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WTF Wednesday? Bangkok Burns, Blankfein Moves Up

thairiot0519On May 6th I warned that revolution was in the air

Today Thailand’s Stock Exchange has been put to flames by protestors along with the malls they can no longer afford to shop in and the television stations that lie to them and tell them how great everything is while their lifestyles go down the toilet.  Like any good colony of cockroaches, Thai traders had already scurried off to do their trading elsewhere - in a secret location away from the lights and they took their market UP 0.7%, betting that this out-of-hand violence will now be met with an equally violent government response that will end all this silliness and let them get back to skimming their profits off the people on a daily basis.

Thank goodness we live in America, where the Lords of Wall Street are free to rape and pillage to their heart’s content while our hardly-burning MSM cheers them on and keeps the sheeple in-line.  Just this weekend I noted to Members that:

On the opposite end of the housing spectrum:  They say living well is the best revenge and it looks like Lloyd Blankfein’s name must be Vengeance as he pays CASH for his new $26M NYC duplex on Central Park West BEFORE selling his old 5 BR Park Avenue apartment (he’s asking $13.5 for the old place).  You would think SOME ONE might have said "Gee, Lloyd, do you really think this is the smartest time to be throwing it in people’s faces?"  Maybe his new place has a "spider hole" in case the SEC comes knocking…

Bloomberg had a good article on "$60 Billion in Corporate Tax Dodges" so outrageous event he Tea Partier think it’s wrong.  The article focuses on one of many corporate tax tricks called transfer pricing where companies (and Forest Lab is a highlighted example) set up subs that sell their own product to themselves to shift profits to more tax-friendly jurisdictions.  It’s a neat trick than any company can do as long as they are big enough to open fake offices in foreign countries and have lawyers draw up BS contracts and use completely immoral accountants to paper it all over.  U.S. companies amassed at least $1 trillion in foreign profits not taxed in the U.S. as of the end of last year, according to data compiled by Bloomberg. That cumulative total, based on filings by 135 companies, increased 70 percent over three years, from $590 billion in 2006. 

Our government, now a mere tool of these corporations, does not hold the corporations up to the same standards as the people and they don’t suffer like the people suffer and, eventually, that leads to a breaking point at which the people will rise up and REVOLT.  Why does this baffle people?  The entire history of our planet is based on revolution – so much so that we even call major positive changes revolutions and the most popular party in America at the moment is, not surprisingly, one that is based on revolutionary ideals.  How do you really think this is all going to end?

Speaking of Goldman – I HAVE to mention this:   While Goldman Sachs racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse.  Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday.  

When Michael Moore stands in front of the AIG Building and says "I’m here to make a citizen’s arrest" and gets thrown out of the building and later talks to a woman from the Congressional Oversight Office who says she has NO IDEA what happened to all of OUR money – it’s "funny" because this is how Americans traditionally deal with being ripped off – we complain, we get a beer, we complain some more and then we shrug our shoulders and go to work and put another few thousand into our IRA’s and 401Ks where these same jackasses take another 1% of our money per year in fees for 45 years while the government forces another 13% of bottom 90% salaries to go into a retirement fund that we already know can’t possibly pay them back – MADNESS! 

Steve Colbert (video right) does a great job of pointing out the way the MSM is now being paid to drive investors into a frenzy of fear while advertising gold and financial services that will help "steer you through the crisis" that the TV station is telling you is going to come as your incompetent government screws everything else up.  Like any great lie, there is a grain of truth to it – our incompetent government has screwed everything up but the stuff about gold saving you is total BS (the sheep are a good idea, though).  Gold is yet another scam being run by "THEM" to get you to take your hard-earned cash and trade it for something Wall Street can sell you without doing any actual work.  Sound familiar?  Just 3 years ago they were doing glamor shots of realtors and featuring all the great homes you should be buying.  Come on people – recognize the patterns!

As I said to you on Monday: "Unfortunately, I can only tell you what is going to happen and how to profit from it, I can’t fix things."  I said we are looking for consolidation between 10,200 and 10,650 so we were EXTREMELY distrustful of the spike over 10,650 yesterday morning – even though we had gone long on Monday’s drop.  Sure enough, it all evaportated in a puff of smoke, which was fine with us as we pressed our disaster hedges "5 Plays that Make 500% if the Market Falls" as well as our new DXD disaster hedge that’s good for 1,500% if the Dow is below 10,500 at October expirations.  I also put up a list of 16 of our shorter-term downside plays in our Weekend Post and you can check the performance of those for yourself so you don’t think I’m bragging.  What I said to Members in yesterday’s 10:01 Alert (with the Dow at 10,700) was:

Here’s where we are on the S&P, 1,155 is our critical line and the Weekend Post has the chart above this one too, should we get over 1,170.  Our below levels are pretty much in 15’s so 1,115 and 1,100 being very critical to hold as it’s also the 200 dma, which is still rising but may falter if we start poking below it and that will yank down the 50 dma and then, even if we recover, unless its a strong recovery we end up heading into a "death cross" and that means we have to go long-term bearish which is sooooooooo depressing… 

For now, as I said in the weekend post, we would LOVE a good reason to cash out those short-side hedges but anything below 1,155 is no reason to act and below 1,140 is more of a reason to add more and we’re already getting rejected off that line.  Copper is $3.06 so I don’t even have to look at the indexes to know we’re going to be weak.  Add oil testing $70 again today and we still need a catalyst to take us higher.  Earnings won’t do it, the Fed Minutes on Wednesday are unlikely to do it and none of our Economic data looks likely to do it so I’m not expecting too much for this Options Expiration Week but I will be very pleased if we consolidate between 10,200 and 10,650 on the Dow , which is about 1,100 to 1,155 on the S&P and 2,225 to 2,350 on the Nas and 7,000 to 7,250 on the NYSE (they are the most in trouble so far) and 620 to 660 on the RUT (they are the least in trouble). 

See – not complicated – just patterns!  We actually finished the day yesterday with a couple of bullish flyers on TNA and DIA becasue we are LOADED with short plays so our risk is a big move up at this point.  Since we "only" have a 25-40% downside protection built into our new bullish plays, I put up a special Alert to Members this morning with 3 more plays that are designed to pay out 1,000% if the market retests last week’s lows in the coming month.  Hopefully, we won’t need them – I think the sell-off here is overdone and I’ll be putting up a couple of upside plays that do just as well this morning as we hopefully have a reason to cash out our short-term, short bets but a little panic selling early on would be a nice cherry on top before a move higher.

My expiration day target for the week was 10,650 so we have a lot of work to do today but Europe held the 2.5% levels I set in the morning Alert and the Euro (which we went long on near the close) is recovering and gold is staying down.  We have Fed minutes at 2pm and that’s always a fun reason to goose the markets.  CPI was in-line today at -0.1% thanks to falling oil prices and now copper is down too along with agriculure so it’s DEflation the gold bugs need to fear, not INflation – YET! 

Keep in mind that the Euro may be dropping but the Credit Default Swaps are fairly stable so this is NOT a global financial crisis yet.  Not surprisingly, the $1,000,000,000,000 fix in Europe has been enough to last 7 days so far and Greece paid their May 18th notes yesterday and don’t have another issue until July so perhaps this "much ado about nothing" panic in the markets over Germany’s short-selling ban on 10 banks is nothing more than a manipulated blow-off bottom that was designed to scare you owut of stocks in into gold and other commodities before it becomes obvious to the average investor that this is a new market, where commodities and financials do not have to lead us higher and they can go back to their historical 8 p/e ratios and the rest of the World can get back to doing some real business…

Not much to do but sit back and see if our levels hold.  It’s a long way up before we’re going to be bullish again but, as I said yesterday, that does not stop us from doing a little bargain hunting from our mainly cash positions with our Discount Stock Buying Strategy.  Who know’s?  Maybe we won’t be living in a World without banks and walking around with pocket scales and strips of gold in order to go to Whole Foods (still over $40) to buy some home-made pasta and extra-virgin olive oil…

 


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  1.  Phil – good morning.  I am a new member and very appreciative of your hard work, as I see the time of "day" you are writing your emails to members.  

    Please forgive my ignorance, but what does MSM stand for?
    Thanks in advance.


  2.  Good morning Phil,
     
    One thing I found for spread (based on spx disaster hedge from Peter) is that, one has to be good at both spread price as well as timing to maximize the hedging. 
    What would be some good near term hedging for next month, say to protect another 10-15% drop of SPX to 950 around mid to late June.
     
    Thanks.


  3. amorgan / MSM – "MSM" stands for Main Stream Media i think :)


  4. Good mornin’!  amor – main stream media….


  5. Euro rally forcing short squeeze—-back to games—expect wild day


  6.  Euro just flew up like the space shuttle, what does that mean??


  7.  Thanks Johnp592!!


  8. Euro – it means jack – as in trying to jack up prices before our open so the big boys can dump stock – already back under 1.23


  9. EUR…EUR/USD.. Prolly means short it!  HAHA.  Going long the Euro in this environment, as we saw yesterday, is not a really safe play.  The Euro could be at 125 by Friday or 115…


  10. Euro -
    "Futures pared losses as the euro rebounded from a four- year low versus the dollar on speculation the European Central Bank will take further steps to halt the region’s debt crisis. " – see bloomberg headlines


  11. Phil:
    actually, your understanding of the political/economical scene exceeds that of your trading expertise, I am very worried about the "non-functioning of American democracy. I often read comments, even here, excusing corporations and blindly trust them: who ruined the financial world, who ruins the oceans with oil spills, etc.
     
    You say;
    Our government, now a mere tool of these corporations, does not hold the corporations up to the same standards as the people and they don’t suffer like the people suffer and, eventually, that leads to a breaking point at which the people will rise up and REVOLT.  Why does this baffle people?  The entire history of our planet is based on revolution – so much so that we even call major positive changes revolutions and the most popular party in America at the moment is, not surprisingly, one that is based on revolutionary ideals.  How do you really think this is all going to end?
    If government and elected politicians do not change things, who will ?


  12. Is that L.A burning in the photo??? 
    My mistake……they haven’t told the California parasites that they are being cut yet.


  13. If government and elected politicians do not change things, who will ?
    You can’t seriously believe the government is capable for fixing anything.  First they create the problem, then a new set of politicians march in the fix the very problems they created.  Insanity.


  14.  Signs of gold bubble about to burst :
    Sears and Kmart to Offer Consumer Gold Buyback Program


  15. I think WE know this about each other but I couldn’t agree more about gold.  I find the people that adamantly hold to gold as the end all, be all, funny to me.  They are as aggressive or more aggressive than any SF Gay rights group, PETA, NEO Conservative or Neo liberal group.  Those gold bugs defend their gold and the logic about it’s safety as fervently as anyone I’ve ever seen.. 


