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Monday Market Measurement – Just Right?

Welcome to dead center! 

We are finally back to the middle of our predicted trading range.  It's the range that our 5% rule predicted since October of 2008 so we're hardly going to be shocked to be here now.  Usually we are shocked when we're NOT in our range.  I detailed the movement this weekend in our 5% Rule Update, so I won't get into it all here but let's just focus on our short-term chart and embrace the uncertainty as we move back to the middle of our range at 1,100

I say it all the time and I'll say it again:  I'm not bullish or bearish – I'm rangeish.  That means I get more bullish at 5% under our line and I get more bearish at 5% over our line and I get extremely bullish or bearish as we get into that 10% zone because – if the market fundamentals don't change – then my midpoint doesn't change and the opportunity is to play us to return to "reality" at S&P 1,100 (Dow 10,200). 

Just look at those nifty little resistance points we have to watch now – the 200 dma is at 1113 and the 50 dma is at 1,084 and we just ran up from 1,030 (we ignore spikes) past the 5% rule at 1,081, which just so happens to be pretty much the 50 dma so that will be our key test for the week as our bottom to top run from 1,101 to 1,102 is close enough to 10% to merit a 2% (20% of the run) pullback back to, WHOOPS!, 1,080.  So 1,080, 1,080 and 1,080 is our line in the sand for the week.  If the rally is real, the number will hold and, if it doesn't hold (especially with all the earnings and economic data we have coming in) then we have to look at the drop from 1,220 to 1,020 (200 points) and consider the move back to 1,120 nothing more than a strong, 50% bounce back to our mid-range. 

We are past the EU Stress tests but JPM says 54 banks should have failed for the following reasons:

  • Lack of rigour in macroeconomic stresses, leading to low virtual portfolio loss rates
  • Sovereign haircuts were applied only to trading books and not to accrual books
  • JPM estimates show that the lack of rigor in CEBS stress scenarios resulted in a 1.7% upward bias to Tier I capital ratios
  • The focus on Tier I (not core Tier I) resulted in a 1.2% lower capital hurdle for a total bias of 2.9% in Tier I capital ratio estimates

Eliminating this bias suggests that 54 banks would have failed a more stringent stress test, generating a capital shortfall of roughtly $100Bn and JPM believes that the stress test results will fail to restore financial confidence, leading to lower yields, wider spreads, lower EONIA, and a flatter EONIA curve.  That remains to be seen, of course.  Clearly our markets over-reacted to the "good" news of the stress tests on Friday and we took the money and ran on that crazy 150-point jump that took us over 10,400.

My comment to Members in our Chatroom at 3:03, when the Dow was peaking at 10,440, was: "From 9,700, 10,670 is up 10% and if we throw out that idiotic spike down and look at the 10,000 mark, then 10,500 is our 5% rule and from there we very much expect a pullback to 10,400 anyway (and 10,470 would be pullback off the 10% run) so, at 10,425 on a Friday, there’s very little reason to believe we’re going to miss anything by cashing out short-term bullish plays here."

That led us into the weekend neutral, expecting a challenge getting over that 1,113 mark (about 10,500) even if Europe and Asia decided to have a party.  As it turns out, they have had a pretty subdued move today with the Hang Seng flat (but dropping 120 points off a gap-up open), The Shanghai up 0.65% and the Nikkei holding 9,500 (barely) on a 0.77% gain but the BSE fell 0.6%, back to the 18,000 line and we REALLY don't want to see India stalling out here.   

The EU has been very disappointing as they have given up 0.5% gains this morning to drop 0.2% ahead of our open on no particular news.  It was a very slow weekend for news in general but I did notice that Commodity Traders have increased their bullish bets by 50% in the past two weeks so SOMEONE is bullish on an economic recovery taking hold.  This is the most bullish commodities have been since April 9th, when oil was $87 a barrel.  Now oil is $78 and it will NOT be good for the still-weak recovery if we pop back over $80.  I was hoping we could rally the markets and rotate funds out of commodities and into stocks that actually hire people and build things but that's not happening and that means we are going to take this little "recovery" with a very large grain of salt.

We'll see New Home Sales at 10 am and get Case-Shiller tomorrow at 9, followed by Consumer Confidence at 10 (probably low).  Wednesday we have Durable Goods at 8:30, Oil Inventories at 10:30 and a very critical Beige Book at 2.  Usually the Beige Book data is collected 10 days back so that will take us through mid-July and should prove telling (we liked the last BBook).  Thursday is the usual 450,000 jobs lost (yawn!) and Friday we have our Q2 GDP (3%) and the Chicago PMI (more deflation?) along with University of Michigan Consumer Sentiment at 9:55 so fun, fun, fun on the data front this week along with about 200 S&P earnings reports – no wonder we're sitting on the fence! 

While all but 7 EU banks may have passed their stress tests, 7 US banks got so stressed out they failed on Friday, bringing the year's total up to 103.  The good news is that that reduces the number of banks on our "Problem Bank List" 1%, now below 800 at "just" 792 troubled US lenders.  Are we really 100 times worse than Europe or is Europe's stress test even more of a farce than ours was? 

Our futures moved higher after FedEx raised Q1 and full-year guidance, overcoming a sharp drop in the Chicago Fed Index and ahead of housing data to be released at 10 am – if we can get past that, we can move higher but we're just going to be hanging out watching our levels, although it does look like our focus short for this week will be FSLR - I had wanted to wait but Barron's blasted them this weekend (rightly so!) and I think $140 may be as good as they get before we short them. 

Time to have some fun! 


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  1. Phil-Gel, What is your opinion on British Pound?, seems with the tightening going on in GB the currency should rise. Am I missing something? Thanks

  2. LYG- what’s your current opinion on valuation here. I have 500 shares from a while back – net cost is very low after the series of special dividends and covered calls, etc. The stock has come up to bump $4. Having a hard time putting a value number on this issue. I am assuming the stress test is the reason for the most recent run up.
    Any suggestions here? Say, Jan 4′s-p/c for $1+ or wait a bit for a move towards $5?

  3. Phil,
    Well put. 
    I was thinking about something this weekend and was curious about your view on the upcoming midterms and the potential impact on the market. 
    There’s no secret  that a lot of us think the market is being manipulated by "them", and therefore one has to believe that "they" have an agenda. 
    So the question is, what would "they" rather see happen in the midterm?  If in fact they are happy with the Democratic agenda, then wouldn’t it make sense that they run up the market prior to the election in an attempt to keep the wide majorities in tact?  Conversely, if they don’t like what’s going on, will they crash the market prior to the election to provide the Republicans ammunition to hurt them in the midterms.
    Just a thought, what is your view?

  4.  Shadow, 
    RE your post yesterday…. 
    So are you trading the IWM calls and puts or just the ETF? 
    I have gotten burned trading the TZA/TNA, too much to follow and feel comfortable yet. 
    Could you explain a little bit more in detail your tweezer strategy? is it when you see two toothpicks sticking out of the candle that the bots are either buying at bottom or selling at top and then one should get out?

  5. Phil, 
    I have both the 11/16 and 16/19 FAZ spreads, are we still holding these? 

  6. Phil --
    July 23rd, 2010 at 8:16 pm | Permalink
    Phil wrote:
    Those are the lines where we want to flip bearish now.  In other words, stop out long trades (short-term, unhedged ones) and put on short-term downside
    plays.   If we hold 10,400 and 1,100 then we just cash out the long side EOD
    and stay neutral over the weekend.  Cash is always nice to have anyway..

    Does this refer to open options and/or stocks, e.g., IWM Aug 65 Call but not C, BAC, VLO, AAPL? What about options such as Sell GENZ 2012 65 Call (to far out to worry about for the short term?)

  7. hi Phil,
    I have a position in BP shares and when I got scared I sold Jan 30 calls for $ 9, at the moment they brought me peace but now that the shares recovered they are dragging the profits in the shares position, what can I do ? many thanx

  8. Phil --
    It would be very, very helpful if you would specify the stop on all your trades. While I understand that 20% is the standard, in the last three days you used 6.25% and 10.00% on some and "I don’t know what" on others.
    On 7/21 you had QQQQ Aug 46 Call @ .76-1.00: Stop = ?. DIA Aug 104 Call @ 1.12: Stop = 1.05. DIA Aug 103 Call @ 1.20: Stop: ? It would be a pretty big leap for me on DIA to go from .07 (6.25%) on the 1st one to 20% on the 2nd, just because you didn’t specify the stop.
    I read a few folks stick with 20%, and I bet some are using 20% when you’re thinking of 5 or 10%.

  9. Phil--
    When you refer to net, as in "Anyway, so I like BYD LONG-term and you can buy it for $7.60 and sell the 2012 $7.50 calls for $2.50 and the Jan $7.50 puts for $1.35 for a net $3.75/5.63 entry…" what are the figures x/y. I think it’s the net basis for the Call / Put, whichever is exercised. My wife thinks it’s the net for neither being exercised / the Put only exercised.

  10. Good morning,
    IWM 62.42, 64.36, 65.36, 66.73, and 67.67

  11. Good morning! 

    FDX is a big help to the markets this morning with a very positive forecast.  They are one of the companies (INTC is another) that I believe are at the beck and call of whoever likes to shove the market around so I think we are in the midst of a major attempt to crack the 50 dma on the S&P at 1,113.  Timing an announcement like that on a major Dow component just ahead of the open is a huge mover and this happens way too often to be a coincidence. 

    Let’s just keep our eyes on the prize(s) of:   Dow 10,200, S&P 1,075, Nas 2,200, NYSE 6,800 and Russell 620, none of whom seem to be in any danger at the moment.  The S&P is our key watch at 1,113 with 1,080 being a failure before we even see 1,075 again

    Copper is still being rejected at $3.20 so we’ll keep an eye on that and below $3.15 is now a sign of weakness.Oil is above our "goldilocks" level of $77.50 but $80 is "too hot" and $75 is "too cold" so not a lot of room for leeway there.  Nat gas should hold $4.50 and below that is a sign that the commodity players may have overdone it and are taking profits off the table.  Gold is still silly at 1,188 and they need to stop trying to take $1,200 because all they are doing is proving the top of the range. 

    New Home Sales in 5 minutes can only be dreadful.  300,000 homes a year is 6,000 homes per state or about 20 homes a day – that’s enough to keep about 100 of your local construction workers busy and isn’t going to feed all those realtors and mortgage brokers who aren’t even considered unemployed, even though they may be making 1/4 of what they used to make.

    FSLR has earnings on Thursday and I like the Sept $135/125 bear put spread at $3.50 as well as a ratio backspread buying 3 Dec $150 calls for $11 ($3,300) and selling 5 Sept $145 calls for $6.85 ($3,425) which is a $125 creadit and if FSLR fails to make $145 by Sept expiration, you keep that plus whatever value remains in the Dec calls.  If FSLR surprises us and heads higher, we can add 2 more long calls and roll the Sept $145s up to Oct or November $150s or $155s and turn it into a diagonal spread.



