw!!!!!!!!


  14. $10/25KP – Took out LVS $135 caller at $5.50 (couldn’t turn that down). Will sell $130 calls later, hoping for a nice bounce. WYNN puts are cashed out.


  15. Ok, going back to bed. That is what you do when you are sitting in all cash and it is still before 7am. But here is something I wrote last night:

    I thought this was it. I am all covered. All cash. Even sold gold. I just put everything I own into the Almighty Buck. Time to buck up, buddies. The dollar’s bottom is walking right down main street, and you can see its crack. It is ugly. So, time to batten down the hatches, and get ready for some major volatility. It is time for the leading stocks to show their worth under heavy selling.

    I am only focusing on my daytrading accounts. I definitely think I panic sold today. But, I try to respect the panic and I will wait until I know what my allocations should be before putting anything back to work.

    And since my trading is getting better, I am putting all my focus into that. Besides, I was just about 98% AAPL & GOOG anyways, and needed to diversify. AAPL has one up move left. Then it rests. Who knows with GOOG. That could surprise to the upside big time.

    Sorry, got distracted playing with my new leopard. The dock dances like crazy. I think this is like a hardware upgrade, too. Can’t belief how fast my computer is now. Silly.

    Yeah, I gotta buy some AAPL back. Love them. I really feel bad for people who don’t have one. My plan is to buy one for all my brothers and sisters because I can now do VNC through iChat easy. It’s nothing new, but its rarely simple. I need a tiny iMac. A communications device with a touch screen. It is so close I can almost taste it. The age of ubiquitous video is upon us. And oh, the fruits that it will bear.

    Remember any jump from here will be super precarious, but a drop from here is for real. As I look at the charts, I don’t like the weekly MACDs. But, I also don’t think the fed will be the next major catalyst. I think it will be political. People need to start campaigning. “We’ve got ad dollars that are going to be worthless next year. Spend! Spend!”

    I think the fed lays low for a bit and lets other people take the blame for a while. Got a lot to do this week, kind of like a vacation week for me. Good luck everyone. Don’t take the markets up too high without me.


  16. Phil:

    You are incredible ! ! !
    Thank you. Thank you. Thank you.


  17. NEM – woo hoo on this move! No, they have a long way to go up and that makes all gold a BUYBUYBUY as my premise is intact and they are just minting money at this point (in retrospect, isn’t that kind of obvious?).

    I’m back in them with the Jan $50s, now $2.80 and I’ll sell the Nov $50s or whatever when and if it turns. XXX


  18. Phil – quick quesiton from last night, wanted to see if you have traded these. I can day trade emini’s and other futures for my personal account (just not equities or single stock futures… compliance :( )

    Have you ever traded options on index futures? If so, what’s your take on their liquidity, execution, etc…

    I figured you probably haven’t b/c why trade the options on index futures when you can just play the etf’s, but since it’s my only avenue to day trade I wanted to know your two cents. And anyone else who might have some knowledge please expound on it!

    Thanks!


  19. PS, I would play this as the third up move for GOOG. And a good time to short when it funs out of steam in the next hour. But, remember, I suck at puts.


  20. What’s up, er down, w/ IBM????


  21. Finally found ya’s

    Phil on YHOO China :grin: :Grin:


  22. I like the GOLD Jun $40s at $4.35, we can sell the current $40s for about a buck or more later.


  23. XLF very spunky this a.m.= 1% rate cut :?: lol


  24. SLB slippery!!


  25. Holy crapola my .13/shr Healthsonix just doubled! Yeah whoooo just made $390+ lol


  26. NEM outa NOV’S big time. Buying Jan. on retrace


  27. Phil,
    im in with you on the bwld spread from yesterday. ugly. at this point, it there anything to do other than just liquidate the whole thing, take our lumps and move on?


  28. phil
    with the dow strangle, how do you think you’ll be adjusting it once the fed announcement is made? at the last announcement, traffic was so heavy my site froze for a bit. i’m not in it yet in part because of this concern, and wondering if i should enter it still?
    thanks very much!


  29. Eminis – if they traded on the same screens I might play with them but I could never get into them. I have an aversion to futures contracts, having had a few bad experiences 20 years ago. I’m sure that would be irrelevant now but I’ve just never had the time to sit down and play with these (and for me, playing with new systems is very expensive as I like to learn by doing!).

    SPWR – took profits on that too early but I had CY and it seemed redundant. Oh yeah, and FSLR..

    Holy crap! Chicago PMI report was 49.7 – that’s contraction!!! First time since February (when we crashed): http://www.econstats.com/rt_chi_pmi.htm

    Construction spending up .3% but August was revised to down .2% from positive so these numbers are total BS.


  30. LVS

    You said you took out the 135 caller, does that mean you bought it back for $5.50? Also, you said you’d be selling the 130 calls later. Wouldn’t a nice bounce put you in a negative position on this?


  31. Phil – Interpret stuff after “Holy Crap” for us dummies. Mean market #’s are the doo-doo or those numbers. Looking up or down?


  32. Phil-QQQQ’s, i’m not liking the chart at all. Time for a non day trade short position?


  33. Out of SIRF.
    Great ride!


  34. Parchesia think you might be right on those Q’s


  35. MA-shouldn’t have sold Nov’s. LOL Have Dec
    SPWR
    Nice buy by me at $87 day after earnings.


  36. RAIL – I guess there’s the answer to my question from a few days ago (he said as he sits on the sideline and watches the train leave!!!) :(


  37. Williams %R just turned up on the Q’s


  38. SA went other way from gold; when it runs it goes hard. Any trade?


  39. CCJ looking strong considering somewhat lower than expected guidance for next quarter on uranium prices


  40. Boeing Buddy BEAV is breaking ATH.

    GOOG $703! DELL cranking.

    You are very welcome Albo!

    BWLD – I feel bad, I never took it because it was so weak looking into the close but let me know what you have and we’ll see if we can fix it.

    Dow strangle turns into a mattress play whichever direction we go. Right now the best new buy is the $138 puts at $2.10 and the $138 calls at $2.29. When it starts moving, you want to have a .25 stop on both ends and then, once you are naked with, let’s say 100 shares, you should buy 50 more shares of whatever the next $1.75-$2 contract is. At that point you put a .15 stop the $138s (which should be well ahead) and an even stop on your new position. If it keeps going, you take 50 of the next level and 50 and 50 and so on. Your top level should always have very tight stops and then you can raise stops on lower levels up to .25 as you keep going but this strategy guarantees you WILL lose that last position (thats why we go 100,50,50,25). As a rule of thumb, I will usually expect to be done when the Dow has gone 200 points in a day and I look to get out while I’m getting paid for the mo.

    LVS – yes, bought caler back for $5.50, rolling my calls down to $135s for $2.20 and selling Nov $135s or $130s probably soon if they can’t break $135. WYNN is bouncing back so let’s watch them.

    YHOO is looking weak so make sure you are fully covered on them (set stops on 1/2).

    Holy cow am I glad I got out of those WYNN puts! ALWAYS sell into the initial excitement!!!


  41. KC- Look at PCLN


  42. Karmcon-I’m going to phase in some QQQQ 55 puts to at least hedge my portfolio and add/dump depending on the Fed.


  43. PCLN – I’d sort of forgotten how much this stock swings up and down. Waiting to sell (high IV) calls before earnings next week.
    MICC – going nuts too, wish I didn’t have my caller though. LOL


  44. Phil.. The NFLX combo from a month ago:

    long jan 22.5s, short Nov 20s, Net credit +.40. Current value -1.9.. Thoughts on improving the position (w/ stupid 30 day rule), or close it out? -Peter


  45. looks like it could be a good time to enter those also….having trouble reading my chart today, lines on top of each other and not giving me any clues right now…


  46. PHIL,
    I sold both legs of my LVS spread. Did not how to play it for a good gain. Later I saw your LVS trade to take out the caller only. Could I get back in it again? What spread. TY


  47. Worst case the 55′s are easy to roll and easy to DD.


  48. Phil – options on index futures. Thanks for the reply… it’s kind of crazy, and won’t have the account open for a month +, but going to try it out (once I do a lot more research). Bloomberg can follow the the options just like SPY options, so it seems “easy” enough… with a 15 minute delay… :)


  49. Phil, do you still recommend the BOOM 50 puts for the 25KP? Also, I wld like to thank you for all ur hard work on publishing the portfolios. Although I have not been able to make all ur moves in the 25KP, it did increase my port by 50%, so thank you again.


  50. Took a big loss on SLB. Bah. Live to fight another day though.


  51. CCJ – it’s not the guidance so much as the LONG term outlook. You are thinking like an option trader but long-term trends are for massive nuke plants being built so this is a fantastic retirement stock until they invent fusion. People are getting into this stock with decade-long timeframes, that’s why it’s one of the best ones in the market to buy leaps and sell calls on.

    PMI – that is the Midwestern guage of factory “health” and should be taken very seriously as it includes Detroit. Any number below 50 means that manufacturing activity is “contracting”, simply heading in a downward direction. If you look at that link, you’ll see how rarely that happens and, if you compare it to a Dow chart, you’ll see it’s a pretty fair corellation to market corrections.

    QQQQ – I have not been moved to kill my puts yet. $54.50 is my give up point, otherwise I’ll be rolling to the $53 puts. Markets are looking stronger now.

    SA – not my favorite. I like ABX, GOLD, AUY, HMY, NEM (I LOVE NEM right now!) and my non-option favorites are MRB and NAK (who I just sold because they are a longer term play and I’d rather have the money for HMY after earnings).

    Oil flying as supplies down yet again. Down 3.9M barrels (expected flat). Gasoline built 1.3M (draw expected), distillates up 800K (draw expected) and capacity was down 1% to 86.2% (means they’re not making product yet it’s building up). This is such a crock but let them rally it and we’ll short later.

    SLB $100 calls as a mo play at $1.50, stop at $1.25 looking for $2+ XXX


  52. Wow even gerald Ford is up today….starting the party too early? or, is the word already out?


  53. Phil or anybody else

    Does anybody have an opinion on FTK?


  54. Renovation time!

    Dumped the rest of my CSCO 32.50′s at 1.35, cost was .85.

    Got out of HMY at .10, from a .09 cost basis. Didnt have a good feeling.

    Got out of my TSO puts at 2.30 from a cost of 1.90.

    Got out of the FWLT’s at 5, from a cost of 4.57.

    Entered GOOG 670 Puts at 6.00 for fun.


  55. Oh, and entered POT 115′s at 2.70.


  56. SLW – time to test my hypothesis SLW up & reporting. Bet SLWBF 7.87 jumps nicely this pm or in a.m!


  57. phil,
    don’t worry about bwld, it’s a very small position for me, and I was mostly just wondering if you had any rules of thumb for when a spread opens up so far out of the money. I’m taking out the bearish legs and hoping for a bounce with a stop on the rest of it.


  58. Oil tankers are showing some life


  59. Go RIO, down days like yesterday always a good buying day.

    MR….gonna take off AMC jus watch


  60. MrN,

    my little chart I use says you are very correct with SLW right now


  61. CHK – Phil, I think you sold your position already, but I’d sold 40s against my Jan37.5s and with continued strength, thinking I should at least buyback 1/2 before earnings, hopefully on another dip.


