Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Friday Morning

Well another week bites the dust and, thankfully, this was a short one.

We have little good to say about this week other than we didn’t break below last week’s lows (yet) and there is nothing wrong with forming what is turning into a month-long solid base at 12,200.  There are very few prolonged consolidations that lead to a sell-off so the longer we don’t go down, the better our chances of going up.

We really, really need an easing of energy prices to get us back on track in the broader markets and we will continue to sell any commodity led rally and buy into any commodity based sell-off until somebody wins this tug of war.  We bought QID puts on Wednesday morning and QID calls yesterday morning and yesterday afternoon we were back on the puts – buy and hold isn’t even a real possibility for a market that was down 200 last Thursday, flat Friday, up 150 then down 250 on Tuesday, up 250 Wednesday and down 250 yesterday, finishing, as we noted in last night’s Big Chart Review, pretty much right back where we started from.

We got a small break in oil yesterday but much of that has been reversed in thin overnight trading.  We had another huge build yesterday and Rowan Menzies, head of research at Commodity Warrants said: "People have got to start being more concerned about demand, especially now that you got the inventories going up and up every week."  "Refineries are curtailing output for economic reasons. There’s weak product demand and they are responding by reducing output,” said Tim Evans, an energy analyst at Citigroup Global Markets. Total implied fuel demand is down 1.1% over the last four weeks from a year earlier. Gasoline inventories climbed 1 million barrels to 230.3 million, the highest since February 1994. “Gasoline supplies are near the highest level ever, and crude oil supplies are still gaining,” said Kyle Cooper, director of research at IAF Advisors in Houston.

Asia gave back most of Thursday’s gains into their weekend this morning as Japan cut its assessment of their economy in the face of slowing US demand.  Due to rising fuel costs, Japan ran it’s first trade deficit ($739M) in a year and the IMF dropped Japan’s growth forecast from 1.7% to 1.5%.  Consumer spending, the biggest chunk of the economy, is "almost flat," the report reiterated. Growth in corporate profits "appears to be pausing." Housing construction "remains at a low level while showing a pickup."  "Obviously, we are not out of deflation," a Cabinet Official said.

Europe is fairly flat ahead of the US open and our big decline came on Europe’s close yesterday so we can assume that European traders are buying our markets, even if US traders are not.  Oil and gas companies are leading the decliners in Europe so not bad news really and it would be a nice trend breaker if we can have people selling oil into the weekend for a change.  LLoyds Bank of England turned in a very good report and showed that banks can make money if they stick to banking and the UK Treasury is completing their takeover of Northern Rock so we can expect the FTSE to provide us with whatever leadership there is to be had as they seem to be the first to straighten out the banking sector.

The Clinton/Obama debates were pretty even yesterday but nothing really matters until March 4th, when Texas and Ohio will be decided.  Out of 2,025 votes needed to clinch the nomination, Obama has 1,199 to Clinton’s 1,040 with 1,014 regular delagetes still to be assigned by vote and 795 "superdelegates" who will likely cast the deciding votes.  Of the superdelegates, Clinton has a 100-point lead in the ones that have committed with about 250 undecided there.  I am saying this here because everyone is talking about the process but no one seems to actually understand it and the market does seem to fear Obama winning so we’ll keep an eye on that primary for a possible inflection point.

The WSJ warns of an "Antibubble" in Treasuries as nervous investors are buying treasuries at any price and atificially depressing the yields, which is allowing the commodity bubble to persist long past it’s logical expiration date.  Last time inflation was as high as it is now (4.3% in 1991) Treasury yields were 7%, now they are below 4%.  Never have investors been paid so little for their money relative to inflation!

Fear!  Fear and terror and negativity entice you to have the bank hold your money for a mere 2% return, even as you can see with your own eyes that there is no way that is keeping up with inflation.  Fear of everything is being fed to US citizens  by the government and the MSM to make them accept the fact the government can borrow and spend at levels never before attempted in human history while at the same time telling you that inflation is "well contained" as they drop food and energy out of the measurements they use to decide how much money Social Security recipients need to live, even while the government raids that same fund, leaving low-interest IOUs in the place of the massive surplus that used to be there.

While the American public has swallowed this nonsense hook, line and sinker, foreign investors have not and they have begun buying up our assets on the cheap, something I mentioned last night regarding Russia’s decision to invest in FRE and FNM.  Still the media will tell you to stay out of these stocks and probably will do so until they retake their highs, at which time they will be added back to someone’s "focus list."

Thank God it is Friday, I’m getting a little sick of this BS!

 

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Research in Motion-RIMM: Data indicates strong business and bright future@JMPS
    JMP Securities reiterated their Outperform rating, as the firm reports that it has gathered data over the last few days that point to a strong business and bright future for the company.


  2. If anybody is interested, I got the following invite for a Webinar from Gainskeeper:

    Tax Benefits for Active Traders

    Tax time presents active traders and investors with challenges and complexities far beyond those of normal wage-earners. At the same time, unique rules and opportunities can help traders save thousands of dollars in taxes once they know what those rules are!

    To help GainsKeeper customers better prepare this tax season, we’ve enlisted the expertise of a leading authority on trader tax and hedge funds to present a FREE web seminar that will explain:

    How to qualify for “trader tax status”—to claim business deductions (even for 2007) which can generate tax savings of more than $8,000 per year.

    How to elect mark-to-market accounting (IRC 475) correctly and on time, allowing you numerous profitable advantages plus immediate tax refunds on all of your trading losses.

    How to use entities to generate additional tax deductions like retirement plan contributions and health insurance premiums (AGI deductions).

    It’s very probable that your accountant or tax preparer doesn’t fully understand trader tax benefits, and the IRS is in no hurry to tell you about, the thousands of tax dollars you can save by taking advantage of the huge but little-known tax benefits available to traders. Join Robert Green, CPA on Thursday, February 28th at 2:00pm ET to learn how to collect your trader tax benefits—before you let too much time get by and, by default, lose them for another year.

    http://www.surveymonkey.com/s.aspx?sm=9GwbWb737yfBzD7_2fROTPkQ_3d_3d


  3. February 22, 2008
    09:10 EDT RIMM
    theflyonthewall.com: Research in Motion-RIMM: Think shares will hit $165 in 2008, reiterate Buy@AMTR
    Am Tech updated their forecast following RIMM’s subscriber guidance and raised their target to $165 from $160.


  4. Aluminum Corp of China-ACH upgraded to Buy from Sell@MLCO


  5. FNM and FRE both cut by MER and both down 6%+ in premarket.
    Obviously these guys have a crucial part to play in any mortgage/housing recovery.

    I think both are going to 0.


  6. Anton, why not -10 ?

    and call Bill Ackman …


  7. That’s not technically possible Cap … but if it was……………….


  8. Euh last time I drink on a weekday.


  9. Anton:

    So two companies backed by the United States Government are going to go to zero?

    Interesting….


  10. “backed by the US Government” : baloney, total baloney.


  11. I think analysts make up numbers in their projections. To say RIMM 165, has to assume so many damn things.


  12. The sub-prime crisis continues to ferment as the German government is being forced to bail out KfW banking group and the IKB Deutsche Industriebank AG to the tune of another $1.46 billion.
    DBA-soybeans hit ATH yesterday


  13. Backed by the US government = Government sponsored enterprise

    http://en.wikipedia.org/wiki/Government-sponsored_enterprise


  14. Phil:

    Are we still DDing on EK @ .25 (10kp)


  15. Anton, why do you think that they’ll go bankrupt?


  16. Anton,

    I guess we should all just roll up and die and so should the rest of the world if they decide to let government backed securities fail. Going to zero is a “hysterical” and self-serving comment.


  17. Anyone heard about the latest legal/financial snafu in the wonderful word of mortgages?

    Heard on Bloomberg Radio on the drive down this morning that there have been about 5 court cases where banks have taken people to court, trying to foreclose after they stopped making payments. In all cases, the banks were told to take a hike because they couldn’t produce the contract due to the fact that they had chopped up all the mortgages, etc. etc.

    So basically, if you want to take a big risk, quit paying your mortgage, then go to court and get to keep your house for free…


  18. Now everyone stop bashing Anton…

    Clearly FRE is in a downtrend, but it hasn’t broken it’s all time low @ around 23. I’m not buying, but it looks like a base to me.

    And there has to be some sort of fundamental value behind a couple trillion dollars worth of physical assets.


  19. ACH calls-1/2 out


  20. Morning all. Here’s the Bloomberg article Jake alluded to: http://www.bloomberg.com/apps/news?pid=20601109&sid=aejJZdqodTCM&refer=home. Don’t know how prevalent this is but if widespread this would be bad news for the banks (or holders). On the other hand, there maybe fewer foreclosures than people think!


  21. Financials and housing indexes weak .. rest more or less ok


  22. BA-JAL might switch to Airbus


  23. fred,
    It’s not self-serving at all – I mean a post here is hardly going to move the market! I wouldn’t say it if I didn’t believe it. Check out their charts, hardly inspiring.

    Steveplace,
    thanks for the article, on the button:
    …the implicit involvement of the Federal government gives them a sense of financial security.
    In fact, GSE securities carry no explicit government guarantee.

    Check out their numbers, they are in crap up to their necks. Increasing conforming limits will hurt them more and hit their debt upside the head.
    Okay maybe you’ll get a government bailout, but I wouldn’t count on it and even then the *ultimate* government bailout didn’t do a whole lot for Northern Rock shareholders!


  24. KC,
    Thanks for looking that up!


  25. wow we’re PSW’s to bash heh.. I was actually honestly asking haha.


  26. Airbus taking new customers, what else is new. I think Market calls might be interesting soon…. Maybe SPY 134.5


  27. JAL is considering adding Airbus as an additional source…not replacing BA.


  28. EK – yes if we can get it.

    RUT looking awful, everything selling, I don’t even see how we are green ont he indexes, must be very narrow…


  29. Is it possible to make this blog/page autoscroll all day long instead of refreshing via the F5 key or clicking with the mouse? I use Firefox and Internet explorer Browers.

    Thanks to anyone who can help.


  30. ACH – Nice trade Optrader.

    PMaggan – Thanks for the tax info.


  31. Phil – Treasury Securities

    One of the Venture Capitalists I worked with said he put $11 million of his personal funds into treasuries “just in case” everything else goes bad, he knows he’ll have this money. It goes to your point of “fear”, he thinks everything will work out but his actions speak to “fear”, which is a function of investing funds in a bunch of startups that may fail due to the credit crunch.


  32. Optrader,

    Is it possible to mention the strike price along with the trade?

    Thanks.


  33. Kalmen – I add #respond to the end of the URL, this way when I refresh it always goes to the bottom of the page. Helps a bit.


  34. I’ll bet you $100 FRE and FNM don’t go bankrupt. Hell, i’ll even convert it to Euro’s for you, if you do the same. The government will just print more money to keep them up and running. Trust me, the government subsidy of a lender will be here long after a BSC or Countrywide go bankrupt. Just for the simple matter of public psychology in an election year, the government will find a way to keep them up and running.


  35. Still a DD on BA @ 1.35?


  36. Phil,

    RUT — We are selling butterfly for 25K?


  37. Bought back INTC covers for some bucks .. ready to sell again in things go down ..


  38. Nas is still looking good, SOX still not going down, we need AAPL to get it in gear and GOOG to hold $505 and GS to pop $175 if we are going to turn this thing.

    I’m watching XOM at $87.50 too, it would be nice to see them head down while the Dow stays positive. The addition of CVX to the Dow is going to suck because it doubles the Dow’s exposure to oil.


  39. GOOG to the rescue


  40. Financials are going to bottom in Q2 after they report Q1 earnings. They’re forming bases now and will be extraordinarily erradic with severe up and down movements. It’s like we’ve been saying, they’re assuming everything is worth zero, so when we wake up and realize that a house is worth something, their balance sheets will look much better.


  41. Phil, did u DD on BA @ 1.35? or are you waiting for 1.05?


  42. WDC – took a position for WDC to hold the breakout today (missed the play yesterday).


  43. Jake – de nada


  44. euh another bad call… I’ve been seriously off my game the last couple days.


  45. For all you apple fanboys…

    Mega Apple filing details next-gen ‘multi-touch input surface’

    http://tinyurl.com/3abq9w



  46. Thank you, DanW


  47. ORCL is just a basket case.


  48. what is the current position on CROX in the 25KP?


  49. AAPL has been looking like it’s about to make a strong reversal. If we can get some sort of overall sanity, I think it’ll be rocking.


  50. parchesia – That would be a smart thing to do, but I doubt financial are doing it. I don’t think they’re assuming things are worth zero.


  51. vishal

    July 25 of which 1/2 covered with March 25 and 1/2 covered with march 28


  52. Phil,

    With EK is it a wise idea to roll to the April 20 to buy time if you have the money and look to sell some of the March.


  53. I get anton, any chart that is pointed down means the stock is headed to 0.

    Its all so simple now !

    Thanks !

    :wink:


  54. steveplace/AAPL- nice find. and it’s fanpeople, thank you very much! LOL


  55. vishal:

    I went into 25K, where is CROX ?

    RMM


  56. vishal

    i have 10 jun 25 covered with 5 jun 28 and 5 jun 25


  57. SWIM-Why down? I thought earnings were great. I am buying some shares for long-term here.


  58. DM- I am with ya.
    AMZN-?


  59. Good am everyone!! Interesting comment on FRE & FNM-I wouldn’t discount the analysis of -0-. Look at cfc, not far from zero & the talking heads said it would NENER happen. Same with WM ETFC, etc, etc. Remember it is just paper so nothing fundamental hard backs it. I am a bit concerned with our local bank here with a big CD tied up with them. This govt is bankrupt-being “insured” with FDIC does nothing to assuage my fears that it will not just evaporate. Having faith, hope that everything will be fine is very naieve if not downright dangerous.Fre & fnm were downgraded so may be a good put opportunity until the fed comes in on the white horse to rescue them!


  60. things r getting really saggy.


  61. Thanx furnace.


  62. why am i making such bad directional calls… This isn’t good as I’m seeing a lot of directional betting for the down side… Shorts would be good. If we don’t bounce from 1340ish then we might be going to 1320ish.


  63. All this bandwagon bankruptcy tells me from a contrarian standpoint that we’re nearing the end of this. The markets would be much much much worse if we were in fact headed towards a FRE FNM bankruptcy. Who is going to lend money in the future if the government subsidies go bankrupt? Or is everyone arguing that the U.S. and life as we know it will cease to exist and should all buy bunkers and stock food?


  64. Big big selling now, this could get ugly. Very depressing.


  65. GOOG looking pretty nice


  66. X – did my morning putter buy-back after the failed attempt at 109. Will recover later.

    This play is making me more money each day than my damn job. Can I really afford to keep working?


  67. phil,

    Are we DD on BA @ 1.35 or are we waiting for 1.05? Any thoughts on FNM/FRE? I was thinking of getting some FRE


  68. POT-Bought back some calls.


  69. We need that computer program back – what level did it kick in at ?


  70. Anyone,

    Are we DD on EK @ .25?

    thanks.


  71. DM-What are you doing wrong? Are your indicators acting up? Mine have been working…


  72. Pimco’s Gross: Fed rate cuts not helping mortgage rates – Reuters
    Pimco’s Bill Gross said that Fed rate cuts are not helping mortgage rates with Fannie Mae 30-year rate at 5 3/4 percent, that battered mortgage market is not easing and is only ‘tightening,’ that the 20% decline in house prices is a ‘serious asset deflation’ and that there is ‘almost no chance’ of inter-meeting rate cut by the Fed.


  73. malai, Phil said earlier, if you can get the fill yes..


  74. sandyb

    So you are suggesting that the FDIC will default on their guarantee of $100K per depositer?


  75. Ackman how’s the yacht? lol you’re ballin right now w/ the shorts hah.


  76. MOS-added to APR


  77. USO and EEM-Looking at puts.


  78. JAL – just more Boeing bashing ahead of the contract award but very effective stuff.

    Rutterfly – I’m thinking about alternatives but, as I said yesterday, the only way we can lose more than $280 is by moving the contract around so it’s a dangerous game to adjust it based on a day’s move. Frankly I wish we had money to buy out the caller on a turn.


  79. Phil,
    My CROX covers seem to be messed up – can you please post your current covers on CROX?
    Thanks!


  80. Par I don’t know, it’s not the indicators… I’ve usually got a feel for it too.
    But for some reasons I’m just missing it…

    Usually I’ll be spot on, but I guess I haven’t been trading for the week before and I just lost some touch with the market. I’ve been busy backtesting strategies with fib lines /w EWT theory, and spent very little time with the market in general. The only real stocks I’m looking at is like FCX and china stuff.

    Honestly, I do think Elliot Wave Theory is break through. Just needs a little work.


  81. Anyone else haveing issues with OPX? Can;t even login to their site right now.


  82. hum…. APPL falling major support @120????


  83. Cap,
    I just called Ackman for you, he says “hi – need a loan..?”

    ;)


  84. Gotta be honest DM, with my daytrading, I actually stopped thinking and started acting on indicators, except for reports and economic news being released. I use my thinking for the LT and fundamental trades but I still buy/sell based on technials. Today’s selloff could just be more the traditional selling into the weekend we’ve been experiencing. I don’t see a reason for it…


  85. JB- OptionsXpress is up a running fine for me.


  86. *and, not a


  87. Phil,

    Not to be pain but can you please answer following 2 questions?

    For 25K
    1. Are we going to close butterfly on RUT?
    2. Do we have 20 BA march or just 10 BA march?


  88. CROX- I am starting to think the CROX spread is to difficult for the blog. I mean we must get 15 questions per day on it. IMO


  89. JB- OPXS working OK for me.


  90. RedMountainMan – 25KP

    http://www.philstockworld.com/newsletters/members/2008/02/20/which-way-wednesday-fed-edition-2/#comment-117810
    http://www.philstockworld.com/newsletters/members/2008/02/20/which-way-wednesday-fed-edition-2/#comment-117813

    There have been some(!) adjustments since. Note that the Portfolios aren’t realtime quite yet. Phil tries to do them on the weekend. I think that they were trying to do something about making “auto portfolio updates” in the 40 hour outage, but we’re like this for now. Hang in there.

    Most sane people don’t stay with comments all day ;-) , so if you’re following one of the portfolios, and haven’t caught up on the comments, It’s very important to read all the comments you missed, looking for “XXX” and the portfolio indicator (10KP, 25KP, etc.) to catch up before posting.

    Understand that the moves aren’t blind, and it’s essential that you understand the reasoning behind the move (risk, fake news, change in sentiment, idiot analysts, stock next door, etc.) Depending on that move, another move may be coming. Smaller portfolios aren’t designed to be churned, but things will happen and, since you’re learning, you can be primed for the adjustments.

    Incidentally, have you done the “homework” in the New Member Guide?


  91. All CROX follower, here’s the Phil’s position on CROX – hope it helps!

    Phil
    February 21st, 2008 at 10:33 am | Permalink
    CROX – yes I got 1/2 cover but just $1.80 for them. Considering selling another 1/2 (3/4 sell) of the $25s if they can’t hold $27. For now, I’m rolling down June $28s to June $25s for $1.50 and will sell some $25s if CROX can’t hold $27. XXX

    Phil
    February 21st, 2008 at 12:14 pm | Permalink
    CROX – I’m leaning towards a full cover with 1/2 the $25s and 1/2 the $28s with a .25 stop on the $28s as we are already well ahead on those.

