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Merry Christmas Eve

First of all, what are you doing here?

Why it’s Christmas Eve, Mr. Scrooge – Most global markets are having a half day so, if you are waiting for a Santa Clause rally on a half-day’s trading, you are very likely to be disappointed.

Remember Marley, who cried: "Business!  Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"

Marley was a man who worked and worked until the day he died and regretted it every day after.  If you don’t believe in an afterlife and you don’t believe in leaving behind the World a better place than you found it, at least find some time for yourself so people don’t call you "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner!" 

Those covetous old sinners in Congress passed the Health Care Bill in the Senate today with a 60-39 vote (Republican Jim Bunning did not vote against the bill but was too chicken to actually vote for it) so we can pretty much count on it moving through the House and on to Obama’s desk in the very near future.  While it’s a total botch-job of a bill, at least America has taken the first civilized strep to recognizing that health care is a right and not a privilege – Tiny Tim would be very proud!

We were told by Fox that Health Care reform would destroy the universe but the market has taken the December passage of the bill very much in stride so maybe we should have just gone for it with Universal Health Care after all…  Oh well, maybe next year!  Meanwhile, we’ll be looking for good investing opportunities once we get a handle on the final bill but I still favor the device space (IHI, MDT, BSX, JNJ, GE, ISRG) as well as big pharma (MRK, PFE), who will be able to serve tens of millions of new customers.  Hospitals (UHS, THC) should also start filling up and we always like our CELG as well as AMGN, who should also benefit from adding a population the size of England to the health care rolls right here in the USA.  I’m waiting for the final bill but home health care providers (AMED, ADUS, GTIV) also look like winners so lots of fun investing opportunities in one of the fastest growing markets on Earth – US citizens who have access to health care!

I’m also done being a grinch about the economy in general as we are over our technical levels and, despite the non-existent volume, if we do manage to hold up through the first week of January, there will be nothing to do but go with the flow in 2010.  For the moment, we’re still pretty darn bearish in anticipation of possibly worse than expected Jobs and Durable Goods reports today but a 20% miss in GDP Tuesday and a 25% miss in Housing Starts yesterday didn’t seem to bother the bulls so why should another 450,000 job losses and a few less washing machine sales?

Despite the total lack of home building in America, copper flew all the way up to $3.25 in overnight trading, erasing almost an entire month of losses all in a single, low-volume rally – yet no arrests will be made.  In fact, the Hang Seng rallied, led higher by metal producers and getting back over the 21,500 mark and the Nikkei broke their own 10,500 mark as the dollar held 91 Yen despite the sell-off yesterday.  That put Japanese exporters very much in the Christmas spirit, especially with rumors circulating in Asia that the US GDP will jump to 4.5% in Q4 based on yesterday’s petroleum inventories.

Bah, humbug you say?  Well maybe so but but oil jumped to $77.50 in overnight trading as news spread of a 4.9Mb draw in crude stocks last week.  I thought that number seemed like nonsense and I did a little research and found out it’s not nonsense at all.  It turns out the number you are being presented with is total unmitigated bullsh*t!  Without going into a big thing let’s just focus on one simple fact – America imports oil.  How much oil do we import?  Usually around 10Mb a day to supplement our own production.  How much oil was imported last week?  Why just 8Mb a day, 1.5Mbd less than the same week last year.

What happens when you fail to deliver 10.5Mb of oil during a week?  Well, oddly enough we don’t get a 10.5Mb draw in our record stockpiles (327.5Mb) but we did get a 4.9Mb draw and that allows the NYMEX crooks to pretend there is demand while Criminal Narrators Boosting Crude cut to the NYMEX at virtually every commercial break so Sharon can gush about how the market is roaring back.  This isn’t just poor journalism – this is a criminal deception of the American people and the $5 jump in crude since last week costs global consumers $430M a day – merrry friggin’ Christmas to us

Adding insult to grievous injury to our economy, the US refining cartel not only ran at just 80% capacity (after Katrina and Rita they were at 85%), depriving us of refined products but imports of refined petroleum products were also cut by 600,000 barrels a day from last year.  That’s another 4.2Mb a week that they short-changed us in order to jack up the prices!  Our total imports were down 2.2Mb a day, which is down 15.4Mb for the week – almost an entire day of American usage parked offshore in tankers so JPM and GS can put the squeeze on us for another few billion in bonus money – yet no arrests will be made…

Please take the time to send this information as a Christmas card to your Congresspeople, the official EIA PDF is simple enough to read and the damage that is being done to our economy is evident to anyone who has to fill up a tank of gas this weekend as once again they jack up the prices ahead of holiday weekend driving in order to rip off as many people as possible.  By the way, if you have a credit card that guarantees you a better price if the product you buy goes down in price after you buy it – use it to buy gas and demand a refund when these BS prices come down – maybe we can get AXP on our side in fighting this nonsense

