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!

Thrill a Minute Thursday

Gosh I'd like to not talk about oil but it is driving the markets

We need a break in the POO (Price of Oil) in order to get the markets back on track and we are dangerously close to crashing the economy.  Gasoline has so far avoided the steep gains of oil so the impact to the consumers has been, if you can believe it, minimal so far.  Should we close the month of July at the NYMEX on June 24th, none of this nonsense really matters.  As with any options, they can go up and down 50% during the month but nothing really matters until expiration day.

It's very easy to knock down oil prices.  A real President would have done it by now but the pumper-in-chief had to be forced by Congress to STOP buying oil at $130 a barrel but he still went ahead and bought $85M worth last week, presumably because they didn't say pretty please with sugar on top.  We have over 700M barrels of oil in the SPR and all the President has to do is release 5M barrels a week for 10 weeks to knock to price of oil down 20-30%.  I won't get into the math of it here but you can see what a 5Mb draw in crude did to us yesterday (+$5 in oil), well a 5Mb build has a similar effect in the opposite direction and knowing there is going to be a 10-week surplus of oil will quickly send speculators looking for greener pastures.

Bush can even enrich his buddies by giving them a heads up to the short side and letting them speculate down for a change, we don't mind if they get rich SAVING us money for a change but the extra $511Bn a year that Americans are paying now for oil over $60 in order for T Boone and company to put another $1Bn in their pockets is really starting to hurt.  And not just us, we are the richest country in the world and can almost "afford" a $511Bn payback for George's campaign contributors but the rest of the world consumes 65Mb a day x +$70 a barrel x 365 days = $1.7Tn and that's a lot of money! 

That's a global $2.2Tn that, as recently as last year, was money that global consumers were able to spend on food, clothing, IPods etc that is now being spent on something that literally goes up in smoke.  There is no better way to transfer wealth from the poor to the rich than by making them pay their hard-earned money for consumables! 

So we have to balance out the $2.2Tn (plus ancillary inflation) that has been sucked out of the global economy in the past 12 months against the fact that we have, in fact, survived it and, now that there is a rising awareness and backlash against it, we can look ahead to the possibility of at least some of that $2.2Tn being returned to the people, who will be able to put that money to work with companies which make up the 90% of the S&P that are NOT energy companies.

It's a $50Tn global economy and the energy sector has sucked up 5% of that money in just 12 months but imagine the boon we will recieve when they give it back.  If we think of 13,000 as being a fair price for the Dow now, then 14,500 is very reachable if oil goes back to the $70s.  While $70 may seem a long way away, I'll remind you that we thought CitiGroup was worth $52.90 just 12 months ago (now $21.06) and we thought Toll Brothers was a $60 stock in mid-'05 (now $22.05) etc…  We've had gold bubbles and oil bubbles and tech bubbles and housing bubbles and tulip bubbles in the past – is this time really different or is this just another bubble about to burst.

Unlike other bubbles that burst, a bursting oil bubble will be a huge boon for the economy and it is in the interest of 410 of the Fortune 500 to pop this one so wake up corporate America and let's put a stop to this one!  Our "leaders" refuse to do anything about it but this is an election year, so put some strings on those donations or perhaps give the other guy a call if your boy is too deeply involved with the energy lobby.  We can change the world, one Congressman at a time!

So we ended the day BULLISH yesterday because I think the markets dropped 500-points this week on a scam and there are plenty of good things going on in the economy.  Oil is now up on something besides dollar weakness and while our weak leader may be unwilling to do anything about, you can bet that we will see some real action from the rest of the world as well as our own newly empowered Congress, who are about to kick back a Bush veto (Farm Bill) with record speed, sending a clear message to the President that he has crossed the line from lame duck to dead duck.

The Hang Seng dove 417 points in last night's trading while the Nikkei ended positive by grace of a 300-point recovery after lunch (I'll have what they're having please!) that saved them from posting a 1,000-point drop in 5 days.  Nothing good actually happened in Japan, weak results from a Bank of Japan government bond buying operation prompted a sharp selloff in Japanese government bond futures, with the money flowing into stock futures so – Yipee, I guess…

Europe is flat to down ahead of our open and UBS is raising $15.5Bn at a very steep discount (31%) to it's current share price.  This is money needed by UBS to make up for over $37Bn in morgage write-downs taken by the bank in addition to the $15Bn they just raised by selling off their Alt-A assets to BlackRock at a 32% discount.  UBS is already down over 50% from is't highs last May and this is just a small taste of what will happen to big oil companies who have run up their expenses 100% on a 150% rise in crude if crude falls below $90!

Our markets are looking to open flat this morning and if we don't hold 12,600 it's going to be time for some mattress plays so look alive today!  If oil fails at $135 and fails to hold $130, I will get downright bullish as $130 was our target for as far as we thought they would take this scam but, as I said before, you can't really know when a bubble will finally pop.  As long as the numbers you see are effecting option and not the actual consumers, they can paint anything they want on that ticker – consumers don't care what it says on CNBC, they care what it says at the pump and that's where were going to get some blowback if gas prices at the pump begin to reflect the fantasy-land that oil is in.

Gas is at $3.65 a gallon as a US average and there are 42 gallons in a barrel (not all gas but for simplicity's sake) so that's $153.30 per barrel.  Not much of a refinery/delivery/retail margin at $135 a barrel is there?  Something has to give people and it has to give by the time these contracts close in June!

Don't forget it's a holiday weeekend and we want to be well covered regardless but let's give the markets a little chance this morning, they may surprise us!

 


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. GM Phil,
    ISRG getting killed pre-market. Any news out from the company or otherwise to cause this? Is it panic selling from folks trying to make room for margin requirements.


  2. No doy?  How is this big news (yet bloomie has it highlighted in red).  Love it…

    8:04 *FORD LOWERS ‘NEAR-TERM PROFIT OUTLOOK’                    :F US


  3. bballer -

    ISRG: Intuitive Surgical: On call, guides for revs "somewhere around" $850 mln
    in total revs vs. $873.1 mln First Call Consensus (288.65)
    [Update]
    The co guides for gross margins to continue to be in 69% range.


  4. Thanks Mark!


  5. selling off:

    May 22 (Bloomberg) — Ford Motor Co., the second-biggest
    U.S. based automaker, said it expects to break even in 2009,
    delaying a profit target.
    Ford also is cutting North American vehicle production for
    the rest of this year, the Dearborn, Michigan-based company said
    in a statement today.


  6. TASR up pre market on new orders….


  7. ESLR and STP both reported and up pretty nicely… should see some buying in solars today, but not sure of the correlation btwn all of them.


  8. AMR
    Looking at a daytrade in a couple of the airlines.


  9. fred – AWESOME idea.  enjoy.

    Goldman Sachs Group Inc., Merrill Lynch & Co. and Lehman Brothers
    Holdings Inc. retreated after analyst Dick Bove reduced earnings
    forecasts on concern the brokerages will fail to fully hedge
    against credit losses.


  10. AMR,
    In @ $6.55


  11. fred – already got multiple positions on AMR. Not as volatile as CAL, but its made me money in the past, so I’m sticking to it.


  12. Sure, let’s trot out the head of the Nymex for an "independent" opinion.  So, the fact that it’s doubled is completely based on supply/demand.


  13. phil,
    what is your reaction to nynex’s ceo statement just made on cnbc. esp reg the 50/50 spilt amongst spectators being long/short?


  14. Phil:  

    Are you listening to this liar from the NYMEX talk on CNBC, ‘all of the rise in oil is due to supply and demand?’  I figured that might get you going on an entertaining rant or two to start the day, with these crooks literally bankrupting businesses by the day I thought it might be nice to get you going for some entertaining reading while trying to trade these crazy markets :)


  15. DVN- company says Barnett Shale is not slowing down as rumored.  Production can increase 10% to 25% from current levels


  16. May 22nd, 2008 at 8:54 am | Permalink

    -->


    Phil – Excellent commentary as usual.  Why is it hard for anyone to believe that the oil
    futures market is being manipulated?  I believe speculators play a part, but that most
    of the manipulation is on the part of OPEC.  If you are sitting on a pool of oil worth
    hundreds of billions of dollars, it seems to me that the price on the futures market
    could be manipulated rather easily for a relatively small amount of money.
    Remember when the Hunt brothers tried to corner the silver market back in 1979-1980?
    They ran it up to $50 an ounce in January 1980.
    How much more could OPEC do?

    -->


  17. Phil,

    Will you cover your LEAP C now?
    What to do with the naked ANF in the 10K? Do you expect a short term rise in price? Or why you take the front month? It is safer to take the 2 or 3 front month and sell the premium half.

    Thanks


  18. WTF!!
    Should we buying puts of GOOG and AAPL?!


  19. V taking a hit. any reason for it? Thanks


  20. GOOG – interesting chart, testing the 200 day ema right now at 544.97, and the 50 day ema is 537… this seems LT like a set-up… will have to watch and see if it breaks wiht some volume or bounces off of…

    AAPL – hanging on to it’s 20 day ema at 179.30, the 5 day ema is coming down from above, the 50 day is at 166.70… wonder if it’ll get that low…


  21. What are the chances that our President is filling the SPR so that he can release that oil into the supply chain following an attack on the Iranian centrifuge facility? I know the conspiracy theory people would have you believe that he’s just lining the pockets of the oil execs (and himself), but do you think he’d leave office without at least delaying Irans nuclear program a few years (knowing full well that Obama isn’t going to do it)? I’m not looking into debating whether or not it should be done…too many <liberal pacifists><j/k> people here won’t even entertain the other side of an argument to get into that. But by filling the SPR now you can accomplish 2 things…make your friends rich and attack Iran (and release a bunch of oil out of the SPR when you do it).


  22. GS – Solar
    Cut SOLF (P/E 30) to sell yet maintaining a Buy rating on FSLR (P/E 109).  GS was one of the big initial investors in FSLR.  Granted there is much beyond a simple P/E ratio to look at but this is a ridiculous call.


  23. Phil,
    I have the following spread on V
    Long Sep 50 (6 contracts @ 6.74 now 6.90)
    Short Jun 50 (6 contracts @ 5.00 now 1.30)
    Is it a good time to buy back the callers and wait for a rebound to sell again or just roll the callers to July today?
    Thanks


  24. Sorry V spread strikes are Sep 80 and Jun 85.


  25. billbigd:

    what is your action today so far ?


  26. foredu – V – great quesiton man… volume is rather large this morning, 4.7mm shares already, and 10 day ADV is 16mm (i.e. 25% of the ADV the first 30 min).  Lot of selling… let’s see if ti comes back b/c I don’t see any immediate news… or if there’s just some big guys out there who’ve made enough and are cashing out…


  27. ISRG – Not sao bad, I’m taking out my caller as he’s down 1/2 and if we get worse I’ll sell $270s.

    CAL is best US airline I think.  LUV is well hedged for oil for the next year.

    NYMEX – it’s not about the speculators that are always on both sides, this is a distraction technique.  The issue is, as masters points out, the fact that 1Bn barrels are in storage for bull speculators. Not options, physical oil that has been taken off the market!  That is the net result of hard money flowing into the market and the higher it goes, the more money flows in and the more barrels come off the market.  CNBC is working very hard to cloud these issues, essentially attacking each negative item that has come out in this week’s testimony by clouding the issues and rephrasing the arguements to suit their needs – very slick!

    It’s not that no one belives it Albo, it’s just that the whole thing is a rigged game and that rigging started (sorry conservatives) when George Bush was appointed President after getting record donations from oil and defense companys.  The whole country has been co-opted by the military/industrial complex and we just live here, it’s a long, hard fight to overturn that system but, as usual, they have pushed the pendulum too far and are about to suffer some blowback in the upcoming election.  The problem with the Dems is they don’t tend to play dirty once they have power – hopefully they’ve learned a lesson this time.

    Cover C?  Never!  Well never until about $22.50 anyway.

    GOOG – bought out my $540 callers for $23.4!  XXX


  28. FSLR also took a hit, should we take out the callers?


  29. Thanks, Mark


  30. Anyone with historical charts able to create and superimpose the housing bubble on the current oil bubble? Trying to see if the timeframes are similar..


  31. What is our trget sell price on mrvl options? i know its in the dtp


  32. Nymex President:
    They should take his statement, investigate it, see if it’s true, if not haul him off in cuffs for the "perp" walk.  But then again we should do that with a lot of our public officials.  I agree with Phil that we should simply announce a release from the SPR, we don’t even really need to do this.  I’d do this in conjunction with a national ban on Sunday driving for all but essential services and people who work on Sunday.  This would let people spend some time with the families.  Not really serious but some sort of radical rationing move that would send a signal to the world markets that the Americans are serious about conservation.


