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Throw the Bums Out Thursday

There's only one thing voters hate worse than Democrats:

That is, of course, Republicans.  The latest NY Times/CBS News poll found that, while while voters rate the performance of Democrats negatively, they view Republicans as even worse with 63 percent disapproving of Democrats and 73 percent disapproving of Republicans.  Still, the prevailing "they all suck" attitude is not good news for the Democrats as they have the most seats up for re-election and over 63% of the voters are pretty much determined to vote for "the other guy."

I would propose instead that we begin a national campaign to elect "None of the Above" as a write-in candidate.  I don't expect it to change much but it would force a lot of run-off elections and would send a real message to Washington that we are sick of the nonsense, that we are "as mad as Hell – and we're not going to take it anymore."  If you watch this video clip from 1976 (click picture) you're realize how little progress we've made in 35 years of American politics.  If only we'd taken Howard Beale's Oscar-winning advice at the time and gotten off our sofas and actually said: "I'm a human being, goddammit! My life has value!" – maybe we could have done something about the Corporate Kleptocracy this nation has morphed into.  Now, instead, we are once again asked to flip the switch for Republicans or Democrats and, if the candidates weren't labeled, it would be very hard to tell most of them apart.

In many election cycles, voters readily acknowledge that they are dissatisfied with government or Congress in general, but they tend to have a stronger connection toward their own representative. That is not the case this year, with 55 percent of voters saying it is time for new leadership and only 34 percent saying their lawmaker deserves re-election. It is a historic high for a question asked in each midterm election year since 1990.  Of course, the MSM plays a huge roll in this as 8 out of 10 Americans rate "the economy" negatively but, when asked about their own family's financial situation, 6 of 10 say it is the same or improving.  So 40% of the people feel their own situation is negative but 80% think it's negative for everyone else.  Gee, I wonder where they get that impression?   

It's the economy, stupid!Voters do not perceive Republicans as having better ideas and disagree with them on the biggest economic issue of the campaign — whether to extend the Bush-era tax cuts for the wealthy — a sign the party has no real advantage on key pieces of their agenda, which makes it more necessary to run as a generic alternative to the party in power. The economy and jobs are increasingly and overwhelmingly cited by Americans as the most important problems facing the country, while the federal budget deficit barely registers as a topic of concern when survey respondents were asked to volunteer their worries.

All this dissatisfaction with the economy and our leaders does not bode well for the markets as we test the top half of our range at the 5% rule.  For the 19th consecutive week last week, investors continued to dump mutual funds in favor of bonds with $10Bn of outflows for September alone.  As I've been warning Members during this rally, the volume has been too low to take it seriously and we are not making serious breakouts of our key levels yet:

We'd love a reason to get more bullish but, we did our bullish shopping when bull was out of season and got such good bargains that it's getting hard for us to pull the trigger here, at what may be the top of a tight range that may last into earnings season.  On June 7th, we initiated the Q2 Buy List and on June 11th, the market was so low and (we thought) so wrong, that we set up a virtual portfolio aiming to turn $10,000 into $50,000 by Jan 21st (currently $24,275) and the dip at the end of June led to us Rounding Out Our Top 20 Picks on the 26th but the market wasn't done "crashing" so we took 9 Fabulous Dow Plays Plus A Chip Shot (WFR) on July 7th.  

On August 29th, we got another dip but not as good as the last one so we went with the strategy of "Defending Your Virtual Portfolio With Dividends" and, on September 3rd, I decided we may have been a little too conservative as we looked like we'd break over 1,070 and hold it so I added "September's Dozen," which were 12 more aggressive trade ideas for Members who may have felt they were being too bearish as we were breaking up.  So that's where we stand and it's important to keep that in perspective for new Members.  As I said to Members in Tuesday mornings Alert:

Remember – these are ideas for hedges to cover long-term BULLISH positions (see Virtual Portfolios Tab).  We end up talking a lot about bearish plays as we move higher but keep in mind that we are still generally bullish in our outlook but markets don’t go straight up and there’s no reason not to try to take advantage of the dips along the way.

So, at thin lines (2.5%) we're willing to be a little more aggressive but thick lines (5%) make us need the market to PROVE it still has game above our levels.  There has been little to excite us on the "buy and hold" side of the game this year but we've been fortunate with out timing in our bottom-fishing expeditions but the real money has been made on the dips as we've paid attention to our ranges and taking those high-reward covers at both the June and August tops.  Now is certainly the time for caution and we're using TZA, SDS, DIA and SQQQ as various hedges (with option plays, of course) to cover the above-mentioned bullish plays.  

Our HOPE is we consolidate near the 5% line into earnings (and we have FDX, RIMM and ORCL today) and that earnings are good enough to give us reason to look up to 1,200 again but hope doesn't pay the bills so we watch and wait – PATIENTLY for clarity

Asia did some stuff today and Europe did some stuff today but none of that matters as we have our usual 450,000 lost jobs for the week today and we'll get the Philly Fed at 10 (NY Fed was not so great) and tomorrow is CPI and Michigan Sentiment (not sounding good based on NY Times poll above).  FDX had good numbers and raised guidance but missed by a penny and are down 2.8% pre-market, which will ding the transports at the open but I love them at $80 if they get that low.  

See full size imageTomorrow is quadruple-witching end-of-quarter options expiration day so we could be up or down 200 points on the Dow or, more likely, flat as a pancake but next week has plenty of excitement with housing news (boo!) the FOMC Rate Decision (0.25% forever!), Leading Economic Indicators and Durable Goods (boo!) on Friday to put a real stake through our hearts ahead of GDP the next Thursday. 

In other words, after careful consideration, I think it would be prudent to maintain disaster hedges through the weekend

Let's all be very careful out there!


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  1. If anyone wants to follow the play by play of the FDA review panel for ARNA:

  2. I think I’ll pass on getting lured into the political commentary today.
    Phil,  Do you ever trade the VXX?  It’s getting down down there again.  I’m thinking about buying some since it’s inevitable that something will happen to scare the market again.

  3. Nice, thx Augrusot!

  4.  Watched the documentary "Casino Jack and the United States of Money" last night, about  Jack Abramoff and the sale of the government to corporate lobbyists.  Had to turn it off half way through. Made me sick. Worst part is that for every deal at the top, there`s a price paid way down the food chain in real human suffering.
    I don`t recommend it to anyone who still believes in Mom and apple pie.

  5.  Does anyone know where the link to Phil’s article about buying a house vs investing in the markets?

  6. CL is awesome today! Lots of 20-40 cent swings in a period of a couple minutes! Definitely good for daytrading today.

  7. jmm12,
    In yesterday’s post

  8. Good Morning, 
    Any good plays on Oracle and RIMM?

  9. Good morning,


    IWM  63.73, 64.37, 64.94, 65.46, 65,83, 66.39 and 67.09

  10. ben1be / sick — Thanks for the pointer. Apple pie flopped face down on the floor decades ago.

  11. Throw the Bums Out – Uuum, for these guys??


    ARNA is on the docket now, going over their data.  Nothing new thusfar.

  12.  aceland,
    I apologize, maybe i’m having a brain fart, but i can’t seem to find it.  Is it in the comment section or the daily write up?

  13. Hey all,

    If you saw my first post to enter UAUA…we are not entering…after investigating a bit further I decided against it.

  14. Hey Phil….maybe one of these days you will come to realize that the TEA Party is NOT made up of evil, demented, lunatics that the MSM would have you believe. In fact, they are very normal, civilized, thoughtful, responsible everyday Americans who have “righteous anger” about the dysfunctional political system. They are, indeed, “Mad as hell and are not taking it any more”! That is why the TEA Party is trying to take back the Republican Party and transform it into one that is fiscally responsible!
    With all due respect, your previous negative comments about the TEA Party simply reflects your own prejudices, biases, and misunderstanding of the people and the movement itself.
    I think you need to get out more.
    When was the last time you had a conversation with someone….other than your group think liberal friends?
    The TEA Party represents the original idea of “Power To The People”.
    You may have more in common with its objectives and goals than you are willing to admit….being that that would not be the “cool thing to do” among your liberal friends!
    Randy Cox, Ph.D.

  15. jmm--I think it was Phil’s comments around 10.30 am

  16.  aceland, 
    found it.

  17.  ty

  18. A seminal article by Phil.  Print it out and show it to your parents and kids.

  19. I think the current political situation can be neatly summarized by paraphrasing Jack Nicholson’s Joker in the first Batman movie, "This Congress needs an enema!"

  20. Exec/
    Good idea!
    This market is scared of its own shadow. If They dont prop it up there are no buyers at this level.
    Hopefully Q3 will come soon and it will be up or down from our range.
    But in the meantime, if I was a investment Bank with 80% of my profits coming from trading revenues, I will do something to move this market and force some funds out/in new positions. It wouldnt cost me much with such poor volume of trades.
    So Up or Down?
    Up you loose with VXX and down is jackpot. This is why I d rather buy puts on stocks to double win on volatility and delta if we go down…

  21. Good morning! 

    I put up a lot of good reading material at the end of yesterday’s comments so you can go there if you have extra time. 

    Unfortunately, I have to head back to Florida tomorrow so I’ll only be here until the open.  Hopefully we have a nice, dull expiration day where we annoyingly flatline – that will be more likely if we stay flat today (+/- 1%).  Actually, scratch that, if we go OVER the 5% marks, then that will lead to a wild day tomorrow so more relaxing if we DON’T gain 1% today

    Same old levels under watch with the same old 3 of 5 rules in place (flatlining is boring!):

    • Up 5%: Dow 10,710, S&P 1,123, Nas 2,310, NYSE 7,140 and Russell 666 
    • Up 4%: Dow 10,608, S&P 1,112, Nas 2,288, NYSE 7,072 and Russell 660
    • Up 2.5% (MUST hold): Dow 10,455, S&P 1,100, Nas 2,255, NYSE 7,000 and Russell 650

    This is better than yesterday morning with Nas over 2,288 and RUT over 650 so down this morning is still progress and slow, steady progress is how you build towards a breakout so hope continiues to spring eternal. I’ll be watching the newsflow, especially how we deal with the Philly Fed at 10 although it might be good – who knows? 

  22. Good morning Phil,
    Got a bad position on RIMM, sold Sep. 70 Put while back, suggestions?  Thanks.

  23. ARNA/Aug – Still no faith on that one. 

    Woops, Philly Fed down 0.7%, was expected to be flat but the negative number is not going to make people happy.  On the other hand, last month was DOWN 7.7% so an optimist would say it’s 90% better.  I’m very happy as this is a way better way to test our levels (on bad news) than just drifiting around on low volume.  I’m going to stay optimistic as an uptrend is an uptrend, no matter how small (I think Horton said that).

  24. ben1be/Abramhoff
    No more Mom ?? No more Apple Pie?? No more Flag ?? What kind of country have is this, Anyway ??? 

