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Turnaround Tuesday – Will CNBC Apologize to America?

I wasn't worried, were you?

Actually, we were worried enough this weekend to revisit "5 Plays that Make 500% if the Market Falls" as we took off our very profitable April 28th disaster hedges in last week's dip, leaving us net long and just a little nervous going into the weekend.  As I mentioned last week, I find myself in the very strange situation during capitulation cycles of having to push back against general Member sentiment as even the most experienced traders tend to fall victim to the combination of market and media manipulation when it's as relentless as it has been for the last 10 sessions as the markets dropped 7.5%, pretty much without a break

We first noticed the all-out media attack on the markets way back on June 15th, when CNBC featured the tag-team combination of Pimpco's Mohaned El-Erian and Nouriel "Doctor Doom" Roubini – one who is pushing his bonds and one who is pushing his book and both of whom can be counted on to spin things as negatively as possible.  That very effectively put the breaks on the rally from 9,800 on June 7th to 10,450 (6.6%) on June 15h and ran us back down to lower lows as EVERYTHING that happened since then was put into a negative light.  I won't rehash all the idiotic statements made by Cramer or the Fast Money crew or the rest of the Criminal Narrators Boosting Commodities – it's either obvious to you or you'll never see it at this point. 

CNBC has been woking the markets over since May 21st, when I first pointed out how negative their coverage had shifted.  Over the weekend, we discussed the workings of the game and the players that CNBC work for and, wouldn't you know it – this morning, timed for lunch in the EU, Dr. Doom Roubini is their very special guest – AGAIN!  El-Erian and Gross were kind enough to warn people this morning that "shares are no bargain as the recovery fades" and Barton Biggs is telling anyone who will listen that he liquidated half his tech holdings last week.  Funny how they don't tell you WHEN they are buying or selling, just a mention after the fact to "help you" make the right decision. 

The psychology of the stock market couldn’t be worse, yet the valuation probably couldn’t be a whole lot better,” said Phil Orlando, the New York-based chief equity market strategist at Federated, which manages $350 billion. “Because corporate earnings estimates are rising, there’s a significant valuation imbalance that suggests later this year stocks are going to start going up again, and they’ll probably go up sharply.”  Profit for Standard & Poor’s 500 Index companies will jump 34 percent in 2010, compared with a projected gain of 27 percent on March 29, according to more than 8,000 estimates compiled by Bloomberg yet if you listen to Corporate News, you would think the World was ending.   

We won't be sure the World isn't ending for another week but we made it through the holiday weekend and expectations for Q2 earnings (or at least Q3 guidance) have now been pushed so far down that it will be hard for even PALM to disappoint.  Today we get ISM Services and short-term TBill Auctions.  Wednesday we'll get MBA Purchase Applications, Redbook and ICSC Retail Sales Reports and a speech from Jeffrey Lacker at night.  Thursday we get Chain Store Sales, BOE and ECB rate announcements, 3, 10 and 30-year auction announcements, Natural Gas and Petroleum Reports on the same day, Consumer Credit Report and a look at the Fed's Balance Sheet and the Money Supply after hours.  Friday finishes up with Wholesale Trade at 10 so nothing too Earth-shaking ahead but the next week is crazy busy.

We have very few earnings reports this week:  CSIQ, FDO, WDFC, COMS, GBX, HELE, ISCA, INXI, LWSN, NUHC and PSMT – that's it!  Next week gets interesting with AAP, SHAW, AA, CSX and NVLS on Monday; FAST, INFY, AIR, ADTN, INTC and YUM on Tuesday; ABT, JTX, PGR, TXI and MAR on Wednesday; SCHW, CBSH, FCS, JPM, MTG, NVS, PPG, WWW, GWW, AMD, GOOG, KMP, PBCT, TPX and NCTY on Thursday and BAC, C, FHN, FNFG, GCI, GE, GPC, KNL, MAT and BPOP on Financial Friday, which is also option expirations day so it will be fun to see if we can take back 800 points as fast as we gave it up to finish around the same 10,450 we were at on last options expiration day in this manipulated joke of a market. 

 

Fortunately for Members, we also have "5 Plays that Make 500% if the Market Rises," so we'll have a hot time in the old town tonight watching all the bears scramble to cover.  During last week's carnage, we went against the grain entirely and moved from 25% to 35% invested in long-term, well-hedged plays but ditching our Disaster Hedges and covering our Mattress Plays did make for a nervous weekend so you'll have to excuse me for being relieved, at least for the moment.  Once we get past the open, we don't mind if the market turns down because we can adjust on the fly, it's the gaps down that we fear when we are bullish into the weekend but just look at how cheap the Dow is getting:

 

To be more bearish here is to assume the S&P chart will get worse than it was in the ‘08 panic and we’re already passing the ‘09 panic.  Earnings have to be TERRIBLE to justify this movement.  Taking a look at the Dow above, do you really think all of these companies are not really oversold – that once they report earnings THEN we will see how they are still 20% overpriced?  Think about it – it’s not all that likely.  Don’t think about the economy and your fears and the Dow index as an abstract – the Dow is a reflection of the performance of these 30 companies just as the Nasdaq is a reflection of 100 (well, mostly just AAPL these days) and the S&P is a reflection of 500 companies.    

On Friday, I had said to Members right at 9:38, in the Morning Alert: "If we run up, then it will be prudent to get more neutral into the weekend but if we stay down and hold our levels, then saying a little bullish will be fine. Out of short-term short trades if you haven’t already.  Keep in mind we have some great 500% upside plays you can still grab here if you think you are too short."  The latter was a reference to our 500% upside plays.  We also went with EEM July $38 calls at .99, and a QLD $50/53 bull call spread for $1.30 (selling puts as well for more profits) as well as long plays on RIMM, AA, HOV, VLO and TASR.  My optimism was based on the considered TA analysis I shared with Members at 2:39:

After completing last month's "Omega III" market pattern on the Trade Bots, it's now time to spring the bear trap and run the "Apha II" into options expiration on July 16th.  Maybe there will be as little logic to the rise as there was to the fall – who really cares – it's just our jobs to try to catch these waves when they come and ride them out for as long as they least (until the cheerleaders are back on CNBC and we know it's time to bail!). 

Yesterday Morning I said to Members in Chat (yes, I know, we are a sad bunch of addicts that wake up and talk about the markets on a Monday holiday) that China hanging around 20,000 was still pretty bullish as they were at 11,344 in March, 09 so, when people say markets are failing because they dropped from +100% to + 75%, it does strike me as a bit funny because what the MSM is saying is that anything less than up and up and up without a pullback is a reason to panic

Remember, China tends to lead us up and down and not vice versa in a long-term view and India, has very interestingly gone the opposite way since mid-may and they are up 114% since March ‘09.  One might wonder what they have to be so happy about or one can wonder why are we acting so miserably?

The S&P was at 666, went to 1,220 (up 83%) and is now 1,022 (up 53%), so we’re a lot worse off than China so far but the question is, are they under-reacting and should be down around 16,000 or have we over-reacted and the S&P should be back at 1,140 (up 72%)?   Even Europe is bored with going down and flatlined yesterday and they are leading us up today (up 2.5%) after some pretty good gains in Asia as well (up 1.5%).  EU bank stress tests come out on July 23rd and the French Finance minister is upbeat about it

China bought $6Bn worth of Japanese Bonds this morning but said they were not ditching the Euro so that perked up the Euro and knocked down the Yen in overnight trading.  Chinese companies, though, are running all over Japan and buying up Japanese firms and the Agricultural Bank of China's $23Bn IPO is 20x oversubscribed so that's $460Bn of sidelined money in China that will have to find something else to invest in later this week – see how smart that EEM play was? 

We remain cautiously optimistic.  Not much has changed for us, we've been buying on the dips since the flash crash at the same levels – we just never thought we'd get so many opportunties to buy at the lows.  Now we'll see what levels we can climb back to so we can work our way into a new set of disaster hedges but, meanwhile, the millions of retail investors who were influence by the MSM to dump their shares at the bottom and now become a part of the pack scrambling to get back in as we open, now up 1.5% in pre-markets should demand more than an apology – they should demand an investigation! 

 


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  1.    I think if anything, one can use this bounce to get those downside hedges for a cheaper price.  I definitely plan on doing that.  Looks like we got through 1020 on the /ES which was the resistance last Friday we broke through and rocketed higher before everyone sold into it.  As Phil, I and others suspect, the bots are in full command of this thing because there is just too much fear around the world.  I will be using Fib levels and shorter time frame SMAs to layer in those hedges.  I don’t plan to add any longs until we close above the 06/21 high on the SPY--113.2--meaning we’d have to breach through the declining 20 and 50 SMAs plus flattening (and undecided) 200 SMA.

    There are too many fiscal and monetary programs across the globe in place where I think it will be enough to affect the "E" on companies’ forward P/E.  So this quarter’s earnings might still be good, but it’s all about the guidance for subsequent quarters.  This aspect scares me most as what I thought I was being as cheap on a valuations basis really aren’t that cheap.  Which means those initial positions with assumptions that I have 20% downside protection was placed too early as there could be more than a 20% drop in the stocks’ price.
    If China is really in a soft landing, the US continues to grow (albeit at a slow rate) and other emerging economies proceed with their growth prospects, then I think we can weather it out without too much of a "disaster".  And hopefully that’s what happens and my gloomy thinking can be wiped away but I’m not as certain about it now as I was late last year.
    Good luck to everyone.


  2. Morning Phil & all. I am kind of wondering why you published this article? Was it giving equal time or do you agree with it, just not yet?
    http://www.philstockworld.com/2010/07/05/double-dip-great-depression-ii-game-over-bye-bye-bull-crash-dead-ahead-sell-get-
    liquid-now-dow%E2%80%99s-%E2%80%9Cslam-dunking%E2%80%9D-below-6470-again/


  3. Phil,
    The OS/OB chart is interesting.  I was wondering what that chart looked like the first week of October in 2008 when we were in a similar situation and a lot of people where expecting a bounce.  I might just sit on the sidelines for a day or so and see how the market reacts.