  62. Morning, X is doing pretty well today.


  63. Phil, did you get a chance to revisit IMCL last night? Any change in your original line of thinking? I think that they present at a mtg next week. Thanks.


  64. I’ll tell ya DNDN could go to 7 and those NOV 7.5 P’s would still go down in value!


  65. Phil,
    What’s your stop on the POT 115 puts?


  66. CCJ – Phil, what would you consider an entry point for CCJ 10′s LEAPs? I know $40 was the entry, but missed it.

    tnx – Brian


  67. Wow Cramer’s flock is buying DRYS like crazy but it doesn’t seem to occur to them that the stock is flat becuase other people are selling it like crazy…

    NFLX – ow, that is so painful if you never rolled up. Hopefully you learned something (like stick with more stable plays under your restrictions)… Since you can only make one move maybe you want to spend $1 to roll him to 2x the Dec $25s at $2.40 (and it’s $1.40 now but you should go for $1 and hope to pick it up on a dip). You can put yourself in position for that now buy taking a round of Mar $27.50s, which is what you’ll roll the Jan’s in to cover (will cost .75 on the DD but you gain a month overall).

    It tightens up your spread, puts him 1/2 out of the money, buys you a month and cuts your spread in half (same margin though because you are doubling). Sure beats giving him $1.90!

    LVS – I’d stay out. You missed the lows and, don’t forget, I have no faith in them, we’re looking to make money off the caller on the volatility crush, nothing more. Since we beat our first caler out of $10 and we’re in for $16 after the roll, selling the current $135s for $7 gives us a better than free ride. Entering from scratch is just gambling and this thing is way too volatile but I will look for something on it AFTER the Fed.


  68. DRYS – Any new entry point on this ? And a general question, Phil (looks like I missed your comments associated with the DRYS puts position), do you see shipping to be affected long term despite all the talk about global growth?


  69. ramana-a new entry point on DRYS long or short?


  70. Somebody slap me sold my USO calls monday for a sweet 48% gain
    figured we were due for a pullback and I’d get back in

    The pullback lasted one friggin day! gimme a break!

    Guess when it comes to these oil scumbags just doesnt pay to ever get out
    Will wait for the next pullback which may not come til next year!


  71. Karm – but the lagging is SLWBf & it hasn’t moved yet. SA woulda worked from .5 to .7 on NOV’s. Playing AUY on similar. Obviously shoulda listened to phil on NEM (the prophet of profits) thot it would slow up at 50 & give me a chance to buy some time – but…


  72. DRYS – parchesia, that is the question :-) If you notice my follow up question, I am in a dilemma, I have been following Baltic Dry Index for last few weeks and I see it go up and up…except yesterday when it fell. So the question in front of me is are we expecting long term shipping to be affected or is this short term correction we are trying to play.


  73. Mark- UPL over $70


  74. MR – Karm you’ve been very right on MR so far. close to now woulda been nice!


  75. Know what you mean MrN with those no float slow moving options…..like watching grass grow or these NOV 55 Q’s lol


  76. BBD – yeah, insane right? CC’s going on right now… we’ll have to see where it goes…


  77. One nice thing about that type of contract though, is if you gotta go “walk the dog” you can and won’t miss anything.


  78. HMY – Nov 12.50′s, took half off at 0.10 for a 0.04 loss on the 10 am drop on volume which triggered my stop.

    Now waiting to see were it goes on the other half… looking to at least recover the loss.


  79. BOOM – No our BOOMs went bust although they would have worked out well on today’s jump but I didn’t like the ATI and TIE fade out as the three of them usually trade in the vicinity of each other: http://tinyurl.com/2acmde

    FTK (11/1) goes in with my theory that you’d better have some friggin’ amazing earnings to justify a 400% increase in your value since last earnings. They are a great company and I wouldn’t bet against them but the value is way stretched, the p/e is out of control and if SLB is trading down, something must be wrong in the sector.

    HMY – getting out at .10 (after big DD’s to get even) is mission accomplished. Once you make a move to save a trade, the biggest mistake people make is getting greedy and not getting out when it gets even – good job Dan!

    BWLD – happy to go over the strategy there. In general, if a spread blows you out on one side, you take out your (in this case) caller into the intial excitement and sell your own puts if you can (you can also roll them farther out to lock in the profits on your closer ones – back in time works too but costs more money). Depending on what happened, we may want to tighten up the calls, looking for a recovery, or go longer and sell more calls against.

    I very much like BWLD at this level. They were hammmered by chicken costs, that will be fixed. Business is good otherwise, earnings were up 20%, just not enough to justify 100% increase in stock price but I love them at $30. They backed forward growth of 20% plus and they are a young franchise – even McDonald’s made mistakes along the way (remember the fish sandwiches?).

    So it’s BWLD Jun $35s at $5 XXX, they were $10 last week and you can sell the Dec $35s for $1.35 but I’ll wait a while.


  80. Mark- HOLD on this is a story that people are not paying attention to because Nat Gas is $8


  81. Not Sure MrN,

    Last time I was high on one of these China ADR’s it was EDU which wouldn;t even brk 50 for me….of course now ita about 80!!


  82. I’m expecting more near term weakness. I don’t expect the economy in the U.S. to collapse. It should begin to pick up again in the spring. I think Kramer is pumping too much like Phil said. Wait a little longer to see if the China bubble bursts. It should really fall to a support level of $100 but Kramer threw a stick on the spokes there, at least for the moment.


  83. Phil, NFLX.. Not too much to worry, I originally did this an an educational play for myself. 0.5% of my portfolio.

    To recap: Roll caller
    From Nov 20s @ 6.3 to 2x Dec 25s @ 2.45, currently debt 1.4, but aim for $1.

    Roll long:
    from Jan 22.5s @ 4.5 to 2x Mar 27.5s @ 2.8 = debit 1.1.

    Seems like I’m putting $ 2.0-2.5 more into the trade, and doubling the margin (2x 2.5 spread vs 1×2.5 spread) It also seems to be nearly doubling my already negative delta. I’m fine with betting against nflx.. but is this all consistent with your thinking? -Peter


  84. Mark,

    Word of advice on eminis…be really careful…I wouldn’t trade these with a 15 minute delay. You must have real time tick chart data. Also, you need an ironclad money management technique to trade these. I made some money doing this but so many are on the same trade trying to scalp a couple points it’s become a very crowded trade.



  85. I dont know whats going on ! as we wait for the Fed, but like Phil, I don’t trust this strength.

    Just bought some QQQQ puts near highs (tight stops if it goes against); think we get some selloff b4 Fed and maybe after.


  86. Took some quick profits on buys from yesterday. NOV RIG BHP PCU AGU etc. You never know what will happen at 1:15 cst.


  87. DRYS .. sold all shares I bot yesterday near close.

    I think it could retest yesterday’s low.


  88. fredrang – no worries, if / when I do trade these… it will be VERY carefully (trailing stops etc). And I’ve traded eminis before pretty profitably… just not the options. And I won’t have a 15 min delay… I was just messin about that (hence the smiley face).

    BBD – you saying Nat Gas going back to 15 circa ’05? If so I’m all in…


  89. CHK – earnings should be good but they did hold back production to keep prices up so it’s tough to call (which is why I got out). If you’re well ahead with the $40s sold, they are doing you no good anyway but you can take $1.50 off the table by rolling to the Jan $40s and sell 1/2 the Dec $37.50s which kill your upside on half but protect almost your entire position against a drop while leaving your naked half room to fly.

    That’s an XXX as an earnings play on them by the way!

    IMCL – sorry, I got sidetracked but that meeting is one of the reasons I wanted them. I’m starting to think the recent action (just a pullback of the ATH) is a shakeout and I’m ready to call a DD if we get a Fed pop later, although the trade is around even so far.

    WFR getting hit.

    NEM – sold $50s for $1.85, stop at $2.25 (against Jan $50s) XXX


  90. HMY – Completely out of the Nov 12.5′s for a total 17% loss on this pullback. It looks like it’ll go back up but I’m not taking chances after coming back from a 70% loss and DD my basis down to 0.14.

    Still have a small amount of Jan 10 / Nov 10 spread to roll and recover the loss anyway.


  91. I recommend that everyone reads a couple times the 2 Phil’s posts in yesterday comments, especially the one about YHOO. Great comments about rolling.


  92. UPL coming off the high during the cc…


  93. DNDN – I don’t want anyone ever telling me they didn’t get a chance to buy it!

    FXI going insane!


  94. MARK- NAT GAS at $15 we can only dream. I will not bore the blog with details but they have a couple of reasons why production can increase.
    PCLN- added on the retest.


  95. Are all the positions in 10k and 25k portfolios long?
    How do I tell if they are short calls etc. I see no negatives contracts

    During the week are all changes to those portfolio’s in the intraday.

    I am busy ; is it a reasoble approach to simply mirror those portfolios?

    Thx


  96. ne1 else getting that “calm before the storm feeling”?


  97. Phil,
    Can you restate your DNDN trade, thanks?


  98. SPY is up the highest % right now if I think the market will move downward, which ETF will move the most – SPY Q’s or DIA, or should I look at a specific etf for hedging a fed move like XLF?


  99. BBD

    What makes you think Natgas is headed to $15 when we are at record storage, drillers are sitting idle (NBR) and the weather is warm. Look at last year’s draw downs, unless we have an ice age I just can’t see $15.


  100. MEMC rises on Conergy deal, while Conergy plummets-MarketWatch
    Herb Greenberg’s MarketWatch blog noted that MEMC Electronics’s (WFR) stock rose 21% after reporting decent earnings and poor guidance, due to a 10-year, $7B-$8B deal it announced with Conergy. However, Greenberg pointed out, Conergy issued an earnings warning Friday, causing its stock to drop 30% in Germany, where it trades. Conergy is running out of cash from its IPO in 2005, and its debt is soaring, which should give MEMC investors reason to pause


  101. Phil, I picked up those DNDN naked puts in July when the subprime crisis was just getting noticed and DNDN was going to be out of cash by Oct. Little did I know they found some (now) unemployed banker to give them 150M! Those guys could sell a blind man a TV…..now if they could only develop a drug (they sure tried to talk their way into Phase LLL acceptance from the FDA last time.


  102. DD ON Potash puts??


  103. fredrang- I think you miss what I was saying on UPL. Production is the key. I do not think Nat Gas can hit $15. If it did UPL is $100


  104. CHK – thanks Phil. Going with your suggestion to roll to Jan40s. I’m about even on my 40 callers, so I’ll buy them back and wait to sell the Dec37.5s.


  105. Guys. Suggested cover for FED
    YHOO 2x Jan 35c
    YHOO 1x Apr 32.50
    YHOO 2x Nov 30

    thx


  106. Sorry all call. Have no downside protection yet.


  107. Phil,
    CHK Roll suggestion please:
    Currently hold :
    Cost
    Chesapeake Energy [CHK] Jan 37.5 Call $1.90
    Chesapeake Energy [CHK] Nov 35 Call $2.50
    Thanks!


