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Testy Tuesday – Fed Pop or Drop?

Isn't this exciting? 

We popped all of our 5% levels yesterday, now all we have to do is hold them and we can start looking ahead to the 10% lines.  Just 10 days ago, on Friday the 10th, we did our last multi-chart study and I said in the morning post: "I am not TA guy but If I were a bear, I’d be pretty darned concerned about the charts as it looks to me like the 20-day moving averages are registering a short-term mistake in a generally rising trend."  Look at how those 20 dma's have snapped up in less than 2 weeks (blue lines are mid-points, green circles are 5% levels):

So Gold and Transports are running away with SOX falling behind.  We've been playing the SOX up with USD, which is up 10% since I picked it in that Friday's post but that's been a relative underperformer for us as we nailed the bottom with a buying frenzy into the late August drop which culminated with my very bullish "September's Dozen" from the 3rd.  There were actually 10 stocks and only 9 fit in the multi-chart (I dropped HMY, who already gained 15%) with way more than a dozen trade ideas for our Members to take advantage of the anticipated short-term moves.  Of the 10, only IRM has been laying around but we weren't expecting a quick move on them and played a conservative April spread and took the risk on Oct $22.50 calls, which are our only loser, down 30% at .20 but I still like them if we break up from here.  

The leverage you can gain with option plays is truly stunning.  On BRCM, for example, the trade idea was a straight purchase of the Sept $32 calls for $1.25, BRCM topped out at $35.49 with the calls close to $3 on the 14th and they expired on Friday at $2.16, which is up 72%, even for people who didn't stop out between there and up 140% that Tuesday.  That trade was a combo trade with the sale of the October $30 puts at .70 and those are down to .30 (up 57%) which are well on their way to expiring worthless for a full 100% gain.  We also took an artificial buy/write that stretched from Jan to Jan 2012 so that was 3 trade ideas on one stock – you can see how quickly we get past a dozen!

We get aggressive at the inflection points – had we failed to hold our levels in early September, we would have quickly bailed out of the aggressive plays so the risk/reward ratio on them was pretty high and, of course, being able to make 72% or 140% in less than 3 weeks is always a good thing but it's also one of those good things that only come to those who wait and, unfortunately, now we are back at an inflection point and waiting (patiently, I hope) to see if it's going to be time for an October Dozen or more Disaster Hedges. 

Of course, we went with the disaster hedges first.  We do so on the same logic as we took the aggressive plays – if we fail our lines (in this case, if we break over our 5% lines and hold them), then we kill the trades – as disaster hedges are essentially very aggressive short plays with 500% return targets.  These are INSURANCE plays to protect our bullish positions, not bets that we think the market will fail.

I still have my concerns as the September "rally" has come on very low volume and it's entirely possible that the whole thing is simply "window dressing" by funds, looking to post up a good quarter to stop the massive flow of monthly withdrawals, which means it will be very hard to trust anything that happens between now and the end of the month.  We still have the madness of the election season to contend with as well as our housing data (better than expected starts today!), total lack of employment and significant overhead resistance.  Worst of all, it seems that individual investors have now turned bullish and they are hardly ever right! 

Our International multi-chart is also looking strong with the very notable exception of the Shanghai and the Baltic Dry Index but these are things we MUST NOT ignore, especially as the Shanghai heads down to test that 50 dma at 325!  It's hard to see copper holding up if China is failing and Hong Kong (the HSI) is NOT where the building is.  India continues to be on fire and Europe is much improved but the Nikkei is pathetic and up solely on Yen manipulation – which is not something we can count on being sustained long-term:

On the whole, I love Caroline Baum's quote in Bloomberg this morning: "Recovery Deniers Just Got Mugged by Reality."  That about sums it up, doesn't it?  As I pointed out in June's "Worst-Case Scenario: Getting Real With Global GDP!" when I was attempting to talk bears off the ledge after our "flash crash" sell-off:   

We have a lot of new Members since then and I want you to understand exactly what I mean when I say things are undervalued so we can be prepared to act if the opportunity arises…  We have already been rewarded with 20% discounts to buy back the same stocks we loved back then (Feb) with hedges that protect us all the way to 40%.  Should we wait for 40%?  What if 40% never comes?  What if the MSM doomsayers are wrong?  Since we have a plan that works in either direction, we’re sure not going to idle all of our cash for no reason – certainly not at today’s interest rates

Well, opportunity may be here again so let’s ignore the BS and prepare ourselves for some real shopping opportunities.  The world will not end tomorrow and, even if the Western World drops back to the stone age, somebody in China will still want to put a diaper on their baby tomorrow morning and, one day, our stocks will recover!  Plan the trade and trade the plan and we will be able to go out there and, not only shop with confidence, but have fun doing it!

That was pretty good advice with the S&P at 1,042 and now that we're at 1,142 we're going to be a little more cautious but we're not going to automatically assume things will get bad again.  Perhaps we've actually recovered, perhaps things are actually getting better.  I know – BLASPHEMY!  But I'm willing to say it, even if no one else is

CAUTIOUS optimism is the watch-word heading into the Fed this afternoon.  Most likely they will not be upping the QE at this meeting and we should get a sell-off that re-tests our 4% lines of Dow 10,608, S&P 1,112, Nas 2,288, NYSE 7,072 and Russell 660 – anything better than that will be bullish indeed but we'll be hedging for a dip – just in case. 

Be careful out there!

 


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  1. GM – hold your nose and buy ?  not me …  waiting for the turn; so far Sept. has been a crazy one way ride; mucho speculation.
    Semis not doing well.
    Trannies seem to have topped out.
    BDI topped out (at a low #).
    Energy weak – mixed.
    Financials; so/so.
     
    Tech strong.  REITs (puke) strong.
     
    pstas
    http://www.downsizinggovernment.org/
    It has been nearly two years since President Obama vowed to go through the budget "line by line—eliminating those programs we don’t need."
     
    Guess we need all those programs pstas; just can’t find anything to cut.


  2. Phil, Thanks for the inflation play on CCJ yesterday. Many times when you put up a trade it gets bought heavy so I changed to Jan BCS of 25/30, selling 22.50 puts. What do you think of this one, maybe too conservative?


  3. Phil,  What would you suggest for a short gold play?


  4. Good morning!

    I am less enthusiastic today because I can’t think of anything the Fed is likely to say that will make the markets happy.  Our levels remain the same and I’m not willing to put up 7.5% levels yet as people tend to take that to mean that I’m targeting them so I don’t put them up until I AM targeting them.  That means, of course, that I am targeting the 4% and 2.5% lines for a reasonable pullback (but hopefully not):

    • 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

    It seems to me that a real rally would have volume, for one thing.  Also a real rally would have copper well over $3.50 (it’s right on the line) and oil closer to $77.50 (now $75.80 after yesterday’s silly pop) and natural gas would not be under $4, even without the hurricanes. 

    DIA $105 puts at $1.05 are a nice downside day trade with a very obvious stop on the 10,750 so that’s the on/off for that trade.  The delta is .32 which means it will take a 50-point drop on the Dow to get $1.20 back so that’s pretty much our goal – anything over that is a bonus!

    Our two short-terrm disaster hedges from yesterday are still good and I’ll reprint that comment in full: 

    Hedge/Dclark – See above news note on markets moving in lock-step.  Since pretty much everything goes up and down together, it makes sense to short indexes that go up the most and invest in ones that have gone up the least (if you are bullish).  Last week I said long RUT, short S&P was the pair and here’s the chart.  Unless the RUT does pop over 666 and hold it, we may be just testing our tops here across the board.  

    • SQQQ has been a bad bet but the Nasdaq (not the Composite) is at 1,975 and 2,000 (1.25% higher) is going to be a tough nut to crack, especially since that puts AAPL at $285.  SOX lagging is also an issue.  Nov 43/48 bull call spread is $2 and they don’t even have Oct puts lower than $47 but you can sell the Nov $40 puts for $1.70 to make a net .30 on the $5 spread with a nice 1,566% upside at $48 (SQQQ is now $46.05).
    • SDS can cover the S&P against a 5% drop back to 1,080 by taking the Oct $29/32 bull call spread at .97, selling the Nov $27 puts for .56 for net .33 on the $3 spread with SDS at $29.84 so it would take about a 10% drop in SDS to put pressure on the Nov $27 puts and that’s a 5% rise in the S&P to 1,194 and, of course, it’s rollable

    Keep in mind these trades are HEDGES against a bullish portfolio.  I am not expecting them to win and if we pop out 5% levels and hold them, then there’s really no point.  Unless we break below 3 of 5 of our 4% lines, they are probably not necessary other than as a proper hedge against an unforeseen disaster, which can always happen at any time and are better played with longer-term hedges

    Overall, I expect a sell-off into the Fed and I don’t expect the Fed to say anything to change it but that won’t stop the bots from doing whatever they want to do so don’t get too excited by a pullback if you are a bear. 

    Good lines to watch are Dow 10,750, S&P 1,045, Nas 2,350, NYSE 7,250 and RUT 670 – getting past those means we will need to start looking up at those 7.5% and 10% lines but expect a lot of resistance there. 


  5. Good morning,

     

    IWM 64.42, 65.54, 66.18, 66.36, 67.09, 67.87,and 70.55


  6. Cap / topped — Trannies?


  7. Whatever Cap does with the trannies is his own business. Don’t ask, don’t tell.


  8. CCJ/Jomp – No such thing as too conservative.  It does bother me to see my picks moving the market and I hope everyone takes that into account when looking at these trade ideas.  Chasing is always bad!  If I see a momentum play, I say so and, of course, as long as the net of a spread works out then the amounts for each leg don’t matter but the difference between entering at net $1 or net $1.50 is HUGE and it’s better to look for an adjustment, like you did, than pay 50% more than intended.  On the CCJ, you are in for net $1.25ish so right on the money, which means you need to be very careful with it as there is no particular near-term catalyst we expect to take it up 20%. 

    Short gold/Trad - I would suggest Xanex!  Once you have a few of those in you, then we could look at GLL, where the Nov $33/37 bull call spread is $2 and you can sell the Jan $32 puts for $1.95 so .05 on the $4 spread that’s $2.45 in the money to start.  $32 is 10% down on GLL so 5% up on gold, which is $1,344 and that’s the point (without rolling) that this trade begins to cost you more than a nickel and you can always cover with GLD if gold gets over $1,300 – using that as the on/off line. 

    LOL Gmarts!   


  9. Vix appears to be leading the way.


  10. Any one has any comments on the article Insiders selling outpaces buyers by 290 to one. Why would they all jumping ship. Just to pay for their mortgages???


  11.  JR- 66.74(ish) is not a significant line for you?


  12. Buying half position IWM Oct 67 puts for 2.1 with the objective to sell the 66 puts for 2.1 upon a fall for a free entry into the $1 spread.


  13. drcraig

    Actually, I’ve got a trend at 66.78; why 66.74ish?


  14. yodi / insiders — what is the typical ratio? I don’t pay attention to insider sales, but I do pay attention to insider buying. Especially meaningful purchases. There are a lot of stock incentive plans that lead me to believe sales aren’t very telling.


  15.  The price keeps bouncing off 66.74. No fancy calculations. 


  16. RevTodd
    Following you conservitive buy/write plays, I would be pleased to know your view on your handling of the monthly plays.
    Most of the Oct plays are now showing ITM meaning that you looking for a call away of the stk should the market hold until exp. My question: do you hold the caller until you drain all premium out of the same, and roll to the next month, should you decide to hold the stk for an other round, or do you just get called away and you look for greener pasture.
    Obviously if the stk still pays a good div. it would be prudent to roll, if one feels the stk is not overpriced. Thks for your opinion.


  17.  Stock to watch:
    IDCC
    beautiful fundies, heavy buying volume this month
    trades in a 22-30 channel
    someone has a substantial bull call spread on the Jan 11 25/30  maybe selling the 25 P to help pay for it.
    might be nice if we get a pullback


  18. CAG-
    For the year, the company lowered its earnings-growth forecast by 3 percentage points to 5% to 7% over the prior year’s profit.