Also boosting commodities this morning is Gang of 12 member BCS, who announced that Central Banks will avoid the dollar in 2010 to stop it from rallying.  And, of course, there is renewed speculation that our own Fed will keep rates near zero for at least another year.  There’s nothing like speculation about what Central Banks will do to take the steam out of a currency move and BCS managed, as I noted earlier, to push copper all the way back to $3.27 and gold touched $1,107, up $20 from yesterday’s low.  If this sounds like the same nonsense that was used to drive down the dollar this summer – it is – but it worked then and the IBanks will go back to the well again and again until investors wise up, which is often never…

Durable goods came in up huge at 2% ex-auto, way better than 1.1% expected but, including autos, we were up just 0.2%, way less than the up 1.2% expected.  Jobless claims for the week before Christmas came in right at 452,000, which is the lowest level since last September so yay, I guess.  

There’s a great story in the USA Today this morning about how Detroit is very concerned about our nation’s orphans.  No, not the poor children who have no parents – they couldn’t care less about them.  What they do care about is the 3M orphaned customers who either lost their dealer because of closings in 2009 or whose current car brand is going out of business.  Urban Science, a consultant firm in Detroit, says 1,467 dealers closed in 2009. The bulk were General Motors or Chrysler dealerships. They were forced out of business when the car makers filed for bankruptcy and could close weak dealers. GM is killing the Pontiac, Saab and Saturn brands. Its Hummer brand will likely be sold to a Chinese company. That leaves Pontiac, Saab and Saturn customers needing a new place to service their cars.  This will be an interesting marketing story to follow next year!

Have a very Merry Christmas – it’s been a wonderful 2009 for the markets and we’re fininshing up over 20% if this holds up.  Can we make another 20% in 2010?  I’m still a bit skeptical but the recovery has already been miraculous and we’ll be going over ways to protect ourselves over the weekend as we get ready for what will hopefully be a happy New Year!


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  1. Phil — Good morning.  I still have some March DIA 106 and 108 puts.  I’m down about 25% in each.  Given that you appear to be leaning to a more bullish stance, even if it is only a nod to the inexorable trend, would you sell them now and stand aside?  It seems to be that we’re short term overbought by most measure, so there ought to be some sell off (someday) to get out of these things.  I guess the questions is — are we just too early to be so bearish?

  2. Good morning, Phil.  Just an observation about the health care legislation and the markets.  Since the most significant aspects of the bills, either Senate or House, will not take effect for years--2014 and later--why would there be a pronounced effect in the nearer term on many of the stocks.  For example, maybe the $95 penalty for not having health insurance in 2014 will cause a person or two to get coverage in four years time, but will that really affect UNH’s bottom line in the next 6 months or a year.  A lot of things are going to happen in these industries that will impact the various companies’ finances long before the legislation helps or hurts them.  Of course, I see UNH and others are up significantly in pre-market trading, so I guess I don’t know jack.

  3. PHil
    LYG- buy/write – July p/c @ $1.30  +/-; $1.91/2.21 ; they just paid another dividend ($1.42/share). They paid $.84 back in May.  +/- 30% on call away.
    I have 500 shares of LYG purchased back in May. My basis is not $.85 after the dividends and selling puts and calls. I am considering selling the July puts and calls on the 500 shares I own plus doing another buy/write. What is your insight on just how secure LYG may be?

  4. Markets are closed at 1 and I’m flying out the door to save the Retail sector with some last minute shopping (mostly food).

    The highs are still there to break at: Dow 10,549, S&P 1,127, Nas 2,242, NYSE 7,380 and Russell 615 but we seem to be well on our way now as long as you are willing to ignore the thin trading.

    The QQQQ Jan $44 puts from yesterday dropped a dime to .30 but I still like them through next week, just in case we get that big post-holiday drop.

    It does seem to me like they are determined to make sure the markets gain 20% for the year so these levels are likely to hold up for the print at this point.

  5. Phil, Hope you watched the "Limey" on CNBC John Brown, talking your story.

  6. phil
    what do you recommend to do with long puts of EOG?

  7. Happy Holidays Phil – do we need to do anything with the EOG JAN 10 95 puts that we bought or the IYR 45/47 put spread that we sold? As the VNO 70 puts we sold, are up 28%, I assume that it is time to take my Christmas present?

  8. Phil,
    Any adjustments for the Jan SRS 8 puts, or continue to just hang on? The markets seem determined to continue to ignore CRE woes.

  9. CEPH couldn’t break through its previous high FWIW.  GENZ appears to have bottomed.  I am going to pick up a few (2) 45 Apr10s to see where it runs.

  10. Europe is already closed.  FTSE finished up 0.5% at 5,400 and Dax finished up 0.2% at 5,957, once again rejected at 6,000 but still a strong week.

