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Monday Market Movement – More Monetary Madness

Get ready for a crazy week!

We have data this week, we have the Fed and we have elections and yes, we have a worthless currency that’s worth less and less every day.  This morning, China’s PMI hit 54.7 for October, up from September’s 53.8 and indicating that China’s decision to raise rates had no impact on growth.   India found this thrilling and went up 1.4% (as of midnight) but the Nikkei flatlined because China’s gains are Japan’s losses at the moment as the Dollar failed to maintain an early pop to just 81.2 and fell back more than half a point in Asian trading.  

The yen’s moves have been "excessive" recently, a Japanese government official said Monday, but he declined to comment on whether Tokyo authorities intervened in the foreign exchange market earlier in the day to knock the currency lower. Exporters remained under selling pressure, with Canon off 0.6% and Toyota Motor down 1.1%. Honda Motor lost 3.4% despite reporting solid second-quarter earnings as the automaker cut its fiscal second-half net profit outlook.  Sony shares fell 2.2% as news that the electronics giant had returned a net profit in the July-September was offset by concerns over pressure on earnings at its television division.

"The soft U.S. dollar suggests that the market is still gearing up for a sizeable QE this week," said Greg Gibbs, currency strategist at RBS in Sydney. In Seoul, the market was modestly higher but investors were cautious ahead of the Fed meeting this week. Net selling by foreigners also tempered demand. "Some investors appear concerned that the Fed’s meeting this week may not take enough quantitative easing measures to satisfy market demands," said Lee Kyoung-min at Woori Investment & Securities in Seoul.

QE2, QE2 and more QE2 – this is the basis for the global rally.  How much QE2 will be enough to satisfy a global market that is now counting on AT LEAST $1Tn to be handed out by the Fed in 2011?  It’s not just QE2, of course, the Fed continues to hand out money to Wall Street on an almost daily basis through their Permanent Open Market Operations or "POMO" and that trade has become as reliable as our "3am Trade" on the Yen as we at PSW have now begun to follow the POMO schedule (as Goldman Sachs has been advising their own clients) to give us an advance look at how each day will trade.  

Just like our 3am trade, it is amazing when you can tell all 6Bn people on the planet earth about a trade yet it STILL continues to work like a charm.  How can there be a bet where EVERYONE wins?  There can’t.  Someone has to lose but, in this case, the loser is the Federal Reserve Bank of the United States of America – who play the part of the perennial sucker as they are willing to sit down at the table and be taken for all they have two or three days a week.  And why are they willing to be so generous?  BECAUSE IT’S NOT THEIR MONEY!  

Wake up America – the Fed is giving away YOUR money in what seems like "just" Billions but, as I said on Friday, is actually TRILLIONS of your dollars being used to support top 1%’ers on the GS Client Distribution List, who got this note in mid-October:

On the interplay between the FED and STOCKS: Since Sept 1 – when QE was becoming a mainstream focus – if you only owned S&P on days when the Fed conducted Open Market Operations (in US Treasuries), your cumulative return is over 11%.  in addition, 6 of the 7 times when S&P rallied 1% or more, OMO was conducted that day. this compares to a YTD return of 5.8%.  the point: you would have outperformed the market 2x by being long on just the 16 days when – this is the important part – you knew in advance that OMO was to be conducted. The market’s performance on the 19 non-OMO days: +70bps.

Goldman actually understates the situation because, as we have been pointing out for months over at PSW, the difference between performance on Fed Free Money days vs Non is about 10:1 to the bull side with the S&P up 10.5% since August 27th on 20 POMO days vs up 0.91% on 24 non-POMO days.  Since late September’s Fed meeting, the moves have gotten more extreme and your would think, at first, that GS may have poisoned the well with their October note to clients but, quite the opposite, now the fat-cat money is rolling in and MAGNIFYING the move on POMO days, driving the market into a frothy frenzy:

 

[chart via James Bianco writing Barry Ritholtz's The Big Picture]

Today, is of course, a POMO day.  Sadly, this knowledge does not do you any good unless you knew this on Friday so I will tell you today that Thursday is another one and so is next Monday – we’ll have to wait and see if the pattern holds up post-election but that will depend on the election results and what the Fed does on Wednesday (2pm), when they make their statement.  It would be kind of strange to see the Fed jack the stock market up over 10% in 60 days only to disappoint us at their next meeting, don’t you think?  Still we remain concerned and leaning towards cash until we get through this wild week and THEN we can jump on board for the next 10% move in the markets.

[TENGRAND]For the moment, we are watching our lines of resistance but upside resistance if futile if the dollar continues to head south and it’s already been driven back to the 77 line in early morning trading, down from 78 on Friday morning so your stocks better gain at least 1% today or they are losing ground to Yen and Euros and, of course, gold, which is up 2.5% on the same move.  Gaining 2.5% in a day is one of the reasons owning gold can be such fun.  In fact, pension fund manager Shayne McGuire is running around to conferences telling Global Investors that gold will hit $10,000 and ounce.

McGuire has an interesting logic here – he’s a fund manager who is telling other fund managers that his math shows that if they all put 1% of their holdings into gold, it will go up to $10,000 an ounce – a self-fulfilling prophesy that can be very lucrative, especially for McGuire – whose Texas Capitol PENSION Fund is 100% invested in gold already.  Is this blatant market manipulation with an open request for collusion among fellow fund managers to manipulate global commodities markets or just good Capitalism?  Zombie voters cannot tell the difference and will prove their indifference on Tuesday!  

Of course, I could make the argument that if every fund manager put 1% of their holdings into CROX, that we could get that stock up over $1,000 too.  The total current holdings of GLD is now $50Bn and other gold ETFs have about $30Bn, representing 59M onces of virtual gold or about 1,850 tons, close to an entire year’s Global gold production although, at current prices, that production is on pace to pass 3,000 tons next year.  This does not, of course, deter gold bugs, who continue to bid up the price of this metal, which becomes less precious as they drive up prices and encourage miners to dig deeper.  

Just like buying $70Bn worth of CROX stock doesn’t actually make the stock "worth" $1,000 a share, neither is gold worth $10,000 if global funds dump another $1Tn into gold ETFs but supply and insane demand will push the price as long as McGuire can keep lining up new suckers.  Just like Bill Gross did with his bonds – talking up the US Bonds while he was actually dumping them as fast as the buyers showed up, McGuire can divest himself with a very nice profit as long as he keeps reeling the suckers in.  Fortunately, there was one born every minute when PT Barnum made the observation in the late 1800′s and the population of the planet was just over 1Bn which means now, there are over 6 suckers born every minute or 8,640 each day!   So kudos to Mr. McGuire for continuing the tradition of the great Barnum, who once said "Every crowd has a silver lining" and both the gold trade and the bull market trade, are getting very crowded indeed!  

