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Which Way Wednesday

Barack Obama - 2 Years OldWell I’m uplifted!

We had a fantastic day in the markets yesterday as we went bottom fishing in earnest early in the morning, picking up entries on JPM, X, IP, VNO, HMY, M and IYR early in the day, ahead of my 12:48 observation to members: "BAC breaking up along with their preferred stock – that’s a good sign.  SKF back at $192 test area, XLF at $7.45 so just a little push and maybe we can get somewhere!Indeed watching our levels paid off and we went flying up after that.  As I often say, you NEED to make these buy decisions at the bottom, it’s too late once the train starts moving.  We did grab a momentum play on BAC as they crossed $4.40 but, other than adjusting our DIA cover play, we had no need to make adjustments during the run-up because it’s what we were playing for.

We went into the close fairly neutral (a very slight bearish bias on our DIA puts), having accomplished our mission and not being sure what kind of speech Obama would be giving.  It turned out to be a great one and the Republican response by Gov. Bobby Jindal was so mind-blowingly awful that Rachel Maddow was stunned to the point where she was unable to speak and I will leave my own commentary at that!  On this same clip, Cris Matthews had the comment of the week, saying that the Republicans were so mired in responsibility for this crisis that they had to outsource the response (Jindal is Indian).  I found that very funny…

As we expected, there is no "quick fix" in Obama’s speech and we’ll see how well the markets hold yesterday’s gains.  We would have been more bullish had we not had so much trouble with our two critical levels I said we should watch in yesterday’s morning post: Russell 411 and NYSE 4,790.  As I said in the morning, these were just the levels we needed to break in order to consider the day’s action anything more than a weak bounce off the horrendous drop of the past two weeks.  That’s why we do not jump on the bandwagon once the rally gets going – we do our bottom fishing at the bottom and we sell or cover into the rallies.  If it’s a real rally, we have a long, long way to go and we will have very strong buy signals – a good start would be holding our watch levels today at: Dow 7,245, S&P 760, NAS1,425 (I raised that one), NYSE 7,490 and Russell 411.  We also want to see the SOX over 200, still pathetic but something and let’s not even consider being bullish with the Transports below 1,600 (7% to go).

Oil is at $40, the DBC needs to retake $20 and the BDI needs to hold 2,000 – None of these are signs of a "healthy" global economy but they are signs of a pulse, and right now we’re not even sure we have that!  Global economies were generally perky this morning, following Obama’s most upbeat speech since the campaign.  Bernanke was also generally upbeat yesterday as he addressed the Senate, hopefully we can get past the House hearnings today without a misstep and have another nice afternoon rally.

China is certainly doing their part, committing Trillions of dollars to their own stimulus program and President Hu Jintao announced this morning (good timing) that even stronger measures may be required to boost domestic consumption.  "China’s advantageous economic conditions have not fundamentally changed, but downward pressure on economic growth has intensified," Hu was cited by state radio as saying during a State Council meeting.  According to JPMorgan chief economist Frank Gong: "Top of the agenda will be to pass the Social Security Law, approve proposals for medical reform and discuss educational reform."   Wow, sounds like Hillary accomplished a lot on her China Trip!  Boosting consumption in China is very difficult as those without a social safety net are not confident enough to go out and make long-term investing decisions – something the communists understand but the Republican party does not…

Meanwhile, Japan’s Aso has come to us and is meeting with our President this week.  Aso pledged $2Bn to support our troops and reconstruction in Afghanistan and, in another indication of the globally coordinated push to improve the markets, his Finance Minister Yosano said: "Stock prices must in principle be determined by market forces, but since excessive falls would affect the health of banks, insurance companies and others, the government must come up with generic steps to support stock prices."  The Nikkei climbed 2.6% in morning trading as the Yen continues to pull back against the dollar while the Hang Seng bounced back 1.6% and the Shangai held flat at 254. 

By the way, on Feb 4th I said: "Dollar dumping helped our market yesterday as the dollar fell 1.25% and we will probably retest the 50 dma at 84 before turning back up.  There are still no viable alternatives for currency investors and the Yen index is back at 112, just about where Japan needs to force it back down, most likely by trading Yen for dollars so let’s keep our eye on that move this week.  A combination of dollar strength over 86 and a big build in crude today could send oil back to its lows and we’ll be looking for short plays on USO and XLE (and, as always, XOM if they dare to test $80) if we get another pointless run-up after a better than 3M build in crude inventories but I think we break +5Mb today and it will be tempting to just go short on oil into this morning’s report..Check out this Yen chart, check out this USO chart, check out this XLE chart, check out this XOM chart – You’ve gotta love getting your information that far in advance!

European markets are up about a point ahead of our open.  A plane crashed in Amsterdam with 9 dead and 125 survivors.  They still don’t know what happened and, like all plane crashes, this one spooked the markets but it doesn’t seem like a terrorist incident.  Google is joining the long-running case against MSFT in the EU courts that was originally pressed by browser rivals Firefox and Opera.  This could explain MSFT’s severe stock drop this week as any thoughts of the smaller companies giving up due to lack of funds is now out the window as Google can fund this case from the ad revenues from the people searching for information about this case…

Oh no - time for Ron Paul's question!Not much to do today but watch our levels.  The next move is Bernanke’s and then we’re back to waiting for Geithner but I do reserve the rights to call an audible during comments today!  GM and F will be guests at the White House today as they meet to discuss a way forward.  Our F shares should get another good pop today and let’s keep in mind that taking half off at 50% allows us to put a stop on the rest at 25% and lock in a 37% profit.  I know it was supposed to be a long-term hold but 50% in a week is a pretty good annualized return!  

FSLR really stunk up the joint with last night’s earnings and get hit with a slew of downgrades.  We’ve been short on them since they were at $300 last May and they are my least favorite solar play for reasons I outlined in this post.  We’re done with them but they are dragging down the entire solar sector so a good second chance to catch SPWRA, my favorite solar play, at $30.  You can sell the $25 puts naked for $1+ on the morning dip, which is a fun way to get in (or not get in and get $1) or you can buy the stock and sell the Apr $25 puts and calls for $11 for a net entry of $19 ($6 profit if called away) or an average entry of $23 if the stock is put to you below $25 in April.   That is a 23% discount off the current price and THAT is the way you enter a stock position! 

We may get a small upside surprise from existing home sales at 10, oil inventories should be net flat at 10:30 and then it’s the Bernanke show – let’s sit back and watch the fun!

 


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  1.  First solar falling – major support level = 110, but with 3 downgrades, seems like going to break that.
    http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b8C1257DA-33C3-42BB-B652-06A02FD08049%7d&siteid=yhoof2


  2.  As they used to say in the old wild west "FSLR, what a buying opportunity"


  3. Did an American invent the automobile ?
     
    http://www.ideafinder.com/history/inventions/automobile.htm


  4.  matt, look at wfr…when these solar co’s fall out of favor, it can get pretty ugly.  ldk still looks pretty fugly.


  5. anythoughts on FSLR ?


  6.  Cap,
    Well, right now FSLR even too ugly for a sympathy date.  Let the technicals settle, give it some time on the gov alt energy spending, should be ok.  But let’s see what Capt Phil thinks first.


  7.  looks like ags just caught an upgrade


  8. faber reported some ag transaction


  9. Phil: what do you expect from AAPL the next 10 days /
    I believe there is a stockholder’s meeting,
    I might want to gain some time and roll my AAPL march 90 to APR 95.