  4. Should rally alot more than what it shows at open….
     
    IWM…
    58.60 59.10 60.02 60.79 61.38 61.97 62.59 62.92 63.25 63.60


  5. Phil: when to uncover the AAPL aug270 calls ?
    have 1x july callers 260, sold at 2.71$,


  6. Good morning,
     
    IWM 60.82, 61.74, 62.36, 62.49, 62.91, 63.36, and 64.43


  7. CNBC guest "You’ve got to respect the BOND market"  They’re not letting up.


  8. Good morning! 

    OurNone of this means anything unless we can hold those low closes to end the day and failing any of our low spikes will be a major sign of weakness as we’ve been watching these for a week:

    • Low Spikes:  Dow 9,725, S&P 1,042, Nasdaq 2,145, NYSE 6,480, Russell 608, SOX 326 and Transports 1,921. 
    • Low Closes: Dow 9,815, S&P 1,050, Nasdaq 2,158, NYSE 6,512, Russell 617, SOX 332 and Transports 1,955). 

    Keep in mind we get a BETTER price on our disaster hedges with the market going up so it’s a great time to take some if we are not heading up and up and up but it is natural for there to be some profit taking off a strong open.

    Copper was rejected at $3 and we NEED copper over $3 to believe in the rally so let’s watch that very closely.  Oil is still way down at $72.91 and we can live with low oil prices but low copper prices are an indication of very weak industrial demand. 

    The Nasdaq is going to have a hard time gaining traction if AAPL can’t get going to let’s keep an eye on them and, of course, we really want to see Europe holding those 2.5% lines at FTSE 4,944, Dax 5,965 and CAC 3,425 at their close.  ISM services is at 10 am and they are expected at about 55.4 so we need a beat there if we are going to make 2.5% ourselves today.  Once we get past that, we may be able to build a more exciting rally. 


  9.  Everyone is going to sell into ISM services no real reason to buy unless the number surprise to the upside. Should tough to pass 1040-1048


  10. Phil:  have closed 0.5x callers july260 for AAPL.


  11. We will go higher as a result or in spite of the ISM number… I think..  In TNA at 36.30


  12. Using the bounce/Jdub – Definitely a good time to begin to re-establish some hedges but don’t go too crazy.  I’m looking for a 50% retrace of the drop, to about up 4% on this bounce, maybe by Wednesday.  After that, anything goes…

    CNBC still has "Bears on Parade" for the morning programming but they have scrambled to get some bulls on the phone to keep themselves from looking like total fools.   

    Good chart on why ISM is very important to watch:

    Opposing views/Morx – That’s the difference between a liberal and a conservative, a liberal will read and listen to opposing views BEFORE dismissing them as idiotic…  8-)

    OS/OB/Exec – I do believe I used a similar chart in March of last year to illustrate then that it was probably time to buy.  It’s not an exact science but that’s why we do the buy/writes and scale in – it gives us a lot of room for error. 

    AAPL/RMM – I’d uncover them now (assuming ISM is good), you are lucky you didn’t get blown out.   Take at least half off and see what happens. 

    Oh, good job RMM – exactly the right thing to do!

    Not chasing anything here until we see 1,040 hold and 9,850 on Dow


  13. Phil / New stimulus boost to mkt     Doug Kass writes, "Larry Summers is engaged in concocting some unconventional approaches to kick-starting jobs and economic growth"  This could give a boost to Caterpillar and who else?  Worth a speculative play?


  14. ISM 53.48, down from 55.4 last month so a big disappointment.  Anyting above 50 is expanding but the pace of the expansion slowed down between May and June and, of course, CNBC thinks this is TERRIBLE


  15. Political views/Phil – lol – "Opposing views/Morx – That’s the difference between a liberal and a conservative, a liberal will read and listen to opposing views BEFORE dismissing them as idiotic…  "
    Whereas a radical thinks whatever the other two are discussing needs to replaced completely. ;-)


  16. Phil, any thoughts on a TASR options play now they are so low?  


  17. As I thought and so far correct….’going up in spite of’ ISM’s big loss.  The market make very little sense.  Lies, but I’ll ride it.


  18. Good morning Phil DIa mattress waht is the current position- I have Sept 100 put , 10 position and 5 sept 108 put with 5 cover at july 101 short put and half cover July 104 short put, roll all july put down to august 98 short put?  thx


  19.  Bad numbers good price action, I guess this must be priced in for now, Either way China is showing bullish divergence MACD


  20. TSLA went all the way back to 18!! Nice round trip.


  21.  Phil, I have 10 July TBT 39P and 5 TBT 38P sold, what do you recommend at this point for a roll? I already own 400 TBT bought at 45, so I wouldn’t want to own another 1,500.
    Thanks


  22. Good morning Phil,
    I hope all of you had a nice holiday. Tha mattress is question already so I have only a question on desaster hedges
    Looking at the aug 36 call of SDS at 3.15 any good do have TZA in place thks


  23. Just started to scale in on some hedges here.  Bought the Sept. 106/102 put spread for 1.67.  Order in for selling Oct. 6 TZA puts for .65.  Puts me in the spread for 1.02.  If I don’t get filled on the TZA put, I’m comfortable with holding just the spread.  


  24. Stimulus/Tusca – CAT is always a good one and so is SHLD as they benefit from home improvements and any kind of cash for appliences-type of deal.  Solars are already up on a $2Bn solar deal this weekend, which I meant to talk about but other things got exciting. 

    Sunny times for solar energy, as the White House extends $1.85B in loan guarantees to Abound Solar and to Abengoa’s (ABGOY.PK) solar unit, and promises to help transition to a “clean energy economy” that will create hundreds of thousands of jobs in the future.

    June ISM Non-Manufacturing Index: 53.8 vs. 54.9 expected and 55.4 prior (>50 denotes expansion). Prices index fell to 53.8 from 60.6. Employment fell to 49.7 from 50.4. New orders fell to 54.4 from 57.1.

    June Employment Trends Index: 96.7 vs. 96.1 revised in May. It was the 11th straight month of increase, but the "moderate increase" in the index during the last two months suggests that many employers are now concerned that the recovery is losing momentum," Conference Board says.

    Failure Friday takes the holiday weekend off, with no reports of closed FDIC-insured institutions – and even the problem bank list is mostly unchanged at 798.

    The national office vacancy rate climbed to 17.4% by the end of Q2, the highest level since 1993 and a sign that businesses aren’t planning major hiring campaigns in the foreseeable future.

    Mixed messages: The U.S. economy will likely slow down in the second half of the year, says Dallas Fed’s Richard Fisher, hurt by weakness in private consumption. Fisher believes there may be increased political pressure for an expansion of monetary easing, but notes there’s not much more the Fed can do.   Striking a more optimistic note than his colleague, Richmond Fed’s Jeffrey Lacker expects private consumption and corporate capital investment to expand sufficiently to keep the U.S. economy in a sustained recovery this year and next.

    For the first time, EU officials say European countries will be able to tap an existing €500B ($629M) EU safety net, as needed, if they exhaust national funds on problem banks. The EU’s Olli Rehn also confirms stress tests will include " sovereign debt shock in order to reinforce the credibility of results." Premarket: DB +2.2% , UBS +2.7% , ING +3.7% , LYG +3.6% , BCS +1.9% .

    The IMF and Ukraine agree to a $14.9B, 2.5-year stand-by arrangement to bolster the company’s faltering economy. The agreement requires Ukraine to legislate budgetary, energy-sector and financial-sector changes.

    Though its budget revenue is below target, Greece is on track to meet its deficit targets this year, and officials say the economy may not contract as much as the 4% that had been forecast.

    The eurozone may not fall victim to a double-dip recession, but prospects aren’t exactly bright. Economist Nouriel Roubini thinks eurozone growth in 2010 will be "closer to zero," following the macro shocks of the last few months.

    Is Italy next in the line of fire? "Perennially weak growth and a mountain of government debt mean that the Italian public finances are a potential time-bomb waiting to explode," writes Capital Economics’ Roger Bootle. "The size of the Government’s debts will eventually prompt the markets to turn their sights on Italy and a default is a distinct possibility."

    The U.K. is reportedly drawing up contingency plans in the event of a BP (BP) collapse.

    Ken Rogoff declares that the much-anticipated collapse of the Chinese property market is here. “You’re starting to see that collapse in property and it’s going to hit the banking system,” Rogoff tells a panel of central bankers and academics. “They have a lot of tools and some very competent management, but it’s not easy.”

    Follow the supply chain of the iPhone 4 (AAPL) and you’ll get a sense for the coming challenge of rising costs in China, and why this is really bad news for low profit-margin firms like Dell (DELL) and H-P (HPQ).

    With 2010 half over, the 10 biggest winners and losers year-to-date in the S&P 500, led by Zions Bancorp (ZION, +68.1% in 2010) and Nvidia (NVDA, -45.4% this year).

    Time to bargain shop? Barron’s thinks so: Thirteen of the top 25 companies in the S&P 500 now trade at or below 10 times estimated 2011 profits.

    PC players have seen their stock prices slammed, but Barron’s Eric Savitz believes the selloff has been overdone and it’s time to go bargain-hunting. He likes Microsoft (MSFT) and Intel (INTC) in particular, and stocks including Nvidia (NVDA) and Western Digital (WDC) are worth a closer look too.

    Apple (AAPL) is missing out on a huge opportunity in China, says Lenovo (LNVGY.PK) chief Liu Chuanzhi, which is good news for Lenovo as the country’s leading PC maker. "We are lucky that Steve Jobs has such a bad temper and doesn’t care about China. If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble.”

