Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

GDPhriday – Low Expectations Could Make for a Good Day

Everyone is down on the GDP all of a sudden

As I related Wednesday - the GDP, like the Beige Book report (which we expected to be poor) is made up of many factors like Trade Balance (same), Government Spending (up due to census), Personal Consumption (earnings reports indicate up), Residential Investment (HD and LOW indicate up), Corporate Earnings (way up),etc.  The biggest etcetera is Inventories and they are a major wildcard.  As near as I can tell, April was a very enthusiastic month and we began May with the "flash crash" but that was shaken off so I have no reason to think orders didn’t continue to outpace inventory through mid-may at least

We did, as we discussed, get the best Beige Book in 2 years in early June so I’ve gotta go with expecting two months of inventory builds that trail off sharply as merchandise went unsold in early June as the market collapsed and even the top 10% stopped shopping for a couple of days.  Still, it seems to me that that was too late in the month to knock GDP below 2.7% and I think we still have an excellent shot at 3%. 

We’ll find out shortly but Asia didn’t wait and had a pity party this morning with the Nikkei giving up all of the week’s gains, back at 9,537 so I’m still loving EWJ if we head higer but, if not, look for the Dow to begin filling that gap!  The Hang Seng was choppy but held 21,000 and the Shanghai can afford to take a break at 2,637.  India continues to be our top global concern as the Bombay Sensex continues to move to test the rising 50 dma as they fall to 17,868 and it looks like they’ll meet up next week in the 17,600s and that will be a very critical test. 

Samsung knocked the ball out of the park with an 83% jump to record profits on amazingly strong memory chip sales.  We can probably thank 64-Gig Smartphones and IPads for much of that gain but, holy cow!  Net income climbed to 4,280,000,000,000 – too bad that was Won ($3.6Bn) but not bad considering our own chip giant, INTC, only hit $2.4Bn last Q.  Despite lower chip prices, revenue was up 17% and I’ve already mentioned that Samsung has pledged $20Bn to become the World’s #1 solar power provider so you’ve gotta love these guys – unlike US companies, they "get" Capitalism and the concept of building towards the future

Europe is trading down half a point ahead of our GDP and our own Futures are down about the same as a wall of worries once again trumps 86% of companies reporting so far beating earnings estimates.  Euro-zone Inflation is at a 20-month high (1.7%) as is Unemployment (10%) despite Germany’s extremely good numbers.  As is typical globally, it’s the difference between countries that made infrastructure investments and the ones that didn’t. 

8:30 Update:  Damn, 2.4% GDP.  That’s not good.  On the other hand, Q1 GDP has been revised up a full point to 3.7% so you can take this preliminary estimate with a 40% grain of salt as our government is THAT CLUELESS in estimating growth – which should not be giving you the warm fuzzies about their policy decisions…  Consumer spending was 1.6% vs 1.9% in Q1 and that has a huge weighting, while business spending was up 21.9%, accelerating from 20.4% in Q1.  Prices were up just 0.1% so inflation is contained to the point of deflation and employment costs, which I said mattered more than GDP yesterday, were up 0.5% and it’s not good for companies if production costs go up while prices stay flat.

I’m very disappointed by this report but happy we can get a nice test of our rising 20 dmas to see if they hold up.  Fortunately, my morning Alert to Members yesterday was to pick up the DIA Sept $102 puts for $1.95 and we added the USO Aug $33 puts at .35 and hung onto those as a GDP hedge.  We added a BXP short play to our ongoing VNO short and we weren’t suckered into any bullish positions all day so, now that I’m looking back at it – I guess we weren’t all that bullish yesterday (but we did pick up a bunch of long-term bull plays on Wednesday, so it was a balancing day).  As you can see from the chart, it’s likely to be the Nas and the Russell giving us the big test today but it was the SOX failure (which we expected) that kept us from being bullish about yesterday’s bounce:

We’ll likely see oil test our $77.50 line once again and that’s going to be critical for them to hold.  Gold took a bounce just over my $1,150 target but not enough to draw us in as they are down from $1,260.  Watch that 2,200 mark on the Transports and, of course, Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635 but I’m not expecting any of those to breakdown unless the Transports lead us lower so doubtful.  More likely we will be holding our breath over the weekend where global markets could flush down the drain over worries on the US economy or the Government could announce QE2 and we’re off to the races once again. 

Timing is everything with these announcements and the Fed’s Jim Bullard floated a trail baloon for the markets yesterday saying: that the US is "closer to a Japanese-style outcome today than at any time in recent history."  Bullard argues in a new paper that if deflation risk grows, the Fed should resume Treasury buys. Quantitative easing would be a better reaction to a negative shock than yet another promise to keep rates near zero, he says.  Today’s GDP report will give the Fed additional firepower on Bullard’s side of the argument for sure

In other bad data news:  We got the July New York ISM Business Index and that was down to 58.4 from 69.3 in June - very sucky.  We get the Chicago PMI at 9:45 and that will send us to new lows if it’s as bad as NY and then we get hit with the U of Michigan Consumer Sentiment at 9:55, also probably down so the hits will keep on coming this morning and that makes for an excellent test day.  I love test days – my long-term premise remains bullish if we hold up and we’ll discuss that on the weekend. So come on bears – give it your best shot – you ain’t aint so bad

Have a great weekend,

- Phil

 


Tags: , , , , , ,

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Here’s a good technical charting site for those of you that are interested:  thechartpatterntrader.com/index.php


  2. 2.4%, and Q1 was revised upward.  Ho hum.  I guess we have the continuation of a ‘not too hot and not too cold’ recovery.  After this morning’s sell off, lets figure out what we can buy and hold for the summer rally. 


  3. Day camp visiting day this morning; good luck …. we either get this pre market flush and rally; or the flush continues.
     
    Up to the bots.
     
    End of Quarter today …
     
    See you in the afternoon.
     
    Bought a small amount of TNA pre market.  Fingers crossed and exit orders in.


  4. My guess is the final flush will come after weak consumer sentiment number at 10


  5. Ipad / Sim card – (amata sorry i missed your question yesterday)
    You can switch sim cards on the ipad – (don’t know about a locked Iphone) I checked with apple when I got mine yesterday – 5th ave store totally mobbed on a thursday afternoon – sold out of all the wi-fi models -
    what a great experience – sales person greated me and I was out the door within five minutes – even though the lines were huge – and they had my $829 plus tax - still feel like a sucker and have not taken it out of the box - 
    It’s much cheaper to buy a sim card in europe from a local telecom – you just buy a pre-paid – insert the card and away you go – you can then reload it as needed – if you don’t speak the local language it may be hard to navigate the menu to set-up your pre-paid sim and load it – you might want to get the sales person to help you – in addition to cellular stores – tobacs and magazine stands sometimes sell them.
    I also have a blackberry from T-mobile and will simply buy a local sim card and swap mine out – this gives me a european local number and I can call back and forth with the people that i am travelling with -
    need to check phone messages on regular line – just swap sims -
    You must have a world phone or phone that is compatible with the local protocol -
    In most of europe, I think this is GSM but not positive – its easy to google that -


  6. KMP -
    selling puts and call -
    You might want to check with your accountant that selling the options won’t trigger a sale of KMP that starts your holding period over – don’t know what that will do in terms of your K-1
    In other words, don’t sell a call with less than 30 days left to expiration and don’t go so deep in the money that its not a qualified covered call – don’t think anyone was looking at front months -


  7. Damn.  One day too early on that overnight hold of FAS short.  GDP seems about as expected, right?  Everyone knows it’s slowing.  Duh.  CNBC and premarket wants us to believe it’s a suprise.  Expecting the unexpected would dictate an up day..
     
    Cap, have fun at camp!  ….but while it is end of month end of quarter was in June.


  8. Hi
    What would you do with the FSLR positions Hold on or take some profits
    tx


  9. Matt everyone knows it’s slowing?  I would disagree many think its fine right here on this board.  70% of my account has been short for 2 days.  Yippppie!


  10. Good morning!

    Lots of fun this morning – we’ll have to see what sticks but I love it as you can’t get much worse news than this (although we’ll see what Chicago PMI says in 10 mins) and we have all these lovely levels to test: Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635 but I’m not expecting to see them today. 

    Oil is very dangerous if they can’t hold $77 because that will tank XOM and CVX and whack the Dow but coming into the weekend, the NYMEX pump crew will pull out all the stops to hold $77.50.  We have a disappointing dime on the USO $33 puts but no sense in blowing that so we’re done there and we’re done with the DIA puts if you are still in them.

    For mattress players, the move is to sell the $103 puts for $1.71 and stop the $104 puts at $2.25 if we have to but hopefully we bounce back and make a bit of money but only a 1/2 cover by the close no matter what as Monday is a real wild-card.

    *** You can wait for the 9:45 Chicago PMI as that should give us our lows (assuming it’s bad) and, if that’s bad, we’ll get more downward spin from sentiment and THEN we’ll see what holds.


  11. Phil – all the beats came from April – which was carryover to Q1.  Q3 and Q4 will tell us everything.  Unlike Apple….the rest is really in the doldrums.  WFR getting spanked.  So is SPWRA.  Maybe Samsung will buy 1 of these two….


  12. I wouldn’t be buying here, this is just range bound trading and we are going back to the bottom end of the range
    tza will do well imo


  13. On the bright side ARNA is still going as retail has definitely stepped in from $6.   QCOR is holding it together, but not sure why they spiked yesterday (earnings?  come one!).   Watching ARIA, CRIS and ONTY for entries.


  14. Watch the SOX on the 2.5% line (343.50) as below that is very bad.  Transports testing down 1.5% at 4,350 (Dow Transports) so another spot to watch and the rest of the indexes need to hold 1.25% or we’re likley heading to down 2.5% for all of them. 

    As I often say, you can be generally bullish but you don’t fight a short-term panic so a lot hangs on this Chicago Report now that the mood has changed. 

    Spain/Russian – That’s not good!  Timing is everything with these guys and all this negativity all of a sudden feels more like a flush than a "realization" that things are not that great all of a sudden

    FSLR/Savitri

    Rule #1 – ALWAYS sell into the intial excitement

    Rule #2 – When in doubt, sell half.