    Phil
    February 21st, 2008 at 1:17 pm | Permalink
    CROX – yep, I guess we’ll have to sell the $25s now and hope for a flatline this month. XXX (that’s a cover the rest with March $25s)


  92. happy:

    why would you want to close out the RUTterfly? You have a full month of time decay working for you, and it’s there as a downside hedge.


  93. JB- Right as I said that my positions disappeared, and I can’t log back on now!


  94. for what it’s worth, my EK order filled this morning from yesterday at .25


  95. Also having problem with OXPS.


  96. BillBigD – no, it’s just 6 people. Soon they will be “just like Jake”. ;-)


  97. So this is how they plan on propping the markets up…don;t let anyone into their trading accounts!


  98. AAPL theflyonthewall.com: Apple-AAPL: Order cuts at Asian suppliers could indicate muted Q2@MSCO


  99. Par – I’m not too much of an indicator guy, I think they lag too much. I like an oscillator to say it’s oversold or not, but that’s it. Have you found a good set of working indicators?


  100. well, i capitulated and fully covered AAPLs
    of the 1/2 that had been naked, i sold half – 125s yesterday towards the close.
    sold the other half – 120s just before 10 am this morning when it didn’t feel like it was going to hold.
    now i’ve sold 3/4 – 120s, and 1/4 – 125s.

    these are all against jul 125s. should i roll down to the jul 120s, or is it too soon? (yikes what an awful question)

    thanks so much!


  101. OXPS OK for me (Visalia, CA)


  102. Fred-I have no clue but the last bank failure, Home S&L just closed their doors. U couldn’t take ANY $ out-it was locked up!! How do I know? Had $ in them!! It started a run on the banks as people panicked. GM debt was b/-c, so another good put there. Also, Fred subscribe tot the smallish newspaper for the Naples area. There r loads of foreclosures around that area. Banks usually have to post in the paper first.


  103. sakiko:

    your comment her now was better than ??
    Txs.

    Yes: I read all of it, I copied them into a file, I reread, I follow the comments.
    BUT: some of you EXPERTS make short comments, I go into the portfolios and I cannot find it. Often the person raising the issue does not answer vthe question.
    You were nice to pick up and give me a decent response.

    Txs, we need more like you .

    RMM


  104. AAPL breaking below $120 is bad!

    BA/any stock – I’m not buying anything right now until we retake yesterday’s watch levels as this could easily snowball into the weekend.

    CROX – fully covered thank goodness, 1/2 with $25s, 1/2 with $28s.

    EK – we are more likely to get out with the DD at .25 and getting 1/2 out at our adjusted basis on a bounce (hopefully!)

    There is a lot of nagative commentary coming out regarding the credit environment, that’s driving the sell-off, spooking everyone. Make sure you have some index puts for the weekend as we could get a black monday event if the bears take control of the press this weekend. XXX That would be March DIA puts, whatever cost $3 or Aprils that cost $4, you can take them now as mo plays and mattress them down.


  105. Call me crazy but I am buying some AAPL here. Bought some July $120′s. Will sell against them later.


  106. Phil – on the Rutterfly, you said, “Rutterfly – I’m thinking about alternatives but, as I said yesterday, the only way we can lose more than $280 is by moving the contract around so it’s a dangerous game to adjust it based on a day’s move. Frankly I wish we had money to buy out the caller on a turn.”

    If you did have the money what would the turn look like?


  107. Ruterrfly/Happy – we really can’t close it on mo and I’m working on whether it can pay to roll it. I’m having connection problems so I’m going to reboot and work on options.


  108. WAG, CVS, ESRX

    Doing well as this markets is giving people headaches and agita.


  109. sakiko,

    Is that a compliment?

    lol


  110. I thought about that Phil but it’s just old news to me. The shock factor has worn off on the credit news a while ago. Yeah, credit sucks, auctions suck but well all know it. I thought the fact Russia was investing in the U.S. would be positive news…


  111. RIMM-Bought some calls.


  112. OptionsXpress- I can log on now, but I can’t get connected to the streaming quotes- Anyone else having problems? Is that what your problem is JB?


  113. Sakiko,

    My wife’s sister and husband live in Visalia. We’ll be out there later this year.


  114. Is anyone else having trouble with POS Optionsxpress website. I can’t get streaming quotes.


  115. Optrader, just shorted USO on that little bounce. Thanks for the heads-up.


  116. does anyone know what are the QID equivalents for the DOW? i’m wondering if these wouldn’t be better than DIA puts for weekend protection. comments appreciated. thanks.


  117. COF puts-1/2 out.


  118. Phil/Newbie’s wife,
    Thanks for CROX updates.


  119. I just instant messaged a help person… And they apologized for the ‘inconvenience’ but said that there is not an ETA on correcting the problem on optionsXpress… this is some BS.


  120. I dunno man, if you want to be long stocks into the weekend, that’s your prerogative.


  121. Go NYT puts!! (Apr 17.5).. Money flow is pouring out


  122. Sorry for this question… I need a back up system… I will definitely be working on that today… What is the DJIA at right now?


  123. windy – QID is ultrashort QQQQ
    SDS is ultrashort S&P
    DOG is short DOW30


  124. It’s not hard for the big players to re-enter the markets on monday. Today is not looking good as it broke through 1340 on the S&P. Next horizontal support would be 1320. If I was a buyer and long the market, I would want to enter there.


  125. BillBigD – Crox

    Can you direct me to the nearest store where I can by my summer Crocs supply?


  126. windy:
    SKF – Ultrashort financials
    SUS – Ultrashort banks

    DXD – Ultrashort dow


  127. Is anyone seeing volume on this drop? All i’ve noticed as another lack of buyers, so bids drop very quickly.


  128. got filled 5 ek @ .25


  129. Damn, I’m having connection problems but that looked nice and bottomy – let’s hope it holds.


  130. I think when someone buys/sells shares they should have to state why. Then we could data mine the database and become much better traders. :-)


  131. EK .25 filled!


  132. Yah there’s volume Par.


  133. Here’s a fun slow moving play for anyone who likes CROX long term. Buy ’10 40 put, sell 2 ’10 25 puts. I got it for 2.40, but you might be able to do better. Gives you a very wide window to win.


  134. Scaled into more AAPL and BA.


  135. My quotes for OPXS aren’t working either (Charlotte, NC)


  136. Jake – see? I read everything (might take a few days to understand it, tho). As Phil says once in while, the people who are trying to help the new Members now were the same ones asking annoying questions earlier. I see you helping!

    PMaggan – Visalia seems like any LA suburb; very few notable restaurants, however. Virtually every franchise and big box store known to mankind are within 3 miles. Huge farming presence (Tulare County is the largest producer of milk in the US: over a billion bucks), but the people I’m in line with at the grocery store are no farmers. Nice enough place.


  137. thanks steveplace/nav
    do you have experience trading or tracking any of these, particularly DXD?


  138. So that’s 12,200, 1,330, 2,280 on the big 3 and 8,900 on the NYSE, 685 on the Russell and we still need 350 on the SOX or I don’t hold out much hope.

    Nothing but doom and gloom from analyst after analyst on CNBC, looks like a forced bottom to me but maybe I’m just delusional, we’re going to just have to wait and see what happenis on Monday but BXP and VNO are holding up and I really believe in them as barometers for small and mid caps.

    EK getting no fill at .25..

    More noise about MBI/ABK losing ratings yadda yadda…

    I just bought a bunch of RUT $700s at $16, it’s risky but I can’t buy this sell-off.


  139. EK – giving up and paying .30 XXX


  140. windy:

    hah! i couldn’t trade my way out of a paper bag

    I know of people that play the ultrashort financials and banks


  141. phil/AAPL- is this sound LTPing
    i’m in JAN09 130s and am thinking i will roll to 100s if/when AAPL goes below 110 (AUG07 low) b/c i fear AAPL could c 90ish if it gets that bad.

    that should cost me about 13.00- i’ve shorted a MAR 125s at 6.70 and should b able to grab another 3.00-5.00 when i roll my caller to ITM.

    so i’ll pay about 1.00-4.00 to gain 30.00 (~10.00 of which is ITM). so at worst i need to collect about 0.50/month more (not counting that i’m 0.20 ahead of schedule in collecting rent)


  142. OPXS- Finally working!


  143. OXPS working for me now.


  144. DXD
    Is the ultra short DJI ETF. Twice as much “bang for the buck”.
    JB


  145. Phil,
    CROX – Jun 25:
    In one of my accts I am1/2 covered with Mar 25s at $2.70. Do you suggest covering the rest with 28s or may be 1/2 of remaining (total 3/4/cover) with 25s? or something else?
    Thanks!


  146. Also, getting ready to sell March puts against my April Index puts with very tight stops but I’m hoping for a bounce back to even here at least. I see oil recovering a bit and that can spark a rally.

    Big big news is Bill Gross and MER saying home prices will drop 20% in the next 18 months – the reason I’m bullish is that this happens to be my exact target that I’ve had for over a year and I just don’t think I’m that much smarter than most fund managers so this news is shocking only to retail investors.

    They could have made this forecast anytime but they chose today, this is manipulation pure and simple but that is not to say it will not be successful to some extent.


  147. CNBC-Are they all shorts or what?


  148. EK filled at 0.30, now total 80 at 0.49 in $25KP

    Phil,
    The DIA puts you mentioned – I am assuming that are not for small Portfolios.


  149. And S is up 4% ! Maybe I’ll just go play some golf today.


  150. BA – Can someone please post which calls were bought few days earlier and we are now talking about DDing at $1.35 (or waiting for $1.05)? Is it Mar $85s (BACQ)?


  151. Phil,
    extra insurance into the weekend?
    we’re selling off today on no news..


  152. I’m right there with you Opt. I covered my short long ago…


  153. RUT – so Phil, you’re taking out the callers now and looking for a rebound to sell again?
    WDC – breakdown, not breakout LOL. Grabbed Mar covers in time before the dip and now looking for a rebound to yesterday’s levels.


  154. Hi Phil, I have a full time job, and can’t monitor and adjust my position everyday. If I just want to buy some ’10 leaps, and sell calls against it. Which stock are the best to play with? Or I just need to follow yout LTP? Thanks


  155. RUT/Joseph – Oh that would be the turn, taking a shot at holding $687 that we hold it, buying out the caller, rolling down the other 2 ends $20 each and ready to sell the $680s if it breaks below $685 to restablish the spread at a lower strike. It’s a very expensive play!

    OXPS – that was what made me reboot, they were giving me trouble but I’m up now so I don’t know if it was me or them. I lost Esignal at the same time so maybe they use the same engine in the background.

    IMCL with another good market fighting day.


  156. u bought my EK’s at 30!! Just got out of them. Anyways since it was a loss, I’m sure I don’t want to repeat the process! think I’m in 4 puts only for a bit.


  157. Anyone for aapl calls-they r super cheap & I think when this markt does a turn-a round, its a quick scalp.


  158. PHIL:

    when you make your comments about certain “levels holding”.I know what you mean but where are the charts which you look at, what site ?

    My RUT 700 calls are already moving ITM.

    RMM


  159. POT calls-1/2 out. Taking quick, small profits in this market.
    RIMM calls- 1/2 out as well.


  160. AAPL- resilience at 119ish?


  161. Nice error from OXPS:
    [COMException (0x800706ba): The RPC server is unavailable.]
    AppTrade.CCacheClass.get_Session() +0
    OXNetAccnt.WebBase.HandleError(Exception oException)
    OXNetAccnt.WebBase.Page_Load(Object sender, EventArgs e)
    System.Web.UI.Control.OnLoad(EventArgs e) +67
    System.Web.UI.Control.LoadRecursive() +35
    System.Web.UI.Page.ProcessRequestMain() +750


  162. andy- just speak into the mouse


  163. Phil,
    Was wondering what you would do.

    20 IWM Jan 09 73′s @ 4.00
    -20 IWM Mar 71′s @ 3.00

    I’m doing the real estate thing and selling premium every month against
    my long position (long started at 7.45, but I’ve collected 3.45 in expired premiums). I am up 50% on my March short position. I’m thinking I should leave this on and collect that remaining $1.20 premium. Do you have a better idea?


  164. Xian – good Apple strategy but I would only 3/4 cover in case you are wrong and they actually go up. You can always cover back up with lower strikes if it goes down but it’s harder to adjust when you get blown out to the upside. As long as your net sale pays for a $10 roll, you are in good shape based on the caluculation that you can sell the same every $15 down and you have enough months to roll to the $90s or lower.

    OXPS/CMan – I’d risk it with the 1/2 the $25s, I just stopped out my $28 caller anyway. XXX


  165. for those of you who want to know when “big programs” are coming in / volume, here’s ONE way:

    http://traderfeed.blogspot.com/2006/10/tiki-dow-tick-and-program-trading.html


  166. PHIL,

    Did you just stop out your $28 caller for CROX?


  167. Phil – Don’t forget that Bill Gross also predicted in 2002 that the
    Dow Jones would drop to 5000 before recovering.


  168. whatever happens for the rest of the day, i can’t imagine many people going long into the weekend…


  169. Another wave of selling hits Oracle. Now down $5 since record results on Dec 20th. Over 20% down on NO news. I keep wanting to get back in. Resisting so far but end of 3Q next week and good earnings forecast. S+P has long term target of $27 but it seems to me that long term could be 2009 at the moment.

    You never know Oracle could be the catalyst to rall the Nasdaq.


  170. Looks like aapl held its retest of 180 day lows of around 119


  171. Apple-I think there is HUGE potential with ATV/Movie rentals, and people just don’t realize it.


  172. Hmm manipulation eh? Sketchy. Well I think they picked today to help bind the market for maybe weak housing numbers on Monday. If the market sells off today based on “speculation” then it won’t sell of that bad on monday if the actual numbers are terrible….


  173. Opt – what about CSCO from yesterday? still holding? it doesn’t look strong today. thanks.


  174. CNBC – it’s called herding the sheep. That’s why I was so pissed when I was writing the morning post, it was just non stop SELLSELLSELL and all they are doing is fostering panic and bankrupting their viewers – it’s sickening that these bastards get away with this!

    DIA puts – no, just weekend protection for people who feel that a 500 point drop would hurt them on Monday but if we shake ourselves back to green today I’ll be a little less intense with the covers.

    BA – as a straight entry I really like the Mar $85s at $1.35 but as a DD it’s a tough call as it isn’t THAT much of a discount to our original position but I think I’m going to pull the trigger here before it gets away. XXX

    RUT/KC – yes but I have lots of cash. Small players cannot take that risk but we expected this range ($680 to $720), that’s why we targeted the middle but I said yesterday when people had the chance, if you haven’t got the stomach for the swings just get out even, it’s the nature of the position.


  175. If markets are boring you, try out the Frozen Grand Central
    http://www.youtube.com/watch?v=jwMj3PJDxuo


  176. CSCO-My stop is at $22.70.


  177. RUTterfly – thanks Phil on the strategy explanation.
    BIDU – do you have a target price for these guys post earnings? I’m still holding Mar250 calls after earnings, looking for ~290 by expiration.


  178. We just need a crash for a proper bottom.


  179. phil/AAPL- i dig it, thanks a ton.


  180. CNBC-Dylan Ratigan is particularly annoying today.


  181. I am having so much fun w/ this market that I went out to play in the snow w/ my kids.

    We built a snowman.

    Fun.


  182. Went with some EEM puts, passed on USO.


  183. WDC/STX – ridiculous on HPQ guidance but, then again, so is HP’s selloff.

    LTP/Bar – There are no stocks in the LTP that I do not love and there are no stocks in the LTP that are fully naked that I don’t love in that special kind of way that makes me want to be fully naked with my stock so that’s the best place to look. Especially the ones that are in the red as you’ll be getting a better entry than we did.

    Damn, here’s another huge sell program ahead of Europe’s close, I’m wondering if they are dumping us ahead of the weekend? I’m liking the QID $53 puts here for $2.75 as the roll to the $55s is just $1.40 if you have to and I’ll play that with the intention of rolling up and doubling down if we get blown out Monday but it makes a nice reversal play for lunchtime.


  184. Thanks Phil for your explanation on the LTP. If I want to follow the LTP, should I buy all 2009, or 2010?


  185. I am so not buying this low volume nonsense (sell off)


  186. Phil,

    Did you DD on BA @ 1.35? I know you had mentioned about your intention but wasn’t sure if you actually went ahead and bought the BA @ 1.35? Also would like to know if this would be a good time to buy FRE/FNM?

    Thanks.


  187. DM – A selling climax would certainly clear the air, but we
    seldom get them. Usually, market just keeps drifting down until
    the sellers get exhausted. I got to think we are getting close.


  188. Hello to all. My first day here.

    I decided to test Philstockworld, so now I´m beginning to read read and read.
    Any changes on the 10K?

    I hope we have a great time here.


  189. who’s up; MER BSC AMZN HD GRMN GOOG

    AAPL still acting like a total POS. Hard to believe it was 200 a month and a half ago.


  190. so changed my name to normal


  191. DM/crash- another one? w/ all these triangles- that still look intact to me- i’m inclined to think we can have a quick burst down.

    but something makes me think we r just going to drip this way down- relative to recent volatility.

    for sure, a good sign of a bottom will b when banks get bought after an earnings report- but that could b 2 quarters out.

    i don’t know- a crash might make too easy to call


  192. cap/volume- good call. drip, drip, drip…


  193. SWIM-Revenues up 100%, Profits up 30%, Stock down 6%…


  194. opt
    seems like it sank


  195. Mark,

    That’s interesting info but how does one track this easily? Is there a site that runs this info?


  196. Xian / Albo – I think we just need a good catalyst. Jan 22 was a good reversal day, which was due to rates after Martin Luther King Day… Maybe it’s all up to Bernanke to kill America to save America?


  197. rounded bottoms are nice, but crashes are faster… just get it out of our system and move on…


  198. Optrader- tells you alot about market psychology. All news=bad news. They find one bad thing and concentrate on that.


  199. Phil,
    1. “BA – as a straight entry I really like the Mar $85s at $1.35 but as a DD it’s a tough call as it isn’t THAT much of a discount to our original position but I think I’m going to pull the trigger here before it gets away. XXX”
    Is this DD for 25KP?
    2. Hate to ask – CROX 1/2 coverave 1/2 cover – are you talking about:
    “CMan – I’d risk it with the 1/2 the $25s, I just stopped out my $28 caller anyway. XXX”
    I already have 1/2 cover – I think you are saying leave it at that – Is that correct? (I also took out my 28 caller).
    Thanks!


  200. This is a rout


  201. POT and RIMM-Bought back the calls.


  202. IWM/JB – I’d roll to the Aug $67s and wait. If it breaks below $68, you can sell the $68s for $2.20 and pay for the roll but otherwise you will gain huge position on your caller without having to buy him out (although I’d still put a $1.50 stop on him but make sure they break $69).

