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Monday Market Movement – “Like Moths to a Flame!”

"Investors are drawn to China like moths to a flame." – Neil Woodford

That’s a great quote.  Neil is the head of investments at Invesco, running the UK’s largest investment fund with a decade of 15% average returns under his belt so let’s take the man seriously for starters.  Mr Woodford’s concerns coincide with figures showing that food prices in China were 10.1pc higher in October than in the same month last year – a level of inflation not seen since mid-2007. This is deepening concern that China’s economy is now starting to overheat.

"I do not deny that in the long term an economy like China will grow much more rapidly than the West. But I think one has to be very careful about correlating growth necessarily with economic opportunity, and opportunity to make money," said Mr. Woodford.  

And so it is that the moths are all drawn to the light, even as it burns them. For they are blindly drawn to its grace, hitting their heads about the light, destroying their senses, going without food, and becoming easy prey to those that hunt them.  Even those few moths that will get within the embrase of the light will burn unable to escape, ever

There was no escape for Ireland this weekend as the IMF and EU pinned the country down and forced them to swallow a $130Bn aid package at (get this!) 6.7%.  $17.5Bn of this money is to come out of Irish pension funds all just to make sure Bill Gross doesn’t lose any of the money he lent to Ireland!  I honestly cannot tell you who is the more vile, despicable villain in this debacle.  Is it the banks, who started this mess with their idiotic lending practices?  Is it the lobbyists and lawmakers, who turned Ireland into a tax haven for EU Corporations and destroyed the economy by funneling tax breaks to the wealthy?  Is it the Irish Government, who stupidly bailed out the failing banks with guarantees that put the nation on the hook for more money than their entire GDP.  Is it the bondholders, who drove up the cost of financing Ireland’s newfound debt to levels that threatened to break the National Bank or is it the EU & IMF, who are effectively playing the role of loan sharks, borrowing $100Bn at 2.5% and forcing Ireland to borrow it back from them at $5.8%.  

Perhaps that’s the answer, this is all just a gigantic global shakedown where the bigger, more liquid nations who can still borrow cheaply, are making a little spare change by forcing smaller, weaker nations to go into debt at much higher rates.  Of course Pimpco et al happily play along – they make a fortune on these games but even the mighty Mohammed El Erian can’t FORCE an entire nation to borrow $100Bn over a weekend like the EU is doing to Ireland.  Before the bank bust, Ireland had very little public debt, now the EU is forcing Ireland to accept a debt bomb that amounts to nearly half of the nation’s $227Bn GDP.  This would be like forcing the US to borrow $8Tn at 7% – it would wreck our country and we wouldn’t stand for it – why should we expect the Irish people to roll over and play dead for the EU, who they were only cajoled into finally accepting the Lisbon Treaty just one year ago after years of rejection?

Now Ireland is betrayed, stabbed in the back AND thrown under the bus by the EU at the first sign of trouble.  The people of Ireland are being forced to go about $25,000 EACH into debt at 7% in order to make sure the EU’s bondholders get paid – roughly $75,000 per wage earner!  Plus, as I mentioned, their nation’s pension funds are being forced to kick in an additional $6,666 per citizen ($19,000 per wage earner), likely busting them down the road as well.  Things are so great in bond land that unsecured bonds are even making a comeback, with $246Bn already sold this year, more than double last year’s pace.  And why not, there is no such thing as default anymore – if you buy a bond then you are on the side of the men who seem to be able to economically enslave entire populations to insure they won’t take any losses.  The Irish people must vote to accept their fate on December 7th, may God have mercy on their souls…

So we have bond moths throwing money at high rates as they don’t see the risk.  We have commodity moths driving prices ever higher as they don’t see the risk.  In fact options on $100 oil contracts for December are up over 20% since last week but, even more disturbing, is that there are now 45,424 open contracts (controlling 45.4Mb) at $100 strikes at $5.55 for contracts that expire in 4 weeks at 20% above the current price.  Do they know something or are they simply heading into the burning light as the Fed fuels the fire with $45Bn worth of POMO this week?  Oil moths seem downright rational compared to the momentum stock buyers in the US with companies like AMZN, BIDU, CMG, DECK, FCX, GMCR, NFLX, PCLN, POT, SBUX, WYNN, etc. trading at valuations even Icarus may think are out of reach.  And that’s just from the US perspective, let’s look at those stocks priced in Euros!  

Wow, those US markets are on fire!  The combination of the rising dollar and exploding MoMo stocks are making those US markets look like very attractive flames to the global moths, just as their own rallies are faltering.  Does that make US equities a place to put your paper or simply a place where a large number of investors are likely to get burned?  Maybe today’s headline will read "Stocks rose sharply Thursday after Ireland moved closer to addressing its debt crisis, better-than-expected economic data suggested the recovery is accelerating and General Motors (GM) returned to the New York Stock Exchange (NYX) with a massive initial public offering."  Oops – silly me, that was the headline from November 18th, when the Dow popped 1.6% to 11,181 – the last time Ireland was "fixed."  Surely American investors aren’t stupid enough to buy into the same premise just 11 days apart, are they?  Surely you don’t know American investors very well if you answered that with a "no."    

50,000 people marched on Dublin to protest the budget cuts.  Ireland only has 4.5M people so that’s like 3M people marching on Washington (it’s always a matter of perspective) so there’s no slam dunk on Pearl Harbor Day as the EU attempts to bomb the Irish into servitude.  One of our Members said in chat this morning that, as a bond buyer, he expects to be protected "no matter what method I have to employ to get it back WITH INTEREST, otherwise, what is the point of being a creditor?"  Indeed that is the pervasive attitude in the investment community but why should the Irish people, or any nation’s people accept it?  

Even if the Irish people do agree to each take on $75,000 worth of debt at 7% in order to pay back loans that they never asked for that were used to bail out banks that they never profited from – even if they agree to this insanity – who is to say they can actually afford to pay it back?  THAT is the joke that Flip (our Member) and other bondholding moths do not see as they head into the light – we are currently in the stage of replacing one stage of broken promises with a new set of promises that simply haven’t been broken – YET.  

In a few years (in 2013, in fact, when the EU already terminates the current deal) we’ll be right back where we are now and you’ll be asking the Irish people to promise to pay $150,000 each to fund the next rollover, maybe next time at 11%.  Defaults don’t always come by choice but by artificially preventing defaults and continuing the madness that has already engulfed this planet – we only "extend and pretend" the global debt bomb as bond buyers keep transferring money from one unpayable loan to another under the very, VERY false assumption that there is some infinite amount of money that will keep the game going forever.  Only vast amounts of money printing can inflate our way out of this mess and, if that’s the case, then what’s the point of tying up money at 7% if it’s devaluing at the the 20% pace the Dollar was setting for the first 10 months of this year?  

So consider this fair warning.  Things are not "fixed" and our PSW Holiday Shopping Survey is not giving us as rosey an outlook as the breathless announcers on CNBC are indicating.  I am hearing very bullish commentary about retail sales but, so far, none of us are really seeing it in the stores we visit.  I’ll have more to say on Retail as we get some real data, the stuff they are quoting today is just thin-sampling nonsense for the most part and should not be taken seriously.  Today is Cyber Monday and we’ll probably get those numbers along with store counts on Wednesday and I’m still expecting the numbers to disappoint overall and I have no doubt at all that margins are slipping considerably as Extreme Discounting is now considered the norm in retail land.  

We’re still in cash and we will be amusing ourselves by trying to double up our $10,000 to $50,000 Virtual Portfolio, which was up a virtual 160% at $26,000 when we lost interest in risk in early October.  Our goal is still to get to $50,000 by Jan 21st (options expiration day) despite our hiatus, and we’ve had great success with our short-term trading this past month, so we’re going to "go for it" in this still-choppy market.  

The Dollar is NOT going down.  In fact, it’s hitting 81 this morning, just 1 point off our goal.  This can provide a nice boost for the markets (in dollar terms) if we get a bit of a pullback to re-test 80 but, after that, it’s anybody’s game as the dollar could break back down or the Irish people could grow a spine and tell the EU and the Bondholders to shove it.  If only US citizens had been that wise when we were "only" $75,000 in debt per family, as opposed to the crushing $671,846 per family hole we’re in now.  Of course, you don’t really have to worry about national debt as you can just buy a home in a debt-free country and move there after transferring your assets to off-short accounts and relocating your business to a tax haven – like Ireland!  

If for some strange reason, you are not wealthy enough to walk out on this train-wreck of an economy before it all hits the fan – don’t worry – we’ll send you a post card…

 


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  1. Good Morning Phil,
     
    I’m working on setting up a Buy/Write portfolio from scratch.  If you were pure cash and starting today, would you go with the 8 dividend stocks you laid out in your "defending your portfolio" post or would you do something different today.  The stocks I’m working with at the moment are MSFT, T, VZ, BA, HD, KFT, MRK, PFE.


  2. Every  bondholder seeks a guarantee to be paid back. Indeed, any lender gets as much possible collateral as they can get the borrower to cough up.
    Whenever I used to borrow money, I had to put up "my" house to get a mortgage. I had to put up my car as guarantee to pay back the loan, even my so-called non-recourse loans (used credit lines) came with a stipulation that they would be among the first  paid if I decided to put a templar aperture in the side of my head.
    So I don’t agree with you that a lender should put himself at huge risk to lose all his money--no lender--including the odious Bill Gross. (Stockholders are another story entirely.  They should bear all the risk, facing the possibility that their entire investment could be lost).
    The notion that those who lend money to a sovereign nation should be more at risk than a simple mortagee, is not only suspect, but terrible business practice.
    The Irish (or any other individual or nation) that has borrowed money from me, is damned well going to be put in a position of having to pay me back, no matter what method I have to employ to get it back WITH INTEREST, otherwise, what is the point of being a creditor?


  3. NET $ (.70)%, dx/y = +.46%
     
    crazy moved overnight, high on the NET was +.23% at 5:00am, the low is now
    Futures = 1183.00, high = 1193.75, low =1179.50


  4. Hi Mike,
    I see your posts all the time, but don’t have a clue what NET stands for.
    thanks


  5. Good morning Phil, In your post you write  "…DECK,FCX, … trading at valuations even Icarus might think are out of reach." The valuations of DECK are 20.85 (trailing), 17.75 (forward), PEG 0.80. It is high but lower than many many other companies. Also, according to my very fashion conscious 11-year old daughter Uggs (produced by DECK) are the only acceptable winter shoes (acceptable for "popular" girls at her middle school) . FCX trades at 12.48 (trailing P/E), 10.03 forward P/E) that does not look that high to me. Or am I missing something?