    Rule #3 – If you didn’t follow Rule #1 or Rule #2, why are you even botthering to look at Rule #3 because you are just a greedy bastard who doesn’t follow the rules.  8-)


  15. Phil,   What about Veeco  (VECO)   Growing industry, raised guidance, good option premium         ?


  16. Uh oh here we go… TD Ameritrade showing wildly INACCURATE balances on accounts just like it did on fat thumb day….gonna be a wild ride. Check your positions for accuracy before panicking and wildly dumping.


  17. Oh dear, Chicago PMI was GOOD!  Now this is just confusing, isn’t it?  Well so much for the shorts and now sentiment has to break the tie but that’s not worth risking profits on.

     Chicago PMI: 62.3 vs. 56 expected, 59.1 prior. Employment 56.6 vs. 54.2 prior. New orders 64.6 vs. 59.1 prior. Prices paid 58.1 vs. 61.9 prior.


  18. brother.. I sold some FAS long into that surge with a market order and they dropped it down almost 10 cents before it executed.  Despite the volume, that is some thin trading.  The volume actually looks pretty high.. but it’s all their trades and they don’t really want to buy at their own inflated levels..


  19. Pharm / JAZZ – you mentioned this one a while ago and I bought small position.  do u still like it?  How about CERS, ONXX and DCTH?  Thanks.


  20. Hi Phil,
    Hope you’re feeling better.  SOX now barely above 343.50. 
    Wanted to get your thoughts on AKAM.   Still getting hit today.  What do you think about selling Nov. 30 or 29 P?
    Also, what do you think about CTXS? Wanted to initiate a ratio put spread on this but it’s down a decent amount today so I may wait for a mean reversion if I can get it.


  21. Phil my wife likes your explaination on Rule # 3


  22. Wow ‘consumers’ sentiment is improving!  We’ll I’ll be damned stop the presses the consumer knows about as much as an invalid.  Means nothing.  We rally for another 20-30 minutes and we make new lows into 9pst. 


  23. Buying/Rwv – No, no buying.  Not ahead of the weekend.  We have plenty of longs and it’s really a question of how much protection to add but we’ll have to see which way the wind blows today before deciding how to play the weekend.  Certainly no major buying though.

    Q1/Pharm – SPWRA finally getting attractive again.  WFR back to lows really fast on a miss (.06 vs .09 expected on $448.3M revenues vs $466.2M expected).  They also lowered estimates on earnings but raised revenue guidance so it’s a case of making more stuff for less money that Samasung were prepared for but others were not.  This is how US corporations get killed by foreign competitors due to lack of investment, which is driven by our culture of negativity that discourages R&D spending (which includes hiring top talent) in favor of short-term profits and cost cutting. 

    LOL – now sentiment is BTE at 67.8 vs 67 – silly old bears, trapped again!

    July Reuters/UofM Consumer Sentiment: 67.8 vs. 67 expected, 66.5 preliminary. Expectations 62.3 vs. 60.6 prior.


  24. Phil / Pharm, great post last night.  I would add it’s amazing anyone is surprised.  We’ve got a 5 year supply of houses and CRE so we don’t need to build anything for years.  That’s the biggest driver in our economy.  With that shut down and the consumer indebted the only hope for future positive GNP reads is Gov’t stimulus (hopefully structural initiatives like Pickens plan) and (the biggest opportunity of all) import substitution (forget the bs about an export boom).
    So far the Dems have failed to grasp structural initiatives (where are all of our ivy league geniuses? they get it in Germany, Korea, China, Brazil and Singapore).  Meanwhile the Republicans are crazy to be pushing fiscal austerity (as long as we don’t tax them) when this will produce a negative GNP read next year.  But then they did elect George and are now pushing Sarah?
    Still, free money means corporations will continue to make good profits.  They can only grow internationally or through gaining share from competitors.  Deflation will hurt pricing, witness Kellog, but the Dow increased 250% 1932 to 1936 while the economy tanked.  So as long as the Gov’t makes bank deposits unprofitable and fixed income returns lousy, the mkt may remain divorced from the real economy.  I think this is what Phil has been trying to teach me?


  25. Phil,
    WFR got slammed today.  With their lowered guidance, do you still view them as a long term buy?  Also, should I sell some puts into this?


  26. Phil -
    SDS hedge -
    Long sept. 30′s @ 3.90 (down .20) -
    Can I sell Aug. 36s calls against for .70 or would you still recommend the spread and sept. put sale  – not crazy about selling the sept. 28 or 29 puts at .22 or .28 a five percent move up should put those in the money – but i guess my longs compensate


  27. VECO   up $1.25 since my question.  OK   no buying ahead of weekend


  28. Phil, what do you think about EXPE? I am long some naked calls…any thoughts? thanx


  29. boy, the bots are feeling peppy today!  They’re on a rampage-


  30. Clarification: I am long some naked AUG 20 calls, if I want to build a position here which will be the best way to do it? long bull-spread and short put?


  31.  Wow. NFLX up 4%! Short squeeze?


  32. Wow, quite the turnaround! THe National Hurricane Center is tracking two potential storms (http://www.nhc.noaa.gov/). Although there is a small chance right now the %s usually increase. Im definitely not going to be short Oil going into the weekend, no matter what it does today.


  33. JAZZ/ter – still in them from a while ago…..Stock has moved up from our initial entry and the Sept 7.5 P/C is on track.  Not an entry now, but we will work a spread next week.  DCTH, selling the 7.5 Sept P for 90c is a nice entry.  CERS, about where we picked them up, and ONXX…not interested as much. 


  34. Bought more shorts…. Turn around here we come.  New daily lows coming.


  35. Netflix held up better than the market yesterday as well.  I would not want to be short here. We already had a big drop.  It is unrealistic to expect another 10% down in the near term.  Furthermore they are a company with real earnings and growth.  I would not buy, but I would not short it here. 


  36.  Phil, 
    What is the current mattress play? I don’t hold anything now… 
    Thanks 


  37.  JRW / yip
    Any IWM s/r lines?


  38. IWM 6519 6450 6383 6294 6210


  39. Phil: MRK a buy here ?


  40. amatta
     
    Mattress Dec 106 p long cover with 1/2 103 or 104 p Aug short


  41. IWM – R3:68.03 R2:67.01 R1:65.99 64.97 S1:63.95 S2:62.93 S361.91


  42. amatta
     
    Sold aug 103p short this morning for 1.96


  43. Message taken
    tx


  44.  Thanks! yip and Pharmboy


  45. Pharmboy: your Pivot/Support/Resistance numbers are like mine: what software are YOU using to get these?


  46. amatta, if you don’t hold anything, you have nothing to protect, so you don’t need a mattress play. :)
     
    If you mean that you don’t have a mattress play, then look up the DIA Sept or Oct Puts that you cannot roll up for less than 50 cents.  On my screen these are the DIA Sept or Oct $105 Puts.  If we look like going higher, then cover those with some Aug at the money puts and be ready to uncover them if we look hesitant again.


  47. Pharm – how high do you think ARNA will fly before mid-Sept? Do you think we will see 12+ like VVUS was?


  48. RMM: TOS


  49.  Pharm / ARNA : Are you selling any ARNA here? I’ve held just about a full position since $2.90, and added some after the drop on VVUS. Risk/reward is getting worse, in my mind, since I think they’re about a $15 stock on approval. Sold about 1/3 this morning, but dont know what to do with the rest. Sell August $8 or $9 covered calls? Or just hold. Advice appreciated. Thnx!


  50. oh my no bids on jan11 TZA calls! I was wondering what happened to my spread. I guess I should have switched to the new spreads with the split, since there seems to be no liquidity on the old ones? 


  51. ARNA/JRO – no idea.  ARNA was at $20 at one point…..I am selling Aug Ps on the way up.  If I get called away, so be it with calls (I am 2/3 covered now).  We will need a good bull call spread, but w/o Ps, so these will be a risk – but we know how much we can lose.  We will be gambling on an FDA decision, so be prepared.


  52. VECO/Stock – We took a 5:3 backspread, selling Aug $50s for $1.25 ($625) and buying the Oct $55s for $1.55 ($465) which is now $225 for the Augs and $300 for the Octobers so another $75 added to the $165 starting credit is not bad for a week’s work, is it?  That was a bearish play, of course and they may be a bit oversold now but I’d be cautious with something like the Oct $40s for $6, covered with Aug $43s at $2.20 and then you roll to Sept and eventually Oct vertical to give them plenty of time to recover.  If they sell off further, $2.20 should pay to roll you down to the Oct $36s and maybe you want to chance them naked for a recovery from there. 

    Volume at 10:15 is just 37M, pretty low considering all the "excitement."

    AKAM/Jdub – Much better thanks, just a one-day thing.  AKAM is a nice stock and $30ish would be very nice so that’s a good entry I think.  CTXS I don’t like at all as a company.  They are highly valued for products I don’t think are very relevant these days.  Since you can sell the Aug $55 calls for $1.75 and the Sept $55 calls are just $2.75 there’s no sense in waiting if you want to short them.  You can sell 5 of those for $875 and buy 3 Dec $60 calls for $2.50 ($750) and that’s a good start and a fantastic start if you wipe out Aug and get to sell Sept next.

    Rule #3/Yodi – That may be the most important rule of all.

    Good summary Tusca.  The Dems are solidly behind QE and they will overcome Republican resistance in time for the elections, er, that is – in time to save the economy.  Pouring $20Bn into solar is a no-brainer.  It’s jobs and a future and, down the road we decrease our need for oil and improve our trade balance – Win, win, win except for oil companies, who are major campaign contributiors and current energy companies and, of course, the people who don’t want new industries raising the cost of labor. 

    WFR/Dbarak – Yes, LONG-TERM.  Semis are a rough business if you are not Intel or Samsung and even they have trouble.   Moore’s law is a bitch because you have to constantly sell more stuff for less money and you have to constantly re-invest in next-gen fabs and retrain your workers.  I like WFR because they run a pretty good operation and they are ground zero for QE2, same with SPWRA.  WFR is right back where we like them at $9.30 and just selling the Jan $9 puts for $1.27 is a good start on a net $7.73 entry.   Those can roll even to the 2012 $7.50 puts so you are committing to buying WFR at net $6.23 in 2012.