    Gang of 12 action: Goldman Sachs (GS) is upgraded to overweight from neutral and Deutsche Bank (DB) is cut to underweight from neutral by analysts at J.P. Morgan. GS +2% premarket. Goldman’s risk management was "best in class" and could act "as a benchmark for investment banking peers," according to a research note. (ETF: XLF)

    Consumers are turning to budget-friendly clothing chain Aeropostale (ARO) faster than investors are, writes Barron’s Jay Palmer, but with the firm’s bright prospects and rock solid financials, there’s room for shares to rise 50% or more from current levels.

    Eli Lilly (LLY) is about to lose eight key patents in as many years, covering drugs that generate around 75% of the company’s annual revenue. To cope, Lilly is slashing costs and retooling its pipeline to focus on drugs for difficult-to-treat diseases like Alzheimer’s, cancer and diabetes.

    Confessions of an anonymous hedge fund manager: A nameless hedgie gives straight answers to the ‘dumb questions’ that many (including regulators and those inside major financial institutions) failed to ask in the run-up to the debacle.


  25. Phil, You had the following on your Hedging for disaster post:   TBT is a simple bet, we don’t think rates will go lower.  Over the past 15 months, rates have stayed down around 0-0.25% on the Fed and TBT has gone from a low of $35.51 to a high of $59.75 and now back to $34.62 on Thursday.  on the whole, it has gone nowhere at all in 2 years.  That would suit us just fine if we sell the 2012 $35 puts for $3.40
    The put is now 5.60 – 5.85.  Got the call spread (Jan 2012′s   b 35 c and S 50 c for net debit $2.1.  Sell the put huh?


  26. Net debt $4.10 sorry


  27. Phil HCBK, boring stock but 5% div….would you touch this one?


  28. IMAX — I seem to recall someone mentioning IMAX here. It continues to slide, off 5.8%.  Anyone following this issue that can give some insight into the slide?


  29. Phil, I’ve got the TZA Jan 11   3.00 calls (30), my basis is 4.10 these are my sole hedge (30 contracts which aren’t enough protection for my 270K in equity longs. I’ve been looking for a pop on TZA to sell the upside calls to form a spread, then add more spreads for better protection to the downside.  TZA is climbing back, I’d like some Ideas as to whether I should cover here, and with what, or wait,and a further strategy to get better protected.
     
    Thanks,
    Gordo


  30. Also have 60% cash, and long equities are uncovered.


  31. Radical/Snow – Probably the wisest course…

    TASR/Maxim – I like TASR as a 10-year hold.  They are likely to have a rough couple of years as it is very hard for them to sell into strained local police budgets.  They don’t have 2012 options yet to you have to REALLY want to own them but I do like the stock at $3.93, selling Jan $5 puts and calls for $1.80 for a net $2.13/3.56 entry.  Just keep in mind this play has a very high probablility of owning 2x TASR for $3.56

    Mattress/Gucci – That’s right except it should be 1/2 Sept $108 puts, 1/2 Sept $100 puts, 1/2 short July $104 puts and 1/2 July $101 puts as we stopped out 1/2 the Sept $108 puts last week.  If we have to, we add move $100 puts in preparation for rolling the July $140 puts to 2x the July $100 puts (now $2.45) but hopefully we get a better boost that wipes our our $101 putters and we can just do a 2x Aug roll on the $104 putter.

    TBT/Amatta – Did you sell both of those puts (all 15) or is that a verical bearish spread?  I’ll assume you sold 15 puts, which is a hell of a lot against 400 longs but, with 2 weeks left you wait for a bounce as it won’t take much to wipe out your putters and, if not, the Sept $37 puts are $2.55 and if you can roll your putters down $2 a quarter for a year, that will take you down to $30 and, if you are more bearish on TBT than that, you’d better get out now!

    SDS/Yodi – What is the question?  Do I still like the plays?  Yes but be VERY careful here as they are not really necessary unless you are way undercovered.  The Dow can drop 150 points and you will be no worse off than you were Friday so there’s your free insurance right there.  As I said earlier, I’m looking for double this morning’s move at least for this rally, so back to 10,000 on the Dow, 615 on RUT, 2,175 on Nas, 1,060 on the S&P and 6,700 on the NYSE – anything less than that (50% bounce) is a huge disappointment and I’ll want to be all over those covers. 

    TZA/Jdub – That’s a good attitude, if you don’t get a good price on the put – then you don’t need it anyway…

    TBT/Hia – They have been awful for us but, yes, I think a net $29.25 entry is very fair for that ETF so selling 2012 $35 puts for $5.75 makes good sense.  

    HCBK/Kustomz – Yes, I like them for the same geographic reason that makes HOV my favorite builder.  Northeast is strong(ish) and looks to be staying that way.  Unemployment among the college educated is very low, about 4% and, otside of our cities, we have very few people who didn’t go to college up here. 

    DIA $96 puts at .81 are good downside protection for S&P below 1,040 (about Dow 9,830) so watch those lines and we will be able to put on quick covers on a downturn


  32. Pharm
    I do not know if you are on board today, however I have a question that follows your current market assessment.  I have large positions in TEVA and ARNA, and assuming we could see further deflation of some asset classes, would you take the opportunity today to close them out, with a reentry later at a better price?  By the way, I support your theory of the deflation/inflation scenario going forward.


  33. rainmain – Cap mentioned them last week if I remember correctly


  34. IMAX/Rain – I like IMAX but they are subject to box office, which is down lately.  They may disappoint on earnings and that would make a nice opportunity around $10 but $13 is not that compelling for them. 

    TZA/Gmarts – Well you are greedy already as those calls are $5.50 (up 30%), down from $6 on Friday, which was up about 50%.  Let’s get real here and note that you can buy another 70 and raise your basis to $5.08 on 100 and then sell the $6 calls for $4.50 and that will put you in 100 $3/6 spreads for net $5,800 and your upside is $30,000 if TZA holds $6 which is a pretty cheap way to have 10% downside protection.  Knowing that you have that, then you only have to add another layer of protection if we start failing our levels again.  Better you should rethink your long equity strategy than spend a lot of money betting against yourself. 


  35. Good Morning!  Phil, I hear it is already over 100 in your neck of the woods. On the left coast In Carlsbad this morning, we have a light mist, 62 degrees with late morning clearing leading to sun and a high of about 65. I hear there are still many coastal bargains to choose from…. Thought you might like to know this right about now. Have a good day!  :)


  36. Thanks Phil, long equity strategy is a legacy pre-dating my return to the PSW fold. Looking to completely re-jigger hopefully on a bounce. I’ve been recklessly long given the conditions, and am trying to re-postion for better balance.


  37. Phil, I’m seeing the Jan 11 6.00 calls at  3.30 not 4.50, how does that effect the trade?


  38. In TZA, I have the 11′s not the 2012′s


  39. Phil / re Larry Summers stimulus.  Phil, I don’t like the p/e on CAT heading into continued recession, and Sears/K-mart retail stinks and has pathetic mgt.  Stimulus is likely to be infrastructure this time, as they missed it last time.  eg electricity grid, bridge/highway, maybe nat gas conversion of trucks, anything else spring to mind?  Which medium size cos could be best beneficiaries of such a national works program.  I don’t like solar medium term as I expect $55 oil at some point late in the year during this next leg down in the global economy, and solar doesn’t work with oil at that level.


  40. JRW,
    What’s your feel for this market today?


  41.  heya Phil   CSCO looks nice down here. Would you go with a buy/write or a bull spread (or not at all…)?


  42. LOL. Huge Fat Finger trade on APC up to $100K has permanently every chart on this stock forever.


  43. I have a new position I am opening up in Family Dollar Stores (FDO) for an Overnight Trade into tomorrow. I picked up shares at 39.30, and I have an entry range set for 39.25 – 39.45. This is a great company that is consistently successful, and I think we can expect it to make a move throughout the rest of the day and slight one tomorrow.

    Check out my analysis, thoughts, entry, exit, and stop loss here.

    Good Investing,

    David Ristau


  44. 1020 all NE people
    In Wyoming I have to use heat again, July 6 still snow at 9,000 feet.


  45. JRW – did you exit @ 11:33 on 3 min?  Nice bounce off the 200…but didn’t hold…
    Phil - It amuses me watching CNBC attempt to explain wheat skyrocketing 10% in short order…one word, SPECULATORS!  In 2008 at harvest, there was a $1.50 disconnect between what the speculators "said" wheat was worth, and what the mills were willing to pay the grain elevators…and thus what the elevators actually paid the farmers for REAL grain.  The markets live in an imaginary world…and there are real world consequences that are difficult to measure, but hold long term implications…


  46. Phil, What do you think of FTR at these levels – dividend safe? Thanks


  47. Phil, would you give me recommendation as to how I shouuld roll :
    Sold TBT Sept $45 puts @1.60
    Bought TBT Sept $44 calls @5.4
    Bought TBT Sept $43 calls @5.25
    thanks


  48.  took some Nov HD calls and Aug FDO. 
     
    GO GOOGLE! (and TBT damn it!)


  49. goldman
    You bet speculators, run the price up now, run it down for harvest, good for seed and fertelizer stocks, suck in the farmers, 1930s land grab revisited. My land barley for beer sell it to the farmers this winter round 3 of the land grab.


  50.  New 3X treasury pair LBND / SBND (assume that SBND is similar to TBT)? These are ETN’s, not ETF’s and have some additional differences.


  51. Phil – HD is getting pretty low, @ $27.60 with the Jan $27 puts and calls for 5.60 or so. Are there any caveats you can think of or do you have a better way to play?


