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CPI Thursday

Much like CSI, it's pretty obvious who committed this crime!

A 0.8% rise in the CPI blows away estimates of 0.4% and, as I've already said this week, it's time to get some new economists if they can be this clueless!  The CPI was 1.1% last month and oil started the month of July at $145 a barrel.  Hello, Mcfly – did these guys really think that the relentless drive to $145 in June wouldn't be passed through in consumer costs that started showing up in July as well.  Did they think that the $25 drop in oil towards the end of the month would magically bring the CPI back down 72% (that's what 0.8 less than 1.1 is!).  Really, that is what economists expected!

I didn't even think this would be a market moving number because I can walk AND chew gum at the same time and it did not occur to me anyone in his right mind would have thought that inflation would drop 72% in one month, as if wholesalers and retailers just sit, glued to their TVs, waiting to knock 20% off everything as soon as Bernanke says he feels inflation is contained.  It's like Alice in Wonderland in these markets – everything is so silly the best thing to do is just go about your business and ignore the nonsense… 

We're really through the looking glass when you see investors stampede right back into oil and other commodity stocks at the first sign of a bounce off a 20% drop.  I guess they've never seen a pullback off 20% before so it makes sense that Cramer would hit the BUYBUYBUY button on anything that smells like crude.  I wish I had access to the tapes of all these same idiots telling you to BUYBUYBUY housing stocks and mortgage companies when they made their first bounce on the way to 80% losses. 

It's not just oil that is expensive, now it has to compete for consumer dollars with food and airline fares and tobacco prices and consumer goods etc.  Oil was able to bubble up because people were enjoying a robust economy and it was the ONLY thing that was rising out of control.  Metals began to follow it as that didn't affect the average person but then companies had to start passing on the increased costs and the banks stopped lending money and the consumers were forced to stop using their home's equity (if there was any left) like a piggy bank and *poof,* suddenly there isn't enough money for oil.  This isn't going to change because there' s a hurricane or a shut down pipeline or anything else

I wrote about all this on March 11th and here are commodities bouncing off the low we made money on last time and very likely to retest a 10% bounce off yesterday's low (CRB 420, Crude $130) and THEN we can start a real correction.  Adding insult to injury on what is, so far a 5.6% inflation rate for the year (the highest since 1991, when Daddy was in office), the average weekly earnings of US workers (adjusted for inflation) FELL 0.8%.  Usually we expect + 0.2% to 0.3% but this is an indication that consumers may have as much as 9.2% less spending power than last year.  Since consumers make up 2/3 of the GDP – that IS something to be concerned about.


Unemployment remains at a recessionary 450,000 for the week ending Aug 9th but they've been messing around with those figures as we've noted before and they may be inflated.  According to the WSJ: "The recent emergency extension of jobless benefits remains a factor. Some applicants for the new 13-week extension actually found that they were eligible for new jobless benefits, pushing those figures higher. The government has said this effect will lead to higher-than-expected claims for several weeks."  Either way, it is hard to get a job, hard to keep a job and, when you do get one the pay sucks – Mission Accomplished!

Asia was mixed and Europe is mixed as everyone is waiting to see what we will do.  We get a chance to retest yesterday's lows and we were actually quite pleased to hold them yesterday and we took out a lot of our callers and put our rally caps on at yesterday's bottom and there is nothing in the CPI data that changes my mind.  We expected a dip into expirations, we cashed out our oil and gold calls and now we wait and see before deciding how to play the September option period.

It's going to be crazy out there (as usual) but let's follow the White Rabbit (oil), watch our Big Chart levels and everything will be fine(ish).

We're going back to the well on WM today.  JPM was going to buy them at $8 before the BSC thing hit the fan and diverted them so I like the risk/reward of WM at $4.15, which has been our buy point 2 other times with outs at $5ish. Buying the stock for $4 and selling the Sept $4 call for .71 is also very attractive and you can add a sale of the Sept $4 put at .60 which gives you a $2.69 basis if you get called away at $4 on Sept 19th or forces you to buy another round at $4 for an average purchase price of $3.35 – that's my kind of play!



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  1. Good morning!

  2. G’day

  3. WMT earnings were ok I guess, but that CPI number is gonna suck. FRE up this morning!

  4. I’m liking BA Sept $65s at $2.25 too much to sell so let’s buy 10 in the $10KX.  XXX

  5. Phil:

    did you get the UYGFLY for 2.5?????????

  6. Phil, the butterflies are amazing ….. ws very busy at work last few days and did not do much adjustments and I am right on target on 3 of my 4 butterflies so far.  Thank you.

  7. BA

    Speaking of….order update as of 8/6; does not include all the 737s that American is ordering.  It would be ironic if they don’t bid on the Tanker Deal.  That would be a major embarrassment to the Air Force.

  8. Go FRE Go…..

  9. Woo hoo on FRE! 

    UGYfly – No fill, have to reenter it because I didn’t do it GTC, may not fill at all now but I did get the long call so I’m not too upset to have that naked.

    WMT so going the wrong way.  What a relief as I thought my $57.50 callers were going to blow me out.   This is so great!  Let’s pick up 5 Sept $55s at $3 in the $10KX and the $25KP  XXX

  10. Phil:
    as I am going to Alaska next week,
    I plan to get covers for just about all my positions,
    also: need new DIA PUTS for protection, which ones,

    can you imagine any to leave NAKED until sept 2 ???

  11. WMT 2010 $45s are a gift at $15.50 for an LTP play (I already have).  XXX

  12. 787 Goes IMAX

    Production begins on 787 IMAX film

    Earlier this month, director Stephen Low and an IMAX crew began filming the Boeing 787 Dreamliner for an upcoming IMAX 3-D movie titled "Legends of the Sky." Set in the context of aviation history, the film will highlight legendary 20th century airplanes in addition to the
    manufacturing, testing and first flight of the 787. Initial filming focused on the 787 Premiere, as well as 787 partner facilities in Frederickson, Wash. Additional filming of the 787 will continue this fall. The film is scheduled for release in early- to mid-2008.

    Approximately 25 IMAX crew members filmed the arrival of a Dreamlifter ferrying a 787 integrated midbody fuselage in Everett, Wash., earlier this month. The crew used the IMAX 3-D Solido camera mounted on the crane, to capture the airplane’s arrival. Weighing approximately 225 pounds (102 kilograms), the camera is one of the largest in the world and captures spectacular 3-D imagery. IMAX movies feature surround sound and images up to eight stories high.

  13. Cool Vicky!  That was my goal for this quarter – you can make nice returns without sweating every move the market makes…

    RMM – 2+ weeks, must be a cruise…  DIA Oct $119 puts are the right place to be at $6.20.  You can pick up a very quick .80 in premium selling the $115 puts right now and then you can roll to the way low Sept $112 puts at $1.90, which knocks you down to a $4 basis with clean coverage down to a $7 spread + 1 month.  This is an XXX for anyone who needs downside cover but if we hold here, I’m pretty enthusiastic about this being a bottom.

    VIX still can’t break 22.

  14. Good morning all.
    I’m sorry I was not able to continue arguing yesterday with Ash, we closed on a new house!!!!  (But we can’t move in for a few weeks :( )

  15. Heya Texas, I think we’ve gone purple today after the red and blue yesterday :)

  16. AAPL cleared 180 few min back.

  17. Casino stocks reclaiming some of yesterday’s declines.

  18. crude running higher and market falling.

  19. it would be nice for some sellers to show up in Apple, or do these guys only come when there is some support from the media.  Those Aug 165 callers are painful at the moment.

  20. Now we’re rockin!

    Don’t worry too much about crude, it’s BS and they know it.  Look at VLO take a dive after that "amazing" draw in gasoline yesterday. 

    VLOfly – I love the premiums so let’s roll the Sept $30 calls to the Dec $32.50s for about .30.  We can roll the Sept $35 puts to Dec $32.50 puts for about .60 and that lets us sell a lot more premium so well worth it.  XXX

  21. Phil:
    ALASKA, we always do 3 things: 4 days fishing for silver salmon, cod, halibut,
    then Grizzlybear photography on the Katmai coast,
    then hiking in Denali.

