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Wednesday – Working Toward the Clampdown


No man born with a living soul
Can be working for the clampdown
Kick over the wall 'cause government's to fall
How can you refuse it?
Let fury have the hour, anger can be power
D'you know that you can use it?

The voices in your head are calling
Stop wasting your time, there's nothing coming
Only a fool would think someone could save you 

In these days of evil presidentes
Working for the clampdown
But lately one or two has fully paid their due
For working for the clampdown – The Clash

Portugal is having a national strike today and labor unions in Ireland are planning “mass mobilization” in protest of planned spending cuts, with a march in Dublin on Nov. 27.

Portugal said in September it would cut the wage bill by 5 percent for public workers earning more than 1,500 euros ($2005) a month, freeze hiring and raise value-added taxes by 2 percentage points to 23 percent to help reduce a deficit that amounted to 9.3 percent of gross domestic product last year. The measures are included in the government’s 2011 spending plan, which faces a final vote in parliament on Nov. 26.  “The strike arises in a context of a set of measures that are quite significant and have social impact,” said Carlos Firme, a director at Lisbon-based Banif Banco de Investimento SA. “It’s natural that there are demonstrations of discontent.”

I'm sure King George's Bankster buddies told him the same thing when the American colonists expressed their "discontent" – Don't worry my King, there's sure to be some grumbling from the peasants but your stimulus package is working wonderfully – now come outside and check out the golden horseshoes I put on my carriage team!  

We were able to add a little bling to our own rides as those QQQQ $53 puts I told you about in yesterday's morning post, which we picked up in Member chat on Monday at .45, opened at .75 and flew on up to $1.25 (up another 110% from Monday's entry) and pulled back to finish the day at .98.  We were, of course, very happy to take a daily double off the table because that's all you need to stay ahead of the game.  Even if you are just playing with $450 (10 contracts) – a single double-up like that once a week will drop $23,400 into your virtual portfolio over the course of a year – adding almost 10% to a $250,000 virtual portfolio taking relatively small (0.18%) risks. 

See, it's not as complicated as it seems.  We're just playing the trading range, which on Monday was .45 at the bottom so my call was to pick up the options if they hit .45 again into the close because we still thought the bottom of the range would hold.  Of course that part is based on the fundamentals and our volume tracks and our knowledge of the Bots that are playing games with the markets but the actual act of using what we know about these very, very fixed markets to make money is really not that complicated.  It's perfectly OK to stay in cash when you can take small plays like this and make the occasional double – better than trying to grind out 4% on 25 positions at risk, isn't it? 

I made a call to kill the shorts at 11:33 in yesterday's Member Chat but we weren't jumping in on the long side, just getting back to cash and waiting to see what happens next my exact comment to members was:

Oh no, Dollar popped to 79.71 – it’s out of control!!! Pound ($1.582) and Euro ($1.338) selling off hard into the close and dollar is gaining so fast even the Yen went down but this is the end of their trading and we’re heading into 11:30 with 60M on the Dow, which is only a normal amount of trading for a Bot day so very stickable once the EU people are done panicking. I have to say I favor killing the short directionals and going long into the Fed (2pm) once we hold a bottom (probably a reject of the dollar around 80 or even 79.75).

Have I told you it's ALL about the Dollar?   I'm pretty sure I have.  We had a little Yentervention last night that drove up the dollar into Japan's close and that rescued the Nikkei from a down 250-point open, allowing them to close down "just" 85 points.  The Hang Seng went the other way, with a big gap up at the open of 225 points and they "only" lost 100 points into the close to finish the day up 127 points but still about 700 points off Friday's high and down 1,977 points from the Nov 8th high at 25,000.  The Shanghai managed to take a nice 1% bounce off their own 10% drop line this morning and it's a real tough call into the long weekend but I think we'll be picking a short – just in case things turn south while we're carving up the birds.

Other than a slightly bearish spread on OPEN, we didn't take any new plays after my cash call yesterday as it's going to be a wait and see day.  We didn't hold the lines I put up in the morning post of Dow 11,120, S&P 1,185, Nas 2,500, NYSE 7,550 and Russell 715 with the actual finish at Dow 11,036, S&P 1,180, Nas 2,494, NYSE 7,470 and Russell 719 so that's 4 of 5 missing the mark and, as usual, it's the Russell that holds up the best.  In our Multi-Currency Charts, you'll notice that, as far as Europe can tell – we're still rallying!  

So now our charts are unclear and that makes us love our cash even more.  As long as the dollar is getting stronger (up 5% since my bottom call) then our cash is gaining just fine – we only get worried when equity gains begin to out-pace our currency holdings but there sure are plenty of bargains to be had now compared to where we cashed out!   

We had an increase in Mortgage Applications this week of 2.1% despite the 30-year fixed rate rising back to 4.5% so maybe a good sign there and Jobless Claims fell 34,000 to 407,000 this week while Personal Income rose 0.5% vs -0.1% last month and Personal Spending was up 0.4% vs 0.2% last month.  One thing people are NOT spending money on is Durable Goods, as orders fell 3.3% in October from up 3.5% in September.  Ex-Transport we were still down 2.7%, snowballing from down 0.8% prior but we kind of knew this would happen from the retail earnings reports we saw.  

We're at goal (80) on the dollar so it's very hard to say what's going to happen next.   A break over 80 could lead to a lot of dollar short-covering that can easily bring us up to 82 and that's enough to shove the markets down another 2.5% so we'll be watching that very closely but, for now, I think the dollar pulls back and that lets the markets recover, which sets us up for a short play into the close.  As you can see from Barry's Guardian Chart, Ireland isn't out of intensive care and the sharks have already swum downstream to begin circling Portugal, Italy and Spain.  Another $100Bn here and $100Bn there and we may actually have a crisis one day:


click for larger graphic

Those are Pounds, of course, and Pounds are $1.58 at the moment as the mother country continues to kick our rebel assets, even 234 years later…  Ireland is another band of rebels that won't bend to British rule and S&P is punishing them with a dreaded two-step ratings downgrade AND a negative outlook because they have been very, very bad boys.  “The Irish government looks set to borrow over and above our previous projections to fund further bank capital injections into Ireland’s troubled banking system,” S&P said in a statement. Putting the rating on “CreditWatch with negative implications” reflects risk of a further downgrade if talks on a European Union-led rescue fail to stanch capital flight, it said.


This is playing games with the entire EU's credit at this point and the Markit iTraxx Financial Index of credit-default swaps on senior debt rose 12.5 basis points, or 0.125 percentage point, to 163.5 basis points, the biggest increase since June. Contracts on Portugal’s Banco Espirito Santo SA are at a record, and Spain’s Banco Santander SA are at the highest level in five months.  “Senior bondholders will most likely find themselves as potential burden-sharers, which is in stark contrast with the rules of engagement of the market,” said Roberto Henriques, a fixed-income analyst at JPMorgan Chase & Co. in London. “Even at the worst point of the current crisis, it was generally a given that senior debt was sacrosanct.”

Credit-default swaps on the senior debt of Ireland’s biggest lenders approached records highs. Contracts on Allied Irish Banks Plc climbed 103 to 954.5 while Bank of Ireland Plc jumped 89.9 to 735.7, according to CMA. The cost of insuring Ireland’s government debt climbed 13 to 588, while Portugal surged 13.5 to a record 5888 and Spain was up 9 to an all-time high of 310, CMA prices show

Credit-default swaps typically rise as investor confidence deteriorates and fall as it improves, paying the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

According to Bloomberg:  The 750-billion-euro European Financial Stability Facility, created in May to support the region’s most indebted governments, won’t be big enough to rescue Spain, Citigroup’s Buiter said. A rise in Spanish bank risk could be the “tipping point” for the financial credit swaps gauge, according to JPMorgan.  Credit-default swaps on Lisbon-based Banco Espirito Santo have climbed almost 300 basis points (75%) this month to 699, according to CMA. Contracts on Banco Santander are up about 80 (50%) to 232.

This is NOT what we call a healthy investing climate people!  Of course North Korea is still doing it's crazy thing and half of Wall Street is under investigation by the FBI all of which makes it so you hardly even notice that China and Russia have agreed to stop using US dollars to settle bilateral trade since it's no longer a reliable exchange currency.  This will reduce the need for two major superpowers to hold dollars, paving the way for The Bernank's dream of $10 a gallon gasoline to "fix" the economy.  

That should goose TBT back over $36 today but will it be enough to get the dollar back under 79.5, which we need to claw back to our market targets (above).  Probably not because all the Rubles and Yuan in the World are only enough for Lloyd to light his cigars with compared to how many Dollars and Euros are circulation and with the Euro now looking like the World's scariest currency and Japan actively working to keep the Yen down – where else can people go but the Dollar?  

And don't say gold because that's just silly…

We're investing in Turkeys this weekend.  I hope you have a Happy Thanksgiving and let's all be thankful that things are not much worse — yet.  

All the best, 

- Phil

Top pic credit: William Banzai7 

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  1. NET $  = (.14)%,  dx/y = (.05)%
    overnight high = +.15% at 7:37am, the low (.77)% at 5:20 am
    Futures = 1182.00, overnight:  high = 1185.25, low =1176.50
    oil  = .37, gold +.40

  2. The people of the world today are light years away from armed revolution.  Their boycotts useless.
    Surgical strikes are needed in the form of assassinations at the top of the pyramid.  Can you remember when there was last even the least attempt at taking out one single banker?

  3. What arebwe rallying on – still lost 400k jobs. Yeah

  4. NET $  =(.04)%,  dx/y = (.05)%
    dx/y acting very weird the last 2 hours, really pegged here

  5. I find it amusing that the same people up in arms about the body scan at the airport were not bothered at all when we learned that the NSA was reading our emails and listening to our phone calls! 

  6. Phil/JR,
    I’ve noticed over the last few years that the Bots really have their way on these pre-holiday, light trading days.
    Given the fact that most people have mentally and physically demobilized for Turkey day, how do you feel about going long on the first dip today?

  7. Flip- Im also really shocked that there hasn’t been at least a few attempts to take out Paulson, Blankfien, or Dimon. I mean surely there are more than a few investors (who weren’t PSW subsribers) who lost everything in Oct 2008…. Or maybe just a small business owner who went bankrupt who might blame them (or their ilk) for the mess we are in… One could argue that the gunmen would be doing ‘god’s work’

  8. NET $ (.08)%
    dx/y still acting weird, just pegged to this (.05)% since 7:00, when the NET $ crossed from positive territory to negative

  9. Phil,
    How do you post a link so that it shows up with an alias name.  For example:  Reza99 2:01 post "Red’s" or Your 2:07 post with the link "Fed Minutes"

  10. Exec – what first dip. I went short overnight and am getting killed. I sure hope we get a dip.

    I guess Korea did not blow up overnight but the numbers really did not seem good.