  25. Damn if only the Philly Fed numbers were a bit worse, markets would most certainly gone green

  26. Phil / Philly Fed    Should we be concerned that we can’t get growth inspite of nearing the end of a large fiscal stimulus and a massive monetary stimulus.  As fiscal runs down and the foreclosure crisis tanks housing prices again , doesn’t this herald a negative GNP read ahead?  (and big trouble again for the banks? – just sold my C.)

  27. Pharm, are you following the play by play on ARNA? Seems like some of the posters in the Street’s blog are reading from panel comments that panel members view ARNA’s drug as dangerous to the heart…. I didn’t get that impression, I viewed it as them saying they weren’t that concerned about the danger but had problems with ARNA’s statistical methods… Curious as to your thoughts…

  28. acobra65…….Certainly there is more AAPL pie left.  Go get a big slice.  :)

  29. Hey all,

    I have a new Short Sale in AAR Corp. (AIR). We are looking to short from the range of 19.00 – 19.20.

    Check out my analysis, exit range, and more here!

    Good Investing!

  30. retiredguy/
    Labels: Liberal, liberal, liberal – Conservative, conservative, conservative….. What is a Libeal ?? What is a Conservative ?? This is part of the problem with the system today….. Labels, labels and more labels.  I am sure Phil is liveral on certain issues and conservative on many other issues….. like the most THINKING and INFORMED.  As for the Tea Party… It takes more than anger and frustration to create a viable political party…… I will just leave at that……..   

  31. Kustomz/ Philly Fed is way worse than the headline number suggests.
    In the special Aug questions, export isn’t picking up at all.
    May be if UST rates and USD come down it could bolster US exports. That is my bet.

  32.  PHIL / shorts
    Phil, do you have any IRA friendly shorts, such as TZA, but not including short puts?  thanks!

  33. jro – yes I am following.  The two panel members the discussed heart issues also were on VVUS (they split then, 1 Y 1 N).  I don’t think it was too harsh, but that is just me.

  34. tuscadog/Numbers
    I agree.  The real numbers behind these reports and thier import are NOT IMPROVEMENT in the economy.  All these statistics of monthly reports are a slow erosian, especially with all the later revisions, especially regarding consumer spending.

  35. Iflan/pie
    LOL. If and when AAPL hits 240 area… maybe, I’ll sample some… but right now.. too much whip cream for me….

  36. Anyone having problems with the TOS CNBC feed this morning or is it me?

  37. VXX/Exec – I know it’s tempting but 22.5 is still a high VIX in a normal market and I am starting to feel a little more normal lately.  Copper is over $3.50 and probably the biggest near-term danger is the Dollar bouncing back and whacking commodities and sending that sector lower but, as I said yesterday, commodities are not leading us – even the gold miners are nervous at these hights, which is great because they can flatline into earnings when good numbers can boost them and THEN we can break out back towards 1,170 and 11,000, which will be a sup-20 VIX for sure.   So VXX is a good hedge on panic but there are better ways to play for a dip. 

    Abramoff/Ben – What really surprises me about politicians is not that they CAN be bought but how cheaply they can be bought for.  Especially when you get to the local levels, where getting a $10,000 table at a fundraiser can get pretty much any law you want passed but it’s also true in Washington, where many of these guys will bend over for less than $100K – that’s insane.  In the very least, we should raise the cost of bribes and kickbacks to at least limit the ability to pass legislation to the top 0.01%, who are already so powerful that you can’t stop them.  As it is now, pretty much anyone with a little bit of cash flow has way too much influence and, as I’ve often complained, they don’t cancel each other out because your real sub-set is rich people passing laws until, ultimately, all laws favor rich people…

    RIMM/Amatta – I think RIMM is too low BUT I’d stay away and hope they do miss and get lower, then buy on that dip.  I do like 5 Dec $47.50 calls at $3.85 ($1,925), selling 4 Sept $45 calls for $2.55 ($1,020) for net $905 ($1.81 per long) and 3 months to roll up to a vertical if they take off plus the one long contract advantage.  If they do head lower, either it’s a small loss or it can be rolled down.

    ORCL/Amatta – They were a good entry last week but now, 20% up, I have no interest.  You can do the Dec $27s at .76 and sell the Oct $26s for .63 either full covered or a ratio spread like above in anticipation that earnings won’t justify the move but it’s just not that sexy.   

    Bums/Pharm – No, for None of the Above, I say keep not electing people until they find some good ones (could be a long wait), rather than the best of two poor choices. 

    Mortgage article/Jimm –

    UAUA/David – Warren Buffet and I agree with you.  8-)

    Tea/Retired – I hate to blow it off but save it for after hours and, unfortunately, I have to go to Fla again so I won’t be able to discuss it until next week but I sure don’t want to take up market hours with politics right now. 

    Nat gas did not like the storage report at all, big drop from $4.05 to $3.90 but demand has nothing to do with it and my other prediction is coming true as more and more power companies are flipping from coal to gas.  To me, this is a no-brainer with the carbon trading and tighter regulations but the fundamental story on gas has been very delayed:

    Gas-fired electricity will climb 31 percent in 2010 from five years ago, while coal use will fall 6.5 percent, Energy Department estimates show. The lowest gas prices in 11 months and the regulatory outlook may prompt companies to defer coal projects and build plants that burn the cleaner fuel, said James Rogers, chief executive officer of Duke Energy Corp., a Charlotte, North-Carolina-based utility owner.

    “You will see more and more utilities in the U.S. build gas plants” assuming gas prices stay in range between $4 per million British thermal units and $7, Rogers said in an interview in the Chinese city of Tianjin on Sept. 13. “Gas- fired power plants will be built in lieu of coal plants because of uncertainty in the regulation of coal, on sulfur oxides and nitrogen oxides as well as carbon.”

    UNG Oct $7s just fell to .15 and that’s a fun hurricane gamble with UNG at $6.50, down from $6.80 this morning, when the calls were .24.

     EIA Natural Gas Inventory: +103 bcf vs. consensus of +90 bcf. Futures give up gains, now -2% to $3.91.

  38. Markets holding up well as well as XLF…lets see how much free money they put to work today at 11am

    Lionel/ still trying to figure out what we’re exporting and with so many unemployed..who’s making stuff, Santa’s elves?

  39. In TNA at $42.06

  40. Lflan, Phil
    I made a few bets on AAPL yesterday.
    The only one I want to do something with is Sept $270c that I sold for $1.90, now $2.60.
    Ideas welcomed

  41. JR
    RUT is weak today.  How are you playing it?

  42. Never mind JR……wasn’t refreshed and didn’t see your post.

  43. kustmoz/
    Very funny but elves dont count towards US employment figures. Aren’t they illegals being from North Pole?
    They have more fact sheet in the press release sections about US exports. I found it very educational

  44. FDX- one report a trend does not make, however, a quick read on the press release "kind of" indicates a lowering of expectations, i.e., "we don’t see things getting much better for the time being". So, what I have been watching for is if we get a string of similar reports then where does the "fundamentals" say we get an upward bias?
    For the record, I am taking the heroic position of being firmly ensconced on top of the fence. :)

  45. Out of TNA at $42.20; no conviction

  46. lionel why arent there any numbers from China

    1.4b in free money, may not be enough to pump the markets but flatline possible

  47. Indices – this is strange, IWM is showing a definite downslope, while DIA is flat or even rising a bit.

  48. Kustomz/
    Because it is a factsheet and they are doing a bit of promotion for the US economy. So there are just a few selected markets where things have improved.
    If you want you can access all their data with their cool web application

  49. Phil…. are you still reading the NY Times? The birds in my bird cage like it, but they don’t read much of it anymore!

  50. Phil- would it be prudent to sell out of mutual funds In my 401b account when the market gets toppy and get back in when it is at the bottom of the range. Since I work for the govt. I don’t get a matching amount put into it. There is a 2% charge if I get out of a fund within 30 days.

  51. CNBC just reported 1 in 7 Americans live in poverty.

  52. Is anyone else having problems with TOS?

  53. nicha
    I used to go in and out of mutual funds until they stopped me by saying these are for long term investments, haven’t gone back!

  54. Maya ..AAPL      These are at 2.75 with a time value of .75.   You can roll them 5 for 2 to the Sept 24 280s at 1.18 and stay even, or you can get them covered by buying ITM October calls in equal amt.   Probably AAPL will pull back by tomorrow, so either way protects you.

  55. Oh, thanks, AC!

    Fear/Lionel, Exec – I don’t know guys, we took that Philly Fed pretty well… 

    Dow volume at 10:45 is 36M, 50M at 11 is "normal" and 20M per hour after until 3 so low at the moment into expiration madness tomorrow.

    AAPL still going up, which is helping the Nas a bit but energy companies are a general drag with oil failing to hold $75 and the nat gas sell-off. 

    AMZN getting silly at $147.50 but too scary to bet against.  Watch MCD at $75, that’s another stock that can indicate the market is ready to move much higher if they break out.  IMAX testing $15, that’s interesting too.  

    RIMM/Bob – Wow!  I suggest doing something sooner than this!  Oh well, you owe the guy $24 and I’ll guess you got $4 so that’s $20 to work off and you are obligated to buy at $70.  I’m sure you agree with me that they are oversold so you may as well hold for earnings on the off chance you get a big squeeze higher.  Obviously, that carries downside risk but how about taking 1x the Dec $40 puts at $2.05 because your plan is to roll the 1x $70 puts to 2x the March $45 puts (now $5) and those $40s will mitigate the margin requirement until, hopefully, RIMM recovers enough that you don’t need them.  If RIMM heads down today, they give you some protection and you’ll still do the 2x roll but maybe to the $40s.  March is 6 months out so you’ll need 2 of those plays in a year to get $20 back but, it’s better than NOT getting $20 back, right?

    Concern/Tusca – Not to overly personalize it but right now they are taking extreme measures to stabilize my Dad.  Their goal is not to get him to the golf tournament in November, it’s just to stop him from getting worse and going critical.  When he is stable, they will leave him alone and hope he improves and, after a while, they may try something else.  The economy is like that, you can’t have a double blowout like we did in ’08 and expect one spare tire to put you back in the race.  I have said for ages that the stimulus was inadequate to get us back to growth and the Treasury Secretary of the United States agreed with me but, as he said, their hands were tied as a wave of hawkishness swept through Congress (plus he was laughed out of the G20 meeting for suggesting more stimulus to the Europeans, who had just dropped $1Tn on their economy) and nothing they proposed could get past the Senate floor.  So our government had to settle for stable and stable is where we are.  If we want to get better than stable, we either have to wait patiently (HA!) or apply more stimulus.  I think the demand for action is gathering steam but we’ll have to wait for the elections to see which way it goes.  Meanwhile, look at Nov ’08 and March of ’09 – Stimulus trumps any negative indicators you may be looking at – there’s a reson "Don’t fight the Fed" is one of the oldest market truisms. 