  16. Pharn,   PRX has been very stable lately.  I had thought about a position 6 weeks ago when they were 24 but never did.


  17. Good morning! 

    Still just looking for those major levels to get taken back:  Dow 10,650, S&P 1,140, Nasdaq 2,400, NYSE, 7,250 and RUT 700.  Shouldn’t be hard for any of them.

    VIX is still pumped up at 34.43 so still a good time for bargain hunting but if we can’t break 1,115 and 10,500 it’s just silly to add new bull plays. 

    Gold, copper, oil and Meredith Whitney are keeping everyone out of Commodity and Financial stocks so we’re looking for the Nas to show some strength and hopefully they will once they are done being trashed by all the solar companies, who are also down on low oil prices and the uncertainty of continued EU subsidies. 

    I am still bullish for the day and I still like those DIA ($106s, .58) and IWM ($69s, .60) calls as fun upside plays for the day but if the S&P can’t hold 1,115 then no point

    1,000% upside play #1 is QLD June $61/66 bull call spread at $2, selling $53 puts for $1.90, which is net .10 with a $4.90 upside (4,900%) if QLD gets back to where it was last week.  The downside would have to be rolled along if the Nas falls another 5%.


  18. Exec/California Parasites  Really? 


  19. Oh my what a market the last couple days…my oh me.

    I have a new posting up with a couple of short sales to honor Europe banning short selling. We are looking at City Trends Inc. (CTRN) and a short sale on a Direxion Energy ETF per the 10:30 AM results on the crude inventories. CTRN has already dropped 3-4% in the morning session, but if it rises again, it presents a great opportunity.

    Read my analysis, entry, exit, etc. here.

    I am available all day for questions and comments as always. I have a pretty good working knowledge of stocks, oil markets, ETFs, and various sectors.

    Thanks and Good Investing!


  20. David and or Phil.   what do you suggest for anew trade right here on TBT ?


  21. Pharm, not many people took you up on the DCTH  . Untill just a few minutes ago my screen was only showing one  Jan 2012  15 put open interest.


  22. exec:
     I really prefer to focus on trading here, but the trigger is there again,
    you are good in handing out compliments, have you also ever complained about the locusts ?
    what do you KNOW is the EU or Greece’s debt vs GDP and what is it for CA ? ( to help you, its 8-12 %, CA is 1 %)
    once you know this, tell us what the conclusion is ?


  23. Europe is burning but Brazil isn’t.  Yet Brazil down 17% YTD.
    Whaddya think about EWZ Buy/Write?  Buy at 62.25 sell 12 Put/Call @ 24.70.  Roughly 60% return if called at 60.
    I like violating the 5% rule here.  Scale in but do some more (10% of 50% in market), since its Petrobras and Bank Itau and a few more.


  24. Thanks Amorgan – Sometimes I get motivated extra early.  I’m usually up at 4am checking the markets and the crazier they look, the less likely it is I’ll go back to sleep!

    Hedges/Balance – I think I put those up yesterday but the thing about a disaster hedge for October is that, if you are scaling in in May with a 25% position then you will be assigned much later to DD so we want the money in October, not now.  If we don’t need the insurance then we are making at least 20% on our buy/write so we don’t care about a 5% loss.  If you take short-term hedges to protect long-term plays, you can lose 5% and another 5% and another 5% and wipe out your eventual gains on the main play.  If you are simply betting a downside with a short-term disaster hedge, then I would point out that the high reward you seek reflects the high risk you take so be careful with them and certainly don’t go chasing on a drop like today.   Remind me when we re-test 10,650 and I’m sure we’ll find another good one. 

    Euro/Chyer – It means ca-ching on those EUO shorts!  It’s what I said in the morning comment – nobody it seems but me cares about the ACTUAL VALUE of things.  The Euro can’t just go to parity with the dollar because a bunch of lines on a chart point that way.  There are TRILLIONS of dollars tied up in Euros as well as Trillions of dollars and they do have proper levels based on their interconnected fundamentals – at $1.20, the Euro is officially too low AT THIS TIME.  If their situation deteriorates and the US looks no worse, then maybe $1.10 but I can’t even see $1 as long as the EU remains solvent.

    AAPL still weak – that’s a danger sign still.

    Wheee, gold failing $1,200 – go GLL!

    Who will/RMM – Viva la Revolution!

    LOL Exec – Nor did the Lakers win the Playoffs…

    TBT/Dman – I’ll let David handle that one..


  25. ss/ judah         You in anything now?


  26. Seems to me like the bulls are non existent.  I see this market retesting lows and soon to break 1115 on SP500.


  27. Now the miners (gold and others) are pulling us down.   Rotation is a bitch!


  28. stockbern – TZA on the strong cross on my chart.


  29. ss what MA lines are you using?  I assume that’s what you mean when you say cross?


  30. ss , I show an exit @  6.50


  31. Dmankoff – What was your position in it before? Are you looking to buy/short sale/options?


  32. stockbern – this 68.02 line is one of JRW’s lines that seems to be still good.  The descending trend line from 4/26 is now at 67.68ish. 


  33. ss   thx   still working on my entry & exits


  34. yip – I have been using a RUT 3 min chart with an 8 period moving average to gauge entry/exits in conjuction with JRW’s lines.  JRW, judah and myself have had many conversations over the last month on the methods we use.  JRW’s box is easy to find, but you might have to do a Ctrl F on ssdirk to find my entries over the last month.


  35. MBA Mortgage Applications: -1.5% vs. +3.9% last week. Thirty-year fixed mortgage rate decreased to 4.83% from 4.96%

    Apr. Consumer Price Index: -0.1% vs. 0% expected, +0.1% prior. Core CPI 0% vs. +0.1% expected, 0% prior.

    Apr. Real Earnings: +0.1% for real average hourly earnings M/M, -0.6% Y/Y. Real avg. weekly earnings +0.4% M/M, +1.2% Y/Y. Avg. workweek +0.3%

    Germany’s temporary ban on naked short selling and naked CDS of euro-area government bonds is an attempt to shut down speculators, but the move is widely seen as likely to backfire. World markets slide and the euro hovers near four-year lows. DAX -2.2%, FTSE -2.1%, CAC 40 -2.5%, HSI -1.8%, Nikkei -0.5%. Euro at $1.221. S&P futures -0.8%.

    The euro exchange rate is close to an "equilibrium" value, and its decline against the dollar may help Europe’s exports, the IMF’s John Lipsky says. "The current level of the euro does not appear to pose problems… It’s perhaps easy to forget the euro, when it was created, debuted at a value of $1.17."

    Goldman Sachs (GS) economist Jim O’Neill says the euro’s slide has eased its "overvaluation" but illustrates concern that monetary union could unravel, prompting a need for European policy makers to take coordinated steps to stabilize the currency. "People need to remember that for the past couple of years the euro’s been very expensive," O’Neill says.

    Global sales of mobile handsets surged 17% in Q1, driven by rising demand for smartphones that saw Research in Motion (RIMM) and Apple (AAPL) grow market share at the expense of Nokia (NOK), according to Gartner’s (IT) latest survey. "Even though this is good news for the industry, it is not such good news for the tier-one players, which are losing market share."

    BJ’s Wholesale Club (BJ): Q1 EPS of $0.49 beats by $0.06. Revenue of $2.5B (+12.8%) vs. $2.6B. (PR)

    Chico’s FAS (CHS): Q1 EPS of $0.20 in-line. Revenue of $482M (+17.3%) vs. $474M. Shares (PR)

    Deere (DE): FQ2 EPS of $1.58 beats by $0.49. Revenue of $6.5B (+6%) vs. $6.6B. (PR)

    Target (TGT): Q1 EPS of $0.90 beats by $0.03. Revenue of $15.2B (+5.5%) vs. $15.6B. (PR)


  36. Phil/Lakers  ? The Lakers are playing in the Western finals……


  37. LOL at all you gold haters this morning!
     
    Of course it’s all B.S., not a true store of value, not a replacement currency, etc, etc. This is news?
     
    Anyway here’s the break of 1200 on gold I’ve been waiting for, now we see where it finishes as the late buyers herded in by the MSM have been scared out for a quick loss. A failure to retake 1200 today will keep me from hopping back in; next stop would likely be 1170.


  38. 1020- definition of parasite: Someone that takes something from that masses that they aren’t really working or entitled to via the governments generosity (aka buying votes). 
    I was mistaken when I saw the photo.  For a second there, I though California may have realized that the only way out of their fiscal demise was to discontinue providing benefits to the "Parasites" and thus notified the "Parasites" that their free benefits where being revoked and thus the "Parasites" proceeded to burn down the city. 
    Unfortunately, I believe Californian will first lobby the Federal government to provide funds to them that they take from you and I  to prolong their fiscal irresponsibility.  Once we burn down the City’s, the politicians will have to make some hard decisions.


  39. Phil- Re gold…sector rotation to what?


  40. rexx, EWZ is in a clear downtrend. I’ll put it in my WList for later


  41. SS note taken thank you much.
    Eric…Hey man if you can trade it, GO FOR IT!!!  Just don’t tell me it’s ‘the answer’…please. :)
    Just a hater of what I see to be a scam…that’s all.  I could def be wrong


  42. Wow look at the AUD/JPY, I sold that last week at 83.34… Trouble down under….


  43. Pharm – GILD showing some love in this mess.


  44. VIX AGAIN flying.


  45. Back to the 5/7 lows on the /ES. *Should* be support here, but the intensity of the selling makes a long-side gamble very risky, IMO.


  46. It’s sick but I’d be happy with SPWRA “only” falling 2% in a day, I’m waving the white flag, this is ridiculous…. Phil, I sold 5 naked June 15$ puts to finance abull call spread in June… How would you roll this Phil?


  47. Eric – SPX 200dma is 1102 also.  Can we test that?  Maybe not today, but it’s coming.


  48. david, no position in TBT, just scoping it out for a good trade now, any suggestions?  option spread perhaps?


  49. Brazil/Rexx – I haven’t liked them all year as they are part of the commodity bubble and also fairly dependent on Spain and Portugal for tade and aid so I am not convinced they will be turning around soon.

    Well, we wanted a spike down at the open to buy into – any volunteers??  8-)

    Lakers/1020 – Sorry, meant the finals.  You’re right, we still could get a good riot out of them…

    Hate/Eric – I don’t "hate" gold.  I was picking gold at $850, I just don’t like it at $1,250.

