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Testy Tuesday Morning

I think David Fry hit yesterday's action on the nose saying:

"Is the recent downturn in volume because Goldman’s computers were shut down for fear they were compromised?  Of greater importance to average investors is a dirty truth is revealed. Give Wall Street banksters a gaming stake (TARP) and what do they do with it? They give it to their HAL 9000 to trade the hell out of markets. Would you like a free trading stake and the computer to do it? Even though it would be self-defeating in the end, of course you would.  Okay, enough about that although it should provide plenty of interesting reading. Today markets were wishy-washy on continued shrinking volume. That brought out the “stick save” crew (perhaps HAL activated) but market internals remain weak."

That's an interesting take – did the market slide because Goldman Sachs, our market-manipulator in chief, had an internal system problem allowing the unmanipulated commodity markets to quickly slip down to more "real" levels without anyone to goose them at key junctures?  I always say to members, when the technicals are working – obey the technicals and in yesterday's post I predicted we would bottom out in the morning at Dow 8,250, S&P 888, Nasdaq 1,750, NYSE 5,700 and Russell 488.  We did bottom out at about 10:45 and our lows for the day were Dow 8,205, S&P 886, Nasdaq 1,770, NYSE 5,686 and Russell 487 – not bad for a call I published at 8:30 with the futures considerably higher. 

It's one thing to call the market correctly but quite another to turn that call into a profitable trade.  We only made one play in the morning and it was our 10:24 Alert to Members, which suggested the DIA $84 calls at .70, which finished the day at $1.05 (up 50%), that's not bad for our first trade of the week.  We also cashed out our FAZ plays at the dead top when my second Alert of the day at 10:52 suggested to Members: "FAZ – Good time to take the money and run at $5.38."  That was exceptionally well-timed as the high of the day for FAZ was put in just a few minutes later at $5.40.  The EU markets held our watch levels so we made our first trade in the brand-new $5,000 Virtual Portfolio, buying the AA $7.50 callls for $1.75 at 1:10.  The idea is to turn them into a spread but they already made a dime and if they make .50 we're more likely to just take them off the table and not risk earnings.  The goal of this virtual portfolio is to make a series of quick in and out plays using various option strategies around earnings announcements – risky but fun!

We played for the stick-save into the close and we were not disappointed as we got a respectable 50-point goose in the Dow in the last 30 minutes of trading.  We may like to point out that the markets are being manipulated but don't confuse that for negativity.  One of my favorite saying is: "We don't care IF the markets are manipulated as long as we can figure out HOW the markets are manipulated and play along with the big boys."  To that end, we maintained a bullish stance into the close (still very much in cash though) as we expect some follow-through this morning.  Our bounce targets are now this morning's "must hold" levels and they are: Dow 8,260, S&P 898, Nas 1790, NYSE 5,750 and RUT 493.  We are not expecting a huge move today, just some consolidation ahead of tomorrow's data. 

ERX DD Energy Bull 3xIt doesn't pay to be emotional in a technical market, you can't get too attached to a position and our trades are very quick in and outs from our cash positions.  David's Oxen Group Trade of the morning was a huge winner as well, calling a short on WFR, which dropped over $1 from the open and that's our 5% rule for a stock day trade – it doesn't get any better than that!  We also featured 2 new trade ideas in our Channel Checkers section on HOG and HOTT based on the research reports.  So, after sitting on cash for almost an entire month, earning season and a higher VIX have gotten us interested in trading again! 

Today David is looking at ERX, which is a 3x energy bull index that is heavily weighted with XOM, CVX and COP so think of it as more of an XLE tracker than an oil or services index.  Rather than a straight play on this ETF, I like buying the Oct $25 calls for $4.85 and selling the Aug $25 calls for $3.30, which is net $1.55.  If the energy market fails, you don't need to retain much value to get out even and, if it goes higher, you don't owe your caller back $3.30 until the ETF is at $28.30 and $3.30 is enough to roll the Oct $25 calls down to the Oct $20 calls, which would put you in a $8.30 spread for net $4.85 so a great trade to practice your rolling on

Asia kept rolling on down this morning as commodity pushers dragged down the broader markets.  Even the mighty Shanghai Composite fell 1% this morning, it's first loss in 5 sessions.  Japan made it 5 in a row to the downside with a 0.3% loss, stopping at 9,647, still staying over the critical 9,500 mark – which would initiate a nasty head and shoulders patter we don't want to see on the Nikkei.  "Sentiment is not really positive," said Mizuho Securities market analyst Yukio Takahashi. "Retail investors who led the Nikkei's rally late last month are less active."  Shipping stocks also continued to take a pounding as the Baltic Dry Index fell 4%, now down 20% off the June high at 3,375 but still 400% off the November lows.  We'll be watching the BDI's 50 dma at the 3,250 mark to see if that holds but the shipping stocks are getting attractive again as they are overreacting to the pullback.  Low prices on shippers and a high VIX were a winning combination for us in March so stay tuned and we'll be making some plays there this week!

Europe was off to a pretty good start (up about a point) but has faded into the US open (as of 8:30) and our futures have turned down slightly as well.  The catalyst for the downturn was a report from air carriers who saw a decline in traffic for June, which is historically the month when travel starts to pick up for the summer season.  All eyes are going to be on the dollar this week as we head into the next G-8 meeting where trade is going to be a topic of major concern.  The EU Monetary Affairs Commissioner, Joaquin Almunia said this morning that the region’s economy remains at risk even as signs emerge that the worst of the recession may have passed.  “There are some positive signals but at the same time, still the situation is worrying,” he said.  ECB President Jean-Claude Trichet said on July 2 that euro- area economic activity this year “is likely to remain weak, but should decline less strongly than was the case in the first quarter.”  All this negative talk at the regular monthly meeting of EU finance ministers has just taken all the wind out of the European markets.

One thing now (9 am) dragging down the US futures is a CTFC proposal to crack down on excessive speculation.  The CTFC plans to propose sweeping trading limits on oil, natural gas and possibly other commodities.  U.S. Commodity Futures Trading Commission Chairman Gary Gensler said Tuesday the agency will hold hearings this summer to consider imposing position limits for "all commodities of finite supply." The agency will also review whether swap dealers, index traders and exchange-traded fund managers should be allowed to get around those limits through special hedge exemptions.  "My firm belief is that we must aggressively use all existing authorities to ensure market integrity," Mr. Gensler said.  This will be fantastic if they go through with it, all part of the continuing backlash as we continue to work to expose the nonsense that goes on in the commodity markets.  My thanks to all those who took various opportunities to send articles and letters to Congress this year.  As you can see, things do happen eventually if you spread the awareness! 

That little tidbit was all it took to knock oil down $1 in 30 minutes and oil is back at $63.75 in early trading.  As Warren Buffett likes to say – when the tide goes out you can really see who's swimming naked and a lot of speculators are worried about being caught in very compromising positions.  Also caught with nothing on is California, who had their credit rating cut for the 2nd time in 2 weeks by Fitch as the state turns to handing out IOUs to pay their bills.  Fitch lowered its rating of California’s general obligation bonds by two steps to BBB from A-, placing the debt two ranks above so-called high-yield, high-risk junk ratings, and said the state may be cut further.

We'll be happy to hold above our bounce levels this morning and we'll be watching the action mostly from the sidelines as we let Tuesday's test progress.  Tomorrow we have data and some earnings and, as I said, we have plenty of fun earnings plays to make regardless of which way the market goes. 

Just be careful out there. 

 


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  1. Everyone missed the RedBook numbers again. Again they were worse than last week -4.3% Week on year


  2. CFTC news has trumped the oxen trade?


  3. We’re watching the WEAK BOUNCE levels this morning of: Dow 8,260, S&P 898, Nas 1790, NYSE 5,750 and RUT 493

    Of course below that is a retest of yesterday’s lows of: Dow 8,205, S&P 886, Nasdaq 1,770, NYSE 5,686 and Russell 487

    The EU markets need to hold the levels we watched yesterday:  FTSE needs to hold 4,182 with 4,231 as the 200 dma.  The DAX needs to hold the line at 4,591 with the 200 dma at 4,674 and the CAC needs to hang onto the 200 dma at 3,174.

