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What Me Worry Thursday?

What a freakin’ recovery!

As I said on Monday: "It’s a paper tiger of a straw man we’re building for $1Tn but you HAVE to respect $1,000,000,000,000 – you just have to…  Our 5% Rule series for the S&P over the 1,155 breakdown line is the very critical 1,170, followed by 1,185, 1,200 (critical), 1,215 and 1,230 and THEN we are on the way to recovery."  Wow, that guy is AMAZING!  Anyway, so here we are at 1,170, after two days of testing the 1,155 line as a bottom so now it’s onwards and upwards to 1,185 hopefully.  I also said on Monday: "Below that, we’re not too impressed but it also won’t be very surprising if all $1Tn buys us these days is some moderate lift that isn’t strong enough to break our major technicals."

We have been casting a wide and bullish net since the crash, finally pulling some of our sideline cash for long plays on ABX, APPY, BAC, BIDU, BRK/B, BSX, C, CAT, DIA (3), DF, ERX, GOOG, LIZ, LVS, MEE, MON (3), RIG, T (2), TBT (2), TZA (shorting it), UNG and WFR.  We’re hedging heavily, of course, but it feels good to have longs again after being in cash for a while.   Our short-term bearish plays (mostly DIA and TZA) have been crushing us so far, which is good in a rally but yesterday was a bit much for us and we got a little more bearish but it looks like the G7 has adopted the "Better Red Than Dead" mantra as the World racks up astounding deficits to put off admitting that this little debt problem is not isolated to the PIIGS nations. 

Nonetheless, the global markets are rallying in unison – even while the Pound ($1.47) and the Euro ($1.26) collapse and even the Yen jumped back up last night, falling off the very BS 93.63 to the dollar it hit at 3am to psych up the Nikkei exporters back down to 92.75 this morning.  I noted weeks ago how the Yen knocked down for Japan’s open and then drifts lower into the US open virtually every night – it’s what currency traders call the "Goldman Trade" because you can bet it every single day and have a perfect quarter.  Sure it’s blatant manipulation designed to fool an entire nation of investors but, what else is new – Fuggedaboutit

So, a TRILLION Dollars down the rabbit hole in Europe – Fuggedaboutit!  I pointed out to Members in yesterday’s chat that, as savvy as we think we are, it’s still hard to wrap our heads around $1Tn.  $1,000,000,000,000 is $1,000,000,000 in additional revenues for 1,000 companies.  Think that doesn’t prop up the Global GDP?  Fuggedaboutit! 

The US has already spent $3.6Tn bailing out the economy and that’s not even counting the $300Bn a year of bailouts to military contractors in the form of a war (or whatever they are calling it now) that’s off budget and never ends but at least keeps 250,000 soldiers and contractors occupied and wastes a lot of fuel and ammo because the LAST thing the US needs right now is 250,000 more jobless people who know how to use a gun coming home to a country they may not even recognize if they left in 2007. 

Remember how "outraged" we were when we were told Saddam had taken $1Bn out of the country and his palace had over $100M hidden in it.  Imagine the soldier in charge of that investigation being told about Madoff, Goldman Sachs and JPM – at least in Iraq we got to torture people!  Remember how outraged we were when Saddam spilled oil into the Persian Gulf?  Let’s put the guy who prosecuted that in charge of what BP did to the Gulf of Mexico!   Remember when politicians spoke out against the "oil for food" scandal?  Exxon and Chevron have yet to deal with 100,000 old wells in Texas alone that are an environmental disaster and threatening the food supply but not a peep from politicians, who recieved $35M from oil companies in the last election cycle (2008) and $11M already in 2010!  We’ve gone to war over far less my friends…

How much is $35M?  Well there are about 600 Senators and Representatives so that’s $58,000 EACH, almost 1/2 of their annual salaries!  But that’s just the Oil and Gas industry, not including King Coal, pipelines, miners, etc – who all have their own categories.  Of course all these guys put together are NOTHING compared to the WHOPPING $476,000,000 spent by the Finance Sector.  That’s almost $1M per politician!  No taxation without representation?  Well that’s very interesting as not only did $1M bribes (what else are you going to call them) give the financial industry TRILLIONS in bailouts but in the "turnaround" year of 2009, our government collected the LEAST amount of taxes since 1950

Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.  Taxes paid have fallen much faster than income in this recession. Personal income fell 2% last year. Taxes paid dropped 23%.  This tax drop has boosted consumer spending and the economy, which grew at a 3.2% annual rate in the first quarter. It also has contributed to the federal debt growing to $8.4 trillion.

If you are one of those suckers that pays more than 9.2% of your income in taxes, after you fire your accountant you can check out this chart on where your money is being spent.  A whopping 25% of the money goes to National Defense with Social Security eating up another 23% (right, like you’ll ever see that money again!) and 11% goes just to paying interest on the debt we ran up through last year.  This year we will increase that debt by 20% and the government kicked Q2 off with a big bang by announcing a RECORD $82.69Bn budget shortfall in April.  This is the 19th consecutive month we’ve run a deficit – also a record! 

Karl Denninger says the real number is actually $175.6Bn if you count the money that is being shifted from FICA and Medicare to mask over the real shortfall in the Federal Budget.  You see, the government treats the 23% of your tax money that goes to Social Security and the 5.4% that goes to Medicare as "profits" because you didn’t ask for them back yet. 

So, like any insurance company that ends up in jail, the Government spends that money on other things and make their books look pretty(er) in a gigantic ponzi scheme that all falls apart when something bad happens - like perhaps Baby Boomers hitting retirement age.  Then the whole thing falls apart as fast as Madoff and there will be lots of investigations and finger pointing about who should have seen this coming but didn’t and how come regulators didn’t notice that our Government stole $5Tn out of our retirement accounts, etc

I wouldn’t mind so much if the government was spending our Trillions to build infrastructure (things we will use for many years) or to create jobs but that’s not happening.  The only "shovel ready" project I’ve seen it the shovels full of BS that have come out of Washington for the past two years.  Why has $3,600,000,000,000 been given to the banks to pay off loans they shouldn’t have made and unload assets they shouldn’t have backed while less than $200,000,000,000 (5%) has gone to create jobs for the people who paid for the bailout?  Well, the people who got the bailout contributed $1M to each and every person in Congress and unemployed people don’t contribute crap – that’s why!

Sorry, not much fundamentals today because I’m so pissed….  Much as I joke about it, we are heading towards a Financial disaster of biblical proportions.  You CAN’T pay off debt with more debt forever.  You can for a surprisingly long time but not forever so one day this party will come to a horrifying, crashing end.  It could happen in 2 years (2012!) or it could happen this afternoon if we have another "fat finger" incident that doesn’t magically turn around like the last one.  Idiot commentators sit in their nice leather chairs on TV and tell you that what the PIIGS need is austerity but those little piggies are 10% of the global GDP and that’s not counting the UK, Germany, Japan and the US – who are pretty much the rest of it.  Cut those economies 10% and you’ll REALLY have a catastrophe!  

Let’s bring the boys back home so we can start the damned revolution!!! 


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  1.  So, what to do with those DIA puts…. take the loss? 
    I bought the DIA 108′s yesterday at 1.51 just seconds before they dropped like a rock to the 1.30′s, now I’d be happy just to get even. Today looks to be an up day, barring bad news from Europe sending us into a tailspin. Take the loss? 

  2. I have a new post up with a Buy Pick of the Day in Direxion’s Daily Energy Bear ETF (ERY) and a Short Sale of the Day in Gildan Activewear (GIL). Check out my analysis, entry, exit, and stop loss for each here. These are two profitable trades that I think you should take advantage of today.
    Good Investing!

  3. Phil,
    I don’t see how you haven’t gone insane falling all this corruption in politics, finance, etc. for all these years. Reading this stuff is infuriating and to know that the MSM essentially ignores most of it or allows so much spin and deceit to pass as investigative journalism makes me want to take a baseball to my TV. Then to top it off, I go on Facebook and see most of my friends distracted with trivialities and the best thing most of them can comment on is the fact that their favorite circus act (er, sports team) did whatever. I definitely took the red pil by joining your site. Now, the question is how do I move myself through the 5 stages of loss regarding the idealistic B.S. of what I was taught this country was and sublimate it for the good of others while also protecting my own financial future.

  4. Phil,  Do you like buying FCX at 73.24 selling Jan 80 P/C’s for an entry of 50.49 making 29.51 if called away and 65 net if the shares are put to me in Jan.

  5. Rifle assoc gathering in Charlotte today. Want me to go set up a PSW booth?

  6. Phil,  Your soliloquy of the day is right on point.  It is a crime that we have not used this money to improve our physical infrastructure, re-educate our workforce and move our country into the 21st century technologically (can anyone feel good about flying the friendly skies today).

  7. Phil
    Once again you have nailed it….. "The only thing being shoveled is the BS in Washington for the past two years". They need, however, to keep those shovels ready for all the graves that will be dug for the States that are dying of debt. I am totally befuddled trying to understand why anybody would put even a dime into the muni’s. Speaking of bubbles – that one is larger than the housing bubble that recently shocked the world, and brought it to its knees.

  8. Thank you OXEN!  Always nice when your first trade is a big winner in 9 minutes!  In ERY at 9.74, out at 9.99! 

  9. MYL – 1/2 position on Jun $21 C for 1.10 if they make it over $20.50.  They had some bullish kickers in the 5 min intraday yesterday….swing trade.  Gravestone doji as well, so I am betting that they move up today some.  Looking for 1.35 or so.  Out by EOD unless chart looks strong.

  10. Yip - 

    Thank you. If you can still get in a short sale of GIL, you should. 

  11.  TBT is down again

  12. aceland…. there are crutches that I rely on in order to understand the craziness – don’t try to figure it out and make some big profits. A well stocked bunker (aka wine cellar) is also a good confidence builder, when trying to cope.

  13. Great Post Phil!  Glad there are no sharp instruments within reach ;^0

  14. Good morning!

    I’m in a better mood now, I needed to get that stuff off my chest. 

    We’re still watching the good old 5% lines at Dow 10,900, S&P 1,166, Nasdaq 2,380, NYSE 7,250 and RUT 685.  This is an all or nothing game – failure is not an option.  Well, it is an option but its one with a lousy outcome…

    1,166-1,1170 on the S&P is our bull/bear switch, of course.

    Congrats to those who stayed bearish into yesterday’s stick but let’s watch out if NYSE holds up and, of course, we will be surprised if S&P 1,155 fails again (that’s what signaled last Thursday’s massive drop). 

    Oil is a catastrophe at $74 this morning and copper is back below $3.20, right at $3.19.  The Euro is $1.25 and the Pound is $1.46 so a total mess over in Europe and the Yen is rising too so a full-blown panic our of the EU – Again! 

    If we have another big breakdown today I don’t think we’ll be getting a fast comeback so hold on tight and keep an eye on copper $3.20 and oil $75 as our turn-around indicators but they are already jamming the indexes up despite the huge commodity drop and dollar rise. 