  33. bbd
    Can we all piggyback your trades?  LOL


  34. BMB — Phil posted this the other day, might not be as specific as what you want, but does show correlation:

    http://s.wsj.net/public/resources/images/P1-AL604A_BUBBL_20080515213615.gif


  35. Blame Wall Street for $135 Oil on Wrong-Way Betting (Update2)

    May 22 (Bloomberg) — Oil’s rally to a record above $135 a barrel came as traders bought crude to cover wrong-way bets that prices would decline, according to data from the New York Mercantile Exchange. The number of outstanding futures contracts, known as open interest, fell 8.1 percent in a week to 1.36 million at the same time that prices rose 2.6 percent, the data show. Falling open interest and rising prices are signs that traders are buying to exit so-called short positions that would profit if oil fell, and lose money as they rose.


  36. fred,do you follow FTO?


  37. Oil – Light at the end of the tunnel?
    The rush to buy back contracts may be linked to the record number of short positions that had been built up in recent weeks by small-sized speculators, which the CFTC refers to as “non- reportable” traders because their holdings are small. Those investors held 123,194 futures contracts betting oil futures would fall in the week ended May 6, an all-time high, and 47 percent more than the number of bets they’d placed on rising prices.


  38. anybody know of sailboat company that just specializes in sailboats and is not private, that is, I can buy their stock?
    Thanks. Do not know much about the industry. Figure lots of sailors will be trading in their power boats for the wind boats.


  39. FSLR-fly: Phil, I missed it the other day. Is it still a valid play with FSLR trading below your 285 target?


  40. DRYS- JBL and I say very nice trade Phil


  41. Those CFTC COT reports include jack about the contracts that get traded at the ICE, the famous ‘Enron Loophole’. Using incomplete data might be very dangerous.


  42. Phil, I was waiting for TASR to bounce to cover my Sept 7.50s with June’s. But seems like no matter what the news, this just doesnt want to move.  Should I offer .35 for the Junes to cover?


  43. "with a national ban on Sunday driving for all but essential services"

    Thats right, no church for you!!


  44. V – credit card defaults on the rise and consumer is hurting.  People are just out of money and if they can’t spend or if banks start cutting issues, then where will their fees come from.

    Attacking Iran would be ridiculous.  All you would do is be handing them another $30 x 3Mbd = $32Bn which they could use to pay people to nuke your ass NOW, not 5 years of development from now.  Even if Bush is that blindly stupid, certianly the entire Pentagon can’t be and someone would have pointed this out to Cheney, who could do a puppet show to explain it to the President so don’t think for a second that attacking Iran would be some act of patriotism or in any way shape or form does anything other than plunge us into another pointless and unwinnable war against an enemy we actually pay to fight us.

    FSLR – yeah that buy rating is doing them wonders isn’t it?

    V/Foredu – I’d take out the caller and wait a bit, things are just not as bad as yesterday’s sell-off yet. 
    All of you guys need to take advantage of sell-offs and, if you don’t have the cash to take out callers when we get big dips like this, then you need to cut down on positions and get more cash.  If you sold a guy a call last week and he’s already down 50%, then it doesnt’ even make sense for you to maintain that caller as the most you can get in the next 4 weeks is 50%.  It’s time to get a better caller in the very least but the proper course of action is pick a bottom (and I picked 12,600 at about 10 am yesterday) and use that point to A) Take out the caller  B) Roll yourself down and C) IF the stock breaks below the level you thought it would hold, THEN sell the lower caller.  If you have cash on hand to do that with at least the positions you strongly believe in (for me that’s AAPL, BA, C, GOOG, ISRG, SNE, SHLD, TM, VZ…) then you can make MUCH more money on your positions over time.  XXX

    FSLR – Yes to buying out the $280 caller, let’s see if we can get a bounce.  XXX


  45. bmb – can’t transpose over one another… but here you go:

    Housing

    Oil monthly


  46. PJ

    I thought the target is 280 at the FSLR-fly


  47. nat gas inventories are already cooked up to cause spike another $5 spike in crude. There is no stopping to this.


  48. Phil,

    I can´t buy the FSLR caller back because of buying power. I´ll stick with them it is safer and not so stressfully.


  49. C- nekkid. also, i’ve added this week

    bove was pumping them on fastmoney…same story: core business gets stronger each day.


  50. Mark, what is they symbol for the Oil Monthly chart?  thanks



  51. AAPL/Phil, I rolled down my calls yesterday to 175. I took 1/2 185 callers out. Should I roll down the other 1/2 of 185 to 180?
    If there is a bounce I can sell the other 1/2 later.


  52. Yev – great question.  I use CL1 in bloomie (for generic crude futures) … "should" be CL.


  53. Church
    I’m an agnostic/buddhist but going to church is fine with me.


  54. GOOG really is weak today, as is BIDU. I wonder if the "paid result" thing from MSFT is spooking them ?


  55. Xian- you see the soccer game yesterday?  A great ending


  56. Phil:

    Are you selling any Jun Puts against the Sept 330′s that you are now way up on in FSLR?


  57. Phil,
    I’ve seen some stupid things out of our <not so conservative off in is own world> President.


  58. BBD- I watched the game.  Too bad for Terry.  He had the game in his hands and missed.  Great game though.


  59. Housing/Oil – I’d like to see the XHB over the XLE, that would be a good set to superimpose the peaks on.

    MRVL – I’m hoping for a test of $15, SOX are leading today and we have a month.

    XOM and CVX dragging the Dow today.

    FSLR/PJ – I’d buy the calls and sell the puts at the moment and cover into a run back to test $280, maybe at $278. 

    TASR – I have 1/2 covers but if you are not too far behind, give them a chance to bounce.

    FSLRfly/Alex – Oh don’t buy them if it’s a stretch, it’s a gamble and we may have to sell $270s if it heads lower, which will make a mess of the play but I’m pretty sure a GS Buy rating will entice some bargain hunters if the market looks positive this afternon.

    XLF on the march!

    C – how ridiculous is it to bet against the guys with $2Tn when everything is going on sale?  Bless that pumkin-head  Whitney, she is making my whole year!

    Oil down a buck.  This could be a problem as the energy sector could still drag down the markets if they fall too hard – what a connundrum for me as I have huge down bets on XOM, CVX and SU…


  60. Potter,
    Don’t really follow Frontier, just aware of them. Do you have a position?  I’ve been playing the range on VLO, selling both Puts and Calls for premium.   Pretty much rangebound unless there is a big move down in oil.


  61. FWIW – The Elliot Wave analysis indicates market decline to ~1234 by 2nd week of June. Possibly farther down later. For your amusement chart is attached. http://i26.tinypic.com/wtwvuc.gif


  62. V – 10 day ADV = 16mm shares, 30 day ADV = 18mm shares… traded 7.8mm shares already… lots of selling.  ma’s pointing down, price below.  Until it changes pace it looks like it wants to be at $77 again…


  63. fasten your seat belts, crude going to fly in 60 seconds


  64. Hello you oil freaks:
    always complain about high oil prices, demand for drilling in the USA, build a new refinery,

    understand that the LT solution is : USE LESS, make cars with lower consumption, lower weight, smaller size,
    yesterday in the hearing, those darn politicians and oil executives: NO ONE ever mentioned LESS consumption but let us loose to drill.
    THERE IS NO and there has NOT been a national will for 30-50 years to deal with this. Its as usual, do not tell those who elect you that LESS consumption is needed. mTHAT WILL BRING THE OIL PRICE DOWN.


  65. bbd- i missed it, but read that it was awesome…i wanted a chelsea win, but i cant remember how i became a fan.

    soccer rules


  66. Banks and  brokerages are all green.  Looks like we might have a rally that is backed by financials.


  67. Natgas
    +   85  BCF

    Nice build


  68. 9:30 *EIA SAYS U.S. NATURAL-GAS STOCKPILES ROSE 85 BCF LAST WEEK


  69. Nat Gas -89cf right in line


  70. It really pisses me off that NYX follows the financials on the way down but is not participating in this little rally.


  71. The US treasury should build up short positions in Oil and then dump half the SPR into the mix. That would raise some funds to give us another stimuslush check.

    Insider trading by the government can’t be that bad….


  72. AAPL/Summit – If you are 1/2 covered with $175 callers that’s perfect.  Hopefully Apple will recover and you’ll roll them up to 2x the $185s when you feel safer.  If Apple turns down before that, you have the flexibility to sell more of the lower calls.  If you do sell more calls lower, use $3 to roll yourself down $5.

    GOOG/BIDU – well regardless of whether MSFTs thing works or not, it somehow drives up Traffic Acquisition Costs (MSFT may lower ad rates too) so there is justification to the nervousness that may not go away for a while.  No matter what, I will be fully covered over the weekend as I want my premium but I expect to get over $20 for the $560s, maybe $20 for the $570s if GOOG pops back to $560, which isn’t too much to ask.

    FSLR  – I already jumped the gun yesterday and sold $290 puts for $18 as that put my target at $272 for the month, something I was willing to lock in (of course now I’m sad but I still have 2 more months of premiums to collect.

    Nat gas was a ho-hum build of 85Bcf.


  73. Boone’s back….hey Phil, have you ever called up CNBC and tried to get booked?


  74. XLE vs XHB – the problem with this chart is the inception date on the XLB is 02/06/06 (i.e. no good LT data) and it should have bias (i.e. doesn’t include those companies that went out of business anymore)… and it’s all stocks, not the actual commodity.  But best I could do


  75. Fred,supposedly they are able to handle the oil sands product and there were some unsubstantiated rumors  re SU buying them.


  76. FTO- Potter is correct and another reason is they handle a lot of Diesel


  77. soros has been on bloomberg tv this morning saying the housing crisis isn’t anywhere near a bottom, and to expect it to overshoot on the downside just as it had on the upside.  they’ve replayed this bit a few times already.  see phil, i can’t watch cnbc anymore!


  78. Phil what about get some jun 22 C calls in a dip .. ???


  79. Phil,

    I need a bit help for a LEAP play for me.

    I have the NDAQ Jan09 45 at 2.52$ , now 1.20$
    Sold half the Jun 37.5 at 1.95$ , now 0,35$

    Selling more here down at this price is a bad idea I think.
    I´ll use the money I collect from the Jun 37.5 for a roll to the Jan09 40 – hoping to get it for that what I got on my Jun 37.5. Then selling the next months,…
    This is my plan. BUT It looks like NDAQ lost ground for the mid term. How can I calculate what NDAQ is worth? If you have a good site for me, let me know.

    Thanks much

    Oil going down Yipee(for the moment)


  80. Here’s something fun for you all…


  81. looks like Oil go down — the others go down too XLF for example


  82. Phil:
    LEAPS:
    ssome of my LEAPS require a lot of work: MCD, ISRG,
    for LEAPS, HIGH ATR creates a lot of work and expenses,

    which, in terms of low maintenance are the BEST LEAPS ?


  83. RMM, look at Merck.  Can sell the 40′s for 1.5 every month and easily bracket up to the 42.5′s if they run away from you.  Merck doesn’t want to go below 38 either.  It has worked well.  Same goes for TXN been selling vs 30′s for about 3 to 4 months.


  84. GOOG is certainly keeping me at the edge of my seat this morning. c’mon go up already, we need to re-cover.


  85. MCD- the best behaved LEAPS i have, C is a close second


  86. RMM,
    what is “ATR” ?


  87. Phil,
    I had the FSLR Butterfly on the 10K. I took out the $280 Caller as you suggested (expect to get a bounce). That will bring the risk from ($700 to $5000). I’m interested to see what I need to fix it if we don’t get a bounce back and it go against our direction.


  88. RMM
    C has a low ATR.  The jan 10 20′s would loose only 3 dollars if C goes down 10.  Perfect for your Alaska trip.


  89. it’s funny because logically GOOG is such a better recession stock than Apple but Apple has already been attacked by hyenas and has more immunity than GOOG so they recover quicker. 