    SDS/Samz – I’d be happy to get out near even.  Clearly we’re not going down and Sept is very close for a naked call.  Selling .70 isn’t much of a cover.  Now that we got a strong comeback off rough numbers, I would not be aggressively short like that.   A good SDS hedge that kicks in on a bigger than 10% move down (20% up in SDS to $38.50) would be the Jan $32/37 bull call spread at $1.30, selling Dec $26 puts for .85 for net .55 on the $5 spread.  Obviously the puts can be rolled along if the S&P is up 10% (1,200) and that’s some good, cheap insurance that I don’t think we’ll need.


  53. Staark…  I’m having a real problem with those.  They are SO MANIPULATED… Just like this market.  This rally is a joke were going lower…..If not today I’d be amazed but if not next week there is no doubt.


  54. WFR, Bought 9.30, sold Jan 10 puts + calls for 2.96


  55. Hanna – as per Phil’s rules…..you are following wisely.  You are almost at a free ride if you sell 1/2, so why not collect a bit of a premium and sell some Aug 7s allowing them to be taken.  Sell the same Ps for a bit more $$.  Then we can sell the rest after OPEX and then enter our spread. 


  56. Morning Phil, so do you still like SPWRA and WFR given the earnings and the fact that samsung is going to blow them out of the water ? or am i too pessimistic all of a sudden ? :)


  57. Phil, seems like ISM on Monday could be a huge catalyst. The way Hussman has framed the analysis, a poor ISM number essentially means we are going back into recession. Rosenberg dismisses Q2 earnings as front loaded with strong April — Q3 will be ugly. Hussman says market is 25%-40% overvalued based on CAPE and q ratio. Rosenberg says he wouldn’t look at stocks until S&P 500 dropped to 900. What is your take on their bearish views?


  58.  Stark --
    I see .75/1.99 on TZA Jan 11s…last trade .97.


  59. Phil/
    What are your thoughts on ES (nuclear services) at $5
    I quite like their business. Their 2% quaterly dividend.
    They are at the sweet spot of $5 that make them at the money on $5 JAN calls and puts that hopefully (very thin) can be sold for $1.20.


  60. I’m in a couple Nas plays that were recommended here, wondering if we should be making any adjustments.
     
    -- QQQQ Aug 46/47 call spread bought on a dip a while back.  I know this is an Aug expiration play.
    -- QID 3x Aug 15/17 call spread, short 2x Sept 16 put bought on a peak.
     
    I think the sweet spot for these two plays is $46.15 – 47 on the QQQQ.  Any thoughts on tweaks at this point, or are we too far out?


  61. By the way JPY/USD was at 86.28 at 3am this morning. Bought some USD at 86.34 and we are up 86.61 already


  62. if you are on TOS, look at TZA options JAN11 20/100, there are no bids at many strike prices


  63. ARNA/Phil - we are going to play the Oct 28 FDA decision (Sept 15 is safety which should be fine), and looking at some spreads for max return, I was looking at the Jan 5/6 bull call selling the Aug 7 P for 45c for 10c credit.  I was also thinking of the Jan 5/10 bull call spread for $2, selling the Aug 6 or 7 Ps for 1.80 or 1.60 debit, depending upon risk for investors.  I really do not want to hold anything after Sept (I think they will be fine, but not worth it JIC).   I like the first one better as we make 100%….


  64. EXPE – I know my friend just tried to book Disney in the fall and had trouble finding a room.  Airlines were downright bullish (and they see forward bookings) and hotels are giving good reports so travel guys should do well.  If EXPE wasn’t ultimately run by Steve Ballmer, I might even like them…  If you are up on the Aug $20s, you can take those off the table for $2.50 and take the 2012 $20/25 bull call spread for $2.  Depending on how much you like them, you can sell the 2012 $17.50 puts for $2.25, which is net $1,750 in margin and that gives you $5.25 net upside at $25 with the risk of owning EXPE at net $19.25 in 2012. 

    Storms/Jrom – I thought that UNG play was the most obvious play of the year.  We’re going to have storms like this almost every week.

    Upside test coming at 10,500, we don’t want to have any trouble here.  Nas popped 2,250 no problem and NYSE over 7,000 so I don’t expect any issues


  65. Phil, what’s your take on old TZA option strike resolutions? I’ve got the Jan 11 3.00/6.00 spread on x 30 with a net .40 entry … Should be worth 2.60 at expiration if TZA above 30, but what now…. I have hardly looked at it since I sold the 6 calls


  66. Let the turn begin..


  67. Phil, 
    Hope you are feeling better… 
    You recommended some synthetic plays to replace my naked longs (C, EXC, etc). How do you make a determination as to whether go synthetic or do a buy-write? I liked the explanation you gave a few weeks back that you are actually building a positon for long term gains with the buy-write vs not on the synthetic…


  68. SNY – Stock has not reacted too much up or down, in spite of the potential $20B possible deal to buy GENZ. Unless they really overpay – say over $80 as ‘news stories’ already said $70, SNY should be a good long-term buy at these prices?
     http://finviz.com/quote.ashx?t=sny


  69. Sure feeling like a squeeze / flush kinda morning!


  70.  Stark — I’m not on TOS (maybe I’ll switch soon), but I think it’s a problem with those confusing and exotic post-split contracts.  These are listed as "TZA1," but they aren’t even showing up on the eTrade options chain.  But there is a bid out there. 
    Phil — echoing Stark’s question, it it better to roll out of these modified contracts on TZA (on the January hedge), into something easier to trade?


  71.  Thanks Phil on AKAM/CTXS.


  72. Phil- I just got back from Disney.  It was packed!!  We went to a Luau at the Polynesian Hotel @ $65/plate.  The dinner was sold out (holds 500 people).  The parks were filled to the gill every day/night we were there.


  73. Phil / QE2  Thanks, but isn’t your enthusiasm for SPWR moving you away from the very best structural alternative, natgas conversion?  The technology is already competitive and could be cost competitive immediately if the Gov’t would bully/subsidize the oil majors to set up the gas station infrastructure.  Converting existing trucks is a burden, but operating costs and pollution decline and new trucks cost the same.  Should I buy CLNE (Pickens baby) and what else would gain from natgas roll out? CHK,……


  74. Phil/WFR  — I’m in WFR @ 11.50 and sold Oct 11 puts @ .86 and Oct 12 calls @ .87  Would you adjust this? I’d take the calls off at 75% of potential and  let the puts ride.
    Thanks.


  75. Hello Phil do you thing selling March $5 puts on TASR is a good idea ?
    thanks


  76. Copper just refuses to fall!


  77. Hello Phil do you think selling March $5 puts on TASR is a good idea ?
    thanks


  78. Loopy,  it’s all about bonds.  The economy is fine, market is being held up by ‘massaged’ economic numbers because trade of the century is being set up on bonds.  They have to stuff billions of toilet paper into as many hands as possible before explaining to everybody that the current course is unsustainable and pulling the trigger.  Think about it this way:  They can take a smaller float company and move it 100-200%, but ultimately they can not make trillions on it – not enough size.  If they take a bigger company – size is bigger, but moving it 200% is a lot tougher.  And here is the bond market, which is gigantic in size – Now they can make trillions while screwing EVERYBODY. 
    That is exactly what is happening, they are getting every dumb monkey to buy the toilet paper called US Treasuries.  This process is long as the size is absolutely huge.  In order to do that market must be weak, but not too weak.   Hence we are rangebound until they pull the trigger.  And then the loaf of bread will cost $20, savings wiped out and most likely a few bombs will explode.  Massive wealth transfer.  And that has been happening for years in many countries, from engineered panic in the 30′s to many many instances since, and possibly before. 


  79. tuscadog/CLNE — WPRT is pickens twin baby.


  80. Whoa…..just got out of a 4 hour meeting……good thing I didn’t buy FZA at the open like I had planned.  What the heck happened. 


  81. Hi, Phil,
    I am still holding the DXD Aug 27/30 call spreads.  Cost 0.85.  Right now about 0.525.  I am still holding them because they have been just at bit OTM and they have held their values so far.  What do you think?  Continue to hold?  Or sell them and buy something else? Aug OpEx is 3 weeks away.
    Thanks.


  82. Oh, forgot to mention it’s plain DXD 27/30 call spreads, no puts sold.


  83. Phil; VLO a buy here ?


  84.  Phil,
    SOX might be the key to action post EU closing.


  85. Mattress/Amatta – It was the Dec $106 puts covered with 1/2 the Aug $104 puts at $1.65 and new cover of 1/2 the Aug $103 puts at $1.70 from the morning Alert and back to 1/2 cover by the close.  Since we already picked up .32 on the $103 puts, they should have a stop at .25 becasue we are always thrilled to make a quarter on our covers since it only takes 24 of them to pay for our whole long position! 

    MRK/RMM – I think PFE is a better buy.  People have written them off but the market is still weak and their lack of interest in buying people actually makes me think they have a plan of some sort.  At $15.05, you can drop the net to $11.65/12.08 (20%) by selling the 2012 $15 calls for $1.90 and the 2012 $12.50 puts for $1.50 and that makes the .72 dividend 6%.  The net margin on selling the $12.50 puts is $1,265, which is about the dividend you’ll collect so a clean $3.35 gain (28%) if called away at $15 in 2012.  

    We are forming a not good trendline on 10 and 15 minute charts where the third top this morning makes a downtrend from yesterday’s open and our lows are mathing up to lower lows too so still a good possibility we head back to 10,350 either this afternoon or Monday if we can’t get over 10,500.  


  86. Phil: MO is very high, is this risky to have despite the dividend ?


  87.  Phil,
    Sometimes I think you’re too harsh on Cramer but I just read a tweet from him:
     
    Working on $APKT, $CAVM, $AKAM the trio that caused the sell-off…
     
    ARE YOU KIDDING ME?!



  88. Lapper, tell you what…I am one of ‘them’ and I demand you hand over all your money now or I will rob you at QE2 gunpoint…please email me your account info.
    Signed…THEY
    JK…Sarcasm off…


  89. Phil: VLO 2012 jan 17.5 callers and SPWRA 2011 jan 15 callers are 60 % green, the stock is low and both could go higher so I am thinking of closing those callers, what is your thinking about this ?