    I think we are selling off once again on old news and there’s no volume to the move so we’re not going to worry. 

    ERX is coming down nicely so let’s watch for a good entry on the Oct $25 calls, now $4.80 but it’s the net spread with the Aug $25s that’s key so anything less than $1.50 is good.  Ideally, we’d like to see them test $24 and pick up the Oct calls first and sell into a bounce


  4.  S&P resistance at 898 and DJIA resistance at 8320
     
    I added my SPY put position a few minutes ago… now is 5x… will just sit, watch and wait for the rest of the day
    Keeping a trigger open at the 50MA at 909 to buy more SPY puts


  5. Redbook – Thanks DB, the Journal and Bloomberg both didn’t feature them that I noticed.

    CTFC/Steve – I think the rule change willl take a long time but if ERX can’t hold $24 then it’s a no trade as we don’t know where the bottom is.

    Speaking of bottoms, looks like we’re testing the pre-stick levels from yesterday afternoon, if we go below that we’ve got problems.  All our indexes except the Dow are below their bounce lines so this will be an easy signal to watch for a breakout.  

    The RUT has taken the biggest 30-day loss, down 6% while the Nas is down just 3%, S&P 4.5 and Dow 5% on the nose.  On a 5-day chart, the RUT fell really hard and is down 5% from Wednesday’s close so lots of reasons to watch them for a bounceoff 492.  I’d say if the RUT can’t hold 490, then we have serious problems but, meanwhile, we can play the RUT $490 calls at $11.90 with a stop at $11 or the IWM $50s at .74 with a stop at .60.


  6. Nice start to the day …. ugh


  7. Pre-Stick levels – I was watching SPY and thinking the exact same thing when they bounced it back. I’d like to see the market give yesterdays low a good test , but looking at the way they just defended the stick low I dont think thats going to happen.


  8. i had good luck selling the ICE Jul 120 calls and 100 puts for $5.5  For the Augusts on a similar trade, what spread range(s) would you recommend, or is this an area to avoid at present?


  9. Horesemen taking a beating but volume same old 25M in first half hour so it’s all machines running the same program every day.  Today it’s running "Flush the wimps 2.1a."  The only way this will turn into a route is if they get past 50M by 10:30 and then better than 10M in subsequent half hours.

    Let’s watch the Qs and see if they hold 35, looks like we’re going to test 1,770 again on the Nas.

    Oil just failed $63 and that’s chaos for OIH and XLE, both down 2% so far.  It’s still too orderly and slow to be anything more than range-bound trading I think. 

    Stick lows/DB – I think the morning top-outs from yesterday: Dow 8,250, S&P 890, Nas 1,775, NYSE 5,725 and RUT 490.  If we hold those, that’s a good thing for the bulls and if we fail them, it’s still not bad until we break yesterday’s lows. 

    XLF is holding up at 11.45 and I doubt the Qs will fail 35 so we’re in the same position as yesterday with nice bottom fishing at 10:30. 

    The DIA $84s are back at .75, we picked them up at .70 yesterday so keep an eye on them for a reentry but no hurry unless the RUT perks up.


  10. I’m watching S1 for a possible rebound area ….
    Thin market; seems like withdrawal of liquidity ….


  11. All the traders are scalping tickets in LA to MJ.


  12. ICE/Drum – Regulation can pretty much kill that exchange.  The whole point of ICE is to avoid US regulation so a CTFC crackdown is really going to spook investors there.  If they fail $105 it’s going to be a long way down and I like the Aug $120 puts at $16.65, selling the $110 puts for $10 if you have to (now $10.10) but hopefully getting a ride down.


  13. GOOG ?


  14. Phil – Regarding ICE – we have an old trade – Jul 100 Put and Jul 120 Call that we are short on.  If we fail 105, should we close out the Puts, and get into the Aug 120 put long ?  Thx.


  15. $5KP Play: 5 DIA $84 puts at .70, double down at .60, stop at .55.  Looking for .90+


  16. Phil,
    Newbie here so pardon the slowness on the uptake. The DIA 84s yesterday you picked up, Jul calls or puts? I see the calls are in the 70 range? Thanks


  17. phil,
    That would be DIA calls right?


  18. Phil, are expecting another unchanged day or did we drop a little too far and do some technical damage.  RUT held 490.. but the Naz dropped below yesterdays low..


  19. Phil,
    do you mean 5 DIA calls?


  20.  DIA PUT?  Wherent you looking the DIA $84 Calls?


  21. GOOG/B1 – I don’t like trading them when the premiums are so silly.  Of course we think they hold $400 and, if you are willing and able to buy them, selling the $370 puts naked for $4 is a pretty good deal.

    WOOPS!!!  In the $5KP that was DIA $84 CALLS for .70, not puts!!!

    Correct play is $5KP Play: 5 DIA $84 calls at .70, double down at .60, stop at .55.  Looking for .90

    Fortunately the puts are $2.23 so not a mistake people should be making….


  22. VZ ex-dividend 8 July.  Buying here @ ~ 30, selling 30 Aug09 P now for 1.32, waiting for a bounce to sell the 30 Aug09 C for $1 or better.


  23. The 5K portfolio: The Jul DIA 84 puts are in the 2.25 range, am I missing something? Or did you post this position a while ago? Thanks


  24. Ah, thanks Phil, I see your post now….had me thinking I was really slow


  25. we just had our S1 test …..


  26. Hey Phil….  thanks for the great idea on ICE… I really liked that one and jumped on some AUG puts…
    already enjoying some green on that trade…. yeeehaaawwwww


  27. Phil, remember you can’t effectively daytrade too often in the 5KP.


  28. ICE/Partha – I’d close it out at this point.  It’s a good profit and too risky on the downside to keep. 

    Volume 42M at 10:30 so from 25M to 17M in 2nd half hour, less than yesterday’s 51M.  3rd half hour dropped fast to 10M shares yesterday and we drifted up on that low volume.  If we get a repeat of that action off a higher low then the bulls should be encouraged. 

    Welcome Hatorade!  DIA $84s were July calls.  If I don’t say the month it’s this one and if I don’t say puts it’s calls and, as you can see from last one – if the prices don’t match then ASK! 

    Expectation/Matt – Hard to say now because oil and gold and other commodities are getting trashed.   That’s giving us another big round of down on OIH and XLE as well as the miners and the Nas decided to sell off as well (just broke 1,770).  If the Banks go we’re screwed.  What’s odd this morning is the VIX is less excited today than it was yesterday so it seems like the VIX isn’t buying this move.

    ICE/Merk – You are very welcome but watch the $105 line, which should be support for them.

    Daytrade/Jordan – I’m trying not to but this is a high-risk way to trade $5K as a PORTION of a larger portfolio, not necessarily something someone should do if they only have $5K.


  29. that may have been the low of the day…  82.41 DIA
    24.43 SSO


  30. ERX Oct $25s at $4.50 about as good as it gets.


  31. Phil - Any solar bottom fishing today?  With earnings ahead it might be dangerous, but selling Aug $22 puts for 1.40 might be a good scale in as it gets you in for effectively the March low.


  32. For SPWRA.  Sorry!


  33. Hi Where :  Is there any reason to be bullish on solar? Im just asking because i see all of them as the 1990′s .com thing.
    Is there any chance they get good earnings without depending on govs and/or high oil prices? – regards


  34. Lows of day holding so far…..


  35. Spider – Someday we must be bullish, but I was more thinking that if we go by the premise that the best of the solar groups put in a bottom in March then there might be some premium to sell while scaling into the stock.  I woulden’t buy the stock outright here for sure.


  36. Volume 52M at 11 so 10M in half hour #3 but action much worse than yesterday as we were off our lows at 11am but, of course, our lows were lower at the time.

    Qs just broke 35 and that’s a big worry if they can’t take that back.  GOOG holding $400, AAPL well above month lows of $133, AMZN testing $76.50, which was yesterday’s low, RIMM back at June lows of $68 and BIDU well above June low of $267.  The Qs bottomed out 2 weeks ago (also on Tuesday am) at 34.80 so even on a big picture, this won’t look too bad unless they fail it – then it’s "head and shoulders" for everybody and we’ll need to play things down.