    UYGFLY: are you willing to pay 2.8$$

  22. I must say that we have VLO $35 putters and $32.50 callers and $33.75 is THE EXACT CENTER!  (pat, pat)

  23. JB- I’m thinking a nice light magenta…. LOL

  24. Texas & JB
    good morning. I have gone purple too.

  25. SKF is such a nice puppy to trade :-)

  26. Phil – Need help on APPL roll.  I have long 2x Jan 2010 – 150s short the 2x Aug 150′s and I also have long 2x Sept 160′s and short 2x Sept 170s.  I would like to close the Sept vertical and use the proceeds to roll to calendar spread.  What would you suggest?

  27. AAPL – May just be way too strong to go down.  If it wasn’t for Jobs BS rumors, they’d be over $200 now.  Still, they almost always find a way to dive into expiration so I wouldn’t give up on them for another 30 hours…

    RMM – Alaska sounds cool.  I will not be paying more for the UGYfly as .30 is a lot on that spread.  Also, I don’t think its good for you when you are away as the Fed may do something to rally the banks and blow you out.  I do like the long calls though…

    I think we should all be green, that will make the environmentalists and the capitalists happy!  8-)

  28. Phil,
    FRE and WFR Putters – Are we going to troll the FRE putter to Sept 8′s? How about the WFR, I have a naked put there and was wondering what the plan was.

  29. Top o tha mornin’ Ash.
    AAPL needs to pull back a little more please.  Trying to grab some Oct 180s.  Thanks AAPL gods!

  30. WMT about to go positive!

  31. Green is a GREAT color!

  32. Green used to be the color of money…

  33. VLO  We’ll roll the putters/callers tomorrow EOD if necessary, right?

  34. BA – Phil, we covered our Nov 60′s with the Sep 65′s in some portfolio (or maybe just mine from advice you gave). Do we buy them back and look for a short-term long play?

  35. Phil:
    I bought UYG calls mar18 already a few days ago,
    what about cover for my AXP, V, C, XLF ????? I think so.
    bought DIA putsoct119 for protection,
    today or tomorrow, I need to take care of my full cover callers 165 and roll to SEP, because I am away, I will wrap the AAPL with a full cover,

  36. phil
    in reviewing AAPL charts for the past year at expiration, it would dive on X day when in a downtrend, but would often jump up when in an uptrend.  very tricky for figuring out the best timing to roll out of aug 165 callers.  right now it’s not moving much (good), and it woudl seem that 180 would provide resistance, unless it pops through that.  any thoughts on the best timing for this roll is much appreciated.

  37. RMM, UYG is bullish banks. So, if you are asking if UYG calls will be a hedge for AXP, V, C, etc, then the answer is no. You should bug UYG puts or SKF calls.

  38. MJ:

    I know that, I only wonder whether I should hedge,
    probably yes as the financials can continue up and down.

  39. AAPL/Rahul – I suggest moving to 6x the Jan ’09 $170s at $26.82, that should be near even on the group.  You can leave your $170 caller and roll the 2 $150 callers to 4 $175 callers at $11.50.  You are biting the bullet on $8 on the roll of the caller but better to pay $1,600 to roll them than the $6,000 you owe them with no premium.  If AAPL goes up and up you will roll the callers up $5 per month so that’s $175, $180, $185, $190 and $195 in January, which would put you into a $25 vertical to your caller on 6 contracts – not so terrible.  Just keep in mind that that is your goal and don’t let the rolls get away from you like you did last time.  Right now, the roll from the Sept $170s to the Oct $175s is  + .30 to you, you cannot let that number fall below -$1 or you end up trapped like you are with the $150s.  That is good advice for all  XXX.

    Wow, finanicals just popped. 

    FRE/JB – Maybe they expire worthless?  No, we’re going to roll thembut I was hoping for a run like this so we’ll see how it goes, these guys are nicely explosive once they get going.  WFR isn’t worth taking out caller or putter as we’re only going to roll them anyway.

    VLO – either tomorrow or later we roll.

    BA/DanW – that was the LTP and I didn’t uncover them yet but I will if they hold $65 as they can add $1 or $2 really fast.

    RMM – Gosh those are very dangerous plays to cover if we have a big rally.  I’d go like this:  AXP 3/4 $37.50, C 1/2 $17.50s, V – 3/4 $75s and XLF 2/3 $21s. 

    AAPL/Windy – $180 is hanging tough.  Not much to do but watch it and see which way it breaks. 

    Nice turnaround!

  40. Now I’ve seen it all.

  41. Phil – Thanks for the APPL roll.  I will roll as you suggested and watch my stops better.

  42. WOW  WFR!!!
    GOOG- Phil, I was able to take some nice profits on my GOOG 500 Aug/Sep puts yesterday leaving myself with one Sep 500 put on the house and not covered.  Would you recommend covering here?

    Thanks for the help

  43. $10KX:
    HOV – 1/2 out of the $7.50s even off that DD
    FRE – Same thing if we can get $2.15

  44. Have a look at AAPL Aug 180′s they still have almost 2 bucks in premium,

  45. AAPL – Apple stores are averaging 95 phones sold per day. – Purple is healing and green is good!

  46. Phil:
    really had the same idea on covers for financials:
    its the beginning of a new month for options with 5 weeks to OPEX in SEPT, and I like mostly protection with 1/2 to 2/3 covers,

    BioTech: IBB, DNA,   I am bullish on these, DNA is getting close to 100$ as there is the expectation that Roche has to increase their offer,
    BA: I go 1/2 cover with sep65,
    ISRG: this has a daily ATR of 9.6.$, so I go for full cover with sep310,
    MCD: no cover
    RIMM: 1/2 cover

  47. Greg – Just back from U.S. Nationals in West Palm Beach.  Whooee! Us old guys are rockin in slalom!  It is a great reminder to stay active if you want to stay young…

  48. I’m sitting here trying to figure out where all the good news is coming from that is making everyone want to jump into stocks.  Here’s a few headlines from the news this morning: Worst inflation in 17 years, first time jobless claims 450k, contracting GDP in Germany and France, painful July for foreclosures, Japan is in a recession.  I’m not sure who’s going to be buying from all these companies if the US consumer is dead and the world economy is in recession.  The only thing I can think is we’re experiencing short covering ahead of option expiration tomorrow.  If that’s the case, we could see a scary week next week, especially if the negative news begins to accelerate.

  49. Jefree1, It seems to be true that when the bad news is out people look forward and I guess the thinking is well that was bad, can it get worse? probably not, so lets buybuybuybuy then, as it will only get better from here…

  50. When do 2011 leaps start coming out?

  51. $25KP:
    Those Long UYGs are terrible movers, that’s got good and bad aspects for a butterfly.  Still no fill and I’m not too enthusiastic about it now as we could get some really good financial movement in the next few weeks so let’s cancel that fly. 
    TASR – the stock looks good but it’s a long way to $10 next month.  May as well spend .10 to roll down $2.50 to the $7.50s - it could happen.
    AMZN – Already in Sept.  Let’s roll the Oct $72.50s at $17.40 out to the Jan $90s at $11.25 to pick up $6 and some time (and to cut our downside delta).  We can always buy more and roll the caller higher if it heads up.
    GOOG – Still close enough not to want to act.  I’m actually tempted to buy $500 puts myself for $2.  Oh damn, now I takled myself into it…  Let’s take out both $500 putters at $2
    VLO – still crazy.
    WFR – Oops on that, they going crazy!  We’re rolling to Sept $50s and if we can get that roll even we should take it, otherwise I’d rather have the insurance for now.

    GOOG – Buying 20 $500 puts in DTP  XXX

  52. what reports are scheduled to come out between now and tomorrow morning that could have an effect on moving the markets?

  53. While I think this rally is great, I also think it’s a bit much off all that terrible data so be careful!

  54. oil dropped to 115.1

  55. Windywheel – Consumer Confidence tomorrow morning is the big news event.  I’m not sure if anything can move the market if we are rallying off all the bad news this week.  I think we’ll get our reaction to this week’s negative news on Monday/Tuesday of next week.

