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Thursday Thoughts – GDP Up, Jobs Down

Forget the GDP.

We'll get the report on Q2 GDP at 8:30 tomorrow but I'll be watching the Employment Cost Index to see if we are recovering.  I know it seems like "commie talk" to my Conservative friends, but rising wages and benefits are signs of a healthy economy and you can plot the rise and fall of the stock market very neatly against how well the workers are treated

It was Henry Ford who first "discovered" that, if you expect American consumers to buy your products, you have to pay American workers enough to afford them.  In January of 1914, the Ford Motor Company announced they would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage.  Workers came from all over the nation and all over the world to work for Ford, who had their pick of the best and the brightest, which led to a 60-year legacy of dominance in American Industry. 

Henry Ford had reasoned that since it was possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class and that led to a massive economic boom in "the Roaring 20's" until greedy Banksters and speculators crashed the market in 1929.  

Unfortunately, earning $5 a day is still a dream for much of the workforce employed by US corporations as that is more money than is paid to their tens of millions of employees and suppliers in China, India, Vietnam, South Korea, Taiwan, Indonesia, etc.  Not only have American corporations "unlearned" the lessons that made this country great but they are actively involved in tearing down what is left of the American Middle Class by undermining their ability to earn and save as they ship jobs out of the country and cut wages and benefits for those few workers (135M at last count) who are left.

8:30 Update:  Make that 134,543,000 workers left - as we lost another 457,000 American jobs last week.  Continuing Claims picked back up to 4.56M, also more than expected but, as I said to Members yesterday, so what?  We are investing in Corporate Pirates, not the victims they slaughter so when we see another 457,000 highly-paid US workers biting the dust is good news for the bottom line for the companies we invest in as they buy more slave labor overseas. 

Who could care less if America dies screaming as long as new customers place enough orders to replace us?  As I pointed out in my 2010 Outlook, "A Tale of Two Economies" it doesn't pay for us to focus on the "Poor Man" economy – those suckers only account for about 20% of consumer spending and the real trick for the top 10% (who are 4% unemployed and spend 66% of the money) is how to snip that dead vine away and leave themselves with just the good stuff.  Look at KO’s earnings – US sucks, rest of the wold is EXCITING.  That’s pretty typical and it’s not going to change as the decline of the United States of America's will merit the same historical footnote as Babylon when it all comes crashing down and 6.7Bn other people move on without us.

America is the low-hanging fruit that has been sucked dry by Corporate Pirates who have already moved on to greener pastures.  The American consumer was marketed to and lent money on "easy credit" until they mortgaged, not only everything they owned but everything their children and their grandchildren are likely to own in the future and that money was converted into cash which allowed US Corporations to go multi-national and now that they can no longer get more money out of US workers than they put in – they no longer see the benefit in paying them at all when there are 6.7Bn new suckers lined up who just can't wait to go deeply in debt in order to buy a big-screen TV and a microwave. 

 

America is over and the smart corporations are already fleeing the sinking ship.  We have swept our debts under the rug ever since Nixon took us off the gold standard in 1973 and now we have both a shrinking, aging population AND deflation – a deadly combination for any empire.  GDP in 1973 was $5Tn so 40% debt puhed back for two decades only hit the 1990, $9Tn GDP for 22% and 50% 1990 GDP was $4.5Tn and jamming that 20 years down the line was "just" 1/3 of the current GDP but if we sweep our now 100% debt to GDP of $15Tn under the rug where 300M people in 2010 generate $15Tn and we have 2 lost decades like Japan then in 2030, we may have 275M people, mostly retired, generating $12Tn in GDP with that $15Tn in rolled debt plus another $15Tn we rack up over 20 years so then we’re at 200% of GDP debt – JUST LIKE JAPAN.  Now the funny thing about Japan is – that’s just what they did yet they not only survive but many people would still rather have Yen than dollars so the reports of the United States’ imminent demise are greatly exaggerated – it's more like a long, slow, wasting death that's eating our country away at the core

That's why we were BUYBUYBUYing yesterday while the markets fell.  We're not investing in America, anyone watching CSpan for an hour would know that's a terrible idea – even without looking at the balance sheet.  We are investing in multinational corporations and companies that will still make good money even in the decline of the American empire.  I mentioned CHK and UNG in the morning post and we also added long trade ideas (hedged, of course) on GLW, BYD, BAC, JEC, AA and AET while making RTP our next focus short as we think copper has gotten a bit overdone but we're scared to short it.

The Beige Book was just what we expected but, after highlighting and commenting on it for Members at 2:38, my conclusion was that we should lighten up on our beatish plays (taken in Tuesday's chat) and begin using Dow 10,500 and NYSE 7,000 as our new cut-off lines to flip back more bearish.  It's both hard and sad to have to ignore the mess that is being made of our country by Corporations, Banksters, Special Interests and, of course, Politicians – but we are INVESTORS and we need to INVEST based on who is going to win.  Right now, the Big Corporations clearly have the upper hand.  

We still may come crashing down and we'll be taking on more disaster hedges at 10,700 and adding to those at 11,000 but, for now – let's enjoy the ride and dance to the music while we ignore that burning smell….

 


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  1. Phil/Commie Talk…………now that’s funny!!!
     
    Equally funny is how some people can locate a sliver of positive news within a haystack of doom and construe that things are all good.


  2. Anyone used the ib app for the iphone or ipad??
    Don’t really want to try to get tos before vacation.
    Ditching the lap top and trying pad in europe with european sim


  3. Excellent explaination of Delta, Gamma, Zata Atea Tater, & Gator
    https://www.thinkorswim.com/tos/displayPage.tos?webpage=lessonGreeks


  4.  Sorry Phil I dont think you can include South Korea and Taiwan under the sub 5 their min wage is higher than 3 per hr


  5. Samz3700 / IB:  Yes, have used iTWS on iPhone for about 6 months. Pretty good. You can customise watch lists, and trade / track your portfolio pretty easily. Also has basic charts.


  6. Phil – are you ahead by a day?  I thought GDP and ECI are due out tomorrow morning, but jobless claims are out this morning.


  7. I think Phil may be ahead by a day regarding GDP.


  8. I wonder what Ford’s retained earnings were at the time he offered to double wages.
    Successful companies can offer many benefits to their employees.  Marginal ones that are just barely getting by or live on credit lines, much less.
    Using very successful companies as a model for what all companies should pay their employees, including all the executives, is folly.
    Until one knows the EBITDA, of a specific company comparisons are disingenuous to say the least.  Like saying the socialized  health care sysetm in Cuba, or Canada, with a fraction of our population to what the United States should do.


  9. Phil/KMP, I have had this stock for a long time and when it got real cheap I sold some puts but now I just have it alone and want to rent it ouit like you mentioned. Would you recommend to write some puts and calls against it – I know you would, but which ones would you recommend? Thanks


  10. Oops – GDP tomorrow.

    I’m very sick this morning – some flu thing.  Trying to get through post. 


  11. I would like to know, since 3/9/09, how many mornings we opened up and how many we opened down from the previous day’s close-  maybe it’s my perspective but it sure seems like its at least 75% of the time up.


  12. Re; Ford….
     
    Ford Had confidence in a rapidly expanding economy, and buyers for his products. American business leaders today do not. If Business leaders thought there was somone out there who would buy everything they could produce, there would be NO unemployment. Unfortunately nobody is getting PAID to take risk (at least in the "C" suites) because they’re all afraid of getting their asses handed to them by the markets, Therefore nobody is gonna take the first step to raise wages in the hopes that THAT will be adequate to spur demand for THEIR products. Demand side seed sowing is a risk nobody’s going to take right now in shark infested water
     
    Gordo


  13. Matt, I don’t know the numbers but we tend to open up because we’re basically optimists and today is a new day. As a group, we WANT it to go up. The sell siders like to open up to be better able to shear optimist sheep.


  14. Its a day like today we go down, lots of bullish sentiment…great to sell into then rally back then flat line into GDP #”s tomorrow


  15. Gmarts,
     
    I’d agree with that assessment.  I’m sticking with JR’s opinion that the first 10 min is usually wrong.  It seems to me, you typically don’t get clear direction until after 10:00 am.


  16. Good morning,
     
    IWM 64.54, 65.34, 65.77, 66.09, 66.49, 66.92


  17. Matt – I have been inclined to watch the option volume on the weeklys to try and ‘guess’ for now which way they are going to move the market in the pre-market.  It is a bunch of crap as this was not the norm a few years ago….esp when you can trade the spiders AH until 4:15.  No confirms yet, but just putting a correlation together.
     
    Initial jobless claims fell by 11K, only to be revised next week or the week after making them worse.  People do not pay attention to old news, even when the front page is wrong more than 1/2 the time.
     
    Good day to all!


  18.  Samz, 
    What is the IB app? I am also traveling to Europe, trying to figure out if I should just attempt to cover 100% or find a solution with an ipad or such… How do you get a sim card for Europe, the carriers here offer one?
    Thanks 


  19. I posted previously about EGO.  Earnings just released--beat of $0.11 vs. $0.08 estimate.  Price is up from mid-15′s to low 16′s this morning, barely in the money on my spread below.
    My position is long Aug $16 calls (orig 1.95, now 0.65), short Aug $18 calls (orig 0.48, now 0.1).  Wondering if I should get out completely while there’s some time left in Aug on my longs, or try to roll my longs out, sell some higher valued shorts in Aug to repair.  This is not something I want to hold longterm--just want to recover what I can from a losing position.
     
    Any suggestions on how to play this would be greatly appreciated.


  20. Iflan- are you here? What is your take on AAPL weekly’s?


  21. JRW
    I am new--have been following your posts on IWM--what are the levels you posted--are you bullish today--excuse my ignorance
    Tx


  22. any suggestions on taking a new GENZ position?


  23.  savitri
    scroll back for JRW numbers


  24. Good Morning!

    Still not functioning but it’s the same watches as yesterday:  Dow 10,700, S&P 1,155, Nas 2,300, NYSE 7,350 and Russell 666 with the Russell and Nasdaq weakness a very big concern at the moment as they had both broken over. 

    Remember, if we are going to roll over, those two will start us off so another day of leadership by RUT and Nas to the downside will be a bad sign. 

    Since we were bullish yesterday, best to defend with DIA Sept $102 puts at $1.95.  The plan would be to sell Aug $103 puts against them (now $1.12) if the S&P gets over 1,113, using that as a stop-line

    I’m going to lay down now, back when the drugs kick in!


  25. savitri
    I’m neither, I just play between the lines. Currently in TZA (Bear), but only as long as we are going down !!
    And I may be selling here (IWM 65.34); turning bullish.


  26. Savitri, lines are just support/resistance levels, they are neither bullish or bearish, but rather suggest likely areas for reversal of the short term trend. Direction and momentum determine bullish/bearish positioning.


  27. Tx--everyone --I really appreciate all the help


  28. Anyone think AKAM is a buy
    TX


  29. Cramer does   )-:


  30. ok-that takes care of that


  31. ???  While Mark and Erin talked about "Coffee from Cats" on CNBS, did anyone hear the sound of escaping "gas"??? :)


  32. That was a weird segment…….


  33. I heard it too 1020, but I thought it too tacky to comment on   :-)


  34. Something going on with CSCO, looks like its halted


  35. Another fat finger.


  36. AMATT,
    When I was in Hong Kong a couple of years ago we bought a different sim card for an att phone from a convenience store. The phone was not a smart phone. i’d be surprised if you could do that with any apple product.