    CROX – sadly yes I did stop him out as it went from .90 back to $1 but that’s OK as my naked June $25s now force me to make a new cover decision today and, most likely, if they go down further I will cover with more $25s anyway. One of the reasons I have these rules is it forces me to take an action. It is too tempting to sit in a bad position with a 1/2 dead caller providing inadequate protection. Stopping out my caller forces me to feel the discomfort of being naked and keeps me making better decisions.

    LOL – Exactly at noon CNBC brings in an S&P guy to say the economy looks good to him!

    If we close down here the technicals will be hellishly weak and people are really following technicals this month so it’s critical we break higher off THIS bounce right now. I’m watching the Qs at 43 and they must pop 44 on the bounce or we can just give it up I think.

    LTP – 2009 or 2010 is good, I have different ones for different reasons. By June/July we roll all to 2010 anyway.

    BA – yes, I gave up and paid $1.35 to DD as I thought we had bottomed but apparently not!

    FRE/FNM – not today! Really we need to wait for the weekend.

    Meanwhile, covering open positions and will uncover 1/2 if we turn (tight stops) but we broke all technicals and no buyers in site. XXX


  203. upps what a hard sell off. TRIN jumping higher


  204. Phil

    BA DD on all portfolios?


  205. RUT – that, of course triggered me selling the covers, I went with the $670s to cover as it looked pretty bad.


  206. EK leg down but the DD at 0.25 won´t get filled…


  207. You guys talk like the stock market might be rigged! LOL

    I am suprised that the Bush team hasn’t latched on to that ‘terrorists caused the housing crash’ story yet. Terrorists make a much better target than Democrats, the liberal press or illegal immigrants and I am sure would soak up all the blame. Maybe Helicopter, SB (super banker) Paulson and Bush should get on CNBC and tell Americans that they need to buy stocks to repair the technicals on the S&P or ‘the terrorists win’.


  208. Optrader-

    RAIL- broke through 200dma today. What do you think?


  209. Might be nice if it comes back to bounce off of 200 dma


  210. Apple-AAPL volume & volatility decreases as share price near six-month low
    AAPL is recently trading down $3.22 to $118.33. AAPL call option volume of 60,675 contracts compares to put volume of 35,477 contracts. AAPL March option implied volatility of 43 is below its 26-week average of 47 according to Track Data, suggesting decreasing price movement.


  211. Primus – lol… “America, please take that 1200 dollars we gave you last week, and put it right back into the market from which we took it from”..


  212. BA/anything – I’d wait until Monday at this point, this is just awful!

    Welcome Alex! Great day to start… Hopefully it’s a nice bottom but I think we’re back to Jan 22 levels next week if this keeps up.

    CROX/CMAN – It’s a matter of whether you are willing to take a weekend chance. If you are worried cover another 1/4.


  213. AAPL
    Breached its two year trendline at 131. Next possible technical supports are 117 then 110 then 100.
    As Brian Shannon would say, the 5 day is below the 10, the 10 is below the 20…etc.
    JB


  214. My BA order never filled at 1.35, even when the ask was at 1.35… What the hell??


  215. Alex,
    EK:
    Phil broke down and paid .30 this morning.

    “Phil
    February 22nd, 2008 at 11:02 am | Permalink
    EK – giving up and paying .30 XXX”


  216. What’s driving the semi’s down? SNDK and CY, which I both have positions in, and just realized that was stupid…


  217. More selling – why dont they go to lunch ?


  218. Phil, what about BA in the $10KP. Yesterday you said to wait (to not DD). Is this still valid?

    Are we leaving BA naked over the weekend, both $10KP and $25KP?


  219. who do u use Jake?


  220. Fred – unfortunately not sure. Still learning myself to be honest. We are the programs lots of days, but really an infinitely bit player in the grand scheme of things! lol

    A futures trader I know told me to look for 1324.25 today on SPX. Trend is down…


  221. Has there been any change to the original RUT butterfly?


  222. Carl,
    thinkorswim…

    Its very strange, never had a problem before. And there were plenty of people willing to sell it to me at 1.35, too…


  223. Skiing Snowbird today! Woo-Hoo! It sure is nice to have balance and not be freaking about the down market. Look at that QID provide protection.


  224. I’m just kidding primus. It’s only natural for the terrorists to play the markets… But I don’t think it’s anything new.


  225. CMan. I saw it now, but I´m learning to be patient, 0.30 I can still get, but at this market think it could go a bit lower for me :-) so hoping for 0.25
    otherwise I take it at 0.3 later


  226. I need to look over what I’m doing, down 24.57% in my portfolio since 4 Feb, but I’ve only been doing the trades Phil posts here, except for AMGN which I actually made out good on…

    This just doesn’t make sense to me, anyone? Phil?


  227. Jake,

    Not to get in a broker battle but… I heard TOS had good fills. I use Optionshouse and they filled me with 1.35 BA a minute before close yesterday. And I also got the full fill on EK at .25 earlier this morning.


  228. Phil
    yes it is a bad week for me and all to start the 10K.
    I want to trade too the top of your portfolios starting with the 10K.

    Your QID call yesterday was a great one!!! Thanks


  229. Jake you’re not in any different of a position than most people on PSW. With that said, since you’re very new, you should only play Phil’s DD plays and then learn where and how to cover.


  230. Carl,
    See, that’s the thing, I’ve had great execution on everything up to now (at least when it comes to getting what I want, see my post right above yours for MY problems). EK filled this morning, even.

    But BA? Nope…

    I’m going to go open a chat session with them to see what they have to say…


  231. As always, read the K1 project.


  232. fred

    What trading platform do you have?


  233. Jake,
    What is so stupid about owning SNDK & CY? ( I have both those too and I would like to know your thoughts.) Always like to consider the view from another side.
    Thanks!


  234. What? good fills depend on the broker? anyhow I change from OXPS to TOS but I think first in the summer.


  235. Jake,

    I follow Phil closely as well. The 4 day old 25KP is down about 10% right now. I don’t think anybody is flourishing right now.


  236. Jake, I am really sorry to hear that. I think that the first thing you need to look at is your position sizing. -25% in one month just should not happen, no matter what you do. So obviously there is a big issue here with money management and stops.
    Also, in this market, you need to take profits fast. Been working pretty well lately. Been taking many small profits and they just add up. On my charts we are still in a trading range. I will have to review this weekend though if we close here.
    Good luck with your trading, and please don’t try to make it up in one trade.


  237. Does anyone use Realtick here ?
    If so, can you post or email (markabradley@rogers.com) me what they’re charging you ?
    They just bumped their fees $50 + $50 for turbooptions so its about $400/month for all 3 real time exchanges.
    I’m wondering if I’m getting hosed here.


  238. BA – Yes, I’d say DD at this point. I really do think we finish higher than here and, IF we make it past Monday and IF we make it past Bernanke next week then we could be in decent shape. XXX


  239. Something weird with the market.


  240. The old 25K is down as well…


  241. DM,
    Hey, as long as I’m not the only one down 25% since 4 Feb, I’m cool with that… LOL

    There’ve been more than a few plays that I was really happy about, then there was that ever disappointing CMP spread. For some un-Godly reason I didn’t decide to close it out when I had broken even… Instead I took a BIG hit when I finally decided an early heart attack due to stress wasn’t worth it anymore.

    I’m still up for the year, which is great, and I’m waiting it and being patient. Slowly learning to not let the short term get to me, and I’m getting better at that.

    But watching my portfolio loose money even when the market goes up… That’s rough ;)


  242. mab – funny, our admin just emailed the desk asking who uses real tick. We have it in 3 of our systems, so they’re hosing more than just you my friend! LOL


  243. BA – that’s odd b/c I was filled at 1.30 and I use ToS too…


  244. Insurance set – off sleigh riding with my 7 year old..


  245. PT

    I still use Fidelity Active Trader Pro & Option Trader Pro. They’ve worked out decent pricing which has been my gripe with them but they’ve continued to enhance the software and it works for me. The other big thing since I keep big cash balances at times is they pay 3.7% on their cash account.


  246. POT calls-1/2 out again.


  247. Phil :- Re: I really do think we finish higher than here and, IF we make it past Monday and IF we make it past Bernanke next week then we could be in decent shape. XXX

    You’re such an optimist :-)


  248. kwan
    BA 1.30 at TOS filled, that is really great.


  249. Opt,
    Thanks for the kind words. That was exactly the issue, bad entry on CMP that started me off at a loss, then doubled down on both sides which made it a HUGE portion of my portfolio. For some reason the thought didn’t even come to me to get out when I broke even, that was right before the stock took off, and being in a 1:1 spread did not work out well…

    CMan,
    CY and SNDK are both semi stocks. Different areas of the semi market, but still both in semis. So, in my book, that means your double exposed to one segment of the market. Look at their charts overlaid on each other… A little too closely correlated, IMO. But didn’t think about it at the time…


  250. Phil,

    Can you clarify the RUT butterfly position now. I bought the butterfly but havent’ done a thing after that. Should I buy out the caller and sell another one? Thanks.


  251. Jake I´m down about 6% at the new 10K, but with soo much money in cash it is okay,I think Phil can rescue all of the trades.
    But EK is a bit confusion so long in the portfolio


  252. Alex and others,
    Just to clarify, I’m down (at this time using market prices) 10.51% in the new 25KP… The rest of the loss is in the old 25KP…


  253. Jake – lol I doubt you have it the worst. I’m sure there are people who are more than 50% red. It’s hard making money at the beginning of your trading career, so I would consider you very lucky.

    With hindsight, covered stocks would’ve been the ultimate noob strat. You lose maybe 10% in a year and it’s far less stress… Maybe in a bull market, then switch to options?

    Phil has an innate sense of market direction and the slippage between everyone else and him is very costly.


  254. It’s only natural for the terrorists to play the markets-look at the Put activity on UAL and AMR the days before 911 up 2500% 15B was made by someone.
    FACT!


  255. Everytime I followed Phil and Wang I lost money. I’m not trying to pretend I’m any better than anyone else. It’s just from observation from the 2 years I’ve been trading… It’s just never worth sheeping.


  256. DM,
    Oh, I’m happy with the gains I made (*cough*YHOO*cough*), its just the slow leakage of money from the portfolio that hurts ;) And I do consider myself lucky. I’d be a LOT better off if I hadn’t got so wrapped up in CMP, seriously. I know everyone here is tired of me talking about CMP, but that should be a good lesson for the new players to learn, I think. Just here to help the new people :D

    Just as a point of reference, if I had got out of CMP at even, I’d only be down 12.6%, so bad money management, VERY bad…

    Newb people, LEARN FROM ME!! LOL


  257. EK – I think we bought them all! 1,335 calls bought today. Watch Najerian come on later and say something is up…

    No change to the Rutterfly.

    Jake – you may not be doing anything wrong, the market has been terrible the past two weeks and we’re going to have a losing week in pretty much all the portfolios. The $10KP is down 8.2% and the new $25KP is down 12.7%, this was NOT the best week to start but, of course, it aint over ’till it’s over.

    Good man Orion – that’s the right way to play the market!

    MBI turning up.

    Holy cow, oil is up over “The Turkish incursion into Northern Iraq” That is so 3 months ago!


  258. BBD – yah I saw that too, but no one’s dumb enough to say that publicly because that’s against free trade.


  259. DM, I sincerely hope no one here is down 50% in the last 2 weeks. A trader should never let this happen. We should never risk more than 2% on a position and certainly reduce size during bad periods.
    This game is all about survival and you can’t survive if you lose 50% in 2 weeks.
    Everyone, please be patient! There is no rush, the market will be here tomorrow and there is no need to trade until we find direction. And if you decide you decide to trade, like I have been saying, play with support and resistance and take profits fast!. I have no issue taking 10 times 5% profits.


  260. BBD – I am suprised the SEC didn’t investigate the option activity on UAL & AMR… Oh wait, that’s right… Building 7 (SEC offices) @ the WTC was the 3rd building taken down on 9/11.

    Black Helicopter Alert!


  261. Jake,

    Are you in the US Military?


  262. Thanks, Phil.

    It was all in the CMP deal (losses would’ve been halved if I had been paying attention and thinking smart and took the moment to get out at even, or at least bought out half my callers at the low, which I thought of doing, but talked myself out of, being greedy and wanting to capture all the premium).

    Seriously, a LOT of lessons learned from that one position.


  263. Carl,
    Why do you ask? ;)


  264. Also, I think “sheeping” has been extremely profitable to many here, as Phil’s results have been exceptional. This is why you need to have good money management: to be able to go through a couple of bad weeks (like everyone has, Phil included), without major damage. And be able to play again tomorrow.


  265. I think I remember you making a comment a few weeks ago…. I am asking because I was in the US Navy for 10 years and I am currently live in Virginia Beach, VA


  266. MCD
    Phil i have a spread of JAN 09 LO 50 vs MAR 08 55 SO and am loosing on a down day. Should i roll any of them i.e. MAR 52.50? Thanks for the advice!


  267. S puts-Out for now.


  268. Gasparino making a very good point. MBI and ABK HAVE the money to cover thier obligations, the question is whether they can afford to keep going IF they lose their AAA rating BECAUSE it’s ASSUMED that Buffett et al will step in with AAA companies that will be able to undecut them selling insurance down the road.

    THIS HAS NOTHING TO DO WITH THE BROADER MARKETS!


  269. Carl,
    I’m still active, Army side. Going to college right now (ROTC) and graduating in May, then off to learn how to fly helicopters.


  270. watch spx test 200 min MA on 1 min intraday chart… if fails goes further down, if above then recovery.


  271. Opt-

    Did you see my earlier post on RAIL? It broke over the 200dma today and looks like it will hold. Just looking for something that has some possible movement


  272. RAIL-Sorry, Blake missed the post earlier. This is a nice breakout indeed. Don’t know the fundamentals but it looks like a good play it it closes above 200MA.


  273. Jake,

    Very cool…. where are going to school right now?



  274. UNC-Pembroke, getting my degree in Business Administration, lol.


  275. DM – Your 1:05 comment is inconsistent with their results, especially after two years. Are you just randomly picking from the posted trades? That would explain such a divergence in performance… as would not making VERY similar entries/exits.

    Your trading style is primarily “directional, extremist”, and as I said to windywheel last night, my numbers never got really good doing that.


  276. How many people are in line ahead of me on BA Mar 85′s at 1.35?

    LOL

    That’s the best explanation from the ToS guy, since I put in my order at 9:50 this morning (had to resubmit since I only picked up 1 contract yesterday, need the other 9 today) that I’m at the end of the line…

    Its 1:24 now…


  277. Okay TRIN and VIX moving down is a good sign


  278. Jake:

    The smallest contract orders always get filled last. I’ve watched my trade grid go all the way up until i was next in line, only to get pushed out again.

    I just ignore it now and wait for the chimes to go off….


  279. fred
    You may be able to get TICK and TICK/Q through your platform.I like to set both on one 2minute Today chart. I have a signal lines at +800, +300 , 0 , -300 and -800 . I also have a 5ma line on the chart to filter the readings as well. ( Today the 5ma has been bouncing from 0 to -300 and back all day )

    Good luck


  280. steveplace,
    Do you have a way to see how many contracts have been bought/sold at 1.35 today? Its gotta be a lot, I’m guessing… Open interest is almost 6k…


  281. Hey all, just thought I would pop in to say LOOK OUT BELOW!!!!

    AAPL starting its capitulation move. Where it stops, nobody knows… But, I would guess 115.45


  282. AAPL- now at LOD and quick observation: intraday chart looks mechanically stair stepping on 5min bars


  283. Really wish I could have been around to short the top of that triangle yesterday. Would have been my first big winner in a while.


  284. Phil (et al) – Just out of curiousity I was looking at how the $RUT play worked and was looking at one of my own. If you buy/sell the following:

    BUY DXD $57 at $3.5
    SELL DXD $58 at $3.1
    SELL DXD $59 at $2.6
    BUY DXD $60 at $2.2

    You can make a max of $1 at a cost of nothing (expect dealing costs)

    Seems too good to be true. Did I get something/the prices wrong ??


  285. Opt-Good Play! Rails are on fire lately! One I own was up nicely yesterday on earnings and takeover talk. Makes up for the tanker downturn today but that’s a dividend LT play for me, so I really don’t care…


  286. Optrader

    I know that you have been buying stock in PAL.
    I am looking at Jan ’09 leaps, the $10 strike is $2.30. Worth considering?

    Thanks


  287. film/AAPL- i scoff at 115! scoff, scoff, scoff!!!


  288. AAPL-DD on July 120′s.


  289. xian – watch out for that last step!


  290. Where was the previous low on AAPL? 117.39 or something?


  291. Jake: look at the volume tab… i’m seeing 1,532 traded today, which is not as strong as two days ago, which was at 2932


  292. Opt I completely agree with the money management bit, but playing with 25k, you can’t have serious gains without risking a lot… Unless if you’re a day trader, or use technicals, or magic.


  293. 117.27 on 02/07…


  294. Hey, SBUX, of all things, is green today !

    A flying pig moment….


  295. Well, if 116 doesn’t hold, then yep, 110 is next. But, really, I would like to see 117.50 hold and not undercut the 116 bottom. That would be a bullish sign. This latest sell-off is totally nuts. But, I think any sell-off is nuts…


  296. steveplace,
    Looking at the trade grid right now, it shows my offer at 1.35 as the ONLY 1.35 offer right now on the buy side. On the selling side, ALL of the offers (asks) are 1.35… Yet no fill…

    Am I missing something?


  297. Optrader – Are you still in the JOYGs?
    Thinking of adding back a few since it pulled back to 5MA.


  298. DB: I’m checking your DXD play out on ToS analyze tab and it looks like a funny call spread. you are risking 80 to get 120


  299. film
    just last week you were advocating staying long and naked on AAPL.
    friday afternoon several of us discussed covering at least half, confirmed by phil at that time.


  300. Jake: try doing a cancel/replace… i just got filled in BA @ 135


  301. I think SBUX Jan 09′s at 3 look pretty good. Doesn’t take that much for this stock to go to 20. Good generate a little income despite what anybody thinks of sbux.


  302. AAPL – 117- ish, but it’s so early and the feel is so depressing, I’m callin 113.3


  303. MCD/Henk/EVERYBODY – Holy cow guys you have to learn to let a day/week happen and leave your damn positions alone! I just said this morning we went up and down 250 points 4 times this week and we go down 100 points in one day and everyone freaks out.

    The main problem you all had today is that the VIX shot up to 26+ and your short-term callers gained or held value while your longer calls dropped so your spreads looked worse than they did yesterday but you need to focus on your position and your target prices, everything that happens in between is BS.

    It is not possible to sell a MCD $55 call a month in advance and expect it to flatline at $55 so you don’t have to worry about it all month. You need to look back at prior months, look at the highs and lows and expect the same for the next month. If you don’t think you can stand it – DON’T TAKE THE POSITION.

    I don’t want to be rude but you guys throw me off my game with all this panic constantly. Literally 50 questions a day for the 10 and 25KP which have a grand total of 4 positions. I even notices that someone badgered me into taking the damn BA calls because I COULDN’T TAKE THE 20TH FRIGGIN QUESTION IN 2 DAYS ABOUT DOUBLING DOWN ON THE DAMN THINGS so I said yes just to stop the pain.