  56. AAPL – Ok, last negative post.  I just think it’s important we keep things in perspective.  I know several of us feel this stock should be much higher given the strong sales of the iPhone 3G.  Of course, Steve Job’s health is weighing on investors minds, which may be preventing a run higher.  Another item of concern for me are reported problems with the 3G on the new iPhone.  I know I’ve experienced similar issues with my phone and even took it into Apple and was told they are aware of the problem and trying to fix it.

  57. Talking of idiots Reich is a clueless socialist.

  58. WFR – Rolling the callers to Sept 50′s I assume?

  59. Jefree 1 – Phil has often said that the U.S. market is the "Least Sucky" place to put money.  One of my car friends is in Monterey, CA for the Pebble Beach Concours d’Elegance this week and is staying with the chief judge.  He reports that the europeans are buying cars like crazy because of the strength of the Euro.  His "sense" is that the europeans do not think that the euro will remain at these levels because their economy is slowing.  Perhaps we are seeing some inflow of foreign capital to our stock market.

  60. AAPL- lab friend just got his daughter a macbook. they went to the AAPL store in richmond VA last monday at 6pm. he said it was "a freaking zoo."

    he and his daughter knew exactly what they were getting, so he pulled aside the first salesperson he saw racing around and said to run the bill and put it in a bag.

    while waiting for the guy to return, he saw another shopper looking bewildered and confused by the bustle. this guy asked my friend’s salesperson when he could come by at slower times and suggested tuesday at lunch time.

    the salesperson said "we’re always packed- lunchtime is mostly iphones" 

    i think we’ll have a BOOYAH holiday that surprises everyone b/c of general economic conditions

  61. David:  I took the family up north to visit my folks last weekend (they live on a small lake in central WI near Waupaca), as our last chance for waterskiing for the summer.  After 15 years of not skiing (25 years of skiing not more the a small handful of times)  it was early and the lake was almost like glass, so perfiect conditions and I finally agreed to give it a try.  We got a nice new Connelly salolome ski with the fatter toe for easier starts and the hydrofoil rear fin for smother cuts.  Well it took me four tries to get up and I almost gave up.  Finally I got up and my son had the boat at full throttle which is about 32 mph and he had shortened the rope by 15 feet, so I was flying and holding on for dear life.  After the fourth attempt to get up I was already winded and arms tired, so I didn’t want to let go of the rope with one hand to signal slower, and the short rope was wicked fast yanking me with every cut I made and hitting the wake nearly always put me airborn completely across both sides of the wake.  I didn’t have the strength anymore to cut and hold myself low to the water like when a kid.  My muscles started spasming after the first time around the lake and I had to do one more time around to save face.  I thought I sucked, but my keds seemed to be very impressed and pleased that i gave it a go.  Meanwhile, four days later I still have some sore muscles and wonder how I could be so out of shape since i have been working out for the past two years in the gym and have improved my muscle strength significantly, but it is my wind that really affects me, I get out of breath so fast and cannot recover.  I believe it is an issue with my lungs not getting enough oxygen to my blood vessels and then to the muscles.  I have seen my GP Doc and he just says i am out of shape and have mild asthma, I think it is something hereditary and more serious, but I am a hypocondriac anyway.

    I am kind of proud of myself for doing it, even if not up to my old levels.  Congrats on your competitive success, you are opbviously in much better shape the I am.

  62. jefree

  63. reb    I’d be much more sympathetic to the other perspective if CEO pay was determined by the market.  But since the owners of the companies are not allowed to nominate directors, the whole things has become back-scratching fest in the boardrooms where directors enrich each other.   It’s our own version of crony capitalism that we’ve always criticized in the Asian dictatorships.   As a political moderate I find whole system more than annoying, but as an investor I think it is an outrage.

  64. oil 114.5

  65. GOOG/Texas – from above, you can see that I am now (11:28) bearish but I’m just looking for a retest of $498.  Otherwise, I took the trade down for a reason.

    DNA/RMM – Remember the Cramer rule:  If a stock gets to $80 it is going to $100 and a stock that gets to $100 is going to $120 (he actually said this last year).   MCD I am not as bullish.  I think low $60s is where they belong.   RIMM is a crap shoot at the best of times but people seem to like those Curves.

    Doom and Gloom/Jefree – It’s all old news and the rest of the world sucks worse than we do so money is coming over here from Europe (and what little Asian investors have left after a 50% drop in China).  The catastrophe we started is just starting to hit the rest of the world and that makes us look good(er) at the moment but if you ever start a wave in the bathtub you know that you will rock all the boats in an outlying circle but then it comes back and hits you again…

    2011 leaps should be out soon, that’s usually when I starft rolling to 2010.

    Reports tomorrow:  Big day – Industrial Production and Cap Utiliization right before the bell and the Empire State (Disaster) Index at 8:30 and Net Foreign Purchases, which should be good, at 9.  Then at 10 we get the Michigan August Consumer Sentiment poll and houses are NOT being bought for $1,000 in Michigan so I can’t imagine they are in a very good mood.  So it is possible that we get hit and hit and hit again tomorrow morning and really fall apart.  Hopefully not…

    Rob Reich has a good blog at  Yeah, he’s one of those clueless Harvard economics professors who’s now teaching public policy at Berkeley and he was a Rhodes Scholar at Oxford, where he met Clinton and his cabinet was the only one to reduce the net national debt since Kennedy – certainly the kind of guy you should just write off with a pigeon-holed insult Rebel…

    WFR/JB – yes, Sept $50s when it looks goood.

  66. It would be really AMAZING if they open 2011 options on USO at the same time. But, I don’t think they have the balls for that :-)

  67. Phil:

    DNA: I will not rely on CRAMER, I sold 2/3 of my DNA for a great gain.

    RIMM: bought dec130 yesterday, up 14 % now.
    UYG: bought mar18 , now 11% gain

  68. Phil – Hi.  Back again here with the SSO butterflly
    * 100 AUG 08 60 CALL -10 
    * 100 AUG 08 61 CALL -7 
    * 100 DEC 08 59 CALL +7 
    * 100 DEC 08 62 CALL +10
    I guess I could roll but have found this one difficult to maneuver and have made a few adjustments that haven’t been profitable – probably because I’ve been a little impatient.
    Am considering rolling the callers, but am also considering exiting the trade alltogether.  Thoughts? Thx.

  69. OIL dropping, now at 114.4

  70. volume picked up all of a sudden, WTF

  71. I’m going for purple today, as green is not an option for me.  I want short with QQQQ puts yesterday at the worst time and am dead in the water now, hopeless.  At this rate my account will be zero in another week or two, already just a faint shadow of even a few months ago.  I’m an idiot!

  72. Rhodes schmodes scholar huh Reb?  Who needs all that book learnin’ anyway?

  73. Greg, change QQQQ to USO and you will be in the black again :-)

  74. My wife says I need a new hobby and maybe she is right.  Blowing out three accounts in 8 years has been very stressful and probably taking a significant toll on my mental health, even if it hasn’t really hurt our financial health very much.

  75. ….back when i was book learnin’, we didnt have 8′s- u know how hard it is to count without 8′s?

  76. Butterfly Collection:
    BIDU $310 caller hitting us today but anything can happen tomorrow so we just wait. 
    AAPL still in the zone.  Tempting to push putters and callers to $180 strangles.  Will wait until 1 to decide.
    FSLR – .80 off!
    MA – Also on track.

    Added 5,000 WM at $4.15 (I really am stating to think we set the prices on these things!) and sold 50 Sept $4 puts for .55, haven’t sold calls yet, would like to get $1 for the $4s.
    AKAM will be gone
    BAC will be gone and I’ll Sell Sept 30 puts next for $2.60
    C is  a huge relief. 
    ELN with a nice move today.
    FRE – huge break if they hold it here but I wasn’t going to cry if I ended up owning them for $5.70
    WFR – that was sweet as we sold those puts for $4.25!
    HOV – same as every month, callers get hosed at expiration.  Poor little buggers…

    DTP – We have just the GOOG puts at $1.77, lets DD at $1.45 for avg of $1.65 and give up at $1.30 but must get out by EOD so we’ll be thilled to be 1/2 out at $2.50. 

