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Financial Regulation Friday – Finally!

Yipeee, financial regulation!

That's all I'm going to say about it.  I'm sure there will be thousands of places to read all about it all weekend.  I'll just say that it's about freakin' time SOMEBODY did SOMETHING to reign in the madness.  Whether it's a good bill or a bad bill doesn't really matter as much as the concept that financial institutions NEED to be regulated.  The rest we can get right over time.  I consider this to be a huge market positive because the Financial sector has grown like a cancer on the markets since deregulation.  When corporate profits totaled $4Tn in the 80s, the Financial sector made $400Bn – now that coprorate profits are $6Tn, the Financials make $2.5Tn – that's 40% of all the money earned in corporate America and ALL of 2 decades worth of growth going to the Financials!

Not only that, but that $2.5Tn is AFTER bonuses and dividends that add another $2.5Tn to the total so out of $8.5Tn earned in corprorate America, 60% goes to one sector.  That's what a cancer does, it sucks resources away from the healty organs in the body and eventually grows big enough to kill it.  America has gone from a country where investors make money by investing in companies that build things and sell things and create jobs to a country where investors gamble with "investing institutions" and, rather than put money into creating energy solutions, we trade 6Bn barrels of oil per month back and forth on the NYMEX in order to decide who will end up taking delivery of 25M barrels (0.4%) at the end of the month. 

Why do they do it?  The fees, the fees, the fees, the fees.  Even the stock market has become a casino and not only do the financials make the fees but they build a culture that tells you to BUYBUYBUY and SELLSELLSELL every other day so they can rake and rake and rake those fees but that is not enough for them – they also have to insert themselves in as Market Makers where they make money on the spread every time you buy and sell but that is not enough and they then track your trading and write programs to analyze your trading patterns so they can bid against you – YOU, their CLIENT!  

 

That's still not enough so they game the system by taking on the role of "trusted analysts" who also flip-flop the buy and sell signals on a regular basis to churn more fees while the investing houses line up their bets prior to placing a company on the "conviction buy" or "conviction sell" list and then they run programs to "optimize" their outcomes no matter which way the market goes.  How good are they at this?  Well Goldman Sachs hasn't had a negative trading day in 2010.  That's pretty impressive isn't it?  Some might even say impossible or "fixed" or "cheating" or "manipulation" but I say good show!  And good show to JPM and BAC, who also managed this amazing feat last quarter – NEVER losing

It's like the 1972 Miami Dolphins and the 2007 New England Patriots and the 1934 Chicago Bears all win the Super Bowl in the same perfect season and then they all celebrate at the bowling alley where everyone on the teams then makes 12 strikes in a row for about 400 perfect games…  No, it's not a scam - They are just THAT good!  What's hilarious about this is none of the rich, top 1% investors who defend these people seem to realize that they too are victims of this fraud.  How is this possible?  Because GS makes them money!  Sure GS makes them $1M but makes themselves $3M (75% of GS profits were paid in salaries and bonuses), but $1M is better than nothing.  

Sadly, it's not better than nothing because if we cut out GS and the rest of the Financial cancer that has formed on our economy, then that 75% (about $5Tn), would end up in the hands of productive corporations and (dare we dream?), perhaps even into the pockets of the bottom 80%.  Anyway, we are a long way away from real reform but, as I said, it's a start. 

Not a good start is our revised Q1 GDP, which was knocked down 10% from the previous estimate to 2.7%, mainly due to a smaller than expected gain in consumer spending and a larger than expected trade gap as US consumers lose jobs so they go to WMT and the Dollar Store where they can buy cheaper goods that are made overseas which closes more US factories and Retail Stores so more people end up on unemployment and shopping at Wal-Mart and the Dollar store, which gives China even more money and hurts our balance of trade which damages our GDP and drives investment dollars out of the country leading to less manufacturing over here and more job losses with more unemployed people heading over to Wal-Mart and the Dollar store to buy Chines goods.  Boy am we smart! 

You may imagine you are smart and that the poor GDP number and the scary financial reform bill will send the markets lower but – think again!  We are already lower in anticipation of these events and the Senate, as I mentioned yesterday, also failed to extend unemployment benefits, which will immediately terminate 1.3M people's benefits effective today and another 250,000 people's benefits will expire each week from now through the November elections until all 6.8M people currently collecting benefits are no longer eligible - what fun!  That's sure going to perk up those consumer spending numbers, right? 

I'm expecting and hoping we don't go lower.  The news this week has been TERRIBLE and today's news is TERRIBLE yet all they have managed to do is drive the markets down to a test of our descending S&P wedge back at our good old, reliable 1,070 line on the S&P so WE ARE NOT IMPRESSED by the bears.  I think, in the very least, we should be taking one more stab at the 1,000 line before giving in so we'll be looking for that bounce either today or next week, as noted in Fallond's excellent chart (see the whole market series over at our Chart School):

I've already said to Members, if we can't get back over our lines (see yesterday's multi chart) we are going to be in "Technical Hell" but I don't think a 2.7% GDP is deserving of Technical Hell.  Sure, it's not Asia's 8% GDP growth but ALL of Asia (other than Japan) is less than 1/2 of our GDP and, by the way, did you here the "growing" part of that statement.  So Asia is growing 8%, Japan 1%, Europe 1% and US 2.7% – not exciting but not shrinking and last year, even after a horrific crash in March, we finished the year at 1,150 on the S&P.  What then, are we doing at 1,070 with 100% of the globe reporting growth?  

We'll talk about this more on the weekend.  I already made my bottom call yesterday so I'm going to be a hero or a goat on Monday anyway but I do feel I'm being objective about this and that we are simply testing our non-spike bottom at 1,070, where we expected to form a base into July earnings.  I had said in May, what would be best for a recovery is to flatline at our lower levels into earnings and then turn higher on good earnings.  So far, so good so why bail now? 

Oil is heading back to our "just right" line at $77.50 and copper has punched through $3 – these are the signs we were looking for for a market turn.  The Pound is still testing the $1.50 line and the Euro is at $1.23 but money is still flying into the Yen, whic fell half a point from it's 3:30 high from 89.8 to 89.3 to the Dollar (Yen getting stronger, dollar weaker).  We have blown the Omega 3 pattern unless we can finish the day at 10,350 at least – not looking likely but it should be another interesting day.

Have a great weekend,

- Phil


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  1. I just have one question, Phil: Why the HELL aren’t you running this country? Seriously. :)


  2. Rut traders -
    Do you look for that s pattern (z) on the RSI or on the mom – because I actually noticed it on the mom on yesterdays chart right before  the big move
    Also – are people using the cross over the  8 period ma on the 3 min as confirmation? Or are you using somethhing else as confirmation – I am getting wipsawed off the stoch on the one minute -
    thanks – I know it is in a back post – will read this weekend but no time right now -


  3. Good Morning.
    My internet connection is back today, so no McD WiFi to report on.
     
    Phil had this to say earlier:   "I watch Fox news, I listen to Rush and Ann, read the WSJ, Druge, Hopeychange, the Post, Washington Times, National Review, Weekly Standard,  Heritage Foundation reports "
     
    Wow !   Does this mean that Hopeychange has made it as a bellweather of conservative thought & media ? 
     
    Thank you Phil !  :wink:
     
    [ just kidding of course , I am just happy anyone reads it ; thanks for the props Phil (i think). ]


  4. Rut – sorry that should have said big move up at 12:30 pm


  5. TOS iphone app udated and works! Has additional security features with the password entry.



  6. I’d buy tickets to see Phil and Ann debate the minimum wage; especially the international one.


  7. morning phil….
    got gld 122 puts that im about b/e on…..would you recommend getting rid of them or maybe something else.
    thanks


  8. Good Morning
    Selling the Euro against the Swiss Franc today.
    Swiss National Bank announces risk of deflation in Europe has largely disappeared.


  9. gel1,
    Do you know what happens to USDJPY?  Broke the 90 handle overnight.  89.4 right now.  Time to short JPY?


  10. Geeze Phil, 
    After reading today’s commentary…..I’m not sure I want to trade anymore.


  11. Good morning! 

    Well now we are just HOPING we can make a realistic run back near a few of our levels: Dow 10,250, S&P 1,100, Nas 2,260, NYSE 7,000 and Russell 666Oil below $76.50 is bad (now $77.40 and our "sweet spot" is $77.50) and copper below $3 is bad (now $3.02, which is .10 better than yesterday!) so we are seeing stronger copper and the Dow is still hanging tough.  As I said yesterday, oil going down is only a short-term rotation issue, not really a long-term problem for the market. 

    We liked RIMM last night at $56 and we still like them at $55.  Now I like selling the Aug $55 puts for $3.80 as a nice entry or a nice expiration gain if we just get the $3.80.

    Materials are still weak but gold is still strong ($1,255 now) so a strange mix this morning but we’ll have to see what happens as the day moves forward.  At 9:55 we get the U of Michigan Sentiment, which is expected flat at 75.3 and should be our last bit of bad news for the week.  After that we can hopefully turn things up unless Europe decides to have a bad finish (currently down 0.5%) into their weekend (11:30 close). 

    There is index rebalancing today and that can lead to some very strange activity, especially on the Russell so be VERY careful out there today. 


  12. JRW & Disciples -
    TNA / IWM traders -
    Do you look for that s pattern (z) on the RSI or on the mom – because I actually noticed it on the mom on yesterdays chart right before  the big move
    Also – are people using the cross over the  8 period ma on the 3 min as confirmation? Or are you using somethhing else as confirmation – I am getting wipsawed off the stoch on the one minute -
    thanks – I know it is in a back post – will read this weekend but no time right now -


  13.  Phil / IWM
    Is it time to roll the July calls to the $67 strike?


  14. Good morning,
     
    IWM 62.80, 63.56m 64.31, 64.68, 65.25, and 65.94


  15. cwan….JPY showing weakness against USD and EUR. On your trade put a stop at 89.70, if you are short against the USD


  16. That was the low of yesterday’s close…..they need to hold that one.


  17. tchay… Regarding RIG…are you long on this one? I am also long APC for the same reason, as they too have been beat severely.


  18. Running the country/Mills – Tina won’t let me do politics.  She’s a Washington brat and hates everything about the place…

    Hopeychange/Cap – As I said, I like spend about 25% of my time reading things I totally disagree with.   When I’m pressed for time, just spending 5% of my time on your site is more than enought to fulfill my quota!  8-)

    APOL getting hammered.   AAPL took a big hit at the open but coming back on big volume, that makes the QQQQs kind of interesting for a quick play with the $44/46 spread at $1.19 and, if the Nas keeps heading lower we can sell something like the QLD $47 puts for $1 (now .50) to offset.  If you are extra daring, you can take the $44 calls for $1.90 and wait on the sale of the $46 calls, now .73, hoping we get a bounce off $45 at least.


