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TGIF! Big Chart Reveiw

Happy anniversary awful market!

That's right, today is day 20 of one of the worst market slides in history.  We began Feb 9th at 8,280 and yesterday the Dow closed below 6,600.  That's 1,680 points, almost exactly 20% in 20 days – how neat!  It's not so much the drop that's killing us as the lack of bounce.  The TOTAL lack of positive movement, something Michael Kahn in Barron's is calling "A Slow-Motion Capitulation."  Essentially Kahn is saying that traditional indicators are not working as fed up investors have stopped buying, but they have also stopped selling as there's hardly any point.  Much to the chagrin of the bears, even C at $1 is not shaking out the shareholders as volume dropped from 1.8Bn last Friday to 578M yesterday.

Essentially, we have gotten to the point where Elvis has clearly left the building and the 5Bn shares of C that are held at $1.02 are not held by people who are going to panic out at .50.  We saw JPM and WFC come under attack yesterday, as we expected after the Moody's downgrade we discussed in the morning post.  Those plays still work and the SKF hit our $250 target and we did, indeed short the hell out of it so now let's see what happens.  We are prepared for one last push higher this morning as we are going to get awful jobs numbers but we don't think this level of financial panic can be sustained – not just because of technicals or fundamentals but because the government can't risk this snowballing into an out-of-control crisis.

UNLESS – that's their plan!  That's right, one possible explanation for the inexplicable lack of government action is that the Obama administration looked at the situation, decided it was hopeless and decided it was better to let the big crash happen now than try to prop things up for a year and then having it all collapse anyway.  I said to members earlier this morning it's like when an empty car starts rolling down a hill – If you catch it right away, a single person can stop the momentum but, if it gets rolling, 3 or 4 people would be needed to stop it but, once it gets going, there is nothing to do but let it crash and pick up the pieces after.  We are probably right between stage 2 and 3 right now, it's possible that a globally coordinated effort can halt the economic downturn but, if it turns out we're too far gone, then countries that try to help will simply get crushed and end up part of the wreckage themselves.

Sadly, we had to finish yesterday net bearish once again as there was nothing encouraging about the close but we did do some bottom fishing in the afternoon and, obviously, our SKF shorts and FAS longs are pretty aggressive.  Fortunately, we took those QID calls last week (ultra short Nasdaq, see Mike's chart above) and the XLU and MDY shorts (see last Big Chart Review) are paying off as are, of course our main short plays on the DIA but our stocks are a horrible, terrible mess and we can barely bring ourselves to buy more, even at these prices.  Now I'm hearing that there is something like $11Bn in cash on the sidelines – 50% of the total value of the US markets, investors are just looking for a buy signal, almost any one will do but if this administration is flashing one, it's more secretive than the most complex of gang signs because we're all missing it.

The WSJ has a good article today "Has Fear Blinded Investors to Value" that pretty much touches on the themes we've been discussing in member chat recently.   Brett Arends points out that there are many great non-financial companies that are "accidentally" paying huge dividends due to their decades-low share prices.  "Should Kraft Foods really be so low they have a dividend yield of about 5 ½%? What about A T & T (7%)? Or DuPont (9 ½%), Philip Morris (8%), American Electric Power (6%), British Petroleum (9 ½%), drinks giant Diageo (5%) cellular network giant Vodafone (8.5%), Merck (6 ½%) or a host of many others?" he asks.  Just as we may have overshot the highs in the commodity bubble, we certainly may have overshot the lows in the bust. 

On the right is a fantastic video of the Daily Show recapping the idiocy that was passing as market commentary on CNBC during the market decline.  Well the same idiocy is being practiced now by the same same idiots, who are now cheerleading the bottom as much as they ever cheered for the top.  As Jon Stewart says:  If only I had followed CNBC's advice, I'd have a Million dollars today…  If only I had started with a hundred Million dollars!  Why then now, do we listen to these bozos?  It is just as ridiculous to tell us that WFC is going to zero as it was to tell us XOM was going to $100.  Goldman Sachs is another group of morons who still manage to move the markets with their prognostications - even though they themselves lost more money than the GDP of 300 nations last year – presumably following their own advice

So how bad are things today?  Let's take a look at the Big Chart:

    2 Week 2007 % 50% Nov 60%
Index Current Move High Loss Down Low Down
Dow 6,594 -520     14,021 53% 7,011 7,449 5,608
Transports 1,262 -188       3,114 59% 1,557 1,418 1,246
S&P 682 -61       1,576 57% 788 741 630
NYSE 4,267 -366     10,387 59% 5,194 4,607 4,155
Nasdaq 1,299 -88       2,861 55% 1,431 1,295 1,144
SOX 197 8          549 64% 275 167 220
Russell 349 -45          856 59% 428 371 342
Hang Seng 11,921 -1,254     32,000 63% 16,000 11,814 12,800
Shanghai 219 -47          588 63% 294 172 235
Nikkei 7,173 -13     18,300 61% 9,150 7,406 7,320
BSE (India) 8,325 -518     21,200 61% 10,600 8,316 8,480
DAX 3,682 -254       8,151 55% 4,076 4,034 3,260
CAC 40 2,547 -180       6,168 59% 3,084 2,838 2,467
FTSE 3,514 -336       6,754 48% 3,377 3,734 2,702

We are down to just the FTSE holding the 50% line – the rest of the global indexes we follow. Other than the Dow, are closer to 60% off than 50% off.  ALL of Asia crossed the line, with the Shanghai giving up 8% in 10 days of trading despite the efforts of the Chinese government to boost the markets but they did come sharply off the lows this week and we'll have to wait 2 more weeks to see how things turn out.   What we do not want to see is a European index cross that 60% line.  It is somewhat encouraging that the SOX are actually UP 2% in two weeks and that helped the Nasadq have the smallest loss (3%) of all the US indexes

In fact, the QIDs (ultra-short Nasdaq) have exactly hit our target top at $67 this week and seem content around that line.  The QLD (ultra-long Nasdaq) is down to $20.85 and getting tempting but not today, a day we will be happy to just survive.  Things are certainly bad but are they 60% off bad?  All I can do is repeat what I said on Feb 23rd, in the last Big Chart Review, which was: "I wish I had something optimistic to say here but I don’t."  At the time I said we were looking for leadership and so far, we have found none.  We are finally getting our long-awaited collapse in the energy sector as XOM et al come crashing down, pulling much-needed cash out of those bloated dinosaurs where, HOPEFULLY, they will eventually be put to work in companies that are good for the economy, as opposed to companies that rake in money when the rest of the economy is being bled dry by high commodity prices (and that includes the fees charged on money and stocks).

Rotation is a very painful thing as money comes out first and THEN is put to work.  This chart shows the massive exodus of capital out of the OIH and out of the XLF, which are under-performing the S&P since November by 20% and 30% respectively.  Of course this kind of rotation also means jobs rotate out of those industries and the Real Estate/Construction/Mortgage/Banking industry dropped millions of people from the payrolls and Oil Services is in the midst of the largest decline in drilling operations ever, throwing more people out of work.  So we are in a trough of money rotating out of the market and people rotating out of jobs – until we see some sector stepping up and carrying the ball, neither the money or the people will have any idea where to go

We've been essentially playing this week looking for fear into the jobs data this morning but the panic in the financial space was much worse than we anticipated.  WFC was just put on ratings watch by Moody's, who I forgot to include in my list of analysts who are clearly clueless.  That bank fell 33% this week, down to $8 from $30 at the beginning of the year.  Today WFC cut their dividend to .05 from .34, a move that will save them $5Bn a year and, in the words of CEO Strumpf: "Will help us repay the government's investment at the earliest practical date."  WFC said that its integration of Wachovia Corp is on track to achieve $5 billion in annual merger-related expense savings, and that it expects that total merger integration costs will be lower than originally projected.  I mentioned the ridiculous price of GE yesterday and now JPM has joined the gloom sqad at $16.80.  Even if you don't want them for that price, you can sell the Apr $12.50 puts for $1.20 for a net entry of $11.30, a 32% discount to today's price if put to you.  If called away, you make $1.20 on $8.15 (assuming 50%) in margin, 15% in 40 days!