    Ka-Ching on that OIH put play from yesterday.  As I said, they are really hard to pay but sooo rewarding!

  77. MCD- please sell down to 62.50 for expiry….it’s not like u guys produced that openning warning…i mean, ceremony.

  78. Callers taking the mickey out of me today – I’ll get my own back tomorrow :-(

  79. OIH leading the way down!

  80. Greg – she might be right…just my 2 1/2 cents

  81. WFR – Closed out my trade to get a little more into cash. 27% gain overall on money invested. May get back in once i’m in better cash position.

  82. 113.8 is OILO, drop, drop each drop of OIL.

  83. Robert Reich

    I met him at the blackjack table on Paradise Island in the late 1990′s.  His voice is annoying on television, but he is really a smart guy and fun to talk with.  I was surprised because he is only like 5 feet tall.  His wife is a knockout blonde, who is like 6 feet tall.  They looked really funny together, but you’ve got to realize he’s brilliant since it’s not his good looks that attracted her.

  84. We’re basically right back where we were when the monthly budget deficit of ~$100 B was announced two days ago (on the DOW).  I don’t know why I find that interesting.

  85. SSO/Troy – I really hate the two plays in the same direction at different strikes.  Why not just go to 20 Dec $62s at $6.50 and sell 15 Sept $62s at $3.50.  You are putting both callers into almost all premium at no out of pocket cost.  Since the current value of your spread if you cash out is $8,861 and your new calls would be $13,000 and new callers $5,325, it’s about even but you get the full upside of 5 Dec $62s and the first $3 of upside from the other 15. 

    Gold falling apart too, now I am glad I got out yesterday!

    Greg – didn’t you do that last month?  Seriously though, how about trying one of the hedged strategies rather than shotgunning?

    Book learnin’ – With us it was vowels.   Couldn’t buy a vowel in my neighborhood…

    Commodity crash may be too hard, taking some other stuff with it…

  86. fred
    if he’s so smart then i hope he was attracted to her for her brain too
    i know, it’s a weird world i would create…

  87. Damn they screwed up our nice FSLRfly with everyone panicking out of energy.  This is what I call the Bugs Bunny move, where everyone stampedes in and out of a sector every time someone throws a switch…

    Reich – I don’t think he’s married.  He used to date Hillary…

  88. windy

    What are you crazy?  The benefit of being brainy and not good looking is you can select a woman for her looks, not her brains.  Same thing goes for if you have lots of money.  If you are brainy, good looking and have money then you don’t even need to be married….just kidding of course.

    So you’re a creationist….does that mean you don’t believe in the big bang theory….there you go material to work with…

  89. Reich,

    Well he introduced me to his wife….I guess it’s possible she was "for hire" given he was on Paradise Island.  See how naive I can be, I believed it was his wife.

  90. crude- wow, that thing bounces like lead

  91. DIA starting to set up a bullish engulfing on TA (although I am no TA expert).  Tomorrow will be confirmation.  The DIA seems to be smack b’w the 5 & 20d MA.  It has been bouncing off of the 20 MA for the few weeks or so.  When it violates the 5% rule (up or down), it moves right back in line with the 20d MA 2 days later.

  92. fred
    well 2 out 3 aint bad i suppose…

  93. jomama – Phil – Gold, I kept the AUY in my retirement account but took the 2010 10′s off the table with a $230.00 loss.  Do not think that oil will even make the bounce back to 130 that you spoke of this am.  You would think that there would be a shift to gold with the inflation and shooting war but sentiment is against it with the dollar and oil move.  I remain underinvested in gold so if you see an opportunity in the future please call the ball…

  94. neat info from a friend


    (1) Put Options on the CBOE’s VIX Index rose more than sevenfold on Tuesday to 221,384 contracts. This was more than double the previous record of 110,508 contracts last August 16, the day of the summer low in the S&P 500 and prior to its rally into mid-October 2007.  Puts increase in value as the VIX declines and this benchmark volatility measure tends to retreat as share prices move higher. Put buyers has been on the mark in the VIX over the past year and it would appear they are setting up for a big drop in the VIX and a strong rally in stocks.
    (2) The NYSE reported that in the second half of July short interest in the ETF that tracks banks and brokerages rose 13%.….13% in 15 days. As stated in various reports, my view has been that there is a massive short position in financial stocks. It would appear that more shorting is being poured on through the ETFs. This is the most crowded trade I have ever seen on the short side.
    (3) Open interest in put options on the Financial Select Sector SPDR Fund (XLF) rose to 4.61 million contracts on Tuesday just below the 4.7 million contracts record of July 18. The low in the XLF was on July 15 prior to its 31% rally in five days to July 22.

  95. Phil,
    GOOG won’t die. what’s up with that?

  96. LCC (US Airways) has been halted for the last hour and a half on pending news.  I wonder if the news will affect all airlines?

  97. Good call Phil on SSO – thx

  98. Fred – Blonde, 6 ft, she is an escort. Which is fine, don’t blame him.

    Greg – Try stocks. The volatility is a lot lower, and liquidity is great.

  99. Just back from a trip thru Texas. In AAPL stores in Austin, Dallas, and Houston, all had signs out front: Sorry, no 3G’s available today. Stores were full of people, maybe 50-80 in each store.

  100. UYGfly, Phil, I got those yesterday around 2.65 (.15 higher than your proposed price). I will hold it a few days with the target of 15% profit to get out.

  101. Yogi- 
    Next time yer in Texas…. Holler.

  102. Hey texas,
    I love Austin, but oh my God how can you live there in July/August? 103 with 85% humidity? I thought I was gonna melt, and I grew up in Arkansas. Then, when you go into any store or place of business, it’s about 35 degrees with the ac, so you are either sweating or shivering, no in-between. :-)

  103. Hi Phil,
    Interesting take on financials….

    Financial Stocks Have Bottomed, Meredith Whitney Wrong
    Posted Aug 14, 2008 11:49am EDT by Henry Blodget in Investing, Recession, Banking

    The most famous stock analyst in America, Oppenheimer’s Meredith Whitney, remains violently bearish about financial stocks. Our guest, Tom Brown of Second Curve Capital and, thinks she’s already missed the boat. Bank stocks bottomed on July 15, Brown says, the same day that Whitney’s popularity peaked.
    Stocks bottom before company fundamentals bottom, Brown says, and we’re already seeing light at the end of the tunnel. Based on the lessons of the 1990-’91 credit crackup, investors who wait for metrics to improve will miss half the rally.

  104. US Foreclosure filings surge 55% to 272,000 homes in July.  RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale.  That takes the daily average to 9,066 per day.

  105. WMT crankin’ – that’s some nice, quick money!

    GOOG – I’m still in with 40 puts at $1.55 avg.  Still think I’m right so now it has to break $507 to get me out.  XXX

    Reich – Oh I don’t want to start rumors, I’ve just seen him around and didn’t see a wife, maybe she’s just busy usually.

    Gold and oil right back where they started from.  Probably some fun money to be made off USO calls here but I’m busy watching our expirys…

    Oil bounce/David – I won’t be surprised but it’s not a bet I’m making.  The point is mainly that a run to $130 is going to be a great place for us to start shorting again. 

    RICK taking a beating.

  106. GOOG/Emo – They”re not going to tank on a big up market.  I’m starting to add Sept covers into this rally as I am concerned that tomorrows big data day (very unusual for a Friday) will give THEM and excuse to beat the crap out of the markets into expiration. 

    BIDUfly – Taking out $310 putter at .50 XXX, not worth the risk.
    FSLRfly drifting back to target.  VLOfly too!

  107. BIDUfly – Rolling Dec $300 call to Jan 330 call ($7 credit) that’s downside protection…

    Oh, that means I think Bidu looks toppy too…

  108. t brown just sees everything as bullish…that’s ok w/ me, but it’s starting to bother me.

    a brief comment:

    Prudent Bear? Prudent Sale! 
    Regardless of what he says, David Tice seems to be getting out while the getting is good. Shades of the Sandlers’ exit.

  109. LCC - US Airways Group will sell 19 million new shares of its stock to Merrill Lynch & Co. and plans to use the proceeds for general corporate uses.