    AAPL – By the way, I was looking them over last night and I do think $300 is about the right price so I think they’ll move into a band of $270-$330 as long as nothing strange is revealed in earnings.   That does not mean I love them at $270 though because most companies I think are 20% undervalued don’t have an iconic CEO who has cancer – never get carried away with this stock – without Jobs, they are still good for $220 (discounting 5-year growth by 50%) but good luck convincing buyers of that on the pullback

    Philly/Lionel – Yep, unlike NY Fed, not much bright side to this report:

    Sept. Philly Fed Business Outlook: -0.7 vs. 2.0 expected and -7.7 in July. New orders index -8.1, shipments -7.1, employee workweek -21.6. "On balance, firms reported declines in prices for their own manufactured goods: More firms reported decreases in prices (21%) than reported increases (7%)."

    IRA shorts/Salvum – I like the AMZN $160/140 bear put spread for $10, that’s a double if AMZN can’t justify this level by XMas.  That’s a good way to play the lack of consumer confidence that seems to be plaguing the polls.  There’s also nothing wrong with allocating $1,000 to the TZA Apr $26/32 bull call spread as that pays $3,000 (up 200%) if TZA drops only slightly and you can stop out at $500 (down 50%) if TZA falls about 20% (the net delta is .10), which would mean the RUT is up 7% to 695, a clear signal that you are too bearish anyway! 

    TOS/Rain – It seems to me they did something like consolidate their servers or they opened up the TOS servers to the AMTD crowd and have really lowered the bandwidth available on the site.  I notice a pretty big performance difference between the real and paper-trading screens so I tend to use those for most of my lookups (you can have both open in different windows).  Even in paper trading though, I’m not getting the CNBC feed right now – it says they will be live in just a moment..

    AAPL/Maya – Tsk, tsk, never bet against AAPL…  Unless we pop today (doubtful) we are likely to flatline to pins tomorrow and I would think $270 is the pin for AAPL.

    We are in a stealth sell-off with NYSE advancers at 1163 and decliners at 1693 with declining volume at 139M vs 79M advancing.  On the other hand, there are 91 new highs – that’s pretty good actually.  Nas is more evenly mixed on volume but same adv/decl ratio (0.6)

    FDX is good now at $82.  Jan $75 puts can be sold for $3.75, which is a fantastic net entry at $71.25 (their spike low in July was $69.68).  The 50 dma is $81, if that doesn’t hold you can cover using that line for on/off.  Riskier way to go is Apr $75 calls ar $12.60, selling $75 puts for $5.50, which is net $7.10 with no cover and the goal would be to wait to get $7 for the $90s (now $4.80) to make a free $15 spread or take no less than $6 for the $85s (now $7) to make it no worse than $76.10 on an assignment of 1x

  56. pstas/Fence
    You have just defined the true definition of a politician vs statesman…. this is called a "Mugwamp".  You have placed your mug on one side of the fence and your wamp on the other side of the fence…. failing to take a stand. LOL  This is an old political adage….

  57. Phil, you like CL at 74.70? I bought one contract, just counting on at least getting back to 75$

  58. lio/ thanks for the link

    Bought a small amount of TZA 30 XLF rolling over, seeing weakness in ES and log wicks on the chart.. some bit of profit taking that may spread

  59. Phil- from one who has a mom in a nursing home at 91 who does not wish to be here- best luck to your Dad and I hope for the best but there are worse things than having health problems you succumb to!

  60. Phil,
    hypothetically, if AAPL does move up today or tomorrow, what can I do with the sold $270c’s?
    BTW, I COULD sell my shares that I own, and bought below $270, but that would not make much sense either, would it?

  61. nicha/funds
    That is one of the biggest rip offs in the financial industry controlled by Wall Street.  The ability to manage retirement plan accounts in the government and large employers is in the dark ages.  My brother-law and sister work for Walmart and CVS with large 401(k) balances sitting in cash….. because there are no appropriate funds (all actively managed funds) to manage the swings in the market.  Walmart now allows a Russell 1000 and 2000 index fund which gives some opportunities.  The Walmart fund is administered through Merrill Lynch and CVS through Prinicpal Group.  For those participant/investors who are market savvy with today’s market, these administrators because of limited selection is making it impossible to effectively manage one’s money.  One other problem…. you buy or sell at the end of the day closing price… but, in most plans the decision must be made 1 to 2 hours before close AND you know how the market can swing in the last hour. In my opinion, this should be a fiducairy problem…. becasue years ago, the banks kept too much money in their own CD’s.  The law was re-written to create a different "prudent investor rule" which said bank’s were in violation of duty by not diversifying the portfolio away from basicall CD’s (the bank’s own investments)..       

  62. DCTH: somebody has bought  700,000 shares in the last half hour from 100,000 previous total volume. Let’s see if it can start a real short squeeze…
    PPS up 7%

  63.  Oh my! Dont look now, but TBT is starting to show some life! 

  64. Thanks, Phil, I remember that you once wrote it will take over a year to "get it" for new members that didn’t have options trading expernance.  I am one third there.

  65. Phil/Fear
    I don’t think the PF is the driving force of the fear. 
    We’re near the top of the levels so it shouldn’t be long before the fear mongers on CNBC and the other networks restart there "scare the investors" campaign.  Being cynical, this consolidation period is nothing more than the big institutions positioning themselves for when they give the scar order to their puppets.
    BTW……when’s the last time you heard them beating the double dip, runaway inflation, skyrocketing deficit drums?  Should be any day now.

  66. Good web site Lionel!

    Fencing/Pstas – I’m right there with you at this line.

    Times/Gel – It’s the only paper I care if I miss.  That and the Financial Times. 

    Funds/Nicha – Well I don’t know about tax implications and such but that 2% charge is ridiculous and would drasticlly impact your timing.  In an account like that, I prefer to just stick with dividend payers that automatically reinvest over time and leave them alone. 

    1 in 7/Otto – Depends on the definition I guess but with 20% of the population underemployed, it’s not too surprising. 

    CL/Jrom – I like the company but the stock isn’t cheap right now and all those consumer products companies with a lot of houshold cleaning products have tough comps this quarter because last year everyone was worried about H1N1 and stuff like that was flying off the shelf.  I’m not clear on your numbers though because they are over $75 now.  Notice in the long chart, they failed to hold $76.50, which had been pretty good downside support this year and was upside resistance since late 2007 so watch that line closely. 

    Health/Jthom – Well I’m going down with the kids this weekend so I’d like him to last till then.  It’s hard to let go though and Dad’s "just" 75.  I was very close to my Grandpa Max, who lived to 96 (born in 1903 – that guy could tell you all about the Great Depression!) and it breaks my heart to think my kids won’t have an opportunity like that to really connect with someone who has so much to teach them. 

    AAPL/Maya – If they are covered calls then you can let yourself get called away, which is not a terrible idea if you are concerned about earnings next months.  Otherwise, it’s no big deal at all, you can just roll them to the Oct $280s, which are now $4.70 and pocket $2 and give yourself $10 more upside on the stock.  Oh wait, forget that!  I see Sept 24th weeklies where the $270s are $5.25 – those are a good idea!    TOS says they are .AAPL100924C270 – After that you can roll to Oct whatevers. 

    Markets still holding up pretty well overall…

  67. DCTH + 12% with velocity

  68. Thank god for the FDA panel lunchbreak! It’s almost like ARNA is my child and she’s up in front of an audience just getting torn apart! lol

  69. What a way for CMG to suddenly take a hit.. "they" were really pushing this stock up as much as possible until the sudden realization that its ran up much more than the overall market.. I wonder if this has anything to do with the expiration week. I held on my 3x short Sep $165 calls until the last minute! Then it started plumeting like a feather..

  70. YRCW is getting a nice boost from FedEx report up +5%

  71. Grandparents / Phil – my sympathies, Phil – grandparents (or great uncles & aunts) are really important to kids. My kids only knew one such; my wife’s mother who died some years ago. They still remember her and her wisdom very fondly. The depression in the US didn’t affect her much; she was busy dealing with the Japanese occupation of Korea, and she was most affected by the Korean War. Lot of stories about how to survive.

  72. JRW do you think we are going to retest 64.37?

  73. JR/IWM,
    You see them filling the gap today?

  74. Acobra65- Mugwamp- Geez, have not heard that term since high school history class. If all the same to you, however, I prefer to stick with the original source:
    The jocular word mugwump, noted as early as 1832, is from Algonquian (Natick) mugquomp, "important person, kingpin"
    That has a much better ring to it. :)

  75. RIMM – BOB – I am the proud seller of some Jan 65′ puts myself.  If they crap out tonight then i wll roll down 2X lower myself.  I had a opportunity to take a 3k earlier loss or roll etc – now it’s just time to see what happens – they are undervalued but there is a lot of negative momentum,.

  76. ravalos /  CMG
    I am not in this one at the moment, but I like the prospects for the company going forward.  Do you think this would be a good time to sell some naked puts? Thanks

  77.  ARNA followers – can’t watch the fun but thinking about it – how are they doing?

  78. Matt,
    What’s your take today?

  79.  Hi Phil,
    I know that this board has moved on from TBT but I have some positions that have been rolled from when it seemed OK to sell Puts in the mid 40′s.
    I have
    30 Sept 43 Puts sold at 5.40 and
    30 Sept 46 Puts sold at 7.50.
    Could you advise on the best way to salvage this position.

  80. RIMM – jomama, I sold their puts from 50, 60 to 70 and rolled once, so I am not take a very big lost as it appears.  Will see their earning tonight and roll tomorrow. 

  81. gel1 / CMG,  I think it’s way overvlaued, I am looking to sell naked CALLS.

  82. Deano – not sure so far, hoping Pharm will pipe in. Seems like there are a few making negative comments but most of the panel is silent…. Dont know if it is a good or bad thing, guess we will find out :)

  83. Phil… my condolances, as it is very tough for the younger ones. Last weekend my father in law ( also a trading buddy of mine ) passed away unexpectantly. He was a lifetime concert musician and music was his whole life. Last Saturday he spent the whole day playing the piano, organ and sax for mass at his church, went home and changed clothes, and then called his best friend to take him to the hospital. He died in the helicopter ( massive heart attack ) on the way to the hospital.  He must have known it was his last day, as he spent the day doing what he loved the most – playing music that was enjoyed by so many.

  84. lionel / IWM 63.37



    Exec / gap

    If we are to get to Max Pain, I think we sink today then gap down to 63 !!

  85. Thursday’s economic calendar:
    2:00 PM Hearing: Report on Exchange Rate Policies, II (Geithner)
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet

    Geithner will testify later today that the U.S. is dissatisfied with the pace of yuan appreciation and is considering ways to encourage China to let the currency rise faster. Lawmakers are itching to pass legislation on the matter.

    At the open: Dow -0.11% to 10561. S&P -0.13% to 1124. Nasdaq -0.14% to 2298.
    Treasurys: 30-year -0.41%. 10-yr -0.13%. 5-yr -0.05%.
    Commodities: Crude -1.08% to $75.20. Gold +0.55% to $1275.70.
    Currencies: Euro +0.61% vs. dollar. Yen -0.15%. Pound -0.13%.

    10:00 AM On the hour: Dow -0.31%. 10-yr -0.11%. Euro +0.44% vs. dollar. Crude -1.18% to $75.12. Gold +0.46% to $1274.50.

