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Testy Tuesday – Gentle Ben vs. Reality

Behold the power of prayer! 

We had a wild ride in the futures in the last 16 hours as they were up 1% and now are barely holding flat at 7:30.  Our catalyst was Dr. Ben Bernanke who, as we expected, attempted to boost the markets in a scheduled speech where the Fed chairman said he is hopeful the economy will gain traction and not fall back into a "double dip" recession.  "My best guess is we will have a continued recovery, but it won't feel terrific," Bernanke said.

Bernanke didn't offer new clues about when the Fed would reverse course and start to tighten credit. However, he did say the Fed won't be able to wait until the jobs market is fully healed before it pushed rates up.  Observing the economy, Bernanke said the news so far is "pretty good." Both consumers and companies are spending sufficiently to keep the recovery moving forward. The private sector, he said, is "picking up the baton" as government stimulus, which mainly powered the recovery in its earliest stage, starts to fade.  n relations between the United States and China, Bernanke said there is a real desire between the two superpowers to work together to ease trade and economic tensions. Both countries sort of understand there is a "co-dependency relationship," Bernanke said. The United States snaps up Chinese goods and the Chinese is a major buyer of the U.S. government's debt.

Wow, really Ben?  I guess that's some "good" kind of codependency and not the actual definition of codependency, which is: "A tendency to behave in overly passive or excessively caretaking ways that negatively impact one's relationships and quality of life…  Codependency may also be characterized by denial, low self-esteem, excessive compliance, and/or control patterns."  According to Mental Health America: "Codependency is an emotional and behavioral condition that affects an individual’s ability to have a healthy, mutually satisfying relationship. It is also known as “relationship addiction” because people with codependency often form or maintain relationships that are one-sided, emotionally destructive and/or abusive."  Gee, he's right – we DO have a codependent relationship with China! 

Even more interesting is the way the MHA links codependency to Dysfunctional Family Structures, saying

A dysfunctional family is one in which members suffer from fear, anger, pain, or shame that is ignored or denied. Underlying problems may include any of the following:

  • An addiction by a member to deficits, military and other entitlement spending, credit card spending and unrealistically low interest rates.
  • The existence of legislative, judicial, or executive abuse.
  • The presence of a 24-hour media that tells us we are suffering from a chronic and terrifying ailments and conditions while offering no solutions and no hope that causes the viewers to lose their will to live so they sit there all day and watch more TV in an intellectual downward spiral that ends up with the viewer almost caring who wins American Idol or believing what they hear on Fox "news."

Dysfunctional families do not acknowledge that problems exist. They don’t talk about them or confront them. As a result, family members learn to repress emotions and disregard their own needs. They become “survivors.” They develop behaviors that help them deny, ignore, or avoid difficult emotions. They detach themselves. They don’t talk. They don’t touch. They don’t confront. They don’t feel. They don’t trust. The identity and emotional development of the members of a dysfunctional family are often inhibited

Attention and energy focus on the family member who is ill or addicted. The co-dependent person typically sacrifices his or her needs to take care of a person who is sick. When co-dependents place other people’s health, welfare and safety before their own, they can lose contact with their own needs, desires, and sense of self.

Does this sound like any G20s you know?  I altered the bullet points, but you get the idea!  I also re-ran my January post entitled "Hayek vs. Keynes – An Economic Smackdown" this morning as we are rolling into the Keynesian endgame I predicted back then (as well as my 2010 outlook from December) and Anthony Crescenzi of Pimco agrees with me, saying: "Nations have reached a “Keynesian endpoint” as exhausted balance sheets leave policy makers with few options to bolster economic growth.  Time, devaluations, and debt restructurings might be the only way out for many nations.”  Crescenzi wrote this in an e-mailed note titled “Keynesian Endpoint” that referenced the Great Depression era economist John Maynard Keynes. Debt-fueled spending programs aimed at combating the global financial crisis of 2008 are among policy tools now “being seen as a magic elixir that has morphed into poison." 

My follow-up commentary on Keynes in Member Chat this morning was: "Right now we have a battle between US Keynesians and the Hayek crowd in the EU.  Europe followed Keynes after WWI and ended up with hyperinflation and WWII while the US followed Keynes but the fact is that we were heading into another disaster UNTIL WWII kicked off our manufacturing and sent 20M unemployed people overseas, where they sent their paychecks home to add to household savings (which were partially forced by rationing).   The US government was able to finance a massive debt cheaply by issuing bonds (war bonds!) as well as the global investment flight to the relative safety of the US.  Putting women to work put more and more money in people’s banks and, after playing war games for 4 years, the boys came home and everyone could afford new cars, new homes and appliances and that put even more people to work and led us to a pretty good quarter-century of growth.  THAT’S the only reason the Keynesian solution worked.  Otherwise, as Europe painfully learned in the 30s, the hangover isn’t worth the party."

We are dangerously close to replaying that 1930s scenario with our great circle of Fiat Currency Failures coming all the way round to the UK this morning, after moving rapidly from the PIIGS to Eastern Europe and now coming into the home stretch where the US faces, first a failure of individual states, and then the whole ball of wax is in danger:

 

I'm actually encouraged that things are moving so rapidly, with economic hitman and rating agency, Fitch, warning that: "The scale of the United Kingdom’s fiscal challenge is formidable, it warrants a strong medium-term consolidation strategy — including a faster pace of deficit reduction than set out in the April 2010 budget."  To which I say "Well, duh!"  The warning came one day after Prime Minister David Cameron told Britons to expect years of spending cuts, while the European Union pledged tougher sanctions on governments that break deficit rules.

At this point, this is nothing more than what we call hyena attacks, which happen when the bearish investors send their media hounds out to attack any weak prey in an attempt to foment a very profitable panic in a stock or a currency and you will often see them at key turning points, as it's often the bears who are panicking as they reach the bottom and they are desperate to get out of their short positions before the situation turns around.  This does NOT mean that we go cotnrarian to the Hyenas, though – we learned in 2008 just how effective these attacks can be but they are a good sign that a stock or, in this case - a country, is under attack. 

The world needs predators, of course, they thin the weak out of the herd.  In fact, hedge fund manager Ray Dilio is a proud hyena, who made $780M (just his commission!) in 2008 playing for the Dark Side.  Yes the hyenas server their purpose but, just because they bring down one slow gazelle – it doesn't mean that gazelles have a fundamental design flaw, does it?  The same is true about stock, countries and currencies:  Right now the whole gobal herd is being stampeded into the canyon and the hyenas smell blood and they are attacking any weakness that they see but, as investors, we shouldn't be fooled into thinking we have to bet on the fact that no gazelles will be caught, we can bet that the herd will survive.  Will A global government come crashing down and default on it's debts?  Very likely.  Will 2 or 3?  Possibly.  Will they all?  No.  As I pointed out in my weekend report: "The Worst-Case Scenario:  Getting Real With Global GDP," it's a big world out there and ALL of the countries we pay attention to are only about 1/3 of the global GDP and if the ENTIRE Western World collapses and our economies sink to the level of Mexico – 75% of the Global economy would still survive (and arguably do better without the top 20% sucking up 75% of the wealth). 

Despite all the gloom and doom in the MSM, we continue to steer more bullish at PSW.  We have been dipping our toes in the water and bargain-hunting blue-chips and even this morning I posted a long on both oil and Dow futures, which are both up nicely at 9:15.  We got a nice penny spike on copper futures yesterday (and that's plenty for copper!) and we added longs (well-hedged still) on BRKB, HMY, VLO and TBT and, after hours, I laid out a nice SSO (ultra-long S&P) option spread that has 700% upside if the S&P can hold 1,050 through January. 

We are below our break-down points but we didn't expect to come back yesterday.  We do, however expect to come back by tomorrow and if we don't make AT LEAST our weak bounce lines by then – we're going to have to consider another layer of disaster protection. 

So, nothing about fundamentals this morning – the World is still spinning and that's bad news for the bears, who are betting heavily that it won't continue

 


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  1. If you look at Ben B’s track record of opinions and forecasts on the economy and housing over the last several years they are pathetic.  If he ran a website like Phil he would be broke.  He lies.
    Levels I see on IWM this morning.
    59.99 – 60.71 – 61.70 – 62.69 – 63.37 – 64.11 – 64.92
     
    I’ll leave you with a Bernanke Quote….
    February 2006…..’Policy makers expect the housing market to cool but not to cool very sharply’
    I was PREACHING we were in a bubble since 2005 so somehow I know more than Bernanke….WRONG.


  2. Every stock on my screen is green except for ISRG, cant remember the last time futures were down. Anyone buying at the open…I like QCOM


  3. Phil, we are in general agreement that things are bad, getting worse, and may lead to a worldwide depression.  I, for one, am sore afraid. So what is your solution?


  4. yipcarl
    Sounds like you do know more than Bernanke or tell the truth!


  5. Shadow…..The truth is the only difference.  Get a book called The Creature from Jekyll island by Ed Griffin. 
    This market I don’t think it going to hold up…looks awful.


  6. yipcarl
    I fear a 90% contraction because we 2X 1929 problem and still sinking.


  7. Barfinger – errr, what!!?? Are we reading the same Phil?


  8. Shadow I 100% agree except we might be like 8x 1929.  A massive correction coming.  Just don’t know if it starts today or in 2011.


  9. JRW- Any lines between 62.68 and 61.84?  In 39.11, out 39.63…feeling lost in this range…


  10. Oil services selling off pretty hard again. RIG especially.


  11. Good morning! 

    OK, now they are downgrading the UK, the last thing left to attack is the US and, after that, then what?  At times like this it’s more about looking at what holds up, not worrying about what goes down. 

    In my magic mirror I see (and if you didn’t watch "Romper Room" this makes no sense):  RIG and DO heading up along with COP and YHOO and DNDN and JDSU.  WAG is being a good boy at $30 and KFT is holding the line.  V and JPM are nice and XOM, HPQ, FCX, MRO, RIMM , PG and E are all having a nice mornign and even MEE and AXP are here for our party…  

    We’ll see what sticks today.  Our bounce lvels are already hsot across the board, even SOX 340 went down and Transports need a big improvement to get back over 2,000 (2%).   The other levels we need to retake are:  Dow 10,250, S&P 1,100, Nas 2,260, NYSE 6,820 and Russell 666.  Keep in mind that, when we do get there, I will suddenly turn bearish and warn you that THESE ARE ONLY WEAK BOUNCE LEVELS

    But, for today, I am mister sunshine and lollypops because I think it’s worth taking a chance down here.  I love this SSO trade, which should pay 700% if the S&P holds 1,050 through January:

    Let’s assume the S&P holds 1,050 for the year.  Then we can assume SSO (ultra long S&P) will be at $33.62 or higher by Jan and we can take the Jan $29/33 bull call spread for $2 and sell the $20 puts for $1.50 and you are in the $4 spread for net .50 with 700% of upside if the S&P doesn’t go down further.  The $20 puts are so far out of the money that they have little margin requirment, TOS says I can sell 10 for net $1,995 of buying power and the spread would be another $2,000 so total margin requirement of $3,995 to make $4,000 in 7 months – simply if the S&P does not go lower.

    IF the S&P does drop 20% to 840 then that will trigger your purchase of 1,000 shares of SSO at net $21.50 and that then begs the question of, IF the S&P drops 20%, wouldn’t you like to buy the ultra-long on the S&P as a long-term play? 

    So, if the answer is yes, you can spend $4,000 (but be prepared to come up with that $21,500!) on this upside play 1st. 

    Oil wooshed up to $72.25 and that’s an out on our longs.  We’ll consider over $72.50 but I doubt it as that was too muuch too fast.  USO play can be held as that’s longer-term than the furtures plays. 

    At this point we are so desparate for good news that we’ll take $2.75 on copper as an improving sign! 

    Plenty of time to get bullsih, I still think we need a blow-off bottom and it’s hard to get too bullish until we see it but it’s worth dipping our toes in the water down here.  S&P 1,040 is the big breakdown along with 6,500 on the NYSE so we’ll watch those closely. 

    If you are worried the other way, we have the following TZA hedge, also with a very large upside but this one does require an 8% drop in the Russell by Jan:

    Best way to decide where to get bearish is to see which index has fallen the least and that (on the year chart) is the Russell.  That brings us back to our TZA hedge and now you have to think of your SDS spread as a hedge of a hedge.  In other words, now we are prepared to have $4,000 of TZA put to us no problem because we have it covered if the S&P goes higher (and we assume the RUT and the S&P won’t go in opposite direcitons).  So now we can buy the TZA Jan $4/10 bull call spread for $2.10 and sell the $6 puts for $1.45 for net .65 per $5 spread, which has a 669% upside ($4.35) if TZA goes from $8.13 to $10 (25%), which requires just an 8% drop in the RUT

    I am NOT in favor of going with this trade if the Russell is over 620 (now 622).  Today is truly a testy Tuesday – be careful out there!


