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Testy Tuesday Morning

Oh so close yesterday!

I predicted the exact top in the morning post, saying: "A real Free Money Day if the US markets try to catch up (that would take us to 8,750 on the Dow!)."  One thing we know at PSW is not to turn down money when they are giving it away and our ONLY play of the day was grabbing the DIA $88 calls at $1 (which we exited just under my top call at $1.45, up 45% for the day) and we added the DIA $89 calls at .88, exiting those at $1.02 (up 16% for the day) which helped take the sting out of our USO puts, which we stuck with despite the run.  Other than that, we added one hedge and just watched the fun from the sidelines, still loving our cash as the markets tested our 40% (off the top) targets.

The 40% levels I laid out yesterday were: Dow 8,413, Nasdaq 1,717, S&P 946, NYSE 6,232, Russell 514, SOX 329 and Transports 1,868.  The Nasdaq and Dow were already over so it was all about the Russell, NYSE and S&P which, as you can see from David Fry's chart, made a brief spike up at 2pm, hitting 947 on the index and 95 on the SPY before pulling back to finish just under our 946 target.  The NYSE fell just short of our mark, topping out at 6,202 at about the same time but the Russell became our 3rd index over the mark and held 521 into the close, their best level since we fell off a cliff in November.  We are, of course, still waiting for the Transports, who made a huge 71-point effort (4%) yesterday and finished at 1,791 despite $68 oil.  Note that the transports tried leading us in early May and were at 1,909 at the beginning of the month so not all that impressive until they break that.  The SOX, on the other hand, have broken over their May top with a 5.3% gain on the day (14 points) that took them to 285, still 15% off the mark but a very nice effort!  Our big concern yesterday was the VIX went up (4%) with the markets and closed back at 30, indicating a lot of put buying into our rally.

Geithner is over in China and we are at a very critical inflection point on the dollar, which bounced off downside resistance at 78.50, which is just about our December spike low that lasted for one day (Dec 18th).  Even with the dollar that weak, oil was $42.50 that day and, when the dollar bounced the next week (on the way to a 10% gain over 2 months), Oil crasked to $35.13 on Christmas eve – down 25% in less than a week despite already having sold off 68% off the $147 high in a hideous commodity crash that ran from July 1st to pretty much that day!

There is all kinds of currency posturing today and the dollar has been bouncing up and down like a yo-yo in overnight trading.  China’s former central bank adviser Yu Yongding will meet Treasury Secretary Timothy Geithner today and tell him the U.S. shouldn’t be complacent about China continuing to buy Treasuries:  "I wish to tell the U.S. government: ‘Don’t be complacent and think there isn’t any alternative for China to buy your bills and bonds’,” Yu said in an interview yesterday. “The euro is an alternative. And there are lots of raw materials we can still buy.”

The U.S. should take China’s interests into consideration “so that your own interest can be protected,” Yu said. “You should not try to inflate away your debt burden.” China could still diversify some of its Treasury holdings into euros or commodities, Yu added.  “Yes, some people say the euro is very weak,” Yu said. “Okay, weak is good, we’ll buy very cheap.”   The best outcome for China would still be to negotiate with the U.S. and reach agreement on its Treasury holdings, Yu said. “The borrower should keep their promises,” he added. “The U.S. should be a responsible country.”  This is very well-played by China as they have a "former" minister taking a very public hard-line and they add weight to his words because Geithner does have a meeting with Yu today.

Even as I write this (7 am) the dollar has fallen from $1.41 to the Euro at 5am to $1.425, that's almost 1% in 2 hours – a ridiculous move for currency and we're retesting yesterday's highs for the Euro on Yu's comments.  Despite the ongoing scandal that is now touching England's Treasury Secretary Darling, the Pound is also heading back to yesterday's high of $1.65 and we are, of course, losing ground to the Yen as well despite the fact that Japan's gross national debt is close to 200% of their $4.3Tn GDP – something I learned on Friday when I was the "celebrity judge" for a debate on Japan on Canada's Business News Network.  That would be a $27Tn debt in the US – apparently investors think we're heading that way fast enough to make Japan look stable by comparison!

Tim is on his way home and tomorrow it's Ben's turn to tap dance as he addresses Congress in what used to be called the Humphrey Hawkins Testimony but since that came from the "Full Employment and Balanced Growth Act" of 1978.  With almost 10% of our population out of work, no growth and certainly no balance - they have now decided to stop reminding people what a total failure the Fed has been in stabilizing our economy or our currency as Bernanke is practically sneaking in tomorrow with none of the fanfare that used to come ahead of a Greenspan performance.  That means it's almost time for my favorite reality TV show: "When Ron Paul Attacks!"  Why is Ron so angry?  Here's what Bernanke, Geithner and the Administration are supposed to be doing per the Act:

  • Explicitly states that the federal government will rely primarily on private enterprise to achieve the four goals.
  • Instructs the government to take reasonable means to balance the budget.
  • Instructs the government to establish a balance of trade, i.e. to avoid trade surpluses or deficits.
  • Mandates the Board of Governors of the Federal Reserve to establish a monetary policy that maintains long-run growth, minimizes inflation, and promotes price stability.
  • Instructs the Board of Governors of the Federal Reserve to transmit an Monetary Policy Report to the Congress twice a year outlining its monetary policy.
  • Requires the President to set numerical goals for the economy of the next fiscal year in the Economic Report of the President and to suggest policies that will achieve these goals.
  • Requires the Chairman of the Federal Reserve to connect the monetary policy with the Presidential economic policy.

Unfortunately, Ron Paul is only given time to ask one question every 3-6 months.  I would propose we put him in charge of a television show where policy makers are forced to set realistic goals and demonstrate tangible economic results before they are allowed to use the words "green shoots" and move on to the next level.  Meanwhile, it's 7:30 now and the dollar has dropped another half a point since 7 am and gold is rocketing back to $982 from $970 yesterday (1.25%).

How then, you may wonder, can we be short on oil at $68 (our upside target is $70 and we are scaling into shorts)?  Well, weak dollar inflation is a great case for higher oil but the problem for oil, unlike gold, is that – when all is said and done – it's still a consumable commodity and people have to buy it or a glut forms very quickly.  We've already seen OPEC frantically scramble to cut 10% of their output since last year but, over that time, the US has still averaged a build in storage of 3 Million barrels a week.  There has been a mild uptick in demand over the past few weeks but how much of that was real consumer driving and how much was caused by retail gas stations topping off their tanks in anticipation of summer drivers showing up?  We'll get a better clue tomorrow, when we see how much gasoline was used the week AFTER the holiday (report runs 5/23-5/29).  This will be the last holiday inventory and then we are back to "normal," whatever that is these days.

Unlike Gold, oil NEEDS to be CONSUMED.  Unless they shut the wells, 86 Million barrels of it come out of the ground every day and there are dozens of economies where oil revenues make up over half of the GDP of the country so they need our money more than we need their oil.  At $68 a barrel, that money comes to $5.8Bn a day but that's up from $3Bn a day when oil was $35 and if they want to take oil up to $100 a barrel, they are going to have to get consumers to come up with another $3Bn a day ($1.1Tn a year).  That is, of course, BEFORE processing and mark-ups that actually cost the end-users double that ($2.2Tn a year). 

So here is where the bullish oil premise runs into trouble – WE DON'T HAVE ANY MONEY!  We had to borrow money last year to pay over $100 a barrel for much of 2008 and, since then, the global economy has collapsed, our 401Ks were chopped in half, 10% of us lost our jobs and can't afford ANY oil at all and those of us who are left have become a lot more concerned about going to a gas station and paying $60 to fill up a tank.  You can bitch all you want that $60 with the dollar at 78 isn't the same as $60 with the dollar at 84 but WE DON'T CARE.  There has not been enough (any) wage inflation to put more dollars into the hands of the consumers.   You cannot sustain inflation unless you inflate the money allocated to the connsumers as well.   Not only that but the banks have stopped lending and our homes lost 25% of their value so we can no longer take out lines of credit to gas up the hummer.  In short – it's not 2008 anymore and you can fantasize all you want about $100 oil but your customers just can't afford it

Now, I will point out that I made a similar argument last year in March, when I wrote "$200 Oil – Who's going to Pay For It?" when oil was "only" $100 and Goldman Sachs was busy pushing the price higher by issuing reports that oil would go to $200 (sound familiar?) due to "Chinese demand and the inelasticity of US demand."  Well both of Goldman's premises proved false but it took 4 more months for oil to finally turn down at $147 but what a crash it was!  My article was not just on oil, it was on all commodities, yet this year it is oil that is leading us higher with a 100% move in 3 months.  Is it sustainable?  Do global consumers have $3Bn a day more than they had in March when oil was $37?  Since the US's 100M households consume 20% of that oil we can figure that, after refining mark-ups, we are on the hook for about $1Bn a day.  Well, that's only $10 a day each – no problem right?

