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Thursday, October 6, 2022

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Testy Tuesday – Bottom Busting or Big Bounce?

Wheeee, what a ride!

Finally all our very boring sitting around at 75% cash makes us feel smart as the market makes what we hope is that final blow-off bottom to re-test our lows.  I already sent out an Alert to Members this morning so a lot of this is old news to them but nothing has changed since 4:30 so here's a quick reprise – What we are mainly seeing in the futures this morning is 2 major factors that are driving the markets lower:

1) Japan, where too strong Yen (88.6), -0.1% industrial output, -1.7% exports, rising unemployment (just 5.2%) AND lower houshold spending (-0.7%) numbers sent the Nikkei down 1.25% today to 9,570.  If you think about it though, pretty much all of that is a strong Yen issue because it lowers demand for the exports (making them more expensive) and then factories slow down and people get laid off and household spending drops from that PLUS the fact that it’s now cheaper for them to buy imports so they can buy the same stuff at lower prices. 

So, overall, nothing people shouldn’t have expected but ugly to read about.

2) China, where the Shanghai fell 4.27% today to 2,427, which is a lot because they are a 10% limit down market on individual stocks so you can bet the selling isn’t done if the AVERAGE was down 4.27%.  The Hang Seng was ugly too, falling 2.3% to 20,248.  What sent China off a cliff was kind of silly.  The Conference Board, which is a NY-based research firm had reported that Chinese economic indicators rose 1.7% in April – something at the time (June 15th) we thought sounded a bit high.  Well, funny thing is it turns out the people at the Conference Board must have been high on something because it turns out they made a "calculation error" and the correct number was just 0.3%.

There is a third factor in play and, earlier this morning I thought it was too silly to be considered but, apparently, you can panic retail investors over pretty much anything.  On Thursday, there are $547.5Bn worth of bank-loans from last year's special liquidity program that are due to roll over and there are rumors circulating that the ECB won't renew the facility at all.  The ECB has, in fact, already promised to replace it with rolling 3-month loans at the same rate, hoping to make it annoying enough for banks to seek long-term funding elsewhere.  The ECB is also pissed off at the banks who have taken their money for a year, yet haven't increased their own lending – which was the whole point of providing liquidity.  The same nonsense goes on here but, as I may have mentioned last week, our Fed works FOR the banks and just keeps funneling free taxpayer money to the banks while the banks keep reducing the amount of money they lend to those taxpayers. 

So Asia was awful and, in Europe, it’s another day of protest in Greece and Europe is dropping 2.25% and taking our futures down about 1.25% so far (8am).  Let’s watch those international 2.5% lines (red ones are the downside of course) around our key levels (circled).  None of these charts reflect today’s action, unfortunately but we will be looking for the DAX to show a little strength on that 6,000 line and we hope the FTSE can hold 5,000 and CAC 3,500:

We needed a blow-off bottom and hopefully this is it and not a sign that we’re in another deep downtrend (as many are betting on).  We have our TZA disaster hedge from Friday and Thursday’s SPX and other SDS hedges (like the one on the Buy List) short-term but we are generally too bullish for this drop, especially on our Mattress Play where the June 30th $102 puts we sold for $1.60 are going to be well in the money today (so they have to be rolled to July).   

Since we can expect the VIX to shoot back up to 40, the best way to add protection is going to be selling puts on ultra-shorts against bull call spreads, like TZA July $6/7 bull call at .60, selling Aug $6 put for .48 is net .12 on $1 spread for a 733% upside.  Our risk is owning TZA at $6 but a drop like this should show you that owning a little TZA can be quite comforting in the event of an emergency so if you are protecting $25K invested in a $100K virtual portfolio, then selling just 20 TZA Aug $6 puts (which can be rolled) for $960 and spending $240 more out of pocket buys you $2,000 of downside protection and your risk is owning 2,000 TZA at net $6.12.