  12. Good morning,
    IWM 58.68, 61.74, 62.22, 62.66, 62.98, 63.56, and 64.14


  13. yipcarl,
    The lows of S&P 1040, and Dow 9774, shouldn’t mean anything, but I think they do--numbers mean something to computers and they are in control most of the time right??, so I agree, that we are not done going down at least until we reach those levels one more time--then up.  If we go up before then, at some point in the near future, we will be going down again.  I know this shouldn’t be the case, but I have watched it happen over and over.  Watch SNV, it has a line down out of the trading range to 2.45, noted on the 10day chart,  I am 90% sure it will go there, from past observations of these lines.  I always put my buy at 3-5 cents above(maybe 10, so I am sure to get the shares) 


  14. SSO or SP500 holding up till Jan 2011?  it’s simply one man’s guess(me) But there is no chance of that…
    Phil I wonder how you see your forecasts in the last couple weeks(not disaster hedges) working out in 3 scenarios. 
    Market at 11,000 1/1/11
    Market at 10,000 1/1/11
    Market at 5,000 1/1/11
    And when and if….. you will start adding more trades idea’s that work with the worst scenario I’ve painted above


  15. Fizz Interesting…..


  16. I have a small short position in RIG, I think it may be going to its ’09 low. Stop now at my entry (47.10).


  17. Bernanke/Yip – He’s bad but Greenspan was worse, mostly because he had a reputation for being right so everyone followed him off a cliff. 

    Man they are making this hard to trade.  Volume about normal with a lot of push and pull action.  Copper failing $2.75 already = BAD!  RUT failing 620 = BAD!  10 S&P points to 1,040 is 1% down on all indexes just to test the line!

    Open/Kustomz – Watch and wait for clarity is best strategy.

    Solution/Barf – I don’t see an exit strategy outside of hyperinflation but I’m surprised they haven’t announced more stimulus to seal the deal yet.  Another $1Tn over here should stuff enough cash into the pipeline to light the inflationary fires, especially if they by-pass the banks this time and put the money on the streets. 


  18. Phil I don’t see that happening.  Deflationary period for many years to come.  Money not in hands of people, no inflation for now…


  19. Phil/yipcarl
    I also wonder how you see reasonable chances by Jan of even slightly up from here?


  20. Phil,  this sentence from your post above confused me last night and confuses me still this morning.
    That brings us back to our TZA hedge and now you have to think of your SDS spread as a hedge of a hedge.

    Which SDS spread are you referring to?  Or is it the SSO spread?


  21. Unfortunately I’ve been listening to a BUNCH of people telling me about the bounce so I missed the TZA trade.  I was watching levels and the minute indicator on IWM which CLEARLY showed over bought at 640am but as always these several outside influences influence me not to take the trade….TZA at 7.50….


  22. Watch and wait, im with you and dont like what i see…oil holding up well…no mass exodus just yet


  23. I meant i missed TZA at 7.92 not 750…lol. sorry


  24. Out of the RIG short with a modest gain, but will watch for another breakdown. Terrible chart.


  25. JRW…that’s a long way to the next level…58′s?


  26. JRW
    Ok, I have to ask, every morning you post a symbol with a series of numbers.  Care to explain to a newbie what this means?


  27. Phil,  If you believed in Natural gas as a long term investment, would you use UNG or actually pick companies that drill and provide services.  Thanks


  28. Phil, How do those long-term hedges work if the markets drop a lot within a month or so?  How much would they protect us for a 20% drop in a month?  Or a 40% drop in a month?


  29. Difficult to trade down here, mostly creating new S/R’s throughout the day; still in the channell from Friday. Made 24 cents on TZA, now out; in TNA (1/4) at $37.80


  30. JRW when do you switch to TNA?  I’m surprised you’re still trading for the upside…..


  31. Moved the RIG short to some Aug puts. Going to try to be patient for $40.


  32. Phil, yesterday you said my selling the FCX $60 puts and calls for $5.30 was risky.  So today I bought the 55 put for $.95.  Is that better?
    What is your OIH trade?


  33. Exec it seems that every morning it’s explained.  if you go back you will find your answer.
    Put IWM in the quote window.  Pull up chart.  See if you see any correlation with those numbers and the Support and Resistance levels of IWM.


  34. Out of TNA at $38.22
     
    exec,
    IWM , Russell R/S levels to play between !!


  35. Everyone pack up and go home now…GS below 140…the the end of the world as we know it…=D


  36. Will flip long RIG at $40. I think it may get there this week.


  37. Hi Phil, do you see fcx coming back to the 65 mark soon? we have july 60 puts and jan 65 puts--thanks,


  38. Grab your pants.  I mean your shorts.  I think we’re headed down today. 


  39. RIG – what’s going on?


  40. Gold keeps bouncing back up against its high. Very bullish, IMO, but there could be a fake-break lower first.


  41. Phil – Test of 1044…1040 coming???  GS below 140, I’m loading the guns and moving the bullion to the fallout shelter…=)


  42. MW/
    Stop loss @ 3% on David’s weekly trade


  43. I think we likely close green and am getting some light long exposure.


  44. FAS just bounced off the Feb 5th low of 19.94.  We’ll break through today.  Sooner than I expected.  It’s clear folks want out-


  45. I’ve increased TZA exposure and 1/2 covered longs, expecting down in the near term. 


  46. yip,
    Draw a line on the highs and lows (2 day, 1 min chart); just playing the channel


  47. People want out matt but it’s getting too bearish, IMO. We’re very oversold and approaching support. I would not want to add to shorts here except things like RIG that are crashing.
     
    Cash or small longs for me today, unless we break under 1040 for more than a few minutes, then cash.


  48. Phil: your suggestion was to get 5% of hedge per 100000$, that is 5000$ NET,
    on 5/26 I established a TZA BCspread jan 4/12, I want to add a little more and wonder what to do:


  49. Services/Eric – Yeah, they flipped hard when oil was rejected at $72.50 but that’s silly as it’s a huge intra-day move.  If they wnt to keep selling OIH at $92, it’s still a buy. 

    Scenarios/Yip – That’s easy.  It depends.  It depends on how we get to those levels and what the chances are it will continue.  This is just what I was saying earlier today in either the Hayek post or in Buy List comments – you can’t treat the numbers like they define the conditions.  Those numbers are just random BS based much more on mood than anything else.  Let’s pretend it’s June of 2008 and you’re asking me what would I do if the Dow hits 5,000.  I would BUY because it’s stupid.  What would I do at 11,000?  That would depend but, as with anything, I would sell stocks that seem expensive and look for ones that seem cheap, just as I would do if we flatline.  I add trade ideas every day – it’s up to you to decide if you want to play them.  Some are long and some are short but keep in mind that if you have $20,000 (23% of $100K) in buy/writes with a 25% updide ($8,750), that’s an 8.7% gain on your WHOLE portfolio right there.  If we play 5 short term positions of $2,000 each at any given time and take our 20% gains off the table and stop out with 20% losses and, in the average week we have 3 wins and 2 losses – that’s net another $400 a week, which is another $20K a year while we PATIENTLY wait to see which way the markets are going instead of constructing endless fantasy "what if" scenarios that distract us from paying attention to what is ACTULLY happening so we can stay on top of the short-term trades. 

    RIG/Eric – I think they will bottom out on some sort of lawsuit announcement – either Louisiana suing them or BP suing them.  At that point I will be very excited about selling puts. 

    Deflation/Yip – In that case you are best off putting your money in a 10-year note that pays 3% interest and waiting for your chance to buy a 5Br home for $150,000.

    SDS/Leon – Damn, I meant SSO spread (the one that is above it).  I have a mental block about mixing those two up

    Nat gas/Trad – I like UNG as a long-term play.  We’ve been playing it as a trade into Oct and it ran way up and we took it off the board but that doesn’t change the 2012 play, where you can buy the stock for $8.15 and sell the 2012 $10 calls for $1.55 and the $8 puts for $1.85 for a net $4.75/6.38 entry.  A fun risk play on hurricane season is still the Oct $8/9 bull call spread at .39 and you can knock .10 off 7 of them by selling 1/7x the Jan $7 puts for .70 so you short 2 of the Jan $7 puts for about $300 in margin and you collect $140 and then you spend $546 on 14 of the spreads and you are in for net $406 or .29 per with an upside of collecting $1,400 (+$1,000) if nat gas is over $9 at the beginning of hurricane season.  Worst case is you have 200 shares put to you at $1,400 plus the $406 you spent on the spread for net $9.03 per share.


  50. Besides the stick which I’m totally down with I’d like to know the reason why anyone is saying we would close up?  We VERY WELL MAY but besides a hunch/stick I have no idea how one could or would predict that.  Our economy is not in a recovery, things are not improving by any meaningful degree and the 12 month rally should have never happened.. Again I’ll paste this…….It’s a parallel.
    http://greatdepression2006.blogspot.com/2007/08/famous-quotes-from-past-revisited.html
    We are in nothing more than a 13 month Dead Cat Bounce…. When the cat stops his/her bounce for good I have no idea but that cat is dead.
    The real manipulation would have us bounce here, again take us up to 11k or higher( a fundamental joke) have everyone singing Cum By Ya all over again only to have it crash again but this time harder and faster….


  51. RIG – grabbed some @ $44.30 anyway!


  52. JRW….I see that but the lower channel keeps getting lower….


  53. People, don’t panic; we’re just in an orderly down trending market; you will know when we are at the bottom when Cramer changes his position from sell to SHORT !!
     
    In TNA at $37.60


  54. Well, they just popped the Feb 5th low for FAS.  By one cent.  How’s that for control?  Clearly, the programs are in control.  Take out a bunch of stops and head higher?   I think they’ll make it look that way… 
     
    There is an awful lot about the action we’ve been having that screams ‘set up’ for a reversal.  But look at the trend since May.  It’s down.  Stop trying to invent scenarios for a reversal.  And that goes for me, too.  We’ll see it when we see it.  Until then, batton down the hatches!


  55. YipCarl – Don’t let the facts and truth get in your way of making money.  We are a country built on lies…when we outlaw lying, that is when we should really get worried…


  56. I looked up the SSO spread above and I am seeing $1.70 instead of $.50


  57. Hedges/Cwan – Long-term hedges do not work that well on sharp drops early in the cycle BUT if the market bounces back and wipes out the hedges in October or Jan or whatever – what’s the difference?  It means your longs recovered and you didn’t need the hedge.  Again, the problem is that too many of you guys think every twitch in the market must be traded -that’s not the case.  I think we demonstrated back on some old buy list we had that TOTALLY IGNORING the positions during the collapse and recovery was the most profitable strategy.  You have a definitive payoff spot on a hedge, you know the maximum you will collect so if the indexes cross 20% and 25% and you want to hedge to 40% – you just add another one.  Realistically though, if you are that worried about the markets dropping 40% in a month – you shouldn’t be buying long stocks at all – you should be at WalMart stocking up on canned beans and ammo…  8-)

    Difficult/JRW – I agree, it’s pretty much a no-trading day – tempting though it may be.  Have to at least wait for EU close, where we got a run yesterday but that died in the afternoon too and we’re down 100 from there. 

    RIG/Hia – That would be the exact opposite.  Also, I’m now confused as I can’t reconcile how you could have bought or sold $55 puts for .95 yesterday.  Anyway, on OIH, now $90.35, I like selling the July $89 puts for $5.70 as an entry.


  58. Phil…all good points except the deflation comment.  If I can increase the dollars I have trading that is great in a deflation.
    Matt…I hear you that seems the most logical to me.
    Goldman You are 100% correct.  In any event I’m concerned to trade at these extremes…see Matt’s comment above. 
    We could have a fierce bounce or breakdown just as easily.
    I guess my 110% return on 2x and 3x ETF’s in 2008 and predicting that Oct decline within like 2 weeks(mostly luck) although earned me a boatload…. hurt my thinking process.


  59. hI Phil — could you give an idea what is going on with TEVA-- it is so weak — I still have June 57.5 short put and June 42.5 long put in the IRA account about 10 position — looking to roll gain from last month roll…please give me a suggestion, this may have to roll to Jan 12 at least 2x  or  2.5 x for even trade thx


  60. If you want to see why leveraged ETSs are bad long term investments, just look at the daily charts for FAS and FAZ.  Today, FAS went below it’s Feb 5th low.  But FAZ hasn’t even gone above its May 21st and 25th highs let alone it’s Feb 5th high.  On Feb 5th, FAZ peaked at 22.61.  It’s now 17.6.  As for FAS, on Feb 5th its low was 19.94.  It’s now at 19.83.  That’s a 28% difference between the two since Feb 5th!  They are supposed to be the inverse of each other.  What a rip off.  Very hard to cover one with the other.


  61. Out of TNA at $37.77.
    Will someone just start a run on the banks and get this over with !!


  62. JRW after further examination your comment
    yip,
    Draw a line on the highs and lows (2 day, 1 min chart); just playing the channel
     
    …makes no sense to me. either using horizontal lines or DeMark trendlines… I see no pattern anywhere that you could be playing IWM
    S1 on IWM today 61.16…we just broke through…


  63. yipcarl,
    GE’s line down was to 15, I am watching to see if it will get there.  Also, AAPL’s was to 199.  doesn’t seem possible right now does it??  The great thing about these lines, is that it has went up or down to those prices usually within 10 trading days (I use the 10-day chart to pick up on them).  The VIX has a line down to 24.10, so that is why I think the market will surge higher, maybe even tomorrow since we are approaching the end of the 10-day period.  About the time I tell someone else about this though, it will probably not hold true, and I will just look stupid, but it wouldn’t be the first time.