  52. Carlsbad/1020 – I’d have to get up at 2am to get done with my preparations for the markets so no to the West Coast thanks…

    Longs/Gmarts – As long as you know what needs to be done, then no big deal but don’t over-compesate for losses you already took.  Better to just lock profits with momentum plays like the DIA puts above and then you can get back out with 10% here and there on pullbacks – you’ll be surprised how fast that adds up.   On TZA, that was 2012, not Jan, if you can roll your Jan $3s back a year for less than .40 then you should do that.  Flaw number one in your plan was paying premium for the calls – never, ever a good idea on protection plays. 

    Infrastructure/Tusca – CAT is infrastructure.  Very hard to say you won’t play CAT but you think we’re going to build things.  Maybe the rails (Buffett has Obama’s ear) and CSCO if they start building up capacity for the web but I sure wouldn’t be going around buying building materials companies off the backs of those housing numbers.  When things are this beaten down, you can afford to wait until AFTER an announcement to place your bet, rather than diffusing your capital on randowm speculation.

    CSCO/Oakd – I do like them at $21.40 and you can sell the Jan $20 puts and calls for $4.50 to drop them to $16.90/18.45, which is a good entry for 6 months out. 

    Can you believe the negativity on Fast Money at lunch?  You would think this was a continuation of the downtrend if you weren’t watching the chart.  They have a person to negate every single positive, including the move up!  Now some jerk is saying that EU banks may not fail the stress tests but that’s a negative for EU banks….  Amazing! 


  53.  PCLN – Phil you have any good ideas for a low maintenance short on PCLN?


  54. Don’t let $1.02 (20%) get away on the DIA $106 puts.


  55. goldman,
    No, I exited at 10.23 from TNA; got TZA at 10:55


  56. Speculators/Goldman – It’s only speculating when they are betting against you, otherwise they are called "smart money." 8-)

    DIA puts now $1.07 (25%) so .05 trailing stop is good.  Can move up to .10 trail at $1.20 but that’s all for a day trade cover, which means you could take 1/2 off at $1.30 and stop the rest at $1.15 (if we get there) to lock in 25% and have a more relaxing upside.  

    Watch the Nas at 2,100, that’s about a 1/3 pullback off the run from the lows of the futures.  If they can’t hold that, we may end up going negative for the day, which would suck.

    FTR/Jomp – No idea what they are going to be doing now, I wouldn’t count on them keeping dividend there.  


  57. PHil
    What do you make of the divergence between RUT and SPY -
    seems like we should expect selling into any rally until proven otherwise -
    980 anyone?


  58. Hi Phil,
    Just to participate in the discussion.  I look at STD (Banco Santander) which is the (I think) largest bank in Europe and of course based in Spain.  The price movement is a good tell for the health in Europe.  Presently it’s up a little over 5% !


  59. exec,
    I’m not impressed, my bias was up but now I’m in TZA and it looks like we may go through IWM 59.72 and that should take us to 58.68.


  60. Phil okad
    As I see CSCO their new machine that THEY bragged up is only incrimentally faster. My oppion was and still is replaceing all those slower machines is not worth the cost. I think the stock is solid but they will not speed up the net now. More fiber optics will do much to huge parts of the country but who do you play?


  61. JRW - was asking if you were out of TZA at 11:33 on 3 minute…12:00 was a bigger exit signal…turned down again at 12:09 quickly…very tricky…


  62.  Looking a lot like a bull trap.


  63. goldman
    No, I thought about it at 12:03 but stuck that out; still in TZA


  64. Phil/2am  I thought that WAS your usual wake-up time…… ;)


  65. TBT/Jossie – Way too later to really adjust now with 90% losses.  I’d certainly roll the $44 and $43 calls down to the $37 calls for $1 – you can sell the $39s to pay for the roll if you don’t want to do it out of pocket and at least then they are not hopelessly out of the money.  The Sept $45 puts are now $9.50 so down $7.90 on those and you can roll the loss to 2x the Jan $36 puts and they can roll to the 2012 $30 puts and hopefully, one day, TBT comes back.  

    HD/RJ – I like them with hurricane season and also possibly benefit from stimulus.  That’s a good play selling Jan puts and calls in the buy/write for $5.60, netting $22/223.50 – just the kind of defensive entry you want to make in a bad market!

    PCLN/Bgb – That’s like playing with a rattlesnake!  I wouldn’t play them at all but you can buy the 2012 $110 puts for $15.75 and work on collecting $1.50 a month to pay for them so selling 1/2 Aug $150 puts to start for $4.25 as that knocks you down to net $13.65ish and you have a better downside delta (.15 to 1/2 of .17) so if they have a nice, long-term downtrend, you can do very well.  As I said though, too crazy for me to play.  

    Oil totally trashed, below $72 now so big drag from thqat sector. 

    Divergence/Samz – The RUT has been very strange since they lost their leadership.  Pretty much can never get it going.  They had a huge 4% move off the futures bottom (588 to 612) but now gave up 3/4s of it while the other indexes have only dropped back about 1/3.  This can only happen with massive machine tradening because 2,000 stocks just don’t move like that in a day naturally.

    STD/Dezev – I have enough trouble figuring out if C has money or not, I sure don’t want to start investigating STD’s assets.  Any European bank will be driven up and down by rumors for the rest of the year.  Maybe not bad if you are willing to make a very serious long-term commitment (for better or worse)  but no way would I want to guess what they’ll do for a month or a quarter or a year.

    Oh great, now CNBC is rolling Roubini clips – RELENTLESS!  Notice Whitney doesn’t think we’re going lower so she is no longer a guest on their channel.  That, by the way, is a powerful tool CNBC has – if you can’t come up with a viewpoint they want to hear, then you cease to exist to their viewers.  That can be very damaging to a lot of fund managers…

    CSCO/Shadow – It’s not about how good their new boxes are, just as long as they are better than the competition’s.  No way would I play the fiber game other than maybe OC if they get down to the low $20s again. 

    SQQQ is a fun short play (ultra short Nasdaq) if you can get the $64 calls for $1, hard to buy but maybe on the dip and then it’s just an act of faith to hold them a few days.  I’m thinking like $200 for 2, 3 more at .70 and 5 more at .50 is $670 and then a move back to $1 would be very nice

    2am/1020 – I like to sleep late some days! 


  66. JRW,
    You called it.


  67. Phil, 
    Yes I sold the 15 TBT puts (10 @ 39 5 @ 38). So i guess I will hold for a recovery in the next 10 days, although it looks pretty dim at this point..
    Pardon the beginners question but I am not sure I follow the rolling down strategy; do you actually close the older positions and sell new ones at lower strikes? Wouldn’t selling further in-the-money puts be better if there is a recovery in TBT as the delta is 1 or close to it, versus the lower strikes which wouldn’t be?
    Thanks


  68. Got my TZA Jan ’11 calls (30 at 4.10 entry) covered with Jan ’11 6.00 calls @ 3.70 to create a 3.00 spread for for a net ..40 cents which is 2.70 in the money now. 650% gain if TZA above 6.00 in jan.  Even at TZA 3.60 and 11K$ back in my pocket. Locked in gains.
     
    Thanks for the advice PHIL, now I need to lay on some better covers. What would be a good Tza  spread at these levels? I need additional cover.
     
    Thanks,
    Gordo


  69.  Phil,
    Writing a Call spread like FAZ $13 Oct – $18 Oct and partially financing it by writing the $11 Jan Puts looks like an attractive proposition but I’m wondering about the real cost of the Puts being longer dated than the Calls.  Are we not just kidding ourselves about the real cost since when the Calls expire we will have to spend an unknown amount of money to close the Put position or in the alternative sit naked with the Puts for another 3 months and tie up a lot of margin which would then not be available for a follow-on hedge?


  70. Yes, low volume machine trading …. yawn …


  71. could be wrong; but I think we bottom here today …


  72. SQQQ/Phil – did you mean the 64 puts? Don’t see the calls going for a dollar.


  73. Oh, and WHEEEEEEEEEEEEEEEEEEEE !!!!!!!!!!!!!


  74.  SQQQ/Phil: Calls or Puts?


  75. Phil and all
    Thanks I agree if CSCO have the best mouse trap that is the one to buy but no reason to replace their old traps. I am not interested in fiber because the big money is instilation whhich I found to be done by local independent excavation cos. and they are almost out of work. The other thing I found out is the government is giving money out under the Broadband Technology Opportunities Program but like the simulus in general lots of red tape and slow to no go.


  76. or not ….


  77. Phil,  I want to do a CHK October hurricane spread.  Suggestions?


  78. Phil
    looking at part of my AAPL lays Bought Jan11 180 c for 38.78 now up to 76.37 and sold the jan 11 200 call for 27.48
    if I close this play now I cash in 15.70 Does it make any sence to hold this position until experation Jan11 thks


  79. JRW,
    What’s your next S level?


  80. Phil Jan 11 200 c now trading at 60.95 sorry


  81. JRW III
    July 6th, 2010 at 1:02 pm | Permalink  
    exec,
    I’m not impressed, my bias was up but now I’m in TZA and it looks like we may go through IWM 59.72 and that should take us to 58.68.


  82.  JRW & Co – Had a busy morning so I wasn’t able to take advantage of some of the nice entries/exits on IWM. Finally got in around 1pm with a sale of 2 TFU10 contracts at 595.50. Trying to keep my stop just north of the 8EMA. So far so good with the breakdown at 59.72. 


  83. Official S1 is IWM 59.20


  84. 1/2 oot of TZA at $8.89 for 81 cents


  85. JRW, did you get my email on Friday?  Can never trust a msft product…


  86. Phil-  Do you have a handy dandy Excel spread sheet or equivelent  that you use to manage your trades.  If so could you share the format with me? If not ,how do you track the complex option trades to the end and tie them to the equity positions?  Knowing that would be so much help to my getting started with options.  Thank you kindly!