  6. NET $ (.65)%
    The dollar would be stronger, but being held lower by the Franc and Yuan
    $$$/Franc (.06)%
    $$$/Yuan (.16)%


  7. NET $ is just my crude attempt to net out the dx/y against the Euro, Yen, Franc and Yuan
    Many times, I am seeing discrepancies between the relationships and what the the dx/y is showing


  8. mike / net — maybe the actual calculation would be more explanitory. "net out" tells me nothing.


  9. From Birinyi – A Year End Rally?
    Between European debt, North Korea, and today’s red All Up Down
    tape, the prospects for a year-end rally seem to be dwindling.
    History, however, tells us a decidedly more positive
    story. We calculated the S&P 500′s return between
    Thanksgiving and New Years Eve for each year since
    1945. Over the last 65 years the market is up 72% of the
    time for an average gain of 1.92%.
    On more of a risk / reward basis, when the market is up the
    average gain is 3.38% whereas the average decline during
    down years is 1.88%. The best year was 1971 when the
    S&P 500 rallied 13.02%, the worst year was 2002 when
    the market lost 6.29%.
    A rally is typically strong out of the starting gate: on average
    the low occurs in November. When the market declines
    the bottom is usually in mid-December, and investors who
    hold on are slightly rewarded for their fortitude. (Lows do
    not correspond to the composite chart because they did
    not all occur on the same date.)


  10. Could someone explain what is happening in Vegas and what dates (MLK day)? Sorry--new member here.


  11.  Mike / currencies —  I would be much more interested in what you are doing with the data investment-wise, rather than getting the data snapshots without context or strategy.


  12. NET $ (.82)%, dx/y = +.57%
    Futures = 1180.00


  13. My basic context, is using it the NET $ against the dx/y to see if the dollar is really stronger.
    Again, I am no currency expert.  Here are the relationships I watch.
    Dx/y,  Euro/$,  Euro/Yen, Yen/$. $/Franc, $/Yuan
     
    This is the calculation I do:
    dx/y versus $franc + dx/y versus the $/Yuan I save the total
    Then,
    I take The E/Y vs. the Y/$ leaving me with E/$, which I compare to the actual E/$ taking the differnce
    I add the two totals and compare to the dx/y
    Many time I have been finding the NET $ calculation negative even as the dx/y is showing positive.


  14. NET (.87)%,  dx/y = +.73%
    C =1181.34, F =1180.00
    10yr = (1.71)%,  30yr = (1.00)%
    VIX +3.87%
    oil +.15, gold (3.09)


  15. My whole idea started a few weeks back when Geithner made comments about the $$$$, Euro and Yen. 
    For a week or so after that the NET $ relationship held around 0, no matter what the dx/y did.  So I could see that some currency manipulation appeared to be taking place.
    In the last couple of weeks, its has been widening out, so probably the NET $ has less validity. (if any)
    My hope is to be wrong and be able to believe the direction of the dx/y again.  I would like to think that world governments would not manipulate the currencies.


  16. Postcard/Phil
    PANAMA !!! Debt free, growing GDP with the mightiest military defense (ours) in the world…. LOL And Tax Friendly 


  17. Good morning!

    I’m believing the 0.3% number for shopping gains and that is a negative against inflation and a huge negative against contracting margins so, if today’s numbers don’t pan out – we could be looking at a very sharp reversal of market fortunes.

    BUT (and it’s a big but) it’s a heavy POMO week so not a good time to bet down.  In fact, I’m kind of scouting for a bottom to get bullish off of, maybe Dow 11,000 – we’ll have to see if it holds but (another big one) we need to keep a VERY sharp eye on that 81 line on the dollar as it’s very dangerous to be long while the dollar is rising.  

    What I’m looking for is a dollar pullback off the 82 line and we’re up 10% here so that means a 2% retrace is expected which means 80.36 is our key test on a pullback.  As we’re at 81.09 at the moment, we could drop 1% very easily and that should push the markets about 1.5% higher and if we get all the way to 82, then the pump is primed for a major market goosing.  

    We’re still 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 were over on all on Wednesday but now we lost the Dow, S&P and the NYSE so things are clearly deteriorating.  

    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 

    These are our SLOW-moving indicators and should be taken very seriously.  Now we lost the NYSE unless they bounce here but let’s bet that bounce using Dow 11,000 as a stop and grabbing the DIA $112 calls for .94.  20 of those are $1,880 and that’s a good play for the 1050 Portfolio, looking to make our first $500 with a .13 gain or stopping out with a $380 loss (.75) or less under the 11,000 line.  



  18. They are still pushing the hell out of the momentum stocks.  NFLX up ANOTHER 2%, testing $195.  

    PCLN down a bit but I still like the Dec $350 puts, now $1.25 as one I would DD at .75 for $1 avg so let’s call that 5 in the 1050P – Keep in mind we are generally looking to make 20% and get out unless we feel very comfortable with the direction.

    V dropping fast, that’s can’t be a good sign for retailers.  

    MA dropping like a rock that was tied to V!  

    Looks like those DIA calls are not going to work so a quck dime loss is prudent to take off and we can reload if we recover

     


  19.  DIA $112 already down to .84.. oh boy.. Phil you still a go on your DIA calls


  20. For what it is worth
    using ParSar a trend following indicator, the VIX flipped to a positive trend on the open, the trailing stop for the trend is 17.76, that will follow it up, above there it is intact
    (just note, that some people actually use VIX extremes as contrary indicators)
    On the ParSars for the rest:
    Negative Trends in place using ParSar:  S&P500, NAS, DOW, EEM, EFA
    Positive trends:  VIX and dx/y


  21.  Phil, just saw your comment on DIA.. Are you buying the PCLN $350 puts? 


  22. Good morning Phil,
     
    I think that I missed it, what’s 1050 Portfolio?


  23. http://www.creditwritedowns.com/2010/11/video-quantitative-easing-explained.html
    This is old, so I am sure everyone has seen it, but it made me laugh, or cry, depending on perspective!


  24. Wow.  Sorry I sold my TZA Friday


  25. NET $ (.83)%,  dx/y = +.76%
    C =1176.50, F =1175.25


  26. Phil,
    Happy morning to you
    You mentioned yesterday at options premium is cheap at present and instead of selling, perhaps there may be a few select buying opportunities.
    Could you please briefly explain to me how I would determine the option premium value for a particular stock, for instance AAPL or GOOG or AMZN?


  27. 50 day MA for the S&P:  1174.32 – 1176.07 (exponential and simple)
     
    above 21 MA:  1192.71 – 1198.83
    below the 200 MA:  1127.74 – 1132.74


  28. oil (.05),  gold (5.80)


  29.  Phil,
    Are you buying the PCLN 350 Puts?  Looks like they are 1.40×1.60 already…..
    Doyle


  30. Hi Phil shall we sell any Dec DIA putters for the mattress?? thanks


  31. Look at NFLX go. Damn…


  32. Netflix is almost at $200 with the market down 135??? Any rec here? 


  33. I believe the 1050 portfolio is the 10k into 50k by jan port.


  34. TZA looking good finally!  

    Dividends/Exec – I do NOT think it’s a good time to commit cash.  I don’t even think it’s a good time to sell puts.  I think it’s a lovely time to defend your Portfolio with CASH and PATIENCE!!!  

    Guarantee/Flips – Answered above but why should you be guaranteed anything you didn’t negotiate for up front?  If you lent unsecured money at a certain rate then that’s what you get.  Ireland should have never bailed out their banks and neither should we.  If the ENTIRE system collapses tomorrow and EVERYONE’s money is completely wiped out then what happens the next day?   Farmers farm and toolmakers make tools and eventually they need an accountant to do their taxes and a lawyer to enforce their patents and even a banker to hold their money and everyone goes back to work with no debts.  Who loses that game?  Only the people who have accumulated massive piles of cash – who will simply have to start again – maybe growing some vegetables to sell on the street corner…  Why should the average citizen give a damn whether or not you get your money back?  If they move forward and borrowing costs go up – just don’t borrow any more money – not too complicated.  By the way, I don’t consider this a "what if" – it will happen to some extent, just try not to be the guy holding the "hot potato" bonds when the music finally stops.  

    DECK/FCX – See, you are assuming that 15% growth is a given for next year while I’m saying that you could be looking at 21 forward or maybe 23 as margins contract.  That’s 50% over the average for the sector and that is what I consider overpriced.  FCX is in a sector that traditionally carries a p/e of about 8 BECAUSE it is well-known that commodities can go down as quickly as they go up so there is a tremendous amount of risk in their numbers – you are exactly the kind of moth I am talking about – looking only at the pretty light and heedless of the heat.

    Poor APOL just keeps going down and down.  They are the anti-MoMo. 

    History/Pstas – I hate to say it but this time does seem a little different so be careful following historical trends.  

    Vegas/Jabob – Some Members are trying to organize a Vegas weekend.  Not very formal yet.  

    Manipulation/Mike – It’s nice to have a dream I guess but how can they not manipulate currencies when they coin it at will – that’s pretty much the definition of manipulation.  

    Panama/Acobra – That was my alternate for Gel but he seems to be favoring Costa Rica so we need to ask him what he sees down there as they are both too hot for my taste so I never go myself.  

    Woops, big turn as the Dollar is knocked back off 81.2 – these markets really want to fly.  NFLX right through $195 and $196 already.  It is so all about the Dollar right now.  

    PCLN/Novice – I’m picking them for the 1050P, yes.  It’s a virtual portfolio as we’re just trying to see if the market is "winnable" and it gives us a chance to practice small portfolio trade management.  

    1050 Portfolio/Bob – Well I get sick of writing things over and over again so the $10K – $50K Portfolio is now the 1050P and our goal here is to take $26,000 and turn it into $50,000 in the next 50 days so we need to make $500 a day. 