Our winning pattern last week was to stay generally in cash and short the markets with hit and run plays.  It’s a little tricky playing POMO as you have to wait for the dip and then buy as there is an operation date and a settlement date (the next day) to consider.  As a rule of thumb – take short profits quickly and take long profits quickly and we play the moves in either direction for a turn as we’ve been trapped in a pretty tight range since early October as the S&P creeped up 40 points in 20 days and hasn’t done a think since.  Last Monday I did "Chart Art" and we haven’t moved an inch since then so same everything as we had last week doesn’t need to be repeated other than the fact that the US markets FELL 1% last week when priced in Yen or Euros as US stocks cannot rise fast enough to keep up with the declining Dollar.  Actually, if you want to see something very, very sad, check out the S&P 500 priced in terms of CMG’s stock price:

CMG has outperformed the S&P 500 by 4 to 1 since the 2008 crash – that must be one yummy burrito!  It’s a great example of my CROX theory as CMG has outperformed the Euro, the Yen, gold, oil, wheat, cotton, corn – you name it, they’ve outperformed it as earnings rose from $78M in ’08 to $126M in ’09 and it looks like they are on track for $182M this year – very impressive growth but does that make them worth $6.5Bn?  Even if they add 50% in 2011 ($273M), which no one is predicting (20% is estimated) – that’s still a p/e of 23.8, which is a bit high in the restaurant category.  We are short on CMG at $210, as well as several other ridiculously priced stocks but then there’s are some we still like.  For example, last weekend’s Dividend Plays, as we can’t afford to be in all cash if it’s inflating away from us.  

As we discussed in Member Chat over the weekend, it’s the worst kind of inflation because the top-down, Quantitative Easing style of inflation is aimed at driving rates lower even as the Fed floods the markets with easy money.  This means that Joe 6-pack can’t even put his cash in the bank to keep up with inflation.  Savings becomes pointless as anything that is saved in cash is, as I’ve been noting for months now, losing 2.5% of it’s value each month.  This is an all-out effort to force US consumers to spend and spend like there is no tomorrow because, if they don’t, there probably won’t be one.  The Fed uses top-down inflation to force the upper middle class to play the markets too and top 1% guys like Shayne McGuire can scare all the top 5%’ers into gold or CROX or CMG or whatever else seems less scary than cash (and we’ve already scared EVERYONE out of real estate, haven’t we?) in what is nothing more than a fear-driven market rally.  

That video is from this weekend’s "Rally to Restore Sanity" with Jon Stewart and Stephen Colbert in Washington, that drew over 200,000 people, almost 3 times what Glenn Beck drew a few weeks ago so there is still hope for America – slim though it may seem.  Generally, people are fearful – so fearful that they are afraid of cash – how sick is that when you think about it?  Warren Buffett tells us to "Be greedy when others are fearful" and there is little harm in sitting out this week with the cash no one seems to want, watching and waiting for the results of the election and the reaction to the results and the FOMC statement and the reaction to the FOMC statement and that brings us to Thursday and then we have Non-Farm Payrolls on Friday, which is the Big Kahuna of economic data so we shall see what action we get off this exciting week but my bet is still on the blow-off top between our 10 and 12.5% lines – we’ll have to see what sticks!  


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  1. Citizens Against Government Waste:  China Video
    http://swineline.org/media/


  2. Good morning!

    I’m traveling today so I won’t be around till late afternoon.  

    Levels are same old, same old until they all break and hold for a day.   3 of 5 red on the 10% line is still bad and any breech of the 7.5% line will be — badder.  We should open greener than this and, if not – very bad as we’re up almost 1% at 5:30 am:  

    • Two Week HighsDow 11,249, S&P 1,189, Nas 2,482, NYSE 7,586 and Russell 711
    • Up 10% (must hold)Dow 11,220S&P 1,177, Nas 2,420, NYSE 7,500 and Russell 700
    • Up 7.5%: Dow 10,965, S&P 1,146, Nas 2,365, NYSE 7,280 and Russell 672
    • Up 5%: Dow 10,710, S&P 1,123, Nas 2,310, NYSE 7,140 and Russell 666 

    Looks like we’ll be off to a big start mainly based on the weak dollar so watch the 77 line on the /DX (dollar futures) for a bounce and, of course, if copper can’t confirm above $3.80 and oil can’t confirm above $82.50 (same weak dollar) then what is the point anyway?  

    Ignore gold, you have GS saying $2,500 and CS saying $4.000 and that loonies McGuire with $10,000.  I’m going to beat them all and say that gold can go up to $100,000 if everyone on earth buys at least 0.25 grams because that’s about how much gold there is in the world total!  This would also work if everyone in the world decided to buy an original beanie baby, as there’s about 1/4 of them for each person in the World too! 

    Obviously, the move is to go short off the gate, using a line like 1,190 on the S&P as an on off switch.  We look for a weekly like the SPY $118 puts for less than $1 but keep in mind any kind of play ahead of the election (tomorrow), the Fed (Wednesday) or the Non-Farm Payroll report is very much gambling as each of those could send us 200 Dow points up or down very quickly.  

    Have fun! 


  3. NET $ is +.38% at 8:00 EST
    since the 4:00 am EST mark, has been positive high of +.74% at 7:30, low of +.03% at 3:50 am


  4. Charts today:
    AMD…failed break-out
    NE…still looking safe
    M…moving higher in the channel
    TBT…bad day Friday…long term hold
    MELI…out today either way
    Long:
    NUE…promising reversal in steel stock
    UNG…hmmmmmm
    BUCY…buy the pullback?
    short:
    VMW…still waiting
    SNDK…still waiting 
    http://ben1be.tumblr.com/


  5. Hello, Phil, what are your thoughts on YRCW this morning (up 30% during the weekend)? Is it worth chasing? 


  6. NET is +.03% at the Personal Income numbers, big swing lower was NET $ +.47% just before the realese
    dx/y showing +.25%


  7. NET $ (.02)%, at 8:37 est, first negative I have seen today since 4:00 est


  8. whats crazy the Net $ is negative (.02)% and at the same time the dx/y is showing its highest % up +.27%, very misleading


  9. Hey all,

    We are looking to get into a new position in Suntech Power (STP) this morning, and we are looking to sell our positions in JKS and YGE after some very positive earnings from JKS that have put the stock up more than 15% this morning.

    Check it all out here!

    Good Investing!


  10. Anyone tempted to buy a boatload of VXX and sell at the end of day or tomorrow morning? Seems like volatility should go up at least a little between now and tomorrow.


  11. NET $ back +.16% at 8:02 est


  12. jromeha
    i like your idea --but my experience is that it is so badly designed, it doesn’t track the way you think it would so i may miss a good trade (but from someone who’s been burned)--i won’t touch it


  13. Anyone know why crude is rapidly going up since 9:00 am?


  14. jromeha
    VXX thanks for the tip. On the last boat load of VXX I lost 340.00 should have listened to Phil.


  15. david
    congratulations on jks--great play!