    SPWRA/Where – Well, I always like them but I don’t think orders are going to look too good this Q and costs didn’t come down enough to compensate so I’d wait and see how low they can go.  If they do come back, we can watch the $25 line to hold on a bullish play but if oil keeps going down, they have nowhere to go.

    Solar/Spider - It is all about the mandates and rebates but there’s plenty of those to go around.  The problem is that the government programs still depend on the purchaser getting financing and no one is doing that right now so order flow is dead.  Long-term, solar power will be huge in the future, they improve it a little bit every year and unless oil gets cheaper every year too, switches will be made.


  37. Big Banks say they will stop accepting Californias’ IOUs on Friday. Hypocrites – the govt took theirs !


  38. Phil, I understand, but good to repeat.  I think the point is if you only have saved 5K in your account, one shouldn’t be trading, let alone daytrading, period.


  39. Jeez BA just taken out to the woodshed


  40. $5K/Jordan – Good point.  I was assuming rational people with small trading accounts, not $5K life savings on the line!  8-)

    BA/CaFords – I just buy and buy on the assumption that we’ll still be traveling by plane in 2020 and AirBus won’t be putting BA out of business by then….

    Go ZION!


  41. Solar thing / 
    Probably is not the place, neither the moment, but it worth a deep analysis. Im not an expert, but I understand that today,  total output energy from a solar panel =~ energy to build the panel.  So the ecuation is not "very green". Looks more like you are transforming today oil into a new form of energy container. 
     
    I have to review some articles I have saved about this.   STILL, that does not prove my bearish look on solar. Time will tell the true. And of course, they are tradeable, and that is what it matters.  :-)


  42.  With solar PV I think long term bad, because we’re seeing the rise of CSPs.  Sopogy http://www.sopogy.com will probably be Cramer’s next First Solar, and will probably be on of the first CSPs to go public.  BrightSource will be a biggie too.  Probably next year.
    Solar PV is awaiting http://www.covalentsolar.com/, which should actually make solar cost competitive with wind.
    So I agree, Solar long term good, but some of these PV companies are going to go the way of PEIX and ANDE, if you remember those lovelies.


  43. Phil – I agree, but you would think that cancelling a 15 plane order from a 10 year backlog would be insignificant. I will be happy to buy more at a lower level, since the last round was at $36


  44.  Enviro energies, http://www.enviro-energies.com, is a pretty cool wind company located up in Canada.  The fact that Ed Begely supports Enviro at first makes you think — how ridiculous!  But when you think about it Ed Begeley has been a first adopter, and is part of a community of first adopters, and this is the first company that he has supported, so it’s actually a pretty powerful endorcement.


  45. Guys, you remember the 3x SPY? (UPRO / SPYX)
    Now we have options on those!


  46.  CNBC "the call of the wild" should be renamed "the sound of silence" cuz that’s what I do with the mute on my remote everyday at this time… chuckle


  47. Phil how do you feel about MA ?


  48.  "the call of the wild"  -- I’d like Denis Kneale to be on too, that way you could mute all the annoying people at the same time.  Actually, Michelle Caruso Caberra would be good on that show as well.


  49. Spider  - I think it’s SPXU that’s the opposite of UPRO, not SPYX, yes?


  50. MrMocha: You are right, they are: UPRO= +3x S&P500  and  SPXU= -3x S&P500


  51. Intraday … new lows;  looking to test yesterday’s lows now …  82.08 DIA was yesterday’s low;  82.29 now.


  52.  How bout ICE eh?…  grinding through that 105 support level… still not getting the big down spike yet, but it sure is looking weak…
     
    uh-oh… just went through 104…. yeeehaaaawwww


  53. Watch out Golman – The Pope blames economic crisis on "the damaging effects on the real economy of badly managed and largely speculative financial dealing."

    Volume 61M in 4th half hour, not even 10M.  Energy sector getting crushed again today but still not at yesterday’s open yet even though oil is $1 lower at $62.74 so that’s a big drag on the markets.

    Solar/Spider – I very much doubt that is true. 

    CSP/Occam – Oh yeah, I don’t know what tech will win but solar as a concept is the future and will probably be our major fuel of the future until they get fusion working.  Enviro is interesting but Begely and Gates were both PEIX investors and that wasn’t the best one to follow (unless you got in early and got the hell out of course).

    BA/CaFords – With cancellations, everyone is looking for a trend.  Meanwhile BA just spent $580M to buy a parts plant for the 787 so we know which way they are betting.

    ICE is melting!

    3x SPY/Spider – Yay!

    LOL Merk!

    Ow ugly little sell-off.  Total lack of buyers as volume still not there.  Oil testing $62.50 now.


  54.  S&P looking like it wants to retest 888 support… I’m luvin it


  55. ICE is melting, and I am waiting on TOS to release funds .. sigh!!! :-(


  56.  Wonder if Goldman can’t properly prop up the market without its magic code.  I’m surprised that Goldman hasn’t programmed it’s code into FPGAs yet.   I was trying to get a hedge fund to do that back in aught 1, and they’re finally doing it.  bit disappointing that Goldman is wasting micro-seconds.


  57. MA/Jays – There was just a report that delinquencies are way up on credit cards and that means banks will cut back on credit and hurt MA and V’s fees. 

    GOOG failed $400!  IBM at $100, not cool if they fail.  TOT down at $50.75, almost tempting down here.  VLO way down at $16, UNH up 8% for some reason, LVS up 2%, Qs touching 34.80 – BIG DEAL!

    Good idea Occam – herd them all into one place and lock the door and throw away the key!

    Well if you are trying to stay bullish this is a real grit your teeth kind of thing.  I still like another round of DIA $84s at .60 if possible but it’s still worrying that the VIX is under 30.  FAZ still not at yesterday’s highs.



  58. LOL occam !


  59. Phil, Is ICE still a good trade at this level ?  I had an execution glitch … acting when you gave the trade.  Thx.


  60. Big pharma and health providers up on health plan agreement.  MHS is rockin…


  61. Phil – What do you think about the CAT 2011 $25′s


  62. If the DIA’s hit 55 we jump out right and if they get around 60 we are doubling the order?


  63.  welcome back Phil… for a few minutes there the internet was saying your website didn’t exist… chuckle


  64. Big pharma was up…..MRK, hummmm….


  65. Hmm how worrying is that "head and shoulders" on the DIA daily chart?
     
    Spider do you have links to any articles on the solar energy cost?
     
    If wanted to debate the "green" nature of solar, I think we would benefit from seeing a full lifecycle energy calculation, including production, operation and disposal costs.
     
    For example, here is a reaosnably compelling argument that those "high efficiency" lightbulbs we can buy use far more energy on a lifecycle basis, and are therefore paritularly un-green.
     
    http://www.savethebulb.org/Energy%20Wasting%20Lamps.pdf


  66.  New Palin Classic (sorry Cap, I know you must lurve her)
    —————--
    Palin said there is a difference between the White House and what she has experienced in Alaska. If she were in the White House the "department of law" would protect her from baseless ethical allegations.

    "I think on a national level your department of law there in the White House would look at some of the things that we’ve been charged with and automatically throw them out," she said.
    ————--


  67.  30 mins until CNBC Santelli reports the 3yr auction results…
     
    if he doesn’t grade it as an "A+" auction that required no Fed buying into its own stuff, then…  uh-oh


  68. LOL Occam!

    ICE/Partha – You know I hate chasing.  Best to let it go as it’s way off now.  I still think it can drop a long way but our puts are up 20% already and we’re ready to stop out if they bounce back, not buy more as this is a big move in a day.

    CAT/CaFords – Are you talking about buying out the cover in the $100KP or buying them from scratch?  Either way I do like them here and $30 was my target.  Of course, it would be nice to make sure they actually hold $30 first…

    DIA/Hatorade – If they hit .60 we DD but not if they are falling straight down.  As it’s going now yes, we want more at .60.  Volume is just 77M at 12:33 so 16M in past hour = very inconclusive action.  The note auction is up at 1pm and it’s silly if the market reacts to it but that doesn’t mean it won’t.

