Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Fuhgeddaboutdit Friday: This Week – It Never Happened!

That's right – yoos guys didn't see nothing this week.

If anyone asks you, nothin' happened this week and you don't know nothin' about no crash.  I mean, what crash, right?  We got those markets higher than where they were last Friday (don't ask how) and if anyone tells you anything different just tell 'em to come see me and Lloyd and we'll tell 'em the way it's gonna be.  Goldman who?  Euro what?  Financial regulation where?  You know what your problem is?  You worry too much!  It's not like the World is gonna end until 2012 so why not live a little? 

Sure the Banksters are using accounting tricks, including (according to the WSJ): Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup that "have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public, understating the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods. "

Well who cares as long as it makes things look good, right?  That’s the lesson we are all meant to take out of the already forgotten about financial crisis of 2008 – it’s only a crime if you get caught AND you are found guilty AND there is a penalty that exceeds a day’s worth of earnings.  Other than that – Fuhgeddaboudit! 

The Chinese are bailing out the Americans (who are bailing out their banks and the IMF)  and the Germans (who are bailing out their banks and the IMF and the EU) and the Saudis (who are bailing out their banks and the IMF and Dubai) and the EU is bailing out Iceland and Ireland and the IMF is kicking in a little something to grease Greece along with Spain, Italy and Portugal and, once they are on their feet, I'm sure they will bail out the Baltic States and Eastern Europe before it's time to bail out France and the UK and once those guys are all bailed out, bailing out California, Michigan, Illinois and our beloved New Jersey will be a snap and then we can all toss Japan a few dollars too – Fuhgeddaboudit!


Don't you worry your head over this chart here.  We made all that other stuff go away and we'll make the chart go away too.  The fix is in, I tell ya.  What did I say on Wednesday?  I said "THEY" ('cause my lawyer says not to say "WE," in case someone is listening, if you know what I mean…) were flushing out the suckers to clear the decks so "THEY" could (and I quote): "buy the SPX overnight and pump us up for a big finish so they can get back to cash on Friday and book it."  And that's what happened.  Are you surprised?  I'm not surprised – how could I be surprised?  I told you it was gonna happen!  In fact, On Wednesday morning I even painted you this picture:


Under this picture I told you: "screw the fundamentals today, it’s all about retaking those blue lines (20 dmas) by the end of the week."  End of the week is here and how do the charts look this morning?

See, the fix is in.  Oops, I meant to say – See, it's all fixed or at least fixed enough to bring in a fresh round of suckers, the kind who didn't go to Church with us yesterday as we prayed during Member Chat into yesterday's close:  "Dear Lloyd, lead us not into temptation.  We are weak and we fall for these low-volume pops every time.  Keep us on the path of the well-hedged and light our way with solid floors we can use as stops when thy will be done – Amen….

In fact, yesterday's fireworks inspired us to get back into the insurance game and we flipped a little bearish right into the close by buying back 1/2 of our short DIA June $103 puts as we got a buck from them already.  That's our overriding "Mattress Play," that helps us flip from bullish to bearish on the fly.  We hit our goals of 5% runs, especially when we consider the S&P Futures bottomed out at 1,055 Wednesday night while our boy Jim was predicting Dow 9,500 and sending those lemmings of his off the cliff in after hours trading.  That allowed our man, "THEM" to BUYBUYBUY those index contracts and 5% over that mark is 1,107 and, wouldn't you know it – we hit 1,106.75 in the Futures this morning when "THEY" (coincidentally, I'm sure) bolted for the exits

Nasdaq futures bottomed at 1,783 and this morning they bailed at 1,874 – two whole points over 5% and the Russell was also popped over the 666 5% line (from 634 Wednesday night) by 5 points before someone pulled the trigger but, as we know, the S&P is our button man.  Someone (I don't know who and, if you ask me, I got a guy who says I wasn't there) bought the Dow futures at 9,828 while the sheeple were selling and they got out at 10,277, which is less than 10,319 (the 5% mark) but you know – the Dow – Fuhgeddaboutdit…

I'd talk about fundamentals this morning if they mattered but the game is over for the week.  May is over, whoever wanted to pop 5% at the end of the month is long gone and all the suckers are left holding the bag into a long weekend.  Like any good mob fans, we've got our bags of cash on the sidelines and we'll see which way the wind is blowing next week but this weekend, we're going to have the family over and, as you know, nothing is more important than the family!   

Our boys are working overtime and Personal Income is up 0.4% but we ain't spending none of it and Personal Spending is up 0%, nada, zip!  The Feds thought they could squeeze 0.3% out of us but we gave them the slip and held onto our money.  We get the May PMI from our friend in Chicago at 9:45 and then our boys in Michigan check in with the word on Consumer Sentiment, also for May.  PMI should be flat around 60 but if those consumers don't cheer up with a 20% drop in the oil vig – then watch out below!

Have a great holiday weekend,

- Don Phil


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Oh yes……how nicely all the pieces of this puzzle are fitting together!! 
    Problem is, that cute graphic has a striking resemblance of a category 5 hurricane.  Do you think all the pieces will hold together when the storm reaches the coast, or will they be ripped apart and spiral out of control as the eye of the storm consumes wall street?

  2. Dumb questions of the day!

    What is Permalink?
    Is there a setting on this site that has the comments listed from newest to oldest?  Currently my settings list oldest to newest which requires scrolling to the bottom after refresh.  I noticed yesterday that my I-Phone has the comments listed newest to oldest.
    What is the significance of the members who comments are listed with colored borders?

  3. oncmed
    May 27th, 2010 at 12:51 pm |
    EXEC  – U got SSPro?
    oncmed/ Yes I use SS Pro.

  4. Exec/
    Permalink does nothing except a quick screen roll to "Leave a Reply"
    It is not a dumb question, I had the same for a few weeks until I gathered the courage to click on it :)

  5. Phil,
    I’ve been gorilla trading for the last year or so using ETF’s.  It seems that most of the members are trading options, (something that I’ve never done) so I’ve found it difficult to track the trades that are frequently discussed in this forum.  I completed reading Sage’s Book, and while I’m still somewhat confused about the entire concept of option trading, I have a better handle on it than I did before.  Sage indicates that "collar trades" should be the foundation of a portfolio.  Do you follow this advise?
    The idea of 20% returns with a relatively safe investment is definitely appealing.  I still find the entire "collar trade" concept confusing, so I’ve come to the conclusion that the only way to learn fast is to open a position or two and sink or swim.  I’m all cash at the moment and was thinking about starting with 50K.  Could you recommend a collar trade or two that you would typically buy into?

  6. How do I see yesterdays’ posts?  and the Buy list where is that please?

  7. Gulf Oil Spill…..T. Boone Pickens was on Larry King last night.  Pickens is an oil man.  King asked him whether the ‘top kill’ would work to stop the oil flow.  He said "Probably not.  It’s a long shot."   He says this problem will only be solved by the drilling of relief wells, which I think has already begun, and that a month from now the oil will still be flowing into the gulf from this uncapped well, most likely.  Not very encouraging.
    On a different note.  Phil, why are you not that bullish on AAPL right now?  They can’t seem to make their products fast enough, as consumers line up and yank them off the shelves.  Forward P/E is 16.45.   New products are in the pipeline.  What’s not to like? 

  8. dman – click on Phil in the Names above and scroll down to yesterday’s link.  Buy list is under portfolio tab, but I think that one is a Watchlist.
    Speaking of depressing

  9. Speaking of the oil spill.  I’m shocked that they raised their estimates yesterday regarding the quantity of oil that has flowed into the gulf.  Who would think that BP would down play the event by low balling the numbers.  The good news is they were only off a few million barrels, if it was the government, they’d be off by a few billion barrels a day.  I wonder if the person that estimated the number of barrels spilled is the same guy that places the 70% chance of "top kill" process working?

  10. Phil — I am new member…. I totally misunderstood the 2X ETF and I am in FXP for 200 shares with Break even of $180(factoring in reseverse splits).. i enough pretty bad.. any suggestions on how i can structure some options play to bring down my BE so i can exit with a smaller loss? thanks!…dave

  11. Pharm,
    Cheery artilce.  Echoes my thoughts.  Perhaps we push a little higher.  Then look out below.

  12. jrw….same levels as yesterday?

  13. Pharm,
    Cheery article.  Echoes my thoughts.  Perhaps we push a little higher.  Then look out below.

  14. Paul F the author of that article is one guy that’s been speaking the truth for years.

  15. Lionel/iflan – the permalink is useful when you’re ready to refresh the page and don’t want to manually scroll back to where you were before refreshing the page. If you click a permalink then refreh it’ll take you back to the same comment on the page.

  16. Good time to mention the leave a reply box doesn’t work on an iPad

  17. SS, What are you looking at this morning?  I bought some TZA pre-market.  I should probably put a stop order where I bought, leave and come back in the afternoon to close it out — but I know I won’t.

  18. Kwan/
    Thanks for the tip
    So it wasnt a dumb question at all!

  19. juda nice call>>>based on what?

  20. judah – not in anything at the moment.  Just amazed at how mind bending this market has become

  21. VVUS – trying to get the Sept bear P spread 11/7.5 for 1.60.  They are moving up on the 5d MA, and I think it should fill if we are patient.

  22. I’ve been obsessing over this chart lately:

    When I compare it to the 2006-present Dow chart, it lines up pretty well — its only skewed by a month or so.  Even the mini head and shoulders top on the right shoulder of the larger Head and shoulder top line up well.  Unsettling really.  
    Also interesting to check out this blog that lists all the news on a daily basis from the 30′s:   
    Never hurts to bone up on some history.  It HAS been known to repeat itself on occasion… 

  23. FYI: A permalink, or permanent link, is a URL that points to a specific blog or forum entry after it has passed from the front page to the archives.

  24.  MEE broke above downward trendline resistance, backtested the line 32.70

  25. Kink I’ve been examining to phenom for years..
    Check out this site,.

  26. SS,  I know what you mean.  The past couple of weeks have felt like that final, panicked scene from Trading Places.  (I know Phil has the clip.)

  27. lionel
    Before waiting for my question on DIA mattress this afternoon it looks to me the DOW will go down before the end of the day due to long week end if not for an other bomb shell. So waiting for Phils recom I am thinking of selling some Jul / Jun 103 puts in the close.

  28. SS, JRW, JUDAH,
    I have to give you guys a lot of credit. I don’t know how the hell you day trade, read the blog, post, watch your portfolios, analyze what the market is doing, analyze what Phil is saying etc, etc. I can barely keep up with the reading, and my positions. I find that if I am day trading I can’t seem to get ANYTHING else done. Not to say that I don’t do it occasionally. And thank for all the great comments.

  29. Keep in mind that these bearish prognostications (like the one Pharm links to) have been rally fuel for the last 15 months. I’m not saying they are wrong — long term I think they are right. But the market is unlikely to break down when everyone is all lined up short and ready for it.

  30.  CC up

  31. I think we might get a bounce at 10,200 with low volume stick.

  32. lflantheman 
    Good morning I am following your GOOG play. Trusting you do have your long OCT caller in place, please give some advice when it would be a good time to look at starting a new opening and how much ITM. thanks

  33. jbur   You just  can’t do everything this site offers.

  34. Oh what an ugly open!  Still it was nice that we didn’t tank in pre-market, wasn’t it? 

    666 is the line in the sand on the RUT.  Our trading range was 620 to 660 but 666 does keep turning up like a satanic penny in both directions so we’re going to have to see that to get bullish (assuming we ever get back there). 

    What we have here is a test and rejection of our bottom levels so now we’ll see what can be held now that the manipulators have taken their exit this morning:

    • Dow 10,200 to 10,650
    • S&P 1,100 to 1,155
    • Nasdaq 2,225 to 2,350
    • NYSE 7,000 to 7,250
    • Russell 620 to 660

    As alsway, 3 of 5 over and we can risk bullish bets but not below so the Dow is our swing index but they are the least meaningful indicator so we really NEED the S&P to confirm a move up and it’s very unlikely the RUT can break their upper band if the NYSE can’t hold the lower band.

    Chicago PMI is 59.7 (I said 60) but it seems to be disappointing people as it’s down from 63.8 in April but maybe those people weren’t watching the markets this month?  How could you possibly expect an improvement from 63.8 with the market dropping 10%???

    I’m into neutrality over the weekend.  The EU needs to get another week under it’s belt without any major incidents to calm things down and we really need to see the Euro hold $1.25 (now $1.234) before we can feel comfortable that international markets will stabliize.

    Meanwhile, the people selling gold on TV outnumber the people buying gold on TV by about 100 to 0 at the moment.  As I said earlier in the week – don’t go being the 1 guy buying the gold!

    We’re right on the line of last Friday’s close at 10,193 but we got to that close on a 75-point stick save into the close. 

    Michican Consumer Sentiment came in at 73.6, up from 72.2 last month on a 20% drop in oil that’s already been reversed and consumers aren’t spending money even with that drop.  This is not a good thing!  

    Cash is still king.  Let’s let ourselves be pleasantly surprised to hold our levels but also ready to find real bottoms next week.  As I said yesterday, I expect to consolidate down here for quite a while so we’re not in a huge hurry to buy too much and we have so many good prospects (WFR still $11.43) that it pays to be cautious. 

  35. Pharm, I know you’ve spoke about PDLI many times (I think your last article you mentioned a competitor) but do you like them down here? My thought process is August 4.5 calls have very little premium and they should get a bump up during that timeframe b/c they are paying their .50 dividend in Sept? Your thoughts?

  36. Yodi/Mattress
    If you start asking the afternoon question at 9.55am, then I d better leave my screen and head off for a game of golf with JRW :)

  37. stockbern:
    No doubt about that… Phils Stock World isn’t a world, it’s a whole complex universe

  38. Phil – Math/Chaps/Homer Simpson on Fermat’s Last? I am only familiar with is theoretical work on donuts. 
    Does Andrew Wilkinson’s note on the BK bullish options play make BK bull call spread Jan 12 25/30 and sell a J12 20 put for a net $.30entry on the $5 spread? The stock was below $20 for a few days in March 2009.