    Asia was up because we were up and Europe was up because Asia was up but they are coming off their highs quickly as the currency collapses (what’s the point of your stock holding up if the money you exchange it for drops 10%?). 

    As usual, ALWAYS sell into the initial excitement as we expect to be very bouncy off our S&P zones so try to sell your short plays as we test 1,166 and buy them back if we fail 1,170 and vice versa on the call side.  If we break below 1,166 – then that’s the play down to 1,155 but below 1,155 is DOOM!!!

    Have a great day!

  15. Phil, when do we start "island" shopping?

  16. BIDU is like an energizer bunny. Just keeps on going up. Now at 82.

  17. Thank you Dave!  Now in the interest of time, since I’m new, where is the info on GIL?  I just (quickly) looked over column and I couldn’t see anything about GIL?  Forgive me I’m brand new!!

  18. Phil, gel, others?  In reading this article and others last night, it occurred to me that a long gold, short euro play might be a long-term good pair trade.  Any thoughts on that combination, I’m not too savvy regarding currencies?

  19. Yip -

    The Short Sale of the Day section is all about Gildan Activewear. Typically, when I have a story I have a Buy Pick and Short Sale. Also, if you have questions, try to ask them on my story because Phil’s page is already overcrowded and sometimes I miss them on here. Whereas, I check my own story incessantly.

  20. DIA/Power – I’d sell the $107 puts for .75 and roll to the June $107 puts at $2.10 if you didn’t get out on the dip, that’s net about .35 to buy a month.

    Nas getting a huge pop.  AAPL, AMZN, RIMM, BIDU… the usual.  Other indexes a little slow to follow so we need to see Nas break 2,425 to show us a little something and that’s right at S&P 1,170 at the moment so shame on both of them if they can’t get us higher

    I’m inclined to buy DIA $108 puts here at .74 but this will be another one of those things where we take a dime loss and reload later and hope to get our dime back – like yesterday.

    If the S&P pops 1,170, then I like the DIA $110 calls at .74 as well and we’ll have to decide which one to take off at some point.

  21. Phil – GIL still holding 31, i was looking at buying a put (cant sell naked calls) but the spread seems wide to me. What is your thought?

  22. FCX - when you chart this against SLV for various periods, you see that these have tracked well together for a long time, and the current divergence is much larger than normal.  Presuming this gap will be closed, buy FCX or sell SLV, or both?

  23. Phil, one last question. How does it make you feel when over 50% of our fellow citizens feel that we need to pursue new drilling in the Gulf and that over 50% feel that the ongoing spill is an "isolated incident"?  :(

  24.  I am short 400 May 77 on Bidu and 200 May 82s . Obviously this was done before the split. Thoughts for the margin call? 

  25.  Phil/ NFLX
    I still have some short calls june 105s and 110s, what do you think should I do with them?

  26. Phil, speaking of shovel ready, how about providing tax credits to truckers to convert to natural gas and truck stops to add NG pumps.  think that might help create jobs and solve some of the issues surrounding oil!!

  27. NFLX –
    Am I the only one in this??  Short May 95Cs
    What to do??

  28. NFLX
    Oh – Hi Tchay – nice to have company on this sinking ship

  29. Phil/BP claim update – I received a call from an adjuster on my beach house loss of rental income from the BP oil spill.  I have to provide 3 years of tax returns and proof of loss of income (which is easy in my case).  They will pay the claim once the month of the cancellation is over in order to insure that we do not re-lease the house to someone else.  If we continue to receive cancellations due to the spill we just need to continue to provide loss of income proof until this is over.  He said that the file will not be closed until we are satisfied that the issue is resolved.  Again, if this is correct then BP will have a huge liability.

  30. Phil! 

    I’m new I just have to say after reading and reading and reading your commentary’s it’s so nice to know I’m not alone in the world!  Reading your stuff is like listening to a tape recorder of thoughts. I agree with just about EVERYTHING you’ve said in terms of politics, the sham of the market, 911(what really happened) etc etc. 
    Kudos to you my friend!!!
    PS Your graphs, charts, and pictures are phenomenal!

  31. Phil. in the 107 DIA put @.69

  32.  Phil:  I’m short the NFLX May 115s.  Would you wait for the take-over talk to die down (hopefully) or roll them now?   In addition, would you sell additional calls or do you think it is too dangerous in case the take-over talk is real? It doesn’t seem like AMZN really needs NFLX.  Thanks.

  33. LOL AC!  Yes it does suck to swallow the red pill, doesn’t it?  We can talk about activism over the weekend but, during the week, we just learn to make money following the chicanery.  You kind of have to follow Yoda’s 3-step system and 1) Unlearn what you have learned 2) Clear your mind and 3) Feel the Force flow through you and the markets, which control your actions but also obey your commands once you get used to them.

    FCX/Trad – I like FCX at $65, no more. 

    NRA/Morx – I think if I stand behind some buller-proof glass there’d be a lot of people there who would pay good money to take a shot!  8-)

    And we’re over already!  Amazing…  I consider the DIA calls to be defensive but defend we must!

    Munis/Gel – I ran out of time on that one.  California is now on the 10 most likely to default list and Arnold says "Terrible Cuts" are needed:


    ERY/David – Nice call and a nice, non-greedy exit point!

    TBT/Tcha – Very likely to go down again as the EU currencies crash. 

    Island/1020 – I think we need to take this a lot more seriously…

    BIDU – Yesterday’s bull call combo can be layered up $5 if you missed it or if you want to push it higher (especially if you have a short caller).

    Gold/Euro/Mr. M – I wouldn’t bet both as they are the same trade and, when the US or Japan begin to get attacked by currency sharks, the Euro may not look so bad by comparison.  I had a gold play last week but I really wouldn’t have my heart in an upside play here – I think they are long overdue for a test of $1,150.

  34. SS, Brilliant lines and advice from JRW at the end of the day yesterday.  Jumped in at IWM 71.04 (or as close as I could get).  The put/call prices weren’t stable enough, so I went with TNA.  If we can get JRW’s lines the evening before, it makes a world of difference in the morning for me.

  35.  edro
    it is good that I slowly reduced my position from 10 to 2 Calls, now I guess need to start to increase it into exatement, plus sold 1/2 105s puts just in case ( waiting for Phil opinion)

  36. NFLX Backspread – Selling 5 May $120 calls for $5 ($2,500) and buying 3 Sept $135 calls for $8.40 ($2,520).

  37. judah – JRW’s lines from yesterday were the standard Pivot Point and Resistance and Support lines.  Most of the time his lines are in addition to these. 

  38. Sold May 120c for 4.75…seemed like a no-brainer w/ 8 days til OPEX?

  39. It’s so much more relaxing shorting BIDU now that it’s an $80 stock instead of an $800 one. I didn’t change my put quantities, so I lose only 1/10th as much, lol.
    The reverse-split was a gift to BIDU shorts, really.

  40. Mr. M
    Yes, your strategy is spot on for a long term approach. I am short the Euro, and long gold. One must have patience and not get depressed by the short term corrections – just hang in there, and wait for your payoff. I predict the Euro will drop to 1.10 vs the Dollar by year end and then on to parity by next year.The economy in Euroland is lagging ours here in the US, and will for some time to come.I like the EUO for the short play on the Euro. I also play the FX daily. Today I am short the EUR and long JPY (Yen). I have a sizable position in GLD as well as the miners (also silver as it will tag along with gold) and will be adding much more on the next pullback.

  41. Looks like Wall Street has been culled of fat fingers.  Back to business as usual. 

  42. judahbenhur
    Om iwn what is 71.04, ?  a moving average  ?

  43. SS, Thanks. Well, then I’ll have to ask him which method he uses.

  44. Qcmike/IWM.  That was the pivot point calculation JRW posted yesterday at 5:01.

    May 12th, 2010 at 5:01 pm | Permalink  
    BTW, I’ll be out most of tomorrow
    Pivot 71.04
    R 72.28 and 72.95
    S 70.37 and 69.13
    Support trend ascending at 68.66; Good Hunting !!

  45. Should have known nothing is different than before the ‘glitch’ last week, yea right.  We are right back to basics as the machines drive this bailout economy/world right back up! LOL. What a joke.

  46.  Phil/ GS /NJ
    PHil, what fo you think of GS here for a long?
    And what do you think of the NJ Governor?

  47. I googled a news article on CA debt. Also, tax freed muni’s like MQY are still pretty awesome all the way around. They fluctuate around like any stock, so you want to try to get in at a local minima, but the corresponding 6-8% in tax free yield (paid monthly) beats "money markets" and "sweeps" all to hell.

  48. yipcarl,
    It’s the same pattern so far as all past breakdowns since March 09 have followed. Leading stocks quickly re-take their highs after the correction, with some pushing to new highs. The broader market follows along.

    We should therefore expect a push to new highs, except that the damage this time was more severe. That’s part of why this area, where the major indexes are trying to re-take their uptrend lines and 50 smas, is pretty important right now, in my opinion.

  49. Woops, there goes copper over $3.20 like a rocket. 

    GIL/Morx – Can you sell the $30 calls ($1.40) against the Sept $40s (.25)?  That’s one way to go short.  On the put side, you can just buy the June $30 puts for $1, which have a .35 delta so a 3% move in the stock down is a 30% gain for you. 

    FCX/Mr. M – Sell SLV is safer but for a very long-term play, FCX is buyable.

    Spilling/1020 – It’s typical, 1/2 of this country believe what they believe and nothing is going to change it and the other half believe pretty much the opposite and the crazy thing is that every 4-8 years we flip the government and rewrite the laws to accomodate whoever has power at the time – madness!

    10% gain on the DIA calls is disappointing but I’m inclined to take it if the Dow fails 10,900.

    BIDU/Sunilram – Wow, 600 short calls – that’s gotta be annoying!   I wouldn’t captitulate on either if you can avoid it.  It may help you to sell Sept $63 puts for balance ($3.80) as they just have a .20 delta so not too damaging if you get your sell-off and, of course, you can roll them along. 

  50. Phil,
    i quite like ADM with their ethanol business.
    What do you think of that play
    SELL DEC $26 put for 2.05 ($24 is where I would like to buy them)
    BUY DEC call spread $26-$30 for $1.95
    Their dividend is too meager and the stock too expensive to hold it as a normal buy/write,

  51. Phil/Munis
    Repeating an old prognostication – "the end is near", could not be more to the point. The realization of the magnitude will soon be known, as many states are on the brink. July 1, when the new budgets start, you will see some fireworks in not only most of the States but also municipalities. Case in point – Illinois has only 1 million left in cash, and is facing 12 billion deficit. They are insolvent and the measly 1 million in cash is good for only a few minutes. California is only a few steps behind. Nevada is a basket case. Cities are just as pathetic. The "Big Boom" is just around the corner. Can the US government backstop these immenent bankruptcies? – nope their budget deficit is catastrophic, and their is no way the States debt could be absorbed by the treasury. This bubble will make Greece look like a "garden party" when it starts to ignite.