  108. HMY Nov’s – wow did that scale in and out work well or what? dd 2x sell 1/2 even 1/2 then out this a.m. .15! SA & SLW legging up again! Auy not bad off the floor


  109. Phil or anybody, I adjusted the LVS spread this morning by to long Jan 140s/ short Nov 135 I could roll the Jans down to 135 at about even and then roll the short Novs down to 130 for 2 credit. Does this make sense given the reaction we saw to Wynn.


  110. I’m really surprised CNR (TSX) is moving higher, sure it bottomed out technically, but oil moved higher, US dollar is going lower, it’s all these things against them… Maybe they’re just way too over sold.


  111. I meant I could roll down the Long Jan 140 to Dec 135s at even.
    Sorry, complicated.


  112. Wow WFR is takin a lickin,

    I almost shed a tear for my Nov 65 caller there.


  113. fredrang – I’m the one who brought up Nat gas $15… I was really just f’n around (need to be more careful, forget people can’t read sarcasm). BBD just believes in the company itself for his reasons.


  114. POT – it’s a fed gamble, not set stop.

    CCJ – You can get $1.77 for the current $15s and that’s 1/2 of what it would cost you to roll down from the ’10 $50s to the $40s so that’s the best place to start. If you have to roll down twice it will cost you $8 more to be in the $30s, the cost of selling maybe 5 month (out of 26) worth of premiums. How can you not love this stock? That would be an XXX for anyone looking for an LTP position.

    DRYS – these guys are too risky if they Fed eases so, unless you are already in, ahead and covered it’s not worth messing with. You can’t just watch the index, this is why it was somewhat of a suckers rally. Whenever you hear a jackass analyst pump up 1/2 of a story (cough, Cramer, cough cough) you can be pretty sure he’s just fronting on the stock. Just like GM, it’s easy to move product if you give it away. The shippers have been in a rate war as they all got nervous the economy would slow so they bid down to lock up business. Just like gold miners who hedge production, it will take them a while to work through that, even if the economy does hold up.

    Wow, look at the rebound on SU! OIH coming back strong. FWLT weak of all things.

    NFLX – like I said, you owe him $1.90 now and for .35 more you have the right to sell another 2 months of premiums while keeping yourself 80% covered should give you enough leverage (at $1 per month in premium) to ride out a dip or, at worst, collect $3 from the Dec-Jan rolls (you’ve laid out $3) and end up whatever value you have left in the Febs as profit. It’s not sexy but it’s not a loss.

    Dan – if you see a pair the second is probaly a short but download the regular spreadsheet, which gives those details properly (it’s a flaw in the system I use). The $10 and $25KPs are designed not to be daytraded so as long as you can check in once or twice a day it should be easy to follow. I wouldn’t try to “catch up” we take new positions all the time but you could enter one of our spreads that we are losing money on – that just means you’re getting a better entry than we did!


  115. Good place to take profits before the Fed.


  116. Phil,
    Holding FXI Nov 205 Puts at $7.50. Getting crushed this morning. Suggestions? Roll up, DD, or just take my lumps. Worried the expected rate cut could push this higher. Pls advise


  117. DNDN – NO, I can’t restate it! It took me 1/2 hour to write it! It was about 5:30 on Friday. 8-)

    Best moving ETF – DIA is the one I count on but the Qs are stretched right now.

    IBM nice comeback!

    POT – generally I will only double down when I am 20% or 40% down and I am determined to stay in a position. I tend to pick numbers that make things work out even, like if I’m in at $6.20, I like to DD at $4.80 to give me an even $5.50 or, even better, $3.80 for an even $5. It’s silly but it makes me happy…

    Oops! It’s face painting time, back in a while.


  118. NBR anybody? That’s a pretty good bounce. Dead cat?


  119. Phil:

    Short and Long term portfolio’s are very clear

    The 10k and 25k with sometimes 3 legs are very hard to understand if there are long and shorts?

    How often are those 10k and 25k portfolio’s updated?

    Thx.


  120. Phil:

    I may well be wrong but I think the market sells off
    later today and tomorrow no matter what the Fed does.
    A lot of mutual funds close out their fiscal years today
    and I would expect some selling in the stocks that have
    done well this year.
    If you were to short a solar stock would it be FSLR or SPWR?
    Thanks.


  121. Phil,

    In general, love your site. I think one way to improve PSW would be to add a search function (by ticker) that only searches for YOUR postings on a stock. Eg. There have been a ton of quesions on AAPL, where some members complain of missing trades/rolls etc. Since intra day moves are already categorized, it would make sense to add a search function inside. Since we do play the same stocks over and over, it would require a little work to filter but definately doable. My 2 cents. =)


  122. Hi all, just had my sons halloween party in school so I missed the morning action. Fun times.

    Looks like I might rate cut gamble a little on NLY.


  123. FSLR is a better short than SPWR but either one is a dangerous short. Look at the forward P/E and PEG for SPWR vs FSLR. FSLR is dramatically overpriced especially given their fixed price contracts.


  124. I think I am going to do a QQQQ strangle on Nov 54/55 and then place a 10% stop on both sides. If we get whipsawed, oh well, I lost a bit, but if we get something silly, then I am in with a good chance of closing out one early and the other taking off.

    Anyone think of a reason to NOT do this?


  125. SNP- nice little day trade on oil inventories


  126. NLY sounds like something cramer would do, be careful on that one.


  127. Film-Good idea, with the Q’s, I have more of a short bias if that helps


  128. SU was upgraded to 124 Canadian


  129. I’m taking 1/2 off BA now.

    NLY – I mean I like cramer, but I think he’s off target on that one… There are better plays…


  130. I don’t even know he recommended that I just assumed lol… Wow I better watch my mouth sometimes… It feels like a cramer stock, that’s all.


  131. Thanks, Fredrang
    I know they are both dangerous.
    Planning to go in small with tight stops.


  132. DM

    Are you done now? lol. It is a pretty good pure play for rate cuts so we’ll see, that’s why I only recommended it for fun/gamble money. I’m not banking on the Fed but I don’t want to be left out of a run just in case of a good pop.


  133. Why is a good rate play?


  134. parchesia, I TOTALLY have a short bias, but I am willing to throw away the loss on the calls because the downside has so far to fall. Maybe I will do a modified strangle with DIA or SPY puts and QQQQ calls. Or maybe I will just throw all my money up into the air, and whatever Bernanke wants, he keeps.


  135. YHOO – Ozzie you shouldn’t risk the Nov $30s and you should at least cover with $32.50s or maybe even turn around an sell 2/3 the Nove $30s.

    CHK – you’re in great shape. You know you need to sell Nov with just 2 weeks to expiration. You can roll all to the Jan $40s, take 1/2 youe money off the table and sell 1/2 the Nov 37.50s at $2.12 which will protect your downside while leaving you with 50% upside gains (didn’t we just do this play?)

    LVS – Nov $135s are the best calls to sell, no reason to move him off them, especially if it costs you a month. They already took a hit as if they had bad earnings so now we’re playing for the volatility crush. Spend $2 to roll yourself tighter though, that is very worth it no matter which way the stock goes.


  136. Oh my god, deregulation comes out of Washington. Someone get Shumer on the phone. This has to stop.

    http://www.marketwatch.com/news/story/fcc-bars-exclusive-cable-tv/story.aspx?guid=%7B36552526%2D2CF0%2D452D%2D8E97%2DEB5F9FA59A0D%7D&dist=hplatest


  137. I’m at market neutral after running my portfolio up 24% over the last 2 weeks
    wish i could say it was all my brilliance lot of luck involved

    I expect the market to go down after the Fed if not today then thursday and friday we’ve had a helluva run from Dow 13500 on lower volume in a very short time

    we’ll see


  138. OXPS … $30 should be another trigger to move higher. Hopefully fed cut pushes it through.


  139. Charts I’m watching are all getting squeezed in tight – just mine or are we ready for a big move (if I just had any idea which way!?!?!?!)


  140. DM

    Their whole business is buying at low rates and reinvesting that purchase at higher rates. So theoretically, a rate cut would give them a better buy rate and increase their rate of return on the reinvest. There are other plays as well but that’s why this is considered a pure rate play.


  141. MSFT looking big and hard. Who would have thought?

    I think I am going to put my money on a “relief” rally of no consequence and then something else taking us down. Although, if they really wanted to help the short side, a language change on the last day to take losses would drop us 500 points and bounce the dollar. I am okay with that.


  142. In with a baby bet on FSLR Nov 140 puts at $4.00


  143. I also put in a STOP BUY order on GLD at 78.55. If they take down the dollar, I should catch the pop. Gold needs to fly or consolidate from here, IMO.


  144. FXI – I’d roll but I’m funny that way. The time to roll is when you’re in the most pain once it turns you lose a buck. It’s “only” $4 to to roll to the $215 puts, you would have loved that deal yesterday when they were $6 more. You can also take your $2 loss and try to win that back by rolling to a spread of the $230s at $18.15 and the $220 puts at $12.05 which has a max gain of $6 below $220 and a max loss of the $5.90 plus the $1.90 since you already lost!

    In other words you went in for $7.50 on the $205 puts and now they are $5.60. You roll those to the $230 puts at $18.15, which is + $12.55 for $20.05 total in. Now you sell the $220 puts for $12.05 (better if you can wait for a nice dip) and your cost basis is now $8 and you have a $10 position advantage over your putter. It would totally suck if FXI went over $222 on you but you can turn a $2 loss into a $2 gain if it stays below $220 and you can probably roll up if it goes the wrong way as the putter’s premiums should stay higher than yours.

    $10 and $25KPs are usually updated on the weekend but we made a lot of moves and I thought it was a good idea to get everyone on the same page ahead of the Fed.


  145. thanks phil. thats what I did. must be learning something ha!


  146. FSLR is the one I would short. SPWR is a way better company.

    Fan – that’s such a good suggestion we’re already working on it! We’re going to add meta tags to comments but it won’t be just mine (if we can we’ll use a Yahoo-type star filtering system so you can see all, most or few comments).

    $124 Canadian – that’s like $150 American by next week!

    Hmm – MON up, BG down, POT flat…


  147. Any (nefarious) reason why the GOOG 670 Puts are at 7 now, when they were at 6 earlier when goog was the same at the 699-700 range or is it just some basic reason I’m missing?


  148. NRG Mar8 45 calls.. 144010 volume today, mostly in 1 big trade. Open interest previously 9k.. anyone know what’s going on with them?


  149. Phil,

    I posted this earlier today and ended up selling the Dec 47.5′s for $3.5. My question is in hindsight for future trades what is the downside to this? I am up 45% on the March position and if the FED eases should I roll both the long and short call up to 2x March 55 and 2x Nov 50 to capture more premium or just leave it alone.

    Thanks

    October 31st, 2007 at 9:46 am | Permalink
    Phil,

    I have the NEM March 50’s that I took off the cover yesterday at $3.3. What would you cover with now after earnings?


  150. dday – I just think oil might be a better thing to do… I mean there’s always rate speculation, and I think the biggest pop should be buying whatever speculators are buying, on the 25 and 50 cut rumors.

    If they never really paid attention to nly now, I’m not too sure if they’ll care later. Maybe, maybe not.