    What am I missing?

  11.  PCLN CMG rocking again pre-market.
    Crazy BS.

  12.  Phil: Dog ate the homework?
    I guess for you bloggers this, " I just lost a big comment" is your best excuse.  Might need a note from your mom. :)

  13. German business confidence at 20 year high:,,6261243,00.html
    Anyone have any plays/watches on Germany?

  14.  samz…..employment figures.

  15. Phil / What time does mkt close today?

  16. Looks like Ken Griffen (one of the original quants) got a subpoena from the DOJ yesterday as well. Time to take the bots down?

  17.  Established a long position in CMG yesterday.  Just following Willie Sutton’s rule.  

  18. NET $ just jumped positive here = +.07%, highest was+.15% at 7:37
    dx/y = (.12)%

  19. NET $ (.18)% at the bell

  20. NET $ (.27)%, dx/y  = (.12)%
    all of the dollar weakness id from the Swiss Frac, somone hammered the dollar lower at the be
    $$$/Franc = (.63)%
    C =1191.90, F =1190.00
    oil +.48, gold +1.10
    10yr = +2.79%,  30yr = +1.44%
    VIX (7.85)%

  21. Good morning!  

    Looks like the RUT is getting overly excited this morning and it’s really JRW’s thing but it looks to me like TZA is now going to be an exciting weekend play with the sale of the Dec $18 puts for .60 and the purchase of the Dec $18/20 bull call spread at $1 for net .40 on the $2 spread that’s currently $1.70 (425%) in the money.  

    We’re watching: Dow 11,120, S&P 1,185, Nas 2,500, NYSE 7,550 and Russell 715 as levels that need to be retaken for this to be anything but a bounce and we’re over on all with the Dow and the NYSE right on the line so we’ll watch those closely and, of course, not go short if we’re over on all 5 but I’m thinking we get rejected here.  

    Our other levels are still in play at:

    • Breakout LevelsDow 11,500, S&P 1,220, Nasdaq 2,600, NYSE 7,750 and Russell 725
    • 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 

    And, of course, there is nothing wrong with cash.  Cash is the new black (as in not red) so enjoy it into the weekend and we can have lots of fun next week as I’ve decided to go for a double on the old "$10K to $50K by Jan 21st Portfolio", which we haven’t played since we lost a couple of shorts and fell back to $25,000 – halfway to goal with 2 months left to play!  It could be a fun way to give ourselves a greener Christmas and if the next two months are like this one was – there will be plenty of opportunities for small, aggressive plays.  

    Meanwhile, my best to all of you and your families – enjoy your Thanksgiving and don’t worry about the markets…  They sure don’t worry about you!

    All the best, 

    - Phil

  22. NET $ (.47)%
    oil = +.35
    C =1190.08, F =1188.50

  23. Happy Thanksgiving to you and yours also Phil.  And everyone else…I am grateful for so much in this life, and this has become a nice part of that.

  24. CMG and NFLX will undoubtedly go to 500 per share and in a linear fashion (because they represent the new food and entertainment of the masses)  (Not to mention that I am short both – surely that is another equally good reason why they continue to climb.  Ah, the power of parataxic thinking. 

  25. Good morning Phil,
    Re. DIA mattress sold yesterday some long DIA 114 jan11 for a nice profit. I try to re-establish my positions.
    What are the official positions today thanks
    Hope no one is watching CMG up 5.50

  26. Good morning,


    IWM    70.89, 71.94, 72.15, 72.49, 72.71, 73.15, 73.43 and 73.91

  27. scans/stjean
    (Email’s and Listening) LOL that would require READING and being informed on news… quite a stretch for the general American public….

  28. big jump here, NET $ +.10%
    C =1191.92, F =1190.25

  29.  CMG…out    +30%.  I’m a good pupil, Phil. 

  30. Phil:
    Thanks for all your help. I wish you and your family a safe and wonderful holiday.

  31.  JRW    Thanks for the daily lines.  I use pivot point calculator .com but my lines are always a little off from yours.  Do you use the open on the current day in your calculations?

  32. NET $ +.36% new high that I have seen, dx/y (.29)%

  33. Wow!  Nat Gas $4.36 – It’s like it’s a commodity or something.  

    CNBC really pushing this "Big Black Friday" thing and that’s why we dove into January as earnings reports showed that nothing actually happened.  You’d like to think that investors aren’t dumb enough to be fooled twice by the same crap less than 12 months after getting burned but that would be silly as we know that these investors are as dumb a toast.  

    Assassination/Flips – I believe there were some bankers targeted by that pesky rebel Osama Bin Laden, who said at the time: "America is a great power possessed of tremendous military might and a wide-ranging economy, but all this is built on an unstable foundation which can be targeted, with special attention to its obvious weak spots. If America is hit in one hundredth of these weak spots, God willing, it will stumble, wither away and relinquish world leadership."  Now please save your political-based responses for this nice long weekend – thank you!  

    Rally/Samz – There is an excellent article on the main page by Charles Smith that everyone should read about Wealth and the Recovery on my favorite "Wealth Gap" topic, which points out the top 5% in this country are now so rich, that it really doesn’t matter what the other 95% do and the top 20% are effectively the ENTIRE economy except for people who live a subsistance lifestyle – spending all they earn just to survive.  So, in short, it’s a wast of time caring about anything but TIF sales, which were very good this morning:

    Body Scan/StJean – That’s because they pick the battles they can win.  They want you to be excited about Body Scans because it’s easy to show you bombs on planes and say it’s "for your safety" and that makes you "understand" the government’s position so the MSM writes jokes about it on all the big shows and all the news people talk about it and they discuss it to death until you get bored and submit over time.  By getting you to accept this violation of your rights, it makes other violations of your rights seem less onerous.  Ben Franklin said a long time ago:  "Any society that would give up a little liberty to gain a little security will deserve neither and lose both."  I’m actually for scanning but very against reading mail.  I don’t think you should be allowed to take anything on a plane if they can’t be sure it’s not a bomb but that would require the airlines to provide you with food and drinks in flight and they sure don’t want to do that.  

    Bots/Exec – Sure, if the volume is low then their firepower, which is pretty steady, gains a lot of relative traction.  As I said above, I think the move is to go short on the early pump, not long.  SPY Dec 9 $119 WEEKLY puts at $1.05 are my current favorite short play.  

  34. lfanderman  If I could only force myself to buy a stupid stock like CMG (instead of intellectually and actually shorting it)  I would be a good pupil as well.  My mind is my best friend and my worst enemy.

  35. Willsons

    Confluence calculations have nothing to do with the open, but where we open, as today, sometimes has a great deal to do with confluence lines !! I did say before yesterday’s close that there would be a push this morning:

    JRW III (premium)

    Done for the day; 4%, and really had to work for it !! Should finish at IWM 72.10 to set up tomorrow’s push. 8-)

  36. NET $ +.13%
    oil +.43,
    what they do invent a POMO for the day?

  37. Link/Exec – You highlight the text you want linked and click the thing on the comment box bar that looks like a globe with a paper clip and that brings up a pretty self-explanatory box.  

    XLF and FAS really taking off nicely.  NFLX not holding $190 so far but CMG testing $250!  

    Comments/Red – Yeah, I have the bad habit of writing hour-long comments and, while I’m doing it, I may call up about 100 other windows for reference and each one is a Russian Roulette game with the possibility of crashing me.  It doesn’t happen often enough for me to change my habit but it does happen often enough to be annoying.  

    AMZN making news highs, EXPD making new highs – guess we could hav eused toms more longs…  Interestingly, the Dollar is still at 79.63 so this is some solid buying here.  We are up 2% on SOX and Transports and 1% on the indexes (1.7% on the crazy Nas) while the FTSE is up 1.2% but the DAX is flat and the CAC is up just 0.5% so a very strange rally but we’re over our targets so no point in trying to go too short unless we see some of the levels failing again.  

  38.  Phil, 
    I messed up a sale of 10 Jan 21 SKX puts and instead sold 21 Calls yesterday and just noticed today it had been filled…and obviously the stock is surging. Is there a way to do a bullish vertical here with those sold calls to still salvage the trade somehow or better to hope for a pullback and exit?

  39. How late’s the market open today?

  40. Germany/Rain –  That’s a poll and if the Irish crisis spreads to Portugal and Spain that poll will do a 180 next month so I don’t think it’s very useful for a long-term investing premise.  

    Close/Tusca – Regular time today, closed tomorrow and a short day on Friday. 

    TZOO flying now too!

    Bulld in crude of 1Mb, drawdown in gas of 500K and flat distillates is a bad report but they are spiking to $82 on the NYMEX futures (/QM) and that’s a good line to short off on the way down


  41. NET $ (.28)% slammed back the other way negative by the Euro,
    dx/y = (.17)%

  42. Amatta: I did the same damn thing this morning before I had my coffee. I bought instead of sold 20 put verticals. Then BRCM skyrocketed before I could close. Not a great way to start the day. Thinking of taking the rest of the day off.

  43. Phil,
    I’m a first-time poster here, although I have followed and profited from this forum for some time. 
    I hold DBA Dec 28 puts @ $0.45.  Given my expectations for a rising dollar (as refuge of last resort) over the short term, should I double down on DBA (@ $0.35) or play it another way?
    Thanks in advance for your help.

  44.  Jbur, 
    I hear your pain. Frustrating! 

  45. If NFLX is down this must be a sucker’s rally!!!!  ;-)

  46. Jbur – just a recommendation from a guy who has done the same thing more times than I would like – TAKE THE DAY OFF! I always found myself pressing to make up for my dumb mistake and it usually ends up with me losing even more $$$. 

  47. Big test on Dollar, being shoved down to 79.50 on oil inventories – great coordination!  Copper only $3.76 so who are they kidding?  

    CAT making new highs along with COST – interesting combination…

    Parataxic/DD – Good word! 

    Mattress/Yodi – We should be reestablishing with the March $112 puts, now $4.85 as the higher puts stopped out and the Dec $108 puts were the cover at $1.75 and we can take them out at .50 and go naked again if we keep going up but, otherwise, they are fine for now.  

    CMG/Iflan – Nicely done! 