    We’re still moving up on zero volume but it’s all about the prints now.  Very hard to hang onto bearish positions just looking at the charts – very annoying.

    DIA/JCM – Since you have 2 sets and are down a bit, why not sell the 12/31 $104 puts for .45 as you’ll get that premium in 7 days no matter what and even your $106 puts have a better delta. 

    Health care/Juda – You are not wrong.  UNH is hurt, not helped by health care and the fact that there will be virtually no effect on them for a few years is why they are rallying (not much) despite the passage.  I am not worried about shorting the losers but the winners list above is worthy of our long-term attention.

    AAPL flying on renewed IPad anticipation.

    10,500 just went!

    LYG/Pstas – They are like C, they raised a lot of money by dilluting the hell out of themselves and they paid off the original shareholders first.  Long-term, I still like them but it’s probably going to be a long, slow road to recovery.  However, LYG is a dividend payer first and foremost and having a few thousand shares to retire on is not a bad plan as you will likely get many, many checks from them over the years. 

    Limey/Jamie – No, missed it.  The kids are home and we’re in Christmas fever mode so I’m all over the place this morning.

    EOG/Tcha, EMC - I say we burn them in effigy!  Actually I just bought the $100 puts at $2.50 and will sell the $95 puts when they come back a bit so less than $1.50 for the roll-up is my plan.

    IYR/EMC – I thought we did this yesterday?  Take out the $45 putter and spend .50 to roll up to the naked $48 puts and be patient.

    VNO/EMC – 2 step program protocals remain in effect (TAKE MONEY:RUN).

  11. Wow, AZ has some big problems as well.  Seems they were in bed with its brethren, CA (yes, the state I live in).  The govenor sent out a letter that basically said ‘we are screwed’.

  12. Everyone have a well deserved break. We can hope some logic and sanity comes back into the market next year, but I won’t count on it.:)

  13. Market Internals update at 10:30amET – NYSE volume 110M shares, about 59% below its three-month average; advancers lead decliners by 3.2:1. – NASDAQ volume 215M shares, about 59% below its three-month average; advancers lead decliners by 1.7:1. – VIX index -2% to just over 19.00

  14. SRS/Chuaeu – This is a true test of the statement that you shouldn’t sell any puts unless you REALLY want to own the stock at that price.  Nothing to do but grin and bear it as the market goes completely against us on very low volume. 

    GENZ/Pharm – Good play!

    California/Pharm – I heard if Obama doesn’t fork over $8Bn by Jan you guys are closing down.  Yet the market rallies and rallies…

    Sources say California Governor Arnold Schwarzenegger will ask President Obama for $8B in relief to ease large-scale cuts to the state’s already diminished social programs amid a $21B anticipated deficit. The state was the biggest bond issuer this year, selling $36B.

    Sanity/Ocelli – I’m out shopping for casual straight jackets as that should be all the rage next year.  8-)

    According to an anonymous Japanese official, the government will forecast 2010 GDP growth of 1.3-1.4% in its report due out tomorrow, marking the first growth in three years. Many analysts believe any growth would be more modest due to the effects of deflation and a strong yen.   Yet our EWJ calls just lay there..

    Meanwhile, data released today suggest Japan’s hardly out of the woods. The government’s Business Outlook Survey found 1.9% of firms said the recent quarter’s conditions worsened, down from 0.3% last quarter – and 3.5% of firms surveyed expect things to get worse in the coming quarter.

    SEC and Finra are reportedly investigating whether investment banks deliberately sold risky securities (CDOs) to clients, and then bet on the securities failing. Goldman (GS), one of the firms fingered, has already responded, saying, "The buyers of synthetic mortgage CDOs were large, sophisticated investors… They did not rely upon the issuing banks in making their investment decisions."

    Sources say Berkshire Hathaway (BRK.A) is in talks to buy troubled residential-mortgage originator and servicer ResCap. Buffett and others are said to have large debt positions in ResCap, which is on the brink of dipping below the net worth of $250M it is required to have to stay in compliance with its loans.

    In the next few days, the Energy Department will announce the first of $18.5B in loan guarantees for building new nuclear reactors, and industry experts think the first guarantee will go to Southern Company (SO). GE (GE) and others have invested tens of millions of dollars in plans for reactors in the hope that a drive for cleaner energy will force environmental advocates to rethink their skepticism over nuclear power.

    The VP of America’s largest shopping mall says holiday season has been super: "We knew eventually they’d splurge, and I think they saved up all their money and they’re spending it this Christmas, and I think it might just save us this holiday season. They are buying thoughtfully, but they are buying."

    Yesterday’s striking downturn in new home sales was attributed to uncertainty over the extension of the first-time homebuyer tax credit, which kicked-in in November. With the credit now having been extended, sales could regain momentum in coming months, which may be why the data made few waves on Wall Street. Still, the reading exposes how dependent the housing recovery is on Uncle Sam.