  64. Here comes our level. I’d like to see a big red ‘panic candle’ gap down just below it, and then I’ll buy more.


  65. Matt did you read the article yesterday about the strategy that sells one and buys the other?  Seems very interesting in theory and your comment here supports it!


  66. I wish the volume was here, this has the look of a nice blow-off bottom but just 53M traded on the Dow at 10:40 means we can’t take it too seriously.

    RIG 2012 $35 puts can be sold for $9.20 and that’s a great entry if you REALLY want to own RIG at net $25.80 (now $44.38) in 2012.  If your margin is 1/2 ($15) less the $9 cash, you tie up $6 to make $9 in 18 months


  67. 1140 support may act like rice paper.  wheeee…..?


  68. Wow I confused myself.  I BOUGHT the 55 FCX puts at $.95 this morning to protect the sale of the $60 puts and calls at $5.30.


  69. FIZZ…many people agree it’s all speculation, you’re not looking stupid either way, we could definitely have a bounce.  We bounced for 13 months what’s another few months….


  70. Phil; on 4/19, opened a spread on C jan2012: calls5 base 1.16$, callers7 base 0.47$, putters4 base 0.71$: what adjustment please ?


  71. JRW III
    I have seen the run in Driggs ID on First Bank of the Tetons, FDIC crushed it and continues more and more crushing. What it means to me is too big to fail must fail.


  72. Diamond offshore drilling – second spill today??? (CNBC)
    GM 1.37M vehicle recall (CNBC)


  73. Some good news for the board?  news.yahoo.com/s/ap/us_job_openings


  74. JRW your 58 and 68 moving average lines that you mentioned yesterday I like. People use all kinds of MA pairs to determine short term direction…however after much review the last 24 hours I like your 58 and 68 a lot.  Do you use Exponential MA or Regular?


  75. O.k., in June 99 SPY Cs at 6.66 :) . This is close enough to try.


  76. GS/Gold – Those 2012 $70 puts not looking so crazy now are they? 

    FCX/IProsp – I like $60 to hold and I wouldn’t panic out of those puts unless they blow the line (I assume those are puts you sold?).  If they are puts you bought – cash out you greedy bastard.  All it takes is one word from China on copper consumption and they bounce $5 overnight.  I’m actually very surprised that FCX is getting no respect for their respectable gold mining operations. 

    Oh no – Rumor of a new spill on a DO rig in the gulf!!!  Sounds like BS to me as GS just cut DO to neutral but that’s how the hyenas work.  GS does a downgrade, someone takes a large short position on that news, then they spread a rumor that kicks a stock when it’s down and they "accidentally" make a fortune.  If the SEC comes knocking they say they were following the GS downgrade and had no idea there would be a spill rumor – that was just a happy coincidence….  Speaking of GS leading the pack attack:

    NEW YORK (MarketWatch) — Transocean Ltd. /quotes/comstock/13*!rig/quotes/nls/rig (RIG 44.73, -4.44, -9.03%) fell 10% to $44.42 after Goldman Sachs downgraded oil drilling firms to neutral from buy and issued bearish comments on the effects of the oil spill in the Gulf of Mexico. "We believe that the Macondo oil spill is likely to have a long lasting impact on the industry and most negatively impact the deep water drillers," Goldman Sachs said in a note to clients. "We think that the current six month moratorium on deep water drilling in the U.S. could be extended and now assume that it lasts 12 months with limited activity until 2012; deep water dayrates are likely to face pressure."

    Notice there is no legitimate news on DO – just a rumor from CNBC so far..


  77. yip
    Connect the highs  with diagonal lines , then the lows, to get a channel.
    We are at the bottom now, 61.10
    In TNA at $36.86 (1/4)
    .


  78. DO/goldman: flyonthewall says: "Deutsche Bank said they confirmed that Diamond Offshore is not even drilling at the questioned site and recommends purchase."


  79. Yip, no I missed that article.  Provide a link if you can..
     
    Fully covered.  Just for fun.  Part of what makes me think this will continue to the downside is the dear in the headlights looks I can see on the faces of many of the subscribers here.  They’re catching a lot of folks off guard.  Which means they’re getting theirs before you can get yours.  VERY LOW VOL rally here..


  80. Mattt…
    Here you go..Article on ETF strategy
     
    http://www.cxoadvisory.com/volatility-effects/shorting-leveraged-etf-pairs/


  81. JRW…I see now.  I saw before but I thought it was a little sloppy. It doesn’t surprise me it works for you!


  82. JRW/Yip – IWM has a constant avg downward slope since 1:45 Monday…orderly exit, not that much fear amazingly…


  83. Man these spreads are crazy.  I just went to DD on GLL July $39 calls and the spread was $1.65/1.85 and I offered $1.65 and filled instantly.  Be very careful with the numbers you see on bid/ask – they are crazy wide!

    Fallout/Gold – Good plan!

    FAS Jan $10/20 bull call spread for $3 is a nice way to play a recovery. FAS is currently $19.68 so you make 200% if we hold this line.  You can sell the $9 puts for $2.20 to make it a net .80 spread and if FAS falls over 50%, you own it for net $9.80 and, since that would double FAZ to $35, you can take the Jan $23/32 bull call spread for $1, which pays $9 if FAZ is up 50%, which would pay for all the FAS you have to buy and it raises your cost back to $1.80 on the overall spread


  84. JRW the low for the day is 36.85, you got in at 36.86 at 7.47am??? OMG.


  85. Per finance.yahoo.com/banking-budgeting/article/109739/the-bad-news-bad-news-on-jobs;_ylt=AvEyGPGpxHSA_4GOwxj6pnK7YWsA;_ylu=X3oDMTE1bWE2Ym81BHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawNqb2JzbmV3c2V2ZW4-
    Based on the latest data, the firm predicts the economy will actually lose up to 200,000 jobs, net, in June. "The big news is that we have a job loss of about 200,000 coming in June," says Trim Tabs’ Madeline Schnapp, "and the market isn’t ready for it."


  86. yip / moving averages
    I use both for different reasons, simple because most TA people and the bots use them, exponential for strength of momentum change. SS has a triggering system he might share with you.
    Out of TNA at $37.25


  87. I’m calling it. Today is a bottom.


  88. SS…would love to learn about your triggering system
    yipcarl@aol.com


  89. Phil, given the leverage decay on FAS/FAZ wouldn’t it be preferable to short FAZ with a bear put spread instead of go long FAS with the bull call spread? Or is there some premium skew that makes the longs more attractive? 


  90. yip – RUT 3min 8ema chart.  Usually first move of morning is wrong.  Wait for opposite colored candle of 1st move to cross 8ema line.  Stay in until a significant cross the other way.  Today you would have been in TZA at 9:45 and still in.  Not foolproof by any means, but effective.  Won’t post much more about it as it is in last 2-3 months of history.


  91. goldman / 1:45 line
    Exactly, I’ve been making consistent quarters off that all morning
    In TNA at $36.40 (1/4)
    I hear the president has decided that we need another 200.000 census workers !!


  92. Lots of stocks keep popping up very quickly after each sell off. SPG is one of them; I’ve bought out the short calls in my condors to get some long exposure there.


  93. SS…nice, thanks, you actually shared that with me.  Good luck on finding anything 2-3 months ago. LOL, that would take a month of Sundays…. These strategies should be posted in a member strategy area because scanning back 30-60 days is not practical.


  94. In the time I typed that SPG went up almost $1.


  95. Why the same people still won’t answer the door. Wait that is the new simulus package of job creation.


  96. If any of your know Harry Dent….he’s been very accurate for decades… Of course unless you heard him say Dow 40k when we were moving up though 12k 4 years ago… Besides that he’s been very accurate…At any rate he just put out and email saying..
     
    IT’S TIME TO BUY.  Wow…. 


  97. My IWM 60.71 line looks like the trampoline right now…


  98. INTC below $20!  It’s about $19.92 now.  How about some long term bull call spreads?


  99. Buying more TNA at $37.41


  100. ss
    Didn’t your system give you a sell TZA at 11.15 ?


  101. JRW – yep.


  102. "IT’S TIME TO BUY.  Wow…. "
     
    Yip, these guys just wait for the high-probability conditions like now (oversold, at major support), then shoot those emails out. Nothing wrong with that, but not exactly rocket science either, IMO.


  103. JRW – switched to IWM calls after.


  104. JRW…You mean 11.24 am?  At 11.15 it was still we’ll below the 8EMA line?  It wasn’t until 11.24 that it jumped above it?


  105. yip – actually, 11:18 by my chart.


  106. Hi Phil. 
    I know it is still a bit early but I think I will go back to bed today
    The DIA mattress Fully covered the Sept 103p (long) with Jun 103 102 & 101 shorts What does your kristal ball say thks


  107. Pharmboy - QCOR - I have a lot of ITM JUN calls on this, should I take the money and run or exercise, do you like this as a long-term hold?


  108. TZA/RMM – There’s nothing to do.  TZA is at $8.55 but your caller still has $2.35 of all Premium so no point in doing anything with your $4.60 calls is there?  This is what happens, you have no premium left and your caller is all premium.  If we get to Jan and TZA is at $8.50, you cash out at $4.50 end of story.  If you want to add more, you should consider maybe selling some $6 puts for $1.30 because that’s a net $4.70 entry and you would be paying net $8.60 to add more $4 calls – follow?  If TZA drops to $4 (1/2) your $4 callers are down $3.90 from here but your $4.70 net entry on the puts is down just .70.  I cannot stress enough – sell premium, Sell Premium, SELL PREMIUM

    Real manipulation/Yip – That is what we’re counting on!  There’s no reason for the markets to do anything but drivft around this level at least through earnings but I don’t see that as a working plan coming into the fall election season.  It may not be now but in Aug 2008 things looked very grim too but the market rallied from a spike down to 12,500 (a flash crash) all the way back to 14,200 in October.  Once they realized Obama was going to win, the markets began to tank again.  In the 2006 mid-term elections – the rally came from 10,700 in early June (and July double dip) to 12,000 in November (back when 1,300 points was still considered a big move).   Bush’s 2004 re-election was a massive rally from 9,700 in late Oct to 10,400 on election day because "you don’t change horses in the middle of a race."  You want manipulation?  Wait till you see it done Chicago style

    SSO/RJ – You system will quote you the ask on what you buy and the bid on what you sell.  You need to make an offer that makes you happy and, if you don’t get it, move on.  The last Jan $29 call was sold for $8 and the last Jan $33 call was sold for $8 too but lets take the middle for the $5.50/6.35 bid/ask spread and call it $5.90 so that’s a $2.10 spread and I had quoted $2.  Then the $20 puts are listed at $1.30/1.50 and the last sale was $1.45 but that’s to be expected as we’re down from where I quoted it and the VIX is now down 1.5%.  You need to REALLY work on your skills here because if you are seeing $1.70 when this spread is, at worst, .65, then you will have a VERY hard time making money on these spreads.  Possibly it’s your broker but you should spend a month or two paper trading to get experience with entries and exits on spreads.

    Trading/Yip – Hey that works too but if the whole thing melts down, what are your little electronic bits of virtual money going to do for you? 

    TEVA/Gucci – I know, they seem good but they’ve been selling and selling.  This is a big Cramer fav so I have stayed away since we got out in the $50s last year and I don’t find them very attractive here either.  Talking to Sam Antar reminded me never to trust Israeli companies and also, the whole legal thing with generics is so quesitonable, I have no idea what I’m investing in over there.  So you had a bull put spread $42.5/57.5 (and I guess you can see why I never pick them) and TEVA is now $51.12 on a huge sell-off so, mechanically, the proper move is to take money and run on your puts and roll $8.60 $57.50 putter down to 2x the $50 puts at $4.25 and just hope they don’t go lower.  Those can be rolled to July $45 puts even but if you don’t REALLY want to own TEVA at $45 in July – you are going to be miserable waiting out this play.


  109. Eric L… True however he has been saying its going to turn for weeks and has been cautioning at some point he would call a bottom and now he has.  It’s not like he just jumped in out of the blue.  Although of course you’re right it’s all a guess, an educated guess or not is debatable, that depends on whose guessing…still a guess.


  110. ss
    I just sold 50 of my June 62 puts for $2.50; basis $0.27 !!


  111. SS and JRW…Totally my bad… 11.18am it was.  I was looking at the 3 min chart..Sorry..


  112. Phil
    HOV bought back today the HOV Jan11 10 call for .20 sold originally for .90 still holding the long leg of the vertical 7.5c bought originally for 1.80 now a lousy .37 waiting for better days to be able to sell the caller again holding no putters at this stage. Hope they come out of their wood houses before Jan 11 thks


  113. Testy Tuesday is a good way to describe today.  I’m still holding this DDM and these swings have been testing my bullish resolve. 