THAT'S how much extra it costs us ($3,650 a year per family) to buy oil at $68 a barrel vs $35 a barrel.  Oil at $100 will cost every American family another $3,650 a year – no wonder so many people are saying "no mas" – we simply can't continue to pay for this!  "Necessity" or not and the greed of the speculators (GS et al again) coupled with the irresponsible actions of the oil producers, who want their cut no matter how much it hurts you, is effectively destroying our recovery before it even has a chance to begin.  Until investors realize that $60 oil is unaffordable long-term (global consumers went into massive debt to pay for it last time) we will continue to have an underperforming economy as 450 S&P 500 companies are held hostage by the 50 commodity pushers in the index, who seem more than happy to kill their clients.  Perhaps the average GS analyst or oil speculator is too out of touch to realize that those 1,000 barrel lots they buy for $68,000 each are 50% more money than the average American family earns in an entire year.

I waited patiently this March as oil rose and we even took a bullish play on natural gas for our $100K Hedged Virtual Portfolio, which is VERY conservative - but I had to put my foot down at $65 last week after doing the math.  We learned last year that the markets really can stay irrational longer than we can remain solvent so we have a more cautious attitude on the short oil play but it really is the same ridiculous run we had last year under much harsher conditions and this time, there is no $168Bn worth of stimulus checks to help us gas up for the summer and consumer confidence may be back to 52, but it was 120 last summer when people were taking 3rd mortgages out (no docs of course) before heading to the gas station to pay as much as $5 a gallon.  I may be early on this call but I do think that – the longer I'm wrong – the righter I'll be in the end….

We're still mainly in cash with oil as our big downside gamble – be very careful out there as we can run into BIG TROUBLE if we don't break those 40% levels.


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  1. FSLR First Solar: LA Times reports $400 mln Optisolar acquisition not all it’s claimed – Kaufman (189.06 ) 
     Kaufman notes that the LA Times yesterday reported hat FSLR’s $400 mln acquisition of OptiSolar, announced on March 2, 2009, included an application but not a permit to use 136,000 public acres of land to set up to 19 gigawatts (GW) of utility-scale solar power, which means it can be denied at any time; FSLR’s Press Release on March 2 implied it has the rights to the land. They note the story said the rights to the land are not a sure thing. It was reported that the inspector general’s office of the Department of the Interior was looking into the OptiSolar acquisition because the application appears to have been used, knowingly or not, as a way to enhance the value of OptiSolar. However this works out, it looks like it may be a due diligence issue; it may have been a misunderstanding. They a 19 GW project would consume more than $10 bln of solar panels and would have figured into the takeover valuation; they reiterate their Sell rating with a $86 tgt.

  2. The weather girl is speaking some bearish comments on oil !  
    Holy cow, the boyz are feeding her negatives;   time to short Oil !??!

  3. Hi Phil-
    I am into USO $38 puts at a little under $1.70.  Just wondering when to take profit.  Do you aim for 10%, 20%?  I made the mistake of cashing out too early on my POT puts yesterday.

  4. Man, the futures are bucking like a bronco!  Home sales data is 10 so that will be the excuse for whatever move they are going to make.  This is, of course silly as the data is inherantly misleading as it includes foreclosed sales so how can a rational person even pretend to draw a logical conclusion from this number?  March was up 3.2% and April is projected to up 0.5%, any negative will be a disappointment but it should be positive as auctioned homes ARE SOLD – it’s just the price that sucks…

    It’s all about the 40% lines if we head higher:  Dow 8,413, Nasdaq 1,717, S&P 946, NYSE 6,232, Russell 514, SOX 329 and Transports 1,868 but we might, MIGHT be hitting the point where $70 oil will begin to drag the Dow, RUT and Transports and that’s going to make this a very tough area to break over despite the bulls on TV today saying they don’t see any reason why the S&P won’t hit 10,000.

    This is a great technical vs. fundamental battle and that’s why I’m sidelined as technichals have been kicking fundamentals ass all year so I’d rather wait and see than take the fundamental side other than the oil trade, where I feel very strongly that the fundamentas are against them.

    The dollar is calming down at yesteray’s lows and we’ll be looking for $67.50 to break on oil if we’re lucky and $68.50 to break if we’re not. 

    I’m leaning towards a down market day and I like the DIA $84 puts at .92 with a quick stop out if the Dow gets back over 8,700 (its right there now).

  5. China oil stockpiles highers since 2008, US inventories highers since 1991 – and that’s from CNBC!

    We had too much of a commodity rally with too many idiots who thought it would never end who are going to be caught with their pants down if this thing breaks and that can tank the whole market.

    FSLR/New – Wow, finally someone is saying that the emporer has no clothes?

    Oil/Cap – Maybe now.  8-)

    Too early/Celeste – There is no such thing as too early.  The way oil moves, you can make that same trade 3 times in one day.  As a rule of thumb (and see this weekend’s article on scaling) once you are up 20% (.34 in your case), you should set a stop at 20% of the profits so about 1.95 with a .10 trailing stop until you get to .70 profit (60%), where your stop can move to .15 etc…).  Oil is a momentum trade, you MUST take profits off the table or you will get hit upside the head with that table very quickly.

    Lots of buying off the bell, no volume so I guess people are waiting for the data. 

  6. Phil,
    what’s the recommended cover for the DIA puts, if any?

  7. Phil,
    You are still going for the SRS trade mentioned in your 4:11am? Also, before the Home-sales data release or after?
    You said to:
    On the Oxen trade, the SRS was down to $17 yesterday, now $18 so scaling in is smarter than not.  I like the $14 calls, now $4.10 and keep a finger on the $16 puts, now $2.65 to sell if they drop to $2.50, putting you DITM in a $2 spread for $1.60 and you just have to buy the caller back on upside momentum.  If you go in with half an entry at $4.10 and it goes straight up, nice profit.  If you trigger the cover at $2.50, you can DD on the $14s if they hold $17 (feel free to ask during session) at about $3.20, which would put you in for $3.65 avg with a 1/2 cover at $2.50 so net $2.40 on the $14s with the stock at $17 would be our goal and we can cover another 1/2 if it heads lower and set stops on the $16s, which bottomed out at $1.80 yesterday so don’t expect too much movement.
    Assuming you meant to sell the $16 Call and not the PUT – correct?

  8. Damn, should have made the DIA an "or play’ where we took the calls over the line….  I just can’t accept the bull premise here – I’d like to but I can’t….

    DIA/Maxt – on the Sept puts?  No cover.  It doesn’t pay to cover them at the top of a big run unless things look really hopeless.

    XLF still doggin’ it. 

    SRS – Oh absolutely.  We got just what we wanted with the early dip.  Now it’s a problem to enter as they are back up ahead of the data so you may want to wait and hope we get a positive report to give you a cheap entry on the $14s, now $4.30 although actually, since the $16s are $2.95, the spread still works straight.

  9. Just sitting on my hands here.  Was on the phone and missed getting my AAPL calls.  I never like to jump in between 10am and 10:30.  Always seems to be an inflection point.

  10. Transports on fire again, up 1.5%.  Everyone else is pretty much flat except the SOX down 1.5% (we’d have Nas leadership otherwise). 

    Pending home sales way up.  Up 32.6% in the Northeast, up 6.7% overall, down in the South.  That’s a huge number and if they can’t make those 40% levels now it would be pathetic.  Keep in mind there was an $8,000 first-time buyer credit that kicked in last month.

    Let’s see if "THEY" use this news to sell into or if we’re really going to go somewhere now.  

    Hurricane forecast is below average for this year – that’s not bullish for oil….

  11. PENDING SALES – I don’t know about in those regions, but in the NW we’ve seen a huge spike in pending due to the fact that pending includes an accepted offer by a short seller that is pending approval from the lender.  The vast majority don’t close, but people get excited about the pending number although its virtually worthless since they changed the definition.

  12. SingaSteve: wonder how you play this am the AAPL ?

  13. here comes some selling,,,,

  14. Phil – what do you think about ISYS at this point? thanks

  15. RMM
    Was on the phone and missed my entry.  Now just waiting.

  16. Whee, that was exciting – right bact to yesterday’s highs but we don’t seem to have escape velocity….

    Short Sales/Bigs – Wow, that makes the number even more bogus than I thought!

    Nice second chance on the SRS entry (just the $14s) and DIA $85 puts , now .95 (stop at .85, looking for $1.15+)

  17. RMM
    10-11 is like a no buy time.  I try to avoid it.   Plus today the market internals were not that strong with advancers and volume so this should fizzle out.   Maybe some shorts now would be the way to go.

  18. amzn a good short this morning imo.

  19. Phil, do we hang in on the DIA, DJX puts, or turn and run with the tape?

  20. Cap
    AMZN looks like a bull flag.  I think I would rather be Custer and have a better chance.

  21. ISYS/Ranj – I don’t follow them but they are a nice nice player and at a very good price if you don’t mind holding long-term.  If they had options I’d say they make a great buy/write but they don’t so I’d say this is one you want to buy at $7.90 with a DD at $7.50 but a stop at $7.30 (.40 net loss) because, if they don’t break $8 before $7.50 that will be bad.  Another way to play is wait and hope one of their contracts loses funding (likely) and tanks the stock before they break over $8 for good…

    Boy they are yankin’ those FOREX trades around today!  They can’t get cash buyers for commodities so they are devaluing the cash!  This is a good scheme and makes you realize how deep Goldman’s game is as they bought commodities with the dollar up in the mid 80s and now that the dollar is down to 79 they sell the inflated commodities (up 40% as a basket) and take the 10% deflated dollars.  Once they are out of the physical commodities, all they have to do is buy dollars again to kick off a commodity crash and by doing nothing they gain 10% on their dollars which they can use to buy commodities that fall 30-40%.  If you buy into the home data, the dollar shouldn’t be making new lows as buying a home sucks up a lot of data into a really big commodity.  The home is a commodity that is exchanged for cash (creating a demand for cash) and competes for dollars with other commodities.  More dollars exchanged for commodities means less dollars left in circulation means stronger dollar and the fact that we’re not seeing that indicates shenanigans somewhere in the chain.