  10. Aggri/fertilizer: takeover fever,
    CF made a bid for TRA, now Agrium made a bid for CF.


  11. Phil,
    what are your opinions about buying puts on GS??


  12. Cap: watch it,
    SKF rising again


  13. FSLR – See post.  I wouldn’t keep shorting them at this point but I sure don’t want to own them.  Once they settle down they go back to being fun channel trades.

    AGU offered $3.6Bn for CF, about a 20% premium.  I’m just happy they got the money, indicates some thawing.

    AAPL/RMM – Meeting without Jobs is going to cause questions so be careful.  Your position is very risky and frankly I don’t like it as I have no idea which way AAPL could go.  Could easily go 10% down or up.

    There is nothing at all encouraging on the Dow in 15, 30 or 60 min charts – be very careful.  I’m going full naked on DIA puts until we cross back on NYSE and RUT.


  14. OK, I just this second sent the Alert to Premium members – let me know if you DON’T get it.


  15. Phil: buy DIA puts jun 76 ?


  16.  Phil,
     
    Agree, mkt weak here


  17.  I got the alert twice.


  18. Phil: saw the alert but there is no info.


  19. I got the alert but there is no message attached only logo attachment


  20. I didn’t get the alert


  21. OIH group selling off, probably a small build coming judging from the movement. 

    We’re coming close to Dow 7,245 – that’s a big test.  S&P 760, Nas is right at 1,425 and, of course, we’ve already lost the NYSE and RUT.  Those now become our upside stops if we blow them.

    BAC in pullback, C down 13%, something not good…

    DIA/RMM – Not a buy, you should already have them! 

    Alert – OK, I’ll have to consider that a failure… Make sure you have "load images" turned on.   I got the 5:08 pm alert twice and the new alert (same message as bold comment above) not at all!


  22. Home sales could turn us around – not saying they will but they have the ability to if good.

    Oops, here they are already.  Down 5.3%, lowest in 12 years.  Median price down 14.8% in 12 months but inventories down 2.7% except the new slower monthly number means the number of months increased overall.  Down 25% in the west – not at all a market saver!


  23. Phil,
    We broke our Dow line. What’s now?


  24. AAPL tanking badly


  25. Its Crazy Ron Paul; Mr. Run on sentence himself.


  26. Dow/Emo – Now we are net short and looking to see if we hold yesterday’s bottom.  I’m very concerned because BAC, for example, has miles to fall, as to many XLF stocks now and their momentum can take us below yesterday’s lows.  X just fell 5% so that sucks and XOM is down with the XLE at 2% but OIH is already off 3.6% so you can bet that trend is down.

    ON THE OTHER HAND – We were clearly oversold at 7,100 yesterday so I’ll be looking to do the same kind of bottom fishing today, using all the lovely cash that is building up on the DIA put play.  We missed FAS yesterday so maybe a second chance today.  This was our spike low time yesterday as we got Case-Shiller.  We shook that off and we will very possibly shake this off so I’m going to take a chance here and cover the DIA puts with 1/2 the $74 puts at $4 and I will cover with more at $3 if we head up or roll those to 2x the $70s if we break 7,000 but I think we hold this bottom.

    We’re getting past Ron Paul already.


  27. The hearing will cause trouble to the market again, as these politicians make their wild remarks.


  28. RMM; SKF rose w/ Dow fall and takedown in BAC C and others.


  29. Wow – Did you hear that comment on CNBC?  "This isn’t going as planned"  it was supposed to be puffball questions and the Congressmen are not sticking to the script so they are going to commercial.  How can you possibly think this isn’t all fixed?


  30. Cap: I always watch DIA and SKf, they have this inverse correlation.


  31. Phil:  Thanks for the advice yesterday.  Long the DXD and Long DIA puts are helping me salvage some profits this morning. 
    JW


  32. FAS Apr $4s at $1.88, selling March $5s for $1.10 puts you in for .78 on the dollar spread and the March $6s ($1 out of the money) are still $1 so you probably have room for a $1 drop.  I would go with the Aprils here and wait a bit to sell.


  33. Phil,  I’m not watching tv.  That’s a very interesting observation you make!  What’s the agenda?  Is CNBC trying to engineer a turn around or are they stilll selling gloom?


  34. Oh – best to wait to get past oil inventories in case they are a disaster and take down markets.


  35. Energy, Financials, Real Estate weak; other stuff seems more stable.  I think the market goes up and financials also from here.  Which means SKF goes down.


  36. Phil, are you getting long here or expecting more downside?


  37. KFT – waking up!


  38. DUH   What’s so new about home sales.  Who buys in January.


  39. CNBC/Matt – I’d have to say they forced the market down with an agenda and now they got the turn signal from corporate to move things back up.  As Cap pointed out yesterday, the endless repetition of "nationalization" isn’t an accident.  These bubble-heads don’t have casual conversations, they are reading off a teleprompter so SOMEONE at GE decided they want the word nationalization repeated until it was burned into every investors brains.  Maybe it’s just because GE can only pay bonuses in stock this year so they want as low a benchmark as possible – hard to say…

    DXD/JW – that’s good but don’t be greedy – that was a great run on DXD and you should cash out.  If we break further down you can use the cash to buy a new position but 5% is a good time to take the money and run!

    Long/JW – Yes, I am now 60% long as soon as I sell the rest of my put covers (and I’m adding FAS too!).

    Oil build 700K, gas down 3.4M, build 800K distilates – good for oil, big reverse, full cover on DIA puts.  Long XLE should work too.


  40. This is amazing – CNBC never went back to Bernanke!


  41. SKF; picked up a couple of points in adjusting my hedge (sold 176 + bought back 173.8)


  42. Not surprising on gas when you only run refineries in the low 80% utilization.  Is there any measure of oil supply that is sitting in tankers etc?


  43. DXD/JW – Oops, I forgot what you have, if it was long months – cash out = cover, not actually cash out!  Sorry, I can’t remember everyone’s position all the time.


  44. Phil, I think the connection of CNBC and the market is alot more then simply getting a low entry point for stock options.  Their finance arm must really be involved in options on equities.  Either that or they are doing it under the table.  They know they have the ears’ of retail investors… and they are using that to their advantage to be sure.  Everyone is looking for Murdoch to abuse his power with the DJ News Service but CNBC is doing right under most people’s noses.


  45. TIMMEH !
     
    Hey Timmeh showed up for O’s speech last night; beyond that he is MIA.


  46. Let’s attribute this sell off to Barney Frank !


  47. I do not believe that Barney caused the wild fluctuation of AAPL,


  48. We have given up almost all of yesterday’s gain in 1 hour.


  49. Np Phil.  I knew what you meant.  Thanks


  50. I’m watching the DXD $66 puts at $1.50, were $2.25 yesterday so a fun play if Bernanke does a good job today.

    WFR at $13.50, selling Apr $12.50 puts and calls for $3.60 nets $9.90/11.20.

    Well it looks like that wasn’t a bottom at all!  I’m still buying for now, I haven’t heard any news that says there’s a problem.  If we fail 7,150 I’ll be a little concerned….

    CNBC/Matt – Well I’ve been on their case for ages but no one pays attention to me…

    Boy you can’t fight that negative Dow trend I noticed earlier.  I thought the big dump would let off some steam but it’s all up to 7,150 holding (see the 30 min chart) but it’s going to be hard to make the turn without a catalyst.

    BAC holding $4.30 is encouraging. 


  51. Cap/yesterday’s gain – I seem to recall saying yesterday that it wouldn’t stick. I should have a coloured box , black I think :-)


  52. So, FSLR 110 support holding today.  I didn’t think it would break it this morning.  Should have said that in my comment.  but if you bought some puts at the open, it did go almost exactly to 110.  I’m out.


