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Will We Hold It Wednesday – Oil Slippage

Why did Obama interrupt our TV shows yesterday?

 

All Obama did was tell us there was a spill and it needs to be cleaned up.  Apparently we should probably have a long-term energy plan too but he doesn't seem to have one but I think he said he knows a guy who knows a guy who has an idea that might help our children's children at some point or another.  The saddest thing about Obama's speech to me is he points out how America has done great things in the past:

I will not accept is inaction. The one answer I will not settle for is the idea that this challenge is too big and too difficult to meet. You see, the same thing was said about our ability to produce enough planes and tanks in World War II. The same thing was said about our ability to harness the science and technology to land a man safely on the surface of the moon. And yet, time and again, we have refused to settle for the paltry limits of conventional wisdom.

I guess that's like the conventional wisdom that says you can't run $1Tn a year deficit for 10 years and lower taxes and fight a $1Tn war and not expect it all to come back and bite you in the ass.  Or maybe he was talking about the conventional wisdom that says that 5% of the people in the world should learn not to consume 20% of it's fuel or maybe the conventional wisdom that spending 100 times more on military research than we do on energy research when we're fighting wars for energy is just about the stupidest decision made by any society in human history…

Conventional wisdom aside, what I find disturbing in this statement is that America has only done two great things in the last 100 years:  We finally woke up and helped our allies win a war (but only after we were attacked) and we finally woke up (again out of fear of Russia) and decided to use our great national resources to make a lasting scientific accomplishment (and it's ironic that Obama has cut further moon funding).  I guess we can say that Al Gore inventing the Internet was a big deal too, so that's 3 things in 100 years so I guess we're about due for another.  

But what is the plan?  There is no plan!   That right there is total BS.  First of all, let's recognize the fact that the US spends $1Tn on energy every year.  One third of that is money we send overseas to import oil.  That means, we can easily justify a $3Tn expenditure just to find a way to generate the $300Bn a year at home and keep those trade dollars in the country (a business plan with a 10% annual ROI).  Factor in job creation and keeping a lid on overall energy prices and we have a real winner here – why can't Obama say that?  

 Here's MY plan:

  1. Restart cash for clunkers.  $5,000 for 40M cars that get 20 mpg or less to be traded in for AMERICAN MADE cars that get 35 mpg or more.

    1. Costs $200Bn, stimulates the economy, creates jobs, saves 320 gals per year per car or 300Mb of oil (cutting 10% of our imports)
  2. Offer consumers $200 per mpg over 30 on new car purchases.  Penalize them $200 per mpg under 30.
  3. Arrange interest free 10-year payment on purchase of energy-saving lights for homes and businesses.

    1. Switching to energy-efficient lighting will knock another 5% off total US energy consumption.
  4. Mandate all new homes be build with solar heating and electricity.  Offer real incentives to convert existing homes. 

    1. At $50K per home, $200Bn a year will take 4M homes a year off the grid (5%) and put hundreds of thousands of construction workers back to work.
    2. In 10 years, 50% of our homes will be off grid and we won't need to spend $3Tn to fix the existing grid, which is badly strained and wasting 50% of the energy we put into it.

As you can see, I haven't come close to spending $3Tn because we need that "moon shot" approach to this and it will take time to develop major solutions like better public transportation, alternative energy, grid improvements, etc. 

What I would also like to do is set aside $50Bn a year to fund research and promote science in the schools and I'd also like to set aside $5Bn with which we'd set up a science version of "America's Got Talent" where each state would have monthly $1M prizes for the best energy saving idea or invention ($600M) and the monthly winners would compete in 4 regional events for $50M quarterly prizes ($800M) that would be televised nationally to stimulate interest and keep people focused on science and energy conservation.  Those winners would then be eligible for the grand prize of $1Bn with another $1Bn to the top 5 and matching funding available (as a government investment) to develop the winning ideas and inventions.  How's that for motivation?

Where on earth would we get $500Bn a year to spend?  Well, we use 350Bn gallons of oil a year so a very simple $1.25 per gallon tax would take care of that and also have the added benefit of encouraging people to economize.  We were paying $1.25 per gallon more for oil (involuntarily) just a year ago and if the average person utilizes our programs to switch from a 20 mpg car to a 35 mpg car – they will save more money on fuel than they spend on the tax!

So, there's that problem solved – now on to the markets! 

Nomura Holdings says the China property bubble "is going to burst very quickly, with prices set to fall as much as 20% in the next 12 to 18 months."  At the same time Pimpco continues to attack the rally, this time issuing a report saying "Commercial Property to Stay 40% From Peak" for 3-5 more years.  High unemployment, potential re-regulation and an increased savings rate are among the factors that will "lengthen the deleveraging process and suppress a recovery."

Both the Shanghia and the Hang Seng flatlined today despite the Nikkei jumping 1.8% back over the 10,000 mark (which we expected).  It was the normal nonsense with the Yen that drove Japan's exporters higher but the Yen has already rebounded from 91.75 at 3am to 91.20 at 9am in what is still the most reliable currency trade I've ever seen.  Foreign investors in general are bailing on the Asian markets and this marks the first time in more than a year that the markets registered net selling for a month (May).

Europe has flatlined after a strong open, dropping about half a point straight down into lunch as the Euro and Pound dropped on news that Spanish banks had to borrow record amounts from the ECB ($105Bn) in May to keep afloat.  This was DOUBLE what they borrowed when Lehman went under in Sept 2008 to maintain liquidity.  $1Tn doesn't go that far when the banks need $100Bn a month!  Spain's borrowing costs jumped 245 basis points, approaching the all-time high again with 1-year notes at 2.45% vs 0.9% in April

This is why we are both bullish AND skeptical!  We talked about how the Spanish crisis was MAJOR way back on April 29th and, if we hadn't already cashed out that week – that alone would have been a good reason to do so.  But, once again, IT'S NOT NEWS!  Just like Moody's downgrade of Greece was not news on Monday (and we correctly played it bullish), worrying about Spain's May numbers now is equally pointless.  

Right now, it's all about our levels.  We broke our levels and now we need to hold our levels or it will be time to give up on our rally dreams and get a bit more bearish.  I told Members yesterday afternoon that I though we would pull back about half a point before we got a run over 666 on the Russell but we got a big stick save into the close that took us to 668 BUT the NYSE did not make 7,000 so we're still not satisfied.  Everyone else is looking good and we'll see what happens today but it's the same levels we were looking to take back in Monday's morning post, which are the same levels we were expecting to fall to on April 29th! 

 


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  1. Speaking of energy efficient lighting, I have a friend who works in LEDs – he claims this will soon replace other forms of lighting and represent huge savings. He practically goes into "the world is saved mode" when he talks about this. Little hard to believe, but he’s certainly a high-up insider and believes it himself. Might be an opportunity or two there.


  2. Phil – do you like SYK and SVU?  looking for bull call spread idea with put sales.  thanks.
     


  3. Moving Averages -
    Question for day traders (Rut traders) what are the longer moving averages you use to make sure you are trading with the trend?
    thanks ?


  4. Phil,  It doesn’t seem that Nokia has a plan for competing, but it holds such a prominent position in the marketplace.  Do you think this company can figure it out?  Is Apple just that dominant that everyone else goes away?


  5. NOK RIP


  6. AAPL…..there can only be one ;-)


  7. Snow –  a restaraunt opened by my house that is entirley outfitted with 100% LED bulbs throughout. These things look sharp…as crisp and bright as halogen and only use about 3 – 10 watts of electricity. Downside is they are still really expnsive. Home Depot is charging $75 for one light bulb that goes in the large recessed lights. People will save a boat load of money once these come down in price in a year or two. Retailers will be the greatest beneficiaries. A clean white bright light that reduces electric costs and heat from the bulbs will also reduce the demand on the HVAC systems.


  8. Out of my SPY puts from yesterday’s close. I expect /ES 1100 to be defended.


  9. Obama and politicians in general are pathetic.  I do work for the public sector and yesterdays speech illustrates a cold hard reality of life.  The government doesn’t do anything efficiently or good.  Government differs from the private sector in the sense that it’s not their money.  There’s nobody steering the ship that really cares if it takes one day, two days or a month to do anything because there’s no accountability or risk associated with failure.  When’s the last time you heard of someone getting fired or a government agency going broke because their so incompetent they can’t make ends meet?  It’s rare, and usually only the result of political pressure.  I deal with government every day and understand totally why it cost 1000 bucks for the gov to purchase a toilet seat.
    The bottom line, Bama’s speech yesterday didn’t have anything to do with correcting the problem we face.  It was designed for the sole purpose of distancing himself from the disaster with the hope that he can keep his phony baloney job.


  10. LED for in home use a long way off, tried buying some for my kitchen to use in  ceiling and it was terrible, need large transformers and not enough light is produced.  Probably ok for small scale lighting. 


  11. JRW,
    What are you thinking this morning?  TNA, TZA


  12. Good morning,
    IWM 63.59, 65.40, 65,84, 66.27, 66.97, 67.62


  13. Good morning!

    Same script as yesterday with Pimpco pushing a sell-off and the media making much ado about nothing but we also have FDX making negative noises.  The deal with FDX is that they have been cutting prices like crazy trying to make YRCW go BK and it’s not working and now it’s starting to strain FDX, who had a small dip but not too much so hardly a crisis. 

    Same old levels to watch but now it would be TERRIBLE to lose any of them:  Dow 10,250, S&P 1,100, Nas 2,260, NYSE 6,820 and Russell 666

    We need that Russell to hold it together today and we’re not really happy with the NYSE below 7,000, which I know is harsh but that’s the difference between enjoying a bounce and actually starting to feel secure. 

    We’ll see how the morning goes but I’m for being very well balanced here as we’re likely to flatline into expirations on Friday anyway and then we’ll have to wait until next week to get a real feel for where we’re going (and it’s almost time for earnings again!). 

    APOL is coming back nicely this morning and AAPL is doing well, which bodes well for the Nasdaq.  BP is holding $30 but still scary and OIH is way up at about $102! 

    Copper can’t seem to hold $3 and that’s a concern and gold is back at $1,235 on the Spanish worries.  Oil is way up at $76.70 and that’s not going to make consumers happy. 


  14. Do you think we stay steady at or around these levels for the rest of the week and then they rally next week after expirations? Selling 104 calls look tempting if that is the case.


  15. Phil – no urgency, but when you get a chance could you take a look at http://www.philstockworld.com/2010/06/11/turning-10000-into-50000-by-january-21st-members-only/
    I have a couple of questions, including whether that portfolio will still work, especially YCRW and BP.


  16.  Hi Phil, thanks for your thoughtful reply to my help post… I am reminding you here about the positions as you requested. They are June SDS 32/35 Calls bought for a net of $4700, and TZA 8/9 with a July 6 Put. This one it seems at least can break even if the market doesn’t continue trending upwards to July…
    I appreciate your offer to help me build the long side-- I will sell all my positions I hold now ($110K in unhedged longs) and I replace them with buy-writes that you recommend at this entry point. I was putting a list of the ones I found interesting on the Buy List but I am not sure how to balance them properly to have a diversified group… I would feel a lot more comfortable if you could suggest the entries — I know it is a lot to ask, but I prefer that, and learn as I go than continue to make very costly mistakes. 
    Thank you very much.


  17. Pharm,
    Can you comment on CRIS, when you have a chance? Is this dead money now or still hopeful for next set of data?


  18.  Sorry I forgot to mention I don’t hold the sold call for the SDS, I bought it back for .20 yesterday. 


  19. Phil/Fedex  Not sure about YRCW.  Fedex had a good quarter, and it was their view on future earnings due to a slowing economy thats causing the drop…….


  20. CRIS – not dead money, that metastatic rectal cancer is a tough one to hit, and they have 2 other shots on goal for the hedgehog pathway )ovarian and basal cell (this was their initial one)) as well as the collaboration with Chuga on HSP90 inhibitor.  Wait until things settle down, as I know cancer docs were all over the HH pathway.  BMY and PFE also have inhibitors.  This would have been a very big one to hit, as it is #2 in terms of cancer death.  I will buy more when thing settle.


  21. ATPG – a calendar P spread (big one) just went through where they sold the $9 July and bought Dec 7.5s for a 1.20 debit.  Interesting.


  22. JRW,
    IWM has been sitting in the middle of your ranges.  Do you typically wait for it to move near you R/S levels before acting?


  23. Phil--I’ll also be following your suggestions to amatta--have been studying, as I can, but don’t want to miss this opportunity to go long AND want to sleep at night.  Love your hedging strategy and your buy/writes--just buying the stock wth no cover scares me into missing out on profits and makes me buy/sell too much.


  24. Morning, trying to keep up w iPhone since power was knocked out by a storm yesterday. Only thing making me nervous is The china put. Do I need to figure out how to sell on the phone? Tried it once but phone froze.