  19. ‘…..lead to some strange activity’  
     
    Strange activity has become so common we’re going to have to stop calling it strange.  Let’s just refer to it as a bankster conceived, programmer conspired, computer perpetrated scam.


  20. samz
    The Sig rune is on the 1 minute stoch; ta solid cross of he 8ema on the 3 minute is conformation.


  21. Long XOM, TNA


  22. Well, now things are not looking very good but I am still hoping it’s a blow-off.  It sure makes me feel like capitulating! 

    Drillers/Tcha – Yes, I like RIG long-term and many others were unfairly beaten down.  Safey may cost XOM on the bottom line but not RIG, who will just make more expensive, safer platforms. …

    GLD/Bambi – It’s too insane to play I think, better off in more rational places.

    Wheeeee – Consumer confidence 76.0, we snapped our news losing streak finally!


  23. Consumer Confidence … lets turn those bots around for a while !!


  24. Gel/ RIG
    I got 1/4 of position @49 and another 1/4 @43 ( Long stock and short Jan12 50s calls & puts) very exating about position


  25. Kind of amazing that the supposedly most sweeping changes to the financial industry since the great depression just got nailed down and the only impact it had on the 3x leveraged financial etf was a 1.8% premarket pop.  I’ve seen bigger impacts on the financial sector from Starbucks announcing a line of instant coffee.
     
    That tells me something.  Either 1)  the bill is already baked in and the drop in financials just happened to coincide with the drop in the rest of the market or 2) these aren’t the most sweeping changes since the great depression.
     
    To me, the most sweeping changes to the financial industry were when the Republican Congress drafted a law for Bill Clinton to sign allowing banks to trade derivatives.  Nothing has had a greater impact on the industry or economy.  This new bill does little to change that. 


  26. In TNA at $41.14


  27. gel1,
    I am thinking if it’s time to buy USDJPY here.  89 seems like a strong support.  So far, I haven’t see any news about why USDJPY went down below 90.  Maybe because of US markets down yesterday?


  28. Phil/stupid RUT tricks.  Thanks for mentioning the TOS pivot point charts.  I hadn’t used them in a while, but this morning, I pulled up the DIA chart on one screen, the IWM chart on another, waited until each touched the first support line and held for a couple of minutes, then bought DDM and TNA.  No RSI, no Stoch, no other technique.  I’m selling if they don’t get over the PP line.  Again, thanks for the simple reminder.


  29. Phil/RIG: How would you play it long at the moment with the VIX flirting with 30 and the pullback over the past several days?


  30. Jumped on the RIMM trade but went out to Dec and got 7.10 for the 55s.


  31. RIG: Jan 2012 50 P + Cs can be sold for about $28.50 as part of a buy-write on a $50 stock price.


  32. Phil/ RIG
    in oil business oil service companies including drillers have a deal with oil companies to markup minimum profit margin (ussualy 25-35%  of revenue) but is not responsible for performance or disasters ( or have very low responsibility), exept some countries like Russia where markup is higher but performance and other responsibilities are higher ( but still limited)


  33. tchay…. Thanks! – I will structure something today on RIG. Timing is right, and I respect your expertise.


  34.  INTC hurting me 2 ways today.  My LT position taking a hit (which is fine since it is LT and I ain’t worried). But my partial covering of the mattress plays with the DIA weekly 102 strike which is in the money-delta differential will now cause me to be more attentive throughout the day.


  35. MSFT trading down as if people just realized Steve Ballmer is the CEO.

    Yen/Cwan – They are VERY interventionist on currency at the BOJ.  You can really lose your ass on that trade. 

    Trading/Exec – I wouldn’t want to try to trade stocks for a living or run a buy and hold fund.  They have wrecked the rational investing markets and turned the whole thing into a game of roulette but we can make very good money betting that other people are going to lose and that’s what we do so it depends on your mindset, really.  We know the game is rigged and we may not know exactly how it’s rigged but we can bet with the house and collect our winnings right along with the guys who never lose.  I can live with that.  We may complain about the game being rigged and we may hate the people rigging the game but if people are going to insist on playing anyway then there’s nothing stopping us from betting on the winning side. 

    IWM/Yshen – With all this time left, you are better off doing a DD on than a roll as a .20 DD only increases your delta by .07 while a .37 DD increases your delta by .17 but, again, we have such a long way to go to recover that unless you are early in your scale (with a small commitment) you can just wait as we can be back over .40 in minutes and back on our way to .50 (up 20%).

    Bankster conceived, programmer conspired, computer perpetrated scam/Matt – Yes, but that would not be the "strange activity" that’s what we call a normal, program-trading day…


  36. chaps/RIG… very nice long term play, I believe.


  37.  I can’t find any news on INTC.  Anyone know why it’s taking this big a hit?  If there is no news, then I’m all for adding to my LT holding on this name.  


  38.  Phil/RIMM – Birinyi put out a bulletin this morning indicating RIMM is statistically likely to fall 3.4% today, and 15% over the next week following the earnings disappointment. 


  39. chaps
    I think buy/wright is very good strategy for RIG now because of huge volalility of RIG’s options


  40. Out TNA, XOM … take the $ and run in this market !
    Need better entries and exits on TNA !


  41. cwan/JPY
    I agree… my charts reflect you are correct –  good for maybe 20 pips


  42. Consumers Update – Consumer broke and not spending…but very hopeful.  Bot programming is simple…. "IF Consumer Sentiment > 75.5, THEN "move markets up immediately…then sell to retail for a slow crash back down"…


  43. May Ballmer remain the CEO of Microsoft as long at takes … ;)


  44. Cap/entries and exits.  If you use TOS, set it up with one of the pivot point charts.  This morning, you could have entered a buy order at the first support line of 40.75 (first support) and a conditional sell at 42.03 (pivot point) and slept in. 


  45. Phil,
    I hear ya.


  46. Cap/ Thank you for showing the way this morning on TNA.
    With JRW lines and comments and your entries it makes things a bit clearer for non-day trader like me.


  47. dear phil-continue to be hurt on BAC. Own 40 $20 calls at 1.4 against 25 Jul 17calls at .49, 5 Aug 16 calls at .86 and 5 Nov 20c at 1. It is still 7 months to go, and i have sold 10 Jan 12.5 puts at a buck and10 Nov14 puts at 1.15. What additional calls should be sold? or should i DD, or roll? thanks


  48. This don’t feel right today.  Wouldn’t surprise me if we chew up the candle from the 10th.


  49. Gel
    HAL has same very expensive Jan12 options, and I think price for stock is still reasonable at this level


  50. I mean the 7th


  51. Chaps/RIG…. WOW! – you know how to pick the plays. I executed your buy/write with the 2012 straddle for a 56% discount. Best bargain shopping I have experienced in awhile.


  52. Exited swing gold longs but am going to reposition fairly soon, probably as early as a re-test of 1250, where there is light price support.


  53. AA — looks like a good entry point, you can sell Aug calls and enter below support at ~$10.50 @ 7% discount.


  54. Back in TNA at 41.33 … no particular line there, just thinking we go higher from here in the market at some point today.


  55. Phil – prior to morning coffee kicking in I sold a series of calls against  older VTI positions in  but bought a few DEC61s by accident. The spread which was reasonable at the time (two days ago) is wild now .65 to 1.35. What’s up with that and what is the best way to undo the boo boo?


  56. tchay/HAL
    I have a concern for this stock, for the reason being they very likely will be brought into the mess with BP through the very nasty legal proceedure commonly known as a cross complaint. This could hurt the investor sentiment.


  57. Phil - Hope you read my "clyclone" post yesterday…the odds have doubled in the past 12 hours to 70%.


  58. jdub INTC, price war with AMD and IPad taking market share from note/netbooks and FTC settlement weighing down an otherwise great companies stock


  59. ^^^"Cyclone"…need spell check…=)


  60. out at 41.48; unsure; may wait for lower prices


  61.  Cap/JRW- when you have a moment, could you please point me to posts where the IWM/TNA system is explained…txs very much in advance.


  62. Back in XOM at 59.66


  63.  Pharm- any investment ahead of diabetes conference next week? AMLN or other names? txs


  64. Well, I did not expect that; out of TNA at $41.42. Sell conformation on the 3 min


  65. Gel/ HAL
    it is possible, but I hope 50% off by selling so expensive options will compensate for this risk :)


  66. sns – besides ‘cancer’, diabetes has over 70 clinical trials.  I will have to sort them out, as I was just starting to look at them.  AMLN got its pop already from Novo and Bayer? taking a hit on side effects.  Otherwise, MRK has their lunch….


  67. JRW,
    Are you talking about the engulfing through the 40 day?


  68. Phil- how do I structure RIG in a 10K account. Is RiG the right company to go with in a small portfolio. Thanks.


  69. Impact/Matt – I think not only was the worst-case baked in but that whole crash of the financials was nothing but a show put on for the Senate to put leverage on the anti-banking Senators so the paid puppets in the Senate could say "look what you are doing to the markets – think of the widows and orphans who invest in these banks!"  As I said yesterday, it’s the same playbook they’ve been running against this country since it was founded.   Jefferson was only or 3rd President and he saw it coming already but it was too late… 

    NICE ENTRY JRW!!! 

    Charts/Judah – It is very nice just to have even an approximate visual confirmation to guide us. 

    RIG/Chaps – I’d go for the 2012 $40/65 bull call spread at $11 and sell the $35 puts for $7.60 for net $3.40 on the $25 spread and your worst case is you own RIG for net $38.40 (now $50.24) with a 635% upside at $65 and a BE at $43.40.  Your buy/write is good too

    RIG/Tcha – Thanks.  I believe it was pretty clear in RIG’s contract re. responsibility but you never know, with lawyers and crazy politicians involved, what’s going to happen.

    GLW nice and cheap at $17.35.  Not a buy yet but worth watching.  

    Looks like the EU is determined to sell into the close.  We are down 3% on the Dow for the week so 2.5% rule is about 10,200.  S&P is down 4% and needs to get back to 1,090.  Nas is down 4.25% and needs 2,250, NYSE is off 4% and needs 6,825 and Russell is off 4.8% (the worst, which is why we played them) and needs to get back to 650.  A 2.5% drop for the week is an excusable dip below our expected range but finishing 4% or lower is an indication we can break lower next week so we REALLY  need to see those numbers come up by the day’s end or we have no choice but to flip to a bearish stance into the weekend

    Don’t forget that the 4% line, since it is almost sure to get a bounce from the 5% line, is good downside support anyway but laying around down here at the 4% lines, especially if the Dow starts playing catch-up – is a bad sign.  The good thing about the 4% line though, is if you take a bullish bet here, you have an excellent chance of at least being able to get out even on the bounce off 5% (20% retrace), even if we do break below the 4% line.