Keep in mind that, if you are looking at a $2,000 loss on your $25,000 at this level then if TZA stops your bleeding here, even if the market rallies back and you end up losing $1 on 2,000 shares – it’s going to be the $2,000 you get back on your $25,000 bullish positions.  It is worth sacrificing some upside to protect your principal when we don’t know how bad things are going to get.  Also keep in mind, though, that if have sensibly hedged positions, like our buy/writes, that this drop is NOTHING and doesn't need to be protected yet and that means we can afford to take longer plays with better pay-offs to protect against further downside AFTER we have a real breakdown.  Right now, all we are doing is testing "flash-crash" lows again.

We absolutely don’t want to buy puts as the VIX will send the premiums way up and we’ll be paying top dollar on a momentum play.  That’s why we’ll be looking for some reverse-index puts to sell, like the TZAs because, even if the market turns back up, the VIX will shrink and our buyback won’t be so bad if we decide to take it off the table. 

So let’s not panic – this is why we are 75% in cash and this is why we always have a disaster hedge in place, to take advantage of just such a drop!  Take a good look over the Buy List as we’ll get some excellent entries and also, in the comments on the buy list, we had some 10 margin plays to make and those should also give us great prices into the drop as well as our list of 500%+ plays, which we should also get great entries on BUT – let’s make sure our red levels (-2.5%) hold up first:

Globally money is FLYING out of stocks and into US Treasuries and we are now at record lows (very bad for TBT) so we’ll watch that as well as $77.50 oil (now $76.30) and $3 copper (we’re right on the line) as both are generally bullish levels despite all this panic.  Meanwhile, our friend who initiated the XLB trade we followed last Tuesday was a genius!  The July $32/30 bear call spread was already 100% in the money yesterday at $1.40 (up 75% from .80 entry) and today is likely to be a good day to take that money and run as copper tests our mark and FCX looks for a bottom around $62.50, which is a tempting buy down there.   

If this selling keeps up, it’s going to be a rotten way to end the first half of the year but, as I mentioned last week, we were relentlessly driven down last year from June 12th (8,800) through July 10th (8,150), a 7.5% drop that was reversed in one week and led to the insane rally that took us up to 10.500 in November so it seems a little premature to panic as we fall from 10,500 on June 18th to perhaps 9,800 today (6.66%).

So here we are again, right before the Holiday weekend and, wouldn't you know it – we're heading down!  It's very comforting to see our 5% rule obeyed so well as we fail at the 10,500 mark this week (20% up from 8,750), which makes our EXPECTED retrace (20% of the run) 10,150 so we'll be watching that line closely on the way back up but, for now, we'll be watching that 5% pullback off 10,500, which is 9,975 – which is what we need to hold to call this just a bullish pullback.

I’m expecting Case-Shiller Home Prices to be a relief (9am) and Consumer Confidence at 10am may be an upside surprise as well so maybe our open won’t be all that bad but, right now – the futures are awful!  Ideally, we would at least like to hold those June 8th spike lows and the June 7th close, which were: Dow 9,725 (low close 9,815), S&P 1,042 (1,050)  Nasdaq 2,145 (2,158), NYSE 6,480 (6,512), Russell 608 (617), SOX 326 (332) and Transports 1,921 (1,955).  So scary low numbers to shoot for but much more important to see us hold those closes.

9am Update:  We did get Case-Shiller and we had great numbers – +0.8% vs -0.5% in March and up 3.8% for the year, better than the 3.5% expected and the 2.3% in last month's measure BUT, the S&P took ALL the fun out of the report by titling it: "While Most Markets Improved in April 2010, Home Prices Do Not Yet Show Signs of Sustained Recovery."  Not very catchy is it?  So that has done NOTHING to improve the futures, nor did ICSC Retail Store Sales, which were off 0.5% this week but that isn't stopping them from forecasting +3-4% for June as the calendar shifted Memorial Day sales into the June count so May was better than it seemed and June will look great – next month!