  39. Yip, Based on our collective disbelief that the market kept moving up the past hour yesterday, that people would wake up this morning feeling as if they had been on a bender, that Phil expected us to at least retest Dow 10,150 and SPX 1195, and that the market was not up of down 2% premarket (so I didn’t feel like I had already missed most of the move).  So, I got out when SPX retested 1195.

  40. Damn, looked away and missed the green cross at 9:55

  41. Phil,
    A new member, following the site as non member for a couple of  months.
    Been in 90% cash since April end. Love AAPL, sold 95% of it from my portfolio 4 weeks ago at around $255-257.
    What’s best way to get in? Have about $2.5M (total) to put to work… before the market leaves town
    Buy AAPL July 130 c for $103.50?, sell the July 260 c for $11 and stop out at $230? This provides no downside, and 14% upside in 7 weeks.

  42. Good Morning Phil,
    Thinking about selling RIG, Jan 2011 60 put for 11.50.  What do you think?

  43. Yip, meant 1095, of course.

  44. Exec – was just responding to your symbol deletes….if you still need;  under file you can just load a default layout (e.g. trader.lyt) and it will have a sample list of symbols for exchanges…

  45. ss: no news from you ?
    on IWM, pivot is 66.56
    R1,R2 67.69, 68.27
    S1,S2  65.98, 64.85.

  46. Good Idea Lionel

  47. ss: it went to the close of yesterday and now what ?
    From the pivots, we are in upside territory.

  48. Watching the drama on the oil spill on Bloomberg every day I sent out an email of my idea to stop the leak.
    Dear Sirs,
    Watching the daily life TV on Bloomberg TV can be very frustrating.
    I can understand you will have millions of wild suggestions and I trust no solution.
    The idea of pumping cement in to the tube outflow could be more productive on a vertical tube but it looks like the tube is bend further up on the ocean floor resulting that the injection of cement will be hampered by the bend as such.
    My suggestion is as follows
    First slide a some what larger steel elbow over the open end of the pipe lying on the floor. The side of the elbow which you slide over the broken end of the pipe should be like a fennel making it easier to slide over and by reducing the leakage of oil. By sliding the elbow over you have the other end of the elbow in a vertical position to the ocean floor. Up to now you will not be restricting any out flow. The vertical part of the elbow should be fitted with a quick turn connection.  The second step is fitting a Y or T type connection to the vertical part of the elbow. The both legs of the fitting not connected to the elbow should be fitted out with closing valves. Both open at this time. Once the Y or T is fitted to the elbow close the most vertical part of the Y or T and allow the oil to flow out to the side. Having the vertical out let of the Y or T closed the outflow the oil can now only go by the side. Now we fit extension tubes on the vertical part of the fitting . Once fitted, obviously all ends of tubes and T or Y should have quick lock fittings to allow the robot operation possible. Once the tubing eventually going to the ocean surface is fitted, close the open end Y or T and the oil can be pumped to the surface.
    I trust my suggestion will help.

    Phil – any thoughts on profiting from this prediction of for-profit education reaching it’s limits?

  50. RMM – I have to leave for the day in a few minutes.  Have a good and safe holiday weekend everyone.

  51. Jud
    Knew what u meant… Thanks and good call hard to argue with those facts

  52. oncmed/ got it.  Good looking out!!!

  53. ss,  Have a good weekend.  Thanks for all of the input.

  54. Hello Maya1,
    Welcome, I like your AAPL trading ideal.

  55. yodi – like

  56. The morning’s bad news is getting bought. Credit cards looks ready to go green.

  57. PDLI/Jro – yes, and buying the stock and selling a strangle is best.  I think they are a takeout candidate at these levels for Roche, but time will tell.  They have a bunch of things in the pipe with PFE, LLY, Roche etc.  Unfortunately, many companies are ploughing money into biologics…..

  58. Sorry Maya1, miss type, AAPL trading idea.

  59. Gold miners got bought quickly this morning too. That’s fragile and may reverse back today, but still very bullish action there.

  60. ss: have a nice weekend and holiday, hope they plug the oilleak otherwise it will be an ongoing nightmare with enormous consequences.

  61. Maya1 – Phil answered your question at the bottom of yesterday’s post.
    See "Permalink:"

  62. RMM, judah – just wanted to leave you with a live shot of the beach just a few hundred yards from my beachhouse.  Let’s hope it stays looking like this.  Scroll down to see it.

  63. Phil: my TNA jan C35/55 spread and jan Putters 35 is supposed to remain untouched until Jan.
    Its not a question of greediness at all, but to get this off my books would be desirable.
    With the endless up and down, is there a not too risky way to close this sooner than Jan ?

  64. Diamond, Good reminder!
    For new folks: Phil usually posts an early morning post on the previous day’s board before the the current day’s article and board is ready. That didn’t occur to me for a couple of weeks.

  65. HK players, we half-covered yesterday and today you can get $1.20 for the 19 calls so I’ve moved to full cover for the weekend. 

  66. Morning Pharm – I asked you abt THTCF recently. Check them out today. Fortunately  i have 8400 shares (thanks to a money manager). I should just give him all my money and go do good stuff.

  67. Jbur, and other new members:  The reason why this stuff seems like it is moving fast is because it is.  Moment to moment people are making decisions that influence your decisions.  It can be hard to keep up.  I ran a prop group trading fixed income options for years and whenever I got back from a long vacation it took a couple days just to get back into the rhythm and I had years of experience.  Focus on just a few things and forget about everything else.  As you become proficient, you can begin to add on more things to look at.

  68. Judah,
    with SS out, and JRW not checked in, how do we make any determination on lines? I don’t feel comfortable just going with yesterdays.

  69. SS, Spectacular.  Enjoy the long weekend.  I’ve been completely distracted these past few weeks by strangles.  Though I have made more money on strangles than any other strategy this year, I’ve decided to stop doing them.  I don’t think they are worth the distraction.  I’ll be fully on board trading with you next week. 

  70. Damn SS- Beach house in Destin eh? Redneck riveria!!!lol  They send us to "New Lt School" after we commission in Montgomery, AL and  when I was down there my flight rented a beach house one weekend. Probably the prettiest beaches I’ve ever seen…

  71. Also for new folks, he often doesn’t go back to that page after the morning posts so don’t enter comments after that.

  72. Hulk, thanks for the perspective, much appreciated. You and stockbern are right, only several things at a time. I didn’t realize before that there is a plethora of trading techniques, styles etc. Aggressive, conservative, day trading, intermediate term, long term, long term hedges, disaster hedges etc.  I am only are RELATIVELY new here; been here about 6 months, full time.. my login name used to be "jburgess", but decided to shorten it, make it easier.

  73. Thank You Hulk1182, It really helps.

  74. Hurricane/Exec – I don’t see fiat currency collapsing and us going back to the barter system (and that’s what paying for goods in gold is but don’t get me started on that).  Obviously (to non-gold bugs), if it can’t be transferred by wire, it’s not going to be used!   So revalutaions?  For sure.  Collapses?   Probably.  Hyperinflation?  Most likely… but it’s a long, long process.  Rome didn’t know they were declining until the barbarians were at the gates – I don’t think we’ve evolved that much in 2,000 years…

    Permalink/Exec – If you want to refer to a specific comment, you can copy the permalink and that takes a person right to that spot in the post.  As to the scrolling.  If you leave the page at the last comment and hit the F5 key under most browsers, it should hold your place as it refreshes the page and then you just scroll down from where you are.  Failing that, another stupid computer trick is your "home" button takes you to the top of the page and your "end" button takes you to the bottom.   When we redo the site this summer I will see about putting in an upside down view but it doesn’t do me any good as I read all the comments and reading the last ones first out of order would drive me nuts… 

    The colors signify "moderators," members who have earned the distinction of making enough great calls that they have their own following and the colors make it easy to identify them.   Over time you’ll get to know who everyone is and there are plenty of very smart guys who don’t have colored boxes too, which is why you will realize that the "convenience" of skipping what other people have to say so you can get right to your questions is actually a very bad idea as you won’t find a smarter group of traders anywhere outside of one of the IBanks (and those guys haven’t been all that clever lately).

    Collars/Exec – I am not a fan of collars in this market environment.  This is one of those things we had a big discussion of very recently which is why it is suggested you go back and read a month of posts and comments before asking questions – you’ll probably find the answers to everything you want to know and even some things you didn’t realize you wanted to know.

    AAPL/Iflan – Because the factory that makes their stuff just raised wages 20% to try to stop the workers from committing suicide so often (once a week is OK but it was getting ridiculous).  I keep warning you guys that the workers of the world will unite when they realize they have nothing to lose but their chains (thank goodness we don’t educate the proletariat anymore, right – it only makes them uppity).  The problem with owning AAPL long-term is Steve Jobs could relapse any time and the stock will drop 30% overnight.  I don’t like things that can’t be hedged, especially $250 things…

    We did have an AAPL play at the end of yesterday’s chat – PERMALINK – now is a great time to execute as we can sell 1/2 the June $260s for $7.60 against the Oct $290 calls at $11.10 and we either ALSO sell 1/2 the June $270s for $5 and roll the longs down $10 or we sell the other 1/2 the June $260s for $6 (a sell-stop) and roll down $10.

    Farrell/Pharm – Wow, and the worst part is I can’t disagree witht he guy!  I like this, especially as it’s in the MSM MarketWatch:

    But will Main Street exit? Will we ever learn? No. The Wall Street casino makes mega-billions for insiders like Blankfein and the Goldman Conspiracy. Yet "The Casino" is still below the 2000 record of 11,722. So after accounting for inflation, Wall Street lost over 20% of Main Street’s 401(k) retirement money between 2000 and 2010. Yes, Wall Street’s a big loser the past decade. Their advice is self-serving. Period.

    Given their miserable track record, only a fool would bet with Wall Street. Betting odds are Wall Street will lose another 20% in the next decade from 2010-2020. Yes, today’s market is a "buying opportunity," but only for Wall Street casino insiders like Biggs, Blankfein and even low-level staffers inside "The Casino." But not for our 95 million Main Street investors, there’s more pain ahead, this market’s dropping.

    Oil/Exec – This is a MASSIVE disaster.  People outside of Valdez Alaska have no idea how badly oil can poison the environment for decades and destroy an entire economy.   That’s another corporate tragedy that the MSM failed to report on as their advertisers didn’t want the big, bad government interfering with their drilling operations.  The logical lesson learned from XOM is there should have been a $1 per offshore barrel super-fund clean-up thing set up and that would have dropped $300M a year into a fund (for 20 years now) that could have helped up prepare for and respond to disasters like this.  The problem is a fund like that also pays for safety inspections and, as it’s becomming clear from BP testimony – that is NOT something the oil companies want more of. 

    FXP/Davemistry – WOW!  Are you saying you are down 77% on FXP?  That’s a lot, you know…  One thing I will tell you is:  Do not make your past losses the problem of your future trades.  In other words, if you try to take your $8,300 position and you won’t be satisfied until you get your $36,000 back, not only are you very likely to be disappointed, but the kind of risks you will drive yourself to take in order to make 3x on your balance is more likely to wipe out the remaining $8K.   Assuming you believe in the bearish position on China, let’s say we can assume you DON’T think they will get back to 25K on the Hang Seng (up 25%) and that means we don’t think FXP is going lower than about $21 (down 50%).  I think the best way to play FXP higher for a good return using $8,000 is to sell 10 2012 $25 puts for $3.90 (collect $3,900) and buy 20 2012 $25/35 bull call spreads for $4 (-$8,000) and that will pay you back $20,000 in 18 months as long as FXP doesn’t fall mre than 15% and your break-even is $27, which is 35% lower than here.  So that trade gets 1/2 of your money back in 18 months if the Hang Seng doesn’t go up more than about 7.5% (to 20,900) and doesn’t lose money until the Hang Seng is up about 12% at 21,762.  If you are not that bearish on the Hang Seng (and I wouldn’t be if we take back our bottom levels) then you shouldn’t be in FXP at all!

    Keep in mind that all those bottom levels are are weak bounce levels off our lows.  We are still in technical hell if we can’t retake them all.

  75. Jbur,  JRW usually checks in late morning with his input, and I typically have used his previous day’s lines until he checks in.  Or, what I used to do before I was using JRW’s lines, you can usually gauge the resistance points by the day’s moves — 67.17 seems to be resistance, for example — and, if it breaks up you buy TNA, or fails to break through you buy TZA.  I really believe JRW’s genius in is how he trades more so than his lines.  If you can learn that, the lines don’t matter as much.

  76. IWM anTNA have gone BELOW pivt point ad thhat means bearish. TZA .

  77. Good morning
    ss, enjoy the weekend, try to relax !!
    IWM  65.46, 66.47, 66.64, 67.15, 67.76, 68.83

  78. RMM… I don’t understand my problem getting the correct pivots?
    You wrote….
    on IWM, pivot is 66.56
    R1,R2 67.69, 68.27
    S1,S2  65.98, 64.85.
    Think or Swim has Pivot as 66.20
    R1R2 68.05 68.99
    S1S2 65.26, 63.41
    I don’t understand.

  79. JRW…I’m surprised your lines changed so much from yesterday.  Not the new level lines of course…I mean yesterdays level lines for that respective level has changed more than I thought it would have. 
    Are you just looking back 1-5 months like you do and seeing that much of a change in lines in 1 day?

  80. With this little IV spike, June premiums are still very high. I’m selling some condors, e.g., on V (long 60P, 85C, short 72.5P, 75C), and similar set-ups on COF, SPG, and possibly BAC. Generally keeping a slight bullish bias with them.
    By this afternoon, MMs will already be discounting the long weekend, so don’t wait too long to sell.