  52. Eric… I concur…it’s just so illogical…not that it should be logical, it’s hard to unhook my logic from trading. 
    I think we head back to 11,600 by summer before we see the major disaster that i believe is coming…

  53. JRW – In addition to the standard pivot points I also have the camarilla pivot points on my chart.  The low of the day stopped dead on L3 and the high was within .05 of H3. 

  54. SS, I’ll add those.  Thanks a bunch.  Are you in anything at the moment?

  55. NFLX/Tcha – I think you can sell the June $100 puts and, if they break over $120 (super doubt it) then you can roll the June call up to the $115s for $3 and $6 so about $1.50 avg out of pocket to jam everyone $5 higher. 

    Nat gas/Trad – That’s TBoone’s plan and I hate giving him money but it’s a good idea.   There’s no reason at all Trucks can’t fit hybrid engines and mainly use nat gas on our highways.   It would save a huge amount of oil and also help stablilize nat gas demand at a level that encourages more production. 

    NFLX/Edro – I’d go to 2x the June $115 calls and sell the June $100 puts for $4 to balance a bit.

    BP/SS – Doesn’t sound too onerous.  I figured they would bury you in paperwork or press for some kind of arbitration. 

    Welcom Yipcarl!  Nice to have you on board.

    QID June $16s at .95.

    NFLX/John – Very likely just a hedge fund rumor.  Last I heard, insiders were selling so I think this is nonsense. 

  56. Morgan Stanley has made a prediction, that the 10 year Treasury bond yield will climb to a nine year high by year end, to 5.5%. This represents an additional 1.5%. Their reasoning is that with a 1.42 trillion budget gap for this year, the treasury will have to issue a massive amount of bonds, thus forcing the yields higher because of supply and demand metrics. Our friends at GS take a contrarian position, and do not agree. I am inclined to support the MS position.

  57. JRW – Bought puts at H3.  In the May 70′s for .60.  Small cross on the 3m8p.  Have become uncomfortable shorting this market ONCE AGAIN.

  58. Opinion/Tcha – On what?

    BIDU Backspread – Buying 3 Sept $90 calls for $6.50 ($1,950) and selling 5 June $80 calls for $5.50 ($2,750).  By the way, I like to enter these by doing a 3/3 diagonal at my net ($1) and then selling the 2 extras.  Makes for easier fills and if it goes the wrong way on me, I can just sell the extra calls for more

    And wheeeeeeeeeeeeeeeeeee!

  59.  Phil,
    QID June $16, you mean Put or Call?

  60. As cool as Euro/Dollar parity sounds, it’s not going to happen.  The dollar funding shortfall becomes exacerbated with that type of move.  If that s the case the $1T bailout in europe was a waste.  The need to defend the Euro. 

  61. JRW – some of the pivot point calculators I have looked at also give the midpoints between lines.  In fact, JRW mentioned one yesterday as a breaking point in either direction.  My software does not plot them automatically, but I can easily calculate them and add lines.

  62. Pharmboy/Phil,
      PARD will be releasing Phase 3 data for their drug in lung cancer on June 5 during ASCO. Any ideas if this has a chance of working? My gut feeling is that it will fail and that will be the end of PARD.

  63. judah – sorry that last comment was for you.  BTW, guess where we stopped and paused here……midpoint.

  64. SS -
    Those pivot points really help – snagged a quick .35 on the way down there from 71.90 -
    bounce of pivot plus – macd cross – mostly anything that will make me more disciplined would be great.
    Do you have a problem thinking that the market should be doing one thins (like going down) and then having that influence your trades – it is killing my ability to trade – if its trending up you just have so much more going for you to trade in that direction – constantly struggling not to short – wonder if the relentless move up also makes this worse

  65. minijoe – if he doesn’t say, he means calls (unless he goofs :) )

  66. samz – my bearish bias has definately inhibited my ability to make money.  I am ready to short at the drop of a hat.  Agnostic is the way to be when daytrading, but oh so very difficult for me.  That’s why I am trying to stay disciplined and follow the charts and lines. 

  67. Chart experts, take a peek at BLK and tell me what you think.

  68. judah – I am out with 10% on the puts.  Downward trends aren’t lasting again.

  69. judah – IWM also following the bottom trendline from Tues open.

  70. BLK looks like a nice set-up to me kustomz. It’s at support from last year, and the 5 ma is turning up.

  71. Mr. M
    The article by Janduah makes one ask the question – how can the imbalance of debt be eventually paid? there are only three solution: 1. Get the economy cranking and pay the debt from profits – this will take decades and many of the biggest debtors are in decline economically relative to their monitary needs. 2. Taxation increases – nope, as that will kill the economic growth, and the workers will not stand for more taxes. 3. Inflate the currencies and pay the debt with depreciated monies. – That WILL be the political decision, and the debt holders are screwed, but the revolution that would otherwise take place with the alternative solutions, has been avoided.

  72. Kustomz -

    Looks like its on a breakout path with a lot of room to its upper bollinger band. It follows a pretty consistent up and down over two year period, and it is on the beginning of an upswing on fast stochastics. My guess is you could hold for a couple weeks and get 6-8%. 

  73. Pound down from $1.49 at 3am (same time the Yen was being cranked up) to $1.4677 now – that’s a pretty shocking daily drop for a currency while the FTSE is open but they are still up for the day (.75%) even though the country just lost 2% on it’s cash in a day.  The whole global market has it’s fingers in its ears and is chanting "La la la la la – I can’t hear bad news"

    If we were heading up, 1,170 should act a little firmer as a floor.  Will 1,166 hold?

    Oops, looks like the BIDU fantasy value hour has ended….

    Dow volume at 11 is 60M – 10M more than usual stick day so far. 

    GS/Salvum – Not above $140 and we’ll see if they even hold that on the next test.  As to the Governor, he hasn’t bothered me yet but I’m so wrapped up in national nonsense I don’t even have time for the local brand.

    Wow, copper flying up to $3.24 in almost a straight line off $3.18 – those futures are like a little slot machine now.  You would think FCX would be happier about it but they are making slow progress.  They topped out at $87.50 and $70 was a 20% pullback so a 20% bounce is $73.50 (weak) and 50% is $78.75 so all they are doing now is testing the weak bounce zone – that makes them another nice indicator to see if there is a real rally to be had.

    ADM/Lionel – I agree they are attractive down here but chart is very weak.  I’d scale in very cautiously until the prove they can beat the 50 dma at $28.50.

    Munis/Gel – I think that’s what funny about the default chart.  California is in better shape than a dozen other states but none of them are even on the watch list.  That’s when you know investors are underpricing risk.  Same with the oil sector right now.  BP looking at $10Bn clean-up cost and whole industry will face many billions of additonal safety costs from now on but XLE acting like it’s rally time.  Maybe they bought the next election already but, other than that, I can’t explain it…

    MS/Gel – That’s my $60 target for TBT so I concur. 

    QID/Minijoe – Sorry, they are calls when I say $16s as opposed to writing out the word put when I mean put but always ask if the prices seem off or the move seems out of context with what I’m saying

    PARD/Japar – Someone thinks it will go well, they are up very sharply off the $1 test last week.  I have no idea on the study but they are a fun craps roll.  PARD Sept $1.50/$2.50 bull call spread at .25 (no more!) pays $1 if PARD has a hit – it’s a fun $250 bet to make $1,000 and fair chance of getting 1/2 back even if they don’t give a good report.

    Bearish/SS – I just wait for ridiculous run-ups, like the Qs before or BIDU or NFLX and then I short.  Can’t bring myself to naked long anything other than very brief DIA covers.

  74. BIDU is as crazy as ever today.  Buying a few 80 calls here for the bounce.

  75. Thanks Eric, it broke down around 185 in April my thinking is it get back to that level. Charts show July of 08 had a similar oversold condition and it bounced back nicely.

  76.  PHIL/ AFFY
    Could play the May covered calls here with the release of topline data sometime in June.  4% if taken (not bad for a couple of weeks) and then could rewrite for June?  What say you?

  77. judah/samz – back in puts.  Following the MACD would have kept me in the original puts.

  78. SS, Thanks for the advice earlier.  I see that pivotpointcalculator also does Camarilla.  Don’t know how I missed that last time I looked at the site.  I think we’re back to that mode where we have to take the short bets off quickly and let the long bets run.  As for trendlines, I can’t seem to draw the 4/26 line with great precision, but it still seems that IWM is having trouble breaking through there.

  79. hey ssdirk
    i have the SAME problem.  My logic gets in the way.  Buy?  Huh? 

  80. SS, You using 12 and 26 for your MACD indicator?

  81. Phil -
    The euro has me really worried  – I cannot figure out all the possibilities – but at some point it has got to hurt our growth and earnings -
    Any thoughts on how this might play out near term?

  82. Thank you DR, on that 1000 point sell off BLK held 167 firmly…

  83. judah/MACD – yep.

  84. ADM/
    Thanks Phil for your comments, I will watch $28,50 closely.

  85. judah -
    I am keying off the macd but using the one minute charts as well – 12 and 26 is kind of slow at 3 min

  86. mrmocha: what makes you think there might be a bounce for BIDU ? because its more tradable now ?

  87. Samz, Yes, I see.  1 min looks better.

  88. judah – another thought.  For some reason I am playing the IWM 70′s which are around .70 with a 1 to 2 cent spread.  I may have mentioned this before, but I think we should use whatever is around 1.50 to 2.50 with the same spread.  Then the spread won’t hurt as much to enter and exit.  The spread is definately an advantage to using TNA/TZA.

  89. Hey remember that time when the S&P started the day at 1,170 and then it fell below 1,166 and then below 1,155 and then, like an hour later, we were down at 1,070?  Ah, good times….

    AFFY/Salvum – It’s a good plan.  If you get called away it’s no big tragedy. 

    Euro/Samz – I have to stick with being mid-term bearish.  There is no way you have strikes and government cutbacks and volcanos and not have that impact your GDP and, therefore, international sales – which are 50% of the S&P’s revenues.  Couple that with any sort of slowdown in China, where they are trying to at least reign in construction spending, or India, where food inflation was 16% last month – and you have some very serious issues in Q2. 

    Housing optimists "aren’t paying attention" to the facts, Dean Baker says. "I think we’re going to see a big fall-off in purchases for the rest of 2010 and even into 2011. So the idea that somehow the market is stable, that housing prices will rise anytime soon – it’s really hard to make a case for that."

    The number of households facing foreclosure fell 2% in April Y/Y, the first annual decline in five years, reports RealtyTrac. But banks still seized a record 92,000 homes last month, and nearly 12% of homes with a mortgage were at least one month behind on payments or were in foreclosure.

    Small businesses are being left out of TARP, says the Congressional Oversight Panel, and their credit availability is still seriously constrained. "Without these small businesses there will be no meaningful economic recovery."