  37. I see CSCO spiked to 26 then halted, looks like fat finger is right kink


  38. Good morning again!

    I’m back now – I’ll do my best to catch up.


  39. gmarts – Ha!  I guess I’ve revealed a bit too much of myself…… :)


  40. JR,
     
    You sitting long or short?


  41. Phil: hope you get over your flu fast, you have a fever ??
    question: I like to sell premium on my stocks: BAC and GE: how far should I go out in time ?


  42.  I still think market will go down starting from next week, largest drop coming. I have been observing the market seems to be tracing out Nov08-mar08 pattern. Lower lows around 900 target


  43. Phil – AMSC – do you like them?


  44. Q’s breaking below yesterdays lows


  45. Wow, bloomberg thinks there MIGHT be a bond bubble happening. Evidently some $700B have moved into bond funds since last year, bigger than the funds that created the internet bubble.


  46. Clarification: make that since the beginning of last year.


  47. Get better Phil!  (how about a little time off?)


  48. Was that the ciruit breaker on csco?  Closed out XOM bull-put spread this morning into the excitement.  I like the risk-reward of sell 60 puts and buying 57 puts.  Usually for a credit of 1$.  So max loss is 1.5 and gain 1 – but it is very rollable if it goes down.


  49. Phil
    You say, "Since we were bullish yesterday, best to defend with DIA Sept $102 puts at $1.95.  The plan would be to sell Aug $103 puts against them (now $1.12) if the S&P gets over 1,113, using that as a stop-line."
    Still getting used to the lingo.  Are you saying to buy the Sept DIA puts and then, if the S&P hits 1113, to sell the Aug DIA puts?  Simultaneously, I don’t understand 1113 as a "stop-line."  Thx--RDT


  50. Phil, is the world ending for MU or is this overdone ?


  51. JRW    Think we hit your 64.54 line today?


  52.  Short TFU10 since 652. Hit resistance at 646.50 yesterday afternoon, will be careful there. Otherwise goal is IWM 64.54. Entry a leftover from drop through 8EMA around 10:22 am, just happened to trigger on the slow rise while I was busy. Got luck despite several 3 min bars over the 8EMA after the sell. 


  53. rdtruitt – yes, you do these sequentially.  First, you have a long position in DIA Sept $102 Puts.  These gain when the market goes down, so they are good as a defense, to put your otherwise bullish portfolio into neutral.  However, if the market starts going up, e.g. if S&P hits 1,113, you start losing on these.  If the market goes up too much, you can "neutralize" some of the negative effect of the DIA Sept $102 Puts by selling higher-strike Puts against them, such as the Aug $103 puts.  Aug puts have another advantage, in that they lose premium faster than the Sept puts – a desirable property.


  54. Phil,
    FWIW, ever since a relative recommended it to me I’ve been taking 1-2 teaspoons of Honey every day and, in the two years since I’ve been doing so, I’ve noticed a significant reduction in episodes of illness. I don’t see how it can hurt and it tastes great besides! Stay Healthy!


  55. Micron MU  trading at 4x fwd P/E, at b/v.  Any industry observers here have a view.  Looks cheap vs c/flow and it takes 2 yrs to build new chip capacity , which seems to be in reasonable balance from what I can read, so MU’s margins should continue to be good?


  56. South Korea/Taiwan/Chyer – I stand corrected.  I must be getting old, I still think of them as 3rd world in the back of my mind but I do know better….

    Ford/Flips – Bottom line is they started the ball rolling and all manufacturers began paying higher wages and the middle class in America exploded and we had a massive national expansion where workers and corporations benefited – and it’s not even like we were relying on exports to bring in capital at the time.  The coproraitons, like government in theory, derive power that is granted to them by the working class on the theory that they will work to the benefit of all.  If that public trust is violated then, in a DEMOCRATIC system, the larger working class has the right, by law or by violence if necessary, to effect a change of leadership – both corprorate and govenmental. 

    KMP/Jomp – Looks to me like you can get a nice return from selling the Jan $65 calls for $4 and the $62.50 puts for $3.50.

    Up/Matt – That seems about right and we should have been more suspicious of the punch-up in the futures 2 days in a row – those usually end badly. 

    Testing yestterdya’s lows now – watch out if they break!


  57. Tablespoon of honey + teaspoon of apple cider vinegar (organic) in a glass of water 1st thing in the morning is excellent.


  58. nice bounce off your line JR


  59. Phil/KMP, Did you mean sell the 65 puts – they are 3.50, 62.50′s are 2.60


  60. Phil,
    When you advise us to buy protective puts on days like today, what should the position size be relative to our portfolio (not including cash)?


  61. I haven’t followed here recently, so sorry if this has been discussed, but one thing I like for bear protection here are the major REITs, like SPG, VNO, and BXP, all of which have run ahead of the broader market and are just off of their yearly highs.
    It will take a fair bit of energy to push them to new highs, but if that happens you can exit if they break to a new yearly closing high at a small loss. More likely they stall out here and you can run a long theta trade with, say, short call verticals or long put verticals, and make some money if they stall out or go down. I’m short all three with put verticals, against a more bullish portfolio.
     
    Hope you feel better Phil.


  62. Honey and vinegar… Gimme Zithromax and Percodan…..:-)


  63. Sellbots going in Hard!


  64. Phil- your second cold/flu in the last 2 months. Let me know if you are open to naturopathy. Got a nifty treatment that will take the cold out from the root.


  65. wow. slicing through supports like a hot knife through butter today.


  66. Demand side/GMarts – And THAT is why you need Government stimulus intervention.  The New Deal made more sense to people of that time because they KNEW that putting money into the hands of the workers could boost the economy, it had just happened 20 years earlier.  Right now, you have Big Business interests pulling the strings of their puppet Congresspeople to do anything they have to do to STOP that from happening again because they have no interest at all in empowering the American middle class.  The US consumer is like a strung-out heroine addict – they are hooked and there’s no reason for the dealers to hand out any more freebies – they will just keep buying until it finally kills them and then the dealers will move on to a fresh set of buyers. 

    Thank goodness GENZ finally trailed off!

    IB/Amatta – If you don’t have experience using it, I would not rely on a new form of trading if you are away for a long time.  You need to either lock your account into a more neutral stance or get to cash on any positions that you aren’t very long-term confident of.   Anyway, do you really want to spend your vactation worrying about the US markets, which are open from Lunch through Dinner for you? 

    Woops and there we go! 

    FAZ is flying.  If XLF can’t hold $14.60, that will be bad for financials. 

    SOX leading us down again, down 2.75% RUT and Nas 2nd, down 1.15%.

    Oil seems to be immune so far so USO Aug $33 puts at .35 are a nice way to play them breaking below $78 – out if the S&P retakes 1,100.


  67. And they wonder why the retail investors are reluctant to enter these markets?


  68. Is your post regarding KMP a buy/write including buying at the current $66.25, or solely the calls and puts?


  69.  GS and TBT still up for the day. Again, dont understand the activity in either of these names lately…explain?


  70. I’m surprised CNBC has not yet attributed the selloff to "Investors concerns about this mornings jobless claims numbers"   LOL


  71. Hanna: Yen is way up today. Might explain it.


  72. Nicha, I’m interested on that naturopathy!


  73. TASR down 4% to below 4 again. To DD or not to DD, that is the question.


  74. Would you advise to buy FAZ for the day trade?


  75. jvest I’m so happy I dumped that dog with flees.  I have a short now and I’m on 18%


  76. Part of the key to honey is to get local honey. I think the idea is that it helps the immune system by exposing you to allergens. Never tried it myself but I’ve been hearing more and more about people being helped by it. Quite the opposite of what most are doing these days with hepa filters and clean wipes keeping those same alergens at bay and reducing the immune systems ability to respond. The ‘germs’ sales tactic seems to work well but that’s another "don’t get me started" topic.
     
    Do they still have bees in Joysee?


  77. I’m also scratching my head trying to decide on what basis the opinion has been formed that we going to have a good GDP report?   No one has a crystal ball HOWEVER the chances of a good report is slim and none and we have a MUCH better chance of being at 9800 on the dow and 1020 on the SP500 within a week than a good GDP report I’m holding ALL my shorts into tomorrow expecting a less than good GDP.  It’s almost time for this market to give up and ride down to it’s first level of support at 8200 on the Dow.


  78. Nice!!!!!!!
     
    I know Matt’s got wood


  79. Phil, did you actually see DIA Sept $102 puts at $1.95? I was waiting to get something close to that price, but I never saw it drop below $2, and Yahoo seems to confirm with a day range of $2.20-2.38. I’m just trying to understand these mattress plays better. Were you quoting a current price, or were you just stating that we would want to buy it at around that price if DOW were to hit your 10,700 watch?


  80. Rainman…..agreed.


  81. EGO/Markz – Have I mentioned what a very bad idea vertical plays are in MOST situations lately?  They offer virtually no flexibility if you miss your target…  That’s why I almost always try to pair them with a put to offset the cost, that way, you could get out with a loss on the spread and not be too damaged (as long as the putter is out of the money, of course).  There are 3 weeks left to trade in Aug and, if the market holds up, there’s no reason to bail just yet but you should probably rationalize that you are going to buy out the caller anyway so do it now, for a dime, and that leaves you in at net $1.60 and you should be thrilled if you can get out for $1 on a move back up or stop at .50 and call it a day. 

    CSCO/Kustomz – That was very strange.  They shot it up to $26 for a second and then the big sell-off, couldn’t trigger a buy I guess so they gave up. 

    Flu/RMM – Much better now that I’ve mixed medications.  Just ignore what I say today and everything will be fine.  At the moment, selling Jan puts and calls seems to be paying much better than 2012′s, probably because mid-term volatility is much higher than long-term at the moment so if you do conservative sales there, the worst thing that happens is you roll them along on a big move. 

    AMSC/Jrom – I like them as a concept but they got a little ahead of themselves.  Maybe back at $25 you want to sell puts.  Watch the test of the 50 dma at $29.50 and they just blew the 200 dma at $32.20.


  82. Phil, what’s your opinion on FTR? it’s paying $13% annual dividens. What option to play? thanks


  83. ravalos- naturopathy…
    http://www.internetindia.com/health/thac/
    Check out the disease section in particular.


  84. Its ever more clear that the Fed has no clue, Ballard says the the D word and more QE is needed spooking the markets beyond what I thought would be the low…gooooo Ballard!!


  85. Bond bubble/Rain – That’s why every single day we hear from Gross or El-Arian on why bonds are the only safe place for money and how evil it would be if we don’t pay off our debts and how inflation must be contained at all costs.  If the bond bubble pops – those guys are screwed. 

    Time off/1020 – With days like today? 

    Maybe I’m fuzzy but can anyone tell me WHY we are down 1.5% now?


  86. "Have I mentioned what a very bad idea vertical plays are in MOST situations lately? "
     
    Utter nonsense.
     
    You can absolutely adjust a vertical. There are good and bad verticals of course, but buying in the money and selling at or just- OTM gives plenty of flexibility and has many advantages. If the trade goes against you, you can roll out in time for a calendar, or go deeper ITM at reduced cost, etc. If the trade quickly goes your way you sell at nearly full profit and reposition for more profits. If the trade flatlines you get nearly 100% profits.
     
