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Take-Off Tuesday Already?

Wow, this market goes from zero to sixty in record time, doesn’t it? 

Our 1,113 mark (see yesterday’s post for charts) was tested and broken on the S&P yesterday (see David Fry’s chart) on a silly stick save into the close but, seeing that, it was very obvious that "they" are looking to paint some impressive moves on the charts this week so strap yourselves in – it’s going to be a wild one.

1,120 is our next big test on the S&P along with the satanic 666 on the Russell and 10,700 is the next big test for the Dow (as 10,500 seems well in hand).  Advancers led decliners 20:1 on the Nasdaq, which shows you what a total farce the market is because we had the same ratios going down so stocks are either ALL good or ALL bad on a random daily basis.  Human beings do not trade this way my friends, this market has been totally taken over by machines and the affect of your individual trading is about the same as shotting a water gun into a wave to slow it down.  

As long as you accept this fact and "go with the flow" you can be a very happy channel surfer but fight the tide at your own peril!  We stuck to hedged plays in yesterday’s Member Chat with our bearish play on FSLR in the Morning Alert and then earnings spreads on MEE and VECO along with long-term bullish plays on LYG, GS, CHK and our beloved TBT, who are finally showing signs of life.  We also keep selling GENZ calls to overly enthusiastic buyers who think someone is going to pay more than $70 for the company – even though it was at $50 before the rumors started.  Aside from the lack of logic that a buyer with a p/e of under 10 will pay a p/e of over 20 for GENZ, it just isn’t really the right credit environment for buyers to be bidding +40% for a company.  We aren’t buying puts but we’ll certainly sell Jan $70 calls for $4 as that’s just silly! 

The markets are back in "Soar and Ignore" mode this morning as bad news is now like water off a duck’s back to the market, much the same way good news was ignored just 2 weeks ago.  The moon is full this week so I’m going to start charting that against the market as we’re still trying to find some sort of early predictor of this moody behavior.  ICSC Retail Store Sales were up 0.6% vs 1.4% last week and 3.8% for the year (down from 4.2% last week) in a very quickly eroding outlook for retailers.  We’ll get Redbook Chain Store Sales at 9 and Consumer Confidence at 10 and tomorrow’s the Fed’s Beige Book through about July 15th and if anything is going to tank the markets, it will be that so we shall remain cautious until tomorrow afternoon.  Of course, we did all our buying almost 1,000 points ago so it’s hard for us to get motivated to buy more at these prices anyway…

It’s also hard to get motivated to buy at 10,700 when you look at the above chart and realize how dangerous the jobs situation still is in this country.  American corporations may be doing well as they sell 50% of their goods overseas (and make 80% of them overseas) so the United States in iteslf plays a smaller and smaller role in their overall planning.  As long as overseas markets grow and labor costs keep going down – Big Business can shake off a little slowing demand from the hometown consumers

No company is more American than Harley-Davidson and HOG is a perfect example of the death of the American worker as the company reported $71M in profits, TRIPLE what they made last year – on LESS SALES.  That’s right, Harley laid off 2,000 Americans last year, 20% of their US work-force and will dump another 1,500 this year.  Harley is transitioning from "Made in America" to "Assembled in America" and we’re lucky the remaining 5,000 employees are still allowed to do that!  

Because of high unemployment, management is using its leverage to get more hours out of workers,” said Robert C. Pozen, a senior lecturer at Harvard Business School and the former president of Fidelity Investments. “What’s worrisome is that American business has gotten used to being a lot leaner, and it could take a while before they start hiring again.”  And some of those businesses, including Harley-Davidson, are preparing for a future where they can prosper even if sales do not recover. Harley’s goal is to permanently be in a position to generate strong profits on a lower revenue base. 

Despite all the hiring we’re doing over there, our little rally yesterday failed to get a reaction out of Asia, which pretty much flatlined this morning.  The Hang Seng finished the day up 133 on a mighty stick into their close so I don’t count that and we should be very concerned that the Nikkei continues to gap 1,000 points away from the Dow – even with the Dollar climbing to 87.5 Yen in last nights FOREX manipulation trading.  The Dow and the Nikkei are now 12% apart for the year, with the Nikkei down 10% and the Dow up 2% so one of them is out of their minds:

If we’re going to be pushing up to our 5% lines at Dow 10,700, S&P 1,155, Nas 2,300, NYSE 7,350 and Russell 666, then we could look at EWJ Sept $9 calls at .70 as that’s just .10 in premium on the Nikke index, currently $9.59.  Even a 50% catch-up by the Nikkei would be 6% and that would take EWJ to $10.16 so $1.16 for the calls at least and a very nice 65% profit so that’s my bullish play on global markets if this party keeps going. 

Europe is doing a better job of keeping up with us and EU indexes are up about 1% ahead of the US open (9am).  All the EU indexes are in their safe zone – if it’s a dull day we can look at the charts tomorrow.  We had good profit news from DB and UBS this morning as all the global Banksters are having a nicw quarter (hence our LYG play yesterday).  SAP raised their sales outlook and had a 16% jump in profits and Daimler continues to show Americans how to run a car company (and they have universal health care and 6-weeks paid vacation!) with a nice profit AND raised guidance

Redbook Sales came in +2.7%, in-line with expectations and Case Shiller was up 1.3%, a bit better than expected so still showing signs of life in the economy.  We get a preview of the Beige Book with Richmond Manufacturing at 10 and the Chicago Fed at noon – if those are not pretty good we’ll be taking some speculative shorts into tomorrow’s Fed report as it would be a shame to blow our lovely profits on a "flash crash," wouldn’t it? 

Other than that, get ready to ride the waves and have some fun as the market approaches ramming speed

 


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  1. Wow…..that is an ugly chart.


  2. Phil -
    If I want to chase with a tight stop what woud you short on gold be? GLL – how far out?


  3. Good morning Phil, restating my question from early morning. Thanks
    jomptien
    July 27th, 2010 at 3:47 am | Permalink  
    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


  4. That chart right there proves why this economy’s ‘recovery’ is all smoke and mirrors.  We are being brainwashed into believing the impossible is possible. 
     
    Phil, since we’re in agreement the market is a joke.. both on the way up and the way down.. can we refrain from trying to apply any fundamental assessment to it and make statements like this is a fair value or that isn’t a fair value for something?  Instead, we should solely be looking at ways to decipher the bot’s programs and crack ‘their’ code.  It’s our only chance in this market.  We should all focus on trend analyses, pattern recognition, sig unes and other tells we can come up with and not debate whether AAPL should be going up or down.  It will only go up when they want it to and it will only go down when they want it to.


  5. Good morning Phil,
    Is this a good time(VIX < 23) to set-up some hedges? which ones? I know most of the people have aready set ones weeks ago but since I am a new subscriber have not done any yet. Many thanks and have a good day!


  6. matt, what you are saying in effect is that we should all be selling options more often, since when doing so we do not have to predict what the stock will do, only what it wil not do.  The margin of error on the trade is greater.  But Phil tells us to never sell an option unless we absolutely want to own  it at that price.  And I can understand that , since a fast move over the strike you sold at will cause devastating losses.  And of course selling premium is very margin intensive, as compared with buying. So where does it leave us?  Condor trades with defined risk?


  7. matt/TA — that would be TA, not Phil’s bag if I’ve been around long enough. I understand what you’re saying and would like to find more ‘tells’. I have a friend that has been looking for a tell on the dow for about 20 years now. I think he’s looking at the wrong dataset and should be using the S&P and/or russell but the cost of historical tick data is prohibitive.
     
    Even if he did use the larger indexes, it’s like trying to find a needle in a needle stack. It also has to be the needle that the other bot brains haven’t thought of or witnessed. That reduces the odds even more. I think in some ways, his methods are too focused and he’s basically trying to create a bot himself rather than riding on their coattails although he claims to be looking for a ‘tell’. Even if he does find it, I think he’s going to have the same problem looking for the algorithmic exit.
     
    On the other hand, I think ‘loose’ algorithmic trading, like JRW’s probably has the best chance of riding with the bots since it’s NOT algoritmic. There is some squishyness to it. I believe it’s that squishyness that the bots can’t handle or identify. JRW might think his methods are more concrete than what I’m describing but the number of people who are trying but not succeeding with his method are evidence of that squishyness. Personally, I haven’t figured it out yet and still don’t see the sig runes but I think that might be a matter of setting up the charts EXACTLY like JRW. If I change the time frames on certain charts, I can sometimes see them but I with no consistency.  Changing the timeframes has the effect of squishing or stretching the markers in such a way that they can appear suddenly or disappear and is likely the reason someone the other day said they see sig runes everywhere! I think JRW’s setup gives him a consistency that others can’t find.
    Blah, blah, blah… time for another cup of joe.


  8. fdj/risk — I’m not sure I believe some of your statements. For example, that the margin of error on predicting what a stock won’t do is greater than what it will do. I could go out on a limb here and bet that none of the s&p 500 stocks will be at zero in 18 months and I’d bet my margin of error would be better than you telling me where those stocks will be. It’s a matter of extremes and being able to make money at a comfortable level. Also, I’m not certain about your assessment of why Phil advises to sell puts only on stocks you’d own at the strike. I think this is just common sense use of options. If you weren’t using options and would buy the stock at that level, selling the put is only beneficial. I don’t think it has anything to do with a fast move.


  9. fdj — I shouldn’t have said "believe" should have said "
    "aggree with"


  10. Matt,
     
    I’m a bear but it is futile fighting the BOT’s.  If they want the market to go up, and they control the market, which it appears they do, then it’s most likely that the market will go up for the following reasons:

    Most people want the market to go up because they don’t short.
    Union and other pension funds get decimated when the market drops.
    Brokers need the market to go up.
    The Government needs the market to go up.
    Mutual Funds need the market to go up.

    The only people that want the market to go down is people that short and the Republicans.  So where do you think they’re going to bring it.


  11. exec/up — I agree with everything your saying. Have you ever heard of "deep capture"? How about "failed to deliver"? You can find your down drivers there.


  12. exec, that’s one of the ‘truest’ statements I have read in while


  13. Matt……This melt up is amazing.  I agree with you but the tape is sick.  This is reminding me of the 12 month plus smoke and mirrors run up from March 09 to April 10…that BS looks to be resuming again. I cannot believe it quite frankly it’s another Ground Hog life.


  14. Heavy volume in FAS/FAZ this morning.  Usually indicates a rocket kinda day.  Phil’s headline is probably aprapos for the day..  but being a tige who can’t change his stripes, I’ll be looking for a fade today.


  15.  Hi Phil, 
    I really need help figuring out what to do with my positions…as per your comment yesterday if we pop the levels which we have I’d better have some buys ready… Which I don’t!  Don’t know also if I should kill some of the shorts including the DXD and SDS hedges? Is your feeling we will move higher towards 10,700 and then pullback. 
    Here again is the link to my positions (which again I thought were slightly bullish--but yesteday I lost 2.5% with a 1% move up!! spreadsheets.google.com/ccc
    Thanks a lot for your help…!


  16. rain, I’m just saying that it is easier for me to predict what a stock won’t do (move 20% one way or another in two months) than what it will do.  In other words when I buy an option the stock must move one way within a stated time limit.  If I sell an option the stock can just sit there for two months or move slightly and time works in my favor.  The percentage of winning trades has to be greater when I sell, but there is the chance for catastrophic loss when there is a move over my strike.