  87. SQQQ – Sorry that was the $64 puts, now .90! 

    Oh, now CNBC says we are in the Dow pattern of the Great Depression and, of course, the Roubini quotes at the top of the hour.  It’s hopeless…

    TZA/Gmarts – I love selling the 2012 $5 puts for $1.65, that’s just good, free money.  We can sell 20 of those for $3,300 credit and use just $900 for the 30 Aug $9/10 spreads at .30 and that pays $3,000 if TZA goes up about 10% (3.3% drop in the RUT) and, if they don’t, then we roll a 50% loss to more Oct spreads as we still have $2,400 credit from the put sale and worst case is we own 2,000 TZA at $5 ($10K)

    Writing puts/CS – You don’t have to do the short put leg.  It’s really for people who have a longer-range view of things.  If I sell FAZ Jan $11 puts for $1.45 it’s because I don’t mind owning FAZ at net $8.55 and that’s because I know that as FAZ drops 50% to make that a possibility, I’ll be going long on financials to the point where my purchase of FAZ makes a nice hedge.  I also know that I can roll those Jan $11 puts even to the 2012 $7 puts or to 2x the 2012 $5 puts so my real commitment is to buy 2x FAZ for $5 but even those can probably be rolled to 2013 $4 puts and 2013 $3 puts and 2014 $2 puts and if the financials go up and up and up forever then I’m pretty sure my long financials will do quite well.  If, on the other hand, you feel that every leg of every trade must make money for you under all circumstances – this is not going to be a trade you enjoy. 

    BTOP/Shadow – Yes but there is a program and CSCO does benefit, especially over the summer as schools begin doing the work.

    CHK/Hia – Nat gas COULD collapse so no need to won the stock as a Jan $13/24 bull call spread is $3.50 and already $5 in the money and 2012 $8 puts can be sold for $2 so worst case is you own 1x at net $10.50 (40% off) and otherwise you are in a $11 spread for $1.50.

    AAPL/Yodi – The question is what’s the chance of AAPL blowing $200 and wrecking your $15.70 vs can you use $15.70 to make $4.30 in something safer for the next 6 months.  Looking at the CHK play above, I’d rather commit $1.50 of your AAPL proifts to that with a $8.50 upside as it only needs to do 1/2 (hold $18 and you make as much as AAPL with far less risk). 

    Wow, I am blown away by how far they knocked this market back down.  The RUT is just 1 point over the pre-market lows now but the Dow is still 120 points higher so the DIA $93 puts at .59 still make sense as a cover for RUT failing 590 and Dow failing 9,680.


  88. lapper,
    Yes, I’m looking into it, thanks.


  89. I figured you meant that puts.  Thanks for that!  I went QID anticipating AAPL to move lower as the market is being taken to the woodshed


  90. What an ugly market hopefully the Holland soccer game is better today


  91. JRW,
    Do you have the stones to go long TNA here?


  92. Other 1/2 gone at $8.88


  93. Oh Great and Merciful Lloyd….Grant us thy stick.


  94.                                         PHIL……opinion on puts or buy/write on      HOG……GABBY


  95. Phil,
    Thanks for the advice of AAPL
    in respect of the CHK  I can not find any Jan 12 13/24 bull only 12.5/22.5  for 5.60 pls explain
    CHK/Hia – Nat gas COULD collapse so no need to won the stock as a Jan $13/24 bull call spread is $3.50 and already $5 in the money and 2012 $8 puts can be sold for $2 so worst case is you own 1x at net $10.50 (40% off) and otherwise you are in a $11 spread for $1.50.


  96.  Stopped out just over the 8EMA at 590.10. Very cool. 


  97. exec,
    If they can break through, I think the target would be 60.10 or better
     
    I’m set up for TNA


  98. what ever happened at 2:11 messed up my IWM charts. All my lines are squished against the ceiling.  Anyone else having thaat problem?


  99.  TESLA MOTORS – TSLA
     
     How low will this stock fall?  I looking to buy at $16… 
     
     Anyone else have thoughts on this one?


  100. JRW,
    I hear ya.  Need to be cautious with the downward Mo and all the talking heads driving the fear.


  101. Phil, could we hear about the pair trade, FAZ and FAS?  Or any thoughts about when leveraged ETF’s are at parity, if it’s worthwhile to buy the ETF and its inverse?  There was a reader who asked about that on Fri…or did I miss the answer?


  102. Phil, with the latest news regarding YRCW and the bondholders.  Do you see a change in your original outlook?


  103. Phil/Yodi – CHK no strikes like that and call spreads are much larger and put price much smaller.


  104. hia_5
    I think Phil has a better bookie than we have possible insider info ha ha


  105. Hi, ashmoret,
    What’s the story on YRCW?  I’m not seeing new news on finance.google.com.  Thanks.


  106. HI cwan120,
    Here’s what I found on yahoo finance.
    http://www.reuters.com/article/idCNN0610864120100706?rpc=44


  107. At the market high today, I closed out 100% of my positions in TOS and Schwab, and closed out everything in Fidelity coounts with the exception of Gold positions and a few shorts. Almost everything is in cash, as I see nothing that is positive, and more importantly I have no hope for a turnaround until we can get a new administration in our government. If we continue down the road with the same mind-set in DC with additional monitary easing, and debt expansion ( Summers is proposing this), as well as a follow-through of the plans to raise taxes in January, then we will fall further in the markets than what was experienced in March 2009. I will start looking to go long at that time, but not until. In the interim, I will be trading short positions and currencies ( the best opportunity I have seen in some time)  Political discussion – nope that is as hopeless as the market is looking forward.


  108.  Agree with GEL1
     
    Aside from a gamble with TSLA @$16 


  109. Gel/discussion  Our system is hopeless, not the discussion…….


  110. Hey Lloyd!  gel1 just tossed the towel in, time to rally!


  111. stick or anti-stick, that is the question…. Phil? JRW? Also learned a valuable lesson about buying oil futures and not putting a trailing stop on them today :( .


  112. Gel – discussion – Amen !


  113. Stick or stick, that is the question.  Or, rather, the question is whether the bulls use it to save the day or whether the bears use it to beat the bulls into submission.


  114. Sure looks like (on the daily charts) we have trotted to the edge of a cliff for a look down.  If we slip past last week’s low today or tomorrow, then I think we are in for a big fall…  It does not look good.  Phil, I hope you see things turning (up) here.


  115. Spreadsheet/RV – No spreadsheet.  I used to use http://www.poweropt.com but the time it takes to enter and update the data was too annoying.

    HOG/Gabby – They look interesting down here but this market is getting downright scary, I wouldn’t buy them as they are too speculative at $21.  At $15 yes but not $21.

    CHK/Yodi – LOL, I must have had the totally wrong symbol.  CHK isn’t even at $18.  I wonder what that was?  Well with CHK, then, It would be the Jan $17.50/24 spread for $3.20, selling the 2012 $15 puts for $2.20 for net $1 on the $6.50 spread that’s $3 in the money already.  Still pretty good but I’ld love to know what the heck I was looking at before.

    TSLA/ITrade – What car company has been a good investment this decade?  Why should the next one be different?  Sure it’s cool and all but they may be years away from turning a profit and that means a dillutive round down the road and, if oil falls back to the $60s, then anything with alt energy is suspect. 

    FAZ and FAS/Jerconn – Well we can expect both ETFs to decay over time so the logical move is to short them both but we got burned for a while shorting them both at $45.  Now they are both $18 so not as interesting but we could look for pairs that are at higher starting prices so they both have more room to fall.


  116. Man this is one achy-fakey tape intraday. Bots are making money


  117. This is one bonkers market. US real underperformer the last few days.


  118. What is the record for consecutive negative days for the DOW and/or the S&P?


  119. Capt.
    Stick!!!!!!!!!!!!!!!
     
    IWM 59.19, 59.51, 59.72, 59.88, 60.10 and 60.76 are resistance points


  120. Hi, gel1,
    I have a stupid question (stupid to me, not you): I guess you must have a lot of long-held positions that were ITM?  By cashing out all at once, won’t you get hit by a big tax bite on April 15 next year?
    I have a few positions that I’ve had long before I joined PSW.  If I cash them all out, it’s going to be a lot of taxes.


  121. Good luck to you all…. from time to time I might stick my head in to post a short I like, or a currency plays that really looks terrific, otherwise it is the sidelines for me.


  122. Sell-off into each mini-rally today…and now a sell-off into the "mini-stick"….WoW…this is hard to watch as the game has definately changed…


  123. hahaha thanks JRW… I actually bought in when exec asked if you had stones..lol down a bit on the RUT contract I bought bought hoping for a good close.


  124. cwan…. I thought of the tax ramifications, but I feel the long positions will deteriorate over the coming months should my expectations materialize. so I am better to avoid this and suck up the tax penalty. Furthermore the tax will be far more after January of 2011. …. Lesser of two eviils, the way I see it.


  125. Phil, Did the DXD, the FAZ and th TBT spreads and puts this morning based on your weekend recommendation.  Sure eats up buying power in IRA’s.


  126.  BURN IT ALL DOWN !!!!


  127. Too late for another play today; 2% on TNA 10% on TZA ( I can hardly wait until I don’t have to use 6 orders to play TZA),12% on the day, and life is good !!


  128. "
    Full of sound and fury, and signifying of nothing"


  129. Gel1,
    Thanks!
    Please do stick around and give us updates on your views on currencies.  I did a couple of your currency plays.  I’d appreciate it if you continue to recommend your plays.  You might get a color box for that!


  130. Capt.,
    Sorry, I just didn’t feel the conviction in either direction after I dumped my TZA; I’ll try to get you something tomorrow !!


  131. JRW- any chance you could post your entry/exits on Tuesday so us in the RUT pack can get some further confirmation on our own TNA/TZA purchases?  I personally don’t need to know "when" to enter time wise, it is just nice to have some "JRW confidence" backing my own moves.