    Shorting/SPR – That’s a good plan Steve but then they’d have to use all that money to bail out GS – someone’s going to be on the wrong side of that trade and I would be too if I were "too big to fail" and could bet the farm with impunity.  This is one truly messed up system we have here.  I’m starting to warm up to Obama as I think he’ll have the balls to make changes Hillary never would and, the way things are going, I’m no longer looking for the middle of the road solutions.  Things have gone way too far and we need a big push back, not a nudge.  FDR was practically a communist but that’s what we needed to rescue us from the excesses that led to the Depression – it would be nice if we didn’t actually need to wreck the country before the next reformer comes to office.

    LCC – buying the stock for $5.53 and selling $5 calls for $1.10, net $4.43 and called away with a 12% profit in the stock portfolio – good use of $50K.   XXX


  90. ATR  average trading range


  91. Very interesting calendar Mark.


  92. Singapore Steve:
    man, can hardly wait until Aug.20, then its go North: 4 days hiking in Denali, 3 days bear photography in Katmai,
    4 days coho/halibut/cod/bass off Sitka. What is better ?


  93. What a time to trot this out! Idiots.
    Energy Watchdog Warns Of Oil-Production Crunch IEA Official Says Supplies May Plateau Below Expected Demand

    The world’s premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand. The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world’s top 400 oil fields. Its findings won’t be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.


  94. I think IBM has a low ATR and MCD, PEP but SHLD from the K1 section turned bearish on the chart.


  95. rsaddington – ISI creates my favorite calender each month, but these are always "interesting" to keep thumbtacked to your wall…  ;)


  96. Ok .. got a few 22 June calls @ 0.63


  97. masters- i sent the tesimony to a buddy who works in florida legislature, he’s moving it to the eyes of a rep from palm beach. says he’s trader/manager in his previous life who might take interest.

    my coral gables rep is just an attorney.


  98. go google go!


  99. BCSI – holy schmoly – just got clobbered today. They have some pretty decent Web Gateway/proxy as well as WAN opimization products used by a lot of companies.


  100. Alex in Thuringen:
    ATR is average trading range, the typical variation.


  101. RMM
    We don’t need any new refineries, gasoline volume should decline and we should simply update the capacity we have.  Arguing we need more capacity to refine is a complete "red herring".


  102. Phil,
    Interesting note on how economies such as India are surviving high oil prices…Govt is heavily discounting the actual price…How long can this last?
    ***************************************************************

    NEW DELHI: The Cabinet headed by Prime Minister Manmohan Singh may meet on Friday to consider raising petrol and diesel prices among other measures to bail out state-run firms that have been reeling under unprecedented high crude prices.

    With Indian Oil, Hindustan Petroleum and Bharat Petroleum projected to lose Rs 200,000 crore in revenues on sale of petrol, diesel, domestic LPG and kerosene below import cost, industry sources said a hike in the range of Rs 2 to 5 per litre appears on the cards.

    Petroleum Minister Murli Deora on his part neither denied nor confirmed Cabinet being scheduled for tomorrow.

    "We are discussing all possible measures to help and protect our public sector oil companies… some remedial measures need to be taken (urgently)," he told reporters.

    The three firms are currently losing Rs 450 crore in revenues on fuel sales every day. Petrol is being sold at a loss of Rs 16.34 a litre, diesel at Rs 23.49 per litre, LPG at Rs 305.90 per cylinder loss and kerosene at a discount of Rs 28.72 per litre.

    Deora has called a meeting of heads of the oil PSUs tomorrow morning and after that may brief the Cabinet of the financial strain on the companies in view of international crude prices topping 135 dollars a barrel.

    "I cannot rule in or rule out anything at this stage," Deora said when asked if petrol and diesel prices hike was an option under consideration.

    "We are concerned at the financial health of the PSUs," he said, but asked the consumers not to panic.

    "There is no rationing of fuel as has been reported by one newspaper. We can never resort to such an anti-consumer practice. I have spoken to BPCL Chairman Ashok Sinha who has categorically denied such a move," he said.

    Deora said state-run retailers IOC, BPCL and HPCL were under severe financial strain and may have taken some measures to cut cost but fuel rationing was not being resorted to.

    "I would like to plead with the public and consumers that there is no such move," he said. "Government is at work trying to solve the problems being faced by PSUs. There are some measures that are under discussions."

    "Our PSUs have done great service to the nation. Besides making available auto and cooking fuel to every nook and cranny, they have also been selling at a price lower than the cost. This has caused some constraint and we are concerned about it," he said.

    In Asian morning trade on Thursday, New York’s main oil futures contract, light sweet crude for July delivery, rose to a high of USD 135.04 a barrel before easing to USD 134.87. The three firms are faced with a huge liquidity crunch and are borrowing Rs 3,500 crore a month to meet day-to-day expenditure. Borrowings of the three firms have reached Rs 65,000 crore.

    Government’s bar on oil firms from raising fuel prices despite cost of raw material (crude oil) doubling to over 135 dollars a barrel, is likely to see the three firms end the current year with a revenue loss of Rs 2,00,000 crore. Last year, the revenue loss was Rs 77,304.50 crore.

    Government makes up for just over half of the under realisation of oil companies on fuel sales through issuance of oil bonds, while 33 per cent of the losses is compensated by companies like ONGC and GAIL. The rest is to be borne by the retailers.

    ****************************************************************


  103. Bill Seidman Quote:

    RE:  Oil countries; "They have conquered us".  The guy on with him is a fool.  He doesn’t care that it will destroy 90% of the economy.
    This whole segment and day is annoying.  Perhaps it marks a top and that f’n graphic is really pathetic.


  104. bballer: From new members guide.
    Often you will want to share something you found on the web with other PSW members. The comment box at the bottom of the page has a special Add Hyperlink function for doing this. Please link us all to items you find rather than copy/paste dumping them into the daily comment flow.


  105. obama’s vs hillary’s balls- i think obama’s inexperience is an asset here. he’ll b "too dumb" to think he cant push back on big interests/lobbies…all he has to do is stay clean and in power

    something tells me we’re going to have an attack on the next watch b/c of a mix of probablilities and opportunities


  106. fredrang- what do u mean by "update" our current capacity?


  107. BA – I missed the entire move since mid Apr.  Picking up Nov $80s here.


  108. Alf,
    My Bad. I will be careful next time.


  109. xian
    Spend the capital it takes to update the existing refineries to run any kind of crude.  It’s complex but a better use of $s and much quicker than siteing and building a new facility.  We often run in the low 80% range due to the age of facilities and lack of capital investment.  When I was at Chevron our Richmond, CA refinery was down every couple weeks for some type of maintenance issue.  We ran that facility until it would break and then we’d fix it.  The oil companies weren’t really that interested in spending capex until they had to on refineries.  I believe that is still true today.  Here’s the best story:
    We had a refinery in Port Arthur, Texas that Chevron wanted to close due to age but if they actually closed the facility they would be required under Federal law to clean up the site so we kept just the lube oil part of theoperation going which was 5% of total capacity so we never had to clean up the site.  I think Chevron has since sold the facilty.  That’s the mindset you are dealing with.


  110. Nigeria Military says it repelled attack on Shell facality, no damage to Shell Facility — Bloomberg 11:25AM — That’s the first time I’ve seen that!


  111. Didn’t know Hillary had "balls".  Anybody see the item aroudn the holidays, "Hillary Nutcracker" for cracking your holiday nuts.


  112. Mark,
    What equity trading firm are you with (if you can say)?  I had a friend of a friend that worked at CAPIS here in dallas, then moved over to Jones Trading about a year ago.


  113. Took off my AMR for a 5% gain, turned out to be boring.  I like that LCC play assuming they aren’t bankrupt in the next 30 days.


  114. fredranG
    I have been in oil/refinery technology licensing and building all my carreer.
    we get hired to update/debottleneck refineries all the time, this is incremental and is very attractive, the trouble is that US refieries are kind of old and need a lot of maintenance, we have licensed and build the most modern refineries outside the USA during the last 30 years, so, they are the best,

    also: you oil freaks always make the mistake to look at things ONLY by looking at what is happening at the US,
    oil companies  are international companies and they really have plenty of capacity, this capacity is not in the USA but out there in the world and they ship gasoline to the USA, so there is no real refining shortage worldwide,

    the best strategy was and still is: use foreing oil, use your refineries out there (do not build here), BUT, USE LESS otherwise the price goes up.


  115. RMM
    So why did you say we should build  refineries if we don’t need any?  Sometimes you puzzle me.


  116. they’re technically "lady-balls"

    also called "thatchers"


  117. LOL  xian!


  118. Phil:
    I always hear that C LEAP is good, you agree ?
    what about jan 09 or jan10 strike 17.5 or 20 ??


  119. Solar is getting killed today


  120. rsaddington – was his name Forrest Hopper?


  121. rsaddington – do you have an email you can post?


  122. Phil, are you leaving ANF naked in the 25KP?


  123. fredrang:
    I said when you look at a worldwide basis, no new refineries are needed, the oil companies have it right, have the refineries out ther and supply the US market with products,
    some people will of course argue: you take jobs out there, NO, a refinery is capital intense, NOT people intensive.
    Overall you are much better of to have your capabilty out there.
    US based refineries do need to be updated so they are more effective3 and more efficient. That is being done and its ongoing, better technolgy always justifies incremental upgrading.

    Got it ??


  124. Thats him……my email is mgaddington@gmail.com


  125. The word FREAK is the one that  is puzzling to Me.


  126. Die RIMM DIe! My overlapping butterflies that I chased this thing higher with are finally starting to pay off :)


  127. Whats going on? Sliding in to the red.


  128. GOOG down again


  129. rsa – shot you email.


  130. billbigd:
    you prefer addict ??


  131. BBaller22 – Thx for he India info. I will keep my eye on my IFN and close it soon.


  132. AAPL – Phil – I have 6 July 170′s covered by 4 June 180′s.  Should I roll my callers down to the 175′s?


  133. Market pretty much moving directly against POO at the moment. 

    Booked on CNBC – they called me once, over a year ago and wanted me to be in the studio at noon for a 2 pm 5 min segment and I told them no thanks.  I used to do the radio show but that got to be a pain as I simply like writing and trading so that’s what I do.  If Sage and I ever finish the book, we’ll have to do some PR then.

    Nice Mark except can you move the XLE so that it climbs the uptrend of the XHB – the point is if we can match up the upside that the XLE is tracing ino the XHBs bubble top (summer ’05) then the top and downward leg of the XBH will give us a future view of the XLE.

    Holy cow – the CNBC girl just said "You would think the government would put an end to speculation if they had any leg to stand on."  This is such a farce – I think on Russian TV they at least went to the trouble of putting up some fake evidence, not just naysaying everything that was contrary to the party line…

    C/Rank – We did get C calls, the $20s and they are still cheaper now at $2.05.  XXX

    Oh no, now it’s the dreaded "China Demand" story!  This is amazing!

    NDAQ/Alex – What I said before.  Roll yourself down and wait.  You either have faith in your stock or you don’t.  If you have faith, be thrilled you wiped out your caller and wait for the recovery.

    Low maintennance leaps – good quesition, lets talk about that on the weekend.  MCD and C are great choices.

    FSLR/Wii – We’ll have to see where things shake out, very choppy so far.

    IEA – I do not trust them at all, their timing is often coincidental.

    India discounting – Same in China, all this "demand" is based on the governments keeping gas prices down and these energy traders use this as "evidence" that demand is inelastic.  My demand for 1st row concert tickets would be inelastic too if you keep selling them to me for $50 but for $500 I tend to go a few rows back….

    C leap – very good but take the $20s and roll down if you have to, it’ll be cheaper then.

    ANF – yes naked, the month is young.

    Do not panic (yet) commodities are selling off.  Keep your eye on the Dow, which is holding up well:  http://finance.yahoo.com/q/cp?s=%5EDJI


  134. RMM
    The question is do you?  What’s with the "freak" thing.


  135. Buying out my V $85 callers at $1.20 as there is no point to having them down here.  This is a good example of managing a roll as I had $80 and $85 callers so I’m getting ready to "leap frog" 1/2 my callers to the $75s if they don’t hold my target $77.  That will effectively flip me from $80 and $85 covers to $75 and $80 covers and then I put tight stops on my $80 covers, who I am up more than 50% on and, if V keeps going up, I can always roll the $75s to 2x the $85s or I can then cover with more $75s or $70s if it keeps heading down.  I’m buying flexibility and it has a value.   XXX


  136. I am no crude/gasoline expert. If nobody is willing to take delivery of crude at this price, will that mean low refinery utilization and increase in gasoline imports?
    Open a refinery in Mexico and sell gasoline to US at 3.5 or less a gallon :-)


  137. billbigd:
    the overuse of a precious resource leads to higher price,
    the market will do this,
    only those who have plenty of oil can interfere with market and set the price of gasoline LOW, like IRAN and Venezuela,
    here are some examples of events which should be upsetting to you:
    all those consumers who operate vehicles which get only 10 mpg (because they are too heavy, engine too big etc) use up TOO much of a precious resource,


  138. From CBS Marketwatch under the US Airways ticker:  J.P. Morgan’s ‘optimistic’ forecast sees for $94 barrel of oil by fourth quarter. 