  17. Hey all,

    I am starting a short position in US Steel (X). I entered at 47.45, and we are looking to exit at 46.50 and below.

    Check out my analysis here!

    Good Investing!


  18. Good morning,
     
    IWM 64.37, 64.96, 65.36, 66.73, 67.21, and 67.98


  19. Good morning!

    Dow 10,700, S&P 1,155, Nas 2,300, NYSE 7,350 and Russell 666 are our targets at the moment – pretty much the 5% lines off our mid-ranges.  My betting is NO but that won’t stop them from trying and, once again the RUT is leading the way with the Nas. 

    Keep in mind we expected this yesterday as they held back the horesemen to give the Nas a super-push today.  Even BIDU is moving up now so all stops have been pulled out to get us over 2,300 on the Nas but 1,900 on the futures is proving tough to beat so we’ll see how the day goes. 

    Losing either of our greens is a bad sign already, of course and 1,120 on S&P is key along with $3.20 copper.  Note gold is NOT going up with the market – that’s actually a good sign for a sustainable rally.

    I like FAZ at $13 more than I liked it at $13.60 yesterday so we can risk the nickel we made yesterday on that line to the upside.    We have the EWJ play above if you want to be bullish but I don’t, I think this is overdone but we’ll have to see how Richmond Fed and Consumer Confidence at 10 play out.


  20. Interesting JR……lots of numbers on the downside.


  21. fdj/buy/sell — that clarifies things. I missed the correlation between buy/sell and do/don’t.


  22. Good Morning! – Phil, imagine the look on future HOG purchasers faces when they notice the word CHINA imprinted on a part of their "american made" ride……Priceless!


  23. JRW - how strong is your 67.21 line?  I had a weaker line around 67.01, but nothing around 67.21.  Thanks!


  24. Phil, how do you like FORD? would you set-up a buy-write for a nice entry point? which levels and time frame?
    thanx


  25. cmsosa/ford — are they making the iPhone bumpers?


  26.  Pharm / Others
    What do you think of PLX?
    Thanks!


  27. Unemployment/Exec – Yes, it’s like we’re conducting an economic experiment to see how many unemployed people can fit in a country before it collapses into anarchy.  Much like phone-booth sutffing – it’s a lot more than you would think…

    Gold/Samz – Nouns are very helpful when asking those kinds of questions…  I assume you want to short gold and you know I hate to chase, we shorted at $1,200 and now we’re at $1,171 but I think gold can still fall pretty hard so GLD Oct $111 puts at $2.60 have good bang for the buck and you can turn them into a spread by selling whatever Aug puts are $2 on the turn, playing it like a mattress play.  If you want to just go with a put as a momentum play, the Sept $112 puts at $2.12 would be my chioce but I’d feel better having the spread to fall back on.

    Impossible/Matt – Why, sometimes I’ve believed as many as six impossible things before breakfast!  The fact that the daily/weekly movement of the market is a joke does not negate fundamentals.  This is the critical thing you do not get – price is not value.  I don’t care if they want to sell me GE for $13 or VLO for $16 - it will not make me like them less.  The "code" you are looking for is a trading range as the bots create a buying sentiment and sell into it and then they create a selling sentiment and buy into that – not complicated.  The people who control the bots go out and try to manipulate the news to make it look like the bots are just following "fundamentals" but, in the end, they are smart guys just like us who sell options to suckers who think they see a breakout in either direction but, in the end, we expire right about where we started every month. 

    Hedges/Cmosa – Well the FAZ was a good start this morning.  Don’t confuse a little pullback with a breakdown but if we lose 666 on the RUT and 1,113 on the S&P and 2,300 on the Nas then I like the QID $15/17 bull call spread at $1.15, selling the Sept $16 puts for .80 as that’s net .35 on the $2 spread that’s $1.70 in the money right now.  I figure the big boys have reported and now we’ll here from some little companies that may be struggling and that will bust some confidence and, of course, I"m a little worried about tomorrow’s BBook but only if we can’t hold our levels.


  28.  Out of MEE yesterdays low X really killing coal stocks today 8% gain too good to ignore


  29. The "code" you are looking for is a trading range as the bots create a buying sentiment and sell into it and then they create a selling sentiment and buy into that – not complicated.
     
    I never looked at it in from this perspective.  Makes sense.


  30. Phil, I had sold short 2x $80 Jan 11 Puts on FSLR back in January.. then I rolled them up to 2x Dec 2010 $85 Puts for some credit, and last week I bought back one put. I am thinking of switching direction with the remaining Put (which is now $2.20, down from $6.00 when I sold it) and buy it back while simultaneously selling short 1x Sep 2010 $160 Call for a net credit of $0.35. What do you think?


  31. Still looking for a fade today..
     
    Phil, I completely agree with your assessment that they create a euphoric atmosphere, via their media pawns, for their bots to sell into.  And then the opposite.  And you’re right, that is a range. 
     
    Oh shoot, it’s 10am.  Unleash the bots!


  32. goldman
    66.73 is an 8; 67.21 is a 5, and 64.37 is an 8. The rest are less. Good hunting !!


  33. Wow, what an amazing head fake in IWM just now…"bots gone wild" this morning!  Danger Will Robinson…


  34. I haven’t heard any updates……is GS still making money trading every single day or have they decided to through in a few losers to give them cover?


  35. It’s funny seeing what I said being debated.  This will be very interesting after I’m dead to see how my writings are interpreted – maybe I should go the Andy Kaufman route and fake my death so I can see how people interpret my body of work after I’m gone…  8-) 

    Don’t get sucked into the mindset that the bots have infinite power.  They do have a lot but only in a low-volume environment as it’s very, very expensive to move the market around.  

    Consumer confidence 50.4 vs 54.3 in June and 51 was expected yet they jammed the market up on that???  What total insanity…  Matt, you must be very pissed.  Even I’m pissed at this one as it’s simply stupid!  At least it’s a good chance for people who missed FAZ to get in near $13. 

    No word from Richmond Fed yet. 

    July Consumer Confidence Index: 50.4 vs. 50.8 expected and 52.9 prior. Present situation 26.1, vs. 25.5 prior. Expectations 66.6 vs. 71.2 prior. "Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook… retailers are very likely to face a challenging back-to-school season.”

    Sales of new homes are abysmal, yet the supply of new and existing homes is expected to grow. Home builders, which began buying up lots late last year in anticipation of a rebound, are stuck with thousands of acres that are prone to lose value as the market struggles. Many will build homes on the land, rather than write off its value and wait for the market to improve.

    The Reserve Bank of India raises rates more than expected in an effort to tame inflation as the country experiences dramatic growth. But there are concerns that the hikes may result in a slowdown of industrial growth.

    09:30 AM At the open: Dow +0.38% to 10566. S&P +0.44% to 1120. Nasdaq +0.43% to 2306.
    Treasurys: 30-year -0.56%. 10-yr -0.31%. 5-yr -0.19%.
    Commodities: Crude +0.25% to $79.18. Gold -0.81% to $1173.50.
    Currencies: Euro -0.02% vs. dollar. Yen -0.81%. Pound +0.31%.

    10:00 AM On the hour: Dow +0.18%. 10-yr -0.25%. Euro +0.02% vs. dollar. Crude -0.06% to $78.93. Gold -1.1% to $1170.10.


  36. A conference on the reform Fannie and Freddy in August. There goes a republican talking point….. :)


  37. Woops!   July Richmond Fed Mfg. Survey: 16 vs. 23 last month (above 0 = growth). Among the index’s components, shipments -9 to 22, new orders -12 to 13, jobs +6 to 15.

    Game on with the QID play.


  38. Small start in DXD @ 26.13 earlier today……


  39. Never underestimate the BOTs Phil……they have only begun to unleash their true power and will take over the world……just like in Terminator.


  40. Phil, I’m on vacation this week so have been unable to monitor closely.  Nevertheless, I’m in what I think is a bear put spread:  I bought DIA Oct 100 puts and sold Oct 93 puts.  I’m currently down $235 on the spread.  QUESTION:  Given a range bound market, when we get near top of the range, are there situations when it is worth covering the short put at a profit while hanging on to the losing long put to wait for a pullback?  I also have the hedge spreads on DXD and FAZ where I’m in a net losing position, but nothing I’m worried about.   My portfolio is up  thanks to good entries into the Fab 9 Dow plays (+WFR) 


  41. Courtesy of MarketTamer

    Three White Soldiers is a bullish reversal pattern consisting of three reasonably long white real bodies.
    The pattern is the inverse of Three Black Crows.
    Each session opens inside of the real body of the prior candle and then proceeds to trade higher.
    Each session should close at or close to the high of the candle.
    The nature of the bullish move is evidenced by some selling pressure which is overcome by the end of the day by the bulls and creates more of a balanced and sustainable up move.


  42. Popping the corn. This Fall election will outdraw Jersey Shore….. :)


  43. Me pissed?  Why?  The market is doing exactly what I expected it to do!


  44. Morning gap filled, Now what’s next?…. perhaps we can generate another tempest in out little teapot.


  45. Phil, above in the post I think the S&P levels are off by a digit.  1013 should read 1,113, and 1020 should read 1,120, I think.


  46. In TNA at $46.25 off the gap fill.


  47. gmarts - nice call on the gap fill, I missed that reversal potential!


  48. JRW/Soldiers — was that a tell? Notice the soldiers on the IWM 8 minutes after your post. Can you do the black crows too?


  49. Forgeddabout it boys.. it’s a down day.  There ain’t any turning this mother around.  I mean really.. how could you even ask for another up day?  We were due for a pullback and now that the consumer confidence and Richmond Fed data are out what possibly could take us up?  Go short and go play golf!


  50. Matt, maybe you’re right, but if I’m short in this tape, I’m sure as hell not ballsy enough about it to go play golf :-)


  51. Out of TNA at $46.85


  52. IWM/10:24 — that peak corresponded nicely with the trend line created yesterday after 3:00 (logarithmic axis).


  53. Good morning Phil,
    Just a small reminder of yesterday in respect of the DIA mattress play we are now naked in Aug. Only long Dec 104 and 106 putters . Thks


  54. rain,
    Just saying we are in a bull environment !!
    I’m sure matt will confirm !!


  55. looking more like a sideways chop to test 1100


  56. Phil  I saw you commending on GOLD this morning 19.50 down!!


  57. now 20.40 down


  58. 22.00 faster than I can write


  59. The cast of MTV’s Jersey Shore rang the opening bell this morning:
    http://www.youtube.com/watch?v=VXuWq7NpPyU
     
    It makes you want to short the market just on principle. For serious, bra.


  60. Link Amatta – That doesn’t seem to link to your sheet, just the main page of Google docs.  I’ve requested access so check your Email.

    X/David – A real tiger by the tail, be careful with them – they do crazy things in both directions but a very good idea for this morning and already a winner. 

    See, now the horesement are keepting the Nas UP today.  GOOG getting putshed up, AAPL up 1.4%, BIDU up 1.5% – RIMM is down 2.5% and AMZN 1.3% so watch for them to turn up and get things moving again.  On the other side, if the other 3 blow 1%, then the bearish plays will be looking good. 