    Clueless:  The Fed’s infusion of reserves to the financial system in 2007-2009 does not appear to have sparked a jump in spending that could lead to inflation, Fed Vice Chairman Donald Kohn says, but such concerns may sway investors, so the central bank is closely watching consumer expectations.

    Here’s a clue:  Extensive central bank money printing, such as the ECB’s new measures to stabilize eurozone government bond markets, ultimately will stoke inflation, Pimco’s Mohamed El-Erian writes. Inflation’s pace will vary in different parts of the globe; "Over the medium term, the U.S. will be next, with Europe and, even more, Japan lagging."

    Initial Jobless Claims: -4K to 444K, in-line with consensus. Continuing claims +12K to 4,627,000.

    April Import Prices: +0.9%, in-line with consensus and vs. +0.5% prior (revised). Ex-energy +0.3% vs. -0.2% prior.

    EIA Natural Gas Inventory: +94 billion cubic feet vs. consensus of +100 bcf. Futures swing to gains, +1.45% to $4.347.

    NY AG Cuomo reportedly opened a criminal probe into whether eight major banks (GS, MS, UBS, C, CS, DB, CRARY.PK, BAC) gave misleading info to ratings agencies in order to get higher ratings on certain mortgage-related products.  Along with Cuomo’s probe, the SEC is said to be looking into banks’ roles in mortgage-related deals and has issued civil subpoenas. Targets of the probe include JPMorgan (JPM), Citigroup (C), Deutsche Bank (DB), UBS (UBS), Goldman Sachs (GS) and Morgan Stanley (MS).

    NYSE fines Goldman (GS), UBS (UBS) and Cantor Fitzgerald for various trading violations. The largest fine goes to Goldman, but the firm will pay significantly less than the $450,000 levied because of a separate settlement with the SEC.

    On the theory that "if everybody is guilty, nobody is guilty," Goldman Sachs (GS) may actually come out as the big winner as Wall Street investigations widen (I and II), Joe Weisenthal says. Clients will figure "there’s no good reason to leave Goldman for some other firm, if in the end their behavior was very similar."

    The stunning perfect-every-day performance of Goldman (GS), JP Morgan (JPM), BofA (BAC) and Citigroup (C) is "another triumph of the rigged-market theory," Jonathan Weil says. "How exactly do these banks’ trading divisions make money? However they did it… this isn’t the way ‘trading’ works in the real world."

    The Senate is looking into four home health-care companies, including Amedisys (AMED), the country’s largest home health-care firm, to determine whether they deliberately increased the number of home therapy visits to get higher Medicare reimbursements.

    On the heels of yesterday’s announcement of budget cuts in Spain, the government in Portugal reportedly reaches agreement on austerity steps aimed at slicing €2 billion off the nation’s 2010 budget deficit, half from spending cuts and half from tax increases.

    Gold hits another new high, and money pours into SPDR Gold Shares (ETF: GLD), but is it too late to join the party? World economics have changed drastically in recent years, so the consensus is that gold will continue as a hedge against uncertainty. But gold is getting "frothy," and for 20 years prior to its recent run a gold investor would have lost his shirt.


    Notable earnings after Thursday’s close: ALKS, BBI, CA, JWN, NVDA Comment!

    12:00 PM Fed’s Kocherlakota speaks to local business leaders
    12:30 PM Bernanke: Community Development
    1:00 PM 30-Year Bond Auction
    1:15 PM Fed’s Fisher: Economic Update
    4:30 PM Fed Balance Sheet
    4:30 PM Money Supply

  90. RMM, yes my (weak) premise is that BIDU sat around 77 for much of yesterday and then did a magnificent stick, so today’s bet is that this is a new addition to the Tradebot Stick Algorithm.

  91. samz/Euro
    The depreciating Euro will help the Eurozone price their exports more profitably, and should help their export volume, however, we here in the US will have some difficulty with our exports to Europe as we will be priced out of the local market. The currency market always acts as a balancing fulcrum and adjusts to the prevailing economic metrics.The US will have a faster growing economy than Europe, asuming everything stays relatively the same. I can not see any monumental problems going forward as the adjustment plays out.

  92. Let’s bring the boys back home so we can start the damned revolution!!!
    Finally, someone who isn’t afraid to say what really needs to happen. Amen.

  93. judah, ss, why would the MACD be trending down (yesterdays chart) while the index moves up?

  94. morx – what chart and settings are you looking at?

  95. UAUA has been bouncy the last two days and I’ve been able to play the waves in both directions for a dime here and a dime there.

  96. SPY Puts/
    Big positions on 900 and 950 Jun 18 Puts on SPY (four times bigger than the alleged Universa’s position on 800 puts
    That is a "real" disaster hedge (20% and 30% down) from where we are now

  97. SS, That Tuesday trend line hanging tough.  Let’s say you want to play it back up from here.  Which do you think is better on the options — selling puts or buying calls?

  98. Trading AAPL  ……  Ready to repurchase AAPL calls below 257.50.

  99. judah – Not sure.  Maybe buying June calls and selling May puts this close to expiration.  Sounds like a question for Phil.

  100. anyone have a good widget for display live quotes if you don’t want to have your trading window up

  101. Phil: is this market today going lower and end lower ? what is your hunch ?

  102.  Birinyi just put out a bulletin on China’s recent onset of a bear market. According to the bulletin, once the CSI 300 index breaks the -20% threshold, it declines an additional 48 days and 13.7%.
    Any ideas on how to play this?

  103. Hey remember that time when the S&P started the day at 1,170 and then it fell below 1,166 and then below 1,155 and then, like an hour later, we were down at 1,070?

    Hah, yeah. But that could never happen nowadays Phil. They’ve added loads of safeguards since then.

  104.  Anybody know why the big 5% jump in DCTH today other than just a breakout from the recent consolidation?

  105. PARD – I would rather sell June $14 P in DCHT than spend money on them.  So, DCTH June $14 P for $2.10.

  106.  FXP – Phil what do you think of a June 42 / May 44 diagonal for 2.4 in FXP?

  107. judah- I am not happy with the way my 70′s are acting at the moment.  Since I got in them at 11:30 I am up from .74 to .76 while the RUT has fallen almost 3 points.  So selling may prove better at this point.

  108.  google ‘public data’ charts getting cooler and cooler

  109. Gil – I think the selling caused people to jump out of their positions to cover their shorts.  DCTH is a long term hold.  I am still liking blast from the past PODD as well.

  110. Along with many others I took a bath last year on AIG, as they insured much of the worthless mortgages. Does anyone know who the largest insurer of muni bonds might be?  I’m looking for a long term short.

  111. gel/muni’s – isn’t that ABK and MBIA?  If so, ABK stock has been beaten to near death. 

  112. SS, I agree.  As an experiment, I bought 71 calls and sold 72 puts at the same time.  The calls are even, the puts are up a nickel. 

  113. judah – do you mean you are up a nickel on the sold puts?  I am now underwater on my puts while IWM is clearly lower than when I bought the puts.  Good lessons.

  114. Wow, they have the bears scared to sell (or short) and the dip buyers jumping into every buy signal on the 1 minute chart.  I think that’s what last Thursday was all about – "THEY" want the retail holders to be slow to sell and quick to buy on dips so "THEY" can unload their crap because right now, any volume selling still collapses the market.  The trick is to train the retailers to "not want to miss" the next big dip so now a 200-point drop will set off a buying frenzy and "THEY" can get several good volume days of selling out of a 5% move (500 points) down because every day Cramer will tell you what a great chance it is to get in and every day people will believe him

    Trend line/Judah – Speak boy!  Now roll over.  Now play dead.  Now buy on dips.  Good boy!!!  8-)

    Today/RMM – I think we’re heading to 10,700 sometime between now and Tuesday morning. 

    13.7%/Power – Well that’s pretty much our 5% rule as 20% leads to 10%, then 5%, 2.5%, 1.25%..  and that’s how we get our 38% Fibonacci retracement and then a 20% retrace of that drop takes us right around to Birinyi’s level.  I used to love FXP but they reverse split it but you can still go for the June $40/46 bull call spread at $2 and that’s a triple right there if you hit it but you can also sell the $37 puts for $1 and that’s more than 10% down so you need a 5% move up in China (1,000 points) to put you in trouble, which can easily happend but they are rollable down to the Sept $30s, which needs a pretty big move in China to lose

    Safeguards/Eric – ROFL!

    DCTH/Gil – They rang the bell on the Nasdaq this morning.  Sometimes that’s all it takes for a small-cap to move as they catch a little new buzz. 

    FXP/BGB – I like the above play better but yours is good too.

    Gold and oil heading in opposite directions.

    Very quick .15 on QID worth taking 1/2 off on then stop out the rest even to lock in 7.5% in this crazy market.

    Bonds/Gel – MBI is major player along with ABK but I don’t think I’d mess with either of them. 



  115. SS, Yes, I mean I have made a nickel (now .06) on the puts (the puts are down .06).  I am now down .02 on the calls, even though it is the same bet.  I’m dumping the calls.

  116. Phil, during the crash I rolled down 8x short May $41s on WFMI to 4x Jun $40s at no cost.. the original credit I got from the may shorts was 0.12, so now it’s about the same ($0.11 if you include commissions from the roll).. with the good numbers from WFMI, the stock is sitting around $42.5.. would u recommend I wait or should I roll up NOW to a further month/higher price? THey seem to have found a resistance point around $43, BUT this could be ONLY for today, if this MADNESS continues WFMI could climb higher later on.. any suggestions?

  117. judah – I wonder how those same strikes would have worked in the June options?

  118. Phil, I’ve been holding out on rolling my naked short POT May 105 puts (good call). With just a few trading days left and POT at 103, it may be time to roll. I have been keeping my eye on the roll to Sep 90s, but it looks like I can get Jun 100s now for 0.25 credit. Good time to roll today? We usually roll Wed before expiration. Thanks!

  119. 1,166 is very bouncy so far but 10,900 not impressive at all.  NYSE having similar issues with 7,300 and Nas can’t close the deal on 2,425.  RUT 720 isn’t happening either but we’re still consolidating high, not low and you have to respect the week’s move so far unless we blow our levels.

    Any green shoot in a storm:  Fuel demand may be recovering as natural gas futures hit an eight-week high after today’s light build : +1.38% to $4.344. One trader says: "The word is optimism, optimism about a recovery… That’s what is propelling this market forward.”

    The Fed’s aggressive campaign looks to be getting traction, Real Time Economics says, as financial reform is heading into its endgame with the central bank getting most everything it wanted in monetary policy independence.

    Three lunchtime reads:
    1) Making finance easy to fix, not hard to break
    2) Beijing’s stop-and-go measures
    3) Gold enters the "mania" stage

  120. @tpsquest – wow, Phil & I aren’t the only radicals in the room!

  121. Phil/Pavlov.  It took me a minute to pick up that reference.  Just trying to make nickels and dimes.  :)
    With a week left to opex, when you are daytrading, do you prefer to buy the calls or sell the puts on an upswing, or vice versa on a downswing?