  139. i like the idea of refineries abroad.

    "freak" always reminds me of the chappelle episode of charlie murphy recounting his rick james adventure. (seen here and here)


  140. The tech sector (+0.7%) recently surpassed financials (+1.1%) to become the largest sector in the S&P 500.


  141. Phil & All:  Celgene (CELG) looks like it has bottomed out.  Could bounce back to 60 range.


  142. pls listen, Bob Pisani does not want you to short energy, what an asshole? Give him 5 bucks and he will say whatever you want


  143. BIDU looking nasty. 

    Really every single guest on CNBC talks about more sources for energy, never about JUST USING LESS!  It’s supply side idiocy at its finest…  We have a 20mpg fleet, Europe has a 35 mpg fleet.  Sign a piece of paper tomorrow that says in 2010 all cars will be 35mpg and then US demand projections drop 1Mbd each year from 2010 to 2017, that will immediately crush the long-term speculative market and force people to find other places to park their assets in a very capitalistic laissez-faire manner.

    AAPL/Bigs – I would wait, they are holding $178 very nicely.

    WHAT???  Maria just rang a bell and said oil has peaked!  Holy cow, I didn’t know she had that power.  I think these guys just react to whatever I write now and Maria will now be cast in the roll of the playful oil bear – so cute!

    CVX primed for nice breakdown below $102, watch for a break on that line.

    With NAFTA, if there were a real need for more refining capacity then Carlos Slim would be building them in Mexico.  Also, VLO wouldn’t be selling 4 refineries would they?  Just more BS being shoveled our way….


  144. CNBC vs russian state television – at least russians could claim to have been in fear, CNBC is just stupid or so brainwashed they cant even think for themselves.


  145. RMM- I am confused plenty of refineries and plenty of oil so why should this freak be worried.    IRAN and VEN gas prices are supported by the GOV. So does that count. ?


  146. phil
    thinking of re-covering GOOG.  is it too soon?  AAPL red.


  147. BUSH:
    the only thing I ever heard Bush say which was true: when he called the USA being addicted to oil, of course, he does not understand that he should propose a meaningful energy policy,
    but, I have to say, CONGRESS or any politician does not do it either,

    and

    the US population does not do anything either.


  148. CNBC trivia- i cant believe it, they r really making this into sportcenter

    mccain also has a ranch, nice touch.


  149. Phil;

    I practice selling calls whenever ther is an overexitement (stock going higher and higher),
    what about the opposite excitement: stock going lower and lower: assume you own longs here, when do nyou sell shorts here ? I guess you always stay close to ATM ?  Please advise.


  150. Phil:
    should AAPL fall further, at what point do you roll down the caller ? Is thew answer: when the premium for 180 is less than for 175 ?


  151. On the topic of refineries in other countries, Reliance (in India) is expanding its refinery to 1.2 Mbd from its current 0.66Mbd. Slated to come on-line mid 2008. Will be largest refinery complex in the world when its done. Can process all kinds of heavy crude also.


  152. Oil – Maybe we could just take tax away from gas and place it on the cars? (100% car tax maybe?) That keep gas cheap and environmentalists happy.


  153. billbigd: WE are the oil addicts, I might have used the word freak erroneously.

    Venezuela has oil and they do not pay market price for oil, so, their refineries produce gasoline at much lower cost,
    Chavez "protects" the people of V. and Cuba, gives them gasoline at low prices, not because he is so nice but he can afford it, he does NOT  loose money.


  154. Greetings from Beijing, all.  Been cleaning up the books.  This retracement has been textbook perfect at 600 points and 50%.  Actually made money the last couple of days and I’m cleaning out my callers all over.  Still holding 1/2 my Solarfly calls thoughs.  This could still drop and it balances out the putters.  I’m real glad I picked up those extra ones because it is a double right now and we’re below the 280 mark.
    Beijing is really dynamic.  Entire streets and buildings are coming down and being rebuilt in a week.  Unbelievable and I’ve been to SE Asia and this is 10X what’s going on in Singapore and Malaysia.  No wonder copper is blowing prices away.  I’m going to try to see what’s happening in Chengdu.  It will give me a better idea of what the overall construction capabilities of China are.  Right now, as an engineer, I’m impressed.  Copper has huge demand over here along with bricks.  Biggest problem is the beer sucks.  Look for my write up in Draft magazine in 3 months.  Without beer, all is lost here.


  155. xian’s comment reminded me of something.  Why doesn’t Mexico sign a deal with Japan and France to build 5 nuclear reactors on the US border in Mexico, and then sell the power to the US.  I mean, you have to get the US to buy it, but I think California would love some cheap sources of energy.


  156. PHIL – ahhh, yes, unfort can’t put diff time frames for each… that would be sweet though no?… well maybe I can… go go gadget paint!


  157. Bush’s only good idea was to build new refineries on government owned properties in order to facilitate the permitting processes maybe he should also propose that for nuclear plants.It would be a good idea to build new refineries that are not located  in a hurricane zone.I also  seem to remember in the not so distant past when refining utilization was consistently over 90%.Overseas refineries would only increase our dependence on unreliable sources.Once we  have to rely on foreign sources for the majority of our refined product…game over


  158. GOOG/Windy – I’m seeing how the day plays out.  As long as the sell-off is led by commodities, I will ignore it.  I see nice things getting bought like KO, IMCL, FDX, INTC, IYT, MDT, WMT, DELL, CROX… looks like bargain hunting to me and GOOG is sure a bargain!

    US population – When you initiate a policy like "No child left behind" that stresses teaching standards for standardized tests you are creating a nation of zombies who are trained to "know what they are told."  Education standards in this country have been under attack since Reagan/Bush1 and any textbook fascist will tell you that controlling your population starts at the schools.  That’s why the Administration has such a jones against madrassas (Islamic fundamentalist schools), they know exactly how well the educational system can be used to create a pliable public…  Control the media, control education, wait a generation and there is no one left who will even think to oppose you!

    Selling puts – since I don’t have many stocks I don’t bother but the  logic does apply of course.

    AAPL/RMM – As with everything, you roll when it’s worth it, as I said above, my steps are usually Roll down, buy out my caller and wait to see what calls (if any) I want to sell next.  New situations call for new decisions, not rules.

    LOL James – love the report, have a great time!


  159. Demetrius:
    you are on target:
    if you want a big, heavy gas guzzler, I will not even tell you not to buy and operate it, if you do so, you obviously can afford it,
    BUT, based upon what I said earlier, I do not want you to burn up a precious resource simply because you can afford it, there are far more who cannot afford it,
    therefore, you should have to pay a tax based upon the size of your engine, that esssentially determines consumption (big car=big engine), if you want to do it, ok, but not at the expense of the majority.

    By the way: this is the concept which is used for 50 years in Europe, that also influenced engine develkopment and engines turn out high horsepower by higher RPM.
    So: do we wnat to lkearn from others ?


  160. Film, sounds like a cool idea. Don’t know about the regulation in Mexico, but we could pay the govt to get that done :-)


  161. Phil – I have APV JR Oct 190′s and want to roll to APV JP Oct 180′s.  What is a proper price to shoot for and is this the move you would make?


  162. They have regulations in Mexico?  Oh, you mean bribes.  Yes, they have those.


  163. Or should I roll to the AAPL Oct 175′s? And what roll price from 190′s?


  164. thanks phil, regarding GOOG!

    by the way, today is the 125th bday of the brooklyn bridge.
    http://nycvisit.com/bb125/


  165. Banks are still green.  Maybe there is still some mo here.  Time to head out for a coffee break.


  166. anyone giving me advice how to use 5MA or other MA for trading/buy/sell?


  167. hybrid vespa


  168. Film_F Ref Mexican bribes. One person’s bribe giver is other person’s lobbyist. Same difference.

    -->


  169. GOOG just following the direction of the NASDAQ. If you overlay the GOOG and QQQQ 1 min charts they’re nearly identical for the whole day !!


  170. 140mpg


  171. xian
    just saw that too, kool.  the three wheel one has some niffy engineering.  Too bad we cant see stuff like that out of us manufacturers.


  172. Consumption – I had a very simple idea:  You set a standard at 30 mpg.  If you buy a car that gets less than 30 mpg, you pay $5,000, if you buy a car that does better, you get $5,000.  At 25 you pay $10,000, at 35 you get $10,000.  At 20 you pay $15,000, at 40mpg you get $15,000….  Give Detroit 18 months until you enact the tax and let them figure out what the demand will be in the showrooms.   Let rich folks drive what they want, it’ll be directly offset by helpiing someone else buy a car that gets proportionately better mileage.  If we raise our milage over 3 years to 30mpg then boom, 5Mbd saved.

    Also, let oil companies drill where they want but they put up bonds to undo environmental damage and take out insurance to cover any rationally forseeable accident.  Oh, and they have to pay us the average of what they pay other foriegn countries for oil and we take all of that money and use it for conservation and alt energy.  Even if it’s just $30 per barrel, that’s $30M a day on US production = $11Bn

    APPL/Grant – $4.50 is great when you are that far out and it’s cheaper than that now.  You can go to the $170s for less than $10 and that cuts your premium from $36 to $17 so it’s really worth considering as your current position costs you $10 a month in premiums.  You can offset the roll by selling 1/2 the $180s, which pose no major danger to your upside but pay for $4 of the roll down.

    Regulations – Trump was talking about putting up buildings in Asia and he said he asked someone about doing an impact study and then he had to explain to them what it was and then they laughed at him.

    Bribes/Lobbyist – I prefer bribes, you deal directly with the guy and there’s no waste from the lobbyist "costs".  That’s why the lobbyists lobby for finance reform, it makes them so much more valuable…


  173. I’m dead serious about the "Phil for President" bumper sticker.  Where do I get mine?


  174. RMM You are hilarious. 5MA – Study up on moving averages.


  175. Phil,
    On your consumption idea…what about the small independent contractors who need the larger, lower mileage trucks and whatnot to haul carpet, tile, carpentry equipment, plumbing supplies, etc. These folks are by no means rich, but need those larger SUV’s in their day to day business.


  176. Carl Icahn Says Obama Would Be a `Terrible’ President for U.S.

    May 22 (Bloomberg) — Billionaire investor Carl Icahn said Barack Obama would be a “terrible” U.S. president whose election would bring higher interest rates and a loss of international confidence in the dollar.

    “I don’t normally get involved in politics, but this time I am,” Icahn told an investors conference in New York last night. “I don’t think Obama really understands economics.”

    The Illinois senator is the front-runner for the Democratic presidential nomination. Obama has 1,962 delegates, according to an Associated Press tally, putting him 64 delegates shy of the 2,026 needed to clinch the nomination.

    “I personally think he would be a terrible president,” Icahn, 72, said. Obama would probably go on a “huge spending spree” that “the country can’t afford right now.”


  177. Phil – Ref Simple idea. The ratio of Rich/Poor people <1, so to be fiscally neutral you may want to reconsider your factors.

    -->


  178. i’m surprised to hear trump asking about an impact study.  the only reason he’s ever done one is so he could figure out who to bribe to end up doing what he wanted to do anyway.


  179. Carl Icahan "loss of international confidence in the dollar"
    Hard to believe it can be more loss of that confidence…well the ususal rep chatting…


  180. alf;
    txs, everyone refers me to some definition, I know then definition, but tell me how you use MA in your trading, if you do ??