  12. phil
    do you still recomend yrcw here

  13. Pharm, Phil / TEVA
    have a position which is underwater after friday drop: Jan CALL$45 / CALLER $55 / PUTTER $45, any recomendations what to do with it now? Thanx

  14. MEE speculative play: it was trading below 30 for a while but has broken out of its range, nearing $32 with earnings announcement tomorrow (Tues) at 4pm. I bought some naked Aug $32 calls at $1.55.

  15.  FLSR/Phil – I cannot be net short on calls, so will be opting for the put spread. In general (not just in FLSR), how would you ‘fix’ a put spread if the stock moves up?

  16. Hei Phil! I have TBT Dec 35 calls at 2.93 (today 3.4) Its a bad idea to sell sept 38 calls for 0.9 to collect premium? I think its better then take dec spread.

  17. amata
    I have traded TNA/TZA the stock and IWM stock and options. IWM options are workable, TNA/TZA spreads are too big and 20 contracts seems to be a limit on speeed where 80 contracts works for IWM. The tweezer I notice is the 2 large bodies at the same height, the third shows direction. It seems that if the toothpick or wick sticks up or down the bots are clearing stops or limits and the move is more confirmed with faststock. I am not very brave so I watch for confirmation on the 3 minute with EMA.

  18.  Phil- What do you think of CBOE?

  19. Wow, New Home Sales came in at 330K, 10% BTE but last month was revised down from 300K to 267K, which is terrible but Mr. Market doesn’t care as it looks like they intended to rally off that data point, no matter what it was. 

    So 10,500 and 1,013 are our test for the day.  We have 7,000 on NYSE, 650 on the RUT (and 666 is key resistance to the upside, as usual) and 2,300 on the Nas would be goal with 2,250 needing to hold up.  I don’t see us having the juice to make it over this morning but we have so many earnings this week, anything can happen. 

    Nonetheless, odds favor shorting the Dow at 10,500 and the Sept $101 puts are reasonable at $1.95 with a stop if we’re over the 10,500 line so risking about a dime as we cross back and forth.

  20. YRCW!!!

  21. YRCW – Phil, in your Update article you recommended selling half but the devil on my shoulder wants to buy more instead. Is there any reason to think they’re not recovering at this point and should head to $1 long term?

  22.  I suppose you would say wait for a dip then buy it.

  23. DCTH +10%, looks as though shorts continue to cover and the turn seems to be well in place

  24. cmsosa
    July 26th, 2010 at 9:59 am | Permalink  
    hi Phil,
    I have a position in BP shares and when I got scared I sold Jan 30 calls for $ 9, at the moment they brought me peace but now that the shares recovered they are dragging the profits in the shares position, what can I do ? many thanx

    PD: sorry I did’nt specified sold Jan 2012 30 for $ 9

  25.  Phil- What do you thinkabout   DIA, USO and IWM puts?


  26. gmarts…..what does that mean…."the turn seems to be well in place"?

  27. Phil: why is TSO and VLO rising quite a bit ?

  28. Ascending trend line across Friday’s tops stopped the move right at 66.14 !! Of course it will continue to ascend throughout the day.

  29. 1/2 out of YRCW @ .40.  Thanks Phil!  Great call!

  30. info question-EDZ is 3x while EEM is 1x?

  31. exec,
    DCTH has very promising technology for treatment of liver cancer, and rose from single digits on successful Phase III results and aplication for FDA approval. PPS rose to $16 before massive short attack withprice driven from 16 to 6 on very positive news, looked a lot like action on DNDN. Since bottomin below 6.00 stock has been under accumulation and it appears to me that a lot of the 30%+ short interest has evaporated. Price/volume data looks positive and I believe buyers are coming in in anticipation of a major move up based on publication of major article in New England Journal of Medivine and anouncement of possible Chinese partnership and initiation of studies for primary liver cancer. I believe the short attack is being unwound and hedgies are now going long.
    Still very much a speculative play, but I believe we will see 25 or so by FDA approval. JMHO, I’m long the stock and Jan options.

  32. jomptien/Pound
    I have no sentiment one way or the other at the moment. They are doing everything right at the moment, and I like the new PM, but the markets have not yet shown much emotion. I am watching though.

  33.  Dallas Fed Manufacturing is terrible, question is who is the pony and who is the cart??

  34. I am still in a long term play – selling the USD/SGD… Stop is @ 1.3875, and will take profit @ 1.3300.. It is tracking as planned, and will hold until limit is reached.
    Currency markets are bland at the moment – probably summer doldrums.

  35. Hi Phil Looking at you FLSR Play  the same carries a margin of over 7,000.00 Setting up a sept play sell 5 sept 160 calls and 5 sept 115p net credit 2,600.00 margin 6,900.00 In your case you receive 3.400.00 but you pay the same for the caller in the hope you are making some money on the declining caller. your thoughts pls

  36.  gel1/ the singapore manufacturing index is not good alot worse than expected. why do you think it will fall to that level? I still think there will be a new low in the market in the days ahead as the earnings loses steam. 

  37. Pound/Jomp – I think $1.55 is about right for them.  I’m happy with the Euro at $1.35-1.40 too so currency plays don’t interest me here.  There’s so much manipulation going on I don’t see the point in betting currencies although, obviously, betting the Yen up from 87 (down against the dollar) is my favorite aside from the usual opposite play between 3am and 8am. 

    LYG/Pstas – I like them at $4.04.  You can sell the Jan $4 puts and calls for $1.20 for net $2.84/3.42, which is not a bad bet on them through Jan.  

    Mid-terms – There’s too much at stake for the top 0.01% to leave the Bush cuts to chance it.  Those guys are all about the capital gains tax so if you hear about a compromise on that front by the Dems, that will be the sign that a deal has been cut ahead of the elections but if the Dems stick to their guns on that one, then you’ll see some very major money backing Republican candidates. 

    How the expiration of President Bush's tax cuts might affect you in 2011

    FAZ/Amatta – As a hedge against bullish financials, yes.  Europe is back up half a point so we’ll see how it goes but you don’t want to be too agressive with your hedging as we’ve already got a 500-point Dow cushion added to our embedded hedges in the buy/writes, which is quite a lot.  If you are talking about Aug hedges, those we killed a while ago and you would be best off taking out the callers and hoping for a pop or, if no pop, then rolling out to a longer month spread. 

    Cash/Garbon – I’m sure I answered this already…  Quick answer is that is for short-term, unhedged positions, not our hedged, long-term stock positions, which we generally don’t touch quarter to quarter, let alone day to day.  The same goes for long naked puts, which are simply targets that a stock will end up over the strike at expiration.  Our opinion on that specific stock would have to change for us to change those.

    BP/Cmsosa – LOL, sellers remorse.  What you should do is be happy you have a winning position.  You effectively sold BP for $39 and it’s at $38.35 now so it’s not "dragging your profits" at all, is it?   Those calls are now $10.80 but all they can ever do to you is pay you $30 for your BP shares.  If you feel that is not going to be fair compensation, you can buy 1x the 2012 $45s for $5.60 and roll the callers up to 2x the Jan $38 calls at $5.35 and that gives you $8 more upside on your 1x stock and still pretty good protection but you’ll be regretting that if the well pops and BP goes down again.

    Stops/Garbon – I do specify stops on all trades.  RTFM!  If you make 10%, you stop at 5%.  If you make 20%, you stop at 15% etc.  If you lose 20%, either get out or move to next leg of your scale - not at all complicated.  If you need someone to do that math for you and hold your hand, I’m sure there are many fine services who will be happy to do it but I’m a little busy and have chosen to have a sight that attracts self-directed traders who will contribute to the greater good of the community, rather than loading us up with needy people who ask questions all day, waiting to be fed their next fish.  The QQQQ Aug $46 calls are still $1.15 (up 53%), the Aug $104 DIAs are $2.46 (up 119%) and the $103s are $3.10 (up 158%) – so I feel like this is a pretty ridiculous conversation that is taking my time away from trying to analyze the market and find new trades that will work for less needy members. 

    x/y/Garbon – Again, we have articles on this, we have a new members guide, we have a homework assignment to go back and read a month’s worth of posts and commens where you will see that question answered at least 3 times.  Please do that first, especially before asking general basic strategy questions during market hours. 

    YRCW/Jerri -  I still like them here but the reason they were so compelling when we entered was because they were so cheap.  .40 is still cheap but a little more worrying.  I suppose I like the Jan $1 puts sold for .70 (you can only lose .30) or the covered stock at .40, selling the Jan $1s at .10, which should be rollable assuming they survive the year. 

    TEVA/Tcha – It’s not underwater, it’s on target.  You don’t lose any money if TEVA holds $50 do you?  You can’t run option spreads if you are going to be ruled by current values in your portfolio.  You set up a trade that pretty much makes money if TEVA is over $47 and right now it’s at $50.  If you don’t think it’s heading below $47, then your job is to learn how to be patient and let the decaying premiums work for you.  Since you are buying premium in an artificial buy/write, it’s not as clear that you are making money as a straight buy/write. 

    MEE/Jvest – Good idea.  We can also play them NOT to go down with ratio put spread.  Buying 3 Oct $28 puts for $1.70 ($510) and selling 5 Aug $30 puts for $1.10 ($550) puts $40 in your pocket and a very quick bonuse profit if MEE takes off and just a roll and adjust if they head south.

    FSLR/RN – What spread?  Give me strikes and costs.

    TBT/Pahurik – I am of the mindset lately that ANY profit made on TBT is a fluke and should be taken quickly.  If you are of a mindset to stick it out but want to lock in profits, why not sell 1/2 the Dec $37s for $2.50 as those can be rolled to 2x the $40s or you can add more if they head the wrong way.  I’m sure you’d be thrilled with to clear $3.25 if TBT is over $40 as you need $41.25 to make that much on the calls as they stand. If TBT really flies, you don’t need to do a 2x roll, you simply "only" get net $2 back on 1/2 and have no upside limit on the other half. 

    CBOE/Hulk – Too many new regulations make it very hard to figure out their future. 

  38. Hello all,
    We are now involved with a new Play of the Week in Teradyne Inc. I like this company for 4-6% growth this week from my entry range of 10.15 – 10.25.

  39. Thanks Gel

  40. Should be Gel + Phil

  41. chyer
    The short USD/SGD plaay is mostly based upon the Elliot wave TA that is tracking well. I entered it July 14, and for a while flirted with my stop, but then did what it was predicted to do. I follow the fundamentals, but most of the serious traders are chart jockeys, so I try to keep a perspective on both. I really like these long term plays, as you have a much better advantage for reaching your objective.

  42. QQQQ – Selling 1X Aug 44 calls ($2.7, delta = 0.837) and buying 2X Aug 46 calls ($1.22, delta=0.557). Net delta = 0.277; Net amount received=$26, Net margin=$200

  43.  FSLR/Phil – The put spread you recommend, Sept 135/125 for 3.5, If FSLR goes up to $170, what is the exit strategy? I understand what you do in the call back spread, but not sure how to approach this with the put spread.