    Other advantages of a vertical like the above: gamma won’t ever flip against you, theta is your ally (if done as above), vega is your ally (if done as above), net cost/risk is low, delta is easily managed.
     
    These kinds of issues used to be important to traders here, lol.


  87. Phil, it must be that astrology thing…


  88. PHIL
    if we break 10,400 on dow where do u think next support is 10,290? thanks


  89. phil what about akam @39


  90. Phil,
    I have a pretty good guess..watch the yen and the fxy


  91. Phil because i said so…read my 9:25 comment :-)
    O yea and the Feds Ballard is says Japan style D for the US is likely


  92. Kevin/KMP, No, I’ve had KMP since 54 and sometimes sells puts when it gets low but wanted a more long term play to capture some premium instead of shorter term plays.


  93. Phil/
    70m volume on Dow in 2 1/2 hours.
    It is a volume day so the bots cant prop us up to higher levels. Except from that it has been only good news in Asia and Europe and good corporate news.
    If we gonna stay rangeish as you said, it seems that our IWM range is 600-670. We awere at the top, so we may be retracing to the middle.


  94. Phil, I agree don’t want to be looking at the market every day while away. Now how to do it, as the problem is that as we had been discussing my portfolio is not balanced at all… I was too bearish (thinking I was bullish 60/40) when we ran up 500 points and now I am too bullish… I am trying to get an account with TOS to see if I can structure the portfolio to be completely neutral, but I am not sure I can do it on my own. Would appreciate some help (couple nights ago you kindly were going through the positions and left for dinner…).
    Thanks 


  95.  JRW what is the current support? Are you looking for a turnaround? Seems silly for this crazy drop… Looks like TBT is turning back up


  96. lionel/range — +1


  97. Phil/bonds — any thoughts on when the bond bubble will pop? I’ve never been a bond guy. That would turn into a major bull run in the markets, no?


  98. GS guy on CNBC… We’ve been successful because we’re better fundamental analysts than the other guys…..(Yeah, That’s it, fundamental analysis)… LMFAO  :-)


  99. Phil…yea the reason why we are down 1.5%?  Why were we up 5% last week?  Same question both good.


  100. @Phil
    Why we are off 1.5%:
    There are more sellers than buyers. Bids are disappearing faster than virginity on, "Hung", and "Jersey Shore".
    It’s a day before a weekend, three day weekends are popular this time of year on the east coast on the Cape, Martha’s, P-town, Jersey, Outer Banks.  One of the biggest vacation weeks of the year next week. Fun time in earnest in Europe begins today.
    No surprise, here.


  101. It’s funny how when the volume slows down the BOTs take over.


  102. Phil, why down – no reason! :)   Are you surprised by this explanation? :)
     
    Ah, USO Aug $33 Puts for 0.35.  Music to my ears.  How long have I waited for you to bold that line!


  103. Jossie- I had a similar ? yesterday on FTR. His response:

    FTR/Jbur – Best is to just go long and be willing to own more.  You say it’s not much premium to sell (big dividend payers are like that) but you can sell the Feb $7.50 puts and calls for $1.20, which is nearly 20% of the stock’s price so, if you are excited about 9% annually, you should be bouncing off the walls over that return in 7 months.  By the way, if you are not willing to own more than 2,400 shares, the very simple solution is to cash 1,200 shares and free up $9,300 for a stock you are more enthusiastic about and then do the buy/write with 1,200 shares because this buy/write returns 3x more than the stock so 1/2 still makes 1.5x more than keeping all the stock for the dividends. 


  104. Volume dying. only 7m on Dow in the last 30min compared to 30m earlier this morning.
    It could be the return of the stick at the end of the day today!


  105. Buyers poking little heads out of holes like prarie dogs, asking each other "Are the Bots gone?"
     
    Bots are waiting behind the trees with clubs….


  106. Phil Hi I hope you feeling better should be moving down here to Cancun Had one flue in two years !!
    My question is on BWP had  short Sep 30 callers and they were called away  today some one stealing my dividends
    I still have the same amount of Sep 30 short putters outstanding with good profit but I am thinking of selling still the Aug 30 putter .30 putting me back to my stock at 29.70 The stk pays div. of 6.7 % not a bigger as I am paying 35% interest on any partner stks Possible should wait as it looks the market is on the down turn.  Thks


  107. Current support is IWM 64.14; next major support is 62.31 but I don’t think we’ll see that today !!   I’m in cash since12:15, looking to go long, working on a project and watching my trades; I’ll follow up on questions later.


  108. By the way it might be a good day to sell some Aug 104 putters for the mattress play got up to 2.20 for it


  109. Fed Bullard/
    “‘The U.S. is closer to a Japanese-style outcome today than at any time in recent history,” Bullard said, warning in a research paper released today about the possibility of deflation. “A better policy response to a negative shock is to expand the quantitative easing program through the purchase of Treasury securities.”
    But what does he thinks Japan has been doing all these years with the JGB market?


  110. XOM/Jo – Nicely done!

    Nice catch in the BBook was sent to me.  The Beige Book report from the Ninth District (the upper Midwest) noted that the June Creighton University business survey reported "signficantly increased" manufacturing activity for that month. However, the report made no mention of a more recent (July 16) Creighton survey which gave a much more pessimistic view of the economy, esp. in the banking sector.  That’s interesting as, if that reflects the bulk of the report, things may be moving significantly downhill as stimulus dries up.  

    DIA/Rdt – Sorry, the idea is to use the Sept $102 DIA puts to cover (now $2.55) and then you can either take the money and run or defensively cover them with August puts.  Since we made our 20% on a day trade, we’re in take the money and run mode now – the covers are more for a move against us.  Yes, stop-line is the line to stop being bullish or bearish so, in that case, I felt comfortable holding the puts naked UNLESS the S&P went over 1,113, in which case my bearish premise would be blown.  As it turned out, we went straight down so a non-issue. 

    Keep in mind that if you use just 2% of your portfolio for day-trade covers and you take the money and run at 20%, that’s still 0.2% of your portfolio and hitting a move like that 48 times a year (once a week) is 15% added to your ENTIRE portflio at the end of the year.  That’s plenty to make out of quick, protective plays that are providing added insurance.

    MU/B1 – They are a messy, messy company.  They always seem good and usually trade like crap so I only get interested when they are crazy low.  I would like them at $5 so you can go artificial but it doesn’t really pay enough to be interesting yet. 

    Thanks Jordan!

    Honey/Kevin – Hmm, not a bad idea.  I drink tea and honey when I am sick but I never think of it as a preventive.

    KMP/Jomp – Sorry.  I meant to sell the $62.50s, better to have $2.50 of leeway than .90 in that case.  Don’t forget they handicap their growth trajectory every time they pay a dividend.

    Size/Dbarak – The size should be whatever it takes to get you to neutral, at least.   Anything over that becomes a bearish gamble.  So if you have a $100KP that is 60/40 bullish and let’s say you are gaiining $2,000 on a 100-point move up in the Dow and losing $2,000 on a move down – then your primary goal is to cover that loss.  Since the $102 puts are $2.10 with a .40 delta, it will take 250 points to make $1 so then you have to decide how worried you are.  Generally, you want to try to mitigate about 1/2 your damages so you are looking at $5K lost on your main positions at 10,250 and that means you want to gain about $2,500 on the short puts so 25 contracts at $2.10 would be $5,250 comitted to the hedge. 

    We are willing to take a $500 loss if the S&P goes back over 1,113 as that puts us back on the path to gaining our next $2K and a downside move to $2.55, like we just had, makes us .45 x 2,500 or $1,125 and that’s plenty to make as it offsets 1/2 of a 100-point drop and we can cash there and simply look for another put to reload on if the bounce line doesn’t hold (10,400).  If the bounce continues and we recover, it’s a free $1,125 added to cash and if we go lower, you have your $5,250 plus another $1,125 to buy the next put (the DIA Sept $101 puts are now $2.13).

    By the way, on those kinds of trades – a very big drop raises the delta and they end up paying more and more on the way down so if we do collapse past 100-point drops, these still make nice brakes to slam on the portfolio. 

    REITs/Eric – We just did VNO but I accidentally forgot to bold it yesterday (sorry all).  The trade was:

    BXP had good earnings but still face tough times and they are up at $82 and VNO is also zooming at $83 – that makes them good shorts and we can sell VNO $85 calls for $1.60 naked or go for a ratio backspread, selling 5 VNO Sept $85 calls for $2.75 ($1,375) and buying 3 Dec $90 calls for $3.50 ($1,050) for a $325 credit and you keep the change if the Sept $85s expire worthless. 

    That’s working well with the Aug $85 calls down to $1.15 and the Sep $85 calls down to $2.30 and the Dec $90 calls at $3.20.  I worry about stimulus blowing us out of short REIT plays so I like having the long end of the backspread as a partial cover.  I think today I would switch to BXP, whose guidance was tepid and got no follow-through on earnings so a similar play, selling Aug $80 calls for $2.85 naked (rollable to 2x Sept $85s) or selling 5 Aug $80s for $1,425 and buying 3 Oct $85s at $2.70 ($810) for a $625 credit.  This is a tight roll so a fairly bearish spread and you need to be ready to DD quickly if thye find support above $80

    OK kids – 5% Rule quiz: If the dow drops 170 points from the open then we expect a bounce of what? 

    That’s right, 34 points, back to 10,434 and anything less than that is???

    LAME!! 

    Now you are getting it!


  111. phil , i believe we are down because of the deflationary comment ,. also , i think there is a real sentiment change on the long term viability of the U.S.  the long bond got creamed this morning ,that was more unusual than the staocks going down at the same time . i think the cat is starting to climb out of the bag . my 2 cents.


  112. Phil ; I have a SDS vertical call spread ; Bought March $ 40 /Sold Mar $48 calls for net $1.22.now $1.51. I will be traveling for a few days. Leave as is?


  113. Could we get a DIA Mattress update?  Long Dec 106 puts.  Should we cover with Aug 103s or 104s on this bounce?


  114. Phil:
    what ETf would you recommend for a bullish and a bearish market ?


  115. Interesting… another 12:51 spike in volume on the IWM. We saw that yesterday as well. Ssomeone covering shorts before lunch?


  116. rain / 12:51
    Part of that was me !!  8-)


  117. Wow, the day sure flies when you take a nap!  8-)

    Naturopathy/Nicha – I try stuff but my problem is mainly that I have alergies and, if I get run down, almost any exposure to large numbers of my kids friends, like I had this weekend, seems to give me some horrible disease.  I am pretty pissed about this one because it’s summer and I’ve even been drinking a lot of juice drinks with my new juicer so I would have expected to have more resistance.

    KMP/Kevin – Not at all, that’s just spotting for Jomp, who already has them.  If I think a trade is good overall I usually remember to bold it but I’m not terribly excited about KMP in the upper $60s. 

    Ooh a bad treasury auction!  $29Bn in 7-year notes at 2.394 with disappointing bid to cover of 2.78 (under 3 is waning interest).  This was not expected as TBT was selling off into it all day and now they are re-thinking the .50 drop. 