    If you are new and nervous about trading, please take the time to paper trade a month before committing. Once you see a position go up and down 10 times until it finally expires right where you wanted it to you will feel better about riding out a position but you guys are mixing up daytrading, which we do here, with small portfolio investing – which demands you pick a position and, whenever possible, follow through with it.

    I will be happy to discuss this in more detail over the weekend but I literally don’t have time to read or look at charts or do anything else I should be doing when I am answering the same question over and over and I would much rather read the information that many of our senior members have than over discuss every trade.

    If you are a $10KP or $25KP player, before you worry about a position, search the news on your position, read the articles and, if something has changed other than the ticker price that day – then PLEASE let us know and ask us what to do but DON’T ask what we’re doing every time a stock goes up and down less than 2.5%, it’s a poor use of my time and yours.

    Thanks


  304. JOYG-No, I sold yesterday. Will take a look at it again.


  305. JOYG-I like it, but I have too many calls right now.


  306. AAPL: will it hold at ??? 118 ???

    my jan2009 120 LEAPS:

    do I have plenty of time ?
    with so much time does it make sense to roll down to 115 ?

    Please help.

    RMM


  307. Optrader- Does that mean you are altering your very successful 5 ma strategy and taking smaller profits than usual? I thought your discipline meant you would stick with it period.


  308. “THIS HAS NOTHING TO DO WITH THE BROADER MARKETS!”

    Yes, it does.
    If they lose their rating then so do the the bonds AND CRUCIALLY THE CDS’s that they wrap. Financial institutions, especially the banks and the “oh so quiet” hedge-funds, that are valuing insured CDS’s as if they are AAA, because of the monoline wrapping, will have to revalue them at their lower rating – the deeper the momoline rating cut, the deeper the write-downs. And, with the write-downs, the banks’ ability to lend tumbles some more:
    And the crunch goes on…
    on and on.

    Although, if the monoline’s are only cut to AA, which looks possible that should help the institutions considerably. I think that’s what they’re currently working at trying to achieve. A cut to “AA” should, when it sinks in, see a super rally on the markets.


  309. Jake,
    I’m a 1LT in MN ARNG. Former USAF crossed over via OCS. I would say that you should go Warrant Officer if you want to fly. You won’t be flying much after you reach CPT and get company command. You don’t want to get stuck in staff hell. My business partner who I met on my last OIF deployment is a WO5 and currently at Rucker doing something for which I’m sure he’s overqualified to do. I guess you already know what you are getting into as an officer but I would have went WO route had been more familiar with the Army especially if I wanted to fly.


  310. steveplace,
    Tried to cancel/replace, and it wouldn’t cancel the previous order, which means I couldn’t put in the new order…

    Talking to ToS support again…


  311. RMM
    don’t worry, AAPL will be above 120 by january. hopefully by next week even.


  312. Windy, I WAS WRONG! LOL! I got smacked on that call.

    And since I was expecting a breakout right then and it didn’t happen, I am waiting for that signal/feeling again before I do. Because of the nature of my positions, it made the most sense to go to cash again as I would be unavailable to roll positions during the day and felt the posibility for a $20 move in either direction was possible.

    So, I am sitting on all my cash, and hoping that the bottom comes next week when I will be around. Or even better, if it comes today and it is all up from Monday. But, I don’t see that happening. I stick by the bearish triangle breakdown and that should force a retest of last months lows. AAPL may stabilize here, but the real run will not maintain any strength until the indexes get up off the mattress.


  313. 30 year bond futures is starting to move down. Money seems to be coming out of bonds. We may see atleast a end of day push.


  314. To piggyback off of Phil:

    If you guys are getting shaken out due to portfolio volatility, you don’t need to be in it. Instead of blindly following Phil’s trades, you can tack on some risk/reward calculations or stop losses or something.

    Heck, a better way to play it is to enter one of Phil’s positions the day after he initiates. Chances are you’ll be up 20% compared to the 10kp.

    Fear and greed…


  315. FXI just staying strong and bucking the trend … all day!


  316. Phil/Opt-I was just thinking that since rails have been doing well lately, would that be preceding an economic upturn, at least from manufacturing and industrial standpoint? I got caught up with some hedging earlier and the thought just occured to me after analyzing my ARII position.


  317. RMM:

    If your comments have more than two consecutive questions marks or exclaimation marks, you’re too emotionally involved in your positions.


  318. Apple March $140 @ $0.50 they were trading at $1 at the market open. When we’ve been trading in the $122-127 range these were $1.50.

    Quick play of the dip.


  319. bigs-Make sure you specify what’s coming down with bonds for me. Is it the price or yield? Makes a big difference :)


  320. Phil – I posted a thougtful reply to you wrap up post from yesterday. I hope you get a chance to read it this weekend.


  321. spx testing 200 min MA again…


  322. Najarian EK – Now that is funny, and very likely to turn out true. I’ve seen it several times before when the stuff we are buying in small lots as a group gets his attention, and as a result, he recommends it to his readership and on Fast Money.


  323. Phil,
    i hope you re feeling better now!


  324. But, I would add that AAPL/GOOG look sickly here below 120/500 and do not appear to have many fanatical supports in the big money ranks. I have access to one account today and will grab a few Apr 120′s for a swing if it looks like a bottom. But, there is nothing enticing me yet. I have managed to let go of my innate desire to buy because the price is lower.


  325. DXD – Well I checked the latest prices and it no longer works (risks 450 to make 550) but I’m sure the prices I originally entered were valid (the longs cost 5.7 and the shorts raised 5.7) so I think it may have been a good trade.
    (Assuming I got the spread.)


  326. yeah Nav and my logn term postions on Hmin start wake up after 3 months sleepping..


  327. CBTC-No, I never said that I only play 5MA strategy. In fact many times I said I don’t. I also play support/resistance or long term plays.
    About 3 weeks ago I also said that we were entering a period of range-bound trading and I was adapting my strategy to take advantage of those. This has not been a market to play the trend.


  328. It would be nice if the market could draw a line in the sand and refuse to go down like oil does.

    I suppose when your out of Nigerian Rebels, Bullish press releases from OPEC, Mysterious refinery outages and Saber rattling from Hugo Chavez. When you get tired of all that, you need a fresh suspect and it looks like it is Turkey’s turn at bat to prop up oil prices.

    http://news.yahoo.com/s/ap/20080222/ap_on_go_pr_wh/us_turkey_iraq_3


  329. steveplace:

    o really??????????????
    I am soooooooooooo nervous

    RMM


  330. well yesterday i said that it didn’t feel so bad
    today however, it feels really bad, even though the numbers aren’t as bad, the feeelings are worse. my own personal vixdex, or windex. (since i can’t see clearly out the window anymore.)


  331. Why do you guys keep defending AAPL when all it does is go down? As a new trader it truly seems like too many people here have fallen in love with the stock.


  332. And if you want a glimpse of what I think the ultimate use for the AppleTV is, look at this:

    http://www.elgato.com/elgato/na/mainmenu/products/hybrid/product1.en.html

    The “maintenance” usb slot on the back could just be a coax to usb dongle that turns the AppleTV into your new set-top cable box. That is the trojan horse. Once the set-top box market actually becomes a market (which will start any day now because the FCC finally forced it) who are you going to get yours from? How about AAPL, who has been getting rave reviews for its product? Or maybe MSFT, who doesn’t make hardware? Or MOT who made the crappy one you are dying to replace.

    Said it before and will say it again: What is a set-top box these days? Just a harddrive and a user interface. Who does that better than AAPL?


  333. Primus-That’s what the market was doing all last year. You got killed if you tried to short anything. Bears were looking like they were from Chicago! Even if a company missed earnings, they were rewarded lots of times on outlooks. Now, it’s the opposite…


  334. LOL, the windex!


  335. RMM:

    Your rhetoric indicated as such. And it shouldn’t have been directed at you, but when I start seeing extreme punctuation in comments, I generally see an overreaction to market noise.

    And IMHO, I wouldn’t roll your apple as long as your covered


  336. RedMountainMan – Jeeze, there ain’t that much to worry about. Those LEAPS only lost 2.50 today, and the cost of the roll to a lower strike hasn’t reached the magic $3 per $10 advantage yet.

    I’d be looking at your caller. From a margin point of view, do you have the ability to kick him out (assuming the protection is all used up) and rolling down to the next guy?

    I bought full covers somewhat late this morning. I’m just going to assume they go 111 and not worry about it.


  337. Zouk, I make ALL my profits from grabbing AAPL leaps at irrational sell-offs. They are 2/3 of the way through their multi-year move and multi-year incredible growth.

    I am in love with the stock. But, I have stopped trading like it. I basically got out at 160 and have been waiting ever since. I can guarantee you that if you buy Jan 2010 calls now you will make 1000% in the next 18 months. Guarantee is a strong word, but this stock should hit $400 on $8.50 in earnings in 2009 and a 45 multiple. If we can get the irrational rally in the market, then maybe we can push that PE to 50 or 60.

    This is a shakeout of the non-believers. And I pity the non-believers.


  338. I pity the fool!

    http://tinyurl.com/2tpv6a


  339. rankxerox

    I had was long on HMIN between last september till late october. It was a very good play.
    Please let me know if it starts to get bullish.


  340. yipeee partial fill on EK 2 out of 40 :-)


  341. RMM – Go read the K1 collection of knowledge.. in there you’ll find guidelines (not rules) like: rolling a position you believe in 5$ for less than $1.7, or 10$ for less than $3.5 is generally worth it.

    120 to 115, will cost about 2.15 right now.. Not worth it.

    If you had 140′s and wanted to roll to 130′s for 3.25, that would be worth it.

    Please go read up on K1.. For your own good! -Peter


  342. DB – IF you can get those fills, that’s great, the trick is getting that set of fills. For me that costs $40 no matter how many I buy so that’s a nifty risk/reward if they come in but you’ll often find the numbers are hard to actually get.

    BA – I hate to tell you Jake, but I see $1.30s being filled – who are you using?

    Red – as above, calm down! If you sold $120s and Apple is below $120 what are you worried about? Maybe if it falls BELOW the next strike but are you planning on rolling every time Apple moves $3 off your strike? You will have a very busy month and a very rich broker.

    Bond Ratings – The loss of the ratings will force some reshuffling of the bonds but new bonds will be reissued by new insurers, the point is that the insurance placed on existing bonds is valid. You (since I would guess you are short) need to worry about NO cut and AA cuts which, as you say, will rally the markets. I think it is possible for a rating agency to go over MBI’s books and leave a triple A in place with good justification. The fact that the rating agency would feel compelled to elaborate the position could serve to further rally the financials.

    Smart guy on CNBC says he did not look at his long-term investments once this week as he is in it for the long term and is not concerned about what happens on any given week in the markets.

    Bonds – that money may be going under the mattress the way things are going this week!

    Nasdaq hitting Oct 2006 lows!

    Rails are strong as they are moving coal around along with other heavy commodities, if we don’t see the truckers moving to match then it’s not as exciting as it seems.

    Much better thanks Henk! 8-)

    AAPL love – You may be right Zouk but many of us were here for a few of these pointless sell-offs in Apple and made massive amounts of money on the turn so we don’t mind giving them a mulligan or 4 on the way down.

    QIDs do look like they are topping off for what it’s worth. Not much time left for a real improvement and the weekend is hanging over our heads so a big buy here would make a statement by someone, although that statemnet may be “I’m a reckless idiot.”


  343. Phil, sorry that we drive you nuts!!! :(

    Sometimes, we just have to walk away from the screen.

    Got back from lunch…

    Filled order with TOS: DD on EK @.25 and DD on BA @ 1.3, not bad! :)


  344. sakiko and steveplace:

    now I am getting you to work with me; good for you and for me.

    my NEM sep47.5: I might get more.

    RMM


  345. Par – I know, I know, It would be great if those days were here again. Have they been talking about Obama as part of the selling, Wall St. has to be scared of him taking the White House.

    the Zouk – You have a very good point on AAPL. Just about everyone here loves the company (me included). And your right, for the past 2 months you would have been much better off openly shorting AAPL. But that is also why most of us own ’09 & ’10 Leaps to sell against and are advocating buying them down here while they are so cheap. The only thing I am worried about is a new product release and giant gap up. Phil is right, as bad as it is, the US is still the least sucky place to be.


  346. Thanks for the reply Opt. I’m irritated with myself for getting out of trades at the wrong time. It seems like you have the touch for knowing when to stick with it and I’m trying to learn. An example is PAL. I’ve made some $ but I’d have made more if I would have stayed with the 5ma system instead of taking small gains. Probably just greed on my part.


  347. Phil,
    ToS… It finally got resolved, they contacted the exchange, there was some sort of error and the exchange agreed I was entitled to the order being filled, so I got it at 1.35. Lots of pain and hassle though with the support guys.

    One of the two that handled it is going to call me after the close so we can discuss it. Evidently, all of the fills (according to him) below 1.35 were for spreads…


  348. Film,

    I think that AAPL is a great company, but I can’t see the P/E doubling to 45 next year. I think that is a big stretch.


  349. rolled 2/3 of my GOOG covers from the march 510s to the 500s, for extra protection. (long june 490s)
    didn’t think GOOG would break 500…


  350. AAPL- a mulligan or 4- LOL

    mulligans r common during shenanigans


  351. Alex I’m long in 30 and 35 june .. think they report before opex march.. probabilly start to move then


  352. Andy – Good job filling EK with .2. That was my originally plan, but went to lunch and worry it might go away. Patience!!!


  353. AAPL-P/E 4 months ago was twice what it is right now. Why is it a big stretch to think that it will in 18 months?


  354. Everything is just hovering… Makes me nervous…

    What is in store over the next 1hr 40 minutes? Up or down. Everyone place your bets now! LOL


  355. AAPL/love- considering the fundies remain solid and perhaps r better than anticipated (deffered revenues) and i have a longer term view (2yrs+), i can afford to love it when my callers take 70% of the downside on days like today- and today is a bad day for AAPL.

    so, i love the fundies, not the stock.


  356. I usually invest only 20% of my “Cash” in the market, but today I had to move some money to invest in stuff that I am planning on not touching for at least a year, mainly AAPL and RIMM. Periods of fear are the best time to invest.


  357. Great, now we have a Fed head making comments; can’t be good.


  358. opt- right on, buy fear


  359. Kelvin Sampson will not coach Indiana for the rest of this season. (AP)
    Indiana suspends Kelvin Sampson — accused of major rules violations by the NCAA — for the season Friday


  360. Rank – I hope everything is OK after your boy’s surgery?


  361. Anton,

    Why do you think a monoline downgrade to AA would lead to a rally in the markets? This would force a downgrade of all the AAA-insured bonds that received that rating through insurance, as I understand it. I can’t imagine how it would be perceived as good.

    I could see how a monoline breakup could possibly rally the markets, depending on how it is spun and assuming that the muni-insurance side kept its AAA. But a split is very unlikely to revive the the financial sector, who will be left with the crappy, CDS-holding side of any monoline split.


  362. sakiko – You are completely right. I am picking out random people and random trades. I’m trying to get people to think of phil’s logic of placing the trades, rather than the trades themselves. At the end of the day, I’m too young and inexperienced to impose my morals and values on others (For I don’t know what the best morals and values actually are… Yet).


  363. Phil, I had an alert trigger for TASR about an hour ago when the Jan 09 12.50s sold for 2.50… I seem to remember you saying this would be candidate for producing monthly income.


  364. Closed 1/2 of short positions on IBN & FRE on today’s sell-off; rolled Leaps down on IBN, PCP & GS to adjust to today’s red color. Also initiated spread on RIMM—Jan 10--105′s and short March 106.63!


  365. Jake,

    I an hoping we will close flat from here, but think it might go lower since it’s Fri. Have not been too impressed with Friday’s sell off lately. :(


  366. Newbie’s wife, it was a lame attempt at interjecting some humour, I got only 2 out 40 contracts (still at .25), been sitting there all day. Essentially I haven’t had time to watch today, picked up a few QID calls in the morning and sold them what seems now to be too early.


  367. I think theres a bit of buying coming in.


  368. fed guy-

    Fisher Says U.S. to Avoid `Prolonged’ Slump in Growth (Update2)

    By Vivien Lou Chen and Scott Lanman

    Feb. 22 (Bloomberg) — Federal Reserve Bank of Dallas President Richard W. Fisher said that the U.S. will probably see slower economic growth rather than a deeper downturn.

    The most likely scenario is that the U.S. will avoid a “prolonged period of negative economic growth,” Fisher said during an interview today before a speech in Fort Worth, Texas, without mentioning the term “recession.” He also said he’s hearing increasing expressions of concern about inflation from executives he speaks with, which has “gotten my attention.”

    Fisher spoke after data this week showed the U.S. is moving closer toward a recession, while inflation is accelerating at the same time. He said today that the slowdown in growth will probably last for a “couple” quarters and warned that it may be difficult to quickly raise interest-rates.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=abtTLM4bMqGg&refer=home


  369. Sampson sets this program back 3-4 years.. what a fool (I am an IU grad)


  370. Put it this way, RIMM jumped up huge on ‘increased subscriptions’ yesterday. I bought my iPhone about 2 weeks ago, I had to order it because the 2 of the 3 AT&T stores that sell them in my town had 30 min plus lines of people clamoring to get them and the third store was sold out of them. I know of 2 people personally that have just bought iPhones within the past few weeks and I would say just about every 4th person I talk to is ‘going to get one’. Now this is a very small part of the market, but I have to believe that iPhones are flying off of shelves because it is an amazing product.

    As Phil puts it, this company is in the middle of a ‘huge winning product cycle’ and irregardless of all the foreclosures, $4 gallons of gas and crummy economic news, I think people are going to keep buying AAPL products for many years to come.


  371. And to answer you question, Kelvin, why am I here? I came here because Indiana University asked me to. They asked me for a favor. I said the real favor, follow my advice and fire your effing a** because a cheater is a cheater.

    Bring back Bobby! Bring back Bobby!


  372. xian re: Fisher,
    Well that wasn’t bad, at least…

    Phil,
    Topic for AH/the weekend… Why use index calls/puts (QIDs, QQQQs, DIAs, etc.) as hedges and not VIX options?

    Also, is there any actually advantage to using QID instead of PSQ, fundamentally, when it comes to trading the options? Yes, I know PSQ doesn’t have any options to trade, but from an academic POV, what would be the difference in returns/hedging when comparing QID calls/puts and PSQ calls/puts (if they existed)?


  373. “I’m too young and inexperienced to impose my morals and values on others” – Oh, I don’t know about that… at this point, you might have a chance to remind others about what the world could be – before we used our experience and got to this age where we stopped caring about everyone else.


  374. the Zouk- IU program (this year excluded) has been on the downside for many many years and that includes Bobby


  375. all is o-k thnx greg.. in fact i’ve got him on my arms rigth now.. Doctors were very proud about thir work .. it’s a very clean work .. you couldn’t say baby had a harelip.. it was the stay at the hospital what made the baby . and me too, feel sick .. we are in the house save, healthy and strong


  376. kwan- I hope Phil feels the same as he did about TASR- because I went 1 step farther than you did and put in a GTC buy order that got filled today.