    Rotation/SNS – I think we are finally going to rotate out of commodities and financials into (and I know this sounds crazy) companies with sound fundamentals and growth prospects. 

    Looks like we have pretty much filled in the "fat finger" gap now – the next move is very critical!


  50. Phil: once a spread is setup, such as my TNA call spread jan35/55 plus putters jan 35, you said many times, that I trade/adjust too early,
    what if big marketmoves up or down move callers or putters in a very green situation, say 60% green ? you still do not touch it  ?


  51. judah – you around?


  52. SPWRA
    do they plan to push it to negative number????????


  53. That looked like a fund liquidation


  54. I know you don’t hate gold Phil.
     
    All these markets are just about perceptions and us trying to guess what future participants’ perceptions will be. From that perspective, it’s almost irrelevant what the underlying is. Frankly, it could just be some flashing numbers on a screen with no real connection to anything real at all. Oh, uh, wait….


  55. exec/parasites  as I wrote, Really!?  You might want to get out for some fresh air……


  56. SPWRA/Jrom – I wouldn’t do anything with a month to go but note that you can roll to 2x the Jan $11 puts about even and keep an eye on that.  If you are worried, you can sell a few June $11s for .90 and those can be rolled to Jan $15s and if you are too bullish to do that, then why worry about the puts?

    Oil up 200,000 Barrels, gasoline down 300K, distillates down 1.1Mb and refineries still very low.  Kind of blah news for oil and I don’t think enough to retake $75 but no reason to fall to $70 either (now $72.50).   Still, not worse is good for the markets as they need more bad news to keep going lower. 


  57. Yes, Phil. What to buy with strong fundamentals and growth prospects?!


  58. XLF showing some relative strength here.


  59. Phil – In the 51/48 TNA spread you recommended a few days ago for 2.40.  Would you recommend selling any puts against it on this move down?  Thx.


  60. Phil, for real   , sound fundamentals & growth prospects?   It has been a year since we’ve seen that  :)


  61. Dmankoff – Honestly, I do not think I know enough about options to offer you a spread. As far as buying and selling it as an ETF, I would say that TBT is nearing a bottom, but we need the market to turn positive to get TBT going. We have been bearish most of this week, but I would say that a lot of investments are starting to bottom after last week’s rise. I think getting TBT as a buy around 40.25 area would be a great place to buy. It is a slow mover though in the regular stock market, so I will defer to Phil for the options spreads.


  62. SS, I’ll be back on board with you by Friday.  I’ve been totally preoccupied with a large number of SPX put verticals that I had bought to protect some SPX putters (the putters are May 1030).   The verticals are just in the money, but of course only $3 or so to cash out now, and perhaps $10 by the beginning of the day Friday.  So, I’ve been playing around with closing orders for $5-7, but no fills.  I know that if SPX starts to move up, these things will evaporate. Nice play on TZA, btw.


  63. Financials are at their 50 week moving ave.  What to do?


  64. Phil:
     
    What would you do with short MEE June 37 puts sold at $3.50? Current price $6.70 including about $.80 premium. Taking assignment to be into the stock at $33.50 is one option.


  65. judah – I once let my put verts on the RUT go from $6 in the money to zero waiting for $8 that never came.  Good luck.  Here’s to hoping you get the full 10.


  66. DCTH/stock – Phil’s play was better and less risk. 
     
    GILD – ’bout time.


  67. Phil: my bias: towards OPEX, market will drop most of times,
    yesterday’s order to 2x roll down SPWRA putters did not go thru, will set up again to to get even,
    still have the callers jan15, base 2.16, now 0.99$, probably should cash in,  comment please.


  68. They are just eating premium away on both sides of the trade. 


  69. Now I’m liking VLO.    It will probably touch 5/7 low today


  70. SS, Thanks. I remember when that happened.  I’m not trying to be greedy, but you know how difficult it can be to get SPX to fill.  If we don’t move up much by Friday’s open, I’ll be able to buy one of JRW’s cars.  Otherwise, just a scooter.


  71. judah/scooter – with a motor or razor.  Nice.  Happy for you my man.


  72. SS,  Looking at this morning’s charts.  What time did you get into TZA --9:52, 9:53, 9:54?


  73. Now rumors of Greece leaving the EU…sending the Euro higher


  74. TNA/RMM – It’s not a rule, at 50% one way or the other it’s a good time to think long and hard about the position.  A bi-directional spread is usually something you want to leave alone as you did 2 sells and one buy and your buy had far less premium than your sales.  So the only adjustment you generally want to make is to improve yourself if it goes way against you and you want to press it.  Any adjustment you make when it’s going your way is just greed unless you think that your rally will be reversed. 

    LOL Tcha! 

    LOL Eric!   Not a good sign when everyone’s a comedian – shows how sad the markets are…

    Funamentals/AC – I stand by my top 8 (so far) list of the last couple of days.  If we can get some good consolidation without one of those silly reversals, then I’ll be going over the Watch List too for the weekend.  I’m into taking situational advantage of things like SPWRA and WFR, who are both down over the Euro panic (half their contracts are written in Euros) as well as affected by low oil prices (like that will last forever).  These are 10-year trades though and we’re scaling in over the first 5 so it’s ridiculous for people to watch anything they do each day like it matters. 

    MON actually showing a little backbone just under $55. 

    XLF needs to hold that $15 line. 

    WFR & SPWRA draw a line in the silicone at $11. 

    V bounced. 

    AET very attractive at $30.

    TASR back under $5.

    UNH $30.

    AXP $40.

    TNA/Wayne – Gee I hope that’s a bullish $48/51 spread!  My attitude on TNA is they dropped $2.75 today to $51.20 and the $48 puts are $1.20 so if we sell those, then the Russell has to drop ANOTHER 10 points by Friday before we’re giving the $1.20 back.  Those are then rollable to June $30 puts (now $1.30) and that’s going to take a MASSIVE drop in the RUT, where I’ll probably be very happy to own TNA at net $28.80 so why wouldn’t I sell the $48 puts now for $1.20?

    MEE/Chaps – It’s for June so I’d wait until June.

    Selling slowing down at 10:54 with 74M on the Dow.  That was quite a flurry.  Still no buying, just the selling slowed down.  As I keep saying, this market has ZERO support for any kind of volume selling – still my biggest fear above 10,200. 

    SPWRA/RMM – I imagine you have the buying power to do a 2x sell now and put a stop on the 1x you already have.  If we’re lucky, they turn around and you make money on all 3.  If not, another quarter down the hole…


  75. CHK / Phil     Entry?


  76. GOOG Germam court investigating GOOG on criminal suit stk down 5.60 for all GOOG friends


  77. While AAPL is weak, it’s trading about $20 higher than it was the last time we were at these levels. GOOG is right where it was then. So I think there’s some relative strength in AAPL right now.


  78. Hi Phil,  I’m a new member of the site.  Where do you see GLD going over the next month?  i have June 125 GLD calls.  MY cost basis is about 1.5.  Now its down around a buck.  Do you see it rebounding by June expiration so I can at least make my money back or should I sell out on the next bounce?  Thanks!


  79. judah – 9:55. 


  80. Phil, what do you mean by Brazil depending on Spain and Portugal for ‘aid’? Do you mean that Brazil is loaning to Portugal and Portugal may default? As for trading, China is Brazil’s largest partner, U.S. is 2nd. However, looks like capital today is indeed leaving riskier assets and moving into safer assets, hence the drop the in oil and foreign currencies/markets.
    Those interested in plays may look at the Aussie dollar which is crashing and burning today, FXA -2.7%!, and BZF (-1%). Brazil will be raising rates again… Looking at plays there might be best.


  81. judah – candles just bouncing around the 8ema.  No strong signal to sell yet.  No other indicators saying sell.  Watching TBT (bond guys) to give indication also.  It’s actually nice when the candles are close to the 8ema line.  A cross gives a good exit.


  82. SS, That was my next question.  Why didn’t you consider 10:39 or 10:54 sell signals?  I’m looking at IWM not RUT, but I assume they show something similar.


  83. SS, Now that I look at the RUT chart, I see some slight, but perhaps important differences.


  84. Good morning,
    #’s same as yesterday, plus 67.73 and 66.93
    In TZA, finger on the trigger to sell if it bounces at 67.07; reload at 67.73


  85. judah – huh, interesting.  The RUT 10:39 and 10:54 didn’t actually cross like the IWM chart did (just set it up and looked at it).  On the RUT the 10:57 candle crossed, but I stayed in thinking it was not strong enough to shake me out.  It was also between JRW lines.  This may go to our initial premise playing this of "set it and forget it till close with the 1st move in the morning being wrong."


  86. Marketwatch - more than 14% of homes in foreclosure or delniquent….


  87. Out of TZA at $6.82.5


  88. Taking 1/2 off for 4.5% gain.  Gotta leave in a few for a meeting.  Letting the other half ride.


  89. CHK/Stock – I like them down here but we need to see a firm bottom on oil first.  They’ll take gas down if they keep falling.

    Welcom Kyw!  You must be new to have calls that you paid a premium for – we’ll fix that attitude real fast!   No I don’t see it rebounding – I don’t like that play at all.  You paid top dollar at the top of a run and that dollar can evaporate very fast on you.  If you want to stay in it, you can sell the May $119 calls for .35 and use that .35 to roll your June $125 calls down to the June $120s at $2.15 so costs you .80 more and you are in for $2.30 in calls that are currently $2.15.  If GLD heads higher, you roll the caller into a vertical and, if they head lower, you can sell June calls to cover and either stick with the vertical spread or roll yourself to July. 

    AAPL/Eric – I agree.  That’s why I think any weakness in AAPL means the market is not going to get anything going as they should be leading us up. 

    Brazil/Raul – Yes, they are all very tied up in loans to each other but my main concern on Brazil is that they are very commodity based and that market may implode as there was never any reason for it to go up as much as it did. 

    Well, this is ugly but we couldn’t have a better set-up for a massive reversal on the Fed minutes at 2pm.  Not that there’s any real reason for a turnaround on the minutes of a 2-week old meeting but it’s a great excuse to run the Bots as they will have a few pages of text to point to and say "that’s why."


  90. Hey Phil,
    I’m a new member. I have 1500 UNG which was put to me @ 12 some time ago. I’ve sold calls against so I’m net 9.94. Any suggestions?