  90.  Pharm/ Arna I sold half around 7.80 will buy back if it settles, almost 1 dollar jump on no news is crazy, but I believe they may trade in the low teens near the decision. You said not holding anything near end Sept, what do you mean? 


  91. Phil,
    still have BAC AUG 13 call for 1.27 (even now) is it time to roll them? or hold a while more…


  92.  Phil,
    RIMM rising on this phone news.  Do we sell into excitement on this one or it’s been beaten down so much that it deserves to go up further?


  93. Phil, I am looking for "smart" ways to unwind the FSLR play (bear 135/125 put spread).  One option is to close it.  Another is to sell the 135, and leave the 125 still there, for a bounce.  Another is to sell the 135 but buy a 110 put to cut on margin from the naked sale of the 125.  Ah and yes, I can just let it be… What’s your thinking?


  94. Good morning,
     
    Sorry, wrapped up in a project………IWM 64.48, 64.79, 65.08, 65.34, 65.53, 65.83, 66.01, and 66.26
     
    Had 1 play with TNA, now in cash


  95. JRW – And we thought you just slept in….. Or decided to play golf on a day with little news like today :)


  96. Rimm.. Screwed up with their storm offering.. Do you think they have the resources to put out a phone that can compete against Aapl mot htc etc. Aapl in my view is being punished for not moving to vz sooner as they’ve lost at least 3/4 million in possible sales due to the competition catching up.. Rimm better knock it out of the ball park with this one.. They aren’t sitting on much cash to just burn it on the next flop


  97. Pharm / FRX   What do you think of their pipeline prospects to offset Lexapro going generic in 2012?  It’s a cash machine currently, so still long.


  98. lapper
    Your comparison of the Treasury Bond market to the world’s largest toilet bowl proves you have taken your expertise in creative writing to levels that I have never seen before.  Yes, that paper is really toilet paper, and once it reaches the "flush stage" it becomes totally worthless. This "bubble" that is in the making, is really a balloon, that will not just pop, but will explode, as the escaping air will be very quick, once the markets figure out what is happening.  The Fed is holding the needle ( flush handle), and just waiting for all the suckers to jump in. ( the Chines know this, and are shifting their portfolio to close in expiration dates in order to mitigate the sad outcome)


  99. Pharm / FRX  What do you think of their pipeline development prospects to offset the 2012 patent expiry on Lexapro?  It’s a cash machine so I’m still long.


  100. Europe sold down into close with FTSE closing down 0.5%, DAX held +0.4% (which is not good considering their great numbers) and CAC up 0.25% but a huge save of 1.5% iff the 3,600 line so a bullish test over there.   The question is, was Europe holding us up or keeping us down? 

    SPWRA and WFR/Micro – I’m actually going to Washington in two weeks and I’ll know a lot more but the Samsung thing will take years to play out and I have run hundreds of scenarios and they pretty much all come up solar for our long-term energy needs unless someone gets a fusion reactor going first. 

    ISM/Mattlev – That’s another case of very low expectations (53.5 down from 56.2) and we’re in a perfectly normal pullback on ISM and others coming out of a recession.  I’m sorry but it does seem to me that all these prognosticators have turned into absolute idiots who pull the fire alarm every time someone lights up a cigarette.  Rosenberg is another jackass who is trying to tell you that the companies (86% of whom are beating estimates for the WHOLE QUARTER) are SO dumb and/or decietful that they are misleading the investing public by telling them Q3 is in-line with expectations as they cover up a terrible 2 out of 3 months of Q2.  And they are doing this why?  They can go to jail for lying or they can easily use the cover provided by the Fed and the data to project more conservative numbers, which they could then beat and look like geniuses.  Well I guess Rosenberg has the game figured out, doesn’t he?

    ES/Lionel – They are a nice little company but nothing very exciting.  I agree that the buy/write is a high-percentage play if you can get your price. 

    QQQQ/Markz – Well it would have been good if you got out 2 days ago but you should win one or the other, right.  Those are not a good combo as it’s very hard to hit both but, as you note, you are on target for the best possible finish around $46.50.  As with any play, if you are up 50% with more than 2 weeks left (on short-term play – 1/3 of initial time is rule of thumb), you should take money and run. 

    Yen/Lionel – You have to take that 8am money!  They usually bottom out early and then recover again (more Yen to the dollar) and 85.937 was the LOD at about 8:45 – total reversal now. 

    TZA/Stark – Very strange, no open interest either.  That’s why the bid/ask spreads have become unplayable.  

    ARNA/Pharm – A little chasey up here isn’t it?  Why not Oct $5/10 bull call spread for $2.50, selling Sept $6 puts for $1.60, which is net .90 on the $5 spread, breaking even at $6.60.  It will be nice not to have to worry about the put side going into the news.  Another way to play a crazy run is to take 4 Jan $11 calls for $1.65 ($660) and sell 5 Aug $8s for .60 ($300) and 5 Sept $5 puts for $1.20 ($600), which is a $240 credit with worst downside case that you own 500 ARNA for net $2,260, which is $4.52 a share so 40% off in a month and, to the upside, you flip bullish on the spread by taking the $240 credit and buying 2 more long calls if you have to.


  101. Courtesy of Mish:
    Every time there is a little blip by China in its purchasing or holding of US treasuries, hyperinflationists come out of the woodwork ranting about the "Nuclear Option" of China dumping treasuries en masse.

    Fears are extremely overblown for several reasons.

    1. China’s purchasing of US assets is primarily a balance of trade issue. If the US runs a trade deficit, some other countries ruin a trade surplus and thus accumulate dollars. This is purely a mathematical function as I have pointed out many times.

    2. If China dumps treasuries for Euro-based assets, oil-based assets, yen-based assets or for that matter anything other than dollar based assets, the problem merely shifts elsewhere and those buyers would have to do something with the dollars such as buying US treasuries or other US assets. This too is purely a mathematical function.

    3. If China dumped treasuries it would tend the strengthen the RMB and China has been extremely reluctant to let the RMB appreciate. Indeed, the US is begging China to revalue the RMB upward, but China resists.

    While China may make short-term moves in its reserve holdings, the odds of China dumping treasuries or dollars in size is quite remote.
     
    Michael Pettis discusses those ideas and more in The capital tsunami is a bigger threat than the nuclear option.
     


  102. Phil
    I am glad you posted the rules… I had them in the inverse order. Looking forward, I hope to be more careful!


  103. TZA phil, Scwabb SSpro still shows signiicant open interst on the old options but huge rediculous spreads. I am currently figuring that my long calls (Jan 3′s) are at the very least excercisable at 1 to 5 ratio, but I’m trying to figure out what to do with the short 6′s I sold?….
     
    What happens to them?  Call the broker and let them work on it?


  104.  Hi Phil,
    Should a long position in PCLN be initiated into earnings on the back of EXPE results?


  105. Okay, I am back now … at 8.46 i said "Day camp visiting day this morning; good luck …. we either get this pre market flush and rally; or the flush continues."
     
    Looks like we got the former, and now we have a narrowing triangle.
     
    The good news is that all my TNA sells executed and I am now flat !
     
    JRW junior in action !   :grin:


  106. Well, that was a nice little fade!  Could be it though-


  107. Phil / Chart
    Imagine the upside if we can just get over that line !!  8-)


  108.  Still looks like market go down today, working off oversold conditions going nowhere


  109. yeah loopy we are all loony, make sure you are long a lot of 30-year bonds.
    And if you think China is dumb and will be taken to the cleaners by banksters- well, then CAT scan might be in order.


  110. Anyone knows what time frame the put/call ratio encompasses? Is this a ratio for ALL calls and ALL puts open for a particular stock from today’s date until the longest expiration date??


  111. Im shorting copper here, this is ridiculous – gimme a selloff! Damn….Im starting to sound like Matt!


  112. what do you think of DE?--any thoughts on a play
    Tx


  113. For what its worth, today is op-ex for weekly options and the max pain on SPY is 110.


  114. jromeha: gotta be careful with copper, it was 3.70 in April


  115. kinki: how does calculate the max pain (where the highest volume of options is?)


  116. TZA/Gmarts – They will be what they will be when they expire.  If they are a hedge, don’t worry about it as they either pay you if the market is down or you paid your insurance money if it’s up.  The Aug $4s are $2.40ish so figure your $3s are good for $3 at least, which makes sense if you divide the current price by $5.  Since $3 is your max pay, you could ask for $2.50-$2.75 on the spread and see if you get any bites as the spread is $1.53/5.70 on the Jan $3s and $1.50/2.02 on the $6s.  Never hurts to ask…

    Synthetic/Amatta – It’s a trade by trade thing.  I look to minimize risk and maximize reward based on my target price at expiration and how many factors I think may screw that up along the way.  Also factored in is stuff like how good I feel the stock is to be a DD in a long-term portfolio like:  If I have a an AAPL Jan $160/180 bull call spread at $17 and I sell the 2012 $180 puts for $15.50 I imagine the most likely reason AAPL will be put to me at net $181.50 is the death of Steve Jobs.  Since I have confidence that AAPL will survive that event, I know that even if AAPL crashes to $100, I would happily take my $181.50 assignment and then DD at $100 (worst case?) for an average entry of $140.75 and then I would sell $40 worth of 2014 puts and calls that would drop my basis to about $100/100 (and if AAPL drops to less than $140, I don’t need to DD as the write will drop my basis low enough anyway) and I will be very happy to tuck 4x AAPL away in my retirement portfolio at net $100 per share and will be proud to leave it to my kids so that makes that artificial buy/write very appealing to me vs buying AAPL at $258 and selling the 2012 $250 puts and calls for $94 for a $164/207 entry.  If you are READY, WILLING & ABLE to commit to a long-term holding – you will find you can make very good money by accepting assignment risks

    Oh, forgot to finish my point.  If RIMM, on the other hand, had some catastrophe, I would probably have no desire to ride out their issues for 10-20 years.  That’s a big part of the decision process – what will you do in down 30% or more scenarios for then next 4 years?