  132. Gel1, I agree with cwan, one of my best plays for the year was your AUD recommendation so if you can, please continue to edify us with your currency plays, especially simple ones that can be played with ETFs in IRAs.


  133. Phil,
    I don’t understand about FAZ and FAS decaying over time.  Can you help me understand!!!
    Is this true of all leveraged ETF’s???


  134. gel / taxes
     
    Well, a tax liability is simply a good indication that you are making money, congrats. (It’s better than the alternative) !!
    At this rate, next April I’ll be providing Uncle with a new aircraft carrier…………….well, at least a helicopter !!



  135. -(2011 – Goldman @ PSW)
    "Wall Street is the great fiction in which a few endeaver to live at the expense of everyone else."
    -(1801 – Economist)
    "Government is the great fiction in which everyone endeavers to live at the expense of everyone else."



  136. "Wall Street is the great fiction in which a few endeaver to live at the expense of everyone else."

    -(2011 – Goldman @ PSW)



  137. "Government is the great fiction in which everyone endeavers to live at the expense of everyone else."

    -(1801 – Economist)


  138.  JRW & Co – 0.6% gain on about a half day trading TFU10 based on IWM S/R. Prior to all that nonsense at the end of the day (when JRW stopped trading) I was up 2.7%. I can eliminate some of these losses in the future by sticking to the strategy more closely and setting a looser stop loss. Today my initial stop was always $1, and then my trailing was set about $0.50 over the 8EMA, with frequent adjustments. I’m pretty happy with the results given my sub-optimal ability to monitor and participate in the market today. This was definitely easier than playing around with options, and probably easier than moving around 150k shares of TZA!


  139. No worries JRW, I was able to sell for a small profit right after the market closed &I know with all the orders you make it’s tough to always post stuff on here. I will be following tomorrow for sure! Is there a book you would recommend? I always look at your lines but I’m not always sure which way to go buy/sell short the RUT……


  140. JRW and the rest…  I had to go to the doctor for my leg, only got the opening TNA ride 36.30 to 37.09….
    Tomorrow we go up.  This was a washout day.  ‘They’ wanted to give it another day for people to get short before they rally this thing up to 10,200…IMHO


  141. goldman / entry-exit
    OK, but remember, I’m trying to TEACH YOU TO FISH (actually HUNT), not serve you fish !!
     
    Today for example, I posted 60.82 as my lowest level and we opened there, so you know I’m going long. Then as the pump failed I bailed per the system. The 3 min chart should have given you the rest of the day. You’re good enough at this to have confidence in your self, but you can always ask me a question !! Good hunting !!


  142. hi phil i was away most of the day today could you give a head up on market recap today-- should we hedge more or you think market is bottom out and possible forming a base or investors just sell into strenght to get back $$$…. and stay more in cash — thx


  143. Phil: Turnaround Tuesday ???
    What is your explanation of market going up and then dropping on what bad news ?
    Wisk I had stayed covered on AAPL calls and TNA.


  144. JRW - I bailed @ 11:33 on TZA…big mistake. I think you are so much of a natural, that you don’t realize how difficult, if not impossible, your method is for 99% of the population.  It is so much more than knowing "when"…being decisive, calm, patient…the human factor is the real problem for most, even if they can’t admit it.  
     
    Concerning thoses taxes…make your trader cash now as the "Trader Tax" cometh…along with the "Vat" in 2012 (10-15%)…so buy everything you want before then!  The VAT is a given…easy to hide, easy to hike, can leave the "visible" income taxes untouched for 80% of the country, and they don’t even understand their tax rate increases as the corporations pass through the VAT to the consumer…. 


  145. drcraig,
    You’re learning, and developing a system that works for you is the important thing. Congrats !!


  146. Gel- if so inclined, contact me via email:
    philstas1011@gmail.com
    Thanks,


  147. TFU10/Drcraig – what is this TFU10 of which you speak? And it has something to do with IWM?


  148. TFU10/Drcraig – what is this TFU10 of which you speak? And it has something to do with IWM?


  149. Snow – TF is the RUT future symbol….


  150. YRCW/Ashmoret – They have to pay $21.6M to bondholders, which is 20% of their market cap and 1/4 of their cash but survivable. 

    Noat a bad stick at the end for a change but a rescue back to less than 1/2 the day’s open move still sucks.

    Oil/Jrom – Ouch!

    Turn up/Grant – I’m very disenchanted by today’s action but not ready to capitulate just yet.  On the brite side, good entries on disaster hedges and our nice gain on the DIA puts.  On the dark side – everything else….

    That is one blow-out discrepancy today.  Dow up 0.59, S&P up  0.54, Nas up 0.1%, NYSE up 0.8% and RUT down 1.5% – haven’t seen anything like that in ages.

    IRA’s/Hia – Well you are supposed to pick ONE that works best for you with TZA the least margin-intensive protection. 

    Decay/Dez – Yes.  It’s true of any index fund, just maginifed with ultras becasue, very simply, if the market moves up 5% and your 3x ETF moves up 15% from 100 it’s at $115 but then if it moved down 15% it’s at $97.75 so the straight Dow, let’s say, goes from 10,000 to 10,500 and then back to 9,975 and is down just 25 our of 10,000 (0.25%) but your ETF has lost 2.25%, 10x worse than the index it’s tracking in a flat market.  Choppy markets chew up all ETFs, more so the ultras. 

    Recap/Gucci – See above but yes, we sadly do need to hedge as this is one pathetic looking market.   How we blew that open I do not know, there was no news at all, just relentless selling all day spurred on by doom and gloom.  They still haven’t proved this isn’t a bottom but I think all hope of a strong comeback are out the window unless Asia and Europe ignore us tomorrow and keep moving higher, then we may still snap up. 

    AAPL/RMM – You have to take things off when you are that exposed.  Roll out to a 1/2 Aug cover if you are worried but NOBODY should be in open July positions that they have premium in (sold premium OK) after tomorrow.


  151. goldman / 11:33
    No conformation, maybe 12:03 or :06 and then you should have been back in TZA at 12:15 on the 3 min chart. Keep at it, you’re always getting better !!


  152. What will they say if LeBron James leaves Cleveland ?
     
    http://www.zerohedge.com/article/cleveland-fed-gdp-dreary-outlook


  153. JRW - Think I’ll run SSPro Tuesday…ETPro doesn’t have an 8ema setting, I tried to create one by adjusting the smoothing ratio to 0.266.  Looking at the SSPro chart for today, they are not the same…think I’ve been looking at an inaccurate conformation chart…youch…


  154. I recall someone mentioned "Schwab Platinum" a few days ago.  I have an account at Schwab, and I got "Schwab One".  I can’t find anything about "Schwab Platinum" at their web site.  Does it provide more services, or deeper discounts?  Can someone help?
    Thanks!


  155. exec JRW
    exec this administration is the scapegoat left with a mess and personally they have done nothing to correct it. I will vote against them or not vote. Sorry your bailing but both You JRW, my father, and I agree on gladly pay taxes on a profit and as Phil says take the profit and run! BUY AND HOLD IS DEAD!


  156. cwan120 - I mentioned the "platinum" schwab account.  That is what they mentioned when I called them last week, three levels…platinum, gold, regular.  I’m not sure if the rep made it up or not as I noticed it is not listed on their website.  I was attempting to compare Platinum ET Pro to their best package, and they did say their discounts and account levels depended on account cash size and/or number of trades…just like most other brokerages.  Sorry for the confusion…


  157.  brutal relentless selling. Chris almighty. GOOG – 12 straight red bars.
     
    frack


  158. Phil: my AAPL calls were and are AUG270,


  159. JRW / Taxes / Helicopter:  lol!  That’s great because Ben is gonna wear his out next year!  Remember, he’s still got his job regardless of who wins in November.


  160.  Goldman, 
    I am a few steps behind you, trying to replicate the system.
     
    Would you mind running the exact scenario to setup the signals to enter and exit? I’ve gotten so far, setting the IWM chart at 3 mins, fast stochastic, RSI and another indicator I am missing… when they all converge (as well as having bounced a support level--not sure also what constitutes a bounce-- 2 or 3 times  what exactly? ) then buy.  when a resistance is not broken (after 1st try?), sell. 
    Thank you for your help…


  161. amatta:
    let me know please when to enter a TNA trade, still mighty difficult and always behind and late.


  162.  RMM, I would no problem but I am having the same issues, not sure yet on the correct signals and how to properly setup the charts, etc


  163. amatta:
    3 min charts (I have no 3 min so I use 2 min, this is riskier), stochastics with RSI, Momentum,
    put in the lines which JRW publishes,


  164. Phil:  I apologize if you have read this before, but hadn’t seen any comment, so wondered if you had really even saw it from the other day.  Please ignore if you don’t have a mind to comment, but  I have come across a small booklet that claims to be translated from Russian text of a meeting that took place around 1905. I wanted to share some of the quotes and would really appreciate your thoughts--so many of the things you come up with are things we have thought as well and are so grateful that someone else is "thinking" out there!!:
     p. 22—“…hatred will be still further magnified by the effects of an economic crisis, which will stop dealing on the exchanges and bring industry to a standstill. We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, a universal economic crisis whereby we shall throw upon the streets whole mobs of workers simultaneously in all the countries of Europe. These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot.”
    p. 30…“ To complete the ruin of the industry of the [people] we shall bring to the assistance of speculation the luxury which we have developed among the [people], that greedy demand for luxury which is swallowing up everything. We shall raise the rate of wages which, however, will not bring any advantage to the workers, for, at the same time, we shall produce a rise in prices of the first necessaries of life, alleging that is arises from the decline of agriculture and cattle-breeding: we shall further undermine artfully and deeply sources of production by accustoming the workers to anarchy and to drunkenness and side by side therewith taking all measure to extirpate from the face of the earth all the educated forces of the [people].”
    (many other things are in there also) And further in reference to some of the things we have talked about--
    They also claim to name the presidents, and have control of the press, our education system--they provide the scheme on how this is being accomplished—they say this is all being orchestrated so as to establish a super-government ran by a despot.  One of the many very disturbing quotes, is that people will serve them just for the right to exist. 
    The name is the Protocols, and there are 24 of them outlined that talk about their goals they have worked on for centuries.  They talk about how we are just cattle to be herded by them.
    Thanks. 