    Fundamentally I see your point; they leverage 10X on their assets and a rate cut helps huge. But you got country wide with a couple trillion on assets and it’s rare for BAC to loan out to a dead company… Big oil, with prices becoming more expensive with a lower dollar… US Steel, that’s poised for a 107 break.. NYX profiting from the heavy buying volume… Maybe SPY / DIA strangle for a whipsaw, or coverage on either direction….

    I look at NLY on the daily, and I see a good shorting opportunity.

    Good luck on the trade, you’re obviously more experienced than me, hope it turns out. I’m keeping cash today.


  151. That FCC move isn’t deregulation. It’s handing markets to Comcast and Cox and Time Warner (and eventually AT&T and Verizon) where other people were willing to put their capital at risk and the cable and telecomm duopoly wasn’t!

    To retroactively invalidate long-term contractual agreements which were the only reasons that many of these communication facilities were even built is nigh onto criminal and certainly constitute a taking.

    They’ve a lovely reference to how this harms the cable companies, but that’s all part of a big lie. What this really did is pull the rug out from underneath the 370+ fiber-to-the-premise master planned communities who only were able to pay for the fiber plant installation buy entering long-term agreements with the service providers. It also means that no small player will be able to do broadband installs into multi-tenant dwellers in exchange for a period of exclusivity.

    But worse of all, as I mentioned above, it means that those people who already spent their money to wire locations which were previously under-served now are forced to open their facilities to the cable and telecomm duopoly — which no longer has to open their own facilities to competitors.

    Or at least that’s my first reading impression. Still waiting to hear from your regulatory associates what if any protections were left for those who’d already placed capital at risk.

    But right now it looks like a last-year-of-a-Republican-administration gift to the cable and telecom duopoly. Who had failed to establish a right to other people’s physical plant in courts and who were very annoyed that they couldn’t sell what turned out to be very profitable services over someone else’s lines.

    FTTH uptake rate in otherwise under-served rural areas or poor urban areas (which aren’t getting built-out from the Comcasts or Verizons of the world) are typically north of 50% of homes passed and in some localities are 90+%. Comapare that to Verizon’s goal of achieving a 20% take rate.

    Blech!

    reinharden

    PS: Dropping by to see what’s up before the Fed results. Got to figure out how to make some money since the FCC just made it harder for me. ;-)


  152. GOOG puts – just supply and demand.

    Guy on TV with a $985 target on Google (mine is $3,500 by 2015 so yawn).

    DRYS cranking now.


  153. NRG .. I thought they were a takeover rumor a month or so ago because of their Nuke Power applications.


  154. DRYS – Thanks Phil


  155. Phil
    Not another question about DNDN but I cannot sell any options in my retirement account. Is DNDN with a stop a reasonable gamble?
    Thanks.


  156. LOL 985, that’s pretty exact.


  157. reinharden, I didn’t read much of it, by I assumed that if anyone else wanted to come in, they would have to use their own equipment.

    I see this as a plus because it frees up competition in the future. It would suck if it was a grab, but I didn’t read it that way. Granted it is a disadvantage to rolling out for a community, but if this extends to WiMax and other wireless communications, then it is a HUGE win to them, right?


  158. DM

    We’ll see how it works out, if I lose oh well but if the cut is .5 I could see a dollar or 2 quick pop and scrape 50-100%. If it’s .25 I’ll still make a smidgeon. If nothing I lose my gambling money.
    Also, the difference between NLY and something like countrywide is large. NLY only invests in government guarenteed investments and has no storefront where they sell loans and such. It’s just a virtual bank playing the spread between what they can borrow at and what they can reinvest in…that’s it.


  159. I went to 75% cash, and what isn’t cash is mostly stock, not options. Just trying to play is safe THIS TIME. And; I will be in a meeting from 1 – 2 pm CST, during Fed statement.


  160. Marcb/Nov BIDU spread is great! In my $330 puts, my putter lost $1.60 and my March puts gained .10 on the volatility increase!

    NEM – If you locked in gains there is no risk. The only “risk” is to your upside as you’ve capped it but, as you saw, I sold the $50s myself as they paid my a $1.50 premium (3%) after a 10% run in the stock. I call those non-greedy exits, locking in reasonable gains by capping yourself at a number you would have been thrilled to get the day before. The problem most people have is once they make 20% they want 30% and once they make 30% they want 40% and then, when it snaps back to 20%, they refuse to accept anything less than 30%. Then it drops to 10% and they won’t get out until they are at least “even” and back to 20% up.

    There’s no winning with this attitude and the time you spend worrying about a 20% gain once it’s made IS NOT WORTH IT unless it is going to gain another 20% for you. If you make 20% in 2 days, if it’s not going to make 20% over the next 4 days they you are already sitting on a position with diminishing returns. By capping a good gain with a safe call that keeps you well covered and pays you a premium, you are taking cash off the table and freeing yourself to move on to other things – that’s good trading!

    This is why I don’t get along with brokerages and hedge funds. They want people to focus on sectors or, even worse, just one or two stocks. To me, there’s a trade and I make a trade and I finish a trade and move on – I really don’t see the benefit to fixating on things like that.

    The FCC has been so horribly perverted by the government it amazes me!


  161. LFG down hard. That’s one ugly 1 year chart too.


  162. Buying leaps on DNDN.


  163. We’re going to get $95 oil and $800 gold and a 75 dollar (down 8% in 2 months) if the Fed cuts rates – I really don’t understand what the party’s about but pass the punch!


  164. An inconsequential reply to an earlier posting – I’ve *NEVER* been *ALL* in Apple. Apple’s way too volatile and that’d be way too scary! At least for me.

    From time to time, I’ve found Apple had become way too much of my portfolio. Keeps me busy selling it just to manage my risk exposure.

    I’m in wait and see mode at the moment with AAPL. Surprisingly few problems have popped up with the Leopard roll-out. And the take rate has been phenomenal. 2 million sales in 3 days represents nearly 10% of the addressable market (about 21 million machines shipped within the last 4 to 5 years with sufficient specs to officially run Leopard). If there’s some Leopard buzz, I suspect that we’ll pry a few older users out of their old machines and into new ones; however, it’s too early to tell.

    Macs last too long for their own good. One of my main home servers is running MacOS X Server 10.4 and I acquired the machine in 1998! That machine replaced an SE/30 that I acquired in 1989! I’m going to replace that server rather than upgrade the OS…but that means I’m getting 9 years between replacements. And I know lots of home users who got a first-generation iMac who are just now thinking about upgrading. So I think Leopard will push some over the edge and I think we’ll see an additional increment to Mac sales over the next couple of quarters.

    When I see the percentage take rates in colleges, I’m astonished to see the differences in percentages going Macintosh just between the Freshmen and Seniors. It varies from school to school, but it’s not uncommon to see entering classes going 50% Macintosh with graduating classes being back near 10% Macintosh.

    But, no dissertations today since I’m supposed to be working (and looking for a good Fed trade). With the iPhone launch in Europe over the next few weeks, at least one or two hardware revisions pending in the coming weeks, and with the Christmas season upon us immediately afterwards, Apple has a news flow setup that might well keep them from a real test downwards (barring the Fed screwing things up today). I have achievable scenarios that I suspect would easily support a $300 price…although when they’d get there is always the interesting question. Suffice it to say that I’m not yet buying Jan 09 $300′s…but I’m thinking about it.

    A gPhone announcement might give us an interesting bounce. By all available data that I’ve read, Google’s phone is essentially Google software running on near-reference design phones. Which might well solve a lot of software problems. But they also need to address some of the hardware issues. I will say that not all that I’ve read jibes with what I believe Google should do or what I believe that they will do. ’cause I think they’ve the ability to be a touch more disruptive than they’re getting credit for. But I don’t know if they’ll do it now or later. But I don’t think we’ll really see gPhones on the street until 2008. Which means I can worry about Apple for the quarter instead of Google. ;-)

    Anyway, back to trading versus pontificating.

    reinharden


  165. OIL-over $94 OUCH


  166. Alright everyone it’s time to make sure your orders are in and you’re hedged because we all know the electronic markets are about to get slammed with orders.


  167. DM

    Biggest diff between CFC and NLY is overhead. NLY has no physical structures to purchase and maintain like CFC. They are a cyber bank with people behind curtains you never see. They make money in any economy…just a bit more with a rate cut.


  168. parchesia-good thinking


  169. FCC and competition – Most of the places that are effected by the ruling have structures in which the networking physical plant reverts to the property owner over time. Once AT&T and Verizon figure out which places they want to cherry pick the best customers, they’ll go back for additional relief. ’cause it’d be stupid to ask them to spend $1500 to connect a home again when there’s already a fiber running into their house, right?

    Of course, if they did redo the fiber plant, that’d be good for FNSR and GLW and perhaps ALU and TLAB (although I’m staying far away from ALU at the moment).

    Fiber-to-the-premises is truly in its infancy. There’s currently 369 total projects up and running. 365 of them average under 2000 customers each. The other 4 (AT&T, Verizon, SureWest, and another who slip my mind) have the rest of the 2.1 million. Verizon has something like 1.4 million (or two-thirds of the current installed market).

    The FCC ruling impacts other installations as well…but it’s the FTTH stuff that has been getting the more interesting legal challenges *and* producing outlandish subscription rates and surpising amounts of high-end revenue. Turns out that even poor customers spend way too much money on cable TV services if it’s made available to them!

    reinharden


  170. Rein,

    The funny thing about Verizon and their fiber optics right to your home is, once into the phone they plug it into the old coaxial that everyone has running through their attics and walls…I wonder how much effect that causes?


  171. home not phone lol


  172. China says Natural Gas prices seriously low, to adjust soon-Reuters


  173. CMG – I refuse to buy a restaurant with a PE of 80+.

    Which doesn’t stop my girlfriend from taunting me every quarter since the IPO. I hate companies that are *always* overpriced. Maybe someday I’ll figure out that that’s just what they cost.

    But then I remember Boston Chicken and Krispy Kreme and I think maybe I’ll stick with technology. ;-)

    reinharden


  174. I’m buying GS $240 puts for $5.50 ahead of the Fed simply because NOBODY is playing for a drop. VERY dangerous play.

    DNDN with a stop is a good gamble but I’d rather own MU or HMY at the moment as actual sticks (DNDN can gap down on bad news).

    Thanks Rein! Don’t forget everybody, I’ll be accepting investors for the PPhone. It’s going to be very cool and have “stuff.” You may begin throwing money at me now.. 8-)

    Good point about the systems getting slammed Pachesia! I’m going to go ahead and roll up to the DIA $139 puts for .37 and I’m going to pick up 1/2 more $140 calls at $1.35 (I have Q puts that offset them). My feeling on the calls is I won’t lose more than 1/2 and I’m happy to roll the puts as we still have 10 days to pullback after another idiotic Fed rally.


  175. Let the party begin! panic sellers


  176. CFC vs NLY – True, but CFC is at it’s low, where as NLY is at it’s high. Losers need the bail out cuts, winners don’t. From an investment point of view, I agree with your logic… Just hard for me to trade it when I see companies out there that live off of rates cuts.