  81. Yip, If you go to you can get different flavors of pivot, resistance, and support points.  TOS also offers several different methods. 

  82. yip
    my program calculates these, I do not do it myself, it calculates pivot, R ans S, its,
    I do not understand why JRW ‘s numbers are different,

  83. JRW, can you label these numbers for me? 65.46, 66.47, 66.64, 67.15, 67.76, 68.83
    Is it S3, S2, S1, R1, R2, R3? Wheres the pivot? Always halfway between S1 and R1, I assume as these are deviations from the mean?

  84. judah: you are right, I also see many different ways and therefore different results, there is one for FOREX specifically.

  85. Wow, there’s a big volatility skew in favor of puts on the SPY right now. Somewhat less on the DIA, and the IWM looks normal.
    Selling SPY puts, buying the calls, and flattening the delta with short stock would actually be a small guaranteed win for anyone who wants to bother with it.

  86. Judah, you’re right. Looks easy, but it’s not. I got burned so badly on TNA early on that I wouldn’t touch it for 5 months.

  87. yip,
    The previous day’s data has more influence than earlier days; S/R levels don’t usually change that much but relevant trend lines can.

  88. RMM, Yeah, if you load up your charts with all the methods, including the mid-points, throw in Phil’s 5% rule and 20% retraces, add in some round numbers,  you can find a pivot every couple of points!  :)

  89. JRW, judah – still lurking while packing.  On the IWM 3 min chart draw a line from the bottom of yesterdays 10:00 candle to the bottom of today’s 9:45 candle.  I think this may provide the slope of today’s low volume move.  Will be interesting to see if it profides support/resistance in addition to JRW’s lines.

  90. judah: I have no expertise in drawing trendlines, JRW ans ss can do this, I strictly use the pivot and R and S lines which the program calculates,
    JRW III: what you published at 10:52, are these trendline levels or R and S levels ? please clarify .

  91. RMM
    As I have said before, these are relevant levels !! NOT pivots; they may occasionally line up with a pivot, or a pivot may be at an important S/R level. BTW, judah is right, pivots come in 3 basic flavors, you get to chose whatever works for you.

  92. JRW III: thanks, that is what I thought,

  93. Phil: I have about 140K in long equity positions (e.g., CAT, GE, JNJ, KO, and etc.) in my portfolio. I’m worried that my understanding of your hedging strategies will not be strong enough before the day comes that I wish I had some protection place. I’ve been reading about the various disaster hedges and mattress plays. My concern is that I will not select a strategy that provides sufficient protection in the event of a major downturn. More so, I’m concerned that I’ll haphazardly throw a strategy at the portfolio only to learn later it was the wrong one. Could you make a recommendation from which I could start (e.g., assume a 20% drop)?

  94. Thanks guys… The question is if there is so many different methods of pivots how do we know which ones we are using? I’d like to be on the same page and not have to ask you guys all the time.

  95. aclend,
    See post to RMM

  96. Oops, on that FXP spread, I did the math on part 2 for a 3x ETF and FXP is a 2x so the Hang Seng would have to rise 17.5% to hit the b/e point (22,831).  Of course these are approximates as you can’t count on these ultras to behave themselves

    IPad/Kwan – That’s what you get for buying version 1.0!  I’ll have the programmers look into it.

    1930 News/Kinki – That is kick-ass!  Thanks.  Thanks Yip too – I love that kind of stuff…

    I think we’re right about here:

    9. "I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
    - Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
    "I am convinced that through these measures we have reestablished confidence."
    - Herbert Hoover, December 1929

    "[1930 will be] a splendid employment year."
    - U.S. Dept. of Labor, New Year’s Forecast, December 1929

    10. "For the immediate future, at least, the outlook (stocks) is bright."
    - Irving Fisher, Ph.D. in Economics, in early 1930

    11. "…there are indications that the severest phase of the recession is over…"
    - Harvard Economic Society (HES) Jan 18, 1930

    12. "There is nothing in the situation to be disturbed about."
    - Secretary of the Treasury Andrew Mellon, Feb 1930

    13. "The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity."
    - Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
    "… the outlook continues favorable…"
    - HES Mar 29, 1930

    14 "… the outlook is favorable…"
    - HES Apr 19, 1930

    15. "While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
    - Herbert Hoover, President of the United States, May 1, 1930
    "…by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent…"
    - HES May 17, 1930

    "Gentleman, you have come sixty days too late. The depression is over."
    - Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

    16. "… irregular and conflicting movements of business should soon give way to a sustained recovery…"
    - HES June 28, 1930

    17. "… the present depression has about spent its force…"
    - HES, Aug 30, 1930

    18. "We are now near the end of the declining phase of the depression."
    - HES Nov 15, 1930

    19. "Stabilization at [present] levels is clearly possible."
    - HES Oct 31, 1931

    Trading places/Judah – They removed it!  I wish I knew how to download video and archive it…

    Day trading/JBur – Just like anything else, it takes practice.  It’s all a set of skills you build up over time.   I’ll bet you are the same guy who’s spent 20 years working on his golf game but you expect to be able to trade like an expert in 2 months, right?  Go easy and work your way into the harder stuff once you master the basics so they don’t command much of your attention, it’s amazing how much progress you can make in a year. 

    Donuts/Brooklyn – Stephen Hawking already has dibs on that one!  As to BK, just because some dumb-ass spends a ton of money on a position doesn’t always mean he’s right (this is why Option Monster doesn’t work – their whole system is based on following those trades).   I think any bank is a crap shoot this year, at least until we see how regulation affects them.  I like going long on C and BAC just based on TBTF or play XLF on the theory that there will be a banking system in 2012 but individual banks are scary with 10% on the FDIC’s watch list and all the intra-bank lending that still ties them together and the complete unreality of the CRE market.  Other than that, sure…

    Good discipline Judah!

    AAPL/Maya – That permalink to AAPL was a response to your question in yesterday’s chat!   8-)

  97. As far as JRW’s LINES not pivots I see people getting confused there often.  I’m fully aware that JRW’s numbers are support and resistance levels NOT pivots. 
    I guess I’ve got to look to see the different Pivots TOS offers and find what matches the ones we use here.  As far as quote tracker I do not want to download another medium, I’ve just got to many already!

  98. THTCF – I picked them up on my charts yesterday as a mover and this morning saw their info on the drug.  If you are up….I would take 1/2 off to protect your gains.  If you are even, I think you can do better, but I don’t know enough about the market for that indication.

  99. If i were trading today i would go with TNA right here. FWIW

  100. PHIL…. I KNEW you would like that.  The reason I’m here, on this site…is because I was talking to a total stranger and he said, ‘You know about Phil’s Stock World’?  I said, ‘no’.  He said, ‘You should check it out, you sound exactly like Phil’.
    P.S. That Gold SHORT position in DZZ is killing me but I’m holding on hoping we don’t make another new high.  I know(almost) it’s coming down at some point just don’t know how far it goes up first!!!

  101. Gold coming back down to 1200. It will probably nip a little below, but if it quickly recovers I’ll get back in.

  102. Gotcha JRW. Thanks again. I know you do 1/4, 1/2, and whole entries. How are you deciding which position size to use on a given trade?

  103. Eric…sounds like I should be following you to recoup some of my losses in DZZ!!!
    I am a blockhead.  I got so tangled up thinking…and I still do…that Gold is a joke I blindly went short w/o stops or options protection.. Stupid.. 
    You trade options off of GLD is that what you said a few days ago?

  104. On the VVUS spread, it is a 1/4 entry FYI.  My premise is safety of the drug.

  105. I’ve got a bunch of good blogs…here’s another…on CA housing..

  106. Phil, there are some great inexpensive or free software packages available for video capture, like or, I’ve tried several that work well.

  107. yip,

    Yes, options on GLD. I like verticals buying ITM selling ATM.

  108. Hello Phil,  maybe you did see this one early
    Thinking about selling RIG Jan 2011 60 put for 11.50(now is 11.25 and 11.40).  What do you think?

  109. Eric got it… Thanks..looks to be holding 1200 for now…

  110. Phil: please look at my 10:29, TXS

  111. Phil, there is some great and inexpensive software available for video capture from internet, for example:
    I’ve tried several package and they work well.
    Thanks for above advice…  I am not a golfer, but I get the point.

  112. aclend / size
    Conviction, and to some extent direction, in that I can easily buy or sell 10 blocks of TNA, but it’s harder to do 75 blocks of TZA without getting killed so it takes me longer to get heavily into a short play. If I am firmly convinced, I’m all in with the 1/4 of my portfolio that I day trade.

  113. Phil, there are some great internet video capture software programs available, like:
    I’m not a golfer, but I certainly appreciate your advice. Mastery takes patience, determination, and a lot of time. It took me decades to master my past profession.

  114. Pharmboy,
    your opinion on NKTR:

  115. Hey Phil,
    Sorry if this is redundant, I think I posted it in the wrong place originally. I understand this is the active portion of the day for you.
      As a fairly new member I’ve done a couple of your buy/writes with success (Thanks!). I’m not comfortable yet with the shorter term plays, and they require more time during the day to manage than I can usually alot. I’ve seen you make reference in Chat to exercising the Put sell leg of a buy/write as a mellow way to enter. I, like some other may find themselves, am in a situation looking for a relatively safe way to replace lost income on a monthly basis. I usually use Put selling on a shorter term basis (1-3 mo) rather than the longer intervals of the buy/writes. Do you recommend using the buy/write Puts in this fashion, or would you recommend a different strategy?

  116. morx
    Good call on TNA at 11:19 I got back in at 11:25

  117. JRW…You always seem to get in at the bottom, I’ve done nothing yet…..
    Are you using fast stoch 14 length, 3 smooth length one, 3 smooth length two, 20 oversold 80 overbought?

  118. Phil, there are some great software packages for video capture that are available like:
    I am not a golfer, but very much appreciate you advice. Mastering anything takes commitment, endurance, patience and a lot of time. It took me 25 years to master my previous profession.

  119. JRW – I am using GEL’s pilot method, feel it in my butt.

  120. yip; I always get out too early, sold at 48.19 then it ran up immediately,
    I said before, JRW"s timing is FAR better than mine.
    When I make 20 cents, he makes on same trae 80 cents.
    He is GOOD in doing this, he can make $$ in a downmarket trading TNA.

  121. Just learned (from Daily Options Report) that SPY goes ex-div soon, hence the premium on the puts today.

  122. RMM no questions about it.  I wish I could sit as a fly on his wall for a single trading session, a single trading session…
    Not that I could then do it but I could at least have a complete visual idea of what he’s doing.
    I get out to early too however that is a sign of a successful trader I believe..

  123. Out of TNA at $48.955 for $1.155 or another 2%

  124. Eric did you put on a GLD position?  If you do could you share the trade?

  125. By the way, that means a likely .30 correction in the SPY, given the put premium.

  126. JRW III: please tell us why you got out now, what signal did you get to make that decision ??

  127. yip / stoch
    Yes, I think I posted all my trade set up yesterday.

  128. yip,
    I haven’t yet. If I did it right now it would be: short June 120 calls, long June 111s (the 111s because the bid-ask spread is still pretty tight on those, then it widens below them).
    So when I buy, I’m looking to:
    - sell much more extrinsic than I’m buying
    - keep bullish
    - avoid strikes with poor liquidity (anything below 111 right now on the calls side).
    Incidentally, you can always put on an equivalent trade with a bull put vertical. If liquidity looks better on the put side when I want in, I’ll sometimes do that instead. In that case I’d probably sell the 120s and buy the 111s or 110 puts.

  129. JRW-RMM
    Seriously JRW another top you get out?  Do you have a crystal ball?  How did you make that decision?  I’m looking at the stoch, mom, RSI, on the 1 minute and I see they were all topping but that can’t be it.  A lot of bottoming and topping happens on 1 minute charts…

  130. Been in class, looking forward to your next trade JRW!

  131.  DCTH on a sixty minute chart has a beautiful looking wedge and just looks like its going to make a big break in one direction or the other and soon. Based on fundamentals my guess would be up. Have taken a small  bull call spread 14/15 for June on speculation it will at least hold 15.

  132. yip,
    A nice feature on ToS is that you can set it to show the extrinsic and implied volatility on the options tables. This lets me see at a glance what I want to buy and sell without having to pause to calculate it. So I have it showing delta, implied volatility, extrinsic, and open interest.

  133.  DCTH on a sixty minute chart has a beautiful looking wedge and just looks like its going to make a big break in one direction or the other and soon. Based on fundamentals my guess would be up. Have taken a small  bull call spread 14/15 for June on speculation it will at least hold 15.

  134. Hi, Judah,
    Did you get any more of those low ball $0.10 SPX verticals?
    On Wednesday, I got 10 June 1175/1180 calls for $0.20.  I immediately put in an order to sell for $0.45.  On the big stick save yesterday, my order wasn’t filled.  Today has been a quiet uneventful day.  But at about 10:30, it was filled!  It was a small experiment.  But 100% win (after deducting commissions) in 2 days is fun!
    I’ll do more of these!

  135. RMM
    I’ve got a line at 66.47 so I took the profit.
    Also, I should tell you that I had some computer issues this morning and had to rebuild the whole matrix, still working on it; and trading from the open 1/2 blind, sorry. Still up almost 11% on the day !!

  136. RMM
    Sorry, of course I meant a line at 66.64

  137. JRW III: that is what I concluded, it got to your line.  TXS man.

  138. yip,
    Strength or lack thereof when reaching one of my lines.

  139. bought the e-book on option trading hoping it wouldn’t be security coded to where I couldn’t print it.  I can understand the free copy on the site being that way, but can’t understand why you can’t print a book you pay $40 for.
    it is very hard to read this material online…any fixes for that?  thx

  140. morx / pilot
    It is somewhat like that; I can’t even imagine what it must be like for Phil !!

