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Testy Tuesday Morning

Fed minutes come out at 2pm.

Keep that in mind today as it's very unlikely they lowered the rates to zero following the 12/16 meeting where they chatted about how nicely the economic outlook is improving.  The last Fed minutes were released on 10/29 and we spiked down but recovered in our election rally that took us to 9,600 on Nov 4th, after which we plunged to 7,500.  Now we are in our inauguration rally and we are expecting to see roughly the same high – we just hope they aren't followed by the same lows after the excitement wears out!

David Fry's monthly chart of the DIA gives us a good view of where we are in the big picture.  Note the extremely low RSI and the bottomish-looking MACD but we haven't turned up the moving averages yet and that makes this a very dangerous time when we could still get another bottom test before we make a real move.  Looking at the volume in 2002, when we turned the last bear market, you can see that we are far from putting in a high-volume reversal that can give us more confidence.  First things first this morning though – we got half the dip we expected in yesterday's choppy session and got the famous "stick save" into the close but, overall, it was not the kind of day you want to see following a $750Bn bailout announcement that includes tax cuts. 

During member chat, I noted that 8,900 was holding up suspiciously well and, sure enough, right at 3:30 somebody punched the buy button and the market jumped 60 points into the close.  Now we have to watch the same levels as yesterday for a break out but we may have to flip short if we run up to our opening levels (see yesterday's post) but can't break them ahead of the Fed as that could be the catalyst that sends us lower.  Also, we may see oil pull back sharply off $50 if they are rejected there, especially with yet another build in inventories expected in tomorrow's report.

This morning I posted an update on our very successful (up over 30% from our hedged entries) list of "Stocks to Buy at the Bottom" from Dec 1st and we'll be adding many more entries as earnings season begins to take shape and we get an idea of where to put our sidelined cash.  One addition to the list is going to be the XHB (homebuilders), which may actually be putting in a real bottom and Obama's tax plan will allow companies to use their tax losses to offset taxable income for the past 5 years.  This will also be an excuse to "rebate" tens of billions to the financials and they should get a pop too but the homebuilders, who took Billions in write-offs last year, will be proportionately looking at huge paydays.  We've already been bottom fishing HOV as a long-term naked hold but now I like XHB at $12.80, selling the Feb $12 puts and calls for $2.35 which puts you in for net $10.45 if called away at $12 on Feb 20th (14% profit) or having another round of the stock put to you, giving you an average entry of $11.23 (a 13% discount).  This is not as sexy as our more volatile selections but its a solid bet on a long-term recovery in the sector.

Asia was fairly flat in morning trading, not knowing what to make of yesterday's US trading.  Japanese exporters kept the Nikkei positive while the Hang Seng dropped a bit but coal and banks led the Shanghai up 3.25%.  Europe is up quite nicely ahead of the US open, which also looks pretty good in pre-markets.  European indexes are up about 2%, as Germany agrees on a stimulus package and they got good news on EU inflation, which was low enough to allow for further rate cuts.  So keep in mind that this is just another round of massive global stimulus keeping the markets afloat. 

[Slump Continues]Chrysler reported sales were off 53% in December but no one seemed to care and F (another naked gamble we took at $2) had a very nice day yesterday as their sales "only" fell 32% but, as you can see from the chart, we did seem to find some sort of bottom in November.  We're very please with TM, another one we hold long-term, who made a significant recovery with their "December to Remember" sale and should have no trouble holding $65 long-term, making them a great trading vehicle for us to sell options against.

We are, of course, not happy with an energy-led rally and we're still looking for some real signs of rotation – we'll see how well our XHBs do this week as well as the copper plays of RTP and FCX we jumped on yesterday as our first trade in member chat which we should probably cover into whatever rally we have today. 

We get Factory Orders (expected down 2%) along with ISM Services, which are going to be awful (37 expected) so that will be our first test of the day but then we have to wait on the Fed and see how willing the markets are to shake off what is very likely to be a very disturbing read.  Natural gas stocks are also flying as the Russia situation continues and MacWorld goes off today and we'll see if AAPL can justify it's run back over $95.  We remain directionally agnostic and stick to watching our levels as we still haven't had the volume to confirm any trend but a good day today could pave the way for volume buyers to come back in.

 


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  1. Good mornin’
    Phil/Question from yesterday.  I’m up over 40% on many of my putters.  Are you still using the 50% rule when taking them out?
    Thanks


  2. Sorry Texas, missed that one!  Within 2 weeks of expiration we up our buyback to 70% and 85% next week.  That is, of course, assuming you feel they will expire out of the money.  Premium evaporates very fast in the last 7 days and we have no reason to buy it back if we don’t have to.


  3. Phil, you mentioned copper yesterday and today, what about PCU?  They have a bit too much debt, but they pay a nice dividend and have had a nice run…


  4. Thanks Phil… what about further out.  Example: sold the AAPL Apr 90 puts for $14.00.  They are going for 8.35 now (40%).  I can sell the news without losing a single share.  Meanwhile, my Apr 90 callers that I sold for 10.70 will gain some ground after Keynote.
    Thoughts?  Thanks


  5. Phil: Good Morning
     
    can you look at the DIA put situation:
    have dia puts march 93 and march 91, no putters at the moment,
    what is now best protective put position ???


  6. AAV is a Canadian energy trust that pays an 18% dividend.  There is a danger of the tax laws changing or the dividends being cut but they went no lower than $3.85 in the panic and I do like owning them at $5.10 and selling the Aug $5 puts and calls for $2.05 as that’s in for $3.05/4.06 and a monthly dividend of .07 for about another .50 between now and August – this is a very nice ROI on $4!


  7. Pharmboy, Phil:
    What’s your opinion on AMGN and GILD, I’ve read several articles where they either could be bought by PFE.
    Thanks


  8. This all seems so unreal, but gonna have to give in soon.


  9. Phil: with the health news about AAPL/Jobs, what is your view on AAPL now ?
    my longs are april 90, the 1/2 cover shorts jan 90.


  10. Phil: SKF might be heading low again for a quick PUT sell ??


  11. I’m really suprised Obama is proposing to allow back filing for companies to offset previous taxes paid with lossess incurred since then.  He’s really cozying up to everyone.  Everyone gets something.  Particularly those who put us into this friggin mess.  The builders and their financiers.  At what point are companies and people held accountable for their actions?  This is becoming a joke.  A bad one.  There is very little for us Americans to hang our hats on with pride these days.  Our principals have gone out the window.  It’s a travesty.
     