  114. Buying another 5 of TNA at $37.52; IWM 61.37 is the floor.


  115. JRW and I thought covering half of my TZA October calls just now was a good trade.. bought 1.64, sold for 2.75… However your 900% trumps it by a little. lol


  116. Nice ride! Taking a little off here.


  117. Let’s rally today !  Why not ?


  118. Oil falling EURO gaining?


  119. Hi Phil My mistake I have long put  June 52.5 and short put june 57.5 my typing mistake.  sorry  — so you rec buy back the long put and roll 2x june 57.5 short call to july 50 shot put for 4.25 right? do you mean Jan 11 50 short put — july is only 1 ish


  120. Harry Dent – isn’t he the two-faced guy in Batman ?


  121. out ddm 39.48
    in dxd 30.58


  122. Well, we got a little boost now that we got rid of those depressing Europeans but it don’t mean a thing if we can’t break yesterday’s highs, AT LEAST.  Volume at 11:42 is 90M on the Dow so a resonably strong hour for the turn (about 40M).

    FCX/Hia – Ah, that makes more sense.  I’d be more worried about the upside though. 

    C/RMM – I would LEAVE IT ALONE – it’s 18 months away for goodness sake!  You can spend .70 to roll down to the $2.50/5 spread which puts you $1.10 in the money but guts your potential gains substantially if you are desperate to do something for the sake of doing it (and the only reason you would rationally be doing anything is because you have lost faith in C hitting $7.50 in 18 months but still believe it will get to $5.  If you don’t at least think that, then you should be getting out, rather than tossing fresh money at the trade. 

    Nice new C play is 2012 $2.50/5 bull call spread at $1.10, selling 1/2 x $4 puts for $1.20 is net .50 on the $2.50 spread that’s already $1.20 in the money.

    Jobs/Iflan – That is nice!

    Jobs/Gold – That is bad!

    Good SPY timing Eric!

    DO/Boob – Nice job finding that.  Smelled like BS right away.

    DO/Doro – Now this is getting interesting…

    Bottom/Jimmy – I’m there with you (actually I called it yesterday.  Wrong so far…).

    Short FAZ/Maxim – I guess you could if you find a similar risk/reward but I think there’s a slim chance on the combo to win a bit on both, which I always like.

    Harry Dent/Yip – Nice guy, always has a towel…

    INTC/Cwan – Aren’t they on the buy list?

    DIA/Yodi – Yep, going back to bed and seeing where we finish is best.

    Copper $2.7777 – all is well, I guess.  Oil at $72.15 but, more importantly, the Euro is testing $1.20 again!


  123. hp phil – i am looking to get short the dow or spy after this pop up. i think dow can go to 9964 or 1017 . and the spc to 1065-1072 . i want to buy puts without using alot of capital , is that possible ? thank you


  124.  Phil – didn’t see the TEVA Q (Basic Member), but I am sitting on a Teva Sep $70 call (bought before this site), down 78%.  Do I take my pennies and skulk away now, hold on, or is there a better strategy?


  125. lol, Phil!
    "Jobs/Iflan – That is nice!
    Jobs/Gold – That is bad!"
    I’ve got to get to where I can afford a premium membership one of these days!


  126. 1/2 out of TNA at $38.45


  127. A friend just phoned to say his hedge fund buddies are betting on a big rally in oil soon over Mid-East tensions, fwiw (probably nothing).


  128. Out of the naked SPG calls. I’m keeping the put side on that one: I don’t think it gets back over 85.


  129. Phil,
    Given all the negativity surrounding oil drillers, any good plays on oil sands stocks?


  130. FAS – why are there multiple options for some of the strikes (Call Jan strike 10 for example)?


  131. Phil
    Would like to do an aggressive bull spread on a 2012 leap on SSO. The chart shows some terrific gains if we have a nice recovery down the road. Thanks!


  132. GILD continuing its slide

    YEN held up fairly well during Euro short covering


  133. Sold the rest at $37.64


  134. My limit buy on BEXP was filled at $16.00. This stock follows USO, except it reacts as if it was on steroids, as the moves are more exagerated. My target is $24.00. I set a stop @ 13.00. The price of oil will not be down forever.


  135. make 33
    I like SU, and it moves well when oil moves up. One sixth of our oil consumption here in the US comes from the sands. The Chinese are also big buyers of this stuff.


  136. JRW you are unbeleiveable I would give a body part to stand behind you for 1 day, just 1 day. I watched all morning and made 8 mental trades, ALL PROFITABLE.  The moment I make a real trade I lose.  I’m so frustrated.


  137. The head of General Electric Co.’s finance arm said the company aims to cut its holdings of commercial real estate by half, reports The Wall Street Journal.
    GE Capital wants to reduce its $80 billion portfolio — including assets such as office and apartment buildings, as well as loans secured by commercial property — to $40 billion and shift the mix more toward loans and away from ownership stakes.


  138. Hi Phil: Great article on "My Top 20 on SDS". It really helped me understand how u go about controlling risk,but hedging is the one area I still have problems with in the sense of seting it up & determing what hedge to use.
    I think I may have have misread your comment yesteday on the SDS hedge using Sept. $29/$36 C paired with Sept $30 put and I  closed out my 30 option position as a hedge against my $300k in buy/writes and $30k in naked puts,most of which are in large cap stocks paying dividends.
    Did I misread you? If yes,reenter position in same amounts? Would a hedge with July DIA puts work since I’m in Dow stocks and plan to buy more later? Thank you for your help.I really appreciate your guidance. 


  139.  is this SOB market going to make me double down?
     
    There’s no way you can look at the TBT 6 or 9 month chart and not triple down. Well, not if your me and you chasing ….


  140. Even though I regretted it yesterday, I’m also selling some more GDX, down to 1/3 my original position. Reaching ‘too good to be true’ levels too quickly.


  141. kustomz,
    GE’s portfolio is only worth $40 !!   Just ask Cap.


  142. yip,
    In TNA at $37.30


  143. IN TNA 37.37,.,,No way could it be?  I caught an upswing?


  144. Bought FAZ OCT 17/14 bear put spread & sold FAZ OCT 27 CALL for net credit of 0.65. Hoping we don’t melt down now… 


  145. Phil – "Swiss Bank Euro Purchase" rumor…did that spike the markets and euro @ 11 EST?  The response was "no comment"…


  146. Take a look at TBT vs DIA 2-year .  Did something happen around Aug 2009 that results in a large disconnect of these two charts? (and could it be the ETF fees eroding this instrument?)
     
    Maybe some economic majors could put in a theory …..
     
    I feel like inflation has been ‘hiding,; not quite sure how tho…


  147. JRW…thanks…HAHA of course you got in 7 cents cheaper BUT at least I saw it!


  148. yipcarl
    I am so with you today. I joined this group to learn hedging and get confidence in day trades that always work on ppaper but my actual trades have mostly  loost money, that is why I stopped last week.


  149. JRW not concerned about what its worth, they continue to deleverage…that worries me


  150. Hello all,

    I have a new position that I have entered for an Overnight Trade in Vail Resorts Inc. (MTN). I have my analysis up now. The entry I have listed was from 45 minutes ago, and it has moved up since, but I still think up until about 38.00 it is a good trade. We are looking to exit tomorrow morning like always unless we get some really great movement today.

    Check it out here.

    Good Investing!


  151. yip
    Also the winners were all on down plays. What is that telling me?


  152. Shadow…. JRW is onto something I know it however for me to think I can figure it out in weeks or days is not prudent.  I am getting it.  The real trade I took was an embarrassment and had nothing to do with the methodology.  Honestly I see what he does and it’s not that hard if you’re on it.  It’s just hard to discipline yourself to trust what you see and don’t forget it to trust what you see.  I chased foolishly.


  153. GE – All they have to do is mark it to market.  And presto, $80 Billion becomes $40 billion.  Mission accomplished !
     
    If they are planning to unload $40 billion in loans or properties, all I can say is "to whom" ?


  154. TNA … S1 held; now trying to break above 20 EMA.  If it does, 50 EMA becomes possible (need a nice RUT rally)


  155. From 9850 to 14850 on the DOW – Is that possible?


  156. Out at .37.98
    JRW…my 2nd biggest issue is when to bounce out.  When you have a 1% plus run in 15 minutes it’s hard for me to stay in.  I’m not sure how you reconcile that… By the time the RUT 1 min turns or IWM with indicators show turning you lose .5% before you can get out.
    looks like a good play now..


  157. " It’s just hard to discipline yourself to trust what you see". thanks Yip for your words, with patience and discipline we can conquer everything! and with a little help from our more experienced e bright friends


  158. yipcarl/JRW
    How many computers do you use? Running 4 to 5 screens on one doesn’t do anything but prove I have physical disabilities. I have a new supper Gig router coming tomorrow. Not sure what I should keep on each?


  159. Trader…yes….
    Shadow…Funny you ask
    I have a laptop… and I just RE set up (2 days ago) my 4 monitors and I’m wondering again why I have them up.  I multi task through charts because that’s what I’m used to doing.  I have 6 charts jammed on my laptop on 1 window… I don’t know the multi charts I never got comfortable with but I’m attempting to do it again.
     
    If we blow through the 61.70 --61,84 area higher I think we go…


  160. shadow / tech
    Let’s talk after hours


  161. Phil: I opened  the AA BuyWrite jan10  a few days ago, fine,
    I wonder what to do with stock positions:GE 16.4base, INTC 20.7base,MDT47base, MRK32.4base, PBR 50base, PGH 20base, these are not covered at the moment, what about  selling calls and puts on these ?


  162. HOV/Yodi – You are in for net .90 and if you sell the $5 put for $1.40 your net entry on HOV (worst case) is $4.10 and your upside triples (and you make .90 as long as they are over $5).

    Damn, huge rejection off $1.20 on Euro.  Pound can’t get it going either.  If the Swiss are going to intervene, they’d better do better than that. 

    Towelie.jpg Towelie image by royohanaDent/Cap – Either Two Face or the guy with the Towel. 

    S&P/Trice – Well, the easiest way is to lock your bet.   My TZA play is probably one of the best bangs for your buck but if you want to go with the S&P and spend little and not use margin then something simple like the Sept $38/42 bull call spread for $1.05  SDS is a 2x ETF so if the S&P falls 5%, they go up 10% from $36.58 to $40.23 so up 100% and possiblity of much more.  Meanwhile, you can probably stop out at .50 if the S&P begins to recover so that’s my definition of not using a lot of captial to insure.  If you think we are collapsing sooner and will bounce back, this play isn’t as good and you may be better off with a July spread but I’m thinking if we do break down (and I don’t think we do) that it will be a big one and a long time until we recover so I still favor the longer hedges.

    TEVA/RDNelson – I don’t advocate duming anything after a relentless sell-off like this unless there has been some fundamental change to their business.  Really though, for next time, at some point when you are bleeding cash between the March 23rd top at $64.50 and the non-stop grind down to $51.32 today, it may be a good idea to DO SOMETHING!  Anyway, the Sept $70 calls are .08 so they are dead and there’s nothing you can do "with" them to get .40 back – the play was a ridiculous, out of the money gamble where you paid an outrageous amount of money to someone like me because you didn’t believe in gravity and I did.  I think, given your situation and determined to "win" my trade – I would sell the July $57.50 calls for .28 and use that money to roll down to the Sept $60 calls at .54 so .18 out of pocket to improve your positon by $10 and you have a $2.50 margin requirement on the sold calls.  If TEVA heads back up, you would need to either stocp out 1/2 the calls at .50 or double down your longs in anticipation of rolling the callers to 2x the Aug whatevers.  So, amazingly, the play is still salvagable but man, this would have been easier 50% ago!

    Humor/Snow – Hmm, I never thought about that, some of my stuff must be lost if you don’t see both sides…

    Oil/Eric – I’ll believe anything coming into summer driving.  There are hundreds of Billions of dollars riding on every $10 per barrel they can get – plenty of money to pay some people to run a blockade or fire off some missles. 

    Sands/Make – The drillers are not a big issue.  It’s only deep-water drilling they are going to cut back on and that’s not even 1Mb per day, which is 1% of global production in a huge glut.  SU is the best sands play but those guys don’t make any money with oil under $70 so I’d wait to make sure oil firms up before playing.

    SSO/Gel – 2012 is a long way off and SSO doesn’t go past 2011 yet.  If you want to be aggressive and play them up you can go for the $34/42 bull call spread at $3 and sell the $20 puts for $1.50 and that’s net $1.50 on the $8 spread that’s .15 out of the money at the moment.   I’m assuming you have no problem owning SSO long term at net $21.50..

    Trading/Yip – The trick is to PRACTICE.  Make every trade for 1 share or 10 shares and do that 1,000 times (about 3 months the way you guys trade) and THEN YOU WILL BE GREAT AT IT!  Simple enough?

    GE/Kustomz – About time someone admits that sector is dead!  Look at SRS now – $30!