    GS & TBT/Hanna – I’m not sure there’s a unified theory for those two together.  GS is up because they’ve already figured out how to circumvent FinReg (see yesterday’s post) so the crime spree continues.  TBT is up because only an idiot would give the United States money to hold for 10 years at 3%.  Fortunately, there are almost a dozen suckers born every minute with the larger global population and we haven’t run out of suckers yet but we might one day…

    Yen/Kinki – Another banner day for the 3am Yen trade as they fell from 87.4 at 3am to 86.7 at 7am and just bounced off 86.6.  I am amazed that these wild currency swings are simply ignored every day.  Also, have you guys noticed that we are once again having an overall market rally on a declining dollar?  Maybe we are overthinking things and should just FOLLOW THE MONEY:

     


  118. Watch out for 64.88 as well !!


  119. IMAX is getting earnings approval today and an upgrade already.


  120. JRW — I thought you went to lunch :-)


  121. Phil/USD/JPY
    I try to play these moves with options on FXY buying 115 calls and selling 113 puts below 87 yens.
    Made money twice and I have been reloading today
    If you have a better idea please let me know.


  122. JRW/ Thanks for the warning. Sharp as always !


  123. Out of TNA at $42.66 for $1.21 at the trend line from yesterday’s tops !!


  124. The FSLR position from Monday (buy $135 Put sell $125 Put) is screwing up my portfolio stats.  I hope I don’t have to hold it for too long, just after earnings tonight.


  125.  Phil, hope you feel better! 
    The FAZ plays have been treading water, now down about $300 on the play. (I have 5 11/16  and 10 16/19) have a position in C ($16K and BAC $12K) worth keeping still? 
    Thanks


  126. LIT / PMG bugs -  the new LIT (lithum) seems to track PPLT (platinum) with the volatility of PALL (paladium), so I’m figuring its range is going to track their range, and when they’re all rich, then they’re all overbought, and when they’re all dear, they’re all oversold. This is useful since PPLT and PALL have histories while LIT does not as it was only launched this monday.


  127. Phil
    The VNo play you set up below sets you back in TOS margin by 7000.00 is this not a bit high ???


  128. rain
    It’s 10:24 in the morning here, a little early for lunch. Just working on a timing advance accelerator module and I have a double screen here in the garage so I can see posts as well as my charts.
    .


  129. Allergies/Pitiful Phil – ok, my turn – I used to get nasty sinus infections from allergies backing up the passages – heard the bit about washing out the snout with salt water, did a little research & it seems to be real. So, tried this & that, ended up with a jala neti pot from the very nice folks at healthandyoga.com, and have had no sinus infections since. They make a great little stainless pot, ship it quickly – you don’t really need the special salt, table salt is fine. They are very enthusiastic about the pots and yogic practices in general, and there’s some discomfort with learning to use the thing. But once you’ve got it down, it’s very helpful. I don’t think it helps with ED, though…….


  130. @Phil ..;
    "….a LOT of  juice drinks with my new juicer …"
    If they are vegetable juices take them in moderation. If they are fruit juices, stop right now.  You don’t need copious amounts of fruit juice. A lot is harmful, triggering an overreactive response from the pancreas.   A little goes a long way. 
    Juicers are great if sparing amounts of vegetable juice are taken.  And watch out for the Beet juice as they are very high in sugar as well.
    Any refined sugar should be completely eliminated.  Cut out 90% of your sugar intake and watch what happens.
    That’ll be .05 cents, please.


  131. Sorry Phil not coppied your play
    BXP had good earnings but still face tough times and they are up at $82 and VNO is also zooming at $83 – that makes them good shorts and we can sell VNO $85 calls for $1.60 naked or go for a ratio backspread, selling 5 VNO Sept $85 calls for $2.75 ($1,375) and buying 3 Dec $90 calls for $3.50 ($1,050) for a $325 credit and you keep the change if the Sept $85s expire worthless. 


  132. TASR/Jvest – Note the March $5 puts can be sold for $1.50, not a bad entry discount if you want more. 

    FAZ/Alik – Not for me.  I only like them when we have a very clear top and I didn’t know we’re break down so hard this morning.  I have no reason to think there will be a lot of follow-through to the downside here unless GDP really sucks tomorrow. 

    Bees/Rainman – We had a honeybee nest in the attic and we had them relocated and the guy gave us a bunch of honeycombs.  It was good for tea but way too strong on it’s own but certainly did smell like our local flowers – very educational for the kids. 

    GDP/Yip – Good corporate earnings indicate solid GDP.  Inventory is a wildcard as is trade balance but generally we should get small upward revision to the magic 3% line.  Indications are that Personal Consumption made a comeback but it does depend how fast housing wound down on the stimulus withdrawl.  Government spending HAD to be up with the Census and we heard good reports from HD and LOW that indicate Residential Investment should be much better than last Qs -10.7%.  Inventories are the real wild-card and that can break the report but the BBook didn’t really indicate a slowdown during the measurement period.  

    DIA/Jvest – Never?  You need a better broker!  Here’s the actual sales graphed out.  Generally, I try to go by last price but if the last price looks stale, I split the bid and the ask – which is what you should do if you are trying to get a good entry.  Of course, momentum trades are the exception as we take the contracts that have penny spreads just looking for nickels and dimes anyway. 

     

     

    FTR/Jossie – I like them.  I’m not as sure about them as I was on the old Buy List as I’m not yet comfortable with their new mix but I don’t think they made a bad deal with VZ.  My main concern is they cut dividends short-term to help with the financing so I’d rather wait for a big sell-off and buy in then, hopefully back at $6 if they cut dividends. 

    Dow volume at 1:35 is very low 94M.  Not good if the indexes can’t retake yesterday’s lows (which was near the close) so watching 10,480 on Dow, 1,104 on S&P, 2,260 on the Nas, 6,990 on NYSE and 649 on the RUT so let’s call over 650 a "bullish" sign that can lead to a green stick into the close.


  133.  Phil, hope you feel better! 
    The FAZ plays have been treading water, now down about $300 on the play. (I have 5 11/16  and 10 16/19) have a position in C ($16K and BAC $12K) worth keeping still? 
    Thanks


  134. JRW – don’t short the yellow wire…geek!  =)


  135. JRW/
    Do you mind me asking what is this module for?


  136.  Theory: either gold is mispriced or treasuries are. Gold was $270/oz in 2004. It’s $1150 now, up 325% and interest rates are at a 50-year low. One or the other will adjust.
     
    Mechanism: Buy GLD Jan11-100 puts for 1.90 and TBT Jan11-39 calls for 2.10, in a 1 to 2.7 ratio. For example, $1000 in GLD and $2,700 in TBT. If gold adjusts to 500/oz, or if TBT runs to 59 (strike +20), then each position has a potential to be $26k, with the other expiring worthless, so a profit potential of $22.5k. 
     
    Better yet layout $37k and make a quarter million.


  137. @snow
    There’s a ‘squirter’ Neti now available that forces the salt water further into the sinuses.  It’s great.  No head tilting.
    And as for salt, I ‘ve used the 1/4 teaspoon method and much prefer the little pre-measured packets that come by the hundreds.  Especially traveling.
    @Phil
    The only thing you can count on to truly build your resistance is building up to 1 hour of cardiac exercise at 80% of your maximum target heart rate for your age.  Nothing will work as well.  And if you do that and then sit in a chair with little gross physical movement during the day, your resistance will also weaken. 
    Got to move.


  138. Back in TNA at $43.14; nothing in the way of IWM 65.34 now !!


  139. lionel / module
    It’s for my C-4 Corvette,  406 dual inter-cooled supercharged 725 HP; Trying to make it a little more responsive !!


  140. Except the descending SMA 200 @ 65.20….


  141. Lionel you bet…what time frame?


  142. lionel / sma
    Good point !!


  143. Phil, don’t know if anyone has recommended pomegranate juice to you before. I use to get colds and flu often as well as allergies in the spring and fall. I have been almost allergy free (couple bad days in the spring) without any medication and no sickness for 18 months now since I started drinking it. One of my daughters is IgA deficient (immune system deficiency) and she has been feeling better since starting drinking some as well! I know it sounds too good to be true, but works for me! 


  144. EricL
    All else being equal do you prefer to buy a bull call spread or sell a bull put spread if bullish outlook? They look almost identical in risk/reward, & greeks.   Thanks


  145. JRW, I’ve got an SL55 made 486hp and 550tq at the wheels and a stage 2 Buick GN thats closer to your 725HP Vette
    Heres a clip of the SL on the dyno…
    http://www.youtube.com/user/beauphus123#p/u/13/fxICRVNUX84


  146. Yipcrl/ On the daily screen 3min


  147. Hmmmmm, seems to be failing; out of TNA at $43.00


  148. kust
    Sweet !!!!!!!


  149. kustomz/ really nice!!


  150. What’s going on with Nat Gas today? TBoone has made 11.7% so far.


  151. Phil / SPY puts – I am long a small position in  August SPY 108 puts, down about 50% in past 2 weeks.  Should I hold on for a bit longer or roll to Sept?  Thanks. 


  152. Thanks guys, I show her no mercy :-) and shes in the shop getting more upgrades due to all the Vette’s running around with 700+ HP

    Looks like financials are here to save the day


  153. Ref: Sinuses.
    I surf  every day and have allergies so my sinuses get worked. This is the best thing I have found so far for a bit of relief.
    http://www.neilmed.com/usa/adword_sr.php?gclid=CPOS_N2rkaMCFQs_gwodJhmMnA
    The neti pot is good too, but sometimes it won’t work if you are too clogged.


  154. Back in TNA at $42.


  155. Rainman/Nat Gas
    10:31 AM EIA Natural Gas Inventory: +28 bcf vs. consensus of +34 bcf. Futures +2.6% to $4.84. Comment!


  156. That was $42.78


  157.  lionel,
    I see the 200 SMA at 65.61… Also, When do you use EMA vs SMA??


  158. FTR – dividend already cut – from their website:
     
    What is Frontier’s dividend policy? Frontier intends to pay an annual cash dividend of $0.75 per share (payable quarterly) of Frontier common stock, subject to applicable law and agreements governing Frontier’s indebtedness and within the sole discretion of the Frontier Board of Directors.


  159. amatta
    EMA is for direction; SMA’s are S/R points.


  160. Hi, flip, just saw your 1:47pm post.  Are you saying that if I exercise 1 hour per day, but for the rest of the day I sit in a chair with little movements, that’s still not good??  Then why bother with the exercise?


  161. Phil/time off   You do not have days like today until they are……. :)


  162. Watch RIMM….Acting like it wants to really rocket. 


  163. lionel/NG — I don’t understand. Inventories up less than expected should drive the price of gas up, and it is, UNG +3%. CLNE should be invesely correlated and be headed down. Whuck? What am I missing?


  164. Holding the Jan 155p short  stk is trading at 150.00 and they want still 15.55 for the Jan putter 10$ premium!!!


  165.  JR, 
    Thanks. I am still showing the 200 at 65.51… Boy I had the perfect timing finally today when I wrote the post at 41.67 but got stopped out a few minutes later at 41.70 as I put a .20 trailing stop. Then it took off like crazy. I really don’t know what to do as I have gotten burned both ways. The other time my connection froze and by the time I called Schwab TNA had dropped .90 on 1,000 shares…. ended up holding it and had to exit the next day at a $1.6 loss… 
    I guess to trade this you really need to have several screens and computers not just on one…


  166. It is the GS stock just to fill in


  167. Amatta,
    I use JRW parameters, SMA 200 on 3min chart and EMA 8 on 3min and 1 min chart.
    Currently we are crossing SMA 200 on my daily chart with 3min periods


  168. Rainman, you are missing the energy bill which should be bullish for nat gas.  In the news today.


  169. Rainman/ NG
    My understanding is that NAt GAS demand is up (inventory build up less than expected) CLNE sells nat gas equipment. Their sales will be up so CLNE goes up?