    DIA/Colberg – False move I think stay short.

  22. Man, the dollar cannot catch a bid. Look at it relative to the pound — silly. Huge bets being placed on dollar inflation that has yet to manifest in any concrete way (apart from the momentum of the bets themselves).

  23. Phil: again a costly caller, SAP jun40 running deep ITM, 36 cents premium left,
    what move would you make and when ? I have the stock, base 51$/net 43,

  24. Beat me to it Phil, good point re: home buying. Also, savings still going up, spending still going down. That equals dollars out of circulation.

  25. Phil – I have the AGU July 40 puts from a while back.  Would you roll them to the 45s, DD or just leave them be….thx.

  26. Steve – we should see AMZN back in the 70′s b4 expiration.

  27. XLF is negative.  You would think they would be happy someone is buying homes…

    Gold back at $990 so oil is doggin’ on the dollar move, now $1.655 to the Pound (-2% today) and $1.43 to the Euro (-2%) and back to 104 Yen (-1%). 

    Oil at $68.50 again, not good if they hold it.  Looks like they are going for $70 if they can (and we really hope they can’t).

    SAP/RMM – I would roll him to 2x the July $43s and you can either roll yourself to 2x the 2011 $25s ($20.90) or just buy 1x the Jan $50s for $2.80 to cap their gains.

    Now Medvedev is dissing the dollar.  What a laugh.  These oil sellers will do anything to keep prices up. 

    AGU/Pharm – They are just flatling at $50 now!  I’d sell 1/2 the June $50s for $2.20 and roll up to the $45s for $1.  You want to stop 1/2 of the putters out at $3 though (maybe 1/4 at $2.50 and 1/4 at $3 if you have enough contracts).

    MA, V and AXP all weak.  Watch that XLF 12 – they can say green shoots every 5 minutes but if XLF fails 12 we have problems!  FAS blowing $10 by the way.

  28. AMZN – just covered; hope to reload close to 5 MA on intraday chart…..
    1.40 on that short call….

  29. AMZN – just covered; hope to reload close to 5 MA on intraday chart…..
    1.40 on that short call….

  30. Phil,
    I own shares of UGL bought at $33 however I don’t have an even amount to sell covered calls against. Any thoughts on rolling these to an option calendar spread to protect some of the profits?

  31. Does V look like it has built a support base @ 64.xx ?

  32. Cap
    AMZN will probably drift back to it’s 50ma in the 78-79 range.  That’s my guess.

  33. Oil – but tomorrow’s inventories will be another build and everyone will be shocked.  Will wait for $70 (or high $69s) to reload puts.

  34. Seriously considering a pound short here. They are in bigger trouble than we are, IMO.

  35. Just looked at X…wow….no GM, no Chrysler, auto sales suck, commercial and homebuilding sucks, no oil rigs being built, who is buying steel? 

  36. Steve … mine too.
    just re-entered short for day trade….

  37. Ned Reilly …. what an idiot….. Dow can go to 14000.  Housing market has "turned".  This guy is so clueless its unbelievable.

  38. Kudlow just cuts the Bear off!!!
    Nice work Larry!

  39. Phil: clarification please:
    you say roll callers 2x jul43 or roll to 2x 2011, 25 , OR  sell stock and buy 1x jan 50 calls ???

  40. Where do you see TNK, VLO pulling back to Phil?

  41. RMM
    Got into AAPL call at 139.50.

  42. Phil, what variations do you see regarding buying 100 shrs of FAZ @ 4.65 and selling 1 JUL09 5 Call@ 0.70?

  43. Doug Kass’ call on the next market move

  44. Phil,
    I’m in OCT 32 USO puts, short June 31s (1:1). A little strange I know, but that’s where I’ve wound up. I’m kind of tempted to leave it alone until we get definite signs of weakness, but the position is also not ideal from a premium perspective — theta is just barely in my favor. Any suggestions?

  45.  Looks like an attrition day to me.
    Yesterday trapped bears like me and forced me into a neutral position. Keeping a positive green bias on the market and grinding the index up little by little towards 9000 is the scenario I would hate the most to see happen.
    so watch it eventually happen that way… ouch.

  46. UGL/Calch – From a controlled risk standpoint you could go for July $33s at 5.65 and sell June $37s for $2.08 for net $3.60ish on a $4 spread with a month advantage.  I’m not too bullish on gold here though so personally, I’d take the profits and wait for a pullback.

    V/B1 – $62.50 is the rising 50 dma and that’s your best support.  They are overdue for a pullback anyway so $65 for sure and maybe the other $2.50 from there if it breaks.

    AMZN/Steve – Gosh I hope not, that would totally trash the Nas.

    Inventory/Fab – It’s a tricky one because its AFTER the big weekend so we have refiners throwing out extra gas at jacked up prices through the 22nd and all the retailers happy to top off tanks with the extra .25 charge they put on that week but what if the mororists don’t show?  Remember we used to get MasterCard gas consumption reports?  What happened to those? 

    Hey, the Transports actually pulled back,  only up 1% now!

    Kudlow’s logic – "It’s a free market economy so it must be good."

    Ags, Energy and materials leading the rally (oh, and Transports of course).  Things must be booming in America!

    Oh great, Sharon on CNBC says "oil traders are taking a break in the march towards $70 a barrel."  So I guess that’s the plan kids!   Only 5 hurricanes predicted (usually 7-11) but she reminds us that it only takes one to make her pals big winners…  Arrrrrgh!  Then she tosses it to the other girl who asks here guest if $150-$200 oil is right around the corner.  Wow, now Sharon is trying to calm the anchor girl down from her insane outlook – that is a first!

    SAP/RMM – I’m saying sell the stock and go to 2x the 2011 $25s for your own position and roll the caller to 2x July $43s.  OR you can stay in your positon, roll the caller to 2x the July $43s and buy 1x the 2011 $50s to cover his extra x.

    TNK/B1 – They ran up fast from our entry, pullback to $11-$11.50 is to be expected and Baltic Index can’t sustain this run (at least I don’t think so).  VLO also had a great run but should hold $22.

    Hey somebody suddenly pulled the plug!

    FAZ/Gohp – I would just sell the July $4 puts naked for .45.  If you have 50% margin that’s $2 set aside for each .45 you make and if you get them put to you at net $3.55, THEN you can turn around and do a buy/write for Aug.   So, rather than taking $400 to make (hopefully) $105 at $5, you can sell 2 naked puts and collect $90 at $4.

    USO/Eric – You sold the $31 puts?  They are .10 – why would you not buy them out?  It costs you .65 to roll your Oct $32 puts to the Oct $34 puts plus .10 to buy out the $31 puts is .75 and you can sell the July $32 puts for .50 to pay for 66% of your $2 roll while ending up with more positon advantage than you have over the current putter.

    War of attrition/Merk – That doesn’t work unless your enemy has a vastly superior supply line and it will take a lot more than "green shoots" to bang us over 9,000 without a correction I think.   Of course I thought that 300 points ago too!

  47. Kass:  50 S&P points ?  Hardly a "big move".

  48. Pharmboy
    What do you think of BVTI?

  49. USO – Thanks Phil.

  50.  LOL Phil… didn’t you get the memo?… flat line consolidation  counts as correction for this 5th leg of the impulse wave…. 
    stair steppin to 9K… LOL

  51. Oil – riding another USD drop, *they* will do their now daily ritual (14:30 pump).  Seeing how US held up, HSI and NIKKEI will bounce tomorrow.  Oil may open up near $70 before inventories.  If that happens, I will take yet another shot at USO puts…

  52.  Chinese buying Hummer… ain’t that anecdotal of the ultimate end of the USA if Americans keeps their promises for this generationally huge, mind boggling debt to international creditors?
    Why conquer America with an army, when you can just buy it or foreclose on it right from under our feet?

  53. CELG making a nice move today.  It broke out of it’s downtrend a few days ago.   Why do they always go up after I unload them.   My AAPL trade has gone rotten but still not smelly enough to get rid of it.

  54. Interesting action on the RUT today,it’s like they didn’t get the memo that everyone else was going down

    Oil/Fab – I think they sell into the close with a pump into inventories followed by a proper sell-off.

    I like selling RUT $530s for $12.55 naked here.