  44.  Phil,
    FSLR – Understanding your natural reluctance to pay rather than collect premium would I be correct in drawing the inference that you have a fairly strong hunch that this stock will by taking a haircut?

  45. Phil
    I am sitting on a large quantity of TBT Dec 32 naked puts. There is not a lot of premium left for decay purposes, so I thought I would re-position. I believe in the fundamentals of holding a significant position, and would like to stay ahead of the market on this one, as I KNOW the day will eventually come when everybody wished they stayed on board.  How would you play TBT today?

  46. Closed out XRAY for a decent profit… David – thanks, once again!

  47. TBT/Gel, Phil recommended selling 2012 30 puts awhile back when it was about this level. Seems to be working fine with no hassle. He may have a better one now though.

  48. Phil, it’s been awhile since you stated your favored solar/alt energy plays. Besides SPWRA, what are the alt energy/solar plays you like?  

  49.  Phil / TEVA
    thanx, just needed your opinion about future of stock, it dropped so hard just start worry a little

  50. chyer/Asian currencies
    When playing any of the Asian currencies, you should take into consideration the effect on these currencies that will be significant when the Yuan is revalued. They all will spike upwards, as was proven the last time the yuan was revalued. The SGD had the greatest relative change in value. The current play that I’m in is not based on this possibility, but would certainly have a positive effect.

  51. YRCW/Jvest – We doubled down and sold half to get back in line.  I do think they go to $1 but I’m not going to blow a whole small portfolio over it so we went cautious.  Note my comment to Jerri above.  If you were already in them then you can sell the calls for .10 and DD so then you can set a stop at .30 on your new stock and not too damaging. 

    BP/Cmsosa – Not quite the same as the 2012s are $13.20 but you can roll them to the Jan $37s at $6 and sell the 2012 $35s are $7 if you are so gung-ho bullish on BP now. 

    Puts/Roma – I wouldn’t touch USO and we just did DIA but now IWM is up there as the RUT hit 660 on the dot in futures and then pulled back and 666 is the 2.5% rule for the week so they too make a fun short with the IWM $63 puts at .95 but that’s pretty much something you have to be determined to ride out to 666, which is probably a .20 drop and then DD (.85 average) and pull 1/2 back off when even and then take a strict stop if the get over 666 again.

    TSO, VLO/RMM – I don’t know why TSO ever does anything but VLO was stupid cheap again so an obvious buy at $17.

    Congrats Boobs!

    EDZ/Drum – EDC is the 3x bull on emerging markets. 

    NFLX still laying around.

    EU closing up around 0.5% – much improved since we opened

    Dallas/Chyer – We need to watch those as they will be the BBook this week, several bad reports does not bode well actually.

    FSLR/Yodi – So you are doing a short strangle?  There’s nothing wrong with that, I super-doubt FSLR runs over $160 but the $115 is a possibility and something in between is very likely.  I’m surprised the margin is the same so that’s a good alternative for an earnings play. 

    QQQQ/RN – Those can turn ugly on you over time so be careful. 

    FSLR/RN – The bear put spread’s exit strategy is you lose $3 and feel like an idiot.  There’s not much you can do if that goes bad.  It’s a 1:2 risk:reward play and you take those and try to be right half the time. 

    FSLR/Cslan – See today’s post and referenced Barron’s article.  Tellurium IS toxic and they’ve been sliding on it but this issue could snowball on them and it’s their entire market advantage.   Not only that but silicone costs are way down so their advantage their is dropping too plus I imagine no one who does a lot of business in the EU is sitting on a lot of signed contracts at the moment so many possible reasons for a poor earnings report. 

    TBT/Gel – I assume those are short puts?  While there is not a lot of premium left it’s still .75 that you have a VERY strong possibility of collecting in Dec so moving it is pretty much throwing that out the window.  You can roll them top March $34 puts at $2.25, which adds $1.50 for 4 more months so very fair and hardly a margin effect overall.  I’d say, if you want to add more risk than that then sell more $34 puts as TBT may take a VERY long time to make us happy on a big run over $40. 

    Speaking of TBT.  If you have an adjustable mortgage or if you invested in something that does poorly if rates rise, I still like the TBT 2012 $45/55 bull call spread at $1.75, selling the Jan $33 puts for $1.25 for net .50 on the $10 spread.  If you do 10 of those, worst case is you get assigned 1,000 TBT at net $33.50 in Jan (but, of course you would roll and 2012 $25 puts are $1.65) and then you can sell calls against those and continue to cover your rate-sensitive stuff.  If TBT even holds $33, you have a cheap spread and if rates do kick up, you get $10,000 back on your $500

    Here we are:  10,500, 1,113, 2,300, 7,000 and 666.

  52. money is going out of bonds, the 30Y yield is up 11.43% !!! coming into stocks

  53. USA Today reports that President Obama will appear on ‘The View’ this week, reaction options either no comment or speechless

  54. Thanks Phil, I take 1/3 TBT off at 3,6 with 22% profit and sell other 2/3 Dec 37 calls for 2,5.  So I am 35/37 spread net entry 0.1$

  55. JRW – kind of odd that there is a ascending line that connects to the lows at 3:42 Friday, 9:42 today, and 11:42 today….coincidence on the "42", yet strange.  Seems like we are  going to need a lot more volume to keep above that line and get this party going further!

  56. JR,
    You mentioned that you overlay TBT of the IWM chart.  I noticed TBT is out performing IWM.  How do you interpret that?

  57. Gel1 -


    All -

    If you are following my Long Term Positions, we have a new update on all the positions on my page.

  58.  JRW, 
    Thanks for your response yesterday. I am assuming the Sig Runes have to be sloping upward? I did find the ones you mentioned yesterday on Friday;s graph. However I see that a lot come up during the day, but not necessarily with the short leg going down long going up and the top short going down… is that the specific one that would point to an uptrend? 

  59. JRW III  you are very quiet today  missing your comments

  60. Goldman/42 — you know that "42" is the answer to everything right?

  61. rainman – LOL..yeah I seen that movie!

  62. 07:00 AM On the hour: S&P -0.07%. 10-yr +0.01%. Euro -0.01% vs. dollar. Crude -0.81% to $78.34. Gold -0.13% to $1186.30.

    08:00 AM On the hour: S&P -0.18%. 10-yr +0.03%. Euro +0.15% vs. dollar. Crude -0.75% to $78.39. Gold -0.08% to $1186.90.

    09:00 AM On the hour: S&P +0.05%. 10-yr -0.04%. Euro +0.2% vs. dollar. Crude -1.14% to $78.08. Gold +0.27% to $1191.00.

    09:30 AM At the open: Dow -0.01% to 10424. S&P -0.07% to 1102. Nasdaq -0.25% to 2264.
    Treasurys: 30-year -0.02%. 10-yr -0.08%. 5-yr -0.1%.
    Commodities: Crude -0.34% to $78.71. Gold 0% to $1187.80.
    Currencies: Euro +0.19% vs. dollar. Yen +0.32%. Pound +0.43%.

    10:00 AM On the hour: Dow +0.14%. 10-yr flat. Euro +0.25% vs. dollar. Crude -0.3% to $78.74. Gold -0.04% to $1187.30

    11:00 AM On the hour: Dow +0.51%. 10-yr -0.15%. Euro +0.17% vs. dollar. Crude -0.1% to $78.90. Gold -0.51% to $1181.70.

    12:00 PM On the hour: Dow +0.63%. 10-yr -0.13%. Euro +0.59% vs. dollar. Crude +0.22% to $79.15. Gold -0.24% to $1184.90.

    Notable earnings after Monday’s close: AAN, HMA, JEC, LM, MAS, PCL, RRC, SANM, SLG, UHS, VECO

    "All hell breaks loose" in the stock market… starting today, according to Arch Crawford’s astrology-based investment newsletter. Before you laugh too much, his letter predicted the 2008 collapse and has outperformed the market so far this year.  Perfectly timed with RUT 666!

    June Chicago Fed National Activity Index: -0.63 vs. +0.31 prior (revised from +0.21). Three-month moving avg. -0.05 vs. +0.28 prior. The numbers suggest growth in national economic activity returned very close to its historical trend in June after reaching its highest level since March 2006 in May. Inflation will likely remain subdued over the coming year.

    June New Home Sales: +23.6% to 330K vs. 311K expected, 267K (revised from 300K) in May. Months’ supply 7.6 vs. 8.5 prior. Median price $213,400.

    July Texas Fed Manufacturing Outlook: Business Activity Index -21 vs. previous -4. Mfg. Production Index 4.9 vs. previous -1.9. New orders and growth rate of new orders pushed deeper into negative territory. Capacity utilization -1, its first negative reading in nine months. Shhipments stabilized, rising from -9 to -1.

    Exactly what I said was going on last monthWith individual investor sentiment at its most pessimistic in a year (bearish investors up 7.2 points to 45%, vs. 32% bullish), mutual funds, pensions and endowments are buying at their fastest rate in this bull market. The last time money managers and individuals were this far apart? March 2009, before the S&P 500′s 63% rally.

    We used to care wheat this guy said until he was exiled to AsiaThe U.S., Europe and China are all decelerating, and global growth may slow to 3.25-3.5% on average during the next three to five years. "Post-crisis headwinds will restrain trend growth in world GDP by 1-1.5%," forecasts Morgan Stanley Asia Chairman Stephen Roach.

    "I’m more optimistic," Barton Biggs declares just three weeks after reducing his holdings, citing recent data that tell him the U.S. economy is not slipping back into recession. "I’ve definitely changed my mind to the degree of risk out there," Biggs says, naming Procter & Gamble (PG), Deere (DE), Caterpillar (CAT), Cisco (CSCO) and Microsoft (MSFT) as big firms that will benefit.

    Wall Street enters this week "on the cusp of a breakout," bulls say, but another spate of convincing earnings reports is needed from bellwethers such as Chevron (CVX), DuPont (DD) and Boeing (BA). Wells Fargo’s Brian Jacobsen says the answer may lie somewhere between bullish and bearish: "This market is more like a turkey and not a bull or a bear."

    One lesson from earnings season so far: Now is not the time for optimistic CEOs to talk about an expansion push right around the corner. Talk of increasing capacity by Texas Instruments (TXN) and Delta Air Lines (DAL) last week was a turnoff. "You’ve got plenty of investors convinced out there that the economy is going to double dip," said Merrill Lynch’s (BAC) David Bianco.

    Germany is getting flak from European regulators because six of the 14 German banks that were stress tested, including Deutsche Bank (DB -1.7%) and Postbank, didn’t provide detailed breakdowns of sovereign debt holdings. The non-disclosure is likely to fuel rumors that the banks have something to hide.

    Bank of Israel unexpectedly raises its benchmark interest rates by a quarter-point to 1.75%, "to a more ‘normal’ level," which Win Thin says should attract some investment to a country with "solid economic fundamentals." Dollar -0.34% against the shekel.

    The stress tests represent "a substantial step forward,” according to a Goldman research note, even while stating that raising the Tier 1 capital ratio assumption from 6% to 7% would have more than tripled the number of failed banks from 7 to 24, out of the 91 surveyed. J.P. Morgan says 54 banks should have failed, and the stress tests will wind up reducing confidence and widening spreads.