  377. DM,
    You don’t want to push morals and ethics, but have no problem telling the citizens of another country how screwed up their government (and thereby, the people themseves, based on our system of government, elections, etc.) is, and pushing that belief on them?

    :D :D

    All in good fun ;)


  378. Andy you are so patient!

    I hope I’m not being too bullish, I just really believe this sell-off is beyond what is warranted from the damage we’re seeing in sub-prime and that even the downgraded numbers on the global economy amount to nothing more than a cold overall. We get GDP next week and if it comes in BTE we could be up 1,000 points and if Ben tells Congress they have data that the cuts are working and, in fact, may need to be reigned in before we overheat again – all bets are off.

    On the whold, I think that, since we have a month and since next week will at worst give us a bottom and since we are half cash, that we can afford to be a little bullsih and should be psychologically ready for a rally. If we’re going down to 10,000 or below for 2 years, there are lots of nice dull ways to play that but if we are heading back to 13,500 next week, blink and you’ll miss it!

    Jake – OXPS has a “check status” button on the order that I hit anytime I think I should be getting a fill that alerts the floor that I’m irritated. Maybe TOS has similar.

    90 minutes to go, not looking promising at the moment. Oil closing at $98.65, up about 4% on the week and that’s not good as it’s pretty much in line with the 5% rule (20% pullback is meaningless) but, again, it’s the weekend and everyone is paranoid.

    AAPL may be heading to a 50% retrace off highs at this point ($101) and that would be truly amazing as they haven’t done ANYTHING wrong. It’s all fear, fear, fear but there’s really not much point in being the only idiot standing still when the crowd is stampeding past you.

    GS broke $172 down but gold is down and that makes little sense if the financials are collapsing.

    An AA downgrade would be a “buy on the news” event. AA is more than priced in already, people like Ackman are howling for junk status to be placed on these guys and they’re just not going to get anything close or you may as well shut down the entire insureance industry today as none of their books would stand up to real scrutiny.

    TASR – absolutely but not today unless you are willing to follow it down if next week goes bad (worse?). I love them down here and would play the Jan $10s naked as you can always roll to the ’10s for a buck if it goes the wrong way and wait out a dip. When the stok gets back to $12.50, then you can sell some as no good rally goes unpunished with these guys.

    FRE moving up nicely. I should be picking up Apr $25s but my heart just isn’t in new positions at the moment.


  379. BBD
    I disagree, somewhat. While the program had had a few down years at the end of Bobby’s run, it was set-up for good things when he got fired and Mike Davis sent the program into a downward spiral (after one good run with Bobby’s players). Sean May was going to IU before Bobby got fired. Both Oden and Conley said THE reason they did not consider IU was Mike Davis. I think had Bobby not got fired he would have another championship right now.


  380. AAPL is also almost totally recession proof. Most of their customers are either in the higher-income brackets or are younger and will only buy AAPL (75% of college freshman planned to buy macs).

    Alright guys, I am out. Should be back to full-time Optrader mimicking next week.


  381. Jake – VIX is analogous to “Rate of Climb”. Indexes are like “Altitude”. Now me, I want to use the right instrument…


  382. Phil,
    To my knowledge ToS does not have that feature. Just their live support/chat. That’s how I bugged the crap out of them and eventually got the fill. My issue with them is that the first tech/support guy basically wrote it off and said, literally, “Good luck.”

    So I started watching the trade grid closely, and when I SHOULD have been filled, and didn’t, then when I tried to cancel the order and put in a new one, and couldn’t, I contacted them again. Somehow the second guy managed to find the error at the exchange, but the first guy didn’t. Guy #1 just wrote it off as me being too low on the list to not get filled at 1.35 between 9:49 and 12:51 (when I first contacted them), basically.

    In the end, I got the fill, and I’ve never had problems with them before, so I should just be happy. But I’m stubborn ;)


  383. lol – if you only knew


  384. rank – very glad to hear that. Our children’s health makes all of the ups and downs in the market seem very unimportant by comparison. Best to you and your boy.


  385. Phil..or others who follow TASR…looking at grabbing some Jun 12.50 calls naked..it seems to be listless after earnings and looks due…at $1.30 range seems like a good risk reward…any thoughts..i believe a new product line is in the offing soon..thanks

    Oh..relatively new to this site and will write a little intro over the weekend..great site…


  386. sakiko,
    Oohhhh, using terms that are near and dear to my future job, I like it!!

    Which reminds me.

    Phil, just an idea, but don’t even bother with the people that keep asking questions over and over (like I did). The people that post here are pretty good about filling them in on what they missed, so you don’t have to. I was the same way last month (oh how times change), and the forum members took up the slack when you couldn’t. I know I, for one, am now trying to return the favor.

    Just a thought.


  387. sakiko – I sound like a socialist, but at the end of the day I love profit, I love girls, and all the little evil pleasures in life. But I just can’t help to feel something is just wrong.

    Phil believes the market will end higher, but with all the analysts saying life is bad (regardless if they’re wrong or not) why would you hold over the weekend with Housing data on Monday?

    There’s no Earnings AH, nobody speaking, nothing. The market feels oversold, but I just can’t visualize buying. How ballsy are the rich?


  388. Primus

    Why did you decide to buy an iphone prior to the 3G upgrade?

    Thanks


  389. Film,

    75% of college freshmen planned to buy Mac’s… point me to the article where that is referenced. Was that one small liberal arts school with 1500 students in upstate NY?


  390. Jake,
    Did you make sure it is a limit order and not a “STOP Limit” – that has happened to me – just a thought.


  391. Perhaps if Ron Paul doesn’t lay into Helicopter and make him stutter and stammer on live national TV again next week, we might be ok. Greenspan should have versed Helicopter in the benifits of using jargon to avoid actually saying anything of substance. I bet the same clowns that were clamoring all those years for ‘more transparency’ from the Fed would just assume CNBC take thier cameras elsewhere when Helicopter is talking.


  392. spx nice pop above 200 min ma… see if it holds…if so look for 1340 then 1350


  393. Eric,
    You’re absolutely right, but I suspect, from the numerous different articles and interviews that I’ve read that the Banks have mow accepted a downgrade is inevitable, anyone who thinks the monolines are AAA is 100% wrong by the way, but if they can manage to wangle enough cash together to secure a AA rating they will spin that to be a positive. Ultimately we know that it is total b/s, but the market is a fickle beast and the (apparent) removal of uncertainty could (and IMO quite likely would) see a major rally, so I’m ready for it if it happens.
    I will absolutely sell as near to the top of that run as I can of course, because the reality of the mammoth, never-before-seen-credit-contraction, isn’t even close to being priced in. My p/folio is up 31.7% in the last two weeks selling index futures into the rallies and I haven’t seen a shred of of news to change my stance. Though I have no allegiances whatsoever; if the facts change, I’ll change my mind.

    “Every mania in financial history has been liquidity driven. You can go back to the South Sea Bubble or tulips in Holland. As long as the money is coming in, everything is fine.”

    - Raymond DeVoe, Dec. 11, 1995

    This mania was debt. And the show is over.


  394. Phil, I haven’t looked at my insurance company’s 10-K but I sure hope they weren’t writing credit-default-swaps for SIVs!!!!

    Do we know AA is priced in? There’s a huge legal issue brewing as to whether the monolines’ CDS-writing even counts as “insurance”, as opposed to derivative trading. That’s just one of many questions that are wide open. I just think it’s still way too early to guess the damage, or lack thereof.


  395. Jake you’re right. I’m too much of a care bear.


  396. Phil – I know there have been lots of questions about AAPL lately but I just had one a little more specific one.

    I have 4x Jan 09 130s and sold 2 Mar 125s for around 6.

    Currently marchs provide almost no protection to my LEAPs so I was looking to roll down my LEAPs to 120s if I could do it for around 3.5 but doesn’t look like I will be able to. I dont like that my callers (although against 1/2 my calls) provide no protection and have an advantage on me.

    I am looking to maybe Roll the calls down to 120s (1.7 or so credit each) and then sell an additional 120. THat should bring in around 8 or so credit which I could use to pay down for the roll down of 2 leaps and then maybe roll the other ones down out of my pocket for 3.9 or so.

    How should I reposition? Unlike Xian I did not full cover with 125s and so would have to pay way more out of my own pocket if I were to roll to the 100s.

    Thanks


  397. Phil – in the dotcom crash every day felt like it should be the bottom , but it never was because you didnt realise. The worst part of that decline was the retracement was quite significant and you thought – that wasnt so bad – then it all blew up again. (Did that twice from what I recall). The real difference today is that the media are perpetuating the doom and gloom. Back then everyone still thought the “dotcoms” would save the world , even though they didnt until years later. Today very, very few are positive and fewer still can actually articulate what is going to pull us out. In this day and age I dont think thats going to happen untill the media change their tack. Of course we have to spot the opportunities, but we will get beaten back quite a few more times I think.


  398. DM,
    I agree with you. It feels “wrong” to be going up on Friday afternoon, and I’m just waiting for some of the manipulators to come out with a giant fly swatter to punish all those people that dare buy right now…

    I want to add, though, that my take right now is that fundamentals and technicals mean jack and shit right now. This market is dominated by sentiment, hence the fear and skittishness. Unfortunately its hard to analyze sentiment the same way you can technicals & fundamentals.

    The proof for me is listening to Bloomberg Radio. All the analysts and economists on there are split 50/50, with a good portion that, while they don’t say so, basically have no clue anymore (see my comment about Tom Keene yesterday morning).

    Something has to change sentiment in the market, but when even the “experts” have no clue and all the stuff the look at is basically split 50/50, what can change sentiment? Its going to take a lot to get it to change to the upside, while even a little thing, like an analyst saying he’s seen more roaches crawling around in his apartment and calling into question the quality of Manhattan real estate because of that, is going to make people sell. The market is predisposed to the downside, right now. Its going to take a lot to get it to go up, IMO.


  399. Status feature-I like that, boy that sounds like me when I need a new cocktail on the plane.
    furnace- you can say what the program might have been sent up, but stats show the Bobby was not doing well. Sean May was somewhat a disappointment until his last year and without all the other talent he had around him who knows Davis was over his head, and Sampson would be a good cold caller for a brokerage firm.


  400. DM,
    Feel the love! :D

    CMan,
    It was an error at the exchange, ToS contacted them, the exchange admitted the problem, I got a fill that I was entitled to. As for what the error was and why the first guy didn’t identify it, well, those are the two million dollar questions ;)


  401. OXPS check status – CooL! Im going to try it next time I offer the direct quote ask price and dont get filled right away. It does happen every once in a while – especially on spreads where you are right at the ask and still dont get filled for hours.


  402. DNA – Anyone buying / shorting it ahead of the FDA announcement AH regarding expanded use of their cancer drug?

    Also a possible catalyst is today’s news item that NIH is to start study of their Lucentis & Avastin drugs.


  403. Was listening to a podcast from the UK yesterday and David Cameron was questioning the Prime Minister in Parliament about the Northern Rock bank meltdown, demanding details on the cost to the tax payer now that Northern Rock is nationalised, etc. ending the questioning with a quite brilliant statement

    “This governments disclosure policy on the details of the Northern Rock scandal is so bad it would make Fidel Castro proud!”

    I like PM question time, they so let rip on each other…


  404. ORCL making nice comeback. Maybe others will follow.


  405. Got my full cover for CROX MAR $25 at $2, sleep better this weekend


  406. DM / “why would you hold over the weekend” – well, it comes down to conviction, doesn’t it? I understand being flat every session close, but you miss out on biggish moves. The first few months of last year, every Monday was “Merger Mania Monday”. To protect yourself from the wrong move, you have to hedge – it’s just the cost of doing business – and I personally never fully hedge. It makes more sense to find another trade (for me). As an options trader, I guess that I could buy into your argument (and the apparent posture that the market will drop nnnn) and just buy index puts to make money.

    In the end, you just have to keep the watchlist up, and if you see something interesting, construct a trade around it.

    Being flat every evening incurs a lot of commission; something that is detrimental to small portfolios.


  407. NEW YORK, Feb 22 (Reuters) – Moody’s Investors Service on Friday cut its top “Aaa” ratings on Channel Reinsurance, which provides reinsurance of policies written by bond insurer MBIA Inc (MBI.N: Quote, Profile, Research), due to its exposures to residential mortgage backed debt.

    Moody’s cut Channel Re’s insurer financial strength rating three notches to “Aa3,” the fourth highest investment grade, from “Aaa.”

    “Moody’s believes that Channel Re’s weakened credit profile could negatively impact the value proposition of its reinsurance relationship with its sole customer, MBIA,” Moody’s added.


  408. Andy – Question Time is awesome! Mr. Blair really shone as a debator at that podium. And those MPs are sort of fun to watch.


  409. BBD – “Sampson would be a good cold caller for a brokerage firm” – LMAO

    Knight did do a helluva job at Texas Tech (IMO).


  410. Can someone (not Phil please) tell me if the RUT butterfly in the 25K was:

    buy 5 Mar 680 calls
    sell 10 Mar 700 calls
    buy 5 Mar 720 calls

    or do I have that backwards?


  411. Dan B – We don’t even have G3 coverage up here in Alaska yet and they aren’t sure when it will be upgraded. I have Wi-Fi in my home, at my work and at my favorite coffee shop, so it really isn’t a big deal. Plus, stepping up from a Palm Treo, the iPhone still loads full pages faster over the Edge network than my Treo could load those lame ‘mobile’ pages. And my contract had just expired so I could actually lower my bill every month by switching.


  412. Nat Gas-another move higher


  413. Zouk, that was a changewave survey, I can’t find it in all the spam I get from Toby. It may have been more like 75% of college freshman WANT TO BUY a mac. But, it was up from 40% or lower the year before. Sorry, it is very like me to throw out stats without references in normal conversation. I will see what I can dig up later. Regardless, I really do not have a hard time believing that as 18 year olds want whatever is hot. And that is the mac. Whether they can’t follow through on their desires because their parents want them to save $200 and buy a POS dell that breaks in 15 months, is another issue.

    Also, I believe something like 80%+ of college freshman have iPods, so it all seems reasonable to a fanboy.


  414. Sakiko,
    I don’t know if there’s any highlights on youtube or somewhere – but William Hague was phenomenally good at PM questions. He routinely destroyed Blair, often having Tony himself laughing, and I’m a huge Blair fan by the way!


  415. Every single position now red.


  416. Lunch & Shopping time – Have a good weekend !


  417. Greg
    you have it right


  418. Greg,

    I happen to keep track of Phil’s 25kp. Good luck!

    Phil
    February 20th, 2008 at 3:41 pm | Permalink
    $RUT butterfly:
    Buy X $680s, now $39.40
    Sell 2X $700s, now $26.40
    Buy X $720s, now $15.90
    This should cost about $2.80 per contract and have no margin requirement. Risk is the $280 you pay and payoff is up to $1,700 between $683 and $716.
    That’s going to be a 3/6/3 in the $10KP and a 5/10/5 in the $25KP XXX


  419. Andy, those UK political sessions are fierce! It’s like those guys are born and bred to fiercly debate each other. I’ve seen a few of the Tony Blair sessions where he was just getting hammered continuously for an hour and he just kept fighting back more and more. There is just so much energy in those british parliament sessions compared to the sleeping and snoring you see on CSpan.


  420. Im off to lunch, and I think it’s a McDonalds day. You guys in MCD positions can thank me for supporting the cause!


  421. Apple about to break $116


  422. Film (and everyone else),

    I think there is tons of money to be made on AAPL going up over the next few years, just not right now.


  423. Yes – I did remember seeing MP Hague a few times and agree with you. I think the concept is pretty fab; it would clean up our US politicians (on either side) mo riki tik.


  424. I bought a top of the line Mac Pro, SO I DID MY BIT, man this machines screams…. 8 cores, 6 GB ram…


  425. VIX only looks predictable lately, it did not used to have this strong a correlation with the markets. I hedge with the DIAs because I know them best so I don’t have to think when I make my plays, that’s very important in an active market. The QID’s are for fun only, that’s no way to hedge! As to PSQ, I’m still learning the QID’s, I don’t enter into these things lightly. I paper traded QID for 3 months before making my first trade.

    AAPL/recession proof – Don’t forget the $49 IPods! The timing of this roll-out, just in time for spring break, indicates to me that Stevie saw this slowdown coming last year and swapped the line to crank out low cost Nanos. That’s why they cut the DRAM order, they plan on selling these guys with “scrap” chips in them in mass quantities rather than the normal 20M 8-32g units. Don’t forget it’s all about ITunes and people may not want a $79 IPod but they’ll buy a $49 Ipod and put 30 songs on it.

    The problem with most analysts is they haven’t got a clue in the world how to run an actual business so they see Apple or Garmin cutting prices and immediately downgrade sales projections. You would think after 4 straight years of beats that Jobs would get the benefit of the doubt but “this time it’s different…”

    The same goes for Google, people have no clue how to value this company. Nothing like it has ever happened before, they are STILL increaseing market share and the growth of the market overall is still accellerating. Who else but Google will be able to make money off the eyes of an African farmer? They have mastered micropayments and Coke IS willing to pay .0001 to put their brand in front of that guy 1,000 times on the off chance he’ll buy a Coke one day. 1 penny may not sound like much but multiply that by a billion eyeballs a year and find 1,000 sponsors who feel it’s worth getting their names out (I hear Mgdala’s used goat farm has some extra inventory to unload and $5 burning a hole in their pockets). Who else on earth can make that transaction work? Google does it Billions of times every day…

    Welcome Levost! I would caution against March anythings until we get through next week as it has been very ugly.

    Jake – I try not to but I always feel like maybe I didn’t explain myself adequately.

    AAPL/Joosj – for sure you should sell $115s at this point on your uncovered set! You can still get $6.70 for them, which is pretty good, about enough to roll yourself down $10. You can just put a stop on the 2 remaining callers, no need to buy them out unless things get worse.

    I just don’t see that as being as bad as the .com crisis or the S&L crisis. There were NO banks making Billions in 1987 and they hadn’t just come off of 3 years of record profits. Still this is a really pathetic finish and needs to be respected if we don’t get a hell of a kick at the close and, even then, we should add index puts into that…

    DNDN – $7.50s are .12, that’s $120 I’m willing to risk just for fun. XXX


  426. Thanks Furnace & Newbie’s wife


  427. exactly Zouk. AAPL are tremendous long term. Just not now. There used to be a phrase that was seen a lot around here:

    “It’s not my job to save the market.

    It was a superb piece of advice and one I have gained a huge amount from.
    You don’t see it so much these days……..


  428. okay out of puts


  429. Buyers back


  430. buy button …


  431. wow…

    Phil’s cheerleading kicks in.


  432. See, bailout plan for ABK has “significant” progress and may be announced Mon or Tues. I still think this is just a massive shake out.


  433. Despite merger madness, I still think it’s stupid to buy this particular weekend.


  434. wtf ?


  435. Financial going vertical.


  436. It’s not my job to save the market. I stole that from Phil.
    One trade for me today, but a nice burger. All have a nice weekend and GO Memphis


  437. This is madness…everything on my watch list (~50 or so varied companies) have exactly the same hourly trend chart, now all pointing up.