    China/1020 – I tried to find exact numbers but very hard to figure out what’s made where.  I think this country needs a little protectionism if we are ever going to bring jobs back. 

    F/Cmsosa – We shorted them at $14 down to $10 and if they hit $14-15 I’ll probably short them again but $10 is a fair price for them so, if you want to be bullish, I’d sell the 2012 $12.50 puts for $2.10 and buy the $10/15 bull call spread for $2.60 for net .50 on the $5 spread that’s $3 in the money already (up 500%).  Worst possible case is you own F at net $13 but that would mean the stock is below $10 (anything above $10 is profit on the bull call spread) and then you can DD at $10 or less so a net entry of $11.50 on 2x is your worst-case scenario but a sweet 900% profit if F just gets to $15 by Jan 2012.

    MEE/Chyer – Nice! 

    FSLR/Rav – Well I am short on them so I like it bt seems like a lot of margin to make a little money.

    GS/Exec – They had a relatively bad trading quarter last Q and I’m pretty sure they "threw it" as they were under investigation at the time and they got so much crap for their last two perfect quarters that I think 3 in a row would have drawn a lynch mob.  As to bots taking over the world – let them have it – they are not likely to do worse than we have so far..

    Copper failed $3.20.  $3.20 is VERY strong for copper but $3.15 would be a bad hit now that they’re up here. 

    DIA/Poindexter – Bear put spreads are very hard to manage profitably.  They are target bets and nothing more.  If the Dow is far enough below 10,000 to justify your net – you win, othewise not.  All you have is the net delta of .16 so you will gain or lose that much more than your putter for each 100-point move in the Dow.  Rather than take out the putter (now $1.15), you are better off spending the money to roll yourself to a higher put ($104 puts are $3.55, + $1.20).  If you don’t have enough faith in the position to roll up to $3 for $1.20, why bothter being in it at all as you are only going to lose money to time decay every day the Dow spends above 10,000?  If anything, roll the putter to Aug $102 puts ($1) and then at least they expire and lower your basis at some point. 

    Soldiers/JRW – Interesting..

    Pissed Matt – I meant the move up at the time – THAT was ridiculous. 

    S&P/Jordan – Thanks!  Good to know someone is paying attention!  1,113 and 1,120 it is! 


  61. If we break below this trend (IWM 66.56) it’s 65.93, then 65.36


  62. Jersey Shore rang the opening bell?  I’ve know seen it all.  It’s official.


  63. Yip -

    Oh my…that’s hilarious. 


  64. I meant now…yea Dave it’s painful.  wow.


  65. Just now on CNBS, The CEO of Razorgator – the online ticket broker – bet big on ticket sales on the world cup, bought a bunch, could not sell all of them, (only 7 sellouts out of 64) cost the company 3.5 million.
     
    Razorgator will now be laying off 25% of their workforce. Too bad Harakiri is out of fashion……. :(


  66. In TZA at $29.67


  67. Good trading to all. Taking the twins to surf camp….. :)


  68. Phil.
    Holding FAZ Aug 15c long pd 1.76 now .66 down 1.10 sold the Aug 17c for 1.16 now .35  so down on the long caller quiet a bit any good suggestions. thks


  69. Gawd, how I’D love to be at Surf Camp right now!!!!


  70. Not startling but $RUT will have a death cross tomorrow.


  71. Watch out for IWM 66.26 in addition to the rest.


  72. Jersey Shore rang the bell!? Wow, what has our society come to? That being said, Ill admit I watch the show.


  73. Out of TZA at $30.17; TBT coming back !!


  74. NOW FAS has closed its gap.  Covering until we break through to the downside.


  75. In TNA at $45.74


  76.  Phil, 
    Thanks, I authorized it. Since I assumed based on the post this morning and commentary from yesterday we were going up to 10700 I took out the SDS bought calls and sold Puts as well as sold the DIA 99 Puts… What timing! Now the market turned south…


  77. FAZ stop at $13.45 and .15 trail after this.

    DIA/Yodi – Yes, that was a brilliant call wasn’t it?  I don’t know why you have 2 diff strikes on Dec putters, best to be all Dec $106 puts (now $6.45) and our goal is to sell 1/2 Aug $103 puts for $2 (now $1.35) or whatever we can for $2 if we think we have support (right now the $105 puts are $2.08).  If we can’t crack over 1,113 on S&P or 666 on RUT, I’m not inclined to cover

    LOL Kinki!  You said market and principle in the same sentence.  8-)

    Razorgate/1020 – Wow, really?  People didn’t want to go to South Africa and pay $1,000 to watch a soccer game – that is shocking!  Ritual suicide is too honorable for those dummies…  Have fun suring!

    FAZ/Yodi – If you are going to stick with a hopeless position with less than 3 weeks to expiration, at least DD to lower your basis to something realistic or roll.  The calls were .50 this morning and a DD there would have dropped you to $1.13, which is at least sort of in reach with the .37 delta (but still dodgy).  Bottom line is you lost .30 on the spread so if you still believe in FAZ it’s time to roll to Sept, where you can take the $12/13 spread for .50 so + .20 is net .86 and you will be lucky to get your money back or you can DD and drip your baiss there to .68 and keep a 45% upside at $13.  If you don’t believe in the trade enough to do that – then you should feel lucky to take .30 off the table now. 

    RUT/Dez – That’s why they need the RUT so high – I don’t think they want that cross to form on the RUT as it will make it very hard to fight the TA crowd.  Holding 666 should just about avoid a cross as the 50 dma will probably kiss the 200 without crossing over.  If that happens, we will be doing some wave riding of our own I think!

    Jersey Shore/Jrom – Really?  Maybe I should look again but I gave it 10 minutes and gave up.  And I like Big Brother so it’s not like I can’t stand watching people in a house but THOSE PEOPLE are loathsome…

    Oil back in magical $77.50 land.  Copper making a critical run back at $3.20, Nat gas testing $3.60 and gold $1,161.  We’ll see how this plays out.  Dow, of course, holding 10,500 nicely but they can’t do it alone.  Europe closing flat on FTSE and DAX but CAC held on to 0.72% gain

    11:00 AM On the hour: Dow +0.07%. 10-yr -0.25%. Euro -0.07% vs. dollar. Crude -0.62% to $78.49. Gold -1.65% to $1163.60.

    Germany holds out for a better deal from the Basel Committee, refusing to sign up fully to new draft rules on banking capital and liquidity until it gets better treatment for its nationwide networks of savings and cooperative banks.

    Goldman Sachs (GS) is launching Derivatives Clearing Services in order to help clients address new regulations, by offering clearing services for all listed and over-the-counter derivatives. Just yesterday it emerged that an unsatisfied Financial Crisis Inquiry Commission is pressing to look at Goldman’s books on derivatives.

    SEC chief Mary Schapiro starts filling in details on how the agency will do its part in the Dodd-Frank reform, including allowing investors to nominate board candidates with company proxy documents and working with the CFTC to regulate derivatives. The new law instructs the SEC to write 95 rules.

    Women can save Wall Street, Paul Farrell says, slamming the "little boys inhabiting the brains of Blankfein, Paulson, Summers, Bernanke, Geithner and all the other so-called leaders whose secret, collective death-wish is taking America down with their childish games… Too much testosterone is killing our world."

    UAL (UAUA -0.7%) wins unconditional EU regulatory approval for its $3.17B acquisition of Continental Airlines (CAL -0.6%) that will create the world’s largest carrier. U.S. regulators are also reviewing the deal.


  78.  JRW, 
    Damn, not reacting to TBT! 


  79. Phil, please decode TASR earnings for us. Sales/profit down, stock up 1.6%.


  80. amatta / TBT reaction
    Oh Yaeh ? !!!!!!


  81. Phil – I know, I know….I’ll chalk it up to a guilty pleasure. They are just so stupid it’s funny.


  82. Uncovering FAS short at 23.2


  83. Phil/ 5% Rule    I love the 5% rule.  Major 5% rule support is currently at 1100.   I see 1100 is ~  in the middle of the trading range since last November.  When you get time, how do you determine where the 5% rule support level is? 


  84. Will recover FAS short above 23.26..


  85. Lots of buy gold ads on the satellite radio and TV, Hmmmm, maybe more downside to come


  86.  With the way the markets are acting this summer, I think they might as well move the exchange down to the Shore so the brokers can get tans while they work, and they can peg the indices to how many times The Situation scores with the hawt babes. ;)


  87. Pharm, I’ve been a bit out of the loop lately, but curious what are some of your favorite plays for new entries? Also, any thoughts on VIVO and MYGN? If there’s a previous post I should refer to please let me know. Thanks!


  88. JRW III
    just trying to follow your moves on TNA did you get out at 11.40 thks


  89. Out of TNA at $46.14; matt’s going SHORT !!!! 


  90. yodi
    11:47


  91. USD/JPY a relatively good indicator today.


  92. yodi
    Even with TBT skyrocketing, TNA can’t get over the 8ema (no buy confirm) !!


  93. Uncoverd FAS short again at 23.35.. will cover again if over 23.36 and call it a day.


  94. Not to argue but "they" can’t keep this from happening mathmetically unless $RUT soared to an unbelievable level.  We are just dropping off too high a number from 50 days ago well over 680 and replacing it with today’s close.


  95.  Phil/ Whats going on with CHK, couldnt find a reason for such a big drop?


  96. Back in TNA at $46.22; TBT still climbing


  97. phil, what do you think about the latest 50/200 dma relationships for the averages in regard to the reaction of others affecting the markets


  98. Well, the trench is backfilled, let’s see if we can pile some dirt on top…..


  99. JRW III
    Stoch fast tells me to get out of TNA at 12.16


  100.  Watch for June pattern forming, if we may have a blow off on Fri, situation looks familiar.


  101. yodi / 12:16
    well, we are still above the 8ema, the trend line, and TBT is still climbing; but we ARE stalled back at IWM 66.56 so I guess we’ll see !!


  102. in to TNA 46.24


  103. I will bail TNA if we can’t get over IWM 66.60 on this move !!


  104. Phil
    Do you like ABX at 40? If yes, should we go for a spread before or after earnings?


  105. out 12.42 at 46.40


  106. The dollar index futures actually seem to be steadily moving up (and the EUR is steadily moving down).  


  107. Out of TNA (2/3) position at $46.18 average


  108. phil
    What do you think of cnq and su
    I own buy writes on each of them.


  109. Very good call on the turn JRW!

    TASR/Jvest – Just what we expected. Int’l orders were put off but not canceled.  Same went for domestic sales to municipalities who were coming into their budget.  They already sold off in anticipation of this and it was not worse than expected although I would have liked some upside guidance.  Still, Stinger is gone and TASR can spend more time marketing and less time in court next year. 

    Support/Roscoe – Observation.  I went through it somewhere once but don’t know where.  On S&P, for example, we came down off a bottom at 800 that held after 9/11, down from 1,500 which was a run from 450 in 1995 to 650 in 1996 to 950 in 1998 and then a re-test of 950 (rejected off 1,200) in 1998.  We tested 950 on 9/11 then fell to 800 and held that nicely and it took all the way until 2008 to confirm it as solid support.  We ignore spikes , especially if they are panic (or euphoric) – driven so 800 looked good and 40% over that was 1,120 and we allow for the gravometric pull of large numbers so we use 1,100 as our baseline there.  Since that also works out with out top to bottom moves from 1,500 to 700 as a 50% line – it becomes a very good target for our center line.  That is then confirmed through observation of how well other 5% lines hold up around it. 