    RIMM/DrCraig – I hope so!  I would love to load up on RIMM in the $40s! 

    RIG/Tcha – Not as good to buy/write, I prefer my artificial play as you only end up in 1x at $38.40 if put to you.  Easier to roll or even just cancel the put to avoid severe downside.  You can go into that play with a net $5 stop loss on the whole thing. 


  70. goldman… thanks for the weather forecast… I accordingly sold some January UNG puts.


  71. exec
    Yes but the 40 just happened to be ther, it was the 8ema at the same spot that forced me out. I’m pretty sure HAL just played me !!


  72. tchay/HAL
    You could be right, but I believe the ravenous lawyers are more dangerous than the oil that has been spilled.


  73.  HERO doing alright , despite selling waves


  74. Yen/Phil: Yes, I know BOJ is very interventional, and that’s what I meant by shorting JPY, betting that JPY will go weaker, which means that USDJPY will go up.  In the last few years, USDJPY never stayed below 89 for very long.


  75. Gel/ HAL
    I investigated personally this issue:
    1) it is imporsible to prove now that a kick was happened because of poor quality of HAL’s cement job
    2) I know that HAL offered to do it differently with higher quality but little bit more expensive but BP declined the offer ( it is proved by e-mail communication)
    3) according to contract between HAL and BP, even if it is complitly HAL’s fault, HAL’s max responsibility is a cost of the contract (max what they can loose is a price for that job)


  76. In TNA at $41.66


  77.  INTC bottoming 19.92 stop


  78.  Phil,
    Do you think if we can hold steady into EU close and if financials hold where they are, we could see a rise starting at 11:31 ET?


  79. that was nasty whipsaw around 56 level.  could have gone either way.  bots are playing everybody.


  80. DIA trendline of the lows from Wednesday through Thursday and now this morning.  Holds every time so far, still a downtrend, though.


  81. ugg…DIA July 105. Should not have held on to them. Wait it out?


  82. Gel/ HAL
    LOL, everything is possible, Phil thanx


  83. Phil/GLL
    July $37 Puts at $1.15/$1.35. We sold them at $1.30 last time and bought them back at $0.75
    Are you still interested?


  84. Oh my gosh.. Phil, here’s another one for your list of manipulations-
     
    1) At 10:38am I placed a market order to sell FAZ
    2) I got confirmation it was completed at 10:39:10am
    3) I looked at my chart to see where on the one minute tick range it was executed and it was outside (above) the range on the graph.
    4)  The next minute I saw the graph go up to the point where my confirmation said it was executed
     
    Long story short, the information I’m trading off of, Scottrade’s supposed real time stock streamer, has a one minute delay.  Every trade I make is executed real time but done so based off of 1 minute old information.  I would suggest everyone look to see exactly how ‘real time’ their chart data is..  a lot can change in a minute!  It’s like trying to fly while looking in the rear view mirror- 


  85. REITs finally showing strength this morning. I added a few SPY calls at the 107.20 area, but it wouldn’t surprise me to get a sudden last shake-out that sends us near 106.15 support (/ES 1055 area). So my idea is to scale in and try to endure the pain on the first round if we get that shake-out. I’d be a bigger buyer at those levels.


  86. Well, just as I posted that…..


  87. There goes everything…we are officially in hell.


  88. There goes everything…we are officially in hell.


  89. ‘the stick’ is killing me.  I am 0-5. 


  90. BAC/Drum - Wow, too many positions for me to keep track of.  Is that your whole portfolio or do you have time to look at other positions?  BAC is at $15 and they are not hurt too bad by FinReg so your putters are probably good to expire worthless, which means anything you make otherwise is gavy so I’d take out the July $17 callers for .09 and the Aug $16 calls at .60 and roll down to the Jan $17.50 calls for .57 and then sel the $20s for .45 and then you can wait patiently and see what happens.  If you want to be daring, just cover 1/2 for now and see if you get a pop to sell more into.

    VTI/Brook – I never play those things but the implied volatility really kicked up on you and that’s why it’s so crazy.  There is the VIX but then each stock/ETF has it’s own implied volatility so you are getting a double whammy from this fund.  61 by December may be a bit ambitious so be careful. 

    VNO and BXP say we are bottoming so far – watch that $75 line on BXP!

    Cyclone/Goldman – Yep, we shall see.  Nat gas is up a bit.  I don’t think a cyclone is as likely to cut off supplies as a hurricane on the whole but oil goosed up $1.50 since yesterday so that’s the way we should go next time. 

    AAPL still selling off, not a good sign.  Nas doesn’t go anywhere without them anymore and they are down 1%.  On the other hand, you could say the Nas is holding up well, down just 0.5% with RIMM down 8% and AAPL down 1% (hittingt he Nas for 0.2% all by itself).

    Oh wait, it’s Europe heading down and down and down into their close.  All down over 1% now so might pay to grin and bare this drop until we get rid of those wimps at 11:30.


  91. I wouldn’t panic guys. There are clearly buyers who were early and had to get shaken out for a quick loss. Then we’ll be ready to go up.


  92. Whole buncha stops just got fired off there.


  93. i suggest reduce sizes or stop all together, this is just hunt for TA daytraders


  94. Going to get a little AAPL too on a panic spike lower, hopefully.


  95. cwan/JPY
    JPY is doing ver well against the USD. I sold the USD against the JPY and have set my stop at 89.90


  96. ok; here is what I will look for on TNA … a test, and piercing of the lower bollinger band.  If that happens and overall market not feeling like a disaster, I would likely get back in.  Right now, that BB is 40.93 and rising.


  97. Phil,  I sold a RIG Jan 11 65 put for $11 a while back and am upside down $8.  Can roll for 9 to the 2011 50′s?  I pick up 15 of spread and cut my net to $2 for a 48 entry vs my original entry of 54.  Is this worth doing or should I be patient?


  98. In some AAPL, but with verticals. If we plunge again I’ll take out the short leg.


  99. Matt,
    I see those anomalies all the time.  For example, I use to trade DDM and DXD all the time.  I’d have two windows open one the DOW the other DDM for example.  Well DDM would tick up or down a second or two ahead of the move on the DOW.  I never did get this given the fact that DDM is suppose to track the DOW.  So how the hell does it move first?


  100. Well that was an interesting move.


  101. WE need to break North here !!


  102. RUT up, Dow, SPX down.  Which one is the truth teller?


  103. This is the wimp flush!!!!!!


  104. judah,
     
    I think it’s the RUT; there’s a bid under a lot of stocks, including REITs and other fund stocks.
     
    But, I will be very happy to get another scary leg down to /ES1055, which I think would be a nice long entry.


  105.  Phil,
    I was looking at a risk reversal using TNA.  Can you (or someone else tell me where the Russell would have to be for TNA to decline to $20 (lowest strike price for Jan/11)
    Thanks


  106. The relative strength in the Russell today is a bit surprising…


  107. Goldman / TBT   Did you catch my thoughts on this yesterday?


  108. Matt…
    Scottrades data and charts SUCK.   Are you using Scottrader Elite?  If so for how long?  Did  you just notice the the 1 minute chart candle get painted after the 60 seconds has elapsed?


  109. I’m still not liking it.  The head and Shoulder buffs are eating this up.


  110. So a best case bullish scenario for today is a total reversal of these levels and closing up 150 points or so on the Dow?


  111. JRW,
    Is that the cross patter you referring to at 11:23?


  112. Okay, Europe, have a nice weekend.  Thanks for the stomach-churning ride.  (Now where did I put that stickie that reminds me to check the European markets on Friday mornings before I buy anything…)


  113. RIG/Nicha – No, it’s simply too expensive to play.  Any play that involves selling naked puts is too expensive and too risky for you to play with a small account.  You want to try to make profits off directional plays, like the QQQQ July $44/46 bull call spread (now $1.16) so 2 contracts is $232 and you stand to make $168 if the Qs make it to $46 by July expiration and you can be really happy taking a $100 profit off the table.  The IWM July $68 calls at .37 are another nice trade because we have a long time (you can’t day trade) and we’ve doubled down on it so it’s cheaper than our initial entry and we still like it so if you buy 5 contracts for $185, you might make a quick $100 next week.  In general, those are the trades you want – the ones where we are way behind but we’re rolling or doubling down as you can’t afford to do that so let us make the mistakes and come in after skipping the round one losses.

    Intervention/Cwan – Oh my bad.  I always get mixed up with the Yen!  Sure then, I agree with that, they will fight to hold 90 so worth a gamble on the BOJ taking action.

    HAL/Tcha – Not that this is likely but it is BP that is indemnifying HAL.  Even if contract is iron-clad, if BK/HAL/RIG are assessed for more damages than BP can pay and BP goes BK, then the judgement stands on the other companies.  Not likely but that’s where the concerns lie.  People are talking hundreds of Billions in damages are possible here (also something I find hard to believe). 

    11:31/Jdub – I’m kind of counting on it!

    DIA/Jimmy – Still have a month….

    GLL/Lionel – At $1.30+ I’m interested but I don’t see why we should accept less with gold breaking $1,255.

    FAZ/Matt – Absolutely!  I’ve been saying that for a while and I’ve taken to only offering to buy or sell at the best price of the past few minutes or lower.  I don’t fill most of my offers but at least I’m happy with the ones I do.  There have been several articles – they now have Bots that drill down right to each individual order and do their best to steal a dime if they can.  It doesn’t really matter if you have a 1 second delay or a zero second delay because in the time it take the electricity to go from the exchange to your house to print that chart on your screen, the Bot has already seen your execution and gone in and out of the trade around you.  Keep your amounts small enough so you are feeding off the moves it makes around less cautious traders and you can pick up those nickels and dimes too.  

    RIG/Trad – Due to the possible downside risk, I agree with that trade as you can always roll back and it would be nice to get out with a quicker $2 profit.  Nice, sensible adjustment!

    Europe steadying into close, down about 1%.

    Which one/Judah – RUT is hardest to manipulate (2,000 stocks, all smallish, no clear index leaders) while NYSE and S&P are next hardest and they are down the least.  Nas is useless because they are now the AAPL+Some other guys index and the Dow has always been a joke.  Today’s joke is XOM and CVX down 1% while oil and gasoline are both up over 1% and only 8 of 30 components are green at the moment vs 50% of the S&P – just BS manipulation to scare retailers out of the market before the big boys start buying


  114. Good point on the July Calls…thanks for the reassurance. Now let’s watch this market get our of this funk…I’m putting on my rally cap.