    And all this talk about this being the worst financial crises since the Depression.. which I think it is.. and we haven’t even broken the lows from .com bust on the Dow yet.  And that primarily hit the Naz!
     
    Paul Farrell is my new favorite pundit.  He doesn’t pull any punches.
     
    http://www.marketwatch.com/news/story/15-reminders-Wall-Streets-con/story.aspx?guid=%7B1983C24D%2D6988%2D4645%2DA2F0%2D9422397777F7%7D


  12. Borders one of the first retailers to release holdiday sales:
    NEW YORK (Reuters) – Borders Group Inc (BGP.N) replaced its chief executive, who had been on the job less than three years, and the book retailer reported a sales decline for the holiday season.
    Borders said sales at its superstores open at least a year fell 14.4 percent during the nine-week holiday period ended January 3. Total sales were $868.8 million, down 11.7 percent. 


  13. PCU/Pharm – Just not as good RTP or FCX.  I still think you have to be very careful to buy quality here as the market is still very dangerous.  

    AAPL/Texas – That’s very different.  You sell the puts with the HOPE of making $14 in 4 months.  That means you expect to make $3.50 a month to be "on track."  If you make $7 in one month, you have effectively a double on your expectations and, options being what they are, you can be fairly certain it will be a lot tougher getting that last $7 so you will now be lucky to make $1.50 a month going forward.  That means you are risking $7 to make $1.50 this month and surely you have better things to do with $7 than take a big risk to make, at best, 20%.

    GNW is flying!  Yet another one of our buy and forget plays coming through…

    DIA/RMM – I wouldn’t cover until after the Fed.  If the market takes off, you can sell the $91 puts (now $2.25) and spend $1.50 to roll yourself up $3 but if we sell off, you can probably sell $89s for $2+.

    Pending Home sales down 4%, not 2%!  Factory Orders down 4.6% but ISM is an upside surprise at 40.6 (37 expected), up 10% from last month.  Keep in mind that ISM is a SURVEY and could be wrong.   Either way, under 50 does represent contraction to the previous month so a wosening situation.

    We’ll see if they can support the markets on this but they are taking very bad data pretty well actually. 


  14. xom, not going up despite oil rally.  when the market has a catalyst to go down this mofo is going to go to 75 very fast.  patience daniel-son.


  15. G’day
    This link http://fidweek.econoday.com/ to Fidelity’s site shows dates of scheduled releases of data and reports.


  16. WASHINGTON (MarketWatch) — In a sign that further weakening may be in store for the U.S. housing market, an index of sales contracts on previously owned U.S. homes fell 4% in November from the prior month, the National Association of Realtors reported Tuesday. The index, which is considered a leading indicator of existing home sales, was down 5.3% from the prior year. Pending home sales in November fell in all four regions, with declines of 7.2% in the Northeast, 6.7% in the Midwest, 2.4% in the West and 2.2% in the South. The October pending home sales index was revised to a decline of 4.2% from a prior estimate of a 0.7% drop. NAR is calling for a real-estate focused stimulus plan from the government. 
     
    Massive revision down on October …. from .7% to 4.2% so only off by about 600% boys!


  17. John – AMGN would be a gigantic buy for PFE.  WIth a market cap of 60B, not sure they could swallow that big of a chunk (that would be almost as big as the Pharmacia deal).  GILD is 15B less on market cap, so not sure on that one either.  I would be suprised if PFE goes that big (but nothing is out of the question).  CELG and Allergan (AGN) are more in line with future growth for PFE.  I can see JNJ going after Amgen (JNJ thought about MRK after the Vioxx debacle). 
    WPI is another interesting play here.  They are a generic maker and have a nice portfolio of postmenopasual drugs and a few other high profile generics.  Some, believe though that generic makers are going to get hit hard by the new administration.  (FWIW – MRK is getting into the generic biologics (AKA Enbril/Procrit anemia drugs), so MRK could be on the prowl for one of the biotechs with the technology – although MRK also has the anti-viral part of the company that they say they are expanding).


  18. DNA is flying.


  19. RIMM/IBM   For callers that are ITM with little premium (RIMM 36.625, IBM 80) would you roll up and out (Feb 40/85) or just up in January now and then out next week?


  20. AMGN/John – Pharm is our pipeline expert but I like them much better than GILD.  PFE has enough cash to make the play but I wouldn’t count on such a massive takeover in this lending environment.  I’m really shocked that they have been sitting on their hands (and $20Bn in cash) this whole time and haven’t made a buy on the crash, which kind of makes me nervous about the sector. 

    Tell us when you capitulate DB and we’ll go short!  Be calm, this is just the 5% rule so far and when we were down it was just the 5% rule too.  The key to catching these trends is knowing where the breaking point is and the way you feel right now is exactly why the 5% rule works, it’s just about the spot where people on the wrong side start to lose their conviction and that’s what leads to blow-off tops and bottoms.

    Speaking of the 5% rule – SOX up 2.5% and leading the other sectors.  Now we have a big sell-off on ISM et al so it’s nice to know the market hasn’t thrown all logic out the window yet.

    AAPL/RMM – My view is the same as it ever was – they are worth $95 but need to be covered there as $100 is a tough nut to crack.  If they hold $95 today, obviously you can roll the $90s up to 2x the $95s and give your caller much more premium.  Those can then be rolled to the Feb $105s and those put your Aprils $15 in the money so not too bad.

    SKF puts/RMM – Good instincts but they bounced fast.  Still $5 for selling the Feb $80 puts is a good deal as it takes a better than 10% run in the financials to put the puts in the money.  See how nice it is when you get used to the ebb and flow of a certain ETF!

    Principals/Matt – Don’t forget in 1929 there was no Federal Reserve and the government couldn’t just print money because it was backed by gold and had real value.  Obama’s plan is keeping the headline stimulus under $1Tn by giving back-door money to the builders and bankers which is really sickening, of course, but the government can now avoid a depression by printing up as much money as they want since they are just bits of paper now.  So stocks may hold thier "value" in dollars but I’m pretty sure those dollars will lose their value as people begin to catch on to this shell game.  That does not make me bearish on the market though, IBM can hit $200 in 2010 but a gallon of milk might be $6 too…  I liked that article!

    Borders/Anton – I don’t know that I’d draw a conclusion from them.  They were terribly run operations and BKS simply kicked their asses.  When they started it was books and music and the music segment killed them and then they remodeled to be "more upscale" than B&N but it turned out book people aren’t actually snobs, they just like well-organized stores with lots of places to sit and read.  I’m sure BKS did poorly too but I’d sure pick them over Borders.