    That was a pretty wishy-wash "recovery" so far.

    CHK/Chyer – There is a whole thing this week about ground fracturing (the way they get gas from shale) damaging the water tables as it drives toxic chemicals into the ground.  Bad for CHK but worse for XOM and CVX, who just bought a ton of shale reserves.  If it goes down as a big thing, then nat gas skyrockets, which is good for CHK again but not the same growth story they counted on.  UNG still a very good play on all this. 

    DMAs/B1 – I haven’t been thinking much about them other than what I mentioned on RUT earlier.  Back when it was happening I said the "death crosses" were being painted to panic the TA people and allow the funds to scoop up stocks cheap prior to taking the market higher.  Now we are higher and the Bot Masters are painting the opposite – painting a pretty chart to bring the cash back in so they can sell what they bought last month. 

    ABX/Kururi – I don’t like ABX while gold is falling.  Once they get below $35, they get very interesting or if Gold ends up holding $1,150 and taking off again. 

    Copper back to $3.20 so gold has no excuse.


  110. June Chicago Fed Midwest Manufacturing Index: -0.5% to 79.4, down after the past couple of months of gains. Steel output and machinery production were up (0.9% and 0.6% respectively), but auto production slipped 0.2% and resource output dropped 1.4%.   Not so bad.

    On the hour: Dow +0.01%. 10-yr -0.31%. Euro -0.11% vs. dollar. Crude -2.01% to $77.39. Gold -1.95% to $1160.00.

    U.S. apartment rentals surged in the first half by 215,000 occupancies, nearly twice the number in all of last year, and the vacancy rate slipped to 6.6% from December’s 8.2%. A number of factors apply, including lower homeownership due to foreclosures, but it should mean increased earnings for REITs like Equity Residential (EQR) and AvalonBay (AVB).

    ikes for Fannie Mae (FNMA +18.4%) and Freddie Mac (FMCC.OB +14.5%) as the White House plans an Aug. 17 conference to discuss the future of the housing finance system, with an eye to delivering a reform proposal to Congress by January.  Wow, I guess reform must be code for "give them more money."

    Apple (AAPL +1.6%) trading up on news of long-awaited updates to its Macintosh desktop line, though the business is no longer its chief revenue driver. Along with processor upgrades, the company adds a tower desktop with as many as 12 processors and a multi-touch trackpad similar to those in MacBooks.

    Over in electric vehicles: GM is taking orders for the Volt (eligible for a $7,500 federal tax credit) starting at $41,000. And Nissan (NSANY.PK) will roll out its all-electric Leaf model in December after taking firm orders in August.

    Three lunchtime reads:
    1) The political genius of supply-side economics
    2) Cash as the real real option – to do anything
    3) Market goes to the dogs, which chase their tail risk


  111. JRW III
    Well we have not much of a direction TNA was in at 46.00 out at 46.03 possible we have to wait until the last 1/2 hour


  112. Dollar rising Euro dropping trend is still happening.


  113. In TZA at $30.04; 66.28 failing, TBT failing


  114. JR,
     
    Thanks for your posting and help.  I’m starting to get a feel for your style.


  115. Now Dow is holding up better than the other indexes.  Might get exciting if they fail 10,500

    1:00 PM On the hour: Dow +0.08%. 10-yr -0.33%. Euro -0.05% vs. dollar. Crude -1.8% to $77.56. Gold -2.12% to $1158.00.

    The Treasury sells $38B in two-year notes at 0.665% (.pdf), the lowest yield ever. Bid-to-cover ratio of 3.33, vs. a recent 3.1; indirect bidders take 32.8%, vs. a recent 35.9%. Treasurys traded lower across the board: the 30-year yield +0.06 to 4.08%; 10-year +0.05 to 3.05%; 5-year +0.06 to 1.79%; 2-year +0.05 to 0.64%.

    Schlumberger (SLB) and Smith International (SII) get an OK in the U.S. for their merger, which now awaits an Aug. 24 shareholder vote at Smith. (MW)

    Keep your eye out for some great theater in the Select Sector SPDR Trust’s ETF ticker suit against PowerShares, Dave Nadig says. PowerShares just added an "S" to end of the well-known SPDR product tickers to launch its own small-cap versions (XLF becoming XLFS, for example).


  116. JR,
     
    Does PP provide any support?


  117. We are officially regressing to the 1930s – no running water and no electricity in SoCal


  118. Out of TZA at $30.48; IWM 65.93 support., plus pivot resistance and TBT coming back !!



  119. In TNA at $45.31 (2/3); will bail if we go below 65.90, but I think "they" want us higher !!


  120. I am so kicking myself for not playing USO.  I know I should have bought puts the moment it went above $35.
     
    Otherwise, a dull day.
     
    Phil your comment re: Dow not holding 10,500: not my definition of excitement…


  121.  Phil, 
    I guess I took out the hedge at the wrong moment! I was so sick of getting killed by the unnending up moves and having broken the lines we should be heading higher, but no…  Based on having failed the levels now, do you recommend to get back on the SDS hedge (moved up on me now .40 for 40 contracts… I authorized the link on google for the positions… 
    Thanks 


  122.  phil
    is veco a buy here


  123.  JRW, 
    What is Pivot Resistance?


  124. Out of TNA at $45.77 at the IWM 66.26 line !!


  125. amatta / Pivot
    It’s just a line; whether we’re above or below, it’s something to get through !!


  126. Ok, took Phil’s GENZ analysis to heart and sold some Jan calls…..still p.suing it even safer and did the $75′s instead of the $70′s……yes, I know, less profit….but it’s safer with less downside, in case some bozo with lots of money comes up to bid the stock up beyond $70.


  127. If you look at advancing vs declining shares today (A-D line), stocks are in bad shape today.  This may portend a few days of weakness, besides the terrible economic numbers we are seeing.


  128. jerriodmb/veco — thanks for bringing that one up, I’ve never looked at it but it looks like a good long term or trader. I’m tempted to buy at 43 and sell the sept 43 calls and puts for 7.50 for 17.5% in 7 weeks or an entry of 35.5. I’ll wait to hear from Phil though.


  129. In TNA at $45.72; BUY PROGRAM !!


  130. There goes AAPL how predictable, doesn’t make me too confident we can sustain these levels if they have to use these dirty tricks to keep the markets propped up but  I’ll take :-)


  131. DD as you know has been skewing the Dow 30 today.   A move below 40.00 again today would be testy.


  132. JRW
    how did you get in on that move?  I am totally perplexed at that entry.  TNA rejected the 45.72 level several times over the previous hour, how did you know this particular time it was going to jump??


  133. Hey all,

    I have a new Overnight Trade in Silicon Labs Inc. (SLAB). The company is poised to report earnings at 0.64 EPS. I am expecting a nice beat.

    Check out my analysis, entry, exit, etc. here!

    Good Investing!


  134. yip / jump
    Look at the Stoch 2 min before, and the RSI and Mom as well ; plus we were above the 8ema !! Remember, I don’t watch TNA, I watch IWM !!


  135. Excitement/Jordan – What can I say, it’s been a quiet week…   USO is very risky in the middle but yes, shorting at $80 and long at $75 seems to be working.

    Volume better than yesterday at 111M at 2:30 on Dow but still fairly low and stickable. 

    Oil finished right on our $77.50 line, copper barely holding $3.20 and gold $1,159 so almost to my target.  All in all, a good Testy Tuesday so far. 

    SDS/Amatta – I think having a hedge is a good idea.  I never got an Emaill to invite me in but now I can see it.  Remind me later and I’ll try to make heads or tails of the thing.  The first thing I see is you have 60 items so already way too many things to watch at once and I certainly can’t spend a whole day tying to figure out how the mix is looking..

    VECO/Jerri – I made an earnings play for them yesterday that should work but they are certainly not cheap. 

    GENZ/Maya – Safe is far better than the alternative!

    A/D/FJD – Interesting we are holding up so well considering.

    Dirty tricks/Kustomz – Actually it makes me think they are having trouble when they have to resort to tricks….

    2:00 PM On the hour: Dow +0.15%. 10-yr -0.28%. Euro -0.04% vs. dollar. Crude -1.99% to $77.41. Gold -1.99% to $1159.60.

    David Rosenberg believes now is no time to be bullish after the rally that may be about to meet resistance and "was devoid of volume [and] devoid of validation from the bond market." If stocks fail to break through the 200-day moving average, he would be nervous about a market that’s "completely unprepared for 500K claims and sub-50 ISM."

    Bringing good things to lifeGE will pay $23M to settle SEC charges over oil-for-food kickbacks in Iraq to win contracts under a U.N. program. The SEC says GE "failed to maintain adequate internal controls to detect and prevent these illicit payments."

    Default!  Japan Airlines (JALSF.PK) and its state backers are seeking a waiver of ¥522B ($6B) in debt, about ¥383B of which is in loans. The carrier’s rehab plan includes cutting costs by ¥440B over five years and merging its three core units.

    Potential dark side of the SEC’s offer to pay huge bounties to whistleblowers bringing evidence of fraud. Similar payments were deemed illegal not long ago, John Carney says, and the potential for abuse is great: "No doubt lawyers are already figuring out how to alert employees… at companies with falling stock prices about their potential windfalls" in class-action lawsuits.

    BP says it plans to claim $9.9B in U.S. tax credits based on the $32.2B charge it reported related to costs for the Gulf oil spill. BP is just "following IRS regulations as they’re currently written," but the move likely will become the latest BP-related political hot potato.


  136. yip,
    Although I’m sure you already have it, there’s the trend from the tops at 9:40 and 12:40 (break out )


  137. I see that but it blew straight threw it in a milla second…I have 5 screens but I guess my screen set up isn’t perfect.  You have a camera?  I’d love to see a shot of how you’re set up.  I’ve looked at the mom, stoch, and RSI at 1120 time frame and I see nothing different except mom pushing through middle line but that’s it???  Also this is the first I’ve heard of the 2 min…it was the 3 min I thought, although it’s not a big change it’s still different. I assume your out?  If not how you stayed in after that spike down would perplex me but since it’s right above the line and holding you probably didn’t sell. 


  138. MEE dragged down by PCX guidance. Will be interesting to see how MEE’s guidance compares after closing.
     
    Yahoo In Play: "6:19AM Patriot Coal beats by $0.19, beats on revs (PCX) 13.67 : Reports Q2 (Jun) loss of $0.15 per share, $0.19 better than the Thomson Reuters consensus of ($0.34); revenues rose 6.3% year/year to $539 mln vs the $526.1 mln consensus, due to higher ASPs. Sales in the second quarter totaled 8.1 million tons, including 6.2 million tons of thermal and 1.9 million tons of metallurgical coal. This was slightly lower than the 8.3 million tons sold in the second quarter of 2009, which included 7.3 million tons of thermal and 1.0 million tons of metallurgical coal."


  139. Phil, JRW – stick or anti-stick? I need to make some of my $$$ back I lost from not having the courage to stay with my shorts this morning!