  115. Wow, look at YRCW!


  116. exec
    10:18 on the 3 min


  117. YRCW up 16%
    Yes!


  118. YRCW on a roll today.  Back over .21.


  119. Phil   What is your take on the silver/gold trade.  I see Jesse Cafe America is pointing out a cup and handle
    on the charts for gold.  Silver seems a better trade though.  Your thots appreciated when you have the time.


  120. SPX weeklys close today, correct?


  121. JRW - You lost your "gold" and showed up as "Anonymous" a few seconds ago on my screen…freaky!


  122. I’d love to see your chart because I’m showing nothing


  123. Phil / Art Cashin   Why does the head UBS trader tell us (great sad poker face) he doesn’t like the mkt here and Dow is going lower.  Are UBS short and planning to buy on next dip?


  124. Hi Phil
    what is the short side of the IWM play  JUN 30 ????
    The IWM July $68 calls at .37 are another nice trade because we have a long time (you can’t day trade) and we’ve doubled down on it so it’s cheaper than our initial entry and we still like it so if you buy 5 contracts for $185, you might make a quick $100 next week.  In general, those are the trades you want – the ones where we are way behind but we’re rolling or doubling down as you can’t afford to do that so let us make the mistakes and come in after skipping the round one losses.


  125. Out of TNA at $41.92; we can’t seem to get out of this zone.  I’ll wait untill we have some direction !!


  126. Judah            Do you see a pattern from the past today?  I’m trying to figure out the close.


  127. JRW/Direction, From your lips to Lloyd’s ears. 
     
    Stockbern, Haven’t been looking, but I’ll spend a few minutes.  We’ve sure had a lot of Friday sell-offs into the close lately.


  128. exec,
     
    JRW III
    June 25th, 2010 at 9:53 am | Permalink  
    samz
    The Sig rune is on the 1 minute stoch; ta solid cross of he 8ema on the 3 minute is conformation.

     
    What charting soft ware are you using ?


  129. Phil – I would appreciate your thoughts on a put spread on the SPY. If I assume we do not hold 1040 would buying the Aug 107s for 4.35 and selling the 100s for 2.30 for a total cost of 2.05 on a $7 spread or just sell the Aug 107 calls for 4.65 work just as well ? Is there a better play ? I have about 1M in stock holdings to protect so what sizing would you also consider ? Thanks


  130. SS pro


  131. TNA traders -
    Anyone else finding this to be a much easier day than yesterday ?


  132. Wow, copper totally took off!  $3.07!

    TNA/Cslan – It’s a 3x ultra at $41.50 so $20 is about 52% off and 1/3 of that is about 17% down in the RUT.  Of course there are many factors in between – the difference between the move on 8 consecutive up day that get to 10% and 8 up and down days that get to 10% can be astonishing.

    H&S/Exec – I think we moved past the head and shoulders pattern and hit the K and T levels per this video.

    Bullish/Jimmy – It would sure help!  10,350 would be close to confirming that we are still in Omega 3 and that this whole sell-off was nonsense. 

    Europe/Judah – Good riddance! 

    Yay YRCW!!!  I think they can, I think they can….

    Gold/Wilsons – We’re ultra short gold but nervously so.  I really wouldn’t want to be long on gold going into the G20.  It’s not like they’re going to come out of the meeting saying – "We’re doomed!"   Silver I wouldn’t touch with a 10-foot pole that was attached to a 20 foot pole that was being handled by a robot on another planet.  They are currently investigating several firms for manipulating that market. 

    UBS/Tucsca – Another Gang of 12 member manipulating the  markets.  CNBC has been in a "Save yourselves – get out now" mode all week which, of course, means it must be time to buy.

    Short side/Yodi – The short side is you lose you $185 (stop at $130 would be wise, about .30 per contract).

    Volume coming into noon on the Dow is 75M, normal for a program trading day.


  133. CL/ Oil just shoot up


  134. JRW -
    I use the software that comes with IB – trader workstation
    It’s not great because you can only have one minute intervals on daily charts – two day and more it’s five minutes – also only has daily views – i.e. you cannot do week or month intervals
    thanks for you help much appreciated


  135. The FIN/REG is a serious bad joke. It actually solves and addresses absolutley nothing. In fact it keeps the ponzi going under the ILLUSION of regulation. I am sadly dissapointed in you comments Phil, as though this were a good thing or actually accomplished anyhting other than political subtrefuge for Barny and Dodd. They should both be in jail for perjury if nothing else, all the lies they have told. The public theater continues and it appears you are in the front row, based on your comments/take? Another shining example of no leadership 


  136. matress Phil — keep full cover into the weekend? TZA hedge add more or take some off into the weend or wait  till next week thx


  137. JRW -
    I probably have to get a better trading system than my laptop – but hard in Manhattan in terms of space and keeping my wife happy – but one screen is a real limitation


  138. Phil, Bgt chk,              bgt jan 11  $25 call     sold jan 11 $30 call for $1.80   sold 2.5 times the call order in jan 11 $22.50 puts  for $1.9      – now what, if any thing?


  139. FYI, I’m getting a lot of slow loads on refresh of PSW only, not my other windows.


  140. laptop/samz3700 – most laptops support an external monitor while also using the builtin screen. Hang one on the wall above your laptop…


  141. exec,
    On SS Pro 3 min 10:18, 10:21 shows a piercing then engulfing red accross the 8 ema; that is a sell conformation.


  142. TNA; I have a day-long rising wedge … is that typically bearish (bear flag) ?


  143. samz
    IB has LOTS of problems; get an account at Schwab they offer a great basic chart and SS Pro as well, or TOS has great charting.


  144. In TNA at $42.15


  145. Cap / Wedge
    Yes, very !!  So it probably means the Bots will rally in the next 30 to 45 minutes  or so.


  146. Currencies…. out of JPY and CHK plays with profit. Now shorting the EUR against the GBP… looking for .80, with stop at .8280. Could take some time but expectations are realistic.


  147. tchay… I still think the hiena attorneys are far more toxic than the oil


  148. Just broke above wedge … 42.84 next ?   No position  


  149. I have IB client 2 years,and IB charts and services much better today and all functions work ok and IB price is the best for small trader.


  150. Phil / Oil   Given cash reserves of majors, many acquisition will be made in next couple of years.  Can you suggest small/medium (oil) focused acquistion targets which are good buys at todays prices.  (I don’t like gas as much short term as there’s a huge supply overhang thanks to shale and LNG).


  151. Protection/DK – Well see yesterday’s comments (end of day) as I did the math on using /ES (S&P Minis) as protection as well as going through the logic of NOT committing too much cash and using your sideline cash to offset the commitments of the puts and calls you sell – in other words, using the buy/write strategy to have other people PAY YOU 20% to protect your stocks.  That should be your primary hedge, especially in a large portfolio, where your strategy should lean towards wealth protection in favor of growth.

    Speaking of crooked systems – check out how the Market Maker is messing with our IWM $68s.  They are nearly .05 lower than they were yesterday when the Russell was at the same level (638).  

    Mattress/Gucci – Depends how we close.  If this is all the run we get today then we get more bearish (see above 2.5% minimum levels).

    CHK/Hai – So you took a Jan $25/30 bull call spread for $1.80 and sold 2.5x the Jan $22.50 puts for $1.90?  Wel that’s a bit greedy but as long as you REALLY want to own 2.5x at net about $21.50, there’s nothing you need to do.  I wouldn’t put more money into the spread as your puts are already in danger so it would just raise your put-to cost at this point.  If they get all the way down to test $20 again – THEN it might be worth a little action but not at $22.50.

    Man, they are shaking, rattling and rolling these moves, trying to get people to stop out on the way up. 

    Slow/AC – Mines about normal.

    Oh yeah!  Now we’re moving!!!


  152. USO:  Just popped up on what looks to be 4 million shares traded in 3rd hour.  Still holding my $37 calls which are suddenly looking much better and are 8% over my entry.  Told myself I would exit on any jump up to $35, but that large trade put USO over what I was marking as resistance.  Was off-line most of yesterday and haven’t reviewed posts from yesterday afternoon yet. 


  153. tchay and gel1- thanks for the posts on RIG. Can’t resist a fire sale like this. I’m in at net 21.65 or 55% discount.   I like it!


  154. Samz/wife: Spending some of those profits of diamonds is a great way to solve that problem.


  155. This market feels like a tightening spring…


  156. Stockbern/pattern.  Similar today to 5/14, a Friday, which also had a big Europe sell-off between 10:50 and 11:30, then up and down throughout the day, back to its lows just before 3:30 with a big stick finish into the close. That’s how I read the chicken bones today, but we haven’t seen much of Mr. Stick lately so I’m not looking for him.  My faith in Mr. Stick has been sorely tested this week.


  157. To verify my point. Just why are the financials taking off today? Is it actually because they now have direction from the unknown as is purported by the likes of Bloomberg or is it in fact because they have had their way with Barny and Dodd? Derivitives are good to go and GS and everybody else got the green light on continued HFT. Fanny and Freddy are not even addressed? So where is the change/regulation? Oh, credit cards got a few small whacks as crumbs to throw to the masses as evidence of this "for the people" legistation. More of the same just more subtrefuge and lies. The truth is the banks own the entire world and all the financial resources since they make the rules as they go along and hire the politicians to make it appear something other exists. Market Making is still in control of the few on their terms so whats to be happy about? Nothing changed.


  158.  YRCW selling their logistics business to focus on trucking. Makes them stronger looking forward, hence the jump today.


  159.  Lawsuits
    Before the plaintiff files a suit, it is not clear who is responsible for the harm done to them BP, HAL, RIG, etc.  So, when you sue, you sue absolutely everybody possibly responsible, until it has been determined by a court that they are not responsible.   So RIG will continue to get dragged into court, but after a while, people will get used to it.


  160. Out of TNA at $42.74 average


  161. Phil, took your RIG play from earlier, however, bought the Jan 2012 vertical call spread for $10.35 and sold the $35 put for $7.60 giving me a net entry of $2.75.  Worst case, I get put to for $35 giving me a net entry of $37.75.  B/E is $42.75.
    No sense doing straight buy/write as there’s no dividend, so less capital intensive this way.  Right?


  162. Phil,
    As you noted copper exploded and is still doing so.  Fortells?


  163. jee did people go to lunch


  164. JRW - nice call at mid level $41.15…got a load on the secondary pullback and I sold at $42.75 (64.31).  I’m playing it very safe today!


  165. ^^^"$42.15…not $41.15!"…shesh, I can’t type!