    "We have a deep level of questioning about whether we’re getting the straight scoop here and whether Goldman is working with us on information that they surely have," says the FCIC’s Phil Angelides, threatening to audit Goldman’s (GS) system for data on derivatives.

    FedEx (FDX) raises Q1 EPS guidance to $1.05-$1.25 vs. $1.01 consensus, up from prior guidance of $0.85-$1.05, and lifts 2010 EPS to $4.60-$5.20. FDX +4.7% premarket. (PR)

    The European Commission launches a formal antitrust probe against IBM on suspicion that the company has abused its dominant position in the mainframe computer markets.

    Taking a cue from Bahrain, the United Arab Emirates says BlackBerry (RIMM) is operating "beyond the jurisdiction of national legislation" and is open to misuse that poses security risks. The comments raise concerns that other Gulf countries may opt to curb certain BlackBerry apps, giving an advantage to rivals like Apple (AAPL).

  63. Phil/TBT
    Thanks, yes they are sold puts, so I like your advice and will let them expire worthless in December, and I will sell some ATM March puts today.  I’m still 50% cash, so I have the margin.

  64. Come on…’re serious???
    Astrology Based- I’d love to hear about how this works.  What is he basis of his work?

  65. Phil
    I am planning a long term play on GS. I know they are the target du jour, and despised by the government (et al ), but they are the casino and can outfox the politicians any day they choose. Do you have a play in mind. Thanks1

  66.  Hi Phil,
    Thoughts on RIG at these levels?

  67. GLD is smack at it’s uptrend line going back to Oct ’08. Should it break below it could break down pretty quickly. Looking to buy the GLD Sep 110 puts and selling the GLL Aug 40 puts for around net .38 debit. I’m longer term bullish on gold, not for inflation reasons, and this is a shorter term hedge on some further out call positions

  68. Obama appearing on the View…. he has finally found a place that fits.  Maybe next week on the weather channel!

  69.  Well after reading Arch Crawford, maybe I’ll rethink my GLD hedge

  70.  Phil, 
    I was looking to get into the GENZ play, however although the stock is up another $3.5 from your post recommending ($64.5) Schwab is only at $8.00-$9.10 Bid/Ask for the $65 2012 calls…
    Am I missing something here?

  71. Crawford….It’s TEOTWAWKI again!! It’s been a while, fortunately, I still have my bunker.

  72. These dooms and gloomers screw up my trading.
    I watched the Dent update and he’s talking the same way as Crawford.

  73. It looks like the DOW is allergic to 10500.  It give back each time it touches that level.

  74. Looks like we’re starting to roll over a little here.

  75. phil
    any thoughts on or SYNM

  76. Gel – do you like shorting the YEN as a daytrade right now?

  77. To those who shorted HOV….. I hope you got out before now. And I wish I had held onto my longs.

  78. Pharm / drug shortage – are u following this story?  quite scary.  seems like more than just a shortage of suppliers.  perhaps govt. rationing?  any thoughts?

  79. jvest
    Hi your remarks on HOV still have a 100  Jan 11 7.5 long calls for you bought for 1.80 now trading at .20
    Phil recommended  the other day I should sell some more short at 4 which I did at .90 now .65
    What stars do you see in HOV thks ?????

  80. JRW – am I correct to presume you are in $?

  81. Obama on The View ?   That’s about his speed.

  82. Cap/Gel – so I guess we shoulda put Bush on "Are you smarter than a 5th grader"?

  83. Cato vs. The Center for Amerikan progress on cnbc now.
    blah blah blah …

  84. Gel .. LOL,   you and I need to coordinate our insults !

  85. "Raising the Cap Gains tax rate to 20% doesn’t discourage investment at all".
    Yah; if you say so ….

  86.  AAPL and GOOG underperforming. GS red, but recovering. TBT slowly falling for the last couple hours, but still positive. Strange action today….

  87. I hate the repeated tax debate on CNBC.  Why doesn’t anyone bring up the fact that $200k isn’t THAT MUCH money?  I think if you bumped up the cutoff line to $1 million you would have a much easier time in passing it.  I can’t help but believe teh $200k mark was set so the uber rich have a strong army of ‘$200k-to-a couple million a year income earners’ to help fight for their tax cuts.

  88. Anyone want to take a guess which way this current stalemat breaks out? I bought in for my first trade of the day around 12:40 and it’s basically been sideways action since then…

  89. Cap… Yep! – Just like trading the easy plays – Obama really makes it easy for us, eh!

  90. jromeha
    July 26th, 2010 at 1:17 pm | Permalink  
    Cap/Gel – so I guess we shoulda put Bush on "Are you smarter than a 5th grader"?
    I look it that way he was smarter then us as he became President or would you say the some from Obama?????

  91.  Gel/ I agree with the effect yuan revaluation will have on the asian currencies, but I think the coming weeks will show the growth targets will prove to be too optimistic, even China have hinted that they will reconsider if growth is affected. So far only Europe have been beating economic numbers which is supported by the weak euro. Singapore raising the trading band for SGD is to cool the overheated property market. They still have other tools if they want, like raising downpayment requirement.
    If the world economy improves from this point then I agree SGD will be a great bet, but I still think we have another big drop to come. short term I think high 1.34 range is more realistic. Just my 2 cents

  92. price action/hanna:  Totally.  The 1min S&P e-mini chart looks like a bar-code/railroad track at the moment.  Nothing but robots right now.  I think all the traders bought at 1000, sold at 1109ish and took the day off :\
    Oops, looks like someone at Goldman decided to hit the "Markets:Up" button…

  93. Phil,
    Aug 104 putters in the mattress I am up 1.10 sold for 2.87 now 1.77 1/3 cover only  shall I leave them alone or buy back ?

  94. I look at it as his family (like the Kennedy’s on the Dem’s side) is very powerful and connected. I consider him personable, but definitely not too much smarter than the average person. He had a lot of money behind him…

  95. make that "bought at 1100 and sold at 1110ish and took the day off"

  96. I think Obama on Jeopardy would be fun:
    "Name the 57th State"
    "What is my home state of Hawaii"

  97. jromeha
    Shorting Yen today – nope… If I had to make a trade today on the Yen, I would short the USD vs the Yen… Not compelling however
    I am scoping out a trade on the CAD/JPY… selling it short. Just waiting for the stars to line up – all based on Fibonacci and pattern resistance. Will post if I put it on.
    EUR/CHF is a long trade today… but set tight stops

  98. Be careful about "bashing " the Bush name too much… Jeb will be the Repub nominee for 2012. He has the conservative vote, combined with the Latino vote (he is married to a Latina and speaks Spanish better than his brother spoke English. You heard it here first!

  99. Whew, this is quite a day for YRCW.  Just got a fill at .12 on Jan $1 calls, so now half-covered with those.  I think I’ll let the other half ride for now.

  100. Confidential college transcripts and test scores obtained by the Washington Post reveal that neither presidential candidate, George W. Bush nor Al Gore, were shining students during their college days at Yale and Harvard, respectively. Although each earned respectable scores on the SAT college admissions test (a total of 1355 of 1600 for Gore and 1206 for Bush), neither did that well in their college courses. Both earned a mix of B and C grades. Gore’s lowest grade of D came in a natural sciences course, while his top grades were an A in French and English, an A in Visual and Environmental Studies, and an A- in Social Relations. Bush’s lowest marks were a 70 (of 100) in Sociology and a 71 in Economics, while his highest scores were High Passes in History and Japanese.

    In 2005, the Boston Globe obtained comparable information on John Kerry’s undergraduate record at Yale. It shows that Kerry had a cumulate grade average of 76 over
    four years in school. His freshman year average was 71 and his senior year average was 81.
    Barack Obama has not released transcripts for his grades from Occidental College, Columbia University and Harvard Law. He has also not released his SAT and LSAT scores. No explanation has been offered for not releasing them.

  101. Gel – How is saying the Bush family is the republican version of the Kennedy’s ‘bashing’? I agree, Jeb would be a much stronger candidate than the moron that is Palin.

  102. Hey all,

    I am trying to work an Overnight Trade. I don’t want to force any, and nothing is fully meeting my expectations. The only two that are really close are Valero (VLO) and Lexmark (LXK). Valero is scary because it is closing refineries and refining has come down to its lowest levels since 2003. They are poised to report a profit for the first time since 2008, but I am afraid guidance may be weak and profits won’t be as high as people wanted.

    Lexmark is anyone’s guess…looks poised to improve, but I am worried printers are not having the same success as PCs and other tech…printing is obsolete.

    Let me know your thoughts. 

  103. Jeb Bush?  Don’t  even go there.  Remember the Terri Schiavo disgrace just a few years ago.  Pandering to "Operation Rescue" and its leader who advocated violence against doctors who performed abortion procedures.  Even Palin doesn’t go that far.  If you want another person (like his brother GW) who panders to  far right extremist Christians, go with Jeb. 

  104. Rolling DIA DEC 104p to 105p for .43

  105.  What a day.  My hedges are are losing money while my longs (INTC, GS, AAPL, PFE and MO combined) are barely positive.

  106. David:  was going to get into your TER weekly trade; but it has already popped out of the buy range.

  107.  VLO/David – I have consistently been selling $17 puts on VLO to fund a $16-$17 bull call spread successfully for some time now.

  108. Yawn, this market is too boring; i’m going to go out for a three martini lunch.

  109. Solar/Jrom – They all got expensive on us.  SPWRA, then WFR were the last two cheap ones I liked.  Now I’d rather wait for things to get cheap again. 

    Obama on The View/B1 – He needs to do something with those poll numbers. 

    TBT/Pahur – That’s a sensible way to manage it.

    Astrology/Exec – Hey I just report – you decide…  8-)

    GS/Gel – They are never out of the woodshed but buying 5 2012 $155s at $22 ($11,000) and selling 3 2012 $150s at $12.60 ($3,780) and 3 Jan $135 puts at $9.25 ($2,775) is a nice mix as you net out at $8.89 per long with easy rolls in either direction and current Jan $155s are $10.40 with just 6 months to go so many, many ways to win with that ratio.

    RIG/Jdub – Stay away.  They make 1/20th what BP does so they can’t afford to be found 5% liable in this case.  There are reports that they (not BP) turned off the alarms on the rig that exploded so the workers could get a good night’s sleep.  Whether true or not – that just makes them a little too risky here.   If they are found negligent, BP will have a great case to void their liability waiver.  If BP goes BK, then the waiver is useless anyway. 

    Gold/Fortep – I just can’t take them seriously until they test $1,150.  They are avoiding it the way oil avoided testing $80 in April and the first time they tested it in May they had a spectacular failure as the pump job collapsed. 

    GENZ/Amatta – You can see why we liked selling those 2012 $65 calls for $11 (and why Rule #1 is "ALWAYS sell into the initial excitement")!  Now we can have fun buying 3 Jan $65 puts for $5 and selling 5 Aug $65 puts for $2.50 and that’s net $250 with the goal to roll to Sept puts and keep selling $1,000 every month until BP gets called away.  If they don’t get called away (company sold over $65) and start selling off, then we can adjust.  On the upside, we can still sell the 2012 $70 calls for $5.70 – just as good as selling $65s for $11….