  25. exec
    I’m in TNA at $47.50


  26.  Abt FDX--I have a friend who currently works at the census (not as enumerator but as an admin temp).  She tells me that for the month of April and May, they sent out about 25 overnight packages to Chicago of fingerprints of their hires.  That’s 1 office (covering 2 medium sized counties) in NJ.  And they will continue to send out packages throughout the summer as scanning of forms are not done locally.  Multiply those figures over all the Census offices in the country plus the 375K or so Census workers hired and that’s pretty good addition to FDX’s numbers for the quarter.  I haven’t looked at their numbers and can’t tell how their domestic numbers looked.  And frankly, I probably won’t even be able to say how much this would have contributed to their domestic numbers.  If it turned out to be a decent portion of their domestic revenue, then maybe this factored into their weak guidance.  
     
    Just thought of throwing this out there.


  27.  Shanghai market had been closed for the past 3 days and Hong Kong market was closed today.


  28. Hi Phil-- SPWRA buy write – bot stock at 15.32 ( on May 11) sold call and put same time but  adjust on May (17) roll down to jan 10 short call for 3.42 and Jan 11 12.5 put for 2.84.  My net for stock 9.06. By jan exp if call away pofit about 9% is this correct.  Any adjustment need at this point --thx


  29. exec,
    You are correct, however today we opened at the bottom of a 6 day channel, so I playing the channel. Connect the tops and bottoms from the 8th; ignore the 14th.


  30. Potential intraday H&S setting up right here on SPX.


  31.  Hey Phil…
    cool article…haha…but what your asking for is what I call the good dictator…someone to get all the "good things done". Unfortunately when presidents and federal governments have the power to interfere in markets and subsidize programs, those powers can be used by the "bad" dictator too…(bush) and with lobbyists gone mad (as every program will have a corporate loser) efficient common sense ideas like your would never work….but like you said, doing nothing is worst..
    anyway…back to the real world..was hoping to get your view on oil…just sold my calls and was wondering if you though we might be trending downwards…
    cheers 


  32. Nice call, Eric.  Back to 1100 on /ES?  and then a rebound…


  33. Out of TNA at $47.48 for a 2 cent loss based on the 8ema on the 3 minute chart.


  34. LEDs/Snow – We used to be in a stock called OLED that made organic LED’s for displays and lighting.  They got bought out and I’ve never been sadder to let go of a stock as I really feel that tech has a huge future.  

    SYK/Terra – Yes, it’s a growing sector, of course and SYK has been executing pretty well, barely missing a step the past couple of years.  I think they’d be a lot higher without all the uncertainty in the markets but they have been weak so I’d go conservative by just selling Naked Jan $50 puts for $3.80 as an initial entry point.  If they get stronger, you can still buy the stock and cover below $55 but if they stay down in this range, it will give you a chance to make a quick $3.80 and be done with it or roll out to 2012.  SVU is fine as a math play as we don’t expect them to go down much and you can buy them for $12.73 and sell the 2012 $12.50 puts and calls for $5.40 for net $7.33/9.92, which is 70% if called away and 22% off if put to you.

    NOK/Trad – Nok miscalculated and went with an almost all cheap-phone approach, assuming people would want $49 phones but they miscalculated since most phones are subsidized anyway and people think of phones like their cars – they want the best ones they can afford since it’s with them all the time so it’s not a place that people economize on.  That’s why the high-end guys are kicking ass.  For them to turn that battleship around and play catch-up will take quite a while…

    ICE is hitting new highs as commodities make a comeback.

    That’s right Exec – Hurumph

    Next week/Jimmy – I think we could still go either way but we HOPE we rally. 

    HIGH RISK PLAYS/Snow – If you can still get the NET entries, they still work.  It’s not about taking all of them, just the ones you can afford to take a risk on (50% losses very easy to come by if they go the wrong way).  Those plays are meant to risk 1 (the 50% loss) against a payoff or 10 (the 500% gain) or better.  If you take those plays once in a while and take your losses when you have to, you only need to be lucky 1 out of 3 times to do very well.  Of course, now that we are testing our bounces, I think it’s best to see if we hold them until next week rather than chasing..

    SDS/Amatta – Well that one I think I told you to get out of.  You need to understand the mechanics of these trades – once you get into expiration week, if you are out of the money, you will lose 20% of the value PER DAY.  Also, $4,700, unless you are protecting over $100K on long positions, is very extreme for an insurance play.  At this point I’d say take out the $35 callers for .11 and hope we get a nice dip that lets you exit the $32s for $1 or more but, if not, be realistic.  You can roll the protection to July $32/35 for better than even but don’t do that if you are not protecting anything or it can be another waste.   On the TZA, obviously there is nothing left there in the June spread.  I remember Monday morning I had said your best case was to take out the $9 caller for .05 and then sell the $8s on a dip and the $8s ran up to .15 – hopefully now you have learned that a dime is much better than nothing!  As to new entries, we’ll be updating lists over the weekend but I make new picks every day – just pick a diversified group of long-term trades that works for you.  Also, I hate to say I told you so but this is a very important one as I did tell you so last Thursday so keep this in mind next time you have short-term hedges:

    SDS/Amatta – Well they are still $2.30 in the money and SDS loses $1 of the S&P gains 1.5% so I would hope your stock positions are recovering while SDS is going down.  Next time, let’s go over your whole hedge after hours to see what your total coverage will be.  Of course we’re already down 7% on SDS from 2 days ago, which was really the time to cash out.  Anyway, there is a huge amount of risk to running a June bear hedge out to next week.  If you can cash out with a small loss, better that than a big one.  Also, I think you miss the point on disaster hedges as they are there to protect you from 20% drops in the market, not 10% ones so if we don’t get a 20% drop and you can get out even close to even – that was free insurance.  The real issue is you don’t seem to have covered your longs as our buy/write plays absorb the first 20% of the drop. 

    Sold SDS call/Amatta – Oh good, then you are halfway to executing my plan already!  Don’t be greedy, just be happy to get out with anything.  The TZA’s (as I also told you last week) are a non-issue as the putter pays for the spread so now you just have to hope the putter expires worthless or we work on that next month.

    FDX/1020 – Yes, their earnings are being squeezed over discounting and the slow economy of course but it’s the war with Yellow that’s hurting them (this is like S and the regional carriers). 

    You are right Fizz, not worth the stress of "going for it" in this market.


  35. arbolito
    June 16th, 2010 at 12:19 am | Permalink  
    HI Phil: 5 possible trades: I have 2000 SLV shares @ 18.52 base.  Strategy: sell 2012 18 call for 3.50, sell 2012 17.50 put for 4.00 and as I cannot sell naked puts buy the 2012 7 put for .05. total credit 7.45, lowering my basis to 11.07. Is this correct?how many contracts of SLV would you trade
    I have 2000 BCRX @ 11.71 base. Strategy: sell 2012 10 call for 1.85, sell 2011 put 5.00 for 1.40, buy 2.50 put for .32. total credit 2.93, lowering my basis to 8.78, if put to me the cost would be 3.92 for the second batch. IS this correct? How many contracts would you trade?
    I have 500 MSFT @ 20.19 base. Strategy: sell 2012 27.50 call for 3.45, sell 2012 25 put for 3.35, buy 2012 10 put for ??.Is this correct?  How many contracts would you trade.
    I like LDK. I want to own 2000 shares long term. Strategy: buy 1000 at 6.01, sell 2012 10 call for 1.24, sell 2012 5 put for 2.15, buy 2011 1 for .12. Can I make a straddle with different expiration years? Is this a smart strategy?
    I have a 150 k portfolio invested, that I want to hedge. following your TZA hedge recommendation, would I buy the 2012 6 call and sell the 2012 11 call , now for .68? would you sell any 5 puts for a net credit on the position? How many contracts would hedge this size of portfolio?
    Are all these smart moves? I am still learning a lot for your advice and the comments of all the valuable people on the blog. It is hard for me to follow up on everything, but llittle by little and I am sure I will get there. Thanks for your help


  36. Oil inventories up 1.7Mb, gasoline down 700K and distillates up 1.8Mb – Still not supportive of $75 oil and they are dropping fast.


  37. In TNA at $47.17


  38. judah,
     
    Yeah. Let’s see if the rebound can get back over the neckline. If not it may be tough to make any more progress today.


  39.  Regarding LEDs--Isn’t CREE a big LED maker?  Anyone has thoughts on or hold CREE?


  40. ATPG, wow.


  41. Eric,
    They really don’t have to make progress today, all they have to do is defend the 200 line one more day and they should be set !!


  42. Eric, Yes, sir. I think the fight for the day’s direction is right here.


  43. If we are talking LEDs than VECO and POWR are two others people might want to take a look at…


  44. JRW, I agree; consolidation is what the bulls should want here.


  45. JRW,
     
    What period do you have your Stoch set at?


  46. exec
    14,3,3


  47. LEDs/Snow – (First post, so excuse any errors in protocol!) I used to follow LEDs as I’ve been big on them for years. I brought the first LED flashlights to Mongolian friends living in off-the-grid yurts on the steppe. 12 hours of life from a 9v transistor radio battery and they thought they were great. The LED industry has been long been in the cross-hairs of the electrical equipment manufacturers and buy-outs have been going on for years. There are few pure-plays left. One of the biggest acquirers has been Koninklijke Philips Electronics (PHG).


  48.  Hi Phil,
    I want to get into /NG but futures scare me for a long term hold.  I’m torn between going long UNG vs. Nat gas players (APC, CHK, etc).  I found this one LP, $CQP--Excellent dividend. BUT, I for one don’t buy a stock for its dividend.  I buy a stock because I think it’s going to go up. Dividends are icing on the cake.
     
    Thanks!


  49. Phil / FXI  You still looking for a bounce in FXI Phil?


  50. amatta
     
    I am following your todays questions to Phil .
    Just look at the questions arbolito has put to Phil. You mentioned you want to liquidate all your longs I take it they are stocks. Before you sell stks check if they are not suitable for any buy write plays. Sample arbolito!!!!
    Grandmother long plays are placed on a daily bases on this board such as WMT, CAT, SI, and even RIG was a good play sometimes do not buy the stock just set up a synthetic buy example by buying the 45 Jan12 long WMT and play the monthly c/p shorts against them.  Just remember nothing here is casted in stone only death and taxes are for sure!!!Hope this helps


  51. Wow!  Phil’s  yesterday BP  5July33-3Oct33 spread is now over $2!


  52. I enjoyed Phil’s remark yesterday about investing in a nano violine to play to JRW. I am following JRW play’s on Papertrade yesterday I bought in the morning 700 stk and did nothing to it all day at 3.58 I sold the stk for a profit of 1699.00.
    Buying and selling constantly on a daily bases makes the broker very happy!!!!
    Up to day I bought 500 stk (papertrade) of TNA this morning and left them up 200.00 up to now


  53. Yodi, I think he was referring to lflantheman; if i had JRW’s skills at day trading i’d be happy to share the wealth with the broker.


  54. RIG is showing signs of bottoming. Getting bought on dips and the 5 MA has turned higher. I exited my puts for a small loss and started a conservative long of some July 35/45 call verticals.


  55. Jdub/ UNG    If you buy the UNG stock, you will get a K-1 at the end of the year, which may show a gain or loss unrelated to your profit on the stock.  Phil usually recommends options for this stock.


  56. JRW
    I was in your backyard on Monday ( I hosted a luncheon at the Swiss Inn in beautiful Sonoma. ) Some of the best Italian food I have enjoyed in a long time.


  57. Dear Phil: Going over the blog I found Amatta’s remark which I copy here: I would so very much appreciate your help in helping me with my portfolio. I am hedging some positions with your buy/write strategy: for now fro, but awaiting answer on some others. what info do you need from me?
    " I appreciate your offer to help me build the long side– I will sell all my positions I hold now ($110K in unhedged longs) and I replace them with buy-writes that you recommend at this entry point. I was putting a list of the ones I found interesting on the Buy List but I am not sure how to balance them properly to have a diversified group… I would feel a lot more comfortable if you could suggest the entries — I know it is a lot to ask, but I prefer that, and learn as I go than continue to make very costly mistakes. Thank you very much".
    I feel so much like Amatta, please help me with building a strong portfolio. Thanks.


  58. And wheeee! 

    China put/Morx – Do you mean the FXP July $35 puts from yesterday?  If we can’t hold our levels, those are not worth keeping (still .95).  By the way, do you know how I use the IPhone to trade?  I use the phone function to call my broker!!!  8-)

    FDX/Jdub – Interesting point but I think FDX’s package volume is so astonishing that even those numbers won’t do much to offset a general slow-down.

    China closed/Cally – Thanks!  That’s damn good to know.  That sucks, it’s why we didn’t get a move in FCX so absolutely let’s get out of that one.

    SPWRA/Gucci – Yep, it’s dull but that[s about it, not muck to do but wait to get called away unless you are looking to get much more aggressive but that’s silly after you went conservative and took a hit to your upside potential in exchange for safety.  I loved them at $11 but at $14 I don’t see taking any more risk unless we see the broader market turning up.

    Dictator/Bambi – If appointed I will serve my people…  As to oil – we are done with it over $75 and might go back to shorting at $80 but too dangerous in between. 