    For the first time ever, Hollywood passes $10B at the box office. And that’s before the mob scene expected this weekend, with debuts of Sherlock Holmes (TWX), and It’s Complicated (GE, CMCSA), and with Avatar (NWS) in only it’s second weekend.  My oldest daughter is an extra in It’s Complicated!

    EIA Natural Gas Inventory: -166 billion c/f vs. -173 bcf expected. Nat-gas futures plunge, -1.8% to $5.70.

    Sector ETF strength: Silver– SLV +1.8%. Gold– GLD +1.5%. Steel– SLX +1.5%. Real Estate– IYR +1.2%. Coal– KOL +1.2%. Gasoline– UGA +1%. Oil– USO +1%. Semis– SMH +1%.
    Weakness: Healthcare Providers– IHF -0.4%. Biotech– BBH -0.4%.

    Dow leaders: AA +1.8%. TRV +1.4%. DD +1.2%. UTX +1.1%. BA +1%. INTC +0.9%. MMM +0.9%. AXP +0.8%.
    Laggards: MRK -0.5%. DIS -0.4%.

    X is still going nuts! 

    USO Feb $36 puts at $1.10, giving it another shot.

  15. 30-year mortgage rates move back above 5% – to 5.05% from 4.94% – according to Freddie Mac’s latest survey, the third straight weekly increase. A Fed program to buy $1.25T in securities backed by home loans has helped reduce rates this year, but is scheduled to end in Q1.

    RIMM still falling.  UNH and HUM not liking the health care bill already.  IBM may have finally hit resistance at $130. 

    TZA Apr $10 calls at $1.80 are a mellow way to be bearish.

  16. The TBT 45/50 bull call spread is down today due to large 1.40 bid/ask differential on the 45 and only 0.20 bid/ask differential on the 50.  no volume so I guess we just ignore it.  TBT up today too.  Frustrating. 

  17. phil,
    well christmas rally came in for aapl. i closed out all my aapl 205 covers yesterday on that completely b.s. drop at 3:32 and just now recovered my long stock with the 210′s at the same price

  18. Phil, since aapl exploded today, is it time to roll up my short 200 jan calls, or do i wait? i am long jan. 195 calls and short jan 200. how are situations like this best played?

  19. FDX still falling!

    Dollar moving back up and indexes weakening. 

    TBT/Terrapin – Yes, you do have to ignore the bid/ask on verticals and just keep in mind whether or not you are on track.  I don’t see much that’s going to knock rates down in the next 3 weeks.

    AAPL/High – It’s going to be a very happy new year if the IPad comes out in quantity.  I’ll be lining up at the store for one.  I already use my IPhone all over the house for quick web access, triple the size of the screen and I’ll be a very happy camper. 

    AAPL/Bord – Well it’s a vertical and you are on the money so you will collect your cash unless you want to go for it, in which case the rule is ALWAYS sell into the initial excitement.  So the short Jan $200s at $10.30 have just $3 in premium and you can roll them to the Feb $210s at $10, which are all premium and roll yourself to the Feb $200 calls at $15.50 for just $1.25, which puts you from a $5 spread to a $10 spread for $1.50 but, keep in mind that a bird in the hand is very often worth 2 in the bush…

  20. HO HO HO- Greetings from snow covered nO. Wisc. Forgot to mention ATHX. I’ve more than doubled in 5 days, stock is on a tear. It is in regeneration using stem cells on many levels; heart, liver. It is a tremendous break through in curing so many heath problems-climb on board-apparently this is somehting that works! And have great holidays everyone!!~

  21. Wishing Phil and all a Merry Christmas and Happy Holidays .  I think this year the mad shopping rush will be Saturday and Sunday.  Hopefully I won’t have to be at the mall this weekend.

  22. I realize that this is contrary to believe, but I think X is topped.  I just don’t see it.  Someone mentioned NUE and X comparisons….there ain’t.  Going with a small position in shorting X.  55 Jan10s are 1.88.  Gonna try for 1.85. Again, starter position.

  23. Since I typed, X moved up….I’ll try 1.75….

  24. Pharmboy
    Any thoughts on Celldex Therapeutics Inc CLDX

  25. ATHX – yeah, that deal from PFE helped.  More than doubled is an understatement.  I wish my company was public.  We would be worth $100/share on deals like this…..

  26. merry christmas everyone! i’m off for my traditional last minute shopping! the gal’s have thanksgiving+1 and we guy’s have christmas-1.