  181. Icahn. Geez he hasn’t looked at this prez. Whats Bush done so far.


  182. RMM, continue reading, lots of info on the net. What does the Table of contents say. How to use them. Use your brain.
    Table of Contents
    1) Moving Averages: Introduction
    2) Moving Averages: What Are They?
    3) Moving Averages: How To Use Them
    4) Moving Averages: Factors To Consider
    5) Moving Averages: Strategies
    6) Moving Averages: Different Flavors
    7) Moving Averages: Conclusion


  183. JB – You could set a separate standard for commecial vehicles but with the same goal of upping standard mileage by 50%.  This is what people don’t get, we consume 15Mb of gasoline a day.  The fleet needs to improve 50% so getting a truck from 8 to 12 is just as important as getting a car from 20 to 30 and just as effective.  It is not impossible to make a truck that gets better fuel, just more expensive and don’t forget that saving 50% on fuel over the time of ownership will pay for itself so the "burden" you are placing on small truck owners is not tremendous.  Let’s say the average contractor’s flatbed gets 12 mpg.  All I’m saying is that if they buy one that gets 12 mpg again they will pay $5K, if they buy one that gets better than 18mpg, they will get $5K…  Pehaps it will be slightly smaller and haul slightly less (like the ones you see in Europe) but the question will be, is it worth $5K to them.

    Rich/Poor ratio – No, it’s a program that would cost the governement money.  There are 16M cars bought each year and if every person bought a car that got more than 35mpg in year one it would cost $160Bn but would cut over 1Mbd of consumption which is a $47Bn improvement in our trade balance which would strengthen the dollar and the $160Bn could be raised by placing a .50 per gallon tax on gas, which will encourage more people to turn in their gas guzzlers and take advantage of the new program.  This would have the side benefit of saving the US auto industry, although that assumes they are smart enough to actually produce more efficient cars so, based on their past behavior, maybe not…

    Yes Carl Icahan is the guy I want advising me on policy (end sarcasm font).

    Shakin all over in the markets, either trying to get rid of retail longs prior to a move up or a serious lack of buying.  Volume is light so I read this as a lack of sellers with lots of nervous buyers on the sidelines.  It would be neice to see some sort of catalyst for the upside.

    Well I just took out my Apple callers, we’ll see what happens but it was a quick $3 from yesterday…


  184. CEO of BA at the close – BUYBUYBUY!!!    I love the 2010 $80s for $13.20 but lets grab 25 July $85s for $1.90 in the DTP  XXX


  185. NASDAQ 100 H&S
    If we don’t negate this by going above the neckline around 1990, then short tech hand over fist


  186. Phil, light volume may also be due to memorial day weekend coming up.


  187. MJ – Looks like we already broke the NASDAQ H&S on your chart.


  188. Interesting WSJ opinion article on the realitve economic value of various approaches to world problems.  Includes a unique insight into the Iraq war…

    online.wsj.com/article/SB121141221734512357.html


  189. Phil
    Here is a link about ethanol crock in oregon.  The E10 blend which is 10% ethanol that is mandated to be used here will lower your mpg by about 10%.   I have seen this similiar reduction in my car here as well.   You may have failed to take any of this into your calculations.
    http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/1211433909137150.xml&coll=7
    Also for any of you hydrogenn on demand naysayers, the input of hydrogen into your air/fuel mix should increase the BTU’s over gasoline making it more explosive hence better MPG.


  190. Uh oh, oil coming back I think.  1 hour to NYMEX close and they are back at $132.70.  On the bright side, XOM and CVX going green can put the Dow up at 75.

    Go go FSLR!

    Rolled QID putters to 80 Jun $39 puts in DTP for + .45 XXX


  191. USO  I know there is not a linear relationship between the prices of oil and USO, but it should be fairly close in the front month.   Anyway, after multiple adjustments, I’m short a June strangle in the USO at various strikes.  My closest calls are 108 and my closest puts are at 97.   Here’s my question, what is the range of oil prices where I make gin, with everything expiring worthless?  I’m guessing it’s something like $118-$134, but I was wondering if anyone could be more accurate.


  192. Hi Phil,
    Any reason why the Defense sector has been selling off recently?  Also, do you like UTX at this level (about $72).
    Thanks!


  193. BA

    Okay, why did I just buy the BA July $85′s?  The CEO is speaking right after the close, and I gather that we expect good news?  Why not the June calls?  Are we expecting to sell against these if it goes against us and/or sell against them if it moves with us?


  194. Anyone know of any solar thermal company that uses reflective mirrors to super heat a molten salt solution to drive steam turbines?


  195. Ehtanol – I’m not in favor of that at all.  We waste so much energy we can conserve our way out of this crisis.  If we had a Kyoto-style meeting and pledged to cut US consumption 5% a year for the next 5 years if other countries would cut just 2% a year, that would be a cumulative  global reduction of 2.7Mbd per year and 13.5Mbd at the end of 5 years or close to 20% of global demand.  More than enough to allow 1Bn people to step up to first world levels of fuel conusmption at current production levels. 

    Get me one of those Phil for President stickers!  8-)

    Actually, I would have to be elected dictator for life as I would make many enemies very quickly and I would need to put a lot of people into "detention centers" while I cleaned house…

    Eph, that is one crazy play you have going there!   If you are ahead on the $108s you should ge the hell out of those and roll the puts to tighten up as that was one massive run in USO the past few days and you are NOT likely to get another one. I can’t even figure out how you get the range you’re looking at if you own $97 puts and $108 calls.

    BIDU $360s are $11.25, let’s grab 10 of those in the DTP, out at $10, looking for $14+  XXX


  196. FSLR – Phil, I have a vertical put spread, long 5 x jun310, short 3 x jun290 that’s done well, would you do anything beside close it out?


  197. USO  I’m short on all of them.  My closest short put is Jun 97, my closest short call is Jun 108.


  198. Singapore Steve,
    Source: http://thefraserdomain.typepad.com/energy/2005/09/about_parabolic.html

    • Sandia has tested a thermocline storage system that uses a single tank that is only marginally larger than one of the tanks in the two-tank system. A low-cost filler material, which is used to pack the single storage tank, acts as the primary thermal storage medium.
    • Nexant has developed a near-term thermal storage option that uses biphenyl-diphenyl-oxide HTF in the solar field and then passes it through a heat ex-changer to heat molten salt in a thermal storage system.
    • Kearney and Associates is investigating using a lower temperature molten salt as the HTF in the solar field as an innovative approach for reducing the cost of thermal storage for troughs.
    • Work at the University of Alabama and NREL is looking into using a new class of fluids known as organic salts (or ionic liquids) as the HTF and thermal storage media in a parabolic trough plant. Organic salts have the primary advantage of being liquid at room temperatures

  199. mj
    that nasdaq 100 chart is scary


  200. CNBC just reported a snafu in the farm bill: Congress left out a section and Bush vetoed it.  Now the question is whether to put the section back in, let him veto again, and then vote to override….
    We might have found something that everyone could agree on:  don’t physically print bills until until final passage including the President’s signature.   Until then, keep everything electronic.   You can still have your Rose Garden signing sessions, but don’t waste bazillion sheets of paper printing bills and then throwing them out.   Call me crazy, but this seems like a no brainer in 2008.


  201. b gross- blowing up the spot on inflation


  202. Alternative Engery Question – Does any one know which country is leading the way in developing alternative energy sources (solar, wind, etc)? I would suspect the US since we seem to have the most to lose (and gain) if we get it right.


  203. sbux heading up to that 17.30 level again – good short?


  204. Phil,

    Like you said earlier to me with NDAQ selling the premium and roll down the LEAPs

    But only rolling to an At the money strike. DITM isn´t good.

    With BA LEAPs why do you take the Jan10 80´s? and not the 100´s? With the out of the money strike you need not to much cash and can use it to diversify your portfolio or make other trades.


  205. blc
    I believe that would be Iceland.  They use geothermal power to make electricity and to generate hydrogen to run their cars.  For not having oil or gas they are the most energy independent country that I know of.


  206. What´s up with AAPL today?


  207. Quick question..
    What happens to the put options someone is holding, when the company goes bankrupt? (Let’s take AMR for example)


  208. Iceland is very cool and you can even do a one night stopover on a trip to the UK.  There is a tour called (I think) the Golden Circle where you take a bus for 8 hours with lots of stops and see ton’s of different kewl geologic stuff: mud pots, geysers, etc.   The hot water in Reykjavik is directly heated by geothermal and you can smell a slight wiff of sulfer when it comes out of the tap.


  209. Oil selling off that is good

    Phil,

    At the AAPLfly I have the Jun185 caller? Do you think it is good to roll them to the ATM JUN 175?

    Thanks


  210. starting to sell off ??


  211. Peter…if you own the puts you exercise and make someone buy your worthless stock, if you are short the puts they’ll be assigned to you.


  212. you can also just sell/buy the puts….bankruptcy is about the best thing that could happen to someone who is long puts in a company


  213. AAPL just lost 5 bucks.  any hews?


  214. may be some Rumor that Steve Jobs is dead, those bastards coming up with whatever rumors. Where is the SEC?


  215. could google fill the gap back to the 450′s?


  216. SS – no news, just breaking technical support.  $170′s a big number for support also, and the 50 dma is currently at 166.50ish…

    Don’t forget this thing gained 60% in 2 months……………………………………..


  217. Boeing CEO
    Sorry, been out.  Where is he speaking?  CNBC?


  218. BIDU – ouch on that trade!


  219. Phil,
    Possible that Apple and Google used to crush QQQQ’s


  220. Defense sector selling off as idiotic talk of war with Iran not looking so likely now.  UTX I always like – if they spun of Otis I would put it in my retirement account, expanding populations have nowhere to go but up!

    BA – I doubt the CEO is coming on CNBC to announce delays.  BA is unde constant hyena attack so anytime the truth comes out they get a pop.  July is because I might be wrong and they give us more flexibility and I thought the premium on the Junes was a little rich.

    Solar thermal – That too would be UTX, who have a division called Hamilton Sundstrand that is creating a division called SolarReserve.  You can always tell which companies I own a lot of because I know all sorts of silly things about them!

    Oil testing $130 into the close!  Now this is getting exciting…

    FSLR/MCK – You can roll the caller down to a full cover at $280 puts or $270 puts but it’s a stupid vertical so I think you’re nuts to push your luck.  You can go longer and lower to the Sept $280 puts and let the calls stand if you want to stay with it, then you can always sell more to cover if you feel the need.

    Big sell-off on GOOG, APPL, BIDU…   Not really sure what that was but maybe trying to force a bottom.  With oil down $2.50 I’m not really inclined to worry here.  They have 15 mins at the NYMEX and this still looks like a commodity sell-off.

    Farm Bill – I like the fact that Bush vetos bills without reading them (or having a competant staff member do so at least) - there’s a real testimony to this administration.

    SBUX – I still like them, not one I would short

    BA – because I want leverage and intend to sell callers down the road.  If I buy the $100s and sell the $85s I tie up $15 in premium anyway.

    Here’s a nice Ernst and Young report on Renewable energy prospects of different countries

    Options bankruptsy – If you have a call, you are screwed.,  If you have a put, you are possibly screwed.  Best to sell on the initial dip when you hear of such things.

    Alex – I didn’t know we had a June Applefly but I wouldn’t rush to change things here, this is painful to watch but as long as the sell-off is led by commodities and we are holding 12,600, things aren’t so bad.  Right now I’m holding off covering Apple, I’m going to roll down the BIDUs we just picked up to the $350s and I’m hanging tough on GOOG if they hold $540 and, if not, I will sell enough $530s to pay for my own roll down.  XXX


  221. Phil, et al.
    Can someone explain NDAQ’s movement?  I can’t find any recent news that explains this sudden drop.
    I have a June spread (37.50/40), I’m not sure if it’s worth paying to get a profit out of this play.


  222. Carl Icahn
    Always reminds me of Mel Brooks when I see him.


  223. GOOG has dropped $40 from Friday’s expiration !


  224. Rolled GOOG down for $5.50, rolling Apple down for $3.  XXX


  225. Not an expert on bankruptcy but I owned options on an ADR, as I think Phil did, which pulled it stock from the US. I was told that there was nothing Fidelity could (would) do for me. I waited a few weeks and the stock was still listed on option trader so I put a sell order in at around 60% of what I paid. There were no bidders but me. A few weeks later, the MM put a bid in at 40% of value and I took it. I figured I won that one, although that is not the norm.


  226. Should we buy back AAPL covers here or keep over night?  1/2 covered now.  Sold 1st half earlier today.


  227. Phil,

    Any changes on 10K and 25K Portfolios? mainly the FSLR fly, or do you only change if it moves out of range 296$ and 264$ ?

    Thanks


  228. AAPL- back in but moved down in strike price, June 180′s


  229. Phil:

    took out, as you say, AAPL callers,
    now we wait what happens,
    if AAPL goes up, sell again, yes????, particularly before weekend.