8:30 update:  Jobs losses were in-line at 650,000 lost for February, but January was revised up from 598,000 lost to 655,000 and December job losses were ratcheted up over 100,000 to 681,000, the most since 1949 when 500,000 losses were the result of a workers strike (you know, demands for living wages, benefits, security, etc – something we may see here soon).  That pushes unemployment up to our expected 8.1%, 0.2% more than was expected by economists, who certainly must read different papers than I do.  Close to 2.5M jobs have been lost in 4 months, but, as I mentioned yesterday, the labor and productivity numbers indicate this fad may have run its course, providing things do not deteriorate furthern and companies begin shutting down en masse.

Well congratulations, we made it through our data point – maybe now someone will buy something (please!).  Next week we get Wholesale Inventories on Monday, probably still dropping, Retail Sales on Thursday (already BTE based on report we saw yesterday) along with Business Inventories and our Trade numbers on Friday the 13th.  Overall, a light data week so the markets are now free to do whatever they are going to do.  We do have a Consumer Credit report at 2pm this afternoon

Obviously we will be happy to cover our long puts and flip bullish, riding  our (hopefully) well-timed plays from yesterday but let's not fall in love with a bounce off a 25% Dow drop since Jan 2nd.  We EXPECT a 400-point BOUNCE along this downtrend so we're not even impressed with anything less than 7,000 next week, which is now a 6% gain off 6,600.  Of course we also need to watch our Big Chart levels for signs of further weakness but I'll be willing to go 60% bullish at the open and stay bullish into the weekend if we hold a 2.5% gain on the day (6,765 Dow, 700 S&P, 1,350 Nasdaq, 4,400 NYSE and 360 on the Russell).

I will be on LiveStock (good name) at 1pm this afternoon and you can watch it live here.  Hopefully we'll find some fun afternoon trades.

Have a good weekend.


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  1. Phil
    In reviewing the k1 posts, I came across the  safe market/collar trade you and Op Sage have reccomended in the past. Is this an appropriate time for the play, or is the market too volatile right now? If its not, could you suggest some entires? Thanks

  2. Collar/Deano – Well the Vix is a little high so the long premiums are a bit much but which specific ones are you looking at?

  3. Can we get a drumroll while we wait for the jobs data please?

  4. Looks like the data is slightly above expectations.  Or more clearly, more jobs were lost then the average consensus was looking for.  Unemployment now at 8.1%.  But keep in mind, these are preliminary estimates and will undoubtedly revised higher.  I think we are in for more of the same.  Not a capitulation event.

  5.  SKF crash alert !    lol

  6. Wow.  SKP is starting to take that big BM we ( or I) need it too.  arousal levels rising!

  7. SKF crash would come if it dropped to around 130. Until then it is not

  8. Phil,
    Again on XLF/UYG.  Essentially, they both are priced as (long-term) calls--so why not to load a bunch and forget about them, say until 2011?

  9. There’s nothing to justify a crash in SKF off this data.  It all depends on where the big fish want to take it.

  10.  G’day.
    Phil- DIA. I have full cvr of +Jun71P and –Mar68P, In spite of  reading both posts that your wrote last night, I need advice. Thx.

  11. Jobs were pretty much in-line this month but they revised over 150,000 more jobs out of Dec and Jan, that’s why we’re at 8.1%, we were already at 8.1% but the data was lagging.  I think that there may have been some book adjustments done by the new administration to push some bad news backwards so it will be easier to show progress later.  You can be cynical and say that’s manipulation or you can buy the party line that the data was previously manipulated and they are just "fixing" it to give a more honest reading.  Either way, this trick only works once, I’m sure Nixon had great intentions when he started out…

    DIA/Bro – Full cover is good at the moment, just watch 1.25% and 2.5% levels to decide when/if to stop out at least 1/2 of the covers.  I would certainly roll up long puts into this rally (.50 or less per $1 higher strike) and keep a good eye on Europe’s performance as a negative close there can spill over.  I’ll be out at 10:30 as I have to by in NYC at noon for the Webcast so make sure you guys catch me there this afternoon.  If I can I’ll check chat here but, if not, we’ll keep an eye on the usual nonsense as much as possible.

  12. Forgot to make that last an alert:

    DIA – Full cover is good at the moment, just watch 1.25% and 2.5% levels to decide when/if to stop out at least 1/2 of the covers.  I would certainly roll up long puts into this rally (.50 or less per $1 higher strike) and keep a good eye on Europe’s performance as a negative close there can spill over.  I’ll be out at 10:30 as I have to by in NYC at noon for the Webcast so make sure you guys catch me there this afternoon.  If I can I’ll check chat here but, if not, we’ll keep an eye on the usual nonsense as much as possible.