  166. Q1 GDP, final: +2.7% vs. +3% expected, +3% second estimate. Corporate profits +9.7% vs. +9.7% prior. Core PCE price index +0.8% vs. +0.6% prior. Consumer spending (real final sales) was revised down to +0.8% vs. a preliminary +1.4% and +1.7% in Q4.

    June Reuters/UofM Consumer Sentiment: 76 (best since Jan. 2008) vs. 75.5 expected, 75.5 preliminary, 73.6 in May. Expectations 69.8 vs. 68.8 prior. "The June 2010 survey recorded the most favorable news heard by consumers about jobs in five years. Unfortunately, consumers do not anticipate significant declines in unemployment during the year ahead."

    The ECRI Leading Index turns up again but growth keeps dropping, pointing to the "inevitability of the slowdown." The measure rose to 122.9 from 122.4, but annualized growth fell to -6.9% from -5.8%.

    Maybe they’re not all little Greeces, but 46 U.S. states are looking at budget shortfalls of a combined $112B for the fiscal year ending next June – with new cutbacks and taxes running counter to any federal stimulus that might come for the rest of the year.

    Highlights of the U.S. financial regulation reform bill; the bill’s winners and losers; and finally, what’s missing from the legislation.  With financial reform legislation settled, stock watcher Thomas Lee sees the first of several clouds of uncertainty lifting for investors. Watch for June ISM and labor data showing continued slow growth, European stress tests using credible criteria and positive/negative earnings reports consistent with prior quarters. 

    Bernanke is waging an "epochal battle" behind the scenes at the Fed for control of monetary policy, struggling to overcome resistance from hawks for further stimulus to prevent a deflationary spiral, Ambrose Evans-Pritchard says. "Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed’s balance sheet from $2.4T to uncharted levels of $5T."

    The 10-year Treasury yield is currently down under 3.09%, which raises the question, how low can yields go? Breaking 3%? CRT Capital’s David Ader has what to watch for: still jobs first, and credit spreads and swap spreads with eyes on Europe.

    Japan’s consumer prices fell for the 15th straight month in May, providing a reality check to any suggestion that an end to the nation’s deflationary problem is just around the corner. Nikkei -1.9%.

    New day, same headline: The cost of insuring Greek sovereign debt hits a new record. CMA DataVision says the price implies a 69% probability of default over the next five years. Greece’s five-year CDS has widened 1.97 percentage points in three days, making the country the world’s second-riskiest sovereign borrower, behind Venezuela.

    Useful interactive graphic maps out overall debt as a percentage of GDP for the world’s most powerful countries.

    The FCC pauses its 180-day review window of the proposed JV between Comcast (CMCSA) and NBC (GE), saying the firms have failed to fully comply with information requests. The deal review will resume when the two cough up the requested documents.

    Despite iPhone 4′s (AAPL) antenna woes, Apple faithful are coming out in droves, with an astonishing 77% of buyers in key areas saying they’re upgrading from an older phone. 28% of iPhone 4 buyers owned an iPad; of the other 72%, 39% said they would probably buy one within the next year. AAPL +0.6% premarket.

    GE (GE) and Hitachi (HIT) are in talks to change the ownership structure of their nuclear-power alliance in order to boost sluggish orders outside of the U.S. and Japan. The nuclear focus is critical for Hitachi, which is trying to shift away from its money-losing semiconductor and consumer-electronics operations.

    Boeing (BA) temporarily grounds a fleet of Dreamliner test planes after discovering a problem in the horizontal tail. Dreamliner spokeswoman Yvonne Leach calls the problem "regrettable but under control," and says the already behind-schedule delivery timeline won’t be further delayed.

    Salesforce.com (CRM) files a patent-infringement suit against Microsoft (MSFT), escalating the software giants’ battle over the cloud. The complaint is in response to a patent-infringement suit Microsoft filed in May. CRM +0.7% premarket. MSFT +0.6%.

    BP’s (BP) stock drops below 300 pence for the first time for 13 years. "Many investors are capitulating as BP has gone from a solid dividend-paying cash cow to a high-risk punt," one analyst says. Shares have collapsed more than 50% since April 22. BP -3.5% premarket to $27.73.  In its latest update, BP (BP) says it has now spent $2.35B on containment and cleanup costs. Also pressuring BP shares, Nomura analyst Alastair Syme says it needs to sell shares to assure counterparties it has enough cash to withstand spill costs. "A sharp rise in liabilities or alternatively a collapse in oil prices could leave the funding much tighter," Syme said. Issuing debt is expensive, and selling off assets takes time, leading Syme to suggest BP sell about $10B billion of equity now.

    A Caroline Baum column spurs Jason Kilborn to look at the cross-border mechanics of a BP (BP -4.3%) bankruptcy.

    While most investors are routinely steered to the most liquid investments and large, well-known stocks, Yale finance professor and investment chief Roger Ibbotson believes investors pay a premium for liquidity, and says that over time, one actually makes more money buying less-fashionable, less-liquid stocks.

    The hunt for Philligan’s Isle is on!  Greece is preparing to sell, or put up for long-term lease, around 6,000 of its islands to help repay its debts, reports the Guardian. The areas for sale include part of Mykonos, one of Greece’s top tourist destinations, and the island of Rhodes.

    A tropical storm brewing off the Central American coast has a 70% chance of forming into a hurricane within 48 hours, with one computer model indicating it could head into the Gulf of Mexico where BP (BP -4.1%) has a flotilla of ships trying to clean up the oil spill.

     

    Three lunchtime reads:
    1) El-Erian: Beyond the false growth vs austerity debate
    2) The renminbi runaround
    3) Soros: Germany’s Europe deficit


  167.  Hey Phil,
    Do you think there’s more to meet the eye on INTC’s weakness?  Or should I load up on more here or go elsewhere?  I still have about 70% in cash and currently have Jan 12 12.5/17.5 spread for 3.60 and sold 15 P for 1.50 for a net entry of 14.60 and if put to me, I’d have an avg cost of 14.80.  That gives me 26% of downside protection.  
     
    And what’s up with crude?


  168. Phil…. having now read yesterday’s posts, I now believe we are making progress by agreeing on two very important concept changes, that will save the USA – flat tax and global minimum wage. I would be honored to join your administration pro bono.


  169. YipCarl, the comment I made was based on Scott’s web based platform.  I have Elite at home which is much better but I haven’t checked to see if it has the same delay as the web based product.  It’s probably not as bad but still not too good.
     
    FWIW, I actually got to short FAS today after the open.  There usually are no shares available.  I’ve never been able to read into what this means.. but logic would say shorts have been covering and freeing up the shares for others to borrow. 


  170. Jbur/RIG
    Better yet…. Transocean is a Swiss company, and is not subject to US government confiscatory objectives.


  171.  Hi Phil,
    They opened weekly options for AAPL
    any trade idea (calendar, or backspread)?


  172. Why does Bernanke think buying more junk assets from foolish speculators will make those foolish speculators turn around and lend?  You can’t push a string!  They already have all the money they need.  They just don’t want to lend.  Deal with it Bernanke!  Why does he think his plan will be any more successful then Japan’s plan for doing the same dang thing?  They’re 15 months into deflation!!  He needs to take up basketweaving or something and quit f-ing with our country.


  173. Matt/ Basketweaving requires some talent. Watering plants may be more appropriate.


  174. Plantwatering/Lionel:  Then he’ll get some real green shoots…


  175. We have first more than 10 years flat tax for all peoples with tax free minimum and all firm not pay incom tax before you dont pay dividens. If all money stay in firm for  investing, you pay only then take money from firm. And after this reform frms pay more taxes then before.


  176. One thought I have here is that the action is still pretty weak, and we need to be alert for the possibility that a fast rally might remove some buying pressure but then not hold.
     
    I’m not interesting in chasing any of these little ‘rallies’. My simple plan is to hold a 1/3 long position that I added today, and then add to it on a further retest of lower support levels, which we could easily reach today or early next week. If we don’t re-test those levels then I won’t make as much but I’ll still do well. Not worth the risk of adding into these weak pops though (unless you are a fast day-trader like JRW, of course).


  177. RIMM pulling back the Nas.  AAPL is no help either.  GOOG testing $470.

    Mr. HOV on CNBC – sounds confident.

    AAPL $270 puts can be sold for $10.80, not bad if you are considering buying 100 AAPL shares.

    Oil/Tusca – I really don’t trust anyone but XOM right now and even they are taking hits.  RDS/A someone mentioned is OK, but with small and medium firms, we don’t know what regs and costs will be so it’s very dicey.  Check out www.zmansenergybrain.com, for good insight into that sector – Steve used to do analysis here before starting a site and he and I used to do a radio spot together during the oil reports – he’s the best guy I know for analyzing the energy sector. 

    USO/Poindexter – See, well played now but don’t be greedy.  $80 oil would be the likely top anyway and risking into weekend is madness! 

    YRCW/Oakd – Thanks!

    RIG/Hoss – You totally get it!  Also, don’t forget this is just move #1 and even if RIG falls, you still have the roll down to 2014 $20 puts or whatever.  As long as they don’t go BK, you aren’t really forced to own them anyway.

    Ow, my neck hurts from that head fake.  Good thing I was making lunch or I might have gotten worried8-)

    Copper/Dez – It fortells that this sell-off was forced BS, a sort of anti-window dressing to flush the retail shareholders out of positions before the big boys come in and do their end of quarter buying for the big finsish.  We could even get a huge pop today with the index rebalancing but it’s hard to believe that funds weren’t already loading up the last couple of days on that sell-off.

    INTC/Jdub – I’d go for it.  INTC and MSFT are so heavy in so many indexes that manipulators often use them to move the markets around.  Also, when you think about it, they are so liquid that I can sell 5M shares of INTC to drive the price down in the morning for an average exit of $20.20 and then slam a buy on 5M shares down at $19.90 and probably get my whole 5M back for less than $20.20 avg – that’s a very cheap way to push around a multi-Trillion dollar market!  I’d add more long calls (assuming they came down in price) and then see if you can get a better price to sell more short calls.  On oil, I think the dollar is weakening to Euro, Pound and Yen today. 

    Pound over $1.50, by the way, Euro at $1.236 and Yen 89.32 so dollar diving and copper hitting $3.10, gold $1,256 with oil at $78.50 now and an hour left to trade it. 

    Pro Bono/Gel – That’s good because our budget will be very limited due to our balanced budget ammendment.   8-)

    RIG/Gel – Yes but they can still be sued and have judgments, right?

    Weekly AAPL/Ed – Certainly nothing I’d play witout watching them for a week but that can become very profitable for us as we take advantage of mispricings (right now there is zero interest). 