    List/Arbolito:

    • SLV I don’t believe in, it’s riding gold’s coat-tails and we already know it’s totally manipulated.  This is not a stock or even an ETF basket like DBC, this is pure speculation on silver not going back to it’s normal range (around $12).  Your trade is fine if you are willing to take that risk $3 on the 2012 $12.50/18 bull call spread which pays $6.50 if silver holds up and breaks even at $15.50.  I know the other trade is net $11.07/14.29, which seems better but, again, silver is not a company and if it plunges back to $7, what are you going to do with 2x at $14.29? 
    • BCRX is also risky/crazy and you are missing the point on buy/writes, which is to make SAFE plays.  Selling $10 calls on a $6.38 stock is not generally considered playing it safe.  You can’t make your new trade responisible for making up the losses on your old trade.  You are down $10,000 and if they keep falling, do you really want to DD?  I’d dump the stock and buy 100 Jan $4/6 bull call spreads for $1 and sell the Jan $5 puts for $1.30 (and if you must buy, buy the 2012 $2.50 puts for .45 so there’s something left) so your worst case is 10,000 shares are put back to you at net $4.70 and your best case is you get your $10K back.  Again, this is based on you wanting to be in BCRX long-term, personally, I’d go with PFE.
    • MSFT is a company I don’t like but cheap enough at $26.42 where I think your strategy is fine.  You keep saying how many contracts but if you have 500 shares, the anwer is 5 – that’s something you really need to know. 
    • LDK is a nightmare (RMM can tell you).  We like STP and SPWRA and, since SPWRA got away that means we like STP at $10.10, selling Jan $9 puts and calls for $3.60 for net $6.5/8.25.
    • On the TZA hedge, you can now take the Jan $4/10 spread for $1.45 and sell 2012 $4 puts for $1.30 for net .15 on the $6 spread that’s already $2.39 in the money so it’s up 1,493% to start and has a max gain of 3,900% so committing $450 to 30 contracts has an upside of $18,000 at $10 and your worst-case obligation is you own 3,000 shares of TZA at net $4.15 in 2012.

  59. Fannie and Freddie getting de-listed. Off over 50% this morning — yikes!


  60. Well this has nothing to do with our trading but I am very sick to see the oil out flow all day on the bloombergchannel.
    My suggestion to cut the damm pipe at the bottom and fitt a T piece over it would have done the trick but now I see the piping is even leaking below the sea bed wall and the pipe.
    So simple again cut the pipe as they have shown to b able to do shove a type of Foley catheter down the pipe as low as you can go and inflate it. Bang end of problem. We save some gasoline to have Obama flying down there every five minutes and picking up oil at the beach. PLS any Doctor could help you with this. Sorry I am not a doctor.


  61. Nasdaq 100 futures took out the high of yesterday in the last 20 minutes.
    Phil, is the market ready to swoosh up?


  62. Phil--things I have to do today--will check over posts later--thanks for the math play.


  63. JRW,
    Broke your range.  Do you sell, hold, or go short?


  64. 1/2 out of TNA at $48.50


  65. In TNA @ 48.50.  I’ll use my trailing stop again today.  Setting it initially at .50 for no more than a 1% loss should they turn down.


  66. yodi: saw your response to Amatta and  appreciate your comments to him/her. Could I exploit your expertise and ask you some silly questions of things I don’t understand, i.e  your comment "by buying the 45 Jan12 long WMT and play the monthly c/p shorts against them" can you please explain in simple language: buying the 45 jan 12 long: does this mean buying 2012 45 calls of WMT and selling MONTHLY calls and puts against it? What would the benefit be? can you please explain to me. One very thankful rookie.


  67. Phil, Yesterday we talk ARNA plays with guys, I understand right, that buying stock 2.95 and selling 2012 JAN calls and puts 2.95 we have net entry 0 and no  big risk to ARNA go to zero?


  68. Hi All -

    For those following AMED, or just interested in class action lawsuits, Sam Antar (www.whitecollarfraud.com) has a rather negative article out on AMED which I’m going to post.  The lawsuits allege AMED abused Medicare’s reimbursement system for at-home therapy. (See Wall Street Journal article($).)

    Sam writes: "In addition, the lawsuits innovatively utilize a provision under Section 406 of the Sarbanes-Oxley Act 2002 which provides a back-door way for investors to force ethical corporate governance and sue public companies for malfeasance. That provision requires Senior Financial Officers, such as the CEO and CFO of public companies, to abide by a strict code of ethics which broadly defines corporate malfeasance and effectively makes it easier for defrauded investors to prove misconduct by certain senior executives…"

    Here’s Sam’s article:  

    Class Action Complaint against Amedisys uses Sarbanes-Oxley Act Corporate Governance Provisions to Battle Alleged Corporate Malfeasance.  

    To summarize, it’s alleged that AMED manages to have a larger number of patient service calls hitting numbers that generate extra payments.  First, it was an extra payment if patients had 10 visits, so considerably more had 10 visits than 9 visits, and so on.  Here’s another excerpt:

    Allegations that Amedisys intentionally increased patient visits to trigger higher Medicare reimbursements
    According to the Pomerantz press release:

    Specifically, the Complaint alleges that defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company’s reported sales and earnings growth were materially impacted by a scheme whereby the Company intentionally increased the number of in-home therapy visits to patients for the purpose of triggering higher reimbursement rates under the Medicare home health prospective payment system, as those excess visits were not always medically necessary; (2) that the Company’s reported sales and earnings were inflated by said scheme and subject to recoupment by Medicare; (3) that the Company was in material violation of its Code of Ethical Business Conduct and compliance due to the scheme to inflate Medicare revenues; and (4) based on the foregoing, defendants lacked a basis for their positive statements about the Company, its prospects and growth.

    On April 27, 2010, The Wall Street Journal ("WSJ") reported that Amedisys has been taking advantage of the Medicare reimbursement system by increasing the number of in-home therapy visits in order to trigger additional reimbursements.

    Here’s an excerpt from another law firm’s press release in the news today:

    http://finance.yahoo.com/news/Law-Offices-of-Howard-G-Smith-bw-1484721186.html?x=0&.v=1

    "The investigation concerns allegations that the Company has been taking advantage of the Medicare reimbursement system by increasing the number of in-home therapy visits, some of which were not medically necessary. On May 13, 2010, the Wall Street Journal reported that the Senate Finance Committee launched an investigation into whether Amedisys and certain other in-home therapy providers “deliberately boosted the number of home therapy visits to trigger higher Medicare reimbursements.” The committee sent letters to the chief executives of the companies requesting information about the companies’ therapy visits from 2006 through 2009 and their financial relationships with referring physicians."

    There seems to be a growing number of law firms trying to get involved too: http://finance.yahoo.com/q/h?s=AMED&t=2010-06-16T11:19:52-0400.

    Any thoughts? 

    Ilene 


  69. Out o TNA at $48.47


  70. JRW,
    Now what? 


  71. JRW,
    Nice trade by the way


  72. From B-Berg:
     
    "Fannie and Freddie were taken over by regulators in 2008 as home prices collapsed and are 80 percent owned U.S. taxpayers. Shareholders include Vanguard Group, Blackrock Inc., Kinetics Asset Management, and California’s state pension fund. The U.S. Treasury had injected $145 billion into the companies to keep them solvent as of the first quarter of this year.
    After the delisting, “We lose some transparency into what is essentially a large black hole that is eating up a large part of our bailout funds,” said David Lutz, managing director of equity trading at Stifel Nicolaus & Co. in Baltimore"
     
    Exactly right, IMO. The total U.S. taxpayer GSE exposure is over $5tn, I believe. If there’s a 20% loss on the bonds, which some have said is possible if defaults run high enough, that’s $1tn in extra losses.


  73. exec / Now
    Now it pulls back, tests IWM 66.75 or 66.63 or even 66.40 before going back up, IMHO !!


  74. Phil: Thanks for your answer, I will go over them one by one. SLV, would you suggest I liquidate them if they reach my base and get that cash? what precious metals hedge would you recommend against high inflation/devaluation risks?


  75. ARNA/pa – no no no…if ARNA goes belly up….then you will be out the cash.  IF you must get involved, please consider the July 3s discussed yesterday unless you want to take the risk of losing it all.


  76. BTW, I did NOT get a sell signal, so if you’re in TNA you’re still OK; I just tend to take profits at my lines in a stall !!


  77. What is your primary sell signal?


  78. AAPL is cranking!!!


  79. AMED: As one who worked in LA for 5 years in public healthcare, I can tell you that playing fast and loose with medicare rules is the status quo…squeezing every conceivable dime out of the Federal government for one of the poorest states in the Union is looked upon as justified at a systemic level. I don’t know if it rises to the level of fraud in this case but I wouldn’t be surprised.


  80. The dollar has now given up its morning gains. It has clearly broken its uptrend line and I’m thinking it may head to at least the 50 SMA on the /DX, where there is also a little price support (roughly 84.65). If so, I’ d think that would support equity prices near-term.


  81. Hi Phil- OVTI – hi 52 wks hi yesterday and now look like a break out— not sure — what is your method to start a bull spread when a stock is breaking out  – or not doing anyhting and wait for a pull back thx


  82. By the way I’m reducing my gold exposure further here for the short-term; too risky with the dollar moving down, although at some point a lower dollar may support gold. We’ll see.


  83. Pharmboy, my question was only theoretical, its be good to know risk for future similar plays.


  84. exec
    I watch everything you watch on the 1 minute chart; conformation comes from the 8ema on my 3 minute chart. ( an engulfing candle over the 8ema in the opposite direction.


  85. Anybody know why NEP and OVIP were halted?
     
    Phil,
    I have a position in NEP. Any way to protect now that trading has been halted in case they sell off when trading resumed?


  86. arbolito
    I am by no means an expert but have learned a lot from this site and PHil worth ever penny you pay for being a member, but to start to understand the lingua you have to read and read.
    A stk like WMT ia a grandmother stk it does not move very much, but if you do not have the funds to buy the stk and do not mind loosing out on the dividends WMT 2.3% you buy a synthetic call option well in the money. The same will go up and down with the price of the stk as higher the delta as more you pay for the option and the option  goes up and down with the stk The 45 Jan 12 call has at the moment a delta of +.69 I prefer a .75 or .80 but you pay much more. This long call stands in your account the same as the stk but for much less money , at the moment about 9.00 against the stk of 51.30
    Against the Call position you sell shorter term calls and puts I am holding at this time short Jul Sep 52.5 putters and 55 short callers. Like I had the Jun 52.5 putter but I did not want to have the stk asigned to me so I rolled to the Jul putter 52.5 for a smaller credit as well keeping the original amount you received for selling the put. And this you keep on playing all year long . I trust this helps good luck


  87. aceland,
     
    A class-action suit against NEP on behalf of shareholders. Company didn’t file its 10-Q on time, apparently.


  88.  Phil – TZA hedge – you’re much better at buying at bid and selling at ask than I am. What if you’re in the $4/$10 at $1.60? What if the 2012 puts only have open interest of 11 and no trades, or you can only get $1.15? Do these numbers still make a worthy hedge?
    Love the concept, just don’t want to blow it with bad fills.


  89. CREE/Jdub – They have a ton of growth priced in already.  Would have been nice when they tested $60 but $71 is a bit much.  I like Jrom’s suggestion on POWR, who are very small and growing fast.  $9.73 for a share and you can sell Jan $7.50 puts and calls for $3.65, which is net $6.08/6.79 with a 25% profit if called away and a nice entry regardless

    Europe closing up about .25%

    PHG is a good one and welcome Tenger! 

    LP/Jdub – I don’t know what that is but I do like UNG as gas is still relatively cheap and it’s volatile enough that you can always sell calls and I like CHK, who are so much the best (like VLO) that it’s silly to mess around with the others. 

    UNG is $8.54, which is miles over our entry now but you can go artifcial for hurricane season and sell the Jan $8 puts for .97 and buy the Oct $7/9 bull call spread for $1 so that’s net .03 on the $2 spread that’s aready $1.54 in the money.  If you are willing to own $4K of UNG long-term then you can sell 5 of the put contracts and buy the bull spread and you either get the stock or you might get paid $2,000 not to own it, which is preferable as the stock has tax issues

    CHK is up 20% from our last entry at $25.22 but you can sell the 2012 $22.50 puts and calls for $9.60 for a net $15.62/19.06 entry, which is right back where we like them.

    FXI/Tucsca – If we hold strong then yes but I think China is closed the rest of the week or something so maybe a good snap up Monday if we are heading higher.

    Good advice Yodi!

    BP/Drum – Those spreads are great a the end of the month!

    Portfolio building/Arbolito – Do not expect me to "build" and manage your specific portfolio.  I have a hedge fund for people who want me to babysit their money.  My job is to put out trade ideas that I think will make 20% of more and, when they make 20% or more – I don’t want to know about them.  If they don’t make 20% of more, I am very happy to talk about adjustments to the positions but it’s up to you to learn how to trade.  You can’t buy your way onto the NY Giants and stand there in the middle of the field at kickoff and say to the coach: "Now tell me what to do so I can be a good football player."  You will be killed!   As I said the other day, why is trading the only profession where everyone thinks they can jump right in at expert level on day one?  Malcolm Gladwell has a book called "Outliers," where he discusses what it takes to be successful at something.  I strongly suggest you at least watch the video

    FRE may be a fun pick-up at .55 but you won’t know a thing until they trade OTC on July 8th so a total gamble. 

    Swoosh/Dez – Maybe as Euro and Pound are recovering very nicely and copper is touching $3 again ($2.9985 right now).