  27. CLDX – I bought them a week or so ago outright.  Data due in a year, but the whole area is gaining traction.
    Celldex Therapeutics (NASDAQ: CLDX) is developing CDX-110 (PF-04948568) along with Pfizer (NYSE: PFE) as a cancer immunotherapy product candidate targeting the tumor specific molecule called EGFRvIII, which is a functional variant (tumor-specific) of the epidermal growth factor receptor (EGFR), a protein that has been well validated as a target for cancer therapy (i.e. Erbitux). CDX-110 is currently being evaluated in a Phase 2 study (ACT III) of CDX-110 in patients with newly diagnosed GBM. NCT00458601 is the entry for this study (last updated on 11/20/09) and April 2010 is the estimated date for data collection for the primary outcome of progression-free survival status at 5.5 months from the date of first dose. The estimated study completion date is Nov 2010.

  28. QC – also a starter position, being ready to DD at some point.

  29. Hi Phil, folks,  any thought on Citibank for the new year? I am considering ditching it at a loss, the 33% stake the government wants to sell has me very concerned. On the other hand I have been in a hole for 3 months and I guess I could wait another 3.

  30. RMBS – if anyone is invested here.  Judge Kramer yesterday confirmed again for the umpteenth time that the TRIAL WILL BEGIN in January as planned.  IMO Samsung needs to settle and then try to buy RMBS.

  31. Rasmussen poll: 29% say the economy’s getting better, 47% say worse. "Overall, just 13% say they’re spending more on gifts this year compared to a year ago; 66% are spending less. 10% did most or all of their shopping online, while 49% did none of it in that manner."

    ATHX/Pirate – That sounds like fun but where were you 5 days ago?  Sadly they don’t have options yet but when they do I think they’ll be fun to play.

    Mall/Stock – Everyone will be at the movies and movies are now integral parts of malls so if stores are smart they will stay open until 10 at least to catch people.

    X/Pharm – Playing with fire!

    Have fun High!

    ZION is NOT participating in this rally.  Down to $12.86.

    SOX are driving us today, up 1.2%.  Transports are a drag again, pretty much flat.  I suppose we’re selling electronics but not shipping them – must be all those new teleporters or something…  YRCW bucking the trend, up 10% again.

    11:30 Dow volume just 27M, 50M at 11 is "normal."

  32. Also looking at the volume chart on X.  Huge price – volume divergence.  Even more so than our REIT friends.

  33. Merry Christmas to Phil and All !
    Hi, Phil, any idea on the DIA covers?

  34. Eben/RMBS. Thanks. Yes, RMBS has been a great ride this month, as it is most months.  The antitrust trial is really the gift that keeps on giving. 

  35. What is MRVL smoking these days?

  36. Phil, Thanks for the AAPL guidance, but I have a further question (as I do want to learn the why and hows, don’t give a man fish, teach him how to fish, yadda yadda yadda). Why wouldn’t I roll up and be long Jan. 200 calls and short Jan 210 call.  I just want to understand the reason why rolling into February might be better (acknowledging that AAPL could go back down). 

  37.  Hi phil, just checking in…Been skiing at snowshoe, wv.  First time skiing – i can see why you are hooked.  i just dont have a good feel for the markets right now.  with a low vix – most of my strategies are very low reward/risk – so, back to the slopes and happy holidays.

  38. I’m in AZ now and I overheard a woman in Sedona yesterday morning talking about how the school systems are considering shutting down some of the public schools in order to combine the students into classes of 60 or more in order to save on costs.
    Can you imagine growing up as a kid in a class that’s 2-3 times the size of what you experienced? That’s hard enough for most college students to manage let alone pre-teens. 

  39. Hey, sorry-been rushed so cld only ck in with u guys to get some insights! Delivered a Christmas to a homeless fam, did last minute this & that. I will be more attentive. Thanks for the heads up on cldx. I had read about the immunotherapy on this. I am also on VVUS, & MELA. Mela is a device that scans the body 4 melanoma wo using the biopsy. It is apparently a hand held device that will save time & money. It has been range bound, but not for long once it catches on.I have also made a bunch on these last two. Seems the vol is up on the biotechs with everything else hanging tough at least with the options-gave up on the $ even though it was up23%, the options would not get sold for a profit. I think these brokers have been partying too much to get the orders in.

  40.  kwan, i live in az – the schools suck.  i  send my kids to private school – worth every penny.  i am a public school guy myself – educated in ky so i am not averse to public schools, but az public schools are very unimpressive.

  41. AAPL is now punishing the shorts with a huge squeeze.  could lead to panic buying soon and a fabulous way to goose the indexes since AAPL is so well represented in most of them.

    C/Steve – I’m sticking with them long-term.  I think the overhang is the government dumping shares but once that’s done, as long as the economy holds up, they should be able to get back to business.

    RMBS/Eben – They are testing $25 and looking good already.

    DIA/Cwan – As I said earlier, foolish not to cover with the 12/31 $104 puts at .45, now .38 (I was foolish and didn’t cover!).  Now the move would be to sell the 12/31 $105 puts at .72 and roll yourself $1 higher for leverage.

