Archive for 2007

Quick Weekend Wrap-Up

Sorry but I was away for the weekend and got back later than expected so just the facts here real quick!

My take on the week was is was a good test of market willpower with lots of bad news and some shaky earnings that still didn’t seem to really matter.  We held most of our levels which amazed me but what really amazed me is how few positions ended up stopping out on us despite the market gyrations.  That indicates to me that the market is still pretty bullish and our "Go with the Flow" virtual portfolio is still pretty bullish too.

I can’t even discuss the 39 positions we closed without explaining them as most of them were positions we sold, so the net "invested" on the group was -$162K, meaning we were paid that much to sell the calls and puts above the positions we added for ourselves.  When those positions were closed out we ended up collecting another $27K (this is just the STP and LTP, not the $10KP or Google or "yawn" Stock virtual portfolio).  So the net gain on cash is infinity as we never laid any out to make the money but it worked out as a great buffer for the positions we did leave on the table.

The average gain of the positions closed for the week as 159% but that includes 1,000%+ gains from no-basis TASR and CEGE calls and without those the average is 66% on 18 average days open.  Our biggest losers were AAPL and COF calls we sold and that’s not too bad because our longer positions benefited from those gains.

That leaves us with our Short-Term Virtual Portfolio with 74 open positions that are much more hedged with an average gain of 19% on 27 average days open.  The Long-Term virtual portfolio has 49 open positions with a ridiculous average gain of 309% as we have, this far into the year, run the basis on many of our positions down to zero (of course that’s the whole point, it means everything else is profit!).  The more important gain on capital is up to 45% on 69 average days open, up from 36% last week indicating we have a pretty strong group there.

Our $10,000 Virtual Portfolio lost $4 for the week to $18,258, which is great considering the beating we took on our DNDN positions, and I will…
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Friday Virtual Portfolio Moves

Posted May 11, 2007 at 9:51 am | Permalink (Edit)
GOOG – I still have faith. Next week I will likely roll back a month and sell Junes if my posiitons aren’t working but I think they are way undervalued here.
Posted May 11, 2007 at 9:58 am | Permalink (Edit)

FXI – now I have a caller! I sold 1/2 the May $114s into the initial excitement. $2.50 was just too much to pass up as it was .50 yesterday…

Posted May 11, 2007 at 10:04 am | Permalink (Edit)
AMGN – beware $55.50, if they beat that they are probably going to look like a recovery bargain to the chart boys.
Posted May 11, 2007 at 10:07 am | Permalink (Edit)

WYNN – no I still have the spread. I was thinking they were going to recover but now I’m thinking thatI’d better sell the $95s for $2 while I can (XXX by the end of the day).

Posted May 11, 2007 at 10:48 am | Permalink (Edit)

TSO – I’ll consider taking $120 puts into the weekend if they can’t break $121.

XOM smoking my poor putter! Boy did I need that to offset some of the damage to my leaps.

AMGN failing at $55.50, I think the bargain hunters are fading out.

Posted May 11, 2007 at 10:56 am | Permalink (Edit)

FXI – that’s why I only sold half – you never know but the $115s are still $2.50 as the velocity of gain changed (I’ll bet they’re angry about that!). I will stop these guys out at $3 and sell the next $ up on the turn. Right now the $116s are $2 so at about $2.50 I will pay .50 for a roll. I can do that all the way to $120 and I will still be even if it doesn’t close next week above that mark. Meanwhile my leaps would be a double so the $1.25 (only sold

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Well it’s been a while since we’ve been glad to get out of a week but let’s get this one over with!

Please make a post-it and put it on your monitor.  It should say 2 thing:

  • It is NOT my job to save the market
  • If it doesn’t bounce over 20% it’s not recovering!

This is no time to be a stock picker, this is the time to be a trend spotter.  We have our Nasdaq calls as a general call on the markets but it’s a long way to go before we are "back on track" for the week.  Happy Trading has several market watching charts up this morning over in Wang’s World but I placed my bet on the Nasdaq (if anything is going to recover at all):


This will be an easy day to make a decision as anything down is very, very bad!

Asia was not too bad this morning with the Nikkei and the Hang Seng dropping "just" a little over 1%.  Of course export companies took a big hit as worries about the weakening US consumer dominated trading.  Over in Europe the markets are trading down at their open other than the UK, which is being led back up by merger mania in the mining sector.