    Wheeee – BP flying on escrow Settlement rumor!


  90. Amazing. I’m in TNA at 48.17 at 30,000 feet in the air on the way to Europe…yes I am flying commercial!!!  First time for everything!!! 


  91. Phil – Time to do something with USO JUL 31/33 bull call and sale of 29 puts? Roll the 33′s to JUL 35′s, sell the 31c’s and buy back the 33′s or excercise the 31′s, buy back the 33′s and leave the p’s alone?


  92. arbolito
    One more things go by Phils role sell only puts IF you really like the stock. I do not like selling puts if the market is going up and the VIX is going down!


  93. Thanks Eric. I found some other stuff about corporate malfeasance and inappropriate transfer of funds.


  94. JRW,
    Nice call on the bounce and no sell signal.


  95. Yip / 48.17
    We have the same entry; good luck !!


  96. ARNA/Pahurik – Not no risk.  If the stock trades below $2.50, you will have another round of shares put to you for that price so your net entry is $1.25 on 2x the original amount of shares. 

    AMED/Ilene – Good to know!  They already took a big hit in the past month so I don’t think I’d be shorting them her ($47) but I don’t think they are much of a buy either until we get clarity on this. 

    Metals/Arbo – The inflation hedge we like is TBT (ultra-short 20-year treasuries) I think metals are way overpriced but FCX is still a nice way to play copper with a little bit of gold and, worst case is you end up owning a top mining company…

    Sell signlal/JRW – I think you have to consider that your sell signal was bent away by BP and that this IS a good time to get out on a possible top.

    AAPL seems done at 2.5% line and none of the indexes looking too exciting at the red lines.


  97. Again JRW!!!!!  Wow! 


  98.  Thanks Phil! LP-Limited Partnerships.  I was thinking NG pipeline managers/builders or a niche player like $EPD.  I found this about $EPD operations:  
    When you take natural gas out of a gas well, it has liquids in it. You have to take those liquids off before you can safely put them in an interstate pipeline, and those liquids are then like gasoline and can be used all up and down the chemical process to make ethane, butane, plastics, propane. Enterprise is the leading company in this business.


  99. Phil-  I know you recommended a trade on BP.  I’ve been setting up similar trades in my paper trading account to get an idea.  I did a Jan 11 44/50 bull call spread.  And then maybe selling some Jan 11 puts as well.  Is this the type of trade that you advocate for a stock like BP?  Is the spread too tight?  I know you’re busy so no hurry.
    Also, is appears that Europe is gearing up for more bad news in Spain and serious resistance in Ger and Fr to the bail out.  When do you think EDZ is a good entry? 


  100. QCOR has its game on today, my oh my.


  101. +1 recommendation on Outliers. Blink was also good and BOTH are applicable to trading.


  102. Fraud/Ac – I met with Sam and told him to focus on actions that he felt had teeth.  Sam is a pro at fraud and knows all the tricks so if he thinks there’s a case here – there likely is!

    Dollar/Eric – I agree, it’s time for a pullback anyway. 

    OVTI/Gucci – I don’t play stocks that are breaking out.  I’m a value guy who likes to play off the bottoms, not the tops.  If you want to take advantage of the run you can buy 3 Jan $25 calls for $2.10 ($610) and sell 5 July $22.50 calls for .80 ($400) so you are in 3 at net $210 (.70 each) and if OVTI keeps going up, you just add 2 more at no more than $2.50 ($500) and you have a nice 5/5 spread at $1.42/.80 and you can roll the callers along if they keep going up.

    NEP/AC – I have no clue, which is a fine example of why I avoid Chinese ADRs!  Maybe they moved 10% and hit the new rules but they have some kind of class-action suit against them so news can be pending at any time on a stock like that. 


  103. aclend: Thanks for the input. It does seem like the practice of trying to do an extra service or two, to have a large payment kick in, is the natural consequence of how the rules were set up in the first place. I think what Sam is saying (without having read the law he referred to) is that the plaintiffs don’t have to prove fraud (which is very hard, due to the "intent" requirement) but only that there was a lapse of "ethics." I’d have to read a lot more to know how that’s defined, but I’m guessing that it’s a lot easier to show than fraud is. 


  104. One can only guess but I see us breaking higher…


  105. Oil up almost a buck….What a joke. So glad I took my small profit shorting it before the inventory report.


  106. 1/2 out of TNA at $48.71 ( top of channel)


  107. All out $48.66


  108.  Hi Phil,
    If we can’t hold Gap resistance (now support) at 111.97-112.00 on the SPY, day trade puts (with tight stops) a good idea?


  109. Anyone playing intel?


  110. USO July $33 puts at .51.


  111. Starting to look like a 2007 mirror, expecting AAPL to make a slight  new high around earnings and that will be the last, SPX most likely to end this short term rally around 1135-1150 before making new lows.Sept
    Recent negative news ignored by the market is troubling


  112. Phil: is there any way to search for your posts for a specific day?  Say 6/9?


  113. Hi Phil,
    Great site – a bit overwhelming at first but am picking it up the more I read/absorb.
    I like the buy-write strategy (I am more than happy with 20% yearly gains on "boring" trades!).  I notice you mainly are looking at large cap 2-3% dividend stocks.  What do you think of these high dividend stocks for that strategy?  HTGC (7.5%), LINE(9.9%), NLY(15%), PGH(6.9%), SUI(9.9%) are on my radar for income stocks.  What is the downside of using the buy-write strategy on these vs others on your buy list?
    Thanks,
    Mike


  114.  Phil… The UCO play I am in that we discussed before.  I have the UCO stock (ETF) and sold the the July $10 calls (covered) when UCO jumped to about $10.  Now w/ the big run-up in oil – I just want to confirm the strategy is to still "LEAVE IT ALONE" until we get closer to July expiration – at which point I will decide what to do from there.  Which might be to buy the calls back, and sell more for the next month out (to keep collecting the premium)…


  115. Phil, is that a buy or sell the "USO July $33 puts at .51."


  116. Would you believe this is Jim Cramer? "I am calling this a bad rally… We used to have fundamentally-based rallies – that’s not how this market works… This market is stupid. And it is hated for a very good reason. The market seems rapacious, arbitrary, capricious and downright ridiculous."

    MBA Mortgage Applications: +17.7% vs. -12.2% last week. Thirty-year fixed mortgage rate increased to 4.82% from 4.81%.

    May Housing Starts: -10% to 593 vs. 637K expected and 659K (revised) April. Permits -5.9% to 574K vs. 630K expected and 610K last month.  It’s a bit early to draw firm conclusions from May’s big drop in housing starts, Briefing.com says. Although the market reads the news as if starts tumbled due to the end of the homebuyers’ tax credit, it’s possible that it’s a simple easing after three out of four strong months of growth. In any case, it’s good news for the housing market longer term but bad news for the economy and employment short term. 

    Michael Shulman’s surprised that the Street was surprised by this morning’s weak housing data: "What did people expect after the expiration of the home buyer tax credit, with unemployment north of 20% in the real world, and Freddie (FRE) and Fannie (FNM) now responsible for more than 97% of all new mortgages?" Shulman believes we’re only 25-33% through the foreclosure crisis.

    May Producer Price Index: -0.3% vs. -0.5% expected and -0.1% prior. Core PPI +0.2% vs. +0.1% expected and +0.2% prior.

    May Industrial Production: +1.2% vs. +1% expected, +0.8% prior. Capacity utilization 74.7% vs. 74.5% expected, 73.7% prior.

    EIA Petroleum Inventories: Crude +1.7M vs. consensus of -1.3M. Gasoline -0.6M vs. consensus of +0.6M. Distillate +1.84M vs. consensus of 0.8M. Futures head lower after the surprise build, -0.79% to $76.33.

    S&P is worried corporate bankruptcies may start to climb, especially among lower-rated firms that will find it difficult to refinance heavy debt loads in coming years. By 2014, 72% of debt coming due will be considered speculative, up from around 41% in 2011.

    In an indicator of ongoing lending struggles, 91 banks and thrifts skipped their May TARP payments – 23 of them for the first time. That’s up from 74 banks deferring in February and 55 in November. Twenty banks have missed four or more payments, and eight have missed five. (previously)

    Fed officials may trim their growth forecasts next week as Europe’s debt crisis lowers demand for U.S. goods and keeps financial markets uneasy. The 2011 growth forecast could be cut by as much as 0.75%, and the "extended period" language for rates is likely to stick around.

    Spain rescue rumors continue, this time following a local media report that the EU, IMF and U.S. Treasury are drawing up a liquidity plan involving a €250B ($335B) credit line. Spain says no such plan is in the works.

    France jumps on the austerity bandwagon, as the government proposes a series of measures including raising the retirement age by two years and hiking income taxes on the rich. France seeks to hold on to its top-notch credit rating by showing it is serious about reining in spending and borrowing.

    Russia is considering diversifying its international reserves, following fluctuations in the dollar and euro, which account for 88% of its holdings. The Canadian and Aussie dollars are likely candidates.

    Is the worst for the euro over? Few people are ready to say so yet, but it’s worth noting that the euro is holding up despite a barrage of bad news about Europe’s sovereign debt crisis. Euro firm at $1.23.

    Credit investors are pricing in a 39% chance that BP (BP -4%) will default in the next five years, up from just 7% last month.

    While maintaining its sharp downgrade was justified, Fitch says BP’s (BP -4.7%) big widening in credit-default swaps is overdone. A quick resolution of the cleanup-costs issue could lead to an upgrade.

    BP (BP +1%) agrees to a $20B fund for Gulf spill costs, and Kenneth Feinberg will run claims as a third party. (WSJ)

    This is why MSFT is on the way out (remember when they pretended they had a tablet and Jobs tricked them into calling it a Slate?)With a tablet-friendly version of Windows (MSFT) still MIA, computer makers like H-P (HPQ) and Dell (DELL) are turning to rival software to help keep pace with the iPad (AAPL).

    Three lunchtime reads:
    1) Roubini: How to avoid a double-dip global recession
    2) Small businesses are targets in shakedown
    3) Five dot-com boom ghosts find new life

    FRE on the march – up to .73 already so no need to keep them – tight stops!


  117. Hoping markets go bananas this afternoon in VXX


  118.  Phil – When you say USO July $33 puts at .51, are you suggesting buying or selling puts? I know for calls it’s assumed to buy according to your new member guide, but when I see you post put trades I’m not sure…


  119. PHIL….your opinion of     MKSI  as a buy/write…..GABBY…..Oh, my plan to reduce the deficit………legalize and tax "grass" and conductt a national lottery with tax-free winnings


  120. USO – buy the puts.  Phil will say sell XX Ps  for $XX.


  121. humvee4me
     
    Thanks for the correction on the violine. Yes no flies on JRW. I am following his input closely


  122. Interesting:  Moviegoers – lowest Memorial Day attendance since 1993….Box office receipts for the next weekend plunged 24%.  Phil – RTH Ps….??


  123. Hey all,

    If you haven’t picked up any positions in Winnebago Industries Inc. (WGO), the stock is in a great spot to be an Overnight Trade. I have been playing it as a Play of the Week, but it has moved basically nowhere. We are holding into tomorrow morning to see what we can get out of earnings and then exiting. I am expecting good earnings from the company, but I was expecting more people to see the same. Good position to get in. I am going to repost my article about WInnebago on my page for today.


  124. JamesD -

    BHP might be a good hold actually overnight…I will update towards end of the day.


  125. Phil, what do you think of DO at this price? I apologize if youve been asked this many times before, but doing a search for DO pulls up everything with a the letters do in it. Do you have an advanced search options? Am I just a complete goober and it’s right in front of my face? Thx


  126. TZA/Tpuck – I’m probably not better (although TOS does have good execution), I’m probably just more patient.  If I don’t get my price I generally don’t play.  On a day trade, like FRE, I may want to buy at .55 but it’s at .57 so rather than buy 10,000 at .55, I buy 5,000 for .57 and offer to DD at .53 for a .55 avg.  If it gets away and goes up, then I have the stock and, if it goes down below my target, I have my entry.  If it flatlines at .57, given the nature of the play I would be fine paying a bit extra knowing that it held up for the day.  It’s the same thing with option entries – you can work your way into almost any trade with patience and persistence.  So, back to the TZA trade – Since TZA is at $6.40, there’s nothing wrong with being in the $4/10 spread at $1.60 as it’s $2.40 in the money.  You DON’T NEED to cover if they hold $6.40 to make a profit do you?  IF TZA goes lower, THEN you’ll be worried about the cost of the call spread but then, SURPRISE, you’ll get a better price for the calls.  The only other worry is theta decay but, with a 2012 put cover, it’s not an issue in the near-term.   This is the kind of thing I need my nano-violin for – you are worried that TZA will keep going up and all you will make on your $1.60 entry is $6 without having had to commit any margin to the naked put sale.  Well, wah, wah….  8-)

    TNA/Yip – That’s great as long as the plane doesn’t have to bank around and ash cloud and you lose the satellite for 15 mins while the market goes crazy… 

    USO/Brook – I think we hold the price ($75) I just thought we’d dip down for now so I grabbed the USO puts.  If you are worried about the position, cash it out, it’s up a ton and now your risk is high vs. reward (.50 more)

    Oh no, now Bill Gross is out to gloom everything up on CNBC!