    Hi Merk!  I didn’t even know I was gone.

    VNO hitting 5% rule, bad if they break that ($41.50).  ICE past 7.5% – nasty!

    Auction should be a great excuse for one of those rallys that makes DB throw a fit…  8-)


  69. Stevenparker:  I do have some stuff about solar enrgy. I have to search for those.
     
    Here 3YR auction results in few minutes:
    http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/2009_3year.htm


  70. DIA $84 calls – So you can see from the slow, tedious way they head from .70 to .60 how we can set targets like DD at .60 and out at .55, it’s not a fast thing but don’t generalize.  It’s not fast because the lower Dow raises the VIX and there are still 2 weeks to go on the calls and 200 Dow points is nothing in 8 sessions so they are holding their value well.  If this were a Friday I wouldn’t want more.  I was guessing before but my guess is right and .60 should come right about 8,200 which we expect to hold and that means something is really, really wrong if we see .55. 

    Once again this proves the best way to follow my scale-in bets is to NOT buy the first price and wait for the DD point! 

    At this point we want oil to come off this floor as we need the energy stocks to perk up to avoid the dreaded head and shoulders pattern from forming on the day.  Mr. Stick will have his work cut out for him as we need to do better than 8,280 on the Dow and 894 on the S&P so it’s going to be a wild close although I still think they use the upcoming auction results as a reason to rally us up. 

    Volume just hit 82M at 10 to 1.


  71. Auction – Phil, spot on  – I just saw a eTrade alert that said "US 3 Year Notes $72.64m in NonComps" - Dont know what it means but SPY jumped $0.1 and I did indeed throw a fit.  I already have by stops in place in anticipation of auction or PPT :-)


  72.  yeah Phil… after 12 noon for about 15 minute window you were gone… I tried several browsers and they all said your website was not there, but all other sites I track were fine… 
     
    S&P trying to grind down that 888 support level….
    I’m thinking 3 yr auction results could be the catalyst to energize the next leg down… just a few minutes to go


  73. Occam … palin … pretty funny.
     
    Her and Biden ought to co-star in a comedy show or movie.  Dumb and Dumber 2.  Al Franken could join them.


  74. JPM is in a hell of a channel since mid-April!

    GOOG $370 calls for $33.85, selling $400 calls for $14.10 is net $19.75 on the $20 spread with break even at $389.75.

    LOL DB!  They do it every time, don’t be surprised…

    Site/Merk – Must have been a trunk access thing.  I think there’s something about url’s propogating server nodes that can cause that but we haven’t done an update that I know of which would cause our url to change.

    Yes auction could also be sell-off excuse but hopefully not..


  75. Ha… auction was a non-event… yaaaawwwwwwwn


  76.  Whhhheeeeeeeeeeeee…. ski down that ICE slope !!!


  77. Looks like the OXEN ERX trade was a total bust …. unless they want to claim they caught the falling knife.


  78. Not a very good auction, 1.52% on auction, much higher than last time (1.45%), bid to cover 2.62.  Certainly nothing to rally over as there is demand but only for a higher price. 

    ICE continues to liquidate, below $101 now!  No reason to do the spread anymore, .50 trailing stop is good as Aug $120 puts are already $21.20 (up 27%).

    Volume not moving so no reaction to notes but that’s bad for bulls as the only catalyst now is likely to be a BS stick save.

    Probably flatline into stick save that takes us above H&S pattern (Dow 8,280, S&P 894).  Breakdown would be losing 34.80 on the Qs but 2.5% lines should hold today even in a sell-off and that’s down 2x from here (doubtful). 


  79. FIt !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


  80. Phil,
    Can you post the other side of the AA $5K play, now that you’ve done so well on the first leg, cause we’re coming up on the $.50 exit point.


  81. Helloo Phil;
     
    The AA calls are getting close to you +.50 target, is that still the target ?


  82.  Michael Jackson funeral starting… 


  83. ABX Aug $31 puts sold naked for $1.15 is a nice net entry at $28.85 if put to you.

    $5KP AA play – The $7.50 calls are now $2.35 and that’s a .60 profit on $1.75 (35%) in one day so we can take that and run as it’s great money for 24 hours or we can sell the $9 calls, now $1.10 for no less than $1 to keep a .75 spread.  Much riskier of course but, since break even is $8.25 – I’m willing to risk it.   That makes the play selling the $9 calls for no less than $1 but holding out in case they go higher.  $9.70 is the breakdown point


  84.  Phil, are you suggesting to place the short AA $9 calls at $1 (or better) at this time or holding out for better price??


  85. Phil, I have some UAUA buy-writes with Jul 5 puts and calls. Should I roll the Jul 5 putter? To Aug 5 for a credit or pay 0.7 for Aug 4? What about the caller? Thx.


  86. Trading seems to be halted on UNG. Option prices doing strange things too.


  87. Phil, it seems I’ve heard you say things about the dollar getting a little stronger before gold is a good thing to consider…. I’m thinking of waiting a little longer on those ABX puts…. I have been watching them and am wanting to buy them…. I just don’t know if I want to just yet…. do you think that is a bad idea or is there maybe a reason you would talk me out of waiting?


  88. DRYS – anybody know why it would do such a perfect drop and pin at 5, is there some news that relates to that price?


  89. GLD is up now, after a down morning.  Is THAT signifying a dollar weakness due to the less than stellar offering….???


  90. Boy, I hope the whole summer is not thin like this … will be boring and painful.


  91. Com’on Cap, we can sell premium (what little there is of it w/o a HIGH VIX)….


  92. Just crossed 100M in volume at 1:45.  Under 140M at 3pm is stick territory and its very doubtful we’re going to put up 40M in just over an hour.

    YRCW back at $1.44.  Nov spike low was $1.20 and March low was $1.48 so deader than dead and I have to like them down here as a straight buy as option selling isn’t worth it on them at the moment.

    AA cover triggered at $1.04 so that’s a .71 basis on a $1.50 spread.  That’s why taking .60 and running is a good alternative, max gain is .79 anyway and now we have to wait but it was a gamble that maybe we get $1.20-$1.50 for the cover.  Greed is never good!

    VLO still going down, below $16 now.   Oil failed a run to $63, that’s probably why.  We’ll see if they can get something going into the NYMEX close at 2:35 but not looking good right now. 

    AA/Sgrundahl – hope the above explained it.  Yes, the original idea was to make a cheap spread but, having made most of the potential .80 in profit without the cover, it was just as well to cash out.  I went with the cover because I wanted to stick with the original idea of the trade, which was to demonstrate how a vertical into earnings can yeild a quick profit but I have actually decided that we should have taken it as a lucky break and cashed out instead as we don’t have enough money to tie it up for extended periods. 

    UAUA/Ajay – Wellt he $5 puts are $1.73 and I am kind of surprised we’re getting no reaction to lower oil prices.  I suppose I’d go for the Sept $4 puts and calls at $1.64 so only a dime to roll them to $1 in premium.  You can do a 1/2 sell on the calls side as it only costs you .24 per contract and gives you more upside and you can always change your mind later and cover those.

    UNG/Eric – Yeah, wassup with that.  No ticks since 1:37.  I see no explanations but they are halted.

    ABX/Roam – Nothing at all wrong with waiting.  They just hit a price I’m very happy to pay to own ABX long-term, that’s the reason I make those calls and it is 10% lower than here so we’re talking gold dropping below $850 – not that there’s a direct relationship but just to make a rough comparison…

    DRYS/MrM – $5 is just a psychological line where I’m sure people have stops on both sides, nothing more.  Big buying came yesterday at $4.93 and I like the stock at $4.95, selling Aug $4s for $1.20 and Aug $5 puts for .65 for net $3.10/4.05.

    Gold/Pharm – I see nothing there.  Dollar is generally strong against Pound ($1.615) and Euro ($1.395) but just 95 Yen, which is way on the low end.  Commodity players are terrified the dollar will break up and it won’t be so good for equities either but it’s also no good for the dollar to go lower if oil is going to go to $70 so hopefully the dollar just hangs out here until we get through the month at least.