    I will be on LiveStock (good name) at 1pm this afternoon and you can watch it live here.  Hopefully we’ll find some fun afternoon trades.

  13.  Phil
    On the collars I like GMCR, INTC, and DIS – let me know what you think & how you’d play and thanks very much.

  14. WebTV – How do you watch the channel on LiveStock? Do I need an account? I can open the page, read the description, but I see nothing like a "watch" button or similar that will launch a viewer.

  15. Stock entries/Deano – Any stock where you can enter with 1/2 to 1/4 (better) of your desired total and you can sell April puts and calls against it where the net entry if put to you is 15% lower than the entry price is "attractive."  That goes for our whole buy list but today, as I said above is a day I would rather watch and see what happens but if you are caught too bearish, then it is a good idea to pick up a few, just in case.

    FAS is still fascinating at $2.85 and those SKF puts aren’t too expensive yet.

  16.  Matt,
    Did you see the lol part ?  :)

  17. Still Cheap:

    RIMM, X, QLD, ABX, M, INTC, FCX, GOOG, GS, JPM, AXP, KO, GE, VZ, YRCW, PFE, HOV (.70 baby!), CAT, ANF, plus our whole Buy list

    Just things to watch or buy if you are highly motivated but the opening is weak actually with big tech getting attacked to keep the Nas down so I don’t think the bears are quite done and I don’t know if the bulls are any more anxious than I am to pull cash off the sidelines into the weekend. 

    MA is back at my $145 target but V is surprisingly weak, possibly ahead of the consumer credit report at 2pm.

    COH, ANF, COST are cheap retailers.

  18. LIveStockJordan, All – Use the link above, it should take you to a channel with Tim Sykes on it.  It is my understanding that I will be right there at 1pm, the show on now is a repeat of his last show.  I’ve never done it before but it’s supposed to be really simple.

    Cool, moving right along to the 2.5% line on NYSE and Transports with S&P close behind (kind of like a horse race!).

    This is why we need to take those bullish chances on the bad days, things get away from you fast once they get moving.   This is getting a little crazy already but fortunately, we’re in a position to sit back and enjoy the ride!

  19. Notice the pronoucned slowdown as everyone hits 2.5% at around the same time.  This is like water hitting the levy at the moment, little pullback expected to 2% but, if we don’t get that and we crash througn, it indicates a whole lot of pent-up action behind the buying. 

    As we discussed yesterday, 2.5% is not enough to capitulate the shorts we need to break over 5% on a single move to get them to cover – that’s a tall order!

  20. SKF dropping (down to 228) but premiums on 120 and 150 are not reacting.
    Any clue??

  21. AMZN still on sale because BKS bought an EBook company to challenge Kindle.  This is like betting against AAPL because MSFT announces the Zune.  If they get down to around $62.50, that’s a nice entry point, probably selling Apr $60 puts and calls (although you can wait on the calls if you are brave).

    SKF/Bv – Yes, the MM on SKF is a crook.  Prices are held until he works up a good spread as you’d be surprised how many people make market orders on options. 

    Losing 1.25% after hitting 2.5% is BAD by the way!

  22. Phil: marketorders on SKF, nuts with that type of spread.
    PUTTERS: is there time to wait for the rally next week ? This drama must end, is it next week ?

  23. WebTV – Oh, I got it, had to turn off add-blocker on my Firefox LOL

  24. J.P. Morgan analyst Mark Moskowitz this morning trimmed his EPS estimates and price target for Apple (AAPL), while maintaining his Overweight rating on the stock.
    For the September 2009 fiscal year, he now sees EPS of $4.73, down from $4.82; for FY 2010 he goes to $5.15, from $5.26. Moskowitz cuts his target on the stock to $100, from $102. Driving his more cautious view: the crumbling economy.
    Seems every few weeks someone takes a wack at AAPL.

  25. SRS is the new SKF!

  26. Phil, a question about premuim (back to basics for me):
    Say stock is at $50, and I am looking at a put and a call at the $51 strike.
    Suppose the put and the call are each worth $5.
    So, the premium for the call is $5 and for the put is $4. 
    Is this right?