  55. Edro – had not heard of them b’f your post.  Similar treatment regimen (relatively) to DNDN for prostate cancer, but stock is much cheaper.  You probably saw they filed for Chapter 11 in November, but are still trading.  FDA approval is likely (it would seem), as the patients life extension was 44 mo vs 30 w/o treatment. The trmt would be expensive, and they would need to expand beyond current diseases, but seems to me that they could be better than DNDN, as many blood borne cancers are a bitch to treat, esp. if it is missed early on.  They have pulled back some from Monday, so I would wait until the dust settles and then climb on board for a ride.  Thx.  I will watch them.

  56. SS – let me know next time you unload CELG…

  57. Hi All, I’m new here, but here is an observation for what it’s worth, looks like some horizontal support around 940 is SPX that if we break should lead to a short term pullback. Here is the Stock Charts version$SPX&p=5&b=3&g=0&id=p97357153028&a=163545239&r=3228&depth=24&listNum=1&cmd=chartnotes,939|964

  58.  Everytime the DJIA ticks a lil bit red I get this soothing wellspring feeling of hope… then it instantly ticks up green just to remind how sucky I’m supposed to feel today… LOL
    I feel like that kid on that commercial they have been showing recently on TV where I get to play with the cool red toy truck for 5 seconds, then the well dressed businessman snatches it away from me and gives me a lame cardboard cutout of a truck.
    Heyyyyy… 6 points in the red… I feel hope again… chuckle

  59. Hello Phil,
    I am in all cash for good or bad, but if i want to take a little position agains oil at this point what would you recommend ?
    other then that is it wait and see ?
    what about the s011 spread on C ?

  60. I am teetering on the edge of capitulation today.  About ready to throw the towel in so odds are the market will rally after I do.   So just to warn all you boys out there.

  61. Asking an oil country head whether oil prices are fair is like asking a barber if you need a haircut.

  62. Agreed ephem. Price/Consumption elasticity of oil is way below 1. Any uptick in the price of oil ultimately benefits oil exporters.

  63.  Santelli calling down Geihtner… calling a spade a spade…. LMAO

  64. Hummer/Merk – Holy cow, what could be worse than 100M Hummers sucking up all the world’s gas?  Why can’t they just let that thing die?

    CNBC girl:  "How dare President Obama call [people who engage in the buying or selling of a commodity with an element of risk on the chance of profit] speculators?"  Are these people for real?  Is it that they hired these girls 20 years ago based on looks and now they are just stuck with them???  Surely there must be one person at the network who is embarrassed by what comes out of their mouths…

    Welcome Jbooy!  Well, I think we’re about to test your S&P theory in a few minutes….

    Let’s see if 940 does hold on S&P, as well as 8.700 on the Dow (we can go back to that DIA put play if it doesn’t).

    I have to agree with Doug Kass – a 2.5% pullback on S&P, maybe holding 900 would be a very nice consolidation move if they hold it.

    SOX down 4% and Nas doing very well considering.

    Oil/Micro – I still like the July $35 puts, now $1.15.  As to C, yes to the leap spread.

    Holy cow, they just jammed USO way up.  Will it be enough to get OIH (down 1%) and XLE (down .6%) back in gear though?  It’s been tight but oil has held $68.50 with about $68.70 forming a top so that’s where I’d want to enter a futres short on this run (starting at $68.60, DD at $68.70 and $68.85 with a stop at $69.05 – same as the morning trade otherwise). 

  65. CHK  I’m buried on my callers, but I’m reluctant to make an adjustment because I think this run up was too much too fast.   My position is  + 5 Jan 10 20 Calls / – 3 Jun 19 Calls, – 3 Jun 21 Calls.   ( I’m - 1 Jun 19 put, and – 1 Jun 21 put as offsets.)

  66. CSCO  Any opinions on it into opex?   I’ve got a + 6 Jan 11 17.5 / – 3 Jun 18 spread and I’m wondering on whether I can get away with selling 3 Jun 20 callers and then 2X rolling the 18s into July whether I should keep the slot open in case the stock keeps moving up.

  67. Despite oil being near it’s top for the day EWZ at its low.

  68. Phil,
    I am stuck in my USO 35 PUT. Where do I go from here?

  69. Hummer
    I want the one that gets 100mpg.   A few weeks back someone was converting them into an electric car.  40 miles off the first charge then a small engine kicks in to recharge them so 100MPG!     Maybe not in production until 2011.  Suppose to have good power too.

  70. emo
    I’ll sell you my USO 36 put ok.  give you a good deal.

  71. CHK/Eph - You won puts as well as a full cover?  That’s too bearish.  Not much you can do now though other than wait a bit.

    CSCO/Eph – Too strange now that they are in the Dow, I’d wait at least a week to see how they perform in their new spot. 

    USO./Emo – Nowhere, I’m stuck too at the moment.  This is not even a fake fundamental rally now, it’s purely dollar driven.   I’m thinking the dollar hold 78 and, if it doesn’t, this economy is so screwed it doesn’t matter much…

  72. ITMN – looks like a morning star trend from yesterday (although not the low for teh last 2 mo), but a huge volume spike at that low (10.58).  I am taking a small position here.  I noted yesterday that JNJ is looking at them and the perfenidone data should set them up for a takeover.  Options on them are horrible, one can drive a truck through the spreads.  Buy order in at 11.85.

  73.  up 500 points during the last 4 trading days and we seem to holding and consolidating these levels and that does not give me a warm fuzzy feeling for a bearish scenario right now… sooooo relentlessly green
    I just wish they would take the DJIA up to 9000 to test the resistance level and just get this pain over with…. sheeeeesh 
    I wanna see volatility and excitement… I really hate slow grinding days… so boring, like watching grass grow…
    snore snore snoooooooore

  74. CHK  No, I’m short Jun puts as an offset to my buried callers.

  75. Oil back to $68.45 – see, those futures can be fun!  Nickel stops here of course.  Oops, and out at $68.50!

  76. SingaSteve: do you still have V positions ?
    when I sold jun65 puts, they went bad, I rolled to jul62.5, now they are a little better, will have to wait for a better day .

  77. ITMN/Pharm – How about buy at $11.89, sell July $10 calls for $2.20 and $12.50 puts for $1.55 nets $8.14/10.22 as I assume the buyout rumors will last more than 3 weeks even if they don’t pop and you can sell Augs?

    CHK/Eph – Well that’s better then!  Do keep stops on them though. 

    CNBC says that F says car sales way up in May

  78. FXI  Any nearterm predictions?

  79. RMM
    Yes, would yo like to buy it from me? And also a good deal on a AAPL position too.

  80. Reuters says that U.S. stocks reduced earlier gains on Tuesday as financial shares came under pressure after several companies announced stock offerings.  This is new news?  I recall nothing but stock offerings since the stress test.  Maybe fundamental considerations have returned.

  81. DIA   What is your current mattress?   I managed to roll my longs from Sep 87 --> Sep 89 for .99 yesterday and wonder if I should roll up my callers.

  82. Tomorrows events.
    07:00 am EST – MBA Purchase Applications

    07:30 am EST – Challenger Job-Cut Report
    08:15 am EST – ADP Employment Report
    10:00 am EST – Factory Orders
    10:00 am EST – Non-Mfg Index
    10:30 am EST – EIA Petroleum Status Report

  83. Well the markets are determined to take that Ford news as a big positiive so no way to fight it.  Just have to see how far they can push.  This May had an extra Sunday and less people went away for the holiday, that’s why they have good comps and a boost over April, which had just 8 weekend days vs. 10 but don’t ever try to use logic like that to people who want to react to a report….

    Reloading on oil futures puts at $68.75 (1x), $68.85 (2x) and $69.05 (4x), same rules as before.

    FXI/Eph – If we close green they should bounce back a bit.

    Offerings/Gohp – hardly news but it was AXP, JPM and someone else all in the same day (but the Fed caused this by making a filing rule for people who want to pay back TARP so a non-issue really).

    Sharon Says the NYMEX pump crew is ready to pile on into the close.  When the hell did they start pointing this out?  Oil already up 15% since Last Tuesday, 5% more is $70.

    Highest 10yr/2yr spread EVER – isn’t that special?

  84. Treasury’s new moto: All ye bears who enter here, abandon all hope!

  85. CNBC saying the "pros" prognosticate a 15-20% correction down to 7500…. Bwah-hahaha Ohhhhhhh how I wish !!!
    But that Ford news is giving some energy to the market.  I wonder if Mr. Stick comes out to play at 2PM and starts a big 1.25% to 2.5% run up?   If it causes bears anxiety, pain and suffering… hey why not

  86. Made .10 on the DIA 84 puts today, should I be looking to reload on this blip up or should I wait for the 2:30 pump?  Scale in from here?

  87. Dollar still crashing!  Pound is pounding us at $1.66, Euro 1.43…

    RUT up 2% now, killing naked call play. 

    DIA/Eph – Still naked on Sept $88 puts.

    ADP/Steve – that thing is a total wildcard. 

    DIA/Smash – Good job taking the profit.  I think I’d rather not play unless we get some crazy pump to short into right at the close.  ADP is a wildcard tomorrow and factory orders should be good if autos picked up.

    GM only down 29.6% from last year vs. -37.5% last year, quick, take them out of bankruptcy!  8-)

    I don’t know why Bush didn’t think of this – all they had to do was LET GM and Chryselr go BK and have 3M more people lose jobs and another 1M foreclosures with another $2Tn in debt and we’re ready to rock and roll!