  53.  I swear to God, the story of Paulson & Bernanke coming to Congress is something they just all love hearing again and again — they should shut off the lights in congress, build a campfire, and toast marshmellows when he tells it!


  54. How about some downtrending market plays ?????
    "The trend is your friend"


  55. Treasury debt insurance has risen to record levels!  (ie. US becomes a default risk).  Ok, now we know why the panic sell-off.  Obama and Bernanke have both said they will spend and spend and spend but I think it’s Obama’s pledge to be honest about our budget that is spooking people as who knows how many lost Trillions are hidden in those ledgers.  Still, this is nothing that we haven’t discussed before and I usually figure if we knew about something last year then there must be at least 25% of investors who have also figured it out so we are just getting the knee-jerk from the people who are surprised that the US is a credit risk with their $11-$64Tn debt levels (depending on how you look at it). 

    Obama should have taken my advice and pretended the whole thing was an accounting error – we could be at 9,000 by now…  8-)

    Good idea DB – Black with black text for you!

    FSLR – Good one Occam!  Also good on Paulson and Bernanke, it’s like a parable now so they can just use the shorthand like: "As it says in the book of Bush the Son, Economies 7,  Disaster 5: Lo Paulson and Bernanke appeared before Congress and said ‘veryily thou art screwed.’  And Congress looked upon the powerpoint and they began to tremble."

    How dare they cut Ron Paul!  I would pay just to hear him!


  56. Phil:  I am long the DIA April $73 Puts and the DIA May $72 Puts.   I have not created a spread/cover.    Your thoughts at this point ?   Keep long to see if we hold 7,150 on the DJIA and if we do, what would you sell ?    Thanks    /SWB


  57. Trend Edro – Well I just bought the FAS calls and the DXD puts and you can feel free to do the oppositie and follow the trend.  The trend WAS our friend at 9:45 but the risk/reward of getting in now looking for more downside is no longer attractive to me.  You have to have a premise to trade off, you have to have targets you believe in and places you WANT to make a stand – not just chase every wave after it washes over you.

    DIA/SW – I’m fully covered with March $74 puts at $4, which is pretty bullish but you can cover with $72 puts at $3 and use the money to roll yourself up to May $77 puts – the April puts are unacceptable. 


  58. About the trend -
    I don’t think DOW 13000 to 7200 is a wave


  59. I was reading this article on Seeking Alpha and came across this statement -  "Stimulus plan: Most of President Obama’s stimulus plan spending does not happen until 2011!"  This was suprising , I thought spending started as soon as pos after the bill was signed ? The author seems to think its the case , I have my doubts,


  60. Phil:  I am long X stock, short July 25 puts, short Apr 25 calls.  I’m considering rolling the puts to Oct 20′s and paying for it by rolling the calls to Jul 22.50′s, improving both positions.  What do you think?


  61. Phil – Ref MSFT. I just cashed my $19 covers and have naked Jun18 and Jan20 calls. My intent is to take another set of full covers of Mar17C and roll myself down. Do you have any better suggestion?


  62.  Forsooth!  love that Biblical & Renaissance language!   And Joseph Stigliz said, "the skinny cows will rise out of the rivers and eat the fat cows."


  63. What I really love about this is that I see my social rotation theory in action.  The conservatives who listen to Fox and read the WSJ are dumping their stocks and the liberals, who liked what Obama said yesterday, are buying them up.  This could be the greatest transfer of wealth in the history of the world as the believers keep buying at the bottom.  Obviously it could be not bottom at all and the liberals are going to be sucker bagholders but this is what happened during Clinton’s first term – the Conservatives acted like the world was ending and missed out on the whole .com boom and that’s why you have so many hippie Billionaires today… 

    Wave/Edro – So where is your bottom?  Mine is here, mine is actually 1,000 points higher than this and I am seriously concerned that we could break down from here – with or without merit. 

    Meanwhile – ABX bouncing back nicely.  All gold on that report that Treasuries are looking risky but, duh, we knew all this.

    Spending plan/DB – I’d say 1/3 is pretty immediate and the rest is over 2 years, it’s a real stretch to say 2011 is "most"  Also, don’t tell CNBC but this is just Plan 1.  There will be many plans to come if this economy doesn’t pick up and clearly the Dems are not backing down on their theory as to what it’s going to take to move this country forward (pretty much the opposite of everything Kudlow is saying right now).

    X/Clueless – I think it’s way early to write X off but the roll is valid.  Perhaps keep track of the net cost and make sure it doesn’t turn unfavorable on you but, otherwise, nothing to lose by waiting.

    MSFT/Bro – I’d kill the Julys and roll the Jans to the $15s and hold naked unless they fail $16.50, in which case I’d sell 1/2 the March $15s and wait some more.

    Cows/Occam – Come on, Maria is only doing her job…  8-)


  64. UK just closed up 0.8% @ 3847. Which is probably close to the average of the US upside yesterday and the downside today. So just following the trend…


  65. convert UYG stocks to FAS ???
     
    PS please dont raise you rate to $500 a month we love you because your a decent guy !!!! think of us small people :)


  66. Careful DB, you will be accused of using untrustworthy right wing blogs when you raise questions about Porkulus here !
     
    :grin:


  67. Phil – conservatives dumping stocks and liberals buying them ?!?!?!   LOL.
    How about FSLR and the solars then ?
    And how about the indexes ?
    Must be a lot more conservatives than Liberals with the S&P down from 1006 to 760 since election day !
    How come we didn’t win the damn election then ?
    Can we get a ticker on the bottom showing stocks liberals are buying and conservatives are selling ?  PLEEZE ?
     
    You crack me up, man !   :mrgreen:


  68. microflux;
    how can a rational man like Phil raise rates in this economic environment,
    he would violate badly his view of caring for the people when the financial world is in the dumps.


  69. wow, things are changing.


  70. Amazing they trigger this with just a few Q & A answers.  C rocketing.


  71. Phil — Okay, no premature rolling on X.  Do you still like UNH long Jan 20′s, short April 26′s here?  Thanks.


  72. UK/DB – Very aimless if all they are doing is following us. 

    UYG/Micro – Well I like those Apr $4s for $2, that way you even have the escape to cover with March $5s but there’s nothing wrong with UYG as LONG-term hold.  As to fees, I’m going to great efforts to have a program in which current members will not be affected by increases while we raise them for new ones. 

    Damn, I’m getting passed over for Commerce Secretary for Gary Locke.  Big points in negotiating with China so I like him. 

    FSLR/Cap – They are just a bad company.  What do you think, liberals just buy anything you slap a "solar" sticker on.  Oh wait, that’s right, you guys bought everything with the word "oil" on it didn’t you?  Yes, there were a lot of conservatives heavily in the market, they lost the election, they unwind their postions because they can’t believe that Obama can be sucessful and they start buying bonds and drive the rates down to zero – that’s called economics…. 

    Rational/RMM – Well YOUR rates will triple as I’m moving to a model that charges by the question but not others.  8-)

    C not being nationalized – what a non-surprise but look at them go.

    Watch BAC – at the same $4.80 top they hit at the open. 


  73. People do realise that Japan basically funds the US deficits through her massive trade surplus…which is collapsing along with her exports? Who buys all of Obama’s debt when the Jap’s can’t? 
    KA- BOOOOOOOOOM!