    11:00 AM On the hour: Dow -0.07%. 10-yr -0.23%. Euro +0.71% vs. dollar. Crude -1.43% to $74.93. Gold +0.48% to $1274.80.

    12:00 PM On the hour: Dow -0.16%. 10-yr -0.29%. Euro +0.54% vs. dollar. Crude -1.82% to $74.64. Gold +0.55% to $1275.70.

    Initial Jobless Claims: -3K to 450K vs. +9K consensus. Continuing claims -84K to 4,485,000.

    Q2 Current Account: -$123.3B vs. -$123.5B expected and -$109.2B in Q1.

    Aug. Producer Price Index: +0.4% in-line with expected and +0.2% prior. Core PPI +0.1% in-line with expected and +0.3% prior.

    July International Capital Flow: Net foreign purchases of long-term U.S. securities $61.2B vs. $44.4B in June. International demand for Treasurys $73.8B vs. $33.9B in June.

    Sept. Philly Fed Business Outlook: -0.7 vs. 2.0 expected and -7.7 in July. New orders index -8.1, shipments -7.1, employee workweek -21.6. "On balance, firms reported declines in prices for their own manufactured goods: More firms reported decreases in prices (21%) than reported increases (7%)."

    EIA Natural Gas Inventory: +103 bcf vs. consensus of +90 bcf. Futures give up gains, now -2% to $3.91.

    Thirty-year fixed mortgage rates tick up for the second straight week in Freddie Mac’s survey, to an average of 4.37%. The survey 30-year rate hit a record low of 4.32% two weeks ago. Fifteen-year rates fell to a new low of 3.83%.

    Daily POMOThe Fed buys back $1.379B in Treasurys maturing in the next 1-3 years, of $30.162B submitted by dealers. Short-term notes are flat, and most remain lower: the 30-year yield +0.07 to 3.94%; 10-year +0.05 to 2.77%; 5-year +0.04 to 1.48%.

    Your bullish (or contrarian bearish?) sign for this hour: Another large swing in the AAII individual investor sentiment survey means the poll’s bulls are at the second-highest level in the past two years, at 50.9%. The bears – who reached their own second-highest reading a few weeks ago – are now down 7.4 points to 24.3%.

    About time!  The SEC will propose new disclosure rules targeting "window dressing," which some banks use to temporarily lower debt levels before reporting finances to the public. A WSJ analysis shows that as a group, these banks consistently lowered debt at the end of each of the past six quarters, reducing it on average by 42% from quarterly peaks.

    Basel III doesn’t go far enough in imposing tougher bank standards, so governments must pick up the slack, Simon Johnson writes, pointing out the "world of difference" between requiring banks to reach a certain capital-asset ratio – which they can do by shrinking assets and making fewer loans – and requiring them to raise specific dollar amounts of capital.

    Tax cuts for top wage-earners should take a back seat to more pressing measures, Obama economic adviser Larry Summers tells CNBC: "Why is now the right moment to lock in several hundred billion dollars of tax cuts for 2% of the population when we could be using those revenues to strengthen incentives for investment in the country’s future?"

    The new foreclosure numbers from RealtyTrac are less than encouraging: Banks repossessed 95,364 properties last month, a 3% rise from July, a 25% rise from the year before, and the highest of any month since the financial crisis began.

    Real median household income was flat this year at $49,777, the Census Bureau’s income and poverty release notes, but the poverty rate rose to 14.3% (highest since 1994), from 13.2% in 2008. People without health insurance rose to 50.7M (16.7%) from 46.3M (15.4%).

    FinReg 1920s Style: Ninety years ago at this moment, a horse-drawn wagon – laden with 100 pounds of dynamite that was surrounded by 500 pounds of cast-iron sash weights – exploded in front of the J.P. Morgan building, killing 38 and injuring hundreds more. It was just days after the indictment of Sacco and Vanzetti; damage from the blast is still visible at 23 Wall St. today.

    The good news about FinReg, James Surowiecki says, is that this crisis didn’t go to waste. But there’s always the bad news, which is that it’s still unclear whether the reform is enough to prevent the next one. Columbia law professors weigh in on what the law does and doesn’t accomplish.

    Greece gives an unequivocal no to the idea of restructuring, saying a Greek default would spark selling in the bond markets of countries like Ireland and Portugal and would have "much broader implications for the eurozone." Still, Greece has a long way to go to convince investors.

    Greece is protesting a bit too hard that it doesn’t need to restructure, writes Yves Smith, and its logic on avoiding a default isn’t exactly encouraging. If Greece were the first periphery country to default, it might indeed get aid, giving the idea of first mover advantage an entirely new meaning.

    Japanese exporters such as Sony (SNE) and Honda (HMC) – who have much to gain from Japan’s intervention in the yen – are keeping up the pressure on the central bank to safeguard the exchange rate, calling for "zero tolerance" for a stronger yen. Now: yen +0.04% against dollar, -0.46% against euro.

    C-Blocking Part IPotash (POT) tries to build a consortium led by China to back a management buyout to trump BHP’s (BHP) $38.6B hostile offer, The Globe and Mail reports. Potash has been working to find a white knight, while worries in China about BHP getting control over the market for a key crop nutrient have sparked talk that China would try to block a deal.

    C-Blocking Part II – Earnings plunged last year at foreign banks operating in China while their Chinese counterparts posted double-digit gains. But no one is likely to leave a market many see as a driver of growth; HSBC (HBC), for example, says the country is key to its "emerging-markets strategy," despite a 60% slide in profits in 2009.

    Only a little guilty: Impressively, both Boeing (BA) and Airbus managed to claim victory over the WTO’s most recent ruling on subsidies to aircraft makers. Airbus, understandably, is pleased the WTO ruled against Boeing, while Boeing is relieved that only a fraction of the funding in question was found to violate WTO rules.

    Better than a movie!  Global sales of Microsoft’s (MSFT) new videogame "Halo: Reach" broke the $200M mark on its launch day. The strong debut should help Microsoft’s November rollout of its new gaming system, and provides a glimmer of hope as Microsoft and rivals Nintendo (NTDOY.PK) and Sony (SNE) try to revive sales in the flagging $60B game industry.

    Ford’s (F +5.1%) gains crest 5% after its upgrade to Overweight from Barclays Capital, which raised its price target for the automaker to $16 (34% higher than Wednesday’s close). Barclays notes investors "appear to be ignoring the fundamental increase in Ford’s earnings power" even in a slow growth environment.

    Bets against Research In Motion (RIMM) have doubled since April; investors are betting RIM just doesn’t have what it takes to stand up to competition from Google (GOOG) and Apple (AAPL), and think the company will face continuing pressure from various countries on security issues.

    Three lunchtime reads:
    1) For investors, optimism about the market could pay
    2) Lehman Brothers: Paulson made the right sacrifice
    3) Three bears threatening the new Goldilocks economy

  86. UNG/ Great Play Phil on Oct $7 @20c already
    I have sold the $7 Putters as well @ 64c
    A beauty!

  87. Oil getting destroyed and I cant even log into TOS. I got a stop at 74, but I better get some free trades b/c I would’ve bailed at 74.50, the stop was just in case a flash crash happened….  Phil, why do you think oil is falling so much today when the rest of the market seems to be holding up. I seen the chart you posted yesterday, but it seems like todays 1.70 fall is a bit excessive.

  88. bobhu / CMG
    Thanks… Probably better to wait on this one for a better entry. The revenue growth of this company has really driven the stock price, and may have created some euphoria.

  89. JRW – does max pain usually work for the IWM and other indices?
    Gambling in the IWM with you; into the IWM bear put spread of tomrrow (64-63) for 0.16

  90. IWM and other indexes extremly disconnected and premium on calls has increased much more that VIX would indicate. Either the RUT will go up or other indexes will go down today. Max pain tomorrow!

  91. Phil – preferred disaster hedge du jour?

  92. Bobhu, well i am glad that you were smarter than me on this one. I find it hard to believe that they are going to roll over but the short interest and negative sentiment is quite impressive!

  93. Nice channel in IWM; connect today’s tops and bottoms; but watch out for a break out !!

  94.  Phil,
    On TBT I have 2012 Call Spreads  $35-$50, $40-$55 & $45-$60.  Would you keep these, modify these or close out and move on?

  95.  ARNA – for those interested, the ARNA presentation this morning to the panel seemed really good. It seemed to be a tight presentation. Then the FDA presented – they were more negative then i thought they would be, and focused more on the tumor-in-rats issue (which i think is a non-issue). They also seem reserved about the "slim margin" of efficacy. Then the panel broke for lunch. Overall, i would say this has gone slightly in ARNA’s favor so far, but not as well as i had hoped. The panelists seem more positive then they did yesterday (some are the same) for Meridia, so i think at this point we are leaning toward a split decision, maybe with a positive leaning….we’ll see what the afternoon brings. 
    As a side note, i think that this "slim margin" stuff is crazy. if the FDA bothers to put together "rules" and "guidelines" for efficacy (which, i maintain they shouldnt) then what does it matter how slim the margin is? Presumably the point of the panels that established these guidelines was that line X was considered effective. They cant come back in retrospect and say, "Well, sure, it met the end point, but that wasnt such a robust end point anyways." Ok, enough ranting.

  96. Hanna – are you watching it live or following along with the live blog on ‘the street’? Maybe the live blog has a negative spin but I thought it’s been more negative (but this is my first panel so maybe Im just clueless) than I would like. It seems like the negative viewpoints are very vocal while there are not too many positive comments. The audience is definitely pro LORC though.

  97. JRW / 63    So after a drift down today you feel big drop tomorrow plays best for the bots at expiry?  Why?

  98. Great call JRW on your 64.37 line.
    Out for now. Other indices are seriously lagging this down move (but it was nice to see them forcing this market down since 1pm)
    I am shorting SPX now for a catch up

  99. Whee, got rid of those SPX Sep 1130 and 1140 short calls.  Some of those were rolled from 1120 callers.  Today’s drop is such a gift for short stranglers.

  100.  Phil or Pharm/DCTH:  I’ve been selling puts against an equity position in DCTH to bring the basis of $11.41 down. I have SEP 7.5 short puts which if I get put the shares,  would bring the basis down to 10.12. Also have JAN11 7.5 short puts but that’s a ways off. If I were to buy back the SEP 7.5 today I would realize a 73% profit on the short call. What’s the better alternative: lock in the surety of the short term profit or work toward bringing the long term basis down? Thanks, and Phil, hope your time away goes well. 

  101. Gel – sorry for your family’s loss. It truly sucks when it is an unexpected loss……

  102. Gel/ My condoleances to you as well

  103. Phil – Be strong. Times like yours will not be something your kids will ever forget. Have a safe trip.

  104. Phil, sorry for your dad’s continued struggles, didn’t read that earlier when I was whining about my oil contract (/CL) and TOS not working. I did give TOS an earful though and got my futures trading charge reduced another .25 cents.
    Gel -  my condolances to you as well.