  438. Anton:

    If there’s anybody to save the markets, I know the guy.

    http://img502.imageshack.us/img502/6672/colbertwowcs1.jpg


  439. look at that nyse trin ……


  440. It’s not my job to save the market. I stole that from Phil.
    One trade for me today, but a nice burger. All have a nice weekend and GO Memphis
    What happened?


  441. Woohoooo!!!! Beautiful. Oh my, I was soooo loaded. I am covering a little bit. Was well worth going over my 20% limit.


  442. My system totally jammed up on me and now I can’t get into the site on my main screen!

    What a riot! This is why we have tight stops on new callers, still going 3/4 cover into the weekend no matter what, will happily roll up index puts if we go higher but flat is a huge improvement for the close.


  443. This is nuts, one moment the DJI is -1%, one (short) mail later is at 0%; I thought my platform reset itself or smth :)


  444. NOK QCOM


  445. Bought what I could in APR 120′s. If I was home, I would go long with full positions in all accounts with a stop at the LOD. Volume getting huge. Worry if goes under 116.80. Big Reversal. Just what I was looking for. Finally. Hop it sticks. Would love to see a reversal of the triangle, but that is a long way up with only 20 minutes to go, but encouraging here, nonetheless.


  446. That was soooo cool!


  447. Shows one more time that when everyone expects the market to do something, you can be sure it won’t happen.


  448. Phil, thanks for the advice. In terms of the stop for my 125 callers, I assume it would be 20% of profits, so around .6 from as they are at $3 and I am up around $3 on the sale? Should I just leave the order in in case?


  449. I thought the Bond Insurers didn’t matter..? :D

    Careful though boys, the bailout could be total bollox.

    I got stopped out of my short ES futures just as that run started, so I’m heading out to dinner. Have a smashing weekend everybody.

    Ciao.


  450. DNA halted. I don’t know about you guys but I can’t get pages to load. At least the advice is easy – Yay!

    What an insane market, I totally need a drink.


  451. wow, i just got out even from the EK and BA positions i purchased this morning to cost average. nice!


  452. Just amazing. Crappy day turned into best day of the year so far for me. Have a great weekend everyone!


  453. locked out for pst 1/2 hr


  454. Go look at the 5 min chart for SNDK, someone put in a really bad order, setting the LOD in the middle of the huge upswing.

    Poor guy (seller) and lucky bastard (buyer). LOL


  455. Well I’m writing but I’m not sure who’s reading. Near as I can tell a whole lot of people logged in at once and started refreshing like crazy to try to figure out why the market jumped and blew out some kind of SQL limit we had. It would be nice if you guys could ease up on the page refreshes just a bit so everyone has a chance to read.

    Holy cow look at those RUTs go! I was sweating those out for a while, now we can go back to worrying about them beign too high but this is why you buy out your callers after a 50% gain as a rule of thumb.

    Even Apple is coming back, QIDs are slow off the mark, GOOG good as usual. BKX up 2%, that is insane!

    Well it was a crap week but what a finish…


  456. Phil,

    Thanks again for your comments throughout the week, which I read with great interest. Even though I’m too bearish to play your portfolios right now, I use your methods in setting up my put spreads and they hold up beautifully on these little reversals!

    You’ve really helped me get more consistent results.


  457. This is the first time I’ve seen PSW.com go down on an UP movement(!)

    How fortunate that I DDx2 on some DIA calls this afternoon. woohoo!


  458. Oracle turned round a 4% drop.

    It was that computer again.


  459. R U Kidding me !!


  460. That was a great finishing and maybe the first instalment back to 13,300 Have a nice weekend all.


  461. Phil, what kind of hosting do you use? I hear that Amazon s3 is supposed to be good for managing ‘surges’ in traffic.


  462. ha! sorry, don’t mean to toot my own horn but…

    Mark
    February 22nd, 2008 at 2:56 pm | Permalink
    spx nice pop above 200 min ma… see if it holds…if so look for 1340 then 1350


  463. DM – did you see something at 3:26 to exit your puts?


  464. That was a good ending, makes bears very scared.


  465. Whoever spoke about the triangle fakeout break …. there you go


  466. “That was a good ending, makes bears very scared.”

    Except the ones using PSW calendar put spreads.


  467. W. T. F.

    Phil, if you get the chance this weekend in your portfolio reviews, could you make it clear whether or not we need to cut in half our position sizes in EK and BA in the 10kp.

    Since we doubled down, if we get back to even, I believe that we normally get half out again to help out our basis.

    If you advise to keep the extra contracts, that’s fine, but I’d like to see it spelled out so we don’t have as many questions about it.


  468. Phil, how do you predict the market closing green today? Unbelivable rally…


  469. Just finished placing covers for the weekend when BAM….Not much time to place stops!


  470. DNA

    Nice, they got approval for Avastin to treat breast cancer.


  471. “How ballsy are the rich?”
    Well I just got my answer.

    Cheers.


  472. Now it’s back… What kind of hosting? I don’t actually know but I just told Greg to yell at them. I want to do something different but we have a major site change still in the works so it will have to wait a bit but I see the exchanges and esignal and OXPS jam up on big market moves and we do too. It’s not just the 500 members, it’s a mega-spike on the free site, some of that will be addressed by moving that end behind the firewall, which is what we tried last weekend and had to reverse.

    FDA granst Avastin accellerated status. DNA still halted but I think that’s pretty darn good news. It’s not “full” approval but it’s a fast track for a MAJOR upgrade of Avastin use.

    ROFL – that should have turned Jake’s portfolio around quite nicely. Old $25KP gained like 6% in 30 mins…

    DNDN was the way to go, they are happy to hear anyone getting approved for anything and jumping up after hours.


  473. Mark- wasn’t that you that was a whole 0.01 off on the SPX close a few days ago? You’ve got the touch.


  474. Phil,
    Still down 5% from last week (week-over-week change, that is). Almost made back as much as was lost yesterday! So that’s good.

    And just another friendly reminder about the e-mail, you mentioned drinks and it made me think of it again, so it’s your fault! LOL


  475. BA – WASHINGTON (AP)--A 28-mile “virtual fence” that will use radars and surveillance cameras to try to catch people entering the U.S. illegally has gotten final government approval. Homeland Security Secretary Michael Chertoff announced approval of the fence on Friday. The fence, built by the Boeing Co. (BA), uses technology the government plans to extend to other areas of the Arizona border, as well as to sections of Texas. The projects could get under way as early as this summer, said department spokeswoman Laura Keehner.


  476. Market turned about 20 minutes after I went to a higher percentage cover on a couple of my long positions where I was only 1/2 covered. Even though my premiums would have been better if I covered at end of day, I will probably still appreciate the additional insurance next week if these types of market swings continue.


  477. Phil/All,

    I am fairly new to the board and would like to share my current portfolio…it is approx 10k and i am looking to paper trade phil’s recommendations before actually trading them. however, this is what i currently have and am interested in thoughts of the more experienced traders. what puzzles me the most is that it seems that i am losing more dollars on a daily basis even with covers in place. any advice or guidance would be appreciated. thanks in advance.

    Stock Position Contracts Strike Expiration Buy Current Gain (Loss)
    AAPL Call 1 170 01/16/09 12.15 7.375 (477.50)
    CME Call -2 520 3/21/2008 24.1 17.5 660.00
    CME Call 2 530 4/18/2008 29.05 22.25 (680.00)
    FXI Put 1 145 3/21/2008 6.5 9 250.00
    ISRG Call -1 290 3/21/2008 16.25 12.3 395.00
    ISRG Call 1 280 4/18/2008 20.5 28.5 800.00
    QQQQ Call -30 44 3/21/2008 1.4 0.89 1530.00
    QQQQ Call 30 44 4/18/2008 1.83 1.41 (1260.00)


  478. DNA – Avastin approved for Breast Cancer. Should move up $5-$10 once the trading halt is lifted. the ETF ‘BBH’ that has about 30% of DNA is up about $5-ish


  479. my quotes went down around that time too. these exchanges/brokers need to get more bandwidth. it’s a brave new electronic world.


  480. Damn am I lucky today. I set hard stops on a number of my callers that had made 50%+ before I went to lunch. They all triggered and saved my ass on the run up. Thanks for the discipline Phil.


  481. Daveo – I did the same thing. Set stops to lock in gains on 1/2 my short positions, leaving the other half in place for weekend cover.


  482. Primus

    Thanks


  483. these exchanges/brokers need to invest in more bandwidth.


  484. Just want to complete the story on the issue with my BA order today with ToS.

    Turns out it was a messaging problem between the exchange (in this case PHLX) and ToS. PHLX’s messaging system went down and they didn’t notify ToS.

    In all likelihood, my order had been filled for a while and it was just that ToS didn’t know because the exchange couldn’t talk with ToS.


  485. Good weekend everyone, excellent finish, we’ll see what next week brings.


  486. man, i wish i was around to c that finish in real time!

    amazing, everything i look at turned on a dime at 320p- just amazing.

    i bet it was the same people buying who were stair-stepping AAPL to the downside all day.

    AAPL- if someone is going to call me a fanboy (in good fun it’s cool) w/o acknowledging the long term fundamental and heavily covered nature of my positions, then i must say that someone is a hater.

    i never say: buy the front month OTM calls now for the reversal- this is it! get in for a swing trade! AAPL is only going up now!

    i always say: buy something at least 1yr out and start selling front month.

    of course, this should not b anything new for people to read here on any stock that has LT prospects and r good for premiums.

    this is the PSW way (if i may b so bold to state myself)- solid fundies, LT prospects, buying red screens and keeping covered positions.

    this is very different from throwing good $$ after bad (averaging a loser), which is what some people think is going on w/ AAPL.

    buy a LEAP and sell some fool $400 dreams this month and the next, and the next, etc.


  487. xian – it’s like you showed up for the rave, and they’ve moved on…


  488. sakiko- “i’m blowing up” looking at these intraday charts.

    anyway, just another day in the market, so not like anything is safer now- but phils’s point is excellent: the bears felt that.


  489. DNDN is a great DD play stock.. to be “Safe” I went with 10 May 7.5′s back when they were .72. Added:

    10 more @ .58
    20 more @ .45
    40 more @ .41

    and I’ll only need a 20 cent pop on them to break even.. Let alone one of their every 6-8 week $2 jumps.. Play money at it’s finest.. -Peter


  490. Q’s daily chart prints a Dragonfly Doji – with long tail..
    maybe we go up next week..


  491. Here are some “details” on the monoline plan, although the actual content is still pretty unclear:

    http://www.ft.com/cms/s/73450cf8-e187-11dc-a302-0000779fd2ac.html

    This is similar to what they were discussing some weeks ago, although the bailout amount ($2bn) is smaller. The banks providing the money to prop up ABK are the same ones with the most exposure to ABK’s insurance.

    Looks like the business split is still in the cards, and it’s still unclear what the resulting ratings for ABK’s parts will be after it is over, so I’m not sure why CNBC is talking about saving the AAA rating. Maybe they know more than the FT.


  492. alright peoples!

    it’s happy hours!!

    i hope all had a sweet day- thanks for the great feedback/exchange this week.

    im out!


  493. Phil – I would appreciate any thoughts on current MSFT fundamentals. Technically it looks so ugly.
    Thank you.


  494. RIMM – WOW!

    Rank – that is very great by the way. Jackie had a lobsided head and we “fixed” her by making her wear a helmet for 6 months that her skull grew into and Maddie had to have tonsils and adnoids as it was blocking her trachea, it’s amazing what they can do these days. I’m so glad for you, I know what a relief it is when they come home safe and sound.

    Plan for next week: Call Ron Paul’s office the day of Ben’s testimony and tell him that Obama needs to see him right away to discuss being a running mate. Make sure the meeting is far away from the Senate chamber…

    Liquidity driven bubbles – I agree with DeVoe (plus I love their music) but, again, there is no model for the incredible concept of GLOBAL liquidity where you literally have access to all the money in the world for the right price and, since all the money in the world is A LOT, the price of that money is relatively cheap and is likely to remain that way.

    Ins Companies – they all have reserves and there is no one on earth who had more than $1Bn and didn’t have $10M+ in CDOs or something like that. It can’t be avoided. Even if you think it’s junk, junk is still part of a balanced portflio and it’s irresponsible NOT to do a structured diversification reserve cash assets. Again I will say, it’s no big deal. We have a $60Tn ANNUAL global economy and $400Bn of loans are being written off, it’s not even 3 day’s worth of global income. Only people who went hog wild and concentrated their investments in sub-prime are getting hammered, for others (like Lloyd’s today) it’s no different than any other single item that goes bad.

    British Parliment rocks – I would pay for that channel.

    Holding over the weekend – while that is a little risky, holding overnight in general is a very successful strategy as most gains for the past two year came on opening gaps up. So if you are a day trader, it makes a lot of sense so buy on a poor afternoon (like this one until 3) and hold overnight.

    Greg – that’s the right Rutterfly.

    DNA open, up 9%.

    Good one Mark (2:56)!

    EK/BA – This is why it’s important to read membership materials and not just wait for me to say something. I did, on several occasions in the past few days, remind people that we are doing to DD SO WE COULD get out even at 1/2 and reduce our basis. When the opportunity did come, I couldn’t get the damn page to load and, even if I could, I certainly couldn’t be counted on to make reminding people to take a profit on a position that was bleeding cash just 6 hours ago. At some point in the process, natural selection does have to kick in. Me and the other more experienced members on the board are happy to teach you to trade as best we can but we can’t be expected to trade for you – it’s just not possible, you have to meet us halfway and learn the rules and, in absence of contrary suggestions, follow them.

    Since I got locked out, I ended up much less covered than I intended as my callers stopped out and I didn’t have time to re-cover everything. I didn’t get out of my BAs and EK hasn’t come back anyway but that is absolutely what you are supposed to do, especially in a limited portfolio. We deployed more cash to save a play that went bad – you must never forget what your goal is on a trade.

    How do I predict the market closing green? I just see pattens forming sometimes and sometimes it’s difficult to put my finger on (hence my more frequent use of THEY) and it’s also difficult when I get bogged down in BS, which is why I got pissed about the redundant quesitons earlier becuse, believe it or not, I’m looking at a lot of data here and trying to formulate and test hypothesis and it’s a lot harder when I get trapped in the drip, drip, drip water torture of “Buy EK now, sell EK now, DD EK at what price, what if it’s .30 and not .25, how many did you fill, Buy EK now, was that 5 or 10, what will the basis be, are we buying EK now…” so today, when I am myself struggling to get a clear picture on the market (as well as trying to look over 100 stocks I manage that are NOT EK) I got a little annoyed. ;)

    Jake – catching up on the weekend I hope.

    FP:

    AAPL – I’d roll to Apr $115s at $10.98 (+2.60) and sell the March $120s for $5.40 to get $250 back and a better position. If this goes well you can sell someone else the Apr $120s or $125s and roll back to July with that money, working your way back into a better spread.

    CME about right but I do not like 1 month spreads in general.

    FXI – very risky.

    ISRG – about right but if you have a small portfolio and this is how you trade you have an excellent chance of having a smaller portfolio if anything goes even slightly wrong.

    Qs – You’re a braver man than I am on this spread. It’s a good price but you should have stopped out at least 1/3 of your callers that far ahead.


  495. MSFT – they are the only people besides the Fed with a license to print money! I’ll get more into it when I’ve had more drinks but it’s time to build a snowman – have a good weekend all.


  496. xian – well, it was pretty funny, as I was about to DD on a bunch of BAC ’10 45C and had been typing away on an email; I happen to see DM “okay out of puts” on PSW and I had added BAC 42.5C (then 85 cents); next thing 100 contracts cross at 90 cents. So I put in a small order, got filled at 95 cents. Bailed at 1.25 right at the close. Also added to the LEAPS, which I’ll sell against.

    But the quickie will pay a a nice burger. maybe at this place: http://www.theoldhomesteadsteakhouse.com/index2.htm

    Check out the dinner menu, “Classics”, 20 ounce burger.


  497. xian-

    hovnanian on fast money rightnow.


  498. Anyone,

    Did you guys DD on BA and got out? What is the latest story on BA?

    Thanks.


  499. That was just great. Shorts got killed. The 1 min chart on RIMM is just crazy.


  500. malai:

    read phil’s comments earlier…


  501. Opt – could you please share how you handle spikes like this one with regards to STOPs? Did you have automatic stops on your puts or you were trying to stop them manually? If automatic, is it market or limit order? My understanding is that it is essential for balanced portfolio to be able to cut one side on a big move.
    Thank you,
    Dmitry


  502. A “virtual” fence is such a load of bulls-t.

    You need a fence AND technology.

    And whoa, 28 whole miles ! not even kilometers.

    That Chertoff, he is slick.


  503. malai,
    I did DD on BA, but lost track of it during all the excitement and missed when it hit 1.70, nor did I have an order in prior to the start of the excitement because I totally did not anticipate it hitting that high today.

    So yes on the DD, no on the getting out at break even.


  504. Funny … or not so funny … today I was trading w/ TV CNBC noise OFF.

    So of course was caught unawares of the ABK inspired rally.

    Recovered a lot of my losses; but did not exactly jump on board the rally train.

    Damn.

    But I did build a snowman today.

    And took the kids sledding after market closed.


  505. Opt, you are unbelievable … you never cease to amaze.


  506. Hey, uh, Cap. You know that you and I are good to go, but, kilometers are shorter than miles ;) So 28 kilometers would be a shorter distance than 28 miles (28 kilometers = 16.8 miles [roughly]).


  507. Jake, I know that. I was being sarcastic.

    Like, look at that commitment … 28 MILES not even KMs .. long fake fence … out of 2000 mile border.


  508. Phil, my son also had his tonsils and adenoids out at age 5. His tonsils were so huge and ugly, practically blocked his whole throat. Wasn’t getting enough air / snored like a madman.

    Day of the surgery, he was playing outside afterwards. No more snoring. Silence. An amazing thing.

    The important thing is their health; Rank glad to hear your child is doing well.


  509. Amazing to scroll thru charts. Some stocks went wild. Like AAPL ,GOOG, RIMM, DRYS, FSLR, AIG, other financials.

    And some hardly moved at all.


  510. Cap,

    Got ya. The Internet sucks sometimes.


  511. Frankly, I don’t see that recycled ABK news as sufficient to ignite the rally we saw, that started curiosly at 3:30 pm on the nose.

    But we’ll take it !


  512. First the FDA’s ruling late today regarding DNA’s drug, Avastin.

    Then the Supreme Court ruled in favor of MDT today (said that since MDT’s catheter was FDA approved, MDT couldn’t be sued under State law.) The ruling also protects other medical device makers.

    Could be a good Monday for MDT, AMGN, DNA, DNDN etc.


  513. The MDT ruling was Wed. Missed it somehow.


  514. sakiko/BAC- when opportunity knocks…nice stuff.

    lipper/HOV- i think phil likes them too. this weekend i’ll try to learn something about the builders current conditions.