  74. Phil:
    UNFAIR; my comment was for Microflux, you trespassed,
    first charge for non-trading comments (which you like yourself), that is far more chatter than my questions,
    two: my questions and your answers give my more confidence, but if your comment leads to a loss, you need to share,
    three: if I reduce my questions, then you should give me a discount.
    Wonder whether the above rationale is clear ???
     
    PS: how come I cannot add funny faces  ????


  75. Anton, you will appreciate this … about to dial in to a conference call … Anatomy of a Chapter 11 Real Estate Bankruptcy – Typical Issues.  Law firm putting this on.


  76. UNH/Clueless – Well the beat down goes on for them.  Yes I still like the Jan $20s but better to wait for an uptrend to sell.   May have to sell lower covers if they can’t pull it together. 

    FCX doesn’t think the world is ending.  Big dollar pullback in the wind may drive copper up to good levels. 

    Damn, we couldn’t make our upside breakouts.  RUT is holding us down, below 400 is bad.

    RMM – Oh don’t take it personally, I was just kidding.   Funny face is just 8 then – then )   There are others but I don’t know them.

    Due to the 60-min Dow chart, I’m not too keen on buying things right here.  I do like HOV if they get back to .80 though… 

    BAC $4.80 would be a nice breakout if we can get it and hold it. 


  77. Picked up 4 points so far modifying my SKF hedge; should have been able to pick up twice that.  Cost now 171 – 19, net 152.
     
    I have this on to help protect the calls I have sold at levels of 240-300.


  78. LOL
    Listen & learn Cap ;)  


  79. Phil: how does inserting funny faces work ?


  80. If what Bernanke just said doesn’t take us under 7000 then im all in today! LOL


  81. kustomz, please quote for those of us without TV at work!


  82. Phil: some people recommend IBM,
    I would not mind having a little more IBM LEAPS – if you approve that this makes sense,
    I have jan 2010 LEAPS 75 (18.05$),


  83. what a crap slop day.


  84. HOV?  R U smoking?


  85. RMM, it’s like this
     
    L-)


  86. MrMocha, im so burnt out that my brain cant retain information for longer than 60 seconds. I say quite that job and join the unemployed, they just extended benefits for another 9 weeks and upped the payment 25 a week!!

    Basically he said why would investors invest at the moment, to risky that’s why we the Fed stepped in to stabilize the financial system. Certainly scared me, i had my hand in the cookie jar and quickly pulled out.


  87.  Damn!  FSLR breaks the 110 resistance just as the afternoon begins.  Will be nice to buy more puts after a dead cat bounce--wonder how low it will go today.


  88. Cap:
    th1 hour ago did manage to get twice SKF and SRS to give up some gains, I am already using apr calls.


  89.  Speaking of dead cat bouces — What do you think of GDX Phil?  I guess it was down 8% yesterday, but didn’t break support at 33.  
    I’m not sure it feels so great though.  I’d like to see 35.5 today--is that too much to think it should reach?


  90. RMM – 8+-+) = 8-)  That’s all I know…

    Yep, Bernanke not helping much at all today!

    Transports right at the 5% rule, RUT leading us down 3.5%, no one else has crossed 2.5% yet.  SOX are still green. 

    SKF going for $180 again, if they can’t break it we may have a good short.

    BAC pulling back but would be good if they hold any .20 mark above $4.  221M shares trading already makes them a nice indicator.

    IBM/RMM – More to fall if the market does.  Total buy at $70 so as long as you are comfortable with that possible drop then it’s good.   I think I would go with the Jan $90s at $9.95 and sell the Apr $85s for $4.85.  If it heads lower, you can use the $5 to roll down to join your existing $75s and if it goes up you have a 2x roll to July $100s, which would make your $75s very happy.

    HOV Matt – I keep trying to figure out why they are trading like BK and I don’t see it.   They have $800M in cash and no major debt covenants due until 2012.  They are expected to lose $1.47 this Q and $4.90 for the year and $2.33 next year.  Even if this were true, they only have 50M shares floated (40% are shorted) so that’s $250M this year and $220M next year.  After that they go back to being a stock that makes what?  .10 a share on my .80?  In a good year they make $10 per share – that’s something I’m willing to gamble on. 


  91. AAPL RIMM MA green, good sign. Im keeping an eye on KFT, it goes red and the Dow sinks fast..something i noticed the past few weeks, S&P holding 754.. line to watch for the day..they fought tooth and nail to get it back to 760….


  92. Phil: on your IBM comment, you would buy an OTM call, usually you/we go ATM or ITM, why here not ????


  93. Man, I didn’t expect this today.  My last hope is for a 3:30 save.  I’m covered until then..


  94. GDX/Occam – I don’t like them as, to me, ABX is so far and away the best, why should I "spread my risk" with a general ETF.  By the way, very bad sign for GDX if ABX does cross their path so good one to short there. 

    This is not like yesterday at all.  Yesterday we noticed that the A/D line was way better than the indexes were looking.   Today we have a broad sell-off in-line with the indexes and, worst of all, the VIX is flat on a 2% Dow sell-off.  So plenty of good reason to be concerned.  I’m watching BAC to hold 4.60 otherwise it’s 4.40 for sure and probably $4.20 which could pump the SKF.

    Meanwhile, oil is sneaking up 5% – I think we’re retesting the bottom and then we get to see if we can really break back up, same as yesterday, about 1:45.  If we do break 7,150, then we have to get more bearish.


  95. RMM – :-) :-) :-) :-)


  96. DB: how do you do this 8-)


  97. Look at them defend 754, if we can hold and run up to 760 in a short amount of time i would go bullish into the afternoon. We need to get all the folks in suits with pretty ties off the sets.


  98. RMM   &-) &-)         %-) %-)


  99. IBM/RMM – Because you already have DITM calls that will do well on a run up and this lets you double up your longs for $5 out of pocket, rather than $17 and, if we fall further, you will have doubled down at $10, lowering your overall basis and, if IBM takes off, you’ll gain on your longs and roll to a much higher caller, putting both positions fully in the money so the premium is irrelevant. 

    Damn, I didn’t want that to be the bounce.  Interesting, it happened as we got near the break.  I’m thinkng maybe a major buyer who wants to make sure nothing terrible is said which is pretty much what happened yesterday – it wasn’t what Ben said, it’s that he didn’t say anything to stop that guy from hitting the buy button.  We still have Durable Goods, Jobless Claims and New Home Sales tomorrow and the GDP on Friday so you do have to be brave to buy here…


  100. Phil – TIE. I have +Jun10P covered with -Mar7.5Putters. The March putters are out of time premium, please recommend adjustment.


  101. CY at $5, selling 2011 $5 puts and calls for $3.20 is net $1.80/3.40.  Dull but potentially profitable


  102. RMM – If you are really really interested here is the Smile directory that tells how to construct all. I dont know how many get through the editor. But you can probably drive Phil nuts by trying.


  103. If GE would just cut its dividend, i betcha it would rally an easy 15%


  104. The markets must be really slow with all this talk about smiley faces.  I think I’ll look the other way.   (-8


  105. Phil: do you prefer me asking questions or sending smilies as DB has enabled me me to do so???


  106. " Interesting, it happened as we got near the break.  I’m thinkng maybe a major buyer who wants to make sure nothing terrible is said which is pretty much what happened yesterday – it wasn’t what Ben said, it’s that he didn’t say anything to stop that guy from hitting the buy button."

    I must agree, timing in the run ups are very suspicious


  107. TIE/Bro – I recommend at least waiting for March before buying back a March 20th putter.  Notice you can roll to 2x the Jan $7.50 puts for + .55 and roll the caller to 2x the Sept $5 puts for + .25 so net .30 for you to roll him into 100% premium.  As long as that cost doesn’t pass .50, you’re not in bad shape.