We're going to watch FCX at $62.50, AAPL at $260, CAT at $62.50, PFE at $14, OIH at $95, XOM at $57.50 and XLF at $14 as all are stocks we'd like to sell puts against and all are stocks that should hold their lines in various sectors IF WE ARE NOT BREAKING DOWN.  If they can't keep it together, then we'll be hitting those disaster plays hot and heavy

Let's be careful out there!   

 

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Support/Kustomz – "Yes but when I see this kind of sustained effort being put into breaking support, it makes me wonder why someone is working so hard to convince us to sell…"

Effort by whom? "They" and ‘Them"
I see a sustained effort not to break support. Clearly "they" keep saving the market from a melt down as demonstrated this afternoon. This is where matts frustrations stem from. The Fed has feed trillions into the markets giving a green light to speculation things will be free and easy forever. I think the sellers realize that free really isn’t free and Governments around the world need to tighten their belts leading to slower growth (hopefully not collapse) that leads to risk aversion.

Nothing wrong with waiting for the smoke to clear and to see some leadership in some of our favourite stocks before we get stuck without a place to sit in this game of musical chairs.
 

jdub gel
The rotational screw will only end when they put it to the 1%ers. I planned on selling my dividend stocks this year but the sqeeze has already taken a few years dividends away. Hope either of you have an idea of when to bail?

I suppose that public corps could put more money into stock buybacks and pay less out as dividends, which would increase share price and thus increase potential capital gains

We just don’t freak out in front of everybody. From today, "honey, would you.." "NOT NOW! Were going to be digging in dumpsters if this keeps up!"
Amazing how my account can be thousands of dollars down and buying back a covered call for $60 makes me feel like a success.
Shadow – what do you need to know abt PRO? i don’t know much but maybe someone else here could help?

Phil, any new thoughts on MEE? You recommended buy/write back at 38 and lately they’ve been around 30 for a while. They filed a lawsuit against the mining regulators. Trying to understand if the fundamentals are any different. I haven’t seen it on the past couple buy lists.

 Humvee: I have yet to hear what the outcome is on my biggest Canadian Trust-PWE but I have trimmed my position on it by 1/3 already and will start to scale out of it on strong days (which I hope we still would have).  I will also continue to trim holdings (not too much) w/ high dividends and will put some money to work on high yield debt–emerging market and corporates as I do not see interest rates spiking anytime soon.  I have TBT to protect against any sudden interest rate shift until the unemployment numbers here actually get any real traction and the EU (ex Deutschland) turns things around.

morxlntway
First I want to save my charts screens because loading pro and resetting all those screens takes a 1/2 hour every day. Second I want to save the options layout some how that can be accessed without the wait to trade. So far the only way to get a fast trade is to go back to the trade page which makes pro 1/2 worthless. That would be a great start. I have 3 computers and pro won’t let you load on more than one. I have discovered how JRW trades and see all his signals but pro will only allow misses by too late!

And only pro has the tools  that refresh real time, I tried everything else.

Phil / End of month window dressing push?  What happened to that concept? I thought the machines were in control.  Are the funds trying to reduce their customer load!  I was playing for a spike into Wednesday and planned selling that day.  I got it wrong again I guess? or do you still anticipate some gamesmanship/stick tomorrow?  I’m still a Ddipper, but I thought it would be later in second half as I suspect 2nd quarter earnings will still be ok overall, especially for blue chips, big tech and oil integrateds.

kustomz:  the Fed won’t let the market tank, and there isn’t enough genuine buying interest to sustain a bull market, so I guess shearing the sheep between 1040 and 1150 seems like a good way to turn profits.  Keep hope alive so that the Matts and the Phils of the market never fully capitulate. 
 