  230. Phil:
    when you say rolled down for 3$, AAPL, which ones did you roll down >


  231. Like I said earlier , I really don’t get GOOG/BIDU reaction to (I assume) MSFT "cash back" program. Phil , earlier, reckoned it would increase TAC but an interesting article from someone who tried MSFTs offering reckons GOOG might actually benefit. All in all GOOGs 8% drop this week is odd.


  232. Hope everyone is buying AAPL.  For better or worse, I would hate to be the only one.  Buying Jan-09 220′s in IRA’s, got lots of July 220′s to sell you guys as covers in a month or so.  Also picking up jan-10′s.  Probably 240′s as those should be ITM by the time I would cover them.  Most of this predicated on the strong support at the 200dma for the q’s and volume on the support and selloff.  Also, tired of watching everything so closely.  So, I am locking up my funds for a few months in AAPL.


  233. irished
    Since you mentioned you have Fidelity thought I’d let you know that they will be releasing an updated version of Wealthlab Pro.  This is the system that lets you do amazing backtesting of strategies but it has been standalone from Active Trader Pro.  The new version will enable you to execute trades directly from Wealthlab Pro.  Took a test drive this morning at Fidelity and it’s really cool.


  234. JUL 220s- picked em up as well


  235. Peter –Ref Puts & Bankruptcy. I could not believe Phil’s suggestion (put supposed to be the insurance policy) so I called the broker. Phil is 100% right. Eventually you will get your strike price, but it may take a year or so to clear. Broker advice matched Phil’s: close the position ASAP.


  236. Film
    What can you do with AAPL jan10 240′s?  You can only sit and wait for them to go up.  You can’t even sell calls against them in the short months cause the margin requirements would be huge.


  237. FSLR – stupid vertical Phil, I don’t like verticals either but it resulted from a 1/2 roll from a lower strike where I used the short to pay for part of the roll. In the end I salvaged about a 60% gain following some of your recovery techniques so I’m pretty content thank you!


  238. Phil,misprint on GOOG roll to 350 mine filled for 3.30


  239. fredrang – Sounds nice, does fidelity’s new system run on a Mac?  Or are they still dragging their knuckles with crashrosoft?


  240. fredrang
    Thanks . Must admit have WealthLabPro but have not had the time to play with it. It is not as easy to use as ATP but eventually will figure it out.
    Have you had problem with Directed Trading and option pricing on ATP? Went to one of their seminars and guy said you get the option price/stock price on same graph but only available on Directed Trading and not Market Monitor. Seemed kind of weird, but everytime I try it my ATP locks up and have to force close it. Called Fidelity ATP, said they know but do not know when it will be corrected. I cannot use Directed Trading section at all. Do you have that problem?


  241. FredRang
    Do you have hands-on experience with Wealth Lab Pro? I have it the for years and I am authorized to do “autotrade”, never could make it work.


  242. Singapore Steve: aapl 240 ???   wow, what a strategy.


  243. fred, re:fidelity as of yesterday option trader pro doesn’t work in vista


  244. GOOG - if I glanced through the posts right, you covered enough to pay for your roll, but waiting to see if goog recovers a bit before fully covering? I added more longs bringing me to about 30% covered so I’m looking for your queue on adding more callers.


  245. SS, I would not cover them until they were ITM.  I suspect that would be around August.  Remember who you are talking to?  I am the poster child for irrationally exuberant.  I don’t plan on covering them much at all, I will likely sell them when AAPL tops out at the midpoint of the channel I want them to stay in.  If you are going to sell covers, you should step down to 220′s or 210′s as I suspect that will be retested at some point if you don’t want to use margin.  But, hey, I am just posting what I am doing.  Take it for what it is worth.  I still haven’t bought the Jan-10′s.  Having a hard time committing as it would be fabulous if we dropped even further or if we flattened out and had the IV pullback a bit.


  246. irished
    I’ve only used Directed Trading a few times and haven’t had issues with price quotes.  I have had some issues with order execution, especially on spreads.  Fidelity is making steady headway and I’ve stuck with them since I trust that they won’t close up shop someday and I their office is about 10 minutes away.  That saved my butt last August durng that crazy expiration day.  They gave me a guy in the branch to help get my issues resolved. 
    WealthLab Pro is amazing and I’m planning to go to one of their sessions to get more detailed data.


  247. RMM, SS, I don’t know if you use the THEO calculator from ToS or similar, but the returns are pretty much comparable for most moves across the strikes.  I think we move more violently to the upside in the next few months, so I want to be OTM to increase my returns.  It really isn’t that big a difference of a return.  It is just not made for selling premiums.  This is a directional play but with some distance for protection.


  248. Potter,
    Thanks for the info.  I still have XP, don’t even know if it works on a Mac but I’d guess that it does.


  249. Q crushing is a good theory, that was a totally pointless sell-off that made no sense with oil pulling back 2% on the day.  I was thrilled to roll GOOG, APPL and BIDU.

    NDAQ – LOL, there doesn’t have to be news, this is not a rational market.  Generally if the Nasdaq 100 does poorly, then NDAQ does poorly as you can imagine trading volume will fall off.  Again, having a verical is probably the dumbest play in the market so you get what you pay for.  If you had a long, like I do with GOOG and Apple, then you say "Yay,  a sell-off" and buy out your caller and improve your position. 

    $10KP/$25KP – No changes but we took out FSLR caller, regretting it so far!

    AAPL/GOOG covers – I have none, I doubt I will have any at EOD unless they have a great run but I will certainly cover tomorrow.

    AAPL $3 roll – I’m rolling down any AAPL I have (they are all in the money) at $3 per $5 bracket.  I think that is a total gift.  Same with GOOG at $5.50 per $10.  Rolled the BIDU in DTP down as well and I’ll wait and see as I don’t agree with this drop.


  250. Film
    For the 25 dollars the 240′s would cost, why not just buy the oct170 for about the same price and  you could get $6 /mo and estentially have them for free by oct.


  251. Bronek,
    That’s what the next release is supposed to take care of…autotrade based on the parameters and studies you set.  I just tested a beta version today.  I really hope it works when released as it’s totally cool.


  252. I’ll check it out, Active Trader does not…


  253. "crashosoft"?  is that a slang for that company Teeny Weenie Cain’t Get Hard aka Micro-Soft?


  254. PHIL – I have the GOOG Jun $520′s, currently Naked ….  should I sit tight or cover.  I noticed you rolled your 540′s down .. but did you cover to pay for it …  per your earlier comment ?


  255. phil:

    ok, understand your roll for 3$/5$ bracket,
    what strikes do you have now in AAPL calls ?

    How far away from actual price you like to be ?
    10, 15, 20 $


  256. MikeE – The one and only!


  257. I shouldn’t talk bad about MSFT.  I have Jan09 27.50 and I’m "selling rent" against them.


  258. FilmFlam
    Good luck on the sessions. It is hit/ miss as far as worth. Too many people in the class who do not understand trading very well and when the course says advance procedures with ATP, it reverts to stop loss stuff and not much use to people who trade often, as we do. Absolute best was one I attended in Florida taught by a guy from CBOE who knew almost as much as Phil. One I attended the other day on advance procedures in ATP was a bust, except for what I said earlier which does not work. At least it is free and good food. I live in NY so there are a variety of courses. Check out the quartely update course that is usually taught by one of their well informed people from home office and quite good (sometimes). I only hope to learn one or two things each session and lunch on them.


  259. Irished: I am using ATP ver 7.3.10. I just entered the “ –ANFHP” into the 3mths chart, then displayed : “chart options”, selected “Compare to”, typed ANF into the : “Symbol” window and clicked on “Compare”. It worked. But, there is no intraday data – only historical charts. New ATP update is scheduled before end of May. FYI


  260. Fredrang
    Last message was for you. Sorry. How I got the two names confused is a mystery.


  261. I wish they would change their name to Mega-Hard.  Wouldn’t Linus Torvalds like that?


  262. Phil – 30MPG, does this increase every x years?… Don’t you just prefer having less cars on the road… Paying 50,000 for a honda civic… While it sounds like murder, there’s a lot less noise pollution, traffic, environmental pollution, and it’ll have a push for public transport…. I am not against cars, but at this rate, traffic / accidents / demand for policing / etc are going to get out of hand.

    Maybe driving is a luxury, but I don’t think transportation should be. With a developed rail system, a couple dollars can take you around the state…. Country…

    Businesses should be able to write off the expense of a cars.

    2 cars at 30 MPG is equivalent 1 car at 15MPG.


  263. AAPL – Stop going down or I’ll buy the front month 175′s!  What am I thinking?  Just because it goes down does not mean that it’s coming right back up, but oh! it’s sooooo tempting!!!


  264. SS, because I would have no cash as my callers would take all my money on the run up.  Instead, I split between July and Jan-09.  I will look for premium plays when I think AAPL has gotten ahead of itself.  It is still catching up, IMO.  Besides, the point of these particular positions is to not have to watch them.  If I cover something, especially something as volatile as AAPL, then I feel the need to watch it, and then I feel the need to trade it.  Instead, I drop half my IRA’s into Jan-09.  I will use stops if this isn’t the bottom as there is no need to be a hero, but I like the odds of success as I have them in my head.  Time will tell.


  265. VIX has been relatively flat for most of the session. Is that bullish?


  266. GOOG drop is not odd, just a Fibonacci retrace of gains from $420 bottom ($420 to $600 = $180, 33% =  $540).  Life is not that complicated really….

    Bronek – lots of ugly experience behind my advice on holding puts through bankruptcy!

    MCK – it’s fine if you HAD to salvage into it but don’t lose site of the fact that it’s still a stupid vertical and take the money and run before you get trapped again – that’s all I’m saying.

    GOOG/Doug – I rolled first and I’m waiting to cover, maybe until tomorrow.  Tomorrow we get only existing home sales so nothing major to move the markets and then the holiday weekend but, after a sell-off like this, I’m not sure how short people are going to want to be into the holiday.  We’ll see how Asia reacts tonight (assuming we stay green) and, of course, whatever oil does is critical but it’s not getting pumped back up after hours. 

    AAPL/RMM – I’m in all Oct $160s now.  Basis $33.67, about even.

    Wow, BIDU, FSLR, ISRG all getting hit hard all expensive stocks, iking of interesting pattern.  Apple and GOOG going too so maybe someone is just redistributing some cash or maybe someone is trying to paint a head and shoulders pattern on the Nasdaq. 

    CROX getting a late boost, PLCE having a great day, SINO at ATH and not stopping there,


  267. AAPL is spooking me but I rolled my AAPL calls from $175 to $170 for $2.6.
    I have dipped in margin now since yesterday. I always had it but never used it – glad to have it for a rainy day :)


  268. Bronek
    Your right it works. guess I was looking at closer in time period of intraday/ 5 day stuff. It did not crash the software either. Of course it worked this am and not pm but will play with it some more.
    Thanks.


  269. Short before the weekend, hopefully my T/A is correct and price would travel to 138.30 (SPY) before the weekend tomorrow.


  270. Film
    I also feel that AAPL may be consolidating some here.  hoping some up and down movement so that we can make some money.  This last ran up cost me becasue I got stuck being fully covered.   Only 1/3 now so if it ran up I could have an easy 2x out.   If it climbs back to the 185ish I will sell more.  If not I will wait until about 17 days from expiration then start to fully cover going in. The premiums are still decent at that point.


  271. DM – Public transport is not a very real option in this country due to poor ability of government to use eminant domain to engineer a better system.  They could strengthen the existing rail system but the oil lobby spends a forune to tell  you what a bad idea that is and how we shouldn’t "subsidize" the rails every time they try to do something about it even though there’s not a rail system on the planet that isn’t subisdized (and should be for 101 environmental reasons). 

    Buses would be an answer but also would need massive subsidies and government investment in a hub and spoke system to get going.  Sure it would be way cheaper than the war but good luck getting it going, perhaps if we release a video where Osams tells us to vote against public transit….

    VIX is flat, market is flat, not much to it but the VIX is up 2 against a 500 point drop so we’re not too out of range.


  272. AAPL  What’s a better call roll Oct 170->Oct 160 for 5.50, or Oct 170 --> Jan 170 for 6.40?  Or nothing?


  273. Singapore has a very efficient subway and bus system.  Entire cities spring up around a subway station along with a bus distribution network.  But then here everyone wants their 160 acres of land.  States and cities need to integrate better land use requirements for a effective mass transport system.  They usually want one without the other because the council are the ones living on 10 acres of land.   Portland OR MAX is great, but for the cost you could have given out free bus card to anyone below 25000 income and improved both the bus system and the road infrastructure for less than half of what it cost.