  141. Hey all,

    I have finished a long term financial report on Trina Solar Ltd. (TSL). This is a solar company that has seen an average of over 100% growth for each year for the past five years, and it is sitting at less than 80% of my fair value estimation.

    Check out the story here if you are interested in any long term investing. It is part of a new Long Term Portfolio that I am starting today.

    Thanks and Good Investing!

  142. yip: sold again too early but better green than red.

  143. In TNA at $48.54 (1/2)

  144. Hi, Juday, RE low ball verticals
    I was too excited and didn’t check carefully.
    My order was only partially filled.  Only 2 contracts were sold out of 15 contracts (SPX 1175/1180 calls) I bought on Wednesday.
    So, I’ll have to wait and see…

  145. jr
    Welcome Captain !

  146. Phil: the AAPL play you laid out last night is really interesting.  Compared to artificial buy/write, where you buy long term ATM calls and sell front month OTM calls, this seems to cost less, and perhaps make more?  In what kind of situations do you use each?

  147. Phil / Stick or sell off today   How do you see pm playing today, or have the bots gone to the beach?

  148. I’m just slow today I’m not catching anything.  Some days I’m the slow kid….
    Eric… I’m just getting familiar with TOS however I need to get familiar with that specific tool…

  149. Cwan, Nice. I have gotten a couple more filled.  Flipping them right away is probably the best approach.  It isn’t going to make us rich, but they don’t take much work and they are awfully low risk.  I only did them origianally to protect strangles, and I’m getting out of the strangles game, so I may not do it much more.

  150. tuscadog,
    Well what we least expect would be a fade !! IMO

  151. Doubling TNA at $48.92

  152. JRW I see how that entry at 12.10 makes sense when looking at the Stoch, Momen, and RSI…..

  153. RIG/Bob – That’s a little more aggressive than we wanted to be.  If you sell the Jan $60 put for $11.50 you get hit with about net $11K in margin and you own RIG at net $58.50 and make $11.50 at $60.  I’d rather sell the $50 puts for $6.20 and buy the $45/65 spread for $10 so your b/e is down at $51.20 and worst case is an assignment at net $56.20 (assuming calls are wiped out) but upside at $60 is $8.80 with another $5 to be made at $65.   Most importantly, the $50 puts will be a lot easier to roll at $45 than the $60 puts would be AND you can kill the bull spread if things turn south, hopefully without too much damage.  So it’s a more comfortable position overall.

    Pound is getting pounded.  Down from 1.461 this morning to $1.448 on a huge dip into the EU close.  Euro finishing at $1.233.  Copper off to $3.14 from $3.18 and gold down at $1,205 despite EU weakness (as usual).   Yen, also as usual, bottomed out at 91.4 to the dollar at 3am on the dot to perk up the Nikkei exporters and has sold off ever since, down to 90.50, where it just bounced .25.  I’d never seen anything like this in my life – 3am on the dot almost every day – it’s like the Mob opening up a loansharking operation inside of Citibank with a big neon sign that says "Crimes committed 3am every weeknight" - you just can’t be more obvious!

    Oil/Yodi – Sounds workable but I think everything that seems "easy" at ground level gets a little impossible 5,000 feet beneath the surface.  I think that 75% of this delay is being caused by BP trying to only use solutions that insure the well remains "viable" for future exploitation and if they wanted to slam the damn thing shut there should be a bunch of ways to do that like dropping a daisy-cutter down the tube and melting it all to slag and sealing it shut or perhaps something less drastic but you get the idea…

    Education/Morx – I agree with the premise, it’s worth looking at but that sector has already taken hits.  Remind me on the weekend and we can take a look.  I think there’s going to be some deflation coming in college costs as people will shy away from borrowing $200,000 to send their kids to school for 4 years – this is another one of those expenses Europeans don’t have to put up with (but not every dumb-ass goes to college there). 

    Have a good holiday SS (and everyone else!).   Your beach looks nice and sandy.  I’m a pool, book and drinks kind of guy myself…

    TNA/RMM – The best way to get out is on momentum.  You want to look for an opportunitiy to take out the callers and then sell the calls on momentum.  That would have been a great idea on Tuesday morning but a little iffy into the weekend.   TNA is at $48 out of $55 and your b/e is what, around $40?  How much less than $13 are you willing to take becasue you are nervous?  Keep in mind that you can use the 7:1 TZA play to cover any pullback in TNA.

    And what Hulk said! 

    Dow futures came right off my 10,150 mark so maybe this was just a bullish pullback to the 4% lines IF we hold it.  As long as we hold this morning’s lows, we are still in a bullish 5% area for Monday on the technicals.  Volume is very low at 68M at 11:50 so meaningless moves today regardless

    Miami/Kustomz – That should be the big story for June as most local governments have to balance budgets by the end of month.  This was one of my major market fears for the year.

    CNBC trotting out the Steve Wynn story again?  That was two weeks ago…  Looks like we’re heading for a panic frenzy on CNBC again!

    SPY/Eric – Good catch!

    Hedge/HHFIV – I like the very simple ones.  Right now, I love where TZA is ($6.76) because you can buy the Jan $4/12 bull call sprread for $2 and those pay $8 if we have a major crash.  If the RUT drops 20% then TZA goes up 60% (roughly) to $10.80 and those $4 calls are worth $6.80 with another $1.20 if things get worse than that.  That’s if you JUST do the bull call spread so $5,000 committed to the position will protect about $12,000 of a 20% loss on your $140K in longs and, keep in mind that you don’t lose the $5,000 unless TZA is below $6 (down 10%) so the Russell must gain 3.5% for you to lose $5K and 3.5% of $140K is about $5K so the insurance costs you nothing really if left like that (of course you don’t have to ride it out to a full loss either).   You can, if you wish, add the sale of the Jan $5 puts for $1, which begin costing you money after TZA drops 25% or about an 8% rise in the RUT, which is an $11,000 gain on $140K so, by combining the puchase of the bull call spread at $5K and the sale of the $5 puts at $2.5K you don’t lose any money until TZA is below $4.50 in Jan (down 33%) assuming you have sold a dozen contracts, the most that can be put to you is 1,200 shares at net $6 (assuming the calls are wiped out) for $18,000 and they still make a damn good long-term upside hedge at that price

    Pivots/Yip – I’m big on the 5% rule.  If something like Fibonacci or Pivots lines up with my 5% rule, that’s when I’ll be happy to take a gamble.  The other 9 out of 10 times, I would rather not play. 

    Being like Phil/Yip – I’ve never heard that said as a compliment before.  8-)  DZZ you should shift to GLL, which you can hedge with options at least.   On housing, I still think there’s a 20% correction ahead of us and, until we get that, it’s hard to take any gains seriously. 

    Buy/Writes/Kevinb – We are in a unique market situation at the moment when stocks are down and the VIX is high.  Granted it’s not as unique as it used to be but it still has been smart to sell as much premium as possible into the high VIX.  That has meant going for 2012 sales almost exclusively on our latest Buy List.  If you go back and look at previous buy lists and Portfolios (all under the Portfolio Tab), you’ll see that I usually favor the shorter-term strategy and the Watch List I had set up before the drop, was full of dividend-paying stocks that I wanted to use for income production.  The change came about because the market became uncertain and the blue-chips went on sale. 

    Since we have NO DOUBT that we want to own BA, GE, CAT, UNH etc for the next decade, we do consider selling the 2012 puts and calls to be short-term bets relative to our holds.  If I were not hedging down 20% or more using the 2012s I would not, at this point, be comfortable selling 30-90 day calls or puts in this market as they just do not give you enough protection to cover the risk.  HOWEVER, if we are willing to buy BA for net $40 then you can look out to the 2012 $45 puts alone at $5.10 and extrapolate that out to selling whatever BA puts pay you $5 in Aug (the $65 puts) and assume you either get your quick money in Aug or you end up rolling them along to the eventual 2012 $45 puts.

    As I more or less said above, don’t let your need for an income now force you to take ill-advised risks with your portfolio.  Had you read the last month of posts and comments as advised.  You would have read a huge discussion of the pitfalls of using your portfolio to replace income when you are starting out (less than 10x what you need to live on).  I would strongly suggest you read that and then we can discuss more on the weekend.

    SPY/Eric – Man Yahoo is getting useless, they don’t even keep their stuff up to date anymore..

    Copper $3.139 (if you don’t know why this matters you REALLY need to read some old posts!).  $3.15 is safe(ish) and $3.10 is very bad so we’ll keep an eye out. 

  154. Phil
    Thanks for the advice on BP

  155. JRW : you doubled because it broke your 66.64 line ?

  156. phil, i still can’t find that post on TBT spreads, which are good to buy, please advise where to look
    i’m ready to load up on them today

  157. RMM

  158. Eccelente anlysis!

  159. Out of TNA at $48.72; no idea what just happened, anyone ?

  160. Phil: txs for TNA spread comment,
    I am not nervous, its a question of not waiting till Jan, I also might be away for 3 months,
    momentum: yes, with the big swings, gat $ out of callers and sell again when opportune, not over weekends,
    what is b/e ?

  161. Phil,
    I have UCO June $10 calls with a cost basis of $.26. I sold 1/2 the position yesterday at $.60 and am considering what to do for the weekend. This position is not hedged directly but I do have the TZA disaster hedge for my portfolio and some TZA June $106 calls at $.98 basis. Any suggestions for the weekend?

  162. I have no idea what happened either WOW… Anyone??

  163. what causess the crash ??

  164. And here I was thinking we might finally have a quiet day today.

  165. Man, they have us by our balls.

  166. Spain downgraded

  167. spain downgraded by Fitch

  168. Looks like currencies…carry unwind

  169. Fills/Cwan – It never hurts to ask!

    Pilot/JRW – You do have to go with your butt.  That’s the hardest thing to get across because it’s not all about lines on a chart or points you calculate it’s about how it FEELS when we get to our points and that’s much harder to teach…

    TSL/David – That’s interesting, I didn’t like TSL’s outlook as much, I’ll have to take another look.  down

    Ooh – and Wheeeeeeeeeeeeee! 

    FITCH DOWNGRADES SPAIN!!!  Down goes Spain, down goes SPAIN!!!

  170. What the heck is holding BIDU up? Only my short position!

  171. I can’t believe what a slow bleed this is, this is TERRIBLE news folks, the EU is closed, they will wake up screaming and we will be closed.  Cash, cover, blah blah…..

  172. Bank of Canada will meet next week, and my expectations are the Canadian rates will be pushed up, as inflation is a concern. This should strengthen the currency ETF, as well as the FX trades with the CAD

  173. WOW.  This is going to test to lows again or create new ones no doubt….

  174. Oh my…look at that chart on the DOW

  175. lflantheman / GOOG – Couple questions on the Sep 500 anchor w/ front month callers… how do you make the initial entry? Ideally, you enter the two legs separately to avoid getting screwed on one of them, but this exposes you to extra uncovered risk for a period of time. When you cash our your front-month caller at 7 or 8, you are once again uncovered waiting for the next opportunity to sell front-month at 10. How should we be thinking about this risk?

  176. What are the chances our markets rally to close on this downgrade?  Hell I don’t know much but I can’t imagine us rallying to close, I just can’t.
    I hate to chase but man it looks appealing.

  177. Well, we quickly retook the 1088 support level. Not sure I’m ready to panic just yet, but will probably sell more cover on a bounce.

  178. Nobody told the bots = we ARE going up today …
    Betcha RUT closes at 666

  179. Wow, any news come out?

  180. Perhaps much of this was priced in. Certainly most people expected it? Its not like we all thought Spain was an AAA economy….

  181. In TNA at $47.80 (1/2)

  182. GS has been very strong lately

  183. JRW…LOL… You are a mystery to me.
    Your 1 minute is overbought we are not by a SR line…I don’t know man…

  184. Phil / EDZ  Given your view on Monday pain in Europe, is EDZ a good mattress buy today?  Surprised our mkt is already bouncing back???

  185. Tuscadog…Seems EPV would be a better play…

  186. Wow, the Spain downgrade segues so well with what I was just about to post as some holiday reading!
    The demise of the Austrian bank Credit Anstalt is largely thought of as the trigger for the European sovereign failures that started Great Depression,  a little background here:

    and as it happened on a daily basis, at the 1930′s blog starting on May 13, 1931:

    Remember, it was a contagion in Europe that set off the huge market crash in 1931. 

  187. yip
    You are right , I bailed because I had no info; now I’m in because the bots haven’t been updated so I’ll GAMBLE up and wait for one of my lines to tell me something. Also I’m only 1/2 in !!

  188. Phil/OIH
    I laid in a large short position yesterday, and just closed it out for a 60% profit. – too dangerous to hold over the weekend.  If it breaks $96., then I will short it Tuesday, as it will fall to $86, I believe.

  189. yip: now we are in a narrow channel again,

  190. JNJ – With the rumors / news of pending FDA action it is down past few days. I think by now the worst is priced in. Did a bullish Put Spread. Sure, it will spike down once more if/when actual action is announced, but have 2x long puts to protect the downside. I do not see it below the $57.35 it set in Nov.

  191. kinki
    Good stuff !!

  192. Lionel
    Hope you are enjoying your golf, I am slowly warming up to sell DIA puts just would like to hear Phil’s recommendation which position to sell thks Phil

  193. JRW….again thanks for the confirm..  Sometimes when you trade something for a long time you have a feel for it.  I’ve found over my trading career when I focus on a small number of securities,etf’s whatever I do better.  Jumping all around has not helped much.

  194. Phil: Thank you for the thorough answer. I really appreciate your straightforward and no BS approach to options. Enjoy the holiday weekend. I am already looking forward to next week and investing with the community here at PSW.

  195. LOL, I made 18 cents on one leg and lost 20 on the other in that last trade; coming out of the collapse even !!

  196. Nice JRW!!!!
    I thought oh S, JRW is long this falling knife and had no idea why it was falling at the time.

  197. yip
    I’m just a one trick pony !!