    NFLX $197!  Almost time to short them for a rejection at $200 if you are feeling brave…


  35.  Market down, XLF up (sort of)?


  36. I feel brave… just sold NFLX Dec. 200 calls for $7.50… let’s see.


  37. Trad…excellent video, I just sent it to a few folks..thanks


  38. I hate when my longs go down and my shorts go up! (and, no, I was not intending at sexual innuendo; I only saw that afterward) 8-)


  39. Good morning,

     

    IWM    71.39, 71.76, 72.04, 72.73, 73.43 and 73.91

     

    In TNA at $56.20


  40. aceland
    just wanted to thank you for your reply to my post on friday--


  41. POMO we go.. Lezbie on our way.  I love Ben, he loves me.  Time to go long in equities!



  42. Glad to help, Datuu!


  43. NET $ (1.01)%,  dx/y = +.93%
    C = 1180.76, F = 1179.50
     
    bounced right off that 50 day MA area


  44. Panama/Phil
    From my information from a person who lived in DC owning a consulting business and has lived in 40 + different countries, Panama was his 1st pick because of strong economy, friendly population and stable government ( He settled there 3 years ago, and pretty much "predicted" the state of the world as we see it today and says, it will get worse).  He says…. Costa Ricans do not like Americans.  As for where to live…. I would not choose Panama City because of humidity BUT near David, where many ("expats" from Canada, USA and Europe) are settling the weather at 2500 + elevation is ideal, but if you need large populations for entertainment…. Panama is probably not your choice…   


  45. Maya1 / premium — you might want to pickup a copy of this book: http://www.amazon.com/Options-Strategic-Investment-Lawrence-McMillan/dp/0735201978/ref=sr_1_1?ie=UTF8&s=books&qid=1291045485&sr=8-1 Read it cover to cover and you’ll know more about options than about 80% of the people that talk about them.


  46. Maya1 / book — much of the other 20% are members here.


  47. Phil/Patience,
     
    I hear you, I’m just trying to prepare so that when the time is right I’m ready to go…plus I can monitor via paper trading to get a better feel for it.
     
    While I’ve got your attention, I was modifying the buy/write spreadsheet to include a tab to organize a portfolio and in doing so, I stumbled onto some anomalies that I had some questions about.

    If the goal in the buy/write is to buy half the position that you ultimately want to own and have the remainder put to you if the stock drops.  Do you adjust your position so that the size always wind up in lots of 100 shares so that the options work better?
    How do you deal with stock that is too expensive (IE. Apple) and thus you would exceed your position size if you purchase a minimum 100 shares?
    Finally, I was playing around with the buy/write calculator always using the same strike for both the puts and calls.  Do you typically use the same strike for both?  If not, what is the basis for the options you pick?


  48.  Maya1 -
    McMillian is good but such a snooze – it kind of irritates me that he came out with a new edition but talks about the problem of commissions etc like it was 1985 – he really needs to update it for electronic trading -
    Also – I think some of his reading on tax law is really questionable. He argues that if you purchase a leap spread that you can deduct the loss as short term and the gain as long term – his contention is that the options do not constitute a straddle (in tax terminology not options terminology) bc they are distinct positions rather than offsetting – he might be right that this has not been argued in court – but I think you are going to lose in an audit and most accountants won’t support this either.


  49. Very tempting to go back in to the longs but too scary.  We have to assume VIX is over 23 for a reason.  Keep watching that 81 line on the Dollar.  

    Premiums/Maya – I’m not sure what you mean by Premium Value.  The premium is simply how much extrinsic value you are paying for.  I’m conservative so, to me, I’ll look at the AAPL Jan $340 calls at $5 and count that as, of course, $5 in premium PLUS the $27 that AAPL is out of the money so that’s $32 in total premium or 10% of AAPL’s price in less than two months that has to be gained for you to get even.  Then the question is, how bullish are you really on AAPL?  Whether or not a 10% over 2 month premium is a lot or not is a matter of opinion, not fact.  There are historical implied volatilities to look at or, more simply, you can look to see how often AAPL gives you a 10% move in two months that you need.  Then, you either have a good or bad feeling about it and play accordingly.  

    Mattress/Yodi – Yes, good idea.  I think selling a 1/2 cover of the Dec $110 puts at $2.02 is a good move as they are all premium and can be rolled to the $107 puts and the $2 pays for 2 rolls up on the March $112 puts (now $6.05) if we need them.

    NFLX/Bob – Nice job!  

    IWM/JRW – I see 72.10 as big support but close enough I guess.  Pretty much the 720 line on the RUT.  Very nice timing on TNA!  

    Oh yeah, POMO.  Thanks Matt.  I knew there was some reason I wanted to stay long…  

    Ireland/Mike – Think about it, that’s JUST Ireland.  Then there’s Portugal, Italy and Spain with the last two dwarfing Ireland’s economy by factors of 5 and 10.  

    Entertainment/Acobra – Yes, I expect the Circus Maximus to be back in town when things collapse!  

    100 Lots/Exec – If you can’t afford lots of 100, don’t buy the stock.  Not all stocks are appropriate for all people’s portfolios.  As to what strikes – that depends on my expectations.  Very rarely will I sell puts and calls above the current strike as I’d rather be conservative but sometimes I’ll be super-cautious and drop the put to a lower strike than the calls.  


  50. Phil / SH  Why is SH only up .60% when the S&P is down .96% ?


  51. The dollar appears to have "broken out"

     


  52. OK – Time for a day-trading note.  So now I regret not waiting for .75 on those DIA $112 calls and it looks like we’ve got another shot at .75.  I’m watching the dollar (which is holding at 81.1) and oil (rejected at 84.50) and copper (having trouble holding $3.75) for more bullish signs to get back in on the bull side but not finding them yet so a very tentative entry with tight stops (.70).  

    XLF is under the $14.50 mark so there’s yet another signal to be watching, all right along that .75 mark on the calls we want.  This time I want 30 for .75 ($2,250) which with the $200 loss from before is $2,450 and a break-even back around .80 so that’s the upside play I’m eyeing.   S&P testing that hyper-critical 1,177 mark.  If that breaks it’s a new ballgame anyway and we have a clear sign to cut and run.  

    The question is, is the EU trading pushing us down or keeping us up.  Don’t forget how good our MoMo stocks look to EU investors as the go parabolic so they may be the suckers buying into this thing.  So keep in mind what we’re actually doing here is spending $150 (our loss at .70) to take a 2nd swing at the trade we already blew $200 on.  


  53. bobhu,
    You are brave. I sold the 200 for 4.5 when it was 187. Getting my head handed to me.
    I feel less brave today than when I sold them.
    Good luck to you and me too.


  54. Phil,
    What’s your telling on put/call ratio ? top to above 1 for now…


  55.  Pstas
     
    Birinyyi is right on most of the time…. but I think he has overlooked the largest "game – changer" that could set the market direction for a short period of time – that would be an extension of the tax cuts that have been in place for 10 years. If an extension takes place, it will be interpreted by the markets as a positive corrective measure to re-energize the economy through entrepreneurial investment. The inept position the administration has taken in opposition to this very necessary legislation, never ceases to amaze me. I have to assume they are blinded by their never ending attempt to foster class warfare, and the re-distribution of wealth.


  56. The Big Picture:

     


  57. exec / buy write — I’m not Phil, obviously, and don’t know how he’ll answer, but I think that some of your questions depend on your own investment style and comfort level to answer. I know that I’m at the opposite end of the spectrum from Phil in that I like to play short term options 1-3 months whereas Phil will often choose the longest options he can find. Even so, my strategy is similar to Phil’s in that we both have a foot in value investing and use options to "juice" profits and enforce/implement some amount of disipline. Phil’s scaling in method in combination with options is an excellent example of implementing/enforcing disipline.
     
    As far as sizing goes, because I’m a firm believer in the power of options, I don’t trade without them and therefore don’t trade multiples less than 100 (even lots). That might mean passing by higher priced shares if I intend to scale in (in Phil’s 1x, 1x, 2x scheme, that means 400 shares is too large of a position).
     
    As far as strikes go, this is where the "value" side of things comes in. Value is subjective, loosely based on time and includes outlook. All three of these need to be taken into consideration while determining strikes. I have a conservative outlook right now and that translates (for most issues) that I sell OTM puts and ITM calls that meet my objectives. This gives me bit more downside cusion.  A more neutral outlook and I might sell both calls and puts OTM.
     
    I don’t know if that helps, but I thought I’d throw it out there.


  58.  NFLX; not a care in the world.   Complete insanity.
     
    CMG; same thing even though it is slightly red today; its painful watching these trade.


  59. NET $ (1.26)%,  dx/y = +.94%
    C =1177.50, F =1176.50 (tight see if they flip, last time the cash was below the futures in a major way was Flash Crash day)
    Europe will be closing


  60.  Do all the POMO $$ go into these stupid stocks ?


  61. Phil: "I think it’s a lovely time to defend your Portfolio with CASH and PATIENCE!!!"
     
    … hold … Hold … HOLD … H-O-L-D
     


  62.  just ran up CMG about $2 on only a couple of thousand shares


  63. JRW / dollar breakout — Nice chart.  Thanks!


  64. YRCW at $3.15 and FDX just caught and upgrade and is up 3%, which would give you a whopping .09 on YRCW but, nonetheless, I like selling July $2.50 puts for .90 as a bet they don’t drop below the net $1.60 entry in 8 months.  TOS says it’s net .40 in margin to make this trade so set aside $400 (10 contracts) to make $900 and worst case is you DD at .80 or less ($800 more) and you are in for a $1.20 avg, still betting they simply don’t go BK.  I’d do this for the 1050P if the timing wasn’t so long as it’s a good small trade to make. 

    So, in short – 2,000 shares would cost you $6,300 now and what you are doing with this trade is agreeing to buy 2,000 shares for $2,400 and they are agreeing to pay you $900 NOT to buy it if YRCW doesn’t fall below $2.50 by July expiration.  This is a very nice way to dip your toes into a stock (and of course divide by 10 and it’s very cheap per contract commitments).  

    Whee, there goes oil, jumping over $85 as the Dollar fails 81 into Europe’s close.  Copper now on 3.75 and gold at $1,367.  XLF still not over the $14.50 mark so CAUTION!  

    EU markets closing down 1.5-1.8% at day’s lows.  Were they holding us down or keeping us up?  