  19. rainman
    Obviously it is always interesting to us who and what quantities insiders are buying, mostly observed at the lower and of the stk price, as they possible know more than us it might be a play to look in to, However giving a ration of 290/1 is for me somewhat a red flag on general stk confidence.


  20. yodi,
    I had lunch with my Dad yesterday who was recently hired as President of Orkin’s Southeast division; Orkin is one of the largest pest management services in the country and a subsidiary of ROL. I think he is representative of the typical Republican CEO mindset that only gives credence to what they hear on Fox news about "Obama ruining the country" and there is a lot of ignorant fear and dubiousness that we will get a real recovery. It is typical attribution bias where, even if we do get a recovery, they will always see the glass as half empty because of all the one-sided ideology, which then informs financial decisions. IMHO


  21. IDCC – I think it’s GEL :) see Aug 12


  22. Phil, I observed your Oct DIA play. buy 105 putters. Yesterday I sold as part of the mattress play 105 sept putters in the morning and bought the same back before closing with a 50% profit. Possible do the same today with the Sep 106p. The only fly in the soup are the Feds this afternoon, as the market has no direction this morning. What do you think?


  23. CCL- Overall, fourth-quarter growth is expected to moderate to 2.5% to 3.5%.
    The company said Tuesday that bookings since June have been running ahead or a year earlier through mid-2011, with prices slightly higher. However, occupancies for the winter and spring seasons are currently down slightly from a year earlier.


  24. A new issue of Robert Prechter’s The Elliott Wave Theorist came out this weekend with some striking facts about current market sentiment:
     

    (1) Mutual fund cash holdings are at a record low of 3.4%;

    (2)  The DJIA annual dividend yield is at 2.7%, lower then it was in 1929.  The S&P dividend yield is at 2.1%, right where it was at the 2000 and 2007 market tops;

    (3) The Daily Sentiment Index, a shorter-term indicator, is at 83% bulls.

    My own observation is of a massive wave of commentators on CNBC banging the table for bargain stocks and pee-in-their-pants bullish forecasts for the S&P six months out. Hmmmmmmmm………………………
     


  25. TBT/TLT – I was short TBT calls.  Closed this AM as it seems like a repeat of last month – Bonds have rallied (so TBT sells off and TLT rallies) going into the Fed meeting on QE2 speculation.  I expect nothing will happen and bonds will sell off this afternoon again. (Meaning I expect TLT to go down this afternoon).  But I’m just getting flat here. I made a little on more on option decay than I lost on TBT rallying .  And since I’m long GLL (short GLD calls) I think that will have to be enough ‘speculation’.


  26. ONTY, breaks thru 200 day EMA – up 10%


  27. On the other hand, found in the back seat of Lloyd’s car:

    He is 70% of the market, and He did say 1250 on the S&P by YE !! !!


  28.  Looks like all the speculative ARNA money is going to VVUS now.  No thanks.
    JRW, so are you saying the short term trend is up but you have a fundamental bearish bias?


  29. JRW- so, we will have Mar/April redux.


  30. VIX looks like its up on Fed covering.  So far, the bots seem determined to hold things up.

    BIDU getting fiesty again.  GOOG $515, AAPL $285 and even RIMM is popping again! 

    Insiders/Yodi – Possibly tax reasons as well as they had very narrow escapes from upside-down options. 

    Forgot to mention watching the dollar as it tests 81.  If we are holding up here and pop back through 81.8 (1%) then we might turn the 50 dma away from a death cross and that could lead to a big squeeze up which the BOJ would probably take advantage of next week.  If the Fed does not do a significant easing, the dollar could bounce sharply higher but the Fed know the BOJ will support 85 Yen to the Dollar no matter what so they may take advantage of some QE that, ultimatley, Japan will pay for as they will probably buy whatever the Fed/Treasury jams down their throats between now and XMas – it’s going to be very interesting

    IWM/RN – good call, just watch that 670 line.  

    IDCC/Ben – Good one!

    CAG/Pstas – High corn/grain input costs I imagine.

    CIO Tech buying says very strong 8% growth in Tech Spending over next 12 months!

    DIA/Yodi – Well selling the puts is a great upside momentum play as the putter pays the premium but I don’t think here (10,750) is a good place to sell puts, as we’re buying them right now.  We could get a sharp move down ahead of the Fed or on the Fed and, if we don’t – THEN we can sell some puts but, for now, I like buying them. 

    CCL/Pstas – Finally something that knocks down PCLN!

    Bullishness/JRW – I agree, it’s getting a bit much for my taste too.  At this point I’m just watching the technicals because fundies don’t matter at this in-between level – it’s all about sentiment.  That’s a very pretty chart, man!  I have to learn how to do that…  8-)


  31. Phil
    On HPQ is it too late for the Jan $36/40 bull call spread at $2.50?
    Or should I adjust to?
    Thanks


  32. JRW: "Mutual fund cash holdings are at a record low of 3.4%"
    Could be because everybody withdrew their cash?


  33. aclend
     
    In reply, as outsider, I do not wish to get blasted again on my personal views. But if it is FOX or any other news channel,
    they should back up their views with facts. I have learned to step out of the square box and look at things from the outside, observing it this way, you find you get a better view.


  34. JR,
     
    That is interesting.  Funny you should post the chart after the Pretcher post.  I was thinking the same thing.  How much has the market changed over the last few years where Lloyd and his accomplices seem to control the entire flow of things. 
     
    Also is there an end game if they lose control.


  35. JRW / Lloyd   Funniest post of the month!!  Glad you trust him!


  36. phil
    good lines to watch… s&p 1145, NOT 1045….


  37. JRW- found in the back seat of Lloyd’s car- I bet he’s got a sweet ride!


  38. Yodi- News- just stick with PSW- it’s all the news that’s fit to print. :)


  39.  morxlntway 
    Great. I`m piggybacking Gel`s ideas.
    Why could`nt it have been Yipcarl?


  40. HOV still kicking ass, up to $4.28 now!  Good call by David yesterday:

    Homebuilder stocks are higher after the housing report – LEN +0.5%, KBH +1.2%, PHM +0.6%, DHI +0.9% – but the broader market slips into negative territory. There was actually little in the report to justify enthusiasm: the forecasting error range for housing starts data was +/- 11.9%, and the biggest gains came in apartment complexes.

    At the open: Dow -0.05% to 10749. S&P -0.03% to 1142. Nasdaq -0.12% to 2353.
    Treasurys: 30-year +0.36%. 10-yr +0.31%. 5-yr +0.18%.
    Commodities: Crude -0.58% to $75.75. Gold -0.22% to $1278.00.
    Currencies: Euro +0.57% vs. dollar. Yen +0.47%. Pound -0.02%.

    10:00 AM On the hour: Dow -0.09%. 10-yr +0.24%. Euro +0.59% vs. dollar. Crude -0.62% to $75.72. Gold -0.31% to $1276.80.

    11:00 AM On the hour: Dow -0.09%. 10-yr +0.23%. Euro +0.46% vs. dollar. Crude -0.92% to $75.49. Gold -0.3% to $1277.00.

    Notable earnings after Tuesday’s close: ADBE, CTAS, DRI

    Stock futures are higher after housing starts reach their highest level in four months; S&P benchmark +0.2%. All eyes will be on this afternoon’s FOMC meeting, where the focus will be whether the Fed will again resort to large-scale asset purchases to stimulate the economy. European markets rose after a well-received Irish bond auction.

    ICSC Retail Store Sales: -1.4% W/W, vs. +0.8% last week. +3.3% Y/Y, vs. +2.6% last week. Despite the swings, September sales is on track for a +3% Y/Y rise.

    Redbook Chain Store Sales: +2.2% Y/Y vs. +2.9% last week. A promotional back-to-school season helped with a nominal rise in sales.

    Aug. Housing Starts: +10.5% to 598K vs. 545K expected and 541K (revised from 544K) last month. Permits +1.8% to 569K vs. 560K expected and 559K last month.

    "To make a lot of money in the stock market this year, all you had to do was invest on just the first two days of every month. And get the hell out of the market every other day." John Crudele supplies the numbers.

    While the NBER’s declaration that the recession is over marks a milestone, a separate report from the OECD says it doesn’t expect the U.S. unemployment rate to fall to pre-recession levels until at least 2013. The analysis also says that U.S. public debt is far larger than most believe because federal figures don’t include state and local obligations, and the only cure is higher taxes.

    BlackRock expects a "meaningfully slower pace" of global economic growth in H2, but not a return to recession. The world’s largest asset manager also noted that the dramatic rebound that began in early 2009 has not been sustained in the latter part of 2010.

    Hedgies vs. retail: Individual investors are more bullish on U.S. equities than any time this year, while hedge funds are betting on a drop. AAII’s latest survey found bulls outpacing bears by a ratio of 2.1, but bull/bear funds have reduced bullish wagers to 18% above their holdings, vs. an average 35-40%.

    Euro markets breathe a sigh of relief after Ireland’s four- and eight-year sovereign bond auctions see strong demand. This was a make-or-break auction for Ireland after Friday’s jitters regarding the health of its banking sector. Euro +0.5% vs. dollar.

    UK’s budget deficit in August was the largest for any August on record as debt costs soared, underscoring the pressure to rein in record levels of borrowing. Net borrowing was £15.3B, vs. £13.5B a year ago, and consensus of £12.5B. Economist Philip Shaw: "This is reminder to markets that the U.K.’s deficit situation is not yet sustainable and on a long hard road to anything that could be labeled as sustainable."

    IATA boosts its 2010 profit outlook for the airline industry to $8.9B, from $2.5B in June. Looking ahead to 2011, it sees profits of $5.3B. From the release: "The industry recovery has been stronger and faster than anyone predicted…But a reality check is in order. There are lingering doubts about how long this cyclical upturn will last. Even if it is sustainable, the profit margins that we operate on are razor thin."

    JPMorgan initiates coverage of six oil service firms, with National Oilwell Varco (NOV), Cameron International (CAM), Dresser-Rand (DRC) and Dril-Quip (DRQ) earning Overweight ratings. FMC Technologies (FTI) and Exterran Holdings (EXH) are labeled Neutral.

    Insiders have been loading up on these five stocks: Motorola (MOT), Everest Re (RE), Molycorp (MCP), VMware (VMW), Trius Therapeutics (TSRX).

    Imax (IMAX +4.3%) shares climb after a subsidiary of South Korea’s CJ CGV Co. agrees to install 15 Imax systems in China. It’s the theater operator’s biggest deal ever in Asia. (PR)

    Here we go again!  Vivus (VVUS +13.6%) shares soar after the biotech firm reports favorable clinical data for its diet drug candidate Qnexa that shows "significant and sustained" weight loss over two years. But a Needham analyst warns that investors should still expect an FDA rejection next month. (PR)

    AutoZone (AZO): FQ4 EPS of $5.66 beats by $0.22. Revenue of $2.45B (+9.5%) vs. $2.40B. Shares +1.1% premarket. (PR)

    ConAgra Foods (CAG): QF1 EPS of $0.34 misses by $0.05. Revenue of $2.82B (-2.4%) vs. $2.96B. Shares -3.9% premarket. (PR)   Price cuts and promotions did little to help staple wholesaler ConAgra Foods (CAG), which reflects "the prolonged economic challenges consumers have faced and the difficult retail environment," it said in this morning’s earnings release. CAG shares are -6%.

    Carnival (CCL): FQ3 EPS of $1.62 beats by $0.15. Revenue of $4.43M (+6.9%) in-line. (PR)


  41. pstas
    Amen


  42. jomama,

    Short term…………..that’s why I day trade !!         Long term…………..that’s why I just got dual citizenship !!

     

    exec / end game if they lose control

    Dow 1200,  and I will make a fortune on TZA  8-)


  43. TXN Jan 22.50 Puts covered puts sold in July per Phil. On to the next winner. Thanks.   I couldn’t stomach selling HPQ puts at that time as I have too many HP appliances that don’t work well with each other.  Just like the Board of Directors.