    AAPL/50% retracement- looking at a 10yr monthly chart, i can c maybe y it “deserves” this nasty brutish downturn- let’s hope it’s also short (yes, that’s locke)

    anyway, that chart is stupid parabolic- looks like the current violent spill simply must happen.


  515. Phil/Anyone,
    How do we decide when to DD – like Phil had 0.25 for EK and 1.35 for BA? What is the guideline for deciding this price?

    Thanx


  516. Davin / deciding DD – “conviction and clock”. Especially in small portfolios, you don’t want to be jumping all over the place. Phil is generally conservative, and won’t even suggest an inappropriate trade (based on portfolio size / risk). So you can feel confident that the designated Portfolio trades have some level of conviction to profitable outcome within the expiry.

    Stuff happens, however. The market takes you the wrong way, but if you still believe in the position (and Phil usually does), the DD adjustment is the simplest. In order for it to be successful, you have to also believe that you can get out even at half the position as the leg miraculously comes back (you were a believer, right?) The assumption is that as soon as you get back to even on the leg, you reduce the size.

    Therefore, the DD point is going to be mathematically below where price recovery is going to work. You need to look at the chart and the clock and decide if both endpoint conditions are probable within expiry (keeping premium erosion in mind).

    If they are not, you either kill the trade, or use some other adjustment, like rolling. The correct decision depends on too many factors, including your own risk tolerance and ability to pay for rolls.

    Please see Phil’s 5:13 comment today, and kindly find the time to do the homework in the New Member’s Guide (banner item at top of the page). Since you sound a little new, you’ll need to try to keep from being confused by the daytrading silliness of some of us “experienced” members versus the trades for the PSW portfolios.


  517. sakiko, (and new members like me – i thought this is good opportunity to give my feedback)

    Thanx for detailed reply. yes I am relatively new and it is only second month. I have gone though the new members stuff plus k1 project. Excellent reads there! Still I feel I will take a long time to learn the art as I have a full time job.

    I follow $25KP and dont day trade it as it is not meant to be (also I cant do daytrade because of my FT job). I had the idea of DD and getting 1/2 out at even but what confused me were so many comments today about this one trade EK. And then deciding between 0.25 and 0.30 as finally Phil gave in to this and said OK to 0.3

    With BA trade, I scaled to the original target of 10 (took 5 initially and then DD when it was 1.4). After 2 months of PSW, I have started feeling confident to not follow Phil’s trade “move by move” and decide what is best suited for my portfolio. Move by move is also not possible for me because of my FT job, so I miss lot of good trades. (But good thing is Phil is never short of good trades so be patient and wait :) )

    When today I saw some panic from small portfolio followers, I went over my open positions and felt confident how well they were positioned (Thanx to Phil!). Even if my portfolio was down because of BA and EK naked calls, I did not panic since I knew what is my risk.

    So I dont have any doubt about any position / move that Phil makes in small portfolios since I believe he considers all aspects before making that move. And daily ups and downs of market does not usually require any change to those positions.

    I recall some time back when due to so many comments, Phil had to cover a position which he liked very much and did not want to cover, we ended up paying our caller. Similar happened today when we paid 0.3 for EK instead of 0.25

    I will share some more feedback later.

    Thanx to Phil and other members for sharing their knowledge. It is more than worth any text book.


  518. sakiko – Was lucky. It looks like someone abracadabra’d the market.


  519. Davin – That’s a good writeup.


  520. Oh and I’ll be the first to point out: That rally was sketchy. I know I’m bearish, but that’s the direct opposite of the “crash” that I was looking for (to bottom out the markets).

    I’ve seen a lot of put buying and call selling near the end of it too.. So keep count of your nuts, while you still have it.


  521. Anton / “Question Time” (Prime Minister’s Questions) – I did out that your Government keeps an archive of sorts at http://www.numberten.gov.uk/output/Page306.asp ; I will have to have to find some of the more entertaining ones.

    For the other PSW members, you might find watching these curiously addicting. As I mentioned earlier, methinks US politicians would be a hell of a lot more careful if we had something like this. Spend a few minutes watching this video http://video.twofour.co.uk/play/video.asp?videoID=2729

    which happens to have a topic, the Northern Rock temporary nationalization issue.

    FYI, the half hour PMQ period occurs every Wednesday evening, with the Prime Minister on one side and the Opposition on the other. The debating skills needed to participate and survive these sessions is of the first order !

    DM – Thanks. Luck should take credit when it can.


  522. Wow. What a day! Xian, I had restraint. I did buy APR’s for the swing trade, so I could sell March’s if necessary. But, let’s look at the reasons I called my bottom and placed a significant, but not crazy directional trade on AAPL. And if you look at AAPL on a log scale for that 10-year chart, it looks much better. You can see we are just below the channel level.

    REASONS FOR ENTERING AAPL UNCOVERED:

    1) Resistance held. 116 was a hugely important number and after letting it slip away for a few moments, the orders came in furiously as the market rallied in the last 30 minutes on a Friday. Only missed by bottoming target by $.40.

    2) I was looking for a fake triangle breakdown reversal. It happened. This should have been a strong down day out of that formation. Instead,

    3) As I was trying to buy my Apr 120 calls through E-trade, the only account I could access, I saw the price move up from $7.20 to $8.00 on barely any price move. The stock was getting pushed back down by a MASSIVE sell order while the price of the calls kept pushing higher. I take those divergences as entry signals often. They are great and all other trades are just impatience.

    4) I last called for going naked last Thursday, and was quick to cover when I was wrong. But, the reason was the strong buying volume at the close when BIDU’s earnings came out. You could feel the swell of big money for the first time in a long time. Felt it again today.

    5) If the stock had broken $117 again, I would have immediately flip-flopped and said NEVERMIND. But, that was about as low risk an entry as you are going to get.

    6) I am reading Market Wizards for the first time. Last night I read, “when you have terrible fills, you are getting in at a good time.” Or something to that effect. Terrible fills today.

    7) Phil’s repeated emphasis on not believing the sell-off.

    8) Did I say 116 held?

    9) Downside limited by the strength of that support. I will absolutely close this position if we get below 116.50 on Monday. But, I am in a trade and I will only be stopped out from here on in. I have been waiting, studying, and not trading until I saw the opportunity for a great entry on AAPL. I live and die by AAPL, so of course, I am a terrible example for everyone.

    I really didn’t put that much money into AAPL today. It was a small trade for such a big bottom, but I was unable. I am excited for the open on Monday to see if this holds. There was a huge increase in the call volume over the last 2 days. Calls dwarfing puts FWIW.

    I also believe the GDP number could only really help us. Everyone KNOWS we are in recession. So, if the GDP isn’t negative, then people will be on TV saying “there won’t be a RECESSION because this quarter is not negative, so the next two would have to be and that seems unlikely given the universal forecasts for a rebound in GDP in the second half. Everyone forgets that recession is not the same as slowdown. Everyone has been hearing “RECESSION!!” for months. Now, if people start hearing “NO RECESSION” they will all feel better. They over-react on both sides.

    I had a consulting job for the people I used to work for this week and the head of the production company who is making HUGE money lately asked me about the market for the first time ever. He knows I am big in it and that is why I haven’t come back to work with them. He said he lost all of his gains for the last 2 years in 2 months. That was a great barometer of fear to me. We all want the huge climactic V-bottom. But, what we have is a demoralized investor base that will be paralysed for the next month as we move off this bottom.

    I couldn’t be more excited as I really need my AA-game back in play. Have a great weekend everyone.

    It sucks only posting late at night. I feel like no one ever reads my stuff.


  523. Dmitry, I don’t change my stops just because there is a spike. None of my stops on puts got triggered on this as I sold S puts before the spike ( as posted here).
    It is very important to stay with your stops. and not panic. I noticed that you asked me yesterday about CSCO’s stop, I answered, and then you asked me again today when everyone was panicking and CSCO was down less than 1%. Being disciplined means respecting your stops.


  524. Cap, I was real lucky today as I did not expect such a big move at the end (but I was certainly not expecting a big drop when everyone here was acting like they were panicking). Most of the buys I did today were done with a longer-term timeframe.


  525. http://ap.google.com/article/ALeqM5iY1LMnObmhDUlKGvOv11kqqT7KuwD8UVU1F00

    If EADS/Northrop Grumman gets the Deal, BA would go much lower.
    So we have to hope that BA gets it so we were very Happy with it.
    But it looks like EADS/Northrop Grumman has a better plane…


  526. Opt – thank you for the reply. I didn’t mean stop adjustment because of market panic. I know you are very disciplined. I just wanted to know if you use automatic orders (as opposit to mental) that would have triggered when you are not watching stock movements. It is important for me as I have day job. I see a lot of comments on this forum about how pure market orders (and what stop order essentially is) perform with options. You also shared some important details of your technique, like giving stop some time to confirm, selling half on kiss-goodbye and the rest on confirmed break. This means manual handling. On the other hand do you actually place stop-orders with your broker for the case when you are not around or to manage sudden market moves?

    As for the CSCO yesterday, it is true I was looking to reassess and get out because at some point it did look weaker then others.

    I appreciate it.
    Dmitry


  527. FilmFlam, That was a great post to wake up to. Don’t worry about posting late at night! I’m sure a lot of us like to read good analysis when we get up. I am central time.


  528. Film…I dittoJamie. good overview…


  529. Now Weekend and I want to introduce my person a bit:
    I´m 23 years and live in Germany. Since I got to know optiontrading in the middle of 2007 I want to know more about it. These massive knowledge and mathematic you need to understand all the option trades were very interesting for me. I love mathematic and statistik calculations so this is a great area for me to work with.
    I still have a dayjob, but after it I´m here and want to trade a bit.
    When this all going good with my first 10K I want do to the 25K and then but not later quiting my dayjob and doing trading all the day(This is a big destination for me)!!!
    Especially: I can´t constantly go at 7am to work, come home at 16pm and do trading till 22pm. This is very hard and tiring for me.

    But since I know all the silly gains here in the world especially in the Trading business I want to become a master in trading!!!
    That´s all for me. I still getting more in love with trading and I hope this never ends.
    Now doing on the homework there are really much to read here it´s so cool!!!

    Thanks for this great site and these much educations stuff!!!

    Sorry, my English is not the best but I´m learning as much as I´m reading.


  530. Question for all,
    For those of you that are more experienced, could a trailing stop have been used yesterday to stop out callers? If so, how would you structure the order? And how could you use the same to make sure that you then cover again before market close. I’m thinking it would be a 3 part order, 1st triggers OCO type, where the first is the trailing stop to buy out your callers (just not sure what I would use as a trigger), then the two others (one-cancels-other/OCO) would be a trailing order OR a MOC/LOC to ensure that before the market closes you get the position covered again (either a last minute cover [the MOC/LOC portion] just to make sure you’re covered overnight/for the weekend, or to kick in on a reversal [the opposite of the first order that kicks in on the uptrend] to make sure the rapid up/down is exploited but covering the position to protect the downside during the day if necessary).

    So I’ve got the basic structure (1st trailing stop order buys out the caller, then the two OCO orders either ensure you’re covered before close OR covered before it heads down).

    Reason that I ask is that I’m trying to use the time I have now to figure out strategies I’m comfortable using to “automate” as much as I can since in a few months I won’t be able to make ANY trades during the day due to work. I’ll only be able to put in orders when I get home at night (after markets close) or early in the morning before I leave (before they open).

    And also because I wasn’t able to buy out the callers that had already given me 50% (but I wanted to keep as further protection if we kept going down, so didn’t take out already) in time (defined as towards the beginning of the end of day rally) because I was away from the computer.

    Trading platform is ToS, for reference.

    Let me know if I need to clarify that, may have made it too wordy in an attempt to make sure I covered what I was trying to say.


  531. Alex,

    Nice to meet you. I like the idea of profiles for some of the members who would like to share them. Perhaps that’s an idea for Phil in the future. For example it would be great to know more about some of the regulars (of course if they are willing to share). That would help members to direct some questions to people other than Phil. I know we have some really good people on energy (BillBigD), high tech (reinharden), technical trading (Optrader, parchesia), index technicals (Mark), etc. I know anonymity is desired and needed for some but I think it would make us all better traders.


  532. oil speculation- good to c this discussed out in the open

    Oil Prices: It’s Not About the Oil
    Crude oil prices are again breaking records, but not because of real issues with supply and demand

    http://www.businessweek.com/bwdaily/dnflash/content/feb2008/db20080221_593045.htm?chan=search

    film/AAPL- really nice stuff.

    log chart is cheating b/c it’s still parabolic in price- yet i c that channel (at least the support line). to b sure i c the samething u do, can u list a couple of dates where it touched the support.

    i have now & JUL06 but tos charting is acting funny and not giving me 10yr view in log- only 2yr view.

    also, $400/share by 2010? JAN10 300s r 5.00ish- that kind of math confuses me- or buy JAN10 200s for 14.00ish and sell JAN09s for 4.00ish and u can still bank the 20x return, but b able to scalp in/out of covers on the way up.

    anyway- trying to improve on a 20bagger is kind of crazy- so is planning for that kind of return…so, i love it!!!

    builders- heard this on bloomber and checked it on GOOG finance:
    cash on hand:
    TOL- $900M ; LT debt = $2.3B
    KBH- $1.8B ; LT debt = $2.1B
    PHM- $1.0B ; LT debt = $3.5B (+$400M ST debt)

    RYL- $240M ; LT debt = $8400M

    worst balance sheets r-
    HOV- $18M
    BZH- hasn’t filed since MAR07- so who knows
    WCI- $7M ; LT debt = $1.98B
    SPF- $230M ; LT debt = $1.7B (+$240M ST debt)

    next step is to look at markets, inventory, management, etc


  533. Phil

    If you get a chance over the weekend, I have a question. I am currently trading the 25k portfolio, but I have another 10k parked in another account. Can you suggest some longer-term positions for the 10k? I considered following the 10k portfolio, but I want to just focus on the 25k right now and not get over my head trying to follow two portfolios.

    Thanks


  534. HOV- LT debt= $2.3B


  535. furnace- the LTP portfolio is full of that stuff. the coolest thing here is getting to layer others’ experience, styles/methods, opinions/analysis onto the trends or stocks i’m comfortable with- and learn about more stocks/industries in the process.

    i’m new here and the first thing i noticed was how fast things can move- and do move regularly. what’s so impressive is watching the reactions/thoughts/moves that r shared as the market evolves (this is on a daytrading basis). trying to keep up w/ that move for move is very difficult unless i only try that out for one trade b/c i think it fits me anyway.

    but if i never have heard of EK- i say, that’s not for me and i can learn about it now for next time- besides, looking out for DD’s is best anyway.

    i have a habit of asking phil about unique rolls/positioning on staple names here (AAPL, QID, MCD) and he’s very nice to offer advice on that- i try to make the question one of depth/understanding – but usually it’s really me asking “is this move crazy?” b/c i am after all trying to integrate his LTP style into my portfolio.

    i also like to ask people the reasons they make moves (ie indicators or market internals/news/fundies stuff) or have certain opinions (ie the US banking system falling into dis).

    the rest of the time, i post news stuff and my opinions on things we discuss or i think is market worthy- u know, so others can use me as “some kind” of indicator- LOL (sarcasm font?).

    AH i’ve been known to b opinionated on everything.

    anyway- learning by osmosis can b very powerful- also, the books. there’s a book list somewhere on the homepage.


  536. Dmitry,

    I never use hard stops with my broker, but I am always in front of my screen as this is my full time job. Now, when I go on vacation I just keep positions with wider stops, that I don’t need to nurture. And I usually check once a day.
    I guess it depends on your strategy. For example if you are following the 5MA method, then you only need to look at EOD for exits.
    But most importantly I truly believe that what really matters here is money management. If you are risking a small amount of your portfolio on each trade, you should not be worried about stock price being a little bit above/below your stop at the EOD. Sometimes, it will happen the other way, with price above/below your target.


  537. xian, I do not believe it is cheating to look at log charts when you are looking at 5 year charts. After all, if you bought AAPL at the bottom for (split-adjusted) $6, then a $6 up day is tacking on another 100% to your position, right? Log charts are fair determinants of trends when you have a company that is growing and returning at fairly constant annual growth of 50-100%.

    The trendline I have drawn is from the bottom of 4/03. The monthly low touched the trendline almost every month in 2004 and moved off of it around Sept. 2004. It came back to kiss it in August 2006. Last month we closed just barely above it. And this month has been spent entirely below it. So, it is rather imperitive that we get a move on because it needs to be at 136 or so get above it this month or 148 next month. I would be very content if AAPL would just pop back above that trendline and claw its way to stay above it for a few more months. There is no need to buy OTM leaps until we can reclaim that trendline.


  538. film/AAPL- thanks. the split/growth rate thing makes a lot of sense on the long term (ie it’s growing exponentially LT)

    i notice that the weekly 100MA (106ish now) also gets touched at the same time as the log trend line. this might b a good level to watch too.

    as far as fear indicators go, did the production guy say what parts of the market frustrated him the most?


  539. eSignal comments???

    Im considering buying/subscribing to eSignal. I just went to the demo today that presented the “GET” advanced version. I figure I will not purchase for another few weeks while I study up more on what is and is not in the basic version, plus the benefits of the GET version (very cool stuff in the demo this morning).

    My concern is that Optionsxpress, and even Yahoo Technicals has some really cool charting software that is *FREE*. I know Phil uses OXPS and Ive seen comments about his esignal in the past so I figure he is a subscriber to that too. Im just looking for feedback from anyone that has used eSignal, and also has used the free charting software within oxps, yahoo, ameritrade, etc. How much better is esignal that you are willing to pay so much above and beyond the free stuff?


  540. MER bear- very good data. maybe the link works. this a weekly economic analysis by MER- anton, u r goung to love this.

    https://www.gpcresearch.ml.wallst.com//common/emaillink/pdf.asp?SSS_A9122991261BC019F043489C2C23D8C8&pdf=pdf/The_Market_Economist__22_Febru.pdf


  541. Opt – thank you again. It really helps.


  542. Jake,
    I’m definitely not one of the “more experienced” folks, but I was pretty happy with my Friday results so I’ll share what worked for me. I had 5 short positions (callers) showing 50-60% gains as a result of the depressed market conditions last week, but my long positions were holding up really well. I certainly didn’t want to give up those gains, but I’ve also gotten punished in the past when a small whipsaw occurred, triggered all my stops, only to have the market spin around go lower and kill my long (now uncovered) positions. I was setting my stops too tight, buying back 100% of my open positions, and trying to get every % gain I could.

    On Friday I knew I was going to be unavailable for most of afternoon, but I didn’t want to leave those high % winners sitting out there to turn into losers. I decided to set 12-15% trailing stops on 1/2 my positions. I wanted to make sure I could get at least 45% profit out of these things if the market turned around, but I also wanted to go into the weekend with at least some cover (hence the reason I only bought out 1/2 the positions). I know that buying back just 1/2 of those winning positions reduces my overall profit, but I’m covered into the weekend and I can easily resell the 1/2 I bought back on Monday (at 10-20% more than what I bought them back for).

