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Sunday, January 29, 2023


Thursday Thump – Brother Can You Spare 20 Trillion Dimes?

I hope it's going to be a Thursday thump

At least when you hear the "thump" you know you've hit something!  The market encountered virtually no resistance on the way down back to our mid-points and we could not be more thrilled as we went bearish at the top and we've been lining up our buys all week, expecting to hold 8,650 here but frankly happy to see us go back to 8,200 since we are a little bearish and looking for bargains

We're selling our short plays like SKF and FXP (a cover if you are in yesterday's spread leg) into the initial excitement this morning as we've had great runs and we're either going to be shifting long if we hold Dow 8,650, S&P 888, Nas 1,550, NYSE 5,750 and Russell 490 (the latter 2 being well above the 50 dmas as I look for leadership there).  I called a drop back to our midpoints in yesterday's member chat, 7 minutes after the market opened and it does not look like we will be disappointed this morning with some poor retail results, even from WMT, who shocked people with a profit warning.  We already grabbed ISRG on the dip and I urge members to check out the plays laid out in last night's comments as this is a great opportunity to get in cheap!

This is going to be fun because the crappy American economy will send investors scurrying back to our crappy American currency so we can expect the dollar to pop and that will put more pressure on oil with already (ROFL) dropped 12.5% yesterday – something I mentioned may happen in the morning post.  We'll see how oil handles $40 but, as I keep saying, we're going to have a very hard time sustaining any sort of rally until we get real capitulation in the energy sector (off 5% yesterday) and investors stop putting money back into it and rotate into other things. 

We saw the same thing happen with the builders as it took an agonizing amount of time for the sheeple to stop trying to call a bottom and move on but those same sheeple are now into energy stocks and looking for the next bubble to blow their money on.  Sadly, we have had no clear leadership for them to jump on top of and we have a parade of pundits on CNBC telling people how the smart money is parking oil in tankers and other ridiculous things to keep people invested while the big money dumps out (see "The Roach Motel Theory for Oil").

I read an article yesterday where FRO alone has 70M barrels worth of tankers rented out for storage so who knows how much oil is parked out there in addition to the 4Bn barrels of global storage (SPRs plus commercial) that we're already counting.  Yesterday's 11.8M barrel BUILD in inventories and we sent 9.7M barrels of product OUT of the country last week.  Imports surged by 1.6Mb per day as at least some of those tankers full of oil took the money and ran as oil ran up from $35 to $50 in the past two weeks.  That inventory report only covered through 1/2 so who knows how many more barrels were dumped this week – we'll find out next Wednesday but another massive build in product will be catastrophic for those poor tanker speculators…

I said yesterday, at only half a joke, that we needed to keep up our 30% monthly gain from December's picks into the rest of 2009 to keep up with inflation but, looking at the Deficit figures for 2009, maybe that's right in line!  Between the stimulus, the tax cuts, the war and existing unfunded TARP money – we are crossing the $2Tn mark for 2009 projected debt and that DOES NOT take into account the fact that tax revenues may be down considerably.  That means the US needs to auction off $150Bn a month in notes and MUST find buyers.  The auctions work by adding interest to the notes until the sale is filled and $150Bn a month is 3 TIMES more than we normally auction off in a mere $600Bn average Bush deficit.  THIS COULD BE A PROBLEM PEOPLE!  Have I mentioned I like gold lately?

Still, stocks are commodities too – there are only a limited amount of shares of ownerships in these little money making machines (well, the few that do make money) to go around and that means inflation will inflate stocks too, as well as the meager earnings they do manage to scratch out.  We have our list of 38 key positions we like and we have our daily gambles but let's not be idiots and think that tucking our money away in 10-year notes at 2% is "safe."  A few years of 9% inflation can chop those notes in half on you and by the time you cash you $100,000 note you may be lucky to be able to get a Prius with it.  Money MUST be put to work in this market.  Germany and Japan are already having trouble raising cash so it is not just us with our hands out for whatever change the global market can spare. 