  165.  Phony Protocols/Fizz  -  You have stumbled onto the Protocols of Zion, a forgery from 1906, which were used to stir up hatred of Jews and fear of Communists taking over the world.  The New York Times exposed these as forgeries in 1921.  You can look it up on Wikipedia.  Lots of US hate groups still pass them around.  


  166.  Well I feel like the WORLD’S BIGGEST MORON giving back $17k (from a high of $105k) and depressing my dreams and aspirations of trading my way into a comfy early retirement.  Not much to say but too big bets in on GOOG and TBT and the whoel world absolutely hates these two stocks right now and I think investors are stupid f*cking morons for piling into bonds that pay 0.1% a month, but who am I to say and the market is a cruel CRUEL master. 
     
    At this stage I would characterize myself as being in the Valley of Death on the sinewave looking graphic Phil posts now and again —  that is, where the caption reads "I’ve missed it completely, I’m a moron, I gotta sell or else I’ll lose everything" a.k.a. where the mass market mentality was back at DOW = 6,600.  
     
    Trying to look at it this way, GOOG has had some good runs:
    3/10 to 5/12/2008 = 433 to 600, +39% (63 days)
    11/17 to 2/2/2009 = 262 to 371, + 42% (77 days)
    3/9 to 12/28/2009 = 324 to 620, +91% (296 days)
     
    Trying to fight the pessimism and keep emotion out of what could be a very good investment decision despite the losses. I want to capture the next GOOG move. Sept-540 calls at 1.80 or 550′s at 1.35 would capture a similar move to the first two listed above with 3,500% potential.


  167. AAPL/RMM – You have to take things off when you are that exposed.  Roll out to a 1/2 Aug cover if you are worried but NOBODY should be in open July positions that they have premium in (sold premium OK) after tomorrow.
    Phil – does this mean that a sold put that will need to be rolled or bought back at a loss? No more waiting for things to turn around?


  168. Hi Goldman
    Can I find anything like the setting you mentioned on TOS charts? 8ema thanks
    goldman
    July 6th, 2010 at 4:45 pm | Permalink  
    JRW - Think I’ll run SSPro Tuesday…ETPro doesn’t have an 8ema setting, I tried to create one by adjusting the smoothing ratio to 0.266.  Looking at the SSPro chart for today, they are not the same…think I’ve been looking at an inaccurate conformation chart…youch…


  169. BioD – i bet a few of us could line up to compare the size or our moronicness. But you are right, that’s not what matters. We have to get through with enough marbles to play again.
    Just wish i had taken seriously Phil’s call to cash. I didn’t cause i dint want to have a loss. HAHAHAHA. Laughs on me now.


  170.  Snow – As jromeha mentioned above TF is the RUT futures symbol. The "U10" indicates September 2010 expiration. Since I’m impatient and wish to achieve fortune sooner than I deserve, I’m looking for ways to trade JRW’s system with leverage. I tried with IWM options for a day, and did pretty well, but options are kind of annoying for day trading with all the variables that affect price. I figured my next move would be to try futures, and that worked out pretty well too. The RUT e-mini futures contract is worth $100/point per contract, and moves in $0.10 ticks. Since I’m just starting out with this, I only trade 2 contracts at a time. That requires about $10K in margin. 
     
    I still don’t have a good sig rune on my stoch RSI. Can anyone with Shwab’s system post a screen shot? I may just sign up for an account to get this one critical indicator. All I ever see is an oblique straight line (and there are LOTS of oblique lines to confuse ‘the one’). 


  171. Stoch/Drcraig: You can get the same effect on TOS by putting in the StochRSI study and setting the %k, RSI, Slowing settings to 14,14,1 on the 3 min and 14,3,3 on the 1 min chart.   The come out looking the approx. the same as the sspro stochs.


  172. add to RMM comment Phil-- I have july 250 short put 20 position, suggest to august roll to lower strike and add 1/2 cover with short call ( like 280 short call), I also have august 260/280 bull spread, 250call bot at 16.28 and call sold at 6.53, how should I adjust this or should I buy back aug 260 call and leave the short side decay till august that would even money, loss 6 on august 250call and hope fully even decay with august 280 short call — is this the right way to think of readjust the position….need your help. thx


  173. Hi, goldman, re Schwab,
    What kind of commissions do they offer for "Platinum"? TIA.


  174. revtodd--Thanks for your info.


  175. Fizz/RevTodd
    They may be forgeries but truth is stranger than fiction…..


  176.  yipcarl – Yes truth is stranger than fiction, just not this particular one. Like you, I often wonder if world chaos is part of some diabolical plan.  I confess to a love of spy thrillers and James Bond movies.  But often I think that when we uncover the truth, it is more likely to be that greedy and power-hungry people made the diabolical look normal and acceptable to the rest of us.  I think Phil is pointing out that we don’t need to make up villains because they are hiding in plain site.  I’m for reigning in the robber barons before some demagogue uses a forgery to convince that our problems will be solved if we exterminate another 6 million people.  


  177. Lindsay Lohen to the big house for 90 days.  Her first wakeup call.  Her rock bottom? …or tender bottom?


  178. Wonder if anyone has tracked the number of comments to Phil as an indicator.  Not so many today.  There must be some correlation there somewhere relative to the markets but I’m new to the site so maybe someone else already has noted this and will divulge the secrets.


  179. matt, Lindsay….Washington then Hollywood..if you know what i mean…all the great actors are deceased..its now a cease pool of overpaid delinquents

    dezev, really not much to comment on. Phil’s usually a few weeks early ;-) He’s been pounding the table on the fundamentals but technically its a mess in the markets. All about the earnings and outlook this and next week. So far the data has sucked if you were too bullish but on the other hand nothing that screams dive dive dive…yet.


  180. Hi, dezev,
    You got a good observation!  I didn’t notice until you mentioned it.  Interesting…  Could be some sort of leading indicator 8)


  181. Oh, dezev,
    Welcome!


  182. Hi kustomz and cwan120,
    It’s nice to have a reply.  Having been on another site with a few observations and thought it was a Moseleum.  Perhaps and hopefully this is one where all can share ideas.  Regardless, ala Jim Morrison we might break on thru to the other side.  Bear or Bull market, we’re not getting out of this one alive so perhaps as Rodney King said "Can’t we all just get along!".
    Rock on!


  183. Phil: Re: You have to take things off when you are that exposed.  Roll out to a 1/2 Aug cover if you are worried but NOBODY should be in open July positions that they have premium in (sold premium OK) after tomorrow.
    Please help with the following:
    Buy (5)TNA JUL 2010 40 Call @ $2.70… now .325:           Sell (5)CAT JUL 2010 60 Put @ $2….now $2.09
    Sell (5) TBT JUL  2010 40 Put @ $2.29… now 4.75            Sell (5)BA JUL 2010 65 Put @$3.90…now 4.00
    If I read you correctly, the only one that needs attention is the TNA. …. Thank you for all your help.


  184. From the Dept. of FWIW,
    CNBC website seems to be getting more bullish.


  185. Phil> “That is one blow-out discrepancy today.  Dow up 0.59, S&P up  0.54, Nas up 0.1%, NYSE up 0.8% and RUT down 1.5% – haven’t seen anything like that in ages.”

    Maybe RUT is being discounted more by poor job numbers since smaller companies are supposed to be the engine of job growth. I’m hoping it rebounds with earnings prior to options expiration because I’m overexposed to a dumb spread I took on TNA.


  186. My specific indescretion was a TNA July 35/25 bull put spread at -$1.70. Seemed safe enough when TNA was in the 40s. It could still survive if RUT is above 600 next Friday.

    So Phil, I’ll be watching intently your RUT levels for the next week.


  187. Good morning!

    Futures down about 0.6% this morning.  CNBC went for variety today and has a guy from Global Economics (Roubini’s Group) as the morning’s featured guest at 5am (EU open).  Asia was down about 1% (on "bad" US ISM) but EU now diving 1.5%, giving up 1/2 of yesterday’s gains.  Listening to CNBC for an hour, I’m ready to liquidate too!  I have never seen anything like this – I wish I had time to do some sort of media studies project where we somehow chart the negativity. 

    So far no Pimpco boys so I’m not sure if they can keep the market down without the big guns.  Oops – right when I was typing this they announced El-Erian will be coming up later!  What a surprise…

    GOOG/BDC – They are completing a 20% pullback off the non-spike top at $560 so they are looking pretty normal actually but a 50% pullback of the bottom ($247) to top ($629) is also $438 so if they are going to show any strength at all, it should be around the $440 mark so maybe a nice upside play into earnings for a $24 bounce (20% re-retrace of the drop).  

    Protocols/Fizz – Well who knows what it really is?  Anything from Russia in 1905 could have been just anti-capitalist propoganda.  There are plenty of people who plot to rule the world all the time.  In our country they hold conventions and nominate candidates and then there’s Bilderberg and the Randians (Greenspan is one) and many others.  We used to hope they cancel each other out but, to me, it seems that the top 0.01% have taken control, both in the US and globally and, as I pointed out this weekend, it doesn’t have to be a conspriacty – just enough people who have a Billion dollars using their influence to get the rules changed to favor themselves.  Here a loophole, there a loophole, everywhere a loophole and, before you know it, Old MacDonald loses his farm as the rich get all the dough…  There doesn’t have to be a conspiracy when the game is designed to make you lose.