  122. by the way, Phil, I like very much your proposal of complete openness and transparency as part of the cure for this current state of affairs.

  123. Phil on housing….
    Another fact that is not taken into account…. BOTH of my neighbors(I live in LA) haven’t paid their mortgage since Sept 2008 and Jan 2009 respectively and guess what?  Not even a letter from the bank on their delinquency, foreclosing, nothing.  Yup that’s right not even a letter from the bank.  I have 3 friends in Santa Barbara that are in the same boat.  None have paid their mortgages and the banks haven’t done squat.  All these homes are worth(or were) 1 million or more.  The problem is so gargantuan the banks are frozen they have no idea what to do.  I sold in 2006 and I rent… Get this.  The owner of my house has 3 car washes(good cash flow for now so he’s paying still, i hope) and bought the house I live in for an investment.  He paid 1.6 million…. put down 300k and pays about 12k per month for mortgage all in.  I pay him 3500 per month.  This CANNOT continue. 

  124. Phil/MBI
    Do you have a strong sentiment as to not playing them?  The options are thin, but I thought I would structure a bear spread for January. I think the muni bond market has some significant cracks, as the ability to service the bonds is disappearing.

  125. judah – I just noted the May and June 70 strikes.  Let’s see how they behave by the end of the day.
     May C 2.15/2.17; May P .73/.74; June C 3.40/3.44; June P 2.05/2.08.

  126. SS, I’m glad you wrote them down.  Probably more apt to compare the 70 calls with the 73 puts, but I didn’t notice quickly enough and now IWM has dropped back again.

  127. Phil/Serious  Generally, I tend to be an optimist. This morning’s article is one of many doses of reality that I apply to that optimism. At some point, things will end badly for this country and life as we know it. I am more concerned for the human race and the burning down of the house we all call Earth.
    In the meantime, I will continue to make most of the "dash" that makes up the period between when you are born and when you die and I will save All of my optimism for my Wife and Kids, while keeping fingers crossed.  :)

  128. hi Phil — need your help on TEVA bull put spread that I have now not good — May 60 short put and may 55 long put-- not much premium left, should I have it put stock to me then sell June put and call ATM to get back even or roll down the bull put spread … not sure what to do TIA

  129. hi Phil — need your help on TEVA bull put spread that I have now not good — May 60 short put and may 55 long put-- not much premium left, should I have it put stock to me then sell June put and call ATM to get back even or roll down the bull put spread … not sure what to do TIA

  130. SS,  73 puts at about the same point — may 2.08/2.09.  june 3.31/3.36.

  131. GOLD/
    Retreating rapidly toward $1,227.
    4.49% on 30Yr T must sound very reassuring to US gold holders.

  132. Phil,
    MBI not messing with them?  …but you put out a buy/write not long ago.
    Don’t leave me out of all the fun! You guys were not around for my "Rage Against the Machine" post so here is one from another of my favorite bands.

  133. judah – can’t take the lunacy any longer.  Took a 7% loss on the puts while the RUT was still lower than when I entered.  Heading to the driving range. Will be back in a few.

  134. Can Phil or anyone else give me an idea of the kind of deal I can get from TOS?  I am transferring there from Ameritrade. Ameritrade currently charges me $5 per order and .55 per contract for options.  According to Ameritrade, I’ve done 3400 trade tickets since January 1 this year, which means that I am active.  Any suggestions regarding whom I should speak to at TOS?  Thanks.

  135. i thought TOS just got bought by Ameritrade?

  136. ok, Phil, what would you do with new cash to deploy RIGHT NOW in a few underlying issues?
    TBT has moved too much now, have to wait for a pullback, which we may not get…..
    how about NFLX   TZA    FAZ   XLF  

  137.  Johnp592:  TOS did get purchased by Ameritrade but they are still operating as 2 separate firms.

  138. thx JohnC

  139. JohnC1: Email scott at thinkorswim dot com, and mention you are a member of PSW.
    Last time some members reported $1.50 per contract, no ticket fee.  In other words, 1 contract = $1.50, 10 contracts = $1.50 x 10.
    Please report back what deals you get.

  140. WFMI/Rav – The $40s are $2.60 and you can roll them back to 2x the June $43s at $1.60 each and those can roll to Aug $50s, most likely, now $1.15.  Unless you are THAT bullish on WFMI, that’s the way I’d go (and if you are that bullish then you can sell June $41 puts for $1.35 too..).

    POT/Ajay – They are hanging tough so, unless we blow our levels on the S&P, you may as well give them a chance to wipe out your putter. 

    Daytrading/Judah – I look at both sides and take the one I think is most advantageous.  Most of the time, I’ll look at the spreads and I see none that are interesting but if I see one and think "there’s no way I would pay that" then I look for a way to sell it and, on the other hand, if I’m looking for a cover and I think "there’s no way I would sell it for that" then I look for a way to buy it.  As to Pavlov – The subtlety of the humor is a measure of my respect for your ability to get it…

    Oh yay – somebody lent us MORE MONEY!  The Treasury sells $16B in 30-year bonds at 4.490% (.pdf). Bid-to-cover ratio of 2.6, vs. a recent 2.33; indirect bidders take 32.5%, vs. a recent 38.4%. Direct bidders take 21.8%, vs. a recent 12.3%. Futures erased mild gains – the 30-year Tsy was up 0.08% – to trade flat across the board.

    On a 64-35 vote, the Senate approves creating a clearinghouse intermediary to pick random credit rating agencies for financial institutions, to address the "ratings shopping" system. S&P parent McGraw-Hill (MHP) down 3.5%; Moody’s (MCO) down 3.7%.

    If the magazine-cover curse is really active, bankers may not have much to fear after Time’s cover story on "new sheriffs" Elizabeth Warren, Mary Schapiro and Sheila Bair.

    Transparency/Snow – Good luck getting it done though.

    Renting/Yip – I know, we got offered some crazy price for the house in 2007 and I told Tina we should sell it and rent and then we could buy it back for 2/3.  Well I was totally right but she wouldn’t go for it…  You can get the best rental deals right now and, as you say, you can also live in your mortgaged home for free for at least a year before puch even begins to come to shove. 

    MBI/Gel – Totally crazy random moves based on news and rumors is what keeps me away.  I loved them at $2 but not at $9 but too scary to short with bailout mania all around us. 

    Why is it that they talk and talk and talk about Adobe and AAPL but nobody mentions the real reason AAPL doesn’t want Flash on the IPhone and IPad is that Flash is the number one delivery system for free MP3 and MPeg on the web so it’s really all about AAPL protecting ITunes revenue and hasn’t got jack to do with all this other nonsense.

    Optimism/1020 – I agree.  It’s a rigged game and the world will end but that was true in the 60s when I was born and in the 30s when my Dad was born and in the ’00s when my Grandpa was borm and my daughters were born in the ’00s again and I will teach them to make the best of things and remember to have fun, just like my Father and Grandfather taught me.

    TEVA/Gucci – I’m confused, if you are in a bull puts spread then I assume you had a net collection at the beginning so all you need to do is roll the putter down to the June $57.50 puts ($1.50) and hope that those expire worthless.

    MBI/Ac – So I’m fickle…  8-)

    TOS/John – Our rep is scott at thinkorswim dot com.  Ask him to match your deal at least but tell him you expect better, maybe waive the order fee.

    Cash/DMan – With all cash I would book a flight to Amsterdam and check into the Hilton.  I would visit some of the city’s fine coffee shops and get the "special" and then I’d get a nice meal and play at the casino.  On Monday I’d come home nice and relaxed and see which way the markets are heading so I can make some sensible plays. 

    Hey that was a fun bounce – maybe now a run back to lows by 2:30?

    Creative destruction may have come a little early, but many workers won’t find their jobs coming back as technological shifts make their skills passe – and there’s a limit to what policies can do to help workers who are falling behind in the recovery.

  141.  Anyone else hearing the rumor that Germany brings back the DM this weekend?

  142.  cwan120:  I appreciate the feedback.  Thanks.

  143. TOS
    I just got 0.85 per contract, no ticket charge based on 3000+ contracts per month.
    Fidelity charges me a negotiated rate of about .40 per contract and $5 per ticket.

  144.  Pharm, I’ve been out of HK for awhile but you reminded me yesterday so I’m back in at the open this morning, starting with the May calls for a quick shot, will roll out and cover if they go up because HK is so good to sell calls against.

  145. what would bringing the DM  back do to the equites?

  146. Dow volume/
    Phil isn’t that the slowest hour on record ever!
    Where are the trade bots? Mr Stick? Anyone…?

  147. MrM – yes they are…..Nat Gas has been moving lately, so they have as well.  I am in heavy into UNG, and just waiting.  I know the builds are not good, but if this summer is HOT, NG will be as well.

  148.  edro00,
    what do you do with the 3000+ contracts per month? iwm p/c?
    I am stucked with 200 BIDU strangles so time to call up TOS again.

  149. I am naming my intermediate term trading strategy "Ride the Lightning" and will look to close profitable bullish positions as we grind up and the storm builds, then get strongly bearish in anticipation of the lightning bolt drop.  8-)

  150. Business events scheduled for Friday

    PARIS – Airbus parent EADS releases quarterly financial results…

  151. Is anyone else noticing this?:

    We’ll see which way things break…

    Dow/Lionel – Volume at 2 is 111M, very slow last hour, last couple were slowest of the week because we were at 90 around noon. 

  152. Salvum- That rumored started going around yesterday.  It’s BS.

  153. Phil:cannot get clarity about oil, the impact of the leak,
    have PBR stock base 43.89 now 43.48$, and have sold may 42 puts, base 1.87, now 3.65$.
    What remedial action do you recommend ?

  154. If Germany brings back the DM, it’s game over.

  155. Balance -
    I don’t trade 3000 contracts per month, more like 3000 per year.
    In order to meet the Fidelity pricing  Scott had to give me  the 3000+ per month TOS rate
    I am trying to trade IWM but find I am mostly churning

  156. Phil COAL; I think coal will come back, and I might want to take a position: not necessarily NOW,
    have NO stock, only had sold on 3/10 naked jun45 puts, base 2.54$, now 3.3$,
    what can you recommend ?

  157.  Edro:  Thanks. Your feedback on TOS is a big help.

  158. Phil/subtlety.  Well, my wife might disagree with you that I pick up on subtlety, but thanks for the compliment.
    I will ask this weekend so as not to take your time now.  I am looking for some boring plays to put in my IRA, which I hardly ever touch.  Maybe when you print/reprint the $1,000,000 portfolio article this weekend there will some wisdom in that article that addresses the topic.

  159. Phil: finished with TNA, was great at first, then got tough, now out with a nice gain,
    POT: I like agri/fertilizer/equipment,
    have no stock but sold on 3/18 jun115 puts, base 6.4, now 12.8$,
    how can I build a position ?