  170. XLF is green already.

    CROX having a good day. 

    Verticals/Eric – Sorry, I should qualify that for people who are not adept at making adjustments.  Long-term verticals are useful but once they get closer to expiration, you simply lose more premium than your caller every day you are out of the money. 

    Breakdown/Z4 – Probably back to our test levels at 10,200, 1,170, 2,200 if we can’t hold levels…  We’re up from 9,600 to 10,560 (10%) and the 5% rule is a 20% retrace of the run to 10,368 so there is NOTHING to worry about from a long-term bullish perspective unless we break that level and a pullback here that holds up is GOOD and HEALTHY for a continued run.  It just blows my mind how people change their mind about the markets almost daily.  It’s one thing to day-trade the flip-flops but quite another to flip-flop our premise based on the changing wind directions

    AKAM/Jerri – They missed.  You can’t miss when your p/e is 50.  They haven’t even been visited by the downgrade fairy yet so be careful.  You can sell Jan $35 puts for $3.30 as an intial entry if you can’t wait, net $31.70 seems like a good entry long-term. 

    Good call Kustomz.  So what’s going to happen tomorrow? 

    Middle/Lionel – Another good call.  Man, I should take more day’s off – you guys are good!  8-)

    Neutrality/Amatta – I don’t like that phrase "completely neutral" unless you mean while on vacation.  Completely neutral doesn’t make you much money long-term, other than buy/writes but those are still bullish bets where you risk a downturn but make money in neutral or up markets.  The whole point of a buy/write is you flip the equation from owning stocks that make money when the market goes up, stay even when flat and go down when down to owning stocks that make money when the market goes up, make money when the market stays flat, make money when the market is down less than 10%, break even when the market is down 20% and lose money when the market is down more than 20%.  That’s all it’s about – you increase your chance of winning substantially so, as long as you don’t make exceptionally sucky selections – time and statistics will be on your side.  I will still try to get back to the next few positions for you (if you remind me after hours) but it was summed up properly as you are over-hedged because you don’t utilize internal (buy-write or covered call) covers and trust them to do their job.  That’s something you really only learn to do over time by getting the experience of seeing that waiting actually is fulfillment…

    Bonds/Rain – I’m not sure if a bond pop will rally the markets as people ran out of the markets and into bonds.  If bonds pop they are just as likely to switch to banks, which will be a bad move as the banks will fall next and the FDIC has, at most, $40Bn to cover $11Tn worth of deposits.  As we can see from today’s Treasury auction, M&A activity is already pressuring the bond market.  Would you rather give Uncle Sam $10K at 3% for 10 years or give SNY $10K at 8% to buy GENZ with? 

    LOL Gmarts!

    USO puts worth a gamble holding into GDP tomorrow as a good one is expected and hopefully a small loss but a poor GDP report will drop oil $2 very fast and that would be good for about $1 on USO. 

    FTR/Jbur – Thanks but notice the difference is you are already in it whereas I’m not keen on a brand new entry until we get some solid overall bullishness to fall back on. 

    Cancun/Yodi – It’s not on my list because I can’t imagine civil order being maintained there if things go to hell.  What’s your thoughts on that?  On BWP, they are nice but I think overpriced because of the nice (6.5%) dividend.  That means if anything happens to the dividned (doubtful) or taxes on dividends move up (likely) they may take a hit.  I’d at least wait for tomorrow to see what the GDP says but, if you REALLY want the stock back, why not sell March $30 puts for $2.60? 

    QE2/Lionel – They are just putting out floaters.

    Deflation/Trice – That was a bullish, not bearish comment.  Fed fears inflation, thinks mo money is the answer.  If you like free money, you WANT the Fed to see deflation under every rock. 

    SDS/Dflam – Depends on what cashing out does for you.  If you need that pay to be neutral then no reason to move it but if you have it just as a gamble, it’s way out of the money and 20% in the hand is worth 40% in the bush.

    DIA Mattress/Daveo – It’s still the Dec $106 puts, now 1/2 covered with the Aug $104 puts (now $1.67)

    ETFs/RMM – It depends on who’s leading and who’s lagging.  As you know, I like my DIA puts whenever the Dow hits overhead resistance as the Dow tends to give us quick, 100-point gains.  My experiment earlier this week (or was that last week) determined that I like FAZ better than TZA for day-trade covers but this morning I didn’t like either.  My favorite upside ETF this week was EWJ, still laying around at $9.70 and the $9 calls are up to .72 (+10%). 

    JPY/Lionel – I don’t play currencies but I would imagine you would do far better with a Forex account.  Gel is the expert there.  You need to be able to make the trade at around 3 am too – that’s another issue. 

    Here sticky, sticky!!!!


  171. amatta
    Just play the lines; and use the 3 min confirm chart. Today you would have been in TZA until 11:22 and TNA from 1:04 and still in it for a nice profit on the day. Don’t make it too complicated; it’s not. And here comes 65.34 !!


  172. Kust, sweet ride!  On this one she sounds just mean : http://www.youtube.com/user/beauphus123#p/u/6/fWihjbBI7_U


  173. The 200 day line on $INDU will be lower tomorrow than today.  The 200 day line on $SPX will also be lower.  Right at the end of June (this last happened for 9 or so trading days on the SPX.  The point is that these indexes aren’t making progress and are threatening a rollover of more than a few pennies on their 200 day ma’s.


  174. This looks like one of those days where we have a fall off in the last 1/2 hour; but in the meantime, YEEEHAAAH!!!!!!!!


  175.   Phil , 
    You wrote a day before yesterday regarding my position in EXC:
    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
    The problem is I bought them at 51.50 in December so I am down 20%…(I didn’t know about hedging with the buy-writes). Now I guess the best case scenario is just making the 20% as per above? Or is there a more aggressive strategy? 
    Thanks


  176. Phil, Cancun
    It looks like you are influenced to much by TV and news. I have lived here now for 20 years when I left the US and I would not go back there. I visited my previous place WPB FL. various times and it is positively not for me. Just to feel better Last week I took a trip 50 years back in time to  "Belice" just to appriciate where I was living.


  177. Out of TNA at $43.93 for $1.15 !! TBT failing again


  178. Phil LOL if only…my thoughts this morning were just a reflection of what i would have done if I were Mr. Market


  179. Well Money Honey Bartiromo FINALLY blamed selloff on the Jobless numbers!…   God, I thought I’d lost my gift of clairevoyance!


  180. Dow H: 10,584.99, L:10,387.39 — Range: 197.6  Hmmmm….  I’m a very good driver…


  181. Phil, on FTR. Noted, just trying to help out my friend with the flu :)


  182. In TZA at $31.42; TBT at the low of the day !!


  183. pstas / ssdirk / cwan/ et al
    The currency markets have been an "exercise in bordom" lately as the summer doldrums have prevailed. HOWEVER, this is about to change, and I would suggest y’all get ready for some nice plays – make sure your account is funded. I’m watching some stuff that shows some opportunity.  For one… if the Fed interprets the upcoming employment and manufacturing data as weak,  we may see a move by the Fed in their upcoming August 10 meeting that will give us some terrific FX opportunities.. I recently pocketed some very nice profits shorting the USD against the Singapore $, and I see more shorting opportunities against the USD looking forward… stay tuned, as I will keep you posted.


  184. JRW…would you figure… I got in TZA at 31.44. Damn!


  185. Oh oh !!  Out of TZA at $31.55; getting into TNA now at $43.57 (buy program) !!


  186. yip
    DUMP IT !!!!!!!!!!!


  187. Amazing how you spot that so quickly is incredible.


  188. One further comment regarding currencies, lot of folks like to trade them moment by moment….. not me! I need my sleep and recreation. I suggest you structure your positions (just a few) for a two week window or further out. Currencies do not move like stocks – the time frame is far longer. I was in a play some time ago that took over a year to play out and it was one of the best I have ever been in. The stuff I will recommend will be medium to long term, and you can set your stop loss and profit target with a stop.  No stress and not time consuming is the way I prefer to play it.


  189. Was that a head fake on the stick?


  190. Watch out that last push higher was on very weak volume in ES…this orgy of buying stock may end shortly


  191. I feel like a broken record but I can’t see how this market is or would go into this HUGE report tomorrow bullish…  But I’m mostly wrong so lookout for a blowout rally.


  192. JRW, 
    The 3 minute chart for confirmation? You are on the 1 min and look at the 3 min for confirmation of the candle? 
    I have in fact just tried to play the lines, but on some days (like yesterday) they really didn’t come into play as importantly, I saw you came up with some intermediates, so its still a bit confusing that is all… Getting the hang of it. I should have started with 100 shares or something digestable though…. 
    Thanks 


  193.  Boy looks like the 200SMA is really resisting at the 65.51 line!!!


  194. Yip its the huge outflow out of equities going into the bond market thats sending stocks higher….sounds crazy doesnt it


  195. Out of TNA at $44.04; Pivot’s too much resistace, TBT failing AGAIN, I may be out for the day, it seems nobody is in charge (a free market, and I have NO IDEA how to trade one of those) !!


  196. GEL1
    thanks for heads up. i like currencies :)


  197. JRW – My indicators are showing a slow decay, yet the market if floating up…I’m out too…


  198. @JRW 111
    Many thanks for the TNA entry @43.16.   Out at 44.16


  199. Phil / QE  Puzzled by poor reaction to Bullard this am.  Surely it was bullish for the mkt that a Fed Pres. is talking about preparedness for massive QE if they sniff a slow down.  Bad for TBT sht term, good for gold, great for stocks.  What am I missing, haven’t they just underpinned our downside?


  200. Gel – How do you feel about shorting the Aussie dollar for a daytrade (looking to cover tonight)?


  201. Kust absolutely.  AND finally here’s another shot at going lower will it hold and accelerate.


  202. FSLR/Jordan – It’s getting dangerous with QE noises from the Fed.  Solar is the likely sweet spot for more QE. 

    FAZ etc./Amatta – XLF held up well today but if you are protecting BAC and C then it’s worth keeping.  I hope you read the Smart Portfolio Management series as that suggests you cut back to about 10-12 positions (a 3-leg spread is one position) and keep them fairly diversified.  Having $28,000 of C and BAC does not sound very diversified already.  I do like them both but if you want to commit that much money to a sector, better off just picking XLF as it won’t be subject to a single screw-up. 

    LIT/Tenger – Good thought.  Will be curious to see if that holds up as they really have nothing to do with each other.

    VNO/Yodi – Just the 5:3 backspread is $7K?  Well, if you have the margin sitting around, then making $500-$1,000 on $7K in 60 days isn’t terrible is it?  These are relatively safe ways to play earnings and, of course, we often get quick wins and we release the margin right away. 