  16. skx
    in case anyone missed it--a pretty negative write up in barrons this weekend


  17. AVNR got approval for a disease that was not known of several years ago…..amazing. 


  18. judy
    dollar is down


  19. NET $ +.19% at 9:52 est
     
    almost all of the movement has been on the Euro/Yen.  Almost like, some one sells the Yen, then someone buys more of the Euro.  Almost all other currency relationships just sitting there.


  20. datuu / skx  Don’t subscribe to Barrons, post the text pls.


  21. Looks like the buy programs are kicking in.


  22. even a bounce in the dollar didn’t bring these mkts down


  23. Big change here at 10:20 est
     
    NET $ +1.06%
     
    there was a huge swing on the $/Franc, if I had to guess someone sold a crap load of Franc there


  24. tuscadog--here ya go--
    Skechers (SKX), which makes sneakers that allegedly tone your body while you walk, slipped 18% Thursday after reporting a 70% spike in inventories and earnings that fell short of estimates. "Toning," a new segment estimated at 6% of the $18 billion sneaker market, is breathlessly hailed by marketers as a revolutionary movement sweeping shoes and bras and clothes. But this is the age of consumer skepticism, and Americans aren’t as lazy or stupid as marketers hope, and there really are no short cuts to good posture and chiseled abs.
    Our June 7 column argued the Skechers fad might run further before it eventually stumbles. Since then, the stock jumped from 35 to 45 before it ended last week below 20. Shares may look like a bargain at just six times projected 2011 profits, compared with, say, 18 times for Nike (NKE), which makes shoes for sweatier workouts. But analysts’ estimates likely will be cut further, and discounts to move merchandise shatter the already-thin illusion that these are the season’s must-have footwear. As with losing excess weight, there are no short cuts to shedding bloated inventories, and there’ll be a better time to buy the stock.


  25. Good Morning! Nice week in Vegas last week. Looks like I didn’t miss much except for the typical gyrations/manipulations.
     
    Datuu / SKX — looks like Barron’s isn’t getting the response they would hope for out of SKX. From what I can tell (I don’t read Barron’s), they typically get a bearish reaction from negative article. Volume is pretty anemic though.


  26. WYNN/Phil:  Looks like its time to roll WYNN again.  Probably up on China data.  Looking at a 2x roll to Jan 125s.


  27. Datuu/Yodi – I lost a bit doing the weekly buy/write for VXX as well. I agree, it is a pretty sh!tty ETN . However, Im not planning on holding this more longer than after hours today. My premise is that there will be at least a few people buying puts and looking for insurance in case the republicants dont win as many as expected or QE2 isnt as big as expected. I bought in at 12.96 and am just looking for an exit around 13.14-13.25 sometime today….


  28. guys, I bought VXX at 14.45 with the VIX at 19.75. Vix is up 10% from there. VXX down 10%. Is it actually an inverse?


  29. Datuu / Rainman  SKX   Poor research by Barrons.  Empirical evidence is in the stores, with Shape-ups still the best seller with prime store positioning (front).  Also, see 3000 reviews on Zappos.com ($1billion sales) which are all singing the praises for Shape-ups, it’s more about the easing of pain, discomfort in feet, legs and back than losing weight per the reviews.  I maintain my contrarian position and project toning will be a $1billion business next year again. 


  30. jromeha/barfinger
    jromeha --good luck —hope it works out better for you than it did for me
    barfinger--that’s what i meant about the bad design and why i won’t touch it--its not an inverse-it just doesn’t accurately track the vix--the only person i know who makes money on it has been short it and says "its a product that is designed to fail"


  31. rainman
    you are right the barrons articles usually get a pretty sizeable response--as far as skx goes it hasn’t done much on a big market move--personally, i am still in skx and would like to see it recover--


  32. since that big swing on the $/Swiss, the futures have just sat here, the crzy currency move happened at 10:20
     
    NET $ is now +>31%, well off that +1.06% spike
     
    funny though the $/Swiss franc has not retraced at all


  33. re SKX, I frequent a Colombian restaurant in NY where a waitress there works the whole week for almost 12 hours a day, and I noticed the other day she’s wearing the shape-ups.. I asked her about her experience with them, and she said they do make a difference in her comfort.. she’s able to last longer standing up without significant pain in her back and things like that. So those shoes do work.. it’s just a matter of deeper penetration in the markets.


  34. YIKES! Talk about dumps. Complete retrace on the RUT!


  35. datuu / tusca / SKX — I’m still in with a cost of 19.34 but outstanding puters at 23. I was in the 19/23 buy-write about a month ago and moved more bullish to the 23/23 as the technicals improved. Bought back the 23 callers today and will wait for a bounce to resell them. It looks to me like the bleeding has stopped and we’re building support here but the chart seems to say support is down at $16.50. That was in Sept 09 though so I discount it. If we hit that, I’m doubling down again!


  36. Kinki – yeah that happened pretty quickly. Dollar got stronger and I barely missed my entry on shorting the aussie $


  37.  Looks like IWM is playing nice today.


  38. NET & +.50% here at 11:22, europe will be closing


  39. Re: SKX Shape-ups. Do they make all black and all white to conform to many organizations’ dress codes? If not, then that is missing a huge area. I’m assuming they do as that’s a no-brainer.


  40. Pstas
     
    I was stopped out of my EUR/CHF play. My strategy has been to play the pairs with large lot sizes ($2 mil ) each play, and set tight stops, praying for a nice consistant ride. Almost all of my plays have been stopped out as I have not had the time to watch the screen ( or I am sleeping ). The reason for my lack of profits lately is the ridiculous volatility in the currencies that keeps stopping out my positions….. Not good, but better than losses. I will lighten up my currency plays until a pattern or trend evolves. I am otherwise just wearing out my keyboard.


  41. I forgot about the time change, for 1 week Europe close is different, till we fall back


  42. NET $ = +.31% at 11:33
     
    the $/Swiss Franc +1.46% now


  43.  looks like NASDAQ just sprung a short term bull trap


  44. has anyone seen any news on the Swiss Franc?


  45. WYNN is finally cutting me a break.


  46.  is this our blow-off top?


  47.  69.76 is my target low for the day on IWM. 


  48. 10/25 the S&P cash high was 1196.14, we pushed up to 1195.81 this morning just under and reversed hard


  49.  If it ends like this 3 days NASDAQ close under the opening gap. 


  50. yshenhar / top — I doubt it, I’d expect high volume on a blow off top.


  51. NET $ +.05%

    showing the highs of the day on the dx/y +.54%, while the NET $ is +.05% barely hanging on


  52. BIOD rejected.  Hello basement….


  53. Big flip here at 12:02 EST, the NET $ (.40)


  54. File this under Humor:
     
    http://www.zerohedge.com/article/sodomized-nobel-laureate-phd
     
    The photoshopped pictures made me laugh out loud …


  55. Executed a Buy/Write buying stock and selling a short straddle on XLNX ( Xilinx ). Straddle ( ATM ) paid 11% and the stock goes x-div on Nov 8…. Sold long term hold that pays 2.39% with room for growth.