  140. yip:
    NOT 2 min chart; 2 min before the move. RSI from 40 to 65, Mom from 0 to .3 !! I’m still in; still think "they" want us higher !!


  141. Capt. / Stick
    Behold !!


  142. Washington, D.C.- The Congressional Budget Office (CBO) is generally trusted as an impartial agency without a political agenda. A new study from the Center for Economic and policy Research (CEPR), however, calls attention to a change in the most recent long-term budget projections that is a departure from CBO’s past methodology and results in stark differences in projections for the impact of deficits on economic growth.

    "While there is no universal model to apply to these types of projections, it is unusual that the CBO would, without explanation, make a change that so significantly alters long term projections," said Dean Baker, a Co-Director of CEPR and author of the report.

    "Has CBO Joined the Push for Cutting Social Security," notes that the CBO has changed its modeling of the impact of deficits and debt on private investment. The result is that the long-term budget projections for 2010 show far more crowding out of investment than the 2009 projections, leading deficits to have a substantially more negative impact on GNP growth. These growth projections have been accepted in the media and many policy discussions as reliable projections for the impact of deficits on growth.

    At a time when Congress is poised to make significant decision on the future of the America’s most important social programs, it is essential that policymakers understand the unusual nature of these latest projections.

    The full report can be found here.


  143. yip,
    A perfect flush, back to the daily trend line !!


  144. JRW,
     
    I don’t have the RSI on my screen.  Which chart do you have it on and how do you use it.


  145. exec
    My main chart, 1 min. If there’s no RSI a move is likely fake or at least not strong enough to prevail !!


  146. JRW… I wish I could post a screen shot I’m really trying to see it and it’s troubles me I can’t.  Something must be wrong on my end….


  147. Stick/Jrom – If you "need" to make some money back I would strongly advise heeding this projection:  I DON’T KNOW!  We play for the moves when it seems obvious, not whenever there is a close.  We’re in a very uncertain area overall and it it’s very simple to go short as we test 1,120 on the S&P but not so simple back at 1,113, where we could go back to 1,120 or down to 1,100 on anyone’s whim.  With AAPL now up 2%, that will be your downside signal – it does look like we’re holding up and they’ll probably want to keep RUT at 666 to try to avoid the death cross but a run up to 1,120 if they fail will be worse than not trying at all today so I wouldn’t play it up. 

    3:00 PM On the hour: Dow +0.08%. 10-yr -0.34%. Euro -0.02% vs. dollar. Crude -1.84% to $77.53. Gold -1.99% to $1159.50.

    A junk bond rally prompts a surge in speculative-grade offerings, with Advanced Micro Devices (AMD) and Vantage Drilling (VTG) leading $12.5B of July issuance. As long as the economy is growing even slowly, "yields are going to get low enough on the better-quality debt that it’s going to force high-yield buyers to move down in credit quality."


  148. 1st we go through 66.44, then 66.56, then 66.80 and beyond !!


  149. JRW:  I think the last time "they" tried this, and Phil started complaining about "pointless" sticks, it started a fairly powerful correction.   If they give us a stick today, I think I will short into it.


  150. Everything is Robot driven.
     
    Especially the REITs running wild again …
     
    Bots working hard to try for a green close…


  151. Here’s the year to date on our majors – good view of the hyperactive RUT and the lagging NYSE:


  152. Phil/Volume — I’ve heard a lot of people saying that recent rallys are on low volume and that is a cause for concern, yet when I go to stockcharts.com and look at the dow, nyse, naz, and s&p weekly charts going back to pre ’08, volumes look like they’re in line to me. Are volumes really that low? And if volumes are low, wouldn’t you think "they" that didn’t participate in the rally and perhaps had their bots off would effect volumes? Perhaps just GS dealing with the SEC? It just seems to me that volume has lost the meaning it once had.  Sure, maybe figuring out stick or no stick, but strength of rally? I’m not so sure. Thoughts?


  153. JR,
    I’ve never worked with RSI before.  You said above that it needs to be between 40 and 65.  Is that for both up and down?
     
    Additionally, I’ve been watching the Stoch and momentum a lot while trading.  Is the Sig Rune and momentum in the opposite direction when the move is down?


  154. Phil / Hyperactive Russell
    Nothing like surfing in a hurricane !!


  155. exec
    A H, please


  156. JRW/Momentum — how many periods? 15?


  157. see that, I complain about the REITs and they shoot SLG out of a gun ….I think its a short here … too much jump


  158. rain
    14


  159. I think clearly from the above chart, we’re going to get a nice, early turn signal from the RUT again when the rally is over so Matt can look for a couple of days where the Russell leads us down (percentage-wise) for a bearish sign.  On the other hand, if the RUT crosses 10% (3% up from here at about 685), then we may be looking at something resembling the April rally – maybe stupid but what a ride!

    Robot-driven market/Cap – Kind of like this

    Volume/Rain – The volumes are low, about 30-50% off what we had in the middle of the decade.  Also, 70% of the volume is trading C, BAC, FRE, FNM and a couple of other financials back and forth a billion times a day – the rest of the market has NO VOLUME. 

    RIMM really heading the wrong way, down 5% and back to $53.  Between AAPL and Droid they are getting hit from both sides at the same time and Barrons went so far as to say they are DOOMED.  Seems like a buy opportunity to me once they calm down. 

    The BlackBerry maker’s shares may appear cheap. They trade at less than 10 times estimated earnings for this fiscal year. Yet Apple and Google’s dominance in apps means they are becoming de facto standards in the smartphone market. Technology companies that lose such wars often suffer shockingly fast profit declines. RIM still has a shot. This fall it is due to roll out a new operating system, which might help it fight back. But time is running short.


  160.  an ema test looks to be in play tmr


  161. Wow, they really are looking to make a total farce out of the market aren’t they?  May as well go for another 100-point gain so we can set an all-time record 4 consecutive 100-point gains on the Dow – because things are just THAT great! 


  162. If we don’t survive the retest of IWM 66.44, I’m out !!


  163. JRW…Ok I can see the pick up of the indicators just before the move.  It is interesting that the move was totally predicted by a close study of Stoch, Mom, and RSI.  If these indicators are this reliable on a 3 min chart of IWM it seems to me this chart should be what one should look at primarily for entry. However it’s hard looking at shapes so this is where your RS number system comes in, I can see how that would be helpful. Of course the S/R, Pivots, Trendlines, and so forth establish a sort of range but it seems the 8MA and these 3 indicators are your main entry parameters?  Interesting to note at 11:18 BOTH the 8MA on the 1min and 3 min RUT where under the 8EMA but you still went long, so the indicators overrode that?   


  164. P.S. From my last post…. TBT was in a channel and doing nothing interesting…so no help there.


  165. Hi Phi: CHK down from $30 last Sept. to  $21 today. Fracturing the only problem with them ? 
    what do  you think of DD at $40.51 with a sale of 2012  $40 c and $35 p  for $10 which is net $30.51/ $32.76 for 31% return  plus  4 % dividend.


  166. Man, you can wait all day for a set up like that; got short SLG at 59.42


  167. VECO — a closer look and it would appear this stock is the target of massive shorting. Short interest is 26% of the float.


  168. Out of TNA at $46.05


  169. volume/rainman:  I think that "dark pool" exchanges also cause a discrepancy in volume, as the volume info of shares traded in these dark pools are often not reconciled in a timely manner from what I undertstand.  So it affects the reliability of using volume to make trading decisions.


  170. covered SLG for quick hit 59.05; it should go lower; but I like those 10 minute hitters.


  171. Yip
    If I have conviction, I’ll go with primary indicators only; but of course that’s why I use the confirm chart as I have been WRONG before !!


  172. CHK/Dflam – I’m sorry, are you saying you already own it at $40.51 and want to DD using that spread? 

    Investors typically do worse than the average fund because they fail to recognize reversion to the mean in their decisions, Legg Mason’s Michael Mauboussin says. "They put money in when markets [are] doing well and pull money out when markets [perform] poorly." Ironically, investors may have learned their lessons, since they’re now refusing to buy "when everyone else is buying."

    If you thought this recession was bad, wait ’til you see the next one around 2012, because "the world is going to be in worse shape, because the world has shot all its bullets," Jim Rogers says. "We do have inflation in the world," he says, citing India’s rate hike, so throwing more cash at the problem won’t work.

    Obama’s rhetoric tends to "lay all the blame for our difficulties" on big business and big banks, Mort Zuckerman writes, and is widely seen in the business community as resorting to "economic populism" to stem the growing weakness in his political standing. Obama’s remarks are "taken out of context," Paul Krugman counters – "typical of the whole argument."


  173.  Phil, 
    With the MEE puts, I guess it is now to own the stock for 30? seeing that it went south heavily today…


  174. In TNA at $45.70 (2/3)


  175. There was nothing to edit here, everything Karl says is worth posting:

     

    We Seem To Be Out Of Suckers…

    Courtesy of Karl Denninger at The Market Ticker 

    This is rather amusing…..

    July 27 (Bloomberg) — The Federal Reserve’s policy of keeping interest rates persistently low, which has helped boost bank earnings over the last six quarters, is beginning to make it harder for the biggest U.S. lenders to make money.

    Oh really?  Keeping interest rates low?

    Aren’t you being a little backward with that, Bloomberg?  I think so, and here’s why:

    Notice that when "QE" started the long end of the curve went higher on rates. 

    That’s "NIM", or "net interest margin."  That is, banks can borrow at near-zero (short term rates) and lend out for ten years at the longer rate, which is a higher interest point, pocketing the difference.

    Now remember, Bernanke’s argument for "QE" is that it would suppress rates.  He was either wrong (in which case he won’t do it again as he didn’t get what he wanted) or he was lying, in which case he intentionally screwed every borrower in America and lied to Congress in the process.

    So which is it?

    Does it matter?

    Well, not really.

    There’s no loan demand – as I have repeatedly pointed out and have posted the chart on enough times to go blue in my face, private credit capacity has been reached in the economy.  People are either unwilling or unable to borrow, but which it is doesn’t matter.

    The attempted "can kicking" of "reflation" requires that private credit demand re-accelerate and to in fact buy "just a few more years" we would have to roughly double credit outstanding in the system.

    We keep trying to cheat reality.  We did it in the 1990s and we did it after 2000.  The 2000-2007 run in credit was truly impressive – we doubled, roughly, outstanding total credit in the system, while GDP expanded somewhat less than 40%.

    The game’s over.  The Fed has done all they can really do to stimulate further credit demand, and has failed.

    “When banks can’t find yielding assets and their book is shrinking, the cash flow on their book is shrinking,” said Whalen of Institutional Risk Analytics. “Everybody’s starving to death.”

    With luck it will be a slow, nasty, and painful death by starvation for those banksters and their enablers who intentionally created this mess, despite having actual knowledge that on a perpetual basis what they were doing wouldn’t work – it was mathematically impossible for it to do so. 

     


  176.  Phil- How do you feel about the QID play?


  177. @Pharmboy
    If you have a minute, what do you make of the huge spike in BMY volume at 1:30?