  44. Peter D/Strangles  – getting warm on the upside.  Are you sitting or rolling? (SPY 116 Oct C)


  45. I just installed Internet Explorer version 9 and the comment box is all messed up! I can’t bold things or format my text.. Phil, you might want to ask your programmers to prepare PSW site to work well with IE9.


  46. AGNC  29.67 still time to jump on for the 18.86 div. Div date final 9/24


  47. Rexx-strangles- I have been trying to roll up 3x and 4x on Oct SPX callers since yesterday afternoon. No takers.


  48. JRW III
    What county, ? I have been thinking of doing a dual citizenship.
    1.      jomama,
    Short term…………..that’s why I day trade !!         Long term…………..that’s why I just got dual citizenship !!


  49. JR/Dual,
     
    Where else are you a citizen?
     
    I was curious about something.  Do you have a rule of thumb that you use when a line is being tested.  For example……if it bounces 4 times and doesn’t go through do you bail?


  50. 30K Mar10 C are OI on FSIN.  Gonna buy a few shares after the FED, or buy the same options for 80c or better.

     

    Phil or anyone:  Think MSFT is gonna buy EA Sports?


  51. Guys- My daughter’s boyfriend needs a 10 week pick for biggest % increase or decrease stock for his finance class- any suggestions? thanks


  52. Ravalos -

    You might want to join us in 2010…no one uses IE anymore.


  53. Copper failed $3.50 and can’t get it back.  Watch oil failing $75 to confirm, which seems likely with inventories tomorrow and the contract rollover completed.  There is a huge 350Mb backlog in Novemeber now and Thanksgiving makes it a short month and another 220Mb in Dec and 80Mb in Jan is 650M front-quarter barrels, which is about 25% more than usual tolerance.  Because if this, the 2011 contract sellers have the bag-holders over a barrel (ha ha) and the Jan contracts are a ridiculous $83.73 with Feb aty $84.89 and March at $86.43 even though next November is $78.01 so no real demand, just a big game of chicken on the NYMEX for the November/December bagholders who have to either liquidate or take huge hits on the rollovers. 

    HPQ/QC – If you can still get $2.50 then not too late but keep in mind that’s net $38.50 so not a lot of room for error on that one without the put sale.

    Funds/Aug – I think that’s the reason.  Funds have no cash because they redeemed investors but held their stock. 

    1,045/Maya – Wow, I should probably get short, clearly my subconscious is trying to tell me something! 

    Lloyd’s car/Pstas:

    TXN/Rexx – Nice!  LOL on BOD – you’re absolutely right.  I just had an awful experience in Florida trying to help my Mom’s friend get here HP Photo Printer to work with the computer.  Why are things more complicated than they used to be, rather than less?

    IE9/Rav – Will do, thanks for pointing that out.

    MSFT/Pharm – I think it would be foolish of them to do so.  SNE generally stays out of owning game developers because it sours the realationship with everyone else but Ballmer is an idiot and hasn’t had an original idea since he saved Bill Gates from getting a wedgie at Harvard, from which he’s been coasting ever since… 


  54. Phil/Adusting DXD Disaster Hedge - I hold a DXD Oct $26/30 call spread minus 1/2x Jan $25 puts. The short $30 call is nearly worthless. Is this a sign that it is time to roll? I’m considering whether to buy back the $30 and sell an Oct $27 call in its place, or to roll the call spread to Jan, or to close out the entire DXD hedge and switch to your latest SDS instead. Your thoughts greatly appreciated.


  55. Lloyd’s car / pstas phil   LOL! JRW would not be caught dead in something like that!


  56. exec, qcmike

    If it bounces like a dead cat (ie 3 or 4 bounces each of shorter duration) it’s likely to fail; reverse that for a break-out.

    Well, I couldn’t afford to buy an island like Phil, so I did the best I could. My first choice was Switzerland, but I ended up with Monaco.


  57.  JRW:
    regarding your reply to drcraig "Actually, I’ve got a trend at 66.78; why 66.74ish?" (as we now drop off 66.78) So you also have trend lines that are in addition to your lines posted in the morning.  Since I’m neophyte TA person is there a simple way for you to explain that relationship between the two?  If not don’t bother.  Thanks


  58. David R, what browser everybody else uses? :)


  59. jthoma, try YRCW they either move 100% to 0 or gain 70% back to a dollar


  60. Where is Phil’s Island?


  61.  GILD, creeping up slowly…..


  62. thanks kustomz


  63. Yahoo futures quotes
    Does anyone know how to pull up the current quote on a commodity future from Yahoo?  ie /CL on TOS
    Thanks


  64. JR,
     
    What’s with this 66.66 level?  Why is that acting as such strong support?


  65. Ravalos -

    Honestly, Firefox, Chrome, and Safari have way less problems. On speed, Chrome is the fastest. I like the interface of Safari. Firefox is probably the best all around. IE is like playing N64. Its fun but its N64. Even Opera is better.


  66.  China looks like it is going to fall off a cliff again, aka like the last time


  67. humvee4me
    Did you get an answer on your mortgage question?

    humvee4me
    September 18th, 2010 at 3:23 pm

    foss:  a specific example that I am in    Oct /ZB 135 calls short    ZB is currently priced at 130′ 03    (03/32) and if you sell the call short breakeven is 135′23”        The call can be sold for ‘46  (46/64) which will be a credit to you of $718/contract    and will use about $1500 margin
     
    thanks


  68. redlog,

    My morning lines are confluence lines, natural attraction, Big S/R’s if you will.  In addition, I have several trend lines which are at angles, so my comment was about the trend line connecting the bottoms of yesterday and today then at IWM 66.78.  Hope that helps !!


  69. edro00,
    /CL on Yahoo: CLX10.NYM (change the X and the 10 for different expirations)
    /ES on Yahoo: ESZ10.CME (change the Z and the 10 for different expirations)


  70. exec / 66.66

    Because Lloyd likes that number  8-)


  71. USO / Phil – I have a USO Jan 11 29/33 bull call spread and am short the $29 put (which I noted earlier equates to about $69 oil).  I have about a 50% profit on the short put and am even on the bull call.  Trying to understand the implications of this growing oil backlog on this position.  Is this a trade to stick with or close?


  72. JR,
    Can you post a chart showing your trend lines.  Just curious how your drawing them.


  73. Getting ready for a push higher now !!


  74. exec / charts

    I don’t know how to do that without some security issues.


  75. tradinv1…. before you short any gold plays, take a cold shower and rethink the idea. Gold is just starting its climb ( coukd be a few corrections along the way ) and the odds are against you trying to time the correction. There is a lot of stuff going on under the radar, that is driving the price upward. -
     
    1. Demand for gold has gained 36% from a year earlier, while supply has inched up only 17%
     
    2. Scrap supply ( from people selling their old and unwanted gold ) has actually dropped by more than 40% from Q-1/2009 to Q-2/2010,despite the increase ingold prices.
     
    3. Buying is at a frenetic pace – Case in point …. China just eliminated the DEATH penalty as a punnishment for illegally importing gold, and are now encouraging its citizens to buy and own gold, and they are now available through domestic institutions. ( Bobhu might be able to confirm )
     
    4. China is the largest world producer of gold ( 13 % ), and their government purchases it all.
     
    5. India has increased its gold purchases significantly from ’09 to 2010, even though gold price is rising.
     
    6. The fall and winter season is typicially the strongest time of the year for gold., particularily in India and China.
     
    7. In addition to the endless fundamental supports for a bullish bias, the technical basis is building for bullishness as well.
     
    Instead of a short position…. go long on the Junior Gold miners ETF – GDXJ ( over 60 different miners ) This ETF vastly outperforms the SPY. ME- I am all over the place on gold positions, and none are short.


  76. JR,
     
    Based on your previous comments are we to assume you’re long term bearish?


  77. Phil HPQ.  I’m just waiting for my hard drive to fry (again) so I can finally buy myself an Apple. I bought everybody else(except the kid) one…at least 5 for my wife (one every 2 or 3 years) but have been just too cheap to buy myself one. Finally decided the extra 1k is worth it in terms of my time wasted on MSFT gibberish instructions and crap not working.  Can you imagine if your Ford broke down and they charged you for the new parts and then charged you more for some  upgrade fee and you still had to do all the work.  I hate MSFT.  (But I own the stock)


  78. And another coincidence 8-)


  79.  JRW:  
    Thanks for the help.  I guess when you move to Monaco you’ll be able to sleep in later, or you will become a FTSE/CAC  daytrader.


  80. exec / bearish

    Sadly, I am, for the country !!


  81. Don’t Fret JR  Lloyd and the Boys on CNBC won’t let anything bad happen.


  82. JRW…. very nice duty!  Did to spend any time in the Casino there?


  83. JRW / Casino
    That was a dumb question – You ARE the Casino!


  84. gel

    LOL !!


  85. gel1,
    Please recommend a long play on the ETF – GDXJ. Sounds good to me. Thanks.


  86. So much for a slowdown in Tech
    Taiwan August export order value hits record

    Taiwan received export orders with a total value of US$34.879 billion in August 2010, the highest monthly figure on record with an increase of 3.10 on month and 23.3% on year, according to statistics released by the Ministry of Economic Affairs (MOEA) on September 20.

     
    Electronic products and IT/communication products were the top-two categories in terms of export order value for August, with the former generating US$8.637 billion and the latter US$8.515 billion.
    The January-August cumulative value stood at US$262.784 billion, rising 33.49% on year.

    http://www.digitimes.com/news/a20100921PD201.html


  87. More binary options comingSeeing the popularity of CBOE’s (CBOE) VIX futures, CME Group (CME) will offer gold and oil volatility contracts in the fourth quarter, and contracts tied to expected price swings in corn and soybeans in the first quarter of next year.

    Less jobs: Payrolls shrank in 36 states last month, with Michigan (50,300 job losses), Texas and California leading the job-loss charts. North Carolina paced gainers with an increase of 18,600 jobs. Joblessness climbed in 27 states, with Nevada hitting a record 14.4%, highest in the country.

    10 Weeks/Jthom – I’d short PCLN.  It’s a long-shot but if you want bang for the buck, they could drop hard.  Upside I’d go EWJ on the chance Japan recovers by end of November.  GLL is also potentially fun as a 20% drop in gold back to $1,000 would knock them up 40%. 

    DXD/Jvest – You really need to roll before you are down 50% on the bull call spread (not the net) or if you think the sold put is in danger of failing you.  We’re kind of past both of those here but, now that you waited, you don’t want to start panicking at the top of the range so maybe get aggressive and buy back the caller (.15) and take your .50 calls and roll them to the Jan $23/30 bull call spread at $1.90 (+$1.50).  That way, you are paying $1.50 to drop $1.75 in the money and down 3 strikes (10%) and you can still roll the callers down to (for example) the $25s for +$1 and spend that to move to the $21s if you have to, which is a pretty wide range of coverage. 

    Monaco/JRW – Not self-sustaining.  I need a place with a good farm economy and a passable army if the World crashes.

    YRCW/Kustomz – Good one!

    Island/Exec – That’s one of those "if I told you, I’d have to kill you" things..  8-)

    China/Chyer – Shanghai is a huge concern, below 325 it will be time to go with FXP again.

    USO/Stu – That’s tricky but you can always take the spread off the table and hold the puts short naked as they have $1 more to give you and you’ll be pocketing about $1 right away.  If oil goes up and up, you can always do another spread and, if it goes down, you can roll and do another spread like the Apr $25/30 if it hits $2.50 (now $3.60).  If you get worried, you can always roll the Jan $29 calls ($5) out to the Apr $33s ($3.30) to take a little off the table and change your delta ratio.  If oil pops back over $77.50, you can just buy more calls ahead of a possible 2x roll.  

    Volume at 12:30 is a sleepy 63M on the Dow, about what we expect at 11 on a normal day

    MSFT/Rexx – I agree, lousy company, good stock.

    Great chart set JRW!


  88. 12:00 PM On the hour: Dow -0.07%. 10-yr +0.24%. Euro +0.55% vs. dollar. Crude -0.91% to $75.50. Gold -0.4% to $1275.70.