  27. So Moskowitz lowers AAPL by 2% but the stock drops 4%.

  28. Singapore Steve- was wondering what’s with AAPL.. I used that this mornign to buy back my caller and resell the putter which I had bought back yesterday.

  29. Cap  - if you’re out there – $100 gone on SRS. Ding!

  30. Putters/RMM – You should have stopped out at least 1/2 at 2.5%.  DIA $68 puts that were $3.75 yesterday dropped to $2.60 on that run and are now $3.15 – you have to know that when you get a chance to stop out a putter on a 2.5% segment, you should, especially with $1, which pays for 2 rolls up on your longs.  Now you can look over the other DIA puts and decide what you will do next.  If we make another run, maybe sell the $70 puts, now $4.32, using the 1.25% line on the Dow as a stop.  By stopping out a put you are already beating and switching to a higher delta put for the next run, you can squeeze an extra .50-$1 here and there but you have to be quick to take the nickel losses when you’re wrong. 

    So at +2.5%, you can speculate taking out 1/2 as we’re fairly sure we’ll pull back to 2%, once we fail 2% you can take out the other half and wait for tests at 1.25% to decide if you are going to re-cover.   Since we already know that anything less than 2.5% is still bearish, 1.25% is certainly a reason to be very bearish and stay that way until we cross back over that line.

    Somebody’s paying $11 for the SKF $320 calls, those are a fun sell!  $290 puts are back at $66.50 but it all looks a little dangerous at the moment as they are still beating things down.  Gold is running along with the miners.

    What we have discovered is there are very few sellers above 2.5% as we flew up to that level but there seem to be plenty of sellers there.  It’s the opposite of a bull market, where you see buying on dips like that. 

    So we’re holding green and I have to go do the show so I think 1/2 DIA $69 puts at $3.90 as a wishy-washy cover but I don’t mind a spike in SKF as long as it reverses back to around $240 by EOD.

    Premium’/Jordan – Yes that’s correct.  Some people count the put premium as $6 but if you don’t get the actual money, my theory is it doesn’t count.

    Hopefully the spike up was a test of the waters for big boys, looking to see where the "safe" zone was.

    Well later all!

  31. Later Phil, have fun in NYC and on the show. Can’t wait to see you on camera LOL

  32. Unbelievable what is happening to SKF.

  33. RMM, you should be prepared to test $300 in SKF before option expiration.  They can easily take it there and just hold it to kill premium.  The banks are viewed as weak prey and they will take advantage of that.

  34. Remember last week I said TRLG might be a good short at $13 after their 50% run ? They are now just $8. !!! (I shorted to $9.5) thats a big fall in a week.

  35. Goog breaking down ….

  36. DB – great call – I noticed when you picked it – but got distracted before I had a chance to look closer at them unfortunately.

  37. Phil/VIX
    Still seems a little low…. Didn’t you mention something about 52 yesterday…. trying to find the post. 

  38. To all you SKF/FAS/UYG ers out there.. my feeling is this is a big headfake move.  I’m looking for a SKF entry around 246.4  (very conservative) before SKF takes off again to the upside.  Volume buying is very low and they are just trying to stir up some more interest for bagholders before resuming its acent into close.    FWIWIMHO.

  39. …please take this little ‘s’ and insert it up there in that funny word ‘acent’.  Thanks!

  40. phil,
    aapl actually closed the 1/21 gap -up. what forces or stratigies or ‘burned on the gap’  groups are responsible for this? aapl had to move over 6% to close this thing today!

  41. I’m going to check here for questions on TV so let me know if yiou have any – won’t be practical to type this afternoon.

  42. matt: bank stocks must be close to zero soon, how can SKF go even higher ?

  43. Matt / RMM, it feels like you could have bought SKF calls at the open and sold at the close and made money on this 9 days out of the last 10, is that what you guys are seeing?  Quite the moneymaking trend if true, all you bears take heed.  I’ve been too stupid and optimistic to play this trend correctly, and now the margin requirement on my 290 call sales has gotten so large that I can no longer trade on my account until (I mean if) SKF goes down!

  44. Phil, your HOV trick from a few days ago actually worked, today my order filled.  I bought HOV JAN 2.5 calls and sold JAN 5 calls for a nickle debit.  GO HOV!