    Smiles/DB/RMM – Hey, it’s not going to bother me because I can always do this: 

    Money moving out of bonds.  Could be to go into markets, could be to go into gold…


  108. Phi -
    Do you think there’s any fundamental change in FSLR’s potential going forward compared to your fundamental assessment last year? The article talks about being dependent on an increasingly expensive commodity as of March 2008, but is it still the same story now? Or do you have other reasons for preferring SPWRA? Just curious. Thanks 


  109. I’m hoping for a super spike starting at 3:30… how’s that for a sound investment premise? 8-)


  110. Matt – if that is true, then your box should be striped….


  111. Phil – What are your feelings on USO here?


  112. Cap: I am watching SRS again,
    all of a sudden option symbols for SRS seem to have changed :
    what option symbol for SRS apr 100 and 95 do you get ??


  113. Internal indicator have changed dramatically … TRIN TICK  was very negative now bullish,


  114. Struggle at our levels at the moment.  S&P most important but Nas is off today and we need them to lead.

    FSLR/Strat – The math of the world supply of tellurium suggests that FSLR has a flawed business model.  At low stock prices, you can play them as a low-cost supplier but they physically cannot grow enough to justify a high p/e.   FSLR went with a process that cheaply creats efficient fuel cells but the reason that the process was never used by commercial manufacturers before is there’s no 5-year growth plan unless you lie, which is what they and Cramer did for a couple of years as they jacked up the price and left thousands of suckers holding the bag.  Tellurium comes from copper mining and it’s something crazy like a ton of copper yeilds an ounce so it doesn’t matter what you are willing to pay for it, no one is going to sit there and sift through a ton of copper nobody wants to sell some jackass an ounce of tellurium. 

    Now you’re cathing on Matt!

    USO/Grant – I was shorting March $25 puts at $1.85-$2, now $1.25.  I think $40 is too low for oil but USO can fall while oil stays flat so you need to stay in the current month.

    Yeah, this was just so difficult to predict.  8-)


  115. Phil: what a change: what’s driving it ??


  116. So about 2 hours ago, down 170 Kudlow was saying "This proves that the market is rejecting the Democratic agenda and those solutions just won’t fly with Wall Street" – what is the market saying now?  Why are Larry and Cap never seen at the same time???

    TRIN-TICK/CAP – This is the advantage of being a fundamentalist, I get to ignore those things!

    Coming up to first Dow test at 7,360.  RUT still miles behind so IWM $37s for $4.10 with a stop at $3.75, looking for $5+, out if Dow rejected at 7,360 or if IWM falls below $40.


  117. VIX feel off a cliff


  118. Change/RMM – I have no idea what you are talking about.  Nothing changed except there are now less people arguing with me than before when I said the market was going up.

    Meanwhile, DIA covers stopped out.  Now have to wait and see….


  119. RMM:  SKRDQ & RHUDV


  120. SKF chart looking like a Disney ride today (again)


  121. Cap: txs


  122. mrMocha: that change in SKF is the opportunity.


  123. HOV / Phil –

    Based upon HOV’s 10-31-08 financial statements, their net equity per common share is only $2.78.  If they are expecting a $4.90 loss for 2009, they will be insolvent (liabilities exceeds assets).  So, does HOV go BK, seek additional capital that may dilute current equity or do the creditors allow HOV to work out of the situation?  I looked at the possibility of preferred shares, but they aren’t paying the preferred shareholders any dividends and they are non-cumulative non-convertible shares.

     


  124. RMM, sure but every time I go to a meeting today it drops and bounces, I miss the bottom of the V, to play the roller coaster you must be a full-timer!


  125.  thanks for the GDX advice Phil!   


  126. I hope we close up or a couple days. Phils, what’s the critical S&P line you are watching? I’m long a few 80 calls, hopefully not premature.


  127. HOV/Kazoo – It doesn’t matter what they lose per share, they have the cash, they need to raise no more than $300M to get through 3 years and they still have $2Bn worth of inventory (already written down) to sell.  If the real estate market never comes back or drops 20% more, then they have issues but if we are near a bottom and recover in 24 months or less, this is a 10-bagger.  Meanwhile I don’t like them enough to pay more than .80 so I’m still not in!

    Speaking of HOV – the Jan $2.50/$5 vertical call spread is net .05 on a $2.50 spread.  If you can get this price and pay a low commission, $50 can be $2,500.  Obviously chances are not all that good that you’ll win that soon but I’ve lost more in slot machines with less chance of a win….

    IWM – back in business – that was close!

    S&P/BDC – 760 is good on the S&P, 400 is must hold on RUT, 7,245 on Dow, 1,425 Nas, 4,675 NYSE.  All hovering right around those levels and not at all impressive just to hold here.


  128. With an enterprise valuie of $2 B and MC of $67 mil (and a share proice of 0.87) the market must be baking in a 95% probability of BK for HOV.


  129. where is the best place to learn about your DOW, SPX, NAS, RUT levels?  i.e. how exactly do you determine which levels are crucial


  130. What a brutal day.  I think the name for today’s write up says it all.  Which way Wednesday?  Answer:  All over.


  131. LDK getting some interest.  SPWRA still laying around. 

    Levels/C – Well you have to stay tuned really.  Every once in a while I get into a lengthy discussion of our 5% rule pivot points but don’t ask me when.  In yesterday’s post I set these levels based on 12.5% off last week’s drop to show that we are doing more than a bounce off the 15% line (which we double tested today).  On a 15% drop you EXPECT a 3% bounce so just barely limping back to 12,5% is still bearish overall.  That’s why we had another set of levels yesterday that we needed to hit NOT to be bearish and we ended up being wishy washy because the indexes were wishy washy at those levels.  Today is no better but if we finsih this low I stay half uncovered on my DIA puts (but still in my IWM calls and FAS calls as I WANT to believe).

    Oh great, Cramer is talking to the FDIC lady tonight – there’s a reason to worry!  Still, this makes sense with CNBC’s change of tone, they certainly had this planned for long enough so maybe they are going to spin it positive.

    All over is often the case for our Which Way Wednesdays and I can feel a Thrilling Thursday coming on…  


  132. Phil, your DRYS spread is cool but the OXPS commision is $250 for a mere 100 contracts, ouch! 


  133. The commission difference between IB and OXPS is an order of magnitude. I just bought two google calls for $0.80 commision.


  134. Chris, can you put this trade into IB and tell me the commission: Buy 100 YZXAZ, sell 100 YZXAA, I’m curious how big the difference is and if I should consider IB.  Thanks!


  135. OXPS/Mr M – That’s ridiculous.  Option House does that for $10, TOS $70…  It gets to a point where you just can’t afford to trade with a broker…

    Back to full cover on Long Puts – Man this is hard stuff!


  136. DB: whichever symbols I type in, no smiles appear,
    what else needs to be done ?


  137. You want a nauseating chart?  Take a look at COF.  I mean WTF?!


  138. Mr Mocha Fidelity will charge you $158 – I think (200*.75+8)


  139. LDK flying (about time), JPM bustin’ a move…

    HCBK is good to go at $10.68.  Selling March $10 puts and calls for $1.65 net’s $9/9.50.


  140. Just eyeballing the chart I’d think USO would be in a naked long situation?
     
    Also, DUG, WTF is up with this POS? Should I hold shares through the Mar div or just give up on them altogether?