    Oh yes!  Hit the $68.50 mark on oil again!

  88. Ah ha.  AFL paid its dividend today.  Thats where the little extra cash sitting in my account came from. 

  89. "Highest 10yr/2yr spread EVER – isn’t that special?"
    I think TNX  puts (= long 10-year) and SHY calls (short 1-3 year) would give you an option proxy for selling that spread. This would be an anti-inflation trade, obviously.

  90. LOL Chrysler had a drop and CNBC skipped the results! 

  91. By ‘anti-inflation trade’ i mean betting against inflation, not hedging against it.

  92. I go to lunch and they pump this crap back up again !
    Short AMZN again … 84.50; let’s slam it now.
    GM… new CEO was crowing pre market about their "good results" that "beat their expectations".  Friggin joke.

  93. Phil:would it make sense to you to roll my V july 62.5 putter to july 65 ???

  94. Phil: what is your rationale when you suggest to sell the stock and go out to 2011 LEAPS ITM ?
    you did this for SAP earlier.

  95.  uh oh… is that Mr. Stick knocking on the door?  DJIA over 8750

  96. Phil stil short, but with rut play no longer can see the curb, looking up…ughhhh

  97. So far I am loosing less money as the day moves on.  Maybe they could stay open until 8pm for me and I can get ahead.

  98. Ouch Cap, AMZN looke like it shot straigt up the second you said you were going short :(

  99. Hey Merk, capitulate already so this rigged POS market can crash !

  100. S+P said Corporate defaults spiked in May – so no green shoots there either.

  101. Chrysler Truck sales down 57%, auto sales down 44.8% (-45.7% expected).  Can we call that a beat or only half a beat on the auto side? 

    TALF results coming soon but I can’t figure out what the big deal is.  Only about $9Bn in deals cleared eligability so what kind of surprise can it be one way or the other?

    Damn, we should have shorted HES instead of oil!  Here’s the bullish take from Barron’s – always interesting to read these in retrospect….

    Spread Spread/Eric – Interesting play, too much bother for me but a great premise.  At some point you would think that banks will once again compete to give loans.  That’s what this is really about now, consumers are getting hosed by low availability of credit – the deals may seem cheap but the banks are making a fortune on the mark-ups.

    Dare we go back in on the Oil Futures Shorts?  I assume they are going to punch $69 into the close at 2:35 but might go for $70 so maybe wiser to stay out and hope to catch it on the way down….  Very tempting to short at $69 though…

    V/RMM – No, I think V may head lower.  Just be happy with the profits you have, they are hard to come by in this market.

    SAP/RMM – because you were buried by your caller and SAP doesn’t pay a dividend and you are just as well off with the leaps as the stock, especially since they will lose a little less on a dip but mainly because you can sell 2x the premium every month but still have a higher % coverage to your long position. 

    Losing less money/Steve – Hey if you were a segment of the economy, we could make you an ETF and people would BUYBUYBUY on that news!

    S&P over 40%, just need NYSE to confirm now

  102. craig; that happens; you gotta be patient; the whole market shot up.  And its an even better short now 1

  103. Everyone has to give up and go fully long before we can truly drop.

  104. I am watching OIH and AMZN …. right after 2:30 they jammed OIH up $1 and AMZN up 0.60

  105. Cap
    Maybe you should wait a bit befiore you short AMZN again.

  106. AMZN up almost $1 now last 17 minutes.

  107. AMZN at $85.30 – see, this is why I never bet against them.  They are poison to short!

    SHLD is another one you can’t short – now $67.66

    Somebody sold heavy into the NYMEX close, really slammed it to the pump monkeys who seem determined to hold $68.50 for the print.

  108. Gas reciepts down, another fundamental factor on oil.  HMMMMMM
    Something is a little funny here?   I can’t quite put my finger on it !!??!!

  109. They know how to run a squeeze on that doggie …. so manipulated.

  110. S&P barely hanging on to 946 (40%), NYSE can’t get over 6,200, let alone the extra 32 they need.  SOX still going the wrong way and Transports still making progress.  I would think if the S&P can hold 946 then the NYSE is in the bag tomorrow.

    We do have the ADP report tomorrow morning but that thing is all over the place.    Bernankie testimony is the star tomorrow and be ready to go long as we can be breaking up on all our levels AND Ben can talk about green shoots turning into green sprouts or whatever comes next in the metaphore. 

    Of course Bernanke COULD say something that would boost the dollar.   Not likely but it is ready to bounceso caution is urged all around until we see which way things go. 

  111. The cool thing about these bond ETF options is that if you can successfully negotiate the bid-ask spread (a big ‘IF’ in some cases), you are buying a huge amount of leverage because the extrinsic on the options is negligible.

    E.g., An SHY Dec 82 call at 1.75 (mid of bid-ask) is .20 extrinsic for 83 delta points, meaning that on a move back to the Dec. highs, this is a double. (And why anybody would buy $6,947 of SHY stock for the exact same upside is beyond me).
    TNX spreads are hopeless, but TLT is workable, and if I were going long treasuries I’d rather be further out on the curve anyway.

  112.  I spit on you Mr. Stick !!… h-h-h-hawkh pah-tewy
    That would get me caned across the back in Singapore wouldn’t it…. chuckle

  113. AMZN … gotta pick your spots.
    Another good AMZN play would be to sell the naked June 90′s for 1.30 !  XXX

  114. I sold my shorts, now the markets will crash .. make money you guys !

  115.  DJIA looks to be following a very linear channel upwards since 1PM… extraoplate it out, we could be over 8800 by 3:30PM

  116. Damn, look at MS rally off of their dilution !

  117. more like losing my shorts…Phil, time to get of of puts, today? DIA, DJX, RUT? feeeling small not just short.

  118. Gas reciepts/Chuck – do you have a link to that?

    Caning/Merk – Bad news, as we are an International site, Singaport laws do apply… 

    Thanks Niten!

    If you look at the 1-year view of our indexes, you can sort of see the logic to this run.  If you take out the Nov spike (caused by a unique (hopefully) event) then this is a pretty good U-shaped bottom with a little V spike in the middle in March.  In that case, we are not "begging" for a pullback and we can rise another 5% before hitting real resistance.  The 2-year view shows you how we’re all at 40% levels here (note Nas was 10% higher than the others on Nov 1 ’07).  Our next goal would be -33%, then -20% if you can imagine that!

    Vehicle sales – Don’t you think dealers who knew they may be closed were dumping cars like there’s no tomorrow?  I could sell 1M extra cars too if I give them away…

    Out of shorts/Colberg – Better to take up a long position to balance, like the DIA July $91s, which have a .31 delta that jumpt to .42 on a 200-point gain so good bang for your buck and time to recover if we have a dip.  The idea is not to "win" with this trade but to lower the damage of existing short positions until we see which way things go.

  119. must be time for the real estate / financial 3 pm pump !
    rotate those pumps

  120. spg up 75 cents from 3 pm.

  121. phil: shifted the SAP stock into 2011 LEAP with 2x callers jul43, expect this to work by selling monthly callers,
    this market is not fun, these nickel and dime trades can backfire quickly, just made 7 cemts with DIA calls
    what ablout coverage for tomorrow??? I think you want to stay NAKED ??? are you not shivering lately as this market always has gone the unexpected direction ?

  122. The computers are back in the SPY – its jumping 0.05 at a time rather than the 0.01 bid/ask thats been there all day. Just eating up any volume trying to sell.

  123. "Bad news, as we are an International site, Singapore laws do apply…
    Oh my god, I just stuck some chewing gum under my chair. Does this mean I’ll be caned too?

  124. Like I said yesterday – there is no such thing as down anymore.

  125. Dollar is STILL going down!

    Nice, gas is up 60% in Michigan this year.

    NYSE did it – over 6,200!  Watch out bears….

    Volume not so hot so far.  Almost everyone they interview says they expect a 10% pullback and they’re not buying so who is doing all this buying?

    Harry Rady guy says they are 70% cash and have been selling out into this rally.  Sounds like a rational guy to me…

  126.  Ha… Pisani giving hope to the bears by interview two guys who say to raise cash and build shorts??
    Now I feel so wonderful and reassured….I can hear Bob Marley singing "let’s get together and feel alright"… chuckle

  127. Medvedev on TV ?  What’s he talking about, how to launder dollars into Swiss bank accounts ?

  128.  yes… broke the bottom line of the up channel… no if it will just break down 8750… Oh please please please

  129. Now if they can only get energy to drop; we can get a selloff going !

  130. Here comes the computer known as Mr. Stick ….

  131.  the Bear Terminator trading program is holding 8750…. kill the bears, kill the bears…. uhhhhhg

  132. DIA/RMM – Have to stay naked if I don’t believe we’re breaking up.  If the NYSE crosses then we can sell $88 puts for the duration of the run with a stop back here at 8,750 since it’s holding so well today.

    Gum/Eric – Caning for everyone I say!