    How have ETFs representing key markets performed since the recession officially ended in June 2009? With a starting date of July 1, 2009 through yesterday, a range of asset classes have risen in tandem, including the S&P 500 (SPY) +24%, the tech-heavy Nasdaq 100 (QQQQ) +34%, Gold (GLD) +35%, and long-term Treasuries (TLT) +8%.

    Three lunchtime reads:
    1) Is this what a recovery feels like?
    2) Double dip or global deflation?
    3) Shadow housing inventory: the coming avalanche?


  89. ARUN is starting to "strut its stuff"


  90.  Wheres Matt when you need a good bear?? I’m layering on some shorts here…in high beta overvalued names as well as DIA puts…. I just feel that the risk/capacity for a downward movement is greater then that for an upward one. If we do "great" this week and next, maybe we add a couple hundred more points and go back to 11k…at which point I will be fully short. Agree with those above that we have come too far too fast and we hear no negative news anymore. Also, volume is nothing….


  91. hextra / GDXJ
    The play I’m is as follows: Ratio bull call spread and short puts for a credit. -
    Long Feb ’10 calls – 10 contracts ( $30 strike )
    Short Feb 10 calls – 20 contracts ( $39 strike )
    Short May ’10 puts – 10 contracts ( $34 strike )
     
    Phil is the "spread-meister" and I would expect he could offer a better play ( he usually does )


  92. hextra… Another major consideration regarding the appeal of holding gold positions is the underlying driver of the lack of confidence in the vast majority of the major currencies in the world, brought on by overleveraging in an attempt to revive many of the economies. The US and Eurozone are the principal violators and it does appear inflation is in our future. Gold priced in dollars is the best play, IMO
    I like the junior miners, as their stock price is equated by "profits" and just not the price of gold, as is the case for the GLD etf.


  93. Hanna… I am inclined to agree with you with regard to market sentiment. I am wondering if the runup is due to the anticipation or probability of further easing by the Fed ( printing money through the purchase of assets ) Also, the elections are only 40 + days away, and it appears we will soon see a different face on our Congress ????


  94. Gel,
    Thanks for the insights.  My question was driven by the anomaly that gold is really only at all time highs against the dollar.  If you look at the euro, the pound, and the aussie dollar gold is way off its highs.  So, perhaps you have another way to play this situation and if so I would love to hear it.


  95. gel1 / sentiment — don’t forget that earnings season kicks off again on Oct 7th.


  96. Phil/Island,
     
    Same here.


  97. Phil- thanks- I find these exercises so silly that professors give students to pick the biggest gainer as it eliminates anything over $5.00. I picked LTXC for him- scheduled 3 for 1 reverse split on Oct 1- he may find out his professor is not as smart as he thinks he is-LOL!


  98. JR,
     
    Now what……trend lines just crossed?????


  99.  Phil,
    Any thoughts on AMZN breaking 150? I held them and let them go at $128… damn thought they were getting too expensive… is it a blatant short on your book? What would be a play on them?


  100. exec,

    Annoying day so far, isn’t it !!


  101. gel1/tradinv1/Gold,
     
    Gel1, You have great insight on gold, I don’t think gold is a good (long term) investment(I sold some of my wife’s gold jewel few months ago when gold was over 1200-only got 89%).  But we should NOT fight against the trend and I know Chiness and Indias LOVE to buy and wear gold.   Since Chinese goverment allows chinese to buy gold few years ago(if I remember correctly) gold demand was skyrocketing in China.
     
    I believe that gel1 is correct, don’t short gold now but long GDXJ…..  my two cents.


  102. anyone see anything that might have triggered that gap(s) down at 1:07?


  103. tradinv… You are correct, so I like playing gold against the weakest currency going forward. It appears to me the USD is the best candidate. The dollar has been strong lately because of the "flight to safety" issue, but that is weakening, as the overwhelming debt in the US is becoming more pervasive. Since most of our investments are subject to depreciation in the value of the dollar, I believe gold positions denominated in dollars is a good hedge.I believe the second weakest currency looking down the road is the Euro…. for the same reasons.


  104. Monaco/
    Princess Grace…
    Nice Casino
    Nice Location…
    Tax Haven


  105. Too far, too fast/Hanna – I hate "air pocket" rallies, where we run up on low volume and build upon a house of cards.  They are very scary to trade into.  I can’t see us popping over without stimulus or some other significant news to take us higher. 

    GDXU/Gel – You are very bullish selling the $34 puts.   I prefer to have a discount on the put-to price, your play is net about $34, which is higher than it is now.  If you are that bullish, there’s no need to spend money to be in the money on the bull call spread and you could go for the Feb $33/38 bull call spread at $1.75 and completely offset that with the sale of the Feb $31 puts.  That drops your put-to price 10% and lowers your timeframe and the margin without the upside overhang, which could really screw you if gold goes to $1,500, like you hope it will.  If you wnat to make the $9 spread from the first play, you can always do 20 long and short calls and sell 10 May $32 puts for $3.20 which is net .15 on the 2x $5 spreads and your put-to is just net $32.30 on 1,000 shares. 

    LTXC/Jthom – That’s a good strategy!  I think this is a TERRIBLE way to teach stocks – it’s pretty much the exact opposite of what they should be learning to do…

    AMZN/Amatta – They are not worth $150 but no particular reason to short them as I could see $140 as justifiable.  If you want to short them, I’d pray for $180-$200 and short them there.

    1:00 PM On the hour: Dow -0.16%. 10-yr +0.24%. Euro +0.49% vs. dollar. Crude -1.08% to $75.37. Gold -0.48% to $1274.60.

    Microsoft (MSFT) draws some browser notice as its Internet Explorer 9 beta gets 2M downloads in two days. It doesn’t support Windows XP, but does have extensive HTML5 features and hardware acceleration for faster page rendering, which should help it keep up with recent speedsters like Google’s Chrome (GOOG).

    France Telecom (FTE) kicks off its emerging-market growth strategy by agreeing to pay €640M ($840M) for a 40% stake in Morocco’s Meditel. France’s largest phone company is dealing with sluggish domestic growth by looking to spend up to €7B on deals in Africa and the Middle East.

    A day ahead of Energy Department reports expected to show sharply declining oil demand, crude futures have fallen the most this month (currently -2.3% to $73.17). U.S. petroleum supplies are near a 20-year high and refinery capacity is expected to come in at 86.8%.


  106. Last two FOMC statements:

    June 2010 August 10th 2010 Comments
    Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Shades down their views on production and labor.
    Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Shades down their view on consumer spending.
    Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Shades down their view on business spending on equipment and software.
    Housing starts remain at a depressed level. Housing starts remain at a depressed level. No change.
    Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Bank lending has continued to contract. Gives up the “We’re fine, this is a foreign problem” idea.
    Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated. Finally accepting that their forecasts were too optimistic.
    With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

    Toots the “At least inflation is low” horn. Not a popular instrument at the moment.

    Look for "stable" to be taken out and possible substituted with negative or specifically mentioning deflation as a concern.

    The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. No change. Fed funds are useless at this point.
      To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature. New paragraph for quantitative easing, round 2. Will invest maturing Treasuries, Agencies and Agency MBS in longer term Treasuries. May be avoiding Agency MBS in order to stop problems with the rolls.
    The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. No change. A meaningless statement.
    In light of improved functioning of financial markets, the Federal Reserve has closed all but one of the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities; it closed on March 31 for loans backed by all other types of collateral.   Paragraph removed. The programs are gone, leaving behind a legacy of increased moral hazard risks.
    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. No change.
    Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly. Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee’s ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve’s holdings of longer-term securities at their current level was required to support a return to the Committee’s policy objectives. Hoenig continues his dissent. Thinks economy is improving, and that quantitative easing should roll off.
      1. The Open Market Desk will issue a technical note shortly after the statement providing operational details on how it will carry out these transactions. Footnote added to QE paragraph.

     

    Since the statement, the economic data has stayed weak but Aug looked better than July and some positive notes crept into the BBook, which should keep the negative items either the same or improving.

    Aug 10th we were at 10,700 (hmmmm…) and we finished the day at 10,650 after a spike down but the next day we fell off a cliff, down 300 points! 

    If anything, inflation expectations are lower now than they were then, which opens the door for more QE than last time.  At Jackson Hole, Uncle Ben said that additional easing would probably require “significant weakening of the outlook” or a meaningful decline in inflation expectations (or further disinflation).  We’re not there yet so maybe virtually no change at all in 45 minutes...

      


  107. Phil / GDXJ
    Very nice… This more rational play proves I am still a student, and you are the one teaching the class!


  108. We are failing here; in TZA at $27.55


  109. bobhu
     
    Remember when you sell gold jewlery you need to look at the percentage of gold in the jewelery.
    .750 or 18k is only 3/4 gold at best and the rest are other metals same with .585 or 14k the contains are only less than 60% of gold so you will never get 1200/oz. I deal with it every day.


  110. Phil / 10,700 — Hmmmm…. me thinks the run up is in hopes of a positive surprise that will convert 10,700 to a new floor. Not that we’ll get it, just giving "hmmmm" some context. I like the table format for the statements!


  111. June 23rd Fed Meeting:

    Aug 10th Fed Meeting:

    Where we are now:


  112. Sure looks like someone might have gotten the notes early "Hey, Ben, I’ll take that over for the news room for you, buddy.", "Thanks Llyod, you’re a pal!".


  113. JRW / Ben / Lloyd — Hey JRW, can you change that Titantic picture to be Lloyd and Ben? ;-)


  114. I like selling OIH $109.10 calls for $3 ahead of the Fed.  That group is holding up on weak oil because if this morning’s upgrade but a weak Fed outlook with no easing is likely to knock them down.  The $104.10 puts at $1.40 are less upside risky and can still make a quck 20%.


  115. Nice day to add to my long SYMC positions…. sold some more puts. I have a gut feeling this company could be a takover candidate. Lots of cash in the tech sector, and internet security is in vogue.


  116. WFR hasn’t participated over the last few day and dropped below 11 today.


  117. Wow, that is an impressive move.
    How to move IWM from 66.80 to 66.66 without breaking the boundaries. OOOps a mistake on the way down. Ooops another mistake on the way up. Lloyd be a bit more careful wih your trading!


  118. Out of TZA at $27.38 (1/4); 0.5% loss.  TBT coming back !!


  119. What the hell is going on????


  120.  Sounds pretty negative on the surface.


  121. Can the Fed tell something new for once?


  122. Im shorting oil if it gets to 76. Already covered yesterday’s short – did the Craigzooka play and made 10% on the overnight options. Craiz – owe you a beer in Vegas(if it happens) as well!


  123.  Nice Job Jromeha, I made 40% on the short 70 put yesterday so I decided not to play last night.  Glad to hear its still working.


  124. From CNN (were not these the states where ‘estimates were given??): 

    The national unemployment rate may have only ticked up slightly in August, but on a state-by-state basis, the jobs picture continues to look a lot more grim in places like Nevada, Michigan and California.

    A total of 27 states reported higher unemployment rates in August, nearly double the 14 that saw increases in July, the Labor Department said in its monthly report on state unemployment Tuesday.

    While the rate remained at 9.6% for the country as a whole, Nevada, Michigan and California have consistently racked up rates above 12%.

    Nevada had the worst rate for the fourth month in a row, at a record high of 14.4%, up from 14.3% in July. Michigan followed with 13.1% unemployment, unchanged from the prior rate, and California was third with a 12.4% rate, an increase from 12.3% in July.

    After Kentucky and Georgia joined the list, 13 states had unemployment rates above 10% in August, as opposed to 11 the previous month.

    The jobless rates fell in 13 states, as opposed to 18 that saw decreases in July. Ten states and the District of Columbia had no rate change.

    North Dakota remained the state with the lowest unemployment, posting a 3.7% rate, followed by South Dakota with 4.5% and Nebraska with 4.6%.