  160. Yes Phil,
    I noticed that. I have closed about 10 positions today. Hence, "Ride the Lightning."  :-)

  161. On a Chart IWM 5Day 3Min
    Studies on Upper Subgraph
    Pivot Points (No, DAY)
    MACDHistogramCrossover(8,15,8,EMA,Positive to Negative)
    MACDHistogramCrossover(8,15,8,EMA,Negative to Positive)
    Studies on lower subgraph
    Let me know if you are interested and when you get the chart set up and I’ll tell you how I read this
    I’m churning IWM because I don’t know how to daytrade – the chart seems pretty good – I just don’t trade it….

  162. Here is a great Economic Event calendar for the US reports and worldwide.

  163. Can anyone give me an idea what kind of deal can be worked out with TOS for margin debt?  Ameritrade charges me prime for margin from $50-100,000; prime minus .25% for $100-250,000; prime minus .50% for $250,000 to $1,000,000: prime minus 1.25% for $1,000,000 + in margin debt.  Thanks.

  164. judah – I’m back.  Looks like I didn’t miss much.  On the daily IWM chart today is the smallest candle in a long time.  But, it is a doji (so far). :)  

  165. SS, Just in time for Mr. Stick.

  166. Crisis Tax/Salvum – They have raised the VAT to 20% in some places.  Imagine a 20% tax on purchases?  Well imagine not having a tax and continuing to run these deficits…. equally stupid!

    Data/Kustomz – Yep big day tomorrow, kept me from worrying about the upside all week. 

    Leak/RMM – I’d ditch the stock and ride the puts.  Worst case is you are back on for net $40.53 (counting what you lose on exit) and anything over that is a win.

    DM/Hulk – That would be chaos!  (which I love, by the way)

    Coal/RMM – Where were you when we were loading up on MEE?   They are still pretty cheap and then there’s BTU, which is my favorite and ACI is OK when they are low in the channel. 

    Boring plays/Judah – Good topic!

    TNA/RMM – When great at first, it is very relaxing to get out.  You have many many opportunities to tough them out and then win and, if you take the ones that are great at first off the table, you’ll have more cash to tough it out with!  On POT, I’d stay away (other than my vacation idea for DMan earlier). 

    IWM/Edro – It channels nicely but the Dow and the S&P are less prone to breaking out while the RUT did so on both sides today and I prefer not to have so much bother. 

    Uh oh – no 2:30 stick yet, that kind of backs up up to 3.  Oil crashed back from $76.50 to $74.50 into the NYMEX close.  Copper still $3.23 after being rejected at $3.25.   Gold down a bit at $1,233.

  167. It’s the calm before the storm, Todd Harrison says. Monday’s big bounceback saw the S&P gap up more than 4% at the open, an event that’s happened only six other times in recent history, and "in every single [prior] case, the ‘gap’ was eventually filled, and usually very quickly."

    U.S. companies should avoid too heavy a blow from weakening European demand for their goods stemming from austerity measures, since Europe’s importance as an export market is slipping. The latest trade figures show for the first time Asia’s emerging market countries surpassing the EU as a U.S. export destination.

    That 2nd item is nonsense.  China is massively stimulating and the people are on a car-buying frenzy (like America in the 50s), which means little in the long run.  Overall exports are down so Asia being the best of the worst is not all that exciting.  This is how they put lipstick on our pig of a trade deficit

  168. phil,
    just did some analysis on the oil leak in the gulf. the typical tanker carries about 172 million gallons of oil (42 gal per barrel). The total volume of the leak to date is 4.9 million gallons. so the leak represents 2.8 percent of a single tanker’s capacity. oil companies stay away from this statistic when saying that the leak is ‘small;!!!

  169.  today’s real tough to trade iwm, but very easy to short BIDU!
    edro00, I will put up the TOS as you described and let’s give it a try later.

  170. Phil – David Rosenberg says the same thing as Todd H. and is post is scary….

  171. Some (or maybe a lot) of this selling may be fear of the retail report tomorrow.  The lower we get the more likely we get a relief rally on the actual numbers.  I was kind of hoping we’d finish on the high side so we could take some speculative shorts into the close.  If retail numbers are bad tomorrow, the reaction could fill that gap back to around 10,500 so it’s a very random overnight session ahead, which means don’t go too crazy leaving short-term bets on the table.

    Now we can use 1,167 as a quitting line for day-trading shorts.  Then if 10,850 fails we can use thant and 2,400 on the Nas and then 7,250 on the NYSE…..

  172. Yes China is a house of cards… all hype it’s crashing too.

  173. judah – IWM camarilla L3 = 71.11.  Full stop right on it.

  174. rdr006
    Very interesting factoid, I like it.
    And for whatever it’s worth I agree with fill about this current decline….

  175. re China car-buying: Koreans went out buying cars in the 80s-90s, and are now thinking that was a really bad idea.  Gov’t is providing a lot of incentives to use alternatives, which are very good, and the Seoul traffic jams are a strong disincentive. Also the terrible drivers (except the old pros, the taxi drivers).

  176. SS, Thanks. I had it at 71.10, but I’ll ask later.  3:00, support line, can’t ask for more than that. 

  177. Oil/RDR – Tankers hold 1Mb or 2Mb of oil.  80M gallons at most.  The Valdez spilled 1.5Mb of oil or about 60Mb and, by the way, what on earth makes you think they are being truthful about the size of the spill?

    Rosenberg/Pharm – Yep and if those TA guys say it, it often becomes true simply because enough people follow them to make it true. 

    China/Yip – Good article this morning from Andy Xie, I think, in Phil’s Favorites about how China is on the edge.  Vitaliy Katsenelson sometimes writes for us too and he’s put up some real eye-opening stuff on China and what a hollow economy they have. 

    Whee – and here’s Mr Stick at 3pm!  Probably in time to stop the slide as Dow volume is just 125M (super low) so far

    Upside stick play would be DIA $109 calls at $1.08 with a stop0 at $1 (10,850).

  178. Question, prolly a stupid one that I could find if I went and researched (time issues)
    Does the upside stick play mean DIA 109 calls for MAY?  I would assume it’s always current month unless denoted otherwise?

  179. judah – no position and not sure how to play it.  Chart says down, but boy oh boy Mr Stick has left many marks on me.

  180. Sorry all I had to do was look at the call, my bad. yes he means May And shazam took at the 1.00 already!!! 

  181. So much for that save so far!  Next inflection point is 1,155 on the S&P but we have to get through 10,800 on the Dow first. 

  182. judah – playing it down.  Wheeeee.

  183. SS, Nice. I got distracted by a phone call and missed it all. 

  184. judah – IWM L4 = 70.59.

  185. Stick/Yip – Yes we look for a market "save" shaped like hockey stick into the close (if you read a month of posts and comments you’ll catch up).  So we play for it with some calls but, like today, tight stops if it fails because an overhwhelmed stick is a falling market.  I do omit the current month to save me typing the word May 104,000 times…

    Taking a call position at inflection points is a good way to NOT cash out your other puts, rather than spooking in and out of them. 

    Wow, I can’t believe this.  Cramer said everything was going so well at 2:30….    8-)

  186. SS, Watch out for defense of Dow at 10,800.

  187. judah – took 1/2 off at 10800.

  188. Phil / Mkt events next week?  Retail tomorrow, what to watch for as drivers next week?  Any Greek or Spanish strikes, German votes?

  189. Crammer!!  What do you mean?  He’s the best!. 
    …BARF… My least favorite person anywhere in regard to the markets period.   I’ve love to see him in real life I would talk smack.!
    I did actually read a month but I guess I wasn’t paying close enough attention, sounds like me in school back in the day! LOL….

  190. Cramer’s easy enough to ignor, it’s Kudlow that grates me. He’s gotta be the world’s least attractive cheerleader.

  191. 10,800 better be a tough nut to crack.  Good time to non greedy exit (at least some off the table) on the rest of the QIDs ($1.25) and the DIA $108 puts ($1.35) unless you are really, really brave.  Just keep in mind that if it goes against you in the morning – you are very screwed! 

    You get better prices if you sell into the excitement! 

  192. Buying October 250 AAPL calls

  193. aclend – Here’s to hoping lightning can strike twice. :)

  194. BP may be a powder keg but it’s held up really well around this level 48.20….

  195. judah – L4 on the nose!

  196. Nice daytrade on Qids! Sold after trade alert sent to my cell… Talk about the market getting kicked around in minutes.

  197. Next week/Tusca – TIC Flows Monday, Building Permits, Housing starts and PPI Tuesday.   Wednesday is CPI and oil inventories, Thursday the normal jobs along with Leading Indicators and the Philly Fed.

    Wow, and down and down we go!  Maybe I get my 10,700 today? 

    Come on – where’s all the dippy buyers???

    Reading/Yip – I think you learn more reading the comments than the posts becuses, at some point in a month, some new people ask us pretty much everything and, every once in a while, I end up pontificating on something important.  During a trading day it’s hard to get deeply into things but night and weekend chat gets very interesting at times.  Also, you get to learn who is who and who trades what and you’ll get an idea of what stocks and sectors we all follow – all very good to know going forward. 

    Kudlow/Ekor – Even with the cute little bowties? 

    See how fast they flip those contract prices on you?

  198. ekor… LOL, I don’t want to keep typing worthless posts but so I didn’t want to go on and on….Kudlow is 2nd on my list.
    That joker Kudlow was telling people to buy and that there was no recession from 14k on the Dow until it hit about 8k.  It was @ December 2008 when he said,’We’ve just learned today that the recession started a year ago’.
    MY gosh….Beam me up Scotty. That was the last day I watched CNBC on a daily basis, it took me too long to break myself but that day was it.  Now it’s only very sporadic.

  199. phil,
    according to this saudi-arabian web site

    "Supertankers" are generally defined as those greater than 250,000 tonnes deadweight (meaning the maximum weight they can carry when fully loaded). Today’s supertankers, on average, can carry about 2 million barrels or 84 million gallons of crude oil and petroleum product. The largest supertanker in the world is the Norwegian-owned Knock Nevis which is 647,955 tonnes deadweight and can hold 4.1 million barrels of petroleum.
    my comment about the oil companies staying away from this statistic was not based on the realization that the figures are way low ball but the fact that if we had a real supertanker go down in the gulf we would be facing a much worse disaster and yet everyone is worrying about how to make wells safer and ignoring this ‘disaster’ waiting to happen.

  200. Now if I can buy the DIA $107 puts for .75 on a stick into the close (now .94) I would take them into the morning as a gamble.  The $109 calls are .88 and also a fun 15-minute gamble for you hard-core stick fans

  201. SS, I guess that shows that people are using Camarilla.  The two calculators I looked at showed L4 at 70.57, rather than 70.59.  When you have a moment, can you tell me how you got the different (and more accurate) number?

  202. Thanks Phil.  Please let me know if I should shut up or if I am out of line, I’m new and I’m ok being told. I try not to ask the question that’s been asked 1000 times…. :)

  203. I dont mind Kudlow so much (his brains been damaged by years of cocaine abuse) but Maria (nails on a chalk board) Bartiromo drives me mad!!