  65. Phil, what do you suggest for those of us that shorted the NFLX Dec $190 calls last Monday in the $7.50 range? Seems like a terrible time to exit but too early to roll.


  66. JRW/Big Pic – Thanks for the chart of the current support/resistence lines of S&P


  67. Thanks Rain,
     
    I haven’t done much with options so I don’t have a good feel for them.  It seems to me, since we own some  ETF’s, that it makes sense to at a minimum sell calls to capture the premium.  What I find confusing is which specific strike to buy or sell.  When Phil states that he rarely sells puts or calls above the strike because he is conservative, I don’t understand why it is more risky to sell them above the strike. 


  68. JRW III, thanks for the charts
     
    NET $ = (1.20),  dx/y = +.90%


  69. Phil / SH  My question should have been why doesn’t SPY and SH % changes match S&P % changes?


  70. Judy/NFLX,
    I am NOT that brave, I only sold 1 contract. My thinking was, 1. $200.00 is a big number to break, 2. I can roll to 2X 210 calls or Jan. $220.00 calls for a little debit.  I also short Dec. $190 call(sold for $7.80, now is $12+)…   You are right, good luck to us.


  71. rainman,
    Thanks for the book rec.
    Phil,
    Thanks for the explanation… I just thought perhaps you had specific ‘value’ parameters for premium, but I guess as you say, it depends on factors you mentioned


  72. exec / above — When Phil said he rarely sells puts AND calls above the strike. He said and not or. Big difference. The most simple strategy for covered calls is to determine where you’d like to sell the issue and see if selling a call at that strike makes sense. Think of it as getting paid for placing a sell limit order.


  73. YRCW play/Phil: Unless I am missing something, you mean $630 instead below.
    "YRCW at $3.15 …
     So in sort -200 shares would cost you $6,300.."


  74. Put-call/MiniJ – I think there is a hell of a lot of money lining up against the market and some would say that’s the "smart" money.  Zero Hedge had a good chart this weekend.  What do I think?  I think I like CASH!!!!  

    Oh good, artificial wage freezes!  I was wondering how long it would take us to repeat ALL the mistakes of the 70s…

    Wow Gel, for a second there I thought you were going to say the extension of tax cuts would be an economic disaster that would undermine the dollar and send the markets flying – silly me!  

    And what Rainman said!  

    POMO/Cap – Actually I have gotten the impression that it is NOT going into stocks as it’s all being sucked up by Treasuries, which is why we’re getting less of a market effect on this round despite 3x more money being poured in.  

    And what Diamond said (or what Diamond said I said)!  

    Good catch Mike:

    It was a small decision but the symbolism was huge. A few months before Ireland’s multibillion-euro bail-out, announced last week, Morgan Stanley quietly switched dealing in the country’s bonds, along with those of Greece, Portugal and Spain – together, the four “peripheral” countries often seen as the eurozone’s weaker members – from its sovereign debt desk to traders specialising in distressed financial assets, some of the riskiest investments out there.

    NFLX/Jvest – PATIENCE!!!  It was ridiculous last week and only more ridiculous this week.  As long as they don’t hold $200, then it’s just a matter of waiting it out.  

    SH/Tusca – Well, short-term the pricing of SH is sentiment driven.  Although the fund balances to the S&P periodically, in between it is simply ruled by investor interest – just like any stock is.  


  75. Hi Phil,
    The DIA calls are now 0.7 but the S&P is under 1177.  Do you still pull the trigger or cash is king?


  76. Phil,
    Been looking at YRCW for more than a week…like your idea.
    Thanks…


  77. Is anyone here looking to go Long the EUR/USD at some point.  This seems just like it was last time with Greece.  They try to scare everyone out of the EURO so the big boys can buy buy buy, then Ireland is fixed and away we go.
     
    Is this time different?


  78. Pharm….. Do you know the name of the company that is targeting a solution for MRSA ?… I used to have a position, but closed it out a long time ago, and have forgot the trading symbol.


  79. Phil / put/call chart — Wow! If the smart money is right, the market is on the top floor calling that express elevator…


  80. Also, F*ck you OIL!  With EUR/USD down 160 pips /cl is up $1.25.


  81.  Phil, 
    On the PCLN you are looking to buy 5 Dec 350 P’s at $1.25, 20% of that is $125 (minus commissions $105 net)… even at a DD its $210… is that the goal or to make $500 on this play?
    Thanks


  82. Options/Exec,
    Selling calls below the strike price gives more downside protection as if the stock moves down your sold calls go up in profit. Selling the puts below the strike give more cushion on a down move so you don’t get assigned more shares. Both are more conservative. Probably not explaining it as wel as Phil but the best I can do.


  83. @Phil
    Creditors frequently negotiate AFTER the fact to get their  money back.  Debtors as well. Entire law firms are dedicated to handling bankruptcy work outs. It’s not that much of stretch to believe that the Sovereigns who borrow money are going to be made to pay back that which they have borrowed by hook or by crook.  And you’re right that debtors all over the world are reneging and don’t care about paying back that which they have borrowed.  We are witness to the greatest credit defaults in our history.
    It’s only a clue to the cluelessness of the people in those countries, which have been borrowing to fulfill their socialistically enshrined obligations, (including those forcede upon them by Lord Blankfein, John Mack, Ken Lewis, and John Thain to pay their bonus packages) that they do not see the debt burden they have taken on and will assume for demanding (or their politicians’) something for nothing.


  84. Interesting, they should be falling, but are turning positive
    oil +1.24%, gold +2.50
    NET $  = (1.17)%,  dx/y = +.90%


  85. Phil…. nope – just Econ 101…. Incentivize investment capital, which results in employment increases and economic activity.


  86.  Phil, what do you think about this trade idea…going long CMG Jan 13 puts and selling front month putters every month? We used to do this quite a bit a year ago, but I think it might be better suited for downward trending stocks that are a bit less volatile.


  87. Phil / SPY, SH and S&P lack of correlation given the huge volumes traded daily is mind numbing.  Goldman must make a fortune arbitraging this?  The etf’s are supposed to mirror the S&P 500, how can these etf’s trade with such a huge onging divergence to the underlying index?  It doesn’t make any sense to me?


  88. craigzooka
     
    The Euro is systemicially weak, and will be in this condition for a long period of time – poor economy because of a deleveraging effort. The debt crisis has a long way to play out IMO. I would be very careful going long the Euro, even against the Dollar


  89. Phil SINA up today 64.50 up on the day 2.71 in a down market
    holding stk at 40.59 sold Jan 50 c for 5.06 now 15.00 sold 50 p for 3.50 now .50. thinking of rolling the caller to Jan 11 for 10.70 net cost or mar 11 8.55 net cost and setting a stop on the stock at say 62.02. what do you think thanks


  90. craigzooka / oil — I’m with you on that one ..!.,


  91.  I bought 8 NFLX Dec-165 puts and will do it again in Jan and again in Feb and again in Mar until their P/E is back to 50 (NFLX @ 132). I can risk 0.86 to make 33 for 3 years and two months and still break even. Now that’s patience!


  92. NET $ (1.10)%,  dx/y = +.78%
    C =1178.76, F =1177.50


  93.  Bio, 
    You think the stock will plunge 63 points in one month? 


  94. Here is the big POMO? Will it save the day or only NFLX :-)


  95. Depending/Maya – Yep, there’s only so many things that can be known in advance.  After that, it’s a horse race!

    Strikes/Exec – What Rain said and also the goal is to sell as much premium as possible and that needs to be your guide.  If you are not going to sell the most possible premium, you’d better have a very good reason for it and uncertainty is NOT a good reason because, if you are that uncertain – why are you playing that stock at that time? 

    YRCW/Reza – Well I was looking at 10 contracts mostly so got mixed up as it would be 2,000 shares for comparison.  

    DIA/Carsick – As long as we’re holding S&P and .70 it’s still good.  It’s a tough call as the dollar is right on that 81 line but oil is $85 and copper $3.75 so enough goos signs that it’s too early to ditch them.  From a pure day-trading perspective, I’d add 20 more here at .70 because it feels right to me but we’re risk managing  

    EUR/Craig – Ireland is not fixed.  They voted down the EU constitution 3 times so I don’t know that they’ll just roll over and play dead to be saddled with a lifetime of debt just to pay off some bankers and Flips.  

    Woops, there goes 81 on the dollar again that’s the kind of fuel we need to get going up again! 


  96. gel,
    re: mrsa
    Cubist pharma – cubist.com has a nice presentation on their website.  under presentation & fact sheets, Nov 2010 presentation page 39.  listing some of the players (maybe all)


  97. Has anyone tried soda stream from SODA
    like a k cup for soft drinks


  98.  Phil, 
    What roll do you recommend for the short CMG Dec 130′s and Dec 150′s? (sold for 17.50 and 4.20 respectively).  Also not sure how to set the goal/plan (ie make back the losses-- wait to expiration or sell enough so that at say 50% profit I am whole?) 
    Thanks.


  99. gel, craigzooka / fyi

     


  100. NET $  = (1.10)%,  dx/y = +.78%


  101. pharm- BSDM  stock is down significantly since the buy/write you posted a little more than a week ago.  How are you intending to deal with it?  Are you just going to wait it out for now?
    Thanks


  102. Out of TNA at $57.96 for 3 1/2%


  103. qcmike   Never heard of Soda Stream, but my first reaction is that it’s a bad comparison to the single serving coffee makers:  Soda already comes in cheap, easily storable, long-lived, single-serving units.  Unlike coffee…It’s a lot easier to keep something cold that doesn’t have to be freshly made to be good


  104. Biodiesel:  only problem is if NFLX doesn’t collapse but takes a slow swan dive, each month your puts are going to get more and more expensive or you will have to go further and further out of the money; I’d rather sell calls.


  105. Phil
    GM. Has options. Any trade. ?
    Thanks


  106. Phil,
    Is your site crashing or is it only on my end?  Anybody else having issues?


  107. Phil,
    I am in SVU for net $11.57 after buying back the $12 puts when they started to slide some time ago and with the calls now expired, so the shares are now unhedged. With the stock below $9 and apparently not at a bottom, do you have any suggestions on getting back even?


  108. Button, yes PSW uptime is spotty for me too today.


  109.  button – Have had it crash a few times here lately as well.