    EPD/Jdub – Good scavenger business but they are priced way, way up already.  Probably fairly priced but I’d rather wait for a dip.  Because they pay a big dividend (6.6%) you don’t get much for selling calls but, if you are scaling in, there’s nothing wrong with the stock at $34.72, selling Dec $35 puts and clals for $5 for net $29.27/32.36.

    BP/Jtiff – I don’t think I advocated selling BP puts due to bankruptcy risk although I did sell Jan $25 puts for $2 a while ago and I had to DD at $5 and they are still $4.50.   The safer play was RIG or selling OIH puts to diversify risk. 

    Puts/Jdub – The volume is way too low to risk it.  I’d rather wait patiently and see which way thing break and go for momentum trades. 

    INTC/Russion – They are too dull to own but you can commit to buying them for $17.50 in Jan by selling the $17.50 puts for .85 and then you can take your free .85 and buy the Jan $17.50/20 bull call spread for $1.85 and that’s net $1 on the $2.50 spread and you make 150% if INTC holds $20 through Jan expiration

    2007/Cheyer – We are still in the same pattern we looked at last week (Feb 18th now) and that means no pullback until Monday:

    Specific day/Sean – There’s a calendar on the main page but I usuaully hit the "Phil" tab and then page back to the right date as it’s easier than going trough every post on a day. 

    Welcome Mike!  NYL and PGH were both on our old buy list but not so cheap now.  The others you’ll have to remind me to look at after hours.  The downside is the company cuts the dividend and the stock drops 50% and you are foriced to buy another 100% for just 20% off, which puts you in 2x with a significant loss (see notes on scaling in strategy section). 

    UCO/SrF – Yep, leave it alone.  Generally those trades are either on or off target.  This one is "on" target..

    USO/Hia – That was buying the puts.  Usually if I want to sell, I say so and I rarely do with buys..


  127. Phil – When Crammer calls the markets manipulated, then the whole world knows it too…and the markets are going to be a fun spectacle to watch when all that are left are bots and hedge funds.  Perhaps a TV show will be created around the concept…Hedge Fund VS Super Computer…Pay Per View SmackDown!
    —--
    On a more serious note, three observations today.   79M on Dow screams manipulatable…or mutilation…flip a coin.  My new definition for BP is "Bad Position".  And I’m starting to see a correlation with buying/selling of TBT 30 seconds before a decent size move on the RUT…SS or someone has mentioned this in the past, and it is a strange phenomenon indeed!


  128. Phil,
      What do you think about selling some AAPL calls into the iphone excitement? I’m thinking a bounce down off $270 down to around $250. Or do you think it goes up into earnings?


  129.  Hey, I got the nano-violin on my first post! Thanks Phil. And I am more than willing to sell the leap put and cry all the way to the bank!


  130. Goldman-Yes,  I believe it was SSDirk who noticed the correlation btwn TBT moves and the RUT


  131. Phil — noob here… thanks for all you do.
    I’m looking at SanDisk — SNDK — for 2011 play (or later)… any thoughts?


  132. Hello yodi,
     
    Thank you for your help to arbolito, good for me too.
     


  133. bobhu
     
    You welcome remember Einstein Questions make you wise!!!!


  134. Hi Phil,
    New member, really enjoy your site….any suggestions on how to repair/mitigate the damage on  this trade…I am long shares of FXP at $ 45.50.  What do you think? Dump the shares and take the loss or is there something else that can be done?   It doesn’t seem likely to visit that price again anytime soon.  Thanks. (anybody else with a suggestion feel free)


  135. sundevils,
     
    Wasn’t FXP at that price like a week ago? I think it could go back there.


  136. This is starting to look a little like the March rally where we ground higher every day on low volume and right in the face of increasingly overbought conditions. Could happen again if there are no sellers and the main ‘buyers’ are the trade-bots passing 1000 share blocks back and forth all day.


  137. EricL, I had the same thought — a helium rally, up and up on nothing, especially when there is no news. 


  138. Phil,
    Since the market has been up the last several days and thus no one seems to ask you about hedges anymore…..;)……. I have a hedge question. I need more protection for my longs spreads, thinking of the TZA Jan11 play, but some of my long spreads are expiring in July and August. I know a Jan hedge is not going to be much help for them if the market tanks during July/August because subsequent increased volatility will crank up the TZA Jan caller and short put to a Spinal Tap-pish "11."  So I look for alternatives. A July TZA spread seems too short a time frame. I looked at buying TZA Jan     calls and selling front month calls, and that makes the cost of a spread way expensive.  What would you do? 


  139. Phil:
    I’m a new subscriber. I  own shares of nly and agnc . i bought them for the large dividend. should i sell calls and puts
    against my shares to lower my cost.   Is there a dividend risk on doing this?   these stocks pay a large dividend.


  140. judah/Eric – I’m amazed at the size of the moves up on TZA…with little correlation to volume on IWM.  Volume is feeling like after-hours trading…with only buying, no selling…


  141. Phil…LOL.  That’s funny..  I’m not doing anything crazy…
    EricL…This is exactly my thinking.  This is exactly the type of market I believe we are in that I keep stating.  This is why I think we go back north of 11k.  Since I believe this is fully manipulated I also believe we will see a crash later this year as well.  it’s another ‘pump and dump’.  Make all the kiddies think we are back into recovery then kaboom, down she goes…


  142. judah/Eric – Actually meant TNA…as TZA moves up a penny on $0.15 move with IWM…correlation is missing.


  143. Phil: Thanks for your honest response. Totally misunderstood your post to Amatta. I am reading as much as I can and trying to follow up. WILL KEEP asking dumm question though until I get it right. Thanks.


  144. Melt-up/Eric,yip:  Still an environment ripe for flash-crashes, however…


  145. Phil, perhaps I have not been positive enough on AAPL … ;-)


  146. flush and go


  147. Some insite on LEDs. They run on DC instead of AC, it has taken 20+ years to make them bright enough to work beyond indicators of conditions, like power on. Anything that already converts AC to DC is perfect because the only remaining thing is lower the voltage easy as add a resistor. AC to DC conversion gets more expensive every day and will remain that way because there are only 2 ways to do it. The big transformer as mentioned very early post uses Rare Earth Metals, expensive and controled by China, and lots of copper wire that must be coated with very thin, flexable, and heat resistant insulation. Then rectified by diodes that need to be cooled and smoothed by capaitors and or inductors, more rare earth metals and copper to create what batteries do. The other option which uses much smaller lighter transformer is a switching power supply, they are conponent intensive, as lots of, but creat radio frequency noise that must be filtered and shielded to contain and failure is common. They are used in cell phones and you may have heard of people needing a new battery but it seems to fail very quickly. I have yet to find a single bad battery, its the charger a switching power supply usually overheat failure by allowing to discharge completely too many times or most commonly cooked by fast chargers in cars. LEDs are extremely inexpensive now, its the other stuff needed. Flashlights are perfect because of batteries, they are more rugged than resistance lights, and use less power.
    Now the real problems in lighting is they don’t like to be bright, use about half of floresent now available for $1 each and cost more. The math is 60 watt = 17 watts X 4 hrs. X 30 days = 2KW X .085 per KW = $.17 per month, 8.5 cents per month saved is gonig to take a liftime to recoup the extra cost. The real energy consumers are heating and cooling. I like and use LEDs for indicators and a new trick to bias a transistor or tube in amps, less noise = cleaner signal = better sound or video. LED stands for Light Emitting DIODE, a diode as in power supply AC to DC that indicates it is on. Two birds, one stone, pretty cool and efficient.


  148. Jodi, Thanks so much for your explanation, I am diggesting the info and looking for possible fixes. Thanks also for the advice on selling puts. Much appreciated.


  149. Wall St. makes its money off retail.  Since retail has no $$, they have to get the next wave which is middle and upper middle class to get back in.


  150. hugs4ever
    Hold the same stks. Most high dividend paying stks do not pay lot for callers. Nevertheless I sell callers OTM and if you want to add to your stk bases sell smaller amounts of puts you comfortable with, well under the present stk price. This way you get your div. and receive cash on your short plays. Always remember Phils saying sell only puts if you like the stk.


  151. arbolito
    you welcome


  152. Kink…Don’t misunderstand me…flash crash is the new norm.  LOL.  pump…and dumb…other wise known as flush….Dows above 10,700 by June 30th….2 weeks


  153. Pharmboy - Basically the next target for wall street is PSW members…=D  After we all tire of this monotonous, illogical, manipulated game, then the battle for supremacy between Hedge Funds and Super Computers.  Once the super computers become self-aware (Thanks to Google AI research)…then the super computers will battle it out on a global scale and humans won’t be allowed to participate as it will be Dow 450,000 one day….zero the next!


  154. There is a pretty good wall of overhead resistance at 1140 if the bots can get us up there. Of course at that point we’d have our right shoulder, which means everyone and their grandmother would start to short, which means there would be some kind of bizarre upside move to shake them all out, leaving only GS short for the subsequent flash crash. (Anyone else short will be ‘locked out’ as everything becomes untradeable, like on the last one. )


  155. shadow, good info,  I interpret that to mean don’t buy into LED’s now unless you know exactly what you are buying and why.  As far as the consumer market maybe in five – ten years.  Fluorescents still offer tremendous savings over incandescent at a low purchase cost. Not so for LED.  As I stated earlier, I tried an LED ceiling lamp installation in my kitchen and it was a disaster.  I sent the product back at a loss and went to reliable and available fluorescent which works great and saves power. 


  156. Eric – Agreed on the head and shoulders…could be contraian indicator.  Don’t worry about the flash crash…after the first 10% drop, we all get a few minutes to attempt to sell the rest of our stock…then another 10% drop, then a few more minutes…should be a good time indeed!


  157. What about them AAPLs.


  158. Selling AAPL June 270 calls over Oct 250 calls.


  159. Hi Phil, any thoughts on ELY ?  Thanks


  160. Eric…I think it was a week or so ago it was in the vicinity…I’m just thinking the trend may have reversed with that ETF and with the rebalancing of these leveraged ETF’s daily  I probably should have sold the put instead….


  161. goldman:  Actually I think the endgame might be the computers versus JRW.


  162. 1020 / ELY
     
    Forget the clubs, but the car; I have both and the car works much better than the clubs !!


  163. APPL and backorders. I hear the reason is lack of parts are holding up production. I wonder if this was planned to avoid over stock, suppliers are like refiners, running at lower and lower capacity. APPL probably knew ATT woul limit banwidth like verizon and those big phone bills will effect G3/G4 anything, like iphone and ipad HD. Something to think about.


  164. MSFT / abolito & Phil:
    I just logged in and was catching up with my reading.
    I saw abolito asking about his portfolio, and I have a strategy question:
    "I have 500 MSFT @ 20.19 base. Strategy: sell 2012 27.50 call for 3.45, sell 2012 25 put for 3.35, buy 2012 10 put for ??.Is this correct?  How many contracts would you trade."
     
    Strategic kind of question: I am curious about "buy 2010 10 puts".  I think abolito’s original intent is is: The basis of the stock drops to about $13 after selling 2012 calls & puts, and therefore buy some 2010 $10 puts to protect just in case MSFT drops below $13?  Is that a good strategy?


  165. Ifan/AAPL- is this the anchor strategy where you are long the Oct 250 calls?


  166. BP – news out at 2:45, cuts dividend…stock skyrockets up


  167. Phil
    I sold 10 BP 50 p @ 3..9 last month now $18.1,  thinking the capping would help the price.
    I had rolled 5 to Jan 11  40 p for 4.7 but now at $12 so undrwater on both
    I was holding question till today’s meeting w/ the WH was over and some difinitive cost strcture was known hoping to remove some of the  unknown from BP future ( now highly unlikely BK anywhere in the picture)
    So based on what we know this pm and B Gross comments below thinking good value in the 1 yr bonds
    What’s best way for me to try to get even?
    thanks
    NB
    Gross, interviewed on CNBC, pointed out that BP’s five-year bonds yield 6% to 7% while its 12-month paper has a yield of 10% to 11%.
    "At this point, if you can get 10% for one-year paper on BP, we think it’s closer to double-A than triple-C" in terms of debt quality, the Pimco executive said. "That’s a significant value and we’ve started to buy some."
     


  168. jbur ….yes


  169. Phil,
      What do you think about STD? They were a good bank with a good dividend but Spain is in trouble so not sure if it’s a risky investment?


  170. goldman,
     
    "fter the first 10% drop, we all get a few minutes to attempt to sell the rest of our stock…then another 10% drop, then a few more minutes…should be a good time indeed!"
     
    Yeah, lol. I wonder how that’s all going to work out.


  171.  Goldman / BP : they did cut the dividend "for the year" but the tone set by the president and the chairman were fairly positive. Obama even said he wants BP to remain a solid and viable company. A big change from prior messages. At this point, even if the entire north american subsidiary goes bust (50-60 billion), the stock has still priced this in. BTW, even so, i dont own it and have no plans to play it.