Except those little flash crashes seem to be getting more and more frequent these days…

Shadowfax/Dividend payers
Timing the rotation is directly related to the sentiment of the fear and expectation of the tax change. One must remember, the tax increase is really corrosive to the best interests of those in the higher tax bracket, because of the differential between the typical lower rates on dividends compared to their marginal rate.. Someone who is in the lower marginal tax rate bracket, then their only concern is the number of sellers of the stock, because of the rotation to other investments.
As a caveat… all of this concern might be a moot point, for the reason a change in majority status in the Congress, could reverse the tax increase, and furthermore, spark the markets upwards.  ( It is common knowledge the markets do not support the current administration )

jdub/PWE
From the mouth of the best analyst in Canadian  energy trusts… "CEO William Andrews said in the latest earnings report he will keep the monthly distribution steady at least for the current quarter, but won’t confirm the rate will stay the same post-conversion (to corporate status), until the first quarter results come out in May. The distribution outlook does not look prommissing, given that in years past the trust was heavily focused on just payments." Andrews stated  "As a corporation, Penn West will focus on total shareholder return. This will consist of both growth and income from dividends"
I still think these trusts are attractive, as they morph into traditional corporate entities, but will be a mix of capital gains growth and dividends. One must recognize this structural change is for the benefit of the taxing authorities, and therefore overall return will not be as attractive as it has been in the past

gel1
Thanks that all makes sense to me. I am in so low a tax bracket I didn’t pay a dime in federal income tax last year and based on the losses will not this year. I accually voted for Obama because 1 he preached change and the alternative was worse, 2 Obama has no clue how to fix things including he has advisors on both sides which only causes arguments, 3 the final blow was not realizing the best thing for America was put of health care until he fixes the economy. I really wish I did what I did in 1994, I bought a bumper sticker that said, "Don’t Blame me, I didn’t vote for either! Going back to BUSHNESS is not the answer either. The 1%ers have to pay a share.

Say it aint so!
 
"Randall Lane claims in his new book that Jim Cramer took ex-baseball player Lenny Dykstra under his wing, "single-handedly [creating] the concept of Dykstra-as-financial genius." Now, Cramer is ensnared in a scandal, as Dykstra allegedly agreed to take $250K of stock in exchange for recommending it to subscribers of a newsletter he wrote for TheStreet.com."

 Thanks Gel for the PWE update.  I really did plan on taking some off the table anyway but whatever 2nd thoughts I had, it has greatly diminished.
If yields decrease and open to the Forex risk, I’d rather put the money somewhere where there is one less variable to worry about.  

 Hi Phil,
TBT- is it possibly a good time to go long TLT against longer term TBT holdings?  And if so, I take it a good time to scale off of the TLT would be when employment/CPI/PPI figures actually improve on a sustained basis right (although tough to do as those are lagging indicators)?
Thanks!

Hey everyone,
I know most of you hate my sumations but yesterday I bought RAM memory to max out the last computer through Amazon at 1/3 the cost. I thought ebay was bad but Amazom set a new low. I would vote their stock down all the way. I think others will agree and it shows already. Beware!

kinki, im concerned with liquidity and your statement "and there isn’t enough genuine buying interest to sustain a bull market" sheds light on how this very fact can cause a serious meltdown that’s not expected by those who rely on the Fed coming in to support what we believe to be a technical trading opportunity. All sellers and no buyers = an unstoppable meltdown. Just something to think about.

I tuned into Cramer at about 6:08 and he was asking his producer permission to be positive on the market.  I missed the opening minutes where he might have possibly given an excuse for the call he made earlier in the day.  I also missed him actually making that call.  I still have to work for a living and no, it’s not in a TV shop.  After asking his producer for permission to be positive, he said he might go on the Today Show with it.  Can someone help connect the dots?  What is going on with this scumbag?  Can he be real or was I watching a cartoon?
 
Two things are clear to me:  1) his call was a ruse to get people to dump.  There was massive buying into the close on the financials and  2) he is the type of person who, when I was a kid and I saw him on the playground, I would seek out to beat the $hit out of him.

Shadow – I use Pro on one computer. I’ve tried 2 but you are right it doesn’t work. Re charts, I have 4 screens running, 3 are only charts and have 4 or 5 charts per screen so that’s about 12 charts always running. I shrink the charts by dragging the edges so i can see 4 on a page then on one page i also have a large one in the background that i can click on to bring it forward. If i double click on the top line of a shrunk chart it goes to full page and vice-versa. One thing i have learned is to get all the charts back to the sizes & positions i want and save the layout before shutting down or else, you are right, they wont be there in the morning.
Let me know if i m telling you stuff you already know. Got to check the charcoal.