  91. Gel -
    You around? What’s your take on the Aussie and Kiwi vs USD – would like to go long aussie but seems like it may have a long way to go – what a huge move today – AUD down 3%


  92. Sen. Dodd’s last-minute compromise on derivatives doesn’t change the original language, but postpones legal action for two years, pending the results of a study from regulators headed by Tim Geithner, who is against tough measures. Sen. Lincoln says she’ll fight efforts to tone the measures down. Bank officials predict the two-year window would cause a "chilling effect… all this does is introduce a comic amount of uncertainty."

    Germany’s ban of naked short sales of euro-zone government bonds and CDS has encouraged safe-haven flows, lifting German bund futures 25 basis points on Eurex. U.S. longer-term Treasury futures trading higher: the 30-year +0.43%; 10-year +0.25%.

    Switzerland’s reserves of Swiss francs have jumped 28.7B to 153.6B francs as the government continues to try to cap the currency’s rise against a falling euro. The Swiss National Bank has consistently intervened in forex markets, but foreign holdings have risen 170% since the beginning of 2009, signaling a slowdown; the franc now -1.82% against the euro, -0.49% against dollar.

    EIA Petroleum Inventories: Crude +200K barrels vs. consensus of +300K. Gasoline -300K vs. consensus of -500K. Distillates -1M vs. consensus of +1.2M. Crude futures that were down 0.5% swing to the positive, +0.07% to $72.75.

    The percentage of mortgages in foreclosure hit a record high of 4.63%, compared to the fourth quarter’s 4.58% and a year-ago 3.85%, the Mortgage Bankers Association says. More than 14% of mortgages are delinquent or in foreclosure.


  93. I am gradually selling off my core holdings. This looks very bad indeed.


  94.  Phil, 
    I am trying again to get into the DXD trade now its a -1.90 on the calls and +1.15 on the put. Net -0.75, so the upside is greatly diminished from 2 days ago. Should I do the next level up? (24/28?) which would be around -.20? 
    I am trying to see how to deal with the other stocks that you didn’t say off the top of your head you would keep (C, AMT, T, UCO)
    One is NZT as I was looking for some dividend income, but it has been decimated in the last 4 days, losing 20%. Do you have any suggestions on a strategy to make some of it back? It seems the stock is near a 2 year low, and the dividend yield is 12.5% (and have been raising it consistently) it sports a PE of 7.4, so I don’t know why its been knocked around so low…
    The others are CHY, ANH, AMZN 


  95. Eric – and we have 1102.


  96. For those still short the Russell, next support is IWM 65.71 and 65.11


  97. ss,
     
    I know. If they can’t defend it here it’s bad, but I wouldn’t sell here, even if we nick below 1100 for a few minutes.
     
    I actually bought a small long (a few May SPY 106Cs).


  98. Concerning Mortgages:
    Mortgage rate delinquency matches food stamp (SNAP) percentages.
    Administration "muses" about mortgage tax deduction http://www.cnbc.com/id/37153056
    Now imagine no tax write-off on mortgages, along with a new 15% VAT for new construction…


  99. Hello.  I’ve got DIA May  $106 calls from yesterday PM (ughh), looking for a good suggestion.


  100. JRW, judah – taking this cross as the signal to sell second 1/2.  TBT also inching up, as well as s&p bouncing off of 200dma.


  101. SS, Well done. As for using TBT as an indicator, you’re just watching its movement, for example, when it found support at 40 a short while ago?


  102. Look at the volume spike in the /ES at 10:49. Perhaps some stops blowing at the failure of 1100, or a capitulation event.


  103. I meant 11:49.


  104. judah – yeah TBT stopped sliding and flatlined around 40.10ish.  It started to creep up at 11:50 signaling a reversal of the trend.  It may be reveresed in short order again, but as you know daytrading is all about pennies.  Just trying to find an edge. 


  105. In TNA ( 1/2 ) possition at $50.56


  106. Phil    I have a UWM Put spread that expires friday.  It is profitable. Should a guy wait till friday to close out or take money and run.  It is at full premium now.  thank you


  107. Man, where are those circuit breakers?

    Welcome Kevin!  If you want to stick with UNG long term and you are willing to DD, you can sell Jan $7 puts and calls for $2.40 to drop your bais to $7.50 with an average cost of $7.25 if another 1,500 are put to you.  Assuming UNG is over $7 in Jan, you can roll the calls to a similar spread in 2012, hopefully at a higher strike.  When you are behind on a trade, it’s best to try to get even, not ahead…

    DXD/Amatta – I really hate chasing.  Yes if we fall below 1,100 on the S&P and 10,350 on the Dow for more than a few minutes.  As to other stocks, best to hedge against them and ride them out, not sell them here unless you are just trading them anyway.  The best strategy for getting a 4-day drop back is waiting 4 more days before taking drastic measures.  I really can’t look at a list of stocks during the day but try to remind me after the close.  In a slow week, it would be fine but it’s 2 days before options expiration – not a good time.

    VAT/Thegold – At this point, it couldn’t make it go any slower so why not?

    DIA/Bryan – Well those were stop outs at S&P 1,115 this morning so a bit late now…  I’d sell the $105 calls for .60 and spend .70 to roll down to the $104s and hope the Dow finishes at 10,500 or higher if you want to stick with them – the $106s are a bit far out of the money now. 

    UWM/Wislons – It depends how close you are.  I really think 666 will hold up on the RUT and we could pop back to 710, that’s a pretty wide spread to worry about. 


  108. Doubling TNA at $50.97


  109. After five days at Lake Tahoe, I thought the markets might improve – Nope. My currency play today is to buy USD/HUF at market. (228 ish). Stop at 219. Take profit at 250.


  110.  Hi Phil — I’m new and this is my first post — EXC is at $40 yielding 5% — good candidate for a long-term play?


  111. Phil-
    I sold May NFLX 120 calls, but I also own June 120 calls.  I did not buy at the same time I’m still up on the whole.  The market is all over.  Do you think I should hold the June calls, maybe sell some more premium or roll?


  112. JRW – Great call on TNA…doesn’t look like it can break the 200MA, time to get out?


  113. You picked a very good week to skip Gel!

    Welcome JBaker!  I do like EXC down here but long-term only.  As a new entry I’d take the stock at $40.50 and sell the 2012 $40 puts and calls for $11 and that’s net $30.50/35.25 with a 33% gain if called away plus the dividends and, below $40, you own 2x at net $35.25 (less the dividends). 

    NFLX – I’d just let the May callers expire and see where we are next week.  Unless you really love NFLX, I don’t think it’s a good time to be putting more money in it – just be happy to get out on a bounce with a nice profit.

    Don’t forget Fed minutes at 2 or 2:15, if we are going to pop, that should be the time.


  114. Upside speculative play: Buy SSO $36/38 bull call spread for $1.25, sell $38 puts for $1.10 is net .15 on the $2 spread.  SSO is now $37.67 so you are $1.67 in the money less the .33 you owe the putter if we expire here.  If we head down, you can roll down about 10%, which is another 5% down on the S&P in June.


  115. Crazy Play : TBT June 44-46 call spread for 26 cents ~800% return if TBT is at 46 by June 19. Breakeven at 44.28 or so with costs. Just put in the order, see if it gets filled. Play on normalization of Euro and a slight return to the risk trade.


  116. thegoldenrule,
    Buffett’s 1st rule is don’t lose money, I’m in at an average $50.76, so I have some room to wait, but I’ll swich horses if no one comes to the rescue


  117.  Phil, just an observation, China has been quite flat despite all the other markets dropping hard the last two days, could be a technical bounce or could be turning around short term?


  118. Now I get it; "they" didn’t plan a market drop; it’s just that Lloyd has been busy with real estate lately !!


  119. Hey all. I want to provide you with another preview of my new Daily Musing mini reports I am writing. Here is today’s on Egpyt. Let me know what you think.

    xen Alert – The Daily Musing: An Emerging Market With More Than Just Sand

    Emerging markets are obviously one of today’s most exciting investment opportunities. The success of the Chinese, Brazilian, Indian, and Russian markets have been outstanding. The Hang Seng has skyrocketed over 1000% in the past twenty years with individual stocks doing even better themselves. Wouldn’t it be great to know the next place where this type of money could be made? What other emerging markets are there that have the potential to have even half or one-fourth this growth?

    There is South Africa, Mexico, Argentina, and other secondary BRICs. One country that is overlooked time and again most likely for its politics and less than ideal take on the USA is Egypt. Egypt is a truly fascinating emerging market that has some extremely tremendous potential to develop industries and become the diversified, industrial leader of the Middle East and Africa. With its crucial geographical location and phenomenal natural resources, Egypt is a place that I believe has some long term potential.

    Egypt is nudged as perfect puzzle piece between the Mediterranean Sea and the Red Sea, linking the European world to the Asian world. The country has begun to see significant economic developments and a heavy influx in the amount of foreign direct investments into the nation. Currently, Egypt has the 27th largest economy in the world. They have seen over the past six years GDP growth of over 100% from nearly $75 billion to over $150 billion. The nation, for many years, was an economy based solely in the production of oil and a hefty tourism economy. Nearly half of the country’s economy, as of 2009, was in the service sector – mostly tourism and the Suez Canal. 

    Yet, the nation has developed some avenues of diversification, continued to promote the production of oil and natural gas, and with a continued liberal approach to their economy and political system seen a rise in tourism. The country has done a great deal to bring in economic reforms to help increase FDI to bring to life new markets. Over the past six years, the amount of FDI in the country has risen with the GDP. 

    So, what is driving the economics of Egypt. In 2004, the nation took on economic reforms that included reducing corporate income taxes, reducing barriers to entry for foreign nations, and overseeing their banks with more regulations and supervision. The nation is led by President Hosni Mubarak, who has done a great deal to take a mostly socialist economy in the 20th century to the reformed nation it is today. The nation has taken on some debt, which is about 7% of GDP to help finance this growth. To help reduce the budget, the nation is taking on a value-added tax in 2012. The nation also is cutting down subsidies on fuel and food, which are about 25% of the nation’s budget.

    Mubarak also helped to establish the nation’s first bond market, which has been a great source of income for the nation to help it move away from loans and to investment vehicles. The ability to have a vibrant bond market is crucial to the development of Egypt. In the past nine months, the nation, according to Reuters, the nation received from July of 2009 – March of 2010 $6.1 billion in foreign investments in T-Bills. The ability for the bond market to develop and be successful is crucial to Egypt’s development.

    Finally, the nation has the Suez Canal. The Canal is an extremely profitable source of income for the nation at the heart of the trade between Europe and Asia. Egypt made over $7 billion on the Suez Canal in 2009, and 7.5% of all sea travel went through the Canal in 2009. That is an astonishing number that should continue to stay significantly high. With the development of Asia increasing, it is great for Egypt. The trouble with pirating in the Red Sea is somewhat troublesome, but no one has talked about it decreasing trade in any way.