  21. Thanks Pharmboy, good info.


  22. Phil, i have YRCW 2.5 2011 Calls that i bought for 1.7, now going for about 2.65.  Debating whether to take the gain or sell the 5′s next month when they get to about 1?  thanks.  I am inclined to take the gain, with the thought that YRCW will retrace, probably.


  23. So how can YRCW be up 20% when factory orders are down 5% ? What they going to deliver ? And HOV up 6% when pending sales are down 4%. People must have had REALLY bad expectations.


  24. Borders – oh I agree Phil – I wasn’t concluding anything from their numbers – just a heads up that they were out, as I haven’t seen much holiday retail data yet.


  25. AAPL/Put-
    Thanks for the clarification, Phil.  My original mindset had changed (unbeknownst to me).   When I started seeing the position work toward the upside, I somehow lost track of the mindset that I had when I initiated the AAPL position.  I’m finding more and more that, there is a different mental attitude/discipline that must be applied when collecting premiums on current stock holdings (or when building a position).    


  26. Phil: your 10:05 comment on DIA puts: is marc 93 and 91 out far enough ( 45 plus days ??),
    what is it you would roll up 3$ ?


  27. Phil: when you click on a sector in the dashboard under OILS, an error message 404 comes up, no file found,
    when I do this under Basic Materials, iStockAnalyst info pops up,
    some work, some do not.


  28. After falling 35% in 2008, US stocks are now trading at only 10.6 times forecast earnings, well below the historical average. But are they good value yet? Martin Hutchinson says it will depend on the sector and country. He offers his <a href="http://www.contrarianprofits.com/articles/the-top-bear-and-bull-markets-for-2009/10756">financial advice</a> by picking the biggest bull and bear markets for 2009…

    http://www.contrarianprofits.com/articles/the-top-bear-and-bull-markets-for-2009/10756


  29. RIMM/Eph – Well it’s situational and right now I feel like RIMM is topping out on their run so I would not move them as they have no premium and protect you penny for penny on the way down.  Since they are up $4 in 2 days, spending your own money to roll them up to something with premium is not very appealing.  I would look to roll the the Feb $40s, now $7.05 for $1.50 and see if you get that price and just make sure it doesn’t get past $1.75.  You can always roll them up to Feb $45s for another $3 whenever you want if RIMM keeps going.  IBM will have a tought time breaking $90 so you probably want to go to the Feb $85s there.  Currently that’s a $1.85 roll to push them up $5.

    YRCW/Jo – Oh I like them to $10 at least.  They are just about at the place where we can enter at $4.50 and sell the Feb $5 puts and calls for $2 for a net $2.50/3.75 entry with a double if called away.  In your case, I like the stock enough to stick with it long-term and I would 1/2 cover with Feb $5s now (.75-.80) to make sure you have at least a 10% return for the month and then see where it goes.

    YRCW/DB – I keep telling you, it is all relative.  YRCW isn’t up 20% on factory orders down 5%, they are NOT down 90% with over 90% of the factory orders still there.  HOV is already off 90% with pending sales only off 4%.  You need to step back and look at the bigger picture – it’s very dangerous to assume that just because something sold off 90% that 10% is the "right" price for it.

    DIA/RMM – March is fine for now and you should always apply at least half the money you collect to improving your position.  Obviously, it would be better to get you March puts both at $93 first and then see what you can afford to roll.  $93 does happen to be the optimum put right now as you can’t roll it higher for .50 so you are fine there although, had you followed the practice of always offering .50 for the roll, it would have triggered on the morning run and you would be in the $94 puts nice and cheap.  Thanks on the heads up on the chart – I’ll let Matt know.


  30. UK market has dropped 1.5% since US opened. Now up 0.49% with about 20 minutes trading left.


  31. DB, YRCW got an upgrade this morning.  they are the biggest trucker in the nation and they are priced like they are going to go bankrupt imho.  So, by buying YRCW i am betting against another great depression.  if that happens, than none of this other crap is going to matter.


  32. Phil/YRCW/HOV – I’m long YRCW (albeit Jan11 LEAPS) so I’m not complaining about the gains and I do try to see the bigger picture but I dont like seeing 40/50% gains in 3 days because they never stick. Ditto long HOV. (jan10) Would rather see value judgements leading to steady gains. These’ll be lost quickly the minute the market turns.


  33. Jo/YRCW/Upgrade – Thanks , missed that.


  34. Phil: WFT hedged stock position:
    have trouble figuring what move to make: STILL need to make $$ to get into GREEN ,
    so I need to collect more by selling calls and puts,
    I also need to lift the call strike to 12.5, maybe leaving the put strike at 10,
    2 choices: roll to jan or to feb.


  35. USG (US Gypsum) – Has been up big past few days (was in 7s in Dec) with up 20% today around $11. Anyone know why? Anyone here own it?
    This is a Housing stock that is owned by Buffet since long with him buying in the $35-$40 range 2 years ago…I own it too (with much higher cost) and thinking of covering it by selling calls against it but afraid to loose the upside…


  36. UK closed up 1.1% (+50) after a good run into the close.


  37. SOX pinned at 2.5%, good sign that they didn’t give it up on the dip.  Transports strong with upgrades and oil failing $50 and we’re holding green nicely but don’t forget that’s down 1% from yesterday’s open in general.

    Possibly funneling into the Fed minutes.  The last ones were released on 11/19 (I was wrong in the above post, it was the meeting on 10/29 where they lowered rates that helped the rally) and we tanked that day and the next, leading to our last blow-off bottom.  My summary that afternoon (for those of you too lazy to read the link) was: "They are ready to cut rates further of course and they don’t expect a rebound until Q3 and they dropped 2008 GDP outlook from 1.3% to .3%, that’s a pretty rapid decline!  In 2009 they also see 1% growth or less vs. 2.5% previously projected so that’s spooking the markets but – Duh!  Unemployment forecast raised to 6.5% from 5.5% – sounds like they are dreaming there as it’s 6.5% now."

    If this is all the bad news baked in, we can move up on it but if those numbers are knocked down lower today (and they really were way off base on unemployment) then we could go down pretty fast so be very careful here!

    WFT/RMM – You sold the $10s right?  They’re at $4 and you can get $3.50 from the Feb $12.50s or the $15s and $4.50 from the $17.50s so not much of an emergency yet.  I’d hang on to inventories tomorrow so we can see if oil prices will stick or they could go back to $11 fast.