    Alergies/Dbarak – Perfectly normal, even in a rally, to get a reject off our levels. 

    HOV/Jvest – Man, I only picked one builder to buy since last year and still people shorted them???

    AAPL & GOOG/Hanna – Also AMZN and RIMM…  Sometimes they hold back the horsemen when they don’t need them so they can use them to lead a rally the next day, when the broader index gets tired….

    $200K/Rstu – I agree there, they should have just slapped +10% on the top tier and left everyone else alone.  Imagine trying to get on TV and defending only $500Ks?  Not even most of the interviewers would have pity on that bracket.  Still, I can’t believe no one on the left side doesn’t just say - It’s 3% under $400,000 (net $6,000 on the $200K over $200K) you friggin babies!  Hey – that’s a good title for a post on the subject…  8-)

    Volume coming up on 2pm is just 85M – very low. 

    Mattress/Yodi – I’d take out the putters here.  We either have to make a more aggressive sell over 10,500 tomorrow or we’ll be happy to be naked on what should now be the Dec $106 puts ($6.10)

    Wow Cap, still harping on something Obama mispoke about at 1 am after 3 days of non-stop campaigning?  That is just so pathetic from a person who used to excuse this idiocy on a daily basis.  Oh wait, here’s another collection and notice each of them links to dozens of others.  It’s been 18 months Cap – if all you can come up with is Obama slipping in an interview 18 months ago, he must be one hell of a poised guy under pressure.  Of course when there are no gaffes, conservatives just edit the clips anyway

    Jeb/Gel – That would be one way to energize the left again!

  110.  I’ve been trading Russell futures successfully today using a take-the-money-and-run-like-hell approach. Basically fading the trend, then selling out on those little mini-rallies that keep failing. The trend still appears to be up. I think we’ll close at 666 or better. 

  111. Kinda funny that Gore’s lowest grade at Yale, a D, came in a natural science class; kinda all makes inconvenient sense now.

  112. Phil,
    any suggestions how to play VECO earnings tonight with a 750 long stock position …
    thanks in advance

  113. Humvee -

    Yeah it moved quickly during and after my post. Only would buy it if it gets below 10.40.

  114. You guys will be still be bashing Bush after Obama is gone in 2013; too bad you don’t have a positive message. 

    re Bushes: he is married to a Latina and speaks Spanish better than his brother spoke English
    So do I, and I don’t speak Spanish

  116. Politics…. I am not a cheerleader…. just a prognosticator and handicapper. I don’t care much anymore – I’m with Humvee – a libertarian who can enjoy a good martini, and don’t stress over the outcome, as you will be disappointed either way!

  117. Chaps- Best LOL of the day!

  118. exec / TBT
    TBT can be a directional indicator ($ going to cash or stocks) if it rises faster then IWM could follow, but I think we have seen the high for today; my finger is on the sell trigger !!
    Hello, just not much going on since 9:40 !!
    gel / weather channel
    kinky / roll over
    Yeah, I,m out of TNA at $45.71 for $1.50

  119.  Phil—did you mean to say $1250?
    Gold/Fortep – I just can’t take them seriously until they test $1,150.  They are avoiding it the way oil avoided testing $80 in April and the first time they tested it in May they had a spectacular failure as the pump job collapsed. 

  120. In TZA at $30.36

  121. VLO/David – They will take a hit on closures but outlook should be for improvement.

    Transports are kicking ass with a 2.4% gain today.  SOX up 1% and only the RUT is really moving, up 1.7%.  No other indexes over 1% so I don’t see us breaking over, even on a stick today


    01:00 PM On the hour: Dow +0.59%. 10-yr -0.01%. Euro +0.65% vs. dollar. Crude +0.01% to $78.99. Gold -0.33% to $1183.90.

    02:00 PM On the hour: Dow +0.67%. 10-yr +0.01%. Euro +0.58% vs. dollar. Crude +0.11% to $79.07. Gold -0.39% to $1183.20.

    New session highs for stocks as the Dow returns to positive territory for 2010, and transportation is leading broad advances after FedEx’s (FDX +5.5%) raised guidance. Rail rally: UNP +3.2%, NSC +2.1%, CSX +2.9%. 


    People got a bit too excited about the idea the euro-area was going to break up and forgot that the U.S. has a whole load of problems of its own," says David Bloom, HSBC’s global head of currency strategy. Investors are now shifting focus back to the dollar, and raising their forecasts for the euro.

    "Shale gas is the major growth story in China gas,” according to Wood Mackenzie, which just raised its 2020 estimate of Chinese LNG demand by 48%. But the long lag time in developing these resources will prompt China to import "significant additional volumes of LNG," good news for Chevron (CVX) and BG Group (BRGYY.PK), which are developing LNG projects in Australia.

    Coca-Cola’s (KO) been thinking and acting more like a venture capitalist, as it tries to stay a step in front of competitors as well as consumer tastes. The company’s Venturing and Emerging Brands unit has identified six new (but secret) areas it thinks could lead to billion-dollar brands.

    Users of the iPhone (AAPL -0.6%) who unlock their devices to add unauthorized applications aren’t violating copyright, the Library of Congress decides. The company calls opponents’ arguments "an attack on Apple’s particular business choices” and the iPhone App Store.

    Three lunchtime reads:
    1) The death of paper money
    2) Investing in post-reorg equities
    3) Ten stock-market myths that just won’t die

  122. Gold/Fortep – No, $1,150 to the downside.  They keep getting resuced from it as if someone is very afraid of what will happen if they don’t hold it. 

    TZA/JRW – Today I like FAZ at $13.80.  Let’s see which does better (my exit would be same as JRWs).

  123. Phil,
    We set up a buy write on GE Jan 12 sell  12.5 c for 3.53 and putter 10 for 1.16. well GE is trading at present at 16.00 OK we take 4.69 if they do not go below 10. My question is why did we go in that low , as the stk will be called away most likely ??? thks

  124. FJD…Your spewing nonsense.  I’m very familiar with Operation Rescue and they have never sanctioned violence against anyone stop spreading lies.

  125. IWM should come down to 64.96 according to TBT (next support at 65.85, then 65.34), but there’s always Mr Stick; it is, after all, Monday !!

  126.  Hi Phil,
    CRM puts a good idea around here?

  127. BTW, that TNA play was $45.71 for $2.50, not $1.50; it just took so long, alzheimer’s started to set in !!

  128. Looks like TNA is smoking again

  129. Phil,
    I consider a short straddle at 45 …

  130. Out of TZA even ; TBT coming back

  131. Phil/HOV short – yes, Oxen Group shorted HOV last Tuesday. You replied, "Selling HOV/David – That’s my favorite!"
    At the time I interpreted it as you agreeing on the short. HOV was already up 5% that day, so I panicked and closed out my buy write when HOV was at $4.03. It’s up 13% since then. I guess I just misinterpreted your statement.

  132. Damn FAZ busted by stick with a nickel profit – sorry, stocks are just too damned dull!

    GE/Yodi – It’s called being cautious!  GE is a fianancial and we didn’t know how they would be affected.  GE sure wasn’t at $16 when we took that trade so the profit is what it is but you can always roll to 2013 and 2014 when the time comes or you can buy some more GE stock or sell more puts if you are super bullish. 

    Wow, what a big save that was!  Right off the 7,000 line on NYSE – really trying to keep up appearances, it seems. 

    CRM/Jdub – They are very aggressively priced for growth that is, in the very least, in question.  I don’t know when earnings is – I think they are late reporters.  That would mean that taking the Sept $90 puts for $2.60 and selling the Aug $95 puts for $2.30 could be a good way to get short but you’ll want to keep a stop at $2.75ish on at least 1/2 the Aug puts. 

    VECO/Twofaces – Sorry, I missed that one.  They ran up 4% today so a pretty dangerous earnings play.   I’d go for the ratio backspread, selling 5 $50 calls for $1.25 ($625) and buying 3 Oct $55 calls for $1.55 ($465) for $125 in your pocket and keep the remaining money on the Oct $55s if they can’t gain 15% by expiration day.

    HOV/Jvest – Sorry, that was unclear I guess.  HOV is my favorite as in "how can you short my favorite stock" not that shorting HOV is my favorite play.  I sometimes forget that not everyone has been here a long time. 

  133. Oh a stick!

  134. Very curious action …4 days of AAPL bouncing off 260, is this simple accumulation or are they holding it up just to sell at 260 with every run up

  135. Phil,  GE I just wanted your confirmation it was somewhere at 14.00 but thanks anyway

  136.  Phil, 
    I am getting hammered again as I mentioned yesterday… on what I thought was a 60-40 or at worst 55-45 bullish portfolio… I still have several short plays that I feel loth to kill now that we are at these lofty levels. Do you think that we have hit the resistance levels here as per your post? and I should hold my stance… Here are the positions posted on Google spreadsheet, if you at all have a chance to glance over them and let me know why it is being killed (today down 2%) when market is pulling up? 
    Thanks a lot.

  137. Phil / Appearances:  You sound like you’re suggesting there is something other then appearances to this market..

  138. Are you keeping DIA Sept $101 Puts in overnight for a pullback tomorrow?  Or unloading before close?

  139. Phil;
    how far out in time or to what premium should I go with selling premium for my stock:
    MO, MRK, MDT, BAC, GE, VLO ????????????????????????????????????

  140. Hi Phil,
    New member (2 months), learned a lot and even made money doing it, what more can you ask for.  Would you recommend an Oct call spread $21/$23 on CHK at a cost of $1.10 either paid for entirely by selling $21 puts a $1.10 or partially by selling $20 puts at $0.75?

  141. Sold VECO Aug 50 calls for 1.30.

  142. Super stick popping the S&P now – let’s see if they can hold that and pull off 666 on the RUT and 2,300 on Nas (I still doubt it) - Such exciting BS, isn’t it? 

    AAPL/Kustomz – I think they were holding it back.  Maybe they are going for it tomorrow.  Still lots of sellers at our test levels. 

    GE/Yodi – Not sure what you mean by that.  If I were doing the trade from scratch at $16, I’d sell the 2012 $15 puts and calls for $5.15 and that’s net $10.85/12.93, which is nowhere near as good as the last deal but still a respectable play – and we’re not as worried about GE now as we were then.

    Killed/Amatta – Yes, I thought you were going to post your spreadsheet on-line somewhere?  I agree that this is not the time to kill the shorts but you’d damn well better know what you will be buying if we pop our levels tomorrow. 