    SNY/M2 – Good point.  That means the market thinks GENZ is a good bye at $70 and means that they think SNY can afford them so a good match.  I am super-happy with the way GENZ is flatlining to $70 too.   I don’t like to buy acquiring companies as there is so often a sell-off as deal terms come out (sticker shock).  Even Berkshire got hammered when Warren bought a railroad.  If you like the trade, how about  selling the GENZ 2012 $70 puts for $6?  $64 is not a bad price for GENZ long-term and if the deal goes through at $70 or better – poof goes the premium much faster than expected.  TOS says net $1,400 in margin to pick up $600 so if that goes through in 6 months or less it’s a nice 42% pick-up.  Damn, and I said I wasn’t going to make bullish picks today

    TZA/Esc – I think it’s good to ask for a nice price but no need to force yourself out unless we get back over 10,700 and hold it for a while (or 666). 

    DIS/Loopy – Yep, I am surprised over and over again when I go places and it’s crowded and people are happy and spending etc.  I said yesterday that the top 10% just want to cut the dead vines off America and I think the entire top 40% (who are 90% of the economy) have written off the bottom half and moved on.  Those who still have jobs are feeling more secure in them and the lack of that marginal 10% spenders is keeping things like vacations and meals fairly cheap so people are enjoying themselves again.  The earnings are reflecting that even though the bears refuse to see it.  This doesn’t mean we aren’t back to partying like it’s 1999 but all the bear points are pretty much "what if" macro catastrophe scenarios and that’s tough to base an investing premise on. 

    Nat gas/Tusca – I think nat gas is a great play too (just mentioned UNG is no brainer play) but not the BIG solution long-term (20 years+).  Moores law is working on Solar, albeit a bit slower and we will pass 50% efficiency by the end of the decade (affordable that is) and that starts to get VERY interesting as it halves the cost of installations and double the output to the point where almost any roof in America can make so much power that they have to sell it.  That by itself is a massive game-changer for this country and, eventually, the whole world.  CHK is my other nat gas pick and yes, you will not be powering trucks with electricity this decade or probably even the next one but I see nat gas as a short-term play (a few years) and solar will kill that demand too so, effectively, without the Pickens plan, nat gas is a dying industry as home usage is certainly not going up from here.

    WFR/Rain – You are in WFR for net $9.77/10.38 and WFR is at $9.64, right?  If you want to risk it, you can buy back the calls for .22 (not much to lose) and then see what happens.  If they fall below $9.50, you can sell 2012 $10s for $2.20 (now $2.40) and that drops your net to $7.75/9.37 and, of course, you can roll the putter along if you have to (2012 $7.50 puts are $1.30, which would put you at $7.75/7.63.

    TASR/Micro – Since TASR is one I don’t mind owning for a decade – yes! 

    Copper/Jrom – Yes but RTP (which we shorted) is still slow off the mats and FCX doesn’t seem to believe it either (plus FCX is happy about gold coming back).  My biggest macro worry is a China collapse and there is just no way they need this much copper even if they hold it together but, as I said earlier this week – too crazy to bet against. 

    TASR/Micro – Yes, still good!  8-)

    Trigger/Lapper – Wealth must be transfered from those that hold money (savings) to those that owe it.  One way or another it will happen and if the top 1% refuse to give it to the bottom 99% to pay off their bills, then of course they will eventually default and wipe out the assets of those on top (not the top 0.01% – they love it as that’s how they clear the final table of all the wanna-be suckers).  As you say, it’s a game that has been running for centruries and people just never learn.

    DXD/Cwan – They will start losing money fast if we open up next week.  As you can see, we are hugging the green line I drew on the Dow chart but that’s good for a bullish breakout/stick later if we stay there and then you really don’t want to take a loss next week on those.  If we fail my zone, then you can hang on over weekend.   The Oct $25/27 spread is .85 and that drives your net to $1.18 so that’s a reasonable escape to buy more time if you need the insurance.  If not, losing .33 is the cost of this insurance and not so bad considering the run up we had. 

    VLO/RMM – Any time you can enter for net $16.50 I like them.  Jan $17.50 puts can be sold for $2.15 for a net $15.35 – a nice, simple play.

    MO/RMM – I’d either cover or take money and run here.  Actually, take money and run and just keep on list to buy back if they hold $20.50 in downtrend. 

    Cramer/Jdub – Oh man, now he tweets his nonsense? 

    FSLR is still going down – Congrats to all players! 

    I don’t know how I got so behind today…


  117. Its the strike at which the most options expire worthless.


  118. Stark: TOS TZA 20/100 Jan 11 options: those are the old options before the reverse split, if you look at the Jan 11 100 options there is trading there.


  119. Kinki:  got it, thanks !!


  120. Pharm
    I think ARNA is a real crap shoot…. I have been playing it for income, having sold the January 5′s naked puts.which if put to me I would then have a basis of $3.25 (fairly safe, I hope). In order to get some upside profit, should they get a buyout offer, which spread would you play in conjunction with my naked puts. Thanks!


  121. DIS/ Loopy  Phil  Also don’t forget that a lot of people spending money like crazy at Disneyland are substituting that trip for a more expensive trip to Europe or where ever. 


  122.  I wish you much success Lapper, peace. 

    I just think the system will keep functioning no matter how dysfunctional, it’s human nature.  Have you seen the movie ‘The Day the Earth Stood Still’.  At the precipice, we change…I think we were there Nov. ’08.  I don’t think anyone (including the Chinese) wants to go back to that time and will commit to not letting it happen.  Correction and adjustment is different then collapse….But then again maybe your right and the whole shithouse goes up in flames.


  123. In TZA at $31.74; just look at TBT, even though this wedge formation usually resuts in an upward resolution.
     
    But more importantly, 733 rear wheel horse power  !!


  124. Phil:  why the big push into Treasuries today, did our GDP scare people into bonds or what do you  think?


  125. Phil, any play for WFMI’s earnings next Tuesday? I strongly believe it’s way overpriced. The share price factors a 30% growth in EPS while the analysts forecast only a 12% revenue growth for the next year.  I hold 4x Jan 2011 $60 Calls that I bought a while back super cheap, and I was thinking of rolling them down to 4x Jan $45 Calls but simultaneously sell 6x Aug $39 calls to offset part of the cost. It’s very rollable. Any better idea?


  126. Phil: SPWRA might move?? or can they evne go lower /
    my jan2011 15 callers are 60 % green, maybe close these ??


  127. Hummvee- Yeah, you definitely got to be careful with futures contracts (I usually have very tight stops). I was curious about the Treasuries being so much higher as well.


  128. jromeha: i’ve pretty much quit doing the copper future thing; although I did net some profit, it seemed like every time i’d set a tight stop, it would stop out  and then reverse and it pissed me off too much  :)     now sometimes i will just do an hour  trade and watch it like a hawk, it seems to move a lot around when the asian markets open up. 


  129. If you’re not in TZA yet, a break below 64.79 would be a good entry with 64.49the only major hold up !!


  130. 60%/RMM – What do you think I’ll say about taking 60% gains off the table with 6 and 18 months left to try to make 40%?  You might want to wait the weekend to see if we don’t crash.  Don’t forget, you have no upside risk, only downside, so always error on the side of caution there. 

    BAC/Cmsosa – On a naked Aug call with 3 weeks left heading into a weekend, you should be thrilled to get out even and wait and see what happens next week. 

    RIMM/Jdub – Just a roulette wheel disguised as a stock.  I sure wouldn’t short them here, I think $65 is the right price but AAPL is kicking their ass and that’s not going to stop so I just have no interest. 

    FSLR/Jordan – The spread is $6.35, which is very nice, of course.  I think they get a downgrade next week and you’re good for $10 but that’s a little tricky.  How about rolling the $4.50 $125 putter to 2/3 x the Dec $105 puts at $6.10 (if you have the margin) and cashing your $10.85?  That puts $10 in your pocket and you are good to $100 on FSLR with the rollable put (the 2012 $65 puts are $6.30).  If the market finishes weak, I’d hold over the weekend and hope the downgrade police pay a visit and then you can still do the roll but you’ll cash more on the $135 puts. If you want to do with the cap, Sept $100 puts are $1.25 and should hold a bit more value and if you buy those and cash $135s for $10.85 and leave the $125 puts, that may work out well but, as I said, $125 may not be the bottom, which is the flaw in that plan.

    Good morning JRW!   Good moring to skip – lots of nonsense.

    China/Loopy – I totally agree with Mish.  I’m glad he doesn’t get bored explaining it because I sure do (see Dec 2006 "Burning Dollars to Fight Gravity" at the bottom where I apply my Roach Motel Theory to China’s Dollar position.  $1Tn more FOREX later, I am right so far).

    LOL Gel!  Well, KNOWING the rules is half the battle…

    TZA/Gmarts – Can you not offer to sell the spread as a unit?  If not, ask a silly price and offer a silly price and see if you get bites.  You don’t want to exercize really (giving up your own premium) if you are in the money (TZA $30+) you should get called away at net $3 but check with your broker. 

    PCLN/Jdub – Last time we played them they were a great short from $250s to $180s.  No way I go long at $225.  Very competitive business and PCLN super raised the expectation bar last earnings so I just hope they zoom up to $300 so I can short them again or blow it and test $170 where I may go long on Shatner this time. 

    Flat is good Cap.  It’s hula party day at our camp.  The girls left in grass skirts..

    Upside/JRW – Yep, volume at 2 is 93M on the Dow so super-stickable but it doesn’t look like they have the will to break the line this afternoon (all the better to burn us with).  I think we should take an uptick very seriously. 

    Put/Call/Rav – Hmm, never gave it much thought.  I assumed it was a sum total of open interest. 

    DE/Sav – You missed that teain.  I like CAT better but you missed them too.  Hope for bad China news crashing them and then buy. 

    DIS/Humvee – It’s not just DIS though, it’s the hour wait at almost every CAKE I go to (one of my favorites for dinner meetings as we have tons of them and everyone knows where they are) and other packed restaurants and malls and movie theaters where people are paying $15 a ticket for Real-3D when it’s $5 cheaper in 2d next door and everyone is eathing $20 worth of popcorn and soda…  I’ve been in recessions, we used to carry our own food into the movies and we sure as hell didn’t eat out during the week and you could always find chairs at the food courts in the mall.  This is not a recession at the moment, that’s over.  We MIGHT go back in but we’re not in now and, as long as jobs are at least stable, I don’t think we relapse. 