    USG/M2 – Same premise as the XHB play.  Obama stimulus is best chance yet to kick start construction.  The spiked through the 50 dma at $10 and should hold that now and you can get .70 for the Feb $12.50s, which is $1.50 up from here so if you can’t be happy with another 20% over the next 30 days I can’t help you…  8-)

    UK/DB – You mean like a stick save?


  38. Phil/UK – Yeah the UK hockey stick version .


  39. XLE pulled back hard, OIH still up almost 5% and ripe for a fall after a 20% run from last week.  I like the Jan $80 puts for $1.30 as a gamble.  Out at $1 or if they break $87.50 and looking for $2 (was $4 yesterday so not too ambitious).


  40. USG/mSquare   I’ve got a spread on them where I’ve adjusted my long calls downward several times.  I now have Jan 11 7.5s, but unfortunately I also have 7.5 callers and the fast move has buried them.  I’m debating whether to pay to roll them up or buying more longs in order to do a 2X roll.


  41. Nice discount on ABX today.  Fairly safe spread of July $30s at $8.55 and Feb $35s at $2.80.

    Note sale went very well, more than 2x oversubcribed – people still running to treasuries.


  42. Phil: another check on a hedged position: SNDK, in with calls and puts at jan 10,
    now I could switch to jan 12.5 and get into green. Of course, feb 12.5 would be higher,
    what is best choice ?


  43. Phil: you do not expect any change by the FED,
    UYG and XLF are running high,
    for UYG, you still think NAKED is the way to go ?
    XLF jan 12 (I have) still has 30 cents premium and therefore milk more.


  44. Bought 1/2 pos DIA Jan91C for DT.


  45. RMM: SNDK looks strong but, again, wait to see where we finish after the Fed before assuming everything is going up.  I do expect a change by the Fed, I don’t see how they could have decided to cut rates to 0 without a lot of discussion about how dire the situation was.  This isn’t a policy statement, it’s the minutes of the meeting where they took drastic action…  UYG – in a fairly balanced portfolio, that is one I would risk naked.  Also, it protects you for when you want to gamble on an SKF move to the upside.  XLF – yes because it’s .30 out of a buck.  If you had sold something for .15 you shouldn’t pay the guy .05 back if you don’t have to…  I tend to change my mind when it’s $5 out of $15 though…

    These are lame levels, Dow under 9,000, S&P not making 934, Nas under 1,650, NYSE under 6,000, RUT 511 is strongest looking but that’s normal as people bargain hunt small caps in January.

    Man, 2 more hours of this drift into the Fed…


  46. Excellent article on XOM.

    Another put worth half of what it was yesterday is the FCX $30 put at $1.50.  Very speculative ahead of the Fed but could be good for a quick .75 at least if the market sells off again.  They are testing $30.50 again and, if they fail that, it’s OK to pay $1.60 and stop back out at $1.40 as a momentum play or we could just watch it into the Fed and hope for another nice spike up to short into.


  47.  Phil – MDT spread, you ready to roll to a full cover there?


  48. Gold making a move back to $860, although just back to yesterday’s close.

    MDT/Bigs – I liked the cover better yesterday than now.  They got rejected off the 12/19 high and the real test is here at $31.50, which is the 5% rule off $30, where they held firmly last week.  If they fail here, then I guess we have to capitulate and full cover but I’m pretty sure they pull it together for another run at $33 at least (as long as the market holds up of course).


  49. Phil;
    how do you play QLAD ? am not content about this position which started with apr 31, then apr 30, then apr 29, much $ lost in buying  back shorts, full cover is probably bad (which is different from the DIA puts),
    I have apr 24 calls on QLAD, no callers at the moment,
    QLD calls in a sense is the opposite from DIA puts, except ULTRA, so, moves are more extreme,


  50. Snippets from MacWorld:

    -3.4 million customers visit an Apple Store every week around the world

    -Last fiscal year, Apple had the biggest year in the history of the company selling 9.7 million Macs, and they did it by growing more than 2x as fast as the rest of the industry

    -iPhoto now uses face detection, which finds the face in the photo and lets you click on it and type in the name 

    Lots of talk about improvements to ILife.  They are including links to facebook, which is nice if you use it as people love to put photos up and make comments.

    -New section in Garage Band that lets you store all your lessons, as well as a built-in store where you can download the free bundled lessons and lets you purchase lessons for $4.99 per lesson

    -"We’ve enlisted the help of some amazing artists to help teach you to play their songs" 

    -such as John Fogerty, Patrick Stump, Sting for guitar players; Sarah McLaughlan, Ryan Tedder, Norah Jones on piano

    Now talking about IWork – this is hour 1, you’ve gotta REALLY love AAPL to sit through this…


  51. Home Refi plays… who’s gottem? (suggestions?)
     
    I own C….


  52. Phil: OIH comment at 12,
    did you mean buy put jan 80 ? you were bearish on OIH ?


  53. QLD/RMM – The idea was to take a deep position and patiently wait for the Nas to rally.  You can’t keep fully covering an ultra, it’s way too dangeous.  The Apr $24s have little premium at $8 and you can cover with Feb $32s at $2 and there’s no upside risk other than a cap on your gains.  If it really takes off you can always roll to 2x the Apr $30s and roll your caller up so not a terrible position at this point.

    Refi/Texas – That was FNF, which we played back at $8.  Hard to love them at $17 now.  Title companies just insure the transactions so they are great plays but they already gained back most of what they lost.  Otherwise you are looking at mortgage companies and those are really scary but BAC took over CFC and will be a huge player in a recovery and they are still cheap.  You can buy BAC for $14.40 and sell the Feb $14 puts and calls for $3.25 for net $11.15/$12.58 so a 13% discount if put to you takes you very close to their lows.

    OIH/RMM – that was buying the Jan $80 puts, now $1.10 and I still like them but technically, it was a no-trade over $87.50.


  54. Oil seems to be selling off.


  55. NUE has fallen, what is the verdict ?


  56. MacWorld: 

    - 17" 6.6lb MacBook, really good graphics (NVDA), with available 256G ram drive – that’s pretty cool!  8 Hours of battery life at 3Ghz is also great.  This will be THE machine for people doing demos.  They are claiming 5 year battery lifespan

    - Talking about the iTunes Music Store starting in April of 2003, now sold over 6 billion songs 

    - Starting in April, we’re gonna give more flexibility with 3 pricing tiers: 99 cents, 69 cents, and $1.29. More songs will be 69 cents than $1.29.
     

    -Worked with all the major music companies, starting today offering 8 million songs DRM-free, and by the end of the quarter there’ll be 2 million more: all 10 million songs will be DRm-free
     

    Now Tony Bnnett is singing "The best is yet to come."