  141. Well if you type colon then dash then right bracket one after the other you should get a smilie. All the others depend on how this FCKeditor parses the strings :-)


  142. Just seen this ..  SAN FRANCISCO (MarketWatch) – Chip sales are on track to fall 24% in 2009, Gartner Inc. said Wednesday. The industry research group also said the industry will not be able to return to 2008 revenue totals through 2013
     
     
    Is that why all my chip stocks are up so much !!!!


  143. Phil: if you predict a further rise in AAPL tomorrow, I keep the calls.


  144.  Phil
     
    Have the JUN 78 DIA longs, what’s a good cover? Thx,


  145. VLO  Any target for covers?  I’ve got Jan 17.5s naked as my long


  146. Mocha; no kidding …. I leave for a meeting, Ken Lewis BofA makes some comments; and its off to the races.
     
    Not complaining; good for my port except for my 100 share SKF hedge which has dropped 20 points in an hour.


  147. Reverse stick save today?  It would be about right for today.


  148. DUG/USO – Those are both terrible ETFs to hold as they grind their value lower every day.  All I do with USO is sell naked puts and I never, ever touch DUG.

    Chips/DB – That is way old news.  I just wrote about the CEO of TSM the other day who pretty much said the same thing but I guess now that an american pollster says it, that makes it official.  The problem is US investors always assume CEOs are lying but in MOST countries in the world, if a CEO says something it’s very likely to be true.

    Don’t forget 411 was top out on RUT yesterday so good place to at least lighten up on IWMs!

    AAPL/RMM – I predict nothing but you wanted excitement and this is sure it!

    DIA/  – Well at this exact moment I’d go for the $75 puts at $3.25 and use $1.25 of that to roll up to the June $80 puts.

    VLO – Nice gas usage today, I’d wait and see how they handle the 50 dma ta $22.50.

    Good enough on IWM, out at $4.60.


  149. BAC with a nice 30% intra-day turn.  Who needs penny stocks when we have the US Banking industry?

    FAS crazy high now, now way do I blow this overnight so trailing stop into the close based on .15 on XLF (now 8.33).


  150. 08:30am EST -Durable Goods Orders 08:30am EST -Jobless Claims 10:00am EST -New Home Sales 10:30am EST -EIA Natural Gas Report
     
    For Thursday


  151. maybe a headfake to shake some people out with 20 minutes to go.


  152. Another Hammer on the Indices daily chart to confirm the move off the bottom.  More money could be thrown into the market tomorrow if we stay green today.  Today felt like a shake out of weak hands before a move up.  My trick is only fiddling with one of my accounts and leave the others alone.  You can guess the outcome – the untouched accounts are up big time.


  153. WFR up nicely since our entry!  MSFT with a good move. 

    Here comes Obama – SKF calls are tempting here (just in case). 


  154. DIA puts — looking for a new position of puts and putters. Why did you recommend Jun 80? That’s more than 0.5 per roll? Should I buy Jun 75 w/ Mar 74 putters?


  155. Phil: wrong, I want little excitement, i prefer gains.
    did you buy SKF calls ?
    Do yuo see a move up tomorrow as Peter D ??


  156. DIA/Ajay – Deano already was in the $78 longs and it’s a good tradeoff to move up $2 (200 points) in exchange for covering and it give him much better delta against the putter while taking advantage of our little uptick – just in case it evaporates overnight….  Your goal is always to keep pushing your long puts higher WITHOUT spending your own money.  So you can day trade the front month puts and just keep plowing profits into more protection.  The problem with June $75/March $74 is that you don’t have much leverage to your putter and if we drop 300 you have a problem.  I like 2 strikes if possible and, of course no less than 45 days.  I’d push the putter down to the $73 puts for max premium, you can always roll yourself up tomorrow. 

    SKF/RMM – yes I just bought some $230s for disaster protection.  Figure they lose about $2 (of $7.60) if SKF drops back to $140 but could double if we hit $175 so good risk/reward for an overnight cover. 


  157. Oh dear – I don’t think they have anything firm at all!

    Oh well, there’s the bell – pot luck tomorrow.


  158. WTF … Did Obama do that ?
     
    They sold off C hard and took everything w/ it.
     
    SKF even closed green.  WTF.


  159. They keep letting expectations run up ahead of "progress reports."  That was really ameteur hour as they let people think there was some major announcement and we got the same nothing they’ve been doing all along.


  160. Someone sent me this via email today…. hilarious
    Phil … if too long, my apologies; best I could do via cut & paste (feel free to delete if its a problem).
     
    Read thru to the end. Unbelievable

     

                        
    36  have been accused of spousal abuse 

    7  have been arrested for fraud 

          19  have been accused of writing bad checks 

            117  have directly or indirectly bankrupted at least 2 businesses 

    3  have done time for assault 

    71    repeat    71 
    cannot get a credit card due to bad credit 

    14  have been arrested on drug-related charges 

    8  have been arrested for shoplifting 

    21  currently are defendants in lawsuits, 

    and 
    84  
    have been arrested for drunk driving 

    in the last year 

    Can 
    you guess which organization this is? 

      

    NBA   Or   NFL 

      


      

    Give up yet? . 

      

    Scroll down, 


     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

    Neither, 
    it’s the 435 members of the 
    United States Congress 

    The same group of Idiots that crank out 
    hundreds of new laws each year 
    designed to keep the rest of us in line. 


  161. 84 drunk drivings in the past year?  Wow!  Well they certainly do represent the people don’t they?


  162. That seems kind of high, even for Congress.  I do not vouch for the accuracy of this.


  163. That thing has been going around for years… so it’s hard to even know which year they are talking about.  But I would not doubt at some point it was true.


  164. Hey folks, what you think about the patern that RUT formed last 3 days? If you compare it to the movement of RUT on Jan 20-21-22 and before that on Dec 11-12-15, maybe we could get some nice raly next 2-3 days…..


  165. Phil:  As I watch you during the day it appears to me that you are trading a well hedged portfolio.  So, in an effort to get my feet wet, (and mimick your strategy) I’m considering building "Tech" portfolio containing AAPL, AMZN, HPQ, MSFT, GOOG and RIMM…then use QID to hedge my exposure.  What is the approximate ratio of stock to QID?  For example:  If I was long 10 shares of each stock that would be approximately $6,000 total.  Then, if I bot 20 shares of QID that would cost approx $1200.  Since the QID is 3X, that should come close to covering any losses incurred by my stocks.    I am also thinking I can add to my stock postions on pullbacks and adjust my hedge accordingly.  Is this the correct approach or is there a better way?
    JW 


  166. Hey guys, Im a newbie here and I have been lurking the past two weeks.   I have really been impressed with the flow even though alot of what Phil writes zooms past me.  
    The past few days a few newbies have asked great questions that have really helped me, and Phil references back to some older posts have really helped also.
    I have one more question, I saw in one of your areas for newbies that you said you were going to create a glossary of "PSW" terms, that would be most helpful, Any chance of that as we move forward?
    I tried to put on the HOV vertical call spread Buy Jan 10 2.5 and Sell Jan 10 5, for an .08 debit per contract in TOS, couldn’t get it to fill?
    Also I would like to increase my knowledge of advanced options and would like to hear how other members got their educations?  Thanks
    Also, Phil I believe I am a Premium Member albeit so far for just one month and I am not getting your intraday updates…. am I supposed to be,,,,  I certainly hope so. Thanks
    Sincerely,
    cb


  167. Hey Chuck,  I just got a couple of minutes, but maybe I can answer a couple of your questions. 
    First, on not getting the HOV fill.  You don’t always get filled immediately, especially on spreads that are way OOM (out of the money) or have thinly traded underlyings.   If you really want the trade, put in a GTC (good to cancel) order and let it work.  In fact, in this volatile market, it sometimes pays to have "silly" orders out there if you know you want to position.  When the markets routinely move 200+ points in a day, it’s amazing what can get filled when you have a little patience.  Just be sure you really want the trade on the GTC orders.
     