    AAPL – They have a really nice upgrade cycle… I really like how you can have a 2 year old computer and it’s not outdated… The OS destroys HDs though…. How do you like the OSX server platform? Do you have Remote Desktop?… I was thinking of setting up an encrypted tunnel so I can run my land computer while I’m across the planet.


  177. Phil, Is announcement at 2pm?


  178. Phil,
    What is your DOW Stangle now before Fed?


  179. Phil- I keep having little epiphanies about the LTP strategy. The ability to earn income on my positions (both stock and LEAPs) totally changes my view on my portfolio. Even major price changes like BWLD don’t concern me. Sure it dropped $10 yesterday, but it had run up $5 a week ago. Anticipating earnings, I’d rolled my ITM call up to ATM for a credit, and then bought it back this morning for 10% of what I’d sold.

    Essentially, I earned $4/shr since last opX on this one position. Sweet! And who cares that Mr. Market thinks my BWLD business isn’t worth as much today? He’s still paying me the same *rent*! That’s beautiful cash flow. Heck, I think I’ll open up another branch.


  180. Karmcon, the interesting thing about fiber is this.

    When Verizon started rolling, they entered the house on twisted pair (aka their native medium). But they quickly decided that didn’t work well and they’re switching to MoCA over coax.

    When the cable companies started doing their fiber to the neighborhood (hybrid fiber coax if you’re bored), they entered the premise over coax (also their native medium). But they quickly decided that didn’t work well and they’re switching to HPNA over twisted pair.

    Now imagine that you’re trying to do some FTTP stuff of your own? Do you try to enter over twisted pair or coax? Because both vendors who ought to know are switching to the other one!?!

    Ever so curious as to whether the market will be moving up 200 or down 300 from here. I think for maximum pain it ought to surprise everyone and stay flat on “the expected news”. But that probably won’t happen.

    reinharden


  181. Legh – It’s always @ 2:15pm.


  182. Phil – The party IS $800 gold and $100 oil!!! (I know it’s inconvenient to carry to pay cab fare in Canada, but…)

    Now it’s NXG’s turn but KRY is just crying and won’t play! Someone tried to scrape cake off the floor – don’t give up PLEASE. We need it for the party!!!!


  183. rein- I’m with you on CMG. I’ve owned them for a double, thanks the Motley Fool folks. But when the P/E hit 80 recently, that was too much for me, too. I love the place, love their cash flow, but will wait until the market readjusts before I buy in again.


  184. GS – Already up a bundle and keeping a tight trailing stop on it.

    BTW Film, I bought a 50 OTM call on GOOG yesterday and am up 25% on my experiment of your system. Nice work.


  185. I’ve got to tell you if I were Bernanke I would have to stand pat. But that’s because my main concern would be preserving the integrity of the Federal Reserve (and appearing not to be such a wuss). There is no data supporting an additional cut here. The BOJ said they will be raising rates, China is tightening the ECB is absolutely going to tighten to fight inflation over there (ironically the commodity inflation Bernanke caused with his last cut).

    We’ve got a 3.9% GDP and jobs aren’t so bad which means our biggest fear SHOULD be inflation, not whether or not some arbitray stock index holds a meaningless level or not. An easing here will put us right back to $3 gas and, even worse, $3 heating oil, that’s a new one as we haven’t been that unlucky yet.

    Anyway, there’s what’s right and then there’s what the government does. We’ll see in 15 minutes…


  186. I got FTTH (FIOS) and I am happy as hell with it. I admit, I don’t follow the regs nearly as well as you do, Rein, but I just hope everyone gets to experience this ASAP. I am 15/5 currently, I think. And it feels great.


  187. PTSC – even if that chart print was a fluke yesterday, buying’s picking up.


  188. How Does Apple’s OS destroy your HD?


  189. Demetrius – MacOS X Server – It’s a great product and I’m disappointed that it hasn’t pushed AAPL further into the Enterprise. But they’ve never done a good job selling there. Anecdotally speaking, I’ve thrown most of the server side stuff of the last three startups I’ve worked with on MacOS X Server and that’s allowed them to operate for quite a long time with no IT staff. I was horrified to visit one that I hadn’t visited in a couple of years and discover that their server had a current uptime of 700+ days! Oops, no security patches had been applied. But the danged thing had just kept working.

    Remote Desktop is nice; however, Microsoft’s RDC is only marginally worse so I don’t view it as a huge differentiator. The “Back to my Mac” and “Screen Sharing” features under Leopard are much more interesting.

    Oops…time to check the 2 PM news. ;-)

    reinharden


  190. DM- If you want to remote your mac, run one of the free VNCs.


  191. Reinharden:

    Great comment on Boston Chicken and Krispy Kreme !
    I tried to make money on the short side of KKD 3 different times.
    Too crowded on the short side. Kept getting stopped out.
    Never did make any money. Poor trading on my part.


  192. rein- I’m a longtime SA/DBA, and I do the same thing for startups I’ve worked. Except I use linux for the price point. However, if I were recommending equipment to someone who didn’t intend to have me set it up, I’d tell them to pay the money for the mac server.


  193. Under the Federal Reserve Act of 1913 and amendments over the years, the Federal Reserve System:

    “Conducts America’s monetary policy.”

    “Supervises and regulates banks and protects consumers’ credit rights.” Doesn’t seem like this one is high on their ToDo list does it?

    “Maintains the stability of America’s financial system.” Well that went out the window years ago!

    “Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions.” That’s who pays for them to fly around first class and stay in fancy hotels while collecting honorariams and lining up private sector jobs for after their tenure.

    “The Federal Reserve makes loans to commercial banks and is authorized to issue the Federal Reserve notes that make up America’s entire supply of paper money.” Now THAT they are doing full tilt!


  194. Albo- remember that quote, “the market can remain irrational longer than we can remain solvent”. Just because KKD was an accident waiting to happen didn’t mean you’d know when the Atkins diet craze would start.

    When reading the back history, there’s a member named Prof who targeted the homebuilders waaaay early. Poor guy suffered for the longest time shorting them into obviously bad fundamentals. Hope when the collapse finally came he scored huge and now owns an island somewhere.


  195. The scariest statement I heard was that the Fed was helping “today” by lowering rates and helping us reduce the budget deficit by throwing more money at the problem but that hurts us down the road because there are just too many dollars in the world, leading inflation on everyone. Either way, here we go!


  196. gs fell


  197. Come on Ben get some b—s. Hold pat and send the market a message. They can’t force the Fed’s hand. Save us.


  198. Heating Oil- Who uses that stuff LOL


  199. Trying something interesting. But will only work if we get a sell-off. Decided to mostly sit out the fed, but I put a order in to BUY 20 QQQQ 54 Puts at a stop price of 1.05. Figuring they trigger in a sell-off.

    I put the identical order in etrade, optionshouse, and tradestation. Wanted to see who would get me the better execution.


  200. Filmflam – One of the tentacles of the company I’m currently working with is attempting to do FTTH on a massive scale. As in when I talk to Corning I’m talking about how many more factories I need them to build if we succeed. ;-)

    So I’m becoming more conversant with regulatory issues than I’d prefer. :-(

    reinharden


  201. Fed Spoke yet markett dip dip


  202. Fed cuts rates .25


  203. Dow strangle – see 1:52

    By George K1, I think you’ve got it!

    25 cut in funds and discount.


  204. so what’s going on? I don’t have my realtime quotes today.


  205. what did bernanke say?


  206. or just volatility arrpund ???


  207. 1/4 point cut


  208. The Federal Open Market Committee decided today to lower
    its target for the federal funds rate 25 basis points to 4 1/2
    percent.

    Economic growth was solid in the third quarter, and strains
    in financial markets have eased somewhat on balance. However,
    the pace of economic expansion will likely slow in the near
    term, partly reflecting the intensification of the housing
    correction. Today’s action, combined with the policy action
    taken in September, should help forestall some of the adverse
    effects on the broader economy that might otherwise arise from
    the disruptions in financial markets and promote moderate growth
    over time.

    Readings on core inflation have improved modestly this
    year, but recent increases in energy and commodity prices, among
    other factors, may put renewed upward pressure on inflation. In
    this context, the Committee judges that some inflation risks
    remain, and it will continue to monitor inflation developments
    carefully.

    The Committee judges that, after this action, the upside
    risks to inflation roughly balance the downside risks to growth.
    The Committee will continue to assess the effects of financial
    and other developments on economic prospects and will act as
    needed to foster price stability and sustainable economic
    growth.

    Voting for the FOMC monetary policy action were: Ben S.
    Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles
    L. Evans; Donald L. Kohn; Randall S. Kroszner; Frederic S.
    Mishkin; William Poole; Eric S. Rosengren; and Kevin M. Warsh.
    Voting against was Thomas M. Hoenig, who preferred no change in
    the federal funds rate at this meeting.

    In a related action, the Board of Governors unanimously
    approved a 25 basis point decrease in the discount rate to 5
    percent. In taking this action, the Board approved the requests
    submitted by the Boards of Directors of the Federal Reserve
    banks of New York, Richmond, Atlanta, Chicago, St. Louis and San
    Francisco.


  209. lol phil beat me to it lol


  210. liking those puts now eh boys? ahaha what a whip.


  211. I dissent (Hoenig of Kansas City). They are still worried about inflation, that’s bad for markets, no rally off this, kill the calls!


  212. market DOES NOT like the language of no more cuts coming.


  213. Futures have gone psycho!! up down 50 points in the blink of an eye!!
    I wouldnt think of placing an order til this thing settles


  214. I know who I want for next Fed chief:

    Voting against was Thomas M. Hoenig, who preferred no change in the federal funds rate at this meeting.


  215. FILMflam – just bounced off 1.05.. did you get filled?


  216. LOL, my screen is going nuts. Crazy spreads everywhere.


  217. so is the DOW falling?


  218. Yeah, so the Fed-watching theory that they’re paying attention to home prices continues to seem accurate. Which (as everyone here points out) is going to cause us longer-term issues unless the Fed *also* demonstrates some serious backbone once home prices stabilize, to begin raising rates again.

    Ugh. Where’s Voelker when you need him.


  219. Etrade got them for me at 1.036
    Optionshouse got them at 1.06
    Tradestation at 1.08

    Not what I expected.


  220. Retrace city. Market got what it expected… Nothing to worry about


  221. wow film,
    that’s really interesting! not what i expected either, but glad to see it as i’m trading on etrade.


  222. so, what now ?


  223. Gutsy call for me sold S&P emini short at 1 pm and bought it back a few minutes ago. Had a standing buy back at nice low. Wow the red line went crazy. Better that I had it all set in place. I could not see Fed doing more that .25 and making a cautious statement. Can’t count on them to save it all.


  224. AAPL with a quick test down to $185 and then back to essentially flat on the day near $187. I liked it better at $189. ;-)

    Efficient market theory, yeah, right.

    reinharden


  225. Film – Not sure it is relevant as a test as it’s a one off. You’ll have to try it many times to get a statistically correct profile.