    Something/Matt – I’ve been saying for a long time, we are at the right values around here.  It still remains to be seen if we can justify a move higher.  Other than some global doom and gloom scenario – the question is how on earth do you justify being bearish on individual companies putting up these numbers?  If you can’t justify shorting 30 Dow components individually, then you can’t justify shorting the Dow, can you?  And if that’s true of the Dow I would put it to you that that’s true of the S&P and the Nasdaq and the NYSE and then you are down to trying to pick apart the Russell to find an index with enought internal weakness to justify a short.  That’s why I just can’t find my way to the bear side – I can hardly find individual companies to short – let along whole indexes…

    DIA/Markz – Those are pretty hopeless if S&P pops 1,113 and holds it but they are still $1.88 so not enough damage to run away from yet (assuming you have something to hedge – not looking good at all as a bet). 

  143. Komrade Kustomz/AAPL
    I wonder the same…. however I always return to the rock solid principle of  "Share Value Always Follows Earnings"  This company is continually reporting increased earnings, and I see nothing on the horizon to change this. Overall market sentiment may influence value occasionaly,  but like a rubber band when stretched, it always reverts back to the norm – in Apple’s case I have to assume it is up! 

  144. test

  145. For what it is worth… I was at "Nerd Nirvanna" yesterday ( Local Apple store ), and bought a laptop. The place was jammed to say the least. I always ask a lot of questions targeting the sales associates. They confirmed they are back ordered big time on the iPhone 4. The sales associates are paid NO commissions whatsoever, but according to the consensus, they are very happy with their plan. They are offered Apple stock based upon a six month average between the high and the low of the trading range. The guy I spoke with said many of the folks that work in the store are always trying to buy the stock at a good price, and some hope for a drop in order to get a better price on the spread – ha, I told him Jobs would not like that at all – got a laugh!

  146. Scott (at Sabrient) and I just added two long positions to the DHH portfolio using Phil’s Buy/Write strategy, here for the 20% discount on the stocks.  These, IM and GCI, have strong buy ratings from Sabrient. 

  147. Phil gel, thanks…just frustrated..I buy it the market rips and AAPL hardly moves..may Pelosi be with you to gel :-)

  148. Phil/Market BS - I took the "green" pill today and bought like a mad-man on the "GREAT NEW HOME SALES DATA"…guess what…the largest gain of my TNA/TZA trading venture so far!  I’ve found as long as I don’t think, I do awesome!  I love the new financial engineering economy…the old real engineering economy is so overrated…=D

  149. Selling/RMM – You have some diminshing returns on the way up as the VIX is getting lower and the puts are getting way cheaper so I’d be covering at least Jans right now and 2012 is fine to lock in here if you don’t want to watch over them.  We are very likely to have another dip so you can look at that as a chance to beat Jan callers and recover but you’d better decide now if you are going to have the stomach for it. 

    Welcome Lotter!  On CHK, I wouldn’t be greedy with the put sale but I would be greedy on the spread.  Let’s say you are willing to spend $1.42 on the Oct $21/23 spread.  If you sell the $21 puts for $1.08, that knocks you down to net .34 on the $2 spread and your worst-case is owning CHK at net $21.08 but you don’t MAKE money until you get to $21.34.  If you, on the other hand, go with the Oct $20/23 bull call spread at $1.70 and sell the Jan $20 puts for $1.22, then you are in at net .48 on the $3 spread that’s already $1.94 in the money and your worst case is owning CHK at net $20.48 – doesn’t that sound better?

    AAPL/Gel – Yes and when Jobs talks protectively about the stock, those are the guys he’s protecting.  It’s actually a really smart comp plan as you let ordinary workers participate in long-term capital gains of the company and boy does it make them loyal and motivated…

    Last time we had 3 100-point days in a row was Jan 2009!

    AAPL/Kustomz – Maybe off to the races tomorrow.   Those horesemen were all held back at the gates today. 

    Well that was amazing.  Totally shameless stick on no news at all took us to 175M at the close – now we’ll see if they can get Europe and Asia to move

  150. I’m seeing something strange with my dow feeds. I have a volume for BAC at 140M and a volume for the DJI of 135M. That was around 3:50. Obviously one of them is wrong. Can someone give me volumes for comparison, @4:02 I have DJI @ 178M, BAC @ 152M

  151. Phil, I can justify it by saying their revenue forecasts are overly optimistic.  It’s as though everyone is counting on QE2.  But the forecasts can be lowered just as easily as they can be raised and my premise is that is what will happen.  That doesn’t mean I’m suggesting someone to short them now.  Just to be looking for a turn down once they’ve sucked in the institutional money.  If you’ll recall, we began earnings season with nearly every company being sold hard once they announced due to forecasts or lack of revenue growth.  But with Ford and UPS reporting, that kind of reasoning was thrown by the wayside.  What is so different about them and all the others to justify the switch?  Why isn’t appl following?  They will get their turn once we hit our next resistance level and ‘they’ have to hit the gas again somehow. 
    S&P @ 1115 the HOD.  Yeah, this is perfectly natural.

  152. From my experience, Obama really doesn’t have to release his grades to determine "educated smartness"…. he was Editor of the Harvard Law Review.  For those of you not familiar… only top grade students become editor’s of Law Reviews, especially the HARVARD LAW REVIEW, it’s not really a popularity contest….. As for Bush, name all his business success’s prior to becoming President, not including the stock ownership he was given by the Texas Rangers….. Al Gore, just shows what family, position and money from a connected family can do for you….

  153. Yip,
    I was talking about Randall Terry more than the group Operation Rescue, but that said the group has views that are far from mainstream.  On Terry, read the below information from Wiki.  At a minimum, Terry is not a person who should be given air time and respect by our national leaders, as Jeb Bush did. 
    When Kansas obstetrician George Tiller was killed while serving as an usher in his Wichita church on the morning of May 31, 2009, Terry immediately issued a statement critical of Tiller.[12][13] On the same day, June 1, Terry released a video in which he called President Barack Obama and pro-choice politicians "child killers", and described Tiller as a "mass murderer" who "reaped what he sowed." He voiced regret that Tiller wasn’t able to "get things right with his maker" and that it was unfortunate that he didn’t get a "trial of a jury of his peers and to have a proper execution."[14] Terry’s comments provoked a backlash. The Albany Times-Union, in an editorial, accused Terry of undermining the credibility of the "generally peaceful" pro-life movement, and Jacob Appel described Terry as "a George Lincoln Rockwell for the 21st century".[15][16]

  154.  Phil does this make for a mattress adjustment?

  155. Staying for the last 5 hours for $34.00 was NOT worth it, but the 1st 1 1/2 were worth 5+% !!
    Thoughts on tomorrow? SPX over 1113, down day to consolidate or more of the Short Squeeze Du Jour?

  156. , please consider that Jimmy Carter was, in pure IQ terms, our "smartest" President. Possibly, there’s more to the job?

  157. Did the BAC Nov 16-17 vertical for .20 and sold the 10 puts for .20 

  158. Ok, so Phi says 175M at the close (I’ve got around 178), but then I have
    BAC 153m
    GE 80M
    MSFT 66M
    PFE 55M
    How is that dow index volume calculated?

  159. Geen pills/Goldman – Hey, like the astrology guy said this morning "don’t question it if it works."  

    BAC/Rainman – I see the same of BAC and I have no idea what it is that ETrade measure but I do know it’s consistent and easy to follow so, like astrology "don’t question it if it works."  8-)

    Forecasts/Matt – Again, you are arguing that forecasts (which are not really projecting much growth from current) are overly optimistic based on big-picture macro fears that you expect will drill down and imperil the individual companies.  That’s not a rationale for shorting KO or IBM or UTX or GE….  They are not missing, they are beating and there’s no reason to think they won’t continue on this path UNLESS something actually bad happens.  Again, I’m not arguing that we should be at 1,200 on the S&P or 11,000 on the Dow but I don’t see any reason we should be at 1,000 and 9,000 either so I have no reason to be very bullish or bearish here in the middle of the range. 

    Bush/Acorbra – It’s not even worth discussing.  Conservatives alternate from calling Obama an intellectual elitist to claiming he’s not as smart as Bush depending on what point they want to make at the moment and they sound like idiots.  My policy is not to try to straighten them out because they are doing everything they did to try to win the last election pretty much the same way so best of luck to them on the re-match.  I think the Dems’ best chance is to let Republican’s be Republicans.  I was talking to some Dems this weekend and they were very worried that Steele would be forced to resign as it’s not likely they can find someone worse than him but I told them to have faith because the GOP is filled with incompetent loudmouths who can make tremendous fools of themselves on virtually any topic…  8-)

    By the way, here’s a fun IQ test in case any of you are curious if you are smarter than Bush. 

  160. Oh, crap is that volume weighted?

  161. Back from lunch,
    RAINMAN:  I don’t think BAC is in DJ; GE had total of 80M shares traded but only 18M through NYSE; i think that’s the difference.

  162. acorbra:  not all harvard law review members are offered membership  based on grades, there are a certain percentage (I believe its 10%) given for exceptional circumstances; of course he doesn’t have release his grades, but why wouldn’t you unless they’re embarrassing. 
    phil:  being an educated elite and being stupid are not mutually exclusive

  163. Phil/AAPL/GOOG/members………Note that AAPL closed last Friday at 259.94 and GOOG at 490.06, both within 6 cents of a strike price.  I don’t believe that is coincidence.  I’ve seen it so often that as expiration gets closer I try to figure where the stock might be ‘pinned’ and sell calls or puts accordingly.   Sometimes I’ll sell a straddle at the strike price.  I’ve very often guessed it correctly, for profit.  It doesn’t happen every expiration, but often enough to be useful.  That’s why I’m so psyched about the weeklies.  Now I can try this tactic every week rather than every month!   So her’e how I’ll look for this for APPL (for example) this week.   They may be able to pin again at 260, but more likely 270.  We’ll know by Wednesday, Thursday at the latest.  Let’s say AAPL is 262 on Thursday morning.   We’ll suspect a 260 pin and sell the July 260 call.  Then if it drops below 260 during the day, also sell the 260 put.   Will be interesting to see how often this can be pulled off.   Like someone said, we don’t care if the market is rigged or not.  We just want to find out HOW it is rigged, so we can have fun too.  :)

  164. Phil/HOV – no big deal. It was a small "test" position so no great loss. I’m not asking you to slow down either, keep the ideas flowing. If I need clarification in the future I’ll ask.

  165. @Phil
    Thanks for the FSLR bear put spread.  ((phil )))

  166. Humv/Vol — you might be right. It’s not weighted. BAC is in the dow. 

  167.  Thanks Phil for the RIG and CRM notes.  On CRM:
    That would mean that taking the Sept $90 puts for $2.60 and selling the Aug $95 puts for $2.30 could be a good way to get short but you’ll want to keep a stop at $2.75ish on at least 1/2 the Aug puts.  
    I think they are set to report late in Aug (not sure if on OpEx or beyond that).  On your options idea, I’m seeing a positive delta on this position.  Did you mean to have this as a ratio or did you have the strike prices reversed?