    Is OWW really that much worse than every other travel stock?  Since logic seems to have nothing to do with things, they seem like a good deal at $5.25 as that’s much less than $415 for PCLN.  This is mainly about a lawsuit they are in with American Airlines, who are trying to stop them from selling tickets so it’s risky but you can lose $5.25 on PCLN in 5 mins so I like just buying the Jan $5s for .70 and, if they fall futher, maybe selling the May $5 puts (now $1) for $1.50 or so to pay for that call plus a later spread.  

    SPY $119 puts down to .83 – I’m still going to like them over the weekend, no matter how cheap they get.  Same goes for the TZA spread.    

    Oil back above the $82 line but now maybe we get a shot at them at the $82.50 line.  Dollar is holding 79.50 and a move up in the buck off that weak oil report may drive oil down into the close but too dangerous to short over the weekend.   Don’t forget $45Bn in POMO next week so we’ll be long on Monday.

    SKX/Amatta – Wow, that is a big difference!  The problem is you are kind of chasing now but, if you want to go long, you can buy 2x the July $24s for $3 and if they keep going up, you’ll be able to roll the callers to 2x the Apr $27s (now $1.30) for a $3 spread less what you collected already. 

  48.  Comments/Phil – Autosave? I don’t know what kind of editor your working with but if it doesn’t have it there are options (possibly a pun). You shouldn’t have to worry about crashes blowing up your work.

  49. Psychzo market!  So how long will the ‘push’ last?  Clearly.. they can’t keep this up all day-  Guess they figure to leave everyone happy going into the holiday.  Big volume selling yesterday and almost no volume taking us back up.  Oh their wicked ways~

  50. Phil/Link    
    Either I really dumb  or simply a mindless Neanderthal that is too unsophisticated  to follow self explanatory procedures but every time I attach a link, it displays the link rather than a conceived title…….like in this example, it display , rather than" Answers"…..which is what I would much prefer it to display.

  51. Welcome Keelm!  Damn, those were .60 yesterday and we really are in "take 20% and run" mode these days.  Keep that in mind next time.  Now they are .30 and we could go either way, they are not worth a DD but I don’t think you should bail based on this move, which seems very fake to me – just the bots taking advantage of a low-volume pre-holiday, I think.  

    Take the day off/Jrom – Yes, I think the idea was for people to take the week off so at least a day would be good…

    Editor/Pak – It’s not the post, it’s the comment and I’m using the same one you are here.  No big deal, I said most of the stuff in the post but I lost a nice lesson on rolling that I’ll have to work hard to regather my thoughts on.  

    Happy/Matt – Yes, silly of us not to realize they don’t want families gathering around the table at Thanksgiving without a happy, happy market to talk about.  That would be a real waste of effort, wouldn’t it?  The whole point of this game is to get Uncle Albert to pull his cash off the sideline after he hears how much money his nephew made on CMG and NFLX…

  52. all over, the other way now
    NET $ +.34%,  dx/y = (.22)%
    C =1195.30, F =119375
    OIL +1.28

  53. Matt,
    I can we not short this.

  54. Ok, what just happened with oil? Just rocketed up another 80 cents…

  55. Okay I committed the cardinal sin and bought premium! BUD december 60 calls and now I’m being rewarded with a 50% loss over the past couple of days….any suggestions on how to repair?  Selling some long dated puts?? Thanks

  56. JR
    Are you trading?

  57.  Editor/Phil – Alright but there’s got to be a way around that too for all of us. I’ll try to remember to bring this up over the weekend.

  58.  Hi Phil, Just confused on whether you are advocating going short on SPY over the weekend because of the following two comments you made 
    "SPY $119 puts down to .83 – I’m still going to like them over the weekend, no matter how cheap they get.  Same goes for the TZA spread. "
    "Dollar is holding 79.50 and a move up in the buck off that weak oil report may drive oil down into the close but too dangerous to short over the weekend.   Don’t forget $45Bn in POMO next week so we’ll be long on Monday"
    If I am reading you right you are short the SPY and RUT over the weekend but are long Oil?

  59.  Trading AAPL….To fine tune your trading in AAPL.  I’ve noted that a 2% rise in the stock is generally followed (these days) by a pullback.  If you are using ATM calls 1 or 2 months out, I would advise selling the options any time AAPL goes up more than 2% in one day (like today).  Odds are very high that you will be able to buy it back cheaper the next day.  It’s another way to increase your profits in trading this stock.  

  60. At the open: Dow +0.38% to 11078. S&P +0.51% to 1187. Nasdaq +1.03% to 2521.
    Treasurys: 30-year -0.83%. 10-yr -0.42%. 5-yr -0.21%.
    Commodities: Crude +0.5% to $81.66. Gold -0.17% to $1377.30.
    Currencies: Euro +0.19% vs. dollar. Yen -0.12%. Pound +0.24%

    10:00 AM On the hour: Dow +0.94%. 10-yr -0.46%. Euro +0.21% vs. dollar. Crude +0.53% to $81.68. Gold -0.15% to $1377.60. 

    11:00 AM On the hour: Dow +1.18%. 10-yr -0.65%. Euro +0.11% vs. dollar. Crude +1.99% to $82.87. Gold -0.3% to $1375.60.

    MBA Mortgage Applications: +2.1% vs. -14.4% last week. Thirty-year fixed mortgage rate increased to 4.50% from 4.46%. 

    Oct. New Home Sales: -8.1% to 283K vs. 314K expected, 307K prior. Months’ supply 8.6. Median price $194,900. 

    Sept. FHFA Housing Price Index: -0.7% month-on-month, vs. flat (revised from +0.4%)in Aug.. Year-on-year, prices are -3.2%.

    Initial Jobless Claims: -34K to 407K vs. 435K consensus. Continuing claims -142,000 to 4.18M.

    Oct. Personal Income and Outlays Income: +0.5% vs. +0.4% expected, -0.1% prior. Personal spending +0.4% vs. +0.5% expected, +0.2% prior. PCE core price index flat in-line with expected and unchanged from prior. 

    Oct. Durable Goods: -3.3% vs. +0.1% expected, +3.5% prior. Ex-transport -2.7% vs. -0.8% prior. 


    The unexpected drop in durable goods raises fears that a slowdown in capital spending could hurt an already-anemic recovery just as household purchases are starting to show signs of acceleration. 

    Nov. Reuters/UofM Consumer Sentiment: 71.6 vs. 69.5 expected, 69.3 preliminary, 67.7 in October. Current conditions 82.1 vs. 79.9 expected, 79.7 preliminary, 76.6 in October. Expectations 64.8 vs. 63 expected, 62.7 preliminary, 61.9 in October.

    EIA Petroleum Inventories: Crude +1.01M vs. consensus of -1.9M. Gasoline +1.9M vs. consensus of -0.9M. Distillates -0.5M vs. consensus of -1.5M.  Worse than CNBC said yet oil is up to $83 now – AMAZING!   

    The ECRI’s Weekly Leading Index rose to a 27-week high of 126.4, from 124.2. Annualized growth rose to -3.1% from -4.5% last week. 

    Nov. KC Fed Manufacturing: 21, vs. last month’s 10. New orders for export rose to 11 from 0. Future production eased to 23 from 29. Overall, mfg. growth increased, producers remain optimistic about future activity, and prices, particularly for raw materials, continued to edge higher. 

    No official word yet on the size of Ireland’s bailout, but PM Brian Cowen says the number being discussed is around €85B ($113B). The terms of the bailout may include a bank levy, creating a way for Ireland to increase its corporate sector tax yield without raising its 12.5% corporate tax rate.  We hit our DD target (.85) on AIB on that news this morning!  

    Ireland stands behind the bank, but who stands behind Ireland? The Bank of Ireland (IRE -23.7%) has reversed and again turned sharply lower after rising nearly 15% on news that the Irish government would take a majority stake.

    A general strike called by Portugal’s unions to protest government austerity plans shuts down ports, factories and the subway system in Lisbon. The mood in the bond markets deteriorates, as Portuguese (and Spanish) spreads reach new records; Portuguese spreads are nearly as high now as Greek spreads were ahead of the rescue.

    Portugal will be forced to take a bailout, and then Spain will become a target, as there’s "little to stop the contagion" in the eurozone, says Morgan Stanley economist Joachim Fels. It reaches a point where "governments will say ‘enough is enough, and we will rather borrow from the EFSF at a sensible rate.’"

    Spain is drawing attention to its fiscal reforms and strength of its banking sector as part of an aggressive attempt to separate itself from the difficulties facing Ireland. Despite these efforts, the yield premium on Spanish bonds continues to move higher. 

    China will use "quantitative and price tools" in an attempt to tighten liquidity and cool inflation. This quantitative tightening, or QT, shows how seriously the Chinese are taking the inflationary threat. Ultimately, it is QT, not QE, that may end up being the more important policy.

    The IFO institute reports an unexpected jump in German business confidence to 109.3 – the highest number since reunification. European stocks reverse early falls as the report offers at least a temporary respite over worries about bailouts, contagions, and the possible destruction of the euro.

    Cisco (CSCO) merits a new look, given it’s poised to unleash market changing technology, sits on $39B in cash, plans a $10B stock buy back, and will issue its first dividend by year’s end. "You may have been burned by Cisco in 2010, but many signs point to a better 2011," says an analyst. Premarket, Cisco is +0.6% to $19.33. 

    Deere (DE): FQ4 EPS of $1.07 beats by $0.12. Revenue of $6.56B (+38.9%) vs. $6.25B. Shares -1.5% premarket. (PR)

    Frontline (FRO): Q3 EPS of $0.07 misses by $0.11. Shares -4.2% premarket. (PR)

    Tiffany (TIF): Q3 EPS of $0.43 beats by $0.06. Revenue of $681.7M (+14%) vs. $652.8M. Shares +2.4% premarket. (PR

  61. Phil:
    I am confused about Dec9 weeklies; Don’t see a Dec9; see Dec3, 18 and 31st.
    Appreciate your clarifying.

  62. exec

    I’m in TZA at $19.43

  63. Thanks Iflan – i’ll try a little of cover going into the holidays. Currently in the Feb 300s, which im planning on holding through the holidays. hoping for some hype over good holiday sales. What do you think? Im up about 15% at this point on the position….I could roll forward to january to take some off the table? Or sell some december 330s to cover? Or 320s?

  64. NET $ +.34%, Europe closes next 15-20 min

  65. Phil,
    If QE2 is partially designed to keep interest rates low, and if treasures go up when interest are low, then why is TBT going up?  Is this getting away from the fed?

  66. Hi Phil,
    We’ll be long Monday because of POMO but you like the SPY puts and the TZA spread over the weekend.  Am I missing something?  Thanks.