    SDS/Dflam – Just so we’re clear.  SDS is the ultra short so the Sept $29/36 bull call spread is 100% in the money now and, paired with the sale of the $30 puts it’s about net $2.40 on the $7 spread and it should pay off if the S&P does anything but go up.  I would not take this right now because I am totally bullish here but this is a nice trade to protect you if we fail 1,050 again although you need to be careful with the putter (only 20% out of the money) so I still like TZA better. 

    TBT/BDC – It’s becomming the new SRS so don’t go too crazy.  The disconnect is the prolonged flight to dollar safety and the Fed’s BS buying of TBills at auction.  If the Fed and China go on vaction together and miss an auction - I’ll bet you couldn’t sell 20-years for 4.5%…. 

    Euro/Gold – they never comment but it was bound to happen anyway.  That’s why I began shorting EUO at $25 (now $26.11). 

    MTN/David – that’s an interesting choice for top 10% investing.  Could be very nice if they hold $38.50

    Impossible/Dilbert – Today?  Probably not…   8-)


  163. Phil…Funny smack talking on Dent but ODDLY enough the market has gone basically straight up since he called a bottom.  I’ll keep listing his reco’s so we can see how big of a towel he may need or not need.  He may need a King Comforter or maybe not….
     
    IWM Bounced right off the previous high of 61.84… Perfect example of Support and Resistance..  even if it only lasts 5 minutes….errrr less.


  164. Main charting screen down, having to use Streetsmart Pro
    Out of TNA at $38.30


  165. biodiesel…. Inflation is prevalent everywhere you look. Daily living expenses are way up. I’m developing a couple of properties, and I can tell you the cost of everything ( material, labor, etc. ) is 30% above what was budgeted. The government figures are all BS – nothing new there! I keep scaling in to by positions in TBT, as the BS will not sell forever.


  166. Gel…It is my humble opinion that inflation issue changes rapidly before too long, By 2011 those prices are coming down…


  167. TBT – too late. I went crazy. Despite FSLR’s exposure to Germany, I sure like them at 100…


  168. Phil/SSO
    I like the spread…. in order to juice the income potential, would you advocate selling 4X the puts vs the calls?


  169.  biodieselchris – i don’t really follow FSLR – but they are based here in phoenix – across from the airport.  Anyways a friend of mine works their and apparently things are still going well.  I don’t know what that means but apparently there isn’t any panic in the air.


  170. SS the Rut 1 min confirm really further completes the puzzle for me.  Really that added with the S/R levels etc, along with the 1 minute of the IWM with Momentum, Stoch, and RSI, and MA’s lines is amazingly helpful.  I can see things I didn’t see before..


  171. Yip, I think we all like JRW, but your mancrush is bringing it to a whole new level.. Haven’t seen one this big since john madden was announcing Brett favre games! Take it easy or people will start getting the wrong idea about you (not that there’s anything wrong with that!) :)


  172.  Phil, do you have any thoughts on GILD.  they have become my TEVA.  They are presenting at a conference tomorrow.  They have seemed to have already priced in currency etc but this really feels overdone and inconsistent with the fundies.   AIDS is a chronic disease & GILD freaking owns the franchise.  I get the patent issues, but that is years away – they are sitting on a pile of cash to boot.  At this point, i think big pharma could steal this company at 50$ a share.


  173. This market is one sick puppy. Off 60 SPX points in the last two sessions, and now we’re struggling to hold a 1 point gain.


  174. JR.. that’s a bit of an odd comment.  I’m here to trade and learn.


  175. First Fitch cuts Conn. now Moody’s cuts Illinois’ bond rating


  176. Phil, doesn’t the innate decay of Ultra like TZA make it hard to calculate level in the long term future? I am not sure when they reset them, but with enough volatility (a bad move on the upside would kill it), the market could tank and TZA could be lower as well. For example, on 12/19/2008, IWM opened at 48.65 and TZA opened at 52.94. On 4/30 IWM was back at 50.06 after oscillating between 51 and 36 but TZA was down to 28.05 after rising to over 110. 


  177. ss
    Let me know what you see, my chart is down. I picked up a small TZA position based on this Sreetsmart Pro basic set up, but I’m not comfortable offering intel without my main chart.


  178. JO – the whole sector is getting crushed.  GILD, CELG, BIIB, BMRN, CEPH…etc etc.  Even the big boys are down MRK, PFE, GSK….sad but true in this environment, and I will not be surprised if GILD is bout for $50-60 based upon cash and pipeline growth.  I really thing hedge funds are driving many down to get better entries.


  179. phil,  i have the Jun FAZ 17-20  vertical call spread at .95 and sold the 14 puts for .63. Trade entered way back, and wondering if i should roll the call or get out.


  180. IN TNA in 37.04


  181. EricL, You still think a re-test of 1040? 


  182.  If you have any questions,

    I will be checking in for the next hour or so…at the same time I am working on a World Cup story about team Slovenia!


  183. yip… I wish your projection on inflation would play out, however I must dissent. Our economy is consolidating, and the weakest are disappearing, leaving the strongest players to control the pricing – ie the competition has been diminished. One of my projects is a $12 mil house. Lumber costs keep going up, and the building stats have never been worse. The small companies (usually the weakest and least capitalized) are out of business. The big guys know this and can ask whatever they want. I budgeted 100K for the foundation, but it is at 300K and still not completed. Steel is going straight up in pricing and that applies to everything needed to complete the project. The big guys (survivors) now are in contol, and the competition that keeps them honest are no longer in the game. I’m sure this applies to many consumer products manufacturers, so inflation keeps marching onward.and upward.


  184. JRW – S/R lines somewhat useful today.  The trendlines are much more powerful.  I have 5 parallel downward pointing lines starting at the end of 6/3 thru today.  dowupdown at gmail dot com for a screenshot.


  185. judah,

    We re-tested it this morning. I see /ES ticks at 1041.5 — close enough. The follow-through bounce is pathetic so far. There will likely be a battle at 1040 before it breaks completely, but after that, it will get ugly.


  186. And another thought, volume has been low these past months and I think it is getting clear that retail investors are not coming back – CNBC scared the little Jesus out of them last March with Cramer and co. telling everybody to SELLSELLSELL. They all missed the 80% rocket last year and started coming back in when CNBC started talking about the new bull market earlier this year (Cramer was buying Amazon at $150!) and now, a 10% correction and everybody is hosed again (more if you bought AMZN when Jimmy was screaming BUYBUYBUY)! These retail investors will miss the next boat and get hosed again and maybe quit for good! It also seem that there is some rotation going on right now. When you see AAPL hovering around $250 when in the last 2 weeks we had price projections over $300, it’s not good. When Intel dips below $20, MSFT below $25, it’s also not a good sign. These guys didn’t stop making money last month! But what do I know… 


  187. Out TNA 37.00 Wow glad I did.  1 Min Rut is awesome SS…..


  188. I’ve been flipping the IRA accounts I manage to a slightly bearish posture over the last hour. Right now just buying index puts for protection, but will be building more long-term short positions in the days ahead.
     
    Even if I’m early and we get more of a bounce, this just doesn’t look good.


  189. gel/inflation/deflation – Below is a January 2010 article with some interesting charts and theories on deflation versus inflation.  The fact of the matter is nobody, even the smartest people alive, have a good idea what is going to happen first.  My best guess is deflation, inflation, then perhaps hyper-inflation…although there are definately some major inflated spots occurring right now…
    pragcap.com/why-deflation-remains-the-greater-risk


  190. JRW/yipcarl
    Must leave in 15 mins. will be back after after hours and look for anything you post on screens. Tomorrow I will be awaiting UPS right about closing if your available. Thanks


  191. SS love to see that chart… yipcarl@aol.com


  192. Phil: with today’s market again I feel better not doing any trades, just reviewing spreads/buyWrites/hedges.
    I need to cover more systematically, the use of spreads has never been totally friendly to me, yet I know, it is a less risky way of establishing a long position. BuyWrites also. That is why – after a long relationship – still ask questions.
    In looking at my stuff, I find: in %: cash81,Stocks/MFunds8,goldetf1,BuyWrites/BCSpreads 9, Hedge 1.
    Any comment ?


  193.  Total US debt today (6/4/10) was $13.06 trillion. Total debt on March 6, 2009 was $10.95 trillion.


  194. My portfolio is now nicely hedged and I don’t see much movement in value up or down, and I like it that way.  I’m a sailor, so in sailing terms, my portfolio is Hove-To and battened down for a hurricane.
    What I’m struggling with is I have a buy list of stuff I would like, I just can’t bring myself to pull the trigger yet.  I prefer the cash, but part of me feels like I’m missing something. 
    It feels like the eye of the storm should be passed, but I can’t bring myself to set any more sail.  Is that alright?


  195. gel1 / construction     The excess labor went back across the border when they couldnt find work , and those that have managed to  stay here have firmed up their prices.


  196. ss
    I’m in TZA at $8.26, how about you ?


  197. Yip, I made the comment after reading your 1108 & 1220
    posts so I don’t think the comment was that odd… Anyways, I was just kidding, no offense intended.


  198. IN TNA 37.02  WOW that moved fast


  199. Now out at $8.48


  200. Phil: the other day there were complaints about excessive TNA daytrading comments, today its as wild and I have not even added to this as I am sitting on sideline.


  201. Chance of a rally into the close for oil…SNB needs to start buying up the Euro


  202. ss: my darn system has no 3 min setting, I looked at your RUT-X (is that it ??0 and wonder whether the 2 or 5 min chart is showing what you were talking about.


  203. Sorry was writing an email to another member explaining the method…

    Got out at 37.17 when it started to weaken… My quick fingers worked well that time… Other times it would be at 38 by now!!


  204. Pharm, Phil / FRX  Do you like at $24, near 52 wk low, with $11 in cash p.s. and $4B to cut licensing deals, buy back shares or buy small co patents cheaply given mkts IPO / vencap wasteland?  Seems Lexapro expiry already discounted?


  205. JR..no offense taken.  However if you pay attention to JRW’s trades of course knowing we don’t know anything about what he is really doing…It is astounding of course if it’s true and I believe that it is true FYI…just keeping it real because no one can know anything for sure…


  206. Whoever was selling yesterday afternoon is still doing it, we dropped fast off the same point.  That’s not too encouraging…  On the bright side, volume is low on the downside so far.

    Covers/RMM – I’d sell the 2012 puts now and then just keep your eye on where you would need to sell calls (1,045 is a good line).   Just be a little conservative like GE $15, INTC $18, MDT 45, MRK $30, PBR $45, PGH??  Well PGH I don’t see where you paid $20.

    Dent/Yip – Well we’ll see.  I’m very upset about this fizzle out here.  Buyers just disappeared all of a sudden, everything just falling off now in synch – even gold this time.

    4x/Gel – It depends on how comfortable you would be holding the S&P ultra bulls AFTER we have a huge crash.  I’d go 2x and then you will be happy to DD and roll to $15 or lower if things really go to hell and, if they go well, then you still make a nice pile on your main position. 

    GS still going down!

    ROFL Jrom!  3 great references in one joke – well done!

    GILD/Jo – I think Pharm was bullish on them.  $33 does seem attractive as it drops their p/e to 10ish.  I’d sell the Jan $31 puts for $3 and, if you want to get a little more aggressive than that, you can take $2 and buy the Jan $31/35 bull call spread and your worst case is owning GILD for net $33 and the upside is $5.50.

    Cuts/Kustomz – That’s the next stop on the global crisis express.  It’s all happening so fast though.  At this pace they will be downgrading TBills by this weekend…

    TZA/StJean – Yes, that’s why we we get paid so much premium.  These are disaster hedges that we expect to lose.  If the market goes down, we expect to win and, otherwise, it’s an insurance cost, not a long-term investment.  We’ve been doing them for quite some time so I guess I could look at all the negative examples (and they are legitimate) that you can come up with or I can let you look at April 28th’s "5 Plays that Make 500% if the Market Falls " and decide if these might be good ways to hedge.

    FAZ/Drum – Oh yes, time to get real.  FAZ is at $17.63 and it doesn’t look like the banks will be collapsing in the next 8 trading days, does it?  You’re in for net .32 and you can get out at net .82 so not thrilling but not bad for insurance.  Now you can take your .82 and go Oct $11/15 for $2 and sell the $12 puts for $1.60 and now you have a free (other than margin) October protector that’s 100% in the money with a $4 upside.

    Costs/Gel – That’s interesting.  Worse than I thought. 

    We are right on trac to hit 10,000 tomorrow by the way…  We’ll need good consumer confidence numbers at 5pm but then we have wholesale inventories and the Beige Book at 2pm that Bernanke thinks looks pretty good.  Friday is May retail sales and expectation have now crashed for those (0.2%) but gas sales will drag them down.  To me, it looks like a major seller, not major selling and when this guy is done, we can move up pretty quick.


  207. Yip, I was just making that comment in regards to your posts today at 1108&1220 as well as many previous ones so I don’t think the comment was that odd…Anyways, no offense intended, I was just kidding.