    Thin/Cap – If this is the kind of movement we get on low volume, I don’t think we want to see high volume!

    MA and V continue to fall.  FSLR still down and down.  INTC suddenly out of favor despite general semi upgrades. 

    Ags getting hit too, this is 2 days in a row oil is just dying into the NYMEX close – that’s scary if they can’t get anything going into inventories tomorrow. 


  93.  Got it, thanks Phil.  Considering that I did not fill the short AA, would you close the long AA position at this point or what is your stop?


  94.  target, not stop.  Sorry.


  95. UNG ticked to 12.64 then dropped 30 cents


  96. AA/Sgrundahl – The calls are $2.20 now, still a nice $135 profit on $525 put to work yesterday so I’d ask for $150 ($2.25) and be happy to close it out there.  The alternative to taking a .50 profit off the table is selling the $9 calls for $1, which takes $300 off the table and leaves you in for $225 with the possiblility of a double so your "bird in the hand" is $150 and you are risking that as well as your $525 principal in order to make, at best $75 more so it’s not a good risk/reward to stay in now that you are already ahead.

    UNG resumes with a .30 drop down and still no explanation that I’ve seen.  Very big volume on the down move….


  97. ERX/Oxen & Oil:  What do you folks think of ERX (Oxen’s play today) and Oil in general?  If oil doesn’t go up today, do you think we should hold on to our oil positions?


  98. OIL: Phil, tonight `they` will blow up a pipe in Nigeria. Problem solved.
     
    UNG: got this = July 7 (Reuters) – United States Natural Gas Fund, LP : * To temporarily suspend issuance of additional "creation baskets" * Suspension until SEC declares effective registration statement on form S-3 -
     
    AA : placed sold order only one filled. I’m looking into the spread with the 2 remaining. Will see.


  99.  got it, thanks


  100.  OH MIGHTY STICK!!  WORK THY MAGIC!!


  101. Oil could not crack $63 at the close.  $62.91.

    UNG says they will not issue any new shares now, that’s beyond strange.  Traders are worried this will trash gas prices.  Unfounded I think but we’ll have to keep an eye on them.

    Yesterday’s stick really had us sweating it out until the last minute – we’ll see what time they start today.  Obviously, they need to move in earlier to cheer up the retail buyers as pushing the market up over 8,300 lasted all of 20 trading minutes over 2 sessions and that is no reason to pull cash off the sides.

    ERX/Cwan – I like my spread but not the straight play.  Oil may be in very big trouble short-term.


  102. UNG:  http://www.bloomberg.com/apps/news?pid=20601087&sid=aopSm702v5_8
     
    I bet it’s linked to today’s CFTC crackdown threat.


  103. ICE below $100!  That’s $22 bucks on the puts, good enough for a day trade.  At this point, if you want to stay in, better off buying the Aug $95 puts, now $6.20 and putting tight stops ont he $120 puts, say $21.75 to lock in a $5 profit and you have essentially a free ride on the lower puts and less chance of getting blown out if it snaps back overnight.  Either way, the goal is to get the $120 puts off the table by the close.


  104. Phil TNK drifting slowly but steadily lower, can this be an over reaction if the volume is SO slow?



  105. You said we weren’t looking to DD on the DIA calls if we fall straight down?  Does this qualify.  If so what’s the play at this point?  Just hit .60 and falling.


  106. oh dear this looks grim


  107. GOOG just dropped! ?


  108.  hmm.  . . typical behavior from the Stick.  .  it has never failed not to obey me


  109. Phil, DIA 84′s now a stick play?  ..hold or gettin out @ .50?


  110. what is the next support level?


  111. TNK/B1 – All the shippers are getting killed as the commodities unwind. 

    Whole market turning very ugly but volume still low at 123M just before 3pm.  Simply no buyers at all, haven’t been all day. 

    DIA/Estimated – Good point.  So this is exactly what I was talking about.  We said DD at .60 but when it blows through .60 we don’t just DD like idiots, we wait to see if it stops and at .55 we make a very different decision as we can limit our losses to .15 or DD there (assuming we stop falling) and avg in at .625.  We still need a .07 move back up to get even so we have to think it’s in the cards.  Otherwise, better off waiting for us to cross .60 on the way up and then buy some more to lower our basis.

    We’re crossing 3pm with no stick.  Oil fell right back to $62.50 so you know that’s not good for the enegy sector and solars are still falling and ICE and CME are still falling so no way to know when this ride is going to end right now.  if 8,200 doesn’t hold, we have real trouble! 

    DIA $84 puts now .52 and not a buyer in sight, no obvious support here but move was sudden on low volume so I’d rather keep the puts for the moment as a DD at .50 averages .60, where we were just 10 mins ago.


  112. Well.. I knew July would be a big correction but these guys are in a real hurry to lock in the ridiculous gains over the last 4 months.  I thought we’d have a fake rally till earnings but looks like they want to take the no brainer trades off the table now ahead of earnings.  Moving more towards ‘right’ pricing for the inflated scenarios.  But still more room to fall once we see the inflated part of inflated scenarios!


  113. Just to be clear on DIA $84 puts – I am worried about failing our levels but the volume is still very low and we can be stick saved at the end so I’d rather take a chance here and spend 5 x .50 ($250) to lower the basis to 10 at .60 ($600) and hopefully get a save at the end.  It is OK to pay .54 or .55 but not more than .55 at this point.  Overall, the loss expectation is still fairly small so worth a gamble.


  114. DIA – Phil means the 84 calls.


  115. Damn, I meant CALLS!!!   Why do I keep doing that?


  116. rofl because you wish you had bought puts :P


  117. Phil quit it you getting edgy with the stup, sllac, er uh…puts and calls no lysdexia in your family! ;-}


  118. LOL  Dia Puts.. its a freudian slip. (or whatever is spelled)
    I DD those. And Phil, what do you expect for tomorrow, after 2 down days?
    Will be too risky to keep them overnight?


  119. Spider, I thought we were bottoming so I went long today, which historically means you can expect a big down day tomorrow!


  120. LOL MrMocha. We usually trend to think that way, there is a chance we are wrong when we take an action. So, thats why not doing a 100% move, just scaling in. But… Did You went 100% long?


  121. Dumbass stick save mentality.  ‘They’ have this market so trained for the save you just never know what is going to happen.  I mean, why save now?  I really hate that you have to factor in it’s possibilty in what otherwise would be a very easily traded day.


  122. Good point Steve!

    Actually I think it’s because I’m writing out the word calls in the Alerts and, since I usually don’t write calls, my hands just keep typing "puts" no matter what.  This is why it’s better if I just stick to my regular habits – change is bad….

    ICE $97.50 – Both sets of puts now working well!  Don’t be too greedy…

    DIA/Spider – If we can get out even (assuming .54 on the DD that’s .62 to get out) then we should get out but, otherwise, better not to take the day trade hit and hold until tomorrow.

    Also, on DIA, now the MM is playing games because they were quick to drop and slow to rise.  Probably too many of you guys playing along and he’s screwed if the Dow rises as he’s probably been selling uncovered calls.  Not much the MM can do if we get a real move up though, not with 8 days left… 


  123. ICE – Done at $24 with Aug $120 puts.   $95 puts are $7.20 so selling 1/2 and letting the rest ride with a stop at $5.


  124. I am still in 85 DIA Calls from a couple days ago, now at a basis of .44, thinking I will hold overnight but unsure whether I should roll them down the the 84′s you guys are in, any opinion pls?


  125. DIA/Steve – I would not throw good money after bad here.  The $85 calls are still .30 so not unrecoverable and all you really do by spending .25 to roll is to increase your downside exposure. 

    Ow, worse and worse but filling the $84s at .50


  126. computers just pounding out the downticks …. w/ no uptick rule,they can w/ impunity.


  127. Spider, no I didn’t go naked long, I did some buy/writes using Aug calls on things I’d like to own more of long-term like BAC and HK.