  168. For anyone worried about taxes next year, someone already made the calculations. Unless you make more than $1 million, there is no need to start taking another loan:

  169. Yes Humvee, Obama was selected as the PRESIDENT of the Harvard Law Review in 1990, beating out 200 other people who’s carreers would have been set for life with that on their resume, as part of a liberal plot to make him look smarter than he really is when he ran for President in 2008 – do you realize how ridiculous you sound when you say things like that?  Of course, it’s obvious where you get this nonsense

    For fans of reality – here’s a nice video about Obama at the time he was on the Law Review

  170. FCX was a great play, by the way. My first round of $57.50 put sales expired worthless, and then you had us reload selling $60 puts. That worked out to an early win, with FCX in the 70s now.

  171. acobra/Law review
    It has been a number of years since i was a senior in Law School. however the Editor of the Law Review, is usually an honor for the highest grade point…. usually the guy that spends his entire time in the law library, or politicking with the law professors that are more often than not VERY liberal, and give the nerd the A grades.  Most of these guys leave the school with a grade pont that is superior BUT could never practice law with success, as they are lost in the real world. They usually wind up as a judge. I have known many. The real people who become the best lawyers, are those that have a balanced life, and outside interests. They usually got B’s and C’s, but are the ones who end up making the money.  I never went to the library, except for social reasons, as it was populated by the boring A students, who kept their head in the books, and did little else. I was an A student, but usually got a C, because the liberal professor bastards could not stand my politics, which I kept no secret.  Not to offend anybody, but just my subkjective opinion.

  172. JRW/$34 in 5 hours – hey, that pays for a golf cart rental, right!  I had a similiar last 5 hours trying to force trades…(o_0)
    Looks like 66.76 is up next, then if the market gets "drunk" enough, I’m sure we can party until 67.78…and then the market can "pass out" and go into a coma at 69.88!  I’m thinking this earnings sugar rush could last a few days…barring Israel bombing Iran, etc.  Friday GDP could be very lucrative also…either way, that should be an easy day to make some free money.  Exciting days ahead!

  173. What’s your thoughts for turnaround Tuesday?

  174. Phil
    Law school is a very political experience… most all of the professors, as I stated, are leftists. They relate to their students based upon their political beliefs. These professors could not get a client as a lawyer, and are intellectual, know it all,  nerds for the most part that have relegated to the narrow sequestered life as an educator.  While I was in law school. I worked as an assistant to the Governor ( a friend of mine) of the state (Republican) and it was a very influentual job, as I headed up his efforts to energize the Young Republicans. I had two radical commie professors that hated the idea of me doing this work, and tried to make my life miserable. I was an A student that got C’s in their classes. They are paid to be fair and impartial…. no – they could not resist the influences of their overwhelming bias.  I see the same problem in our political system today, and have not, after these years, been able to forgive it. Harvard is a very leftist institution, and Obama probably was very well accepted, and I’m sure his professors were very comfortable with his political views. Look at Kagin… a poster child for the left, and certainly not a "mainstream" candidate that will look at issues in an "objective" prism.  She is the true Harvard product.

  175. lflantheman--AAPL,
    I watch AAPL too, last several days every time it hit 260 it would get immediately swatted back. Most it ever got above 260 is maybe 15-20 cents. Check out an AAPL 5 day chart, since earnings it cannot break 260, despite the NAS exploding upwards. the chart tells the whole story. I am long AAPL so I am curious as to why you think this week it would be pinned against 270 and not 260 again.

  176. Phil, 
    The link didn’t post… sorry here it is in case you have a chance….

  177. gel1/Law Review
    Yes, we are in agreement…as a rule the A Students become proessors and judges, the B students work for the government and the C students practice law and make the money.  In my class many years ago, all editors during my 2 1/2 my years were all A students, top of the class and all had and have very successful law practices (an exception to the rule). The President of the Harvard Law Review is an accomplishment in it’s own right demonstrating intellect and work ethic, it’s not just based on popularity and politics. The discussion was focused on Gore, Bush and Obama regarding "smarts".  Comparing this Law Review accomplishment to Al Gore and George Bush’s accomplishments prior to graduation is no comparison. IQ, test scores and grades are not a litmus test for success. One thing is for sure…. Obama had no family connections to pave his way to college and Law as Bush and Gore. Usually it’s WHO you know to get there and WHAT you know after you get there. In my experience, we had one essay exam at the end of each semester and all exams were annonymous to the professors….. I don’t think they knew if I was conservative or liberal….Everyone’s opinion is based upon their own experiences… it is what makes the world go around…. nice to hear yours…………      

  178. Phil, here’s another reason profits are rising but doesn’t bode well for the future.  Henry Ford had it right.  If you don’t employ people and give them a liveable wage, you can’t grow your market.

  179. Phil:  Obama was elected as the president of the harvard law review by his peers, nothing to do with grades.  Obviously he is a politician and was very popular.  In addition to grades, one can get on the review by a writing competition which is given variable weight by the forces that be. 

  180. acobra/Law Review
    Our observations coincide…. I believe, as you say, the political implications go much further than the IQ or entrance exams. I had, in my class, some students that could not read a calendar, but were in the law school because their family donated a huge amount of money to the University. They were a legacy acceptance.  Obama, had a much more powerful influence to his acceptance… sure he was intelligent, but the largest influence to his acceptance was his race, and the vast amount of scholarship money that is targeted to this effort.  He was the perfect candidate to receive a scholarship.  I did not have a scholarship, and I worked my ass off to help pay for my education.  I DID something with mine…. Obama took the easy out and became an organizer of weird political ideas in the ghetto.  He wasted his education – why not go to a manual arts school and you can probably do the same with his objective, and move the Harvard scholarship to someone that can benefit from it.

  181. Humvee… The Law review is usually based upon the top 5% grade point in the class for eligability. The grades.. well they are political –  I KNOW.  Bottom line is…. those who suck up, more often than not, are potential candidates for the honor. I did not suck up to anyone, and I can tell you many that were on the Review were not in my league, and I proved this soon after graduation.  I’m not bitter, just cognizant of the way the system works.

  182. Gel1:  I am happy to hear that you held your ground and didn’t let them grind you down!!

  183.  kururi/AAPL….I think it could get pinned at any level.  Depends on how the markets move the remainder of the week.  Could be 270, 260, 250, or not at all.  If it’s close to a strike on Thursday and the markets are somewhat stagnant, then ………well, we’ll see. 

  184. Gore’s lowest grade really must have been Human Sexuality.

  185. Here is a link to the Harvard Law Review, a letter written by Obama, describing how he was helped by affirmative action:
    Now all you libs will say that’s just fine (and perhaps it is); but let’s drop this nonsense about his stellar academics

  186. Phil / Obama Gaffe’s … its amazing that he says as many stupid things that he does, given that almost every word is written for him to say on his travelling teleprompter  (B+ at Occidental in teleprompter reading).
    And remember, when it comes to Obama Gaffe’s … There’s an App for that !
    I love how you go into hyper partisan Must Defend Obama At All Costs Mode at any criticism at all :wink:
    Anyway, just google up Obama’s gaffe’s:  This should keep you busy for a while:

    A Blog Only Cap & Gel & Pstas could love:

    etc etc

  187.  Really, if collegiate status or academics mattered at all then GWB never would have been in office or college for that matter.  Unless you want to include Skull and Bones.  Then all bets are off.

  188. gel,
    I just graduated from law school and agree with the ass kissing for grades comment.  All of my teachers were adamant that we should not come to them and complain about a final grade.  The final grade we received was our final grade, period! Of course, after a year I find out anyone & everyone would complain about grades and would routinely get grades bumped up.  I personally knew kids who went from middle 50% to the top 10-20% by grade appeals.  Oh the joys of law school and "anonymous grading" (before you show your face when you appeal the grade)
    <Stepping away from Gel and speaking to everyone now> That being said, Obama was President of Harvard Law Review….it doesn’t matter how he received the position…he was president of HARVARD LAW REVIEW…what was Bush president of during Harvard Business School? his local AA & NA chapter? lol, kidding…
    anyways, facts are facts and he was the President of HLR--an amazing achievement no matter how he attained this position…let’s move on people! 
    Disclaimer: I did not vote for Obama

  189. Fighting the last election ….
    Just who is it exactly that keeps bringing up Bush other than Obama and Phil ?
    As Bill Parcells says, you are who your record says you are.
    True for Bush.
    Especially true for Barrack "Hey its the other guy’s fault" Obama.

  190. My understanding is that Obama was an affirmative action pick for HLR

  191.  Affirmative action/Cap – What is the source of your understanding that Obama was an affirmative action pick for HLR?

  192. Cap: you are correct (as usual !!) check my link above, it’s in his own words.

  193. rn273 … I remember reading and hearing about that during the election; no specific source I can give you (I don’t collect this stuff, y’know), except I guess this one, courtesy of the O man himself:
     I must say, however, that as someone who has undoubtedly benefited from affirmative action programs during my academic career, and as someone who may have benefited from the Law Review’s affirmative action policy when I was selected to join the Review last year, I have not personally felt stigmatized either within the broader law school community or as a staff member of the Review. Indeed, my election last year as President of the Review would seem to indicate that at least among Review staff, and hopefully for the majority of professors at Harvard, affirmative action in no way tarnishes the accomplishments of those who are members of historically underrepresented groups.
    Source:  Humvee4me’s link above.

  194. Affirmative Action/Humvee – are you referring to Cap’s comment about the affirmative action? I don’t see anywhere in the article confirmation that he was an affirmative action pick. 
    He seems to suggest that he might have been, or he might have come from the writing competition, or from the third process. Where’s the "yes, i was an affirmative action pick" line?
    FYI – I am not an American, am just curious about this topic.

  195. Phil
    have a buy write on TZA sept  34/39 bull call spread and  also sold the sept 30 puts--if the sept 30 are assigned to me should I sell calls against them or just hold as it is insurance— sorry still learning  the ins and outs

  196. Phil,
    I was curious of your thoughts for a buy/write on WAG. The 2011 puts and calls are $4.75 while the 2012′s are $9.25 and the dividend is 2.3%

  197. On tax cuts …. I want to see Phil debate Paul Ryan ….

  198. rn273;  please see my link above  7:51pm- obama’s own words  from the havard law record (the law school’s newspaper)

  199. Cap – I don’t think I quite follow; Obama claims to have been benefited from Affirmative Action during his academic career, and perhaps also in the HLR (since we can never be sure what the exact process was at the HLR). Just that. I don’t see how that (the line you have highlighted) suggests any confirmation that he was an affirmative action pick for the HLR. (I mean, this is like the "All fish can swim, some men can swim, so some men are fish" argument).

    As to information heard during elections, surely it’s a function of the source of the information?  That’s like believing the perma-bulls all the time, or the perma-bears all the time, no? 
    I am disappointed with some of Obama’s decisions/policies, but agree with some others (just like I disagreed with some of Bush’s policies, but agreed with some others) – but I am not sure if misinterpreting statements is helpful in any way.