Matt, the jackass needs to go down but this and my ministick outlook may = good tomorrow. Maybe today is as low as it goes, right now my car is being trashed by HAIL!  fffxxcckk the world I’ve had enough

Matt

He didn’t say "short the market" or "sell the market." He made observations about the way the market was acting.  He made pessimistic observations about the way the market moves at the end of the day: "Now I know a lot of people will say, ‘Wait a second, it just rallied from 270.’ We’ve all played that game. We know what happens – the ultra-funds come in in the last half hour, they rebalance – you go down 500 in the last minute."  It all seemed like rhetoric to me and not specific statements of "short the market."  I think that is an inaccurate observation and unfair to Cramer. 

Furthermore, at the beginning of tonight’s show, he stated people are overly negative, but we still have a little way to go down.  On that way down, he is compiling his buying list and is being very cautious.  I don’t know how these statements, which I’ve seen him make the same statements over the past few weeks, are any different than the statements Phil makes (e.g. when Phil says stay 75% cash and we are waiting to buy and be cautious).
Finally, you have to differentiate between short-term and long-term positions.  When an analyst says "I’m bearish X" or "I’m bullish Y" one day, then 2 weeks later they are the complete opposite, you can’t say "they are a fraud! They had a complete different position two weeks ago!!" I’m sure your opinion on the market changes constantly.  I know my opinion changes every second based on new information acquired.  
Nonetheless, I do feel sorry for the average investor who sees someone like Cramer and takes his word for doctrine….I feel bad for anyone who sees any analyst and takes their word for doctrine…  The only reason I watch CNBC is to get the news and their spin on the news because they can impact the way the market moves (e.g. when they are negative nancies the market tends to go more negative than it normally would).  But, I never take their word as doctrine or as advice without thoroughly analyzing the markets for myself.
Point of story: Listen to yourself and make your own decisions…then blame yourself or thank yourself for the results of those decisions, don’t blame Cramer or a similar talking head. 

morxlntway
I tried for about 10 minutes to save 1 screen and gave up on what etrade told me this AM. Any instructions how to actually save the screen?

At least the barley survived more beer for the masses! Bud loves my stuff and buys it. Sorry Cramer but I don’t like your style.

Well said rstuart, good advice for everyone. Matt is not one to worry about, he has his own opinion on the market and likes to "rev it up" once in a while. I just can’t understand why he chose the pink box……  😉

Would someone please remind me to short TSLA tomorrow… this is reckless enthusiasm for a stock that takes exhuberance to new levels. It will be years before this company will ever have profits, and furthermore the science behind this hype is is "still progressing". This has to be the riskiest "long play" investment that I have seen in a long time. As an IPO it was priced very aggressively, and then overly subscribed on hype. The perfect setup for a dramatic fall. IMO

gel1
I agree and will add in spite of the ridiculous the car is fast 0 to 60 but stops at 125. My STI does 0 to 60 in4.5 sec. and is electronically limited to 150, under $35,000. The car nuts won’t buy it and for $100,000 you can buy under 4 sec. and 190. Short it but maybe not tomorrow! A Honda Accord will do 130.