    :)


  226. Yen gold and silver have hardly moved to this point


  227. DIA stabilizing around yesterday’s close. Goodbye premiums!


  228. Well tradestation is not really good for executions, they have really neat charting software though.


  229. BA didn’t slam, interesting! I’m scaling more now.


  230. Loaded with Q puts the minute they said 0.25. The “pause” thing is probably the worst.


  231. lol the whip didn’t push UNH over the cliff either… that’s kinda funny


  232. Please disperse, nothing more to see here…off for lunch.


  233. In the long term we would be much better off with Paul Volcker, my personal hero…to me he was like Batman and the Incredible Hulk rolled into one.


  234. MCD IS UP. NOW THATS A COMPANY YOU GOTTA OWN


  235. k1:

    Its hard to money if you see something before most others do.
    Staying the course is difficult. Have learned a lot from Phil
    on rolling options, which helps a lot.
    Incidentally, I have made some of my best trades keying off Ken
    Heebner’s moves. He is always early but usually right.

    http://money.cnn.com/2006/06/12/magazines/fortune/heebner2_retirementguide_fortune/index.htm


  236. K1 – do you normally sell ITM calls against your stock/LEAPS?


  237. MCD is going to be the only place people can afford to eat.


  238. DOW only down 50 off todays open pretty much non event to this point


  239. _fab, I will try to remember to try again whenever I know exactly when the volatility will hit the market. Would have been more interesting on a strong gap down. Fairly benign percentage move but it is the first sample.

    But, I need Phil to be right as I would like them all to be closed for a profit sometime soon.


  240. God help me… I’m long GOOG – the STOCK


  241. nasdaq bouncing back up


  242. DOW now off only 20 total non-event!!


  243. China was such a good move for Mcdonalds… I love that company!! is it in the Happy 100?… I should make a Sad 100 portfolio… Round up a bunch loser companies.


  244. Film – Statistical study AND profit rolled into one… Good one! :)


  245. GOOG actually hit high of day.. market disconnect?


  246. GS-Picked some up when DOW went NEG


  247. are we going to see Dow 15,000 now? Anyone a super-bull going through November?

    Hating my GOOG 630 put. Live and learn!


  248. No it’s a shakeout, I’m downgrading google to 400 bucks before 2010. Just to mess with phil.

    MSFT is performing very well with the cut as well, REIN YOU ARE TOPS.


  249. I guess this is why I only have 4 positions expiring in November and 2 of them I opened today…

    Oddly, I’ve been happier with D and WMB this week than most other things and they just kind of sit and slowly accumulate most of the time. Of course, I’m biased towards WMB because my original basis is back somewhere around 70 or 80 cents. Which means that it’s done even better than my $6.505 basis AAPL.

    BRCM looking cheap now, it’s on my list of things to start another position in since it got unduly spanked. TXN is a quarter or two away from having good numbers, but from a stock perspective, it’s probably worth starting to accumulate again as well. INTC and MSFT you’ve heard about way too often from me. And MSFT’s “never” is looking closer than even I expected. ;-)

    I believe that technology is poised nicely to outpace the overall market through the next 6 months to a year barring some additional macroeconomic shocks. ’cause I think we’re starting to see the upgrade cycle that we were talking about last year finally kicking in over the last quarter or two.

    While I don’t applaud the weakened dollar when it comes to travel, I do appreciate that it helps American companies sell goods overseas. And I was under the impression that in general we thought that kick-starting at least a little inflation would be to our long-term goal so that we could inflate our way out of debt by deflating the dollars being held overseas. Which would force China (et al) to deploy some of their trillion dollars in cash by buying American assets in hopes that they’d grow faster than inflation.

    But this $90 oil thing is beyond ridiculous. And if you follow the Japan import numbers, you can’t help but wonder what the long-term impact of the current demand destruction is going to be. Japan oil imports down 9+% in September, China oil imports forecast to stabilize this year and begin declining over the next 3 years. The oil producers and speculators are setting themselves up for a return to $12 oil (well, probably $20 after we account for the new inflation).

    If I hadn’t lost so much money last November/December shorting XOM, I’d be tempted to do so again right now. ;-)

    reinharden


  250. Albo- “staying the course is difficult”. You said it. Personal responsibilty, working hard, paying your debts, saving money, treating others with respect, those things are hard. Doing it as a society isn’t really any easier, but the payoff is the large. Unfortunately, I think there’s a lot of truth to the “Consumer Society” thing Phil writes about, and it saddens me. I hate to sound so much like my grandparents, but whatever happened to self-respect and hard work?

    Sorry all, I don’t want to send us off on that tear again. I really wanted the Fed to hold steady and disprove the theory I’d been reading.


  251. HAPPY 100- I have been waiting for some plays that we hold for a 100 days. Never happened. LOL


  252. Ken Heebner coming on CNBC. Am I clairvoyant or what?
    Were they listed as guests on CNBC website?


  253. Rein – The fat lady hasn’t sang yet. I would be selling the 40 calls, but there’s NO premium… It’s actually probably more worth it to buy the damn things.


  254. Jedda- I sell ATM calls against my long positions. But the big move up after the September Fed session put them all ITM. Doing so put a bunch of my calls out into December and January. So I’ve been carefully managing my rolls to get them back ATM, and watching for opportunities to buy them back or bring them in closer.

    BWLD is a special case, the same thing happened last earnings. Big run up prior to earnings, followed by disappointment after hours even though their earnings were fine. My only miss was that I intended to buy an ATM put just before close, and got sidetracked. So I missed $7/shr or so. Darn.


  255. k1 – different age now. It’s all about bling and escorts… If you want a leading indicator of consumer interests, look at rap music videos.


  256. BRCM is getting cheap now, I agree, but I feel it’ll won’t have a sharp retrace, so we’ll know when it bottoms on this one.


  257. Bio, I thought that up until yesterday. I usually shake myself out before the climzx top, so I may have to jump back into my positions. But, I am willing to let this thing climb for no reason and make up for lost profits on the pullback.

    I have to remember, I AM ON VACATION.

    Another funny experiment gone awry. I put in the stop buy on GLD at 78.45, it flew up and then executed and went back down. That was pre-Fed. Then I put in a stop to sell at 77.45 and it flew down to get that one too. If you really want to get some good prices on GLD, just place stops on etrade and then cancel right before they get there.


  258. K1, unfortunately you were right the other night. Kudos to you.

    My new hero is Thomas M. Hoenig – maybe the next Volcker, who knows.

    All I can say is this scares the sh** out of me.


  259. “the pace of economic expansion will likely slow”

    “intensification of the housing correction”

    “Today’s action, SHOULD help forestall SOME of the adverse
    effects on the broader economy” In other words – gee we hope this works, we haven’t got a clue!

    They flat out state they are going into neutral inflation watch after this and they restate their charter to foster price stability (good that they know what it is!). That sounds like a warning to the commodity pits that they are willing to tank the economoy befire they’ll let oil hit $100 but it sure isn’t bothering energy traders into the NYMEX close but they will probably sober up soon.

    This is all good to MSFT!

    WOW – everything coming back now, be careful to the upside if we break over 13,850 and 1,540 and 2,850 (I know we have 2 of 3 already). GS breaking out like that was just what they wanted.


  260. Had a sit down with big blue for yah, it should be all good now.


  261. look at that candle ! complete nonsense.

    beware month end


  262. After all Phil, we were looking for a nice run into Nov. to short oil into!


  263. Richard- it’s not that I was right, if there’s any credit it goes to John Mauldin, the analyst who described it (at least, the analyst I read). Unfortunately for all of us, I wanted to be wrong. But as a trader, I’m trying to learn to differentiate between what *I* want to happen, and what the trend is. I’d rather follow the trend and make money.


  264. Time to turn off the brain, right phil?


  265. Very happy with X’s performance.


  266. MSFT – Demetrius, I’m definitely with you with regards to fat ladies singing. But never is a very long time and it’s starting to look like I’ll get to add inflation to my side of the equation as well. And now I only need 10%.

    Nintendo has admitted that they won’t be able to produce sufficient Wiis to meet Christmas demand. Sony…sigh…Sony. What to say about Sony? They need to figure out how to reincarnate Akio Morita ’cause they’ve been in a spiral practically since his resignation back in 1994. They’re turning into the Xerox of Japan. Anyway, suffice it to say that the Playstation 3 isn’t going to be on the Christmas wishlist. Which means that while Nintendo is drumming up demand for game consoles that they can’t meet, Microsoft will accidentally be selling lots of people Xbox 360s that many of them didn’t originally want. ;-)

    Of course, I think some of the recent rally anticipates that. And probably, quarter over quarter, it’s going to be hard for the gaming side of MSFT to compare to last quarter since they won’t be launching Halo 3 again.

    Anyway, I like MSFT for the next 18 months to possibly 3 years…but I’m not throwing them into my retirement account. Not unless they buy back a lot more stock in order to create the appearance of earnings growth. A lesson we should all learn from XOM. ;-)

    reinharden


  267. Oh Boy! Cramer’s on!


  268. GS- nice $3.5 gain. SEE YA


  269. Phil,
    Juliet says Hi. She’s a great trader.


  270. Mortgages are going up!!! The cut is being seen as inflationary in the bond market – that is the WORST possible reaction to the Fed cut. The financials should be loving it because it widens their “crack spread” but it’s going to do nothing for the corporate bond market, which was really what the Fed needed to save.

    I’m sticking with my plan of rolling up the puts on the DIA spread, bidding .35 to roll up 1 level. This cut was bad news for CFC and other troubled lenders MER too) who needed a 2 point cut to bail them out.


  271. Baltic Dry Index down again today, but more interesting in that today it’s down for all classes of ships, and not just the Cape Max class as yesterday. It will be interesting to see how this affects our buddies at DRYS and DSX.


  272. Holy cow… Bueller… Bueller…. Bueller… Rationale…. Rationale…


  273. Yes, K1, I’m trying to learn that same lesson, but it’s still difficult to turn the brain off. Or, more to the point, to turn off all manner of reason.

    I think the next post said it well – we need to keep our brains turned off – at least for the moment.


  274. Oh good, AAPL is back above $189 where it belongs.

    I have to pay a little attention nowadays as I promised my girlfriend that I’d reduce my position by 10% at $190. ;-)

    Also promised some reductions at $200, $210, $220, $230, $240, and $250. I don’t expect to have to follow through on the $250 reduction before the Jan options expire…but I hope to have to.

    reinharden


  275. DIA – to the moon!


  276. Oops, $190 would be now. Drats, I don’t really want to sell any. But a plan is a plan. Although in this market a plan seems silly.

    reinharden


  277. qid / qld

    When did they start trading options on the ultra’s?
    10:1 leverage here we go …


  278. What a trip – last thing I read here wa .25 cut… lost i-net, platform all. What great timing huh? I’m so glad!!!! I would have bailed in panic on everything, I think… Lesson – don’t panic. Stick to your plan?

    DM thanks for talking to IBM I was very worried when I heard NAS tanked!


  279. I just gotta introduce the fat lady to jenny craig, we’ll see how msft would do then.


  280. At least my SUN calls are doing great!

    Can’t turn off brain yet. There is no rally here – we are just back to yesterday’s open. If we don’t close over 13,900 it will be a huge loss of momentum and what’s the catalyst we’ll be looking for to break 14,000? Someone is working really hard to create a rally here but you can’t have a real stock rally with rates climbing – it’s like another pipe opening up for the water (money) to flow to. No matter how small, you’re going to lose some pressure.