  45. Mocha: yes I was tempted to buy SKF but did not believe it would go this high,
    last time I made $ shorting SKF was 3/4, only a few days ago.
    Once the banks are destroyed, SKF will drop, that is why I take more time and I have april shorts.

  46. Matt, looks like you’re right , SKF 300 here we come!

  47. Matt
    SKF may hit 300 but it may only stay there for an hour or so.  It dropped almost 150 points in Nov when it was up at this level.

  48. matt: sometimes I find the traders really dumb as they want to go back always to previous lows or highs, yes, their goal for SKF is the 300 level as it was in DEC. Mindless pushing it around irrespective of true economic rationality. Big money can do it.

  49. This is depressing.

  50. Phil,
    Do you still see a room for BXP or SGP to go much lower from here?

  51. bio: its depressing alright and destructive,our lives are changing by the day.

  52. It’s like going on a highway down hill  with no exits to get out. What a mess

  53. with my watching SRS and SKF, I keep forgetting all my other problem areas.

  54. SOMETHING is about to not happen… or maybe it will. 

  55. matt:
    SKF: from 260 to 300, still a long way to go, doubt that it will make it, but who knows.

  56. Phil is on right now. :)

  57. One guy at the LIVEstock says about Phil’s talk: he needs a bottle to understand this talk.

  58. Without Phil, you guys are speechless, even matt.

  59. GOOG creeping up…

  60. Guys, do you know what time European market close? Germany? London?

  61. AAPL getting a whoopin’ today…..

  62. Time to buy, DOW cannot go down below 6500

  63. 20% in 20 days sofar.
    odds favour up 10%  next 10days imho.

  64. Hey, were getting a little turn up here.  You guys reading the blog on Livestock?  I like the George Cantansza and Tony Sapronas comments  LOL.

  65. They’re fiercely defending 260 on the SKF, watch the price action.

  66. Obviously I was a little too conservative in my entry point earlier.  But I was right on SKF going back up.  Well here’s another entry I"m looking for… 267.  SKF should close at or near its high for the day.

  67. this is promoter timothy sykes, you are required by phil to tune in now

  68. er.. that’s 257 not 267!  

  69. Hope yall got in on SKF.  If it goes below 257 dump it.

  70.  If any of you guys are margin constrained by holding too many SKF 290 calls short, I just rolled the MAR 290 calls to APR 260 calls on a 2 for 1 basis even and it cut my margin requirements by 40%.

  71. HAHA!  It’s fun spamming that other site!

  72. Looks like it could be a bad finish to the day.

  73. I have watched Phil in the different world. It is really different.

  74. Phil, I don’t know where  you get the stamina!  Oh yeah, money. 

  75. Hey do you guys change your clocks this weekend ? Forward 1 hour ?

  76. And the week DB!

  77. Speaking of clocks, mine sure got cleaned this week!

  78. The comments on the Livestock site are hilarious.

  79. Hey, the APR calls I just rolled to from MAR are already down 10%, what other stock can you lose money this fast with!

  80. How’s it going guys?  Is this a good thing to do?

  81. Wow!!! We just broke 6500!!!!!!!!!!!!!!

  82. That’s been entertaining so far.  matt, saw you spamming there.  About 10 minutes to sell before we take another dump for the weekend.

  83. Hi Phil!  I’m having fun kidding around with the other chatters on Tim’s site.  Can’t wait for the gf..

  84. SKF scares me. I think me might see SKF 450. Three 10% drops in XLF will do it. (currently holding SKF Mar 120 puts w/ 1.15 stop that never seems to trigger, no matter how high SKF goes).

  85. DB – Spring Ahead. Yes it is one hour. (7 AM -->  8AM)

  86. For all you know mkt might rally +500 pts today?

  87. Clocks/Ramana – Thnx


  89. US. Jan. consumer credit up $1.76 billion - so thats more people making the same mistakes that got us here in the first place :-)

  90.  Phil def a future in it for you, suits you. :)

  91. Tim’s site could be much better if they just showed the screens and left out the people video.

  92. Might as well put a tax on coffee.  What does it provide ?

  93. Steeve – No offense meant, but I saw better production and advice in my neighborhood preschool.

  94. GE daily low is 6.66 not a good number

  95. Stick save !

  96.  We need Moses to part the Red Sea!!!!

  97.  /ES low was 666

  98. and a beauty!