    The company said Thursday it asked the New York Stock Exchange to halt trading of its stock while it distributes the shares and will announce the price once that is done.

  110. UGFly/Wii – I like the play a lot, just lost interest and found stocks to buy in $25KP (BA and WMT) so it sort of got bumped today.

    Thanks BBaller – that’s a keeper!

    Foreclosures/David – A million snide comments spring to mind but that’s where we all got off track yesterday as the conversation swerved from foreclosures to crusades so I will not say anything about it.   8-)

    LCC – well $200M is chicken feed to MER but it is 1/4 of the market cap of the company.  They have a 91M share float so they are picking up almost exactly 20% of the company with a mean value of of maybe $7.50 this year so that’s $7.50 x 91M = $682.5 + Mer’s cash = $150M at least = $832M, pretty close to the current value so I wouldn’t be surprised to see MER picking up a nice discount but they don’t want to piss anyone off so maybe $8.50 would be my guess.

  111. Phil – Purple n Green 4 me!  It’s just news.

  112. AAPLfly – Taking out $175 putter at .57 as I think if AAPL is going down it’s going down by tomorrow and, since I’m generally bullish, we may as well get out of the Sept puts on the dip too.  XXX

  113. markets- i think we’ve been seeing some very nice consolidation trading since JUL 15…albeit w/ high volatility intraday, but still, this is what we’d want to c if we expect a fall rally.

  114. Oops, forgot we had 2 AAPLflys – We are NOT exiting the Oct $170 puts.  Those we will be selling Sept against but we are taking out that $175 putter too.  XXX

  115. RICK – Perhaps it’s "Naked" shorts…

  116. phil
    regarding the above statement
    getting out of AAPL Sept puts because you’re generally bullish, but out of aug. putters because you’re expecting a drop in AAPL tomorrow.  is this a correct interpretation?  because it would seem contradictory.
    i’m holding onto aug 165 callers as you know, gauging for the right time to roll.

  117. RICK must b rank w/ naked shorts…i heard that’s all they do over there.

  118. apparently, the market is "TBA"…i dont think that strikes much confidence, but at least it’s something and i doubt it can make things worse.

    Jumbo Rates May Fall as Larger Mortgages Enter Market (Update1)

  119. phil,
    how far do you expect aapl to drop today/tomorrow?? is covering with 175′s still a play??

  120. RICK – Perhaps I should have said that "RICK is getting Stripped of it’s value by the Naked Shorts".

  121. big day gap btwn aapl and dow & nasdaq. gap usually closes by end of day. either aapl goes up or dow & nas goes down.

  122. I need to figure out a good time to roll my C 17.5 callers that I stupidly sold when C was at 17.60 and looked if it was going lower or to be pinned at 17.50.   That only cost me $1500 so far.  But should be able to roll them out to the Sep 17.5 for a dollar credit.

  123. We need more good news about AAPL 3G service sucking.  That should drop them for a few bucks.  I cannot understand the hype on their 3G phone because I bought a 3.5G Nokia in Manila and they actually had 3.5G reception available.

  124. sing steve
    ran into steve jobs at the corner and he was sneezing like mad

  125. I am going to hold GS naked.  Managed to get out of the bind when it ran up on me last expiration period and all I did was roll out a head of schedule and wait for a pullback and it did.  How things work out if one is just waits.  Plus it looks a bit over sold and earnings coming up in Sept so I dont want to be on the wrong side of a run up.  Anyone have any thoughts on GS?

  126. looks like aapl moving up to close dow / nasdaq day gap when dow / nasdaq tick upwards but resistance @ 179

  127. RICK/David – LOL

    AAPL/Windy – It’s what I keep telling you about thinking several moves ahead.  Although my $175 putter is out of the money and no threat, he does interfere with me taking my Sept $170 puts off the table on a good spike down.  Since I beleive that the spike down will be expiration manipulation only, I want to be free to sell my puts, buy out my caller and leave my Sept $185 calls naked or maybe roll them down to the $180s on a good dip.  If none of that works out, I already beat that putter up for 75% and he’s my second one on that position so better safe than sorry for .50.

    AAPL/Highlander – There’s little reward in selling the $175s fresh but selling the $180s for $2 is free money if you can.

    C/Steve - I would not full cover at $17.50, no way!  How about the $20s?  Or at least a part cover at $17.50.  Those callers don’t pay you anything near well enough to compenate for the fact that C was at $20 twice since last expiration.

  128. so windy do you think we should dump aapl??

  129. sing steve/C- id just focus on selling the 20s…i saying this from a long position in JAN10s, so selling 10% or 20% a month is super ok with me.

  130. The ceo of VTIV bought almost $1 million ($997k) at 17.74.  The only problem with this buy is that the ceo bought yesterday, and almost a point lower (trading at 18.6).  However, this is a substantial $ amount, and the stock’s way down, lots of room to move up.  So I think it’s pretty safe here. 


  131. GOOG apparently can’t fall fast enough to keep up with the declining premium in the $500 puts…  Down 16% at $1.30 so if I DD at $1.10, we’re down to $1.15 with 80 puts, which would be monstrous if GOOG turns down and a $4K loss (assuming we hold .60 tomorrow) if GOOG refuses to lose.  I’m going for it in the DTP only at $1.10, if I can get $1.20 at the close, I’d rather just get out.  XXX

  132. high
    according to my positions, uh, i mean analysis, AAPL by tomorrow should be valued between 165-170.

  133. Hmm. that’s $1.32, not $1.15 so the loss would be $5K if we bail at .60 tomorrow.

  134. Phil:

    is there a search function in your site ???

  135. Phil,
    On VLO, I have the DEC 30 Call and 32.5 Put, with just the 32.5 caller right now.  Would you roll the 32.5 to Sept 34′s here?

  136. RMM- upper left

  137. Yogi-
    I live in Ft Worth, but lived in Austin for 7 years, Great town.  Yer right, damn hot down there.  Wait until september 108 -110 degrees!  Hotter than two mice having sex in a wool sock.

  138. xian: txs, never noticed.

  139. Greg (if you are still there) - now would be a good time to buy the DIA Oct 119 P Phil mentioned above.  U know we will have a pullback (as volitile as this has been the past few months) and then U can sell the fronts against it, roll up and/or out, scaling into the position.  I have done this in my portfolio (small one) and it saves the oscillation, need to ‘gamble’ on positions and I am actually moving in the right direction (finally).

  140. BIDU not cooperating either.  Highlander may have a good point re, GOOG and AAPL (all horsemen) rising into the close…  Although GOOG is already up 1.12%, more than any index and BIDU is up 3.25%, more than pretty much anything else.

    Uh oh – Default rate for junk bonds 1.79% in July vs. 1.49% in June.  It’s not a terrible rate overall but big increase from last month. 

    Here comes fill on those GOOG puts at $1.10.

    GS/Steve – They control everything, never bet against them.  If their stock is down it’s because they are buying it back or granting themselves options…

    VTIV – hey, that’s one I like!  They have been beating estimates since last year and are growing nicely with a low p/e and manageable debt.   They only have a few analysts and they were murdered on a downgrade and lowered guidance by a lot but it was due to a slowdown of FDA approvals, not a business issue.  I like the Sept $17.50s at $1.68.  XXX

    VLO/Scott – Yes, I’m still pretty bullish on them.

  141. Ilene, on VTIV, one could sell the Sept. $17.50 puts for .55, another way to play it.

  142. Greg – I think that the first thing you should do is change your handle here to just Greg, drop that bagholder thing.  My theory is that "How we think of ourselves and present ourselves to the world, becomes a self fulfilling prophecy".   I could choose "David the luckiest bastard ever" and be comfortable with it.  Just a thought.  Good action with the H2O skiing by the way. Lastly,  Phil is giving you some very good advise when he tells you to work with the hedged trades, learning that lesson will give you the freedom to take chances once in a while.  All The Best…

  143. not trying to pull us out of purple mode, but this is relevant and current…i note that goolsbee is a professor at the traditionally conservative U of chicago.