E posted a 13% decline in profit as oil prices fell and gasoline demand dropped even though the shadow cartel member cut production 5% for the quarter.  "Lower European gas demand pulled worldwide gas sales down 10%" and you will see Criminal Narrators Boosting Crude scrambling today to tell you ANYTHING other than that truth.  The IEA is doing their best to stir the pot by coming out with a drop stopping report that claims we will have a tight summer due to demand.  "You’re going to end up with a tightening of the product market in June. By July you’ll have a potential for a 2.5 million barrels-a-day increase in refinery throughputs," said the report’s editor Lawrence Eagles. "You need to have supplies increasing by that amount but we’re not seeing it in shipping data" and elsewhere.

The "Core" PPI came in flat so look for another round of traders deluding themselves that the Fed may cut rates.  They arrive at this conclusion by ignoring the fact that if you do factor in food and energy,
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Thursday Virtual Portfolio Moves

Posted May 10, 2007 at 9:42 am | Permalink (Edit)

TM – I’m waiting for the dust to settle but my plan is to buy the Jan $120s for perhaps $10 and aggressively sell the June $120s for $3.20 to make back my loss on the Oct $140s (-1.27 so far) and using the $140s as a buffer in case it spikes up on me.

Posted May 10, 2007 at 10:01 am | Permalink (Edit)

TSO – selling $120s for $3, out at $3.50 – it’s risky but I can’t pass that up. XXX Yes, I know it is currently at $2.50 but it spiked to $3 and that’s what I want to sell it for otherwise I won’t bother ($2.75 min on half).

IBN already got hammered on that news but my Dec $45s aren’t moving so I’m going to DD there and start selling the Jun $45s, perhaps for $1 but I’m not in a hurry.

Posted May 10, 2007 at 10:14 am | Permalink (Edit)

I’m opening a new $10KP appropriate position (but I won’t put it there due to length) of buying the Jan $2.50s for $2.88 and selling the Jan $5 for $1.58 which means you’re OK if it holds $3.80 and you’re in for $1.30 with a $1.20 max gain. You can also do that with the Jan ‘09 $2.50 at $3.35 against the Jan ‘09 $5 at $2.60 which is a risk of just .75 agianst the same $2.50 spread and a break even at just $3.25 – it’s pretty good money for a year or 2 and you may be able to get out early with small losses or gains along the way. On a big spike, you would cash in as both premiums would be wiped out so you could take an early exit. XXX

Posted May 10, 2007 at 10:26 am | Permalink (Edit)

DIA puts have barely budged on this drop indicating no one is buying it. Selling DIA $133 puts for .85 to cover some of my earlier losses. XXX

Posted May 10, 2007 at 11:35 am | Permalink (Edit)

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Thursday Thump

Well, don't say I didn't warn you…

It was bound to happen sooner or later but let's all take a deep breath and see where we are but first – an aside.  I have fun looking up pictures for the site but sometimes I find some really strange stuff.  In looking for a good picture of Humpty Dumpty falling off a wall (see how I maintain a thread from morning 'till night!) I came across robots singing the Humpty Hump and the Edgar Allen Poe version of the nursery rhymeThis is why I love Google - they appreciate this sort of nonsense enough to pony up $1.6Bn for the rights to show it to you!

Anyway we had a great time today watching the market tumble.  We've been pulling our winners off the table for a week now and had our stops in place since last Thursday and we just took a whole bunch of DIA puts yesterday so the darned market better have gone down or we'd be feeling pretty silly right now.   For some reason it took the market until 11 to decide the retail numbers were depressing while we were heading for the exits at 9:42, when I said: "Weak WMT – it sure spooks me! I don’t mind if WMT is weak by themselves but when TGT is down too then you know the shoppers didn’t move up market (and there is no down from WMT). COST did well but I don’t see them as being a real day to day substitute for WMT."

The market was so bad today that Apple almost went down.  At noon we decided to cover the Long-Term virtual portfolio with some quick sells  and by 1:15 we mover the STP around as well but we had a great finish catching the AMGN move right at 3:07 where my brilliant quick analysis was: "AMGN – something bad! $60 puts for $1.40 as mo play XXX"  Hey they can't all be thesis papers…  8-)

Luckily the team pulled it together and we had the facts by the time the stock had a rebound 10 minutes later and we were ready to buy the June
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Thoughtful Thursday Morning

I'm really having trouble enjoying this rally.