    MRVL/That – All SOX are on fire on increasing demand.  AAPL and GOOG and RIMM and AMZN pushing out chip-hungry devices is huge for that sector and yet another brand-new chippy device from AAPL will also be great news so I sure wouldn’t bet against them.

    Rolling/Bord – You can do that too, I thought buying time would be a good idea to give AAPL time to go higher but it’s not looking like they need it.

    IBM broke $130 too, what a week!

    Have fun Jo – Don’t worry about the markets, they’ll be here when you get back. 

    A new paper from the NY Fed suggests home ownership, down just 1.7 points from its 2006 peak of 69%, has barely begun its decline. Their "homeownership gap" index gauges downward pressure by measuring the difference between the actual ownership rate and one that excludes underwater owners – likely to be tomorrow’s renters.

    Schools/Kwan – It’s insane and things like that are happening all across the country.  I don’t know what country’s economy the stock market is anticipating but it sure isn’t ours.  I suppose it is mainly an inflation bet as the government is going to have no choice but to bail out CA, AZ, NY, FL and everyone else who either need much more money or will be laying off millions of governenment workers next year as their budgets collapse. 

    Yves Smith thinks the Treasury’s doing some fancy footwork in its statements on TARP by singling out "bank only" results. "The problem with the Treasury/Obama three card monte is that the strongest TARP are the ones that paid off first. Things can only go downhill from here. Do you expect AIG to repay the TARP in full? Or the auto companies?"

    Oh and here’s one that’s been getting no coverage at all by the happy, happy mediaFifty-five financial companies failed to pay dividends in November on money they borrowed from the U.S. government, bank research firm SNL said on Wednesday.  The rising dividend deferrals signal that even as some banks are deemed healthy enough to repay the United States, many others are struggling.  Twelve companies have missed at least three consecutive payments of dividends on funds borrowed under the government’s $700 billion Troubled Asset Relief Program, SNL said.

    BIDU with a harsh rejection at $420.  V back to the dark side.  COF bucking like a bronco.  AXP going up and MA same old, same old…

  42. Pirarate – I will put MELA on my watch list.  Like the concept.  Med device makers that have reimbursible products (CETP codes) should do well in the coming years, as medicare will pay for them.  Doc’s are scooping these products up like crazy.  I started a med device maker and it is going gangbusters right now.  Sales are picking up due to the code coverage. 

  43. Phil
    bot EOG $100 put and sold $95
    at least got back all today’s lost
    thanks, very good strategy
    Merry Xmas everyone

  44.  Phil
    Signing off  - Thanks for all the education this year, I learned a great deal. All the best to you and yours for a happy holiday.

  45.  All
    I have enjoyed very much your questions & comments all year. May all have happy holidays!

  46. Merry Xmas to everyone. Enjoyed being here this year.

  47. Guys, look at JTX today. How would you play this? read below….

  48. pHIL – keep my QID position in hopes of a down week coming up? Getting clobbered with this late push up.

  49. Happy Holidays everyone!!  Half days are great.  Our market should be closed the entire week next week.

  50. Pirate – I’m also in VVUS.  it’s had a nice run here.  I will check out MELA – looks like it has made similar type of move.  Thx. 

  51.  Hvae a great christman and happey new year phil and everyone else 

  52. To a safe and Merry Christmas to all.  C U on Monday!

  53. While continuing claims dropped by 127K to under 5.1M, emergency unemployment compensation (for people who have exhausted regular benefits) rose by 142K to 4.4M, up from just 1.5M a year ago – a sign that people who have lost their jobs are having an especially hard time finding new ones. "Extrapolating out the cessation of job losses into job gains is, at this time, a stretch," Miller Tabak’s Dan Greenhaus says.

    An academic study is likely to spur debate on the usefulness of analysts’ predictions. Two researchers found that while "analysts may be very smart people," it’s "a matter of stubborn fact the market pays them little heed and they are unlikely guides to beating the market."

    EOG/Tcha – Yes, when a trade goes against us like that, I’m perfectly happy just treading water until we finally get a turnback. 

    Happy holidays Deano, Chaps!   And to everyone else too – just 45 mins left!

    JTX/TBB   – I don’t play them but HRB is usually a good pick-up ahead of filing season.  It’s too late for them now but maybe this is an opportunity for picking up JTX once this sell-off runs it’s course because I don’t think the impact will be as big as projected in this article.  You can get July $5 calls for .75 but hopefully closer to .65 and that makes for a nice speculative play.  You can even sell the $7.50s for .40 on a bounce (now .30) and then you have a cheap spread.

    QID/LLorens – It’s all about AAPL but I’m still confident in an early Jan sell off but very worried that we won’t get one next week.

    Half days/Peter – We are so uncivilized, why even trade more than 3 days a week?  If it were up to me, we’d all come in every Monday and do our trades for the week and that’s it until Next Monday (still closed for Monday holidays of course).  That will put a stop to all this day-trading nonsens and force a return to funamentals…. 