  110. Button – I also had issues so I’m glad I’m not alone.


  111. I had issues today, crash a few times


  112. yes the PSW server is timing out frequently


  113.  Many sites are spotty – Black Monday must be slowing things down.


  114. maya1…..Go to http://www.cboe.com     hit ‘tools’ then ‘options calculator’.   You’ll find this very helpful in determining whether the option you are looking at is ‘overpriced’, ‘underpriced’, or ‘about right’.  


  115. NET $  = (1.09)%,  dx/y = +.84
    C =1179.14, F =1178.26
    oil +1.59, gold


  116. ephmen85/Soda Stream,
     
    It’s a healthy idea, it let you do some healthy soda (juice….) instead of buy unhealthy soda on the market.


  117. Phil – I had a long post that got lost on you’re statement that we are repeating mistakes of the 70s by freezing wages. Im going to have to disagree with you (if you are talking about Obama’s freezing federal employees’ wages). Federal employees have something that most americans wish they had right now, JOB SECURITY. That should be counted as our ‘wage increase’ until our nation gets back on the path of prosperity. Wage increases for federal employees and military members were originally intended for inflation purposes and to help us keep up with the private sector. Since at the present time there is no inflation (according to our statistics :) ) and  we are well ahead of our private sector counterparts we shouldn’t be getting wage increases.  
    Craig – Id be careful shorting oil. I only do it as a daytrade, not something I want to short for a long time. That period pre black friday was one of the longest (and most stressful times) Ive shorted oil. Im actually looking to go long. It’s held up quite well with the dollar shooting up. Also, if you compare its performance this year to a lot of the metals than it has a long way up to go to catch up….


  118. bobhu / soda — IMO no soda is a better "healthy" choice. Why do people need CO2 forced in their drinks anyway?


  119. I have no problem with the site.  I think it’s cyber Monday (too much internet traffic).


  120. rainman/soda,  I think they are target at the parent of kids (look at their website).


  121. NFLX - 
     
    1) I can’t sell naked calls so that is out, plus on Momo stocks I’ve seen that go horribly wrong.  2) 63 points in a month. No, I don;t expect that, obviously, no sane person "expects" to make 3,700%, that is simply the upside. The question becomes, is this a pick that has some increased probability compared of others of making this drop?
    Consider this:
    5-day:   +7.5%
    1-mo:    +10%
    3-mo:     +70%
    1-yr:        +220%
    2-yr:        700%+
    5-yr:        600%+
    Take a look at the 5-yr chart and try to convince yourself we are not in a bubble. When bubbles pop they usually go fast, so though I don’t expect to make 3,700%, even a pullback to 160 (35 pts, -18%)  puts us back to Oct 20th levels (only 5 weeks ago!), and would generate 5.00/0.86 = 481% gains. 
     
    I’m holding a pair of 5′s and my opponent (the call seller) has aces, so questio becomes do I have proper pot odds to make the bet?


  122. desmoines
     
    Re CBST…. many thanks !. I opened a long position, buying the May 20 calls.. Maybe this time around, it will do better.


  123. JRW… I LOVE your charts !


  124. I wonder if the SODA would catch on with kids  etc
    good stock  ?


  125. NET $  = )1.08)%,  dx/y = +.76%
    C =1177.29, F =1176.26
    10yr = (1.33)%,  30yr = (1.00)%
    VIX +4.10%
    oil +1.48%,  gold +3.5


  126. Bio:  my point was I’d rather sell than buy premium; i agree 100% the nflx is overpriced, I shorted some calls before last expiration and made a profit, but that stock is so volatile it made me run to the computer first thing in the morning, and I refuse to get in trades that make me do that.  So I turned the naked short call into a bear vertical call and it was much more relaxing.   I took less of a profit, but that’s ok. 


  127. Twitter is selling of hash tags (e.g. #BlackFriday to Target, #CyberMonday to Verizon) to generate some revenue. Interesting business model…


  128. My computer crashed so I’m a little behind now – have to reconfigure all my TOS charts! 


  129. @Phil
    "……just to pay off some bankers and Flips.   
    JUST?    Love to see your options house renege on what they owe you and see how fast you change your tune.
    As it happens, I wouldn’t lend a cent to a sovereign nation, to give their people who don’t have the brains to figure out that they can’t simply borrow money to pay for all those socialist prgrams they wanted (and still demand) for 60 years without one day reaping the whirlwind and/or for those who can but won’t work for them.
    But the only government obligations I ever owned were some EE bonds, and municipals so they won’t have to pay me anything back.
    I trust  those who did (and still are) lend money to the socialists get their booty back with interest.  That’s about the only thing capitalist left in the world. If it’s good enough for Warren Buffet to get 10% on his loans to Goldman Sucks, it’sv good enough for anyone else.
    For sure, I ain’t lending a dime to anyone, even to my son, without a pay back guarantee. He’s well aware of what his obligation is to return the cash.  People will treat you how you teach them to treat you.


  130. TRSX/gel – is the one I am in.  I will have to look for any others.

     

    BSDM/doubled- yes, down about $1, but the premise is a LT investment on them.  This was a 1/4 entry, and the puts were sold for the next 1/4 with the Calls sold against them.  Biotech is down all over and this is the time for accumulation on them, so I am scouring for the next entry.  We just need to be patient. 


  131. Phil - What about just selling the NFLX 210 weekly calls for .70+? Eats up a lot of margin but another 14$ out of NFLX seems out of reach….. Of course people were saying that about PCLN at 300 and CMG at 200…..


  132. again the 50 MA range is 1174.32 – 1176.07 (simple and exponential)
    cash low today = 1173.64,
     
    3 area worth watching on the Eminis:  1168, 1152, P&F trend line = 1144
    areas to watch on the S&P 500 continuous contract:  1168 and 1152


  133. XLF Dec $14s have litle premium at .60 – 10 of those in the 1050P for $600


  134. Ahh, CBST is the other…thanks Des Moines – I love IA!


  135. Thanks all for the option help with the options.


  136. Finally getting caught up on things here….bit hectic with taking a 50% haircut on the workforce at my company.  Should settle in now, so I hope to get caught up over the next day or so….


  137. Don’t the unemployment benefits expire for a lot of people on dec 1st?
    Seems like last time they "almost" expired there was weakness in the market?
    anyone else see a correlation?
    or is that just another brick in the wall?
    If 1175 area holds, we should be playing for a bounce here?
    or is the market going to drop out of the range?
    that is the 64,000 question
    can’t decide which way to lean, but feel like you got to buy support until it fails?
    PHil
    which way you leaning here?


  138. Phil or any one is VE on free fall we still have the Apr. 30 c  play open  sold for 1.96 now .97 buy back and resell again



  139. NET $ (.99)%,  dx/y = +.74%
    C =1178.96, F =1177.76


  140. PCLN/Amatta – Our "goal" is never to make $500 on a $650 bet.  That would be a long-shot.  20% is ALWAYS the goal and anything over that is an accidental bonus.   You MUST learn to get that attitude (see Strategy Section) or you will doom yourself to a pretty endless cycle of disappointment and failure.  

    Negotiations/Flips – As a consultant who has been on both sides of that table, I’ve seen my share of unrealistic debtors and creditors.  The point I’m making is that, in this case, the creditors have virtually no real leverage.  The people didn’t borrow the money, their government did and the people are perfectly happy to dissolve that government and start a new one that has no debts.   Once the people of a couple of nations realize this – the bond holders will really have their backs against the wall.  Your bond doesn’t give you a lien on national assets or land or even a way to attach wages – it’s simply based on the good will of a sovereign nation to pay you back.  The only penalty that can be assessed to a defaulting nation is charge them a higher rate next time you lend them money and you WILL lend them money again – just ask Brazil…

    Econ 101/Gel – I’m sorry but the pre-requisite for that course is basic math and accounting, which teaches you to balance your budget before giving tax breaks to the top 1% in the hopes that you’ll get some magical fairy trickle.

    CMG/Ajay – CMG is too volatile for that game.  They could be down to $220 in the morning on a downgrade.  More normal overvalued stocks like FCX are good as are things that are just priced high like MCD or IBM, which may never go down but you should be able to sell a whole lot of puts over time.  

    Arbs/Tusca – Well we arbed the Dow into expiration when I noted that DIA was way higher than the Dow and they tend to true up by expiration day.  I really only watch the Dow and the NYMEX that closely and if you want to play the arb game, you have to pick an index and learn it like the back of your hand so you can quickly see when it’s off track and make a play.  There is no substitute for experience when trying to chase down market imbalances.  

    Euro/Gel – Seems to me their "solution" for Portugal and Spain is to up their commitment by $500Bn, which you would think would make it very hard for them to make headway against the dollar as it pretty much matches Ben’s current madness.  

    SINA/Yodi – Jan $50 caller is $15 and you can roll them to the June $65 calls ($8.30)/60 puts ($6.75) even so not much to worry about really if you want to stay in.  I’d buy the 2012 $75s at $8.70 and put a stop on the stock at $63.50 so, if they head down, you end up flipping a bit bearish and your long calls are obviously well protected with a .50 delta so you can always flip to 2x if they break back over $65 and then you are set up for a 2x roll to the June $67.50s ($7.60) and you’d still have $45 cash off the table.  


  141. Phil
    XLF Dc 14′s at 0.60. Puts or calls?
    Thanks


  142. Lflan
    Thanks for that tip.
    Hope you had a relaxing turkey day…I removed a couple pieces from people…have to chew that meat, people forget!


  143. Gel1
    Can I contact you by email? Need opinion on a trade concept


  144. I had a 100 pip ride last night shorting the EUR against the CHF  My target was reached and some retracement has set in. I am re-entering with a limit sell @ 1.3150. Stop @ 1.3240 and get out at 1.3075.I hope I can get a repeat.


  145. Pharm / CBST Been in and out, but with expiring patent on main product don’t you think it’s priced too high to jump back in?


  146. I like the NFLX Jan $155 puts at $2.05.


  147. Phil :D o u  like AIB ,now $1.01, paired with Feb. 41.50 puts at $ .15 ? thank you.
      


  148. Phil / Econ 101
     
    I do remember the preferred requirement of basic math and and accounting principles, but there was, I believe, a requirement for common sense as well, with a focus on you don’t spend that which you don’t have , and little chance of ever having it.