  125.  I guess someone liked the phrase about them being willing to embark on easing if needed….


  126. GEL – share your gold fears-did the bull 2012 65c-70c vertical and sold the 2012  22.5ps for $.08 last week


  127. I wonder if RevTodd has joined the board
    yodi
    September 21st, 2010 at 10:16 am | Permalink  
    RevTodd
    Following you conservitive buy/write plays, I would be pleased to know your view on your handling of the monthly plays.
    Most of the Oct plays are now showing ITM meaning that you looking for a call away of the stk should the market hold until exp. My question: do you hold the caller until you drain all premium out of the same, and roll to the next month, should you decide to hold the stk for an other round, or do you just get called away and you look for greener pasture.
    Obviously if the stk still pays a good div. it would be prudent to roll, if one feels the stk is not overpriced. Thks for your opinion


  128.  I am currently waiting for an opportunity to go long OIL.  I plan on going long by selling the OCT 70 PUT for $0.75+ if I can get it.


  129. Hemming and Hawing.


  130. Pharmboy
    Any thoughts on SGEN?
    Thanks


  131.  Pharm, what are your thoughts on VVUS?   There are some murmurings about GILD makings some progress on Hep C drugs – they had a good presentation last week at a conference.


  132. craigz
    How do you buy the short /cl back after hours?
    Which broker?


  133. Craig – I actually bought the put before market closed (Im mid-term bearish on oil) and  was the only one selling the 72p last night.


  134. craigz
    How do you buy the short /cl back after hours?
    Which broker?


  135.  I use TOS.  Options on Futures are traded 24/5 just like the future itself.


  136.  Jromeha, Nice!  It looks like we can make money either way, being the seller or the buyer.  Dibs on the 70 strike!


  137. Pharm… do you have a prediction of where the markets will end up late December? I am working on some year end plays with a lot of leverage.  Phil.. also your opinion would be appreciated.


  138. yodi/Gold,
     
    Knew that, I sold 99% gold(pure gold), 89% was the best price that I could get.  I went to few store in Flushing, NY, I got quo. from 60% to 89%(my wife bought gold, small diamonds and jade jewel from this store).  I traded GLD few time and got the differents back. ;-) .


  139. Pharm- yes- we "guesstimated " for 9 states- makes me feel warm and fuzzy!


  140. yodi/gold…. BTW, Chinese like pure gold.


  141. Fed minutes – As expected, little change but laying the groudwork for more QE without committing to anything yet (green is improving language, red is more negative than last):

    Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.

    Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.

    The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.

    The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

    Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth. In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee’s policy objectives.

    The big statement is the one at the end in green.  The Fed is ready, willing and able to turn on the hoses BUT it is all predicated on "if warranted" so I thinkk the upside reaction is going to reverse as there is nothing changing near-term and they’ll have to wait for the November meeting to get real action most likely.

    Based on the action of the last two meetings, where the markets were flattish but fell sharply the next week.  I’m not keen on giving up the hedges just yet – though it is tempting. 

    VLO is cheap at $17.14, WFR is $11.06, GE is $16.59, IRM is $20.90 – so it’s no like there’s nothing to buy on the way up… 

    Copper back over $4.50 is positive but oil blew $75 into the close.  OIH up a bit but I think a winner on tomorrow’s inventory.

    2:00 PM On the hour: Dow +0.13%. 10-yr +0.09%. Euro +0.84% vs. dollar. Crude -0.62% to $75.72. Gold -0.54% to $1273.90.

    Fed Open Market Committee: No real surprises as the panel says it’s "prepared" to ease if necessary, due to worries about deflation. No change to near-zero interest rate policy or in plans to keep rates low for an "extended period." Hawkish Hoenig stands as the lone dissenter again.

    More from FOMC: Inflation is "somewhat below" levels judged to support mandate of maximum employment and price stability. No quantitative easing steps announced today, but the repurchases will continue. Business spending is constrained, lending has kept contracting, housing starts are depressed. The panel surely lowered its economic forecasts, but we’ll have to wait until next month to see the minutes.

    This rally is nothing more than short-covering, John Lekas at Leader Capital says, and it’s "definitely" time to take profits. NYSE short interest as of Aug. 31 was 14.4B shares, second highest in more than a year and highest since mid-June. But unlike June, shorts "were caught flat footed" this time, Zero Hedge believes.

    Shares of iStar Financial (SFI -14.5%) plummet on a Bloomberg report that the commercial real estate lender is weighing a bankruptcy filing. The company expects to begin meeting with creditors in coming weeks to discuss potential terms of a pre-packaged bankruptcy, which would occur sometime next year.


  142. Sorry, just check it whit my wife, it’s 24K gold not the term I was using – pure gold.


  143.  Look at this lovely email from my employer …
     

    Message For All U.S. Employees
     
    Benefits Open Enrollment For 2011
    Within the next few weeks, you will receive Open Enrollment communications at home, via internal e-mail and through access to the information on the (removed website). The 2011 Open Enrollment benefit plan design is based on the current federally mandated changes under Patient Protection and Affordable Care Act (PPACA) as amended by the Health Care and Education Reconciliation Act, commonly referred to as Healthcare Reform.
     
    Since healthcare has become an ever changing landscape of legislation, we want employees to be aware that while we plan on implementing our 2011 healthcare options, the plan(s) are subject to change if the federal government changes healthcare plan requirements, or takes action that affects costs and/or other requirements in the U.S. Although the government may enact such changes, these changes may not qualify as events for you to modify or make different benefit choices. (Removed employer name) wants to make sure you are informed about how the changes, or possible future changes, might affect the terms and conditions of plans offered by the company.
     
    Healthcare Reform Requirements
    Healthcare Reform requirements were significant in their scope. Two of the key changes, allowing dependent children through age 25 and the removal of a variety of visit/dollar limitations, are going to have significant financial effects on our plan(s). Those of you choosing to enroll in the 80/20 medical plan will see premiums increase by 14.7%. The tier structure for the 80/20 plan has also changed to charge an incremental higher premium for each dependent child added to the medical plan.
     
    In addition, Healthcare Reform put heavy restrictions on employers regarding the redesign of their plans relating to cost sharing if companies wanted to retain their grandfathered status (that is, the status of a plan in existence prior to Health Care Reform). Grandfathered status is necessary to maintain an affordable 80/20 medical plan option for our employees primarily due to significant new administrative burdens now imposed by the Federal government. We expect that our medical plans will remain grandfathered for the 2011 plan year.
     
    Our grandfathered status is not certain. If we lose grandfathered status prior to the 2014 plan year due to Healthcare Reform, we would stop offering the 80/20 medical plan option. We currently anticipate being able to maintain our grandfathered status until 2014, at which time we will stop offering the 80/20 medical plan, unless changes are made to the current HealthCare legislation. Of course, we cannot guarantee the availability of any particular plan in any year.
     
    Some Healthcare Reform requirements were already a part of the (removed employer name) plans:
     
    •          (removed employer name) current medical plans do not have pre-existing exclusion requirements, regardless of age which is more generous than the new mandate to remove for children under age 19 only.
    •          (removed employer name) current medical plans already cover preventive care at 100% in-network.  


  144. Craig – you can have it :) , just be careful selling 70$ puts, I have a feeling oil will be closer to 60 than 80 by the end of the year.


  145. craigz…. my bullish play on oil is BEXP – it reacts like a monkey on steroids when oil makes it move. Superimpose the charts and you will see the correlation.


  146. ballistic day for the currency plays…. I guess the dollar is doomed and the handwriting is on the wall in the form of grafetti ( ugly)


  147. srfrog – wow, 14% increase?  Mine is 22%!!!

     

    VVUS – short them into the FDA.  Oct 23rd.

    SGEN – failed in a trial, I am on the fence about them for the short term.

    GILD – yeah, until they get attacked again.  Too much pain.  B’w them and ARNA, it has been a bad year!  Although, with consodliatio ripe, I still like them, BMRN, BIIB, etc.


  148.  This market is going crazy, STX circuit breaker on the upside on no successful buyout. looks like the shorts really gave up this time


  149. Good example of why we take non-greedy exits.  Those DIA $105 puts hit our $1.20 goal and topped out at $1.22 and are now back to .90!  Greed kills! 

    December/Gel – I think we get to 11,500 on a Santa Clause rally.  Heck maybe this afternoon the way they are squeezing the shorts!

    Gold flew from $1,272 to $1,290 after the Fed!  Nice 1.5% pop

    RUT futures hit 670 and Nas futures touched 2,000 – both should be pullback zones.  Copper still not back over $3.50 but oil make it over $75 right on the NYMEX close.  Nat gas at $3.94, which isn’t bad really as it was $3.75 when we went long.

    NOW is the time to short those indexes if you are brave!

    • I still like those DIA $105 puts, now .89.
    • IWM $67 QUARTERLY puts (expire 9/30) are $1.10 and were $1.66 yesterday so look for $1.35 on a pullback.

    I am still happy with our upside plays and we don’t need much protection if we are over 5 of 5 of our 5% levels – keep that in mind


  150. bobhu
    Gold not a good price for you, you should received at least 94%. But stores selling jewelery have an enormous markup they say you pay for labour. Stones diamonds etc is more in the eye of the beholder. Lots are just Zirconia.
    Sould you sell more gold let me know and I give you a melters address in NY.


  151. TLT flying??? UUP down??? Gold up??? really confusing


  152. Out of HPQ, take the money and run on that move!.. will revisit when things calm down


  153. Hey all,

    I have a new Longterm Rating on Cree Inc. We are initiating rating at a hold with a target at $56.

    Read more about this position and my ranges on this one here.

    Good Investing!

  154. In TZA at $26.96 (1/2)


  155. Phil/ Why are treasuries flying if the dollar is being stomped on?


  156. Phil… end of year Dow prediction – I agree with you. I do believe we will see some Fed easing, and Santa does not disappoint. The wild card is the electorial results in November, and the market reaction.


  157. TLT – bustin’ out of the gate…go go go.  

     

    gel – where do I see the market.  At DJI 9600.  I think unemployment is gonna rock our world.


  158. JRW- should be a nice trade- I bought QID puts instead


  159. woops- should have been calls


  160. I asked Lloyd for a tour of the HAL 9000; he said it was clasified, but sent a photo of the HAL 8000 !!


  161. I also think window dressing for the rest of the Q, b’c the funds want to show something good.  Then, Q4 gets real interesting.  Miners are moving after being down all day. 


  162.  I am smelling the japs coming with a vengence


  163. Future easing by Fed…. Remember Ben is a student ( expert ) on the dynamics that influenced the Great Depression… he still blames all of the malaise on the government’s failure to provide QE…. well we all know where he stands and what is coming ( lots of inflation tonic )


  164. JRW – hahahaha nice, what is that a picture of a computer from "War Games"?


  165. yodi/gold,   got it.  Thanks.


  166. Hi All,  Initiating a ratio backspread on ADBE selling 2 Oct 35 C (0.61) and buying 1 Jan 40C (0.5), with a credit of 0.7, into tonight’s earnings. Comments appreciated.


  167. Pharm…. thanks!  I think long term unemployment is baked in, and not much can change this over a long period of time. The market is always looking forward ( months ) and I see good earnings results this round, which will support the PE levels,  and the big Kahuna is the election, that will be the game changer. I’m still prognosticating on that one!


  168.  Phil—I’m in a DXD jan11 24 long call uncovered along with jan11 24 short put uncovered. Long call down around 50%. Short put very close to current price. I can roll out but not down as no strikes below 24. What would you do? Thanks!


  169. I smell the sweet scent of wealth being transferred, Feds done everything and more at their disposal yet here we are 3 years later talking about the same things that continue to weigh on the economy. These guys are clueless and the only thing they can do is kill the dollar….seems like the obvious trade.


  170. AUD/USD above major resistance.
    It should move up to test 96.45 (RBA OCT rate hike are just 30% factored in)
    I am staying long until we test this level and then sell 98 calls (all time high) expiry end of the year.


  171. Confusion/Chyer – Indications that the move is not real. 

    HPQ/Kustomz – Good timing!

    CREE/David – No thanks!  Since August people have been asking if it’s a good time for CREE and I’m still expecting to see $40 and, even then, I don’t love them long-term. 