    Pots/Snow – To clear out sinus, I find Ocean Nasal Spray (for kids) works great.  It’s a saline spray.  Never tried it for your other problem…  8-)

    Fruit Juice/Flips – What?  Man, I’m just trying to be healthy!  I eat plenty of veggies but I’m bad about fruit so I figure that making a smoothie every morning will help.  I’m not trying to live on the stuff though but I figure If I toss a few fruits in a blender and mix ‘em up, that should be good for my USDA recommended allowance.  I’m actually surprised how easy it is to do. 

    Gold/TBT/BDC – Interesting but gold can break on its own without any help from rates.  Good set-up, though and certainly worth a toss with far less than $37,000.

    Movement/Flips – That during the day thing I need to work on for sure.

    Pom juice/Stjean – I’m not a fan of the tast but I have added it to my juice ingredients (until Flips scared me off the whole thing, of course!). 

    Nat gas/Rain – It’s the long, slow march into hurricane season.  They did have a slightly smaller than expected build in inventories this moring too. 

    CSCO – So Bob on CNBC is explaining that it is now possible to put in a market order for CSCO when they are trading at $23.80 and you end up getting filled at $26 under the new regs.  Maria is actually right – retail trading is like Russian Roulette for inexperienced traders…

    SPY/Terra – That was a pretty aggressive short position.  I take it you still believe SPY is heading much lower?  If you are in at $1.25 (now .62) and you want to be short SPY, why not go for the Sept $110/107 bear but spread at .88?  That’s +.16 to drive you up $2 in strike and you make $3 at $107 vs $1 at $107 with your current position.  When you do a vertical like this (or any short-term hedge) you need to be prepared to take a 50% loss and move on so the cost of this $3 protection is going to be about .44 per month.  As insurance, that’s not too terrible as long as you get a drop in the first 6 months. 

    FTR/Thanks Deano.  That takes them down to about 10% but are they done and what about taxes?

    CLNE/Rain – Why should they be down?  They are vendors and make more money on the spread when the price is high.

    EXC/Amatta – NO!  That is your problem.  Do not make the fact that you lost money on your old position the problem of your new position.  The idea is that trade ties up less cash and gives you a good payout with not too much risk as EXC is at $42 now.  Don’t get mad, get even – then make money…  Some of these plays will not work and, WHEN they don’t work, THEN you can take the ones you think are low for silly reasons (like C was) and use your cash to increase the position.  If they all go down, then it’s just a bad market and there’s not much you can do about that but if you have 8 good trades and 2 bad ones, then you can simply (if you still like them) take some of your winnings and add to the 2 bad trades and move forward.  As long as you are buying stocks you WANT to reinvest in over time, then price drops are opportunities to increase your portfolio for the long-term.

    Cancun/Yodi – I have been in some rough parts of Mexico for business.  I don’t think Cancun is one of them but to me, and maybe I’m prejudiced, it seems like it would be hard to sustain the place and keep order if the tourist money goes away.  For my "escape islands," I generally look for places that can be very self-sustaining and unlikely to be overrun by sqatters. Of course, I’m not really a survivalist or anything but I do keep my eyes open – just in case!

    Looks like yesterday’s lows were the "right" levels after all!  Also, that was Monday’s open, which we though was right anyway so I would call this a successful consolidation into the GDP report this week.


  203. flip,
     You are most welcome!! 
     
    BTW we are back at the support trend(65.24) so Up or Down from here, be careful. If we break it I’ll go short, if not, I’m out for the day. Time to test the new sensor mod.


  204. Phil, hope the allergies get better.
     
    If you are up to it after hours, your thoughts on NETL, RBVD, VMW, FFIV. All sort of over-extended, but seem to have some juice behind them……


  205. Going for the stick cost me a few bucks


  206. FSLR – I don’t get why they are influenced more than any other stock by QE.  Could you explain AH?


  207. Phil, hope you are feeling better, what to do with GENZ 2012 70 c and Jan 65 p, keep on original plan or change
     
                                


  208. Jromeha/ AUD/USD
    I wouldnt bet on AUD/USD in August.
    There is a rate decison on the 3rd with minutes on the 17th and a major election on the 21st with a big impact on future inflation (via immigration policy changes).
    Most economic indicator for Australia (recent CPI included) make the case for more rate hikes.
    The only AUD/USD negative is stockmarkets collapsing and risk aversion surging back.


  209. In TZA at $31.50


  210. JRW/DrCraig,
     
    Had a couple of free hours this afternoon and used the Russell futures in place of TNA (/TF). My best attempt yet. Had to convert your lines to the futures chart--a bit sloppy but worked ok. JRW, thanks for sharing.


  211. JRW – 31.53…out already…think they might try and hold 650 on RUT…


  212. @ A fruit or two a day is fine, depending on which ones you eat, but apples, if you are not careful to get organic ones, have too many hormones.
    There’s a list of a dozen fruits you have to watch out for. If you want the list let me know. And there’s a dozen that are good in reasonable quantities, like bananas, avocados.
    But when you  consider it takes four apples to make a glass of fuit juice in a juicer, that’s a lot of sugar and hormones.
    I’d recommend a visit with a nutritionist to get a complete dietary regimen. 
    Get yourself one of the Wiis with the tennis program or other if you can’t get outside.
    Looks like you moved UNG up a dollar this week all by yourself.


  213.  Go GS!! :)


  214. Sold WYNN Aug95 calls at $1.30. 


  215. Out of TZA at $31.77; out for the day. 14.5% on the day; guess I paid for my new throttle mod !!


  216. Phil, OK got it. I am modifying my positions, getting rid of C and entering the synthetic. With BAC I am thinking starting to sell forward month calls to start trying to make the losses back… in the meantime I will hold as you suggest the FAZ plays… are those too much or right? (5--11/16 and 10 16/19). 
    To the rest I am selling puts and calls and trying to close the dogs so that I can limit the positions to 15 or so as you suggest. (sometimes it is tough because there are a lot of recommendations coming in all the time on the posts and I want to jump in them).
    BTW I should be at around 30% of my cash right now then correct ? So $150K in buy writes ($10,000 each, this mean buying $10K of underlying and selling puts/calls-- but I am not sure how to account for the synthetics??
    And then then the hedges should cover a 20% loss ($30,000 loss)? I have DXD ($11,000 in protection) and the FAZ plays (Above) now. I don’t have any DIA mattresses as it has been a little confusing when there are several out there (or do you always only have one bought 1/2 sold?) I had the SDS Oct hedge and got out with a huge $7,000 loss as the market ran up the last week… 
    Thanks. I promise I will require less maintenance as my portfolio stops losing so much! 


  217. JRW - by the way…you saved my ass with your last entry.  My order took about 5 seconds to fill…and TZA fell $0.06 immediately after it filled…  Then you must have bought as it shot up $0.15 immediately!


  218. jromeH
    If you are long AUD/USD… take half profits now… and take the rest if it is unable to breach .9030


  219. z401… lets hang out together with the currencies…. might even be "intoxicating" if we get the right moves!


  220. Lionel – Completely agree with your comments long term, I was just doing it for a daytrade. I did short 2 contracts at .8980. Already covered one and will sit on the other one until later tonight when Im hoping for it to fall further.


  221. ORCL getting hammered!


  222. Phil/hia_5/NG/CLNE — going back an looking at a comparison of NG and CLNE, I guess there isn’t as strong of a correlation as I thought. I think hia_5 is right though that the energy bill is what’s driving it faster than the UNG. When I have watched it in the past for short periods, it was strongly inversely correlated to the price of gas and guess that was due to the uncertainty of of CNG as an alternative fuel. I’m guessing that as CNG becomes a viable alternative the more it will correlate with the price of CNG. Thanks.


  223. Phil: there are timeperiods where trading is better or worse:
    which periods are good to ignore and which ones have better chances ?


  224. Throttle mod?


  225. goldman,
    Just doing my part !!  8-)


  226. Phil
    Could you recommend a trade similar to this one for the next 30 days ?
    2 Weeks/QC – How about selling TZA Jan $5 puts for .87 and buying the July $7/8 bull call spread for .29?  Why?  Because you are going away for 2 weeks so you agree to buy $10K of TZA and sell 20 contracts for $1,740 and you put $870 into 30 of the bull spreads and they either pay you $3,000 for nothing or TZA is lower and you can DD on the puts and set up longer Jan protection. 
     
    Thanks


  227. Rut=650.31…like magic…or perhaps voodoo would be more appropriate.  I was sticking pins in my Bullard doll all day…


  228. JR,
    Do you use SS to execute your trades?
     
    It seems like the spreads are large with Market Orders.  Hard to tell exactly, but the last trade seemed like it was .10 cents lower than when I placed it.


  229. Jromeha/Gel
    I wouldnt bet either way and Gel recommendation is the wise one.
    Now a daytrade on a currency that is mostly exchanged when the market is close, it is a bit like daytrading FXI :)
    What are the contracts you are trading? Cant you trade FX cash?


  230. JRW, SS and I are still working at it.  Haven’t gotten to you level yet, but today 10.3% on 5 trades.  We are starting to get the hang of it.  Cheers.


  231. LOL JRW!  "a free market, and I have NO IDEA how to trade one of those" – we will all need lessons in real trading if they turn off those machines…

    Bullard/Tusca – You would think but complex concepts like that often get you an incorrect reaction at first.  I have stopped being amazed at how totally wrong fairly large groups of investors can be on a regular basis and just go with the flow…

    Momo/Ocelli – Those are so not my kind of trades.  I prefer good stocks that are too low and bad stocks that are too high.  Good stocks that are too high I usually don’t touch. 

    FSLR/Jordan – Because it’s easy for Obama to sell solar stimulus on both sides of the isle.  I lowers dependence on foreign oil, funnels money to existing big business and creates jobs with plenty of ear-mark projects for everyone.  It’s probably the single best shot America has at taking the lead in a 21st Centrury growth manufacturing industry but that window is closing fast as Samsung just committed $20Bn of their own money to grabbing the lead in solar. 

    GENZ/Dave – $70 seems to be the price so it’s a roll-up for the short Jan $65s ($8.20) to the 2012 $70s ($6.70) and you can sell some Jan $65 puts for $3 to cushion a little more upside if you feel over-committed.  If they do the deal at $70 – everything goes worthless at the close!

    List/Flips – Yes, I would like that, thanks!  I don’t do apples, mostly orange, banana, strawberry, rasberry, cranberry, pineapple, peach and mango in various combinations.  I swim in the summers so not an excercize issue now but I need to do more in winter.  

    FAZ/Amatta – Not too much if they work but if we don’t go down on GDP tomorrow, any bearish premise will begin to wear very thin.  Actually, we are leaning more like 60-65% cash because we still don’t know that we won’t collpase over a melt-down in China or the EU.  The EU seems a little less likely but China is still on the table and until we see the Nikkei get it in gear – it is a mistake for us to get too complacent about our own markets.  Hedges should cover the loss you feel the need to protect BELOW the 20% that the plays should be covered by with internal hedging.  So if you have a buy/write on GE that nets $12/13.50 with GE at $16 – you have $2.50 (16%) of NATURAL protection in the positon.  So if you assume GE goes down with the S&P, that’s 84% of 1,100, which is 924.  If you SERIOUSLY fear a drop to 800 then you need to cover about 10% more or $1.60 on your GE commitment but, as I’ve said, covering 1/2 the drop is good so maybe look to cover .80-$1 which means you would spend .20 on a 5x play.  That cover raises the net cost of your GE entry to $12.20/13.60 and, if that is acceptable to you – then that is your fully hedged GE position.  You just go through all of your positions like that until you are satified with your coverage.   Also, too many hedges is too confusing.  I prefer a general DIA OR DXD hedge and a focus hedge like FAZ if you have a lot of financials to worry about.