  149. maya 1…. you can reach me @ 1234gel@gmail.com


  150. NET $ (1.07)%,  dx/y = +.74%
    oil +1.87,  gold +3.0


  151. Phil
    I own the Dec 28 DBA put. Do you have any update on that? Thanks.


  152. Phil,
    when you say:
    I like the NFLX Jan $155 puts at $2.05.
    I am assuming you like the idea of selling them unless you specifically say to buy.
    Is that correct? I could view this either way. Pretty safe strike for a sell, likely nflx will stay above it. And, pretty likely we will see a pull back, so I could see buying it as well.


  153. Phil-- B  5 DXD Jan 25 calls @ $4.5
             S  5           Jan 29 Calls @ $3.00
             S  5           Jan 25 puts @ $1.90—should I leave alone or roll--would like your advice
    Tx
             
                               


  154. Judy, I interpret this as buy the puts.  If he meant sell, he would have either said to sell, or would have called them putters.


  155. Maya1/XLF,  it’s calls.


  156. did I miss any news?


  157. NET $  falling (1.17)%


  158. Wow, that is all I can say….. SOme turnaround we’ve had today….


  159. XLF I assume selling Cs?


  160. S&P ran up 5-6 pts during that 2:30 – 2:40 time frame


  161. VIX +.325 only now,
    C = 1185.09, F =1183.75
     
    oil  = 2.00, gold +5.10
    leads me to believe the dx/y is BS right now, dx/y +.75%, but the NET $ is falling (1.17)%, jmho
    very weird to see oil higher and gold up


  162. doubled, I bought the calls – no premium left


  163.  NFLX will definitely go over 200. For how long is the question. CMG is green as well. These are crazy stocks. Totally nuts.


  164. Phil, got a late start this am, and ended up taking the DIA 112s at 0.81.  Then doubled down at 0.73, to get a net entry down to 0.77.  Took 1/2 off at $0.93 and am thinking I’ll let the rest ride the last hour and change with a $0.05 stop.  Good idea or should I just bag it and take the whole thing down?



  165. Santelli said it might have been the 2nd POMO operation


  166. I forgot there was two, even though Phil reminded us


  167. Anyone
    Having followed this site for a few months now, but more so in the past two months, I am failing to see the fascination for shorting stocks like AMZN, NFLX, CMG and PCLN
    The stocks just keep going up….why are people on this site chasing these Shorts?, and they keep complainig as these stocks keep going up….
    I would have quit a long time ago…yet people keep complaining
    Wht am I missing?
    Are there no other stocks to try make money off of?


  168. Maya:  lol you’re right on; it’s just the inverse of catching a falling knife that day traders enjoy, the fact that they are so volatile juices the equation.


  169. Phil:
    Is that a buy or sell on the NFLX puts? Thank you.


  170. dclark:  general rule is :  if not stated otherwise its a buy


  171. JRW – Your numbers have been great today!  IWM high: 73.44  low:72.03  :)


  172. Maya--the scary thing aboutshorting those insane stocks is they even go higher when the market is down triple digits! Totally insane but your standing in front of a runaway train.


  173. NET $ (1.07)%


  174. Humvee:
     
    Thank you.


  175. Maya- you are absolutely right about these stocks. I learned my lesson chasing TBT earlier this year, and like many others on the site, learned my lessons the hard way. Got my rear kicked. I try to never chase; momentum stocks worst of all…. ah, the siren sound and promise of a quick buck!


  176. Out of TNA at $59.35 for 3 1/2%


  177. 1020

    Thank you !!


  178. maya
     
    The market is up 6% since the first of the year… with all of the positive imputis at the moment…. why would one short a MOMENTUM stock just because it went up? – not me, now or ever. Better to pick the dogs to short in a downward moving market, in order to increase your odds.


  179. Phil buying back these 110 dec mattress putters back again for 25% gain I trust we can sell them again in a while ??


  180. Sold these DIA’  s this morning


  181. I dumped the dias this morning at .70 – sucks


  182. Bailed on the rest at $1.03 for 26% on the DIA play from this morning.  Thanks Phil.


  183. NFLX HOD = 200.00
     
    What a joke !


  184. SODA/QC – I tried it in Bloomingdales – didn’t like it at all.  Kids liked it though but more from the novelty perspective than taste.  Their price comparisons are bogus because I buy 36 cans of soda for $9.99 pretty much any week on sale at the supermarket so that’s about .25 a can – not exactly a pressing need to cut from my budget and certainly not more convenient than just opening up the fridge and getting a soda.  I think it’s a good novelty but nothing to invest in long-term.  

    CMG/Amatta – $130 and $150s that are $100+ in the money?   How long have you been sitting on those?  

    GM/QC – I see no activity so hard to judge the worth of them.  Also, still can’t figure out GM in general but I lean towards same pig, different lipstick.  Maybe the 2012 $35/30 bear put spread for $2.40 would be good to sit on as a start.  You could offer $2 and see what happens.  

    Crashing/Button – My computer crashed, I didn’t see the site crash but it took me about 30 mins to get back up and running on my main computer.  Maybe they were related as I crashed when I tried to make a comment post.  

    SVU/RJ – Wow, they fell off a cliff!  At $11.57 you may as well sell the 2013 $7.50 calls ($2.60) and the $10 puts ($3.20) to drop your net to $5.77/7.88 which is still a respectable 30% if called away but the main point is to get a low basis for a long-term investment.  

    Let me know if you guys have server issues tomorrow.  Maybe it is a cyber Monday thing but I’ll still let the programmers know.  

    Job Security/Jrom – Yes, that is a factor and I don’t mind the wage increases too much other than I don’t like the artificial nature of the adjustment.  These kind of things do tend to get out of hand pretty quickly.  

    Spreads/Mike – Things could get nasty if that trend continues but up we go so everything must be fine, right?  

    Good analogy BDC. 

    Treatment/Flips – Give your son my number, I’ll represent him in the next negotiation.  8-)

    NFLX/Jrom – Aren’t there enough people crying over CMG for you to be adding NFLX to the pile of death stocks?  Much as I agree with the value, I’d rather risk stopping out with a .80 loss on the puts than take unlimited risk on the calls in this runaway market.  

    Unemployment/RW – That’s Dec 4th so it don’t hit the fan until after the weekend.  I agree with you about buying support until it fails and so far so good with our DIA and XLF plays.  

    VE/Yodi – Did I pick them?  I don’t remember that at all.  The busted the 200 dma at $28 with a very ugly chart, you should be glad to get half your money back on that one.  

    IPad/Bob – I see stuff like that on Ebay all the time and find it amazing.  Are people that clueless or is it some kind of scam to drive up prices or something?  

    XLF/Maya – Calls!  If I don’t say puts, it’s calls but of course check if the prices don’t match as I do screw those things up sometimes.   

    AIB/Dflam – If you are already in them from our DD entry then I’m more inclined to cut and run here.  We don’t know what’s going to happen next week and if Ireland rejects the bailout, all bets are off.  

    Spending what you don’t have/Gel – That’s right.  We had a huge surplus under Clinton and then some dumbass not only spent that (and giving unbalanced tax breaks to people to curry favor is spending money) but also spent another $1Tn a year for 8 years just to make sure we were plunged hopelessly into debt so the beneficiaries of the irresponsible tax cuts like you can lecture us on fiscal responsibility.  

    DBA/Chakra – The ones from 11/19?  DBA dropped $1 into the 23rd (last Tues) and we killed our shorts that morning so that’s the update.   You still have a pretty strong dollar going for you and we’re not having a very strong day but if they pop back over $29.50 the party will be over for you.  I’d hold if the money isn’t important and be happy to get .30 and go home otherwise as we got almost all of the dollar run we expected already.  

    NFLX/Judy – Nope, that would be buying them, not selling them.  Since we usually buy, I specify if it’s a sell.  Also, why would I sell NFLX puts when I have made many comments that I think it’s overpriced?  They probably are good to sell too, I don’t expect them to go in the money (now $1.96), just looking for a move up to $2.50 on a dip.  

    DXD/Savi – Those are crushed already, you need a pretty good sell-off to win out now.  If it’s a hedge and you intend to stick with it, then you can invest in rolling out to Apr $24s for about $1.10 and you can then wait out the rest and see how it goes

    Speaking of NFLX – the big $200 is here!

    XLF/DD – Buying calls.  That would be a lot of margin just to collect $600 that’s almost all in the money.  

    XLF $14.50 lined up with FAS $22 and UYG $56 but XLF is over the line and probably needs to lead with a break over $14.60.  

    That’s cash on the DIA $112s at $1.05 (.05 trailing) – nice $3K back after that bad start.    The XLFs can ride now that we have a buffer of a $600 profit..  


  185. Phil,
    What is or was your recommendation for exiting the TZA spread and puts sale?


  186. mike5885
     
    I follow your posts, and have a question – what is your trading strategy to take advantage of the numerical changes ?


  187. Phil/Gel – What are you feelings with the YEN? Are you short at all or are you just sticking with shoritng the EURO?


  188. JR,
    Nice Job,
     
    Your levels were right on.
     
    What are you thinking about tomorrow?


  189. Another Hammer……5 in the last 2 weeks.  We’ve yet to get the reversal that they are supposed to indicate.


  190. Phil / Overspending
     
    Well…. the trophy goes to the Democrats and Obama -  over the last four years an ADDITIONAL $4 Ttril has been added to the deficit….. my oh my !, and this time around, there is no way in hell this money can ever be re-paid, except for a radical solution drempt up by BB through hyperinflation – REAL NICE !


  191. Bank list/Mike – Why can’t they just make a normal chart?

    NFLX/DClark – Buy. 

    Good timing JRW!  

    Mattress/Yodi – Good job taking advantage of the quick 25% profit.  There’s always something else to sell if we need to and back to naked is a good call on an overall weakish day.    

    DIA/Hoss – Excellent job!  Take note people, Hoss does not need to be told to take a 23% profit in a single day!!!

    TZA/Cars – No exit on that – it’s on track at the moment.  It’s not good to jump in and out of 3-legged spreads as the fees and bid/ask spreads eat you up.  It’s on until it’s off and, so far, we don’t have any reason to think the general downtrend is over.  