  105. Wow, I can’t believe TOS has been down this long. I haven’t funded my account yet, but I’m thinking about asking for free trades!

  106. fortep, if it were me I would buy back the Sept 7.50 and sell another round of puts.

  107. tuska / 63

    Because that’s where Max Pain is for Friday’s expiration !!

  108. It’s all about the maximum pain baby!!! 

  109. TOS working fine for me.

  110. Rainman – goodluck.:) The guy I spoke with said that many people who dont even have money in their account or are not active traders call looking for $ and free trades everytime they here TOS is down. TOS should be up now though… Man,

  111. Rainman – goodluck.:) The guy I spoke with said that many people who dont even have money in their account or are not active traders call looking for $ and free trades everytime they here TOS is down. TOS should be up now though… Man, the

  112. Thanks, all for the kind sentiments… It was unexpected so therefore more shock- much better to go this way instead of a long illness. He was the one I put into BP six months ago – he did forgive though ( I hope ). Will never forget the many parties in my home – he would take over the 8 foot grand piano, and create an aura that I have never seen before. He was another Roger Williams, and could play anything, and do things with a piano that no one else has ever done. As we all, sometime in the future, enter the pearly gates, he will be conducting the band that welcomes us.

  113. Gel – Good memories….. :)

  114. Looks like someone is moving into WFR

  115. It’s hard to keep a good market down — this one’s coming back today, and I like seeing TBT up and FXY down (especially given their relative max pains’ at 33 and 118, respectively). One more push-through tomorrow would be sweet. GLD and SLV really throwing my for a loop, I expect a pullback in SLV next month, maybe to 18 or even 17.

  116. Sorry for the double post, these university computers are funky. Pharm – how much of a factor do you think the public comments play into panel decisions? The guy blogging said the public comments are usually positive but the tone with ARNA seems to have been fairly negative with the council on size and wgt discrimination, national women’s health network, & national research center for women and families all voicing strong concerns about the safety.

  117. Sentiment/Exec – It is about time but I’m wondering if they are holding off for a Sept pop so they can pull some funds back off the sideline before crushing everyone’s hopes and dreams once again. 

    CMG/Rav – Something had to give.  I would have thought $160 was the top but don’t ask me as I thought $100 was the top last year…

    YRCW/Lionel – Too bad 5% is just 0.2 for them! 

    Thanks Snow.

    Mugwump/Pstas – I thought that was what they called non-magical people…

    cartoon: Galileo discusses his discoveries with the Church -- thought bubble over priest shows him hitting Galileo over the head with a telescopeTBT/Oncmed – There’s no shame in sticking with them.  It’s kind of like being the guy who says the Earth is not the center of the universe and then being tortured by the church until you recant your views – you know you’re right but what are you gonna do?  On the bright side, you did get a $4 move off the bottom so – YAY!  The $43 puts are $9ish (down $3.50) and the $46 puts are $12ish (down $4.50) and with 60 of them, I’d just focus on the fact that you’re down $4 and be happy to get it back.  You can roll down to March $35 puts at $3.85 if you still have faith.  I assume you have some kind of margin so perhaps you want to consider selling maybe 40 of the $35 puts and 40 of the TLT March $92 puts ($2.10), which is about the same amount but at least they can’t both lose and they might both win and either way, you have less to roll on the losing side. 

    Sorry to hear that Gel but, if you are going to go – that’s the way to do it.  We saw Tina’s Dad at Thanksgiving and he hadn’t been sick in years, still worked every day (but did have a bad heart) and we had a great time and went out on the town, etc.   A week later he died sitting at his desk.  Happened so fast he didn’t even go for the phone.  I would take that over months in the hospital!  My plan when I get old and they tell me I haven’t got much time is to say goodbye to the family while I still can and fly off to a nice clinic on an undisclosed Asain island and let them deal with me instead of having my family go through all that unpleasant crap. 

    UNG/Lionel – Damn, I should have thought of selling the puts – Good job!

    Oil/Jrom – Big backup of contracts still needs to be worked off.  There are still 123,000 contracts in October (front month) and they probably don’t even want 20M of them by Tuesday (end of period) so they have 3 days to dump 100M barrels and there’s already 316M in Nov (which also needs to be 20M in a month) and 210M in Dec (same deal every month) and 67M in Jan but, right now, the penalty for rolling to Jan is almost $9 per barrel (contango) so the choice the October bag-holders have to make is between stuffing themselves into Nov ($76) and risking being trapped or Dec ($79) which is just as bad and is the worst demand month of the year and also has thin holiday trading or Jan ($83) which probably carries tax problems for some traders.  So the lack of hurricanes makes the hoarder’s plans FUBAR for the year and if we don’t get a major storm by this time next month, we could get a huge end of year dump, as we did in ’08, when we dropped from $50 to $35 in December or last Oct/Dec, where we fell from $82 to $69 and busted several hedge funds who got caught holding way too much oil (100M barrels is $8Bn, not exactly small potatoes!)

    Meanwhile, how’s this for turnover – 123,000 Oct NYMEX contracts (1,000 barrels each) have been traded 214,000 times today – how’s that for a hot potato?

    2:15 volume on Dow is just 76M, way, way behind 110M expected. 

    I’m liking those IWM $64 calls at .89 with .24 of premium as a momentum play, out if the RUT can’t hold 645.

  118.  augrusot/DCTH;  thanks for your advice! I probably will do just that but thinking that I would wait until after exp to see if today’s 9+% pop is for real. 

  119. Phil – thoughts are with you and the family!


    On another note, and I know I have asked, maybe Scott from Sabrient can answer or has access – short interest….there is real time data on this, and it would be a good thing to have…these biotechs are very hard to get a handle on the short interest, as most of it is lagging.  If there is a ‘real time’ info, how accurate/powerful is it?


    ARNA – holding in there.  Them panel members are beasts!


    DCTH – I am rolling the the 8 Oct Cs (sold the 7.50s).  I will buy back the 7.5 Ps.  Selling Jan 7 Ps are the next move.

  120. So Phil is going long on the IWM, and JRW is going short… interesting

  121. YRCW/
    Phil, I know it is a meaningless move, but I was just trying to be a bit more "up beat" since most of my last comments have been "bearish-toppish".
    You could be right about sucking in new money by moving the markets up fast next week. It would definitely work.
    I will wait a bit before setting up my bull traps…

  122.  Negatives ES cant hold 1118 for more than a min, not a good sign and the 2:30 ramp job got sold into…positive…low volume usually spells stick….we just may end up flat for the day

  123. NKE  Any opinions?  I’ve got a buried caller and I’m thinking of doing a 2X roll to make my position +1 Apr 67.5 / – 2 Oct 75.   At the very least the drop in premium after earnings partially compensates me for having oversold my callers.

  124. Disaster Hedge/Brooklyn – Hmm, Nas is out outperformer so the real question is do we think AAPL can get to $275?   Well, keep in mind I just made a long call on IWM so, at this exact moment, I’m not feeling hedgy but QID Oct $16/18 bull call spread is .36 for the $2 spread (555% upside) but it’s the kind of trade where you take a double off the table.  If it heads lower, the $15 puts are already .36 so it’s really a matter of waiting until the next time you think the Nas is oversold (the 5% rule is 2,310) and THEN sell an offsetting put.  Otherwise, it’s good for a light hedge just to cover a poor weekend outcome.

    TBT/Cslan – 2012 is a long way off.  As I said earlier to Oncmed, I’d feel better if you had some offsets.  I don’t know what your basis are but you are all over the place on those so the first thing I’d do is roll all your calls to the $35s (whatever number is that cost) and roll the callers to the Oct $34s ($1.25) and put a stop on 1/4 at $1.50 and 1/4 at $1.75 and 1/2 at $2.25 and then you can wait for the fun to stop and sell some Decembers or whatever works.  If it goes up, you are fine – if it goes down, you pick up 20% against your longs and you can use that to roll down and sell again. 

    ARNA/Hanna – Good rant!

    Good call Peter! 

    DCTH/Fortep – Thanks.  They sound good but it’s a crowded space and I’m really not into valuing 32-person companies with no sales at all at $280M.  The don’t make money now and they have no plans to make money next year but they are burning $8M a quarter and somehow have $12M in payables against $23M in cash so they will be borrowing or dilluting for some time.  Also, be careful, the CEO, Hobbs, walked out of ANGO last year when that company went south and make his options look like they weren’t going to pay off.  He was a founder of ANGO and returned $0 since that IPO but they did jack it up to $30 before it fell back to $10, when he left.  That being said, obviously I’d roll the puts!  If you want to lower your basis, sell the Dec $8 puts for $1.70 and take an assignment at net $6.30, not $7.30.  Same goes for the calls, you can roll the $7.50 caller to the Jan $7.50 and that plus the puts takes you down to roughly $9.50/8 and THAT’s where you might want to DD.

    Thanks all – didn’t mean to start that off again.  Just something we’re going to be dealing with for a while and I do appreciate all the good wishes! 

    TOS – Mine is working.  Has been slow but working. 

    WFR/Rain – About time, they were lagging the SOX a bit. 

    EWJ Oct $10s are .11, not a bad upside gamble.

    Short interest/Pharm – As far as I know, it’s only like a monthly report, not live.  Scott would know better than me and you can have Ilene put you two in touch.  On the panels – I imagine there’s a CYA sort of component on the panels isn’t there?  They don’t want to have a record of not being concerned about something in case it kills people later…

    IWM/RN – I hadn’t read JRW’s or I probably wouldn’t have but I was just looking at a high probablility of a quick 20% and maybe better if Mr. Stick shows up. 

    Patience is certainly a virtue Lionel! 

  125. Hey all,

    I have a Short Sale Overnight in Research in Motion (RIMM) up right now.

    Check out my analysis and entry here!

    Good Investing!

  126. Damn, ARNA rejected :(

  127. Pharm – should we look at plays on OREX now?

  128. SPY chart FWIW

    Or how about this one from D. Rosenberg.  Link here on PSW.  And on HFT.

  129. Phil, just checking in. Hope your trip to Florida goes well and everyone is fine!

  130. IMO… It is a good time to jump on CCJ. I sold the ’11 and ’12 naked puts. The company just entered into a 10 year contract with China ( 60  new reactors in the wings ), with possibly 120 more. – steady revenue for a long time to come. The balance sheet is rock solid, $5 Bil in reserves. The big deal here is demand is ready to go ballistic, and the supplies are tight, so we could see a huge move up in the price of uranium. The last time uranium prices took off, CCJ had a huge ride. Next week I will add a spread that has a lot of upside potential.

  131. gel1- I wud be interested in CCJ spread. Please post. Thank you.

  132. Phil… Yes, I believe PSW needs some good line extentions – profitable for you, and beneficial for us. Asia sound like a very good idea.!  All the best to you over the next few weeks!

  133. rn  / short

    Sorry, I got out at 2:00 as the 8EMA crossed on the 3 min chart. (Still out)

  134. nicha / CCJ Spread
    Will do.