  198. If this keeps up, their not going to have a lot of positive things to talk about at the party this long weekend.

  199. jrw!

  200. Current IWM 65.96 and 66.47 pivot at COINIDENTALLY at 66.20

  201. yip: its FLAT, hard to make 10 cents.

  202. commercial paper…is where it all started last time the markets crashed….I’m sure the markets will take Spain’s dg in stride but certainly as a retailer investor i would be very careful.

  203. Phil , any recommended short play , in anticipation of a Monday meltdown following Spain’s downgrade?

  204.  Spain downgrade is not a shocker what took them so long, I feel this is good,if we can still rally than it is legit, SPX bounced off trendline from bottom

  205. Situations/Sean – It depends on the stock, the premiums offered, the outlook, when earnings are, how the overall market is moving, how the sector is performing, how well they obey their channel, what the relative deltas are between the two positions, how liquid the positions are, what the relative trade-offs are between that and a longer play, etc. 

    PM/Tusca – This Spain thing makes it crazy to be long into the weekend.  We’re right back where we were before the crash news-wise now.  You can bail Greece out with $1Tn but you can’t bail Spain out and if Spain goes, France goes etc (see chart above).  It’s not totally unexpected and the outlook for Spain is still "stable" but Fitch is only the first agency to take a whack at the bigger nations’ ratings. 

    TBT/DMan – Again, I am not going to enable you in your poor timing decisions.  TBT is now 2.5% over our last entry and more likely to go down than up next week so my position is to do nothing until next week.  If you do not believe in TBT enough to WANT to buy it when it hits $38.50 then DO NOT BUY IT AT ALL.  Do not buy ANY position that you do not have a firm price set at which you are happy to make it a major part of your portfolio for the long-term. 

    b/e /RMM – Break/even

    UCO/Robo – Uh-oh, greedy!  Really you watched them triple this morning and said "nah"?  I don’t know what I should say to you other than read the Strategy Section.   You take 1/2 a double off the table and that means you have a free ride on the rest but if you don’t stop out the other half with a reasonable profit, then you can still end up even on the trade.  You could have sold the $11s for .30 to lock in a 50% gain on the position (1/2 at .60 and .30 back on the other half) or you could have just rolled 1/2 the profits to the $11s if you felt so strongly about it that you weren’t going to take a triple off the table or even stop that out when it fell back to a double.  As I’m sure you’ve heard, I don’t like the whole idea of buying premium when it can be avoided so I’m VERY quick to get out of positions that have no real value at all if UCO (in this example) were to expire tomorrow at $9.67.

    BIDU – Behold the power of Mr. M!

    Very bad for solars as Spain is a big solar player. 

    EDZ/Tusca – They are already way up so not as appealing as they were when it was our main hedge but the July $45/50 bull call spread at $3.50 paired with the sale of the July $35 puts at $1 is a 100% gainer if EDZ goes up at all from here and $35 is down 30% so a good play if you are not bullish on emerging markets as you can stop out the bull call spread at $2.50 and then just work the July short puts down for an even trade. 

    EPV/Yip – No options (well, options but not traded ones)


    Good point Kinki.

    OIH/Gel – Good call.  That by itself should show people how truly week our recovery was. 

  206. JRW III: you changed your lines , WHY ?

  207. RMM absolutely flat.  My gut is that this market has GOT to sell off before close… I’m looking for a spike to enter short.

  208. GEL
    Yesterday you mentioned a trade on HUN. Was that a buy write selling the 10s or a put entry?

  209. Trading GOOG……..The way I’m trading this now is holding September 480s and 500s as anchors, while actively trading the June 500s.  Yesterday I sold June 500s for 10 bucks and have a buy back order for 7 bucks.   If the trade goes through today it will be the fourth time this week.  I’m peeling off about 25%  earnings on the June 500s each time.  If they are bought back for 7 I’ll put right back in an order to sell again for 11.00.  I’m using 1/2 covers for this, so if I own 10 anchors I only trade 5 June calls at a time.  This way if GOOG rockets, I gain even more.  What if it tanks?  TZA.  I’m staying well protected on the short side using TZA.  This protects the entire portfolio, not just GOOG.  But that’s the way I’m trading it right now and I’m peeling off a fair amount of cash each time GOOG turns around.  If I were going to do this starting over today I would not buy the anchors until GOOG pulls back to about 470, then I’d probably buy ITM at about 450, wait for the rise, then start trading the Junes as above.  Now this may not be the best way to trade GOOG, but for my trading style it works well for me. 

  210. RMM
    These are in addition; I said I was rebuilding my whole matrix

  211. yip: we are NOW below pivot, that is bearish,
    wonder hoe THEY want to go into long weekend.
    yesterday I said, THEY want to have a good feeling and it might close UP.
    Who knows ?

  212. JRW I see RMM’s point, earlier you wrote…  65.46, not 65.96?
    ALSO you’re looking at the same Pivot Calculator as SS or someone else had a totally different Pivot like 66.50 or something??

    May 28th, 2010 at 10:52 am | Permalink  
    Good morning
    ss, enjoy the weekend, try to relax !!
    IWM  65.46, 66.47, 66.64, 67.15, 67.76, 68.83

  213. What is RMM?

  214. Really we know it’s whatever the master manipulators want to do as logic really doesn’t work HOWEVER going into a long weekend up with a downgrade and a day off Monday would astound me(ok only for 30 seconds) but it would astound me.
    JRW I’d love to see this matrix you have… hey if you want to share it with me next time your computer goes down I’ll just send you mine!!! hahaha
    In case you feel the need JR ‘dub’ email is below.. HAHA

  215. exec… it’s a Screen Name like yipcarl or exec..

  216. Well GEE, I’ve just been subpoenaed by the State of Hawaii to appear as a witness on their behalf in the criminal trial of the scumbags who burglarized our rental car there last summer. Travel and lodging at the state of Hawaii’s expense…..
    can anybody say FREE BEACH TRIP?…..
    Surf’s Up!

  217. Hi lflantheman 
    Trust you missed my posting this morning possible you can give some comments now thanks
    May 28th, 2010 at 9:59 am | Permalink  
    Good morning I am following your GOOG play. Trusting you do have your long OCT caller in place, please give some advice when it would be a good time to look at starting a new opening and how much ITM. thanks

  218. Phil/EDZ
    June $40 PUT is .70/.90 and can be rolled to July $35 currently .80/1.00
    It seems to me that it is worth to start selling June puts first.
    Hard to tell with EDZ’s bid/ask spreads…

  219. "RMM absolutely flat.  My gut is that this market has GOT to sell off before close… I’m looking for a spike to enter short."
    lol……I saw this post and thought you guys had some new "RMM" indicator.  Now that’s funny.

  220. ERIC L…. Spain downgrade gave GLD a quick kick in the arse.

  221. yodi     ….     see my 1:20 p.m.   post.    …   would enter when GOOG drops to 470 or below, with Sept or later 450 anchors

  222. yip
    I’m showing today’s Pivot as 66.20

  223. exec: do not use my rmm indicator, its not so hot.

  224. To late…..I already have it at the bottom of my chart with all the other studies.

  225. lflantheman – love your GOOG strategy, it’s basically identical to my HK strategy, perhaps someday we’ll have our own "Anchor Plays" tab here on PSW together!

  226. JRW..that’s what I show too.  What system do you use for pivots?  I’m using TOS…

  227. exec: first month is free, then 50$ a month.

  228. yip
    Streetsmart Pro

  229. Thanks lflantheman  got it would be an other 15$ drop from here

  230. exec…that is funny.  I can see you putting it in the quote window going…that’s not a quote, what is that??

  231. thanks JRW..

  232. Hey you guys need to cut me some slack.  I’m new here. 
    I’m reading about JRW matrix, this Pivot and that Falling knife……How the heck am I suppose to know RMM isn’t some voodoo computer generated indicator that only the rich republicans traders at Phil’s World have access too. 

  233.  Phil, Re: Steve Wynn – I caught that as well and this is something that amazes me every time. These "capitalist" guys complaining that Washington is unstable and so happy to deal with China because the system there is so much stable! Makes you wonder if they would prefer some sort of dictatorship in this country. Would be more stable. Germany in 1938 was very stable and very profitable for large businesses! These guys complain about the role of government in the USA and are so happy to work in an environment where 8 guys in the Politburo decide the course of the country for the next 20 years. Insane! 

  234. mrmocha…..I’m sure Phil would let us do that if we could show consistently excellent results.  You know, there is one thing I failed to mention about this method.  It seems particularly well suited to IRA accounts, as it’s very much akin to selling covered calls, except that we don’t just sell the covers, but actively trade them. 

  235. exec… it’s all good you have a long rope…just don’t hang yourself… I could resist. 
    I’m new too, it’s nice not to be the only one.

  236. DIA/Yodi – At the moment, I would no more than 1/2 cover by selling $101 puts at $2.30.  Also in DIA – This is a good time to spend $1.20 to roll up to the Sept $103 puts.

    You are welcome HHFIV, have a nice weekend.

    Volume still dead at 104M (1:32) so about 15M per hour pace since 11:50 – super slow, even with the big dip.

    Positives/Exec – Keep in mind there’s more than one agenda at work here.  There are those (government, sellers of stocks) who want to paint a pretty picture and get people to tell their friends how great the  market is – this is just what Madoff did to keep raking in suckers.   There are those who want to markets to die – possibly including GE because a poor market wipes out the weaker competitors and also lavishes them with government aid (and keeps rates low so they can get MORE FREE MONEY) while at other times a strong market may help them sell assets and borrow cash against their stocks.  Then there are those like our pal this morning, who did a hit and run for 5%.    The trick is trying to figure out who has the wheel at any given time and what the overriding motives are.   Clearly with Fitch (who works for the Banksters) timed their play to knock the markets down so it seems "THEY" are either still trying to prove a point to Congress, re regulation or they are angling for a fresh round of bailouts before we get too far into election season. 

    Short/Magret – Either the EDZ or TZA plays above would do it.  You can manufacture a possible quick pay with the SSO $34/36 bull call spread at $1.35 and sell the $33 puts for $1 for net .35 on the $2 spread that’s already .33 in the money so you are playing for the S&P NOT to break 1,100 and, if they do next week, best to take the small loss.

  237. drum/HUN
    Yesterday’s trade for me was a Buy/Write…. I like the stock long term, and LOVE the dividend @ 4.25%. After buying the stock, I sold a Jan short straddle – p&c @ $10. – was a 33% discount on the stock purchase.

  238. Out of TNA at $47.76; appears to be failing

  239. JRW I didn’t know you were in ! 

  240. Ok,
    Thanks for the info Phil.  I’m signing off and heading out to the lake for a long weekend.
    Good trading.

  241. Phil – thoughts on an EUO play, or has that boat left?

  242. yip: notice that S1 was broken, might go to S2.

  243. yip,
    We talked about it, 12.56 post.

  244. JRW….My bad I overlooked it. 
    RMM yea but now it back rallying…What are your pivots RMM?  is 66.20 your pivot?  It’s mine and JRW’s is it your too?

  245. Wynn/Stjean – Not a good day to get me started on that!  The funny thing about WYNN is he said all this 2 weeks ago so why are they rehashing it now?  Sadly, I just had a very serious arguement with a very wealthy guy who is against the health care reform bill primarily because it will allow "useless" people to live longer and he blames the current medicare system for bankrupting social security because poor people weren’t meant to live that long.  This guy employs about 100,000 of "those" people and that conversation got started when I mentioned to someone else that the only reason you can buy an IPod for $49 is because it’s made by slaves who live 10 to a room for $150 a month and are so miserable they end up killing themselves and this guy joined in by saying "really, how can I hire those guys?

    Anchos/Iflan – Let’s keep track and see how it goes.  Remeber, it’s not a real strategy until it holds up under varied conditions and, unfortunately, that takes time to prove out.

    EUO/Snow – Oh we’re done with that thanks to Spain.  Too risky now.

  246. To bounce or not to bounce….. damn i feel it’s going lower by close….but I can’t put a position on, I hate chasing!

  247. TBT / dmankoff    My 2 cents.   Wait till next week on TBT.  It will probably be cheaper then.  If you are having a hard time pulling the trigger on this one , then just forget it.  There are plenty of other stocks on companies that make sense, that make a product or provide a service like Walmart, or Pfizer or others on the watchlist.  Do you have Phil’s top 9 list.  Start from there.    Sometimes a company will make more sense that an ETF

  248. yip: just lost all I made earlier, this is a bad day.
    my pivot  and resistance and support levels are calculated and remain the same for the day.
    JRW’s numbers are his trendlines and they also can change during the day.

  249. I couldn’t resist I’m in TZA…my gut tells me 2 things.  You chase you regret it
    the second thing it tells me is there is no way we go long into this weekend..I was thinking that BEFORE the Spain Downgrade….We shall see.

  250. Phil,
    So who do you think is at the wheel for the last 2 hours of trading ? I predicted a fade, but………….

  251. Phil/Wynn  Yeah, Steve has gone off the deep end. What a wonderful and gracious man he was when I met him and Elaine in the eighties. He had just finished the Golden Nugget remodel and had started working on his new vision, The Mirage.  Vegas has not been the same since, for better or worse…….  :(

  252. I know about JRW’s lines HOWEVER he did mention the pivot aside from his numbers.  Is the pivot 620 for you? 
    I just took my first trade of the day, I’m playing a slow leg down.  I only added 25% though.. He it is spiking…LOL.  I still don’t believe it can sustain into close.

  253. Hi Phil :On SDS, now at $1.14, my Sept $29 C is +$.40,Sept. $36 C is + $.60 and Sept. $30 P is + $.28 . Is that the way it works? All up on a down day?
    Sitting  on a lot of cash as you recommended. Broker pays .01% interest (What a rip[off). Any suggestions to invest cash short term for a better return? Thank you.  