    Yen/Jrom – You have the BOJ actively seeking to drop the Yen so you don’t want to bet against it.  They got it down to 84.4 this morning and they are shooting for 85 I’m sure.  I doubt 90 is possible with the weak Euro and, of course, the Dollar isn’t very stable-looking either.  


  192. jromeha / YEN
     
    Yes, I am short the Yen, playing the etf’s – long term. As Pstas has mentioned ( and I agree ) this will be the "play of the decade " when all the chips have fallen. Patience is "key" with this one.


  193. Trophy/Gel – I guess the fact that all $4Tn of that money was directly attributable to the war(s) and tax cuts somehow makes your point in your mind?  Just trying to figure out how those wheels connect…

    Homework assignment for all: 500 Page report on Global Competitiveness.  


  194. DIA 112 — in at .80, out at 1.05….thanks Phil!
    Gel — are you short EUR/AUD?  Working.


  195. Phil--did not fill on Xlf but out of Dia for 25% profit--Merci


  196. Strong day today in banks.  FAS took out the low since 9/23 and now is engulfing Friday’s wick.  Decent volume, too.


  197. Matt,
     
    Are you long FAS?


  198. exec / tomorrow

    You know me; as always, we will have to see 8-)


  199. 7% on the day, nice way to start the week !!


  200.  Phil, 
    With today’s collapse is this a good re-entry for UNG (the 2012 calls this time)? I sold my long 2011 6 Calls and kept the 6 short Puts/8 short Calls. 


  201. @ phil
    "Once the people of a couple of nations realize this – the bond holders will really have their backs against the wall".
    In an ideal world, si. But in a political world, no.  And we live very much in a politicized/polarized world.  
    The ‘"Coincidental Interests" of the elite will assure that if they lent money to anyone they will be made whole (if they really want it back and don’t need a tax writeoff) and damn the consequences.  The Soros’ of the world, the few that there are, can donate all the money they want since they have more than three thousand years’ money in a TBTF bank already, and live in the pantheon of the gods. 
    I don’t think Bill Gross frets about a damned thing because he has been assured he will only make more money, whether the government has to print it or tax the people or combination of both, to get it.  Likewise the FED and all those who Hank Paulson paid off (partially) in China and other creditor nations during his hysterical bailout. 
    There may be a day when a nation’s politicians choose to dishonor their debt.  But I doubt I’ll see it in my life time. 


  202. JR
     
    I know.  Just wondered what your gut is telling you.  I think it is interesting that we continually get reversal candles that don’t confirm.  I swear the Bots create these patterns intentionally to suck in buyers/sellers. 
     
    Matt makes a good observation on FAS.  The banks are due.


  203. Phil / Europe   Ireland will likely vote against austerity on Dec 7th.  We already know from strikes that the other PIIGS won’t accept austerity, so the Euro fuse is lit.  GOP want austerity here and China wants higher rates etc to choke of 10% inflation.  So, where’s growth coming from next year?  So, why are folks buying stocks?  The banks have been buying Gov’t paper, so a global spike in interest rates would finish off many banks, regardless of the sovereign defaults ahead, starting in Europe. 
    Trying to figure out what the trigger will be to bring down the global ponzi scheme of extend and pretend.  Is it going to be Ireland / Euro on Dec 7th?


  204. Tusca,
     
    What happens when the global ponzi scheme unravels?  It’s a pretty dark day so more than likely they’ll kick the can down the road as long as possible.


  205. At the open: Dow -0.52% to 11034. S&P -0.45% to 1184. Nasdaq -0.48% to 2522.
    Treasurys: 30-year +0.5%. 10-yr +0.27%. 5-yr +0.1%.
    Commodities: Crude +0.78% to $84.41. Gold +0.05% to $1365.00.
    Currencies: Euro -1.05% vs. dollar. Yen -0.36%. Pound -0.23%.

    10:00 AM On the hour: Dow -1.23%. 10-yr +0.25%. Euro -1.2% vs. dollar. Crude -0.02% to $83.74. Gold -0.43% to $1358.50.

    11:00 AM On the hour: Dow -1.19%. 10-yr +0.05%. Euro -1.17% vs. dollar. Crude +0.94% to $84.55. Gold -0.1% to $1363.00.

    12:00 PM On the hour: Dow -1.23%. 10-yr +0.08%. Euro -1.14% vs. dollar. Crude +1.59% to $85.09. Gold +0.14% to $1366.20.

    01:00 PM On the hour: Dow -1.01%. 10-yr +0.1%. Euro -1.11% vs. dollar. Crude +1.85% to $85.31. Gold +0.36% to $1369.20.

    02:00 PM On the hour: Dow -1.05%. 10-yr +0.06%. Euro -1.07% vs. dollar. Crude +2.09% to $85.51. Gold +0.23% to $1367.40.

    03:00 PM On the hour: Dow -0.47%. 10-yr +0.24%. Euro -0.95% vs. dollar. Crude +2.3% to $85.69. Gold +0.32% to $1368.60. 

    Texas-area manufacturing turns much more positive, with the Dallas Fed saying its general business activity index jumped to 16.2 from 2.6, and expectations are even strongersix-month outlook up to 31.4 from 26.9, and six-month jobs expectations to 37.9 from 13.0.

    Oct. Chicago Fed Midwest Manufacturing Index: +0.7% to 80.9 (indexed to 2007′s 100), a second straight month of gains. All four regional sectors were up: machinery up 1.5%, steel up 0.7%, autos up 0.5% and resources up 0.4%. 

    Despite the threat posed by government deficits, Goldman Sachs’ Abby Joseph Cohen regards stock valuations as "reasonably attractive… If you agree that the economy is looking better and corporate profits will be better in 2011, equities seem a good place to be." But Vanguard founder John Bogle is less optimistic, fearing a European debt contagion that could "spread very quickly."

    The biggest risk we face isn’t inflation or a currency war or a stock market bubble," James Surowiecki writes. "It’s the risk that, a year or two from now, 15M people will still be unemployed. Opponents of QE2 are effectively saying that the government should do nothing to try to change this… [but] doing nothing would be doing damage." 

    Spain provides a lesson for those who believe the Fed should pursue a policy focused on "fighting the imaginary risks of inflation," Paul Krugman writes. Spain is a "prisoner of the euro," leaving it with no good options; the U.S. has its own currency, and thus far more flexibility. Those trying to shackle the Fed essentially are demanding "that we voluntarily put ourselves in the Spanish prison." 

    President Obama calls for a two-year pay freeze for federal civilian employees. The action – which wouldn’t apply to military personnel – is expected to save $2B for the rest of fiscal 2011, $28B over five years and more than $60B over 10 years, the administration says. 

    Commercial real estate vacancies will top out this quarter, to 16.7%, and gradually fall, says the National Association of Realtors – but "high vacancy rates imply falling rents." An index measuring CRE conditions rose for the fourth straight quarter, to 42.6, but it’s well below the 100 that marks a balanced market (last seen in 2007).

    David Rosenberg lists 12 looming issues that could torpedo the economic recovery and the stock market. The usual litany of worries – China is overheating, Europe is crumbling, et. al. – includes a host of emerging troubles in Canada’s economy and housing market. 

    In-store retail spending rose only 0.3% on Black Friday, but e-commerce sales jumped 28%, putting e-retailers in high spirits ahead of today’s Cyber Monday sales. Stocks like Amazon (AMZN +0.6%) and eBay (EBAY -0.45%) may post some notable share movement today. 

    Some online retailers jumped the gun ahead of Cyber Monday by offering web promotions on Thanksgiving. Others like Best Buy (BBY), Staples (SPLS), and Wal-Mart (WMT) held ‘Cyber Sunday’ promotions. But 9 out of 10 retailers will still offer promotions today – up from 75% in 2007, says a survey.

    Online sales appear to have enjoyed a robust holiday weekend, as CoreMetrics reports a 16% increase from last year and GSI Commerce reports a 14% gain. Amazon (AMZN +1.6%) expects to benefit greatly from Cyber Monday with its Kindle reading device as one of the main attractions – its shares reach a new all-time high of $181.60.

     Some 212M shoppers went to stores and websites over Thanksgiving weekend, 6.4% more than last year, and spent an average of $365.34, the National Retail Federation says. Consumer sentiment has been rising, and anecdotal evidence suggests that people are less worried about losing their jobs.

     

    The Irish bailout is "a measure which is not simply a single shot taken in response to an important crisis, it forms part of the absolute determination of Europe — of France and Germany – to save the eurozone," says French spokesman Francoise Baroin. The euro "is an instrument which will not be taken hostage." Euro -0.8% vs. the dollar.

    As part of the Irish bailout deal, a new EU rescue fund – the European Stability Mechanism – will be created in 2013 in which bondholders may be forced to accept haircuts before any funds are disbursed. Many have argued lenders should have to accept part of the pain for the bad loans they made.

    Smart!  Not wasting the occasion of having all of the European finance ministers in a room together, an informal deal was reached to give Greece until 2021 to repay its $145B bailout loan. The original agreement called for the loan to be repaid by 2015. 

    It’s not just swaps on Spain and Portugal CDS that are soaring, as Italian CDS surge to a six-month high. Italy is like Portugal in that it is growing so slowly that its tax revenues might fall short of covering its IOUs. Italy’s economy is almost half-again as large as Spain’s, and Spain is considered the "big elephant" in the room that the euro zone doesn’t have the resources to save. 

    The ‘half-life’ of bailouts and interventions continues to shrink as the euro (FXE -1.2%) falls more than 200 pips in a matter of hours following a brief surge higher following the announcement of the Irish bailout details. 

    No longer impressed with mere $90B bailouts, investors drove European indexes down 2% or more as they finished on their lows of the day. The good news? With Europe closed, the field is clear for American stocks to attempt a late-day rally. Midday: S&P 500 -0.85%.

    The weird goings-on in European bond markets have investors selling off highly safe German bunds and moving to U.K. gilts for safety. Why? Prevailing views hold that if there are enough bailouts, the zone’s chief bankroller, Germany, can’t help but take the big hit. 

    China’s central bank spent $78B absorbing foreign capital inflows in October, double the amount needed in recent months. Considering higher interest rates would prompt even more ‘hot money,’ add this to the list of reasons the PBOC is implementing quantitative tightening, but not sharp rate hikes. 