  208. Hi Phil — RUT broke low 617 on 5/25 now 610 ish where do you think th enext support will be or do you think it is at bottom— thx


  209. Sorry for the double post, typing from my iPhone… For a trade related question, Phil how much further do you see RIG falling? From what I’ve read they have a pretty airtight contract with bp has anyone else read different?


  210.  Today is really irritating day, feels like majors are trying to stop everyone out. trendlines dont hold


  211. I was bullish on GILD…that chart is horrible and summer is the time to start buying biotech, but the sellers are routing them right now….rotation as I have noted a few times. 


  212. RMM
    Would you rather that I post once every 2 hours and answer 5 questions including yours, or would you like your answer as soon as I can do it ?


  213. stockbern/construction
    Yes, many have gone broke and returned to Mexico because the cost of living there is far less. My cost numbers are influenced nationally, as much of the componentry such as lumber, steel, windows, doors etc are out of state suppliers. Labor cost is influenced by local influences, and I am getting most of my labor from the San Jose area, which is still doing well because of the Silicon Valley economic prosperity.  Believe it or not… the greatest uptick in costs came from local government permit fees, and state government increases in sales taxes. No wonder there is a depression in the property development sector.  Economics should be a required part of any curriculum starting in high school, as it seems nobody understands the cause and effect of government snatch and grab fiscal policies.


  214. JRW – I’d rather you post every 2 minutes!  Please don’t stop buddy…and if it doesn’t work in this format, Phil has mentioned some other ideas.  Personally, I don’t think you post enough on what your are thinking…


  215. In TNA at $37.33
    Thanks, SS


  216. If anyone is in WFR Jan11 10′s the roll to the 7.50′s is cheap here.


  217. Phil…It wouldn’t surprise me if the market keeps failing that level and the move up to 10,200 will happen will be a combination of a gap up which you somewhat mentioned and the rest of the move will happen so fast that if you leave for breakfast and come back you would probably missed it.  If we do rally back that’s certainly a possibility of what we could get.  Of course here we are at the highs again…


  218. JRW III: WOW< I have today not asked a question on daytrades at all, I only watch.
    To answer your question though: by now, your way of TNA trading is well understood – TXS to you - all I personally wish you would do: when you open, send comment about that immediately, and the same when you close. No more sytem explanations.
    Of course, that can only be wish, you have no obligation to do that.
    I have entered into a TNA trade in many days, I watch, I have concluded that if I could enter and leave as fast as you, I could be a real good shooter.
    Of course, you have another advantage: the seaair out at the coast keeps your head cool which is good for thinking.


  219. yip / Reality
    I give out levels,and methodologies,; I tell you what I’m going to do usually before I do it, tell you when I do it, and report results in terms that have been requested by this board. If you want to come along for the ride, great,  if you don’t, great; but don’t insult me !! My sloppy trend lines and simplistic R/S levels have been working fairly well for a while now.
     
    Good hunting !!


  220. Percents/RMM – I can’t see any reason to have 8% in mutual funds that will do nothing for you.  Put it into buy/writes or at least take more buy/writes.  Surely there is a stock out there you want to leave to your wife or kids when you die?  T, IBM, GE (who are wisely unwinding CRE), AXP?  Take AXP – you buy it for $37.80 and you sell the 2012 $35 calls for $9.25 and the $30 puts for $5 and that puts you in AXP for net $23.55/26.78.  So now you have, for example $23,550 tied up and you may end up with $53,550 worth (2,000 shares).  They pay a .72 dividend so that’s $1,440 a year back right there (2.6%) and then you have whatever upside on AMEX over $26.78 a share (it’s $11 higher now!).  How is cash better than that?  If you don’t die by 2012 and you do get assigned, you can go for another riound and drive your basis down to $20.  Other than our spike down (they hit $10), AXP hasn’t seen $20 since 1997.  Maybe things will get cheaper and maybe they won’t but with only 9% of your portfolio in stocks – there’s a big chance that you’ll miss an opportunity to buy in cheap.

    $2Tn a year/BDC – That sounds about right.

    Sailing/Hoss – See my above comment to RMM.  If you know how to balance then you can take on the right amount and you can shift slightly bullish or bearish with the trading winds…

    TNA/RMM – It seems fine to me at the moment.   As I said, it’s not about having no discussion but I want to avoid excessive discussion of it.  This is a wild day so a lot of day-trade moves in TNA.  For me, I’m not crazy enough to trade in this chop other than accumulating my longs on the dips.

    FRX/Tusca – I have no clue on those things.  Pharm seems out today. 

    Hey, nice drop in Gold finally.  Like a rock from $1,245 to $1,237 and down from high of $1,253 (where I was DD’ing those GLLs).  That may be a sign that things are calming down in Europe finally.


  221. JRW III: sorrry but how did I insult you ? In fact I admire you.


  222. Thx Phil.  Lightly moving in the bullish direction.  Took PFE for $14.35 and sold the Jan 11 C/P for $2.85 giving me a net entry below Mar 09 low.  And I bought back those calls on BTU and JPM I asked about the other day and am leaving them uncovered for now, so feeling better.  Still just learning the rhythm.
    In the three months I have been using your system, my little portfolio is up 9.9%, so not only am I learning, but I am APPLYING that knowledge, and it’s paying off.  Thanks.


  223. JRW/
    And this is why you have a golden box…
    Thanks for posting, your day trading helps me greatly  to better time my option selling/buying eventhough I am not day trading TNA with you. ay be one day :)


  224. Out of TNA at $37.68


  225. cafords/  WFR   thanks for the reminder.  You can get so wrapped up in day trading that its easy to  forget your other small positions. 


  226. Phil; TXS for comment, the MFunds I have for a while, I do not particularly like them,
    options trading requires a lot of attention, my wife thinks I should not do this at all, she is worried, should I hit the bucket, she would not know what to do then. Anyone she then would need would also have to know something about options.
    So, at least I need to set up the timeframe accordingly and leave her instructions what to do just in case.


  227. RUT/Gucci -  I’m still leaning towards forced bottom here.  They had a grain of truth in Europe and the hyenas went into full attack mode and are running after anything on that wheel of defaults (main post) they can sink their teeth into but, as I have kept saying – it’s not NEW news!  It’s just a rehash of every problem we’ve been observing here for months and these are the reasons we shorted the market at 11,000 and targeted a 10% pullback.  Now we have our 10% pullback so why should we suddenly think our targets are wrong.  Of course this happens at the top and bottom of every range where I have to act like a goalie trying to keep either the bulls or bears in check when they think we’re either going to the moon or straight to hell because "this time it’s different." 

    RIG/Jrom – It’s not so much about the contract (which won’t help them if BP goes BK and can’t absolve them of damage) but about the ban on drilling as RIG is mainly in the deep water biz.  Still I think we’re at a fair price here ($46) as a LONG-TERM investment. 

    Grab/Gel – Well since only rich people can afford to build right now, may as well stick it to them.  I think the local government understands that just fine. 

    WFR/CaFords – Nice catch, good roll!

    We’re still running into Mr. Seller but he’s running out of stuff I think.  Big stick at 3pm should leave him thinking he might have made a big mistake…


  228. Euro looks like a fish out of water taking its last breath


  229. RMM
    Sorry,you did not insult me, I thought you were saying I was posting too often and I was asking you how you would like me to post.  No problem.


  230. JRW?  I’m confused.  Insult you?  Not even close.  There are people on here saying that I have a man crush on you?  Where do you get the idea I am insulting you? 
     
    ON the contrary I am one of your biggest supporters?  I’m confused.  I said I believe you?  I was just keeping it realistic saying we don’t see you trade.  i say that because your entries and exits are so good they are hard to believe.  You are the best I’ve seen.  These are compliments not insults??


  231. lionel,
    Thanks, Peter D does the same thing; I think that is actually the great value to this board. Although, there’s nothing wrong with some quick profits on day trades !!


  232. yip – JRW accidently typed "uip/reality" instead of "RMM/Reality"
    JRW – I thought RMM was saying "too much" also…still think a JRW tab is the best idea long term for the whole group…but won’t push the point…


  233. yip
    Sorry, my mistake.


  234. 9.9%/Hoss – Hey that is kick ass, especially considering what a rough 3 months it’s been.  Nice job!  The good news is that you will get more and more comfortable with practice and that will allow you to do more "set and forget" trading and move on to have fun with more advanced stuff as you do get into the rhythm of the markets.  Also, BTW – sometimes you can feel it and sometimes you can’t – don’t fool yourself into thinking you always can, just learn to take advantage of the times when all seems clear…

    Kicking the bucket/RMM – I know, that’s what I was saying.  I can tell that’s your concern but keep in mind all you are doing is making a long-term planned buy of a stock at a low price.  There is no particular knowledge required.  Either it gets called away and converts to cash or it gets put to you (or your wife) and there is stock that can quickly be sold.  


  235. I have a man crush on JRW and i want everyone to know!! I love you MAN!! Sometimes i fantasize I’m Phil’s wife, i can hear him telling me no no no honey why pay the extra premium? Love you Phil and thanks for taking such good care of me!

    Come on guys lets keep this from becoming a circus, I’ll start first… :-)


  236. Phil / late sell off      Do you anticipate again today?


  237. Kustomz -LMAO…I myself have a profit-crush on JRW and Phil…oh, and Phil’s black bow tie from his posted pic!


  238. TDameritrade not working


  239. goldman: lets not confuse things, yip is yip and I am RMM and I did not insult JRW.


  240. Kusto…LMAO!!!!   AND Goldman, you guys are hilarious…


  241. I was distracted for like 20 minutes and missed a bunch of stuff.  Damn it, focus is a must.
     
    JRW Tab let’s do it!


  242. Phil : You said don’t go with SDS spread because your bullish now, but do go with the TZA spread as insurance on my long positions since I don’t have ANY insurance now on my large cap buy/writes.Although TZA is small cap coverage, you still  think TZA  works for me. Correct? Also,approx. how much do I buy for each $100k of buy/writes. Thanks again


  243. No man crush here……. :)


  244. 1020
    THANKS !!!!!!!!!!!


  245. 1020… 10-4. Hell No…
    However I like Goldman’s ‘profit crush’ LOL….hahahah.


  246. More Bowie as my GLLs go green!

    Redbook Chain Store Sales: +3.6% Y/Y vs. +2.5% last week. The warm weather made for a pick up in retail sales.

    ICSC Retail Store Sales: +0.8% W/W, vs. 0.6% last week. +3% Y/Y, vs. +2.5% last week. Seasonal summer weather led to marginal rise in sales.

    NFIB’s Small Business barometer rises to 92.2 from 90.6 – the best reading in almost two years. Seven of 10 index components rose – but job creation and capital expenditure plans barely gained, and remain at recessionary levels. (NFIB survey)

    The U.S. leads the way – ahead of closely-lumped Brazil, China and India – in a new Bloomberg quarterly survey of subscribers asking about their current favorite investment markets worldwide. But 42% of investors say the world economy is deteriorating, double the 21% who thought so in January.

    Though the U.S. faces long-term problems, its economy is making extraordinary improvements, especially compared to Europe, BlackRock’s Bob Doll says. Corporate profits could reach a new record high in Q3, and free cash flow for non-financial firms also is exceptional – cash on the balance sheet is close to 11% of assets, a 60-year high.

    The industrial rebound is going better than expected, Honeywell (HON) says, which bodes well for its units making automation systems and specialty chemicals for manufacturers. For the rest of the year, it expects a pickup in demand for aerospace products and a drop in demand for auto turbochargers.

    On the other hand:  "Go to cash," advises BMO Capital Markets – plainly bearish, and here’s why: "The global credit environment is worsening. Cost of capital is going up and availability is going down. There are large gaps between where the credit market prices risk and where the equity market is priced. Equity is lagging the deterioration in credit conditions."

    "The news on jobs isn’t as bad as it seemed on Friday," Brett Arends says. "It’s worse." Little noticed from the report: Leading indicators for June show that the economy will actually lose up to 200,000 net jobs, the unemployment rate improved only because 1.5M people dropped out of the labor force, and there’s almost no growth in private sector employment.

    Employers’ Q3 hiring plans stay roughly flat from Q2, with a seasonally adjusted net 6% of firms saying they intend to hire, up from 5% in Q2 and -2% Y/Y, according to the latest Manpower Employment Outlook survey.

    Morgan Stanley’s global exchange co-chief, Sophia Drossos, says the euro’s got a ways down to go – foreseeing a trough not this year but next, to as low as $1.12. Eurozone troubles are priced in, she says; the surprise could be U.S. strength helping the dollar. Euro currently +0.33% to $1.1975. (video, 3:55; via)

    German industrial output rose by 0.9% in April, as expected, and should increase further given a rebound in foreign and domestic demand, the government said. The numbers follow Monday’s news that German manufacturing orders rose by 2.8%, beating forecasts and adding to signs that Germany is on the path to durable growth.

    Chicago Fed President Charles Evans says Europe’s troubles likely will lower U.S. economic growth but the impact should prove relatively limited. It would be problematic if banks become more fearful and pull back on lending, but he says this doesn’t seem to have happened so far.