  67. Phil
    Is there any trade on EWY, ?

  68. For those of us getting burned on the short side -
    I am assuming Friday is another big push on light volume - 
    What do people think about next week? This is getting painful.

  69. Mike
    Sorry new here – what is NET $

  70. Morning Phil
    I miss doing the great buy-writes that we did a several months back when the VIX was higher. I had to do a number of them to witness just how safe, conservative, predictable and profitable they really are. Sitting mostly in cash at this point takes patience. But knowing that there will be much better opportunities moving forward helps.

  71. Iflan- thanks for AAPL idea. I have been noticing it too but I am afraid to sell anything pre thanksgiving. I am sure apple sales will be good on black Friday so wud like to wait on selling till Monday/Tuesday although big POMO next week.

  72.  iflan / AAPL
    This stock is my largest holding… lots of naked short positions at different strikes. I love this company long term, and have figured out how to play it, as my strategy has been working well for some time. On days the stock is up, ( like today ) I close out all my positions. On days like yesterday, when the stock is down I lay in the positions… all naked puts – .If I get caught is a down market I just keep adding to the positions, as long term I know the trend is up – if nothing else, just wait for earnings ( they never disappoint ).

  73.  Hi JRW,
    I am in the TZA trade with you. trying out your strategy for the first time. what is your IWM line for the exit. 

  74. NET $ = +.30%, dx/y = (.19)%
    C =1195.49, F =1194.25
    VIX (8.63)%
    Oil +2.12, Gold (4.20), oil really rocking
    10yr = +4.63%,  30yr = +2.23%

  75. Exec / TBT – There are a couple issues. First, TBT is a relatively long maturity – and most of the fed buying is concentrated in shorter maturities. Thus, what they are doing is pushing down (or trying to!) shorter term and intermediate term rates. In turn, i think they are stoking inflation and dollar depreciation fears. This is dropping international and national demand for low-rated long maturity dollar denominated Tbills. This has been my premise for being long TBT; i continue to believe that as the fed stokes the money supply – the only thing we need is velocity. And it will happen very very quickly because of the enormous growth we’ve seen in money supply, if velocity ticks up a little…. Kaboom! TBT will go back to its highs within a short period of time (dont know when this will be, but hoping for mid 50s by fall of next year.

  76. jcbcpa

    the NET $ is just my attempt to figure out what the dollar is doing

    basically I try to do a quick net out of the dx/y against the the Euro, Yen, Franc and Yuan

    for what its worth

  77. not meant to be in bold

  78. Thanks for the explanation Hanna.  Makes sense.

  79.  Trading AAPL
    hanna….OK to cover, but no more than 1/2
    nicha…I agree.  Will probably rise through the holidays.
    gel…Very good way to play it.    Sell on bounces, buy on the dips, more or less.

  80. LOL Exec!  Don’t you have a secretary or something?   Step 1) Highlight a word.  I am highlighting the word: Here.  Step 2) While the word is highlighted, click on the globy-paper clip thingy.  A box should pop up.  Step 3) The box below pops up and you put in the URL you wish to link the highlighted word to and click OK (although I set target to new window so the link doesn’t bother what people are currently looking at).  If you are still confused, click on the link for the whole support document or contact the Geek Squad and they’ll come to your house and hold your hand.


    BUD/Sundevil – That’s why you don’t buy premium, not much way to fix a short time-frame directional bet if it goes wrong.  These are crappy options with wide spreads but you should be able to roll into a March $60/65 bull call spread ($1.70) for less than $1 if you really believe in them but you may as well hold our for next week as we may get a nice pop – just don’t be greedy and be thrilled to get out even and read our Strategy Section about scaling in and taking losses (as well as profits) off the table!  

    SPY/Novice – I am for going SHORT on SPY over the weekend.  I still like the Dec 9th $119 puts, now .88 as they have a .40 delta and should move nicely if the S&P falls.  This is a bet on something falling apart in Europe or Asia over the weekend but, of course, we do have Friday to change our minds.  If you don’t need protection or you don’t need to gamble – CASH is my real preference.   Also, not long on oil but not able to get short either as it keeps going up and up (which is better than faking us into a short play, though).  

    EU done with FTSE up 1.34%, the CAC up 1.2% and the DAX up 1.7%.  It turns out that flat DAX number was a mistake from the WSJ, who I use for my quick look-ups on Europe!  That means there’s no real reason for us to blow 1.5% gains today.

    SPY/Reza – That’s .SPY101203P119 according to TOS so it should be the 10th, not the 9th, which is Thursday.  

    TBT/Exec – It’s just a general loss of faith in the bond markets for all debt.  If EU bond rates fly up and the EU doesn’t look any less safe than the US to investors – then they put their money in the EU until the US raises rates enough to cover.  As I’ve been pointing out, the Treasury needs $140Bn a month and Bens QE2 isn’t enough to cover all of it so, despite his best efforts, rates can still go up even though he becomes the main buyer of TBills.  

    Missing/Carsick – Nope, we’re just repeating the same pointless move up we made last Thursday and you can go back and read last Thursday’s comments to see everyone freak out about that too and then you can read my comments saying it’s not all that impressive and that it’s best to roll up shorts and PATIENTLY wait for the little fake rally to die out etc. etc….


    I know 5 days is a very long time so no one expects you guys to remember this or the fact that we have fallen from 11,460 (460 points) so a 92-point bounce (20%) is exactly what we expect to get and we’re really not very impressed with anything less than a 40% bounce (11,184), which would take us over a normal Fibonacci 38.2% retrace.  

    EWY/QC – No, there are no trades.  It’s a coin flip.  

    Patience/Jbur – Good job.  The key is knowing that there ARE good times to commit capital and knowing you can be confident doing so in the next big sell-off is the key to good long-term investing.  Buffett sat for 5 years waiting and then dropped $5Bn on GE and $5Bn on GS within weeks of each other and then sold $5Bn worth of puts on the S&P.  You just have to pick your spots…

    Hopefully Europes close will be the end of this silliness.  Don’t forget (see above multi-chart), from the Euro perspective we are in a huge breakout rally!

  81.  Phil, are you recommending a new buy of CSCO ("merits a new look") or is that just a cut-and-paste of news from somewhere else?

  82. Phil/Hold you hand!!!

  83. novice

    Welcome, as your first time, I hope it’s a SMALL position, as these trades are meant to augment your main portfolio goals. IWM 73.60 should be resistance as well as 73.95; I would bail at a 1/2% loss it it goes against us. I am hoping to see IWM 72.49 again today but it all depends on the dollar.

  84. SPY Dec9/Phil – Now I am really confused since .SPY101203P119 = SPY DEC 03 2010 119.00 PUT

  85. Are the commodities markets still open? Oil is really pissing me off today :)

  86. NET $ +.01%, dx/y = (.10)%

  87. samz, I’m not saying it’s going to happen this year but we have had some really down Friday’s after TGiving.  It’s definately possible.  Especially with all the strife around the world right now.  I think today is more about making folks feel warm and fuzzy for the holiday.  The Naz is just absurd.

  88. I mean are they still open tomorrow ?

  89.  I have a TBT position…. but I am playing this one with caution. I believe the Euro Land debt concern will play out over the next few weeks, and there could be severe exodus out of European bonds all at once, should the comfort level of those holding them diminishes. The targeted alternative would be the US Treasury bonds ( as in the past ), an TBT would be hurt badly.

  90. Good TBT take Hannah. 

    CSCO/Jvest – I still like selling the 2012 $20 puts, now $2.70 as I think $17.30 is a fine entry and net margin on that should be about $4 so a very nice ROI on a stock anyone should be happy to get "stuck with" long-term.

    Yay – Exec got it!  

    USO $35 puts became interesting at .65.

    SPY/Reza – Well, maybe it is the 3rd.  TOS says it expires in 9 days so let’s go by that.  They are still .85 and they have to be the only $119 puts that are .85, right?  

    Commodities/Jrom – I don’t think anything is closing early today.  Tomorrow I don’t know as the rest of the World is open.  

  91.  JRW,
    Got it. I think I am understanding your levels better. I tried to paper trade them, but did not learn as much till I have real skin in the game.. 

  92.  JR, here is Thanksgiving schedule from CME

    NYMEX, COMEX® and DME Products on CME Globex 
    Wednesday, Nov 24
    1615 CT / 1715 ET – Regular CME Globex close for trade date Wednesday, Nov 24
    1700 CT / 1800 ET – Regular CME Globex open for trade date Friday, Nov 26
    Exception: NYMEX Softs TAS (CJT, KTT, TTT, and YOT) will remain closed until their 
    regular open on Sunday, November 28
    Note: Day/Session orders entered after 1700 CT / 1800 ET on Wednesday are for trade 
    date Friday, Nov 26 and will work continuously until Friday’s close at 1245 CT / 
    1345 ET
    Thursday, Nov 25
    1215 CT / 1315 ET – Trading halt
    Order entry, modification and cancellation allowed
    1700 CT / 1800 ET – Halted products resume trading
    Friday, Nov 26
    1245 CT / 1345 ET – Early CME Globex Close for trade date Friday, Nov 26
    Exceptions: TAS contracts close at 12:30 CT / 1330 ET
                         Silver TAS contracts close at 12:25 CT / 13:25 ET
    Link to CME holiday calendar

  93. I see the Dec 3 SPY puts for 0.84 cents but get no listing for the Dec 10s.  Is that right?

  94. Oil, REALLY!!!!?!!!?!?!?!?

  95. Phil
    Is this trade ok today ?
    JPM March $35/38 bull call spread at $2, selling the $33 puts

  96. novice,

    Have you read this ?

  97. SPY/Phil: Yes Sir!

  98. Here is the holiday schedule for commidities if anyone is interested.

  99. If we had bought the NFLX 175 Jan 2011 Calls in July/August for 0.45 (or earlier for that or less), we could have gotten 100 calls for $4500. That would be $208,000 today! Whew! Thats a nice little portfolio booster. I wonder if you sprinkled around some far out of the money calls in momentum stocks if you could make a decent return with just one hit. Someone find me a new momo stock for 2011!!!! :)

  100.  JRW. I missed that – homework for the weekend.. thanks

  101. For what its worth, some observation of new developments yesterday on long term P&F charts
    EEM gave a sell signal yesterday, a break above 49.50 would negate it, downside target is 41, there is also a long term positive trend line at 40.  The 200-day MA  = 41.79, 50-day MA = 45.82.  Current = 45.86
    CR/Y = Continuous CRB index gave a sell signal.  The initial downside target is 284.00. with a positive trend line at 266.  The 200-day MA  =274.73, the 50-day MA = 295.72.  Current  = 297.69.  A breakout above 302 would negate the sell signal.
    XAU  – Philadelphia Index gave a sell signal yesterday as well

  102. NET $ falling off here = (.37)%, dx/y = +.01%
    we touched 80 exactly at some point today on the dx/y and went lower off it (I do not have a time chart for dx/y

  103. Jbur – shoulda taken my own advice! Down 60 cents on my Oil short. I thought theyd do some BS like this, just didnt think it would get THIS high!