  56. Ben… what is your strategy with TBT?


  57. wow, look at WL
    http://finance.yahoo.com/q?s=WL

    That is huge, the buyers must know the real value of the assets held


  58. It is rather nice to see some of the high flying pump monkeys start to come back to earth … AMZN BIDU PCLN NFLX – just a little; a lot more to go.
     
    Still to drop are CMG, CSTR, IMAX, OPEN, WYNN   … wynn and open to report soon, pcln to report soon also.
    Imax is good, but looks like its pumped too high if you ask me.


  59. STT, Northern Trust, Bank of New Mellon, just trying to think whole else has huge trust businesses


  60.  Adding to AMZN short with Nov 160 puts….bad price action recently, regardless of the market direction…


  61. One has to wonder about those 8% ….
    Nancy Pelosi’s numbers among independents according to the latest NBC/Wall Street Journal poll are almost unbelievably bad–8% favorable, 61% unfavorable.


  62. Gel- currencies- yes , the volatility on the currencies is wild. I have dipped my toe in the water a couple of times but the swings are wide and I keep getting stopped out also. Fortunately, I have been using some trailing stops but that has resulted in missing some large moves. I came to the same conclusion toward the end of last week- just too hard to anything at this time. Sitting out for now.


  63. Europe will be closing
     
    NET $ (.10)%


  64.  gel1 
    TBT ..I have a 35/37 Nov spread that I`m planning to roll out to Dec as the premium decays and hopefully roll up to 35/40. Below the 50  MA is my exit which is probably 25% on the position. Its all over the place, but someone`s buying it because it always pops back up. My position sizing is`nt like yours so the up and down here is`nt bothering me too much.
    I had my finger on the trigger to  cash out my SYMC 15/17 Nov spread which was up 35%, but I`m still holding that and some Jan 12 17.5 puts from my first go at it. Those are profitable too and I think I`ll be keeping those.  Thanks loads on that pick. 
    Wish I had bought IDCC when you mentioned it…there`s a lot of chatter on EBIX too, but its down today.


  65. Mike5885
    Please explain :net $ (0.10) etc?


  66. RDY – Sold all of it to take profits. This has been a very good profit maker for me in 2010, but taking profits for now. Will buy it back lower – say $34-35 if there is a pullback
     http://finviz.com/publish/110110/RDYc1dl1234.png


  67. I have been noticing that the DX/Y has not been tracking right the last few weeks
    so the NET $ that is my attempt on the fly to net out the d/xy against the Euro, Yen, Swiss Franc and the Chinese Yuan to see whether the dollar is really rising or not


  68. Cap, that redhead with the whip is unbelievable!  I don’t go for that sort of thing but…  8-)


  69. for what its worth, we are basically flat  here
     
    dx/y showing +.45%, but the Net $ is +.01% to my best estimation


  70. Ben / TBT
    Thanks… I am sitting on long dated naked puts, some at 35 and a lot more at 32. I am not concerned as the strikes are conservative. Your strategy is very good IMO. I probed into Phil’s very fertile mind over the weekend regarding TBT, and he seems to agree with us. Oh,, by the way I am still long on SYMC, and plan to keep the play, as I think there is potential for a takeover ( there has been some scuttle-but on the street, but who knows !! ) – either way – cyber security is a growing concern.


  71. Hello all,
    Scott Brown from Sabrient here.  Phil, safe travels and best wishes with your father.  I lost my grandmother a week ago at 91.
    David Brown, Scott Martindale and Luke Rahbari will be in and out of chat through the week offering any help we can provide while Phil is traveling.  Luke is an option and volatility expert with Stutland Volatility Group which is part of a new joint venture, Sabrient Stutland Asset Management.  David and Scott M are both with Sabrient.
    Pharma do you have an opinion on SGEN?  Was downgraded to sell today and has "earnings" announcement after the bell.


  72.  Cap, I’m with you on CMG …. 2 NOV 195 puts
     
    Also in NFLX 150 puts


  73. gel- what is your play on XLNX?

    Thank you for SYMC, EBIX, INFA, CCJ. Too bad I did not follow you on IDCC.


  74. matt / redhead — I didn’t file that under humor 8-)


  75. Remember a long time ago in a galaxy far far away when NFLX was at 48?
     
    Hard to believe that was only January of this year …..


  76. Scott -

    Just wanted to say hello and have great respect for your company while I still have chat capabilities.


  77. Thank you David.  Enjoyed reading your new report sample last week as well.  We were writing an article on Trina Solar that day which was ironic.  Feel free to call or write any time.  Sbrown@sabrient.com


  78. I’m mostly bearish but took a DIA short term call just in case the market pops on the Dem utter destruction tomorrow. I recall big DOW 300 point moves in 2002/2004 when Repubs stayed in election control.
     
    From there I expect a pullback as the reality is everything still sucks.


  79. Im shorting oil at 83.45. If it doesnt come down a little into close, I would expect it to fall a bit tonight as overseas markets should be a little nervous about our elections. Just a hunch…. Either way, cant see it going up much more(providing no random rebel attacks) between now and 8 pm


  80. how many readers have used overlay to hedge their long stock positions?


  81. SGEN is down nearly 6% and already matched average daily volume.  Earnings/Loss announcement after the bell and Brean Murray downgraded to Sell from Hold ahead of the announcement.


  82. nicha / XLNX
    I bought 1000 shares of the stock, and sold ( 10 contracts each ) the January 27 calls and puts for a 11% discount on the stock. I contemplated the March short straddle with the same 27 strikes as it pays a 15% discount on the buy/write. I am very excited about this company….. It has well over 2000 patents, and is the world’s leading manufacturer of PLD’s ( programable logic devices ). These chips can be programed after being shipped ( in the field ), offering flexibility. They control over half of the world’s market. They have 20,000 customers.The company had sales of over 1.5 bil last year, but I believe they are on the cusp of some very large growth. Last quarter profit jumped 30.4% on a 58% increase in revenue. Operating margins are at approx. 30%….. Look for this one to beat estimates by a wide margin in the coming months.. I will probably add to my position after we get a better picture of the economic trend looking forward.
     
    It nice to have you riding with me on those other trades !


  83. overlay / Luke – well clearly I do not use overlay….what the heck is it?


  84. NET $ (.11)% as traders come back from lunch


  85. I opened a position today buying VGR (Vector Group Ltd. ) I bought the stock and would like to sell a short straddle, but the options are slim and will need to get help from Phil on that one. The company manufactures and sells in the US a "nasty" product – cigarettes. HOWEVER it is a dividend whore – pays a nice 8.15%. The way I see it, I’ll get paid for having to breathe the "repulsive" second hand smoke that we injest each day….. Anybody have an idea how to play the options on this one?