    So, how to get involved in Egypt as an investor. Egypt’s stock market is the Cairo and Alexandria Stock Exchange (CASE). It is a great source of profitability if you have the capabilities to get involved at the Egyptian level. Most Egyptian companies, however, have decided to begin listing with the London Stock Exchange. Several of the companies that have ADRs are listed in this exchange. Some of those companies include Al Ezz Steel (AEZD), Commercial International Bank (CBKD), EFG Hermes (EFGD), and Lecico Egypt (LECI). These are four of the leading companies in the country, and they chose the London market as the first place for ADRs because of ties to London through history and former investments.

    There is one American ETF that we can get involved with is the Market Vectors Egypt Index (EGPT). Other than that, though, you have to go overseas. It would be great to see some more ETFs from iShares or Vanguard come into the picture. When they do, you better get involved.


  120. Phil
    Re WFR
    I have sold
     
    25 May 15 puts @1
    25 May 16 puts @1
     
    Could you advise on the rolls.
    TIA


  121.  David, the only issue I would see long term with Egypt is political stability. Mubarak has already designated his son as successor, but I am not sure that he will be able to stay in power long term. Opposition is getting stronger. That would make me somewhat leery of putting money long term in such a country. Beautiful country though! And much safer than I would have guessed!
    My bet for the long run in emerging markets would be Brazil for the long run.


  122. MRK has very high VIX now Jan12 30s call&put @11.45


  123. Out of TNA at $52.73; reloading for entry at IWM 67.73 on the way back.


  124. TBT/Hannah – Nice idea!

    China/Chyer – I have been looking at FXI but I think there will be plenty of time to play it AFTER we show a liittle backbone of our own. 

    WFR/Oncmed – Wow, those are high!  You have about $4.30 to roll out and I’d go to 2x the July $13 puts at $2.30 and you can balance that selling 1x the $12s at .77 because you can roll those along after you don’t have to pay $4.60 on the other side…

    Some economists are terming the consumer price reports (I, II) as "benign," but how can that be when everything from deleveraging to trans-Atlantic regulating is pointing toward the return of the deflation meme?

    Consumer prices were flat in April, according to the Cleveland Fed’s alternative core CPI measures that don’t automatically exclude food and energy. The median CPI was unchanged (graph) and is up just 0.5% Y/Y, the lowest gain on record. The bank’s 16% trimmed-mean CPI was flat in April and is up just 0.9% Y/Y. (earlier)

    General Electric (GE) expects to raise its dividend in 2011 and says profits will start rising this quarter on strength from emerging markets and the finance division. The company cut its dividend in the first quarter of 2009 for the first time since the Great Depression.

    Market Booster:  Sen. Chris Dodd is dropping his compromise plan to delay derivatives spinoffs after facing vocal opposition from an odd coalition of liberal Democrats and Wall Street bankers.

    "We believe we are fully indemnified" from damages related to cementing work on the Macondo well blowout, Halliburton (HAL -2%) CEO Dave Lesar tells shareholders at the company’s annual meeting. Analysts note that as the well’s operator, BP would have had to sign off on contractors’ work.

    Hugh Hendry (the anti-Jim O’Neill) sees parallels between 1920s Japan and today’s China, which he says could precipitate a greater crisis elsewhere in the world, and he’s putting his money where his mouth is – buying options on 20 companies that will profit from a "dramatic collapse" of China’s Growth. (ETFs long: GXC, FXI, PGJ; and short: FXP, CZI)

    Three lunchtime reads:
    1) Four reasons to buy bank stocks now
    2) Eurozone plays "beggar my neighbor"
    3) Why we need Merkley-Levin on prop trading


  125. Phil, was looking at a SU as a play on oil.  It has dropped sharply over the past week or so and is under $30.  Was thinking to buy the stock and sell covered calls.  All my capital is in a retirement account here in Canada and by rule, I can only sell covered calls or buy calls and puts.  Can’t sell naked calls or puts.  What’s your opinion on SU at this price and what month should I sell if I go ahead with this. 


  126. In TNA ( 1/2 ) at $52.12


  127. doubling TNA at $52.28


  128. SU/Ulty – With those rules, I wouldn’t buy anything that doesn’t pay a dividend.  SU pays a small on (1.3%) but if you want to own them long-term, why not just buy them for $29.57 and sell the 2012 $30s for $5.80 and that puts you in for net $23.77, you still collect your dividend and the caller pays you $30 in Jan 2012 (up 26%) for a nice 30%ish over 18 months and fairly good downside protection. 

    Wow, what a great day this is turning out to be!


  129. PHIL…..
    Do you see any of these financial reforms causing problems with the 2x and 3x inverse funds like DXD?  I know they are comprised of swaps and derivatives however I’m not sure what the potential affect of the laws could be on the instruments I trade like these.  I would hate to have some good option positions like DXD then have them close the positions when the VIX is twice as high…


  130. IWM players,
    If we can break North here, it’s clean to IWM 68.42


  131. WOW so I’ve been watching the 8 day Exp Moving Average on TNA without any ‘levels’ or pivots and it’s pretty amazing how it details the change of direction and allows a nice entry if you’re quick. 


  132. Euro is definitely not out of the woods and I am adding to my short positions by taking a position of buying the September $110 puts (FXE)


  133. Phil dont we have SSO 36-37C spr from last week…is this new rec a DD?  TIA


  134. Yipcarl, Take a look at the IWM and RUT 8 period EMA, using 3 min candles.  SS and I have been using those and watching when the candles reverse and cross the EMA, for entry and exit.  That, and JRW’s lines, of course.  You can use IWM and RUT charts to play both TZA and TNA.


  135. I wish we hadn’d had such a sharp run-up into the Fed minutes – now I’m nervous.  If we were down I would have been more certain betting up on the news. 

    Reforms/Yip – I would think so unless the brakes don’t apply to them.  Have to get more details but probably they will break underlying stocks, not the ETFs.  What will happen is spreads will go crazy when bits of the baskets are halted.

    Ah, here’s the Fed and they upped their estimates for GDP growth by 10%, which is very nice of them….  Now let’s see what can be made out of it


  136. As for the direction in bond yields in the US, remember this:  the trend in core inflation is statistically more than twice as important as fiscal deficits (or surpluses for that matter) in determining the trend in the market interest rates – David Rosenberg
     
    TBT is still going to erode into FAZ/FAS as core inflation continues to fall.  Hell, $2 value meal at Taco Bell.  Wait until MCD and Jack follow it.


  137. Would’nt Timmay and Erin make a great couple?  ;)


  138. juda… amazing this is. I’m doing exactly that.  Exponential Moving average right?  Definitely 8 period,  I’ve added Tradestation’s pivots which don’t give me a number but give me a red or blue dot on the end of the candle when it sees a reversal and it’s UNCANNY.  I’d like to send a screen shot but I’m not sure if I can do that it but what I’m looking at is nuts in terms of it’s predictability for today..
     
    I’m listening to Treasury Security talk to that talking head Burnett(puke) lying through his teeth.  Don’t people know just about every time these guys talk they end up being wrong?  What a sham.


  139. Huge sell candles still pounding down the /ES on every run. We’re making progress, but it’s very unsteady.


  140. Yip, Yep. SS played around with different periods, simple MA v. exponential, etc. and we came to the conclusion that 8 periods of 3 minutes work best.  SS likes to use RUT and I tend to use IWM, but I go back and forth.  Our favorite play is to watch the direction in the first half hour of trading and when that turns, go the other way.  For example, this morning, that would have put you in TZA at 9:54.


  141. Eric/ Excuse my ignorance, what is the ES?


  142. Out of TNA at $52.11 ( 9 cent loss )


  143. The day may end ugly here….


  144. exec,
     
    It’s the S&P mini futures (futures on the S&P index). Ticker symbol in Think or Swim is /ES. It basically moves with the SPX, but the moves on the /ES are a little more exaggerated, so I like to watch it better.


  145. Hi Phil,
    You give the SSO play
    Upside speculative play: Buy SSO $36/38 bull call spread for $1.25, sell $38 puts for $1.10 is net .15 on the $2 spread.  SSO is now $37.67 so you are $1.67 in the money less the .33 you owe the putter if we expire here.  If we head down, you can roll down about 10%, which is another 5% down on the S&P in June.
    I am still in the previous play Jun 40/43 bought the long one for 3.69 now 1.52 short caller sold for 1.85 now .54
    sold putter 40p for 1.67 now up 3.67  any good advice thks


  146. SSO/Oncmed – Well, if you have it, then you don’t need it!  At this point I’d leave alone.

    Sell candles/Eric – Plenty of funds getting the hell out of dodge but I was kind of encouraged by the RUT holding 666 so well. 

    Fed summary from WSJ:

    WASHINGTON (Dow Jones)--Most of the U.S. Federal Reserve Board wants to see the central bank’s balance sheet shrink faster than it would by simply letting its $1.1 trillion in mortgage-backed securities holdings mature. But the Fed is divided on just when it should start selling off those holdings, acquired during the financial crisis through an emergency liquidity program aimed at keeping mortgage interest rates low.

    A majority of Fed board members last month wanted to hold off on selling the assets until after the central bank lifts its interest rate target, minutes of its April meeting released Wednesday show.

    "Such an approach would postpone any asset sales until the economic recovery was well established and would maintain short-term interest rates as the Committee’s key monetary policy tool," the minutes said.

    Others at the Fed, however, want the central bank to move more quickly in unloading the mortgage-backed securities it has acquired, perhaps without linking sales to an interest rate hike. Under that scenario, the Fed would announce a general schedule for future asset sales "soon."

    With one dissent from Kansas City Fed President Thomas Hoenig, the Federal Open Market Committee at its April meeting voted to keep interest rates at between the 0.0% and 0.25% at which they have been hovering.

    "Earlier sales would normalize the size and composition of the balance sheet sooner and would unwind at least part of the unconventional policy stimulus put in place during the crisis," the minutes said.

    Fed members also are divided on the pace at which asset sales should progress after they’re launched. Some said a slow start with sales conducted over a five-year period would allow markets time to adjust. Meanwhile, others said a faster approach in which sales would be conducted over a three-year period would be more favorable.

    "In their view, a relatively brisk pace of sales would reduce the chance that the elevated size of the Federal Reserve’s balance sheet and the associated high level of reserve balances could raise inflation expectations and inflation," the minutes said.