  99. Bronek
    I agreee, they should just stick with charts, the rest is a waste.  Funny that the stocks shot up when deela went on.

  100. Dow + 100pts in 15 minutes – if you ever need proof of the PPT this is it. S&P back from -2%. SUCH A FIX

  101. LOL!  Just got banned from Tim’s site cuz of Delala!!!

  102. Not a stick save, just trying to stop out and make a few pennies on those of us that just bought some weekend protection.

  103. What happened matt? too bearish?

  104. Matt…what did you expect.  You can’t just go imitating Flanders anywhere you want !  :-)

  105. Go, PPT, go!

  106. I think he was asking her to be more bare-ish

  107. O! Keyser lmao

  108.  Wow, way to save the weekend, PPT!

  109. Another 100 pts and it will be a reversal day.

  110. The show is over. Tim Sykes interrupts Phil all the time, I think he has ADD.  Anyways, have a good weekend everybody. Ending on a somewhat hopeful note.
    Phil, if you’re planning on coming to NYC more often let me know, I’ll buy you a drink/lunch.

  111. That was pretty funny…  Definately entertaining. 
    Deleela worked… we went green

  112. That was fun!  Have a good weekend everyone, I’ll catch up later.

  113. Quite a reversal, if the govt makes a significant policy announcement (like ending MTM), do you think there’s a chance that was the bottom?

  114. heh Matt you were begging for it ;)

  115. Good weekend everyone… headed to Austin for the weekend.
    Drinks on the lake…. ohhh yeah 84 degrees and sunny.

  116. I meant if they make an announcement over the weekend.  What do you think ending MTM when the markets are closed would do to SKF on Monday morning?

  117. Matt1966 - Your "enthusiasm" for Daleela was pretty funny.  I wanted her to jump too.
    I hope Phil does not do this regularly, I find video/audio too distracting and didn’t do any trading.

  118. Eph, if I understood the discussion correctly on Fast Money yesterday, they were saying that MTM will have a favorable psychological impact but in reality doesn’t do much because only current-year assets on the balance sheets would be affected and mortgage-backed securities are multi-year assets.  So it would be good for a quick SKF drop, no doubt, but perhaps not a sustainable rally.

  119. And the MTM hearings aren’t until the 12th, I think, so I’m not sure what could realistically happen this weekend.  But have a good one anyway!

  120. Delelah was worth it.  I want to subscriber to her site!

  121. Kustomz, I can’[t be held responsible for what the PPT does.  Hope you got out in time.

  122. On Monday, someone please remember to ask Phil about the trading tax.  What was that about?

  123. Grant , more info on th etrading tax.
    Dear clients:

    On Friday, February 13, U.S. Congressman Peter DeFazio, introduced H.R. 1068: "Let Wall Street Pay for Wall Street’s Bailout Act of 2009", which aims to impose a 0.25% transaction tax on the "sale and purchase of financial instruments such as stock, options, and futures." 

    Please, read more about this proposal, that could cost each trader thousands of dollars, and sign the petition!

  124. If anyone wants to see what this whole big deal is about re: Daleela, here is she in one of Tim Sykes’ videos. So I hope that’s the end of that diversion.

  125. Thanks Jordan.  That should get me through the weekend! ;)

  126.  Phil,  I think it is easier to follow your logic and trades here where you outline your thought process and we can refer back to earlier posts and digest the information.  The video/TV stuff is good to do in order to get your name and brand out to a wider audience – so keep doing it.   The tech set up this afternoon fell a bit short, they didn’t integrate the charts and laptop display well.  

  127. Is anyone buying the action during the last 25 minutes today?  Looks real similar to the action at close yesterday.  Think they’re just throwing up speed bumps to slow the descent.  Might go out on a limb and pick up some more SKF…  the only thing I have to fear is govermnent manipulation.  Which is pretty damn scary.

  128. Can’t get into the livestock link posted. Anyone know if the broadcast is recorded somewhere? I’m really interested to see Phil and Timeh! (the uuber clown of post y2k wall street).