  86. snow, overlay is simply, buying stock and selling calls on that stock position
    Example, buy 1000 shares of Goog @ 615, sell 10 Goog November 19th expiration for $7.50 dollars
    Each options reps 100 shares, so 10 options = 1000 shares
    your breakeven on the position is now  615 – 7.50 = $607.50
    If goog does not reach 630 by November 19th, you collect the $7.50 per contract.
    If goog does reach 630 or higher, you have sold that stock for $637.50  (630 strike price + 7.50 premium)
    It helps lower the volatility of your stock position, plus can add some income if you don’t think the stock is going to move up in a big way.
    Your max loss is 615 – 7.50 = $607.50.
    If you were just simply long stock, your max loss would be the 615 you paid for the stock.
    goog is just an example, we have no positions in goog or have a buy or sell on it.


  87. Luke…. how does your strategy differ from "Covered Call Writing" ?


  88. Dollar strength in advance of QE-2 is destroying my currency plays – all stopped out ( GEEZ )


  89. barfinger-VXX
    Barfinger, VXX is a futures contract sort of averaged over next two months.  So in general does same direction as VIXX but lately VIXX has been firming up a bit with VXX still trailing down.  Luke knows more that than I do but that is the general idea.    david


  90. exact same thing.
    Overlay, covered call, alpha addition, and a few other names.
    The real "art" is knowing which stocks, options, strikes to trade.


  91. Funny, if it was not so serious
    http://www.reuters.com/article/idUSN0149242520101101?

    AIG getting money to exit, lol


  92. Thanks, luke…. It definitely is an art ( aka skill ) !


  93. Here is the AIG article, I posted the wrong one
    http://www.reuters.com/article/idUSTRE6A03EK20101101?


  94. gel 1
    in the coming weeks we will be sharing more on our options plays. Keep an eye out.


  95. gel/VGR: The options are pretty non-existent. Not even any bids on most put strikes below the money. I play MO and PM all the time. If you want to dip lower on the cigarette chain, I’d go with RAI. But it’s competitive position is not so great.
     
    My recollection is that the big Euro/Asian tobacco companies (e.g., British American) don’t have options in the US.


  96. gel- forgot SKWS on that list. Thank you.

    I look at Reuters regarding fundies for the stocks you mention. Is that a good place or is there something you recommend?


  97. gel: correction, at least British American has options under the BTI ADR symbol. But not much action/liquidity.


  98. Long so might want to save for later, article on currencies and the G20

    http://www.moneynews.com/StreetTalk/currency-traders-G20/2010/11/01/id/375508


  99. SGEN/Scott – I have been watching them for the last 3 mo, and they were getting good traction.  The bump by Jefferies and rampant speculation on buyout was what kept me away after 9/28.  The downgrade, well, these firms are all over the place, as 3 firms have $20 or better on them (Jefferies has been missing a bunch lately (ARNA being the worst), so I am a bit suspect on them).  IMGN is my company of choice, as their technology is ‘better’ from my point of view (over SGEN).  From a $$$ standpoint, IMGN is better there as well (560M vs 1.7B for SGEN).  I am waiting for IMGN to pull back and will go long again.  If SGEN gets in the $12 range, may be worth selling a few Ps to get into the stock.


  100. And covered the short oil for a nice .50 cent gain…. That should pay for a couple of tanks of gas :)


  101. NET $  = zero just sitting here


  102. Matt — glad you enjoyed that !
    Scott Brown & friends – welcome.  Not the Senator, I presume (just kidding).
    Luke – I also never heard of the term "overlay"; learn something new every day.  I use it on almost all long positions at some point .. generate cash; reduce basis; reduce risk.


  103. Cap,
    We use the strategy for the same results on portfolios. We also use puts and the VIX to enhance stock portfolios or stock selections.


  104. Mike 
    thnak you for the updates on the $ and other currencies.  I also like your comments on why they are moving. :)


  105. nicha…. I do not have any specific source for my research material… I try to access material everyplace possible. Some of my stuff comes from a hedge fund friend that has a research department that is "second to none", and he shares some of it with me. …. a total cornacopia of information that is cross-referenced..


  106. Luke…. bring it on… We are always looking for new stuff to make our experience more profitable…. and of course avoid the many " landmines" that are always present.


  107. C = 1186.26, F =1183.00

    cash has not gotten below the 1185.71, which was the open today

    the previous close was 1183.26, so might bounce there if not, may fall fast


  108. Chaps…. Lots of thanks!…I have PM and MO, and was just trying to get greedy, I guess. I like the dividends, but also rely on the covered call income in order to make it work, as the stocks are conservative in terms of share appreciation.


  109. GEL
    I acted on your HUN suggestion this summer with a B/W. Got out today with 88%. Thanks!


  110. gel: LO would be good. But is has significant risk exposure to menthol cigarettes, which may be restricted/banned by the government. Problem with cigarettes is dropping volumes. That means all but the biggest, widest moat will probably continue to be pressured. But MO/PM will probably be good forever.


  111.  Just hit my goal low for the day on IWM. 


  112. Hey all,

    I am getting involved with a Weekly Play in Cloud Peak (CLD). You can check it out here.

    Good Investing!


  113. took out the FRI close on the cash, see if we bounce and find any resistance at the open of 1185.71, if we hold and roll lower there, may have more to go on the downside
     
    my first target if we take out 1179.70 is the 1171.70 area


  114. Mike… I see you are following the USD. With the overwhelming amount of news reverberating everywhere that has an influence on Dollar direction ( fundamentals ), do you have a model you follow in order to project movement? I hate ‘surpriise"that was unexpected, and try to hedge the uncertainty.that is always present. I also like to trade the "trends" and not the moment to moment gyrations.


  115. No, sadly I do not have a model to project out
     
    in the big picture, I am watching the 76 – 76.25 as a near term Point & Figure bottom, and then using a ParSar tend indication at 76.73
    so right now, overall I am expecting dollar strength as long as those areas hold.  But as for day to day, I have no idea


  116. anyone have any strong opinions on YHOO? or strong enough to trade on?


  117. Chaps
     
    My trade today (VGR) is on a stock that markets only in the US, which has a declining percentage of "users". I really would like a play on Asia, as the smokers there are really committed, and I do not see a paradigm change in the cultural acceptance there. This is where I would like to concentrate my investment, in this "stinky’ sector. If I can find it, I will rotate my investment into this concentrated area.  Also, in China… the middle class is growing very quickly, and the resources are there for affordability, to engage in this "habit".


  118. LZ got a smack down on earnings even with 3rd increase in projections. Went long with a buy @ 103.19 and December writes of 100p @ 3.40 and 105c @ 3.57 for an entry(ies) @ 96.22, 98.11 and potential profit of 9.1% in 7wks if called.


  119. Chinese currency moving up here, the $/Yuan fell from +.39% to .28%

    first time today

    so Yuan going higher so will lower the dollar

    NET (.33)% here at 3:01


  120. gel: Users are declining in Europe as well as as US. Euro manufacturers are feeling the pressure. The big player in Asia is Japan Tobacco. Savy international investors like David Winters has been in it for a long time. But trades only in Japan.