  135. ARNA / Pharmboy  – I posted this on Optrader’s board and didn’t really get an answer, so I thought I’d try here: Is efficacy based on the treatment being a certain percentage better than placebo (or standard treatment), or is it just that it has to be better and statistically significant? If the latter, then the way to go is increase your statistical power with large sample size……run your trial someplace like Kaiser.

  136. ARNA – well, that was a shame.  Obesity will continue on, and diet and exercise – and speed.


    OREX – they redid their data and it is less, or marginal compared to ARNA, so I have no interest in them. 

  137.  Snow, I did answer on the board. It is compared to placebo.

  138. NKE/Eph – They are at ATHs but 1M FoxCon employees just got their salaried doubled and celebrated by buying new sneakers (not really but you get the idea).  Nike is the perfect developing nation growth story – they make the shoes as cheaply as humanly possible and they slap brands on them and sell them for whatever the market will allow.  Pretty much the same Air Jordans that cost $150 here are called something else for $35 in Brazil.  Also, since they sponsor sports like soccer, and make tons of logo-wear, they are one of the best-known brands in the world so it’s not a company to go short on.  I was very big on buying them when the market crashed but now they are past my point of interest.  Your roll makes sense but if they break $77.50, just plan on adding a long. 

    Wheee, there we go!   IWMs past goal at $1.12 so don’t be greedy if they can’t punch over $65.

    SPY/Pharm – Well there’s why we’re stuck! 

    Here’s another cool perspective chart (click to biggerize):

    Thanks Ocelli!

    CCJ/Gel – Did those yesterday so I agree.

    ARNA – If you have a spread, probably best to pull your long position and let the caller die.  I’m all for picking them up again if they drop way down but party is over now. 

  139. Phil, why do you think BYD is underperforming compared to LVS, WYNN

  140. CCJ- Gel, what put strikes are you selling? 11 and 12?

  141. Is AAPL pinning to 280?

  142. Snow – this is per FDA guidance.  ARNA met #2, not #1.  It was measured against placebo.  Stat Sign. yes.  8000 patients is prettty big, not huge and they were better in the higher weight group.

    "In 2007 the Division of Metabolism and Endocrinology Products issued a draft guidance entitled Developing Products for Weight Management. The guidance stipulates that a drug will be considered effective if at least one of the following criteria is satisfied after one year of treatment:

    1 Mean efficacy criterion – The difference in mean weight loss between the active- product and placebo-treated groups is at least 5 percent and the difference is statistically significant


    2 Categorical efficacy criterion – The proportion of subjects who lose greater than or equal to 5 percent of baseline body weight in the active-product group is at least 35 percent, is approximately double the proportion in the placebo-treated group, and the difference between groups is statistically significant"

  143. Back in TZA at $30.00 off the IWM 64.94 line; I think Mr Stick is done for the day !!

  144. Optrader, sorry, but I was also asking about how big a difference needed to be shown, or whether a simple statistically significant difference was all that was needed. Pharmboy answered that. So you can get your efficacy test simply by enrolling very large numbers and playing on that little bit of an increase over the comparison group.

  145. Pstas / CCJ
    I sold the Jan ’11 puts @ $26, and the Jan ’12 puts @ $30… for around $10 K on 10 contracts of each

  146. short/JRW – so are you still expecting we gap down tomorrow?

  147. I entered the RIMM casino and sold the September 45 puts for an income play.  If if does not work out I will get some help from Jomama for corrective surgery.

  148. 01:00 PM On the hour: Dow -0.07%. 10-yr -0.21%. Euro +0.5% vs. dollar. Crude -1.97% to $74.52. Gold +0.46% to $1274.50.

    02:00 PM On the hour: Dow -0.11%. 10-yr -0.16%. Euro +0.49% vs. dollar. Crude -1.79% to $74.66. Gold +0.46% to $1274.50.

    03:00 PM On the hour: Dow +0.07%. 10-yr -0.23%. Euro +0.53% vs. dollar. Crude -1.97% to $74.52. Gold +0.52% to $1275.30.

    The Senate approves small business aid 61-38 – including a $30B fund to help smaller banks get loans to businesses. Some 500 community banks in TARP could apply to switch over to the new program.

    Investment banks are hiring in preparation for what many expect will be a boom in mergers and acquisitions. Bankers, who stayed put during the financial downturn, are now willing to move as many expect unsatisfactory bonuses for a third straight year.

    Ralph Acampora doesn’t think we’re seeing a market top; in fact, he says the Dow may climb to 13,000 by next June, citing excessive pessimism on the economy. “We’ve seen the worst, we had the earthquake,” he says of the last two years. “What we’re experiencing now are the aftershocks.”

    Abby Joseph Cohen tells CNBC that economic data is better than a month ago and double-dip fears are receding. Interest rates are likely to stay low for the foreseeable future as the economy struggles to recover, she says, suggesting investors look toward corporate bonds with "incremental yields" over Treasurys.

    Global Economy Is Poised to Skirt Second Recession, Fidelity’s Bolton Says.

    Investors aren’t heeding FedEx’s (FDX -4.1%) plea to look ahead to 2011-12, focusing today on a weak near-term outlook. Since FedEx is seen as an economic bellwether, some could take solace from Fred Smith’s declaration that the "economic environment and growth prospects are much improved from a year ago" – slow growth, but growth nonetheless.

    A new Fannie Mae (FNMA.OB) National Housing Survey shows that Americans may still be delusional about housing, but they’re less so than six months back. Fewer people believe houses are safe investments, and a majority of people say they recognize it takes financial sacrifice to own instead of rent.

    JPMorgan Chase (JPM -0.2%) issues an apology to customers for three days of problems on its website, but a bigger problem than the bank’s lack of tech savvy may be fallout from the way it failed to communicate with customers about what was happening with their accounts.

    Mine supply constraints mean copper and tin have the "greatest price upside" among base metals, Barclays Capital says. The firm expects copper prices of $8,000/metric ton (about $3.60 a pound) in the fourth quarter; copper futures currently +0.8% to $3.4955.

    "Serious profit" could be in the offing for oil companies including Shell (RDS.A) and BP as they pump carbon dioxide from power plants into oil fields for enhanced recovery, consulting firm Petrenel says. The practice extends the lifespan of fields while permanently burying the greenhouse gas, a method for cutting emissions.

    OPEC will reduce shipments by 1.2% this month as the global economy slows and refiners in the U.S. and Europe finish maintenance, Oil Movements said, the ninth weekly decline reported by the tanker-tracker.

    In the wake of Starbucks’ (SBUX) re-examination of growth that may have been too fast, its 40%-owned JV Starbucks Japan has put expansion into overdrive, aiming to open up to 60 stores a year to grow to 1,000 sites within three years. The venture’s same-store sales have climbed for five straight months.

    Kroger (KR +0.6%) increases its quarterly dividend 10.5%, to $0.105; it’s the fourth hike since 2006.

    Best Buy CEO: iPad Is Cannibalizing Laptop Sales By A Shocking 50%. The CEO of Best Buy(BBY) just said the iPad is cannibalizing 50% of the company’s laptop sales, the Wall Street Journal reports. When consumers walk into Best Buy now, they don’t look at or want laptops, instead they’re drawn to the iPad. “People are willing to disproportionately spend for these devices because they are becoming so important to their lives,” says CEO Brian Dun. Bad news for Dell, HP, Acer, and Microsoft.


    Energy providers can’t afford to wait for green projects to come to fruition, so many are increasingly betting their future on natural gas. Nat gas prices for the fuel are at an 11-month low, and Duke Energy’s (DUK) Jim Rogers says the price and regulatory outlook ”may prompt companies to defer coal projects and build plants that burn the cleaner fuel.”

  149. New Wall Street movie’s main villain is thinly veiled Goldman Sachs:

    The script is sprinkled with echoes of Goldman: Churchill Schwartz bets against markets that it makes, including subprime mortgages; its credit-default swaps are bailed out at par; and it has friends at the Treasury. An exposé of the firm, written by Jake Moore, a disillusioned prop trader and the film’s central character, begins: “The first thing you need to know about Churchill Schwartz is that it’s everywhere.” A damning Rolling Stone article on Goldman in 2009 opened with precisely those words, the name apart.

    As the financial crisis unfolded, the story was reworked to cast Goldman in a more nefarious light. In the original version, the villain was a hedge-fund manager. But script advisers from the financial world persuaded Mr Stone that an investment banker would be more realistic, since it was banks and securities firms, not “alternative” money managers, that had blown up the system.

  150. Looks like you might be right again JR

  151. rn / gap

    Well, I don’t hold over night very often, but i would not be surprised at a gap in either direction. (That’s why I don’t hold over night !!) 

  152. i guess they’re not going to open trading in ARNA until tomorrow:  i bought some $4 puts which should do nicely  :)

  153. Phil--have a safe trip our thoughts and prayers are with you and your family

  154. ARNA – actually, testing your drug against standard treatment can be either brave or foolish…..years ago someone ran a blood pressure med against two control groups – one was diet, low salt – the other was yoga classes, since the investigators thought yoga was just some touchy-feely hippy thing and would make a good control for the effect of having something done for you. You can guess the rest of story; the yoga worked better than the med. Ooops.

  155. "Bankers, who stayed put during the financial downturn, are now willing to move as many expect unsatisfactory bonuses for a third straight year" – I think the fact that we don’t hang them should be a big enough bonus…..

  156. Out of TZA at $30.24; and we’ll see what tomorrow brings !!

    About 3% on the day, 7% on the week; certainly nothing to write home about !!

  157.  "EWJ Oct $10s are .11, not a bad upside gamble."
    What is your expected hold? Is this a day trade? overnight? 1-week? etc.

  158. Yes Phil;  safe travels:  I never got to meet any of my grandparents (owing to premature WWII related deaths as well as geography) and I coveted that experience; so I understand what your saying about a broken heart. 

  159. Man the pendulum swings hard and fast:
    Bullish: 50.9%
    Bearish: 24.3%
    Bears are getting ridiculed for being cautious at the top of the range here.  

  160. And we close right on the line IWM 64.94, Hmmmmmmmmmmmm !!

  161. These afterhours trading and watching the SPY move up up up is very discouraging.  What’s the basis besides to rip the OPEX one way or another.  yes, bonds can lose money in the front (until you hold to maturity), but these rips up and down AH are a bigger losers IMHO.

  162.  AAPL spiking down huge

  163. Phil,
    Hope you trip to Florida will be a positive one. Think positive. Return savely

  164.  AAPL back up again

  165. OREX getting all the speculative money now. 

    BYD/B1 – No Maccau. 

    ARNA – If it will fill, the Oct $6/4 bear

    Thanks Savi but I’ll be here in the morning! 

    LOL Jrom!

    EWJ/Jvest – Oh no, that’s Japan, they don’t even open until later.  It’s a play on an end of month run-up that pulls the Nikkei back up.  From what I’ve been reading, they are very serious about getting the Yen back to 90 and they jacked it up to 85.8 during the day today so that’s progress from yesterday and I’m sure the exporters will be very happy. 