    Let’s remember I’m 95% neutral so we’re talking about side bets here but I won’t be buying this until we get through the weekend over 14,000. How anyone could have read that statement and interpreted it as “more cuts are coming” is beyond me but this is one of those times where I’ve gotta channel my inner Rodney Dangerfield and sell when they’re buying.

    I miss Juliet! Tell her I hope all is well.

    Holy Cow – I just filled 10 DIA $140 puts at $2.14! It never hurts to ask! This is not a roll, I’m staying fat in the $139 puts and adding as much as 1/2 the $140 puts. I got out of the call side in pretty good shape.


  281. wow. you are right on QID! Just happend yesterday…i remember checking a little while back as a way to hedge and it wasn’t avail.

    http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-30-2007/0004693811&EDATE=


  282. reinharden
    Your girlfriend make your stock decisions? HMMM?


  283. Phil, if you had APVAP (Apple, Jan 08, $180 Calls) with a basis of $0.75, which had pretty obviously paid for themselves an eon ago, is there any AAPL roll that makes sense, or do you just keep selling out of the position? With leverage having dropped away, I’m thinking just to liquidate the $180 strike position entirely.

    I’ve already got a collection of Jan 08 calls at $200, $220, and $240 (all of which are free at this point), so it doesn’t make sense just to roll up. But the premiums seem ridiculous on rolling out.

    Mostly I’ve just been rolling into companies in my long-term portfolio.

    But since I’ve found you to be a much better trader than me, I’m doing what everybody does and asking. ;-)

    Any advice?

    reinharden


  284. Richard- for now we’ll turn off our brains. But let me know when you get a meeting with the Fed governors, I’ll fly out and we can sit ‘em down and give them a good talking-to.


  285. Phil, what did the market tell you about using your brain?! So what if the 10-year went up, it did that last time the fed cut too and look at how healthy the economy is!

    :(


  286. Yea baby! Go market go. Ok, I don’t understand this, everyone was saying that a .25 basis was factored into the market. So, why is it reacting so positively to something that was already factored in? I figure this is a one day news event.


  287. BIDU $360 puts at $11.50 XXX out at $10.50


  288. It’s pretty telling that C is down.


  289. Took off 2 tiers of IBM added on the way down. Whew feel better already


  290. I definitely jumped ship before it hit the harbor. Oh well. I will just hope sit on my puts as a brain play (those don’t pay very well) while the rest is in neutral. If this is the way it has to be, so be it. I am signing off AND TURNING OFF MY COMPUTERS. Talk to you guys later.

    Parting words: I don’t like EWZ and FXI’s new highs. Will probably go up another 10% in the next 2 days, though.

    I wish I was in the NY/NJ area. I need my GOOG margarita. Anyone here owe me a margarita that lives in SoCal? :D


  291. First advice to self. Sell then think when you’re at your exercise point. ;-)

    BillBigD: Well, it’s all a matter of priorities. ;-) She doesn’t like it when I pout about having failed to better liquidate a position. Although she tolerates the sometimes excessive returns well. In truth, my plan existed before I told her about it (but don’t tell her). But telling her does help keep me honest and “on plan”.

    reinharden


  292. Have your theories.
    At the end of the day, Bernanke likes living, so he cuts, when simon says to cut.


  293. Regarding rates- not sure if everybody noticed, but the secondary market in Treasuries had priced in a cut of 50bp by middle of last week. For example, the fat part of the secondary market was 9mo maturities at 4.41 two weeks ago, down to 3.89 yesterday. I see the fact that they’re back up to 4.11 or so as “sell the news” rather than an actual loss in confidence.


  294. I’ll bet this is one of those the Fed cut rallies but were speaking hawkish, which means oil will come down and the economy isn’t as bad as we thought it was rallies…


  295. Correction- 9mo and 1yr Treasuries are 4.14 right now.


  296. Picked up a few FSLR NOV puts.


  297. POT was not a good short.


  298. Alert Alert Cramer runs the Fed

    Cramer “….accept the fact that the Fed will cut and has to cut, or Armageddon’s back on the agenda… recognize that the house of house of cards is going down anyway. Just make it as painless as possible.”

    Fed today: “Today’s action, should help forestall some of the adverse
    effects on the broader economy”


  299. Harvey,

    That makes two of us. Thankgod i didnt DD


  300. BRK up 1.6% on the day at new all-time highs. With that silly PE of 16 and with Mr. Buffet deploying assets to buy companies which aren’t paid in dollars, I’m starting to like BRK even more than I normally do.

    Maybe I’ll just park the most recent AAPL dollars there for awhile.

    It’s only a matter of time before he buys up some cheap financial and cheap real estate companies back home in the States. Although I don’t think he’ll buy until after they’ve clearly bottomed and are on the way up. And those will probably substantially out-perform 3 to 5 years out…

    Does anyone see a Warren Buffett like trader in one of the financials? If so, BRK could kill two birds with one stone.

    reinharden


  301. Phil – What’s the best put bets for the 30% of profit rule. I cashed lots of calls and gold and only have a small put position in HET.


  302. Phil:
    Whats a Better Hedge
    QID calls 35′s to play for market weakness
    or QLD puts for market strength

    screwy isn’t it


  303. OptionSage:

    Would you suggest a long strangle on NTRI? Think stock may
    not go up right away but expect it to be considerably higher
    in a year or so. Suggestions?
    Thanks.


  304. aaannnddd… weee’re… even? Made 35 pips on the EUR… crazy crazy fun.


  305. AAPL reductions – it’a a good plan! You can always buy the $300s cheap with all your lovely cash when it crosses $250 and, if you don’t think that’s really going to happen, then you SHOULD be getting out shouldn’t you?

    APVAPs – that is, of course an adjusted basis. Whenever I make more than a little on a caller I credit the other end of the spread rather than just dump it to cash as it gives me a quick indicator of where I really am on a position. In that one’s case, it has long since paid for itself and at this point my decisions need to be based on how much profit am I risking vs my expected returns. Looking at it that way makes it much easier for me to let go of big winners (like my Googs the other day) as I could clearly see it made no sense to risk $150 in profits to sell a $18 call to get a 10% premium when I know I can do much better with 10 diversified positions than I can with that single one.

    You should roll your Apples back to Aprils that you can sell against like the $190s for $24 (you seem to have $19 on positions) and you can sell the Dec $195s against 1/2 for $8 so it costs you nothing, you are $25-45 more in the money with 3 extra months to go and you are barely capping your gains. That is an ultra-bull play on Apple but, if it goes down in a way that bothers you, you can quickly sell the other 1/2 in $190s, currently $10. That would cover 1/2 your positions and give you the exra cash to roll down with the stock (costs you $2.50 to roll down $5) but, if all goes well (Appl gently moves to $195), you’ll get a 20% return in your first month along with some appreciation in your underlying position – that should make your girlfriend happy! 8-)


  306. Albo a long-term straddle? An 09 at strike 30 costs $18.40 at the Ask. When the cost of the options exceeds half the price of the stock it’s time to reconsider and buy the stock and a long put because of the impact on margin (ie you can borrow to buy stock but not to buy options). So stock + long put might be more expensive but preferred. Either way the one thing this stock has proven in the past is it’s volatile and it would be surprising if that didn’t continue (even in spite of the correction recently). I wouldn’t be holding either position without shorting puts and calls regularly to lower risk against each of the long positions while you wait for the move to occur.
    Sage


  307. buy a leap


  308. Thanks, Sage. That’s great!


  309. If you want, take a look at AVP (TSX Venture)… i don’t usually recommend other exchange trades… But you might get atleast 20 cents upside on the stock. Just a note.


  310. sorry APV* is the ticker.


  311. HXL – Phil if/when you have time. I did follow your trade exactly so here’s where I am; how should I adjust?
    + 2 HXLAX (Jan 22.5) 2.38 ave and + 2 HXLLX (dec 22.5) 2.12 and I sold HXLKE NOV 25 for .45. Should I adjust? I notice my cover turns red at the same rate my dec.’s turn green & the Jan.s are profit.


  312. reinharden- I am teasing. But I do remember one time you had to drive her to work, AAPL drop a bunch and you were pissed. LOL


  313. Too bad Film, I have a really good tequila collection!

    POT – yep that one was awful. $3 was the top of the day but I certainly hope you didn’t let it get below $2.60. If you never lose more than 20% on a directional play you can make a lot more of them! If you still have them now you can DD at $1.50 ($2.75 basis) and spend another $1.75 to roll up to the $120 puts at $3.70 so you would be in for $4.50 on the $3.70 puts. Really, I don’t mke these things up, it’s just math. That way even a wiggle down will get you even and out but these kind of plays only exist when a trade is going against you, once the momentum turns the prices get very different. There’s no guarantee this will work either but, on the whole, I’d rather be 20% down on a position that’s right on the money than 33% down on a position that’s $5 out of the money.


  314. Thanks for NEM a couple weeks back Phil! One of my best trades I can remember. Right now after covering I’m long 20 Jan 47.5′s and short 10 Nov 47.5′s and 10 Nov 50′s. Low delta, high theta, high comfort level.


  315. COH – Bought for a retail play…. Looks like it bottomed around 35ish.


  316. Killed BIDU puts at $11, didn’t like the way FXI is going.


  317. LULU looks interesting… 48 was a solid buy.


  318. Anyone else here think that there is a major discontinuity between the price chart of GS and all the other Investment Banks. Is it possible that the people that run GS are that much smarter then everyone else – I don’t believe it is possible. So when does GS’s chart start looking like it’s peers? I’m guessing by Jan and put a small order in for GS Jan 170 puts @.95 so it hasn’t filled yet.


  319. Sachs boys are bigger traders than the oil boys… Sometimes I feel they’re the same people.


  320. Phil- FXI calls for tomorrow? We have done really well on this in the past!!
    I love tequila!!!!


  321. BillBigD – Yeah, that entire missing the open is sometimes annoying. The downside to having gone back to work is that on good days it takes 45 minutes to get to my office and bad days can be much longer. Of course, I also remember being beside myself on October 11, because I had a day long meeting without any networking — and Apple fell from $170′s down to touch $153 before recovering to close in the 160′s. I’d have loaded up with Novembers for the earnings call and Januarys just for fun if I’d been online for that! Oh well.

    Phil, thanks for the suggestion. Now I’ve got to go study until I figure it out. ;-) Although for fun I’ll mention that the $0.75 is the original basis, not the adjusted basis. The options are well beyond free at this point. My major concern with selling against is that doing so may require more monitoring and as you’ve probably noticed I have days at a time where I don’t get to look at the market. And days like today where I’m the only “executive” in the office and I’ve got no external meetings to speak of. ;-)

    reinharden


  322. now this is window dressing !


  323. BA’s got a fire under it now. Good job, DM.


  324. CROX … ROFLMAO.

    Pumped to 75 … just reported now 64.


  325. GOOG – AH at 707.07 … is that an omen?


  326. SU is killing money… And the CDN/USD pair is 9435.. That’s what 1/2M profit in a day on 300 lots?


  327. LOL…CROX!!!!


  328. now 57.50

    crox Holy moley


  329. Phil – thanks for your big picture and the specific calls and rolls. NEM was incredible – wish I’d ridden it farther. Everything I cashed today was a result of your site, calls & the input of the broader community. This was one fantastic day. Problem – I’m not cover well enough for a snapback tomorrow!