    Terminology.  Like a lot of specialized endeavors, there if a fair amout of jargon used here, but after a few weeks you’ll pick it up.   If you get  lost in a complicated trade description, just ask for a Phil --> English translation and someone will help you out.   Two basics:
    Call vs. Caller / Put vs. Putter.    Calls & Puts are what you buy (long positions), and Callers and Putters are what you sell (short positions).    For example, when using DIA to hedge a position you buy a Put for protection and sell a putter to help pay for it.   In almost all of the calendar plays, we are buying longer-dated Calls/Puts and selling callers and putters against them.
    - Premium:  The excess cost over intrinsic value.   Generally you want to buy as little as you can and sell as much as you can.   Calendar spreads are basically set up to collect premium over time.
     
    Anyway, I gotta run, but sure to keep asking questions, Phil and his merry band are always around to help.


  168. Good morning!

    Wow, RBS loses $34Bn and goes up 30%.  AIG is supposed to lose $60Bn so that should be good for 50%!  This is cool, I love new math….

    Good one Ajay.  Actually it was the drunk driving that bothered me as I know plenty of people with a "get out of jail free" card for tickets and such and I can’t imagine Congresspeople don’t have more pull than that.  A lot of the other stuff (spousal abuse, fraud, bad checks) would seem to be too juicy for the press to just let go so only some spam mail would be able to alert us to the problem.  It’s funny/sad how you can commit any slander under the guise of humor these days…

    RUT/ASB – Well those IWMs went great yesterday but they forced me out into the close.  I buy into the pattern leading to a little rally but both of those rallies were short-lived and led to lows a month later.  What the market is missing is the blow-off bottom we had in November, we’re not likely to V out of this but I really do hope we can claw back to 8,000 (450 on RUT).

    QID/JW – First of all, QID is a 2x short, not 3x.  Hedging basics 101 is don’t focus on the totals, focus on the stress.  In other words, if the Nasdaq falls 20%, what are your expected damages from that group?  Obviously, if you actually bought 10 shares of each it only matters what GOOG doeas as it’s worth 2x the rest combined so you may as well hedge GOOG directly but assuming any basket of $6,000 in Nas you can assume you’ll lose $2K on a bad sell-off.  Now, what is it worth to insure it?  Like all ultras, QID has a poor correlation over time, ultras provide better short-term protection than long term.     You can see from this chart that the hedge does work but NOT IF YOU DON’T TAKE IT OFF THE TABLE ON A SPIKE.  That is the key to using ultras as a hedge and if you are not a disciplined trader, these things can kill you.

    The next problem you have to deal with is premium, which is extreme on the Ultras.  Notice the October $50 call is $16 but the Oct $25 call is $32 – just $16 in gain for a $25 move.  BUT, we can use that to our advantage because the Oct $45 call is $18 with $5 in premium and the $60 is $13.30 so we only expect to lose about $5 (27%) on a 33% drop in QID while the $30s are $27, so a 50% gain if we move 33% the other way.  That is key #1 to a good hedge, finding a positive risk/reward ratio.  I’m thinking you were the guy who can’t sell calls against leaps, which sucks as the best thing to do to keep this hedge is sell Apr $67s for $7 so you are in for net $11 on a $22 spread, a clear path to a double with good downside protection.  This is a play I like for anybody looking to cover some downside.

    Assuming you can’t do that and must calculate naked coverage.  You have $6K in Nas stocks and expect to gain 30% on a 20% move up (and, of course, the key is to try to pick the outperformers) so $1,800 up and $1,800 down.  How likely do you think it is we’re going 30% down.  If you say not likely at all then protect against 1/2 of it = $900.  Now just say, what do you need to gain $900 on that QID position on a 30% Nasdaq drop.  Since the QID Oct $45s gain $9 on a 30% drop – you need $1,800 worth or just 1 contract.  Between now and October, you WILL lose $5 (the premium) or $500 so that’s the cost of your insurance policy and will offset a 10% gain in your stocks, which is why I don’t like any hedge I can’t cover to offset the losses as you’re just betting against yourself.  

    The key to using a hedge like this is to have a goal.  Looking at the Nas, I think it’s heading up from here but I’m worried they retest 1,300 (10% down) so if my QIDs go up 20%, I will be at goal and looking to take them off the table and put that $2,400 (about) to work buying more longs for the bounce.  Then, when I get my bounce, I would sell another $1,800 of Nas stock and re-cover with whatever QIDs are appropriate.  If 10 GOOGs are $3,400 now and drop 20% to $2,700 and I use $1,080 (about half of the QID money) to buy more then I have 14 at $4,480 or $320 a share.  If I get a 10% bounce back from $270 to $300 and I take back the 4 shares, I’m contributing $1,200 back to my QIDs and now I am protecting the same 10 shares of GOOG but with a lower cost basis. 

    I often tell people you have to have convictions in your positions.  You can’t just bet against yourself and hope to win, that is a very tricky strategy.  You need to use the market moves to your advantage so you have to have levels that you watch and take action when a level is confirmed, kind of like shifting the crew around on a yacht to make the turns or balancing on a surf board – the waves may shift beneath you and you make adjustments along the way but you do have a direction and a goal in mind and those short-term moves you make are NOT new goals, merely adjustments – that is something traders tend to forget.


  169. Welcome Chuck!  Thanks Eph for the term glossary.  I don’t think I use all that many special terms.  Read Sage’s book (link on the top) to get an overview of option strategies in general.  By far, the best way to learn is to run VERY small bets and see how they go and ask questions along the way.  Nothing teaches you better than having real money on the line so maybe find a strategy you like, find a stock you like and play one out between now and 3/20 so you can begin to understand the dynamics of a trade.  As Eph said, the HOV play is an IF trade.  They are hard to fill but it never hurts to ask…  Also keep in mind that kind of play is not much different than taking $100 and putting it on a roulette wheel – fun if you win but you probably just spent $100 to watch a little ball fall in one of the other 34 numbers.  The reason I like this better than roulette is you get a whole year to have a vague hope rather than the 15 seconds you get at the casino…

    As to intraday updates – you are here!  We are still trying to get an alert system that functions properly but all the alerts are is the bold comments (and probably not all of them) that you see in the above post sent out by Email.  There is no system possible that can give you more immediate feedback than this one.  Option Monster does the same thing but they only give you about 5 comments a day and they are totally static – you can’t ask questions.  But people seem to like that and pay John a massive amount of money so I’ll be sending out alerts, which is 1/10th of what we do during the actual chat session.

    Meanwhile, our futures dropped off considerably in the last 2 hours – looking kind of flat now after being up about 60.  CNBC is now pushing a ton of people who are saying we are in the middle of a down leg and they are talking Dow 6,000.  Also, I think I’m up to 100 nationalizations even though Geithner could not have been more clear yesterday saying it was not on the table

    See, that could have been an alert!  8-)


  170. Good Morning Phil, everyone.
     
     
     
    UK is up 0.8% @ 3879 well off the highs (+2%) on the euphoria of RBS ONLY loosing $34B (as Phil mentions above RBS now up only 20%) is it any wonder that most people wont go near stock markets. Pre-markets is +60pts but will probably change when the data comes out. (Although only for a while because no one pays attention to the data any more – just nationalisation and stress tests.)