    The Fed at its April meeting made no decisions about its long-term asset sales strategy. In the short term, however, the Fed said it would continue to allow maturing agency debt and mortgage-backed securities that get pre-paid to be redeemed without replacement.

    The Fed plans to continue rolling over its holdings of maturing Treasury securities.

    Full minutes: http://www.federalreserve.gov/monetarypolicy/fomcminutes20100428.htm

    Well this is annoying as we had such a good run that we ran out of gas at the minutes. Since the meeting was before the EU blew up, no one is putting much stock int he Fed’s nice outlook


  147. juda… You got a new partner in crime I love this type of quick trading!  So it is Exponential MA… 
    JRW does the same?
     
    Yes 1954… In fact my pivots say…
    IN 8:51 am
    IN 9:21
    IN 9:51
    IN 10:39
    It also suggests outs as well? 


  148. Hi Phil hear one more
    C having quite some Jan 11 and 12 plays the one which I do not like very much is my Jun play where I am long Jun 3 bought for 1.27 now down .87  short Jun 4 call sold for .43 now .17 How do you roll this baby. Thks


  149. Thanks Eric


  150. Mistake…. Mine says 9:54 too NOT 9:51


  151. In TNA at $51.38 ( 1/2 )


  152. Yip, Nah, JRW has explained his methods, but they are beyond my feeble charting abilities, so we just rely on JRW to give us his trend lines, and he has been very generous with his work.  Exits — yes, just as important as entries, and we use the same method.


  153. SPY May ATM straddles trading for around 2.50 with two days and 90 minutes left on them. Feels a bit like the old days.


  154. Doubling TNA at $51.98


  155. SSO/Yodi – Nothing to do really.  June is plenty of time to recover and no need to roll putter yet.  You can roll your long down to the June $38s for +$1 and turn it into a $5 spread if you want to play this as a bottom. 

    Thank you Cramer!  We needed that pep talk…

    C/Yodi – I’d just take out the caller and hope it comes back, which it will if the new regulations don’t seem to affect them.

    FOMC minutes: A majority of members favor postponing asset sales, expecting them after a rate hike which is still somewhere in the future. Most see faster growth in 2011 and 2012, and opinions are growing mixed on the inflation outlook, with some seeing pressure to come on energy and commodity prices from increasing global output.

    More from FOMC minutes: Members saw fiscal strains in Greece as a threat to financial conditions, if they resulted in intensifying fiscal consolidation in the eurozone (and a spillover effect on the U.S.). Hawkish Kansas City Fed President Thomas Hoenig was again the lone dissenter on the policy statement.

    Felix Salmon notes that Goldman (GS) shares are trading just a shade above book value and with a single-digit P/E, amazing for a company remains exceptionally profitable. But even if Goldman escapes criminal charges, it can’t get its reputation back any time soon – it has "lost its golden aura, and with it the prospect of garnering a lot of fee income going forward."

    Though there seems to be a ways to go to the bottom, Goldman Sachs (GS) sees nothing but opportunity in consumer cyclicals, upgrading Macy’s (M +0.7%) and noting "improving risk/reward profile" across the sector; elsewhere in discretionary stocks today, Whirlpool (WHR) -4.6%; Nike (NKE) -1%; Ford Motor (F) -0.6%.

    Flash crash investigations are still underway, but it’s clear that the lack of unified rules among stock exchanges played a role. When individual trades are broken down by exchange, trades were not coming from the NYSE during the moments of the sharpest drops.

    The bulls’ camp is a person shorter today, as Dan Sullivan of the Chartist mails clients to say he’s going from 100% in equities to 100% in cash.


  156. The trick is getting passed 67.91, then 68.42


  157. Phil : Bought WFR at $12.95,now $11.14 .Sold July $12 puts for $.74,now $1.64 and sold July $13 calls for $1.29 ,now $.42 . thinking of rolling puts to Oct. $11 for $1.65 and calls to Oct. $13 for $1. Your input,please.thnak you
      


  158. Good day for developing our trader’s  "nerves of steel", lol.


  159. Pharm- Are there any healthcare stocks that are close to your buy levels for a core position (not a trade)? If you already posted it on another day, please provide date…i couldnt find anything today. Txs


  160. Jazz Pharma – insiders buying the offering of stock at 8.35 (lots of it, and they own > 30% of the company).  They fell today below the offering but are now back at it.  Fibromyalgia FDA decision due in October….Dec 7.5/10 bull call spread is 85c.  I am going to sell a few Jun 7.5 P  for 40c to offset the costs.  Strong support in this area.


  161. tchay/MRK
    Good premiums as you say. – I sold a short Jan. 40′s straddle, anticipating a upward swing in the stock prior to expiration.


  162. Phil, I am long TBT Sept calls and taking a  hit , considering DD at .70….your thoughts?
    Thanks.
    Phil


  163. sns – Merck.  My posting is here on them.  I also like GSK at these levels, and BMY.


  164. 1/2 out of TNA at $52.11


  165. Sold the last 1/2 at $51.69


  166. Hi, Eric, how do you play "SPY May ATM straddles"?  What are your trade ideas?  Thanks.


  167. I have much difficulty buying into the deflation argument. With the massive amount of quantitative easing in the US ( stimulus) and the new $1 trillion of new money just printed by the EU, this WILL result in inflation down the road. Inflation is rampant in so many countries ( UK, Canada, Australia, Brazil, etc, etc, and China has a major concern at the moment), which will slide into the US, as many are trading partners. The recent upward move in precious metals, is a sentiment signal, IMO, and I have added more gold positions to my portfolio by selling AU (Anglo Gold) puts. Ultimately, it will be the fear of inflation that will move the gold positions. Like TBT, the time to invest is now, not after the inflation storm is well underway.


  168. cwan,
     
    I was just pointing out that they are expensive, due to the volatility. You could buy or sell them, and either one has about an equal chance of working, IMO (i.e., pretty much a crapshoot here).
     
    I’m now short SPY calls at the 111 line and short puts at the 112 line, but that’s just because I sold the calls against the May 106 calls I bought this morning, and sold the puts against some 116 puts I bought this afternoon. So now I’m hoping we just drift around here and I’ll make even more on those trades.


  169. MA with a big pullback: totally gave up its morning bounce.


  170. Gel – I can understand the arguments on both sides, but the real matter is wages are not rising, and CPI is falling.  Yes, sometime in the future (when that is??) inflation will set in, but Japan did not have any from my limited knowledge, and I don’t see it here.  I know there is a critical mass when it comes to unemployment, and massive money printing, but in the immediate future, I don’t see it.  Pharma is offering more discounts on prescriptions….I think all are worried.


  171. Gold is a different beast, and is acting very weak now.  On the weekly charts (GLD), there is a BIG bear candle wrapping that ATH from last week.  If GLD falls to the 20d MA on that chart, I might move into a small position (111ish)


  172. Pharm – Txs!


  173. IWM traders – anyone else having a hard time here – bouncing around too much for me


  174. Back in TNA at $51.12


  175. Guys off the airport… Cabo San Lucas here I come.  I’ll be back on from south of the border tomorrow!


  176. WFR/Dflam – Well that takes you from net $10.92/11.46 to net $10.34/10.67 so worthwhile as 10% is a lot actually and certainly worth trading 3 months for. 

    Nerves/Eric – I miss being all cash already!

    TBT/Phlit – I would not DD.  I take it you are in the $50s at .70 and you can roll those to the $42s ($2.60) and sell the $45s ($1.55) for just net .35, which is a much better use of your money. 

    Deflation/Gel – Yes but the Trillions of new money are going to cover losses taken by banks on homes that have lost their value long-term.  Those Trillions were already taken out and spent in the form of corporate profits and bank bonuses as we lived way above our means for many years.  If you have a relative who’s $200,000 in debt and you give his bank the $200,000 he owes, it’s money the bank already spent so no gain for them and your relative isn’t going to be running out and buying bling.  That’s not even what’s happening here, you have an unemployed relative who owes $200,000, you give $200,000 to the bank through TARP and they don’t even modify your relatives’ loan so he’s still $200,000 in debt with no job and you can’t figure out what the hell was the point of giving the bank $200,000 for!


  177. samz
    It is a lot of work today !! But I guess that’s why we make the big bucks !! ( Forgetting of course about SRS )


  178. Pharm – Your argument for deflation is spot on for the present conditions here in the US. Japan, as you say, is in a delationary "funk" that is never ending, however I do not believe we will be following that path. The unemployment  here is an issue, but more than this dynamic, I think the reason for our lack of core inflation at the moment is the "fear" factor, as so many typical consumers are reluctant to buy anything, as they are insecure. This will abate as the economy continues to recover, and the consumer confidence will return. The massive stimulus is out there and will eventually be "sloshing" throughout the economy, and creating the inflation, as the psychology of safety returns. The discounts we see are a result if this lack of consumer demand, but this will all reverse as the economy recovers further and rrecognize the bargains will not last forever. We have been through this cyclical dynamic many times in the past. This recovery is slower because the recession was deeper than most we have see. 2011 will be a whole different scenario than what we are experiencing today. I am a bull by nature, so my optomism could be influencing my outlook.


  179. ok, phil, i must own some TBT today, getting attractive.  what do you think?  how about Sept. 38/ long calls and short May 41 calls?  then can always roll up if  needed?  or Sept  38 long/ 41 short calls for 1.60 and selling the 37 put for 1.72 for net credit of 12 cents for the $3.00 spread with trouble at 36.88 or below ?


  180.  Have fun Yip


  181. Doubling TNA at $51.49


  182. Phil TBT cost in at 3.75 and sold some calls for a net abt 2.75.   same plan?  come on Mr stick!!!!!!!
    Phil


  183. dmankoff - RE: TBT - Look at hanna5 @ May 19th, 2010 at 12:59 pm | Permalink  


  184. I would be buying more AAPL now but my garage is full and there is no room for the car.   


  185. Whew, did it again. In the May SPY 106s (this time was at 5.90), then sold the 111s at 1.90 on the bounce. Each time I’ve sold the 111s I think I’m too early, but then we quickly reverse back down.
     
    Buy-side volume seems to be slowly increasing, and sell-side dwindling.


  186. Looks like They are trying to get back to even for the day.  A weak stick — not the Almighty Stick we once feared and revered.


  187. judah / stick
    But it may be good enough to make this the second 6 figure day for me this week !!


  188. This is all about SPX above 1115, which is almost exactly 5% below the 50 DMA.  Go back the last several decades and count the number of times the SPX has closed below 95% of its 50 DMA.  When it DOES close below… kaboom!


  189. judah,
     
    Yeah, heh. I’m starting to miss stickie.
     