    Timeperiods/RMM – Do you mean of the day or seasons or election cycles? 

    Whee!  All caught up! 

    TZA/QC – Sorry, must get back on that one afterr CC.


  232. lionel
    All of my trades are "lots’… I do not understand "contracts" in FX trades.


  233. Lionel – sorry for the ambiguity, I shorted the aussie dollar futures. I havent applied for permission to trade currency, had a family member who lost their shirt doing it (not that trading futures is different!).


  234. CNBC is blaming the jump in oil prices today on the weaker dollar, which did not affect gold similarly.  I’m wondering if this has anything to do with the blast that was reported yesterday on an oil tanker bound for Japan in the Strait of Hormuz.  I didn’t see this mentioned anywhere except for stratfor.


  235. And down goes WYNN…… that’s 6 wins, no losses on the selling OTM front month calls on earnings day that I outlined yesterday.


  236. Cribbooky – From my understanding it was a rogue wave not a terrorist act that damaged the tanker….


  237. flip- naturopathy (my doctor is in india) does not agree with your premise. I am a vegetarian. My diet is high amounts of raw vegetables (salads) and high amount of fruits. The natural sugars in fruits are the good sugars (not harmful at all). I will agree with you on the organics though. The hormones and pesticides are harmful. But you can get away in some fruits by peeling the skin and some are just better if you eat them organic. There are high amounts of hormones and carcinogens in meat, poultry as well as milk yet people eat those things. There is a high amount of corruption in food in this country. Watch Food Inc.


  238. jromeha – thanks for the follow-up.  If things go south in the strait…


  239. I had a question for the day traders.  I’ve never really traded at the frequency that I am now.  In and out of the same ETF multiple times in a day at different prices.
     
    When it comes time to figure the gains and losses for tax purposes, is this a nightmare for the accountants?


  240. Nicha – Agreed. But a major problem for people not in the top 10% is that shopping at Whole Foods/Local farmer’s market is just too damn expensive! I try to eat some organic and we feed my soon to be 2 y/o daughter almost all organic but the costs are just insane. I can get an entire grocery cart full of products from the Commissary(Miltary grocery store) for the same price that 2 bags cost me at Whole Foods. There definitely needs to be an effort to make organic/healthy foods more affordable for the common person in this country.


  241. Phil – looks like we’ll get another good entry on WFR – should we wait for the ‘downgrade police’ or get in sooner rather than later?


  242. @exec
    Not a  nightmare but very, very tedious.  Every time you hit the buy or sell button for securities in the same year, you create an entry on 1040 schedule D and D1, then each sheet is subtotaled and carried to the previous sheet. 
    I’ve found it best not to wait till year end and get yourself Scheule D  and D1 forms for the latest year you can and just enter the transactions as you go.  Especially if you have tens or hundreds of trades a year. I haven’t had any complaints from the IRS yet, on crossing out the last year and inserting the taxable year at the top of the form.
    Got to watch your carry forwards though.  If you have just one brokerage account they list each transaction too so it’s not hard to keep track of.  Multiple accounts with different brokers just ‘cubes’ the tedium.


  243. @ nicha
    You have answered your own response: Animal products have high amounts of hormones too.  ANY food that uses these hormones as pesticides has to be harmful if eaten in any quantity at all.  And who would doub that we eat far too much already in this country. We literally are drowning in hormones particularly Estrogen in its three forms.
    I can’t agree with your naturopath that high quantities of any sugar is good for you. Your brain needs only so much to function at it’s best, and if you don’t work out religiously you are stockpiling sugar which you do not need.
    As a vegetarian you are better off than most. 
    My main point however for Phil, is that juicing vegetables or fruits consumes, particklelerly if they are not hormone free, an unhealthy amount of harmful ‘nutrients’.
    I can agree that eating pounds of vegetables a day, if they are hormone free, you should live till you’re a 130. 


  244. jromeha, you USAF?


  245. Gmarts – Yes


  246. Offutt ?


  247. exec – Regarding your question: "When it comes time to figure the gains and losses for tax purposes …"
     
    TradeLog Software
    http://www.armencomp.com/
     


  248. jromeha, flip – My 9 month old daughter is exclusively on mom’s milk, avacado and fruit/fruit juices (non-organic because of cost issues). We are slowly starting her on vegetable juices. During my wife’s pregnancy I fed her a lot of fruit/fruit juices and raw vegetables/vegetable juices in addition to cooked food and nuts. All her tests during pregnancy did not show high sugar content. In fact she had the healthy pregnancy by all standards. I have been following this diet for the last 7 years. I used to suffer from IBS till I started this diet.
    According to my naturopath raw vegetables are blood builders, fruits are blood purifiers. Here is a link to her website http://www.internetindia.com/health/thac/ . Check out the disease section.


  249. I’ve been playing in AH and just witnessed GOOG get whacked


  250. GOOG completely blocked in China


  251. GOOG completely blocked in China


  252. Gmarts, are you in? How’d you guess Offutt? I actually was there for my first 4 years but got selected for AFIT and right now am at WPAFB going to school until March.


  253. Not in, used to bag groceries at Offutt comissary.
     
     
    Baidu up 2.7% on GOOG china blockage


  254. Saw jromeha, USAF,  wondered about Omaha…


  255. kustomz - Search/ads/mobile are fully blocked, news/images partially blocked.  Even though China isn’t a large percentage of sales, still a mess and a potential long term growth inhibitor.  Stock @ 475


  256.  Phil, 
    ON the GENZ deal, you wrote:

    GENZ/Dave – $70 seems to be the price so it’s a roll-up for the short Jan $65s ($8.20) to the 2012 $70s ($6.70) and you can sell some Jan $65 puts for $3 to cushion a little more upside if you feel over-committed.  If they do the deal at $70 – everything goes worthless at the close!
    What do you mean they go worthless? 
    I sold the 2012′s $70 for $6 (now $6.80) as per the post, so I can’t roll out…
     
    Thanks


  257. BAIDU +4%


  258.  Phil, 
    No wonder then I have lost so much while the market went up… I was over-hedging but when the market would go down, I was not making money as the premiums were still masking the gains in the spread??
    So then when the market goes down and you have the built-in protection of the buy-writes, you will see the losses on paper as the calls won’t depreciate in line with the fall (because of premium) and puts will increase in value, so that would probably be a wash…or puts will outpace the calls (depending on greeks), but the long will show the decline. That’s what I will have to get used to. I just freak out when I see my account dropping thousands a day…
    I guess the mattresses are for short term plays to maximize performance as the market fluctuates? Along with the other short term plays? 


  259.  Damn, I missed Phil’s FSLR play! Good call Phil big winner…100+%er huh?


  260. Phil: I mean timeperiods for the day.


  261. Gmarts- definitely a nice job to have when you’re growing up…. Except for the fact u were in Omaha!lol.


  262.  @nicha
    In the list of things she claims not to consume are oils.  Nuts are heavy oil. Nut butters are excellent nutrients.
    The long term effects of consumption of fruits heavy on hormonal pesticides (non-organics) are just now being revealed in studies that track the damage that estrogens do on the body, just as the ones were on animals fed heavy doses of hormones.
    I urge you to look at other sources for how estrogens are now being targeted for reduction in consumption.  In theBamster’s most recent  health care talk, he too has learned a bit more about this relatively new danger to public health.  For women I imagine taking in more estrogen than necessary, if at all, should be especially monitored.


  263.  Phil, 
    One of the positions I was building into (I had only sold the calls and puts and never got the long, and it ran up on me) is WFR. It reported horrible earnings, so I could now buy it at close to the price you recommended it and fix the buy-write. Do you still like them after this report? Or should I just kill the calls/puts if back to even, and move on to another company?
    Thanks. 


  264. She is talking about processed oil. Any oil from natural sources is fine. Similarly she suggests cutting up a coconut in a pan and then cooking in it so that the natural oils from the coconut are used instead of machine processed in which who know what is added or how it is extracted.
    Again, I agree with you the harmful effects of non-organic produce. But she is in India and as of yet it is not as bad there with non-organics.
    Better if we discuss this via email than boring others here :) nichania@gmail.com


  265. nicha
    There are a few other alternatives, chicken, commercial beef make me sick. I buy oganic and bought a half cow, no grains, hormones, antibiotics, and wild grass feed. I butchered it fat free and boned, It tastes like elk, slightly gamey and a bit chewy but no problem other than a lot of work and expensive, the rest of the time I eat fish, not farmed junk.


  266. amatta / missing plays – you can always find something that you could have invested in that would have made you more money than what you already made.  So that’s why never kick yourself for "missing" a trade.  At least that’s how I think.


  267. amatta
    Everyone misses trades. Yesterday I missed geting out of a day trade because of a broken plastic pipe. Fixed but today it blew out again and I only pray IWM opens up or flat as the market closed as I was searching for the valve in the basement and I can’t walk, yesterday I had help!


  268. nicha and others,
    Timely discussion. I just saw Food, Inc. last night that was previously aired on PBS…very disturbing and infuriating. We need a serious food industry overhaul. Even many of the organic brands have been bought out by the majors. The CEO of Stonyfield Farms made a very good point about voting with our dollars. Their sales to Wal-Mart based on consumer demand is already helping to make headway in reversing this travesty of a situation that has developed in our culture.


  269. Howdy.  Traded a little bit in the morning and decided to take my 9-year old to Coney Island for the afternoon.
     
    Our goal was to ride the Cyclone, which is no mega coaster but is reasonably famous for you non-new yorkers just because it is old.  But I am no fan of roller coasters; they make me nauseous.
     
    So we get there, and my son turns out to be about 1/2 inch too short too ride.  No exceptions.  Very disappointing, but I think he was a little releived (and maybe me too) .  So we went on some other rides, had a good time, had some Nathan’s hot dogs, got caught in a thunderstorm and came home.
     
    I see the market took y’all on some rides today, sort of like a roller coaster,  DOWN in the morning, and then back up.  Nirvana for traders, especially futures traders and index option traders.
     
    I had a few small TNA and TZA trades on.  The latter going long TNA before I left as the market kept dropping.  To my surprise, my exit orders executed nicely.  All in all made some decent swing profits both ways on these things, better than in prior days.  Also in a couple of other names like BEXP XOM and EXXI.
    I felt like a junior JRW today !
     
    Beyond that,this summer trading is tough to take.
     
    FWIW, I think maybe another rally attempt tomorrow, maybe early Monday; then down.  Just my guesstimate.
     
    What do the robots say ?


  270. Phil, as for the tale of Two Economies … maybe, maybe not.  See this piece on Alexandra Liebenthal’s book …
     
    http://www.nypost.com/p/entertainment/oh_the_recession_ve_had_TrkiBUWJP1yTiKYsvYnHhN
     
    I am also making a request for some in depth research into the "Cardinal Climax".   We need some astrology around here !   :wink:


  271. Covered my Aussie $ shorts for some for a decent gain, tomorrow should be wild.


  272. Obama demonstrates healthcare.gov on his Mac
    "If we can somehow avoid politics and just observe that the President of the US is using a MacBook Pro with a presidential seal over the Apple Logo, we’ll be in pretty good shape."