    The IMF calls for "decisive action" from the eurozone to ensure the stability of the region’s monetary union, though IMF chief Dominique Strauss-Kahn notes the eurozone’s debt and deficit levels “aren’t hugely higher than elsewhere. The stress put on Europe is probably exaggerated.”

    Fed Governor Elizabeth Duke says new rules aimed at protecting consumers from taking risky loans are necessary but will cut into bank profitability. The changes reduce the ability to build profitability models around penalty pricing such as overdraft fees or raising rates on existing credit card balances."

    A growing number of market pros think we’re slipping into bear territory, noting more fear in the market. Dennis Gartman is one who notices the recent pattern of a firm open, trade a bit better, a slowdown, rollover and then close hard near session lows. "When the pattern changes, we’ll change."

    Uncertainty over costs relating to financial and health-care reforms is hampering jobs growth, Maria Fiorini Ramirez says. "It’s very unfair to say that we have a deflationary environment without taking into account the real cost of living and being in business."

    Enjoy those cheap “Made in China” products while you can, because rising salaries in China likely will affect them, the NYT reports. Local Chinese governments are increasing the minimum wage, while companies such as Honda (HMC) and Foxconn are raising salaries for factory workers. Honda is hit by a second strike in China.

    In its monthly outlook, the EIA keeps its oil consumption forecast at 1.5M barrels but lowers price projections, expecting $79/barrel in the second half of the year. Crude futures +0.81% to $72.02.  Looking out even further in oil prices, forecasts for 2015 range as high as $200/barrel, but the spread isn’t especially loose – and nobody’s expecting crude to be cheaper than today. (earlier)

    The Treasury sells $36B in three-year notes at 1.220% (.pdf). Bid-to-cover ratio of 3.23, vs. a recent 3.08; indirect bidders take 46.7%, vs. a recent 51.5%. Direct bidders take 16.3%, vs. a recent 11.9%. Long-bond Treasury futures bump up, +0.13%; 10-year +0.05%.

    McDonald’s (MCD) announces global comparable sales +4.8% in May; U.S. sales +3.4% vs +3.2% consensus, +5.7% in Europe, +3.8% in Asia/Pacific, Africa and the Middle East. MCD shares +1% premarket. (PR)

    The idea that BP (BP) might actually file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. Given that Shell (RDS.A) and Exxon Mobil (XOM) have billions in cash on hand and market values that easily exceed BP, now would be the time to make a deal.

    Transocean (RIG) records list fewer workers than usual on duty the day the Deepwater Horizon oil rig exploded, and the head of a congressional committee has asked the company to explain the apparent shortage of personnel.

     

    Three lunchtime reads:
    1) U.S. stocks face a world of worries
    2) All currencies are weak relative to gold
    3) The false promise of crisis-resolution funds


  247. JRW – :)


  248. Yip – :)


  249. 175M on the Dow at 3:25 – things are getting interesting!  Another stick attempt coming up, we’ll see if this jerk is done selling…


  250. Hi Phil back again DIA mattress trust the same full cover or ?? thks


  251. Phil,  Why do you like GLW better than LPL?


  252. In TNA at $37.35


  253. Yodi/
    Thanks for asking!


  254.  Hey all,

    This week I am going to be investigating four nations that I think have intriguing investment opportunities that are part of the World Cup 2010 in South Africa. We will start with Slovenia, move to Honduras, then to Nigeria, and finish up with Chile. These reports will talk about the nation, its history, its economy, and why it is an interesting investment moving forward. This will help us get into the spirit for the World Cup and connect it to investing!

    You can check out my first report on Slovenia as part of The World Cup Series.

    Good Investing!


  255. Phil – what do you think of AAPL? It’s been downhill since yesterday.


  256. Hi Quite can you hear the noice of the stick looks like the buyers are coming out of the closet


  257. RUT still red. I think there’s a lot of index futures buying to push us up.


  258. We love you too Kustomz!

    Sell-off/Tusca – No, Mr. Stick just spent a lot of cash to get rid of that seller.  I think we’re on track for 10K, probably not at the close but tomorrow morning. 

    DIA/Yodi – Yes, full cover.  Sept $103 puts 1/2 covered with June $102 puts and 1/2 covered with June $103 puts and I’m expecting we’ll finish up at 10,100 for an easy roll but maybe even get to 10,250.

    GLW/Stock – Mainly because I’ve followed them for years so I have a comfort with their flow.  Plus LPL is an ADR and I can’t get good books, which is a big turn-off for me.

    Nations/David – Very nice idea!

    AAPL/Nicha – I think it’s a healthy and normal sell-off as a new IPhone isn’t a big revenue generator.  Also, labor costs are going up and AAPL can’t pass through that .50 per phone (because of their x99 price points) it takes to double the standard of living for 800,000 Chinese workers. 


  259. Is it just my program (LiveCharts) or do you guys show Dow up 100, S & P flattish?


  260. Phil – really curious about Mr. Seller – any way to find out who it is?


  261. Can someone ‘splain why a "Bearish" advisor, says  "Go to CASH!"  ??
    Why one earth, if you are a bear with a strong opinion that the market will crash or dive, why wouldn’t you advise  with extreme prejudice to "Go to  3X puts!",  or at the very least, sell the  indexes short?
    Several have come out with go to cash recommendations but none that I read call for shorting.
    Anyone?


  262.  MTN making a huge run up to end the day. I am exiting if it gets to 38.80. If you are good with 3-4% instead of risk of overnight…get out.


  263.  So fed up w/ TDAmeritrade…  they are costing me $$$ !!!


  264. snow,
     
    Lots of funds are selling.
     
    We need some honest-to-goodness follow-through tomorrow, not the kind that quickly gets sold into, to have any hope of a sustained rally.
     
    I’m very skeptical we’ll get it, but happy to play us up again if we do.


  265. Bought DELL seems very cheap to me here

    Anyone one else having problems with TD streamer?? Thank the Lord for TOS


  266. Out of TNA at $38.65


  267. Gel/permit fees  You may want to caution your chauffeur to watch their speed when driving to your "house" as well!  ;)


  268. Phil,
    I cashed out my SDS June hedge when we thought it was the floor yesterday morning. Now I only have a small TZA hedge (2.5K) covering all my longs (140K in stock and 130K in naked puts and buy/write puts) with no mattress DIAs. I was previously overwritten on naked puts and trimmed up to get even with cash on hand  (130K) and have been patiently waiting, rather than turn bearish and get burned again on the incessant rebounds back upward. Please advise.


  269.  kustomz / yes… I just got off the phone w/ them… all they say is sorry, sorry – I don’t know any online brokers that systems are up and working all the time.  3 times down in the past month!


  270. Move late in day looks good.  Much better chance for a follow through tomorrow…volume picked up as well. 


  271. Pulled the trigger on one of my anchor plays just now.  Had sold AAPL June 260 calls yesterday for 5.90.  Bought them back just now for 2.60.  I think I’ll be able to sell them for more than $5 again before the week is out.   On 50 calls a quick 16K. 


  272. Testy Tuesday indeed, 7 1/2 % for the portfolio on the day. Trade % was higher, but if you’re interested, you can calculate those on your own.


  273. srfrog i received 250 free trades and when I use them up i was told to call for 250 more (wont end there i guarantee that) , i would call them back if i were you and ask for 250 free trades, thats the limit


  274. Testy of support Tuesday.


  275. "incessant rebounds back upwards" ,  LOL,  what an attitude !
    Great call on FAS today !


  276. RUT and Nas are really dogging it.  Been a long time since indexes diverfed from each other by a point.  One positive note on AAPL and the Nas goes flying tomorrw – maybe that’s the plan.  AAPL is up to 20% of the Nas now!

    Charts/Ac – Better whack that monitor, I’m showing both up about 1%.

    Seller/Snow – I wouldn’t know.  I just watch the order patterns and think about what kind of programs are firing off and when I see a certain pattern I start to see what one guy is doing.  It’s kind of like staring at those dot pictures until you see an object…  Anyway, I don’t think you can track those things back (officially) but, after a while you pick up on some of the signs. 

    Cash/Flips – As I was saying in the main post, when you see this much negative news coming at you from all angles then you know you are surrounded by hyenas and that means there are some desparate bears out there calling in their favors and getting as much negative spin on the thing as possible so they can buy out their short positions (so they need to go long and they tell you to go to cash) before they get squeezed.   If they get caught in a bear trap, the hyenas will gnaw their own legs off to try to escape.  Mr. BMO is just doing his job, for his organization or for his friends, to make their escape as painless as possible.   

    MTN/David – Nice catch!

    Nice timing AC!  I’d start moving into some of the TZA spreads.  They pay 700% and not much downside as, even if you end up owning it at net $4 – it’s always good downside protection.  So plan to work your way into $16K, $4K at a time and if we move $1 on TZA in either direction you scale in so you either buy more cheap or you DCA at a .50 move when it’s going your way. 

    TDA/SrFrog – That’s BS.  TOS hasn’t been down once that I can remember in months (I think it was slow one day for a while).  TOS doesn’t go down because they have a very thin client system – the more graphic your interfrace, the more likely you go down.  That’s why OXPS is a nightmare (but I haven’t tried their new thing).  I must say that Power ETrade has also been very reliable this year but their execution sucks. 

    Very nice timing today JRW!

    Well that was fun, wasn’t it? 


  277.  kustomz… just got off the phone w/ them again… got 30 free trades for next 60 days (how the heck did you massage them to get 250!?)… guess 30 is better than none though!  Thanks!


  278. That was a damn fine call on the action today Phil. Now a buy/write question. How about buying PFF (.25 monthly dividend) and selling Jan11 calls ($1)/puts($3.4)


  279. {Phil that was sell the 37 strike Jan11 calls/puts


  280.  Phil… I’m installing TOS (from TDA) now.  Do you know, is that any different than regular TOS?  Hate to learn yet another new platform – but 3X down in past month (flash crash day… yesterday morning… and today) is unacceptable – BS I AGREE!


  281. srfrog, No massaging, person on the phone asked how many i wanted. I make 30 trades in a matter of days. I think its just a matter of pleasing their Apex clients, and don’t be shy about asking for free trades when they are at fault. Just looking out for my fellow traders, twas my pleasure srfrog!


  282. gel / $12M
    Is that construction cost, total cost, or retail ? Whichever, VERY impressive !! Good luck.


  283. Pharm – or anyone re: charts
    Very basic questions on charting on TOS- for a Simple Moving Average chart/study- there are 3 parameters- price, length, displace. If, for example, I am looking at a 2 day, 10 minute chart, and I set up SMA for a "5" period, does that track the previous five- ten minute periods? and if I switch to a a different time frame, i.e., say a daily chart and not change the "length, then that tracks the previous 5 days?
    Also, what is the "displace" parameter and how is that used?
    Finally, what are your thoughts regarding using the closing price or any of the other options for the price parameter.
    Thanks,


  284. Cramer called for 8200 DOW today.  Between today’s close and that I feel a lot better about all the longs.


  285. lapper / Cramer
    LOL, see my 10:30 post; that’s what I’ve been waiting for !!


  286. that’s right I saw it.  Good trading today JRW.  I botched the exit at the end, other than that it was a good day.  Thanks for your lines every day!  Keep em coming.


  287. pstas, you’re correct on your assumptions about the SMA, based on the time choice you’ve selected in your chart. Displace is simply the offset you want to apply to the calculation, so for instance if you have SMA for "5" period on a 2 day 10 min chart, and you specify an displace of 2, the SMA would be calculated from the previous 7 periods all the way to the 2 periods before your current time (inherently "skipping" 2 10-min periods). Closing price is the most used component, but you can also use an avg of the high, low and close. However using the close should suffice.


  288. Crammer?  You’ve got to be kidding me.  Did he really call Dow 8200?  OMG I may buy long in the after market…LOLOL.
    Some things amaze me, like how Crammer hasn’t been assassinated or that they’re that many stupid people.  WOW.


  289. Good one, you have Matt Simmons on CNBC Fast Money telling everybody that BP will not survive the summer… Right after that, some other guy tells them that copper is going to $1. Gloom and doom much!


  290. A guest on Fast Money that made some sense…. get cut off, he was bearish on copper go figure


  291. Cramer  was pumping XOM earlier as "too cheap", so may have to cover tomorrow. I still think boss GS is going down.
    Europe’s down on them, China’s on their case, so that’s gotta hurt business even if our brown nosed gov does nothing. Maybe they give up banking & just stick with casino operations.  ?


  292. the FAS bull spreads you mentioned earlier today are significantly more expensive than the prices you mentioned, but i like the idea. In view of the current prices, what would be a good spread? thanks


  293. srfrog--you did better than I with TDAmeritrade--I only got 15!  and what is the TOS that you spoke of installing, if you please?  THAnks.