    The Obama Tax Plan


  144. Nice oil pump into the close, up $1.50 in the last hour.

  145. Ilene,  where do you get the insider buying info?

  146. OIL rising again

  147. Xian broke the purple rule today, he should be banned…

  148. did not….

  149. Rising and lowering of oil reminds of a toilet about to overflow…. the nasty water is about to spill over…. then it flushes.  *Sighs of relief*

    Xian. Go purple of go home! :)

  150. u guys r like those PC freaks…everything smacks offensive.

    that link is only on economic matters…no geopolitics, no nothing other than the bottom line.

    i get the sense ur joking, but still….

  151. xian – Heck the article is in the Wall Street Journal.  Plus it is news we need to know.  And to all, thanks for keeping things so civil.  Since I played a part in stirring things up, please accept my apology.

  152. here it comes…

  153. Well, I’m sad to be right – couldn’t hold it…  Would suck to go negative now other than cleaning up on GOOG puts…

  154. TASR – Keeps creeping up, any news?

  155. Liberal author, Opinion Editorial, Liberal newspaper. Where is the news?

  156. Any Technical Analysts out there?  I think I see a possible Head & Shoulders Top forming in the Dow (10 minute bars between Aug 5th and now).  Left shoulder from the 5th to th 8th, head from the 8th to mid day yesterday, right shoulder development in progress, with the neckline at 11,450. If the neckline is violated, it would give a target of 11,000 on the Dow in the coming weeks. Thoughts? I’ve been known to see bogey men too :)

  157. Phil  I have 3/4 covers on C.  Still .16 premium left in them so will wait till tomorrow and will roll to 1/2 covers with the 20′s.  No sense in being greedy.  thanks

  158. JB- it’s not fantasy or opinion- just facts on the proposals and purposes…it’s in this country’s most widely read business publication…some say, a must read newspaper.

    i dont want to take this further (especially the liberal part- as if that meant anything), but i do think that’s a fair game, market relevant and current piece of news/info.

    also, i posted the link to mccain’s economic plan when they put out their pdf a month ago

  159. rampage9
    i would look for some other verification  before using 10 minute bars for a move out in a few weeks.  I would look at the weekly, daily, and the hour charts.  10 minute charts can screw you up for moves out that far.

  160. rampage09 – I am with you, in fact I just entered orders for some Sep QID 38′s, because I have so much tech exposure.  I need to get closer to delta neutral.  Thanks for the heads up…

  161. Thanks Steve – I agree, I like the 10 min bars for a day or 2, but I can’t help but notice the shape.

  162. aapl getting hammered at the pp

  163. David:  don’t damn apologize, let’s just keep it after hours.  You should stick up for what you believe, even if YOU are wrong!  ;-)

  164. someone threw a ton of stock at it and still sspl pops back over the pp. strong sign!!

  165. that was aapl not sspl !!

  166. Rampage – I am amazed that you can use the 10 min chart to make a weeks-long target, that’s some pretty fancy TA!  Don’t ask me, when I want to draw a chart I pull out the old Etch-A-Sketch but I stand by my overriding premise that the disease is oil and commodity prices and the cure is a pullback so we watch that $115 line on crude and we’ll be fine below it and even a spike back to $130 will be no big deal if it reverses there..

    Really guys, now we are going to criticize links we haven’t read because it has Obama’s name attached to it?  At least I read the nonsense written by the other side…  And JB, did you actually call the Wall Street Journal a liberal newspaper?  I think I’d be afraid to ask what you call the middle…  But, great use of the word "liberal"

  167. GOOG puts – in at 1.10, out at 1.50. Just 5 contracts, to pass the time. I’ve had bad luck with the ole GOOG. But carving away beats an all or nothing bet.

  168. Greg – Ditch "the Bagholder" and add "Student of Options".  Heck next year at this time you could be "Lucky Greg"…

  169. JOSB – Rolled 10 Aug 25′s to 5 Sept 25′s at $3.28

  170. PHil:  POO is only back down to May levels and we (you included) thought that the price of oil was going to kill the economy before then already.  Why does that level give you optimism now?

  171. Phil – you should see what I can do with a crystal ball!

  172. Phil Ref Portfolio “insurance”. My preference is to use SPX as a market proxy. Using Eliot wave I am of the opinion that SPX (currently ~1290) will drop to 1160 by Sep/Oct. How do you choose entry point for the puts? I understand that you recommend for stocks the entry level bracket were pricing is about ~$.5/$1, but how do you price an index, be it DIA or SPX? Thanks

  173. Funny Phil!! I have one too

  174. Bronek – from Phil in July.
    Rule number one in selecting an index put is have at least 45 days.  We could take September but, at this point I’d rather see October.  Since it’s 11 weeks away, rahter than look for rolls at .40, I’m going to look to roll up $1 for .50 so, logically, the position I choose is the first position that can NOT be rolled up for .50 or less, that would be the Oct $117 puts at $6.38 as the $116 puts are $5.85 (-.53) and the $118 puts are $6.97 (+.59).  More importantly the $119 puts are $7.60 (+$1.22), the $120 puts are $8.23 (+$1.85) and the $121 puts are $8.93 (+$2.55) so a 400 point drop will net me $2.55 profit and a 300 point drop will net me $1.85 off the Oct $117s.
    So assuming roughly a $2 gain, if I want to cover 1/2 of my projected $30,000 loss of a 300-point drop then I need 75 contracts but let’s say 100 for for $63,800.  On the downside, a 300-point gain will drop me to the level of the Oct $114 puts and they are $4.88 (down $1.50) so I will lose $11,500 on a run up.  Since I lost $30,000 on the way down I can assume I’ll make $30,000 on the way back up so getting my portfolio back to even on a 300-point run up will cost me $11,500. 
    Now I can look to offset that $11,500 loss by covering with current puts.  Question 1:  How low do I think the Dow can go?  Let’s say I’m pretty sure 11,800 will hold (500 points down).  My main goal of protection is 11,000 even and the Aug $111 puts just so happen to be $1.44, which is almost exactly what I would lose on my longs if we head up 300 points!  Also, since my Oct $117 puts have $3 in premium with 3 months left (about) this $1.44 will more than cover my premium loss so also perfect! 
    If the Dow goes up 300, I get my $30,000 back on my main positions and remain neutral with my puts.  If the Dow goes down 300, my puts gain $20,000, offsetting 2/3 of my probably losses AND it’s still not enough to put my caller in the money (and he can be rolled down to the Sept $106 puts even anyway, which is why it’s nice to have an extra month between you).

  175. Wow, Phil – amazing timing!
    Yogi – yes, that would have been really smart, but I did do the boring thing and buy the stock without thinking any further.

    David, the luckiest bastard ever, you’re in luck, here’s a couple posts from earlier to explain strategy. The software was written by a group in a former partnership, but we still use it, and it basically monitors the SEC website which immediately posts filings from insiders.  So we get the information pretty quickly when there’s insider buying in a stock. The software also gives a score, based on its evaluation of various factors relating to whether it would make for a good trade.  I’m going to try to get the proper links this time:,

  176. It’s amazing the things you find on Youtube when you search for republican and democrat.

  177. Phil:

    AAPL flat all day, the action will be tomorrow.

  178. VTIV redux-
    Ilene, I sold a whopping 10 of them, and the OI is now 11, lol.

  179. MCD- just come down already….ur not so cool and the olympics s#ck…damn hype monsters

  180. Xian
    Have you ever been to Xian China  ?

  181. qcmike- LOL…one day, if i think its cool…but i do work w/ many chinese people and when they first saw my name on equipment sign up sheets and then saw me using the machines, they’d look at me a little funny.

    so, id introduce myself and we’d laugh it off…but deep down i know they really wanted to join their armies of light drummers, piston box people and the regular armies too.

  182. Phil,
    Anything can be done about GOOG 500 puts?

  183. Xian

    I am going in Sept.  just wondered if you had any ideas on Hotels

  184. Phil,
    "So it is possible that we get hit and hit and hit again tomorrow morning and really fall apart.  Hopefully not…"

    Are you picking up puts or going to 3/4-full covers before EOD?