  178. Phil … good read!


  179. Out at $45.68 average


  180. MEE/Amatta – If they don’t bounce back, sure.  They were lower than this last week though. 

    QID/Jtiff – I feel surprisingly good about it.  Out if the Nas pops 2,300 again but AAPL doesn’t seem thrilled with $265 and GOOG is just pathetic below $500 and RIMM is dead and AMZN is laying here and BIDU is stretched and that’s the Nasdaq so not looking scary and the RUT is too scary to short and Nas is about as overbought as they are at the moment so default judgment goes to the QID play into tomorrow’s BBook, which is not likely to be very good looking at the most recent regional reports. 


  181. One of the FAZ trades on Friday was the August 16-19 call vertical at .60 offset by theXLF Sept 14s.Any sense moving the spread now to September or is it better to wait a few more days. The reason i’m asking is-in error-i only half sold theXLFs


  182. JRW…so I’m correct to say your primary entry indicator is 3min Stoch, Mom, and RSI and you use your own RSI formula but the Mom and Stoch are standard?


  183. Cap — Nice call!


  184. Phil
    Uncovered DIA’s into the close?


  185. @Phil
    What about negative interest rates, paying  credit worthinesses money to borrow money?  I borrow, say, $10,000,000 FRNs for 10 years and the Fed pays me 2% to do so? 
    FRNs become worth less and less over time so the FED doesn’t actually lose any money during that ten years, in the meantime, real estate gains about 10% during that ten years, all the foreclosed properties held off the market increase over their original value, stocks and bonds inflate significantly, the S&P is at 3600, all assets have done what was intended, grow like kudzu………i think I know where this is going but my meager brain just exploded…maybe someone else can help out here.


  186. Phil : Sorry my questions weren’t clear.
    Ist question was: Is  fracturing the only problem with CHK . Stock has dropped from $ 30 last Sept. to current value of  $21.11 I know they are trying to reduce debt but I can’t  determine any other reason for a 30 % drop over 11 months. 
    Second question was: What  do you think of buying Dupont (DD) at $40.51 and selling 2012 $45 c and $ 35 p for $10 which is net $30.51 / $30.76 for 31 % return plus 4% dividend. Trying to use some cash in my IRA which doesn’t allow vertical spreads & requires 100 % cash against puts,but I want to minimize risk. thnak you. 


  187. yip,
    No, My main chart is 1 min.; 3 min is confirm if I need it !


  188. Phil, how dangerous is it to be selling DIA ATM calls here?  I have some shares, already sold calls, but am tempted to sell more calls than I have shares.


  189. Phil,
    With AAPL up some today, I just sold some Oct 300 covered calls, and if called away, can buy back also as I have enough leverage.
    Question: am up about 60% on AAPL oct 230 and Jan 185 puts. Buy back now? Or hold on to the premium for another 40% or so gain over next 3 months and 6 months respectively.
    BTW: the aapl Jan $185 puts were from your member posts.
    Thanks and keep up the teaching


  190. 5+% on the day; not bad for a flat day.
     
    Phil, Tomorrow ??


  191. amatta, will put all your trades in TOS and will let you know what their model says about delta exposure and why you were down when market was up.  but my reaction was same as Phil, there are so many positions here.
     
    Another thought: you have some what look like speculative, low-priced stocks and they usually don’t correlate well with the major indices.


  192. Damn 5% JRW!  I was positive on 6 of 7 trades in TNA/TZA…but I’m still not holding long enough (old bad habits from my previous trading methods).  I was all in on TZA at 29.13 today, but they shook me out with the 10am data head fake.  Very hard to hold TZA when you see a green $0.35 IWM stick form instantly!!!…grrrrrrrr


  193. amatta, I requested access just now. can’t yet view your trades.


  194. goldman
    Go back over the day’s chart and look at my entries and exits from posts; although I didn’t play that well today it may help. Once you’re positive on a position, you can leave it to the 3 min chart for exit, that may help as well !!


  195. FAZ/Drum – That was a real "just in case" trade and just in case is not seeming likely now.  The Augs are pretty toasted as it was high-risk on that side but that was OK because we had the guaranteed win on the puts if XLF headed higher.  The spread is about .20 now and, if you only sold 1/2 the XLF Sept $14 puts, even though they are now .18 (which would have made a full cover a small winner) you only offset .30 per spread so you are down .10 even if the XLFs expire worthless.  So, bottom line is you are in for net .30 per bull call spread and you can roll to the FAZ Sept $12/13 bull call spread at .50 for + .30, which would put you in at net .60 on the $1 spread.  IF AND ONLY IF (remember those Basic fans?) FAZ drops back to $13 or less, then you can sell 1/2 the FAZ Sept $11 puts for .60ish (now .45) to drop the basis down to .30 again but only if you sincerely need the hedge, otherwise, you should just be thrilled to get even. 

    DIAs/Deano – Nothing happened today so nothing to do.

    Good plan Flips!  Let me know when I can get $100Bn so I can buy up the Gulf coast.  Seriously, that’s a great real estate play right now.  Buy all that land from broke people who need cash and are worried the land will never be restored and apply for state aid and sue BP and then wait 20 years to sell it all.

    CHK/Dflam – Hell no.  CHK’s biggest problem is nat gas is below $5.  It was $11 last year!  The current model is they will supply an infinite amount of gas cheaply and TBoone will get all the trucks to use it for fuel and they’ll be rich one day.  This is based on the infinite supply of nat gas we can get by fracturing.   If we can’t get nat gas by fracturing, CHK still has the most available gas of any US producer and the price of the gas should creep back up to the $8-9 range since half the US supply will become unusable so I like them either way but they could go a lot lower before turning up if fracture drilling is banned (plus possible lawsuits on environmental damage).

    As to DD, that makes more sense.  That guy was very bullish in outlook but, HAHA, it all ties together at nat gas is a huge input cost for them!  I think they’ve had a bit of a big run and I’d wait for a pullback to do a spread on them or you could start with a 2012 $30/40 bull call spread for $6 and roll it down $10 more for $6 more if they drop and THEN sell some puts.  If they don’t drop, then you are making 66% so don’t complain. 

    DIA/Jordan – We could very easily pop to 10,700 on a pre-market run and there’s no way to discount 11,000 from being tested in the next 2 weeks so about that dangerous. 

    AAPL/Maya – Generally, when we are up 50% on a trade, we should have to be given a very good reason at least twice a day NOT to take the money and run.  The Jan $185s seem pretty safe (famous last words!) but those $230 puts could reverse on you and you woulld cry and cry and cry so you have to decide what you would do tomorrow if you wake up and AAPL is down to $250 because the EU is holding a hearing on monopoly issues.  Your putter would jump to about $10 and all your gains will be wiped out?  Will you still ride it out?  Do you REALLY want to own AAPL at $230?  Of course, if Steve Jobs is rushed to the hospital between now and October, you could easily owe the putter $30-40 so it seems like a lot of risk to me just to make $5.  Remember, Rule #2 is:  When in doubt, sell half…  That applies to buying back 1/2 too. 

    Tomorrow/JRW – BBook day!  As I said this morning, I’m expecting scattered misses to come in from smaller Nas and RUT companies anyway but the regional Feds were not good and Durable Goods for June is iffy at best. 

    Good point on Amatta’s stuff Jordan!


  196. Do any of you guys own physical gold ie: bullion? I am considering adding some on the drop as part of an overall portfolio consisting of stocks, bonds, cash and real estate. Man the gold bugs are the nuttiest people I’ve ever encountered, all sitting around railing about government, conspiracies, and waiting for the poop to hit the fan. The standard acronym is SHTF!, and it’s a standard premise within the gold bug community, It’s like a doom cult. Black helicopters and chem-trails,and internment camps Oh My!
     
    That said, I think owning some non-paper (GLD, futures, etc.) might not be a bad thing, but objective information is scarce. I believe the charts suggest more downside from here, and I’m trying to get a decent understanding of the gold market before I make even a tentative entry. I’d love some insight from any of you "sensible" investor types who’ve made a foray in this arena.
     
    Thanks,
    Gordo


  197. JRW – Thanks for the support, especially the intermediate line updates throughout the day.  The key for me is your line accuracy…my 67.01 line was way off this morning, as your 67.21 line would have keep me in my TZA play had I calculated that line instead (or had I paid more attention to refreshing the forum…difficult in the middle of large trades…).


  198.  recent earnings on one page…lots of beats

    http://finance.yahoo.com/news/category-earnings?count=99&start=0


  199. Tradeing IWM options up app 8% on puts, Thanks JRW, wish I could include your RSI but etrade pro doesn’t allow.
    All         ISSI      EPS $.57 more than expected!


  200. List Amatta:

    This is not in the remotest way a conservative selection of stocks.  You are going to have wild swings on this every day and if this isn’t a pure gambling portfolio then you are going to have a lot of stress. 

    I’m just going to go over you holdings in size order to cover the top 10 or so and next time you want to ask me about positions, this is the format to do it in (that goes for anyone):

    • TNA – 500 shares at $43.24 (now $45.64), sold 5 Aug $35s for $9.40 (now $11.60).  Whatever the circumstances were, you bought this for $43.24 and you sold it for $44.40 so you will make $1.16 unless TNA falls below $35.  Nothing to do here but seems like a hard way to make 2.5%.
    • C – 4,000 shares at $4.02 (now $4.16).  That’s a winner so no worries there.  Rather than tie up $16,000 hoping C goes to $5, I’d be more inclined to buy 40 2012 $4/5 bull call spreads for .38 and sell 40 2012 $2.50 puts for .27, which is net .11 on the $1 spread and you tie up $440 in cash and about $3K in margin and the worst thing that can happen to you is you own C at net $2.61, which is 37% less than you are currently in it for so that’s FREE insurance
    • DXD – 29 Oct $23 calls at $4.80 (now 3.90), sold 29 Oct $27 calls at $2.15 (now $1.85) and 24 Oct 23 puts at .35 (now .60).  This is a lot of protection ($11,600) and so far, the FAS play doesn’t need any protection as it’s already hedged and C is just an open stock which you shouldn’t even own naked so we’ll see if this is too much or not.  Meanwhile, DXD is at $26.31 so you are $3.31 in the money and would collect $9,599 if they expired today.  It doesn’t matter what your portfolio says they are worth (about net $1.45) because it’s not October yet.  When you SELL premium you have to learn to wait for the premium to expire or you will be a very unhappy person most of the time. 
    • EXC – 300 shares at $41.02, now $41.89.  And we don’t cover them because???  Well, you are going to need a hell of a lot of disaster hedges if you are going to leave all your positions unhedged and open to — disasters.  And that disaster protection will cost you money and, since you are not collecting that money selling premium then it will be a loss for you because either you stock goes up and you lose on the disaster hedges or the hedges go up and you lose on your stock.  There’s pretty much no outcome here that lets you win unless the stock goes up so much that you don’t care that you wasted all that money on insurance (but then the hedges are put to you and you are screwed anyway).  Nope, not the best plan…
    • They pay a 5% dividend but they’d pay you the same 5% if you sold the 2012 $37.50 calls for $6 and that would    put $1,800 back in your pocket (14.6%) and lower your need for protection against this play.  Now you have net $35.02 committed and you collect about $3 in dividends and get back $2.48 if called away for a net 15.6% ROI.  This is your 4th largest holding and you are getting 1% a month, which doesn’t suck but you could take the same net $10,506 and buy 5 2012 $35/42.50 bull call spreads for $4 and sell the 2012 $32.50 puts for $2.20 and that puts you in the $7.50 spread for net $1.80 and you make $2,850 if EXC holds $42.50 in 2012 and your only risk is you own 500 shares at net $34.30 ($18,400) but the margin is only $2,500 and you can roll, of course

    • So doing the play with the bull call spread generates $2,850 in profits in the same 18 months and you have built in 18% downside protection and you tie up just the $2,500 in margin and the $900 net cash for the spread.  The point of this is, it leaves you more unmargined cash that you will be able to use to make some short-term plays while you wait PATIENTLY for the long-term plays to pay off.  