  104.  Matt thanks – I need some moral support 

  105. Phil,  question,,, your suggested weekend TZA vertical spread is identical to just selling a Put,  ie:  
                          sell $20 Put == sell $18 Put + buy $18 Call + sell $20 Call
    so what am I missing?

  106.  My concern on the short side is that we have some great black Friday -
    The American Consumers ability to buy crap and take on debt knows no bounds.
    That plus the expected media hype could lead to a pop on Monday – which might be nice for anyone not already short but not so much for who already have it on.

  107. JR
    You sure did call today’s action at the bell yesterday.  If this holds, will it qualify as one of the rare occasions that you hold over night? 
    BTW, I’m loving the real time dollar link you posted!!!  It’s amazing how IWM is tracking the dollar these days.

  108.  This is a basic question…I’ve heard people refer to "Buying premium"…what does that mean?

  109. NET $ +.01%

  110. exec / overnight

    It depends on where we close, but aside from TNA/TZA positions, I’ve still got a boatload of S&P and Russell puts (or sold calls) !!

  111. jtrader
    Buying a put is betting 100% for down, the spread has a hedge to mitigate the loss if it goes against you.

  112. Phil – I know oil is a crazy commodity but do you think we sell off a bit going into close or they try to jam it up to 84$? I doubled my short at 83.7 and debating whether to just cut my losses now or hold out. Im beyond pissed….

  113. Mike, when EEM gives a sell signal does EDZ give a buy signal?

  114. Bought USO puts @ $.65 and the TZA spread @ net $.47.

  115.  Buying premium – buying options that have premium over and above their in the money value -
    SPY trading at 120.05 – you buy a 120 jan call – for 1.00 – you just paid .95 cents in premium – also referred to as the time value of the option – although volatility also goes into the pricing equation.
    Phil – is mostly against buying premium – instead we try to sell premium to someone else 

  116.  Perfect…thank you samz3700!

  117.  PK -
    If this is not a familiar concept, I would suggest reading and paper trading for a while or really taking it slowly. 
    If it was just the term, never mind.

  118. NET $ (.34)%

  119. I’m off to Dayton to visit the outlaws.  Have a great holiday.

  120. I have never looked at EDZ before today when you mentioned it.
    But yes, it gave a buy signal yesterday and had pulled back today
    The chart shows 22.5 is the stop, target 31 (long term), so yes it is on a buy signal as of yesterday

  121.  TLT getting a sound thrashing!

  122. when I take a look at CMG’s one-year chart, it amazes me. Back in 1999-2000, about the time I graduated from college and was really eye-balling stocks and charts for the first time, that was when we witnessed the first stock bubble (and ironically, PCLN was one of these). Now watching CMG go from 50 (3/09) to 75 (4/09) to 100 (10/09 and 1/10), to 120 (4/10), to 150 (6/10), to 175 (10/10 only 1 month ago!), to it’s post-earnings squirt to 235 (11/11/10), and after a meaning less pullback the recent 5-day run up to 249.70 (and take your pick on any others, NFLX, AMZN, PCLN, all of our favorites), it’s interesting to see what amounts to another stock bubble forming. This time though it seems to be in a few momentum stocks as opposed to the overall market (e.g. Nasdaq at 5000). But this too will pop and end, the question is when and what does will the ski-slope side of CMG look like when it does?

  123. Capt. / FYI

    Oil has declined 10% in the last couple of weeks and is now on support !! This is a chart of the inverse ETF !!

  124. CMG – if inflation is sneaking up on us, which is sorta my pet theory, it’ll show up in food first. And we know of course food isn’t part of the BULL**** CPI-U because only the most extremist members of society engage in fringe activities like eating and buying gas, so if we are already seeing inflation in food we need to go hunt that data down ourselves. But anyway, if those proice increases pass through to burritos you can expect the next couple of earnings cycles to not show the PEG that’s necessary to justify an $8B restaurant chain. If I could just stop trying to time "The top" I might have some capital left to deploy when this occurs!

  125. CMG/biodiesel/Phil – how about some Dec. 2011 puts instead of shorting the stock?  or June ’11 and be prepared to roll 6 mths. 

  126. JRW – Thank you for the chart and advice. I will definitely take it into consideration. Im pissed at myself b/c I didnt go long Oil before the inventories. Although I am a long term bull on oil, I just think it has a bit further to fall. Also, I am bullish on the $ right now with everything that is going on which is also bearish for oil.

  127. dollar up with market at its highs???

  128. Is the dollar actually up and the market up. Why?

  129. NET $ (.01)%

  130. C = 1197.67, F =1196.25
    10yr = +4.78%,  30yr = +2.54%
    oil +2.20
    VIX (8.43)%

  131.  Dollar +, market +. Welcome to the new world order my friends.

  132. biodieselchris
    Order = Chaos. The New World Order is actually the owners of the world’s military, money making, machine!

  133. how do you log on member chat?

  134. Shadowfax, I’m no option guru, but I did read "the book", and the above TZA spread is identical to just selling a Dec $20 Put (except that spread is more expensive!)   If you had only sold the Put you would have $1.80 at expiry

  135. hanna5, 2011 momo’s, I took at stab at CME, but they aren’t 0.45. I have Mar11-360 and Jun11-490. WIll hold until deep into the money or roll. 
    Also, if this nonsense continues to continue, so to speak, CRM hasn’t had the run that FFIV, NFLX, etc have enjoyed. They seem to have the "cloud" space buzz, or so I’ve heard. Could be an interesting bet. 
    Financials have been the dogs-with-fleas this past year, and taking a contrarian view that the whole SEC / Mortgage / Jail time / World crises kinda things will all "shake-out" there could be a significant run here. Could it be as easy as XLF Jan12-21 calls for 0.14? Maybe worth 50 contracts.
    Homebuilders too. HOV Jan12-7.50 calls for 0.20 or 0.25?
    My short term stuff has been pathetic lately, so I’m with you here, find some cheap OTM calls in some good, solid bets, and buy-and-hold. you only need 1, right?! Other thoughts?

  136. (PS, On CME, those are the Jan12-490 calls, not june’s)

  137. NET $ +.02% as traders come back

  138.  samz…. Your comment about the consumer’s ability to buy crap and take on debt ( no bounds ) has to be the best laugh of the day – sad but true!

  139. Thanks for schedule Minijoe! 

    SPY/Carsic – It’s the Dec 3rds we decided. 

    JPM/QC – Totally.  I think they should be back at $40. 

    2011/Hannah – How about IMAX?  They are primed for silly money on a great growth story.  They are also a 20-bagger since 2008, when we were loving them down at $2.50!  Still, you can’t let the fact that a stock is already up 10x bother you when choosing ridiculous momo stocks.  If they pick up a major installation deal, people could really ratchet up expectations on them so you can commit to owning them for net $22 by selling the June $22 puts for $2.10 and buying the 24/29 bull call spread for $2 so net .10 on the $5 spread that’s $1.50 in the money to start and net’s 50x if it hits.    

    Sells/Mike – Well someone doesn’t want those charts to pan out, that’s for sure.  

    Dow volume at 1:15 is only 67M, very low but it’s all up as I guess the sellers, like we did, took the money and ran on yesterday’s dip so the bullbots have the field to themselves today.  This rally is coming on a steady dollar (79.73) so it is much more impressive than most recent ones.

    Oil/Jrom – I find the ONLY way to play it is strictly below a solid line and then out with a .05 loss and just re-load until it finally works.  

    TZA/Jtrad – What if you don’t want the potential obligation of selling an in the money put?  Also, in the money puts often get assigned, which is a huge pain in the ass.  It’s a valid way to play as well but, I prefer the 2 legs most of the time.  If you have PM, pushing the put 10% lower makes a pretty big difference too.  

    Buying Premium/PK – That’s when you pay a premium for an option.  Like if you buy the TZA $18 puts for .65 you are buying .65 in premium plus you are $1.30 out of position.  If, on the other hand, you sell the same puts, you are collecting .65 in premium and TZA has to drop almost 10% before you even give the putter their money back.  We try to teach people to be sellers of premium, not buyers…  

    And what Samz said! 

    Oil/Jrom – I think this move was a bit extreme but, as I said this morning, it’s going to be a crazy weekend and Ben is on the warpath next week so I sure don’t like staying short on oil with any major risk overnight.  

    Oil – Of course if you were long on the inventory play – absolutely take money and run now if you haven’t already!  

    Have fun Exec!  

    Bubbles/BDC – Yep, as a 1999 survivor this is deja vu all over again.  

    Oh no – My 8-year old daughter is explaining to me that her teacher said this Friday is "Black Friday" and that’s the day we should be in the stores at midnight to get the best deals ever – some of the stuff is even FREE.  This is some really relentless brainwashing they are giving our children these days…  

    CMG/Terra – The put premiums are outrageous but, of course, looking cheaper than shorting calls at the moment.  There are 2,475 open March 230 puts ($15.85) and that is as much as all the call strikes put together but there are also 645 $220 puts and 645 $210 puts so SOMEONE thinks this thing is tanking by March.  

    Dollar/Jabo, Shadow – It’s not really up, same spot as yesterday and the markets are back where they were before yesterday’s gap down so a little strange but not very strange.  Still, if we de-couple here it could get interesting.  

    SBUX making 52-week highs!  

    Member Chat/Sydney – This is Member Chat!  

  140.  shadowfax… I would be careful when considering a short on Oil.

  141.  USO/Phil – Add me to chorus of those who love this trade man. I’m still new and learning so I’m just pulling out $50-$150 at a time but it hasn’t missed yet. I was long for a few days and now I’m out of that and gone short again. I feel like I’m running a toll booth on this thing.

  142. jtrader
    I usually trust Phil’s math but if the market goes up 10 to 20% you don’t lose all, if it stays between the spread strikes you collect the prmeium on the caller and putter. It’s the sell premium instead of buying it like I did on USO puts and you sujest with TZA. I also hold the FAS spread that is up nicely today. I actually expect to sell out all before expiration esp. the USO on Friday, Monday, or Tuesday when oil realizes the price is way too high, we did have a build in inventories. By the way I have lost more than made on TZA/TNA calls and puts, for that I buy the stock or IWM options. You will notice JRW III does the same, but mostly trades the stock, out at close every day! Cash = good nights sleep!