  330. Court, I was really surprised that BA didn’t die on the whipsaw… Especially on low volume, so there’s Really nice cue that it should break 99… What a company!


  331. CROX- looks like my Bearcalls are very safe. OUCH


  332. CROX WOO!!


  333. BBD … mine too.

    also bot some shares @ 58 AH; flipped em at 63+ in 5 minutes


  334. BRK – I picked the as my 1996 stock of the year, they went from 90K to 110K so I was satisfied. This is their new thing, they run up mid year and plateau for the spring as people get worried about who will replace Buffett (I’m still waiting for them to call back but I already told them living in Omaha is a deal breaker).

    HET is not a good Focus put bet – too speculative. Gee, all our puts cashed in and we do need more but I’m not going to rush into anything. I’m tempted to go with POT who sure aren’t going to fix their currency issues after this Fed meeting!

    QID – I’d have to go for the massive pop you can get to the upside if the market breaks. the Jan ’08 $34s are just $2.84 and you can sell 3/4 the current $34s for $1.34. If you get another sell in Dec you’ve paid for 70% of your position and if it pops (it was $50 in Aug) you get no less than 25% of a full gain on your longs.

    HXL flying! We missed a chance to buy out some of the callers so this is going to head to a 2x roll up most likely. Remind me tomorrow as it must be done!

    Congrats Rmyadsk!

    FXI calls – this is not a rally, this is limping halfway back to our 14,200 high from a sharp and relentless drop to 13,600. The big drop came 10/19 at 13,900 (to 13,550) after a protracted sell-off from 14,200 on the 10th. So here we are on the 31st at 13,930 (and boy was that finish forced!) acting like everything is great. After the last Fed blast (9/18) we drifted flat along 13,800 for a week so it’s all going to be about next week’s action. Today is meaningless.

    Rein – selling 1/2 against requires no more monitoring than you do now. If it spikes down, you buy out your caller and roll down with his money, no big deal. If it spikes up, you are on par with your caller, he loses his premium, you roll him along to continue to protect your downside next month and you can stay aggressive on your open half as you have good downside insurance. Try it with a a part of your shares and run them side by side, I bet by Jan it will be your new strategy!

    CROX – now that is funny!

    Good job MrN – that makes me really happy… I don’t think it will all go away tomorrow, maybe Friday…


  335. So now that the fed cut is behind us, are we a little safer in that this bull market will continue? I’m sitting at 50% cash and want to buy some stock again.


  336. CAP- NOW that is a good trade! LOL


  337. I’ll bet any of you a margarita that Cramer’s next pump is Crox!


  338. I’ll take you on.


  339. LoL, Bad numbers but he’ll find some way to twist them around or is this the ultimate fate of a Cramer pick? This is at least the 4th stock i’ve seen him pump and then it’s crap 3 weeks later


  340. CROX-.03 beat is nothing.
    FXI- it was just an overnight play. Also Just an FYI I don’t give a hoot what the DOW does. LOL But I don’t think we are in Rally mode either. Although alot of my stocks say we are. Happy Halloween tonight and have fun with the kids.


  341. BRCM – Reinharden,

    thanks for bringing this one up. I bought a couple of 09′s. Hit pretty hard on what appears to be just supply issues. The fundamentals are still in place.


  342. CROX $60! That blows out my safety on the Dec/Nov $70 spread… I think I buy out the caller and roll down tomorrow (maybe Jan). Revs up 130%, earnings up 115%, guidance in line with estimates at 35-40% growth targets. This is what I keep saying about stocks that double in a year – no matter what you do (unless you are AAPL or GOOG), how can you justify a double?

    I can’t wait until TSO explains how they got to $60 from $30 last year – this will be a good one! LVS is another one that has to justify a double but that one is different because they are going to LIE. Shelly’s entire wealth (3rd richest man in the world) is tied up in his 70% ownership of this $47bn company. There is NO way he’s going to take ANOTHER $5Bn haircut and get knocked off the list!

    MY next pump is CROX!

    Yep Happy Halloween all – time to go be a spooky dad!


  343. parchesia – can I switch the margarita for a Mountain Dew that I’ll probably owe Rein lol?


  344. DM-Haha,hey I don’t mind buying drinks for someone but I can’t buy a drink to give to someone else who lost one of their bets.

    BillBigD-I didn’t even look at their numbers. I just presumed they were bad given the selloff, LOL


  345. If I owe you both, I’ll be pissed!


  346. lol it’ll be fun if we all meet… Drinks for all my friends!


  347. Yeah that’ll be fun! Of course, I think everyone is going to end up owing drinks to everyone but Phil.


  348. Man, is he going to wasted off the free drinks


  349. Wasted- yup, I’m looking forward to that seminar/poker game/party.

    BTW folks, I’m going to be in the cave tomorrow. Bad news is that I’ll miss the action and only be able to catch up on the train ride home. Good news is that I’ll have several hours of focused time to pull together the first submissions for the k1 project.

    I’m hoping to get the first big tranche published by Friday night so it’s available for reading this weekend.


  350. Happy Halloween! It sucks that I’m missing girls dress all scandalous tonight… Crap. But hope you boys have fun regardless.


  351. parchesia
    I told everyone what you said about getting orders in on Happy’s blog(gave you the credit so no worries) But alot of people had problems with optionhouse and Ameritrade. Always have a backup site


  352. thanks k1, you’re really important to the community.


  353. CROX aftermarket selloff begs the question of how MM and Analyst crooks were able to pump up BIDU and RIMM beyond belief; as those should have traded down, not up another 25-30%.


  354. CROX – Cap, you aren’t joking. AH off 21%!!. Great example of market manipulation (or mutiliation .. howerver you speel it). Cover, Cover, Cover!!!


  355. CROX – I don’t want to get all sentimental and stuff, but..

    Their forward PE going into earnings was only 29 with a PEG of 1.38. They seemingly reaffirmed guidance and are still looking at EPS growth of 30% to 40%, right?

    So the only thing that has changed is perception and price. And the new price drops their forward PE down to 23 or so. Which, from my way of thinking, ain’t all that expensive.

    Of course, I say that about most stocks that take a 20% hit. I wouldn’t be surprised if you could make a quick couple of bucks by buying the stock down 20% here after hours and selling it tomorrow somewhere higher…

    That having been said, I’m not going to because it’s not my genre of stock. I feel like I understand technology. Restaurants and shoes and stores just ain’t my thing (although I have some BBY, HD, and WMT in my long-term portfolio for diversification).

    reinharden


  356. Bill-Thanks for the credit! Just here to help where I can, in return for some good trades. I use primarily etrade and had a hell of a time getting my system up and running but it finally came through. Too much volume!


  357. Phil,

    I’ve been a bit tardy on posting up the Crude Oil contract open-interest graph. Here are some new links:
    http://img103.imageshack.us/img103/1674/crudeoi10302007lgrl8.jpg

    http://img103.imageshack.us/img103/7328/crudeoi10302007gl8.jpg

    One of them is super-sized, and the other one is a 660 width that can be posted (if you can read it anyway!)
    It popped into my head when I saw the crude inventory drop and remembered that a) I hadn’t posted these up in here and b) the contracts open at assignment last time around was at ~10K less than the month before.


  358. Reinharden, for all we know ANALysts will come out w/ upgrades to $100 and the stock will open at $82 ! LOL.


  359. Mr_Sparkle ,
    I believe it was you who had posted the schedule of sub-prime mortgages til end of 2008. If you have that info or link, can you please post it again?
    Thanks!


  360. lookin’ forward to the read, k1. thanks for your help and effort


  361. SLW earnings barely in line. How will that impact a miner in this market? They were up 6% today and down 3% after hours.


  362. Phil,
    For the CROX Dec/Nov 70 Put Spread, our putter is going to be DITM tomorrow.
    I don’t have enough margin to sell the long put into excitement first.
    Should I roll Nov putter to Nov 60 first tomorrow?


  363. CCJ: “Cameco had another good quarter. We continue to see increasing realized prices
    for uranium. In fact, we recorded the highest realized price in Cameco’s history even though the spot price of uranium actually fell during the quarter. These higher realized uranium prices generated an outstanding gross profit margin of 67% for uranium in the quarter and made a significant contribution to Cameco’s earnings and cash flow.

    The earnings are particularly satisfying. Our adjusted quarterly net earnings after unusual items are more than five times higher than last year and our nine month earnings are more than double last year’s total, coming in at $539 million, another Cameco record.


  364. CCJ – I don’t get the drop in light of earn. Is it the forecast for 4th qtr?


  365. CMan,
    That wasn’t me that posted the roll-out schedule. I do remember exactly the post you are referring to though. Sometimes I save those things but I can’t find it in my personal archives. If I do dig it up, I’ll post it again.


  366. Is this a normal headline? LOL. courtesy of Jim Cramer @ The Street.

    Cramer’s ‘Mad Money’ Recap: Why Worry? Just Invest

    Investors should set aside negative economic news and concerns about overvalued stocks and just concentrate on buying stocks and making money, Jim Cramer told viewers of his “Mad Money” TV show Wednesday.

    Right now there is one problem facing investors: “they are overthinking this stock market,” he said.

    The market is not working the way the professionals think it should and thus the people who know more about investing are making less and the people who know less are making more, he said.

    “There is a huge wall of money rolling at us courtesy of the Fed and it doesn’t pay to over think it,” Cramer said. “In fact it pays to not to over-think it.” When money comes in, it drives stocks higher and that’s all people should be looking at.

    Oil is driving everyone crazy because people are in shock that this commodity has gone up as much as it has and that no new oil is coming out of the ground, he said. However, “don’t worry about high oil prices.”

    Also, even though alternative energy stocks may seem overvalued, they are still going higher, as are the infrastructure, fertilizer and China plays, Cramer continued. He believes betting against something that’s overvalued is a bad idea in this environment.

    More here – http://www.thestreet.com/_htmlbooyah/funds/madmoneywrap/10387675.html


  367. Cramer is done with CROX. He didn’t like the quarter lol. I haven’t watched his show in a year but I get the feeling now he is just spewing out BS because how can you run a stock show like that with new content everyday?


  368. CMan,
    Here’s a link to a nice chart of the ARM reset schedule:
    http://forum.themarkettraders.com/read-m/26/6829/6896

    And here’s a table with the schedule from Seeking Alpha:
    http://seekingalpha.com/article/45025-recent-monthly-adjustable-mortgage-reset-values-and-a-look-ahead


  369. CCJ – just saw this: http://www.bloomberg.com/apps/news?pid=20601082&sid=aikN5GvvUx10&refer=canada
    New delay at Cigar Lake until 2011. Could get ugly tomorrow given the last selloff on news of first delay. I was actually tempted to take out my caller this afternoon. Now, I’m glad I didn’t.


  370. kc
    that news on CCJ came out this afternoon, and it did sell off today even with good earnings. maybe that was it, or maybe not, don’t know.
    i was also close to taking out my callers, and left them in place.
    we’ll see…