    Why/Cheyer – There is no why – it’s totally irrational.  Investors are saying "we have no faith in the dollar so we’ll buy gold and tie up our remaining capital in dollars for 3 years at 1%."  MADNESS! 

    Election/Gel – Well if the Dems hold on, I’ll be looking for 11,500-12,500 range next year.  If the Reps win, then I’ll be looking for 12,000 by Jan at which point I will short the hell out of the market and prepare to flee the country…  8-)

    Actually I’ve been contemplating Europe as I could wake up at 10 and still have my morning post ready on time, it would be great for my social life!  It’s odd because if I have the same web feeds I don’t think my experience would be any different during the day but I’m sure I’d end up drifting more into the EU markets if I were there every day.  My biggest concern is I’d end up doing both markets and having no life at all! 

    ADBE/DrMTV – That’s a very dangerous spread as you are essentially naked selling the Oct $35s (delta 2x .31 = .62) and covering with 1 Jan $40 with a delta of .17.  That’s a net .55 delta against you to the upside so fine if you are very bearish but you could have sold just a single Nov $34 call for $1.45 which has a .46 delta and has less upside risk (at $36 you owe $2 on either trade and above $36 your 2 $35s hit you much harder) and you are not betting against yourself.  Ideally, a backspread is to take advantage of the maximum amount of sold premium but not all stocks are good candidates for it.  ADBE is not bad as they have $1 strikes but they just got approval (finally) to go on IPhones and IPads so there’s no reason to think they shouldn’t track back to the mid $30s and we just heard tech spending will be up 8% next year and you have to consider how many App developers now need to pick up CS5 so I don’t really like them as a short play. 

    DXD/Fortep – Jan is a long way off and you are on the money although it would have been nice if you were covered.  If you want to maintain coverage, you can take advantage of the drop and roll to Apr $24s for +$1 and sell the Apr $30 puts, now $2.10, for no less than $1.80 which would leave you in that spread with a pretty good basis (.80 less than you have now), even if they drop further.  The Jan $24 puts can be rolled to 1/2 x the Apr $25s so keep that in mind – we don’t always have to go down to make them work! 

    Dollar/Kustomz – Did I mention that when I said to Geithner "So, does the US still have a strong dollar policy?" he almost fell off his chair laughing? 


  172. Confusion/Chyer – Indications that the move is not real. 

    HPQ/Kustomz – Good timing!

    CREE/David – No thanks!  Since August people have been asking if it’s a good time for CREE and I’m still expecting to see $40 and, even then, I don’t love them long-term. 

    Why/Cheyer – There is no why – it’s totally irrational.  Investors are saying "we have no faith in the dollar so we’ll buy gold and tie up our remaining capital in dollars for 3 years at 1%."  MADNESS! 

    Election/Gel – Well if the Dems hold on, I’ll be looking for 11,500-12,500 range next year.  If the Reps win, then I’ll be looking for 12,000 by Jan at which point I will short the hell out of the market and prepare to flee the country…  8-)

    Actually I’ve been contemplating Europe as I could wake up at 10 and still have my morning post ready on time, it would be great for my social life!  It’s odd because if I have the same web feeds I don’t think my experience would be any different during the day but I’m sure I’d end up drifting more into the EU markets if I were there every day.  My biggest concern is I’d end up doing both markets and having no life at all! 

    ADBE/DrMTV – That’s a very dangerous spread as you are essentially naked selling the Oct $35s (delta 2x .31 = .62) and covering with 1 Jan $40 with a delta of .17.  That’s a net .55 delta against you to the upside so fine if you are very bearish but you could have sold just a single Nov $34 call for $1.45 which has a .46 delta and has less upside risk (at $36 you owe $2 on either trade and above $36 your 2 $35s hit you much harder) and you are not betting against yourself.  Ideally, a backspread is to take advantage of the maximum amount of sold premium but not all stocks are good candidates for it.  ADBE is not bad as they have $1 strikes but they just got approval (finally) to go on IPhones and IPads so there’s no reason to think they shouldn’t track back to the mid $30s and we just heard tech spending will be up 8% next year and you have to consider how many App developers now need to pick up CS5 so I don’t really like them as a short play. 

    DXD/Fortep – Jan is a long way off and you are on the money although it would have been nice if you were covered.  If you want to maintain coverage, you can take advantage of the drop and roll to Apr $24s for +$1 and sell the Apr $30 puts, now $2.10, for no less than $1.80 which would leave you in that spread with a pretty good basis (.80 less than you have now), even if they drop further.  The Jan $24 puts can be rolled to 1/2 x the Apr $25s so keep that in mind – we don’t always have to go down to make them work! 

    Dollar/Kustomz – Did I mention that when I said to Geithner "So, does the US still have a strong dollar policy?" he almost fell off his chair laughing? 


  173. Doubling TZA at $27.24


  174. rexx/SPX 1160 callers,
    They can be rolled 2.2X to 1180 callers.  If you had 10 callers and no putters, roll 7 1160 callers to 16 1180 callers, and flip 3 1160 callers to 11 1140 putters, ending up with 11 putters and 16 callers.  However, watch for reversal down moves on the day after Fed.  I would roll the callers up first, and wait to flip later.
     
    For other short stranglers, we had a starter position with SPX 1180 callers:
    http://www.philstockworld.com/2010/09/17/freddiefannie-friday-fat-forclosure-folios-forcasts-further-falls/#comment-362321
    which got to within 5% of the money.  The market looks to be exhausted, but per the rule book, they can be rolled 2X to 1195.  Of course, with the 1180 callers at $5.15, some can be easily flip to 1020-1040 putters.


  175. Kustomz… Yes, the dollar is the bag holder. This is the Fed solution and all I can say "what is new" How else can you liquidate $50 tril in debt? This is a war against anybody that has assets denominated in USD. Banks and lenders are the big losers. This rewards those that buy on credit. Not so long ago when Eisenhower was Pres, the dollar was worth a dollar. That same dollar today is worth $.15. This time around, and factoring in the same time period, today’s dollars will be worth $.01.  Hmmm – you are the smart one, buying real estate and hypothicating the asset with low interest long term mortages, that will be paid off with $.05 on the dollar. I see you as the beneficiary of this wealth transfer.


  176. gel – I think unemployment gets worse (which is not baked in)….why are gold and bonds rallying with the market?  Is it money off the sideline?  I think (as Augusto said) that mutual funds have little cash ’cause they are paying everyone with it as they withdraw the $$ and put it into PIMCO.

     

    Junk bonds are selling at their pre-crisis levels!!!! 


  177. Phil / Elections
    I have been waiting all day for a good laugh… Thanks… it sure does mitigate the stress of this roller-coaster market.


  178. Hey Phil, buying gold and the dollar at 1% would put one up 18% this YEAR!  S&P, well….  Don’t shoot the messenger (unless you are Henry VIII), I just give the facts!


  179. A failed stick would be a blessing now!


  180. Phil,
    Better move over to Mexico good place to settle
    Election/Gel – Well if the Dems hold on, I’ll be looking for 11,500-12,500 range next year.  If the Reps win, then I’ll be looking for 12,000 by Jan at which point I will short the hell out of the market and prepare to flee the country


  181. And wheeeeeeeeeeeeeeeeeeeeee!

    3:00 PM On the hour: Dow +0.48%. 10-yr +0.75%. Euro +1.39% vs. dollar. Crude -1.44% to $75.09. Gold +0.27% to $1284.30.

    Thomas Hoenig’s lone vote against the FOMC’s decision to keep the federal funds rate near zero marked his sixth straight dissent of the year. Hoenig “judged that the economy continues to recover at a moderate pace,” and current policy “was no longer warranted and will lead to future imbalances that undermine stable long-run growth.”

    Charlie Munger’s (BRK.A) remarks defending bailouts and saying that people in economic distress should “suck it in and cope" are not only "arrogant" and "insensitive" but wrong, Mish Shedlock writes. The bailout "made too big to fail, too bigger to fail… We preserved a culture that benefits billionaires like Munger and greedy CEOs that helped cause this mess."

    Seagate Technology (STX +1.7%) is said to have held talks with previous owners TPG Capital and Silver Lake about going private again, Bloomberg reports, but the talks failed, and a deal, which would have been valued at ~$7B, is unlikely to happen.

    Google (GOOG) chief deal maker David Lawee defends the company’s acquisition strategy, saying bets are “paying off huge… How much do you think we would sell Android for today? I would argue it would be in the billions and billions of dollars… The same of YouTube." Google has made 26 mid-sized acquisitions so far this year.


  182.  Phil/ And not forgeting cramping all the cash into AAPL NFLX , AMZN and PCLN


  183. Phil – looking at Jan13 puts (ie naked sale of XOM $50s for $5.56) but the margin requirement is HUGE –  much greater for JAN13 than JAN12. Why?


  184. Yodi – What u talkin’ bout Willis!? Mexico? hahaha or were you kidding? Im not sure Phil would want to live in a place where he’d have to worry about his daughters getting kidnapped or watch the news and see Mexican police members’ heads on stakes…


  185. 1/2 out of TZA at $27.66, 1/2 at $27.56


  186. brooklyn
    XOM is 313.00 PM  for 554.00 one opt


  187. gel, holding dollars is foolish (thanks to the Fed) and I cant help but point and laugh at the Chinese and the rest of our debt holders.


  188. jromeha, I think US have more dangerous places then Cancun


  189. Phil/Europe – I have been having similar thoughts. Actually, pretty sure I’ll move there once my kids are about to start school.


  190. yodi
    I am thinking… starting to look over the travel folders!. Cancun has to be one of the best.


  191. Hi folks, just checking in.  What a day, huh?  Seems like the times are gettin  more violent.  This was  viscious move by ‘them’ today.  Absolutely viscious.   Take a look at FAS.   Good thing I’m beginning not to care about this market or I would have done something rash like cover the double down short of FAS this am.  Who has time for these games?  Oh wait.. you do!
     
    The only thing this market is hanging on is the blood money of more insane QE.  I’m ashamed for it.


  192. Will they punch us through 666 on RUT at the last moment?


  193. jromeha
    The only problem with you is you watching to much TV It is like watching Cramer Have you ever been here?


  194. jromeha
    Just to add to this I sleep with the doors of my house open and never take the key out of the ignition of my car parking at me house!!!!. Do that in NY and if you are lucky you find a thank you note instead of your car!


  195. Heavy selling into stick bot.

    Mexico/Yodi – I actually love Europe.  So nice to be able to bop off to a different country on a high-speed train whenever you feel like it.  London is enough like NY for me and moving to Europe saves me $500,000 for college for the girls, maybe $1M 10 years from now so the deal is pretty much: Move to Europe and get a free house.   I love this country and certainly won’t leave it while my folks are here but when they are gone and if this country continues to irresponsibly spend without taxing – it’s going to be hard to justify staying in the middle of a slow-motion train wreck that is probably going to end very badly right around the time my kids are entering the workforce. 

    Cramping/Cheyer – Well, that goes without saying… 

    Margin/Brook – Margin based on chance of movement over time.  Giving them an extra year introduces much more uncertaintly so probably a good volatility premium for 2013s.    Of course, I don’t think a net margin requirement of $5.20 (ordinary margin) to collect $5.50 for selling the XOM 2013 $50 puts is a bad deal when your worst case is getting assigned XOM at net $44.50.  It’s still 100% return on margin over 30 months, that’s 3% a month! 


  196. Peter D – How do you pick the strike you are "flipping" to?  The 1020 - 1040 puts have a delta of -.07--.09.  Do you have a rule of thumb for the flip?  Are you using Theta as the guilde?  The 1180 calls have a theta of -.28 and the 1040 puts have a theta of -.26.   Thanks for the guidance.
    For other short stranglers, we had a starter position with SPX 1180 callers:
    which got to within 5% of the money.  The market looks to be exhausted, but per the rule book, they can be rolled 2X to 1195.  Of course, with the 1180 callers at $5.15, some can be easily flip to 1020-1040 putters.


  197. Cancun is great, I like Cozumel even better. Lots of real estate for sale at good prices, after the filthy Americans sold off their second homes!