  121. Wassup guys?

    Action about like I expected this morning, just more pump and dump.

    I’m still running around but looks like it was a good day to miss.


  122. Speaking of which, if the yuan goes higher, and the Chinese tighten, which they will, the commodities will get slapped down, hard.


  123. dx/y showing +.48%, but on a netted out basis my best estimate is actually (.21)% here at 3:05


  124. well on the cash we have a daily InsideOut pattern


  125. I knew VXX sucked for holding long term but I didnt think it would be this bad for a daytrade!!! THe VIX is up almost 5% but this POS etn cant even gain 2%! Oh wells, Ill take my 40 cent profit off the table….


  126. Good morning,

    drcraig,

    Good call on that line, but it’s secondary on my chart to IWM 69.28; FWIW 8-)


  127. Mike
     
    Thanks! I have been trying to get a "handle" on the anticipated moves looking forward in the USD. A lot of recent volatility has been generated by the news surrounding the anticipated QE. Here is my take on it…. I do not believe this is QE, but is "reckless printing of money" in the true definition. It is badly flawed experiment at best, as the end result is a deflation of the dollar value. The targeted purpose is to energize the economy through more money in circulation…. this is dumb, as I believe you have to change " consumer and business sentiment ‘ and their are better solutions for that…… So what will happen with all this effort ????? – I think other central banks will announcing ( soon ) similar liquidity related decisions, that will  be cascading throughout the world., and we will experience a lot of currency shocks. The end result is a depreciated value of the Dollar going forward. This is good for my gold positions, particularily GLD. I also like the UDN ffor a long term play. Day to day…. that will be best be determined by you Mike – not me.


  128. Phil:
    Still holding calls: QID Nov 13′s from last week and DXD Nov 22′s. What is the best way to buffer an upside move in your opinion? Secondly, what will be the effect on the markets if they pass tax legislation that preserves all tax cuts for at least two years and do strong QE on Wednesday?  Your opinion welcomed. Hope you are having fun with your family! Thank you.
    dclark41


  129. drcraig- IWM- so, how did you calculate your 69.76 line?


  130. FHN from the dividend play list Phil put out last week is taking a beating today. I can’t find enough news to tell me if selling puts when the bleeding stops is a good idea.


  131. My big picture thoughts
    I agree, I think this is definitely Monetary Inflation.  The Central Banks are all going to try and print like crazy.  All of the worlds politicians want to hide their debt.
    I just do not know if they can fill the gap between credit and real money  in the long run.  I think we will be experiencing deflation, but the dollar may actually end up seeing strength by default.
    Again big picture thoughts, here is a cool video that shows markets valued in gold and the gap that has to be filled
    http://www.elliottwave.com/freeupdates/archives/2010/10/25/Video--DJIA-Priced-in-Gold-What-It-Means-for-the-Long-Term-Trend.aspx


  132. Anyone else going all cash into the "news Trio" this week (elections/QE2/Unemployment)?  I’ve sold everything before the news, and plan to only day trade and sit in cash until we get a pullback of significance.  I believe gridlock will harm Wall Street (see article below)…as unemployment benefits will cease to be extended, tax breaks won’t get a vote until 2011 and may fail, fiscal stimulus will never happen with gridlocked Congress, etc.  I also believe that QE2 is useless to the "real economy" (other than hurting taxpayers via inflation and debt).  Wall Street will sell into the news, unless we get a $2T surprise…which is doubtful as the Fed credibility would be diluted beyond repair if/when QE2 fails as even the Fed expects.  I’ve actually taken a contrarian view that Ben Bernanke isn’t insane…he is only attempting what is possible, however impossible…with extend and pretend being the only real option beyond default.  From his inside monetary and political perspective, the situation is worse than anyone could imagine, and his actions are not thus insane, they are instead desperately realistic…
     
    Stocks Face Dark Side of Gridlock in Capital – WSJ, Nov 1, 2010
    finance.yahoo.com/banking-budgeting/article/111175/stocks-face-dark-side-of-gridlock-in-capital


  133. But one thing if for sure, the govts and central banks are all going to go kicking and screaming, printing every step of the way


  134. NET $ (.25)% at 3:30, 10 min till imbalances


  135. Not selling and going to cash.  Longs have a nice 15-20% buffer, and are working the premiums off 2011 strikes, so I’ve gotten a few layers of hedges to protect me and some cash as firepower if we do get a big selloff. 
    Anyone else suspecting we may not get a huge selloff because everyone’s waiting for it?  It’s like everyone wants it to happen so they can get in cheaper, but the act of their wanting it changes the outcome. (Kinda like Heisenberg’s Uncertainty Principal and the idea that the act of observation changes the result for you Quantitative Physics buffs out there.)
    Wow…SP had perfect kiss off 1177.65 on that last pullback.


  136. Phil
     
    Tomorrow should be a "roller-coaster ride"…. A suggestion for your opening comment – "Tumultuous Tuesday ‘  Grrrrr !


  137. NET $ (.40)% at imbalances
    amazing the dx/y is showing +.55%, but actually (.40)% that is pretty big (just my best estimate)


  138.  Drumk – YHOO – I think its a zombie unless GOOG every really pisses off MSFT or AAPL, and then I think its a home run (or maybe a double). 


  139. Mile / Central Banks
     
    Agreed… All will be in "catch up mode" and will stop at nothing. The USD will come under pressure.


  140. hoss18:  The most recent Barron’s cover and the AAII Investor Sentiment ratio would suggest that there are quite a lot of bullishness at the moment.


  141. Goldman – no way republicans block unemployment benefits, they have illusions of taking back the White House and that is not happening by alienating 15% of Americans.


  142. I’ve been moving more into cash over the last couple of months. I don’t know if a pullback is going to occur but I do know I’m having a hard time finding comfortable bullish plays and I think there are several frothy stocks (cap mentioned several) but i have a hard time understanding and betting with or against ‘group think’. That’s not to be confused with contrarian trading where there are some fundamentals or technicals to base a decision on. Groups don’t tend to pay attention to those things and jump right off the cliff.


  143.  Pstas- The high for the day was 71.17. The average daily range is 1.4 points. Simple subtraction gets you to 69.77, which is very close to a JRW line (69.76 I believe). 