    Speaking of the way things work.  It turns out that one of the 10,000 – Liliane Bettencourt of L’Oreal has been handing out envelopes stuffed with cash to members of the French government.  Two of Sarkozy’s ministers have already resigned over gifts of private jet travel and Cuban cigars.  This is what happens when people who have $1Bn and make $50M a year ($4M a month, $1M a week, $143,000 a day) are allowed to have influence over people who make $100,000 a year.  What is it to her to shove $1,000 or $5,000 into an envelope in order to get a law passed.  What effort is it to her to call her pilot and tell him to give someone a ride or to stop by Cuba and pick up some cigars on his way back from Florida?

    These people do not live on the same planet as we do and what we consider huge bribes, they consider a tip.  You have to try really hard to spend $143,000 a day.  And, if she doesn’t spend $143,000 365 times this year, she’ll only end up with more next year as it compounds on her, so you can see the problem, right?  Also, notice it’s not a crime to give the money to politicians – it’s only a crime (wrist slap) if the politician gets caught but you’ll never see a wealthy donor hauled off to jail – who’s going to write that law? 

    Zion/Rev – Ah thanks – Good to have a scholar around!

    $17K/BDC – It’s never good to lose money but consider that losing $17K in a down market is not a terrible thing.  There are plenty of stocks that are down 17% or more so your total buying power relative to those stocks has not changed.  The thing that really kills people is capitulation, losing 20% in a portflio, going to cash and then missing a rally and then getting back in late and losing another 10% or so on the next pullback – that’s just hopeless.  As long as you are hedged against further downside and own actual stock (not options that expire worthless and leave you with nothing) then retirement can still be secured. 

    Some nice Dow retirement-type plays:

    KFT pays a 4.2% dividend and was up 1.55% yesterday, bouncing off the 200 dma.  Their p/e is at 10 and IT’S KRAFT, for goodness sakes – of course you will be eating Mac and Cheese 20 years from now.  $28.25 for the stock, selling 2012 $25 puts and calls for $7.30 is net $20.95/22.98.  These are the kind of defensive plays to switch to in an uncertain market.  You get your dividend (which is effectively close to 6% due to the discount purchase) and, if called away at $25, you make 20% in 18 months as well.  If put to you, it’s about 20% off too

    PFE has problems with their pipeline but they are being treated like they will go BK with a forward p/e of 6.32.  They pay a 5.1% dividend at $14.29 and you can sell the 2012 $12.50 puts and calls for $4.80 for a net $9.49/11 entry

    Let’s do the math on PFE:

    • You buy 500 shares of stock for $14.29.  This costs $7,145 in cash but only $3,572.50 in margin.

    • You sell 500 2012 $12.50 calls for $2.90.  You get $1,450 in cash and no margin (net $5,695 cash, $3,572 margin)

    • You sell 500 2012 $12.50 puts for $1.90.  You get $950 in cash and it’s $1,567.75 in margin (net $4,745 cash, $5,139 margin)

    Your portfolio buying power is decreased by $5,139 to own 500 shares of PFE, which is $10.28 per share and they pay a .72 dividend so about a 7% return from dividends.  Also, if you get called away at $1,250, you have a $3.01 per share profit so another 30% over 18 months so this is a nice, little 37% ROI if PFE falls less than 12.5% over the next 18 months. 

    You have to learn to be satisfied with these kinds of plays during a recession.  Staying even when everyone else is losing money gives you a significant advantage, making money, even a little, makes you a king but only if you have the patience to take long-term payoffs and quit messing around looking for big short-term winners.

    GE is a great way to bet on one of the evil bastards that control the world.  They have a 3% dividend and you can buy them for $13.97 and sell the 2012 $12.50 calls for $3.20 and the 2012 $10 puts for $1.27.  I like the lower puts because GE’s CRE exposure is a little worrying but happy to buy more for another 30% off.  Net on this trade is $9.50/9.75 and that drives the .40 dividend up to 4.2%

    CSCO also gets no respect at $21.34.  2012 $20 calls can be sold for $4.50 and you can stop right there and be in for net $16.84 with an 18.7% profit if called away at $20.  Also selling the 2012 $17.50 puts for $2, however, drops your net to $14.84/16.17 so your 2x buy-in (if put to you below $17.50) is LOWER than if you just buy the stock and try to protect it with a call - even a generous call like the 2012 $20s! 

    AA at $10.20, selling 2012 $10 puts and calls for $4.55 is net $5.65/7.83.  I’m sure I don’t have to explain why that’s good

    INTC at $19.48, selling 2012 $17.50 puts and calls for $7.10 is net $12.38/14.94.  That makes Intel’s little .63 dividend work out to 5% – very nice!

    T is the phone company.  I use a phone.  Do you use a phone?  Well 30% of all mobile phones are T and over 50% of residential phones are on T despite the break-up.  They pay a whopping 6.9% dividend to start ($1.68) and you can buy the stock for $24.40 and sell the 2012 $22.50 calls for $3.10 and the $20 puts for $2.20 for net $19.10/19.55, which runs that dividend up to 8.7% plus your 17.8% bonus if called away at $22.50.

    WMT is too safe-looking to leave out.  They even pay a 2.5% dividend of $1.21 so, at $48.57, we can sell the 2012 $47.50 calls for $5.60 and the 2012 $45 puts for $4.40 for net $38.57/41.79.

    XOM is a good inflation hedge and so beaten down (back to Sept 2008 spike lows, when oil was $40) that I have to include it.  They have a 3.1% dividend of $1.76 with the stock at $57.46 and we can sell the 2012 $55 calls for $9.20 and the 2012 $52.50 puts for $7.35 for a net $40.91/46.71.  That brings the dividend up to 4.3% and you make another 34% if called away at $55 with your worst case being owning 2x XOM at an 18.7% discount to today’s price


  188. Phil,
    I am no economist, but judging by the onslaught of negative sentiment form the bond guys, they must be worried about their own portfolios and they certainly have a lot to lose if the economy improves and money flees to equities and interest rates have tension to climb a bit. Usually he that clamours the loudest has the most to lose so my suspicion is that they are worried.
    We all just need to survive this with capital intact and minimize losses by use of wise hedging and small positions. I think we win in that case.


  189. Phil,
    I am no economist, but judging by the onslaught of negative sentiment form the bond guys, they must be worried about their own portfolios and they certainly have a lot to lose if the economy improves and money flees to equities and interest rates have tension to climb a bit. Usually he that clamours the loudest has the most to lose so my suspicion is that they are worried.
    We all just need to survive this with capital intact and minimize losses by use of wise hedging and small positions. I think we win in that case.


  190. Rolling/Morx – Not the positions you sold, the ones you own.  As a rule of thumb, any front month call or put you own (not sold) should be gone by the Wednesday of the week before expiraitons unless you are SPECIFICALLY playing for a move between now and expiration.  Your premium decays too fast and, if the stock moves against you, you don’t have time to recover, which is why we switch to a more day-trading mode in the last week of each period – just hit and run plays until the next cycle starts.

    AAPL/Gucci – They are still mainly premium.  Just make sure you know what your roll is going to be IF AAPL heads lower.  If you REALLY wanted to own AAPL for net $245, this would not even be a worry, would it?  Right now you have an even roll to the $220 puts so just make sure that doesn’t get away from you but, of course, it’s going to be risky into earnings although we’d all be shocked if AAPL dives 10% on earnings.  The bottom line is the $250 putter at $7.10 has $1 per day to give you between now and next Friday ($100 per contract per day), this is the time when you make your money as a put seller so unless you have really lost all faith in AAPL and don’t think they’ll hold $243, I’d give it some time.  On the Aug spread, you will either win or lose on earnings – no sense throwing more money at it unless you got much more bullish but then, why worry about the putter?

    Comments/Dez – Always less comments on Mondays and days after a holiday and less comments in bear markets than bulls (when everyone thinks they have the next hot stock they want to discuss vs. everyone just getting defensive).  

    Too early/Kustomz – Absoulutely still my biggest fault…

    Rock on Dez!

    Help/Jasau – There’s no help for a position that’s down 90%, we make our decisions at 20% (see Strategy Section).  Effectively you are making a decision to buy a new position, don’t fool yourself into thinking it’s a roll.  TNA is not very likely to get back to $40 in 7 trading days at this point and it will cost you another $2 to buy another month and roll to the Aug $40s.  You can, however, sell the $40s and buy the TNA $35/36 spread for .25 so 6 of those (about even swap) will give you back $600 of $1,350 if we head up and then you can worry about getting the rest back in Aug.  CAT I would keep as they are mainly premium and BA is the same unless you aren’t REALLY willing to own them, in which case you shouldn’t be selling naked puts in the first place.  TBT is so annoying but we’re just rolling those down and out and I’d spend $1 to push them down to the Sept $38 puts at $3.60 (offer $1 for the roll and see if you get a bite) because, if you can gain $2 in position every few months for $1, by the time you spend $4 you’ll be in TBT $32 puts. 

    CNBC/AC – Yesterday was clearly not the day they wanted a rally. 

    TNA/Jvest – You and me both!  Over 600 is doable I think.  We have some possibly good data this week and then earnings.

    Bonds/BPS – I agree with both of your comments on the subject! 


  191. Phil--thanks for taking the time to talk with me about this, you are very kind. (You and what you have said during the day are the topic of discussion between my husband and I many evenings!) You are soooo right about so many things.  I enjoy reading what you have to say.  Also, I wouldn’t want anyone to think of me that I would encourage or support the destruction of a race--so wrong.
    Also, I so admire you for your care for others--trying to teach us what you know.  Thank you.


  192.  Fizz,
    FYI, I certainly didn’t take your previous post on the "Protocols" as implying that you advocated any of the destructive ways that it was used later on.  I just wanted to point out where they came from so people would know.