Despite my determination to go with the flow and despite the break-out levels we've hit for the Dow, the S&P, the NYSE and the SOX I still feel like it's some kind of silly dream we may wake up from at any moment

We hear from retailers today and expectations are already low so they'd better not miss.  We also have a Google Gathering, which is always interesting but, at this point, Google needs to colonize other planets in order to grow any faster than they are so it will be interesting to see what they have to say today.

Shanghai is still showing no signs of worry with yet another record close and New Zealand, Australia and Indonesia also closed at record highs.  The Nikkei, Hang Seng and Bombay all took a rest and India concerns me as they have some catching up to do.  Toyota was a huge disappointment as they are having trouble controlling costs as they grow sales 9%.  Forbes makes an interesting observation that perhaps the company is just having trouble controlling expectations as the numbers are indeed far better than the guidance would suggest.  Toyota made more money this quarter ($3.7Bn) than GM has this decade (-$11Bn) and is on track to earn GM's entire $16Bn market cap this year.

China is doing their best to bail us out by purchasing $4.3Bn worth of "technology" from US companies but I was disappointed that this includes $1.3Bn worth of MSFT software by Lenovo, who need some sort of operating system on their computers anyway.  An additional $8.2Bn will be spent on China's upcoming shopping trip as they join millions of other International shoppers taking advantage of our cheap dollar this summer.

Europe's big news is that Tony Blair is stepping down on June 27th paving the way for new leadership to tell Bush he is on his own in Iraq.  Mr. Blair told supporters: "Hand on heart, I did what I thought was right." Following the Sept. 11, 2001 terrorist attacks in the U.S., it was right, Mr. Blair said, to "stand shoulder to shoulder with our oldest ally, and I did so out of belief.   But the blowback since, with global terrorism and those elements that support it, has been fierce and unrelenting and costly. 
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Wednesday Wrap-Up

A big nothing from the Fed.

Just as we expected, talk loudly and don't even bother pretending you have a stick.

We had fun in the intraday as we realized the initial reaction was unwarranted but, unfortunately, I had to go and missed the rally, which was bigger than I expected but a very nice 100-point snap back from the initial reaction.  Anyone who thinks the market is an efficient pricing mechanism should take a look at the swing in the Dow from 13,350 to 13,280 to 13,365 to 13,310 to 13,380 that occurred between 2:15 and 2:45 today as this is an interesting sort of efficiency.  This is reason number 11 of why I hate hard stops

I don't like the fact that most of our big gains are just based on M&A mania, now coupled with the commodity bubble to bring us amazing moves in companies like RTP, which gained $11Bn in market cap on the rumor that BHP will buy them to create a $250Bn mining operation.  The fact that RTP denies getting a $100Bn plus offer to buy the company for 3 times it's 2005 value didn't dissuade 400,000 shares from changing hands at close to $300 per share.

Oil fell another .71 to $61.55 with very few barrels being cancelled and a last minute .50 rally saved oil from a possible finish below $61.  We are already shifting our attention to the July contracts, which did not rally at the end (no point in pumping a contract you're not looking at).

On the whole, it was another fine day in the markets but I'm very glad I tightened up my DIA puts (now June $132s) as it just sort of has that late-stage Jenga feel to it:



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Wednesday Virtual Portfolio Moves

Posted May 9, 2007 at 9:30 am | Permalink (Edit)

DNDN – CoolKid has the correct attitude. We buy out our callers and wait or flip to June. Don’t forget there are millions of shorts who got smoked on the initial run and all the FDA was send out a note requesting more information. That’s the kind of favor a fund manager can pull in a pinch as it has no impact on the FDAs decision but wipes out roughly $1Bn worth of share value ovenight.

TM – I forgot about them in all the excitement but I’m going to DD on leaps but I may roll too – have to give it a day.

Posted May 9, 2007 at 9:38 am | Permalink (Edit)

RTP – June $270 puts may be attractive, waiting for a price. Offering .10 for DNDN calls but will go .25 just to clear them out.

DNDN reality check. “Just” 6M shares traded so far and this company is worthless ($4 maybe) if they are rejected as this stage. Who is buying and who is holding if this is such awful news??? CNBC just had an analyst on saying this was a $1.50-$2 stock and that makes me even more suspicious that this is just a flush job.

I’m picking up June $7.50s for .75 and will roll to the $5s if they come down to around a buck. XXX This is risky but those calls were $11 yesterday and a $2 bounce will let me sell the $10s for more than I paid with a free ride.