  198. Thanks Phil for the comments on ADBE.  Guess I still need to study "risk management" for options trades as just understanding logistics can be deadly! (as your analysis shows).  On ADBE, I do have a debit spread (Jan 30/34) which will make $2 if it works and I also have written Apr 30P ($2).  So, this is a very short term trade, which after reading your analysis, I considered cancelling out, but decided to keep it until tomorrow.  I will close it if the stock pops above 35 after earnings.. though I think it will take its time moving above 35 and hence the short term trade.


  199. matt you’ll go thirsty not drinking the koolaid, although it makes you all the more righteous and your thoughts are much appreciated…

    We cant forget that its just a game, play the news and play the moves, take profits and let the suckers lose.
    Yours truly Kustomz…. xoxoxo


  200. Phil – if you don’t want your trades to move the market you better not post dbls. i’m libel to follow you 2xs.


  201. JR,
     
    Good call…..Good Day
     
    What do you think tomorrow will bring?


  202. 1 1/2% on the day……………anemic !!


  203. Good call DrMTV – ADBE tanking despite reporting record revenues (42% growth). 

    “Strong performance in each of our major businesses contributed to record revenue and strong earnings in Q3,” said Shantanu Narayen, president and CEO of Adobe. “We remain bullish about Adobe’s long-term role in enabling the transformation of content and applications across industries.”

    I don’t know what people were expecting but I’m liking them at $30 after hours!


  204. I’m suprised to hear that given your double down.  Did you get caught in the whipsaw?


  205. Yodi – i lived in Veracruz for 4 months and really enjoyed the old Mexico culture. Rarely saw another white person. Great resturants, unbelievably inexpensive.


  206. exec / tomorrow

    I hope it’s a gap up for me to short !!  Other than that, we’ll have to watch the guidelines.

    Have a good afternoon !!


  207. Moving / Phil – why is everybody willing to move to Mexico, learn Spanish but no one’s interested in moving to Korea, a perfectly pleasant advanced country with some great hiking & backpacking (just watch your step at the north end of the trail) http://san-shin.org/order6.html
    Seriously, Phil, a friend of my sister’s just posted a bunch of photos from a trip to Iceland, and the place is gorgeous! Although the midnight shot with full daylight is a little alarming. But they are dependent on no one for energy, have no worries of invasions, and you get to learn Old Norse! But I take your point about London – great city!  And in Korea, while I can hop on a bullet train, it won’t take me to another country. ;-)


  208. I’m holding some TZA …..so I hope you’re wrong.  Not sure what would make it gap up tomorrow.


  209. Phil/Yodi/Margin – I think its a glitch in TOS for my account – it shows $1,841 for a single contract! I will check it again later.


  210. Hi Phil!  I’m a little concerned about a future here for the twins (10) What parts of Europe would be a good fit for the families of subscibers of PSW? How would taxes work? I have the good fortune of having a loving family near Venice where my mom is from…..


  211. exec

    I only made $0.50 on a $27.00 stock(TZA) in the end of day fall, and a small $5000 loss early; so $13,673.00 on the day.


  212. lol Kustomz!


  213. Ya JR…..$13,000 day……that’s abysmal…..you keep that up and you’re going to have to change your party affiliation!!!


  214. Damn JRW!  Only 13k on a bad day, huh?  BTW, your system is the only system that makes sense in today’s market.  Bulls and Bears are fooling themselves and being played for the tools we are.  I include myself in that group.  Just like Democrats and Republicans.  I don’t include myself in those groups. 


  215. Pahruik are you still sore b/c of I stated the FACT that Baltic nations shouldn’t piss off Russia!? Wasn’t badmouthing the Baltics, just stating
    Yodi – WTF are you talking bout!? You said "MOVE TO MEXICO" not come to Cancun or some other resort area. But, since you mentioned Cancun
    http://www.reuters.com/article/idUSN2947321820080830
    http://www.free-press-release.com/news-cancun-travel-warning-may-2010-three-beheaded-including-police-officer-in-cancun-mexico-is-cancun-safe-1274052227.html
    http://abcnews.go.com/International/wireStory?id=10744947
    Can you explain these yodi or are these part of a Western plan to limit tourism in Mexico? Now, Im sure if you’re not a police officer and not involved in the drug trade it would be safer, but I wouldnt call it safe… If we are talking about moving south then why would Phil move to Mexico when someplace like Costa Rica or Belize is much safer? I can admit that America has problems, but Im not sure why you are trying to debate FACTS.  


  216. ADBE, they forecast less shares in the float (20m) and even revenue for next Q…no growth next Q..sounds negative to me  

    this Q..Rev not EPS
    In the third quarter of fiscal 2010, Adobe achieved record revenue of $990.3 million

    next Q
    For the fourth quarter of fiscal 2010, Adobe is targeting revenue of $950 million to $1 billion
     
    based on 531.8 million weighted average shares, and GAAP diluted earnings per share of $0.28 reported in the second quarter of fiscal 2010 based on 533.3 million weighted average shares.

    Company is targeting its share count to be between 516 million and 520 million shares, and it is targeting non-operating expense between $14 million and $19 million. Adobe’s GAAP and non-GAAP tax rate is expected to be approximately 24.5 percent

    Buying back to beat on EPS is in vogue


  217. Thanks – I certainly do not want to roll my Apr puts, so any buying to help ADBE put a floor at 30 would be appreciated.  I certainly did not expect Adbe to tank so much.. But lowered guidance is not good, so I am not sure if stock will revisit its lows again..
    Adobe Systems beats by $0.05, reports revs in-line; guides Q4 EPS in-line, revs below consensus
    Reports Q3 (Aug) earnings of $0.54 per share, $0.05 better than the Thomson Reuters consensus of $0.49; revenues rose 42.0% year/year to $990.3 mln vs the $985 mln consensus. Co issues mixed guidance for Q4, sees EPS of $0.48-0.54 vs. $0.53 Thomson Reuters consensus; sees Q4 revs of $0.950-1.000 bln vs. $1.03 bln Thomson Reuters consensus.


  218. Phil, thanks again for helping me yesterday in adjusting my previous SDS hedge, Jan 32/37 Bull call with Dec 26 putters. As you might recall, you suggested buying back my calls since volatility was down a bit, and spend .80 to roll them out to the Mar 32′s. Well…. with a little volatility expansion today, and a little move in SDS (+.13) the roll is fully paid for. That I like.. Have a good evening.


  219. robert,
    For flipping, we pick a strike that gives us a nice cushion to minimize the whipsaws.  Since we have 3.5 weeks to go in October expiration month, we’d be comfortable with a 10% down, i.e. 1020-1040.  We are betting that the market wouldn’t drop 5% in the next 2 week, pressuring the 1020-1040 putters.  In addition, I have a lot of put vertical in the 1040-1060 range, picking the strikes is a bit easier.
     
    Oh, I don’t look at Theta or Delta when flipping.  We flip when we are in the wrong end of the coin, so we try to get to the other end and try to minimize the risk of being whipsawed.  As you can see, having plenty of margin is the key.  The flipping gets harder when we get to 1-2 weeks prior to expiration as options that are 10% OTM don’t worth much, then it’s time to look for the following month.


  220.  snow 
    Forget Iceland. All the food is imported (except fish and lamb)and so expensive. Alcohol is so expensive you`d have to stop drinking and still half the country is alcoholic. Beautiful public open air pools heated by geo-thermal. NOTHING to do. NOWHERE to go. I went there to play basketball against the national team and ended up with the worst hangover of my life flying out to Paris, puking in the bag all the way.
    Anyone know anything about long term rentals in Portugal or Spain?


  221. I’ve been planning my move to Japan for 2-3 years now starting when the USD/JPY cross was at 120. HAH!  Now its in danger of breaking 80 without BOJ intervention and my plans are gradually getting squeezed.  But what Phil says is true:  You can trade from anywhere now, and if you are a long-term investor like Warren Buffett, you can do it out from the middle of Podunk, Nowhere.   Gonna have to become a night-owl though…


  222. Phil… a thought about Europe – my favoritenplace ( have been there often ) is Como, Italy or somewhere on the lake. This place is heaven on earth. It is a very short distance from Zurich and all the financial whoop-dee-doo, as ell as a very short distance from Milan and the great big city life. I know you are a skier… this location has it all. My last visit there, I stayed at the Villa d’Este which was 1 1600 monistary converted to a hotel. Probably the best food in the world. Check it out!!!


  223. Phil/Europe- is education free over there?

    And by the way if all you rich folks move out of here, what happens to the rest of us?


  224. Phil….Oh, by the way, your daughters are still a little young, but George Clooney has a big villa on the lake a few doors up the street… always a very busy neighborhood place.


  225. Phil,
    Are you still expecting a pullback to 4% lines or further? I’m neutral and need to make some adjustments if we are going to break up from here.


  226. kinkystyle, I live on island in nowhere and with high speed internet I am very close to markets, ic


  227. nicha… I do not guarantee what I will do, but Phil will be leaving his monetary resources to those less advantaged.


  228. 1020

    If you can get in Switzerland is the best !!  It’s all about the passport, Everyone also likes Italians so that’s safe, or Monaco.


  229. Pahurik:  Ain’t it great to be alive in the 21st Century? :)


  230. Do you feel awesome about yourself now, Gel, that you dropped "George Clooney has a villa up the street" on us?


  231. I’ve heard reasons people give for leaving the US.. but I’ve never heard anyone say they were going to move because taxes were too low.  That’s a good one~


  232. Uh oh… Summers stepping down. Wonder if he’s holding the door for others?


  233. ADBE getting hammered to $29.25!  I’ll be liking those options in the morning…

    Europe/1020 – Free health care, free college and good beer are all good reasons to go to Europe.  You can pay to suppliment health care with a conceirge package for silly low rates of like $100 per month.  Personal taxes are under 40% in the UK, Switzerland, Portugal, Norway and Ireland (28% there!) and almost no country has a higher corporate tax rate than the US but, on the other hand, they actually collect it!  They don’t collect SS so that’s a break in the bottom $100K of earnings and health care is another discount to take into account.  They also don’t tend to have state taxes, which is something conservatives never take into account when villifying the "Socialist States" but they do, of course, have a VAT.  Property taxes are very low too!  On the whole, be prepared to give up about 45% of your income over $250K in the UK and about 35% below it but there are lots of benefits if you own your own business or you are retired and drawing dividends.  I don’t know about Italy but, obviously, it pays to consult a tax advisor before considering such a major move as well as seriously considering how the kids would adjust to a move like that.  Although I prefer the Netherlands, Southern France or the Amalfi Coast to the UK, the reality of having 10 and 8 year-old girls is that they would have a tough time learning a new language and dealing with school and dislocation, not to mention making friends so the UK makes more sense for me and I can always buy a nice vineyard in France when I’m ready to retire.

    LOL Exec!

    ADBE/Kustomz – Good point but I still like the IPhone/IPad story.

    Rollin’/Jbur – Excellent! 

    Mexico/Jrom – Actually, it may be part of a Western plan…

    Forget what Lou Dobbs, Arizona Gov. Jan Brewer and U.S. Sen. John McCain are saying about the dangers coming into this nation from Mexico. A recent study suggests it’s Mexicans who should be irate about the United States.

    Police reports have already shown that crime is actually down in many towns along the U.S.-Mexico border, despite the fear-mongering tactics used by politicians who want to crack down on illegal immigration. And even Brewer was forced to admit earlier this month that no decapitated bodies have been found by U.S. law enforcement personnel, as she previously claimed.

    A new report indicates the United State is fueling an explosion of crime in Mexico, not vice-versa. Three out of four recovered guns used in crimes committed in Mexico can be traced to gun stores in the U.S.

    Of the guns recovered from Mexican crime scenes and submitted for tracing by ATF between 2006 and 2009, four in ten of those weapons originally were sold in Texas, the report stated. The three other border states – Arizona, California, and New Mexico – were the source for another third of those guns.