  54. OK, all together now….Jingle bells, Jingle bells…………
    Merry Christmas to all.

  55. Hi Phil and all on board thank you for the good comments and advice a great school of learning all have a very nice Christmas

  56. Happy Holidays everyone!!!

  57. VVUS – careful with them.  They look toppy, and I think they will have a booger of a time gaining approval due to the side effects that one has taking phentermine + topiramate  (speed + anticonvulsant). 

  58. Have a great Christmas everyone!

  59.  pharm – phentermine seems to be pretty widely accepted – the chosen half  of phen-phen

  60. Merry Christ-mass and Happy Holy-days to all. Peace.  8-)

  61. Noting mere disagreement means little, David Merkel quantifies contrarianism: "Ask yourself: ‘What are people relying on to be true, that may not be true?‘"

    VERY important article to read: We must admit that we were surprised to discover that "Households" had bought so many Treasuries in 2009. They bought 35 times more government debt than they did in 2008.  Who is the Household Sector? They are a PHANTOM. They don’t exist. They merely serve to balance the ledger in the Federal Reserve’s Flow of Funds report. Our concern now is that this is all starting to resemble one giant Ponzi scheme. We all know that the Fed has been active in the market for T-bills. As you can see from Table A, under the auspices of Quantitative Easing, they bought almost 50% of the new Treasury issues in Q2 and almost 30% in Q3. It serves to remember that the whole point of selling new US Treasury bonds is to attract outside capital to finance deficits or to pay off existing debts that are maturing. We are now in a situation, however, where the Fed is printing dollars to buy Treasuries as a means of faking the Treasury’s ability to attract outside capital.

    They are just not letting anything go down, really amazing stuff. 

  62. Peter:
    Yes. Let’s keep the markets closed until the new year. That way we get theta decay on our shorts w/o having to worry about price movements.
    Theta decay over the holidays. The gift that keeps on giving. Theta does work over the holidays, right?…….lol

  63. That PHANTOM Treasure thing is amazing. WTF?

  64. meant "Treasury"

  65. Jo – yes, accepted by doctors, FDA has other concerns, as does the DEA…..very tightly controlled.  Much like morphine.

  66. forgot to add, as you well know since you are in the arena……

  67. 5 trillion in capital gains since March, if you were Obama would you let the market go down

    Bunches and bunches of stocks at highs not seen since market highs in 2008..straight up..i think we’ll find out shortly how sustainable all this is.

  68. Cheers all !

  69. WTF/Chaps – That’s the same as the markets, it’s a giant ponzi scheme where p/e is racing ahead of revenues on very low-volume buying but the trick to Ponzi shcemes is you can make very good money investing in them for ages until they collapse – the trick is knowing when to get out.  That’s what high-frequency trading is all about – GS and the other big boys are in and out of a trade 10 times before you know it moved 5 cents so the market is filled with Trillions of retail bagholders while the guys who are driving it higher go back to cash every night.  In the end, it’s just like Madoff – people who think they have $100K worth of stock find out in one lousy day they are lucky to get $60K out.

    Oops, I said I wasn’t going to be negative on the markets…  Wow – what a great finish! 

    Have a great Christmas everyone!

  70. Merry Christmas to all!  May Santa visit every home.

  71. Phil, thanks for the help this year
    Happy Holidays to all

  72. Wow 5 trillion capital gains, I hope Obama doesn’t decide to raise the capital gains tax to 20% to pay for all of his spending.

  73.  Any here around in late ’99? Anyone with a brain was saying "this makes no sense" but the market esp tech went up every single day essentially without stopping. Until pretty much the first of the year. Of course the moves then were even bigger…but my astonishment was about the same.

  74.  I must confess I am essentially paralyzed right now at the relentlessness of this move so just sitting on the sidelines and will wait to see what the new year brings. Would love to short the Q’s but that means shorting AAPL and one thing I have learned (the hard way) is not to be the one to step in front of that train even if I can’t see clear to jump on board. Really want to see some weakness…….

  75.  Thanks for the MELA tip…as a melanoma survivor that idea appeals to me. Will check it out.

  76. Wishing all a Very Merry Christmas & Holidays.

  77. Copper $3.30!  Blowing through Dec high from the Dec low in just 2 days – INcredible!

    Gold finished at $1,105, oil at $77.40 but Nat gas had a terrible day and finished at $5.64.

    Rates are flying, TBT off like a rocket into the close as people are dumping bonds (maybe over that last article I posted).

    SHLD is looking for a white Christmas at new highs.  SNDK never stops going up (WFR still cheap). 