  57. What is FED decision ??


  58. 1:33 p.m. Obama says U.S. faces trillion-dollar budget deficit
     
     
    The market seemed to jump when that was released, must be good new !!!!


  59. Hope TONY is right: the best is yet to come.


  60. aapl just went red


  61. Phil;
    what do you think about GDP –
    call feb 40 for 2.6$,
    caller jan 35 for 2.25$,


  62. wow that pretty much sucked from AAPL.
    The rule is: "Underpromise – Overdeliver" …. not the other way around


  63. 5th richest person in Germany committed suicide, he lost billions.
    has Madoof jumped ??


  64.  MDT- By your definition does this constitue failing 31.5?


  65. LOL – MacWorld ended without one more thing and people are very disappointed.

    Deficit/DB – Only a Trillion?  That is great news!  I’m telling you, Quadrillion is the new Trillion – get used to it…

    GDP/RMM -I don’t know them well enough to know how they fare with oil under $60.  They are up with the sector so you are chasing and they sold down to $16 when things looked bad so not for me.

    Obama says no earmarks – should have credited McCain…


  66. regarding aapl – still think it is a dumb reason to dump aapl shares…


  67. MDT/Bigs – Hmm, not really yet but see how they tried to retake it and failed a few mins ago – a second failure like that would have me leaning towards cover.  This is colored by my love of the stock though, If I didn’t like them so much I’d have covered on the first break down.  Notice that $31.20 is what held on Friday morning too so maybe there is a buyer there with a standing order.

    FED MINUTES:  BAD!!!!  Outlook weak even with the Fed moves.  The gist of this is they did make their move hoping to avert a total disaster, not expecting it to "fix" anything.  They are clearly committed to doing whatever it takes but it looks like they are thinking it will take A LOT.  2009 forecast revised downward again.  If we stay green on this then we really are in a bull rally!


  68. Ref SNE. The only reason that SNE gapped up is that I am fully covered.


  69. Gold really flying now as the President says TRILLIONS in deficits.  Combine that with the Fed saying they are going to run the presses non-stop and we could get a nice move in gold.

    AAPL sellers are being silly.  They can’t roll out an IPhone-type product every time and that’s why the company wants to get away from MacWorld – too much pressure! 

    Have to give up on FCX and OIH puts – they are both commodity sellers and the dollar is going down one way or another unless the whole world goes down the tubes but that’s not worth betting on.

    So I guess (assuming we hold this) that the "bad news" about the economy is priced in and people are looking ahead to all that lovely stimulus money but if we can’t take out yesterday’s highs I’m still not impressed. 

    SNE/Bro – We’ve been talking about Japan being led higher by exporters all week.  SNE is an exporter.


  70. Most people cant read and understand the FED minutes in that short space of time – it’ll take time for someone to interpret them. (and of course spin them in some way)


  71. Phil I brought pot march calls 70 for 12.80  there are 19.55 now
    sold the march calls  80 for 8.93 now they are 13.65
    do you have ant recommendation on how to handle this play    thanks


  72. Phil,
    when you have time:
    I am in an XOM spread that involved selling December Puts and Calls and has left me in the following positions, 20 contracts in each:
    Short the 80 Puts at 4.77
    Short the 80 Calls at 4.75
    Long the 75 Calls at 7.95
    Long the 85 Puts at 7.80
     
    Right now, with XOM around $81, this spread is slightly in profit and break even is $83.70 on the highside and $76.20 on the low side. Should I just sit on it for a while or is there an obvious alteration I am missing?
    Thanks!


  73. I was shaken out of my DIA ½ pos. My TA indicate that we are in the sprint to up finish. I have reinstated full DIA pos for my DT.


  74. OK Phil I’ve capitulated. Cant stand it ant more.


  75. AAPL – There was nothing said at MacWorld that means more sales & profits! There depend a lot on the consumer ‘feeling good’ and spending. Also, more and more of those iPod/iPhones are replacement sales and growth is slowing.
    Of course, I could be wrong and for some reasons buyers will line up to buy $3k Applie laptops by the million but I kind of doubt it…


  76. Phil: Fed has spoken, market going up: what effect on the positions ?


  77. RIMM-
    Did I miss something? I went to lunch and its +9% 
    What gives?


  78. Phil
    I think costco about ready to make a move up
    how about buying the  feb 50 calls selling the 55 feb calls
    thanks


  79. AAPL-
    From personal shopping experience, the iphone was the big hit this season (from ATT Store intel).  I got the original 8GB last Christmas.  This year the entire family got 3Gs. (6 total)… for no reason thant just to have a 3G. 
     
    They always seem to take a year off before introducing a game changer….


  80. Phil: what impact of DIA at 90.8: is it an exuberant rise so selling jan "what strike " ??????


  81. Phil: is this the time to add a few DIA puts to my mar93 ?


  82. USO   I’ve got a balanced position (both a put spread and a call spread) and the + Jul 25 / – Jan 30 position has very little premium in it’s callers.   I’m reluctant to do anything early since oil is so volatilve, but what do you think about this adjustment: +July 25--> +July 30 for +3.30 and -Jan 30--> -Feb 35 for -2.40?   I put .90 in my pocket and move him from <.02/day in premium --> .06/day in premium.  Make sense?


  83.  APPL store was crowded today (NYC suburbs), rest of the mall was empty.  I had to wait to buy, even the roving sales folks were busy.


  84. Phil,
    Do you think this is a good opportunity to buy puts on RIG or the OIH. Since they have run up so much so fast.
    Thanks


  85. Fed did raise their outlook on unemployment and they are freakishly worried about deflation.  They forecast 2010 to be a good year but 2009 is a write-off.    They base their deflationary concern on falling energy prices which shows me that Obama needs to appoint a new Fed too.  This was a big meeting (it was 2 days) and, on the whole, most of the data they are looking at is backward-looking so if people do think we’ve made a bottom here, there’s no reason to sell off on this but there sure isn’t any reason to go crazy and bust the 5% rule without an additional catalyst of some kind.

    POT/Bill – What is everyone’s fascinaton with this stock?  Well you took a net $4 spread that breaks even at $74 and pays up to $10 at $80+ and you are right on target.  Of course you are already up 50%, which is nice but you have to wait until March to get all of the other $4 you might get.   You could take a chance and roll yourself up to the March $80s ($6 in your pocket) and thow the caller into the Feb $80s ($2.40 out of your pocket) to turn it into a spread with more upside but if I were going to do that I’d first roll the caller to the Jan $85 calls at $4 to grab that premium and then roll him to whatever works later. 