  171. Good Morning Phil, DB & All


  172. Asia Markets :    Thursday, February 26, 2009
    (The following is from WSJ; please cross check with other sources to confirm.)   

    Nikkei Average*                            7457.93         -3.29    -0.04%
    Hang Seng*                                12894.94    -110.14    -0.85%
    China: DJ Shanghai*                     241.63      -13.36    -5.24%
    Seoul Composite*                       1054.79      -12.29    -1.15%
    Bombay Sensex*                          8954.86       52.30     0.59%
    Baltic Dry Index                              1960.00      -50.00   -2.62%

    *at Close


  173. Asian Markets Turn Lower on Weak Yen, Poor Data

    Asian markets turned negative late Thursday with the U.S. dollar extending its rally against the yen as mounting economic damage and prolonged political uncertainty in Japan tarnish the yen’s safe haven reputation. The price action in Asia lacked firm conviction as regional exports continue to slump amid the global slowdown and corporate earnings prospects recede rapidly.

    The Nikkei ended nearly flat after briefly turning negative on a spate of profit-taking .

    South Korea’s KOSPI closed down 1 percent and comments by the vice finance minister on domestic foreign exchange liquidity supported sentiment.

    Australia’s S&P/ASX 200 Index finished half a percent higher.

    Hong Kong shares were 0.8 percent lower as blue chips were sold down ahead of the index futures expiry.

    Singapore’s Straits Times Index closed flat. The island state issued revised GDP estimates for 2008 which showed the economy contracted by 16.4 percent in the fourth quarter on an annualized, seasonally adjusted quarter-on-quarter basis.

    China’s Shanghai Composite Index closed 3.9 percent lower as banks, which had led a market rebound Wednesday, were mixed. Auto shares were weak, slipping back after some rose sharply in speculative trade on Wednesday when the official Shanghai Securities News said China, planning to restructure the sector, had chosen four auto-making groups to lead large-scale mergers and four other groups to pursue regional mergers.

    Bombay Stock Exchange’s Sensex ended at 8967.04, up 64.48 points or 0.72 per cent. The index touched an intra-day high of 8960.84 and low of 8788.32. Indian benchmarks pared losses in the last half an hour of volatile trade Thursday to end higher. Auto and oil&gas stocks led the up move while banks and realty stocks ended lower. Positive opening of the European markets and higher US index futures boosted sentiments.


  174. Euro Shares Rise 1%; Banks Lead

    European shares rose in early trade on Thursday, snapping a four-day losing streak, as investors assessed a flood of results and welcomed a UK government insurance scheme for banks’ assets.

    The FTSEurofirst 300 index of top European shares was up 1.3 percent at 725.52 points, and had been up more than 2 percent. The index has lost 12.8 percent in 2009, after falling 45 percent in 2008. On Wednesday, the index fell 0.5 percent, hitting a new six-year closing low for the fourth straight day.

    The STOXX 600, a broader index of European shares, was up 1.2 percent, with banks adding most points.

    Royal Bank of Scotland surged 29 percent after the bank said it planned to place 325 billion pounds in assets in a state insurance scheme.
    RBS reported a loss of 24.1 billion pounds ($34.3 billion) for 2008, the biggest in British corporate history. Other UK banks to gain included Lloyds and HSBC, up 25.8 percent and 6.9 percent respectively, and due to report results on Friday and Monday respectively.

    Barclays rose 10.8 percent. Stricken Swiss bank UBS soared 9.7 percent after appointing Oswald Gruebel, who masterminded a turnaround at arch rival Credit Suisse, as its new chief executive, replacing Marcel Rohner. Allianz rose 10.5 percent as its results showed the extent to which it had been held back by its Dresdner Bank unit, which it has sold to Commerzbank.

    BASF rose 6 percent after the chemicals maker reported a decline in fourth-quarter earnings and said it was bracing for a sales decline in 2009.

    German unemployment rose less than expected in February. It rose by 40,000 month-on-month in seasonally adjusted terms, the Labour Office confirmed. The mid-range forecast in a Reuters poll of 31 economists was for a rise of 60,000 on the month.

    Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 were up between 1.4 and 2.2 percent.


  175. Oil Rises Above $43 after UAE Cuts Asia Supply

    Oil rose above $43 a barrel on Thursday after the United Arab Emirates announced deeper cuts in crude supply to Asia for April in a possible signal that OPEC will cut output further at its next meeting in March.

    Abu Dhabi National Oil (ADNOC), the main oil supplier in the UAE, said it will sell customers less of its flagship Murban crude oil and three other main grades in April than in March. The move came as a surprise to traders, who had expected the UAE to keep April supply curbs largely unchanged.

    U.S. crude [ 43.46    0.96  (+2.26%)] for April delivery was up, after surging $2.54 on Wednesday.
    London Brent crude [ 44.73    0.44  (+0.99%)] gained.

    U.S. crude futures jumped more than 6 percent on Wednesday after U.S. government data showed a larger-than-expected drop in gasoline stockpiles as demand rose on cheaper prices. The data also showed a 1.7 percent rise in U.S. gasoline demand over the four weeks ending Feb. 20, as low gasoline prices lured U.S. motorists back on the roads.

    Reports this week have shown high compliance by OPEC members on production cuts agreed last year to stem the slide in oil. Venezuelan Finance Minister Ali Rodriguez, a former president of OPEC, said his country expected to propose new output cuts.


    Dollar Slips as Stocks Gain; Yen Falls

    The dollar slipped against a basket of currencies on Thursday as European stock markets extended gains and the British pound got a boost from the launch of a bank insurance scheme. However, the yen tumbled to a three-month low against the dollar as investors sold the currency amid concerns about Japan’s economic outlook.

    The euro [ 1.2761    0.0041  (+0.32%)    ] extended gains against the dollar, and sterling [ 0.895    -0.0003  (-0.03%)    ] after data showing German unemployment rose less than expected in February on a seasonally adjusted basis. The single currency remained near recent lows however on ongoing concerns about sovereign credit quality within the euro zone.

    Sterling [ 1.4256    0.0054  (+0.38%)   ] was up against a broadly weaker dollar at $1.4213 after Britain launched a scheme which could end up insuring more than 500 billion pounds worth of toxic assets in a bid to get lending in the recession hit economy moving again.
    The dollar [  97.94    0.57  (+0.59%)    ] rose as high as 97.97 yen according to Reuters data, its highest since mid-November, and was last up on the day against the Japanese currency.

    One-month implied volatility on dollar/yen options has risen to around 18 percent after falling as low as near 16 percent earlier this week.

    The euro [  125.01    1.12  (+0.9%)   ] climbed against the yen, after touching a seven-week high of 125.17 yen on Wednesday.The Australian dollar [  63.54    0.57  (+0.91%)   ] struck a seven-week high of 63.69 yen, according to Reuters data, after figures showing Australia’s business spending jumped in the fourth quarter.

    Gold eases on strong dollar, SPDR stays at record

    Gold eased a touch as the dollar held onto gains against the yen on Thursday and investors took profit from an 11-month high hit last week. Gold was trading at $945.60 an ounce as of 0620 GMT, down 0.7 percent from the notional close of $952.10 on Wednesday. Gold fell 4 percent over the previous three sessions.


  176. What did YRCW do ? -30% pre-market


  177. GMs loss one third an RBS :-) Only $9.6B or $5.9B adjusted. market shows no reaction.


  178. Why are the futures up so much?


  179. :O


  180. :)


  181. ;O