  128. we’ll call this the Michael Jackson sell off ….


  129. I didnt think they’d let it test yesterdays’s lows. Perhaps someome really did take Goldmans code and create an antidote :-)


  130. 10 minutes left, volume 155M, "normal" day lately is 180-200M on Dow.  If we break the pattern here of buying into the close, we have bigger problems than losing on our DIA trade..


  131. Wow, some TA analysts have put the neckline of a Head and Shoulder’s pattern for the S&P at 880.  It looks like its just touching that now.


  132.  Looks like the market is gonna get its dandruff washed out with "head n shoulders" ;)
     
    follow through selloff tomorrow is gonna make things rough for the bulls… good to be duh bear


  133. Stocks making new low of the days:  V, GS, JOYG, WYNN, EOG, AAPL, INFY, SBUX, TOL, URBN, JNJ, MDR, RIMM, TEVA, BDX, WFR, BRCM, DNDN, UPS, PCX, BLK, COST, QCOM, SHLD, UA, LEN, MOS, YHOO, GOOG, TM… Total wipeout now….


  134. Are we still bearish on AA going into earnings?  I wonder if some surprise awaits.


  135. Boy, yesterday’s action really kept me guessing on today’s action.  So now.. what about tomorrow??  I’ve got to believe we’ll open up.  That is, unless this is a real stampede and ‘they’ don’t have the guts and or fire power to pull their shenanigans at the moment.  But I doubt that.  Anyway, all cash.  Not taking a chance.


  136. Buying a few GE leaps here — starter position.


  137.  I’m invested in the selloff… I’m keeping a lil powder dry, but for the most part I’m in it for the "big one"


  138. well that sucked


  139. Hmmm Long slow crappy fills getting out od DIA"S on etrade..anyone else? Looks like more sellers at close than any support…


  140. Sold Half DIA calls (The ones in the DD for a small loss).   If we open green tomorrow, probably get even fast. If not, i use today cash to average cost down, or just do other trade.  The  "picture" is not nice. Very bad day for me, because the VIX climbed and punished all the put&calls I have wrote.
     
    I will dig on the solar thing.
     
    Cya!


  141. while we weren’t looking, GOOG broke 400 (396)


  142. Volume finished at 209M, all bad at the end!  Not sure that was enough to qualify as a blow-off and why wait until last 10 mins to sell like that? 

    LOL, check out ICE at the close – Jammed up to $102.50 for a minute…  Congrats to all who played that one, huge winner - Aug $120 puts finished at $24 and Aug $95 puts finished at $7.20 so good exits.

    RUT plays were crap though, DIA puts will need some real luck to escape tomorrow.  ERX October $25s at $4.20, ABX Aug $31 puts up to $1.40, AA caller finished at .83, $7.50s at $2 at the moment. 

    I hope everyone had fun, finally we’re seeing some buyable things out there!


  143. An after hours stick ??


  144.  ha--we doubled our losses after I attempted to invoke the mighty stick.  anyway, have a good evening all.  "Tomorrow is another day."


  145. Well when do we hit the buy list :) my finger is iching.
     
    also buy FAS :) ?


  146.  Yeah Phil…. that ICE play was a whole lotta fun !!!….  I alwayz luv skiing on an avalanche….. Yeeeeehhhhaaaawwww
     
    I’m still riding it for tomorrow just in case the "head n shoulders" chart gets confirmed with a market wide selling wave tommorrow


  147. Aobut needing luck tomorrow on the puts.  I assume you mean calls not puts, haha :)


  148. Option traders, I’m not one you.  But want to be able to every now and then when obvious situations arise.  Unfortunately, I was honest on my application for an Interactive Broker account and said I didn’t have any experience with them.  So, they made me take a test.  I flunked!  The last question I tried to answer before they booted me to the door was this:
    You sell a $40 put for XYZ and short 100 shares at $40.  At expiration the stock closes at $35.  How much did you make?  I figured it was a wash because you lost $500 on the put and gained $500 on the short sale.  But they answer was + $500.  I don’t get it.  What am I missing?


  149. GOOG $370s now $31.20 and $400s $12.50 so net $18.7 is down $1.05 and that’s normal for these spreads as you have more intrinsic value than the caller.  It always pays to look at potential rolls, like the Aug $380s are $30 and the Aug $370s are $37 but not worth spending money on now.  Conceptually, once the caller’s premium dies, we can pick up another $15 by rolling to an Aug spread if we have to.  It costs $6 to go to the Aug $370s so we can expect that to stay put and that means we can net + $9 on a roll, which would drop our net spread to about $10.  Not worth worrying about this soon…

    DIA $84s popped back to .55 after hours, tempting but I’m sticking with them.

    Buy/Micro – Well, down 600 points since 6/15 I’m inclined to want to see the 20% bounce (+120) hold before I go punching the buy button.  That number was already bounced though, on June 25th and we failed there so now we’re really going off 8,600 and 8,163 is down 5.08% so we’ll be looking for the 5% line to hold and looking for the 20% bounce of 87 points to 8,250 tomorrow but notice that’s the cliff we fell off this afternoon so I’m thinking it’s going to form upside resistance and we are likely to fall from there 1.25% (8,150) or 2.5% (8,000 ish), which would be a neat 10% drop from 8,800 and a very logical correction off a 40% run from the bottom. 

    XYZ/Matt – Depends what you sold the put for.  You make $500 on the short shares and you owe the putter net $5 so it all depends on what they paid you.  Hopefully there was more to that question otherwise you should drop a note to Andy Wilkinson, who is pretty high up in that group…


  150. Does anyone ever look at the after hours orders on days like today?  I noticed someone bought 500,000 shares of DIA after hours for $83.27.  Maybe that’s the weighted share price for an order like that.  I’m just hoping my DIA calls will go up in the next week and wondering if this is an indicator that we will be bullish soon.


  151. I’m hearing that FAZ will see a 10:1 reverse split tomorrow after the close. Has anyone else heard the same ?  


  152. Sorry, seeing news on Direxion’s site…..should have checked there first.


  153. Matt, In order for IB’s answer to be correct the premium on the STO Put would have to be $5; a breakeven (BE) on the Put. They are of course ignoring the broker fees.


  154. Sunco1, I think you got it.  Thanks.  So, I make $5 in premium when I sell the 40 put.  It get’s excercised at $35 so I’m out $5 there.  A wash.  But I still have the $500 from my short sale of the stock.  Damn!  I need to keep studying..


  155. Any view on UNG? I hold equity at 12.50 and sold Aug 12 puts at .90, have not yet sold calls. If price continues down, do you recommend DD and at what price, thx.


  156. Hey spider, yeah crappy day for me too. I am interested in the solar thing because for people are interested in green issues there is material not often covered. The overall energy cost of a technology is difficult to assess. I can easily believe that solar energy requires a net contribution from burning oil at this point, although ongoing investment should improve that.
     
    The other thing with  alternative energy is it produces electricity when it can rather than when you need it. We are going to need to store electricity, and the technology for this hasn’t really changed for a century. You pump water up a hill when you don’t need the electricity, and release it back down the hill when you do.
     
    Not sure how to turn this into an investment premise, but as far as I can tell mass solar (or wind power or whatever) is going to need a major investment in new reservoirs.


  157. matt1966  =
    Selling the put (a bullish trade) will cancel the short. So your profit will be the premium. (witch seems to be $5)
     
    Another way to see this trade is:  (assume stock is at $40 when you buy sell the options)
    Convert the short into a synthetic short: this is buy one put and sell one call with same strike($40 in the example). 
    Then the put bought (synt) will cancel the put sold and you left only with the $40 call sold.  And because the stock  closes below strike at EX, you keep the caller premium. (it should be the same premium as the put because put-call parity).


  158. DIA/Celest – Yes, that is a pretty unusual move after the bell but you never can tell what’s going on in AH trading.  You say buying but maybe someone took advantage of the little run up and got out of the position they took at about 3:45 when a similar order went through.