Asia is a mess with the Shanghai falling 2.3% and they were the stars of the day.  The Hang Seng dropped 3.8% and the Nikkei gave up 3.9% (Bombay, who fell 7.25% yesterday, wisely took a holiday today).  European markets are off another 1.5% this morning but the global Dow is still hanging tough at 1,555 and we can maintain hope as long as they can maintain 1,500 so we'll be watching that closely in our next Big Chart Review.  As expected, the BOE cut rates to 1.5%, the lowest level since the bank was founded in 1694 so when we say these are once in a lifetime rates – we are NOT kidding!  The ECB meets next week and has rates on the continent at 2.5%, already down from October's 4.25% but the markets still want MORE (or less as the case may be).

So the world banks will be lending money at 0% and borrowing money at 2%, then 3%, 4%, 6%, 8%, 10%, 14%, 18%… at which point I think we'll flip our position but, for now, we are firmly bullish on interest rates over the long term.  We'll hear from Obama at 11 and we're hoping his speech on the economy firms up a floor at our mid-point so we can at least move back to a 5% test of the upside.

Jobless claims for last week were way better than expected at 467,000 (540K expected) so that's good news and we get a report on Consumer Credit at 2pm, which almost certainly grew in November by about $2Bn vs a $3.5Bn decline in October as holiday shopping trumped recession.  Earnings are off to a rotten start with big misses by GAP, HELE and TXI this morning but BBBY, BLUD and RT were good last night so we have to give it some time before we draw conclusions.  Volume is still very low, hopefully today we'll have some decent action and, of course, next week earnings season starts in earnest so it's going to be a wild ride.

As long as every man, woman and child on earth can scrape together 3,333 dimes for the US collection plate – everything will be fine!


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Wow, alot of screwy stuff going on with UYG/SKF right now.  Huge swings. 

Hockey stick early today !

Lots of ugly charts today.  Quite a bit more indirection then usual.  And that’s saying alot.

About time to spread a rumor on Job’s health.
DRYS is ripping.  I like my jan11 2.5 leaps.  I want to roll them up but you don’t get much back with the spreads.  just have to wait for a long time.

Tomorrow can be fugly, sold my GOOG. Now the waiting begins.

Back into FSLR short

Phil: your 2:29 on VLO: are you saying maybe cash in 1/2 of the stock ? Need to close 1/2  of them ?

Just got this from my broker:
To AMEX,CBOE,PHLX traders:
Thu Jan 8 15:05:20 2009 EST

Update: AMEX,CBOE,PHLX market data is currently unavailable due to a hardware failure at OPRA

I guess Opra controls even the stock exchanges now.  Opra for president!  LOL

Closed my SKF.  It’s way too jumpy for me right now!  Must be alot of trepidation in the market over jobs tomorrow.  My feeling is that with the holiday the number isn’t going to mean much.  Alot of companies will wait till after the holiday to pare down.  And goofy seasonal employment always screws things up.  So tomorrow maybe an upside suprise… but does ANYONE think we aren’t going to lose more jobs from here?  I mean ALOT more??  No.  So I’ll wait till this nonsense calms down some.

Phil/WFMI – I believe its going up because someone bought a large stake in the company. Its not been widely reported. Someone called Ron Burkle.

We’re 30 min away from the close i wouldn’t get too excited about this move Bob Pisani mentioned earlier shorts will cover before the end of the day, tomorrows jobs numbers are tricky, doesn’t matter what we think about the subject at the moment and how the markets are reacting, I’m wondering what will happen when the numbers are finally revealed.


Anyone follow AMR?  Seems to be near September & October hi’s.  An opportunity to short somehow here?

kustomz, I’m thinking it will be a typical head fake move in the morning.  I’ll prolly go the other way of the runup and initial excitement.  But I really don’t think there will be  a big move either way.  Those will be reserved for earnings!

WFR hedged stock bought at 14.66 $
and have jan 15 callers/putters,
putter still has 45 cents pure premium, caller is ITM but also can burn 47 cents, too early to roll to feb 15 for over 4.5$, do I get it by now ?

Gotta like the little biotechs that report postive outcomes in early Phase Ib trials….not even in the more pivotal ones.  ANDS is up 119%.  $2.5 to $4.2.

matt S&P almost got back to 910 today, if we do have a run up tomorrow i would look to get out around 920 then take a wait and see approach. Getting back to 930 on crap jobs numbers would be very bullish but again that’s near the top of the range. 915 is the number i’ll be keeping my eyes on.