    Grandparents/Humvee – Oh that sucks.  Despite the war I had many survivors in Europe and actually had 2 great-grandmas when I was a kid.  Grandpa Max lived in England and I used to visit with him and my Grandmother in the summers.  They owned a dress shop in London and he taught me how to do the books as soon as I could walk and he would always talk to me about the business like I was a partner.  He was the guy that got me into trading, we would go over the stocks and the news every day and my job was to circle ones that made interesting moves and then we’d discuss the pros and cons.  Of course, he was all fundamentals and he would take me with him when he would walk right into a company’s office and ask to speak to someone in management about what the company’s plans were – an early form of investor relations!  They also loved to travel, also a very cool thing I can’t thank them enough for…

    Yeah, go RIMM and CSCO! 

  166. Pharm – it’s a F$^#ing joke….

  167. Oh well, I had short Dec $40 Puts on RIMM and I exited my position before the market closed due to David’s report.. I should stick to my convictions! bye bye nice profit..

  168. Good job RIMM, great #s considering how crowded the market has become

    Heres some good news furniture
    Herman Miller 1Q Profit Nearly Doubles As Sales Jump
    Revenue jumped 18% to $380.7 million.
    Analysts polled by Thomson Reuters had most recently forecast earnings of 26 cents on $365 million in revenue.
    Gross margin fell to 32.5% from 33.2%.
    Orders surged 22% from a year earlier, while backlog rose 8.3%.
    Shares closed at $18.39 and were inactive after hours. As of the close, the stock had risen 15% so far this year.

  169. I also closed my Sep. 47.50 short Put due to David’s report.  lol. He does make mistake 25% of the time.  Will get it back by his picks.

  170. I have no idea what is happening with the futures, but I am short a bunch of SPX 1130 calls which expire with the SET tomorrow morning. At 3:50 today, these things were still stuck at $1.50 which I thought was rich, so I sold a few more. Immediately, they took off and now show at $2.70. AND THE MARKET IS CLOSED…..
    Think about it. There is no open trading left in these options, but you are now asked to believe the SET for the SPX will prove to be 1132.70, or nearly 8 points higher than the cash market closed. That’s well above the normal deviation. Anyone have a theory?

  171. For those of you following me in the USD/ILS ( Isreal Shekel) – time to take the profit and close it out. Will have some nice plays next week that I am watching…. still a little early
    The USD/MXN ( Peso ) is still alive and tracking down as projected – a little early to take the profit.

  172. RIMM got some serious squeezing going on.

  173. humvee4me
    September 16th, 2010 at 3:47 pm | Permalink  
    i guess they’re not going to open trading in ARNA until tomorrow:  i bought some $4 puts which should do nicely 
    - Good for you Humm….Most of the board was long ARNA and lost money but it’s nice you feel the need to share that your puts will do nicely…. Typical republican :)

  174. Phil, you had mentioned yesterday that you liked RIG, BP and other energy plays. Any spreads that you would consider worthwhile?

  175. Trading AAPL:   Well, we don’t always get it exactly right, do we.  I knew AAPL was headed UP, but I did not expect such a surge TODAY.  I really thought they would hover around 270 for the rest of this week.  Thus the spread I laid out yesterday, which isn’t gaining anything.  We should have bought only the Oct 270s.  At least the few Oct 280s we got a few days ago are doing well.   Now with RIMM showing a very good earnings report, what will AAPL do?  Rocket???    Before the RIMM report I would have said AAPL was looking toppy in the short term.  Now I’m not sure but what this upward movement is to be continued.    I’ve got to think about this one overnight.  Phil,  whatcha think? 

  176. Phil
    My wishes for you and your family! I see illness and death on an almost daily basis, though at professional level.
    Thanks for the AAPL ideas, but DAMN, it got away before I could roll the Sept $270c’s….. So I rolled to 2x the Sept $280′s, and 1x the Sept 24, $280c’s….. lets hope it works or I will have to roll those to Oct…Good news is that these were covered calls…so I have a gain on the stock in the process

  177. RIMM/   A glitch just detected in their armour.   They expected to add 4.9 to 5.2 million new subscribers last quarter, but only added 4.5.  Could this be the crack in the armour that the spear will enter???  (The spear being held by AAPL and GOOG of course). 

  178. jromeha:  Sorry if you lost money on ARNA, a lot of members post results, not sure why you single my post out, I have more than my fair share of loses, some of which I’ve posted.   I’m actually libertarian   not a poor victimized Democrat  

  179. barfinger – Don’t the SPX options trade until 4:15pm?   I suppose that with the RIMM and ORCL earnings that people are betting that SET will be close to 1130 in the morning.  My screen showed the 1130 call at $1.50 bid and $2.70 ask. S&P Sept futures are 1129 now.

  180. help please--a question--i have a crappy position in the vxx--i am long the etf at $18.68 and i sold the december 19 puts for $2.60 that are now trading at $3.60+—?? does it make sense to buy the december 18 put for $2.55--i would have a net credit in the puts of .05 or even the $19 and have net debit of $1.00 but be protected on the downside, or am i missing something??
    thanks--greatly appreciated

  181. ARNA 2.25

  182. ARNA / Pharmboy  – thanks – "Snow – this is per FDA guidance.  ARNA met #2, not #1.  It was measured against placebo.  Stat Sign. yes.  8000 patients is prettty big, not huge and they were better in the higher weight group."
    Given that, if it were me I’d run the trial in people with BMI over 35, say, and put it out as an alternative to bariatric surgery, which is not the world’s safest procedure. Get it on the market, and let the docs prescribe it for off-label, i.e. the bmi 25 – 35 group. Could they do that after this rejection?

  183. Hum – I singled your post out b/c I felt the comment was of poor taste. It’s not like you bought puts in RIMM, AAPL, or another company in which members might be more evenly split on bullish/bearish bias. I didn’t hear of anyone on this board being bearish on ARNA. Maybe some bought protective puts, but judging from comments most were bullish.I also feel fairly certain that most members on here who who were playing ARNA probably lost a bit of $ b/c of today’s decision… That’s why I singled you out and that’s why I feel your comment was of poor taste.
    Libertarian!? lol. You echo and agree with what our other conservative members write almost 100% of the time… I’m always amused by people with VERY conservative beliefs who refuse to be called what they are (republicans) and insist they’re libertarians. BTW  being a Teabagger…I mean Tea party mbr  ≠ libertarian.

  184. JR:  LOL   now you are going to label me oh great progressive; and start name calling--next losing trade I’ll post for you to laugh at, that may make you feel better. 

  185. Barfinger/Futures
    Afterhour are manipulated like the open market times 10…..I’ve been burned enough times to know.  The other day I held TZA into the close and it drops 50 points immediated after the bell… a second later.  I’m sitting there thinking we may get a little pop after the bell and I’ll close my position, and for no rime or reason it moves after the bell. 
    I don’t know who is controlling the after hours market, but they’re definitly seeing things we are not.

  186.  All
    Down  bit on ARNA, but thanks to position sizing, and other good trades made due to participation here, not a big deal. Disappointing as I truly thought given the safety data, and having achieved the efficacy milestone, they would have made it.
    Kind of BS that the other drugs got higher votes with greater safety concerns – I think betting on a small biotech without the lobbying power probably had its effect.
    Education can be expensive. I’ve gotten far more jaded regarding our gov’t agencies having been a part of PSW – but I’ll use it wisely.

  187. TZA has a buy order for 51,000 shares @ 29.65.  Anyone every see that big of an order for TZA in afterhours before?

  188. Phil, do you recommand any stock trading book to read?  Thanks.

  189. ARNA…. I think Pharm advised us on many occasions that this stock was a "crap shoot". It was, and like all gambles it can turn out either way. I got out early with a small loss, but I still remember my play on DNDN last year – which could have gone either way. It turned out to be "lucky 7" and not the "snake eyes" we experienced today. Pharm laid out the odds, so some won and some lost, and some stayed out of the casino.( me )

  190. Phil, I have a $400K 30 year fixed mortgage paying $1750 per month as interest. Is there any to use TBT and reduce my net payments. Thinking of selling puts, if interest rates fall I can refinance, if they dont I can pocket the cash. Can you please tell me some long term plays that I can do year-after-year for 30 years.

  191. IFLAN, there are manycracks in the RIMM armor but i believe that its more than priced in. i thimk you have to go with the coke, pepsi analogy. they are clearly NOT best of breed, but they generate a crap load of cash (they also sell a few phones). their market share is decreasing but in a increasing market.

  192. humvee… I too am a libertarian.  In this political environment it is the best moniker to embrace. Nobody can blame us for the wasteful spending and "out of the park" deficits that will take a generation or two to work off, if we don’t first spiral down the toilet of bankruptcy.

  193. This is what i was waiting for…

    Cash and equivalents at quarter end fell to $2.03 billion, from $3.27 billion one quarter earlier. The company bought back $1.5 billion of its common stock in the quarter.

    Cash is drying up and RIMM’s numbers for next Q seem very lofty while margins decline and competition will continue to get heated. They better sell lots and lots of their phones or they are in big trouble.

    Wheres the growth? Less shares this Q since they keep buying back stock hand over fist

    This Q
    The company, based in Waterloo, Ontario, said it earned $797 million, or $1.46 a share, in its fiscal second quarter, up from $476 million, or 83 cents a share, a year earlier. Revenue increased 31% to $4.62 billion. Gross margin in the quarter was 44.5%, compared with the company’s estimate of 44%.

    Last Q
    Net income for the quarter was $768.9 million, or $1.38 per share diluted, compared with net income of $710.1 million, or $1.27 per share diluted, in the prior quarter. Net income in the same quarter last year was $643.0 million, or $1.12 per share diluted which reflected an adjustment of $0.14 per share related to certain unusual items that were recognized in the first quarter of fiscal 2010.

    and heres their forecast from June for this Q
    Revenue for the second quarter of fiscal 2011 ending August 28, 2010 is expected to be in the range of $4.4- $4.6 billion. Gross margin for Q2 is expected to be approximately 44%. Net subscriber account additions in the second quarter are expected to be in the range of 4.9-5.2 million. Earnings per share for the second quarter are expected to be in the range of $1.33-$1.40 per share diluted
    ..They beat by.02 with a phone that they were counting on becoming a big hit…didnt happen

    Looks flat to me and negative in NS ..I think Davids call was right on, after reality sinks in of course

  194. Party Time! / gel, humvee, jrom – see, that’s the problem – if we had a parliamentary setup of some sort, there’d be room for non-repub libertarians, radicals (like me) who are nonetheless Green party members (I dunno, gotta belong somewhere), tea baggers, coffee drinkers, and anyone else out there. Up The Revolution!

  195. Snow – LOL — Oh, yes for sure.  It is like a large family reunion, or family Christmas party – All of those who are closest to you, have diametrical opinions when it come to political direction. There will never be a consensus, or satisfaction. Maybe that is why we do not rely on civil wars to resolve our differences. I think you have figurred it out!