    Medvedev talking the dollar down by calling for global currency.  So his plan is to print about 50% more Euros ($600Bn) and 300% more of "other currencies" in order to offset 35% of the dollars that are currently held in reserve.  Then he expects people to take their dollars (which are going to be pulled out of circulation and stand to be more valuable) and exchange them for overprinted Euros and GloBucks.   I assume he doesn’t see the need to secure the new currency against counterfieting and there won’t be any time taken to set up an oversight board and set rules and standards that no one will fight over (they can’t even keep the EU moving forward at policy meetings after 15 years and the UK still doesn’t participate fully in the currency.  I say let them try it, it will be fun to watch!

  133. 30 Minutes To Wapner !

  134. oh c’mon…. push it down daggon it… that friggin 8750, I just wanna plant a bomb on it and blow it to pieces !!

  135. Its shamefull how this happens night after night. I cant believe that no ones been asked to investigate.

  136. Man, this BS every day is annoying….

  137. Someone is buying OXPS.  That movement is just wrong….

  138. Terminator Bear for Merk.

    I see no particular reason HES fell of a cliff and is still falling. 

    BIDU is now thinking better of $280 and pulling back.

    Still no volume with 25 to go.

    XLF actually improved slightly from the morning but still down 1%.

    GM still holding .50.

    NYSE still needs a push.

  139.  This EOD hold at 8750 gives me a sick feeling we could be up 250 points tomorrow and playing ball in DJIA 9k’s front yard…
    now I wanna throw up

  140. Phil: I never thought the protective DIA puts can accumulate such big RED $.
    Daytrading in calls and puts cannot keep up, but, fortunately, my long positions and that includes some MFs, make it more tolerable.

  141.  Phil… ROFLMAO !!!

  142.  Pisani is going all out with interviewees to comfort the bears…. chuckle
    I feel so loved and cared for… chuckle

  143. Phil
    Is that you in disguise?

  144. Phil: this nicely looking bear makes me feel better. How do you find this stuff ?

  145. HES Hess: Color on weakness (61.71 -6.38) 
     Hess is trading down ~10% today with no news out of the company. However, the weakness may be related to commentary on the company’s BM-S-22 property, as a Credit Suisse note on Petrobras (PBR) this morning said an absence of news flow out of BM-S-22 continues to intrigue investors and analysts alike, despite an early feeling that this block could be the "golden block" of the pre-salt cluster in the Santos basin given its privileged position in the middle of the "Sugar Loaf" structure. The firm said they spoke to several of their industry contacts, including experienced geologists, and says two wells have been drilled in the area so far, but no details have been provided by the companies: With a knock-on sequence of important discoveries in all the main blocks of the region, expectations surrounding a potential announcement on BM-S-22 were pretty strong. However, following the conclusion of the Azulao well, in early 2009, no meaningful announcement has been made by Exxon (XOM) or its partners. Now, 78 days have passed since the 2nd well at BM-S-22 was spud on 10 March and no oil notification to ANP has been filed yet, nor has any relevant comment been made by any of the block partners…. If results at BM-S-22 prove to be disappointing, they believe risk perception on the pre-salt could increase, deflating the story a bit… While the Credit Suisse note does not mention Hess (HES) directly, HES’ most recent 10-K filing discloses "During the first quarter of 2009, the Corporation’s exploration activities continued in Brazil and Australia. The operator of the BM-S-22 license offshore Brazil (Hess 40%) filed a Notice of Discovery following completion of its first well, subsequently submitted a plan of evaluation with the government and, in March, commenced drilling a second well. In the Carnarvon Basin offshore Western Australia, the operator of the WA-404-P license (Hess 50%), reported a natural gas discovery. Also in the Carnarvon Basin, drilling on the WA-390-P license (Hess 100%) is scheduled to resume in the middle of the year and the Corporation expects to complete 5 to 6 additional wells before the end of 2009…"

  146.  yeeeehawwww…. keep going down down down

  147. DIA/RMM – While they are going against you they will hurt.  If they hurt too much then you have too much coverage.  Ideally, you should be offsetting 50% of your losses on the way down and it should be costing you about 25% of your gains on the way up (if naked).

    XOM coming on strong – makes me even more curious what happened to HES.

    Bear/Steve/RMM – No, that is not my Haloween costume but my kids do have one and yes, it was in their crib when they were young (it’s amazing they are not messed up).

    HES/New – Good find thanks!  If that’s all this is I’d say they are oversold here ($60.40) but I’m in no mood to buy them.

  148. merk: we have run out of time, what’s your cover ?

  149. This is why gov shouldn’t get involved in the free markets, look at oil this is just amazing not to mention
    Our poor worth less dollar

  150. They are just throwing a boatload of cash at AMZN to keep it up !

  151. Oh, LOL, Medvedev thinks the RUBLE can be a reserve currency!  Sure because he’s probably got 50 Billion of them stashed away….

  152.  dang… get a quick 30 pt stick down and it gets yanked to a sudden halt…
    like some charging dog chained to a tree getting his head snapped back when the chain runs out

  153. I was just waiting for Medvedev to say that. lol

  154.  RMM… I’m already positioned to stay neutral all the way to 9K… I got naked calls from Tuesday keeping me sane as my put position gets trashed… my puts are 3/4 covered since yesterday

  155. Check out the Dow dip at the end, couldn’t quite keep it going could they?

    Oh well bears, not hopeless but ouch again! 

  156. Gov is always and forever involved in free markets – thats where free markets were born – they didn’t just grow.

  157.  Yeah Phil… maybe they sucked in just a few more bears today, especially after those final hour Pisani interviews about going to cash and building short positions.
    Now if they pull another Monday and gap up, they can have another layer of bear positions trapped.

  158. Phil,  From yesterday I and others were having trouble following your link to Yahoo graphs.  You are recently using excellent pictures (like Terminator Bear above), so how about doing the same for the yahoo charts when referencing them.  Here is how:  I use a freeware application called Screen Hunter.  Here’s the description from CNET:

    ScreenHunter is a free screen-capture tool for you to easily take screenshots. ScreenHunter can capture a full screen, an active window, the client window, or a rectangular area. It automatically saves captures in BMP or JPEG format, so you don’t have to stop each time you capture, and you can capture as many as you like. It also can save captures to the Clipboard to be copied to other programs, such as Motion Studio and Word. ScreenHunter has a selectable hot-key capture (F1 to F10) and delayed capture, and uses virtually no system resources on standby. ScreenHunter freeware version has no expiration date and can be distributed free of charge.

    It would be more convenient for all of us to see the charts you reference directly in your thread, instead of following a link and the recentl possibility of the dates being jacked up. 
    Here’s the link. I highly recommend it to everyone.  I use it a lot for creating presentations.

  159. fast747, Phil’s and other posters links work for me.  I understand your frustration, yet you should attempt to resolve whatever is coausing the links not working for you.  There are advantages to Phil supplying a link rather than a screen grab;  foremost – the time involved.  Phil does a remarkable job replying to many questions in real time in addtion to his other posts – time otherwsie not wasted creating and pasting screen grab pictures e.g. gif’s.  I am not sure how easily gif’s would be viewable. Also the links are dynamic – real time data and can be referred to in the future as well.

  160. Thanks Fast but do I have to download it to the server and upload it every time or is it cut and paste?  That would be a pain in the ass if I had to stop and save all the time…

    Speaking of pasting – here’s food for thought:

    Oil has rallied more over the last 75 trading days than it did at any time during its entire bubble run from 2001-2008. In fact, its current rally of 99% since the February 12th low is nearly double the highest 75-day rally during the last oil bull (From December 2001 to April 2002, oil rallied 55% over 75-days.) Oil has also gone from $33.75 to $67.75 in just 75 trading days. During the 2001-2008 oil bubble, it took 409 trading days to complete the same task from January 2004 to August 2005.

  161.  RMM… I meant Thursday… not Tuesday
    I had cashed out a bear trade on Thursday’s open, then bought a position of calls. But then the market quickly went down minutes later so I bought a matching position of puts. After that I spent Friday and Monday building a put position into this rally. Monday I finished my last put buy when DJIA went to 8600 and then almost capitulated to cash when it continued to 8650.
    But then I decided to sell a 1/2 cover, and another 1/4 cover against my puts. And now here we are.
    My plan is to ride this rally to 9K, then buy out my putters and sell my calls. Then I will double down my put position and cross my fingers.
    I’m looking at DJIA 9030 as my resistance line. I’ll give it 0.5% to go up against me. If the market breaks over resistance and makes it to 9080, I will stop out and totally give up the trade.
    OK Phil….crtitque away… chuckle

  162. Copy / paste.  Here’s how it works for me.
    1) Image on my screen that I want.
    2) Press F8 or whatever mouse button you set up for screen capture.
    3) I use the setting where a cross-hair appears.  I click a corner of the image area, drag to opposice corner, and release.
    4) Image is saved on the clipboard and/or in a folder location defined by you.
    5) Goto application you wanht teh pic inserted, and CTRL-V or right-click paste.  The image drops in from the clipboard.  You can use insert image if that’s how your application works, and navigate to the default image save folder.
    It’s bullet-proof IMO.  You’ll love it.

  163. Food Retailing Industry
    Green Shoot Police.  Worst Number on Record
    Real food at home consumption down 8.4%.   PCE data released today showed food-at-home spending has declined 8.4% YOY, following declines of 7.0% and 7.6% in February and March respectively and continuing the negative trend that started in September.  On a nominal basis, consumption was down 5.3% and declined more than double its March rate of decline of 2.6%.