  254. This 1085-1090 SP500 resistance is fierce.  I still think it’s going to break…. it’s just not going to blow through

  255. Gel1 – Do you still like CGA? Looks to be on sale. Thanks

  256. JRW   you hadan support line from yesterday @  65.70.  Is that still good?    That would be my entry on TZA

  257. phil thanks on cree advice yesterday. I’m learning a lot by reading the blog, and going back and forth to your lessons. Needless to say this is fascinating stuff and lot of knowledgeable people with great advice for all. Wish I can contribute something, may be one of these days. Thanks.

  258. In TNA at $47.26

  259. LOL.  of course you are JRW… I’ve got TZA on the spike, my gut is almost always right.  I knew it was a chase trade however still think it works out by day end..

  260. stockbern
    Now 65.57;  look at 66.12 or 65.96 falling as an entry if you want TZA

  261. Trading AAPL…..Note that they have not (yet) participated in this pullback.  I consider that a positive sign for AAPL, but also for the market overall to snap back.  I’m not going short into the weekend, but rather, neutral, with covers on longs and TZA.  I’m of course long on AAPL.

  262. Eric….. I have been trading gold for many years, and have a feeling we will see more volatility down the road, because of the sovereign deleveraging issues. I trade the miners as well as the etfs, but would feel more in control if I could directly trade on the CME Globex, trading futures.  I am planning to open an account and avoid the brokerage hassle. Are you doing this direct trading, and do you have any opinions in this regard. Many thanks!

  263. yip
    Draw a line at the 4 bottoms of the day !!

  264. Phil: when is best time to ask you about momentum play the TNA jan spread ? this is not the time now,
    I have to make up 16$ from tthe loss on the TNA stock, I made 6$ from caller trades,
    Then I have the jan 35/55 spread and puttersjan 35.

  265. JRW on IWM?  I’m sure it is just want to make sure!  I’ll do it!

  266. 1020/CGA
    I love that bastard… The numbers of growth and profits are awsome, and the positive fundamentals are right on target.

  267. yip
    Yes, that’s what I track !!

  268. Thanks Gel! 

  269. Sorry all, it has been crazy at work for me….hoping for GOOD news in the coming month!
    NKTR/ j – let me look into them, as they are a device company much like DCTH (although not as sexy).
    Have a great weekend all, and C U on the other side.

  270. 66.25, 66.10, 65.94, 65.73 is what I’ve got for IWM…
    I’ve stretched them forward so I can see them on Tuesday… Damn it’s rallying and I have TZA at 6.99.  I couldn’t find a trade all day and I take one at the extreme, so stupid.  
    Damn it this conviction it has to go lower is killing my sensibility. 

  271. dear phil
    entered a too late June TZA 7-9 spread at .70, but sold the 6 put at .48. Can you see any way to improve this position? thanks

  272. Bouncing on IWM  65.96 +++    Even ssdirk’s TBT doesnt say anything      Could go either way.

  273. Look how nicely VNO fell off $80.  They didn’t know about Spain this morning.  Shows where the stress points are for a lot of these stocks. 

    According to a recent survey by citizen news website Gather, 49% of adults now consider the internet their primary news source; TV is next at 32%, and newspaper and radio each got 9%. Among web users aged 45+, 68% share news via email; 54% of the under-45 group use Facebook to share; and a full 90% of those under 24 use Twitter or Facebook to share news.  And now, your news from the Internet:

    Apr. Personal Income and Outlays: +0.4% vs. +0.4% expected, +0.4% in March (revised from +0.3%). Personal spending 0% vs. +0.1% expected, +0.6% prior. PCE core price index +0.1% vs. +0.1% expected, +0.1% prior.

    May ISM New York Business Index: 89.9 vs. 62.2 in April. "May’s Question of the Month: What is your organization’s profit outlook for the remainder of 2010? The numbers tell the story: 93% positive, 2% negative, 5% neutral; 32% growing faster vs. 0% declining faster."

    Chicago PMI: 59.7 vs. 60 expected, 63.8 prior. Production 61 vs. 63.1 prior. New orders 62.7 vs. 65.2. Order backlog 52.7 vs. 61.4.

    May Reuters/UofM Consumer Sentiment: 73.6 vs. 73.2 consensus, 72.2 prior. Current conditions 81, expectations 68.8. "The data represents troublesome increases in inflation expectations, especially given the recent declines in gas prices," the report says.

    Fannie Mae (FNM) said Thursday serious delinquencies on single-family mortgages in its portfolio fell for the first time in several years in March – suggesting residential mortgage woes may have peaked. Loans at least 90 days delinquent fell to 5.47% from 5.59% in February, vs. 3.15% a year ago.  Not much improvement but the first one in a long time.

    Consumer delinquency rates tumble at American Express (AXP), Bank of America (BAC) and Target (TGT), signaling the potential for an eventual lending thaw. With fewer tardy borrowers to worry about, banks could begin extending fresh credit to American consumers.

    Congress is laying the groundwork for a possible federal bailout of faltering multi-employer pension plans that are jointly run by companies and unions. The plans cover almost 25% of all workers who have a private pension. Opponents argue any aid could lead to a broader bailout and potentially cost taxpayers tens of billions of dollars.

    Members of Congress who oppose pending jobs legislation on the grounds that it isn’t fully paid for are focusing on the wrong deficit, Off the Charts blog says: The deficit to worry about right now is the jobs deficit.

    U.S. money-market funds – heavy lenders to European banks – are now pulling back amid jitters about their health and the ability of eurozone governments to backstop them. Europe’s banks hold about $2.5T of debt issued by governments and companies in Greece, Spain and Portugal, leading RBS’s chief economist to comment: "Make no mistake: This is big. We’re talking about systemic risk."

    The S&P/LSTA Leveraged Loan Index, down 2.33%, is set to post its first monthly negative return in nearly a year and a half as the eurozone debt crisis has its effect on credit markets. Loan mutual funds had outflows this week of $127.5M, the largest since Nov. 2008.

    The Libor for three-month dollar loans is up but that doesn’t mean "imminent disaster," says Citigroup’s Mark Schofield. The Libor-OIS spread has swelled to 30.6 basis points from about nine in the first quarter – still well short of the 364 basis points in the wake of the Lehman Brothers collapse.

    At a National Economists Club luncheon in Washington Thursday, IMF economist Prakash Loungani presented his analysis of housing busts since 1970 in OECD countries. His prediction: Home prices will fall much farther and for much longer.

    Restaurants (often "first in, last out" of recession as a discretionary spending indicator) saw same-store sales and customer traffic decline in April as a sluggish recovery continues with very, very moderate growth.

    The Economist explains why markets are so jittery, considering world GDP is growing at about 5% – far swifter than most expected: "The world is nervous for good reason. Although the fundamentals are reasonably good, the judgment of politicians is often unreasonably bad. Right now that is what poses the biggest risk to the world economy."

    Wokers of the World Unite – In China?  China is supposed to be able to control its workers, but a strike at a Honda (HMC -3%) factory in the country seems to lay that notion to rest while shining a spotlight on labor unrest and income inequality. The strike also is significant because workers appeared to be well organized and united.

    Berkshire Hathaway (BRK.A) confirms that Warren Buffett has been subpoenaed by the Financial Crisis Inquiry Commission after he resisted voluntary questioning. Buffett heads to the capital June 2 along with Moody’s (MCO) CEO Raymond McDaniel and others from Moody’s to testify on ratings.

    ECB Governing Council member Michael Bonello’s takeaway from the credit market collapse: "A universal law that often tends to be forgotten: like individuals, countries cannot afford to live beyond their means indefinitely. Sooner or later, the excesses of the past have to be paid for, often at a high economic and social cost."

    Details from Fitch show its Spain downgrade is based more on skepticism about the government’s growth estimates than on the likelihood of fiscal success. Currency analyst Win Thin: "Stable? Spain should be downgraded multiple notches."

    Sources say federal prosecutors investigating Goldman Sachs (GS) are focusing on Timberwolf, the infamous "sh**ty deal" repeatedly cited in a tense Senate hearing last month. David Mapley, who claims his Australian hedge fund collapsed shortly after Goldman sold it $100M of securities in Timberwolf, calls the deal "a fraudulent concoction."  Separately, sources say Goldman is trying to settle with the SEC on a charge other than fraud, and a fine of hundreds of millions of dollars. Regulatory experts say a lesser charge would reduce Goldman’s risk of being sued by investors, and help the bank avoid the stigma of a fraud charge, but that it’s unclear whether the SEC would agree to downgrade such a high-profile case.

    1, 2, 3, 4 – I declare a trade war!  The House approved a Boeing-backed bill that would force consideration of illegal subsidies in the multibillion-dollar competition between Boeing and Europe’s EADS for the Air Force’s $50B tanker aircraft contract. Earlier this week, Boeing accused EADS of courting Iran and other countries at odds with the U.S., and said this should be taken into account in the tanker competition too.

    Austria has placed a temporary ban on Google (GOOG) Street View cars while it probes concerns that Google used the vehicles to collect private data.

    Apple’s (AAPL) iPad makes a splashy debut in Japan and other countries, drawing long lines of eager consumers. BofA Merrill Lynch raises its price target to $325, saying iPhone tailwinds remain solid and noting better-than-expected iPad sales. Shares +2.1% premarket.

    Three lunchtime reads:
    1) Bubble-onomics: 10 predictions for 2010 reviewed
    2) Chuck Schwab is worried about small investors
    3) Profiting when growth meets value

  274. Phil,
    So if I sell my DZZ, take 1,75 loss on 4k shares what do you suggest I do?  Buy the other gold ETF and sell calls?

  275.  Pharmboy,
    Re: VVUS-  the FDA meeting is in July 25. Why did you pick the Sept 11/7.5 Puts for your trade.
    The stock has not traded below 7.5 in a while. 

  276. 1020/CGA
    With your reminder, I just sold some Dec short puts @10, adding to my long position

  277. yip
    Don’t feel bad, I basically missed the entire ’09 rally because it made no sense. Since I figured it out ( manipulation ) and drank the kool-aid, I’ve made over $1M ; " it’s better to be rich than right " !!!!!!!!!!!!!!!!!

  278. Hey, does that pension bailout include Congress????

  279. RMM you disappeared… Now I’m getting crushed chasing just like I said would happen.  I love when I call it and do the OPPOSITE.  Real Smart Frank…
    Unreal or not so unreal..

  280. JRW   is the Jedi master.  I’m not in anything

  281. Doubling TNA at $47.70

  282. Thanks Phil on UCO. Incidentally, I had a stop at $.40 which never triggered on the remaining 1/2 position, and I would have certainly closed out the position this morning at $.70 had I been trading (as it so happened, I was beating the holiday traffic from NYC en route to the RI shore). So "nah" was not really my response to an almost triple, but clearly I could have had a sell order in.  I had conviction on the trade, the money was not needed elsewhere and I was willing to let it ride so I thought I was more or less in line with the strategy. In any event, I closed the remaining 1/2 at $.50 and am free and clear into the weekend.
    More specifically, I should have asked what I was really trying to ask (as opposed to tweaking your ire;) which is: given the oil spill, the attention to nat gas and now the further developments in Spain, do you have any thoughts on where oil is going short term?
    thanks for your help,

  283. In my opinion, we have seen a pretty strong correction, and the odds are in favor of a direction change. I’m adding some strong plays for the long term. Bought AXP and sold a short January straddle, paying a 28% discount on the stock, for the entry.

  284. Yip, Just a few of observations about JRW’s method.  He is truly agnostic, doesn’t care whether the market moves up or down.  In fact, he often makes his money playing an up stock (TNA) on a down day.  In addition to the morning lines, he draws and redraws his lines during the day, so that he can spot daily support and resistance, such as today’s 4 lows all on a line.  When something goes against him, he cuts it loose.  I’ve never seen him stick with a losing trade.  It is a very disciplined way of trading, and the fact that he can do it while answering all of our questions is really impressive.

  285. gel1,  Know what else has held up well……. DLB    Dolby Labs.     Dont we have an employee as a member here?

  286. JRW help me out here.
    On 1 min IWM…
    RSI is WAY overbought
    Stoch WAY overbought
    Momentum WAY overbought.
    Obviously it’s a 1 minute so what are you looking for in addition to a 1 min chart and what if anything else?

  287. yip: too hard, when I went in at 47.6, signs were ok, then it dropped immediately, like the MM always looks at my trades, got out with loss at 47.34, then it goes up like mad. now 48.5.
    Only JRW knows how to do this.

  288. I’m so fing pissed right now you have no idea.  I buy on the F’ing spike and it’s the best upward rally of the day from the MOMENT I buy TZA at 6.99.  Now I’m pissed and I’m holding it.

  289. JRW, One non-daytrade question.  I recall in February you went long TNA in a big way in the non-daytrading portion of your account.  I was wondering what, at the time, convinced you to make that move, and whether you have done something yet during this current downturn.

  290. Look at IWM now…ref my post to JRW above and explain it to me.

  291. JRW: it has broken your 66.47 and its heading to 66.64.

  292. Looks like JRW IS the MM.

  293. Now THEY yanked it up, will they yank it DOWN into the close ?

  294.  Phil, do you think the pension bailout make YRCW a good speculation?  My recall is that they inherited crushing pensions from their competitors and much of their current pain comes from that…

  295.  Phil, do you think the pension bailout make YRCW a good speculation?  My recall is that they inherited crushing pensions from their competitors and much of their current pain comes from that…

  296. Sold 1/2 TNA at $48.97

  297. JRW…. Your numbers are impressive. I made 1.5M last year following Phil’s strategies, but have flatlined pretty much this year to date. Too many days skydiving without a parachute, with massive storms on the horizon. Your strategy is brilliant, and I have a lot of respect for it, as your stop strategy really prevents any disasters, but the upside has room to run. Sounds a lot like Buffett’s game plan, but instead of his long term approach, you day-trade the same concept Fantastic!