    EVVV still hanging tough — only a little off its all time high. Strong chart considering what’s happened.


  190. 1/2 off at $51.81


  191. Phil/Deflation
    Interesting discussion and the point you have made regarding the movement of money into the banks when doubtful loans are paid off. The bank is the beneficiary, as the payoff is "free money" to the bank, as they have already adjusted their loss reserves to accomodate the anticipated loss. This results in a taxable gain and an increase in their balance sheet allowing them to make a new $200,000 loan to en entrepreneur that will be employing new people and spiking the economy.


  192. The other 10K gone at $52.09


  193. Phil, some advice please.
    Have the SSO May 37/38 Bull call spread discussed last week, at .78, sold May 37 put for .58, so net .20 on the position. Be patient until  Friday, or adjust tomorrow? All we need is a little pop in the market.  And how best to adjust if that’s what you suggest?
    Also long TNA stock at 55.24 (ouch!)


  194. JRW – How many shares do you move each trade…typical size?  Also, instant chat would be much quicker for tracking your input…refreshing this forum is slow…:(


  195. Man, MA is a wreck. That would have been a good short this morning, but too scary.


  196. Damn, missed by $1000 !!


  197. Cloture vote failed!


  198. Bet the funds are just waiting to dump their last shares into the final minute stick.


  199. thegoldenrule,
    What is instant chat ?
    I trade TNA in increments of 10 blocks and TZA in increments of 25 or 30 blocks


  200. Wassellc/1115.  Nice call.


  201. gel:  I think all that money the govt is printing is all going to the banks who, instead of lending, are using it to deleverage trillions of dollars in bad debt.  So the money supply is probably shrinking rather growing.
    But I think if we start going into a deflationary depression, and the Fed turns all the printing presses at full blast, the pendulum might swing hard the other way in reaction.


  202. TBT/David – Any spread along those lines SHOULD work but won’t if the Euro does collapse.  We were weak today so now we have to see how Asia and Europe hold up tomorrow.

    TBT/Phlit – Same plan but TBT may be very slow in getting it together.

    Banks/Gel – Actually, they never marked down the loan in the first place and, through derivatives, they have tens of Trillions of losses that cannot be made up by the siezure of citizen’s assets.  The "profit" in this came has already been taken out in bonuses so I guess Lloyd’s new apartment is a plus from the bailout and also in excess commodity prices as they ran up 4x on the basis of a false economic boom that turned out to be smoke and mirrors.  The money was shipped out of the country at a pace of a couple of Trillion a year and, of course, a lot of that money was sucked up by governemnt in the shape of income and property taxes, enabling to pretend to be able to afford massive tax cuts and equally massive wars while growing government the most in history and running up record debts that could never have been considered rational if the true value of the economy were actually known.  Other than that, yeah, it’s be a great boost…  8-)

    SSO/Jbur – If we are down tomorrow then maybe consider a roll but $37.90 is hardly a place to be moving it around.

    MA/Eric – That was one crazy day! 

    Cloture failed you would think the financials would be happy.  They sure paid enough to get that vote.

    Godenrule – You do know you can hit F5 to refresh right?


  203. JRW – Instant chat is any program, such as the free Microsoft Windows Live Messenger (windowslive.com/desktop/messenger), that allows your "chat" to appear "instantly" after you hit the return key.  There are many free versions.
    With this forum chat, I can’t keep up with you input as I have to constantly fresh the screen…and it takes a few seconds to reload, especially as the forum grows from morning to evening (more graphics/words to refresh).
    Man, what I wouldn’t pay to shadow you on your trades, phil on his options, etc…just like the shadow trader option on Interactive Brokers…where you can here you guys talk, instead of trying to refresh and read.  Although having an instant chat would probably be just as good…
     
    By the way, amazing calls today, I can confirm your entry/exits today…almost flawless.  I’d love to learn you methodology…


  204. Interesting take on inflation prospects.
    http://www.reuters.com/article/idUSN1815559420100518


  205. Damn, forgot to reload and replied to a real old comment. Sorry, ignore.


  206. Still getting green shoots but now no one cares:

    CoreLogic’s index of U.S. home prices fell 0.3% in March vs. -1.7% in February and +1.7% year-over-year. "The housing market is continuing to exhibit signs of stability," says CoreLogic economist Mark Fleming.

    The U.S. economy is showing signs of recovery, but the "math doesn’t add up" on government spending, Google (GOOG) CEO Eric Schmidt warns. "It’s clear the U.S. will have a good recovery in corporate profits," he says, "but companies won’t hire a lot of new people."

    Visa (V) and MasterCard (MA) "inevitably" face caps on credit-card fees now that the Senate has voted to curtail what the industry charges merchants on debit-card purchases, analyst Chris Brendler writes while still praising their stocks – "discounting unrealistic, bear-case regulatory scenarios, while fundamentals (i.e., payment volume growth) continue to improve."

    "We’ve decided that [the big banks] are bad," Chris Whalen says, "but the banks that don’t have trading books are going to trade off too." So he sees opportunity in banks who "don’t depend on sales trading to make their earnings number." Examples: US Bancorp (USB), BB&T (BBT).

    Autodesk (ADSK): Q1 EPS of $0.29 beats by $0.06. Revenue of $475M (+11.5%) vs. $437M. Shares +3.4% AH. (PR)

    Applied Materials (AMAT): Q2 EPS of $0.22 beats by $0.01. Revenue of $2.3B (+24.3%) vs. $2.2B. Shares +0.2% AH. (PR)

    Aruba Networks (ARUN): Q3 EPS of $0.08 beats by $0.01. Revenue of $69M (+50.7%) vs. $66M. Shares +2.9% AH. (PR)

    Gymboree (The) (GYMB): Q1 EPS of $0.99 beats by $0.02. Revenue of $253M (+9.5%) vs. $254M. Shares -3.2% AH. (PR)

    PETsMART (PETM): Q1 EPS of $0.46 beats by $0.03. Revenue of $1.4B (+5.1%) in-line. Shares -0.2% AH. (PR)

     

    But then again, some things are still going over the ledge:

    American Apparel (APP -40.5%) shares plunge after the company says it may violate its debt covenants based on existing business trends and that it is delaying filing of its quarterly 10-Q with the SEC.

    Washington Mutual (WAMUQ.PK) and the FDIC expect to reach a settlement by Friday to resolve their legal disputes, a key to ending the bankruptcy stemming from the biggest-ever U.S. bank failure.

    The U.S. needs to learn lessons from Europe’s woes, Paul Volcker says, as he warns of the need to address long-term budget problems such as "the sustainability of our commitment to growing entitlement programs." On the euro: "I think these fluctuations, frankly, are excessive."

    Market recap: Stocks limped through a session plagued by worries over Europe’s potential impact on U.S. business and uncertainty over financial regulation. Companies that could be hurt if the euro keeps sliding, such as Caterpillar (CAT -2.8%), Boeing (BA -2.2%) and DuPont (DD -0.7%), were among the weakest performers. NYSE decliners outnumbered advancers 3 to 1.

    At the close: Dow -0.63% to 10445. S&P -0.52% to 1115. Nasdaq -0.82% to 2298.
    Treasurys: 30-year +0.05%. 10-yr 0%. 5-yr -0.13%.
    Commodities: Crude +2.15% to $70.9. Gold -1.82% to $1192.50.
    Currencies: Euro +1.5% vs. dollar. Yen +0.82%. Pound +0.59%.


  207. Phil,
    Is there a faster way to post here ( instant messaging ) ?


  208.  Phil, 
    As you requested, I am reminding you about the positions I want to get some feedback on: TBT, ANH, NZT, UCO, CHY, AMZN, C, EXC--specifically I am down between 12%-30% on all of them, so what would be a good option strategy to make some of the losses back? 
    Also although I have been reading diligently all the posts and commentary I was not able to ever find the buy list from Monday (maybe a good thing?) are you still recommending buying after the last 2 sessions?
    Thanks


  209. JRW & Phil – I can research some ways to integrate an instant messaging service.  Microsoft messenger is one that might work.  If possible, sent me an email @ thegoldmanrule@gmail.com


  210. Phil, JRW, Goldmanrule/instant chat. What would really benefit us would be one of those set-ups where you can see another person’s trades real time.  That way, JRW wouldn’t have to post his trades — we’d just see when he is making his trade.  Phil, JRW, you could sell a subscription service to that like Today Trader does. 
     
    Here is how their set-up is described in a NYTimes article:
    The company charges aspiring traders $199 a month for a live, real-time view of Mr. Lindloff’s computer screen, along with the running banter, commentary and advice that he and Mr. Gomez provide through the morning. (After lunch, it’s just Mr. Lindloff.) The service is billed as a chance to look over the “virtual shoulder” of two veteran stock traders, but you don’t really see anyone’s shoulder. It’s more like staring at the instrument panel of a jet while eavesdropping on the pilots, plus the ceaseless tap-tap of a keyboard.


  211. Instant messaging/JRW – No there is not and we’ve tried various formats and like this one best.  Many people stop by during the day and like the fact that you can just hit F5 and it refreshes the page from where you left off, then you just scroll down and read the new comments, make a comment and done.  I do that myself, if the chat were "moving" and refreshing itself – it would be a nightmare to keep track of. 

    Microsoft messaging/The gold – If JRW wants to experiment with a messaging thread, that’s fine with me.  Perhaps you can show me what one looks like in action?

    Stuff/Amatta – Generally it depends on where you are with the positions, how badly you want to stay in it and your willingness to DD down the road.  All those factor into what you can do to "save" the positions. 