  144. Actually, I think it was Schrodinger’s Cat and not Heisenberg’s Principle that spoke to the act of observation.
    And Phil, you asked last week about El Dorado Gold missing by $0.04, and how can that happen when gold’s $1,350/oz. and you own a gold mine.  I read the conference call transcripts and looked at the quarterly statements over the weekend, because i thought this might give some insight into the situation.  (ie when something doesn’t go the way you might expect, maybe there’s a reason, if not, maybe there’s an opportunity)
    From the looks of it, they sold amount of gold they intend all along.  They hit their target as far as ounces produced and sold, however, they were held back because of remaining acquisition costs for their China operations(when they bought Sino Gold last year), and the declining value of the dollar causing taxation issues for Brazilian operations.  They operate mines in China, Greece, Brazil and Turkey.
    It actually looks like a pretty good opportunity if gold remains high, or we get a solid pullback in gold for anyone looking for a gamble on exploration.  In December, they will be disclosing the production goals for 2011 based on several new mine sights(two in China, one in Turkey, one in Brazil) which they are completing the drilling of at this time.


  145. Wow, what a day in the FAS/FAZ world.  Major swings and yet they managed to even up the tails by the end of the day.  Amazing how that works.  And that’s exactly what I bank on these days.  The seemingly improbable. 


  146. "I think other central banks will announcing ( soon ) similar liquidity related decisions, that will  be cascading throughout the world"

    gel the inflation created by a weak dollar cannot be countered by other countries devaluing their currencies, it would be like mass suicide, in a high inflationary environment the only protection they have is a strong currency. Seems the Fed is looking to destroy the world. Strong Euro kills the PIIGS, YEN destroys Japan’s export power, China will have no choice but to let its currency appreciate. Or maybe he’s just trying to get the dollar off reserve currency status. Maybe the people pulling the strings would like the Euro to take the dollars place? Who the heck knows, but one thing is for certain, rarely do  bubbles deflate slowly… POP!

    The wealth in this country is being siphoned out quickly and its bizarre at how obvious it is yet no one in Government besides Ron Paul takes a second look. Doomed I tell ya!! Coming from a manufacturing/business background I’ve never in all my years witnessed such arrogance displayed by our leaders. end rant..

    JRW great ffffn call on IWM!!
     


  147.  If Phil was on, he’d note that the RUT canary just got its neck broken – under 700


  148. Nice stick they are giving us to end the day…. Wonder how Marketwatch will explain the ‘flood of buyers’ during the last hour today?


  149. The only positive thing of days like today’s is that we get to take advantage of time decay.. nothing else! A whole lot of NOTHING..


  150. holy $hit, I stand corrected.  They managed to turn it green!  Selling almost all day and then the strong stick in the end.  Major distributution day.


  151. Mike
     
    The Eliott Wave vidio would not download… I am assuning the correlation between te price of gold and the Dow has correction in its future. If we correlate the currant price of gold to the dollars in the 70′s ( assuming it was a fair valuation), then gold should be priced today at $2,500/oz. It this valuation is correct, then the Dow is accordingly undervalued…. so using historical comparisons, we can anticipate a move upward in the Dow. Deflation….. maybe – maybe not. It is ALL about consumer and business sentiment, and the evaluation they share about RISK and SECURITY. Our Fed and administration do not ( unfortunately ) understand the emotional consequences, or the needed fiscal solutions that can change this prevailing problem.


  152. matt — That’s what I’ve been counting on lately - swings green and red to end flat. There has been an amazing number of days lately that seem to do that.


  153. VXX/Jrom – Damn, I don’t know how many times I have to tell people not to touch that thing.  It’s a sucker’s bet.

    QID/DClark – After today I think we’re in good shape, you can see how easy it is for the market to plunge.  If we move up, like last week, I favor playing momentum trades over the lines like we did a couple on DIA last week.   I’ll be around tomorrow and we can look live but, generally, it’s just picking something with a high delta and playing it like a futures trade over a resistance point.   Don’t forget tomorrow won’t mean anything as voting will be inconclusive until after we close.  Wednesday will be the crazy day, maybe post-election selling to be rescued by the Fed but we’ll have to see.

    FHN/RJ – I’ll take a look later, maybe some dirt has been uncovered.  

    Cash/Goldman – Good move I think.  No big deal to stay flexible in uncertain situations.  Plenty of things to take advantage of once we see what’s up.

    Heisenberg/Hoss – Yes, we are in a real quantum state this week and the market/parrot may very well be dead/not dead depending on who is observing it.  Just make sure you don’t put your cash in a black hole!

    Tomorrow/Gel – As I said above, don’t forget nothing actually happens by 4pm on election day, Wednesday is crazy day.


  154. Check out the action on SPY today ….
     
    http://twitpic.com/331518


  155. Hey, would ya look at that. Another Doji Day.  What does that make? Eight in a row?


  156. rainman:  Its like JRW’s sig rune — except its on the price chart.


  157. hoss,
    Your Heisenberg reference was correct…light behaves as a wave or particle depending on if it was being measured (observed) or not as such. Schrodinger’s cat was more of a physical/philosophical paradox wherein one could not prove the cat still existed and/or had lived or died except by opening the box, thereby changing event outcomes. At least, that is my layman’s understanding of it.


  158. Was it really suddenly a rush of buying?  Or rather a drying up of sellers allowing the computers to stick it green?  Looking at the Volume bars on the IWM 3 min chart, the most significant bars all day are on down moves.  And the rally at the end came on average size bars…so maybe some liquidator reigned it in at 3:15, which magically coincided with the SP hitting 1177.65(Phil’s line).
    Who doesn’t believe in magic???(he says sarcastically)
    and the canary closed tits up….RUT


  159. Phil – I know, I know…..The VXX is a crock. Actually bought back in and lost some of the money I made near the end of the day. I dont even know how that ETN is allowed to be in existence….. WOW, is all I can say….


  160. …and what Phil said. HA. I’ve been waiting to do that for awhile.  :-)


  161. kustomz / Central Banks
    It is all about relativity… the others do not want strong currencies ( export issues ), so they follow suit in order to remain competitive…… I see inflation mestatcizing as one follow the other.  The banks and others who have issued long term debt secured debentures are SCREWED, and it all starts over once again. You are in the perfect position, having hypothicated your real estate holdings. Deflation is out… as the solutions for this "least accepted" scenario are well known, and it is definitely not the policies followed in Japan.


  162. JRW
     
    Bon Jour !


  163. Matt,
     
    Major distribution day???



  164. have to run


  165. WFR getting clobbered AH on an apparent earnings miss.


  166.  Cash/Rain – Don’t feel bad about cash.  That’s like a fisherman feeling silly for having hooks and a rod and reel and some bait because he intends to go fishing.  Cash is part of the preparation process, we need cash to take advantage of the move – whichever way that may be.

    Good physics catch Hoss!   Thanks for looking into El Dorado, worth checking but $1,300 an ounce should allow a miner to overcome A LOT of small issues.

    FAS/Matt – Hell of a stick into the end there, major attempt to keep things green.

    Good rant Kustomz, I certainly feel better!

    Canary/Deano – Yep, they are still a great directional indicator around that 700 line.  The key to today was that the Nasdaq never did quite get things going and that’s our toppy tip-off.

    Valuation/Gel – I know for a fact how many dollars KO or MCD will earn me for each dollar of stock I buy.  They are not undervalued by 100%, THEREFORE, Occum’s Razor dictates that it is gold that is overvalued, not stocks that are undervalued.