    Spain/Ben – I don’t know about Portugal but Luxury Retreats is pretty good in Spain.  American Express often has good things if you are a Platinum Member and don’t forget Ebay, where they have tons of great rentals.  Also, a nice trick in this market is to buy a timeshare cheap like the one I own in Tahoe, where you can get a 13-week quarter share for like $50K + $5K a year and then you can trade those 13 weeks for 13 weeks anywhere in the world through RCI or one of the other swap companies.  You can swap a 1BR in Tahoe for a 2BR pretty much anywhere in the world as it’s considered a top-notch year-round luxury property.

    Korea/Snow – I love to visit but there is no possible way I can deal with the languages in Asia.   I’ve tried and my brain just doesn’t work that way. 

    Como/Gel – When I was in Lerichi, I liked it so much I actually looked at apartments.  Nice place to have a boat and take off for England, France, Spain or Greece whenever the mood strikes you.  Close to skiing, nestled in mountains, on the water…  Villa d’Este sounds great, I will check that one out! 

    Education/Nicha – It’s free but you have to qualify so you have to have faith in your kids to be accepted into college.   What happens to the rest of you is what’s going to happen to anyone who stays in America when the bill comes due and they shut the lighs off – the party will be over and there will be one huge mess left to clean up…

    Pullback/Ac – I don’t know, we’re looking very strong but clearly investors don’t seem to be in the mood to forgive earnings disappointments so…  I don’t know.  We have to be agnostic and watch our levels.  

    Have to run, later all.

      


  234. The rumor is unconfirmed by there is talk that Larry Summers is leaving the White House in November.  Maybe this administration has a chance of redeeming itself.


  235. oops rainman beat me to it.  Anyway, between the Rahm Emanuel mayoral candidate rumors and the Summers rumors, maybe we can get some change to believe in.


  236. ADBE/Phil – what kinds of option plays are you thinking about?  Selling short-term puts or puts further out, or buying a call spread?


  237. adbe 27,8!
    Very nice place is lake Boden on German-Swiss border.


  238. I am not one who like to say " I told you so", but I predicted Summers would be a disaster for Obama’s administration. He is leaving, and the country is in an disaster two years after the fact. This guy claims he is an ecomomist… ya sure ! Believe it or not he is returning to Harvard to teach economics, and specializing in " how to create jobs in a down economy" I am not kidding you.  It is shame, as this is the cross Obama has to carry forever. – Good bye Larry, and oh. by the way, good ridance.


  239. aceland…. George Clooney does absolutely nothing for me, but let me tell you… every member of the opposite sex is blown away by this guy, no matter what the age. – Just ask your wife, girlfriend or teenage daughter. Me… no I am not bragging about the fact I was in close proximity to seeing this guy… I am not impressed, as I think I look far better than this guy, and not much grey hair, as well.


  240.  Unbelievable. ADBE now down at 27.70 as i type (-5.20)….and that was with marginally negative guidance, and this stock is not nearly as crazy as some of the high fliers out there. Imagine what’ll happen if a stock like PCLN, NFLX, or AMZN decided to just meet expectations or lower guidance. Oh well. We’ll see what happens in the morning. Price action was not so great after that spike on the fed report. Picked up a handful of Phils DIA puts….A lotta charts starting to look like they have some shooting star tops going on….. 

    As a note on education in other countries since we’re after hours. I have more then 200k in student loans (not that i plan on paying them off until about 2035 :) )…in other countries, college and med school are basically free, not to mention shorter. The distortions that this causes in the medical labor market (specialty choice, location of practice, and procedures performed)  is huge and no doubt contributes to the costs of healthcare. Yet, it was barely discussed in ObamaCare as a source of reform. Few people will take a rural pediatrics job making 110k/year when they graduated from Harvard with 250k debt….the math just doesnt work. 


  241. Gel1,
    Huge market in Internet security so I like your idea about SYMC.

    "Nice day to add to my long SYMC positions…. sold some more puts. I have a gut feeling this company could be a takover candidate. Lots of cash in the tech sector, and internet security is in vogue."

    Can you share some of the details on SYMC?    Like your investing style!

    DD

     


  242. hanna5:  Med school grads from the Philippines, India, etc.. will gladly take those jobs in the under-served areas in exchange for residency in the U.S.


  243. I see I got you all going on Europe. I lived there. The main thing which moved me out of Europe was the weather. Specially north of the alpes. Yes you can be lucky some sommers but boy seeing rain every day for weeks on end, no thank you not for me.


  244. P.S.  you better borrow Obama’s Umbrella, but pactice first.


  245. hanna looks like weak hands being shaken out, they filled the gap and then some back to Aug 31st price (27.70). Should find support at these levels.. I would think 26.30 (July low) area is solid support if AAPL sells off and markets weaken…if given the chance that would be my buy area if I were interested.

    Summer/Ortzag/Smiley face (Romer) Slowly but surely the Obama dream team will abandon ship, instead of choosing to surround himself with competent people he chose to return favors…he deserves to fail and we deserve better.


  246. JRW – Thanks for that. I checked into living in Switzerland -We’re partial to the Bernese-Oberland region – and I was told it was near impossible to gain Swiss citizenship. When you say it’s all about the passport, what did you mean? Thanks


  247. morxlntway
     
    You right on Vera Cruz. The beauty I like , your are within 120 km distance direct in the mountains. Specially in sommer with a nice moderate climate.


  248. RIMM up AH on this bit of news
    RIM Readies Its Answer to iPad

    http://online.wsj.com/article/SB10001424052748704129204575506160515163820.html?ru=yahoo&mod=yahoo_hs

    They burn through money like a crack whore and haven’t come out with a competitive product in years..dont believe this will be the exception 


  249. Phil/Europe – That’s what I think, it’s all about the kids :)   Other than an immigration attorney, do you have any suggestions on how/where to start the process?  Thanks


  250.  kinkistyle – well, but thats totally not fair. Train in another country for free, and then come practice medicine in the USA…You spent only 6 yrs (usually) in college med school (vs USA 8 yrs), and spent usually 1-2 years less in training post-med school. So, the US doc is 32 with 200k debt, and the foreign doc is 28 with no debt. Besides which, we have tons of inefficiencies, but we train some of the best docs in the world. We also have rigid controls on training, which other countries often lack. Fortunately, we still require certification of foreign med graduates which is a nightmarishly cumbersome process, and usually requires repeating the entirety of your post-med school training as well as taking the 3 steps of the USMLE (united states medical licensing exam) prior to even applying for a US medical license.


  251. Gel/Clooney  That’s something only you and your coiffeur would know……  ;)


  252.  Kinkistyle, grads from foreign countries already do what you are saying – very few of them go back after training here.  They are some good foreign docs but a lot of variance since a lot of these countries have less of a standardized medical education.   England is actually full of pakistani doctors because very few english go into medicine because of the reimbursement system.  I am more than happy for my fellow americans to be treated by foreign docs, physician assistants and nurse practitioners – I will just find something more rewarding to do.


  253. Gel,
    Luv naked puts.  Sold 1,000 NP 57.5 on XOM at the end of August.  Expired worthless so I made out on that one and reloaded for October as well but rolled it up to 60. Came close to buying an equal number of calls as well.   Nice way to make a profit (as long as one has sufficient margin and the appetite for risk.) Violated the rules, but then my intuition was my guide on that one and I know that Phil would not recommend it to anyone.  Sometimes following the path not taken pays off. 
    We’ll see how Oct goes.  I am going for SYMC NPs as well.  I think you are correct on this one.  Dec?  At what price?
    I was born with the moniker and I always loved it.  So thanks.
    DD


  254. hanna5:  Yes.  It can be a grueling process, but these foreign grads are willing to put in the hard work and dedication in order to get a chance to live their American Dream.  And I agree:  Its not fair.  I started out in Pre-med in college, but dropped out after only ekeing a 3.3 GPA in Organic Chem.  But that was good enough for a school in the Philippines, Central America, etc… (if I decided to go that option.  I decided against.) The American system is skewed.
    But its also not fair to the people who live in the inner city and out in the rural areas who don’t get adequate care because there is simply a shortage of trained practitioners to take care of them.  A foreign doctor is better than no doctor.


  255. 1020… LOL.   Man, do you ever have a great sense of humor. I have been told that a good sense of humor is a definitve signal that underlying this "God given" attribute is a high level of inteligence…. I tend to agree, as Phil fits this belief.


  256. Gel….LOL!  I hope my better half does not catch your comments – I know after a good LOL, she would have a big grin on her face the rest of the evening!  :)


  257. doubled / SYMC
    I really like your moniker… I think of it when I make a trade as that is what would make me happy. I really like SYMC, as it has some nice things going for it.. We all are concerned with internet security, as the vulnerability to a breach of our security could be catastrophic. Even Obama has stated this, because he recognizes the danger of a cyber attack, which could cripple US computer networks, and put at risk our national security. The threat of stealing our national security intelligence is but one possibility. So far the government has done nothing to provide a level of security.
    Last month Intel bought SYNC’s chief rival – McAfee, and just recently HP announced it was snatching ArcSight, another security-software firm.  These companies fetched big multiples for their stock.  SYMC is a logical take out candidate, and there are a lot of big boys looking for growth through acquisition. The company is doing very well, and I am already up 50% on my position after just a few months. I added some naked short puts to my position today, as I feel the options are the best play. Why own the stock – no dividends, and I like the leverage of options. A good way to play this one is a bullish spread, but I think the action will take place before the end of the year.  It is for this reason I chose the very bullish naked put sale.  Phil would probably think I am reckless on this play, and maybe I am, but that is just me. Hope you get a "double" on this one – an acquisition would do it!


  258. All you guys got Europe countries passport?  I don’t think you can get free/low premium health care without the citizenship.


  259. 1020

    Getting a Swiss passport is almost impossible (unless you have at least 9 figures to deposit); that’s why I ended up with Monaco. A Swiss passport gets you anywhere in the world, Monaco gets you the EU and most of the world without question or prejudice.


  260. Boy you guys have problems. You get a Swiss passport automatically by getting married to a Swiss


  261. Guys, go for Andorra – mountains, skiing, all the free health care, tax haven……and the language ain’t that tough. Anyone been there?


  262. Phil- I’m not going to debate US responsibility with regards to exporting our guns ect, I was just stating my view that Mexico isn’t the safest place.


  263. Just a few quick words about offshore living…. I have been doing this my whole life, as I am a citizen of both Canada and the USA. I have two passports ( this is an absolute necessity ) so I am free to travel as a Canadian in countries that do not particularily like the US. Also when I used to travel on business, you could not enter an arab country if you have the Isreali stamp in your passport. Canadians are loved all over the world – not so for the US citizens.
    Setting up bank accounts in foreign countries can be difficult. All countries are different. If you like Swiss banks – I think they are the best. It might be difficult as they do not want to have accounts opened by US citizens since the Obama administration trashed UBS. You might be able to accomplish this but it will be tough. Austria is a good choice.
    Instrad of rambling on about all the rammifications, I would like to suggest the two best sources for information regarding foreign domicile and banking:
     
    Offshore Living and investing – David A. Tanzer – a "got to read" as this guy knows it all
    Forbidden Knowledge – Robert E. Bauman – another expert
    These books are probably available at Amazon, or if requested I can get you some addresses.


  264.  wohoo, craigzooka the market maker strikes again.  Sold a /cl OCT 70 PUT for $.80 yesterday,  someone bought it from me overnight for $.71.  If you want to join the game, dont forget, the multiplier on the /cl options is 1000 not 100.  


  265. craigzooka /cl
    a few questions:
    1. assume you bought the 70p back for .71?
    2. Did you offer to buy by just leaving the buy as GTC when placed?
    3. What happens if you are holding at expiration?


  266. gel1 / books — thanks for the book recommendations. Offshore is something I’ve been thinking about more and more, mainly due to thining along the lines of Phil’s and others here (the giant flushing sound of the economy). I’ve added these to my next book order.


  267. Gel/Books- is this a new strategy application ? Gentle nudging and subtle encouragement for the lefties/doomsayers to relocate to the EU (where their views will be held in greater esteem)? Works for me as then it will be easier to get on with the needed dismantling of the nanny state mechanism.  :)