    XOM/Anton – You mean Jan I assume.  Well you WILL get $10 – the question is what will you owe?  Your worst case scenario is collecting $5 and you started with $6.23 so you are risking $1.23 to make, at best, $3.77 (but very doubtful it finishes right at $80).  You can roll yourself to the Apr $80 puts and calls for +$2 and let the $3.50 of premium the caller and putter still have die a natural death and then roll them to another $8 in premium next month.  It’s got a much higher percentage success profile.

    LOL DB!  I am seriously tempted to take some ulltra-shorts!

    SOX are past the 5% rule, RUT and Transports broke 2.5% and we need another major, hopefully the Nas to break 2.5%.  That would be just under 32 on the Qs and about 1,680 on the Nas but I don’t think we’re going to get it – and not just because DB gave up…

    I think the Fed is one ot those things where the Bulls can read it and feel justified but the bears can read it and feel justified too.  Still I remain bottomish and think it’s safe enough to let things run a bit as long as we’re holding 9,000, 940, 1,575, NYSE 6,000 and RUT 515

    HOV up 14%.  XHB making a move.

    AAPL/M2 – 3.4M customers a week in the Apple stores.  52 weeks a year and someone will probably buy something…

    Oops, not holding too well already!


  86. AAPL   Think it’s seen it’s low?   I’m thinking of grabbing $1 for a Feb 80/75 vertical put spread.


  87.  Phil/CHK-
    My cost basis on CHK common is $6.70
    I sold the Apr 15 calls for 3.27 and puts for 3.38 on Dec 24th.
    I sold the Jan 10 puts for 3.00 (rolled from Dec 10s).
     
    I’m looking at adjusting the Jan 10s. Again, I don’t want to get shares called away. I could roll him out to the Apr 17.50s for 4.20 and sell the puts for 2.55. I know I hit you with a similar question last month. However, the position has moved so much over the last few days. Any suggestions?  Thank you!


  88.  Hi Phil,
     
    YRCW – I did the buy around 2.50′s and wrote feb 2.5 puts/calls.  I don’t know how should I adjust this position or if I should just sit tight till Feb and let things get assigned for a nice 50%+ gain.  There’s not a huge amount of premium left in the putter/callers, so I feel like I should be doing something here.  But you also say you like them to 10, I’m not sure how I should adjust my position up to that in these cases where the stock runs up quickly like this.  
     
    Maybe rolling my short straddle from feb 2.5′s to feb 5′s for now for 0.50 debit?  It’s good if I expect them to jump further by Feb, but I lose all sorts of protection.  I need some help on how to think about this properly.  This sort of happened to me with DRYS also, bought stock, wrote puts and calls around the 4.60 area, and then they ran up big.  I cashed out on that one, but the whole "coulda woulda shoulda" (maybe greed) feeling lingers around.


  89. ATVI   It’s down today on no news I saw….the Jan 10 5 Calls for 4.20 (or $1 in premium) seem like a good value.


  90. TLT   I managed to sell a call vertical, but I didn’t get my put spread because I didn’t want to chase the price.   What a big move!    Ratz!


  91. any thoughts on erts


  92. LOL – My eTrade PRO platform is playing up and keeps showing bid/asks that are 100 times the real price. I tried selling some to the bidder but he wouldn’t have em :-)


  93. Phil,
    Any thoughts on buying puts on OIH or RIG after this run-up
    Thanks


  94. Look at WFR go!!!


  95. Phil
     
    what about DOW  ?


  96. DB – I think you called the top right on the money!  8-)

    COST/Bill – I think they ran up on news they were going to be selling IPhones.  I do like them but not if they can’t hold the 50 dma at $52 so I’m very disappointed with them today.  I don’t think I’d want to go with a vertical like that, if you are bullish you can make just as much selling the $50 puts for $2.30 and you don’t lose any money there until $47.70. 

    DIA/RMM – Why cover when we haven’t even hit yesterday’s open?  If you must then sell the $89 puts for $1.60 which pays for 3 rolls and you don’t owe the money back until 8,750 but the idea of a cover is you should have long positions that are doing well, hopefully more than offsetting the drop in your March puts and you can leave those puts open as protection that allows you to let your profits run on the long side.  I would not add puts here but I would roll them higher for .50 if I could.

    USO/Eph – Makes perfect sense as long as your commissions paid don’t wipe it out.  of course oil could drop $5 fast and you’ll be sorry so maybe do it with 1/2?

    RIG/John – We tried OIH before, didn’t work out but yes, I do think they are worth a shot as long as you don’t let yourself lose too much.  Tomorrow is oil inventory and we could go either way and I have a feeling they’ll be pulling out all the stops to get back over $50 but, if they fail it – we will probably go back to $45.

    CHK/Texas – That’s a good basis!  Of course buy back the Jan $10 puts as they are useless  now at .05.  I’d roll the Apr $15s at $7.25 to the Feb $17.50s at $4.50 as they will burn premium much faster and give you plenty of room to roll.  You’re paying $2.75 to push them up $2.50 but they will burn premium 3x faster and you can sell another $4.50 and another $4.50 so a good trade-off if you can wait for the payback.

    YRCW/Chen – These plays were meant to be "safe" ways to make 20-30% and get back to cash in an uncertain market.  I mentioned when we first started doing them that the number one problem with these plays is the experience of "seller’s remorse" where you no longer want to give up your position so cheap but keep in mind that the reality is you would never have bought the stock naked as it seemed too risky at the time.  The good news is you own the stock and you are in control.  I don’t like the Feb roll because you are out of pocket .50 and you may owe him another $1 if we finish at $4 so what’s the point to that?  You can roll him to the Apr $5s at $2.80 but there’s no hurry.  Just keep an eye on the relationship of the roll (net .20 to you) and take it if we firm up over $5.

    ATVI/Eph – Good call.  Someone wants out badly it seems.   I’d offer $1.20 for the Feb $7.50s and see if you get a bite.  Then you can limit your risk to .20 and even sell some Jans if we get a bounce back when this guy is done dumping.

    TLT – that’s getting to be a tough call as money is going to be free for a while but I wouldn’t want to lend it out without at least 10% interest to cover inflation (and that may be low).

    ERTS/Bill – I like ATVI better but someone doesn’t.  GME is the way I prefer to play that market and you can buy them at $23.46 and sell the Feb $22.50 puts and calls for $4.75 which nets $18.71/20.61

    Holy Cow – was that the bell already?  I totally lost track of time….   Nice exciting day.