Posted May 9, 2007 at 9:51 am | Permalink (Edit)

DNDN $10KP Aug $7.50s for $1, sell Jun $7.50s for $1 or better – stop at .75 if uncovered, well worth the risk of 10 contracts. XXX I’ve shifted my previous June buy order to Aug on that basis.

Posted May 9, 2007 at 10:03 am | Permalink (Edit)

DNDN – More data – I question the timing. Why ask today and not make the decision on the 15th as scheduled? Judging from the total collapse of options all the way out to ‘09 thought, you may very well be…
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Wild Wednesday Morning

Fed Day – Party Time – Excellent!

Well we hope so anyway.  What is the Fed really going to say?  Raising rates is not an option with housing teetering on the precipice (see TOL earnings) while lowering rates will send the dollar through the floor that is below the floor we fell through in early AprilThe dollar has been bound by roughly 2% moves so right now we are watching the range between 81.50 and 83 but a breakdown here will take us to a critical failure level at 80 which would be a real Global mess coming into the summer travel season.

So the Fed remains on hold and the market will worry over nuances like who voted and who objected and what word did they use to describe inflation but the reality is that the release of the Fed minutes will be used as an excuse for the market to do what it wants to do anyway so we're going to tighten up our DIA puts and maybe pick up a few calls if we get another nice dip as a strangle would be fun today.

Speaking of strangles – my long standing premise on DNDN has been that the FDA would destroy the callers by asking for more information and delaying their decision and that happened this morning.  While we will play it by ear, all of our positions allow for this eventuality but the sell-off in the pre-market is severe as the stock is trading down 60% at the moment (7:30).  Our two new plays yesterday were taking the stock for $17.20 and selling the $12.50s for $8.10 and while that may sting at first, I'm hoping for a quick buy-out of our callers on the overreaction and another sell into June to turn this into a nice income producer (sorry Mr. $8.10 caller).   Our more complicated play of the day was to buy the $2.50s for $14.65, sell the $12.50s for $8.10 and buy the $7.50 puts for $1.02.  I'll be curious to see what the $7.50 puts go for this morning but this trade should be fun to manage as well.

My prediction on this is that the FDA is asking for more information because they want to be able to blame the company for supplying overenthusiastic data if they run into issues after
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Tuesday Virtual Portfolio Moves

Posted May 8, 2007 at 1:02 pm | Permalink (Edit)

WYNN – buying Jun $105s for $2.68, selling May $100s for $2.72 (stop at $3.25) XXX

TASR – that turned ugly, June $10s down to .45 already. Not adding more as it may be flatlined to expiration but not stopping out on these or Jans yet.

HLYS – massive insider selling causing drop, nothing to do with long-term prospects. Happy holding Aug calls. Also waiting on May $40s – it’s a long way to go in 8 days and I have nothing I want to roll to just yet so no sense in paying a dime for the hell of it.

Posted May 8, 2007 at 1:19 pm | Permalink (Edit)

HLYS – now that I’m looking at it, it’s worth .45 to move to the Aug $40s but not really in the $10KP as it’s too speculative. As to discussions re. waiting for .10 at expiration. I have no capital at risk and I am ahead .37 so yes, another dime makes a huge difference if I can get it (assuming I don’t need the margin freed up).

Posted May 8, 2007 at 1:36 pm | Permalink (Edit)

DNDN play: Are you sure about those numbers? I prefer to keep it simple. This time I like buying the stock for $17.20 and selling the $12.50s for $8.10 for a basis of $9.10 collecting, hopefully, $3.40 in profit in 10 days. XXX I wish I could balance this with shorts as the $30 puts have a $3 premium at $15.60 but there are no puts to be had.

Another DNDN play is to buy the $2.50 calls for $14.65, sell the $12.50 calls for $8.10 (net $6.55) and buy the $7.50 puts for $1.02 (net $7.57). It’s not perfect but you can’t lose more than .07 and you can make $4.93 (up to when you get called away at $12.50s less the $7.57 invested). XXX I’m going to try to get 20 of these for the $10KP as there’s no margin issue here but it will be our third DNDN play and it will be awful if they go to $5 so be careful. There’s a little mo right now so treat…
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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.


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Phil's Favorites

A 2019 Earnings Recession?


A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...

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D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...

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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...

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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ... more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

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Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>