    I was pretty happy with how things turned out. I’m covered into the weekend, I have a lot of positions and a lot of premium I can sell on Monday, and I pocketed a pretty decent profit. I don’t really know if a whipsaw in the market would have triggered my stops or not, but even if it did I still would have had 1/2 my long positions covered, so the sting wouldn’t have been as bad as it has in the past.


  543. Seattle, I signed up for esignal last week and will probably cancel my subscription after the free one month is over. It’s very nice but too expensive if you don’t use it everyday. IMO.


  544. Alex – Hey man, don’t treat options as so mathematical, as most of the math is already translated into laymans terms on most platforms.

    It’s a cool coincidence that you said you’re 23 on the 23rd day of this month though (02/23).

    It would be even more interesting if you were born in Rhineland-Palatinate in 1984 as the area is 19,847 km^2.

    The 7 at the end also coincides with 02/23 of your date of posting… Which is just the sum of the digits 0+2+2+3 = 7.


  545. Film – Why is 116 such an important number?


  546. DM-I have to be a bit bearish as well but I do see some positive technical indicators improving. So I wouldn’t be surprised to see go up nicely for the next few days. I do, however, have to say that in a bull market, we gradually go up and have corrections “spikes down”. In bear markets, it’s the opposite, we gradually go down and then correct “spike up”. I know the definition of a bear market is 20% but just looking at what’s been happening recently, I have to at least consider it.


  547. Thanks jomana. I think I’ll just sign up for the 30 day deal and play around with it for a few weeks. The technical features on OXPS and Tradeking and pretty good and they are free.


  548. Jake – I do almost the same thing as JB with regards to TS and parameters. I usually know the movements (velocity, not particularly a price level) what I’m playing very well, so I feel fine setting stops from 10 to 25 cents wide. I occasionally get a bad/undesirable fill, but I fret very little… just try something different the next time.

    I don’t particularly trust MOC orders (you never seem to get a fair price), and LOO orders never seem to get filled. If you really want to duplicate the order submission in a way that your manual evaluation would have done it, you need to pre-calculate what the order might be (or what would have been acceptable), then construct something that trigger the TS order above your level.

    Remember that a limit order gives you good price – but risks execution, while a market order guarantees execution but not necessarily at a price acceptable to your trade plan.

    I completed two manual trades in the 3 minute period beginning at 1527, and my three other ones were done by trailing stops for orders entered around 1400 and 1510. Those clicked off at 1525, 1529, but I never “saw” them.


  549. DM – I drove past Western on Richmond St. yesterday. Was heading just a few blocks north of the university to pick up my son’s stuff. Made me wonder where you were.

    Stu.


  550. Stu – I own one of the condo’s in 1548 Richmond. It’s inbetween Western and Masonville. It’s reading week now, so in Toronto as I type this.

    I thought your son goes to Mac?


  551. parchesia – I agree for the most part. However, with the couple days that will have ‘positive following’, I’m not too sure about.

    I’m trying to figure out if time matters more than the move. Does the market correct based on the numbers or the duration?

    Let me rephrase:
    Do things correct based on X percentage? (say 20%)… Or the time it completes it? (1 year bear market from a 3 year bull market)

    Or is it some sort of mixture of both? If it is, then it’ll lead to infinite variability…

    Unless, if time is a replacement for liquidity. Then we could discount the moves that are greater than X% in a day (like seen on friday), because they were only liquid for maybe the first 10 points in the half hour. (the other million points moved up only because the sellers were few and far between).

    In an example, say we have XYZ trading at 100, and we have a ladder looking like this:

    Price – Bid/Ask

    99 – 100
    99.25 – 126
    99.50 – 543
    99.75 – 1234
    100.00 (Current price)
    100.25 – 1010
    100.50 – 400
    100.75 – 200
    101.00 – 70
    102.00 – 20
    105.00 – 12

    Now in that given moment, to move price from $100 to $101, would take a buy order of 1610 (1010 + 400 + 200) + 1 (1 from the 101 ask price) lots… But to move price from 100 to 105, would only take 1700 + 1 lots. a 100 lot difference to move price an extra 4 dollars.


  552. A good hedgefund strategy, I suppose, would be able to slip the actual market price against it’s options.

    So back to the XYZ example,

    Accumulate options, then buy the 1700 lots of stock to push price to 105. Liquidate out of your derivatives and stock gently until happy.

    Though, this might not stick by itself. So I guess toss in a rumor (Ambac something something bailout) and it’s a packaged deal. Instant billionaire.


  553. DM – Yeah, my oldest son goes to Mac. My second oldest was staying with someone who goes to Western for a while – long story. He’s home now but he left a bunch of stuff there. We picked it up on Friday, plus his friend, who came home to Hamilton for reading week. You’re in Toronto? I thought I remembered you saying that you are from the “Caledoniaish” area? I used to live in Townsend and Simcoe.

    Stu.


  554. Apple mania. Since Apple is a common topic you guys might like to read this, not because of the article per se but just read the comments to see the emotion involved here.

    http://blogs.barrons.com/techtraderdaily/2008/02/22/apple-hits-lowest-level-since-june-new-iphone-worries/


  555. MSFT – forward p/e of 13, always beat estimates (despite being the most analyzed company on the planet), 20% growth, $40Bn in cash/investments (no debt), no cash flow only because they bought back $20Bn worth of stock in ’06 and ’07 (that slowed considerably in the last 2 Qs), $4.5Bn in quarterly profits and a 2% dividend – all for just $257Bn!

    Windows is still 95% of all operating systems (Linux .57%, Mac 3.22%, Mac Windows 3.59%). With 1Bn pcs a year getting shipped, all MSFT has to do is charge $5 more for windows to make $5Bn more dollars. When they put out Office Live (ASP version) and “rent” their software, there will be an exponential increase in earnings as people adopt the model over time.

    Meanwhile, here’s more good news about Apple: http://marketshare.hitslink.com/articles.aspx

    BA – The Pentagon is probably finalizing their contract decision on Monday according to someone I know who knows these things. If you want to hedge BA, you can buy NOC calls as it will surprise everyone if they win it and they will probably break $85 if they do ($85 calls are .15) so spending .15 for each BA call you have is not a terrible play for insurance. If EADS gets it I’ll be leading the protest march on Washington myself! There are 44,000 Amerciacn jobs on the line here and even the engines are Amercian in Boeing’s bid (Pratt and Whitney).

    NOC’s deal is an EADS parnership that will create maybe half as many US jobs. As with the 787, BA went with a smaller, lighter design than EADS and I would have to think that Airbus’s problems with the A380 would have to make procurement people think twice about a critical replacement program that they absolutely need to get done before the Dems take over and cut their budget.

    If BA loses, it is absolutely a buy on the dip play as this tanker deal represents, at best, 3% of their Net in 2010 and less in subsequent years.

    I don’t think the “virtual fence” is in place of the actual fence plan, it’s just easier to get started. Of course, it’s a BS scam to enrich some tech company Chertoff is in bed with. In reality, there are a couple of thousand miles of border that need to be patrolled 24 hours a day so let’s say 1 man per mile = 6,000 people to patrol a fence 24/7 OR you can hire 100 people per state to verify that businesses don’t have illegals working for them. No illegal jobs = no incentive to come in illegally and we don’t have to look like Berlin (which doesn’t even look like that anymore because Ronald Reagan declared a wall between a free and an impoverished nation was an immoral outrage that would not be tolerated by the United States of America (well the USA that used to exist anyway).

    Trailing stops – OXPS has them as part of the basic order platform and you can choose Bid/Ask/Last, up or down a number or a %. I like using the % of last because it’s the most real BUTBUTBUT doing this on illiquid stocks is death. On a nice, liquid position, I will set last at whatever % works along my basic rules. For most purposes, unless I’m not around or am particulary anxious to exit or worried about a big turn, I’ll set the trigger to sell 1 contract, which serves as an alert for me (since I keep almost everything in units of 5s and 10s) that a position needs my attention.

    Jake – if you are not going to be around I would very strongly suggest adopting more of an LTP strategy, where missing a day or a week for that matter is rarely a big deal. This market is far too volatile at the moment to leave a small portfolio unattended with any kinds of short-term trades.

    I like the idea of members introducing themselves, perhaps K1 can do a “meet the members” page withing the New Member Guide. Anyone who want’s to do a Bio can or perhaps we can find some kind of facebook or myspace type thing we can link to for members (although any of you can do that now by adding a web link to your profile).

    Good builder info Xian, looks like KBH is crusin’ through this…

    Furnace $10K – I like 6 AAPL Jul $120s at $14.48 ($8,600), selling 4 Mar $120s at $5.38 ($2,150) and save the rest for rolling. That way you have one Mid-range play that you know we are all watching like hawks to go with your $25KP. I won’t get into why we all love Apple so much but the path I see on this trade is:

    If it goes up, the Apr $135s are $3.12 so selling all 6 of those would be $1,850, which means you can expect that to be your worst case upside roll, which would put your July $120s $15 in the money.

    If it goes down it costs you $5 ($3,000) to roll down to the Jul $110s and (assuming a $10 drop) you would be able to fill 2 $115s at $6 (now $8.22) as soon as you get nervous ($1,200) and then buy out your callers for $2 ($800) and sell 2 $110 calls for $8 (now $11.62) which would give you another $1,500 and put you in a better 6:4 trade than you have now for a net of just about $1,100 more than you are putting in to start and you still have April, May and June to sell.

    EVERYBODY SHOULD HAVE A PLAN LIKE THIS LAID OUT FOR EVERY MAJOR POSITION YOU HAVE! If you fail to plan, you plan to fail, yadda, yadda, yadda…


  556. HOV and other builders – I’m not going to get into defending these guys but I will say that builder balance sheets are based on a very advanced form of quantum physics that allows for the simultaneous existence and non-existance of assets depending on who the observer is. Many builders have taken full advantage of this downturn to create tremendous tax benefits for themselves as well as to scare their lenders into restructuring their existing debt as more favorable levels. When you owe $1M and you can’t pay – it’s your problem. When you owe $100M and you can’t pay, it’s the bank’s problem!

    Esignal – I use it for all my live stuff and I use Stockchars, Yahoo and Investools for historical. I don’t think there is any one “right” thing but Esignal just works the way I think so it “fits” me best. The trick is to try things until you find something that feels intuitive for you. Just like a pro baseball player has a glove and a bat that HE likes to use, you need to improve your game by making sure you have the best tools for YOU, not for me.


  557. Phil,
    That (going LTP) is the plan after the end of this new 25KP (I’ll be around for this one). The only problem there is that even with the LTP, I will be out of the loop for 6 weeks at one point, so that’s essentially an all cash time, for me (other options would be a covered-call/buy-write CEF or an Autotrade advisory).

    The good thing is that I still have about 3 months to figure out solutions.

    All,
    Setting a last% on short positions that have already given a 50% profit would probably be the best I could do now. To get everything I want would require essentially writing a trading program that could integrate with thinkdesktop and send buy/sell orders, a client side solution that would get data from thinkdesktop, evaluate it, then send a limit or market order (as appropriate) to the application. Until ToS does something to thinkdesktop that would allow that, a last% trailing stop is the closest thing to something that would work.


  558. Jake – I have zero experience with TOS, but both the IB TWS client – out of the box – and, OXPS with its API (either client-managed, or something could be server-fashioned) will let you do exactly as proposed in your last paragraph.

    Automation here is no different than any other kind of automation, and has inherent risks. For example. I could conceptually put a BA 777F with 3 million lines of programming code on autopilot with a shipment of food bound for Cameroon, and have the entire flight crew come back to do a pizza and slumber party in the middle of the hold for 14 hours. I might be OK with that. Sending my mom and sister on a BA 777-200ER on the chase flight 35 minutes laster should give them the same transit characteristics, but I don’t think I’d be very happy if their flight crew came aft of seats 18A and B to do the comparable pizza party.

    3 million lines of code also doesn’t usually account for a freedom fighter walking his used goat below the approach path with a Stinger in the saddlebags on a bad hair day.

    You need to construct trades for what you can anticipate, and actively manage for the rest. Or be like my sister in the example, and not overthink the turbulence.


  559. builders- quantum physics LOL- i should add that i’m not trained/experienced in evaluating balances sheets, this is y the info is so simple.

    so i don’t really know, but there could b 2 particles in a one-dimensional box.


  560. Phil,

    As always, thanks for your help. This site is a tremendous learning experience and I am very grateful to you and everyone else who contributes. Fun and Profits indeed!

    Furnace


  561. Phil and rest of community….relatively new lurker/member but thought I would give a brief introduction..I am a Canadian living near Toronto…recently retired early…graduated with a Business degree to become the next Conrad Black and somehow ended up the Chairman of a large industrial union (Auto Workers)..figure that one out..have been a short term trader for years (late 70′s) and was doing options back then…remember the 2000 bubble vividly..I just laugh..option contracts going up more in 2 hours than the stocks are worth now…ah the days of buying CMGI Mar 350 calls…JDSU AOL…a good time was had by all..lol
    Like a lot of you I am married to my computer 12 hours a day..being Canadian I have two short term(90% options) trading accounts because of currency and a long term retirement account..using TD Waterhouse which is fabulous other than the glaring weakness of no trailing stops on options ..so I have to micro manage a little more than my liking
    I love the social concience displayed by Phil and many others in the community..I view CNBC as a necessary evil…my first thought is “ambulance chasers”…or selling vegomatics or ginzu knives at the county fair..I was just waiting for the comments about last weeks tornados to be bullish for the homebuilders..get some of those unsold homes off the market..maybe interview Dorothy from Kansas to see what she was buying…my guess is she was “long of” wind power companies…
    Politically…I better just stay out of it being a “foreigner”…but just 2 brief comments….and a kinda call for activism that is needed in terms of starting the ball rolling…I think of 2 movies from the 1970′s…predicted the whole current situation..the first is Network which I will give a youtube link to..the Howard Beale rant..can you imagine Larry Kudlow doing this…the second is Being There with Peter Sellers…I just see George Bush as Chance the Gardener..I really can’t blame him..lol…or Forrest Gump writing a final exam in integral calculus..

    http://www.youtube.com/watch?v=dib2-HBsF08

    My trading goals are really just to pay my bills and take a small vacation every once in a while…help out a bit in the community at night by actually getting off my ass and and going out..I am doing what I love to do for a living…selfishly,I may refurb my little office…I desparately need a red “batphone” under glass…and for anyone that remembers Get Smart on TV, if I make a nice gain I would like to add a retractable cone of silence…perfect ambience..lol
    not as great as Havana in the 50′s…my answer to that would have been sitting with my laptop and the guys in front of Satriales Pork Store…now that is an office…
    Again my thanks to this community …there are solutions between taxing the poor and bombing the shit out of people…. I count my blessings every day that I can pursue this dream of trading for a living…and am grateful to the wisdom and advice offered here…I hope I can be successful and maybe contribute at times to the rest of you… oh..I think I saw a comment in K1 by Phil about success being at the right place at the right time…I kinda call that the Ringo Starr theory…good luck to all…sorry about being long winded


  562. Levost – When I was younger, the clout wielded by those guys at the Pork Store would have been “sexy”, indeed!

    Belated welcome, and good to hear about you. Good luck with the trading.


  563. Stu – Girlfriend in Toronto. Staying with her for a bit. Simcoe’s a cool town, I like dover more though, friday the 13ths are wicked holidays.

    Levost – Wow so much experience. Honored to have you.


  564. Hello all,

    I am a newbie to this site as well (approaching 1 month) and have been reading a lot on the forums and the K1 project, but like others, am juggling a full time job with trying to learn as much as I can (at times, it seems like trying to take a drink of water from an open fire hydrant). Just learning to take baby steps but was hoping that someone would be kind enough to walk me through the trade that Phil suggested to Furnace. This is how I understand the trade:

    10K to play with, aapl at 119.45 on Fri afternoon 2/21:

    Initial trade:
    Buy 6 AAPL Jul 120s at $14.48=$8,600 debit
    Sell 4 AAPL Mar 120s at $5.38=$2,150 credit
    Net=$6,450 debit with $3,550 left for potential rolls

    If Apple goes up to $135:
    Sell 6 Apr 135s at $3.12=$1,850 credit
    July 120s are now $15 in the money (~the price of the July 105=$22.95)=$13,770

    Am I to assume in order to complete the roll, it would require buying back the 4 Mar 120s (~the price of the Mar 105s=$15.80)=$6,320 debit?

    If Apple goes down to $110:
    Roll down the 6 Jul 120 to 6 Jul 110 at a cost of $5=$3,000 debit
    Sell 2 Mar 115s at $6 (now $8.22)=$1,200 credit
    Buy out the 4 Mar 120s at $2 (~the price of the Mar 130s)=$800 debit
    Sell 2 Mar 110s for $8 (now $11.62)=$1,500 credit

    I’m sure there are plenty of errors in my thought process above and would appreciate any corrections to my analysis. Also, I’m unclear as to how the net of $1,100 was arrived at if the stock drops to $110 and also what the net would be if the stock went up to $135.

    Many thanks in advance.


  565. Phil, thanks for the esignal feedback. I will just do the 30 day trial and play around to see if I like it. Im going to need to talk to one of there sales reps first though. Ive been to the 2 hour demo of the “Advanced GET” version, but I dont want to start by trialing that. Im a bit overwhelmed looking at their website though with all the various options of the product. Im just going to make the sales rep work and explain everything to me 1-1 before I decide what to trial.


  566. Hi, I’ve posted some more weekend reading over at http://philsbackupsite.wordpress.com/. Comments would be great, :-)


  567. Ongba,
    If Apple goes down to $110 – your net debit is 3000 + 800 = 3800 and net credit is 1200 + 1500 = 2700 so net cost (debit) would be 3800 – 2700 = 1100


  568. Ongba
    If Apple goes up to $135:
    your net cost for rolling your caller would be 1850 (which would mean buying your Mar 120 caller and selling Apr 135), I think Phil meant difference in cost between Mar 120 and Apr 135 would be 3.12. When Apple goes to 135, Apr 135 would not be at 3.12 (look at the ATM call price)


  569. I am planning a vacation to Costa Rica in April and just noticed how much the dollar has strengthened there over the last 5 years. Does anyone have any insight to this as the dollar has been weekening everywhere else?


  570. Ilene,

    Whohuu thanks for the blogroll blog site!!! Very nice comparing other things.
    So much to read in the web.


  571. Blake – They have crazy inflation down there! One of my former teammates moved there in 2004 after early retirement and is having a great time. He had told me that it wasn’t a good idea for residents to keep US dollars.

    You may gain some insight from reading this:
    http://american-european.net/blogs/costa-rica-news/business-and-economy/2008/02/13/colon-value-likely-to-rise/


  572. Welcome Levost – Nice intro! If you read back a bit you’ll notice that’s one of my oft referenced clips too, I often channel my inner Beale… Your handle reminds me of one of my favorite songs: http://www.youtube.com/watch?v=CMub1_CdOrQ&feature=related

    Welcome Ongba! That play is for slightly more experienced traders so the assumption is they understand that the relative price of the April $135s will rise to compensate for any gains in the March $120s. I would strongly advise going through the K1 project if you haven’t already and especially advise paper trading a few like this so you can get used to the way to relationships change over time.


  573. Alex, Thanks for the feedback!! (did I ask for that? :-)