  97. DOW/QC – Too rumor driven for me.  High nat gas is bad for them so maybe when the russia thing resolves although you could hedge in selling Feb $15 puts and calls for $3.25 which nets $12.75/13.87 or just sell the Feb $15s naked at $1.10 – all are quick payoffs if they do get another deal and not such bad entires otherwise.


  98. TLT   I sold a Jan 20/22 Call vertical for .45…. I just wish I had sold more than 4 contracts.


  99. Phil/CHK-
    I made a mistake in my question. 
    What I meant to say was: I sold the Jan 10 CALLS for 3.00 (rolled from Dec 10s)
     
    Sorry for the confusion (I blame my ADHD at the moment)  :)
    Thanks


  100. GME  My only problem with them long term is that their whole business could go away if games streamed like VOD rather than selling disks.   NFLX is getting ahead of that threat by starting a very good (and free) VOD demand business.  Does GME have any plans for something similar or is the video game business not moving in that direction.


  101. So the strategy is let it sit for now.  And when opex comes next month, or when we re-evaluate and become more certain of support levels and how bullish we are on it and see clear movement/settling towards new price ranges, do the appropriate rolls to stay in.  Otherwise just let it expire worthless with a nice gain and move on to our next opportunity.  Thanks, I think it’s all more clear to me now and unnervingly simple.


  102. Alcoa news (13500 jobs to go , slashing output) and BAC warning. Perhaps I did get the top. Shrug that off ???


  103. Broken’ Billionaire Merckle Killed Self, Family Says………….sad…and if Uncle Sam was real he’d throw himself off the Empire State building


  104.  Hi Guys,
    In my opinion, I think we are falling unavoidably into the Second Great Depression. This one is going to be much more severe than the one my grandfather had to endure. In his day the US had a gold backed currency and it had a very robust manufacturing and agricultural based economy. Today we have a fiat currency and our manufacturing base has been closed down and moved to China, India and Mexico. It is hard now to buy any tangible product that is made in the USA. Tragically it is usually marked "Made in China" now.

    I for one have decided to conclude my participation in "Wall Street". It has become such a corrupt and fraudulent system that I no longer have any hope or trust in it as a means of putting my wealth productively to work. Wall Street has become a "den of thieves". I have made a strategic lifestyle decision to disintermediate myself  from them and other middlemen. As much as possible I am removing all corporate middlemen from the goods and serivces I need to surivive. For food, I am growing my own in my backyard, buying fresh from local farmers and reducing my dependence on grocery store chains. For energy, I’m reducing my dependence on the grid and making more fo my own electricity. I’m reducing my exposure to fractional reserve banking and the USD by converting to gold and silver held physically in my own posession. I’m keeping real non-deflation money "in the mattress" like my grandfather’s generation. This seems the sensible way to go now.

    I think we are experiencing a fundamental change in the US. Things will not be as they were during the last two generations. I think I will have to live the way my grandfather used to live, which means living below my means, storing up for periods of trouble when goods and services may be disrupted for extended periods, and living self sufficiently in ways that depends on the productivity of my ground and what I can personally grow and tangibly produce by my own hands or acquire locally. The days of living off the speculations of the bubble economy are coming to an end and we all have to start living in the real world and by the harsh laws of the real economy.
     
    Wall Street has become a gambling casino. Those who play it are going to get tragically hurt eventually. The only ones who will profit are those who are running the game from the inside because they are thieves who think you are their fool and their chattel who deserves to lose your money and welath into their pockets. I for one will not be so willing anymore to play the part of their fool and slave. I choose to survive and live free and independently.
     
    Regards,
    Merkhava


  105. bought some axp feb 20 puts at the bell.  won’t take much for them to drop to 17.5.  may even sell jan 17.5′s if we get a little drop before expiration.


  106. Merkhava, good luck to you.


  107. Good Morning All


  108. Asia Markets :    Wednesday, January 07, 2009
    (The following is from WSJ; please cross check with other sources to confirm.)   

    Nikkei Average*                          9239.24     158.40     1.74%
    Hang Seng*                              14987.46    -522.05    -3.37%
    China: DJ Shanghai*                   211.37        -0.49    -0.23%
    Seoul Composite*                     1228.17       33.89      2.84%
    Bombay Sensex*                       9586.88    -749.05    -7.25%
    Baltic Dry Index                            775.00    3.00    0.39%

    *at Close


  109. Asian Stocks End Mostly Higher, Dollar Firm

    Asian stocks were mostly higher Wednesday, extending their recent rally into an eighth straight day, inspired by hopes massive U.S. government spending and tax cuts will continue to support the dollar and stimulate demand for exports. The string of gains was the longest since October 2007, supported by a rebound on Wall Street and a steady improvement in Asian investment grade credit spreads as policymakers slash interest rates and pour capital into struggling industries to mitigate damage from the financial crisis.

    Japan’s Nikkei rose 1.7 percent to hit a two-month closing high as exporters surged on a softer yen and amid hopes for a U.S. stimulus package to boost the economy. The benchmark logged its first seven-day winning streak in nearly three years, gaining 8.5 percent during the period, including two half-days of trading before and after the New Year holiday.

    Seoul shares ended up 2.8 percent to hit a three-month closing high led by technology issues up on hopes of firmer memory chip pricing, while POSCO rose on a potential output cut.

    Australian stocks extended their rally, finishing 1 percent higher, lifted by the top miners on tentative optimism that generous spending by governments around the world may speed up an economic recovery. Having lagged offshore gains in the first two trading days of the new year, Australia caught up on Tuesday and Wednesday as the few traders in the market drove up previously shunned miners.

    Hong Kong shares gave up early gains to close 3.4 percent lower, hurt by news Bank of America was selling a China Construction Bank stake, triggering worries of a similar equity sell-down in other lenders. Chinese telecom stocks also fell after Beijing confirmed it was handing out the long-awaited licences for next generation (3G) mobile networks.

    Singapore’s Straits Times Index was down 1.7 percent.

    Chinese stocks closed mostly lower in active turnover. Many second-tier shares gained but blue chips were sluggish and telecommunications-related shares were hit by profit-taking.

    Bombay Stock Exchange’s Sensex which fell to a low of 9,510.15 earlier in the day, closed at 9580.31, down 755.62 points or 7.31 per cent. The index touched an intra-day high of 10469.72. Indian equities ended sharply lower Wednesday as investors’ dumped realty and IT stocks after B Ramalinga Raju, chairman of Satyam Computer Services made startling confessions of fraudulence in company’s books.  Earlier in the day, Raju tendered his resignation as chairman admitting to gross manipulation of company accounts.