  143. Is there a way to reduce your exposure using options.  For example IBM is traveling @143.  I want to sell the put at 2012 strike 130 and collect ~$8 for it.  But now I am on the hook for 13k.  But I would like some to reduce exposure to it to half or possibly a 1/3.

  144. jel1
    The USO is a small position, I will get out before loosing $100.

  145. Toll booth/Pak – LOL, that’s a good way to look at it!  

    55 pages!/StJ – Well it does look interesting, thanks.  

    12:00 PM On the hour: Dow +1.24%. 10-yr -0.72%. Euro -0.04% vs. dollar. Crude +2.68% to $83.43. Gold -0.3% to $1375.60.

    01:00 PM On the hour: Dow +1.23%. 10-yr -0.8%. Euro -0.01% vs. dollar. Crude +2.99% to $83.68. Gold -0.38% to $1374.50.

    EIA Natural Gas Inventory: -6 bcf vs. consensus of -1 bcf. Futures +0.6% to $4.44. 

    The Treasury sells $29B in 7-year bonds at 2.253%. Bid-to-cover of 2.63 vs. a recent 3.06; indirect bidders take 42.2 vs. a recent 50.2. 30-year yield +9 bps to 4.279%; 10-year +13.5 bps to 2.908%; 7-year +15 bps to 2.225%. 


    Great quote by V:  Vitaliy Katsenelson makes the case that central planning in China has caused a massive misallocation of capital that must ultimately collapse. As for the timing, Katsenelson notes, "these bubbles usually last longer than the reputation of the person who predicts their demise." 

    Mexico seems likely to take the biggest hit in Latin America should the European debt crisis spread to Spain. Spanish banks control 34% of the banking assets in Mexico. If difficulties in Spain force them to reduce overseas exposure, there could be a "massive sell-off" in Mexican assets.

    With e-commerce spending expected to rise 11% this holiday season, investors are giving Amazon (AMZN) a vote of confidence and a hefty bounce ahead of Black Friday. Shares +4.9%. Other retail gainers: EBAY +2.7%. OSTK +4.4%. TGT +3%

    The improvement in jobless claims is lifting shares of staffing firms this morning: Monster Worldwide (MWW) +5.9%, CDI Corp. (CDI) +5.3%, On Assignment (ASGN) +6.8%.  Based on 30,000 less pink slips in a single week

    Have half an hour for lunch? You might want to check out this 30 minute video that has legendary investor Jim Rogers, on an exercise bike, sharing his views on metals, energy, politics and more.

    Federal prosecutors are investigating Apple (AAPL +1.9%) analysts whom they suspect of insider trading about the company’s supply chain status. This is disrupting the ‘channel checks’ indispensible to traders and has ‘left investors wary about how to research stocks.’

  146. seems like the day is over -

  147. Phil –
    A number of months ago I entered XOM and WMT buy/writes as follows, as per your recommendations –
    Bot XOM at 58, sold Jan 12 55 calls at 9.35, now 16.15; sold Jan 12 52.5 puts at 6.9, now 2.12
    Bot WMT at 54, sold Jan 12 47.5 calls at 5.79, now 7.95; sold Jan 12 45 puts at 4.1, now 1.89
    Should I do anything at this point, or just sit? I have excess margin and don’t necessarily need to free it up (mostly in cash now) – on the other hand, I’m mindful of your admonitions about bailing on a position if you’ve made a substantial part of the total return in a relatively short period of time (particularly compared to the total time horizon of the investment).
    And: I didn’t listen to you re: VXX some time ago, and suffered mightily. Lesson learned. 
    And: Many thanks to you and everyone on the board for what is the best all-around investment experience/community I’ve ever come across — educational and informative and inspiring and amusing, all wrapped into one!…

  148. samz / over

    Dollar making daily high, TBT failing, IWM crossing South of the 8EMA; stick around for a while 8-)

  149.  Phil
    I have a couple of GS positions, and they are way up… so I thought I would take the profit…. Do you have a financial sector replacement play you like?

  150. Go Buckie Go!

  151. hahaha soooooooooooooooooo f$CKING predictable yet I ALWAYS bet against it! Frigging OIL!

  152. gel1
    Phil’s play was FAS BCS Jan 18/20 sell April18 P net about $.20 still better than his call at I remember $.40

  153. NET $ (.17)%

  154. Obama is toast in 2012, and pretty much everything else this guy says I agree with
    Making me re-think my UUP call positions, but not in the short term.

  155. Im doubling my short, this is a joke and it will at LEAST come down a little bit tonight!

  156. I gotta go running in all this cold, snow and ice.
    And this is Seattle!!! In November (???)

  157. Hi Phil :  got your TZA  insurance spread for net $.21.  Consider it cheap insurance for 5 days.
    I bought BMY at $ 27.35 and sold Mar. $27 calls for $1.56  which are now $.56 . Thinking I should roll to June $28 C for $.62.I lke BMY  long term with its 4.9 % dividend and P/e of  5. What’s your opinion.Don’t want to sell puts  since it’s in my IRA account which requires 100 % cash coverage for puts. Thank you & best to you and your family.

  158. IBM/Thatway – Sure, you own them at $143 and you want more upside so you can take the 2012 $150/180 bull call spread for $9 and sell the $115 puts for $9 and the worst thing that can happen to you is you own IBM again at net $115 or, if IBM gets to $180, you make $30.   Margin on the puts should be about $20 so you have 85% off the table back to cash tying up $20 per share in margin and you are covered for a $30 dip in IBM.  If they head up and you want to be more aggressive – just buy a few more calls.  

    Buy-writes/Kimisk – Not much to be done about those, they are means to be dull plays and they are!  On XOM, with a year to go and a nice pop in XOM, you may want to risk buying back the puts and looking to get a better price down the road.  Since we’re way up at $70, you can afford to sell $55 puts if they keep going higher but I’d give them a chance to pullback and maybe you can get a better price down the line a bit.  If you want to be more aggressive, you can take $40 off the table by flipping to the 2013 $40 calls at $30 and they will be well-protected by the 2012 $55s.  Your net on that entry would be about $9 on the $15 spread as you already made $12 on the stock – that lets you put your $40 to work on something more diversified.  I’m glad you are leaning AND having fun – that’s what we’re all about here!  

    GS/Gel – Well I still like JPM best and then the XLF/FAS plays as a general inflation play on QE2 moving the financials.  The

    FAS Apr $18 puts can still be sold for $2.05 and that pays for the Jan $18.33/21.67 bull call spread for starters.  Figure $4 in cash and margin to make $3.34 very quickly.  

    JPM would be a nice pickup at $35 in March so selling the $35 puts for $1.55 is free and the net on the Jan $35/37.50 bull call spread is $1.70 so .15 for that $2.50 spread is also a nice potential profit on low commitment.  

    Good tracking Shadow!

    UUP/BDC – Makes you want to check out bunkers!  

  159. GUess they are going for 84, where I will TRIPLE my short! hehehe any middle eastern shenanigans between now and Friday and my life as a daytrader will be over :)

  160. Capt.

    I can rent a rebel for less than your soon-to-be margin commitment !!

  161. Phil /Anybody
    How is the mechanic in options prices when extraneous situations like the payment of a huge dividend like WYNN did and starter trading ex dividend on Nov 19? Would the price immediately reflect the 8 dividend in the option when its announced? Otherwise it would seem to be an arbitrage opportunity to buy a put or sell a call right before ex-dividend date…

  162. Anyone know of any potential big news tonight out of Asia/Europe besides North Korea? Sorry for my whining, Im just on tilt right now.

  163. NET $ (.02)%

  164.  Amatta – no free lunch – yes the prices should reflect the change in dividend and yes – there probably are arbitrage traders scalping a few cents here and there. Maybee watch a stock or two you like and see how the options behave.

  165.  Phil    Thanks… I dropped in the JPM play… Would love to make a play on the Aussie financials, as I see good times ahead for them… will research…. any ideas?

  166. 10yr = +5.29%,  30yr = +3.00%

  167. Phil
    USO is .01 from the get out point, what is your thought on Friday without Big Ben in play?

  168. $ pushing against 80 and market is not pulling back.  What gives??

  169. Peter D 
    On CMG post yesterday.  I read it and understand what you’re doing as a clever way to avoid loss.  (Probably simpler to just sell a few puts and forget about shortlng this stock.)
    Now assuming that you did not get the fill on the vertical put but you did get filled on the two different shorts Calls on CMG.  You must now be contemplating what you’re going to roll to.  In your post yesterday you said
    ":If CMG goes up, roll the callers 2X in the same month, move the put vertical up to say 220/210"
    My question is what exactly would you roll to on the callers 2x in the same month?  Also since I assume  the vertical didn’t fill would you now go for the 220/210 vertical put spread?  Could you provide an example so I can follow this more specifically? 
    Anyone else, Phil?

  170. button

    No volume, fundies don’t count on days like this; there are just no sellers……………………so far 8-)

  171. this has got to be the most frustrating day in recent memory.  Everything is diverging from each other.  And the clock is running out.  At least TBT is up…
    Come on JRW, spot a sig rune or something.  If you can’t see one – make one :)

  172. NET (.10)%
    last hour

  173.  jromeha
    Next week will give us some definitive direction as to" how and when" the Eurozone problems will play out…. I am still playing the Euro short ( against the AUD ), and have taken all my other plays off the table for the moment, but will go short very deep if we get the right news as anticipated. ( Spain is the heavy ammo as well as the German reaction ) It is like planning a war, and strategically making an assessment of the enemy’s weaknesses. We have to be the victor – taking a loss is not an option. ( out of George Patton’s playbook )

  174. Seattle/bio
    I lived in Mill Creek about 8 years ago and about this time of year Seattle had a very big snow storm…. It shut the city down for about 3 days… I raced to the grocery store to load up as it was beginning to snow heavily and barely made it back because the streets/roads were becoming unmanageable and most drivers could not navigate the snow ( I grew up in that weather)…. I then sat home gpt 3 days watching "the circus" in Seattle…. LOL   

  175. Gel
    I like your strategy on AAPL  Sell puts when down and buy to close next day or so when UP.  Theoretically this could be used for any stock.  What other parameters do you consider when selecting this strategy?

  176. Gel – So just to clarify, even though you just stated "you have taken all other plays of the table" did you close the EUR/SGD trade? I will close as well, if that is the case.