    FAS Aug $22s are $1.25, were $2.25 Tuesday so worth playing for a quarter I think (stop at $1, take $1.50+).


  131. Phil
    I would like to structure a position on VMW an a long term basis. Do you like this one?  I was in it before and took profits, but was too careful, I guess.  Do you have a spread suggestion? Thanks!


  132. JRW:  you still in TZA?


  133. FAS/Phil – Aug 22? You mean the weekly $22? The regular Aug 22 isnt at 1.25; the 23 is, however.
    If you are gambling, how about the 22 call expiring today for 0.4?


  134. JRW:  you still in TZA?


  135. is anyone in ZAGG, they make protective covers for iphone & ipad.
    Best Buy to offer free invisibleSHIELD 4fix to aggravated iPhone 4 owners made by Zagg


  136. What was that all about?


  137. Treasuries/Humvee – Spain downgrade.  As I said this morning, timing of MCO announcements is highly suspect but what can you do?

    WFMI/Rav – Oh, that’s another packed place!  I always write that off to my top 10% neighborhood but boy are they busy every time I go.  I would not bet against them, they just bought the SBUX next door and knocked out the walls and doubled their size – I know that’s a single anecdotal but no expense was spared and they doubled the checkout counters and hired more people – if that’s the decisions coming down from Corporate to Montclair, NJ, then I don’t think they are going to be a big disappointment.  I still think they are way overpriced for a damn supermarket stock though.  There’s not much do do with Jan $60 calls but use them for leverage.  You can roll down to the $50s for .65 and that can be offset by selling 1/2 the Aug $39s for $1.25.  Once those expire, you can look for a Sept sale and roll until you work yourself into a nicer Jan position (assuming earnings are good). 

    SPWRA/RMM – They are 100% premium, of course but you can only win 40% more (why do we have this conversation more than once a day?) so not much more to gain over 6 more months.  If you are bearish then you should cover lower and if you are bullish – then that’s your anwer.


  138. If we are looking at weekly options influencing today’s trade; let’s consider SPY 110; IWM 65, XOM 60, QQQQ 46 as possibilities.   Even AAPL 260 if we get a rally.


  139. humvee,
    Yes,bailing if we break North of 65.12, should have taken profit at my 64.79 line; I have to admit, this makes no sense, but that’s not new is it ?


  140.  exec
    some brokerages (TOS, IB) in addition to 1099 generate file (.txf, I think) that contains all matching trades (even wash sales) done in the calendar year. this file maybe imported into tax software (TaxCut, TurboTAX) , generating schedule "D". 


  141. JRW…makes less than no sense.  Looks like the bot machine that was evident Q1 and most of last year.


  142. Phil,
    SNY – Selling GENZ 2012 Put for such a nice premium. Very nice idea that I hadn’t thought of! Much thanks.
    Has a very wide bid-ask spread, so don’t know if it will actually execute. May also buy a lower strike put to reduce risk and margin (and profit potential). Seems someone did do a spread for 50/75…


  143. Might be a flush by the BOTs JR before a tank


  144. Phil, on your response to Amatta:
     If I have a an AAPL Jan $160/180 bull call spread at $17 and I sell the 2012 $180 puts for $15.50 I imagine the most likely reason AAPL will be put to me at net $181.50 is the death of Steve Jobs.
    How’s that different than just selling the naked 2012 $180 Puts if your intention is to own them at that price? Why bother with the bull call spread? Instead of spending the money on the call spread, you just might as well keep the premium of the 2012 puts and if you get assigned, well you get a better price and then you can do the rest (DD, etc).


  145. Taking too long.  I’m not giving it all back.  Out until clear direction.


  146. Anyone know why oil shot up almost a buck the past 30 minutes? Only thing I can see is the storm system on western africa now has a 20% chance(instead of the 10% earlier) of becoming a cyclone.


  147. As for Treasuries, they are still a good by for now.  Shorts are getting squeezed, and the yield is only going to go lower.
     
    DR writes:  If indeed, the inventory cycle is behind us, then what we have on our hands is an underlying baseline trend in GDP of  1.2% at an annual rate. And if we are correct in our assumption that the looming withdrawal of fiscal stimulus at the federal level and the cutbacks at the state and local government level subtract 1.5% from growth in the coming year, then it begs the question: How exactly does the economy escape a renewed moderate contraction over the next four to six quarters, barring some unforeseen positive boost? In turn, how does a strong possibility of such a  contraction square with consensus views of a 35% surge in corporate profits to new record highs as early as next year? The answers to these questions are as painful as they are obvious.  Pimco or no Pimco, they have made a lot of money and the savings rates for baby boomers is still growing.  Goldman posted this yesterday evening and it is what I have been noting for some time.
     
    ARNA – I see ARNA moving to the 10-12 range with a few pullbacks, but retail is in full force.  I am ok with September (September 15 is the advisory committee meeting), but as we all know and have learned with the FDA, there is a crapshoot (thanks Gel) on the final OK.  That being said, I still like the credit spreads noted by Phil, knowing that IF they are denied…..they go down to $1!!!!!!


  148. Phil – forgot to ask you what you think of ISLN?


  149. Seemed like a bot test run at 1:47 @ 1.2M, with half sold off at 1:57.  Timing was exactly at the point the market needed a boost.  Can’t say I know for sure of course, pehaps just paranoia…hard not to be when the bots can move IWM $0.30 in 3 seconds.  I personally have very little confidence in making any more trades today…nothing worse than giving back profits on Friday evening!


  150. Hi Phil, Are you still bullish on EWJ? If yes, then would you recommend buying it today, or it is better to wait at least until Monday? Thanks!


  151. Phil I am still holding I think part of the play of SSO Au 33p sold for 2.86 now .52 Do I apply rule # 3 HA HA or let the putter go worthless SSO trading now 36.65 thks


  152. Phil,
     
    What’s your read on the close?


  153. VMW/Gel – I don’t see them growing into that valuation ($40Bn forward, now $32Bn) on $200M in profits.  I think they are stretched silly and I will point out that this stock has fallen off a table (10-20% quick drops) over and over again from the last time they were at $100 as they dropped to $40 and then $30 and then $17.25…  There’s a reason you can sell 2012 $50 puts for $5 with the stock at $77.  If you think I’m wrong, you can pair that with the $30/40 bull call spread at $7.50 an that’s net $2.50 on the $10 spread so 300% upside if they don’t fall about 50% and your BE is way down at $37.50 (down more than 50%).  Not for me but, if you are bullish, this is a no-brainer, right?

    FAS/Rn – Not the weeklies!  Those are crazy dangerous.  I must have looked at the wrong thing, didn’t matter, they took off too fast to make the trade either way and, now that we’ve stopped, I have no interest.  Maybe I was looking at the $23s..

    ZAGG – I haven’t even bothered to get a cover.  It isn’t worth the effort to click on the web for it as I’m perfectly happy with my phone as is so be careful extrapolating some huge payday for ZAGG, especially as we know Jobs drives a hard bargain.

    That last little rally did break the pattern ever so slightly.  Let’s the man with the stick know  he won’t be wasting his ammo into the close so I’m still expecting a move up.  2:51 volume on Dow is 108M – LOW (low means they haven’t run a bot to boost us yet)


  154. Weeklies/Cap – Now that’s gambling!

    IWM Aug 6 (weekly) $65s at $1.12, selling IWM July 30 $65s for .25.  $65s expire in 1 hour and are on the money but you can roll them up to Aug 6 $67s, now .30 if RUT takes off.  Otherwise, you have 20% discount on calls.


  155. TNA sitting right on top of its Pivot Point.
    TZA sitting just below.
    slightly bullish unless that changes.
     
    TRIN is high but dropping; slightly bearish.


  156. Weeklies/ Phil …. my theory is that these are going to influence trading each week more than we currently realize.
    Think of Option Expiration week every week !  Crazy stuff.


  157. I agree Cap, they are using the weeklies as a nice little income generator to deal with the BOTs.  or maybe in concert….


  158. Phil, regarding hedges, I was wondering if it would make sense to sell call back ratios on TZA for example. On TOS, selling 20 Sept 50 C and buying 10 Sept  40 C, you have a nice peak profit at 50 which is around 20% down from here on IWM (if my calculations are correct). In this case, with $4300 of margins, you stand to make around $10K is TZA is at 50 by expiration in Sept. The advantage of this is that it costs nothing (actually it’s a $170 credit on a 10/20 ratio). The disadvantage I see is that you start to lose coverage after 20% but there is no rule that you cannot have overlaping ratios. Margin requirements climb quickly when you reach 50, but if you are 60% in cash, that should not be a problem. Worse case, you are short 10 TZA calls, but they can always be rolled. The trick is to find the right ratio and strikes to match your portfolio taking into account your initial protection (for example, mine is around 17% now) and the overall beta of your positions as 20% down on IWM might mean a 30% down on SPWRA for example. Also, this is the type of trades that have to be put in place on a short term basis as these 3x are completely unreliable long term. I ran some simulation and over a 3 month period you can actually have decay or inverse decay depending on market movement. But from month to month, it seems to hold OK. But I probably missed something.


  159. AAPL/Rav – Because I make $3 more on the spread, that’s why.  I don’t expect AAPL to drop to $180 but, if it does, I don’t mind the consequences.  Making $3 on $17 in six months is considered a lot of money by some people.  If I sell more puts, the net margin is $18 so it’s cheaper to take the bull call spread, which pays $3 in 1/3 the time that the 2012 $180 puts pay $15.  The point was, it’s a ridiculously safe way to play AAPL without owning the stock.  Most likely, AAPL holds the $220s or better for the year and the spread expires worthless and if the puts also give us $3 then that’s a $6 profit on $18 in margin over 6 months (33%) and we’re out most likely as we can "only" make 75% more ($12) on $18 in margin in the next 12 months so probably we’ll find plays that can do better. 

    Oil/Jrom – How about the NYMEX closes at 2:35 and I said first thing in the morning they would pull out all the stops to jam it up into the close?