    Data continues to worsen sequentially.  This data, much like the census retail sales number, points to sequential YOY declines in food retail purchases and is the basis of our cautious stance on the group.  We believe that industry sales will remain negative for 6-12 months, at a minimum, and the grocers will begin to print anemic, if not negative, ID sales.  Sales and comp trends are the greatest determinant of stock price performance and we expect weak sales and attendant downward stock price pressure.
    excerpt from pali capital

  164. Fast — thanks … can’t wait to try it out…..

  165. Homebuilding: April Pending Home Sales’ Rise Above Street, but Remains Within Range of Last 20 Months


    The April Pending Home Sales Index rose 6.7% seq. to 90.3, well above the Street’s 0.5% estimate. However, we view this as more of a modest positive, as we note this is consistent with some recent commentary from builders that April was stronger sequentially from March, we believe in part due to some seasonality, a pickup in foreclosure transactions, and some help from Federal and state tax credits. We also note that April’s level is still within a range of 80-90 over the last 20 months, albeit at the high end of that range. Lastly, we note the gain was largely driven by strength in the Northeast, up 32% seq., and to a lesser degree the Midwest, which rose 10% seq. By contrast, the West rose only 2%, while the South was flat; these regions include the more critical homebuilding states of CA, AZ, NV, and FL. As a result, we believe demand is still relatively weak, and moreover, we believe the coming summer months could see a pullback in demand due to seasonality, the expiration of the CA and Federal tax credits, and additional foreclosures coming to market due to the recent ending of the Fannie Mae-induced foreclosure moratorium, which should add to the already elevated inventory levels in the market. Accordingly, we believe these inventory trends should result in further pressure on home prices and large impairment charges for the builders over the next several quarters, and therefore reiterate our negative sector stance.

    April up solidly following March’s modest rise, but level remains within weak range. The April Pending Home Sales Index rose 6.7% seq. following March’s 3.2% rise, above the Street’s 0.5% estimate. We note pending home sales have historically been a one-month leading indicator to existing home sales, with a 71% correlation using a one-month lag. Specifically, March’s Pending Home Sales rose 3.2%, while April Existing Home Sales rose 2.9%. As a result, while we believe April’s 6.7% rise could result in a similar rise in May Existing Home Sales (to be released on June 23rd), we note both metrics remain at relatively weak levels, and should stay within this range well into 2009, given rising unemployment and weak consumer confidence.

    Regionally, rise led by the Northeast and Midwest. Specifically, the Northeast and Midwest rose 33% and 10% sequentially, respectively, following last month’s 6% and 1% declines, respectively. The West rose 2% following last month’s 4% rise, while the South was flat following last month’s 9% rise. On a YOY basis, the Midwest rose 11%, the South rose 4%, the Northeast rose 1%, while the West fell 3%.

    Maintain negative sector stance. We note that the larger-cap builders are currently trading at 0.73x P/B (ex-FAS 109, incl. MDC), above the 1990 trough of 0.7x. However, we believe today’s markedly more challenging housing and macro environment supports even lower trough valuations for the current cycle. Specifically, given our outlook for higher unemployment, still tight credit, rising foreclosures, and elevated inventory levels, our estimate for impairment charges to represent another 30% hit to builders’ book values could easily prove conservative. As a result, we believe large impairments should continue to prevent investors from gaining confidence in asset values, resulting in depressed price-to-book multiples, as well as drive further erosion of book values.

  166. Baltic Dry Index (for June 02, 2009) : 4106 +425
    That is no typo !  What is going on.
    Dry Ships, Inc page has the latest.
    Bloomberg page is not updated (its still June 01, 2009 data)

  167. Cap, I’m sure you’ll enjoy it.

  168.  pasting…isn’t that what Ctrl+Alt+PrtScrn does?

  169. New, do you want the entire screen, or a customized section of the screen?
    Also, CTRL+ALT+PrtScrn doesn’t do anything on my box, and I am assuming it captures a pic of your fill screen display?  Does it send to the clipboard, or the printer?
    Anyway, the Screenhuter application is free, customizable, and does not hog memory…

  170.  CTRL+ALT+PrtScrn captures any selected individual window, like just your browser…
    CTRL+PrtScrn captures your entire screen…
    it gets put onto your clipboard…and you can then paste it onto MS Paint to manipulate…
    but you can’t get a specific area that you select, so Screen Hunter sounds cool in that regard…

  171. New,  CTRL+ALT+PrtScrn… Thanks.  That’s a good one.  I can alternate that with screenhunter depending on the need.  I tested in and pasted results into PPT.  Thanks again.

  172. Testing paste from Yahoo: 

    Well, it’s nice but it doesn’t recognize my multiple screeens so a big problem there and also it only drops the image to my C drive (no CTRL-V) and it doesn’t let me name it and then I have to go through several steps to paste it in and, since it’s a large image off the server, it’s sucking up tons of bandwitdht every time a member refreshes.  This image took me 3 tries to capture but maybe I’d get better if I practiced.   On the whole Fast, it’s nice but not something I’ll be using a lot.  In a post it’s worthwhile but I just don’t have time to mess around in comments…    Thanks for the suggestion.
    Plan/Merk – I don’t know, once we break our 40% levels, anything can happen so be careful.  I see 9,100 as more resistance but not much diff…
    Food/Cap – That’s what I figured, people are forced to choose between food and fuel already…

  173. LOL – after all that work the damn thing didn’t paste anyway!   Oh well….

  174.  FSLR / Barrons…if todays action in HES is any indication…
    IN OUR OPINION, THE solar industry is poised for growth.
    Project development and financing trends have likely bottomed. Following our trip to Munich in March, our expectations for an improving solar market were reaffirmed at the trade event Intersolar 2009. The harsh winter is no longer an excuse, and the industry is entering a seasonally strong period for solar installations. We believe the photovoltaic (PV) market in Europe is now improving, rather than deteriorating, and that investors should take notice of the reversing and/or improving trends in project finance and large-project development.
    In our view, First Solar (FSLR), rated Outperform, remains the product of choice in the European market; conversations with several European customers confirmed this view. Despite a decline in spot polysilicon prices to between $60 and $80 per kilogram, and a drop in tier-1 crystalline silicon (cSi) module pricing to between €2.00 and €2.25 per watt, First Solar installations still have a 40 cents-per-watt installed cost-per-watt advantage, which delivers lower-levelized cost of electricity (LCOEs) and superior (double-digit) internal rate of return (IRRs). We argue that First Solar can be even more aggressive with its module pricing, given its declining cost structure, and we have already forecast another 13% decline in module average selling price for 2009.
    Most will argue that First Solar is being defensive with its pricing in response to falling polysilicon prices; however, we believe the company has the unique ability to be more price-aggressive, and thus offensive, in order to not only secure more market share, but to also maintain price (and margin) pressure on its closest cSi competitors. The recent news that Econcern (parent of First Solar customer Ecostream) is in financial distress is a negative development, but the new contract with PfalzSolar should alleviate some of the risk. Ecostream was part of the 10% to 15% of First Solar’s customer base that was listed as being at-risk; we believe Ecostream is a 5% First Solar customer in 2009. Our price target for First Solar is $231, or 25 times our 2010 earnings-per-share estimate of $9.24.

  175.  that was from the Investors Soapbox column

  176. Good Morning Phil and all

  177. Asia Markets :    Wednesday, June 03, 2009
    (The following is from Yahoo; please cross check with other sources to confirm.)   

    Australia All Ordinaries*                        4009.30      61.20    1.55%
    Nikkei Average*                                       9741.67      37.36    0.38%
    Shanghai Composite*                           2778.59      54.29    1.99%
    Hang Seng*                                           18576.47    187.39    1.02%
    Seoul Composite*                                 1414.89          2.04    0.14%
    Singapore Straits Times*                     2383.82          8.00    0.34%
    Bombay Sensex*                                 14870.90         -4.01    -0.03%
    Baltic Dry Index                                       4106.00      425.00     9.38%

    *at Close

  178. Asian Stocks Near 8-Month Highs, US Dollar Struggles

    Asian stocks hovered close to eight-month highs Wednesday, pausing for breath after rallying on optimism that the global economy is through the worst, while the dollar struggled near its latest set of lows for the year.

    However markets weren’t powering away to the same degree they have done in recent sessions, with analysts still cautious about the strength of the economic foundations for the three-month long rally in shares and higher yielding currencies. The  Australian dollar rose to its highest against the U.S. dollar since late September.

    Japan’s Nikkei finished up 0.4 percent, with resource- and chip-linked shares rising after a surprise surge in U.S. pending home sales added to hopes the global recession may be easing. Glassmakers such as Asahi Glass climbed after a slew of brokerage upgrades that cited long-term signs of hope for the economy.

    South Korea’s KOSPI ended just a touch higher led by shipbuilders on rising order hopes, but losses by banks after capital-raising reports weighed.

    Australian shares rose 1.6 percent to close at a fresh 7-month high after data showed Australia dodged recession in the March quarter as the economy expanded.