Phil… Yes, taking the capital gains rate from 15% to 20% is no big deal, and few even care. However taxing the dividends at ordinary income marginal rates takes away ALL of the incentive to invest in these stocks,  that place emphasis on these dividend dispersements.  Why go from 15% to 39.5% all in one day… it is NUTS.  I do know the reason why this proposal has so much traction – the present administration thinks the dividend dispersement is helping the upper income earners through reduced taxed rates. Geez, have they forgotten about all the folks on fixed income that rely on this income?  I can tell you – they do not care, as their target is is to get the big guy, no matter what the collateral damage is to other investment classes.  What they do not realize, the upper income earners are not as dumb as they are,  and can devise a new creative system to receive fair renumeration for their invested capital, without confiscation by the tax grabbers. Invested capital deserves a preferentail return, as there is risk associated  with  the deployment of this "already taxed" resource.

gel1,
I just checked, TSLA is not available for trading at TOS.  Maybe it’ll be available tomorrow, but might be hard to short.

shadowfax… What is the appeal of this "experiment"?  After all of the "greenies" buy this thing, there is not much of a follow-through market,, and stock price is based upon income, and not environmntal hopes for the future. This contraption will be popular with guys wearing green suits and will demand the car to be painted green. Great for stealth visits to places you are not welcome, as the thing makes no noise.

gel1 phil
 I am one of those that are stated as colateral damage.I am unable to do almost everything and the dividend sounded good to a person who couldn’t make it on a $1,500 per month check. My income from dividens was reduced from $600 to $250 and the stock is down, Medicare premium has increased and doctors have rejected me, all in 2010. I joined this site to maybe put an end to this flush out and now what X 10,000,000 people. I sold land this year at don’t ask to get out now it is my stupid dividend stocks. What next? I doubt anyone knows.

Phil: I have the same problema as Jomptien  have not been getting your sites emails or warnings in the past 2 weeks. Any problems?
Jomptien Phil,
I didn’t bet your morning warning and have not been getting your sites emails or warnings. This has just been in the past 2 weeks. I emailed Greg but still the problem persists. Thanks

 Thanks for the attention Phil!
Yes, long term bull but I see us going down much further from here.  If I’m wrong, great.  If I’m right, I know I can sleep tight at night not worrying about the minis.
BP-I agree they make a ton of cash but I’d venture to guess that the $2Bn/month revenue will most likely be decreased (by what amount, I’m not sure) by the cost of the cleanup, slush fund, plus additional financing cost when they decide to tap the credit markets.  I should have reworded by comment to say that those investors are possibly the reason why the share price is hovering and not falling much further at the moment.
Uncertainty–totally agree with this one.  But I think due to politics, it will be a gradual fact finding mission for those who follow the markets.
TBT/TLT: Thanks for the clarification.  

BP: can’t be evaluated until they bring on the lawyers. I sold 2011 31 calls, so far, looks good. Don’t think they will BK, but I wouldn’t be bullish on them.

shadowfax… The tax proposals are not anything but proposals at the moment…. also, if Congress has a major change in November,  from what it is today, then the tax changes that have been "floated" will never take place.  Dividend income should have a preferential tax treatment, the same as capital gains have at the moment,  but try to sell that concept to someone who has never invested their hard money in anything, and probably was on a trust fund and/or scholarship for his entire life. That IS the problem!  This background, as described, applies to so many of the "pointy headed" intellects that make up our elected government. They, my friend, have never walked in your shoes!

cwan…. I have been shorting the GBP/USD all day, and I think this play should be good for a week or two… so far so good.  I’ll work on this one in the AM, and give you some targets for stops and limits. Still no word on JPY, and why it is so strong. I’m curious as hell, as it is even chalenging the CAD

jel1
If only I could walk.

ON THIS WEEK-END POST YOU EXPLAIN THE WAY TO HEDGE A PURCHASE OF 300 SHARES OF SPY AND GETTIN SOME DOWNWARD PROTECTION BY SELLIG PUTS AND CALLS FOR THE MONTH OF MARCH.
> WHILE I UNDERSTAND THE TRADE, I WANT TO KNOW IF ONE HAS TO WAIT&HOLD ALL THE POSITION TILL THAT DATE (MARCH)IN ORDER TO TAKE FULL ADVANTAGE OF THE PROTECTION.
> ALSO I WONDER IF THE SAME CAN BE EXECUTED AND ACHIEVED WITH THE INVERSE POSITION, NAMELY SELLING SHORT THE SPY CONTRACTS AND HEDGE IN THE SAME MANNER WIHT THE SAME PUTS AND CALLS SALES (INVERSE OF COURSE).