    Prolonged lethargy/Pharm – Sad and dreary.  Poor little US economy.  Sad little World.  No hope at all.  8-)

    ISLN/Jrom – I do not think of them at all.  Storage guys do not excited me, it’s kind of a commodity and these guys are not cheap at all.  I have no particular reason to short them either so just a "stay away" for me.

    Friday/Goldman – I agree, best to just sit back and watch the fun. 

    EWJ/Alik – If we finish green, the Nikkei can flip back up next week.  They are right back where we started only now the $9s are .65 instead of .62.  If we close green, they are worth a weekend play

    Close/Exec – I do think we go green – looks like a classic stick set-up to me.

    Weeklies/Cap – Oh I agree with that, who the hell authorized weekly options.  This is just madness….

    TZA/Stjean -  Well there is the margin for your naked sale of 10 Sept $50s.  It’s a fine idea if you are going to stay on top of it but don’t forget they crucify you on the spreads if you are forced to buy into the excitement (which is why we ALWAYS SELL into the excitement).   Logically, it’s an excellent idea but you may want to consider modifying it to fit something that is less than a 3x mover to the market.

    Wheee, I’m caugt up just in time for the Mr. Stick show!  Come on kids, let’s have some fun!


  160. Phil/VMW
    Thanks for the insight…. I am bullish, but prefer to not take that sentiment to the "gamblish" level.  Lots of other specimens to  stalk,  so will take away the excess risk, and look for safer plays that have maybe equal promise.  I’ve got to get away from the "greedy bastard" syndome, an play the market in "wise" mode.


  161. Out of TZA at a 9 cent profit, annoying !!


  162.  Phil, 
    I am continuing with doing the synthetics and buy writes, I liked EXC for the dividends as i thought it was safe at $50 and maybe a little appreciation, but it went down all the way to $40… the chart to my untrained eye looks very bad? Do you have in mind another stock with dividends to do a buy write-- Also I don;t know if you feel the sector is a good one for the next year and a half? so it doesn;t need to be in the same sector I guess.
    For diversification you mentioned 10-12 (I am thinking 15 with $10K each)  positions, what would be your current allocation in terms of sectors. I see you have 17 such sectors in the dashboard below. 
    Lastly, I am not sure how to take the synthtetics, do you account for the cash outlay or the potential obligation from the puts, to allocate teh 10K I pretend to do?
    Thanks


  163. Phil/VMW
    Thanks for the insight…. I am bullish, but prefer to not take that sentiment to the "gamblish" level.  Lots of other specimens to  stalk,  so will take away the excess risk, and look for safer plays that have maybe equal promise.  I’ve got to get away from the "greedy bastard" syndome, an play the market in "wise" mode.


  164. oops – double post…. got to get rid of my impatience as well!


  165. GEL1
    in regard to currencies. I don’t have a FX account but have been using ETFs and options for trades


  166. Shorting some SLG into this stick …


  167. Thanks Phil for your ES answer.
    I am looking for little companies that are not affected by ETFs trading and robot manipulations.
    The trick is to get the right price on the options :)


  168. In TZA at $31.29 off the top trend; we’ll see !!
     
    And why is it taking soooo long for the posts to appear today?


  169. gel, i have kind of adopted the same point of view.  So, i am doing more bull put spreads that have a defined gain and a defined loss.  But that loss can then be rolled down….I will be looking to initiate a bull put spread on TEVA for about 45/40 probably for oct or dec.


  170. FWIW some sanity returning to Old-Style TZA contracts….. Jan# call at 3.15×3.50, close to previous spreads at .35 difference Jan11 6 call at 1.11 x 2.02 if you throw out the middle ground offer of 1.60 for 1-countem-1 contract.
     
    I think the MM’s forgot to rest the ask/offerbot on these contracts


  171. That’s Jan 3 TZA call at 3.15 x 3.50


  172. 9:00 AM On the hour: S&P -1%. 10-yr +0.52%. Euro -0.37% vs. dollar. Crude -1.7% to $77.03. Gold +0.15% to $1172.90.

    09:30 AM At the open: Dow -0.63% to 10401. S&P -0.57% to 1095. Nasdaq -1.07% to 2228.
    Treasurys: 30-year +1.11%. 10-yr +0.52%. 5-yr +0.3%.
    Commodities: Crude -1.71% to $77.02. Gold +0.03% to $1171.60.
    Currencies: Euro -0.54% vs. dollar. Yen +0.78%. Pound -0.1%.

    10:00 AM On the hour: Dow -0.55%. 10-yr +0.43%. Euro -0.47% vs. dollar. Crude -1.29% to $77.35. Gold +0.03% to $1171.50.

    11:00 AM On the hour: Dow -0.03%. 10-yr +0.39%. Euro -0.41% vs. dollar. Crude -0.89% to $77.66. Gold +0.57% to $1177.90.

    12:00 PM On the hour: Dow +0.01%. 10-yr +0.5%. Euro -0.05% vs. dollar. Crude -0.24% to $78.17. Gold +0.75% to $1180.00.

    01:00 PM On the hour: Dow -0.09%. 10-yr +0.56%. Euro -0.24% vs. dollar. Crude -0.38% to $78.06. Gold +0.95% to $1182.30.

    02:00 PM On the hour: Dow -0.63%. 10-yr +0.57%. Euro -0.18% vs. dollar. Crude -0.47% to $77.99. Gold +0.96% to $1182.50.

    03:00 PM On the hour: Dow -0.39%. 10-yr +0.56%. Euro -0.19% vs. dollar. Crude +0.61% to $78.84. Gold +1% to $1182.90.

    Q2 GDP, advance estimate: +2.4% vs. +2.5% expected, +2.7% previous. Chain-weighted price index +1.8% vs. +1% expected, +1.1% prior.

    Of the 2.4% GDP growth reported, 1.1% was an increase in inventories, indicating that actual demand in the economy is growing just 1.3% a year. "Unless spending picks up," Peter Morici says, "once businesses stop piling up unsold goods, layoffs will outnumber hires [and] unemployment will rise with a vengeance."

    Q2 Employment Cost Index: +0.5% Q/Q vs. +0.5% expected, +0.6% prior. +1.8% Y/Y vs. +1.7% prior.  Paying the workers trumps GDP.

    The cost of paying wages and benefits is rising slowly, but economists see no sign of deflation in the 1.8% rise in the Employment Cost Index – largest Y/Y increase since Q2 2009. "The good news… is that the ECI is still rising, albeit at a very moderate pace, but it is showing no signs of dipping towards negative territory," one economist says.

    With corporate profits now above pre-bubble highs, Steven Pearlstein wonders why the Chamber of Commerce is so quick to fault the government for the dearth of new jobs.

    Companies are rushing to gorge on cheap debt, and it’s been the busiest July ever for debt sales by junk-rated companies. Predictions of the demise of the bond rally have been greatly exaggerated, but investors could get burnt if a recovery jacks up rates.

    July ISM New York Business Index: 58.4 vs. 69.3 in June.

    Chicago PMI: 62.3 vs. 56 expected, 59.1 prior. Employment 56.6 vs. 54.2 prior. New orders 64.6 vs. 59.1 prior. Prices paid 58.1 vs. 61.9 prior.

    July Reuters/UofM Consumer Sentiment: 67.8 vs. 67 expected, 66.5 preliminary. Expectations 62.3 vs. 60.6 prior. "Rather than an economy gaining strength, consumers now anticipate a slowing pace of growth, and rather than economic policies acting to improve prospects, economic uncertainty among consumers has greatly increased."

    The recession was deeper and the recovery slower than the government originally believed, the Commerce Department reports, as it downwardly revises earlier GDP estimates for each of the past three years. Of the 12 quarters in 2007-09, GDP is revised down in seven, as consumer spending grew more slowly and home-building fell more sharply than previously estimated.

    The U.S. financial system is "slowly recovering" but remains vulnerable to crisis, says the IMF, partly because lawmakers have failed to take bolder action. The IMF also conducted stress tests on the 53 largest banks in the U.S. and found that 12 banks, nearly all of them small or regional, would need to raise more capital.

    The Fed now has a paper profit on the toxic assets it’s holding from Bear Stearns and AIG (AIG). The assets are presently worth $69.1B, around $2B more than last quarter, with the unrealized gains on the Maiden Lane portfolios standing at $10.8B.

    Go Barry!  A primary cause of the crisis was "government policies promoting homeownership," Henry Paulson says, urging lawmakers to shrink Fannie Mae (FNMA) and Freddie Mac (FMCC). Barry Ritholtz isn’t buying Paulson’s "thinly veiled attempt to rewrite what actually occurred… to shift his own sad role from conductor of the theft to hapless victim."

    The cost of insuring euro-area bank bonds continues to drop after stress tests boosted confidence that lenders can withstand a slowdown. Barclays: "We believe the best course of action for investors is to go with the flow. We would advise investors to spend the remainder of the summer adding risk."

    China overtakes Japan to become the world’s second-largest economy, the fruit of three decades of rapid growth. Depending on how fast the yuan is allowed to rise, China could overtake the U.S. and vault into the No.1 spot by 2025.

    Also chasing people into the dollarItaly (ETF: EWI) finds itself in political turmoil this morning after PM Silvio Berlusconi dramatically split with a former ally, putting the country at risk of early elections. Berlusconi accused Gianfranco Fini, the powerful speaker of the lower house of parliament, of being a traitor and of trying to administer a "slow death" to their party.

    And this:  Moody’s says Spain’s sovereign debt likely will be downgraded at the end of a three-month study. Spain’s credit fundamentals "continue to be very strong," Moody’s says, but its economy is lagging behind other nations with a similar AAA rating and may need years to recover from its real estate bubble. Also, unemployment rises to a 13-year high: 20.09%.

    After initially saying its search engine was being blocked in China, Google (GOOG) recants: "Because of the way we measure accessibility in China, it’s possible that our machines could overestimate the level of blockage… It appears now that users in China are accessing our properties normally.”

    Consumer idiocy as usualFord (F) says sales of its small, fuel-efficient cars are down in July and that F-Series pickups are up 40%, their best month since March 2008. The automaker’s U.S. market share is up to 17.5%.