    IB/Matt – Well I would have gotten that question wrong because I would have argued with them that there are no $40 stocks that are going to pay you $5 for selling an at the money put… 

    UNG/Concreata – It’s going to keep going down as the news spreads about the share freeze but this could be a good thing long-term as shares will be hard to come by if nat gas does go up.

    Now Cramer has finally gotten religion and realizes the price of oil is BS!  Saying entire energy complex could be overvalued by quite a bit after hitting the buy button on them for the last month when they were 20% higher - what a jackass!

    Energy/Steve – Here’s a very interesting micro-trend in energy:  Wood pellets.  This is a great opportunity for companies with lots of trees like IP and JOE although the carbon-neutral thing is BS.  The logic is that the carbon released from burning the wood is the same as the carbon that would be released anyway from the natural process of the tree dying, which is true but the fact of the matter is the tree would have never existed if it wasn’t grown to be used as fuel and those trees that were there would have had 10x longer lifespans.  It’s funny the kind of crap reasoning they apply to these "environmental" solutions – it’s the kind of nonsense that had them burning 2 acres of corn to make a gallon of gas so 200 people could starve to death in order for a Hummer to go 11 miles… 


  159. No "Stick Save",  now we got a "Stick Foul"!


  160. I had one contract of PGN called away today which wasn’t a bad thing except that the ex date is Jul 8. Anybody know if i buy them back in the morning if i will be the holder of record or did i have to do it today while i was driving back from the mtns.
    I guess that’s something to watch out for when selling cvrd calls.


  161. stevenparker:

     
    Sadly I cant find the archives or the links. Just digging for some information i found I was wrong about the negative energy output. ( That was true for old tech panels and specific panels, like the ones in satellites).
     
    Even if some day in the future this technology becomes an "alternative" (now is only a complement), I refuse to invest in any solar company with current valuations. Maybe I’m too simplistic, but I see current investor hoping for a miracle. I wish solar investor good luck. I only play with puts time to time on solar.
     
    I will share a good reading about energy. Is not specific on solar, but puts in perspective how much work has to be done if we (some day) want (or need) to replace fossil fuels.
    Energy Myths and Realities, by Keith O. Rattie
    Chairman, President and CEO Questar Corporation
    Utah Valley University April 2, 2009
    http://www.questar.com/1OurCompany/newsreleases/2009_news/UVUSpeech.pdf
     
    Regards.


  162. Phil, so what planet is Cramer from….can he really submit that this caught him by surprise? Think of all those poor souls that bought oil faithfully because of him.
    So is there new news about manipulating oil futures—did someone get caught with their pants down? Or is it the same fuzzy info that we all know about?


  163. Phil, at the Atlanta airport. I am amazed it is so busy, restaurants packed to capacity, with lines. Massage shop doesn’t have a spare seat!! I thought this economy was in it’s death throes. Just FYI, here it looks good.


  164. Phil, I forgot to post this yesterday. Cramer yesterday said that the price of oil is manipulated and he is one of the only people to recognize this! How come he was not saying this last year when he was pumping the price of oil up with his buddies at Goldman Sachs!
    This is a must see. He responds to a caller asking a question about oil at about 8:30 seconds into the cnbc video.
    http://www.cnbc.com/id/15840232?video=1173520659&play=1


  165. Phil. yesterday you answered this post….i was curious about the details myself and wondered if they got posted.
     
    RRSP/Jofori – Well you can sell covered calls right?  So that means if you get a dip in GE like from $11.90 to $11.30, you can sell 1x Aug $11s for .99, which lowers your basis to $10.90 and then buy more (say 1/2 x) if you cross $11.50 and another 1/2x at $11.90 for 2x at avg $11.30 with the 1/2 cover of the Aug $11s and the stock at $11.90 so you can set a stop on 1/2 at $11.60 at which point you’d be full covered at net $11.   Happy to go into details after hours, it’s a good thing to get the hang of!


  166. Labor Markets – JOLT Report
    The competition for jobs intensified in May, the government said Tuesday, as employers advertised more positions but the number of people looking for them also increased. The Labor Department’s Job Openings and Labor Turnover Survey found there were 2.6 million positions available at the end of May, up from 2.5 million in April.

    Employers eliminated a net total of 322,000 jobs in May, the department said recently. At the same time, about 350,000 people entered the labor force, pushing the number of unemployed people to 14.5 million.

    That means, on average, about 5.7 people were looking for work in May for every available job. That’s up from about 5.5 in April and way up from less than two per job in December 2007, when the recession began.


  167. Spider:
    RE: Energy Myths and Realities – great summary of the nonsense being fed to people on the energy issue. It clearly demonstrates the reality that it is mostly emotional / guilt tripping and not reality based. It reinforces my view that what really is behind the cap and trade push is raising tax revenue to fund more of the "nanny state".


  168. Ocelli7,  I didn’t think that anyone would buy anything reco by Cramer.


  169. Good Morning Everyone.
     
    FTSE flat most of the day so far. S+P futures being pumped up yet again +0.5% at the moment. Hopefully that’ll go the same way as yesterday. (for the bears)


  170. Good morning!

    Oil/Ocelli – The "news" on oil futures was that one guy that got caught last week spending $10M to goose the NYMEX up to $73 last Tuesday in pre-markets.  That was the morning I was freaking out at what BS the pre-market move was as it was unusually blatant shenanigans and, since they did it in Europe where regulators aren’t in a total coma, there was actually an investigation launched.  So that was the smoking gun and now idiot Cramer claims he never realized that oil markets could be manipulated like that, even though he worked at GS and even though he’s a confessed market manipulator himself.  What it really is is his trying to distance himself as Tyler and I have been pointing out for the past couple of months how he is closely tied to these bastards and is clearly part of the problem.

    Atlanta/Jamie – That’s great.  This is in-line with my premise that this (8,000) is a good bottom for the market.  Yes the economy sucks but not Dow 7,000 sucks, 8,650 is a very fair mid-range and 5% down is 8,200 and 5% up is 9,100 and that is a proper range to trade in based on what I see the global economy at, not healthy but certainly not dead.

    Cramer/Richard - His whole show last night was also focused on "Oh my gosh, oil is manipulated."  Can the guy be more late on things?  Also, now is the time to flip positive on oil as the press suddenly starts jumping on the $50 bandwagon, which will probably be as wrong as $85 was last month.   I think it’s very interesting that when oil was $70 they said $85 (+$15) and now it’s at $63 they say $50 (-$13).   Seems like "THEY" are simply trying to force action on both sides of $65.

    Details/Ocelli – Jofori never reminded me so I forgot.  Remind me after hours or, even better, on the weekend and I’d be happy to expand on the subject.

    Jolt/Ramana – Good report, thanks.

    Cramer/Sunco – Sadly, many, many people buy whatever Cramer tells them to…

    Futures up slightly but still early.  Oil is critical today, if they can’t hold $62.50 then that sector will lead us down again.  Gold also needs to hold $920 as a proxy for all metals holding the line. 

    API Petroleum report (off by a mile last week) showed a 1.4Mb draw in crude and a 750Kb build in gasoline and a huge 3.4Mb build in distillates (probably jet fuel usage way off).  Analysts were expecting a 2.4M draw in crude, a 600Kb build in gas and a 2M build in distillates.  Last week, the API was WAY more bullish than the official report at 10:30 and that started the week-long $10 slide in oil. 

    That’s our big data-point for the day.  We get Consumer Credit at 3pm but not a huge mover and that’s it for data.  AA already said their outlook is bullish and I doubt earnings will be worse than expected and that’s not until tonight.  RT had a really nice beat last night and we get FDO and PBG this morning but that’s it so another day where the market will have little external influence to move on, which is going to make oil totally critical today and we need that sector to stop falling so the rest of the market can catch its breath.