  129. Wow.. put a purchase in for 25 (piddly) shares of SKF at 245.8 which was 2 dollars below the ask and it executed at 7:59 just before close.  Not sure what that means.. cept I’m on the hook now.  The ask didn’t change after my trade and it wasn’t even listed in time and sales.  Maybe one of the MMs figured they’d take whatever bagholder they could get for Monday?  I dunno.  But I’m hoping it’s not time yet for a reversal.

  130. Here I am …..
    Anton:   Ding !  (but did not hold 100).   Look what it took to get there.  Kudos.

  131. Good morning!

    The Livestock broadcast loops around but you can go to "On Demand" to start the show from the beginning.

    Mauldin’s article is great today (main post) – hits a lot of the value points we’ve been discussing re. the real value of MBS’s.

  132. matt
    If we open with a rally on Monday your SKF will get crushed.  They could gap low.  plus you won’t have time to cover them before the open.  good luck

  133. Phil,
      Last week I asked you about how to get out of my March BAC 9 (10), C 5 (20), and DRYS 5 (10) short puts. You recommended the RKH Apr 35 puts. I did not pull the trigger and the RKH has gone from 40 to 31. Do you still advoacate the same strategy (ie selling Apr 35 puts to cover the BAC, C, and DRYS) or do you have any other thouhts?
      Also, I was thinking on my way home last PM that what if C spent $1-2 Billion to buy back shares? They sold shares to Singapore and the Saudi Prince for far more than that. It seems like easy money for them and a boost to shareholder equity for us.

  134. All these banks have the cash to buy back stock.  The issue is will the Feds let them.
    Its a no brainer IMO that C and others (BAC, GE, JPM, WFC, and so on) should do this; but then you’ll get the critics coming out of the woodwork saying we (the Feds) gave you cash and this is what you are doing with it.
    However, it is in the Public interest that they do this and put a stop to this destruction of our financial system.
    Obama … nothing useful to say again today … just selling socialized health care as the must have solution if he is ever going to fix the economy.  This guy is out of tune, out of touch, or just does not give a damn.

  135. RKH/Japarikh – Well yes, I do still believe in the strategy, which is conceptually just rolling to a position that can be rolled further down as the other financials are at a floor.  I mentioned it on the video cast on Friday but I got mixed up and said KBH I think but I meant the RKH.  Even so the Apr $35 puts have gone from $3 to $6.95 in a week but are still 1/2 premium so not worth rolling yet.  The May $30 puts are now $5 and they are great to sell.

    Here’s a good trick for RKH.  You can sell the May $30 puts for $5 and sell 50% more than you need.  Use this money to buy Aug $17.50 puts at $1.80.  This does two things, it cuts your margin requirement in half and it gives you an offset to further declines.  Here’s where it gets complicated but imagine that SKF drops $10 more to $22 by May 15th (expiration).  That would put the May $30 puts $8 in the money and we can assume the Aug $17.50s would fetch about $3.50, roughly the same relationship as the March $40 puts to the May $25 puts.   Well I can take the March $40 puts and roll them to the Jan $30 puts for $1 (but they still have $1 in premium so we’ll call it an even roll) so I can assume we will be able to roll the May $30 puts to the Jan $20 puts about even but THEN, I would be well covered with AUG $17.50 puts as another $10 drop to $12 would only put the Jan $20 puts $8 in the money but the Aug $17.50 puts would jump to $5.50

    Since that would be August before I had to move, the relationship would be like having the $5 in the money March $35 puts at $5.25 (actually better but there are no $37.50 puts) against the Aug $40 puts, which are now $13.05.  Don’t forget we didn’t pay anything out of pocket for those Aug puts and our original entry was net $3.20 credit.  I can use that $5 to roll the Jan (again looking at the current Aug $40 puts for reference) $10 puts (down $10 for $5) and leave those naked or I can roll the Jan $20 puts to the 2011 $12.50 puts about even and roll my Aug puts to perhaps the Jan $12.50 puts even but, at that point, the world has probably already eneded as we’ve had another 66% decline in the bank index.

    Buybacks – Yes, it would be logical.  At this point C should just take themselves private for $5Bn and, if they survive the next few years, they can go out and raise $50Bn selling stock again.  Of course, that logic flows through to the govenrment and why should we give them money without buying out all the shares (NATIONALIZATION) first?

  136. fundamentals of network security…

    I can’t believe I missed this! I’m going to have to do some more reading me thinks….