  185. Ilene – Good material, thanks!

  186. qcmike,
    The Sheraton is typically a decent hotel in China. I haven’t stayed at the one in Xian, though I have stayed in Tianjin and Shanghai (both were nice). As a general statement, the hotels I’ve stayed in while in China were ALL nice and were almost all new (I’ve stayed in Beijing, Shanghai, Tianjin, Jiangsu, and one other place I can’t remember the name of).

  187. PharmB. Thanks a lot. After comprehending this concept I will open position in Nov/Dec time frame. My confidence in accuracy of TA timing is not that great, but usually Sep/Oct are not the best months for the market, and btw Nov 7 is the last week of the 20 weeks negative market cycle. My question was related towards correlation between an index strike and value in dollars. A stock’s strike of $50 is worth $50, so roll of $.5 per $1 is easy for me to understand. I am not sure that an index 118 is equivalent to the $118, so paying $.5/point may not right. Thanks. Let me read you post now.

  188. Those GOOG puts died.    Glad to get out for $1  XXX  Was very bad not to take the $1.70 and run before…

    Oil level/Greg – Because now I think it’s on the way down, not up…

    Thanks Pharm!

    JB, that guys delivery is hurting!

    EOD/JB – I covered most everything when we were up 150 so I’m pretty mellow at the moment.

  189. Phil,
    I put that second link up just for you! I’m voting Republican because :) You’ll like it (i’m sure!!)

  190. JB – as long as you do realize it’s a joke and not an affirmation of your politics!  8-)

    You know it was a silly day when GM goes up 10%. 

    Very good day on the whole, held all our levels and had a nice commodity sell-off, very nice…

  191. JB – LOL at the video :-)

  192. technically, ill b voting "uncle" b/c i dont think we can take anymore of this cr@p…maybe we can try the new cr@p and c if that doesnt double the debt and cripple our international standing.

    iM ouT

  193. qcmike
    There was someone on this site that spent a few weeks over in China recently. Cannot remember if it was David?
    Plus who did the hydrogen assited car?  Is it working?

  194. I think David was doing the HHO car.

  195. Phil, many of my callers that were profitable earlier in the week have now gone sour and I owe them money.  I recall getting hit by the same market uptick last month at expiration week.  You did an expiration week analysis a few months back, it might be time for another one because stocks don’t seem to be pinning the way they used to, anyone else out there with similar observations?

  196. Steve – I was in Costa Rica and have a HOH project going on a Porsche 928 GT.  The first generation HOH device worked in a marginal sense and the only gain I can attribute to it is a 00.8 mpg gain on one trip.  (Verifiable results are difficult to quantify)  The second generation device is in the design/research stage and is months from completion.  

    Meanwhile, the Pilot Jatropha project in Costa Rica is in full swing with almost 10 ha planted in the last month.  We have 20 kg of seeds and after the hay is cut this fall we will put another 15 ha under the plow.  The plants are amazingly fast growing and we will have the first pressing in about eight months.

  197. David
    Somewhere I heard that another good plant for ethanol production is hemp.  Have you heard anything about that? They used to grow it for rope.

  198. Steve – Hemp is a great source for biomass.  The process to turn it into ethanol would have to be cellulosic.  Not sure who is working on a specific process for that feedstock.  Gotta run!  I’ll try to catch up later…

  199. David:  do you live near Golden Beach Fl and have the ability to check into a pre-forclosure property without too great an inconvenience from the internet?  Also, I don’t know the specific address but have narrowed it down to six homes on Golden Beach Dr on a goole map and know the date built, # beds/baths, sq footage, remaining mortgage amount.  I am hoping that would be enough to ID the specific house.  This is why I was inquiring about Khans email address yesterday, to ask him the same thing as I believe he lives very nearby.  If you could help me out without going too much out of your way, i woulds appreciate it as this deal seem too good to be true (so it probably is).  Thanks

  200. David: Nevermind, I found a way to contact a local realtor through Realty Trac.  Thanks anyway.

  201. David, the surgeons who i have spoken with have heard of entereg, but are kind of taking a wait and see attitude.  They don’t seem very excited about it.  It really doesn’t cost them anything if the patient stays another day or two.

    One surgeon made a really good point.  He said, the patients with the really bad ilius cases are the patients with chronic pain who require a lot of narcotics.  As you know, it’s contraindicated in these patients because of the risk of myocardial ischemia.

  202. Singapore Steve
    Are you in the Philippines, I have been there 4 times

  203. Xian – Goolsbee is Obama’s very liberal advisor also the same guy who got him in hot water in Canada over Nafta telling Canadians not to believe Obama that he wants to ditch Nafta, he’s just saying that to cater to the far left.
    WSJ – Phil, JB is correct.  Over the years WSJ has gotten very liberal in their news coverage; editorial page was pretty conservative, now kind of mixed I think.  Maybe conservative when compared to Pravda.
    Everyone, read Ralph Peters today on Russia, Georgia, Putin (sorry no link, Google it).
    Yes, clueless socialist fits Reich pretty well (thought he was at Brandeis now).  Not as clueless as say, Krugman, but up there. I love it when Phil throws around someones degrees and pedigree when he likes him politically; but when he doesn’t like him, well it just doesn’t matter.  :wink:
    Joe Kernan nailed Gov Kaine yesterday over "windfall profits tax".  You go Joe !
    This is ugly – read:  What Banks And The Government Are Not Telling Us About 2009—The Next Shoes You Hear Drop May Be Very Loud Ones
    Hope you had a good day guys; busy one for me; missed y’all.

  204. David, on Yamana.  It really wasn’t moving much with gold in the high 900′s…so i think that sentiment is very bearish on this company.  But, i think you can make some good money selling calls against it.  10$ is a pretty good entry point for covered calls.  If i could sell puts in my retirement account, i would do that first.

  205. that’s scary stuff

  206. FOX escalation of misrepresentations of Obama

  207. Boone Pickens Down $2 Billion In July?
    According to Reuters and The New York Post, T. Boone Pickens’ BP Capital hedge fund was down 35% in July. The fund manages $7 billion.

  208. The world "can forget about" Georgia’s territorial integrity.
    Very nice.
    Where oh where are the peaceniks ?  Where are the protestors ?  When confronted w/ evil and naked aggression and true occupation, nowhere to be found. 

  209. Thanks for that article Cap…

  210. Sore loser of the week:  Howard Wolfson claiming on TV if only John Edwards had been exposed earlier, Hilary would have won Iowa (a big stretch) and thus the Dem nomination.
    Hilary of course is hanging around quietly, ever hopeful that something happens to Obama or he implodes or something.  And Bubba seethes.

  211. McFly … very funny.

  212. JB
    Thanks for the information, I have been in China many times, but never in the west.

  213. jomama – Thanks for checking on Entereg, it is so important to  get information out of my sphere of influence when assessing the market potential of a drug like this.  I will stay with my current position and wait for the results of the phase II pain management drug studies that they are working on with PFE before adding to or closing out my position.  I will post you on this when I learn more.  As far as the patients staying in the hospital longer goes: Physicians are incentivized here, many of them are hospitalists who get scored on the length of stay.  Different market, different perspective.

    AUY – I think that we will have a better buying opportunity in the near future,  This is a strong company with low cost mines that are entering the prime of their production. They also indicate that they will be selling some on their higher cost mines to retire some of that debt.  I am underinvested in gold and will add to my position as opportunity presents.  I think that selling puts is a great idea for my long account.  the 2010 10′s are over $3.25 and purchasing the stock under 10 creates what is ostensibly a lifetime option.  

    Thanks again and if I can return the favor just say the word.

  214. Greg – In this case, if it sounds too good to be true, check it out.  Real estate here in Florida is incredibly soft.  I think that you can get fantastic, no, shocking deals here.  The bank repos are the deals.  Golden Beach is north eastern Dade County (Maimi) about 75 miles south of me.  If you get serious I’ll do a walk through and send you a video assessment.

  215. MDR got thumped today on a downgrade. Glad I sold out yesterday! I had a buy order for some calls when it was at 35, but did not get filled.
    Sold some WMT sep 55 puts at 1.2 earlier in the morning against my 2010 55 puts, which need just another month of selling puts at $1+ to bring the cost basis to zero. WMT is a perfect candidate to sell monthly premiums.