  196. bobhu …. Trading books… I would like to suggest – Technical Analysis Plain and Simple – Michael Kahn.  It is available at Amazon ( what isn’t ? )

  197.  I wonder how my Sept/Apr calendar spread on the 4 calls lands tomorrow for ARNA. I was net debit 0.45, so as long as an Apr11 call holds that value, so with the Sept call expiring at 0, all I need is for ARNA to come back to 4.45 by next April.
    Do they have anything else in the pipeline or is the company basically hosed.

  198.  ORCL beat, AH up 4.5%, highest price for them since early 2001

  199. Gold keeps climbing higher… it has, IMO, a long way to go before we see a significant correction. The demand ( and the price ) is driven by the over-leveraging of our financial balance sheets worldwide. Mostly so, in the US and Euozone. Currencies are losing value vis a vis the appeal of gold ( also now considered a static value that is immune from balance sheet decay ). Henry Waxman ( ya, him again ) is trying to put a stop on US citizens from stashing their net worth in gold, as a result of their concern for the fast approaching worthless USD. This is just a warning ….. get your gold now before it becomes illegal to buy the stuff.  Waxman wants the US citizens to be forced into US Treasury bonds – no thanks to that idea. Just the early warnings of a huge storm on the horizon. ( Hello TBT )

  200. hahaha Gel1 you are hilarious (and obviously you don’t buy physical gold), the tinfoil hats go crazy around here. A cursory search of the bill, (that’s only going to subcommittee which is meaningless), is the intention to protect consumers from TV/internet based gold scams that pay 20 cents on the dollar for your gold jewelry and then sell it back to marked up 200% in infomercials. Waxman isn’t trying to keep someone from "stashing their wealth into gold (Waxman’s primary constituents don’t have any money anyways), he’s just trying to make sure what little money they do put in isn’t reduced to 20% value overnight. When it’s a republican Saint like Glenn Beck (I can’t even write his name without hating this world), then apparently it’s OK!
    If you’re buying gold from Goldline, YOU ARE A MORON. Being small government in my mind I could care less if people waste their money on lousy crap on TV/internet, peddled by republican criminals, and of course realize that certain (non-partisan) vendors and coin shows are the only way to buy and sell physical gold (and Ag and Pt and Pd), but then again I’m not a moron.

  201. Hum- I’m not going to laugh at your losses, I hope you have success in your trading. My point (for the third time) is “:) my 4$ puts in arna will pay off nicely” sounded like you were gloating when most on the board who were in ARNA lost money today. It is not something everyone probably wanted to read when 90%+ of us on this board were bullish. As to what Gel said, he’s absolutely right. Pharm did say it was a crapshoot the entire time and gave awesome advice in buying and selling ARNA the during the entire runup…I know I’m being a little redundant here but Using the crapshoot analogy, it just sounded you were celebrating your bet on the no pass line when ARNA crapped out and everyone else was betting we’d hit the point. But I’ll admit, i was being an a$$ with my comments (attitude stemmed from losing money), so I apologize.

  202. humvee … I don’t know whats up w/ jrohema … he was labelling me last week; now he’s labelling you.  He should worry about labelling himself, instead of telling me why I can’t be an independent !
    Me, not in ARNA, and I defy labels.
    Did buy a small amount of RIMM after hours, hoping for a bounce pre market or open if analysts weigh in positively.
    Only 300 shares at 48.50.  No particular reason; I actually hate RIMM, but think it could bounce a little from right here.  If not, I’m out.

  203. Apology accepted jromeha, and i don’t hold grudges; I can understand how it could be misunderstood, I just was exhilarated for finally getting a home run.  I’m an MD and suspected that after the Phen/Fen debacle of a decade ago the FDA was going to have to be convinced beyond a shadow of a doubt.  Anyway, enough said.  Cheers.

  204. These boards have good opinions and my take is ARNA was definitely not 90/10 bullish. CAP consistently posted it didn’t look good, PHARM said be super conservative if you are going long (and his general trading strategy seems to include MANY biotech plays so 1 or 2 big wins floats the portfolio like EVVV, DNDN, etc), and even I  posted front month volatility was the play IMO and I bought a calendar spread to match it.

  205. that CROX mini-meltdown sure was annoying, I was riding 13 calls into expiration that got wiped out.

  206. I don’t think I ever commented about ARNA; know nothing about it….

  207. Another little news item where all I have to do is let it speak for itself:
    Eleanor Holmes Norton Grubbing for Lobbyist Cash
    September 16, 2010 5:28 P.M.
    By Daniel Foster    

    Yesterday Big Government released audio of a voicemail left by Del. Eleanor Holmes Norton (D., D.C.) for a lobbyist. Here’s a flavor:

    “Uh, I noticed that you have given to uh, other colleagues on the Transportation and Infrastructure Committee. I am a, um, Senior Member, a twenty year veteran and am Chair of the Sub-committee on Economic Development, Public Buildings and Emergency Management. I’m handling the largest economic development project in the United States now, the Homeland Security Compound of three buildings being built on the uh, old St. Elizabeth’s hospital site in the District of Columbia along with uh, fifteen other, uh, sites here for, that are part of the stimulus .
    I was, frankly, uh, uh, surprised to see that we don’t have a record, so far as I can tell, of your having given to me despite my uh, long and deep uh, work. In fact, it’s been my major work, uh, on the committee and sub-committee it’s been essentially in your sector.
    I am, I’m simply candidly calling to ask for a contribution.”

    You can listen to the whole thing here, and see Norton’s response here.

  208. gel1 – Trading books/  Thanks. Will check it out.

  209. Biodiesel – Really!? You’re arguing semantics……OK, maybe not 90% but a majority, does that comment suffice?
    Cap – why you got to stir stuff up when I ADMITTED that I was being an a$$ and apologized!? I know my label, it’s an angry former republican who became enlightened with what the republican party actually stands for during the Bush administration… I was always more of a social liberal but Bush converted me to being pro-democrat on their economic policy as well.  You say you are ‘independent’ but with all your ultra-conservative posts the burden of proof is on you to explain how you are NOT closely aligned with republican party ideals….

  210. Yeah, I’m not big on labels, so let me start by saying "Cap, you are not an Independent"……. :)

  211. Gel – wanted to echo bobhu with the thx, I will purchase it. Not sure when I will have time to read it but that’s another story.

  212. jromeha – you were posting when Cap was typing, check out the time(s)  :)

  213. yes, looks like our posts crossed about the same time.
    It would probably kill you guys to know that I am actually (and unfortunately) registered as a Democrat in NY State, just too lazy to change it to unaffiliated. 
    One time I asked about how to do that, I got a dirty look and comment from one of those surly agnostic tolerant poll people.
    The good news is that I voted for me for US Senator in the primary the other day.

  214. ARNA – I hope that some made some money on them. Me, well, not so much….if one couldn’t have guessed.  Yes, I thought they had it, but, as I have always noted for binary evernts, if one is up, the time to get out is a week b’f the  FDA…regardless.  I was staying in up to, but should have thought otherwise, but hindsight is always 20:20 (I did make a bunch in a kids account and got out, but my personal was not as fortunate).  Sad yes, as it is a huge loss for San Diego.  VVUS is here, ARNA is here, and now OREX (also SD)….hummm, C a pattern.  For big indications, it is hard for biotech to have the manpower, know how and lobbying efforts to get things through.  Some complained that ARNA did not file a SPA (special protocol that gets buy in from the FDA),and it is thought ARNA was too cocky.  Others think phen should have been added, but the FDA (who were consulted as noted by managment) advised against.  Can one imagine the weight loss of the combo????  Think VVUS X2 on the data.  These are additive mechanisms (the way I understand it).  Let’s see what the FDA has to say, but I think they will ask for the DM trial data, and most likely try to understand the cancer angle.  If they do another trial, they will/should do one as snow mentioned, one with a higher BMI where their efficacy was the greatest.   Big pharma stayed away for a reason, and now we know why – risk vs. reward. 


    I am going to have to look into OREX and see if it is even worth it after this run up.  Not really…but I will look at the data.


    Again, I hope all did well, and C U on the other side.  CAP never was in to them, nor commented on them.  Although he did buy CRIS!!!!  (RIGHT?)

  215. Party Time / Cap – you? a Democrat? heeheehee… my old friend from Nebraska, Ben Nelson is a democrat! Although you appear to be somewhat more principled than Ben.

  216. Cap… If you win the primary, I be there with a big political contribution in support of your candicacy  Finally a voice of reason !

  217. Cap – If you make it to D.C., could you introduce me to a senator I truly admire…..MySpace – U.S. Senator John Blutarsky – 72 – Male – Georgetown  Thanks  :)

  218. From Opt:  "ARNA has support from Eisai to fund 90% of any additional studies. So it is really a matter of time to have the drug approved.

    There is also a study to be released by J&J on benefits to diabetic patients by the end of the year. J&J will decide if they will continue their trial of an ARNA compound which has completed the PII without reporting the result. If J&J does proceed to do the PIII trial, ARNA will receive 275 million based on the contract.

  219. barf/4:32pm post,
    I finally found the article on "Historical Analysis of AM Settlement":
    … Even though the average index value changes from Thursday’s market close to Friday’s settlement are approximately 1% or less, there are some very significant outlier cases where the change in the value of the index was very significant. For example, the largest percentage movement as illustrated in the tables from Thursday close to Friday settlement during the time period was the RUT index. The RUT index experienced a very large +4.4% movement from Thursday’s market close to Friday’s settlement in August of 2007. The next largest movements of the RUT were much smaller and were experienced in March of 2008 at +2.1% and June of 2007 at +2.0%.

    Investing in credit spreads for index options with AM settlement must be carefully considered. In general, if an index value is within 2% to 3% of the short strike of an index option credit spread on the Thursday before Friday stock options expiration, an investor should carefully consider exiting the position early on Thursday. Even if the value of the index is within 4% of the short strike of the index options credit spread on Thursday before Friday stock options expiration, an investor should be a little nervous….

  220. Wow, has the market been boring the last few days or what?  Glad I’m too busy to care.  I am suprised to see it holding up where it is.  Guess I didn’t understand Loyd’s position well enough going into oe.
    Mr. Cox, Phd.  Nuff said!  But seriously, it’s not the members of the Tea Party it is the leaders of the Tea Party.  They are mostly con artists.  They DO NOT reppresent change, IMO.  One of the higher members is none other then Dick Army.  The same Dick Army who was the leader of the house when the bill to repeal Glass-Steagall was put forth for Clinton to sign.  He was one of the major pushers for its repeal.  For that reason ALONE, I would never support them.  The next reason is that Palin is involved.  PALEEEEEEAAAASE!
    Oh, and a while back I said if Elizabeth Warren wasn’t appointed to be the new head of the Consumer Advocacy Agency or whatever the hell it’s called Obama would once again be showing his TRUE colors.  You may think he is on your side but you are mistaken.  He’s in the banks’ pockets.. just as all those he’s appointed.  Another con artist plain and simple.  I’m out. 
    BTW, looking forward to seeing Gordan Gecko make his reappearance next week.  Wonder how many other guys sitting in the theater alone along with me there will be!  I couldn’t pay my wife to go-