Another rumour is that Arena is looking at upgrading their SAP software (via a consultant that works in the SAP field)….one doesn’t upgrade their software that costs that kind of jing and not have something brewing.  Does that signal they are in the works for a deal??

Phil: last hedged stock for the day;
DBC bought at 22.54$ and jan 23 caller and putter,
could roll first to jan 23 call and 22 put as there is premium, then roll to feb 23 call and feb 22 put, OK ????

what does a stick save mean?

Good thing I covered FSLR for small gain.
Shares are getting difficult to borrow.  Schwab – No, Etrade – yes, Fidelity – No.

Phil/WFMI – Thnx. Its just been reported on Marketwatch. Seems he has built a 7% stake since November.  Hardly cause for a 23% jump. Caused me to roll my callers this morning nevertheless 🙁

So… what happens when, one day, everybody waits for the stick save … and the stock save doesn’t come? 😉

TOS/AMTD  They are about to start a chat on TOS about the deal and there are about 1200 unhappy TOS customers griping away

What did i tell you that i preferred APOL over EDU.   Nice AH jump.  There goes my 80 callers but still time to settle down.

2500 chatters in TOS traders lounge behaving like kids.  You get what you pay for.  That is one chat group that i stay away from.

TOS  from the Chat:   The rates for existing customers are going to be grandfathered in….I’m not sure if that means as of today but that’s one big  PHEW from me!

TOS Chat   Emails ran 2000-1 against the merger and the chat room was even worse.  I think the Tom’s did a good job of explaining the deal and I was molified.  They needed more $$ to grow the business, the TOS platform won’t change, rates of existing TOS customers are grandfathered in, banking/ACH/Tax reporting will probably improve.   I’m guessing that a year after the deal closes all of the AMTD active traders will be Swimmers.

Gentlemen, I joined this BB to learn the DT. The character of Phil’s trading changed and it makes me considering switch to another chat forum. Can you recommend a site with relatively experienced participants doing DT? Does anybody tried OptionMonster. I like to listen to Guy Adami on my XM. Thx.

DT  Day Trading?

Eph – yes

Bro, there are active chat rooms on TOS, but I’ve never listened to them so I don’t know what they are like.

Eph – thx, for the last 9 mths  I have been planning to open acct there. Now, when the tax year is closed and my main desktop computer is up and running, probably  it is a good time to do so. I will check them out.

Phil/ Held down:  Walmart weighed heavy on the DOW.  If not for that, it would prolly been green, too.  But I really don’t get the sense we are being held down.  Again, it’s a perspective thing.  I just think there is alot of indecision in the market right now.  Earnings will clear that up.  Maybe then some volume will return.  But I doubt it. 

Bro   Hope it’s not too late to get TOS commission structure.  If you are an active trader, they will really work with you.   I pay $1/contract on options and 1-cent/share,$3 minimum on stocks.

AOB   Anyone know why it got pounded today?  I didn’t see any news.

 Bronek, check out the OpTrader tab on this site. They do very short term momentum trades (long and short) off a technical/risk system.

Eph – I am spending few $K/mth on commissions @ Fidelity. Few months ago I spoke with Joe Kinahan, their main salesman. He was encouraged me to communicate with him.

Molotov – Thx. This is a novel idea for me! I am going to gym now, but tonight I may just check them out.

Hey Steve,
I accidentally sold APOL PUTs today as part one of the hedge entry.  Good thing it jumped 10% AH.  This is the good luck that we need when selling PUTs.

TOS chat room is a bunch of amatuers that don’t want to pay any fees. Total waste of time.  I do listen to Brad on TOS because you can pick up ideas while you are doing other things.   Opt trader too is more day trading focused but lately more futures.   Someone mentioned Guy, is there a link on how to get him. 

TOS/TDA – I got the same commission rates from both companies, so no worries.  TDA will match it with other establish brokerages, just like TOS.

Sounds like you got a nice ulcer free freebie.  APOL was a short possibility on Shadow Trader.  I think they missed that one.

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