    Major central banks (Fed, ECB, BoJ) will hold firm on rates next year, Citigroup says in a report to come today, with sovereign debt crises "firmly at the top of the agenda for 2011 and beyond." The bank says the global economy will expand 3.4% next year and 3.8% in 2012, led by emerging markets, and "no one is intervening or imposing controls" to get in the way of gold’s appreciation.

    Gartner cuts its PC sales forecasts, saying near-term computer buying should slow amid a cloudy economic outlook. The firm expects shipments to rise 14.3% this year and 15.9% in 2011, down from 17.9% and 18.1% expectations; tablets should have an effect, displacing 10% of PCs by 2014

    Solar stocks are lower after a report that Germany is considering additional cuts to its feed-in tariff for newly installed solar panels on Jan. 1. FSLR -4.1%, JASO -4.1%, TSL -3.6%, YGE -2.8%, LDK -2.6%, SPWRA -0.8%

    Amazon (AMZN) will revamp its site to sell in regions beyond the U.S. and the half dozen other countries where it does business. An international platform development team will enable new language translations and regional tax, pricing, and delivery adjustments. Premarket, Amazon is +1.4% to $179.80. 

    Momentum stocks tend to fall hard and fast when an uptrend breaks, and Netflix (NFLX +2.9%), nearing a new all-time high, is a classic momentum stock susceptible to a big drop, Dian Chu says. Netflix faces huge competitors, and Chu believes it’s just a matter of time before Apple (AAPL), Microsoft (MSFT) or Google (GOOG) come up with some kind of rivaling technology and deployment network.

    Three lunchtime reads:
    1) The eurozone endgame: four scenarios
    2) Is the Fed’s plan working? Look abroad
    3) Inside Treasury’s nerve center

     


  206. Maya1…..Thanks for saying what I’ve been thinking.    Why would anyone want to short these upwardly mobile momentum stocks?   It must be only for fun.  I’m a momentum trader.   I get on for the ride up, get off when I’ve made a decent profit, then get back on for the ride down.   But shorting something that’s going up up up is trying to predict the top.  It doesn’t work.  If you want to short a stock you need to see it going DOWN with VOLUME, then get on and ride it to the bottom.  So today I made 20% on AMZN going UP, and last week 30% on CMG going UP.    And I’ll play them long till they become proper shorts, if they ever do.  None of the 4 you mentioned should be shorted, in my opinion.  


  207. Iflantheman,
     
    What position did you have on AMZN today?


  208. At the close: Dow -0.36% to 11052. S&P -0.13% to 1188. Nasdaq -0.37% to 2525.
    Treasurys: 30-year +0.5%. 10-yr +0.14%. 5-yr +0.05%.
    Commodities: Crude +2.39% to $85.76. Gold +0.27% to $1368.00.
    Currencies: Euro -0.93% vs. dollar. Yen -0.26%. Pound -0.18%.

    Market recap: Stocks bounced off early losses on strength in the banking sector but finished lower amid skepticism that the weekend bailout agreement for Ireland would stop Europe’s debt crisis. The dollar slipped and commodities finished mostly higher, with crude oil hitting a two-week high. Decliners outnumbered advancers on the NYSE seven to six.

    Congrats Esco, Savi.  Don’t worry, I’m sure we’ll find something to trade tomorrow with all that lovely cash!  

    UNG/Amatta – Wow, that was quite a drop.  Kind of severe.  I didn’t hear news but I don’t think I’d jump in on a one-day drop at the bottom end of the 5% rule (betweeen 4-5% is weak bounce zone) as that indicates follow-through lower is more likely. 

    Dishonor/Flips – Like the sign says, honor does not put food on the table!  The only thing you have going for you is a cowed and uneducated population that puts up with the subjugation of the hundreds or millions by the hundreds – this is nothing the even remotely resembles a Democracy unless Democracy now means we choose the people who will rob us and deprive us of life, liberty and the pursuit of happiness.  You sit at the top of the pyramid and assume the slaves will never revolt but when have they not:?  

    Leaders don’t have to have hundreds of meetings anymore to gather a following – it’s only going to take one charismatic guy with a message to begin unraveling the foundations of the Western Democracies.  Just look at the Tea Party and what they accomplished in a single election cycle – that could have been a very different story if someone came out and had a message aimed at the indebted and the unemployed that promised them a voice if they simply use their vote  

    I don’t think Alexandria or Mary’s last words to their husbands was "I told you this was going to happen" before they were executed by an angry mob.  The elite always stare down at the little people from 10,000 feet and think they are untouchable until it’s too late.  

    Trigger/Tusca – I think Ireland is too small by itself and a no vote will immediately get them friendlier terms.  As the old saying goes, if you are late paying the bank $100,000 – you are in trouble but if you are late paying the bank $100M, the bank is in trouble! 

    That’s a good strategy Iflan.  I wish I could disconnect my brain and do more of those but I worry too much about value.  


  209. lflantheman Good Advice!  I flipped to buying puts on NFLX. . and even that I’m thinking is not too smart.  I agree that If I was selling puts on that momo, I would be in great shape.   Now I just hate the name Netflix!  Its like I spoiled the show for myself by thinking I was smarter that the sheeple who buy this pig.  But I was wrong (in the short term) and that smarts!


  210. exec….I had Dec 180s on AMZN, bought last week and sold today. 


  211. Humbug – got stopped out of the 1050P DIA112C at .69, never filled the XLF14C but I did get the PCLN DEC350Ps at 1.25
    So my personal 1050P is down $260


  212.  NFLX high today 200.00, right on the button
     
    This the top.
     
    (oh please be true …. :)      )


  213. @Phil
    You’re right. I rely on my experience of my fellows.  No one will discuss, let alone do something courageous, about the gentle decline into irrelevance of the disUnited States that has been being engineered by Hank Paulson, Ben Bernanke and the other producers and directors of this debacle that we cannot see behind the curtain.
    Counting on some charismatic to incite a fat, greedy, listless population spread out over a milliions of square miles,  to action is a pipedream, one that I used to have myself until I realized that I was actually dreaming.  The disUnited States, as I keep reminding you, is not "Europe",  which means that it is not France, England, or Greece. Assembling 10,000,000 people to march on Washington is going to take that which doesn’t exist. I wouldn’t  bet on it happening even with money I didn’t have to pay back.


  214. Phil  Bought the NFLX Jan 155 Puts @2.10.  How about CMG Jan 210 puts or perhaps Jan 200 puts?


  215. iflan / Momentum stocks
     
    Oh so right you are… and your profits prove your point !


  216. flip
     
    The most powerful word that has ever been spoken is "FREE". This word incites emotion and drives people to do the unexpected, that in many cases is without intent. The concept of "free" is the governments hook, in order to get support for programs ( entitlements ) that in the end get votes and will eventually bury our society. The problem that prevails, is that unfortunately,somebody has to pay for this largesse, and more often than not, the cost gets dumped into a bin called "deficit", as "pie in the sky" projections of income is nothing more than hyperbole, and hope…… Now that is management you can count on.!!!!  Our road map for the future is clear…. we are following Europe ( the UK was one of the largest and most successful empires in history ) , and we soon will reach the basement for the same reason… Socialism, and the desire of all to reach the status of Nirvana, where everything is FREE.- all you have to do is just exist !  


  217. @gel1
    Great call on ASYS the other day.  Up 6.00 since.   Wish I would have gone for the December 18s.


  218. Regarding the momentum craze, I have had profits with these kind of stocks, but you need take profits and be prepared to join the stampede when they turn in market corrections. No tree keeps growing into space from the sky…
    Note the Current IBD 100 frontrunners:
    1) IGTE  2) RVBD  3)  ARUN  4) BIDU  5) PCLN
    6) FFIV   7) NFLX   8) CMG    9)  LULU  10) CXO
    Nice list to work when a storm hits..


  219. Gel – really? I understand that you dont want to see your taxes raised but it blows my mind that you can write these things being as intelligent as you are! "FREE" was exactly what was happening for 8 years under Bush!!!! THe public had a FREE war (I dont recall a war tax being passed to pay for the two he got us involved with). Republicans are the people who are constantly kicking the can down the road. Phil and others have shown MANY times deficits by presidency and the REPUBLICANS are the ones who blow up the deficit, not democrats.
    Tell me how a McCain wouldve been different/better if elected? He doesnt pass any bailouts (even though Bush did)? He doesnt pass any stimulus? One could argue that if he didnt pass any stimulus then he most certainly wouldve cut taxes (also adding greatly to deficit).
    What youre left with is health care and THAT IS IT!!! So 700 billion is on Obama. The war funding, bailouts, etc wouldve happened under a republicant as well. What solutions are the republicans/tea party offering besides some vague notion of cutting Gov’t spending. It’s funny (in a very sad way) how campaigning on such fluff get so many of their members elected.  I think most of us on this board can agree that our country is f^cked if we continue down this path, what is surprising is how most of the conservatives  don’t look at the facts and insist that Obama "own" this mess that GWB left him.


  220.  Phil/CMG – Thanks, Phil…that’s what I was thinking…seems better with a flat to slowly drifting down stock.


  221. @jromeha
     
    This partisanshit is exactly what the single party running this country wants.  The party of incumbency is the source of all our ills, whether democrat or republican.  I don’t expect that fierce partisans will EVER acknowledge the blame their on politicians bear for contributing the social, cultural, financial, age, gender, race, and religious divide this country has been gerrymandered into.
    The first sign of growing wisdom is when each side says, "WE each all responsible for electing the Senators and congressmen who have allowed us to think that we could have guns and butter, bread and circuses, and not worry about paying for them.
    "A new Typhoon class submarine for 6 billion dollars? No problem.  You want cheap chinese goods at a third of the cost of american made?  You got it.   "Free" education for everyone?  Done. You want 5 kids and no father, no job, with housing, food, health insurance, and walk around money? Here it is.".
    Not until the people throw every senior level bum in government into the streets, and elect leaders who speak the truth to us, will things EVER turn around.  And I will second Colonel Nathan Jessup’s admonishment about that ever happening.
    Don’t be hoodwinked by the Republican/democrat argument.  It’s a Trojan horse.


  222. Phil, you need to tag the $10-50k Update article as Portfolio Review because right now it’s not coming up when you click the Portfolio tab.