  274. Phil, exisiting transporation corridors can be used to significantly expand additional public transport options – it’s happening right now in Seattle – we’re paying through the nose for it, but the city is building a fairly extensive light-rail system. I think eminent domain was used as part of the process  in getting it going.  Buses are also moving more and more people as folks can’t afford to drive as much.   It does seem that the highways are getting a little less crowded these days, though it could be an illusion. 
    If the US government can maintain a gazillion miles of highways which are very expensive to maintain and not very durable, I suspect that the government could afford to significantly expand rail systems across huge sections of our country along existing transporation corridors.   Why not have subsidized high-speed rail systems – I’d love to travel that way.  My tax dollars pay for roads, why can’t my tax dollars pay for more efficient mass-transit?


  275. AAPL/Eph – since I’m looking for a sharp rebound, my choice is to buy the $10 in position and a better upside delta, rather than the time, which I can always roll to later.

    Transport – I’m for going back to open trollys in big cities.  You hop on, you hop off right in front of the place you want to be, they don’t pollute and you can use the existing roads…


  276. Phil……..I m no slow driver. I typically go at least 20-25 mph over the highway limit…..BUT what about mechanical devices ( a governor) to top out car speed on all US vehicles at 60 mph? That would have to create a fairly decent reduction in consumption on top of increased mileage requirements?


  277. On the conservation front I can report that I have consumed only 1/2 of the fuel that I burned last year to date.  My son has reduced his fuel consumption by 32% and the wife?  She is only down 9%.  Our home A/C is set three degrees warmer but I have not quantified the savings yet.

    My Browns gas generator just started bubbling it’s first H2O2.  If you don’t hear from me again it’s cause I won a "Darwin Award"


  278. to me, it’s not just a function of cost – yes buses are cheaper, but a lot of people simply won’t take the bus even when pressed
    I have a feeling that one of these days, the government’s going to start having to subsidize the airlines – why not subsidize high-speed rail on a large scale- it’s way better for the environment, not connected to oil prices and in many ways, a better way to travel (certainly a lot better than the bus)


  279. Phil – does it seem like Google will stay range-bound  in this crazy 50 point range – or do you see it breaking out?


  280. Phil
    your thoughts on V


  281. hondo – governor for 60mph is bad idea because it limits a drivers ability to control the vehicle.  I get the best mileage when I accelerate, then coast, especially in hilly terrain.  Light weight fuel efficient vehicles are a better solution.


  282. Hey guys when is your holiday ? Is it Monday ? (Memorial Day ?)


  283. I’m liking ISRG again down here as an LTP play, Jan $270s  XXX


  284. troy
    Doesn’t the gov alreadysubsidize the airlines through airports, air traffic control etc.


  285. I am actually old enough to remember taking the trolley across the 59st Bridge from Queens to Manhattan, altough I was very young.
    All we have to do is just slow down on the highway and around town and you will see the difference in oil use.


  286. DB- yes, the market is closed on Monday.


  287. Steve – Yes they do, but I can’t see the government letting the major legacy carriers all go bust because of $150 oil


  288. Trollys- Got to love public officials.  We just built a streetcar in seattle called the South Lake Union Trolly (SLUT) so you can ride the SLUT to work.  See seattle is super progressive :)


  289. DB- yes, Monday is holiday. I don’t use the cruise control when pulling my boat. I get much better mileage holding the accelerator steady- 60mph uphill, 80 downhill. Not looking forward to convincing the highway patrol why I’m speeding though. I have driven 5000 less miles in the last year. More phone calls and buying on the internet and not going places until I have a good reason.


  290. I’m not in front of a TV.
    Can someone kindly update me as to what the CEO of BA is saying?


  291. Who’s to blame for the oil crisis?
    Look in the mirror Maria; MSM & the Animal Farm Government.


  292. irished
    My brother just moved from Floral Park in Queens over to Manhattan.


  293. Peter
    You can get CNBC on the ToS platform and also Bloomberg over the internet.   Both are free.


  294. Phil:  "NDAQ – LOL, there doesn’t have to be news, this is not a rational market.  Generally if the Nasdaq 100 does poorly, then NDAQ does poorly as you can imagine trading volume will fall off.  Again, having a verical is probably the dumbest play in the market so you get what you pay for.  If you had a long, like I do with GOOG and Apple, then you say "Yay,  a sell-off" and buy out your caller and improve your position. "
    This was a calendar turned bull call.  April volume is up, EPS is up, profit is up… price is down nearly 20% this month.  Just looking for insight…


  295. Give me a highspeed train to Austin and Houston and I would take it every single time.


  296. CNBC/ToS – I havn’t been able to get streaming CNBC via ToS to work on a MacBook Pro. Anyone else have the same issue?


  297. Portland has probably the premier bus system in the nation.  Lots of routes, always on time, fairly cheap.  They make it work as the 10 high schools in Portland are somewhat specialized.  One is engineering focused, one is arts focused, etc… and students in the district can go to any school they want.  And all of them use the public bus system.  Portland had truly great planning.  Even the famous Urban Growth Boundary which kept the city dense and farmland close.  If only the weather wasn’t so damn depressing. 

    Well, for the record, I think we hit AAPL’s bottom.  That was just the sort of day I was looking for.  I was over committed to some NT GOOG that I should have stopped out of at 570, but the expectations now seem very low for the next 3 weeks and that is when GOOG moves the best, when no one prices in a big move.  I hope they can deliver.  If not, at least I have AAPL.  Great close.  Big volume, and the first touch of the 30dma since it started to rally.  That is usually a great place to buy.


  298. Peter – Interview w/McNerney yet to come.



  299. ISRG – new here and need some help… I have 4 jan 270’s (66.70 now around 50) against 2 jun 300 ( bought at 9.5. Now around 4.8). Now that it’s dropped I am not sure how to fix this. Should I roll the Jans to Oct 250s or something else? Thanks.


  300. Trolleys
    I loved riding the cable cars in San Francisco.  If we had a system like BART in the Northeast I’d ride it every day.  I worked on Market St in San Fran for 5 years and rode BART from  Walnut Creek every day and the key was it was faster than driving unlike going into Boston.


  301. Anyone pay for the CNBC feed over the internet?  When I go tothe philippines they have limited programs of cnbc on so with it I should be able to watch fastmoney and crammer, hey I need some entertainmnent.  I think it cost about 9/mo.  Anyone have it?


  302. Growing up in Milwaukee, we had a fantastic electric ( trolley) bus system. With your bus transfer pass, you could go just about anywhere you needed to go for  .25 cents. I’m not sure of the .25 cents part , but that sounds about right.


  303. Fredrang
    Know the area. I am a Long Island City boy, who lived between the 59st Bridge and the Mid-town tunnel. What landmarks but I lived there before the "yuppies" or whatever they are called, moved in. when I lived there, it was a tough neighborhood with lots of factories and hookers. Interesting childhood. I always tell my wife that I am always looking around and very leary of what is happening around me when I am in the city. I would have a good detective. Will not recount stories but "interesting" area. Floral Park was where the rich lived, or so I thought!!


  304. Singapore Steve, get a slingbox.


  305. Singapore Steve,
    In Singapore it’s plenty safe to take that subway whenever you want, and it’s not a filthy mess either…I don’t know of many urban areas here in the US where you can make that same statement!!


  306. For all of you greedy pigs out there here are some cc paying over 10% for june.  You could do a cal call  if u want.
    TRMS, BPO, LCC, HAE, SOLF, SOL, AMR, VISN


  307. Boeing Synopsis
    1.  U.S. leads in innovation; future is problematic (education science and tech, immmigration, government regulation, energy dependence present dark clouds for the U.S.)
    2.  Business plans assume high price of oil.  Double edged impact; take out inefficient tech and buy more efficient Boeing planes….net positive for Boeing.
    3. 30% operating savings, 20% fuel savings, better engine tech, first carbon fiber and titanium (yeah TIE) lead to lighter weight.
    4.  Dreamliner delays…bleeding edge innovation, 5 years ahead of Airbus, most successful launch in airplane history, overestimated supplier competency…issues being resolved.
    5.  Defense business….why are you losing?  Overall defense business is going well, still protesting tanker deal not based on politics but based on capability.  GAO expected to report back June 19th.
    6.  Haven’t lost an order yet….$12 billion in cash…$16 per share.  If acquisition makes sense we want to be ready.


  308. Thank you Singapore and thank you Bronek!
    I have to run to the bank now.  After the last few day’s action in the market, my Bank Manager wants to have a little "Chat".
    Just Kidding!!! ……..I’m just off to give them my first born male child!!

    Will C U guys later.


  309. A while back there was some discussion regarding charts for options.  I have an IB account, as weill as TD Ameritrade, but TD doesn’t support option charts, and I don’t really like the IB charts.  I have been using Market Watch for option charts, but just wondering if there is another service out there.  Here is a link to a Market Watch SPY chart for comparison.  Thanks.


  310. And here are some more greedy calls paying over 14% if assigned.
    BPO,TRMS, SOL,SOLF,RCH,AMR,FEED,DRYS, TSL
    I’ll let you do the homework.
    TRMS is at 6.63  and the jun5.0 is 2.55.  40% downside protection built in, a 22% return.


  311. I am so experienced that when I put the order to roll down  AAPL, put an order in for 1 call. Off by a little. Was wondering why cash available seemed a little high. Genius!!


  312. irished
    Most likely I’ve heard similar stories from my dad who grew up in Brooklyn.  They always rented and moved about a dozen times. He tells me the story that you always had to pick a fight with the toughest kid in the neighborhood, get your a** kicked and then you were accepted.  Funny he grew up and became a psychologist.


  313. lol that was hilarious Phil… I agree, it’s hard to do anything with capitalism when all the capital is already owned.


  314. My Browns gas generator just started bubbling it’s first H2O2.  If you don’t hear from me again it’s cause I won a "Darwin Award"

    Let me know how that works for ya! Seems like you’d have to pull 30amps or so to generate enough Hydrogen to give you a boost, which means your alternator is gonna be tugging quite a bit on the engine (and burning more fuel as a result). I guess you could use an extra battery in the trunk that you charge at home every night and just use that to power your HHO generator…or use a solar panel to charge your battery while the car isn’t running :)


  315. JB
    Spent 6 years in Singapore.  My kids would go all over on the sub and buses there.  I also used it heavily, but also rode my bike there.  They give you a six inch wide bike lane.


  316. Fred_R: BA guy did not answered why LM & NOC eat his lunch. BA issued layoff notices to 750 engineers and mgrs in its IDS group in CA.


  317. JB
    What are u using for the salt solution in the electroysis?  Adding hydrogen to your fuel air mixture should increase the octane rating.  Effectively increasing your octane rating will make yor fgas burn mor effectively, you don’t need much hydrogen to do that.


  318. Singapore Steve,
    It’s one of my favorite places to travel to. It’s clean, friendly, the subway is awesome, food is good…I have nothing but nice things to say about the place. It’s a little cramped, but if I were offered a temporary transfer to work their for a few years I would jump on it in a heartbeat just so my kids could attend the schools there (which i have been told are very good by US employee’s who have transferred over).


  319. I wonder why we have not seen solar panels on top of elecric cars, would increase their range.


  320. Fredrang
    Stories of being robbed with a knife in your chess, chased, hustled, hookers. Does not mean I am a tough person, but it takes alot to scare me. we used to sit on the stoop and watch the hookers come in their John’s cars, stop on our street which was very dark, turn the engine off, watch the car shake and roll for a little bit, car window would open and something would fly out, and off they went. They had been moved from hooking at 42st and the local police were very friendly with the hookers, if you know what I mean. We of course had no influence. I just always know what is going on around me and who is eyeing me. I am not paranoid but careful.


  321. Hondo / Irished – I don’t really think that the solution is to slow down transportation. The world is heading to a faster economy, so I would focus more on efficiency rather than hinderance. I would love to plant 300mph trains all around the country. How sweet would that be for America?… Mag lev trains can travel speeds that are faster than airplanes…


  322. JB
    The school system , Americam Schooll, is great.  It is cheaper to send your kids to Stanford, but MNF pick up the tab.  I got some great local hideaway places to eat if you ever get back there.  Some great bbq stingray, laksa, curry fishhead, etc.  been traveling there for about 20 years.