  298. This is absurd, the manipulation is astounding.  I cannot believe this market can rally like this on the heels of a 3 day weekend and a new EU downgrade, just amazing. Watch it now turn straight around and go for the lows.  LOL. 

  299. I’m TRULY suprised about the volatility of this market! What an impressive comeback from the lows of the days.. this is ridiculous, very hard to trade like this. Like Phil suggests, better to wait until some clear direction and good bargains and disregard such wild swings!

  300. yip: look at the chart today: for smart daytraders, a great day, 4 x UP and 4X DOWN.

  301. Last 1.5/JRW – I’ll be surprised if one of the big boys doesn’t head for the exits into the close.  I think they are waiting for some stick action to sell into, maybe at 10,200 as they want to sell back to 10,150, which should be defended once we get over.  There’s no way I’d want to have a fund that was less than 1/2 cash into this weekend and anyone who took advantage of the dip on Tuesday has got to be pleased to rasise cash in this zone. 

    Wynn/1020 – Oh I like him but boy did he turn into a Richistan resident quickly.  He’ll be very surprised when his casino in Macau gets confiscated from him one day.

    SDS/Dflam – Yes because the VIX is down so the calls you sold lose money and the puts you sold lose money so not too unusual.  As to broker, ask if they do overnight account sweeps for the cash.   You do not want your money elsewhere if we get a 1,500-point spike down on panic and we can buy GOOG for $300 and GE for $12 etc..

    CREE/Arbolito – No problem, many of the people contributing now were just like you a year or two ago.

    TNA/RMM – Remind me on the weekend but you know it always depends.  You makde $6 back in a few weeks on callers, why not just keep on going with that nice strategy?

    TZA/Drum – I’d offer .40 to roll down to the $6 calls ahead of the weekend.  If it looks like we’re heading up on Monday you take out the caller and flip the caller down to the $5s ($1.90 now) as a momentum play.

  302. Other 1/2 gone at$48.84

  303. Trading GOOG…..with the market reversing I’ve repurchased the June 500s for 8.90 for 11% profit. 

  304. RMM yea I know.  JRW had me underline the bottoms.  It looks so easy in the rearview.  Doubled down at .79

  305. gel
    Thank you !!

  306. Stockbern/DLB
    Yes, we do have a member on the on the board that is an employee… I do not recall his name but I remember the post.

  307. Phil…LOL.  His casino get’s confiscated.  YUP!
    Hey since it’s slow I just want to get your thoughts on the DZZ on last time. 
    So if I sell my DZZ, take 1,75 loss on 4k shares what do you suggest I do?  Buy the other gold ETF and sell calls?
    Or I can hold out Or I can take the loss… Not ready for that yet so what do you think?

  308. JRW…You didn’t trade at all in 09 and now your a Guru?(I’m saying that)  I’m confused.  You just started trading this methodology this year? 

  309. yip:
    my system says it will close around 47.6, that is based on error channel from open to close.

  310. Nice job JRW! I wasn’t able to follow you b/c it’s almost finals week here at the Air Force Institue of Technology but one of these days!!!

  311. gel/JRW – brilliant is an understatement.

  312. thanks JRW for all your precious teachings about trading iwm. i’m learning a lot especially to be quick and to set aside the need to rationalize the market moves. i’d like to know which charts do you usually watch during the day and which time frames. thanks also to all of you from the other side of the atlantic (italy)

  313. judah / Non daytrading TNA
    I drank the kool-aid ; I’ve got a lot in cash and a few bond funds ( cash ), I just thought it made sense given the environment. It did well untill I sold it inApril.

  314. Phil’s right .  "They"  push it   to 10200 , then a dump , but close up for the week.     "SWAG"

  315. RMM You mean TNA?  Honestly it doesn’t look like it.  Looks like the manipulators are going to move this market up and I’m buried in 10k shares of TZA at 6.89

  316. Phil: what day over weekend is best for you to comment more on my TNA spread management ???
    at the right time I plan to do caller sellin/buying, right now they are up 4000$ .

  317. yip,
    Oh NooOOOOOOOOOOO!!!!!!!!1 I day traded, I just was shorting when I should have gone with whatever the Fed wanted !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  318. tradermoksha
    Do a search at the top of the site of my name and it’s all there in the archives !!
    Good hunting !!

  319.  Phil,
    Re VVUS – Can you tell me what is wrong with this picture. It runs contrary to our normal practice of SELLING premium but I cant find a flaw in this plan that Im hoping you may see.
    VVUS is going to have a FDA result in July right before the July expiration. Its potentially going to explode or collapse at that time.
    Buy VVUS July $17.50 calls for  $1.55     Imp Vol 177
    Sell VVUS Sept $20 Calls for $1.85          Imp Vol 120
    So for a net .30 DR this puts you into a trade that could yield $2.50.
    Whats the catch if any?

  320. JRW: trading fast bullish runners on down-days and making big $$: with all the comment to you,  PHIL is getting a lot of rest lately.

  321. JRW… I did the same thing…and guess what???? I’m doing it again today?? Stuck in TZA down 2% and no doubt they’re going to push this higher.  I got out of TZA yesterday,LOST, and at the mkt open it pops and I would have had a winner.  I can’t stand that.  I’m holding this position for maximum pain…

  322. RMM
    Phil is worth 20 of me !!

  323. JRW: your lines today were OUTSTANDING, wish I know how to use them better.

  324. kwan… you are right! – JRW is to day trading what ISRG is to robotic surgery.

  325. yip
    I wish you luck, but it looks like they’re going to take it higher !!

  326. JRW: maybe its heading to your 67.15.

  327. Phil    DIA puts?

  328. If I’m short you know they will!  I’m hoping for a blowout in EU monday and we follow suit tuesday, if not I’m getting murdered again.  I love that I bought at 6.99 when the range is 6.53-7.01.  I might as well have started trading yesterday. 
    Now I’m sick to my stomach. Not because I’m losing money but because that trade was just Fing pathetic.

  329. DZZ/Yip – How about we assume Gold doesn’t rise 12.5% and we look at selling the Oct $31 puts for $1.10 and selling 10 of those will have a margin of $4K in exchange for $1,100 in cash.  Then you can buy the $33/36 bull call spread for $2 and you are in the $3,000 spread for net $800 plus the margin with $2,200 coming back to you if GLL holds $36, 10% down from here (gold $1,260).

    Better rich than right/JRW – LOL, that’s some of the best trading advice I’ve heard in a long while!  It’s all about taking that red pill

    Stops/Robo – You need to be careful with those.  A good platform like TOS lets you set trailing stops on the way up – that’s very hepful.  I think oil should hold $75 unless we really melt down next week but it’s Rule #1 – ALWAYS sell into the intial excitement that you need to follow and a run like we got on oil certainly qualifies as excitement.  If you had July calls, then maybe you can wait but your .50 is $1 out of the money and you need a 10% move in UCO, which is a 5% move in oil before you even earn the .50 premium you are currently commanding.  So how likey is it that we get through $75 to $77.50 vs. the possibility of you blowing it and getting much less?  The trick to buying low and selling high isn’t the buying low part – it’s the selling high that most people forget to do. 

    TZA/Yip – Why not just sell the $7 calls for .65 and you’re down to $6.34 with 10% if called away and protection for next month if not. 

    YRCW/Mr. M – It would be a total gamble but you are right, they are a good company other than that MAJOR issue. 

    RUT getting back to 666.

    So far, that 1,200 line is hitting the selling I expected. 

    TNA/RMM – Just comment once I get a weekend post up.  Once I’m done writing my first post (probably wrap-up) I’ll have time to hang out and chat a bit.  

    DIA $98 puts at $1.20 (now $1.25) bottomed out at $1.08 today so plan on a DD at $1 (avg $1.10) and stopping at .90 looking to make a quick .20 if the Dow flips south so an equal risk/reward.

  330. oncmed,
    I may be wrong, but my understanding is that the July date with the FDA is a panel review, not a decision. The panel will make much more clear what the final outcome will be, but the actual PDFUA decision with the FDA is not until October. So there are potentially 2 binary events to trade as opposed to one. But again, the review panel will likely hint at which direction they are leaning in terms of approval. Thoughts??

  331. Fri, May 28, 2010 11:24:43 AM

    Oil Spill Cleanup Stocks


    Having trouble viewing this issue? Click here.


    Follow Energy and Capital on Twitter

    Site Map

    Oil Spill Cleanup Stocks
    By Christian A. DeHaemer | Friday, May 28th, 2010

    When a tragic event — or an act of God, depending how you look at it — happens like the current oil slick in the Gulf of Mexico, 9/11, or the even the horrible tsunami of 1994… there are companies that come out of nowhere and offer solutions.
    And because we exist in a capitalist world, money tends to flow where it is most needed. In this case, the companies that are Johnny-on-the-spot with answers get the capital inflows.
    That’s how it should be.

    Check out OSIS after the Twin Towers fell…
    OSI System’s makes the Rapiscan security system which is used to inspect baggage, cargo, vehicles, and other objects for weapons, explosives, drugs and other contraband, as well as to screen people.
    Obviously, as the world changed in dramatic fashion, this company was "discovered" and rose to the top as a problem-solver. The stock went up 824% in six months; volume shot off the charts. 
    OSI was able to leverage its stock price to expand at a rapid clip and keep Americans safe from terrorists.
    Sutron (STRN) Jumps 585%
    Sutron is a company that makes products from "the collection and monitoring of hydrological, meteorological, and oceanic data for the management of critical water resources and optimization of hydropower plants, as well as for warning of disastrous floods, storms, or tsunamis."
    Everyone remembers the massive tsunami that killed more than 100,000 people in Indonesia…
    It turns out that Sutron had some technology that could predict these events and save lives due to an early warning system. Capital flowed to the company and the share price surged because they had a solution to a very real problem.
    The Oil Slick
    And today, after the BP/Gulf of Mexico oil disaster, companies are receiving an inflow of cash because investors believed they might have the answers and ability to help clean up the black slop that’s destroyed not only wildlife and ecosystems, but economies, marriages, and lives.
    Sociologists tell us that following the Exxon Valdez oil spill in Alaska, there was a dramatic increase in divorces, spousal abuse, and suicide. You can’t destroy a man’s livelihood — be it as a hotel manager or shrimp boat captain — and expect him to just bounce back… And the Valdez thing was nothing in comparison to what we’re dealing with now.
    There are more than 14 million people who live on the Gulf coast of America (not counting Mexico, Cuba, etc.); there are less than 700,000 who live in Alaska. 
    I consider myself a well-traveled guy, and I don’t think I know anyone who has ever been to Prince Williams Sound where the Valdez oil spill happened. And yet, the screaming and outrage from that disaster continues to this day.
    Even if the "top kill’ plug works and stops the 500,000 gallons of oil that have been flowing into Gulf waters daily for over five weeks, the BP oil spill will be at least twice as large as the Valdez spill.  
    It’s no wonder the Ragin’ Cajun James Carville is spitting bile and calling out Obama on TV. Carville is a powerbroker for the Democrats, known to make and break people and policies. That said, for him to be calling out the country’s president — a member of his own party — is shocking to me.
    But the anger is only going to build… This thing is just getting started.
    When Power Gets Pissed
    The real power in the country — and indeed the world — is centered in Washington D.C. and New York City.
    These people like to spend the weekends on beaches in Delaware and Long Island. Can you imagine what will happen when this oil slick hits the Gulf Stream and turns the corner north?
    Forget Key West… think Kiawah Island, Dewey Delaware, the Hamptons, Newport Beach, Nantucket, the Bush and Kennedy compounds…  You haven’t even begun to hear the wailing, screaming, and rending of cloth that will happen when oil washes up on these pristine beaches and destroys the fisheries from Hatteras to the Grand Banks…
    Let’s hope is stays out of my beloved and already hard-hit Chesapeake Bay. 
    But I’m not holding my breath… The disaster is spreading. Here’s a graph put out by governmental agency NOAA:
    It makes me insanely angry when I think that my children may not be able to fish and crab on a hot summer day. I can’t imagine the rage in Louisiana. 
    It’s a wonder BP headquarters haven’t been fire bombed yet… 
    Cleanup Stocks that Clean Up

    It should be obvious why companies that might be able to clean up the oil have seen share prices go up. 
    Check out penny stock Mop Environmental Solutions ( It jumped from 0.0001 to 0.20.
    Imagine if you had $10,000 in that bad boy a few months ago?
    Now don’t get me wrong… I’m not recommending MOPN in any way, shape, or form. As far as I can tell, they are a story and a website.
    That said, I have found one company that makes those white, absorbent oil booms that are being towed behind boats and sucking up oil. Now this is a quiet company; it pays a 3% dividend and has a P/E of 14 and a market cap of only $135 million. Its float is a tiny 5 million (which means any interest will send it up).
    Like I said, this is a quiet company from the Midwest. It doesn’t put out press releases — only earnings. 
    I was able to find this outfit by tracking down ID codes on these oil booms. These codes were taken from pictures showing the Coast Guard loading supplies.
    These booms are in short supply.
    Louisiana Governor Bobby Jindal said yesterday, "We need more boom, more skimmers, more jack-up barges." He is requesting a million more feet — and that’s just for a single state…
    When word gets out, the company that makes this is going to launch. It would be good if your capital was at work when it did. 
    Christian DeHaemer



    Fossil Fuels
    Renewables & Alternative Energy
    Global Energy
    Energy Stocks
    Solar Energy Investing
    Peak Oil

    Subscribe to
    our RSS Feed

    What is an RSS Feed?

    The Chinese Economy Grew 11.9% Last Quarter
    The Chinese economy is on fire. Car sales jumped 76%. This $9.62 company, which you’ve never heard of, makes the best-selling car in China.
    The last time we picked it, it went up 207% in six months. The world’s greatest investor liked it so much he bought 10% of the shares!
    But you better own this stock soon.
    The company plans to sell its car in the U.S. this summer. Buy now, before everyone else pushes up the stock.