  172. Remember the triple witch this month.  OPEX, Quarterly OPEX and end of Q.  WS needs a good showing for their money….but we are basically flat…since the beginning of the year.  Hummmmm…..this is gonna get fuggly!  Shorting XHB – buying Sept 15 P for 73c for 1/3 entry. 


  173. sundevils,
     
    Can you use the FXP as a hedge for your long positions? I don’t know what it’s going to do, but China is hardly out of the woods.  Maybe sell calls against some of it on the next bounce.


  174. USO/James – I do try to remember to say which but it’s more likely I’m buying if not saying selling specifically.  You can always ask..

    MKSI/Nobhar – Seems like a nice, boring company to invest in.  They don’t have long options and they are super volatile so not ideal for a buy/write but a pretty good dscount for buying the stock at $20.74 and selling Jan $20 puts and calls for $5.60 but make sure you REALLY want to own them at net $17.57!

    Movies/Pharm – I think there weren’t any good movies out.  Why is it no one takes that into account?  There were tons of big movies out this year and attendance was way up and then they blew it with nothing worth seeing on the holiday weekend.   Last year they had Night at the Museum, Up, Terminator Salvation and Start Trek – this year it was Prince of Persia and Sex in the City with Shrek, Robin Hood and Iron Man all having opened earlier already…  IMAX limitations are causing films to stagger their openings differently this year.

    DO/Jrom – I like them but I liked RIG and BP better.  I still like RIG better but BP is taking off (and OIH took off too).  RIG at $48.90 lets you sell the 2012 $45 puts and calls for $27.50 (yes, $27.50) for net $21.40/33.20.

    Smackdown/Goldman – We have that show, it’s called the stock market…. I agree on volume, not enough volume today to get excited about.

    AAPL/Japar – I’m all for selling them once they are done going up but that doesn’t look like today.

    Welcome Haschade!  I like SNDK but not after this huge move.  How about WFR at $11.80?  You can buy that and sell the Jan $12.50 calls for $1.65 and the $11 puts for $1.55 for net $8.60/9.80.

    Welcome Sundevils!  Wow, busy day for new people.  FXP is very dangerous to hang onto as we don’t think China’s going to crash and you have a long way to catch up.  I’d get out unless you REALLY need a hedge against China falling.  I will point out though that you can get 1/2 your money back by cashing out here and selling the Jan $30 puts for $3.50 and the worst thing that can happen is you are back in the ETF at net $26.50.

    We are still looking toppy here – not feeling the breakout and BP is driving what rally we do have.


  175. EPD -
    I think you want to wait for a panic sell-off.
    Some of the MLPs are held by leveraged players – the div. makes it very appealing
    Wait until we have a sell-off where it feels like people are being forced to close positions -
    A GTC limit order around 29.50 might work -
    I scooped up EPD and KMP when they were yielding closer to 10%


  176. APPL – 600,000 iPhone pre-orders went through yesterday before they stopped taking them (by pencil and paper at times when the computer ordering system was down) *and* they’ve pushed the ship date back to july 14th from july 2nd.
    For those keeping track, that’s 10x more pre-orders than they received for the current 3GS. Ridiculous.


  177. Government subsidized actions are the problem not the solutions. That is abundantly clear at this juncture. There are some tax incentives that could be instituted to exacerbate better energy policies(we don’t actually have an energy policy just more rhetoric/lip service)but great scrutiny would need to be taken to find the sweet spots that would actually work and not turn into MORE corruption and bungling of national resources. This is turning into a zoo from the Chicago criminals and that too is abundantly clear to any who care to see. We need to STOP all spending and count cooh on a better approach or we are all toast. So far all the stimulus has benefitted only a chosen few. Pretty pathetic considering some people still believe in the illusions Pravda helps provide on a daily basis.


  178. Re STD:
    Started the big move when they increased their stake in Mexican Unit  $2.5 Billion.
    Since then there have been a number of positive articles.  They are the largest bank in Europe!!
    Might also monitor EWP – Spain’s etf to see what the price action is saying.  Also more gap ups as well.
    The stock is up to $11 from under $9 in just a few days and might need a rest.
    Here is the link to see about their recent expansions.


  179. Phil, curious to know as he has the stk why not sell the Jan11 40 call aswell he will be getting possible 7.50 for that so if the stk goes up he will get called away and has more than 10.00 in his pocket ????
    Welcome Sundevils!  Wow, busy day for new people.  FXP is very dangerous to hang onto as we don’t think China’s going to crash and you have a long way to catch up.  I’d get out unless you REALLY need a hedge against China falling.  I will point out though that you can get 1/2 your money back by cashing out here and selling the Jan $30 puts for $3.50 and the worst thing that can happen is you are back in the ETF at net $26.50.


  180. TNA   In the interest of completing the report on the trade……..In at 48.50, stopped out at 48.42 for a minimal loss. 


  181. In TZA at $6.34


  182. kwan et al…..My opinion…..   If AAPL is not presently in your portfolio you are (still) missing out on one of the best investments of the decade.   Disclosure:   I do not work for Apple.  I do own lots of their stock!    


  183. Keynesian policies have failed miserably. I’m gonna go look at the video Hayek/Keynes, I love that thing. There is likely a balance between the two philosphies that likely would benefit us all, but we tend to go too far in any one direction and GREED and corruption takes over. At some point we will have to suffer abit more to get out of this mess so lets get it over with and shorten that process instead of elongating it…Party at the Fed. Lobby 20 minutes!


  184. kwan
    Your are backing up my previous post on APPL, shipping slowed, parts shortage, they are playing an itune. If you don’t believe my take check what Phil has been saying, don’t touch now. Another thought is if they have nothing new to actually sell and make a profit on, how will their story go next month, they report early?


  185. kwan
    Your are backing up my previous post on APPL, shipping slowed, parts shortage, they are playing an itune. If you don’t believe my take check what Phil has been saying, don’t touch now. Another thought is if they have nothing new to actually sell and make a profit on, how will their story go next month, they report early?


  186. Phil — I’m long the DIA July 105 at a cost of $1.08 and have sold the DIA Jun 104 for an average of $0.65 (100% covered). At this point would you hold till Friday the Jun 104 and let time decay do it’s work? Thanks for your thoughts or other suggestions.


  187. shadowfax
    Thanks for the good data on the LED lighting. We will see much more of this technology as time passes. My desk lamp is this type and I really like it – also my Porsche driving lights, and will spec in lots of these lights in my kitchen for under cabinet - counter lighting as they are cheaper to operate and require minimal space.


  188. "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design" FA Hayek… The Fatal Concert…guess what, we are there!


  189. Out of TZA at $6.43


  190. Iflan/AAPL
    I agree with your assessment of the potential for this company. I have lots of this stock, and would like to add to it.  Is this a good time, and if so, how would you play it?


  191. gel / Sonoma lunch
    And you didn’t invite me ?!!  You are right about the food, great place. Another is The Farmhouse ( River Road NW of Santa Rosa for French )


  192. " The ideas of economist’s and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else, practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist ! " John Maynard Keynes


  193. JRWlunch
    I considered inviting you… but it would have cost you too much trading profit. Next time I’ll pick a Saturday. I love Sonoma!


  194. Another DNDN thorn…..I am a bit biased due to my roots at U of Iowa, but hey, I am just reporting the science. With this trmt it is an injection 3X (once a month for 3 mo).   Cheaper etc etc….


  195. Jimmyv – I have the same contracts and have an order to close them for $1.20 credit. It would be just my luck that we would have a stick on friday at the close. Lets see what Phil has to advise.


  196. In TNA at $47.94


  197. gel 1
    Those are excellent  uses of LEDs. I have considered changing my undercounter lights also, the halogens use 450 watts every time I use them, I have all the parts to make my own except the LEDS. I have a few discarded microwave ovens, the transformers in them cost about $75 each and if you reverse the input and output change from 120v to 2,000 volts to 120V to7.5 v almost perfect for LEDs and enough capacity to run hundreds of them. Your running and tail lights will outlast the car, the car uses a battery, perfect but notice they are not the headlights even though the color temp is perfect.


  198. At this point I think it is fair to say there are numerous defunct economist and many illusions based on their previous prognostications being carried forward as though they were once REAL. Just a little something to ponder. Here is an eye opening realization…..THE ANSWERS AND CORRECT ACTIONS WILL COME FROM US NOT THEM. TPTB have a vested interest to maintain the status quo. This also is abundantly obvious. Change will ONLY come from us. The elections are near and we can all post our thoughts everywhere possible.


  199. We actually have all the power, not them. We simply have not come together as the necessary force YET. Both political elite groups are totally corrupted and we must thin out the dead wood and keep what works and nothing else.


  200. JRW/ELY  That must be some pricey ride!  ( At the risk of sounding clueless, what did you mean?)  :)


  201. Bought some WGO calls, let’s see.


  202.  1020 – From yesterday


  203. Grinding higher/Eric – Could be the plan.  March – April was fake, Fake, FAKE and there’s no reason they can’t do it again.  Check out the week’s 15-min chart – almost a perfect line up since last Wed morning other than two big sell-offs into the close that were both reveresed in futures – pretty much just the kind of BS action that drove the bears crazy in the spring. 

    Hedging/Kururi – I hope no one is asking because everyone locked in their TZA hedges as we hit our 666 goal!  Don’t be so linear – if you have July and Aug spreads then you just need to roll out to Jan at some point if they don’t work out.  If they do work out – then the insurance is a bonus if it comes in.  In other words, if I have a TZA hedge that pays 5x in Jan then I’m pretty confident selling RIG Aug $40 puts for $3.30, not because TZA will protect me on Aug expiration, but because I already have a plan to roll them to the Nov $30 puts and then, if necessary, to the Jan $25 puts and I feel pretty strongly that if RIG is down at $25 in Jan – THEN my TZAs will be in the money

    Welcome Hugs4ever (wow, this is a new daily record!) – Yes, you should always cover but only sell puts if you REALLY want to own more at the net strike.  Remind me later and I’ll look them over for you.

    Dumb questions/Arbo – No problem, you’ll get the hang of it.

    AAPL/Diamond - No I think $270 is still the point at which I’m willing to be a little short but only a very little. 

    LEDs/Shadow – Nice primer, thanks!

    Good 2:38 call on resistance Eric (yes, I am that far behind!).

    ELY/1020 – We talked about them yesterday.  I like them once they put in a bottom.  No surprise golf sales are off but they’ll probably survive long-term.

    AAPL/Shadow – I would really suggest you do not short this stock.  You are way too against them and they have buried many, many bears over the years.

    Buying puts/Cwan – I got the impression from Abolito that he has some kind of retirement account that doesn’t allow naked put selling so he is forced to buy to cover that leg.  It’s not something I advocate as the idea of these trades is to take bullish positions in stocks you truly intend to stick with and sell premium, never buy it. 

    BP/Ban – My advice to someone else in a BP trap was to transfer to OIH puts so not so much risk on one company.  I think BP survives and I have the Jan $25 puts shold short (now $4.10) and you can roll to 3x those if you have the margin but still dangerous if BP goes BK.  I’d say roll 1x there and 1x whatever OIH puts are $8 to split up the current $12 obligation.  XLE is also a way to go on the short put side. 

    STD/Japar – Impossible to say so I just stay away.  Do we know what their loan portfolio is?  Do we even know the default rate in Spain or how much they loaned to Greece or how likely it is the Spanish government will back them if their bonds start collapsing a la LEH?  Hell, we don’t even know that about BAC or C so STD is miles off my list of investments…

    Tone/Hanna – That’s Obama’s MO – big talk and then compromise.  Good to trade on once you get used to it. 

    Ridiculous/Kwan – I don’t know, it has enough good stuff to get me to trade in my original model (I never bothered with 3Gs)…

    Subsidies/Goober – I don’t think they have a choice.  It’s hyperinflation or depression and neither the politicians nor the people have the stomach for Depression.

    Mystery stock/Yodi – I guess you are talking about FXP and the reason is that you can make 1/2 that much only needing FXP to hold $30 vs tying up the money and needing them to hold $38.50 just to get the same $3.50.

    DIA/Jimmy – Sure, let them expire.  You can always roll to June 30th calls, the $106s are .67!  Also keep in mind that DIA tends to true up to the Dow on expiration day.  Right now it’s about 20 points above it (20 cents) as it’s inflated by bullish sentiment. 

    WGO – I have trouble with that one when oil is near $80.


  204. Notice S&P NOT holding 1,115, RUT right on 666 line, NYSE still not at 7,000.  We’re holding up but it’s an ugly hold.


  205. WGO – sales are probably up to those who want to house themselves.


  206. Out of TNA at $48.07; 4 1/2 % on the day


  207. diamond/Phil  - Thanks


  208. gel1…….I believe the July numbers are going to be phenomenal.  They just can’t make this stuff fast enough to fill the demand.  So how to play it?   Hmmmm.   What I’ve got now is October 220 and 250 calls.   I’m selling front-month calls against them, taking profits as it waxes and wanes.  I will also play long calls , probably July’s, in a momentum fashion (much like JRW plays TNA), in a much smaller amount around earnings.  I can’t say yet what form this will take because we aren’t close enough yet.  These are trades that fit MY style, and may not be right for others.   For anyone, I believe far-out deep ITM options are a good  play.  You could even do this as a simple spread, like buying the Jan 200s and selling the Jan 300s for about $58.00, giving you a greater than 70% profit if AAPL hits 300 by then, which I think it might, and with a breakeven of 257.   That’s a simple play to do.  My plays above are more complex, looking for greater profits.  But I think this stock is headed ever upward, and that’s the way I’m playing it. 