  216. Cap – Perhaps you should consider joining a political blog.  Your ultra right wing views are pretty far out of step with the level of thought here.  If you participate, please show some respect for others and tie your remarks to a stock, market, economic principle or at least write a well thought out response.  In other words, reach higher.  

    In order to be sure that you are clear on the U.S. foreclosure situation:  U.S. Foreclosure filings surged 55% to 272,000 homes in July.  RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale.  That takes the daily average to 9,066 per day.

  217. Cap – Good link on the banking situation.  See, you raised the bar already and I missed it…

  218. David, methinks it is you that needs to show some respect.  You are quite presumptuous in telling me, or anyone else what I should do, dontcha think ?.  Your ultra left wing views are pretty out of step with the level of thought in this country, the opinions here are pretty diverse.  You certainly haven’t earned any respect in my opinion.    You are a perfect example of the do as I say not as I do intolerant liberal.
    Thanks for the foreclosure data.  Of course foreclosure "filings" do not necessarily translate into actual foreclosure sales, but that’s another matter.
    Any new tent cities for us to view today ?

  219. Now I get a compliment, after I got all p-d off at you.
    You are welcome.

  220. BTW, I read one or two political / news oriented blogs, nothing rabid, and generally very informative and reliable, with no conspiracy nonsense.

  221. Cap – Hey, we are both Packer fans who grew up in Wisconsin.  I was even a "Young Republican".  

    Looking forward to a more productive dialog.  Enjoy your evening…

  222. Well, a fan of the Pack can’t be all bad …. actually I am a born and bred NYer, but a Packer fan always.
    And I was never a Young Republican.  I’m not even a Republican period.

  223. Phil doesn’t believe it of course, but it’s true.

  224. Goldman says U.S. dollar has bottomed, euro to fall
    watch out, the crooks are calling for the US dollar bottom :-(    I guess they are shorting the crap out of the dollar on this run-up.
    These bastards just last month said crude was going to $200.

  225. qcmike
    Am hre in Corvallis oregon now.  Just got back from the philippines this past week.  Will hope to go back around the new year but good trading until I do.

  226. Rampage – you’re probably gone now but re: dow H&S, don’t worry until we break the channel line connecting the lows. it could happen, but i’m still pretty bullish…and how about that story on vix puts.

    I’d be more concerned in the vicinity of the 200 day ma, and we should expect a lot of MA ping pong until we get there.

  227. Good Morning all

  228. Asia Markets: Friday, August 15, 2008
    (The following is from WSJ; please cross check with other sources to confirm.)

    Japan*                  13019.41      62.61      0.48%
    Hong Kong*       21160.58    -232.13    -1.09%
    DJ Shanghai*         262.46          0.65     0.25%
    S.Korea*                1572.19          9.47     0.61%
    India*                   14724.18    -368.94    -2.44%
    Baltic Dry Index    7420.00      323.00    4.17%

  229. Asian Markets Are Mixed, Investors Ponder Recession

    (Markets in South Korea are closed for the Liberation Day holiday.  Stock, bond and currency markets in India are closed on Friday for the Independence Day holiday. Markets will reopen Monday in both countries.  )

    Asian markets were mixed Friday as investors struggled to factor in, what extent potential recessions in Britain, Europe and Japan would have on corporate Asia’s bottom line.

    Japan’s Nikkei closed half a percent higher in holiday-thinned trade, helped higher by exporters on a softer yen, while shippers advanced following sharp gains in a key freight index.

    Hong Kong’s Hang Seng Index was down almost 1 percent after a spate of disappointing earnings announcements, followed up by broker downgrades of several stocks.

    Singapore’s Straits Times Index was half a percent weaker.

    China’s Shanghai Composite Index rebounded nearly 1 percent, buoyed by better-than-expected investment data, but trading remained very thin because of worries about an economic slowdown. Metals-related shares rose, encouraged by progress in a major steel industry restructuring.

  230. European Stocks Gain on Weak Euro, Oil

    European shares rose in early trade on Friday, led by financial and pharmaceutical stocks, while the euro at six-month lows against the dollar boosted exporters and falling oil chipped away at inflation worries.

    The FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,194.33 points, on track for a loss of less than 0.5 percent for the week.

    Banks were broadly higher, with UBS up 1.9 percent, Royal Bank of Scotland up 1.6 percent and Commerzbank up 2.3 percent.

    Defensive pharmaceutical stocks also gained, with Sanofi-Aventis up 2.3 percent after Warren Buffett’s Berkshire Hathaway investment group raised its stake.

    GlaxoSmithkline gained 0.9 percent, Roche rose 1 percent and Elan added 5.5 percent.

    Mining stocks tracked metal prices lower

    Airline stocks gained from the lower oil price, with British Airways up 3.3 percent, Lufthansa up 2.1 percent and Air France-KLM up 2.5 percent. Gainers included aerospace and defense group EADS, which rose 4.4 percent, while carmaker BMW rose 2 percent and Renault gained 1 percent.

  231. Oil Falls Toward $113 on Bearish Global Demand

    Oil dropped by nearly $2 toward $113 a barrel on Friday to trade near the lowest since early May, pressured by faltering global demand and rising supply. Supply has been rising as demand ebbs. Output from the Organization of the Petroleum Exporting Countries rose 145,000 barrels per day in July to 32.8 million bpd, the International Energy Agency said this week.

    Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 partly on concern about weakening demand and fell as low as $112.31, the lowest since May 2, on Tuesday.

    "The demand side is a major concern. Supplies from OPEC countries are rising but there is a shortage of buyers. The industrial use in China has been cut back," said Gerard Burg from National Australia Bank.

    U.S. light, sweet crude [ 112.95    -2.06  (-1.79%)] for September delivery fell. The contract will expire on Aug. 20.

    London Brent crude new nearby contract [ 112.3    -1.38  (-1.21%)] also tumbled.

    Dollar Rally Continues, Hits 6-Month High vs Euro

    The dollar powered to a six month high against the euro on Friday, boosted by jitters on shrinking euro area economic growth with extra fuel from position liquidation in commodities and energy markets.

    The dollar index, which measures the value of the greenback against a basket of six currencies, struck a near seven-month high of 77.128.

    The dollar’s push higher knocked an already floundering sterling UK Pound Sterling Spot [ 1.8572    -0.0124  (-0.66%)   ] to a 22-month low approaching $1.85, while the U.S. currency also struck a seven-month high against a basket of six major currencies.

    The euro [  1.4719    -0.0103  (-0.69%)   ] was down half a percent on the day at $1.4720, its lowest since February.

    The U.S. currency also gained against the yen [ 110.5    0.80  (+0.73%)   ] near a seven-month high hit earlier in the week

    Commodity markets hit the slopes as the dollar’s rally found fresh legs, led by a near 3 percent slide in gold and oil falling almost 2 percent.

    Dollar buying momentum has also been bolstered this week by the Bank of England warning this week of economic pain ahead and Japan’s economy contracting in the second quarter at the sharpest rate in seven years.

    Precious metals sell off across the board

    Gold fell nearly 5 percent to almost a nine-month low in Europe on Friday, as a strengthening dollar and fears over slower growth prompted investors to sell off commodities. Losses across precious metals were led by silver, which slipped 12 percent or $1.76 an ounce in Asian trade, pulling down gold, platinum and palladium in its wake.

    Gold hit an intraday low of $773.90, its weakest since Nov. 20, before recovering to trade at $785.90/786.90 at 0925 GMT, down from $811.25/812.65 late in New York on Thursday.

    Silver fell to $13.09/13.14 an ounce from $14.15/14.21 late in New York on Thursday.
    Platinum dropped to $1,387.50/1,407.50 an ounce from $1,481/1,501 an ounce.
    Palladium fell to $287.50/295.50 an ounce from $306.50/314.50 an ounce.

    Silver suffered the most in the sell-off of precious metals, with prices plummeting to a low of $12.39 an ounce, their weakest since last September, in Asian trade.

    Platinum and palladium slipped in silver’s wake, shedding 7 percent and 6 percent respectively. Both have suffered significant losses in recent weeks on fears faltering global growth could affect car demand.