    Bernanke/Matt – Sickening isn’t it.  That’s just what I was saying yesterday, they will spend $2.5Tn MORE of our money bailing out the banks but nothing for the people who still live in homes.   Only after your propery is confiscated and your losses are locked in is the Fed interested in reflating its value – interesting…  Sometimes I do wish I could just go on TV and point this crap out to people.


  178. Phil, I have GLD which I have some profits. I wonder if its better to take the profit and run or get GLL to hedge against it. What’s your opinion on this? thanks


  179. USO: I guess the hurricane warning is what spiked USO.  No matter, I’ve learned something:  I was glued to my screen on my 5 USO $37 calls left over from this weeks trading while a client project waited on my desk.  So, I’ve learned that trading options is more exciting than working.  Better work on apportioning my time appropriately.  Therefore I sold out @ .49 for 99% gain on the day taking me from a loss at the open to a 19.5% gain on the $37s. Okay, sounds good but with 5 contracts and "BS commissions" (as Phil called them) paid to E*Trade, I had better get busy with that client project! 


  180. SPG back at my short target already. I love this stock!


  181. Breakout-


  182. Hoo boy; I missed another big run !


  183. Same as yesterday, during lunch time.


  184. Day trading AAPL weekly options is FUN! ;-)


  185. GLD/Jossie – TAKE THE MONEY AND RUN!!!  If you feel like that may be a huge mistake then you can play gold going to $1,500 by taking the Jan $125/150 bull call spread for $5.75 and sell the $105 puts for $2.40 and you are in the $25 spread for net $3.35 and your worst case is you are effectively back in GLD at net $108.35 (less all the losses you miss out on). 

    LOL Poindexter – Well, as long as you learned something…

    Oooh, this is getting exciting! 


  186. Phil – You seem confident so i assume you will not be selling half IWM but instead holding for a higher price?


  187. I think this is another head-fake. But if buyers support these prices into the close, we may have found support.


  188. Out of my AAPL longs for a quick profit. Holding SPY longs just in case.


  189. Phil / Oil   Thks for the link.  What are the rule and reg/s changes which could damage small / medium oil producers profitability? Are you expecting tax increases, tax credit cancellations etc?  Seems to me Gov will have to facilitate the onshore industry here if they want to avoid increasing oil imports at higher prices?


  190. Phil
    Is this the day climb you wanted more than a stick and does that make the weekend safe?


  191. Think FXP might be a buy here?


  192. Phil/RIG
    They can surely be sued, but I believe their exposure is minimal. I like the good risk-reward ratio playing their weakness of today and the VIX option premium boost received.


  193. PFE –
    The clock is ticking on Pfizer’s final, 18-month countdown on its $11.5 billion Lipitor franchise, but analysts are growing increasing fretful about the pharma giant’s ability to find new drugs to fill the looming revenue chasm. On Wednesday Pfizer had to admit that it suspended a slate of osteoarthritis trials after its highly touted pain drug tanezumab--billed as the world’s first likely biologic for pain--was linked to potentially perilous safety issues. And that came just two days after the company had to pull the cancer therapy Mylotarg from the market.

    "We continue to have reservations about (the company’s) R&D capabilities and this announcement only confirms those," Miller Tabak & Co. analyst Les Funtleyder noted in an AP story, which helpfully recaps the litany of pipeline snafus that have afflicted Pfizer over the past 18 months. Pfizer has had five late-stage cancer failures over the past year and a half, and just last week two of its licensed programs with biotech companies produced disappointing trial data on pain. And then, of course,there was Dimebon, an enticing potential blockbuster for Alzheimer’s which worked no better than a placebo in Medivation’s Phase III.

    "While our latest announcements demonstrate the risks and difficulties inherent in working with complex diseases, our pipeline demonstrates our ongoing commitment to focus on high-priority disease areas where there is significant unmet medical need," Pfizer spokesman Ray Kerins tells the wire service.

    Pfizer’s commitment to unmet medical needs, a mantra of the pharma industry, did little to calm restless investors, who have had to deal with a cut in dividends. Pfizer’s shares dipped three percent on Thursday, no small change for a company with a market value of $68 billion.


  194. gel1
    My only fears of RIG being sued are pesonal liability, deaths and injuries and or the trash rig on the bottom.


  195. DRYS – here’s the oddest and perhaps most frightening chart I’ve seen in a long time. If the trade-bots ever were in evidence, they’re OBVIOUS today. Imagine what life would be like if the indices behaved like this. And this is not a thinly traded stock, either.


  196. Now short AAPL with a very small position (put verticals).


  197. Phil: our iwm 68 calls are looking better, you closing out the position today or let it ride over the weekend.?


  198. IWM/Morx – Of course 1/2 out with a 20% gain!  All out at even (.40) then is still a 10% gain overall

    Changes/Tusca – They could pass all sorts of drilling regs, even for land.  They can change caps on liablity, force insurance funds to be set up, force some kind of hazard compesation for workers….  California is again considering (gasp!) actually charging a fee for the oil that is pulled out of their ground (too bad it’s 100 years too late) and then there will be competition against possibly heavily subsidized alt-energy industry.

    Climb/Shadow  – See 2.5% numbers posted this morning.

    FXP/Silent – Betting China goes down more?  Not if we finish on a positive note. 

    RIG/I agree it’s worth the risk, just checking my facts as I was assuming normal litigation practices apply.

    Now we are right on track for a 2:30 stick!  Dow volume 115M at 2pm (up 40M from noon) meansw we are right in the sweet spot for the bots to knock us out of the park later.  If it wasn’t for the rebalancing today, I’d be in a BUYBUYBUY mode but things can go crazy at any moment


  199. Phil or any one what is going on with WMT going steady down 49.29 ?????


  200. Pharm,
    Do you have an opinion on OREX?


  201.  They’re taking RIMM to the woodshed


  202. Phil :FYI, on RDS/A the dutch impose a 15 % withholding tax which makes tax papaerwork more complicated. RDS/B has same features and dividend as "A" but no witholding. 


  203. Phil/is there a play on BP that can be constructed that plays on them either being bought out or being utterly destroyed due to the costs associated with the cleanup? Maybe like buying OTM 2012 calls and puts and playing for a major event to push the stock significantly in one direction or the other over the next 18 months?
    Sorry if you’ve answered this recently but I used the search but it returned all sorts of unrelated material…


  204. I don’t get it NASDAQ is up and so are others tech stocks but AAPL still down.


  205. JRW - Are you trading this "rebalancing" madness?  I’m not sure sure confluence and indicators mean much today…I’m sitting idle myself after a small TZA gain.


  206. Is there a Dow volume indicator in TOS?  I’ve looked and haven’t found one.


  207. OREX/ac – I like ARNA.  OREX = no go.


  208. nicha,
     
    Probably some fund wants to reduce their large AAPL position and is using the iphone excitement to sell into. If they finish while there is still buying pressure it will squirt higher, if not they may eventually wear out the buyers.


  209. boobearsdad:  volume can be checked on the "Market Depth" window


  210.  Hey Phil,
    I won’t put it past the Bots to punch this thing higher and close around your 2.5% lines but with the weekend coming up, what do you think about adding in some hedges here if longs entered yesterday are now proftable?
    And if so, should we go 2X or 3x etfs (recommendations)?


  211. I got killed shorting BIDU earlier in the year so proceed with caution, but lately it’s been good for a WHEE! when I short it over 75, FYI.


  212. jdub,
     
    Thanks again for NFLX. Sold the last this morning. :-)
     
    Actually tempted to try again here.


  213. Phil / Oil  Any new regs requiring deposits or insurance before drilling would play into the hands of the majors with their deep pockets.  Might force the small players into selling out to the majors??  How can a small exploration co. guarantee it will cover/insure a potential $50billion of damages?  Oil cos source globally, so are we being to concerned about new regs potential relative to current (low) share prices?


  214. DRYS/Tenger – They got too crazy to play but attractive again way down here.  I’m waiting for the BDI to turn around first as that has been a catastrophe.

    WMT/Yodi – I wouldn’t pay any attention to what the Dow components are doing right now but WMT may be reacting to price pressure coming through from wage inflation or possibly the fact that Congress just cut of 1.3M of their customers from unemployment checks. 

    X is heading up, that’s a rally sign!  GS giving us some love (sold puts yesterday). 

    Oil closing at $78.80, nat gas at $4.90, copper at $3.10, gold at $1,255 at NYMEX close.

    No 2:30 stick so far – getting anti-stick instead but no volume so can’t take anything seriously…..


  215. Phil,
    Regarding the dry shippers, what do you think about GNK as an alternative to DRYS if BDI comes back?  They seem pretty cheap down here given their earnings numbers.


  216. Phil / Oil Price   Why are oil major down again today on a 3% oil price increase?


  217. PHil -
    Do you use an apple to trade or just an apple screen. Thanks


  218. BA, wonder if the earlier story is contributing to weakness in GE

    MONTREAL – Boeing Co. said Friday it has halted all 787 Dreamliner test flights temporarily because of "workmanship" problems in the horizontal stabilizer, a key part of the tail assembly. Five 787s have been undergoing a range of test flights for the past six months.
    Reports that the 787 test fleet has been grounded are "incorrect," Boeing said, but some of the testers have improperly installed shims and associated fasteners that attach the horizontal stabilizers to the fuselage.

    Read more: http://www.montrealgazette.com/Boeing+halts+Dreamliner+test+flights+pending+fleet+inspection/3201712/story.html#ixzz0rtNEe9QB
     


  219. was the last full-on stick on Fri the 14th? Maybe they gave it up in honor of the summer solstice.


  220. Phil / TZA – I’m down about 50% in July $7 TZA call.  I bought it near the low earlier this month for extra downside play on top of a couple of 2011 and 2012 TZA spreads i already own.  when should i roll to august or do you have other idea?


  221. GS ripping


  222. Go GS!! Yay.


  223. goldman,
    No, I’m in cash, have been since the run to 66.68. The lines are working well today but the chop is severe !!


  224. Executed a bull call spread on BUCY (Bucyrus Int’l.)  Jan 45/60 and selling Jan 50 puts for even on this $15.00 spread.. This company has been maltreated by the markets over the perceived contaction in China demand of comodities. It should recover very nicely over the coming months.


  225. Citi’s kickin’ butt, too.  Excellent.


  226.  PHARM, what are your thoughts on GILD’s purchase of CGI pharmaceutical’s today.  Thanks as always.


  227. Lloyd wrote the bill with the help of Sen. Dodd.


  228. JRW – Thanks JRW…just wanted to confirm I’m not missing anything throwing my basketball into the air and watching CNBC.  "Chop" is right with TNA… and on small volume which I don’t like to see!