  209. Phil,
    I’m not short APPL don’t plan on it either without a real reason. I was long APPL until April. What bothers me is the loyalty and a few members who refuse to believe most things that go up go down. What I say is why I sold them along with what they need to do to maintain their price and their product prices.


  210. JRW – I believe I still have the Car and Driver issue from the 70′s with the first "ELY" Corvette!  
    ELY’s in the back of my ELY – sweet……


  211. Hi Phil : I’m back from prostate surgery last Monday. Doing much better. Didn’t mean to tick u off with my suggestions on your site last friday.I’ll just look at blue comments when I can’t watch during the day.


  212. I wasn’t implying people are being ridiculous in wanting to grab the phone – I’m upgrading mine for sure. Just not anytime before the end of July from the looks of it :)
    Shadow – Don’t forget Apple bought a little company called Lala a few months back, the results of which they’ve yet to unveil to the public even though that site was shut down at the end of May. In a nutshell, that website let you listen to any album (new releases included) one time for free, after which you had to either pay something like .10 for unlimited web listening of that song or you could buy an MP3 version to take with you on your mobile device for .99. It had gotten to the point where I was firing up that website almost exclusively to listen to music instead trying to remember whether the song was on my iPhone, or laptop, or home media server… I’m still going through serious withdrawals right now, and Spotify doesn’t even come close because their catalog is so messy in comparison.
    That’s how their story will go in the upcoming months, if you ask me. Just my $0.02.


  213. And I don’t hold anything in Apple (nor do I intend to in the near future). I’m just reporting interesting pieces of news.


  214.  Phil,
    Can you explain how different spread will behave – short vs. long expiration, at the money vs. out of the money. I see that you mostly recommend longer expiration, in the money spreads – why?
    Thanks.


  215.  Thanks Phil & samz3700 for comments on EPD. I’m thinking of scaling into CQP (shoulda woulda coulda on Dec. 17.5 buy write) Want to see it retest and hold 50 SMA plus 6 straight green days is a bit too much for me to get into.  I’ll keep EPD in my radar and silently waiting for it to pullback.


  216. iflan/AAPL
    Thanks, much!. At the moment I am holding only the stock as a capital gains long term hold. I closed out all of my options a week ago, and took the profit. Realizing the unbelievable potential this company is enjoying, I am re-loading on some option plays. I like the January expiration spread you suggested. I might also sell some puts with the same expiration, as I believe the market strength will build toward the end of the year.


  217.  Apple also bought Siri in April – Siri developed on of the best applications I have seen for the iPhone (and I have an N1…)


  218. I love AAPL, but this seems like a terrible time to buy, there have been many opportunities to buy in the 240′s the past month, even just last week. It seems rather risky to buy so close to the all time high of 272. I would wait until the preorder sellout news cools off a bit. I’m no expert this is just my opinion from dealing with the stock for many years. 


  219. What ever happened to Singapore Steve…he played AAPL almost exclusively on a day-trade basis. Are you still with us, Steve, but with a new moniker?


  220.  I forgot to add that I went into PBCT today.  100 shares sold Nov 15 C against it for a net entry of 13.53.  Been eyeing a small bank holding for a while now and I saw that its CFO bought 5K shares @ 14.07 in the open market on 6/8 so if there’s anyone in the firm that knows its books well, its the CFO.  
    Fundamentals: Great P/B ratio, lots of cash, low debt levels, 6% Qrtly revenue growth yoy and a great dividend yield.  
    Technicals: 20 & 50 SMA below 200 but 20 starting to flatten. Volume picking up as it’s going up.  Now above its 20 SMA. 
     
    And I got it just in time before it took off today.  Will look to sell 12.5 or 15 P if it pulls back to test 20 SMA.


  221. JRW……Have you considered applying your trading techniques to options?  You and I use similar day trading styles but you use TNA/TZA;  I usually use AAPL calls.  AAPL  ATM options are  heavily traded and have usually a nickel or so spread.  Today the July 260s had 14,000 volume and range of $10.50 to 14.97.  Easy to fill, great leverage.  I did not trade them today but what I will typically do is buy 100 contracts or so when I’m fairly certain the stock is moving upward, then set trailing stops.  I’ve had phenomenal results with this technique and I cannot help but think that if you applied some of your knowledge to momentum options trading that you would magnify your results.  Let me know if you have any further interest in discussing.  Thanks.


  222. This just released from the White House: The Cliff’s Notes version of President Obama’s Oval Office speech:
    My Fellow Americans: "I’ve returned … I assembled a team … I’d like to lay out … I’ve authorized … I urge the governors … I saw and heard … I’ve talked … I’ve seen … I’ve talked … I refuse … I will meet … I make … I asked … I approved … I want to know … I met with … I’ve established … I’ve issued … I know … I urge … I expect … I was a candidate … I laid out … I say … I am happy … I will not accept … I will not settle…" --Barack Obama
     
    Also in the news- The White House announced it will now officially refer to the President as "Expander in Chief". According to sources familiar with the matter, "This title is more fitting given our policies & objectives. Besides, we are the only one’s doing any hiring".


  223. Gel, I like the Jan11 AAPL 230-300 bull spread plus selling the Jan11 280put/280 call. For each of these you do, TOS (people correct me if I am wrong) says max gain is $7,700  if AAPL finishes between 280-300. Best part is AAPL can fall all the way back to about 241 and you’ll still break even.  If AAPL rockets to 315 then you only get $6,200 (poor you).


  224. lflan: I have beeen watching AAPL for the same reason as you say at 4:29,
    I have not done yet but I plan to get in with calls, not frontmonth but at least 30 days out, so now would be July.
    ATM or slightly ITM, what is your stance here ? you have the experience.
    daytrade.
    When are you CERTAIN that AAPL is moving up ? I watch candlechart, many times it is up big upon openeing but continues to move up.
    Do you also apply your  technique when its overbought and moves down buying puts ?


  225. james…..I agree with you.  This is probably not a good time to jump in on AAPL.  There is bound to be a pullback before the next leg up.  I haven’t heard Phil talk about this per se, but it seems to me that by using a bull call spread, that you are in a way helping to pay for the initial cost of your stock.  Ex:  Jan 200/300  bull call spread on AAPL is about 76/18 with stock at 267 or so.  So you pay a premium on the 200 of about 6 bucks, but you get 18 back on the 300, for +12.  So I look at this as reducing your purchase price from 267 to 255 .  This is with no margin.  If you want to margin some puts you can sell the Jan 220s for 13 bucks.  Now you’ve puchased AAPL for 242, which I think is reasonable.  And in fact you won’t lose any money on this trade unless AAPL is under 242 at expiration…….not likely.  That’s a way to buy it now, if you want it.  Phil will jump on my butt if I’ve got this wrong, but I see this as one way to get in now if you want to.   Other way…..wait for it to pull back, which it probably will. 


  226. Iflan,
     
    JRW III
    June 15th, 2010 at 11:18 am | Permalink  
    exec
    I’m in the stock; I buy the options for mid-term movement, and that’s in a different part of my portfolio that I don’t report on. This box is for current market S/R levels and direction.
    I’m currently in July IWM 66 C’s at $1.45; made a bunch on the June puts in the last  two weeks ( basis was $0.27 ), but there are a lot of folks on this board that know a lot more about option trading than I do. I’m just a one trick pony !!


  227. RMM….I am never certain that AAPL or any other stock is moving up.  If I’m contemplating the momentum day trade I need to see      Market moving up (the trend is your friend), AAPL not recently on a runup (makes tomorrow a bad day to consider the trade), good new on AAPL (makes today a good day), you’ve got no distractions from the trade, etc. I look at overseas trends, the futures, Phil’s comments about trends (heavy wieght to these), look at recent AAPL charts for trendlines, volume, etc.  then if everything seem to be "GO", I’ll come in with a purchase of ATM near-term calls and follow with trailing stop.  I use large # contracts for the trade.  It;s similar to JRWs IWM trades, easier to show than to explain.  On a 100 contract $10 per option trade I expect to lose no more than 2k or 3k in one day and expect to make an average of 5k plus, with winning days exceeding losing days.  This has been the case.  But as I’ve stated here before, I’m only able to do this trade about 1 or 2 days a week because of time constraints.  (I have a day job). 


  228. Dont you apple owners Worry about Jobs’ health? I’d be concerned investing in any company where the stock could fall off a cliff if the CEO died.


  229. jromeha…….insurance.  Some of my AAPL profits go to far OTM AAPL puts……October’s 200s are about 4 bucks.  I’ve made so much money on this company I think it’s reasonable to spend some of it on protection against just this eventuality. 


  230. Thanks for more info on Appl. I know a very high upper who has gone silent this year. I heard from a friend that his ipod invention may unravel soon as the success is based on monopoly control which may end like Mirosoft Explorer. I continue to see profits up or down, just WAITING FOR THE REST OF THE STORY. Another interesting issue is etrade, I opened an account because their stock was fun to trade between 1.40 and 1.90 now they are on watch because of 10 to 1 reverse split, they are manipulated by a huge holding company who pumps up the stock and then sells huge blocks of options and delutes. Seems like nothing has changed except now its $14 to$19 but I’m twice causous after burns.


  231. lflan: TXS for comment, you do well, probably make more $$ trading than job unless you are a banker.


  232. APPL or ETFCD are no different than JRW’s TNA, it is the same thing only difference is 1 or 2,000 stocks.


  233. Monsters in the Market
    http://www.theatlantic.com/magazine/archive/2010/07/monsters-in-the-market/8122/
    …all at the behest of Citi’s clients. Amid the trading-floor din, Dagger fulfills its duties in flickering silence, with a speed and acuity no human can match.
    “It’s self-learning,” Kang says. “The numbers keep updating, the strategy keeps adjusting itself. It gets smarter.”
    And it makes a lot of money. Algorithms like Dagger can exploit the smallest inefficiencies in the market. They can parse trades in millionths of a second. Some species can detect other algos embarking on predictable trading strategies, and ruthlessly adjust their techniques. They’re growing ever more complex, subtle, and sophisticated. And as they become more popular, they’re creating some serious headaches for regulators.
    By some estimates, algorithms now trigger 70 percent of all trades in U.S. equities. The speed and volume of everyday trading have propelled the market into a new and esoteric dimension, and rendered traders in the pits largely obsolete. Average daily share volume on the New York Stock Exchange increased by 181 percent between 2005 and 2009, while the time required to execute a trade on its electronic systems dropped to 650 microseconds.


  234. jr/AAPL
    The last time Steve Jobs was on leave as a result of health issues, the stock continued to prosper. I believe Apple has a very deep bench, and the stock will perform in sinq with their earnings and product releases, notwithstanding the support investors might place on Job’s participation.


  235.  Hi Phil,
    I’d like to get some exposure into crude oil thinking it’s heading higher in the long term.  Should I look into the integrateds (XOM, CVX, COP, TOT, PBR) or drillers (RIG, HAL, SLB, WFT) or engineering firms in the sector (FWLT, JEC, KBR etc) or Canadian (PWE, SU)? 
    OR if you think I should not dare looking into any of these names, let me know.
    Thanks! 
    By the way, been in this service for only the 3rd day.  And my gains have already covered 1/2 monthly subscription.  But biggest benefit is rearranging my holdings and sleep more soundly at night!


  236. goldman
    You are wise and I agree with all you said. I know algorithms, they start at how a volume control changes volume on your radio. We have to remember that it is still only simple math and we can reverse engineer it, it will continue to cause burn out, their weak link.


  237. Hi All,
    I pretty sure this has been asked before, but i will ask it again as i have spent a lot of time trying to figure it out (which means the answer is probably very simple.. . .). Is there a quick way of searching for all of a particular person’s posts — in this case JRW — like one can do in the yahoo forums? Or would I have to go through all of Phil’s daily articles and manually search through each of those?
    Thanks for any assistance!
    Robo


  238. JRW, made 4% today following you, just wanted to give you some after hours props!


  239. I’m sure if it doesn’t exsist a few lines will solve the search issue. the price may be thousands or free with a google search although I prefer Yahoo, much less bull cr?????


  240. JRW, made 4% today following you, just wanted to give you some after hours props!


  241. jdub
    I know you have directed your question to Phil…. but I will offer my favorite energy plays that will not keep you up at night. I like XOM at these prices, BEXP for tracking the price of oil, CHK for natural gas, as they have the best reserves and technology, SU for a Canadian play and KMP for transmission. I am holding many more, but these are the cornerstones in my energy holdings.


  242. jflan: next to AAPL, is there another stock which is suitable for what you are doing with AAPL ?


  243. jel1
    I love this blog and your energy info is priceless, I only profess to know tech stuff including unfolding missteries of the mind type. I only give true answers. I disclosed my LED lighting idea today with old microwaves. I also can tell you how to build $15,000 interconnect cables, $5,000 power line cleaners, $1,000 surge protectors, or $20,000 amps for 10cents on the dollar. Just ask.