  177.  On RUT we are really close to new 52 week high

  178.  JRW
    The market that last few days is perfect for your play-book… damn – you really called the right way to play it… I’ll have to return to the classroom !

  179. acrobra65
    Gust stopped snowing last night 3 feet, all roads out of hear are closed, 3 degrees, secondary roads not to open until the weekend, avalance on Teton pass, and no fuel deliveries until Monday. It can and did happen, wish I could still ski.

  180. NET $ (.15)%
    I have to run, take care and have a great holiday all

  181.  doubled
    Every stock has its own personality and DNA ( I’n not a a psychiatrist, but if I was, I might make the analogy ), and my experience following this one exposed the thought this would be a good way to play it for maximum gain, and minimum risk.  If I am wrong on my timing or direction, I know my hedge is the compelling upward trend in their business model and resulting profit. ( kinda like a reprieve that kicks in at a later date to sanitize a possible loss )

  182.  Raised in Wisconsin and living in Seattle. Had to program myself to not judge Seattlites’ reaction to snow on Wisconsin standards. We didn’t shut down for 3" of snow. As a boy we once stood at the bus stop for an hour in a blizzard, spent the next hour in the bus getting to school, and two hours later got the news school was shutting down and we’re going home. Finally made it back home at 9:30 pm after walking the last mile when the bus got stuck. Woke up to 6′ drifts in the roads. If that happened here there’d probably be class-action lawsuits for emotional suffering.

  183. Cap-, if you are around, thanks for the NFLX play yesterday. Sold the $210 call for $3.15 yesterday. Bought it back for $2.10 today. Nice 33% gain for a day :)

  184. BMY/Dflam – They should have support at the 200 dma at $25.25 so why not take the March calls off the table with $1 profit and wait for a move up to sell more?  If they fail the 200, THEN you better sell some $25 calls to cover but, meanwhile, you have your basis down to $26.35 on the naked stock.  

    Oil/Jrom – $83.975 so far…  I don’t like pressing oil like that because the dollar is way up at 79.935 so if it falls, then oil gets a big boost right there.  

    ECB/Mike – At least someone is concerned!  

    Dividends/Amatta – It depends if they were planned before the option contracts were issued.  If they are planned, then the dividend is built into the price and if not, then sometimes an adjustment is made to the contracts.  That was the case with WYNN, whose contracts were priced down $8 to reflect the dividend.  

    News/Jrom – There could be an escalation of war.  There could be no war.  Another PIG nation may get into trouble or someone may calm the markets.  Not a good time for forecasting!  

    Aussie/Gel – I can’t think of any big ones.  Don’t forget they have to actually pay interest to their depositors – not at all like the scam the US banks have going.  

    USO/Shadow – It’s a gamble, pure and simple.  I just think the fun from $80 to $84 in 2 days (5%) is not likely to be sustained but we are early in the Jan contract cycle so they can play with contract pricing by trading with each other for weeks to come.  

    Volume on Dow is 85M at 3pm – we do more when we’re closed!  This is a nonsense, meaningless day and I would be very cautious extrapolating anything off of what’s happening today.  

    CMG/DD – If you sold Dec $230s they are now $21.50 and $19 in the money.  Those can be rolled to the June $270s ($22) which can be rolled to the 2012 $310s ($21.40) and those can be rolled to the 2013 $360 at $23.30 so the only question I have to ask myself is do I think CMG is still more than 50% undervalued?  If not, then I just roll along until the market agrees with me.  Of course if you sell a June $150 put for $4.50 and each time you roll up you collect another $4 then you’ll have an additional $20 buffer on that $360 or, if you put it into rolling CMG up $10 more in strike each time, you can push the strike to $410 by 2013, which is kind of a lot and if you really, really think CMG is such a fantastic stock that it will burn your $410 short calls in 2013 – then why the hell are you shorting them?  Anyway, if you are suddenly in the CMG to the moon club, you can simply buy the 2013 $310/350 bull call spread for $10 and offset that with the sale of the 2012 $150 puts for $10 and there’s another $50 they can climb without hurting you on your rolling plan so now you are covered to $460 on the $250 stock that should probably be a $160 stock.  All that can be done without spending a single penny and THAT’s the way we roll!

  185. HA! They got it to 84. CONGRATS, Im am now tripling my short on this ridiculous runup.  Planning on covering tonight

  186.  Phil,  What are your thoughts on doubling down on the Amazon play from a couple months ago?  I’m in the 190/165 Bear Put Spread, short the $170 Calls.  Net $9 on the $25 spread.  I could double down here to bring my net to $3 something.  With the intention of lightening up again when Amazon comes back down to earth (Hopefully).  

    Have a good Thanksgiving everyone.  

  187. gel1 / playbook

    Thanks, but it’s only a 8% week so far !!

    lapper / sig rune

    Well, I’m currently SHORT so maybe when I cover it will help 8-)

  188.  jromeha
    I believe all of the short Euro plays are still attractive, however I closed out a few last night to take profit, and will put some more on as the news breaks. This strategy is to just maximize the profits. I am still in the EUR / AUD long play, as I see this one as a long term play. I guess the short answer to any inquiry, I am trying to "micro-manage" most of the currency plays, as the currency markets are as nervous as the town whore in church on Sunday morning. The direction ( short-term ) can flip from hour to hour.

  189. Phil--Based on your CMG example above how would one handle a purchase of a put gone awry--I  own PCLN ):  350 Jan puts
    B @ 21 now 5-- can anything be done?
    Wishing you and your family a very happy Thanksgiving

  190. Hi Phil,
    Thanks for your suggestions on GE/SYMC.  I will evaluate your recommendation in next few days, as I am not comfortable writing calls at current levels of the stock price.  I took your TZA hedge this morning and feel better about riding things out a little more..  
    Still not good at following most day trade recommendations and even after spending considerable time reading your posts, find it hard to decide (to pull trigger on trades) and even "ask" for directions.. That said, your observations are appreciated. 
    What do you think about USO credit spread Jan sold 35P / bought 32P (net $1.03), entered yesterday.  (Cannot do naked writes in this account).
    Would like to put on XLE spread.  
    Looking to create a credit spread on GOOG, if it pops upto $615 into "black friday" silliness.  Would you consider selling  620C?
    What is the "range" for TBT, for Dec expiration and for few months out – would you recommend entering any new trades on TLT or TBT?

  191.  jromeha —— that should have been stated as SHORT the EUR / AUD play

  192. jromeha
    I can’t get out of my USO puts tonight or tomorrow but between you and Phil I am holding till Friday. As long as JWR doesn’t hire a few rent a rebels I think we are safe!

  193. 02:00 PM On the hour: Dow +1.3%. 10-yr -0.78%. Euro -0.24% vs. dollar. Crude +2.84% to $83.56. Gold -0.39% to $1374.30.

    03:00 PM On the hour: Dow +1.31%. 10-yr -0.9%. Euro -0.39% vs. dollar. Crude +3.26% to $83.90. Gold -0.36% to $1374.70.

    The survival of the euro comes down to how two questions are answered, Geoffrey Wood writes: "Would Germany want to remain in a union with slow-growing, fiscally irresponsible members? And would those countries in turn want to stay in a union in which they are no more than poor and subservient provinces?" The answer seems clear.

    Last week saw $2.8B in outflows from domestic mutual funds, the 29th consecutive outflow and a jump from last week’s $677M in money moving out. Municipal bond funds suffered a $4.8B outflow.

    ComScore forecasts total U.S. retail e-commerce spending from the beginning of November through Christmas eve to rise 11% to $32.4B, nearly triple the 4% growth rate it estimated last year. So far, from Nov. 1-21, online sales have jumped 13% Y/Y, a "very strong start” helped by heavy price cutting. 

    On Black Friday, major retailers will offer in-store shoppers discounts for ‘checking in’ via online location-based services like Facebook Places, Foursquare, and Gowalla. Clearly the retailers want to get the most of the physical buying experience and the web. Retailers participating include RadioShack (RSH), Toy’s R Us, and the Gap (GPS).

    The drop in jobless claims – the lowest level for the four-week moving average since summer 2008 – is good news no matter how you slice it. But Art Cashin notes that claims reports usually are released on Thursday: "I don’t want to throw cold water on [market optimism], but when you have an off-reporting time," it can skew the data.  This is a very good point!  450,000 layoffs is 90,000 per week day and if this report is based on 4 days and not 5 then it’s not all that impressive that layoffs dropped 30,000, is it?  Also, if "THEY" knew the report would be skewed and they planned to make a big deal of it and jack up the market – then they couldn’t have picked a better spot, could they?  

    Apple (AAPL) has recently hired 5 executives with BlackBerry (RIMM) phone marketing expertise, indicating it may be chasing after Research in Motion’s corporate accounts. With 46M customers, RIM leads the corporate phone market, but also recently saw a major defection from Dell (DELL), indicating it’s not unassailable.

  194. Wishing everyone a very Happy Thanksgiving

  195.  JRW
    Still very nice…. you must have taken a few days off this week !

  196. Palotay, Im shorting oil futures into the holiday but I think shorting amazon at the beginning of Xmas shopping season is even MORE ballsy! Hopefully you have th Axe Detailer!

  197. Phil
    The Mutual Funds have started listening to you stocks and bonds going to cash! Very good.

  198. Happy Thanks to you all and to your families, be safe and I hope y’all enjoy the holiday!
    Thank you Mr. Davis and all the best to you and yours.

  199. Phil,
    LOL  I am not in the CMG to the moon club but wanted to understand the logic of Peter D’s post.  I like what you’rer saying about rolling this thing to the point of ridiculousness. 

  200. Gel – thanks for the update - I closed out of my position for a nice profit! Appreciate the advice!
    Shadow – hehehe I wish I did the puts, I wouldnt be down as much! I hope oil comes down for you. Im just thinking that tonight it at least touches 83.60-83.70 range  and I can get out with a manageable loss. Im definitely not planning on holding until Friday – worried we might have some good shopping #s. We’ll see.

  201.  Phil & All
    Thanks and my best to you and yours this Thanksgiving.

  202. Happy Thanksgiving. I am a newcomer but love this site! Thanks Phil and crew!

  203. Out of TZA at $19.37 for a 6 cent loss; Happy Thanksgiving all, it’s been a GREAT year !!!!

  204. Phil, 
    Are we to buy now more OPEN puts with this huge move down? Damn, the only short play I take hedged with these momo stocks and its the only one behaving like we’d like (unlike CMG! which is busting my #$#%^)

  205. Hi Phil and All – Have a nice thanksgiving holiday!

  206. Phil and all:
    Thank you and Happy Thanksgiving to you and yours.

  207. Snow – You guys remind me of the Four Yorkshiremen!  

    Although I will say that you haven’t seen snow until you get 6 FEET dumped on you in Lake Tahoe.  Had that happen twice when I was out there (both early Jans) – no complaining from us though!  