  229. Be nice to see 1075 hold on the /ES, which we’ve been above since 1:30. I think if we hold this area we can get a push higher into the close. REITs are really leading the market right now. They and banks were the first to rally and have been slowly selling off since.


  230.  Phil, what are your big picture thoughts on RIMM – I realize that Apple & RIMM are signifigantly encroaching on their franchise.  They have a bucket load of cash – if that is priced in, if MSFT bought them at 75$ they would become a real player in both the phone and operating system market?


  231. Well there it went. Let’s see if they can take it back quickly.
     
    SPG already off a buck from my short entry.


  232. Jo – interesting purchase by GILD.  They are trying to expand their pipeline slowly from HIV and viral targets, to CV risks (Myogen buy and CV therapeutics) and now inflammation.  I don’t know much about the Syk kinase, so will have to dig.  Kinases are horrible to work in from a small molecule standpoint, but will have to see how it pans out.  Maybe over the weekend.


  233.  Phil—I know someone else already asked this but I’ll repeat here in case you missed it—at the current levels are u holding your short term plays like IWM, maybe QQQQ over the weekend?


  234. How about a 1080 close on the SPX for all us chartists out there…..that will really mess things up.


  235. OREX/AC – They seem like fun at $4.22 as you can sell the Jan $5 puts and calls for $4.60 for net -38./2.31 as long as you don’t mind being stuck with them at $2.31 if their thing doesn’t work out.  You can also just risk .80 on the Jan $2.50/5 bull call spread and hope that, if they get bad news, it doesn’t trash the spread too quickly.

    RDS/Dflam – Thanks, I knew there must be some reason I never play them. 

    BP/Kwan – With the hurricane(s) coming, I think I’d wait to see how low they can go next week.   If you want to play them NOT being at $27, you can buy the Jan $27/22.50 bear put spread for $2 and the Jan $27.50/32 spread for $2 and you make a buck if they are higher or lower but, of course, not the kind of play I like at all.  I like the 2012 $27.50/35 bull call spread for $3.20 with over 100% upside and selling the July $22.50 puts for $1.05 on the assumption they don’t go BK in 4 weeks.  If you make 3 sales you have a free long spread

    Nas/Nicha – They are holding down the leaders.  AAPL (20%), MSFT (4.5%), GOOG (4.2%), QCOM (4.1%), ORCL (2.8%), CSCO (2.7%), INTC (2.4%), TEVA (2.2%), AMZN (2.1%) and RIMM (1.9%) – They do this because those 10 stocks can keep the whole index negative, keeping index funds selling the whole Nas while the manipulators buy up the other 90 stocks and then, once they are done, they buy the leaders and force the funds to start buying back all the stuff they just forced them to sell.   That’s how they screw all the 401K and IRA people over and steal Billions of dollars every day from ordinary people – isn’t it great?!?

    Dow volume/Boob – Under Marketwatch tab.  And what Humvee said!

    Hedges/Jdub – Yeah we have to start thinking of that.  Down here, I don’t really think we need one.  If we don’t go up today, we hsould go up next week but we should have something so I’d say we take advantage of big RUT move and sell TZA Aug $6 puts for .52 and buy TZA $6/7 bull call spread for .51 so a free $1 spread and if we get out of the bull call for .25 then TZA has to fall to $5.75 before we lose out and our upside is a free $1 so selling 20 and committing to owning $12,000 gives us $2K insurance.  You could do the same short puts with the Aug $7/9 spread for .50 to double the upside but I like paying up for the spread that’s already in the money.

    Damn, 3pm and no stick and just 135M on the Dow – LAME!

    Regs/Tusca – Yes we don’t know what will happen but, as a citizen, I would say damn sure no company with less than the ability to put up a $20Bn bond should be allowed to drill in deep waters.  What if this oil spill had happened to a $1Bn driller with more debt than assets?  Just tough luck America, those are the breaks???  Oil companies have long lobbied for very strict regulation of nuclear energy to stifle competition so this is very fair turnabout if nothing else…

    Oil/Tusca – The are worried about the regulations and fees.

    AAPL/Samz – I only have the one IMac (and IPad now) and I use that just for a chart screen as it’s a nice, wide screen and off to my side.  My trading is on my main desktop of course. 

    BA/Kustomz – Hyenas strike again!

    Sticks/Morx – I see Thurs 17th, Fri 11th, Thurs 10th, Tues 8th and Wed 2nd this month.  They’ve been very scarce

    RIMM is still being beaten down hard.  AAPL too  – someone does not want the Nas taking off. 

    TZA/Terra – Can you roll it into above spread? 


  236.  GEL, thanks for the BUCY rec.  I am gonna do a OCT Bull Put spread 45/50 for a credit of 1.9.  I don’t trust this market enough to sell naked puts.  I’m gonna be the proud owner of some RIMM in jan, but i think they get bought out at 70 – the easiest way for balmer to remain relevant.


  237. anti-stick


  238. AAPL – Selling $270 Puts a bit dicey. Consider selling $260s as there is a good support just below. Next few days we’ll have ‘sell the news’ drop and ‘it drops calls’ etc. other news stories making it go down quickly


  239. In TNA at $42.80


  240. JO… the MSFT purchase, should Ballmer make it materialize, – to use Phil’s words " would be the first original idea he’s had since high school"


  241. JRW, It does look like They may be running  a variation of the 5/14 program today.  Stick into the close in the last 40 minutes.


  242. Pharmboy,
    You asked about SPX weekly in the morning.  If no one else answered it yet, let me answer:
    SPX weekly starts trading Friday and stops trading EOD the following Thursday.  The settlement value is computed Friday morning.  There are weeklys every week, except for the 3rd week of each month, because there is already a monthly OpEx on that week.
    Hope this helps.


  243. Man this action is hard to read, looks almost random. I guess its mostly just HFTs


  244. Phil’s Administration?  Pro bono?  I counter-offer!  I’ll donate 1/2 of my book fees to your library!


  245. RIMM/Jo – I would never buy a company as a takeover target unless it was priced to near BK (like YRCW).  I want to see if someone can stand on their own.  I do like RIMM at this price but they haven’t even been hit by the downgrade police yet so watch out  for that next week.  The Aug $52.50 calls aren’t bad at $3.50 and I still like selling the $55 puts for $4.60 because I think they can claw back to there in a month but, if not, both can be rolled down (in strike) and out (in time)

    IWM/QQQQ – Yes on the QQQQ spread and no on IWM if they can’t hold .40, which is out for 10% gain on day.  With .10 gain on 1/2, basis on remaining 1/2 is .30 and that’s not too terrible a risk over the weekend but that’s the only reason to risk it. 

    Global merger and acquisition activity in 2010 is off to its worst start in six years, and with continuing economic uncertainty and the European sovereign debt crisis, the second half of the year could be just as bad. In the subdued M&A market, Goldman Sachs (GS) reclaimed the top spot in the first half of 2010, retaking the crown from Morgan Stanley (MS). 

    A recent decision by a World Bank-affiliated arbitration panel gives ExxonMobil (XOM) a leg up in its efforts to extract compensation from Venezuela, despite Hugo Chavez’s sabre-rattling. The ruling allows XOM to move ahead with its claim to be paid for oil-producing assets, estimated to be worth billions of dollars, and bodes well for other firms pursuing similar claims.

    Yesterday’s durable goods report showed a 1.1% drop in May, but a key measure in gauging capital-spending plans – non-defense capital equipment orders excluding aircraft – rose 2.1% and was 18.4% above its year-ago level. FedEx (FDX) is among companies who plan to significantly boost capital spending. "We’re seeing global commerce expand and as a result… we’re back on the offensive," its CFO says. 

    Yet another experimental drug touted by Pfizer (PFE) failed in advanced testing, raising concerns about productivity problems at the world’s biggest drugmaker.

     

    Afghanistan’s talking to major partners on tapping its resource treasures: ArcelorMittal (MT) on iron ore, Total (TOT) and Eni (E) on oil and natural gas. Today: talks with Rio Tinto (RTP). 

     

     


    Provisions in the financial reform bill will change many ways consumers shop for mortgages and conduct other business affairs. Examples: Mortgage lenders will be required to check borrowers’ income and assets, and caps will limit mortgage origination fees and prepayment fees.


  246. Is anyone having trouble with ETrade pro freezing up besides me ?


  247. Weeklys: I’ve watched SPX weeklys for a while.  A new weekly chain opens on every Friday.  The Open Interests are almost always 0 on Friday, even if I open a position there.  Don’t know why.


  248.  thanks phil, i have previously sold Jan 65 puts for 7.5 which are in the hole – not gonna adjust right now.  Gonna wait for this to shake out first.  I will own them at 57.5 in Jan, so just gonna sit tight for now.


  249. Why oh why didn’t I hold onto my $60.00 RIMM July puts? :*(
    Sorry, just had to let that out.


  250. Out of TNA at $43.33


  251. OREX – they most likely will NOT get approval.  We played these guys last year for the pop and exited stage left at $7-8. Naltrexone(a mixed opioid agonist/antagonist)-bupropion (Wellbutrin and antidepressant) for weight loss?  I would be sick as well.  JMO.


  252. Cwan/Phil’s Administration
    I’m sure there is room for us both…we just have to convince Phil to go for it.


  253. Book fees/Cwan – Hey this is getting good!  How can I set up a slush fund – er, I mean camapiagn contribution account?

    Weeklys/Cwan – I do not like not knowing what’s going on.

    3:30 stick, an hour off and not that strong.   They have a lot of work to do to make it worthwhile.


  254.  Out of July 55 RIMM puts for the day for 40% gain. Will see where they are on Monday, and may buy back in. 


  255. Trying a new weekend mattress for a Monday downdraft – bought SH July 53 calls.


  256. Yep, Phil…. Ilinois politics revisited!


  257. That’s what I was afraid of at 1:20: BS run-up that removes some buying pressure but has no follow-through. And I actually started to think it might hold!
     
    Glad I sold it short.


  258. DF – On Phil’s buy list
    Buy DF120121C5
    SELL DF120121C10
    SELL DF120121P10
    NET DEBIT ABOUT 0.40
    SO YOU GET DF 5/10 BULL CALL SPREAD FOR ABOUT 0.40
    800% return if DF stays above 10, now 10.27


  259. JRW,
    How’d you do today?


  260. OREX/Pharm – That seems to be consensus (no approval) which I guess is why I like the – already priced in maybe. 

    Administration/Gel – I propose a round table, where we all sit as equals.

    RIMM/Dr Craig – Good call!

    Wow, talk about late action….


  261. edro00
    on 6/16 S&P came out with a "strong sell"  on DF with a 12 month price target of $10


  262. DRYS / Phil – the commission on an options spread is outrageous from eTrade. It would cost me 10% of the net just for the round trip and I won’t have it. It’s because the stock is cheap and I have to get so many options. Is TOS much better?