  171. Good Morning Phil, DB & all


  172. Asia/Pacific Markets    Wednesday, July 08, 2009
    (The following is from Yahoo, please confirm with other sources)   

    Australia All Ordinaries*             3766.00        -1.80        -0.05%
    Nikkei Average*                          9420.75    -227.04        -2.35%
    Shanghai Composite*                3080.77        -8.68        -0.28%
    Hang Seng*                              17721.07    -141.20        -0.79%
    Seoul Composite*                      1431.02        -3.18        -0.22%
    Singapore Straits Times*           2259.77      -12.49        -0.55%
    Bombay Sensex                       13769.15    -401.30        -2.83%
    Baltic Dry Index                          3216.00     -159.00        -4.71%

    * at Close


  173. Nikkei, Oil Hit Six-Week Lows on Recovery Worries

    Japan’s Nikkei 225 Average and oil prices hit six-week lows Wednesday as investors pulled funds out of bets on the global economy’s recovery and favored safe havens, such as the U.S. dollar and government bonds. The yen pushed higher as investors reversed positions in higher-yielding currencies, which tend to benefit from rising stocks and commodities. The low-yielding yen is often used as a cheap source of funds to buy higher-yielding currencies in carry trades.

    Japanese core machinery orders surprisingly fell 3.0 percent from a month earlier in May, in government data released just before the Nikkei’s open, adding to concerns that business investment may fall further as companies look to cut capital expenditure.

    Japan’s Mikkei fell 2.4 percent to a six-week closing low, hurt by an unexpected slide in domestic machinery orders and as the yen rose to seven-week highs against the dollar on talk of more stimulus for the U.S. economy. Machinery makers dropped after Japan’s core private-sector machinery orders fell 3.0 percent in May from the previous month, suggesting a recovery in capital spending may be delayed.

    South Korea’s KOSPI ended just 0.2 percent lower, trimming early losses from concerns over the global economy, helped by gains in carmakers and with technology heavyweights regaining ground.

    Australian shares closed flat, clawing back from earlier losses as investors looked to buy some stocks at cheaper levels, including miners and the top banks.

    Hong Kong shares tumbled 0.8 percent, set for a third straight losing session, as talk swirled of the need for a second round of stimulus spending in the United States, fueling investor doubts about the pace of economic recovery.

    Singapore’s Straits Times Index dropped 0.6 percent, also pulled lower by concerns over the U.S. economy.

    China’s Shanghai Composite Index pared back losses, but was still down 0.3 percent. Chinese bank stocks led the pullback as investors worried that China may backtrack on its easy monetary policies following a strong surge in new lending in the first half. The property sector was also weak.

    Bombay Stock Exchange’s Sensex closed at 13759.79, down 410.66 points or 2.90 per cent. Equities ended near day’s lows on Wednesday as traders booked profits taking cues from the weak global markets. Realty, capital goods and metals space were beaten down badly.


  174. Euro Stocks Fall to 10-Week Low

    European shares fell in early trade on Wednesday, mirroring big losses on Wall Street and losing ground for the fifth straight session, as investors braced for the start of the corporate earnings season. The FTSEurofirst 300 index of top European shares was down 0.5 percent at 821.99 points, after falling to a 10-week low of 820.01 earlier. The fifth consecutive drop also marked the index’s longest losing streak since mid-January.

    Oil firms were among the biggest losers, falling along with crude prices on growing doubts over the health of the global economy. Royal Dutch Shell was down 0.8 percent and Total down 1 percent.

    Banks were also losing ground, with Banco Santander down 1.7 percent, Barclays down 1.9 percent and UniCredit down 2 percent.

    Aluminum major Alcoa is due to kick off the second quarter corporate earnings season later on Wednesday.

    Shares of mining and steel companies — recently hit by worries that earnings might not justify valuations after the sector’s sharp jump during the spring rally — were mixed on Wednesday, with Rio Tinto up 1.6 percent, Xstrata down 0.9 percent and ArcelorMittal down 1.3 percent

    On Wednesday, telecom group Vodafone was up 0.7 percent, drugmaker GlaxoSmithKline put on 0.4 percent and Italy’s utility Enel was up 1.1 percent.

    Also on the upside, German chipmaker Infineon surged 7.7 percent after the company said late on Tuesday it would sell its wireline communication unit (WLC) to a U.S. investor for 250 million euros.

    Around Europe:

    FTSE     4,194.02       7.02          0.17%
    DAX    4,597.80    -  0.39        – 0.01%
    CAC     3,023.84    – 24.73        – 0.81%
    SMI    5,326.82    -  2.38        – 0.05%


  175. Oil Falls for 6th Day to $62 on Economic Doubts

    Oil fell more than $1 to $62 on Wednesday, on course for its sixth consecutive fall and longest losing streak since mid-December, after doubts grew about the strength of the global economy.

    Figures from the American Petroleum Institute (API) on Tuesday showed distillate stockpiles jumping by a much higher-than-expected 3.4 million barrels, while gasoline inventories rose 767,000 barrels against a forecast 600,000-barrel build.

    Combined with a 1.4 million barrels fall in crude stockpiles — less than the expected 2.4 million barrels decrease — the oil data show little recovery in demand from the world’s largest oil consumer at a time when talk of "green shoots" has come under renewed scrutiny.

    U.S. light, sweet crude [  62.52    -0.41  (-0.65%)]  or August delivery fell to a low of $61.87 a barrel before recovering slightly, having settled $1.12 lower at 62.93 a barrel on Tuesday, its fifth straight day of losses.

    London Brent crude [ 62.96    -0.27  (-0.43%)] fell.

    Traders were keeping an eye on the Group of Eight summit in Rome, where some of the leaders of the big Western economies called for reduced volatility in energy markets and said unpredictable prices impaired industry’s ability to invest.

    Dollar Broadly Steady; Yen Climbs as Stocks Fall

    The dollar was steady while the yen climbed on Wednesday as uncertainty about the global economic outlook reined in investor risk-taking. Recovery doubts have helped pull currencies such as the Australian dollar, sterling and the euro well off peaks hit in June, and the dollar and yen have risen in the past few weeks.

    The dollar index, a gauge of its performance against six major currencies, was steady at 80.70 Data on Wednesday showed the euro zone economy shrank by 2.5 percent in the first quarter, unchanged from previous estimates.

    The euro [131.03   -1.10  (-0.83%)  ] fell to 130.43 yen, its lowest since late May. It was down versus the Japanese currency.
    The dollar [94.2    -0.68  (-0.72%)   ] hit a six-week low of 94.09 yen, according to Reuters data.
    Sterling [ 151.29    -1.83  (-1.2%)    ] also reached its lowest in more than a month against the yen of around 151.01 yen.
    The euro [1.3906    -0.0017  (-0.12%)    ] was little changed versus the dollar after the data.
    Sterling [1.6059    -0.0078  (-0.48%)    ] hit a one-month low against the dollar of around $1.6048 after weak industrial output data the previous day reinforced doubts about a UK recovery.


  176. Hi Ramana
     
    Pepsi Bottling continue the trend of beating on earnings ($0.05) but missing on revenue.($3.27 v $3.45B). How much longer can these companies eek out cost cuts to bolster their top line ?


  177.  One thing about the $50 oil call Phil, the downside predictions have been accurate, whereas the upside predictions have not.  I think we’ll hit $50, but of course, there may be a little playful goosing before we do.  the market seems ready to be goosed today, but i dunno whether people will go for it.  
    Alas, poor Goldman.
    CFTC review


  178.  Gold weak, we might break $90 on the GLD etf today, which could make some very sad indeed.


  179.  LVS mania running high on Macau IPO talk and not-so-shitty outlook by LVS chairman Sheldon Adelson
    AMGN trying to breach 60
    AIG only down 4% pre-market--it has been dropping about 10% a day



  180.  That’s funny--they didn’t need to have a public hearing to change the rule to benefit speculators.


  181. Would it make sense to shadow a trade like the PCS option play (in Andrew’s column yesterday) at a 10 contract pace. You invest $13,000 and collect $17,500 in 8 months for a annualized 50% return. It appears this investor has enough clout to manipulate the stock and guarntee a $17.50 price in Feb2010. I also noticed the volume was almost double the daily average. I can’t figure out why he didn’t just buy the stock for $11.80 before he manipulated the price up in order to lower the option cost. The only conclusion I can come up with is that he used OP money to manipulate the stock and his own money for the option play. Oh well if you have $4.6m to buy an option position a few bucks here and ther don’t much matter.