  244. jromeha,
     
    You are most welcome Captain !!


  245. JRW
    I loved your car stories yesterday, Have you heard about the 650 HP camaro? Not my thing but if you want to get attention from the red and blue and loose the race it can start spinning tires at 100MPH. I own a 2004 STI slightly modified that at 7,000 feet still does 0 to 60 in 4.5 sec. quite alarmiing to the natural breathing twice as many cylinder big numbers vets.


  246. Phil/Gel,
    what do you guys think of dptr?


  247. shadow / Cars
     
    It’s all about having fun; life is too short not to !!


  248.  RMM..There probably is, but I have intimate knowledge about AAPL and I think that’s important in trying to figure out how a stock is going to move.  So I use it most of the time.  


  249.  hey phil….or if anyone else can help…
    bout the TZA hedge, im too inexperienced that selling anything 2012 is a recipe for insomnia…i was wondering instead of selling the 2012 puts for $1.20…would it be wise to sell really out of the money oct/jan, calls/puts on appl/goog (or something with high price) to get my $1.20…i understand that would require more margin..but are there any other dangers in mixing the spreads of low priced stocks with higher ones.
    cheers 


  250. JRW
    That is the real bottom line


  251. TBT trade long term, buy 40/50 jan2012 spread 3,3 and sell 40 jan2012puts 7.65


  252. Phil and anyone using windows XP
    I now have 3 computers that use XP and do not fix by extreme measors like erasing everything, formating , etc. Although microsoft is not disclosing they seem to not be working on current fixes or problems. The bugs or whatever are going to stop your computer and make it worthless maybe. As a matter of fact I was just interrupted, they are watching me! Warning!


  253. If you think the investment system is rigged, you must start believing your computer is rigged! anyone trading G3/G4 iphone blackberry please be careful and realize big brother is watching!


  254. Thanks Phil. That was my thought on STD but wanted to make sure before I unwound my entire position. Also, would like to know where you think AAPL will start to pull back a bit. I’d like to play the short-term test/consolidation. You think after earnings?



  255. japarikh
    Please be careful APPL will fall someday but when is the big question. The spys don’t care and I don’t care that athorities are watching me, their problem is I don’t say anything specific on line, cell or even land line G. W. Bush changed all privacy fo "Homeland Security" and you don’t matter just do what I say, I know best, just ask me.  Make a statement with a vote just remember everyone has an agenda and works toward their own interest.


  256.  Phil
    As per our posts, I have put a list of the positions to build the 25% buy-write portfolio, but have a bunch of questions. I am posting after hours for that reason. Sorry if it is a lot, but want to make sure to position myself better this time.  For some I didn’t put the actual plays as the ones posted are no longer applicable so Im hoping to get some entry points here (perhaps these could be used for the weekend buy list?).
    TECHNOLOGY
    INTC  2010 15/22.5 $4 15P $2
    AAPL Not sure if right time now and how to play it?
    TASR Do you still like it now?
    GLW
    POWR
     
    FINANCIALS
    C (I hold now 4000 shares bought at 5.06) will trade for 2.50/5 4p Net .23
    BAC Buy Stock 15.8 Sell Jan 15 C/P’s for $4.30
    Not sure if doing also the XLF as I would have 3 positions in Financials?
     
    COMMODITIES/MATERIALS
    VLO (do you like VLO better than CVX?) Buy @ $18.2 Sell Calls/Puts 2012 for $
    FCX Jan 2011 55/75 $10 2012  55 P f$10.70  Not sure I understand why the huge mismatch on the expirations?
    OIH is there much upside left here? 
     
    DIVIDEND/DEFENSIVE
    MO 
     
    FOOD/AGRIGULTURE
    MON
     
    CONGLOMERATES/BLUE CHIPS
    GE  16.2 2012 15 P/C $7
    CAT No play posted
    BA  
     
    HOUSING
    HOV (do you still like them, having lost 40% since post? I like getting in at a better price but not sure if the fundamentals are good still?)
     
    HEALTHCARE
     PFE
    MRK  I think you like this one better than PFE right?
    DCTH  Do you still like it with the big price retreat from posting time?
     
    I hold these long, which should keep by adding protection?
    T  (up 5%)
    AMT (up 5%)
    EXC  (down 20%)
    TBT   (down 10%)
    One thing I don’t have clear is how do I account for the $120K in buy writes that I need to setup. I mean to say do you add up the stock owned, plus the outlay for option premiums plus the posible outlay of cash to purchase positions put to you? Or how is it done?
    Hedges:
    I really like the new hedge you posted today with TZA. Boy that is some cheap insurance…
    On the TZA hedge, you can now take the Jan $4/10 spread for $1.45 and sell 2012 $4 puts for $1.30 for net .15 on the $6 spread that’s already $2.39 in the money so it’s up 1,493% to start and has a max gain of 3,900% so committing $450 to 30 contracts has an upside of $18,000 at $10 and your worst-case obligation is you own 3,000 shares of TZA at net $4.15 in 2012

    But I still currently have the following hedges, which I need to reshuffle to properly cover the buy-writes I am about to enter… Would killing them and exchanging for the TZA be better?
    29 DXD Oct 23/27 and 24 23P’ for Net $1,892
    30 SDS Sep 29/36 30P for Net $3,060.
    These would cover roughly $30K in losses, so I would be covered (with the 20% cushion on the buy-writes), for a 45% drop in the market.
    Sorry for the very long post…
    Thanks a lot.


  257.  Shadowfax
    Step away from the edge my friend.  Microsoft isn’t watching you, unless you happen to be Eric Schmidt.  NSA Echelon program is well know but it searches for key words.  If you are a lot like me and stick to friendly words like dufus or dingleberry, than you are safe.  If you use those "other" words, then its too late for you anyway because they are probably tracking you via subdermal chip implant.
    May I suggest abovetopsecret.com or Enterprisecorruption.com.
    Here, we just like to make money.


  258. Shadow, I may have to take you up on the surge protecter idea. A 3:30 PM thunderstorm today knocked out power
    (while trying to close positions) tripped the GFI outlet and surge protecter but still fried my motherboard and power supply on my 4 month old HP, but the seven year old HP plugged in the same outlet is just fine. GRRR, of course not covered under warrenty.
    Moral of the story have the brokers number in your phone. JIC.
    Phil you got a lighting special trade in your pocket for tomorrow?  jk  


  259.  Shadowfax / Surge Protector
    I would be interesteed in how to build a $1000 surge protector for $100.


  260.  JRW / exec

    Could you tell me what charts you use following IWM? 8ema 3minute meaning an exponential moving average, with a length of 8? Also a StochRSI (14,.3,.3)?
    I’m new to TOS and they have a lot of different Stochastic charts, such as StochRSI, StochasticFull, StochasticMomentum, etc. I would like to follow along and knowing the charts you use would be very helpful.


  261. salvim 1
    I am watched,tracked, you name it and what has happened today proovs it. Too bad people don’t believe it I have felt it for 1..5 years and the rest is not ever reveiled on line.


  262. Phil – Glad to see that you finally have recognized that the Emperor has no clothes !   It is rather pathetic to have to listen to his empty rhetoric and excuses for inaction.
     
    But enuf about politics.  I was pretty much out of the market today; had to go to a court hearing; took up my whole day after 10 am.  Just as well; I would have been frustrated at the continued pumping going on in the market.
     
    Hearing some chatter about 1135 being a short term target (between now and next month) by some money players.
     
    Looking for more pullback in the REITs thru Opex provided the market weakens as well.  Targeting 60 or SLG and 85 for SPG for end of week; although SPG could pin 90 (crazy numbers for both; but they are just algo trading toys at this point).


  263. BP has a new name:  "Barack Petroleum"


  264. Nobody cares what I think about the stock market, the stupid SOBs think I can change the system and in really this has been ongoing since 1980? I am sick of it, I have no control and the only thing I am guilty of is the first lesson in engineering, "Coppy you won’t live long enough to reinvent the wheel, reverse engineer the ? To clean AC line noise take 2 microwave transformers, take output of the first to ouyput of the second ie. 120v to 2000v to 120v and use the filter capacitors in the same ovren to filter the noise out. I would add a cascade of capacitors at 1/10 value ending with a polyproprolene or polystyrene capacitor of approximately .01 m F to eliminate all RF. Try this it really works the additional capacitors are available through Mouser Electronics or other suppliers at less just make sure you buy caps at least twice the output voltage and be careful of plarity if using electrolitics, a fuse is wise as well as a clamping device for surges, prices vary. It will weigh 20lbs or so and you need input and output plugs to connect. This isolates the line noise better than most 1 to 2,000 dollar units.


  265. Phil: Bill Gross says that equities are almost as secure as sovereigns themselves – see video:
    http://www.cnbc.com/id/15840232?video=1522949498&play=1


  266. pstas – 4:34 post — hilarious


  267. GEL, I agree with your thesis on Xom – after the xto deal is completed it will go back to 70. they will also get some assets from BP on the cheap. My favorite play right now is the C and the Sept 3-4 Call vertical for a net debit of .70. This will be very rollable/adjustable if it goes the wrong way.
    I think once the govt is done selling – this should go to 5. xto puts still have a lot of premium as well. with the renewed emphasis on nat gas + our favorite nobel laureate (the energy sec) is not against fracking.


  268. JO…. I agree with you on the possibility of XOM picking up some of the better assets that will be disposed by BP… also, OXY might be a potential buyer. I’m riding with you on the C plays. The sales by the government have not negatively impacted the stock yet, and it is not being irresponsibly dumped.  I have a big spread position in the Jan 2012 strikes, and plan to add more on any dips. Five bucks is realistic, I believe. I think Phil likes C as well.
    With oil pricing headed northward, I believe natural gas will soon be in vogue, as the price is attractive. My oil and gas plays in California have good potential, I believe, as the environmental issues are almost non existant because the extraction method does not require hydrofracturing, which injects millions of gallons of chemically laced water down the hole to blast open the rock, and the resulting hazard of toxic flowback. The two companies that are dominant in the California Shale ( VQ and OXY ) are using the " managed pressure drilling ", which is air-injection, thus forcing the oil to the surface.


  269. Good morning! 

    Huge turn in the futuers since Europe opened.   They are up a point but copper is 2.95 so I’m worried it’s all window dressing now. 

    Of course we have Unemeployment at 8:30 and that can send us up or down anyway.    PPI was deflationary (-0.2%) but only because of oil, ex-energy it was 0.2% so if CPI is not better (higher) than -0.2% it means they still can’t pass prices through to contumers and that’s no good.   At 10 am we get Leading Economic Incicators (0.4% expected) and the Philly Fed (20 expected) so lots of market movers this morning!

    Welcome back Dflam!  Glad all went well.  You didn’t tick me off, I just thought you were a pain in the ass but it turns out the pain was elsewhere, right?   8-)

    IPhone/Kwan – They made an App to get on the list to get the upgrade to the IPhone.  One day they will make them like transformers and they will just reconfigure themselves into new models (for a fee, of course).  Lala does sound good, I haven’t tried that yet – .10 per song is a price I am willing to pay….

    Spreads/Yshenhar – That’s a great weekend question but there’s also no real answer to it because it depends on too many things but there are broad-stroke expectations we can talk about although you do need to read our E-book (link on top of page) to learn more about options basics first. 

    TNA Options/Iflan – You can’t do that, the spreads will kill you on day trades (in normal action).

    Algos/Goldman – Scary stuff!  One got me on copper this weekend, I bought a contract and put in a low stop before bed and the SOBs ran it down to my exact stop befor taking it way, way higher.  That was for ONE contract they ran that.  It’s because it’s all automated so when you think the MM can’t possibly be out to get you, you’re wrong because the MM is a computer and it is out to get you!  That’s why hard stops are way too dangerous, they tip your hand…

    List/Jdub – A great weekend topic but I like RIG, XOM, CHK and VLO best.  RIG will have a rough year (great time to work down the basis) but then they will be RIG again. 

    Searching person/Robo – That’s a good idea, I will mention it to programmers.

    4%/Jrom – Nice!

    DPTR/Jrom – Remind me on weekend, I don’t follow them.

    Put selling/Bambi – That’s totally fine to do if you have the margin for it.  Like we just sold the naked GOOG June $480s the other day for a quick couple of bucks – those are great plays if you have the margin (and are willing to suffer the unlikely consequences). 

    TBT/Pahur – Jan is now looking like it is too soon to expect much from TBT but it’s a free trade and $40 is a good line so I still like it.

    XP/Shadow – Well, I just use ‘em until they stop working then I get a new one…

    AAPL/Japar – Not sure, have to think about it for next week.

    List/Amatta – Weekend for sure!

    Lighting/Doro – Don’t know enough about the sector.  No energy plan from Obama means no boost in near future. 


  270. Phil or anyone….remind me how to find previous posts by certain members……


  271. Memeber posts/Iflan – In Vista  I press the "Ctrl" and "F" keys simultaneously to produce a box in the the upper left of my screen that is labelled "Find:"  To the right of the box you can type in the first few letters of any word you are searching for and it find it for you.  There will also be a "Previous" and "Next" option to help you go back and forth between posts.