  204. judah – my software plots it automatically.  Not sure of the formula.

  205. Phil – Fully covered with 109 puts on the mattress. Stay fully covered or bail on half?

  206. Supertanker/RDR – Oh, I didnt’ get that at all.  I can be kind of narrow focused on up and down 100 days…  Well a tanker going down is always a disaster but I’m very pleased with the transition to double-hulls and there are some risks that you just have to live with but a well blowing out becuase we don’t have the same regs as the rest of the world and we don’t even inspect for the requirements we do have is really disgusting. 

    LOL Yip – We’re mainly in cash so not too concerned about the wild moves but if you read back the posts, you’ll see I can be quite snippy with dumb questions so, in short, don’t worry – you’ll know…  8-)

    DIA/Pyern – Oh, that was supposed to be taken off on the run-up.  Going into tomorrow, I’d cut back to 3/4 at least.

  207. Nice chart edro.  If you could give a short primer on how you read it I’d appreciate it — it’s always nice to hear the strategies of others.

  208. judah – I know Phil has insight into how algo’s trade around the 5% rule, but thes pivot points have to be factored in somehow.  The RUT and IWM both closed smack dab on the Pivot Point today.

  209. SS I used pivots a TON a few years ago but got away from them, I remember being amazed like Fibs… Crazy.

  210. Wow, what a mess of a day.  Mr Stick has failed us but it’s all about retail sales tomorrow and that’s 8:30 so not much to be done about that but go long on oil (now .74) if they’re good.

    That was lots of fun though, wasn’t it?  Tune in for more craziness tomorrow…

    Wilmington Trust recommends that its clients sell a third of their non-U.S. equity holdings because "the sovereign debt crisis in Europe is clearly a threat" and the European bailout will not spur economic growth.

    More clueless Fed speak:  Dallas Fed President Richard Fisher doesn’t see "any obvious trip-wires" that could dampen the economic recovery but there’s also no reason to deviate from the Fed’s "extended period" policy on interest rates. He calls the Greek debt crisis "a wakeup call" for U.S. politicians, adding that "both parties have been reckless and irresponsible."

    GS drops the Abby Bomb:  Stocks should continue to pick up steam even as the economy slips, Abby Joseph Cohen tells CNBC, reaffirming her projection of S&P 1250. She sees strong growth for commodities, particularly in energy and metals, as world growth hits 4.5%, and predicts 10% annual growth in China even as other analysts expect a slowdown.

    Buy Cisco (CSCO -4%) on the dip, Barron’s advises. The company’s latest quarter showed sequential gains in all six product lines for the first time in more than a year and a half, yet the shares sank on CEO John Chambers’ cautious outlook. But Chambers has a history of lowballing the numbers and later beating them.

    At the close: Dow -1.06% to 10781. S&P -1.23% to 1157. Nasdaq -1.26% to 2394.
    Treasurys: 30-year +0.39%. 10-yr +0.21%. 5-yr +0.11%.
    Commodities: Crude -2.29% to $73.92. Gold -0.88% to $1232.20.
    Currencies: Euro -0.65% vs. dollar. Yen +0.5%. Pound -1.42%.

  211. SS/Camarilla.  For tomorrow, Camarilla (using pivotpointcalculator) shows PP 71.20, S1/S2/S3/S4 at 70.77/70.63/70.49/70.08 and R1/R2/R3/R4 at 71.05/71.19/71.33/71.74.  
    If you wouldn’t mind sharing, I’d be curious at to what your software shows.
    Gotta go to physical therapy now and see if I can get my shoulder ready for a golf trip with my son.  Nice job today, by the way.  It shows that a trip to the range at midday is the best way to go!

  212. judah – I am definately willing to share all I have.  Unfortunately, I won’t know the numbers until tomorrow, but I’ll post as soon as they show up.
    Good luck with the shoulder.  I am going on a guy’s golf trip in June to Kingsmill in Virginia.  Do you know it?

  213. NDX leaders with a pretty ugly intraday reversal. BIDU with the pre-split equivalent of a $70 stock reversal intraday.
    Lots of fingers burned there, I suspect.

  214. day is done… can anyone tell me why they can’t  ‘shut the pipe off’ on the ocean floor? I missed the first few days of this thing and I seem to just know it’s bad, getting worse, will take another week to fix… thx for any input

  215. wassellc
    The chart is somewhat congested, I had to change colors so I could see everything well.
    I used the TICKmolester as the general market trend – you can tell quit quickly what is going on.  I try not to bet against the trend.   As only the huge buys and sells print and you get a feeling for how large they are.
    BetterTRIN is used as trend confirmation, you can see that BetterTRIN went negative about 11:30AM and stayed negative all day indicating a downtrend.
    The OBV confirms the trend – OBV on the upper chart is confusing so you might want it as a lower chart.  You can see the OBV confirmed the IWM downtrend starting at 10:40am
    The MACD up/down arrows are primary indicators of trade points, I use the ATRTrailingStop as confirmation.
    Also clone the chart and look at the 5D 5M chart – you will see the trades are quite different and less risky
    Unfortunately I think I know better than the chart and I "KNEW" that today "they" would close higher than 10900 so I got killed on the drop.

  216. kustomz/Maria
    Oh yes, I agree – I love your so accurate graphic description!

  217. Thanks edro!

  218. Philisit – The Blowout preventer(or Christmas tree) failed.  It’s a series of rams that sit at the top of the well that are wired to collapse the well casing and seal the well in the event of a blowout.  These preventers are designed to be pressure activated or manually activated.  They are called Xmas trees because many of the surface wells have multiple rams stacked on top of each other in the event one fails.
    I don’t know about the sub-sea wellhead.  Used to work in the oil patch, so I"ve seen a few of these.

  219. One other quick tidbit, many of Saddam’s well fires from Gulf I took a long time to put out because they either disabled or destroyed the christmas trees when they set the fires.  They knew the preventers could easily stop the blowouts.  IMO, that made it even more devious.
    I read BP’s claiming the circuitry on the BO preventer failed because there’s an issue with the battery.  <shrug>  At that depth, I think things are a WHOLE lot different than on the surface, so I’m not sure I buy it.

  220. Erdo / anyone -
    What is a "TICKmolester" ??

  221. samz -
    It’s a study available on the web – here it is, copy it and paste it into the new study form.
    It histograms large changes of the NYSE TICK indicator so you can easily large orders being placed
    # TICK Interpretation Indicator
    # Based on work by Richard Todd (
    # Adapted for thinkorswim by (aka Eternum on
    # Oct 4, 2009: v1.0
    # Oct 5, 2009: v1.1 – added positive/negative tick colors

    declare lower;

    input low_tick_cutoff = 500;
    input high_tick_cutoff = 1100;

    def median_price = (high("$tick") + low("$tick")) / 2;

    def tmp1 = if high("$tick") > low_tick_cutoff then high("$tick") – low_tick_cutoff else 0;
    def tmp2 = if median_price > low_tick_cutoff then median_price – low_tick_cutoff else 0;
    def tmp3 = if high("$tick") > high_tick_cutoff then 2 * (high("$tick") – high_tick_cutoff) else 0;

    def tmp4 = if low("$tick") < -low_tick_cutoff then low_tick_cutoff + low("$tick") else 0;
    def tmp5 = if median_price < -low_tick_cutoff then low_tick_cutoff + median_price else 0;
    def tmp6 = if low("$tick") < -high_tick_cutoff then 2 * (high_tick_cutoff + low("$tick")) else 0;

    def tmp7 = tmp1 + tmp2 + tmp3 + tmp4 + tmp5 + tmp6;

    plot tick_molester = (tmp7[1] + 2 * tmp7) / 3;
    tick_molester.DefineColor("positive tick", color.cyan);
    tick_molester.DefineColor("negative tick", color.magenta);
    tick_molester.AssignValueColor(if tick_molester >= 0 then tick_molester.color("positive tick") else tick_molester.color("negative tick"));

    plot zeroline = 0;

  222. So, remember our investment in Illumina?  Well, here is one reason why….

  223. judahbenhur and SS
    What security are these pivots you’re discussing relate too?
    Edro is that post a mistake?  What the heck is that, how can you read that?

  224. yip
    no – not a mistake.  It’s a TOS study used in charting.

  225. Edro  Is the script available for BetterTRIN, I went on line and found some script but it doesn’t run when I import it into TOS charting.  I assume you are using the TOS charting?
    Thanks in advance

  226. humvee
    note that his plots TRIN the "right" way – market going up when BetterTRIN goes up
    #Better TRIN from
    #Coded by REM 9.4.09

    declare lower;
    def NYSETRIN = (close("$ADVN")/close("$DECN"))/(close("$UVOL")/close("$DVOL"));
    def NQTRIN = (close("$ADVN/q")/close("$DECN/q"))/(close("$UVOL/q")/close("$DVOL/q"));

    def NYSElog = -log(NYSETRIN)*100;
    def NQlog = -log(NQTRIN)*100;

    plot avgTRIN = (NYSElog + NQlog)/2;

    plot bottom = -100;
    plot top = 100;
    plot midline = 0;

  227. humvee -    yes, it’s for TOS charting

  228. Thanks so much, I need every advantage I can get

  229. Yip,
    IWM.  Several of us follow the RUT and trade IWM options and/or TNA/TZA.  On most days, you’ll see a yellow box with posts by JRW.  He is zoned into the RUT.

  230. thanks guys….i appreciate it

  231. SS/Kingsmill, I’ve played Kingsmill a half dozen times, but not in the past ten years.  If I recall correctly, one of the courses (River course?) is nicer and they use for PGA events. 

  232. Wow Pharm. That’s CRAMAZING! (crazy and amazing). I don’t think I was around for Illumina. What’s the deal?

  233. Thanks Mocha for putting the hex on BIDU w/ your call buy.
    That thing is insane.  Up almost 200 points in a few days just on a stock split (pre split move).
    That is stupidity squared.

  234. Yipcarl …. holy cow; I want your rent deal…. I might even move to LA for it.

  235.  Phil, your comments on "Wow, they have the bears scared to sell (or short) and the dip buyers jumping into every buy signal on the 1 minute chart.  I think that’s what last Thursday was all about – "THEY" want the retail holders to be slow to sell and quick to buy on dips so "THEY" can unload their crap because right now, any volume selling still collapses the market.  The trick is to train the retailers to "not want to miss" the next big dip so now a 200-point drop will set off a buying frenzy and "THEY" can get several good volume days of selling out of a 5% move (500 points) down because every day Cramer will tell you what a great chance it is to get in and every day people will believe him…" is right on the mark!! 
    Get ready to revisit last week’s low, the fat finger one. 

  236. Cap – where have you been?  Missing the daily musings of you and Matt.   Even MrM is busy with the daily grind of work (as am I).  Just need SingaporeSteve back and the crew is ready to roll…..