    Hong Kong shares rose 1 percent, clawing back some ground lost in the previous session, after data showed U.S. pending home sales for April grew, sparking hopes for economic recovery. Bulk shippers hit the spotlight after the key gauge for measuring changes in sea freight surged 11.5 percent overnight. The Baltic Dry Index jumped to an eight-month high, propelled by increased Chinese imports of iron ore.

    Singapore’s Straits Times Index rose 0.3 percent with financial issues.leading the advance.

    China’s Shanghai Composite Index rose 2 percent.  Analysts said recent supportive steps by the government, including a cut in the minimum capital required to launch investment projects for low- and medium-cost housing, lifted expectations for earnings in the sector.

    Bombay Stock Exchange’s Sensex ended at 14845.56, down 29.35 points or 0.20 per cent. Key indices recovered after a bout of profit booking and ended flat-to-positive Wednesday while broader markets outperformed. Healthcare and metals were the top performers while banks and oil&gas space ended in the red.

  179. Banks, Commods Drag Euro Shares Down

    European shares slipped in early trade on Wednesday after hitting a five-month high in the previous session, with the banking sector extending Tuesday’s losses and commodity shares retreating.

    The FTSEurofirst 300 index of top European shares was down 0.6 percent at 880.29 points after falling as low as 876.05. The index, which slumped 45 percent in 2008, has jumped 37 percent since falling to a lifetime low in early March.

    Banks, which have more than doubled since early March, were among the biggest decliners. Barclays, Standard Chartered, HSBC, Lloyds and Societe Generale fell 2.6-5.1 percent.

    Commodity shares also declined as investors took profits from their recent sharp gains on the back of firmer crude oil and metals prices, traders said. Tullow Oil, BP, Royal Dutch Shell, BG Group, Repsol, Total and StatoilHydro shed between 0.2 and 3.5 percent.

    Miners also lost ground. BHP Billiton, Anglo American, Antofagasta, Rio Tinto, Xstrata and Eurasian Natural Resources fell 0.1-3.8 percent.

    Shares in Salzgitter, Germany’s second-largest steelmaker, fell 4.8 percent after UBS downgraded the company to "sell" from "neutral.

    Lloyd’s of London insurer Amlin said it had agreed to buy Fortis Corporate Insurance, a provider of corporate property and casualty insurance, from the Dutch government for 350 million euros ($497.5 million). Its shares fell 5.9 percent.

    Retailers were on the positive side. Morrison, Sainsbury, Tesco and Carrefour rose 0.2-1.3 percent.

    But analysts remained positive and said the market was expected to gain in the second half of the year. "It will not be a one straight line and there can be intermediate corrections, but the corrections should be rather limited in size as well in duration," said Luc Van Hecka, chief economist at KBC Securities.

    Britain’s economy could return to growth in the second quarter of this year, the compiler of the closely-watched purchasing managers’ indices said, after its all-sector reading indicated overall growth in May.

    Around Europe:

    FTSE        4,395.37    – 81.65    – 1.82%
    DAX        5,113.83    – 30.23    – 0.59%
    CAC        3,339.30    – 37.75    – 1.12%

  180. Oil Falls Below $68 After Seven Strong Days

    The oil markets’ seven-day rally dipped below $68 on Wednesday ahead of weekly U.S. inventory data and as investors grew more cautious ahead of the $70 mark.

    U.S. light sweet crude [  68.23    -0.32  (-0.47%)] was down, off an earlier peak of $68.72.
    London Brent crude [  68.07    -0.10  (-0.15%)] was also down.

    U.S. front month crude prices broke above an important 200-day moving average price level last Tuesday, and had closed higher every day since until the last session, when the market finished down 3 cents. "The strong influence has been the breakout of the 200-day moving average last week, which has brought the market higher ever since," said Olivier Jakob, an oil analyst at Swiss-based PetroMatrix.

    The American Petroleum Institute on Tuesday said crude stocks fell 828,000 barrels last week, a smaller decline than 1.4 million barrels expected in a Reuters poll. U.S. gasoline demand during the Memorial Day week, which ended on May 29, rose 2.2 percent from a year earlier to 9 million barrels, a MasterCard SpendingPulse report showed on Tuesday.

    Dollar Hits 2009 Low vs Euro, Currency Basket

    The dollar hit a five-month low against the euro on Wednesday and hovered near its lowest of the year against a currency basket as traders continued to dump the U.S. currency for higher-risk ones due to ongoing speculation the global economy may be recovering.

    The dollar-dumping trend from the past month or so remained firmly intact, with the U.S. currency also hitting its weakest levels since autumn against sterling and the Australian dollar. "The dollar-negative sentiment is set to continue for the moment, and it’s dangerous to go against the trend," said Antje Praefcke, currency strategist at Commerzbank in Frankfurt. "Even data showing that the U.S. economy is improving can’t help the dollar because the market doesn’t want it to."

    The euro was down versus the dollar [ 1.4248    -0.0052  (-0.36%)    ].
    The Australian dollar rallied to $0.8265 [ 0.8188    -0.0019  (-0.23%)    ], its highest since late September.
    Sterling continued to rally on the back of dollar weakness, hitting its highest since October at $1.6664 [ 1.6561    -0.0016  (-0.1%) ]
    The dollar slumped versus most currencies, but rose versus the yen [ 95.87    0.12  (+0.13%)    ] as the yen suffered across the board due to the overall trend for higher-risk assets..

    The Swedish crown remained under selling pressure after tumbling against the euro earlier in the week on concerns about the possible devaluation of currencies in the Baltic region as their economies continue to suffer. Sweden is seen vulnerable to the health of the region’s economy, given its heavy investment in the area.

    Analysts say recent dollar weakness has in part been due to rising U.S. Treasury yields, which has tarnished the appeal of U.S. government debt to some overseas investors.

  181. Gooooood morning all
     Hey… we got a red day on futures…. pinch me !!

  182. Gold steadies as dollar rebounds versus the euro

    Gold was bid at $980.65 an ounce at 5:03 a.m. EDT, against $980.85 an ounce late in New York on Tuesday.

    Investor interest in the metal remained relatively firm. Holdings of the SPDR Gold Trust exchange-traded fund were at record levels on Tuesday, while ETF Securities said holdings of its GBS ETF (GBSx.L) rose more than 7,000 ounces that day.

    Gold demand in India, the world’s biggest bullion consumer, stayed weak on Wednesday as high prices dampened buying interest.

    Among other precious metals, silver was at $15.93 an ounce against $15.94. The world’s largest silver exchange-traded fund, the iShares Silver Trust, said its holdings dipped by 3.11 tonnes on Tuesday, but remain near record levels.

    Platinum was quoted at $1,240.50 an ounce against $1,238.50 late in New York on day, while  palladium was at $249 against $246.50.

    Othere Metals:

    Aluminium rose as inventories fell for the first time in six weeks, but copper eased as concerns about the outlook for demand persisted.

    Stocks of aluminium dropped by 1,125 tonnes but were still above 4.2 million tonnes, having hit record highs on a daily basis since April 20. However the outlook for the over-supplied aluminium market remains dire, ahead of a potential series of production restarts in China and as economic turmoil continues to punish the auto sector.

    Losses in stock markets and a rising dollar kept copper’s gains on a leash: moves in industrial metals tend to track equities, while a stronger dollar makes metals priced in the U.S. currency more expensive for holders of other currencies. But analysts warn that copper’s recent strength masks persistantly poor fundamentals. Markets are entering a traditionally quiet period at a time when a supportive bout of Chinese restocking — which has helped lift copper by 60 percent year-to-date — appears to be subsiding.

    But stocks of copper fell once again, down 2,700 tonnes to 306,525 tonnes.

  183. Kramer is telling his sheeple to buy lilly, maybe some one should have mentioned this news today in FierceBIOtech…
    Doctor demands halt to FDA review of Lilly’s prasugrel

    June 3, 2009 — 10:54am ET | By John Carroll

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    yahooBuzzArticleHeadline = “Doctor+demands+halt+to+FDA+review+of+Lilly%26%23039%3Bs+prasugrel”;yahooBuzzArticleType = “text”;

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    One of the doctors involved in an early clinical study of Eli Lilly’s prasugrel, a potential blockbuster and one of the company’s biggest new drug prospects, has joined with two consumer advocates at Public Citizen to call on the FDA to halt its ongoing review of the anti-clotting drug and force the company to mount new studies on a lower dose of the drug.
    Johns Hopkins University’s Victor Serebruany says that the 10 mg dose of prasugrel spurs the risk of major bleeding and may promote the development of cancer. "While prasugrel does not appear to be a carcinogen, it may act as a cancer promoter through its excessive antiplatelet activity, diminishing the natural capacity of platelets to halt the spread of locally-confined or "silent" tumors," wrote the doctors.
    They added: "Current data are insufficient to demonstrate its safety and efficacy for use in ACS, and we urge the FDA to immediately halt review of this drug until a new Phase 3 study can be conducted with an appropriate lower dose of prasugrel and properly defined outcomes." The doctors want the developers to study a 5 mg dose. Lilly says a study of a lower dose is underway but won’t be completed before 2011, according to Dow Jones.