  167. Phil
    I agree with MCD ( all because of China ), but none-the-less, I plan to keep my Gold, thank you.


  168. Does WFR ever NOT miss!? It’s all good, will be a nice entry on them again….


  169. WFR/Boobear – I think that will be another entry opportunity when the dust settles.

    FHN turns out to be caught up in some nasty lawsuit with FRE and FNM.  ZHedge has a write-up on it but I’d summarize it by saying – Stay away

    OK, I’ve gotta go but feel free to reask anything and I’ll try to get back on things by morning.  Next couple of days should  be fun but today was a good warm-up with 175-point top to bottom swing!


  170. Entry point on WFR – Sounds good to me.  I took profit on that one a while ago., so will be glad to have a chance to reload.


  171. gel, someone should create a new reality TV show documenting the mass hari kari that will be taking place at the BOJ. No one has the fire power to battle master printer OB Trillions Ben Kenobi…

     


  172. Phil, just sold WFR before the bell, where’s your re-entry level?


  173.  Phil:  back in July one of the 2012 income plays that I entered was DBA 2012 22′s selling the Jan 25′s to knock off premium in order to sell monthly calls against,  so now in for net $25.15.  With DBA @ $29.47 it looks like I am way out of position to sell monthly calls with much premium without going to higher strike and more risk.  I mistakenly thought I didn’t need to mess with this type of spread til Jan., (another lesson learned).  In any case I’m thinking of just rolling the caller to 2012 and selling some puts, since I wouldn’t mind scaling into a longterm position at 20% lower price,  but do you have other ideas?  


  174. WFR 10.80 – 10.90 now at 11.10


  175. WFR might make a nice buy/write entry at these levels


  176. WTF – where’s all the political bantering ??? — we go to the polls tomorrow people!


  177. Phil:
    Safe traveling and wishing well with your dad.
    Is REE ($10.03) a good (better?) buy at this level? I am opting to scale in.
    Please advise. Cheers!


  178. Reza, I posted last week REE info´. If you want buy firm, what have only 2 full time employes, you are right to scale in.


  179. kustomz / BOj
     
    I agree with the idea of chronicially following this mess they are in. They sure do have some "violent" methods to express disappointment… this might get ugly before it is resolved….. as they say – "stay tuned"!


  180. bio… too late to change the inevitable results, whatever they are… just place your bets and "pray" !


  181. TKD/ Pharmboy – Hey Pharmboy, as an old Parkinson’s epidemiologist, the mitochondria story sounds really plausible – what do you think about actos in particular?


  182. REE/Pahurik: Yes, I remember, informative piece. Tiptoeing into REE sloooooooowly.
    Cheers!


  183. Reza, I think best way scaling in is selling apr 7,5P for 2,1 or jan 7,5 for 1,4


  184. Pahurik:
    Your suggestions sound OK to me; I am thinking of buying ITM call spreads of 10%-20% lots depending on price action AND selling puts at similar strike prices but more like Jan.


  185. chris … no need to get Phil all ticked off — i said a few days ago there will be a reckoning and he got all mad at me.  As gel says, let’s just wait and see, the cake is almost fully baked.
    Everyone should go vote …


  186. Cap-Amen, the really heavy lifting begins on Nov 3rd.


  187. hahaha Cap – I think ‘independents’ like you might be in for a rude awakening… Just remember, people who have landlines are probably OLD and old people tend to vote republican which skews your poll results. Im going to be laughing my ass off when the republicants dont take EITHER the house or the Senate!


  188. jrohema … you really gotta be kidding. 
    House will be a landslide.  Senate, Dems may hold on just barely.
     
    and check out Chris Matthews !   (obama used to give him a tingle up his leg).  Must watch this.


  189. Yes, liberals are angry…..WHy? B/c although you repubs….errr Independents like to claim he is a commie socialist whatever, he has actually been VERY similar to the man everyone loved to hate GWB (only with better communication skills). THere hasnt been change, there has just been more of the same. That’s why it’s so funny when you/pstas/humvee/hoss/whoever else make these comments that he will need to come to the center in order to get reelected… He has been governing from the center, that’s been the problem… He’s been far too conservative on many of his policies and that is why the left is angry.


  190. Sh!t, picked the wrong time to short the Aussie $!!! Lucky for me I just did 2 minis….


  191. what is amazing jrohema that he’s governing from the center and all of us stupid people just don’t know it yet…  :wink:


  192. GOOG- Phil,  a short play?
    http://slopeofhope.com/2010/11/shorting-google.html
    Nov1 weekly $620′s ?


  193. Could not resist one:
     
    Researchers Find the ‘Liberal Gene’
    http://www.foxnews.com/scitech/2010/10/28/researchers-liberal-gene-genetics-politics/
    "If it made sense for us all to be liberal, natural selection would have made us all liberal."
    I know, a sad story but given the advances in genetic science, perhaps someday it will be treatable.
    In the meantime, there is always therapy, er , elections.  :)
     
    :


  194. Speaking of elections:
    Here’s hoping that regardless of the outcome that the winners  be humble and the losers , gracious.


  195.  pstas 
    You`re kidding right?
    I don`t think the liberals were humble in 2008 and God knows the conservatives were`nt gracious.
    Cap will give one day to gloating, then be on to revealing the next "startling" liberal plot to destroy the American way of life.
    You scooped me on Slope`s GOOG chart, so you guys are starting in already!
    smiley here.


  196. Ben1be- No, quite serious. It is an "old fashioned" gentleman’s code that is best followed, IMO even if one does not believe it.
    What do you think on the GOOG short play?


  197.  pstas
    Good morning!
    I promise to lose gracefully ( I`ll post again from  Portugal).
    Check out Exec`s man on The Chart Pattern Trader. http://thechartpatterntrader.com/index.php
    If that does`nt send chills down your spine…
    On GOOG….I`ve followed Slope for years, He trades those resistance points way before he gets any confirmation and I can`t tell you how many times I got burned blindly doing the same. He`s also a perma-bear. Eventually I gave up that game and moved over here.
    I don`t know how he gets his charts to look like that either, I use Prophet, but his always show such sharp clear moves.
    In my opinion, there`s nothing in GOOG that gives us an advantage either way. Trading it now is a 50/50 crap shoot. If it breaks down from here, I`m short. under that 590 mark somewhere.
    You guys enjoy your day.
    I personally won`t complain about any gloating.


  198. Hey All,
     
    FYI……the Chart Pattern Trader has some great stuff, however, I’ve been following him for some time and he is a card carrying bear and thus a lot of his opinions are skewed in a bearish direction.  So keep that in mind when you view his material.


  199. so many opinions on QE2.  Aussie rate hike today too.  Europe jamming up big. 
    http://www.marketwatch.com/story/sell-bonds-now-feds-qe2-is-doomed-to-fail-2010-11-02