  237. Illumina/Ace – I don’t think they are in charge of that, but the human genome that was once very expensive to sequence is coming down in price.  I would not be surprised in our lifetime that when one banks the chord blood, a genetic test is also done to ‘de-risk’ the disease pool.  Even as embryos grow in a tube, I am sure they will have (one day) the ability to select even more than just the sex.  Ahhh, the wonders of science.
    I should have something this weekend for a post on a few new, small biotech picks.  I have been researching the cancer field and have a few fliers, and one that I think is a crash and burn…time will tell with a little more research.

  238. Pharm,
    Know anything about CBAI?

  239. Ac – no, but this perked my interest:  Canopus has ongoing studies to evaluate the therapeutic application of proprietary camel serum for the topical treatment of psoriasis and acne.
    Again, I would rather spend the money on DCTH, ARIA or even VIAP for 15c. 

  240. I hope that people don’t mind this long post.  I subscribe to the free newsletter at; I just got this email tonight regarding oil spill in Gulf.  They usually send their commentaries via emails first, and post them a day or two later on their web site.  I thought this one is worth posting here sooner, rather than waiting for their web site.
    Oil Slickonomics - Part 3
    May 13, 2010

    We have breaking news on the oil spill in the Gulf. There’s new information that it could be much worse than believed.”
    Anderson Cooper, 10 PM, May 13, 2010, CNN
    CNN breaking news tonight reports that the estimate of 5000 barrels a day spilling from the BP well in the Gulf of Mexico may be very low.  A Purdue University professor has used sophisticated scientific analysis to estimate the flow visible in the now-famous video, and has revised the estimate to 70,000 barrels a day, with a margin of error of plus or minus 20 percent.  That is the equivalent of an Exxon Valdez spill every four days.  Another way to put it is that about 20 million gallons a week or some 60 million gallons have polluted the Gulf since this started.
    The new estimate helps explain the large size of the slick, as estimated by NOAA.  It also leads us to move to our second case among the three scenarios we have discussed in part 1 and part 2 of this series. See for the other parts of the series.  We were already at “bad."  Now we may be at “worse” if tonight’s effort by BP is unsuccessful.  We should know within 48 hours.   
    According to Anderson Cooper, other experts who have responded to the new estimate have now called on the federal government to intervene massively and to stop leaving this issue to the oil company.  They allege BP is purposefully covering up or excluding information and keeping professionals from participating in a coordinated national effort to deal with this catastrophe. 
    We have no way to know what is going on inside BP.  We do know that the reports continue to be alarming. 
    Tonight there is another attempt by BP to use another method to stop the flow.  BP says that we shouldn’t deal with measuring and that we should focus on stopping the spewing of oil.  They are partially correct. 
    Of course the stoppage must come first.  But measuring is a way to determine the responses needed to minimize the damage and clean up the mess.  And this is a very big mess.  BP’s liabilities are growing exponentially, as are those of its suppliers and partners who are involved.
    In addition there is now risk to shipping lanes, because ships and barges cannot safely navigate through oil spills and slicks.  The fire hazard has also greatly intensified.  There are insurance requirements to prevent the transiting of ships.  In sum, it is not wise to sail through a dangerous stretch of oil-contaminated ocean.
    We have seen some firms make investment recommendations favorable to BP and the others involved.  They claim the existing loss of market cap makes them cheap.  We think that an unknown and growing liability is enough to dissuade us from attempting to bottom fish.  You could catch a falling knife.  We are not positioned in the ETFs that have heavy weights of these companies.  
    The other issue has to do with the 30,000 existing drilling rigs in the Gulf.  They too must be cognizant of the risk of operating with an oil slick underneath them that is spread widely on the surface.  Fire hazard again emerges as one of the considerations.  We are told by petroleum engineers that these rigs may have to be evacuated if the slick reaches the sort of proportions to be dangerous to them.  This is true for both drilling rigs and production platforms. 
    This situation in the Gulf has gone from bad to worse.  It still may be contained.  BP’s efforts to capture the gushing oil with the funnel-type device they are attempting to use tonight may still work.  We certainly hope so.
    Meanwhile the combined federal and oil company effort has now widened to over 500 vessels and 13,000 people.  1.5 million miles of boom and containment-type barriers have been installed, and more are coming.  Coastal cities in Florida are making emergency plans.  We have evidence of oil spill damage in three states: Mississippi, Louisiana, and Alabama.  
    Like Yogi Berra said: “It ain’t over till it’s over.”   
    David R. Kotok, Chairman and Chief Investment Officer

  241. Thought, maybe a question, but not sure:  Mr. Retail investor gets burned twice, (2001 then 2008) and pulls out of the market(witnesss $7.2T in money markets and massive bond inflows over the last year vs minimal stock inflows).  Mr. Retail doesn’t trust the market anymore, so doesn’t play.  However, Mr. Manipulator, in order to unload their overly massive positions in equities desperately needs Mr. Retail to come back and play.  To do so requires putting on something to get them to play along, how about the biggest market rally in history?
    Only, and here’s where I begin to wonder if there isn’t a question here, what if the retail guy doesn’t play along?  What if they look at the top 4 guys all pitching perfect games at the same time and say, "awesome, good on ya mate!" but don’t jump in with both feet.  So now you have fewer players, pushing things harder and harder in order to get enough suckers to bail them out.  What’s left is the low volume, thin trading we’re seeing now.  And, as I reason this line of thinking out, the only way out is for one of those left at the table to become the sucker, because when the sh** hits the fan, and it will at some point, someone has to lose. 
    Suddenly, the March 2009 lows don’t look so far away.  The flash crash wasn’t made up, fat fingered mumbo jumbo after all.  When the selling has to happen, ie rates go up, there’s no buyers under this market.  It’s freaking terrifying. 
    I’m not one to panic, I’m a HUGE optimiist, hell I’ve been through more cancers than most people shake a stick at (13-0 if you’re counting, and yes, if the healthcare rationing nutjobs ever got control I’d be dead but that’s a whole different thread), and I am feeling like digging a bunker out behind the house.  I swear I don’t know how you do it everyday.  Good on you mate.  You are amazing.

  242. Cwan
    Thanks for the BP post and the growing concern. I am long BP, but now will "blow out" of it tomorrow. I originally thought the spil could be contained in a short period of time, but I doubt it now. Additionally, BP is UNINSURED, therefore are at the mercy of the lawyers. – not a good scenario for the prudent investor.

  243.  Phil
    Any opinion on MCHP and DUK? both about to x-div

  244. hoss
    Yep, I agree with you – the retail small investor is still in shock from the ’08 contraction, and the pain that was inflicted. It will take a long period of time to build confidence in this investment class. With our economy growing about 3.5%, the market should advance proportionally, as earnings will boost the upward trend of the equity valuations.I, personally am not fearful of the prospects of an economic recovery, as we are already on that path. I’m scared to death of the flock of black swans that are headed our way as a result of the total mismanagement of our financial health, at the state and federal government level. The taxation that is required to service this debt and continued deficit spending will put the economy into unbelievable downward spiral. There will be some dark days in our future, as the crows come home to roost. A well stocked bunker is a good idea, as it might get real nasty.

  245. Good morning!

    Pretty ugly looking futures but we’ll see what the retail report says.

    Sadly, it looks like I was right when I said to RDR "what on earth makes you think they are being truthful about the size of the spill?"  I’m sorry I’m such a cynic but I grew up during Watergate - I expect my government to be lying and I know that only 2 papers in the whole country (Times and Wash Post) were willing to say the President was a crook and the war was wrong etc while our 3 networks delivered the party line until the crimes were so grotesque and obvious that they could no longer be denied.  I remebmer feeling like a subversive for reading Doonsbury, which was so "direspectful" of the President – even though they never pictured him or any officials directly. 

    Also sadly, I was right about video game sales getting whacked by the IPod Touches and IPhones and now IPads.  I didn’t see the report yet but I saw SNE’s earnings report and I head there’s an industry-wide slowdown now and the media doesn’t attribute it to App sales yet so they are going to treat it as a major consumer slowdown concern.  It’s all about Retail Sales at 8:30 but they have to be pretty good now to cheer people up and I’m not thinking they will be.

    Christmas Tree/Hoss – I’m curious why they can’t send a bot down there to force the covers down?  Even if they have to send them with explosives or something, just shut the damn thing down…

    Illumina/Pharm – Yeah if this thing doesn’t get yanked (many people think it’s evil) I think the outlook is fantastic.  I think it should be mandatory.  If your doctor knows what you are pre-disposed to, he could save tons of time and watch things that are important to watch and give preventive recommendations – all good things, I think.  Of course, if I know you are pre-disposed to hypertension and heart disease I may pass you up for CEO in favor of a "healthier looking" candidate…

    Lows/Balance – I hope not!  Not the spikes at least, that was a bit low for my liking. 

    Oil nice and low at $72.50, maybe worth a toss this morning to the upside.  I’d be willing to play the futures off the $72.50 line or even the $73 line with nickel stops.  Rules for trading the lines on futures are 1) take a nickel loss 2) if you lost a nickel and make a dime, set a stop at a nickel to get even 3) If you lose a second nickel, then you can DD but 1/2 out (tight stops) if you make the next nickel.  If you lose a nickel 3 times in a row (.20), it is probably a bad time for your direction so wait for the next inflection point and try again….

    What if/Hoss – We were in this situation back in 2008 and I said it was like the gunfight at the OK canal where the Gang of 12 has killed all the good guys and now they are staring at each other with their fingers on the trigger, ready to turn on each other at a moment’s notice.  None of these guys wants to be stuck with shares if it all hits the fan – they know how fake the numbers are because they are the ones who pumped up the prices and juiced the reports…

    BP with a nice, buyable dip today, way down at $46.50 pre-market.  Worth selling May puts as they are unlikely to go BK next week

  246. Pharm -  Thanks …. been insanely distracted with a business situation while trying to manage my trading activities.
    Its made it hard to be posting much intraday lately.  This too shall change.

  247. BP/Phil – apparantly, they have sent several robots down to trigger the rams and that’s what led to the discovery of the battery not working properly.  The manual override was triggered but nothing happened.  This is where I get suspicious, we have no way of objectively verifying the dead battery or if the christmas tree is in fact intact.  With the containment dome the way it was, I bet there’s a problem with the christmas tree, maybe it wasn’t set right or has been damaged somehow. 
    When the tree fails, Red Adair pioneered the strategy of using explosives to snuff surface well fires at blowouts.  He also often used the charges to destroy or remove a damaged or malfunctioning preventer.  Then they merely lower a new preventer over the well(with the valves open so the pressure just passed through it, re-attach it and then trigger the new device.  It’s fairly simply at the surface.  All the hoops BP is trying tells me they either can’t do that at the depth, or the problem at the well head is bigger than they are letting on.
    Just my speculation though.

  248. And please don’t confuse fairly simple with easy to do.  Its difficult, dangerous work for single men with a death wish IMO.  Add doing it at that depth and I come to the same befuddlement BP appears to have.