  323. Singapore – Or solar paint?


  324. Governor/Hondo – Now THAT’S commie talk my friend!  You’re talking to a guy who considers NY to Boston a 2:45 ride (230 miles).   Actually there are many cars that are max efficient up to 80 but it’s city driving that kills gas and you’ll save more gallons by making people inflate their tires properly than by regulating speed, which leads to congestion (more time on the road = more driver density), which leads to traffic jams which wastes even more fuel.

    ROFL David!  Good luck with that thing….

    Buses – that’s what I mean about it being kind of hopeless here.  In London or NY or Paris, having a car is insane and parking is insane so you take public transport.  Most American cities and communities around them are designed for the auto commuters and not mass transit folks.  In order to make mass transit work you need to actually make it better than a car and one part of doing that is to turn car ownership into a nighmare by taking away the parking spaces etc.  and that is a very tough thing to get past voters. 

    I think about that in NY a lot.  I think they should just ban cars entirely and triple the number of buses.  NY is like a big grid so how hard can it be – buses go up and down each street, you get on, you get off and take the intersecting bus to your destination.  By eliminating the cars you can probably whisk people around the city at record speeds.  I don’t know though, I tried to do SimCity once with no cars and they all hated me…

    GOOG – hopefully this is a bottom test but I don’t see why they will break $600 without a really good reason so yeah, rangebound is very likely.

    V – I like them long-term and this is a nice entry, looking to sell calls around $80 as they should be rangy between $75 and $85 until we get some good signs of consumer recovery.

    NDAQ – I like them but I like the whole market for a rally if oil comes back down below $120 (boy do we have low expectations now).

    ISRG/Joe – Well you were totally undercovered.  You covered $266.80 with $19 so a $5 drop in your longs, less than a single bracket move, would put you negative.  Of course you should take out your caller, they are useless (out of the money callers will lose their value much slower than you do) and, since you are down $16 you should look to sell the $280s for $16 and just take your lumps if it goes up but, right now, you need to play to get even, not to win although I’m seeing the Jan $270s at $59.95 so you’re not really that far down anyway, in which case just make sure you cover with $10 per contract, which is enough to roll your longs down $20 if it drops further.

    BA – I love those guys!  Nice write-up Fred…


  325. How much would a 5×6 ft solar panel cost and what would do to charge.  Must be a equiibrium between speed and the charge rate that could sustain the vehicle.


  326. DM
    I do not mean slow down the world just the crazy drivers when the speed limit says 55, they go 75, or when it says 70 they do 85. Just 10-15mph slower and we will save a lot of fuel and the time difference is very minimal. No pain, no money


  327. DM
    There was a study done by a prof at OSU that had 85MPH as the ideal speed for a pointed vehicle, ie less wind resistance.  So there is no magic speed to save but he said around 65-70 maybe ideal.  Depends on the aerodyamics.  So that is one thing that should be listed on the sticker of a car.  At what speed to obtain ideal MPG.  And if you knew the outside wid speed the computer on board could calculate what your speed should be.  Have not seen that in any car, mayube i should patent that idea.
    Picking a speed like 55 may not be the best for all but then the politicians can’t handle anything else.


  328. designcurve – i’ve never been able to get ToS’s streaming CNBC channel to work on my powerbook.  Works on a windows box like a charm though.  I need to ask the developer’s about this already…


  329. phil, would you mind posting the current positions in the 10 kp?


  330. S&P To Replace Bear Stearns With Intuitive Surgical In S&P 500


  331. irished – Those seem to be the same people that usually over-eat at "all you can eat" restaurants… I don’t really understand why people eat to the point of discomfort. Just bad logic, you should be paying for maximum enjoyment per dollar, not maximum quantity.

    I completely get what your saying: 5mph slower, you save 5 dollars and lose maybe 5 minutes per week…. Not many people get paid a dollar a minute, so it’s economical to atleast follow the speed limits. With that said, some speed limits should be updated… There are roads here in canada that post 60 kph, and it deserves an 80 tag. I don’t blame people that drive 20 clicks over on those roads.

    How about digital speed signs that continuously adjust themselves given the conditions?… That’ll kill a lot of traffic problems / accidents.


    Singapore Steve
    – I like it, but wind sometimes travels sideways. How about measuring engine stress given it’s acceleration? So traveling up hill would give a different ideal gas milage than going down one. Wind hitting your car from the NE @ 30 mph would give different milages than from directly N….


  332. Mac ToSers – in order to watch the CNBC stream you have to detach the window *and* make sure you have flip4mac installed since the stream is actually a windows media video (.WMV) feed.  It won’t play otherwise.


  333. Kwan/ToS – Nice! Thanks for passing this along.


  334. Thanks Phil for your help with ISRG.  The longs I had were originally 240 that I thought were too in the money so I rolled it to the 270 (stock was trading at 295-ish at the time). I should be more concerned about the covers…at that time I was more concern that the stock was going to blow way past my sold 300 calls.  the s&P news should help me some so thanks again for your help!


  335. kudlow- says case (of case-shiller) says every time housing starts reach 1M, that has been the bottom of each cycle since the 70s

    we have 1M now


  336. xian, Kudlow should come out to CA then :)


  337. oil- 5mins of bubble talk from

    International Energy Agency head Nobuo Tanaka,
    Chairman of Libya’s National Oil Corp. Shokri Ghanem,
    billionaire investor George Soros,
    Fadhil Chalabi of the Centre for Global Energy Studies in London,
    Ashley Heppenstall, chief executive officer of Lundin Petroleum AB,
    Manoj Ladwa, a derivatives broker at TradIndex,
    Rachel Ziemba, an analyst at RGE Monitor,
    Kevin Daly, a portfolio manager at Aberdeen Asset Management.


  338. l’calvary
    Lagarde Calls for Higher Dollar and Yuan Versus Euro

    May 23 (Bloomberg) — French Finance Minister Christine Lagarde said she wants policy makers to seek a stronger U.S. dollar and Chinese yuan against the euro.

    “I would arm twist whoever is holding these strings to pull the dollar up,” Lagarde said in an interview with Bloomberg News in Chicago. “I would like to do that for the yuan as well.”

    The dollar has tumbled around 17 percent versus the euro in the past 12 months and fallen against 13 of the 16 most actively traded currencies. It last traded at $1.5720 as of 9:41 a.m. in Tokyo and touched a record low of $1.6019 on April 22.


  339. Phil,
    XLF, IWM, SMH – I have Jan 09 positions in all of these (selling front month premiums) and I also have some cash to deploy. IWM and SMH have been holding up well, so I really don’t see them as being "on sale" rigjht now. XLF is down lower now than when I first purchased it (I have the Jan 2010 23′s). Would you recommend deploying any new cash in any of these right now or do you think we have some more downside? I was thinking of scaling into another 1/2 of XLF here (I have 10, would add 5 more). Any ideas? Wait until next week?


  340. Singapore Steve – VIX – "Volatility Levels Likely to Go Up Again"
    http://online.wsj.com/article/SB121116281276602749.html


  341. MJ, great article.  Thanks for posting it.


  342. MJ – +1. Thanks!


  343. Knotam,

    I also have a NDAQ position, This move isn´t so bad, because you get all the premium from your caller! This money you can spend on your position to prepare it. Roll it with the money like we do in the LTP if you still like it.

    My only fault was to cover half my position, but this should just be enough for a roll from the Jan09 45 to 40 AND I own the Jan09 40 then for a very good price if NDAQ bottoms here. Thats how we do it.

    Like Phil said you can roll down ever!! If we roll down with the premium we get the next 6 times till Jan09 we have the NDAQ Jan09 20 or so, but at this point need more practice.
    I have rolled from your calender earlier in the year my position out in time and I think it is a good deal when you can roll your position out in time because this gives you more months to collect premium and improve your position.

    I´ll switch many positions that are good for LTP to it, because it is much easier for newcomer to work on it AND you learn to have patience.

    Phil, In your LTP you cover Position half, full or not. Do you have a rule for this? I have read K1 nearly finished and can´t find any point to this. Do you only cover on resistance points like C 22.5$ you mentioned earlier?


  344. Good Morning everyone

    UK down about 0.6% today. Not a good start. The UK papers are full of headlines about $135 oil and how the economy will go bust if prices dont come down. All the usual things that quite often signal a "top".

    Be nice to see GOOG recover today.


  345. ISRG!!!  That’s a funny swap for BSC, caught a lot of people by surprise, certainly the bright spot in my investing day as I just took out the caller and doubled up on the dip.

    Robot cars solve all your speed problems, then you can have them all optimize economy.

    Mozilo - What a tool!  Like his loan officers didn’t work off a script and have training in order to convince people to take these ridiculous loans in the first place.  Now he has the nerve to call customers who get professional help "disgusting"?  I think the guy who got Mozilos letter summed it up very nicely:

    "To have recieved the e-mail that I did, stating by one of your employees, that what I did was ‘disgusting’ and ‘unbelievable’ has been just about the final straw. I am trying to do the right thing, I am trying with every ounce of what I have left in me not to blow my brains out over losing the home I have been in for 16 years. The only hope I had left was that perhaps the countrywide company did want to help the people it is servicing … then I receive that responce to my letter. Just great. Now I know, that it is all a nice fat laughing matter to those who are supposed to help."

    Kudlow/Housing – I was watching that and it does look pretty but unless the government does something about foreclosures, there is no point to starting new homes.  These people aren’t moving, they are going from homeowners to renters at best and,  even if housing comes back, they don’t have the credit anymore to get a home – no one’s even considering that but you’re going to have 4-5M families, 5% of all homeowners, who cannot become homeowners again for at least 7 years with a mortgage default on their record.   Then you have to consider the credit damage done to another 25% of all homeowners who are racking up mortgage delinquencies (and probably credit cards too).  These people simply will not qualify for a home loan so the entire housing dynamic is going to be thrown off.

    Very nice video Xian!

    LaGarde has been saying that for a month now, we need other vocal G7 ministers to join in at this point.

    JB – Waiting is best right now, I hope you have at least 1/2 covers on the longs, just in case.  Oil over $130 is simply crushing industry after industry and there’s no way the consumer survives if this keeps up.  Gas prices do not reflect $130 a barrel, we’re looking at $4.50 or better by July if we hold this level, I’m already hearing people say they can’t afford to leave the house and people are flat out telling employers they won’t drive anywhere for work without getting paid for it, that’s a big deal if you think of all the times you (as a boss) may have asked someone to go to Staples or Dunkin Donuts or whatever and gas was never an issue and now people literally say "Hey, I’m not spending $5 to go to Staples."  We’ve hit a big psychological level here.

    Wow – Fires and tonadoes in CA today, what an exciting place to live!

    VIX – 22.50 is my call for the avg vix level.  Unfortunately, if the VixDex holds stready, that would be about 400 Dow down points from here.

    Great article MJ!

    1/2 Covers – The whole point to having a half cover is to cover the other half on the way down.  If you have NDAQ and have a 1/2 cover at $37.50 and it drops to $35, you should cover the other half with $35s and put a tight stop on the $37.50s, which obviously you are now well ahead of.  If it then drops down to $32.50 it is time to buy back the $37.50 anyway and you then sell the $32.50 and put a tight stop on the $35s.  Unless you have a good reason to believe a drop will be quickly reversed, once a caller loses 50% of his value with more than 2 weeks to go, he is really of little use to you and you should be looking very seriously at the next caller down.  Of course you should be rolling yourself down to maintain your spread, hopefully using the additonal money you collect.  XXX


  346. GM Phil,
    Here comes one reason on Apple take down..
    Apple added to Conviction Buy List at Goldman Sachs, Merrill ups the price target to $215 from $185

    ROFLMAO!!


  347. Thanks Phil

    Now I understand more. Everytime when my caller goes OTM And the stock moves down to another Strike whats then ATM: I must rethink(Because my caller is ca 50% ahead) and roll to ATM to get more or the same Premium AND better downside protection, but what is with the Upside?(When the stock starts going up?).

    Is a better upside protection to have LEAP that are ATM or ITM?

    But With stock to stock different. I still have the AAPL Jun 185 caller where I´m 50% ahead, but rethink that this only was a downspike on AAPL and done nothing.

    Are your Tight stops different or ever a 20% trailing stop?

    Thanks much.


  348. DM – great article on the VIX… is this statement true?

    "The VIX, which typically moves inversely to stocks, measures whether investors are buying options to manage their market risk."