 BP/barfinger: I too don’t think they will go belly up unless this relief well is a total bust and I followed Phil’s position vs. BP BK here :
http://seekingalpha.com/instablog/6284-philip-davis/76309-phil-s-take-on-bp-and-an-options-idea?source=kizur
few reasons why I don’t want to go outright naked on calls or puts against BP:
-some other big petro name out there could be buyers of BP’s global assets
-when they tap the credit markets, they get a much better than expected result
-positive relief well news could happen (unlikely but not impossible) earlier than scheduled 
Any of those could potentially have a positive impact on BP, shooting those calls’ IV skyrocketing.  Phil’s options idea are doing great right now as I was able to take advantage of some technicals like buying back those July calls and selling July 29 weekly calls a few days ago (29 served support a few times before finally giving way).  Also great that there are now weeklies on BP options.  Helps me be able to  trade around positions easier.

Shadow – back from dinner. I just go to the top left corner, click on Layout then save as. Once you have saved it as something, it should stay the way you leave it when you save before shutting down. The trick is to take a minute and check each screen, chart, etc and make sure you haven’t changed them during the day and then expect them to be back the way you had them at first.
Hope that makes sense.

 Gel1 on Yen strength: I think it could be the case of risk aversion.  Canadian and aussie dollar both down today.  Aside from USD, JPY is next safe haven currency.  Swiss Franc also up today.

Phil – Thank you. From last Friday’s post:
1)
Phil
June 25th, 2010 at 11:30 am | Permalink 
……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….
In the above trade I have a loss of $110.

2) I have XOM Jan 12 60 Calls that I bought for $8.70 now $6.20. I wanted to find out how I can cover those.

Phil
http://www.businessandmedia.org/articles/2010/20100629161743.aspx
You can watch the stop trading clip at the bottom.  Is there a different part of the stop trading show that I’m missing where he states there will be a drop at 3:40? (I looked up the clip after it happened as I was showering during the bit so I could have missed something…) If not, my interpretation of his comments still stands as follows: The markets are absolutely crazy and could easily swing down…don’t be fooled by the upward rally we are having…be very careful because who knows what the hell will happen.
And I agree.  He should know better….but I do believe he is entitled to express his opinion.  People should know it’s Cramer and to filter his messages accordingly.

jdub/JPY
I agree on the safe haven scenario, which is strange, as Japan is one of the worst for debt/GDP ratios. It scares me. I was thinking, as I cruised the charts today, that it might be the recent softness in commodities that is the cause – as these countries are very dependant on commodity sales.

 gel1/JPY- i failed to add in that one statement which you mentioned—commodity based currencies–CAD & AUD.  I had in my mind risk trade=commodity trade but failed to elaborate.  that’s useful to all the others on the board.  

 Phil or anyone:
I’d like to short coffee but don’t want to go into the futures market.  Has anyone traded a coffee stock that correlates well with movements in the price of the commodity?
 
Thanks!

gel1/TSLA – did you notice that over half (10M shares) traded in the first hour drop?  There was also a fantastic 20% run-up EOD, with limited EOD day trader cash-outs when we hit the intraday market lows (which makes me question if it was day traders that ran the stock up).  I agree that the stock should have headwinds long term and the run-up was out of line with reality, but perhaps some funds needed some window dressing on a down day…and "they" might keep up the alpha tactic on Wednesday for end of quarter?  In a logical world on Wednesday, I would think it should re-test 22.15 and even perhaps 21.30…but logic is why I didn’t follow my plan to buy the IPO this morning, yet my "gut" thought it would spike up, I just didn’t previously think it would be 40% while the markets went into chaos…yet now thinking about it, the chaos could have drove investors into an "IPO self-fullfilling prophecy" trade…

 Forgot to mention, only those with options so $JO won’t do.  I’d rather go with puts (or put spreads if VIX remains elevated) vs. outright shorts.

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