  110. Euro Shares Fall, Dragged by Energy, Banks

    European shares declined about 1 percent by mid-morning Wednesday after rising the previous six sessions, with British oil major BP leading the energy sector down and banking shares coming under renewed pressure.

    The FTSEurofirst 300 index of top European shares was down 1 percent at 881.11 points after finishing 1.9 percent higher in the previous trading session, reaching its highest closing level since Nov. 10. The index lost 45 percent in 2008.

    Energy stocks also tracked crude, which fell as profit taking outweighed escalating tensions in the Middle East and widening supply cuts from the Russian gas row. BP fell 3.5 percent on market talk the company was telling analysts that its fourth-quarter earnings would be lower than expected, three dealers said. BP declined comment. Royal Dutch Shell and GDF Suez shed 0.8 to 2.1 percent.

    Banks were lower, with Royal Bank of Scotland declining 5.5 percent, Standard Chartered losing 5.8 percent, HBOS down 1.5 percent, HSBC falling 1.4 percent and UBS down 1.3 percent.

    Mining stocks fell as concerns mounted that a recession would hurt demand for basic metals. BHP Billiton, Anglo American , Vedanta Resources, Antofagasta and Rio Tinto dropped 0.3 to 4.1 percent.

    The U.S. operations of LyondellBasell, the world’s third-largest petrochemical company of which Swiss lender UBS is a major creditor, filed for bankruptcy protection under the weight of a massive debt load and falling demand for its products.

    British retailer Marks & Spencer reported its worst quarterly sales performance for a decade and said it would cut around 1,230 jobs in a bid to save money in a tough trading environment.

    Britain’s Chancellor Alistair Darling also said the UK was "far from through" the recession, and that the job to achieve economic recovery was a long way from completion.
     


  111. Oil Eases Toward $48, Gas Price Row Deepens

    Oil fell slightly on Wednesday, but drew support from cold weather and an escalation in the Ukraine-Russia price dispute that has choked off gas supplies and increase demand for refined oil products. The market awaits weekly inventory data from the U.S. energy department released later on Wednesday for the latest indication of demand for oil from the world’s biggest fuel consumer.

    Crude inventories were expected to show a jump in stockpiles.

    U.S. light, sweet crude    [  48.29    -0.29  (-0.6%) ] for February delivery was down, while
    London Brent crude rose [  53.44    0.17  (+0.32%)].

    Oil prices have risen nearly 50 percent since a low of $32.40 reached on Dec. 19, boosted by worries over supply disruptions from Israel’s deepening incursion into Gaza, Russia’s gas row with Ukraine, and mounting evidence of OPEC’s compliance with production cuts.

    Evidence of members implementing OPEC’s biggest ever output cuts grew on Tuesday as Kuwait and Iran told customers of bigger supply curbs this month in a bid to prop up prices. The producer group has cut output three times since September in a bid to halt the market’s slide.

    Israel and Hamas studied a proposal by Egypt for a ceasefire in the Gaza Strip on Wednesday that won immediate backing from the United States and Europe.

    Dollar Rally Loses Traction, Euro Still Vulnerable

    The dollar fell broadly on Wednesday, with its recent run to one-month high’s against the euro and yen losing steam as jitters began to surface on the state of the U.S. employment market. The speed of the dollar’s rise also made it vulnerable to profit-taking, with dealers citing central bank buying of euros at lower levels for reserve-management purposes and interest from funds. But the euro area and, by extension, the single currency’s vulnerability were never far from investors’ radars as data from Germany showed a larger-than-expected rise in unemployment.

    The U.S. ADP private employment report, due at 1:15 pm London time, is expected to show that 473,000 jobs were shed in December. The report is seen by some as a precursor to key U.S. non-farm payrolls numbers on Friday that are expected to make sobering reading.

    The dollar fell 0.4 percent against a basket of six major currencies to 82.585, while it also retreated 0.6 percent to 93.04 yen after hitting one-month highs the previous day.

    The euro [ 1.3631    0.0099  (+0.73%)    ] was up on the day versus the dollar, having dipped to a one-month low of $1.3308 on Tuesday according to Reuters data.

    The single currency clawed back some of its major losses against sterling, [ 0.9131    0.0057  (+0.63%)    ] but stayed some way off record highs scored above 98 pence in late December.

    The yen [ 93.2    -0.43  (-0.46%)    ] gave up some gains in the global session on a newspaper report that Japan’s government will seek to scrap capital gains taxes for foreigners investing in Japanese companies through funds, which could encourage capital flows into the country.

    Persistent signs of economic weakness in the euro zone that may force its central bank to cut interest rates remained in focus after data on Tuesday showing a fast fall in inflation.

    The Federal Reserve’s most recent policy meeting suggested the central bank is concerned that downside risks remain substantial, with the central bank seen determined to employ whatever measures are needed to keep rates low.


  112. Gold steadies, supported by dollar; platinum up

    Gold steadied in Europe on Wednesday, with a softer dollar and firm investment demand supporting prices but weaker oil markets keeping a lid on gains. Platinum meanwhile climbed to a near three-month high as investors switched their attention from fears over demand from carmakers — the major buyers of the precious metal — to the gloomy outlook for production as prices fall.

    Gold was quoted at $864.10/865.70 an ounce at 1055 GMT, against $863.35 late in New York on Tuesday. U.S. gold futures for February deliver GCG9 on the COMEX division of the New York Mercantile Exchange were down 70 cents at $865.30.

    The precious metal is benefiting from falling interest rates, which cut the opportunity cost in holding gold, and from uncertainty over the global economic outlook, he said. The dollar is also providing some short-term support. It slipped broadly on Wednesday after striking a one-month high against the euro as traders fretted over the outlook for the U.S. employment market. Gold is often bought as an alternative investment to the U.S. currency and tends to move in the opposite direction to it. However, weakness in oil is capping gains in gold. Crude prices slipped towards $48 a barrel on Wednesday as gloomy U.S. economic data sparked a bout of profit taking.

    Platinum rose through the $1,000 an ounce level for the first time since October 15 to reach a session high of $1,000.50 an ounce. It was later quoted at $988/993 an ounce, up from $965.50 an ounce late in New York on Tuesday. The precious metal’s resilience to the ailing car market has boosted hopes its price slide may be at an end, analysts said.

    Among other precious metals, palladium edged up to $197.50/202.50 an ounce from $196, while spot silver eased to $11.34/11.42 an ounce from $11.44.