  294. Can somebody clarify what is the number said by phil such as today “175M” volume would be Roo low to be that??


  295. fizz… you can download the TOS (think-or-swim) trading platform from TDAmeritrade.  I had been using Strategy Desk – but that went down today along w/ the website.  Go to the Trading Tools tab and you’ll see it.  Apparently TOS did not go down the rest of the website or Strategy Desk.  Looks like it’s going to be quite a learning curve – I’ve been messing around w/ it the past couple hours… however it has a lot of good features.


  296. TOS is a heavy learning curve, but well worth it.  I feel almost like it reads my mind — if there’s something I want to do, there’s almost always already a way to do it; it’s just a matter of figuring it out.  Several months into it, I think that I have it down pretty well, but I still discover new features (things that have been there the whole time) that are handy.


  297. I’m getting ready for some travel and need a trading platform.   I’ll be staying in the U.S.  Who has used iPad for this?  What is your impression?  Thanks. 


  298. JRW
    The number is market value (today). Cost of land $5.75 mil. anticipated cost of construction is $4 Mil + or -, and the balance is is for GEL for the cost of money, effort and aggravation. This is not at lot for the area., as $25 mil is common, even in a crappy market. Roberts (KKR) just built one that is valued at $50 Mil, and there are a lot of those – but they are directly on the coastal water, and very desirable and rare. Mine is up the hill and overlooking the beach and golf course, so not as special. Charles Schwab is right below mine on the 5th hole of the Links, and is in the $35 mil range. The US Open is here 10 days from now ( yep… Tiger will be here ) and this hoopala will drive my investment upwards, I hope. As you can see the sky is the limit, and I am just a pauper, in this game.


  299. Thanks Phil…good teaching. Tell me what you think.   I advised my Dad to get out of some bonds and get into some Blue chips. He uses GS for his retirement portfolio and instructed them to get in. They put in half on the first recent low and then 1/4 in yesterday. There remains 1/4 to allocate. I asked him to tell them to report on allocation and here is what they said:
     
    We put to work another 1/4 this morning and were able to pick up the intra day rally.  There is a clash between two opposing forces (on one hand, low interest rates, diminishing threat of inflation, improving corporate profits versus growth concerns in Europe) in the market which is creating enormous gyrations in prices.  We may not be out of the woods yet, but feel the corrective lows have been made albeit we could see a re-test of lows over the next few months.
    It seems like the call you are making. I’m curious to see where they think the final buy is.
    FWIW everybody, I’ve never had IB go out.


  300. …FSLR
    First Solar Inc.
    is planning to double the size of its manufacturing plant in Germany in a effort to meet demand in Europe and hedge its bets against the euro.
    The company did not say how much money it was committing to the expansion, but said it would increase production at the Frankfurt an der Oder facility to 446 megawatts a year by the fourth quarter of 2011, up from the 223 megawatts of panels now produced there annually.
    The company has about 600 employees at the manufacturing facility and expects to add several hundred.

     


  301. srfrog, I had TD and traded their version of TOS. Then switched to TOS when I found out the rules for IRA’s weren’t the same between them.  The TDTOS product is a pretty watered down version in comparison. 


  302. Damn, something happened at 7:45 that zapped the futures.  I don’t think it was Cramer but we flipped down half a point really hard and fast.  All I see is Chinese workers win raises but that shouldn’t zap all the indexes at the same time like this.  Maybe someone trying to paint a grim picture to shake Asia down.  Something to do with Japan maybe as they had a nice rise in machinery orders and the Yen was jammed down to 91.50 so I’m going to have to guess this is just them opening currency trading (Japanese are biggest currency traders) on the Fitch news, which came after they went to bed last night. 

    So we can assume this is an incorrect, latent reaction to what for us is yesterday’s news and that means I like the RUT futures (/TF) back at 612 but a stop at 611 in case it’s something else.

    It’s funny how I turn to the WSJ for news, even though I just read a great post by Barry highlighting what total crap they allow to pass for facts in that paper under Rupert’s regime. 


  303. Phil – I LOVE these futures trades at random hours! I wasnt able to get in on the 612 part but if I had it wouldve been 130$ (2.6%) on a 5k contract in less than 30 minutes. I know you have to sleep, spend time with fam, ect but Im just letting you know that your posts after hours/late at night has made people who followed them a decent chunk of change. Thank you, we appreciate it!


  304. PFF/Kururi – I think it’s interesting but, of course, if you look at how badly they got hammered during all of 2008, I certainly wouldn’t call them a safe bet by any stretch.  The options are thinly traded so you need to pick a position you will stick with through thick and thin.  With the stock at $36.30 you can sell the Jan $35 calls for $2 and the Jan $33 puts for $1.70 and that drops your net to $32.60/32.80 so about a 10% discount plus you get your dividend but I like so many dividend payers better than this like:

    PGH pays a 0.066 monthly dividend (6.7 cents) on each $9.14 share.  You can sell the Jan $7.50 calls for $1.85 and the Jan $10 puts for $1.85 for a net $5.44/7.72, which is a nice 37% if called away and 15% off if put to you (and they are down from $12 on the oil crash).  That makes .067 a month .80 for the year on $5.44, which is another 14.7% annualized so a nice position to build into.

    TOS/SrFrog – I have no clue on TOS from TDA.  I would assume they didn’t build a whole other platform but who knows?  I guess if you go to the TOS site and download their free client software, you will be able to compare the two. 

    CNBC – They have moved into full-blown end of the world mode lately.  Pretty much since that day I pointed it out - it’s like they are doing everything they can to get the markets lower.  I wish I could figure out GE’s angle on all this – maybe they are looking to get bailed out of all the CRE they are dumping?

    GS/Ekor – Yeah if I were Blankfein, I’d give China a very wide berth in my travels.  They will cuff him at the airport if they want to ask some questions.

    FAS/Drum – first of all, make sure they really are getting away.  Look at the last sales of each strike, not the bid/ask to get an idea of what’s real.  Ask me when the markets are open tomorrow and we’ll see what looks good tomorrow. 

    RUT 613.20 so mission accomplished already.  $1 trailing stop on these guys is good or 1/2 out at 613 (or whatever $1 stop) with a $2 trail on the rest means you are out at least even but don’t have to baby-sit the trade all night.

    Volume/Amatta – Typical volume on a program trading day is 20M by 10, 50M by 11 and about 25M per hour (140M by 3pm) and then about 40M into the close.  If the volume is 140M or less into the close, we consider it "stickable" (easy to influence with 50M shares).   If the volume is +50% in any given segment or accumulates over 160M before 3pm, then that is "heavy" and hard to save (if down, of course).

    GS/AC – That’s interesting.  Do they just go out and buy whatever they feel like for your Dad?   Do they hedge for him or sell calls?

    Ah, Dow picking up nicely now.  I think my premise was right

    Futures/Jrom – They are random partly because, as you say, I have a life.  Also, even when I’m looking, I wouldn’t say something unless I thought it was pretty obvious.  Once the market closes, you can use the RSS feed to send addl comments to your reader and maybe that has an Alert for you but I don’t send out Futures Alerts because those trades are not for most people and I wouldn’t want people to get the impression they should be trading them. 

    Meanwhile, 614.2! 


  305. How do you play the RUT after hours?


  306. Phil / WSJ / Pass For Facts:  That’s why he bought it!
     
    The rest of the week should be more interesting then normal.. only wish I could pay more attention to it. 


  307. I agree w/ Phil.  The trip to 1040 looked forced.
    Friday we had a huge selloff w/ a TRIN of 14+ !!  (crazy bearish)
    Monday, more selling; TRIN about 2.0  (still bearish)
    Today; more selling most of the day, with a TRIN about 0.50 (bullish) and the VIX down about 8%.
    Oil Service dragged us down in particular; and Nasdaq / AAPL  ( i bot some AAPL bottoms for trade$$).
    Not that I’m getting all bullish; but we could see a decent bounce.
     
    Just saying that today’s lows looked like a forced test of 1040


  308. SS you probably won’t see this but I’ve been testing all day and it seems to me SMA are much clearer than EMA, I was amazed at the obvious difference.


  309. Phil … its time to Take The Quiz !
    Who said it — Democratic leaders or Communist Party USA?

    Read more: http://dailycaller.com/2010/06/08/quiz-who-said-it-democratic-leaders-or-communist-party-usa/#ixzz0qK0yQFRJ
     
     
    :grin:


  310. Phil/GS: Oops, the last part where it said "It seems like the call you are making. I’m curious to see where they think the final buy is" was my statement to you and was meant to be separated from the other text…not sure if you picked up on that.
     
    They gave a preview of recommended picks for his approval before they bought and I looked at it for him. I’m happy to report that many of the picks are in your top 20 or 30 that you’ve recommended as long term holds for a retirement portfolio over the past year and a half, which is why I told him to go for it. He is of the old "buy and hold" and "options are dangerous" mindset so I am educating him on the benefits and potential of their use, as well as market timing. They will do whatever he directs them to do since he is a "sophisticated investor." So my plan is, once he has the positions set, to get them to sell covered calls …baby steps.  :-)   I know it would be better to have them at the outset but it is just doesn’t seem tenable for a few reasons right now. Plus, if we really tanked from here and had another generational buying opportunity, he could just double down on the whole lot. No harm in sharing the list though.
     
    MSFT, NKE, PG, BA, CSCO, FCX, SLB, HON, EMR, BAX, BEN, JNJ, AFL, TMO, BK, ORCL, OXY, JPM, V, SCHW, SPLS, TGT, QCOM, BIIB, PX, BAC, PX, XOM, PEP, COST, MCD, TRV, GIS, AAPL, EOG


  311. yipcarl: RUT after hours can be played with mini Russell 2000 index futures (/TF on thinkorswim).  Open all but an hour or so every weekday.  There are also S&P 500 futures (/ES) and mini Dow futures (/YM).  The list goes on an on.  I’ve found loads of ways to lose money on these things, mostly because I traded them without knowing what I was doing.  Now that I know I don’t know what I’m doing, I’m not losing money anymore, because I know not to play them until I do!  :)


  312. yip,
    And what boobearsdad said !!


  313.  Futures/boobearsdad- What pearls of wisdom (other that use a stop!) can you offer on futures trading? I’ve often wondered why JRW doesn’t trade the RUT e-mini. My worry about futures trading, at least on the long side, is that if we have another "event" like 5/6 you can get royally screwed. Not as big a deal on the upside. 


  314. Good morning!

    Been a bit bouncy this morning but we’re surviving gigantic pullback in Europe (back to flat from up 2%) so far.

    Copper went nuts overnigh and is back to $2.825!

    Forced/Cap – Yep, I just can’t find a better logical place to put money but now I understand why ZZ was doing so well in Q1, people were probably buying mattresses to put money in them!

    That was a great video cap!  I passed my quiz, now you tell me if it was said by "Ann Coulter or Adolf Hitler?"

    RUT/Yip – Futures.

    Speaking of the welfare state Cap, here’s a nice map for your blog of the states that receive more Federal money than they pay in taxes and, WHAT A SHOCKER, they are almost all red states with NY, NJ, NV, CT, CO, NH, MN, MA, WI, MI, IL, IN and CA pretty much supporting the entire rest of the country:

    GS/AC – Very interesting.  I don’t agree with MSFT (it’s over), V (tough road ahead), MCD (too expensive), AAPL (too expensive), TX (too expensive) or EOG (CHK is miles better).  If you have the cash, you can do a small buy/write on CSCO, FCX, SLB, JPM, BAC and XOM (my favorites on this list), even just to Jan, and then show him how much better you perform on the same investments over the next 7 months.

    Good plan Boobearsdad and JRW.  Futures are crazy dangerous and, as I said earlier, other than oil, I very rarely touch them.  Oil contracts require about $2.5K per contract in margin and you make or lose $10 per penny the contract moves.  It is not at all uncommon for them to gap .25 onw way or the other so, if you have 10 contracts, a trip to the bathroom can easily cost you a couple of thousand dollars!


  315. TD ameritrade still having problems? My portfolio is not getting updated


  316. Futures/drcraig: Wisdom?  What Phil said.  I’ve earned no wisdom — and no money.  Honestly, they’re too rich for my blood.  Maybe when I have more money, but for now, the leverage is just too much for me to handle, relative to portfolio size.  I’d win one, lose one, win one, lose one, and just about have a heart attack in the process.  You can’t imagine how happy I was on 5/6 that I had left that stuff behind; if you zigged that day when you should have zagged, you could have easily been gapped out of thousands per contract in the blink of an eye, and unless your software platform was keeping up (and even TOS was struggling that day, at least for me), there wouldn’t even have been anything you could do about it.  TOS also put out a message early in the flash crash saying they had changed the margin requirement on futures to 50%; not sure what that would have done to me, but it couldn’t have been good.  (What do they do, liquidate your position all of a sudden, kicking you when you’re down?)
    I actually did make money the first few weeks, but through horrible habits that were reinforced by getting lucky.  When I lost all of that money in one night, I knew that the habits were no good.  I guess we all need a good scare or two early on; one scare after another (aside from just enjoying Phil’s writing so much) is what finally prompted me to join.
    So a big fat "no thanks" on the futures for now.  I’m taking Phil’s advice to the bank; on futures and most everything else at this point.