    1999/Gilm – I’ve been saying that for a while, this has the same kind of feel where people buy things because they keep going up and eventually even the bears start tossing money at things because they feel silly for missing out and suddenly, when the market turns down – there are no buyers at all and it turns ugly fast.   I’m expecting some negative retail numbers between now and Monday but if we’re still going up then – then it’s either all cash or start buying because bearish positions are just pointless and we can always jump short on the way down instead of trying to guess the top.

    Have a great weekend everyone!  Happy holidays.

    - Phil

  78. Happy Holidays to one and all


  79. lost power here at home for about 2 hours, ice and snowstorm here in Omaha.  Strange as we almost never lose power and the snow hasn’t really begun yet.  Expecting about a foot of snow.  Yee Haaa!!
    Merry Christmas everyone!

  80. I hope Santa Claus comes and sees all of you and puts some AAPL  calls in your stocking.   

  81. Good morning! 

    I’m up making sure the fireplace looks good and stepped on before the kids wake up so I thought I’d scan for retail sales articles – not much data yet as most reporters are probably still sleeping (and taking the day off anyway). 

    Asia was down a bit this morning on continuing deflation talk from Japan who oddly finished just below 10,500.  The Shanghai fell half a point led down by miners and energy stocks, which is interesting as they just upped Chinas 2008 GDP to 9.6% from 9% but this year is still forecast at 8% so maybe it’s a negative as now we have a bigger fall year on year.  

    Here’s an article out of India that makes perfect sense to me:  Consumers will have to spend more to buy essential food articles due to rising inflation and so they may postpone buying consumer products.  Rising food prices are likely to affect sales of consumer products as consumers will have to spend more money on food articles, said analysts.  "With spiralling food prices, the ‘wallet-share’ of consumers is expected to tilt towards food products and away from consumer products," said Anand Rathi Financial Services Ltd, in a research note.

    China revises 2008 GDP higher:
    - Gross GDP +4.5% to 31.4T yuan
    - Real growth of 9.6% vs. previous 9%
    - Used 5.2% less energy per 10,000 yuan
    - Services were 41.8% of GDP vs. 40.1%

    This was boosting commodities on Friday (China as usual):  According to London traders, the Chinese Ministry of Commerce recently said the country should increase its imports of commodities for its strategic reserves at an appropriate time. Dealers took this as a hint Beijing could start stockpiling again in the new year.

    Another huge stealth bailout: Treasury says it will back Fannie Mae (FNM) and Freddie Mac (FRE) no matter how big their losses in the next three years, removing previous caps of $200B each. Treasury also said it will not require nor expect the GSEs to reduce the size of their mortgage-related investment portfolios next year, as they had previously been required to do. (FHFA statement)


  82. Merry Christmas everyone.
    For the disney report, On christmas eve Epcot was fairly packed but no where near capacity.  However, the rest of Orlando looks like a Ghost town.  We ate brunch yesterday at some fancy hotel called the Peabody and the parking garage was a ghost town.  The restaurant in the hotel we ate at was seating maybe 15 people and had capacity for about 100.

  83. Craig,
    Point well taken but keep in mind this is Disney’s least busiest time of year. Your travel planning research might have revealed that this is "the best time to go" and that is the reason.

  84. Good morning and Merry X-mas everyone. I took a small profit on MA short and took a small loss on VNO short but held on to QID and DD’ed twice. New basis is $19.27. My first inclination is to ride this out and wait for a pullback on NSDQ but AAPL is scaring the crap out of me even as I type this on my iPhone. Also concerned about the low volume this coming week. Should I exit QID on Monday and get back in on Friday?

  85. Make that $19.21 basis on QID.

  86. After reading some of the posts from yesterday, I had my first bad trading dream where I had written too many naked puts and volatility exploded and I was down to 3K in margin.  Yikes.  So, Phil, Is there a maximum percentage of the portfolio that you would advise to the writing of naked puts? I have gotten much better about only writing on stocks that I would be willing to take possession of but, obviously,  that is not a complete strategy. Thanks.

  87. Good Morning from a STILL snowing no WISC. Rains, then snows. Just a note on VVUS-thought they were developing a better Viagra & Cialyas?? Along with an anti-obesity drug? Apparently they & INSMED on on the same trajectory. Made about 5000% in insm,( b-4 a prem member here btw), but waiting until the vol p u b 4 moving on them again. Have a wonderful Christmas Day!!  Thanks for the great insights in everything. Was a member previously, but we do a huge amount of traveling bet residences so hard to keep up at times.

  88. Thats odd Aclend,  everyone around here says that christmas is by far the busiest time of the year.  On christmas day they normally have to close the park by 10am due to capacity.  But maybe this is just something they tell you to make you go to the park earlier.

  89. I can’t say I’ve seen the hard data on it…maybe it’s a common misrepresentation…but good on ya if the parks aren’t crowded!  At any rate, I hope you enjoy your time.

  90. …and driving around as a resident in the Summer is a much different experience…so we’ll call it phenomonological data.  8-)