  200. "I might have been"   is as close as a politician ever gets to saying  "I did"

  201.  But we aren’t talking about mays or may nots in general, we are talking in context of the HLR. I knew people at the HLR, and there is no confirmation on how a person got picked. In this specific context, there is a significant difference between "There may be job growth" and "I may be an affirmative action pick in the HLR"

    And Humvee – I am going to hold you to your quote that "I may have been" is "I did" (and I guess "I may not have been" is "I did not") ;)

  202. Obama affirmative action pick for HLR:
    Read the article humvee posted. Whether or not a member of HLR received their position based on affirmative action is never disclosed or recorded.  Even if he was chosen based on affirmative action, he was elected by his peers to be the President.  His subsequent election demonstrated his peers believed he was a great contributor to HLR and therefore his appointment on the law review was justified in spite of affirmative action!  Let’s go farther and say he received affirmative action to be accepted to Harvard Law.  Is that unfair when he was living in a racially biased society? What % of the incoming Harvard law class do you think gets in because of family connections or donations? Or grooming from an early age by a family with easy access to excellent educational resources? Or a white person’s name on the application? (It was and still is common for applications for employment or to a school to be rejected on the basis of the applicant’s name).  The list is almost endless.  Conversely, the list is almost endless to the opportunities afforded to the majority classes.  If you don’t believe we live in an unfair system and truly believe affirmative action is the real unfair policy, then you probably also believe the markets aren’t manipulated by computers and the wealthy ;)
    Note: I know a lot about the subject of institutional racism and affirmative action because I wrote a research paper in law school on Constance Baker Motley, the first black woman federal judge.  Before I wrote the paper, I too believed affirmative action was unfair.  However, after thoroughly researching the area, I’ve come to realize how ignorant I’ve been and how privileged I am to have grown up white in the U.S.  Go read some books on the subject and make an educated decision for yourself instead of regurgitating misconceptions. 
    Disclaimer: I am white and have a white person’s name and did not vote for Obama.

  203. rn273 … I wasn’t there dude; just commenting on what has been reported and seems credible given the lack of any verification whatsoever of O’s scholarly capabilities..  And O’s own words confirm that may well have been what happened. 
    If I tell you that O was selected because he was just super duper terrific will it make you feel better ?
    That was my understanding; if your understanding is different; that’s ok w/ me.  I doubt we will ever really know more than what we do already on this completely non-important topic.

  204. For those of you that attended an upper tier law school, you will agree that the curriculum is exactly the same in all law schools, and the rating of law schools is based upon the success of lawyers that graduate from the various schools. I did not attend Harvard, but I went to school with a few students in my class that transferred from Harvard to my school. The only difference in your education is the name on the graduation certificate and the cost of tuition. That’s it. The problem I have with Obama receiving this level of free education, is he never used it.  He wasted it on a carreer spreading hate in the disadvantaged neighborhoods of Chicago.  I am sure there were many potential black students that were qualified to fill his slot at Harvard, and do something with the education in the profession that it has targeted. The purpose of spending resources in the area of affirmative action is to expand opportunity, in this case the legal profession.  He spent 20 years playing ghetto politics…. not worthy of a Harvard Law degree, even if was free.

  205. Gel/Cap – you guys seem so smart in almost all areas but politics! You both b!tch about deficits but if you take out the cost of 2 wars that BUSH started then it hasn’t increased that much at all. Add in the fact that Obama has brought those wars ON THE BOOKS rather than abusing the original intent of supplemental appropriations and there has been virtually no change. How can you say that Bush is not responsible for this a good portion of this mess that our country is in?

  206. gel,
    Teaching at one of the most presitigious law schools in the country is not good enough?  Furthermore, you can’t say affirmative action for acceptance to law school should only go to students who want to practice in the legal profession.  As a graduate from law school, you surely know the power of a law degree and the endless opportunities it affords oneself.  Limiting the power of a law degree would be an unfair policy and one that affirmative action does not attempt to do.

  207.  Cap – I am reminded of this on reading your comment (am I allowed to post it? Or is swearing in links not allowed?). I am merely pointing out that you are passing off your opinion as fact, whereas it is not. Why would you think that if I disagree with you, I would agree with something else?

  208. FDX:  The raised guidance not so rosy after all ….
    This market is ridiculous ….

  209. rn273 … LOL.   Which one is your response … John Turturro’s, or Jeff Bridges’ ?
    jromeha … you are a true believer !  There is no debating w/ you.  Its all Bush’s fault !  grin:
    ’til the morrow, gents ….

  210. :grin:

  211.  Cap – the dude abides, man :)
    Gnite, see you all tomorrow!

  212. rstuart/Law School
    Yes, you are correct – a law degree does much for the advancement of one’s career, and I agree it develops the reasoning ability one needs to take on the challenges of life. My point is that I feel if we provide the very expensive education through affirmative action on a complimentary basis to the student, I believe they have an obligation to follow through with those skills targeting that specific profession. This is done often to encourage a re-population of professional vacancies in dentistry, medicine and in many others. What good is it to invest $50,000 into someone under the guise of filling a professional vacuum, and then have them wash dishes, or whatever. This represents a bad investment, and violates the original intent  If the student pays for the education himself, then anything goes.

  213. A final word on the subject:
    ~ It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat. ~
      Theodore Roosevelt

  214. The Big Lebowski one of my fav…time for NFLX

    Pharm ARNA and JNJ thanks man ;-)

    S did well for me today, sold half they report on the 28th no way I’m holding, that said they have one phone that can compete (EVO)and their prices will attract more the ongoing recession

    F CEO Mulally all over the financial channels pumping the companies products, love this guy since BA…


  215. ~ It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat. ~
      Theodore Roosevelt

  216. Hi, gel1,
    How could you, or anybody, know what Obama would do after he got accepted to Harvard?  Maybe he knew.  Maybe.  But are you a little harsh by applying the perfect science of hindsight?

  217. Ouch.  All this politics.  Seriously???

  218. My point is these grants are made with an objective in mind. The money is a gift, and usually has strings attached. The grantor wants something for the resources he is providing.  A friend of mine was put through medical school by the US Navy. He subsequently spent 5 years in the Navy as a orthopedic specialist doing very rare back surgeries. He received his education, and met his obligation, and now is in private practice specializing in a surgical procedure that has placed him in notoriety as the best in the country for this specific skill.  Would it been appropriate for him to abdicate his inplied professional responsibility, and decide to follow another career?. Express or implied, I believe contracts should be fulfilled. In many cases when a breach takes place there are no consequences one way or another, but, I believe it does not show well on your resume. In Obama’s situation, someone provided the scholarship funds, hoping it would encourage the recipient to enter the legal profession as a member of a minority group. The grantor may not have been pleased to see his money go to the education of a community organizer, albeit a noble endeavor.

  219. Jordon… that’s it…. no mas

  220.  Gel – But very few people work on what they studied (your comments are for any scholarship – not just affirmative action, right?). I have similar problems with loads of people who get subsidies (or grants) to do PhDs in physics to end up working on Wall Street. Would you recommend that such a requirement be made a part of the scholarship contract? 

    Congress moved to extend jobless benefits seven times, as has been the case over the past two years, at a time when almost half of the ranks of the unemployed have been looking for at least a half year.
    The unemployment rate for adult males (25-54 years) hit a post-WWII this cycle and is still above the 1982 recession peak, and the youth unemployment rate is stuck near 25%. These developments will have profound long-term consequences – social, economic and political.
    The fiscal costs of the depression continue to mount, with the White House on Friday raising its deficit projection for 2011 to $1.4 trillion from $1.267 trillion. That gap in the forecast – $133 billion – was close to the size of the entire budget deficit back in 2002. Amazing.
    You also know it is a depression when you find out on the weekend that the FDIC seized and shuttered another seven banks, making it 103 closures for the year. What a recovery!
    Meanwhile, how are the surviving banks making money? By cutting their provisions for bad debts (at a time when the household debt/income ratio is still near record highs of 120% and at a time when one-quarter of the consumer universe has a sub-600 FICO score – which means they are also ineligible for Fannie or Freddie mortgage financing.
    The banks thus far have reduced their loan loss reserves between 23% (Cap One) and 73% (First Horizon) – as Jamie Dimon said last week, these are not real earnings.
    You also know it’s a depression when a year into a statistical recovery, the central bank is still openly contemplating ways to stimulate growth. The Fed was supposed to have already started the process of shrinking its pregnant balance sheet four months ago and is now instead thinking of restarting Quantitative Easing. Of course, we are in this bizarre environment where bank credit continues to contract – last week alone, bank wide consumer credit outstanding fell $2.2 billion; real estate lending contracted $9.2 billion; and commercial & industrial loans slid $5.1 billion.
    What did the banks do this past week? They replaced cash with government securities – the $47.5 billion net buying was the second largest in the past three years. As the banks find few opportunities to lend – households are either not creditworthy enough to lend to or are busy paying off debts and companies that do have any expansion plans have enough cash on their balance sheet to finance their initiatives – they are likely to use their $1 trillion in excess reserves buying government and related securities, especially with the yield curve so steep and the Fed ensuring that it has no intention of taking the ‘carry’ away for a long, long time.
    Did we mention that you also know you are in some sort of depression when after two years of record $1+ trillion deficit financing to kick-start the economy,the yield on the 5-year note is sitting at 1.8%? What do you think that tells you? It tells you that the private credit market is basically defunct, especially when it comes to the securitized loans, which played such a critical role in promoting leveraged economic growth from 2001 to 2007 – the amount of securitized credit that has vanished since the credit bubble burst two years ago is $1.4 trillion – 40% of this market is gone. And what replaced it was this rampant government intervention into the economy – aimed at putting a floor under the economy. But insofar as the government stimulus fades and the contraction in credit persists, it will be interesting to see what sort of spending, output and income growth we are going to see in the near- and intermediate-term.

  222. Phil, Is it best to wait to do some buy/writes when the VIX is higher and you can also pick up stocks at a discount  from now – or not necessarily? Thanks

  223. Pharmboy, that’s an interesting read.  Thanks.  But I’m afraid you’re missing the point.  And that is that new housing inventory is at its lowest level since 1947!
    Want another interesting read?  Ambrose Evan-Pritchard is now firmly in the deflation first inflation second camp.  The same one Robert Prechter has been in since 2002.  Not justifying it, but our crisis has brought me closer then ever in beginning to understand how the Germans got so worked up as to start WWII.  They lost absolute respect for their own currency.  As the article points out, it can happen in a flash.  After the mobs riotiing in the streets, I think the next thing that bothers me the most is that inflation causes a massive transfer of wealth from savers to debtors.  That really pisses me off!

  224. Seems to me that cash is being hoarded in three distinct ways now.
    The banks are not lending, so they are awash with cash.
    Corporrations have a lot of cash because they are neither expanding much or paying people more
    Families are cutting back spending and saving a little each month.
    If and when those beasts are released for whatever reason, inflation could be a real problem. For now though we may have a year or two of another debt fueled prosperity illusion. The wise should beware of this and diversify broadly in land, home, metals, stocks and bonds and or course building communities  and relationships.
    Just my thoughts…

  225. matt, pharm — nice reads.  I suddenly feel bearish…

  226. Pharm, thanks for posting Depression info. Not fun to read, but really necessary. Helps keep things in larger perspective.

  227. Cap – Paul Ryan vs. Phil?…….LOL……