    • MON – 200 shares at $58.37 (now $57.36), sold 2 2012 $50 puts and calls for $20.95 for net $37.42/43.71.  See, there’s nothing to adjust, nothing to worry about – you are just sailing along towards making $12.68 when called away.  This trade currently shows a loss because MON is down $1 and the put/call combo is still $20.70 but why should you care?   Anything over $43.71 is a win for you and anything over $50 is your max gain so you already have 24% built-in protection here so I still don’t see what you are hedging $11,600 worth of Oct DXDs for. 
    • TBT – 300 at $36.42 (now $37.22), sold 10 Aug $36 puts at .80, now .55.  Well, this one is a clear winner but TBT is a very dangerous stock to hold unhedged.   What TBT is is a hedge against your cash losing value.   I don’t know how much you have but make sure you have a great reason for this being one of your top holdings.  Rather than tie up $11,000 plus a bunch of margin on the short put sale, you can just buy the 2012 $40/50 bull call spread for $2.70 and sell the Jan $37 puts for $2.70 (or sell .90 3 months in a row) and then you have a free $10 upside play with no margin hold all the way through 2011.
    • The idea of taking little hedges like this and paying them off is you still have the hedge but now you have $11,000 freed up to make money – CONSERVATIVELY – somewhere else in 2011. 

    • NZT – 1,500 shares at $7.15, now 7.19.  Nice 9% dividend on this one, I like that but they don’t have options so did you remember to deduct the cost of your insurance from your returns?  Don’t get me wrong, I think they are a good buy but now much of a growth story in New Zealand is there?  I assume you did your homework and they are not going to get crowed out by cell services and that they are not under margin pressure from the cable companies.  Well, of course you did because it’s one of your largest holdings. 

    Me, I haven’t got a clue what these guys are doing because they don’t have options and T does have options so I would take my $11,000 and buy 500 shares of T at $26.15 ($13,075) and sell 2012 $22.50 puts and calls for $6.50 ($3,250), which is about $10K plus $2K in margin and the dividend there over 18 months is about $3 ($1,500) and you get called away at $22.50 ($11,250) so that’s $12,750 back for a profit of $2,925 in 18 months (30%) if T can hold $22.50.  Isn’t that better than holding NZT naked and hoping to make 15% if all goes well? 

    I’ll try to get to BAC, SDS, AMT, PFE, JCI, WHR, AMZN, POWR later but dinner time now.


  201. amatta, I entered your trades into the TOS analyze tab, so I could see the greeks.
     
    With respect to the S&P500 your delta is negative 87.27, meaning if the S&P500 level goes up by one, your portfolio goes down by $87.27.  With respect to the Dow, your delta is 9.40, meaning Dow goes up 100 points, your portfolio goes down $940.
     
    Your theta (time decay) is a respectable 171.31, meaning that if S&P stands flat (and all your other stocks stay flat) every day your portfolio will gain $171.31.
     
    Looking at your risk profile graph, your portfolio is optimized for a level of the S&P500 around 1028.
     
    To balance your portfolio into neutral, you can purchase the number of effective units of the Dow equal to your delta.  If you want to go with DIA, then you must purchase 940 shares of DIA to become neutral.
     
    I still have it in TOS, so if you have a question, ask and I can look into specifics.


  202. "A number of new ‘weekly’ options will be listed this Thursday, with expiration at the close Friday Aug 6: new names include GE, CSCO, PFE (earnings 8/3), RIG (earnings 8/4) and DNDN will be listed. Today’s volume in weeklys just passed 300K contracts, with 1/3 of that in SPY, and single stock leaders AAPL, BP, and AMZN."


  203.  Jordan, 
    Sorry I just saw your message. I gave you access to the spreadsheet. Thank you very much for the offer. 
    So you think I have too many positions? I did think it was tough keeping up with all of them but figured most users here had even more and it was a matter of getting more profecient at looking over positions and adjusting… The thing is Phil recommends having no more than 5-10% in each position, for longs, then you ad shorts, then you ad hedges and short trades and so you should have easily 25 positions? 


  204. Number of positions – I have about 7 positions, and about 30% cash.  Most of my positions are in the 5-10% range, but none are pink sheets or stocks priced less than $5.


  205.  I think these weekly options are going to be a big deal and a very good way to ‘daytrade’  options for profits.  You can own ITM further out options and trade the weeklies with minimum risk and no margin.   I’ve already been using AAPL and GOOG for this with good results. 


  206.  Jordan,
    I sold the SDS 31 Calls and 32 Puts (and just kept the short 35 callers) today expecting another run… but no! Also sold the DIA 99 Puts. So that should have tilted towards bullish, as I lost almost 1% today altough averages were a little negative…Would you mind running it without those positions? Sorry for the bother. 
    Boy so that means that I would have needed to have $95,000 in the DIA? And I thought I was around 60-40 tilted to long…I don’t know how to do this without having TOS, it seems it is an absolute necessity… 
    Thanks a lot. 


  207. Phil, 
    I really need help understanding how to properly balance my portfolio, as I am not sure how to account for the buy-writes and short positions. 
    I had assumed that putting all longs against shorts would yield the net long or short position. From this I needed to figure out a disaster hedge to cover a 20% drop (so for example I had net positions of Aprox $150K so I bought positions in SDS and DXD covering for a $30K loss). I didn’t know how to account for the buy-writes and the other short term plays so I just ignored them.  
    Jordan did me the great favor to run the portfolio on TOS and he posted the results… that seems shocking that it was so negatively tilted… I am also deeply dissapointed that Schwab doesn’t offer in streetsmart.com anything to analyze the portfolio on overall delta as it relates to the indexes… Will see about switching but it seems such a pain with all the unsettled positions from the multiple day trades…


  208.  Phil,
    To clarify, the other short plays are basically sold puts on stocks I wouldn’t mind owning, so I assumed this is akin to a long position… 
    I did grant you access to the spreadsheet as I mentioned on a previous comment today, I am sure at a glance you would be able to tell me what is off…
    Thanks again


  209. amatta, you can do what I did.  I deposited a small amount into TOS, but I do not yet trade through them.  I use InteractiveBrokers for trades, and after I execute a trade, I enter it into the analyze tab in TOS and see what my portfolio looks with it.  There, I can also test out new trades and when I like something, I just execute in InteractiveBrokers. 
    Lately, I have been just selling puts and calls on DIA as we go too high or too low- a very simple strategy.
    InteractiveBrokers and TOS are probably at par as far as quality of execution.  InteractiveBrokers has slightly cheaper commissions, but TOS is far better for analysis and charting.  If you are with Schwab, I would definitely think of switching to TOS.  You should talk to their customer service, tell them how much you are trading, how much you have been paying in commissions, and they can probably give you a deal on commissions that’s comparable to what you have at Schwab or better.  You can ask for $1.25 commission per options contract, and no flat fee surcharge, especially with your portfolio and amount of trading.


  210. Mulally on CNBC…again. Odds are they are trying to pump the stock higher for an offering


  211. gmarts, & whomever :
      I’m not in that Gold-bug camp, but did save these addresses awhile back,  as recommended by the Seeking Alpha blogger "Hyperinflation" .  Also remember reading an article where the guy shows new highs for gold  in 15-18 month cycles which should have it peaking again next Feb – Apr.  That I can believe as the Limbaugh/ Beck  lunatic fringe work themselves into a new frenzie after losing more seats in the Nov. elections.  : )      enjoy,
     
    http://www.bulliondirect.com
    http://www.goldeneaglecoins.com


  212. amatta, I removed the SDS 31 Calls and 32 Puts and the DIA 99 Puts.
     
    With respect to the S&P500, your delta is now 163.24.  Your theta is 201.27.
    With respect to the Dow, your delta is 17.60.  This is quite a bullish portfolio.  It will reach its maximum value when the S&P is at 1,230.
     
    So, if S&P500 is flat tomorrow, your portfolio should gain $201.27 because of the theta.
    If S&P500 is up 1% tomorrow, that is 11.14 points, then your portfolio should be up $201.27 + 11.14*163.24 = $2,019.76.
    If the S&P500 is down 1% tomorrow, then your portfolio should lose $1,617.22.
    These are deceptively precise of course, since correlations between stocks don’t always hold as in the past.
     
    The key is to reduce your positions and really understand whatever you have left.  Also, you can have many positions, but the majority should be long-term holdings that you do not touch, options you’ve sold that need little adjusting.



  213. They used NVDA card in previous Imac with similar config..just to clear things up
     
    By Gregg Keizer
    July 27, 2010 02:32 PM ET
    Computerworld – Apple today refreshed its iMac line for the first time since October 2009 by adopting Intel’s Core i3, i5 and i7 processors across the board and abandoning NVidia’s integrated graphics chipset for ATI-branded graphics processors.

    The new iMacs all feature dedicated graphics cards rather than relying on slower integrated graphics chips. A breakdown of the new models is provided here:

    $1199 / 21.5" / 3.06GHz Core i3 / 4GB / 500MB / ATI Radeon HD 4670
    $1499 / 21.5" / 3.20GHz Core i3 / 4GB / 1TB / ATI Radeon HD 5670
    $1699 27" / 3.20GHz Core i3 / 4GB / 1TB / ATI Radeon HD 5670
    $1999 27" / 2.8GHz Quad-Core Core i5 / 4GB / 1TB / ATI Radeon HD 5750
    +$200 27" / 2.93 GHz Quad-Core Core i7 BTO option



  214. New Apple products:
     
    Apple Battery Charger
     
    Magic Trackpad
     
     
    Available in September:
     
    Apple 27-Inch LED Cinema Display


  215. diamond, when I’m in the pool and leave my IPhone in direct sunlight it shuts down..lawyers gone wild.. totally agree..nonsense..you know things are bad when you see these types of frivolous lawsuits


  216. Kustomz and anyone, Now that it’s after hours, I’ll ask this Mac vs. PC question.  I have a creaky and slow five year old power mac, but I love the matte 23" display. I’ve also liked the MAC OS, despite the fact that there are still many websites that don’t like Safari, and Schwab’s Streetsmart Pro won’t work with Macs.   When I got my IPad 3g, I rushed to plug it in to my Mac, only to see a message that my operating system was too old for the IPad ( thanks Steve.)  Not wanting to spend $2000 on a Macbook for a $629 IPad, and needing a notebook (for the kids), I bought a Toshiba with an Intel I7 chip (smokin fast), for $850 .  The problem is, now I can’t put up with the old slow Mac anymore, but I’m unwilling to face the nightmare of trying to migrate 5 years of Entourage (Office for Mac) files to Office (they are not compatible, as I found out five years ago when I first got the Mac).  So, I’ve been thinking about getting the $1200 IMac (the 10/09 $1200 version was almost as fast as the top of the line IMac) .   I can apparently solve the Schwab Streetsmart problem by either using Windows via Parallel, or switching to TOS (Schwab’s margin requirements suck anyway), but Shadowfax now  has me worried about virus issues with Macs (according to the process screens my old Mac appears to be continuously sending out A Lot of data).  Anyone else been through this brain damage? Anyone running Streetsmart Pro on Parallels and not losing speed? What about good Mac antiviral programs?