    • TBT we think will come off these lows so I’d sell puts but I wouldn’t sell calls until they hit at least $45.
    • ANH is a very dangerous stock but they pay a fat dividend so it’s a tough call but they are pointless to sell options against unless they happen to be right on a strike, which makes them bad for our purposes. 
    • NZT is also fun because they pay a 9.6% dividend but, other than that, why are you in them?  Are they growing (is there even anyone in New Zealand who is pregnant this week?).  They are an ADR and don’t have well-reported financials so it’s pot luck on them.
    • UCO is interesting NOW as oil is low.  Sucks if you had them a week ago.  I’d convert 500 shares of theoretical stock at $4,750 to 10 Jan $7.50/12 bull call spread at $2 and sell 10 Jan $7.50 puts for $1.25 so that’s net .75 for 10 contracts with $4.50 of upside at $12 and the worst thing that can happen to you is you own 1,000 shares at net $8.25 (now $9.49).  Of course oil COULD drop to $55 so you may want to JUST take the 10 bull call spreads and sell puts IF we get a huge drop only as making $4.50 from $2 on 10 contracts is a nice $2,500 anyway and your break-even is $9.50, which is where we are now.
    • CHY is another nice dividend paying thing.  What are your top 10 holdings in that fund?  What caused them to drop almost 20% last week?  Why did they lose $350M last year and what steps has management taken to address the situation?  Who is management?  What is the fee burn of this fund?  Does it bother you that they have $2,000 in cash and $266M in debt or that their long-term investments fell 50% last year?   Can you answer any of these questions or is this another totally random casino bet placed because it has a shiny dividend? 
    • AMZN – Don’t they compete with AAPL?  We’ve never liked these guys over $100 and we’ve actively shorted them at $140.  If you are dying to stick with them, you can sell the 2012 $125 calls for $30.25 and the $95 puts for $15 and that would drop the current $125.25 stock price down net $80/87.50 and you make a nice 50% if called away at $125 so not a bad way to be bullish on them at a price I do approve of. 
    • C is a crazy stock.  The only way we like playing them is to hope they don’t go bankrupt and take the 2012 $2.50/4 bull call spread at .75 and sell the $2.50 puts for .50 and that’s net .25 on the $1.50 spread so you make 500% if C manages to hold $4 through 2012 or you end up owning C for net $2.75.  You can also play this more aggressively by selling 1 $5 put for $1.85 for each 4 spreads and that would knock out 40% of your margin and raise your cost to .30.  That means if C is at $2 in Jan 2012, you own 100 shares of C at $5.30 with a $3.30 loss vs owning 400 shares of C at $2.75 with a .75 loss but, if they go BK, you lose 1/2 as much with the 100 $5s.
    • EXC I think I did earlier, right?

    Virtual trading/Judah – I couldn’t do it because of the fund but if someone wants to experiment with it they can but I will warn you that trying to day-trade where not only do you have dozens or hundreds of people stampeding in and out of positions together but also allow a clever fund vulture to watch what you are doing and take you all to the cleaners is a recipe for disaster.   It might be doable with very liquid stocks but with options, it would be a mess.   We already move the markets with dozens of people making the same trades in high volumes – if you narrow it down to the same dozen trades at the exact same time, I don’t think it will go well. 

    Does financial reform move America away from a nation of laws toward a nation of men – politically connected ones? The Senate bill still allows the FDIC to play favorites among the creditors of a failing institution undergoing resolution. Granting the power to provide risk-free investing to favored institutions opens the door for political mischief and "fundamentally incompatible with a market economy."

    "Here a swan, there a swan, everywhere a black swan," laments Reformed Broker, who hopes it’s a major contrarian signal that he’s "never seen so much certainty in so many places of a coming crash."

    It scares me when I agree with Cramer: "The market is prepared for Lehman II… and if you don’t get a Lehman II, and all you get is a slowdown, our stocks may not be so horrible," Jim Cramer reasons. He hasn’t seen anything yet to justify the big drop in P/E ratios, which means stocks might snap back. "Something bad has to happen soon… or else the [U.S.] market’s going to go higher."


  212. kinkistyle…. I do not believe your analysis to be the case. The banks have received TARP money, which is a loan, and additionally, they borrow from the Fed discount window which is also a loan. The only banks that have been supported otherwise are the  banks that have been given an equity injection, such as C, and that equity is currently being dispersed and shifted into the equity markets. The fed discount window… yes… it helps, as these loans are at a level far below the bank’s typical loan interest rates.
    My scenario regarding quantitative easing is separate (stimilus), as the congress passed almost $2 trillion of of this stuff within the last 12 months.and none of it was targeted toward any banks. – so it has, or will be, dispersed into the private sector for the stated purpose of energizing the economy.(banks excluded).


  213. Worst earnings season EVER!

    For the last ten trading days, the S&P 500 has been playing a game of Pong between its 50 and 200-day moving averages (DMA). After breaking and closing below the 50-DMA on May 5th, the index made a beeline for its 200-DMA before bouncing. That rally was stopped dead in its tracks at the 50-DMA, and now once again the index finds itself testing the 200-DMA. It would be one thing if the ‘bouncing around’ was within a range of a couple of percentage points but with a current spread of over 6% between the 50 and 200-DMA, the volatility is a bit stressful for investors.

    Now THIS is a Buy List!

    While markets are currently fixated on the economic troubles in the Euro region and its potential to derail the US economic recovery, not everything is negative. For starters, mortgage rates continue to decline giving investors another ‘last chance‘ to lock in a mortgage at low rates. Last week, we noted that the national average for a 30-year mortgage was down to 5.0%. As of Friday, that rate continued to decline, finishing off the week at 4.97%. Lower interest rates equals more money in consumers’ pockets.

    In addition to lower borrowing costs, consumers are also poised to see lower prices in their daily purchases of food and energy. With the exception of gold, nearly every commodity has been falling in price as the dollar has rallied. In the chart below we have calculated the cumulative daily price change of the major food and energy commodities in the CRB index (Corn, Soy, Wheat, Cattle, Hogs, Oil and Natural Gas) since the beginning of 2008. We then multiplied the changes by the annual per capita consumption of each item. While this method may oversimplify the actual costs, it provides a good idea of how changes in commodity prices have impacted consumers’ wallets over the last two years. When the line is in the green zone, changes in commodity prices are acting as a tax on consumers, while levels in the red region are considered a windfall.

    As shown in the chart, since its low in March 2009, rising commodity prices were slowly eating away at the windfall consumers had built up from the downturn in commodities from their 2008 highs. In the last several days, however, that trend has reversed, and the windfall to the consumer has improved to $2.50 per person per day. So lower commodity prices should ultimately make wallets a little fatter.

    click to enlarge

    The double whammy of positive trends is also coming at the same time that the US job market is improving. Sure, employment hasn’t seen the type of rebound that anyone would consider strong, but it is trending upward. Combining these three things together gives us a scenario where Americans are spending less on housing, less on food and energy, and less time looking for work and more time working.


  214. Messaging Service….. I’m not for it – I want to know what kind of car he is acquiring, so I can buy it from him used. I do not believe you are able to ask questions that might be relevant. The dialogue is as important as the data.


  215. Phil
    The current earnings season reflects 65% of companies reporting BEAT their earnings estimates. How can this not be positive? The S & P is down 6% during this period, so the foreign news notwithstanding, the market should be set for a rally, based upon this positive news.


  216. judahbenhur, thegoldmanrule, et. al. — These "suggestions" regarding JRW are getting unwieldily. If everyone keeps requesting/demanding more, he might just decide it’s too much and quit posting his lines and trades. I think that he is already being more than generous with his time and expertise.
     
    JRW made approx $99,000.00 TODAY! What does he really need with a subscription service where he is paid $200.00/month per person?
     
    I already appreciate what he does everyday. He has helped me understand his method as well as make some nice profits. I don’t need more from him, I just hope he continues.  Asking for more may be asking for too much!  JMHO …


  217. diamond/jrw  Sir, you are correct, he needs that time to count those dollars!  :)


  218. Phil – C – I’ve been holding this C leap vertical since recommended way back since Aug 09:  Long Jan’11 $5 Call (1.65, now .31) , Short Jan’11 $7.50 Call (.93, now .07). Any adjustments or continue to hold? Thanks


  219. I am Missing a lot of the fun here lately.  Not intentionally.  Got a massive business headache that is occupying far too much of my time for far too little reward.
     
    Barely finding time to trade (perhaps just as well; its tough sledding).  Getting some in. 
     
    Will try to catch up on the comments.  Need to see how much JRW is making so I can pound my head against the wall.
     
    Great job JRW; i see the 99k above; holy cow.
     
    And iflan w/ his AAPL trades; hope that’s still working as well.  Hell, I made $300 on AAPL today; Woop de damn do !


  220. Lots of energy names on super duper sale (i think) BTW.
     
    HK HAL ATPG BEXP EXXI EOG etc etc
     
    And, Pharm, I keep saying to look into EMIS.  Back over $3 today (remember 70 cents Phil ?).
     
    My sources say the NVS note solution may be a done deal and will not need another extension (find out next week).
     
    Another source has been telling me $10 by end of June (hard to see that, but you never know and that would make me JRW happy).


  221. Phil  would you still recomment the same as you recommended below or shoul we adjust a little tp the 2012 40/60 spread and what put do we sell thks
    TBT is a simple bet, we don’t think rates will go lower.  Over the past 15 months rates have stayed down around 0-0.25% on the Fed and TBT has gone from a low of $42.24 to a high of $59.75 but, on the whole, has gone nowhere at all in 15 months.  That would suit us just fine if we sell the 2012 $40 puts for $4.25 with $2 in net margin for our troubles.  With $4.25 in hand there is no need to be greedy so we can buy the 2012 $45/65 bull call spread for $5.25 and we’re in the $20 spread for $1 with a lovely 1,900% of upside potential if rates run away.  $1,000 buys 10 of these spreads and your downside follow-through is to roll the puts to 2x longer $30 or maybe $20 puts but that $1,000 returns $20,000 real dollars if rates move up 20% over 2 years - figure to about 6.5% for a 30-year.  If you have an adjustable loan and want to hedge it, this is a nice way to do it. 


  222. JRW
    You are a success story, and you made the investment in research, experience and cash at risk. No reliance on luck. I commend you for your willingness to share your expertise. This thought came to mind last weekend, as I was looking over the emerald waters of Lake Tahoe, and sipping some Sonoma Coast chardonay (Keller Estates), and thinking JRW might be indulging in the same wine from the winery down the road from his home.


  223.  Pharmboy
    Know anything about Curis? This hedgehog pathway seems interesting and appears to be getting a lot of attention. 


  224. Diamond et. al./JRW.  Well, it was just a thought based on something I read.  I agree with you.  I’ve been trading with JRW for many months and appreciate all he does.   I trust JRW will tell us when we are becoming a burden.  See you all tomorrow.  :)


  225.  If I remember correctly JRW likes scotch.   
     
    JRW , thanks for all of your posts.  Remember you earned that color , so wear it proudly!


  226. JRW – man you have become quite the celebrity here at PSW.  Just remember who first noticed you and called you "Money".  Best wishes my friend.
     
    PS – can I have a bailout….oops, I mean loan.


  227. Many thanks to all; I am fine the way things are, I just wanted to make sure there wasn’t a faster way to communicate based on today’s input.


  228. Phil,
    Buy PFF stock (7% dividend) and sell Oct.. 36 calls and puts ($1.20/$2.65)… (furthest options they have out right now). What do you think? Also may be one to keep in mind for the buy/watch list… some Europe exposure though.