    OPEN with a nice flip-flop today.  If only the other silly stocks would follow suit…

    AMZN/Palotay – Gotta wait for Black Friday and Cyber Monday fever to go away.  It could get much worse and then you would be out of firepower so be happy if it heads lower and happy you didn’t DD if it heads higher.  

    PCLN/Savi – Well buying the puts is not the same at all as you are the one paying premium with each roll as opposed to collecting it so the equation is the opposite and each time you press your bet you lose more and more.  On the other hand, at least the put has a limited loss vs shorting the call – so at least you have that.  With the Jan $350 puts, if you want to stay with it, you just buy some time and sell the Dec $370 puts for $2.60 and use that money to roll to the Apr $300 puts at $8.50 so you buy some time to be right.  If the Dec puts go in the money, you roll them and if not, you sell another something and keep improving your position until you get a hit or at least collect enough money so you don’t care.  

    Oops, I got a bit behind but have a Happy Thanksgiving everyone!  

    Enjoy the holdiday – I’ll be around and working on Friday in case any of you crazy day-traders want to play.

    Have a great holiday,

    - Phil

  208. Phil:
    Still in Dec3 SPY 119Ps, at what point should bail? or double down? Any stops (mental or hard?)

  209. Hi Guys, where we poor Mexicans looking for some beans and tortillas, specially with Phil; remarks about Spain Mexico, I wish you all a very happy Thanksgiving and enjoy your turkey!!!!

  210. Happy Thanksgiving to All!

  211. Have a great thanks giving everyone.

  212.  CMG hit 250.51 !    before the close
    Definition of insanity…
    Happy TG day everyone.

  213. Phil
    I ived in Sacramento when they had a 6 foot dump in 24 hours took 3 days to dig the lifts out. When I got there it was cement. In 1976 Snowbird UT 4 feet of heaven overnight. 1993 Valentines day snorkles only about 8 feet in 3 days and April1 I think 2000 3.5 feet overnight and nobody could get to Grand Targhee but me! April fooled who? I was a real powder hound and those were the best days along with Colorado 1974-5 about 100 days of new snow in a row just never as much, once 30 inches!

  214. Wow – Oil now up to 84.2. Arghhhhhhhhhhhhh….. This has definitely ruined my holiday spirit! Enjoy the holidays everyone!

  215. Happy Thanksgiving! Catch ya Friday Phil.  I hate to miss those days if the bots go crazy.

  216. USO/DrM – I think that’s not a bad trade given the constriction but the problem with a spread vs. a naked put there is it’s not just directional but time sensitive so you have to get to the right place AND it has to be the right time or you don’t get paid.  With the put play – we just need a pullback to make us 20% and we get out.  XLE is different because we think it’s going up well over $15 so we can be comfortable with any spread that pays us at $15+.  Oil we only think will go down AT SOME POINT and then we won’t be the least bit surprised if it flies up again the next day.  If you can’t do naked writes in that account – then don’t force short-term trades on it.    On GOOG, it depends.  Cyber Monday is the key, not black Friday and we can expect the usual stunning numbers to come through that week (along with the Fed’s $45Bn) so I wouldn’t be jumping on any shorts too quickly next week.  I don’t like TBT up here ($37) but I like them at $35 or $34 so you just have to wait for another pullback PATIENTLY!  

    LOL Shadow – It’s not Thanksgiving in Nigeria…

    Rolling/DD – The whole key is not to let your rolls get away from you.  Always know where your next roll is going to be and how much your tolerance is for paying for it.  If you are selling $5 worth of puts you have $5 worth of leeway and if you are not selling puts then don’t throw $1 down the drain and make sure you do a roll before it costs you.  

    OPEN/Amatta – The plan was to buy more puts as momentum plays if they couldn’t hold $70.  No crisis yet.  

    SPY/Reza – I like them through Friday at least.  My intention was for a weekend play.  They are still .85 and we can sell the $118 puts for .60 and roll out to the Dec $118 puts ($1.50) about even.  We always have a fallback plan, right?  

    Mexico/Yodi – You guys know how to make beans and tortillas???  Well let’s take the country public and we can get you a 40x p/e in no time!  

    Powderhound/Shadow – Yep, I used to watch the storms forming and bolt out of work and book a flight to get ahead of the storms.  Had my own company so I didn’t care if I got stuck for a week (preferred it!). 

    Oil/Jrom – Have you considered betting something like USO calls to cover?  Or shorting puts like the $35 puts at .59 as you’d be pretty happy to have to pay them off with your future shorts…

    OK – Party time, see you all on Friday!  

  217. Phil, I usually daytrade oilfutures. I rarely hold for more than an hour or so, today I DEFINITELY picked a sh!tty day to do it! I definitely will look into selling the short puts as a way to balance it…. Thanks for the suggestion! Have a great Thanksgivng..

  218. Phil
    I am short cmg shares at 230
    looking to manage the trade
    sell some puts, sell some calls
    what strikes would you start with?
    thanks for the help

  219. Happy Thanksgiving to all! 

  220. I have not doubt on your case, hence my asking.
    Interesting view on NG (nat gas) prices:

  221. "in" ur case that is . . .

  222.  I knew when I unfolded my snow yarn I’d taken it too far esp with the mile walk home … did happen though. Good times to all, and lift a glass to the ones who’ve already left.

  223. doubled/CMG,
    Sorry, just back to the computer after 5 hours.  Rolling 2X question:  The Mar 310 callers can be rolled to 2X Mar 330 callers for even.  This roll is unlikely to get away from us until 6 weeks to March expiration.  We know this by looking closer to the money, e.g. the Mar 280 callers can be rolled to Mar 300 caller for $1.65 credit, meaning if CMG is $30 higher, the rolling 2X of 310 to 330 callers would still be available.  I have more than sufficient margin to roll 8X, i.e. to 330, 350 then 370 if needed.  When I get to the 350 callers, I would consider flipping some callers to putters.  Since the value of the callers are relatively small, $3-$5, it’s any easy flip to putters that are 20-30% OTM.

  224. Nice!  A 10 minute stick save!!  What is real in this market anymore?  Gobble Gobble!

  225. We should have a PSW Ski Weekend in Reno instead of Vegas~

  226. I covered my stupid oil shorts. Ill limp out with a 69 cent loss on the day trading CL. Feel a little better than when I was when it closed at 84.25! And I will be able to relax tomorrow :)

  227. Unified Field Theory of Creep: Readers, including Alicia Pendry of Los Angeles, note that the heavily promoted Mercedes "winter event" sale began on Nov. 11, six weeks before the arrival of winter in North America. The "winter event" ends on Jan. 4 — just after winter arrives.

    [+] Enlarge
    Imaginechina/AP ImagesThe Car of the Year — if you could buy it.

    Readers, including Adam Fox of Cincinnati, noted, "The Chevrolet Volt has already won the Automobile magazine Automobile of the Year award for 2011 and been named the 2011 Motor Trend Car of the Year. A vehicle that isn’t even on sale yet, and won’t be available nationwide until 2012, is already the best car of a year that hasn’t started yet."
    Go to the Volt website and click on "quantities limited, click here for ordering information." You’ll find that buyers in most states can’t get a Volt for "12 to 18 months." Chuck Lane of the Washington Post notes that tax dollars have been forcibly removed from your pocket to build the Volt, and tax credits will be used to underwrite sales. If the Volt is such a great idea why can’t it stand alone in the marketplace? Why are taxpayers compelled to subsidize it? Most Americans pay for their own cars. Government shouldn’t force taxpayers to subsidize a car politicians want to have their pictures taken next to.


  228. From ESPN’s TMQ regular column

  229.  Jromeha,  I also really enjoy trading /cl.  But I trade it using the futures options instead.  I find that you can give yourself a little bit more cushion.  Also,  the futures options tie up less margin than using the future itself.  Plus, you can occasionally get lucky closing your position overnight when the market is not very liquid.  Several times I have been short a /cl option overnight and been able to buy one to close the position for $50-$100 under the theoretical price. 

  230. Craig – I remember, I did one of your overnight trades and it worked out :) . Have a good Tday buddy

  231. Peter D
    Thanks for your reply.  Greatly appreciated.  So in your trade on CMG, I also noted that you would have been filled on your GTC vertical put spread yesterday.  So I suppose that is good.
    Other than committing the margin that could be used for something other than trading this insane stock – it seems like a good strategy.  Ultimately this pig can’t fly to the moon. 
    One other quick question:  So WHEN do you trigger the roll?  You have your eyes on the roll which is what a good trader always does.  Your calls are now at a 30% loss as of end of yesterday’s trading.  So are you rolling now OR are you saying you would wait until 6wks prior to expiration no matter what happens?  (Iwouldn’t think so)  Perhaps I am missing something. 

  232. Phil/Anybody,
    Trying to get a handle on when it is the appropriate moment to roll… I sold 4 CMG 250 Calls for $4.20 a few days ago (now , $9) these I am 100% sure you should’t roll as they are still all premium right?. But at what point you consider rolling them? After the play is $4 in the money? and I look to roll to a srtike OTM and out in time to recapture the same amount that the current play is valued at? 

  233. doubled/CMG,
    My trading plan for CMG has a very wide range that I won’t react if the stock hasn’t moved by $20-$30 either way.  A $6 move yesterday is small in the scheme of things.  If it gets to $270, then I’d move my 310 and 320 callers 2X to 330 and 340.  Then I’d buy another set of put vertical, say 220/210 for $1.7 (since they don’t have 215 strike, I need to buy a $10 spread, thus only buying half the number of contracts).  Moving the original 200/195 to 220/210 (half the number of contracts) would have cost $0.5-0.8, which is great to gain $15 towards the money for minimal amount.  Currently the margin requirement is 1.2% of my portfolios, and the paper loss from yesterday is 0.06% of the portfolios, so no worries.  My Theta is $18 per day, so the decay is working in my favor, the only thing to manage is the delta on the upside.
    This risk is much less than other bullish plays, where they would be hurting if the stocks or market drops 30%.  CMG is "food" after all.  It’s going up further because of momentum traders.  When those traders realize that it’s better odds on the downside, they’ll pile on the bearish plays.  When it falls, the put values goes up and we wouldn’t want to pay the high premium at that time, would we?  So we need to start somewhere to catch the potential fall.