  263. TOO MUCH WORK !!
     
    4% on the day, 19% for the week; have a great weekend !!


  264. Huge divergence between RUT and DJI today… :\


  265. Can’t complain about a 19% week.  You have a good weekend too!!


  266. JRW – Thanks again for your lines, didn’t make 19% but profitable all 5 days…
    Everyone enjoy the weekend!


  267. tenger -
    Interactive Brokers is by far the cheapest – $1 per contract or less -


  268.  Phil -

    Just sent you an urgent email.


  269. Phil/Round table….. LOL-  style may not be our long suit, but everybody will be happy!


  270. tenger -
    Interactive Brokers is by far the cheapest – $1 per contract or less -


  271. DF/Edro – Nice play!

    Fees/Tenger – It depends how much you trade.  In a large account, you should get .75 a contract with no other fees some people probably have $1 and some may have closer to .50 – they seem to negotiate with each person individually.  To me, as long as it’s less than a pennny in and out, it’s workable because, obviously, you are not going to enter any trade where you don’t intend to make a nickel but those damn pennies add up too!

    Keep in mind that it was not very good finishing down at the 4% line for the week.  We’ll examine the ugly charts over the weekend.  Dow volume ended at 433M – amazing jump in volume, especially as it barely moved the market.

    Have a great weekend everyone!

    - Phil


  272. dflam – DF
    Thanks, hadn’t seen that but selling the short straddle c10/p10 gets you 5.78
    So, buying the Jan 12 C5/C10 bull call spread and selling the Jan 12 P10s gets you $5.38 if you’re called away and if put to you you wind up buying the stock at 4.62.


  273. hi-5 – my Etrade pro tends to get mushie in the afternoon (kind of like me). I think it has more to do with other things running in the background on my laptop. It doesn’t completely freeze just has to take a 15 sec break when i clic on something. They have an upgrade coming out this week, i think. Last wk i called complaining and they sent me the upgrade early and went through a bunch of things like reloading java, clearing some history & such. I was impressed with how much time they devoted to my problem. But it is still slow in the afternoon.


  274. Let’s see, the Russell is up 1.9%, TNA is a 3X of the Russell, and I’m only up 4% on the day.   Grrrrrrrrr !!!!!!!!!!!


  275. Phil – can TBT be effectively used as a hedge for a bond etf or fund to get some yield out of side lined cash? i.e what does a change of a half a point in interest rates do to TLT? How much of a move in TBT results from the same change in interest rates?


  276. Birinyi seems to be making good calls on price action following earnings. They kicked ass on Google and Apple last quarter. They correctly called the best Apple trade would be to buy at EOD prior to earnings, and sell first thing in the AM. If you did that with options you would have made 300% or more. They predicted a 10% drop in Google with a disappointment, or a 4% gain with a surprise. Then after the disappointment, they predicted a further fall to the 478 range by 5/28, which is pretty much what happened. This is why I paid close attention to their call on RIMM, and put some money on it. I mucked around with e-mini Naz futures in the last hour or so, lost a few hundred bucks getting stopped out both up and down, but at least it was fun! Learned a lot from JRW this week- THANKS!


  277. EdroOO-DF
    I like those risk/rewards.


  278. Phil
    I own shares of ctsh, vww, trw, and isle  I  sold jan 2012 calls on these stocks.  do you recommend  selling the same
    strike price jan 2012 puts on them also. If so Why?  would it cut my risk?  I am a newbie at this.   Thanks for the help.


  279.  HI Phil,
    I’m looking at the performance of the TBT and TLT.  Even though the TBT is 2X etf, it has lost more than 2x the gain of the TLT throughout the past months (and discrepancy is larger as you compare it across a longer period).  If this is the case, would I not be better off just selling a call spread on the TLT (vs. buying a TBT call spread and just adjust for the 2x movement) as a hedge for higher interest rates?  I can take advantage of any theta breakdown throughout the months.
    Thanks!


  280. Finishing below all our WEAK bounce levels.
    Best index, 1% below our weak bounce levels is also the easiest to manipulate – Dow.
    I don’t get why Phil is optimistic, really.
    And whatever happened to OIH at 11:49-11:50 am EST??


  281. Did anyone find out anything about WMT.  Huge volume late in the day and non-typical price movement.  Is anyone aware of any news?  Thanks


  282.  roberthjrfl--could just be those worried that something  might come out of during the weekend regarding the Yuan.  just a guess on my end.


  283. David Pogue – NYTimes.com
    June 25, 2010
    The Mystery of the iPhone Death Grip


  284. WMT price level looking pretty good for low risk investors. Buying stock and selling 2012 jan50 p and calls =20%/year



  285. .
    June 25th, 2010 at 10:40 am | Permalink  

    goldman… thanks for the weather forecast… I accordingly sold some January UNG puts.

    —————
    Glad to help, I’m always looking for a trade with "scientific odds" behind it…science is my background, I’m comfortable investing in what I understand best.  Thank you for the research you post, I’ve studied the archives and you have a knack for understanding the roll politics play in moving the markets…and a sense of calm and decisiveness, like JRW, that I’m attempting to emulate.
    —————
    tuscadog
    June 25th, 2010 at 11:22 am | Permalink  
    Goldman / TBT   Did you catch my thoughts on this yesterday?
    —————--
    Yes I read it, thanks!
    ———--

     


  286. gel/cyclone –
    goldman… thanks for the weather forecast… I accordingly sold some January UNG puts.
    —————
    Glad to help, I’m always looking for a trade with "scientific odds" behind it…science is my background, I’m comfortable investing in what I understand best.  Thank you for the research you post, I’ve studied the archives and you have a knack for understanding the roll politics play in moving the markets…and a sense of calm and decisiveness, like JRW, that I’m attempting to emulate.

     

    June 25th, 2010 at 10:40 am | Permalink  



  287. Hi, neverworkagain,
    Thank you so much for your detailed analysis on short strangles.
    When you buy naked puts, what’s your rule of thumb in choosing which puts to buy?  Do you buy front month (eg, July) or next month (Aug), and which strike?  And how many?
    Thanks!


  288. Brooklyn:  TLT is 20-year treasury bond; it currently yields 3.89%.  Half a point increase in interest rate will lower the price of TLT by 7% (you can use the calculator to calculate it yourself).  TBT is 2x the inverse of TLT so TBT will go up 14% in price when interest rate goes up 0.5%, theoretically.  However, due to the daily compounding, inverse and leveraged ETFs never move exactly the intended percentage over a period of time.  So I would say TBT should be a fairly good hedge for your bonds/bond ETFs but not perfect (also what’s the maturity of your bond ETF/fund?).  jdub929′s post illustrates this point. 
     
    Phil: I would be interested in your answer to jdub929′s question too.
     


  289. Phil, Great stuff all week : from 1873 Grant, Bush/Enron (that should have been his campaign slogan : Enron For Everyone), to burning tap water.  Always entertaining & informative.


  290. shadowfax – Regarding your question on June 24th, 2010 at 8:21 pm: "By the way what is the diffinition of a condor and iron condor?"
     
    See links:
     
    Iron Condors Vs. Condor Spreads
     
    Iron Condors Explained 
     
    Iron condor


  291. Weird day; had to leave at 2:30 for meeting.
    Very strange prices; REITs up big; XOM down, AAPL down, HK down, other energy/nat gas up; ATPG up big; HAL up nicely, BEXP up; BP down; AAPL down, GOOG down; just a real mixed bag.  Indexes flattish; RUT up (rebalancing effect).
     
    Most random day in a while IMO.
     
    Have a good weekend everyone.


  292. Cap – You need to get yourself a Verizon MiFi 2200. This device would have paid for itself many times over for you the past few days! 
     
    I have had one for over a year and it has been well worth the money! I use it with my laptop and ipad (sans 3G) when I travel and have used it several times when my cable has gone out. I would not be without it.
     
    Verizon Wireless – Mobile Broadband
     
    Verizon MiFi 2200 review – Engadget Mobile


  293. SeanC -
    Thanks. I am looking at it both prospectively and thinking about it with regard to a small portfolio of municipal bonds. The bonds are 5-7 year duration. I think the danger is that the first move in interest rates which will be slight will cause a bigger repricing in fixed income assets because of  the overal change in future valuation the firat hike portends, which might not be reflected in TBT as dramatically.


  294. goldman… thanks much for the kind words… now if I could only convert my efforts into the profitability that JRW enjoys!


  295. Hi, diamond,
    The Verizon MiFi 2200 looks interesting.
    How much do the device & annual subscription cost?  And most importantly, how good are the coverage areas & signal strength?
    Thanks!


  296.  Phil or anyone—I’ve been around here for a couple weeks now and read lots about "THE STICK" but I’m not clear on what you’re talking about. My guess is it’s a relatively larger candlestick appearing around 2:30 or later, but on what index? Or is it a spike in volume around that time or both? Whatever it is, could someone please explain it and how you read it? Thanks!! I’m really loving this site!!!!


  297. cwan120 – I have had both T-Mobile and AT&T before Verizon. I believe from actual usage that Verizon is superior.
     
    Coverage Locator – Verizon Wireless
     
    Verizon Wireless – Mobile Broadband Plans
     
    Perhaps Phil can set you up a long term option play that will pay for the Verizon plan … ;-)


  298. By the way, something to think about before summer storms hit:
     
    I have multiple Battery Back-Up UPS’s around my house. If the electricity in the area fails, I can still trade the market using the MiFi 2200.


  299. fortep - "THE STICK"
     
    In the last 30 minutes of trading when the market moves up very rapidly, on a 5 minute chart it seems to form a backward facing hockey stick:  _/   (see David Fry’s chart).  
     
    Traders can (and do) make a lot of money playing the stick!


  300.  Diamond—so are you looking for "the Stick" on just the SPY? And do you play in the direction of the move? For just that day or into the next? 


  301. fortep – The stick pattern shows up on other charts (e.g., DIA & QQQQ) and you can pick it up and play it to near the close.
     
    A lot of times the stick will fail due to heavy selling pressure. That is why everyone is cautioned to beware of "head fakes" (the market appears to be moving in one direction but suddenly reverses).


  302.  Diamond—hey thanks alot!! That gives me something to work from.


  303.  Diamond—hey thanks alot!! That gives me something to work from.


  304.  Diamond—hey thanks alot!! That gives me something to work from.


  305.  cwan – I have a mifi that i can sell you.  I used to use it a lot before all the hospitals got wifi.  send me email at dhruv.ky@gmail.com.  It is just sitting around.