  217. Apple Faces Lawsuit Over iPad Overheating
    This IS silly, no-one would actually have their IPad on in direct sunlight as you can’t read that superglossy screen outside!!  I do love my IPad, but it’s definitely not beach-ready.


  218. dilbert.com/blog/entry/startup_country/
    A little fun reading about "startup countries."


  219. rdn4evr – Using older versions of Entourage (Office for Mac) files on a new iMac, MacBook or MacBook Pro you will need to install (free) Rosetta.
     
    Mac antivirus programs are optional. Shadowfax most likely had a government agent slip a virus into a PC application that he was running on Parallels.
     
    TOS works great on the Mac as well as on the iPad. The platform and commissions are much better than Schwab.


  220. RMBS VS NVDA, they have 60 days to settle with RMBS. May be lucrative to put a play together on AMD

    http://www.fool.com/investing/general/2010/07/27/should-you-care-if-rambus-beats-nvidia.aspx

    Another interesting story but take it with a large grain of salt…Intel has superior products and fell behind..once
    http://arstechnica.com/apple/news/2010/07/there-will-be-blood-why-apple-and-intel-are-doomed-to-clash.ars

    The ITC is a popular venue for patent lawsuits because it can bar the importation of devices made with infringing technology. If the ITC orders an import ban, that order would go into full effect only after a standard 60-day executive branch review. The executive branch rarely overturns the ITC’s decisions.
    During this review period, the banned goods can be imported but only if the importer posts a bond equal to 100 percent of the value of the imports.

    rd, Steve’s a smart guy forcing people to upgrade, which everyone should do anyway! ;-)
    I run my trading software strictly on PC, IMac for play. Check the net you can pick up used Macs on the cheap, Amazon as well…
    http://usedmacdeals.com/
    http://www.usedmac.com/


  221.  Thanks a lot Jordan I really appreciate it. Hopefully these moves will capture some $ back IF we keep going higher. It would be a tragedy that now we go back down… I would be full fledged chasing, however I did get the feeling from Phil’s comentary that he thought 10700 was well within reach…
    Thanks again,


  222.  Thanks a lot Jordan I really appreciate it. Hopefully these moves will capture some $ back IF we keep going higher. It would be a tragedy that now we go back down… I would be full fledged chasing, however I did get the feeling from Phil’s comentary that he thought 10700 was well within reach…
    Im gonna open an account with TOS ASAP.
    Thanks again,


  223. DON’T MESS WITH TEXAS

    The Dallas Fed produces a monthly index that monitors industrial activity (the business activity index) and the composite just tanked to -21.0 in July from -4 .0 in June. This is the worst print since July 2009 (this metric peaked in April, right when the S&P 500 peaked, at 21.1). This measure has an 86% correlation with the ISM index and the last time it was here (and the time before that in February 2008) the ISM was sitting at 49! This could well be the shoe to drop that reverses this rally (data out on August 2nd – ISM was 56.2 in June; consensus now is 54.9).

    The "outlook" component sagged from 21.5 to 15.8, also the weakest since July, 2009. Order volumes fell to -9.6 from -8.2, the weakest since June/09. The inflation indicators collapsed – prices-paid, even with the higher oil price, dropped to 12.3 from 29.7 and is down for three months in a row. The prices-received index was crushed to -11.4 from -6.8 – the most deflationary since October of last year and this is telling us that we are starting Q3 with profit margins coming under a big squeeze (shhh .. don’t tell Ms. Market).


  224. Phil, on the chance that you are near your computer, what do you think of shorting copper here at 3.216?


  225. Thanks Diamond, but, wow,… Whole new can of worms.. .You mean to say that I’m even going to have problems migrating my old Powermac (g5) Entourage files (what if I update to Entourage 2007 first) to a new Mac?  Seriously, my head is going to explode soon!  I (and several Mac Consultants) never even figured out a way to access the Outlook attachments from all of my real estate transaction files from my old PC days.   (I’ve been too busy trying to figure out Phil’s Buy/Write strategy to see if Windows 7 Office  will read Windows 98 office  files).  Now I’m going to have the same problem whether I use a PC or a Mac? where’s the nearest cliff?
    And okay,  I’ll bite.  Why would a G…….agent slip a virus onto S——fax’s (shhh!)  PC-Parallels app?


  226.  Phil, 
    Thanks for all your comments so far. Just one quick clarification, the prices listed are not the cost, but just the quote from yesterday when I downloaded from Schwab. Which also explains (and it still might sound ridicoulous to you) why I haven’t sold calls and puts against EXC, C is that I bought them way higher (EXC at 50 and C at 5.10), so I was waiting for a pop so I could sell calls higher and at least make some money at the end, versus just trying to recoup losses. Also TBT bought at 45 so I am waiting for it to crawl back to 40 and then sell some calls against them. 
    It is in fact my goal to establish a conservative portfolio, and yes I have been very stressed the last few months with this portfolio (as I mentioned when I joined, I had lost $18K in the last 4 months on $140 invested, so clearly looking to craft a well hedged and safe portfolio… It all is starting to sink in, but it is been hard to grasp the right amount of hedges and shorts to have against the well positioned longs that I want to build into.
    I really appreciate your time and valuable input… 


  227. BMY spike @ 1:30, no idea why.  Can one tell if it is a buy or sell Thinkback in TOS?  If it is a buy, I think investors are bracing for a dividend play that is worth having in this deflationary environment.
     
    VIVO or MYGN.  Not in either one as of now.  I am only buying blue chips and stocking up on CRIS for another run.  Celldex is falling very nicely in our range….@ $5.  Now if ARNA closes at $6 at OPEX, we will all be happy campers and can go home with our free lunch.
     
    ARIA needs to pull back for us to get back in for more, and CERS looking ok.
     
    Still traveling through the heartland, and I think I found my bunker…..it ain’t pretty, but will do after a ‘lil reinforcement.


  228. rdn4evr – The migration of your Mac programs is not really a problem if you have been using them on your "five year old power mac." You can move them directly over to your new Mac (the OSX 10.6 Mac software does it for you), or you can leave them on a CD, DVD or other external drive. However, you WILL need Rosetta installed on your new Mac (as well as Entourage) in order to open them and work with them. It sounds more complicated than it really is. Apple makes it VERY easy to move files and their free software (Rosetta) makes using your old files and G3/G4 applications seamless.
     
    Contact: Apple Support
     
    As to Shadowfax … well I do not admit or deny knowing anything. ;-)


  229. Screw it, I pulled the trigger at 3.233, Im in Matt’s corner tomorrow – it better be a down day!


  230. Global e-book reader shipments fall short of forecast in 2Q10, says Digitimes Research
    Ming-Chi Kuo, Taipei; Yvonne Yu, DIGITIMES [Wednesday 28 July 2010]
    A total of 1.35 million e-book readers were shipped to the global market in the second quarter of 2010, 33.2% fewer than the originally projected 2.02 million units, chiefly because shipments of new models were delayed to the third quarter, according to Digitimes Research.
    Two other factors also prevented shipments from reaching the target. Telecom carrier China Mobile Communications’ subsidized sales of e-book readers were weaker-than-expected in the China market, and volume shipments of SiPix’s e-paper solutions were delayed.
    Barnes & Noble took the leading position in the second quarter with 33% market share, followed by Amazon’s 27%. However, Amazon is expected to regain the leading position in the third quarter when the company launches a new product, Digitimes Research noted.
    For the second half of 2010, demand is expected to pick up as vendors lower their prices. Volume shipments of SiPix’s e-paper products will add fuel to the competition in the market, and the availability of more mature SoC (system on chip) solutions will facilitate product development and cost-down.
    Digitimes Research forecasts that the global e-book reader market to reach seven million units in the second half of 2010 and attain the target of 10 million units for the whole year.


  231. Anyone know where to get good commentary on the Asian markets in english? Be nice to know the justification of some of these market moves besides little blurbs from marketwatch. thx.


  232. jr….   http://www.bloomberg.com/tv/

    So far Europe is higher, lots of beats there too


  233. Gracias kustomz – I definitely shorted copper too soon.


  234. Thx again Kustomz, both are now in my favorites. Up late doing schoolwork but having a hard time paying attention to it with my short on copper. SHoulda just took the quick 150 I was up!  


  235. jr, dollar is very weak..good for copper but i think it can make it back to 82.20…long wicks on the Euro reveals  fatigue/weakness. They keep testing the highs with no breakout, you may be in luck come the morning. They are trying to test the 81.80/81.90 area on the dollar with no luck…could be time for shorts to exit the trade.


  236. Yeah, Im hoping you’re right. I was just thinking durable goods would be bad as well as nervousness about the beige book. Im going to stay up all  night if need be watching this damn thing!lol.


  237. Where are you located again? Korea? Japan?


  238. Phil -
    General Options question that we should all know the answer to:
    Do puts get modified by the exchange if a company announces a special dividend or are you just screwed if you are short puts -
    Let’s say apple decides to pay a special dividend of $10 per share and I am short Jan. 250 puts  (I don’t own these – jusy a hypothetical)
    Does the exchange re-price the puts? I don’t think so, right? Obviously, I would still have time to get out – but just wondering.
    Also – can you add spell checking for those of us who are impaired – Phi Beta Kapa from Kenyon College- but could not spell to save my life


  239. Hi Phil,
    I have a long share position in BP (1.000 @ $43.94) which I bought them a while ago (when they were a safe company and offered a nice dividend) after joining you I sold 10 Jan12 30 calls at $9 (now $12.60). Remember "drifting my gains" we posted about a couple of days ago. After a thorough reading of the site and getting familiarized with your approach to options I am trying to optimize the position selling out the shares and (here you come in) opting for one of two strategies:
    1- rolling the Jan12 call to Jan11 for a credit of 2$ and sell Jan11 30 put, worst case BP is below 30 I sell out the puts bc it`s not worth having it
    2- keep my 10 Jan12 30 call (sold at $9) & sell 10 Jan12 40 call for $7.15  and sell 10 Jan12 35 put, all for a net credit of $1.55 in the 10$ bull spread, worst case I end up with 1.000 BP at 33.45
    Is it OK? you surely have another idea-best of course! Thanx for your comms


  240. BP/Phil
    sorry, I made a mistake, the 10 Jan12 30 call is sold so I would have to buy them back and buy 10 more! I’ll have to do the math again


  241. Hello Jordan,
    I am on TOS, and your analysis on the greeks for amatta intrigues me. How were you able to enter all the position and come up with a composite of the "greeks". Did you have to down load to exel each position, or…..???
    Any help will be appreciated.


  242. jasu1,
    There are videos to show you how to do this and much more on the TOS site.


  243. rj_jarboe
    thanks