  273. Obama may be our last hope, he may suck but he at least is trying which is better than GWB who had no idea how to try to fix anything. Proof is where are we today?



  274. Google Search NOT Blocked In China*
    "Update: Google says it is NOT blocked in China, that perhaps its server miscalculated its level of blockage. Carry on…"


  275. Phil – Is this a picture of Lloyd with a dunce cap on? ;-)
     
    Why Didn’t Stocks Go Up On The Big Bullard Paper?
    Interesting aspect of today’s trading: Commodities rallied, the dollar sank, the euro rallied, and stocks… fell.
     
    Now, if there was any news today, it was the new paper from Fed Governor James Bullard, arguing that The Fed ought to get way more aggressive about staving of a Japanese-style deflationary lost decade.
     
    In theory this should have been good for stocks (and we know the market took it seriously, because the dollar got whacked), but instead stocks sank.
     
    It’s not like Bullard said anything that should have surprised anyone regarding the real economy. So it’s a bit of a head scratcher, and if you’re of the bullish persuasion, perhaps a reason to worry?


  276. PhilHow is that private island project coming along?
     
    On an unrelated matter …
    Those wily Wyly brothers sure knew how to make the serious money!
     
    SEC Brings GIGANTIC Insider Trading Case Against The Famous Wyly Brothers Of Texas
     
    With Case Against The Wyly Brothers, The SEC Goes To War Against Offshore Finance


  277. diamond
    Wyly bors will prob spend time in the gray bar hotel, thats as good as being the richest dead man in the cemetary!


  278. Example of how robots control the markets and price; and screw the retail investor (or try to).
     
    I had sold a small amount of BEXP today at i think 17.52.  With the stock dropping, I decided to buy back the shares.  Price was dropping, its was 17.21 x 17.22.  I had an order set up at 17.24 to buy, rather than change the offer to 17.22, I simply entered it, expecting an immediate fill at 17.24.   So what happened ?
     
    The bots saw my order; they front ran it; immediately pulled the 17.22 offers; filled my bid at 17.24; and immediately dropped the bid /ask back to 17.21/17.22 and then continued to move the stock lower.
     
    There is no way I should have been filled at 17.24, but this is what happens when the exchanges allow HFT firms to colocate their servers and have a tiny tiny microsecond look at incoming orders like mine.
    Now I was only cheated out of $0.02 per share.   But multiply that millions of times, and it becomes real money.  That money adds up over time.
     
    This shows a couple of things; how fake most of the trading we see is; as bots trade with each other; and how frontrunning (their supposed "providing liquidity") in actuality rips off investors.
     
    And by my observation, this kind of thing happens again and again and again.
     
    There was another trade I made, where I placed an offer to buy at the asking price.  I forget which stock.  It should have filled immediately.  What happened here is again, the bots immediately pushed the price a few cents higher where my bid did not fill as it should.  Then, a few seconds later, realizing that I wasn’t a bot that was going to chase the price for a fill, they took it back down and filled my trade.
     
    I can’t tell you how much this p*sses me off !


  279. Boomer Statistics per http://www.philstockworld.com/2010/07/29/bill-gross-ponders-deep-demographic-doo-doo/
    $400 Billion: Amount that will come out of annual U.S. consumption as thrifty boomers push savings rate from 1% to nearly 5%.
     
    47%: Boomers share of national disposable income in 2005 before the bubble burst. Boomers contributed only 7% to national savings.
     
    2.4%: Forecasted GDP growth over the next three decades as boomers ratchet back. GDP has grown 3.2% a year since 1965.
     
    69%: Portion of boomers aged 54 to 63 who are financially unprepared for retirement.
     
    78%: Boomers’ share of GDP growth during the bubble years of 1995 to 2005
     
    Structural Demographics Poor
    Structural demographic effects imply that prospects in the full-time labor market will be poor for those over age 50-55 and workers under age 30. Teen and college-age employment could suffer a great deal from (1) a dramatic slowdown in discretionary spending and (2) part-time Boomer reentrants into the low-paying service sector; workers who will be competing with younger workers.
    Ironically, older part-time workers remaining in or reentering the labor force will be cheaper to hire in many cases than younger workers. The reason is Boomers 65 and older will be covered by Medicare (as long as it lasts) and will not require as many benefits as will younger workers, especially those with families. In effect, Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages.
    Consider what such a decline in US GDP growth and its multiplier effect could mean for Asian growth, global trade, demand for commodities, and growth elsewhere in the world (BRIC).
    The world equities markets have barely begun to discount the increasingly likely severe deceleration in US and world GDP growth ahead, including the secular Boomer drawdown of accumulated wealth of the past 25 yrs


  280. Phil/China PMI - Sunday Aug. 1st, 0100 GMT…any recommended option plays for a potential large gap up or down Monday morning?
    Per http://www.reuters.com/article/idUSSGE66Q04N20100730
    MARKET IMPACT: The PMI is expected to remain above the 50 threshold demarcating expansion and contraction. But inadequate seasonal adjustment of the index means a drop below the boom-bust line is not out of the question. That would rock markets, given that China could account for a third of global growth this year.


  281. Hello QCOR….man, when I am away, the Pharma sector lights up….GENZ (Oh, and can you say bidding war!), ARNA up, QCOR moving up 25%, and now for CRIS……ONTY – putting in a 1/4 order for 3.30….C if they fall to be filled.
     
    and on that note:
     
    Kindle is $139….and we are not in a deflation….
     
    THE EMERGING CONSENSUS

    In terms of what is driving market sentiment right now, it boils down to three things.
     
    First, there is a consensus view that the stress tests in Europe were a game changer and that the crisis has been dealt with. Second, there is a lot of hope that the Chinese government has managed to curb the property and credit bubble and did so by engineering a soft-landing and not a hard-landing and that no further policy restraint is going to be needed. Third, almost everyone is dismissing double-dip risks in the U.S.A., and a whole army of Wall Street research departments are expending considerable resources into dissecting the ECRI and concluding that it is not foreshadowing another recession. The latest was a report that said that the ECRI was only -1.5 (not -10.5) once the effects of mortgage applications were removed. How about that? Remove housing, and it’s “only” -1.5 (as if that is any good in any event).  This takes us back to 2007 and 2008 when all the research houses (except for the one I toiled at) came to the conclusion that once you strip out the effects of housing, the U.S. economy was just in fine shape, didn’t you know? Housing doesn’t matter, right?

    Right.

    But all is not right!

    At least not with jobs and housing.

    First, even though the BLS told us that the U.S. jobless rate fell to 9.5% in June from 9.7%, we know that the rate would be 10.2% if not for the plunge in the labour force over the past two months. Second, we just received the detailed regional data and they showed that the unemployment rate climbed last month in 291 of the 374 areas monitored; fell in 55 and was flat in 28. Now how does that grab you? Of the 12 metro areas with a depression-like 15% unemployment rate, 10 were situated in California – the largest state ostensibly is not yet out of recession (just as Janet Yellen moves back to Washington from San Fran). And when you consider that the state government in California just reinstated a fresh round of furloughs, you know that the extent of underemployment along with unemployment is extremely deep (see “New Furloughs in California” on page A13 of the NYT).
     
    Second, the housing backdrop is still very weak. The high-end homeowner is now buckling as foreclosures among those with jumbo prime mortgage loans (mortgages of over $729,750) have soared 600% in the past 2-½
    years. Foreclosures among borrowers with prime conforming loans have risen 425%.

    According to RealtyTrac, we still have a situation today, despite all the taxpayer money that has been thrown at the situation, where 154 of 206 cities (with populations of 200,000 or more) have posted increases in foreclosure filings on a YoY basis. Meanwhile, sellers of properties are starting to see the light and are cutting their prices (not yet evident in the Case-Shiller but will be soon). Thirty percent of homes sold last month were properties in which the owner had
    to cut his/her asking price (Zillow). As well, it is now taking 8-9 weeks to sell a house upon listing, down from 10-11 weeks a year – in another sign that sellers are becoming more realistic and coming closer to match the existing depressed bids there are out there. Remember – this remains a full-fledged buyers market out there with a near-record 19 million vacant housing units nationwide to choose from.
     
    MORE SQUISHY-SOFT MANUFACTURING DATA

    The headline orders number was pretty bad in June – down 1% after a 0.8% decline in May to mark the worst back-to-back performance since the economy was falling off a cliff in early 2009. A 25.6% slide in volatile aircraft bookings (a surprise) and a 6.8% falloff in defense capital goods were the primary culprits, though we also did see declines in primary metals (-2% – second slip in a row), machinery (-0.7% though this followed a blowout in May) and tech (-1.9% for the first decline since February and the worst result since last October). The positives were electrical equipment (thank you, GE – up 3.7% but this followed two months of decline), vehicles/parts (+2.5% – up four months in a row). The “core” capex orders data were not that bad at +0.6% MoM – this is nondefense capital goods ex-aircraft and feeds right into GDP. And “core” capex shipments edged up 0.2% during the month. For the second quarter, capex
    shipments ripped at a 15.8% annual rate and orders surged 25%. But heading into Q3, we are detecting a visible slowdown – the “build in” thus far is +2.4% at an annual rate for shipments and +7.7% for orders.

    There was also a jump in durable goods inventories – rising 0.9% but with headline shipments down 0.3% on top of a 0.7% decline the month before, one has to wonder how much of this restocking was desired or intended. To be sure,
    the July survey data thus far are flagging a further reduction in industrial activity to kick off the third quarter. The I/S ratio rose to 1.58x in June from 1.56x in May and 1.53x in April – to stand at its highest level since last October.
    If it’s all about jobs, then we had better start to worry. The YoY trend in durable goods orders (thin line, in chart below) leads the YoY trend in payrolls by fourmonths with an 82% correlation. And it looks like there is a very good chance
    that orders have peaked.

    That, along with the claims data of late and the job components of the manufacturing surveys and the consumer confidence report, points to another soft jobs report on August 6th. Pay close attention to the Household survey as
    this has shown declines now in both May and June (-35k and -301k, respectively) and a three-peat only happens 1% of the time outside of recessions. To repeat – when the economy is actually in official expansion mode, it is one thing to see back-to-back declines in Household employment but to see three-strikes-in-a-row is a 1 in 100 event. Maybe the NBER’s silence is really speaking volumes. Let’s conclude by saying that to have durable goods orders and shipments go down in back-to-back months outside of recessions is a 5% event or 1-in-20 odds. We’re either still in a recession or into something that cannot be good even if it’s not an official recession.
     
    NOBODY FOOLED BY THE CASE-SHILLER REBOUND

    Yes, yes, the C-S price data showed a 1.3% bounce in May but everyone has caught on that this was a lagged response to the last gasp ahead of the tax credit expiration. Even David Blitzer, chairman of S&P’s index committee, said “While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still does not indicate that the housing market is in any form of sustained recovery”. Ouch.

    Not only that, but according to a survey conduced by MacroMarkets, 60% of housing analysts are looking for home prices to deflate through year-end – up from 40% who thought so in May. That hurts too (or it will).


  282.  Cap, I hear you. Exact same thing happened to me on a TNA order today and it happens all the time. I see these crazy spikes to the downside of even .5% or more on some stocks! It is an abuse, I can’t believe people are not up in arms over this!