    A pirate’s life for me!  Goldman Sachs (GS) isn’t getting much love from Congress, the press or the public, but an informal survey says employees love the place and leader Lloyd Blankfein. The bank got top marks from workers in seven of eight categories, only lagging in work/life balance.

    The other oil disaster: Oil from an Enbridge (ENB +1.7%) pipeline approaches Lake Michigan, which would cause a "tragedy of historic proportions" and attract the attention of regulators who will find a history of pipeline problems, including leaks, an explosion and dozens of safety violations.

    Wunderlich throws in the towel on MEMC Electronic Materials (WFR -15%), cutting shares to Sell from Buy after last night’s disappointing earnings. "Last quarter, management said it planned price increases in the next two quarters and was upbeat about making them stick," firm says. "The Street didn’t believe it, and we shouldn’t have either."

    Unsurprisingly, Microsoft (MSFT) reportedly is taking steps to try to block the partnership between Yahoo Japan (part owned by Yahoo (YHOO)) and Google (GOOG), which Microsoft estimates will own 98% of the Japanese search market. But Japan’s regulators are taking a softer line, saying advertiser competition will remain strong.

    Aetna (AET +1%) in the news today, as its board authorizes the buyback of up to $1B in common shares, and CEO Ronald Williams tells WSJ that health-care overhaul will mean cost increases.

    ROFL, what a scam!  And the best part is, it’s being played on Fox viewers:   California authorities are probing the sky-is-falling sales tactics of Goldline International, a key sponsor of Fox News host Glenn Beck, looking into whether customers were "lied to and misled" into buying expensive gold coins.

    Three lunchtime reads:
    1) The rising power of the Chinese worker
    2) QE2: Are the helicopters about to take off?
    3) Reconciling rising markets with dismal economic news


  173. The market will keep going down till it get what it wants QE2!! just like march 09


  174. Tx Phil for the FSLR play--my 1st winner


  175. z401
    I believe your best bet to capitalize on the currency markets, is to trade on a platform that is tailored to this type of trading. The ETF trading is OK, but it is not as quick, and is cumbersome in comparison.  I trade with GFT, using their GFT Dealbook 360 platform that is really slick.  It will give you the information and charts that are needed.  Check it out. They will open an account for $250.00 and will give you a paper trading account, I believe, for $50,000. This will allow you to familiarize yourself with the order procedures and the many tools that make tthe platform so powerful and easy. Trading currency options using ETF’s is not effecient, and you are not gaining any leverage, so why do it?  Check out  http://www.gftforex.com for the information that surely will be helpful.  If you have any questions…. give me a shout, as I have been trading with them for a few years.


  176. Out of TZA at $31.58; can’t break IWM 65.10.  Sure glad I made that $2.84 0n TNA this morning; 7.5% on the day.
     
    Now out to the air strip to see if I can break 11 Seconds !!  8-)


  177. gel 1
    thanks


  178. EXC/Amatta – Lots of margin pressure on big energy companies as fuel prices dropped.  That should be better after hurricane season.  You are too hung up on dividends when you are skipping very safe companies like CSCO or ETFs like XLF or DBC/DBA in favor of stocks that will pay you 0.5% a month.  DBC is an inlfation hedge that is long on energy and you can buy the 2012 $20s for $4.40 with the stock at $22.91 (6.5% premium) and sell the 2012 $19 puts for $1.15 (net $1.90 margin) to lower your basis to $23.25 and then you can sell the Jan $24s for .85, which lowers your total basis to $2.40 (effective price of $22.40) and the .85 you sold is like a 35% dividend over 6 months.  So you can commit $8,200 to 200 shares of EXC and collect $210 in a year if all goes well or you can commit $1,775 to 5 contracts of DBC and collect $425 by Jan.  As to the rest, remind me later. 

    Slow posts – Oh my gosh, I forgot to mention they are taking the system down tonight.  Any comments posted after 6 may be lost so best wait until we’re back up tomorrow.  We are doing a big system upgrade and hopefully it will go smoothly.  

    I’ll send this out as an alert so have a great weekend all – this finish was good but not great so neutral into the weekend, certainly not bearish.  

    Have a great weekend, 

    - Phil


  179. Uh oh, I think sticky thought everyone was gone for the day, little did he know mr club was hiding behind 10,500!


  180. JRW – I assume that is the 100 yd dash!  ;)   Have a good one.


  181. The short stranglers are having a good week this week, holding August shorts.  VIX is dropping and 1 less week to expiration means the callers and putters both got slammed (good for us shorting them).   I’ll be buying back some at the close and next week of course.


  182.  Some changes in the Dark Horse Hedge portfolio: 

    Taking profits on the BOOM short and moving into shorting CLDA.

    Also, the IM play, which featured Phil’s option strategy of buying stock, selling calls and selling puts, is still good after it’s good earnings (but the stock is trading slightly lower than before earnings). 

    More here: http://www.philstockworld.com/2010/07/30/dark-horse-hedge-after-the-boom/


  183. Jo… I agree – I like the spreads and you can goose them to whatever level you want by increasing the puts you sell, depending on your sentiment.  TEVA is good, I think. When they dropped a few days ago, I sold more puts. I have the stock as a long term hold, as well. They have a world market, and I do not stress myself with concern about the near term uncertainty that has engulfed the US medical treatment direction – this is still very much in the air. ( I think)


  184. Phil / XOM CVX  Why such poor reaction to great earnings, while oil is at $79?


  185. Phil…. taking the system down tonight… oh my… where will I post my political commentary?  ( HA )


  186. EXC – Sorry that was $2,725 in cash and margin to make $425 in 6 months (15%). 

    Congrats Savitri! 

    10,500/Rain – Reach for the sun and you get burned.  Shows how dumb stick program is, it’s the same selling point we hit in the morning run-up so why waste ammo getting back there when it’s counter-productive?

    XOM, CVX/Tusca – Very poor demand numbers.  Clearly the more they charge the less they sell – this is not the paradigm investors expected to see.  These are not at all growth companies, they are normal commodity/utility plays that are good, solid stocks to own long-term but they’re not going to double unless inflation takes them there. 

    Wow, I can’t believe they couldn’t get the Dow green at the bell – that is just some incompetent sticking! 

    Commentary/Gel – Back to shouting at the TV for you! 

    Have a nice night off everyone – that was a fun week, let’s do it again on Monday.  


  187. Ya’ll have a good weekend. My daughter turns 2 tomorrow and we are having a bunch of little kids over …..I hope I survive…


  188. Phil,
      Glad to see you’re feeling better. For me, taking 10 Mg of generic Zyrtec (Cetirizine HCL: available OTC now, I believe) and Nasonex nose spray (Rx) for the allergy side of my allergy driven Asthma, in conjunction with some meds on the respritory side,  has transformed the situation from acute episodes every three months to episode free for over 2 years. Your allergy situation might not be severe enough to warrant something similar, although I seem to recall you making mention of situations twice in the three months I’ve been a member, but it might be something to consider. The Zyrtec isn’t soporific like Benadril or some others.


  189. Forgot to mention those were daily doses on the Zyrtec/Nasonex


  190. Phil/Stick — I think stick was just trying to make its 200 pt range for the day. I was rooting for him but I agree, that nice round number is a stopper. The incompetence was the waking of the club.
    Cheers! Have a good weekend!


  191. Birthday/Jrom – Maddie is 10 today, sleepover party so I’m sure I’ll be up all night (and then I have to make pancakes in the morning for the whole gang). 


  192. Congrats on the birthday party jromeha, they’re so much fun when they’re little and cute….. Our "baby" is 17 now and 6’3" or 4", but somewhere along the line he became MIGHTY useful, there’s nothing on earth he can’t lift the other half of. There is no greater joy for me than watching our 3 cute little kids turn into fine strong young adults with strong values and personal integrity. We’ve done nothing in our lives more "worth it" than raising these kids! Now I just have to keep up with the college tuition payments.
     
    Blessings to you and yours


  193. gel1

    Why not currency futures which have options and  which  is  ?OS accessible?


  194. ?OS = TOS


  195. Phil/Commentary
    Nope… no guns in the house… I throw the empty gin bottles at the tube…. better to change the channel, I guess!


  196. roma_
    No problem with the futures… BUT, with the GFT platform you can simultaneously enter your limit or market orders along with your stops, and it is all there in front of you – along with the charts (customizable to your liking). Also youi can have all the streaming news and commentary on the same screen, at the same time. I also watch what my dominant currency is doing relative to other pairs and this is also in front of you. This is far more informative and nimble, when executing trades, and takes out much of the uncertainty, therefore risk.


  197. JRW
    Your a man that I can relate to, My little hotrod did 12.8 quarter, 0 to 60 4.5 sec. and I have been toying with a better wastegate, downpipe, and as you did reprogram the ignition timeing. I did install a raceing coil over 34 way adjustable suspention and can do Teton pass at 65 MPH 6th gear even the 25MPH switchbacks, no tire noise. Better responce is where it’s at and to me this is fun stuff. Wish I could shift like I used to but I don’t race it. I also have a 1986 Harley with 155 HP but I can’t control the hole shot, if a friend who races bikes agrees he thinks it can do under 12 sec. Please let me know if your work was worth it, the bike has a raceing ignition that controls everything and really made a big difference. Can’t wait to hear the results, Thanks


  198. gel1
    OK watching what the currency is doing relative another currencies is very useful, but currency options   give us flexibility f.e.positon "future vs sold option"


  199. shadow
    10.97 !!


  200. Phil/Mattress — Phil, how far out do you go on mattress plays? I think your in Dec’s now, how long ago were those purchased? I’ve seen you recommend Dec for people setting up a mattress, do you typically purchase the puts about 6 months out or are you still recommending them just to keep everyone on the same page?
     
    Mmmmm…. Pancakes….
     
    Raymond: Of course you can’t have pancakes without maple syrup.
    Charlie: You bet your butt.
    Raymond: Bet your butt.
     
    Raymond: Maple syrup is supposed to be on the table before the pancakes.
    Charlie: We haven’t ordered yet, Ray.
    Raymond: Of course when they bring the maple syrup after the pancakes, it’ll definitely be too late.


  201. Phil- you had it worse than I did!

    Gmarts- thx for the warm wishes it was a good day.