    Related Articles
    Your Last Chance to Buy Gold

    Three Reasons Stocks Are Going Up

    Battery Company Stocks

    Economic Releases for the week of Monday, May 31st, 2010:

    Jun 01 – Construction Spending
    Jun 02 – Pending Home Sales
    Jun 02 – Crude Inventories
    Jun 02 – Auto and Truck Sales
    Jun 03 – Initial Claims
    Jun 03 – Factory Orders
    Jun 04 – Nonfarm Payrolls
    Jun 04 – Unemployment Rate
    Jun 04 – Hourly Earnings
    Jun 04 – Average Workweek

    Brought to you by Wealth Daily

    From the Archives…
    A Modern-Day Metals Conspiracy
    2010-05-25 – Adam Sharp

    How to Cash in on "Fire Sale" Oil
    2010-05-25 – Jim Amrhein

    Offshore Oil Cleanup
    2010-05-24 – Keith Kohl

    Energy and Capital’s Weekend Edition
    2010-05-22 – Keith Kohl

    Don’t Believe the Fear Mongers
    2010-05-21 – Christian A. DeHaemer

    Are You Prepared For Subprime’s Bigger Brother?
    Starting now, and going through 2012, over 20 million properties in America will be in foreclosure. The financial sucker punch is conservatively estimated to steal $1.5 trillion from our economy!
    That’s not counting the losses from bank failures, businesses going under, or even higher unemployment that’s destined to follow. For most, it will be a portfolio killer.
    Fortunately, we just uncovered two very unique companies that are guaranteed – and have already started – to skyrocket, thanks to this unavoidable catastrophe.
    Before the fastest gains are made, click here for your free report!




  332. Doubling at $49.52

  333. Okay Phil- I’m in DiA with you at $1.24. Will AD if the Dow continues north, stop at $0.90.

  334. Thanks Phil — that’s duly noted. I do tend to overlook the premium and decay and I can always do more on the selling high front, for sure. . .

  335. Phil,
    Sounds good on Gold are you referring to options on GLD or?
    In terms of being buried in TZA I see the calls are now selling for 60 cents.  Say I sell 10 as an example.  I get $600 in my account.  If it doesn’t get called away I keep 600 bucks.  If it does get called away I own 1000 shares TZA at 7 bucks…that’s it right?

  336. Phil:
    looks THEY want to close today about even. Neutral position as we do not know what new horror stories we have by Tuesday.
    Will comment on Sunday about TNA spread managment again.
    Have nice weekend and holiday.

  337. Selling some calls here just to play it safe: hard to see us gapping up huge on Monday. Otherwise done for the week.

  338. Yip, this market can be infuriating if you try to think it through.  I’m on the wrong side of it most of the time because I try to apply logic to this market. For example this morning I’m looking at charts – NDAQ down, CSCO down, GOOG down, everything tech is down but BIDU, so let’s short that because it will follow.  Look at the chart now and guess how much I feel like you do!  This market is now just a casino and if you can figure out how to rig the tables like JRW has, then hurry up and game the system quicklybefore it games you.  This market will make a hardcore drinker out of anyone…

  339. On Tuesday, I meant!

  340. Mocha… logical people have no place here… Too bad I can get logic out of my way.  I see your Bidu chart and there is 1 think I’m happy about…
    IF I would have paid attention this morning… I would have followed you… hahaha….

  341. Hi, JRW III – how did you make that  $ 1 M ? by day trading the 3 x ETFs mostly?  you seem to have a good feel…..
    May 28th, 2010 at 2:38 pm | Permalink  
    Don’t feel bad, I basically missed the entire ‘09 rally because it made no sense. Since I figured it out ( manipulation ) and drank the kool-aid, I’ve made over $1M ; " it’s better to be rich than right "

  342. Out of TNA at $49.48, for 28 cents; I’m calling it a day. Up 13% on the day.
    Have a great weekend all !!

  343. JRW good work..
    PHIL I just sold TZA June 7 sells for 60 cents.  FYI.. First time I’ve written against a position.  It’s about time!  Now though you will have questions from me!!…

  344. mocha; true, no logic game, but patterns,I do mostly what JRW does, one key difference: he always enters at lower price than I achieve, getting out is a lot easier. Just getting the same entry price would make it a lot better for me. But I do not know the signal to enter well enough.

  345. dman
    Yes, I made $ Q1 of ’09, then didn’t lose, but didn’t gain from the March GS takeover of the markets
    Then I saw the wisdom of the kool-aid in late ’09; the rest in in the archives !!

  346. VVUS/Oncmed – Well VVUS is at $12.85 so your $17.50 calls aren’t actually worth a penny and will lose 100% of their value by July expiration while the Sept $20 calls will maintain at least some portion of their value.  Also, if the stock does take off, you lose your time premium anyway so unless it goes over $19.05, you get less than your money back while your caller would gain a significant amount of position value (delta) at $19.05 and would maintain the majority of his time (theta) value as well. 

    Rest/RMM & JRW – Hey, I appreciate it.  I’m thrilled that the day traders have someone else to play with.  It gives me more time to pick out longer-term plays, which is key as we cashed out so much in April.   I love day trading when the rest of the portfolio is full and there’s not much else to do but with cash on the side, I’m all about the research….

    DIA/Power – Now why on earth would you pay $1.24?  That’s 20% of what we hope to make…  You are so much better off letting a trade go than overpaying even 2 cents most of the time. 

    Copper $3.12

    Gold/Yip – What?   GLL is a double short on gold, just like your DZZ.  Yes on TZA but you still keep the .60 so it lowers your net. 

    Take care RMM, Eric – you guys are cutting out early and missing the fun!


    $1.30 on the DIA puts means we now have a .05 trailing stop

  347. Phil/JRW  Where and how can I view the the archives of member comments that JRW referred to earlier?  Oh yeah, my SWAG would have been we finish down……  ;)

  348. Out of DIA at 1.28, rats!

  349. Couldn’t resist.  Bought a few hundred shares of DDM at 41.88.  Hope they plug that leak and we get a pat yourselves on the back rally Tuesday.

  350. Yipcarl – you see how quick that 2% came back on TZA?  Damn…….

  351. DIA/Phil – Hoping for a bigger move into the close. Oh, there she goes again, look out below! Spoke too soon. Double rats.

  352. Phil – With Europe having nearly two days to deal with the Spanish downgrade, could Tuesday be a good day for longs?

  353. Wow………!!!

  354. Yip!  Here comes TZA!

  355. Nice one JRW! 

    Out at goal on DIA puts.  Have too many short to add more over the weekend.

    Questions/Yip – That’s OK, we learn by doing.

    Archives/1020 – You can put JRW into the box at the top of this page (left) but he’s on pretty much every day so probably more effective to use the Phil Tab and go through a month of my posts, hitting CTRL-F to search for JRW comments.

    Man what a scam!  Oh well, it was fun, wasn’t it? 

    Have a great weekend everyone – I’ll be poolside!

    - Phil

  356. Damn Right 1020… Almost even… but not holding over weekend unless I can get out in the after hours…
    didn’t know the symbol of the fund I should have been more clear.  GLL! GLL!  Got it
    TZA…really like this play.  Thanks got it!

  357. yip: well, it ended where I said: about 66 47. the error channel predicted that.

  358. Yip TZA@ 6.90  :)

  359. I have been using Interactive Brokers because of the cheap rates and broad access. I am wondering if I should switch to TOS. Can anyone comment what key features or content justifies the higher rates compared to IB? Thanks for any advice  

  360. Phil,
    How does that happen?

  361.  Phil – thanks for the DIA idea at the end - I ended up holding on until 3:59 for almost 20% gain… made up for the small loss I had on the day! (I was kicking myself for not taking your OpEx gamble last week which had gains of several orders of magnitude!  haha)

  362. Wild ass close.  Out of the DIA puts  too early with .14 profit…  At one point was playing against JRW, and thats scary.
    Everybody have a great weekend and holiday.  I’ll be at the Colonial NIT following Michelson, or last years runner up, Steve Marino.  Next week y’all.  We have a great team here.

  363. Phil/Archives  Thanks Phil. Like my little league baseball coach used to say: "look up boy….."  :)

  364. Phil : didn’t want to bother you during trading,but your respose tomy question on SDS spread has me confused. You said the reason for the Sept. $29 C, $30 C,and $36 put all going  down today is because the VIX  declined.My questons is:
     Do I have protection against the VIX declining or against my portifolio declining . If not the latter, what do you recommend for protection against a market fall since I don’t want to have exposure with my 2011 and 2012 leap plays.Thank you.

  365. Have A Great Holiday Weekend Everyone!

  366. Have a great weekend peeps, thank a Veteran….and don’t mistake me for supporting George Bush or Obama!!!

  367. yipcarl – "In terms of being buried in TZA I see the calls are now selling for 60 cents.  Say I sell 10 as an example.  I get $600 in my account.  If it doesn’t get called away I keep 600 bucks.  If it does get called away I own 1000 shares TZA at 7 bucks…that’s it right?"
    Up to "If it does get called away…",  you are correct.  You sold 1000 shares of TZA for $7.  You end up having 1000 shares removed from your account or you are short 1000 shares.

  368. Looks like we had an inside day on DIA,SPY and just missed on IWM. Next week should be fun……

    if TZA goes over 7$, your TZA stock gets called at 7$ and you keep the 600$, you cannot lose, if TZA goes lower, the callers expire by OPEC on june 19, you keep the stock and the 600$.

  370. Phil or any one knowing JRW,S trading system could you lead me in the right correction pls thank you

  371. Maxim:  Comment on TOS.  I like it because it gives reams of information that is easy to interpret after awhile.  But what I like MOST is that I can do trailing stops on OPTIONS.  Most clearinghouseds won’t let you do this.  I have a day job so that I’m not always at the computer.  I can purchase or sell an option, set a trailing stop and leave the computer without worry.  In fact, this feature put me onto a trading technique that I use often and have described here.  It’s my momentum option trade, where I purchase an option that I think will ramp up for the day, set a trailing stop and forget it.  It’s been very successful.  Some of the success is that the computer decides when I get out (when the play reverses) and lets the trade run until no more can be squeezed out of it.  The computer knows this better than I do.  When I first got TOS it took me awhile to learn it.  It seemed complex.  But it was only complex because I hadn’t learned it yet.  Give it a try. 

  372. iflan — how do set trailing stop on option in TOS, what parameter do you use thx ahead

  373. 373 comments today ?  Wow; must be a record.
    Crazy week … have a happy & safe holiday everyone !

  374. gucci  I trust most have gone already for the long week end
    The easiest way to call TOS ext # 2 and they will help you. But here is how it works You can trade options with trailing stop in two platforms under trade select the stk for which opt you wish to trade select the option month you wish to trade click buy or sell and automatic you receive the order entry you can select the qty and you see the info on the option the price and next to the price it shows limit click on limit and set your trailing stop for what ever you wish to trail before you get closed out if the opt drops below the stop .
    2. way is a bit more for as it says active trader go to trade and click on active trader. this needs a bit more know how and I recomment to set this up on paper trade. In the upper left corner you enter the option symble always start with . (stop) first  like .c100619c3 you need to know the opt symbles C =city 10 for year 06 for month 19 third friday of the respective month.
    you will have to adjust the chart for the day trading.  tools are in the middle above.
    On the right side you find the trading activity need to set the amount of opts you wish to trade order qty do not click auto send this is for experts you need to do this first manual from here you need to play arround as you click on the bit or ask it will show up at the chart . set your trailing stop and market and off you go. You really need to play arround with this and learn by mistakes on paper. Specially if you set auto send the order goes straight through with out confirming !!!!
     good luck 

  375. maxim:
    TOS has a HUGE number of features that there is no way to list them all here.  The user interface is geared towards options trading.  Of course, given a stock symbol, it shows option chains of various months for that stock.  Once you bought shares of a stock, and bought/sold options for the same stock, then it groups the shares and the options of the same stock together, instead of showing shares in one place and options in another place.
    It also provides all sorts of analysis, charts, etc.
    I’d suggest that you open a paper-trading account (it’s free) and try it for yourself.  If you decide to open a real account, email scott at thinkorswim dot com, and tell him you are a member of PSW.  He should be able to give you a discount on commissions.  Last time I heard, it’s $1.50 per contract, no ticket fee.  It’s more expensive than IB, for sure.  After you’ve tried their platform with the paper-trading account, you can decide whether you want to switch.

  376. Phil,
      I really like this site.  I can’t keep up with you greyhounds in the fast lane, but am learning alot,  enjoying the chat banter, links, articles, & profiting from trades.
      Re : you’re DBA / inflation trade, I’m alittle shy about going naked with either puts or calls, so came up with this all ITM combination of spreads : Jan12 20/30 BCS @ 3.55 (BE 23.55, MP 6450 or 180%) + Oct 25/24 Ps @ .63 (BE 24.37, MP 370 or 56%). Requires $418 / option (vs your $30 credit), but even if the Ps turn out to be worthless has 141% upside in 20 months.   Am I seeing this right ?
      Have a good weekend.

  377. Hi Folks-  finished a week’s long worth of intensive training sitting next to my boss.  A real buzz kill!  Was up huge on my overnight hold of FAZ (rarely do) on Tuesday morning (8%)..  by the end of the day had covered it (-2%).  Absolutely killed me not being able to see what the market was doing!  Still covered.  The manipulation is intense these days, huh?
    JRW / Drank the Kool Aid in ’09:  Wish you would have pushed some my way!  Not that you coulda gotten me to drink it..
    Yip, I was rooting for you during that squeeze yesterday.. hope you didn’t sell too many calls so that you locked in your loss.
    I’ll be back next week.  It’s Rolling Thunder this weekend in DC.  The bikers are everywhere.  Have a great one-