Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Thursday Thrust – Just Buy the F’ing Dips!

It's very sad when you can get your best financial advice from cartoon characters.

I apologize for the language but  this video pretty much says it all.  As the man in green says:  "Buy the f'ing dip, you f'ing idiot."  That's the entirety of the market strategy we are being trained like Pavlov's dogs to follow.  Also as the man says "Now, don't forget this only works if you go out and tell all your friends and family to do the same.  That way, when they are buying more expensively than you, you can sell back to them and collect your money."  

Of course it's a Ponzi scheme but it's a gigantic, legal one and the best thing about it is that the Government FORCES everyone to play so you never run out of suckers.  When there is a lack of actual new sucker/investors to put money in, the Government steps in with stimulus or buys equities (QE1) or buy Treasuries from the banks so they can have free capital to buy equities with (QE2).  They debase the currency and drive inflation higher while talking it up even more so and virtually penalizing people for saving money and not shopping.  In this way, the US Government places a tax on every single citizen through a systemic devaluation of their lifetime accumulation of wealth as well as unfavorable savings and inflation conditions that are aimed to force money into equities and commodities.  

What is the logic to this?  Well, none if you are a government that actually cares about the long-term benefit of 310M people but we haven't had a government that was "for the people" since they put two in the back of Kennedy's neck so why complain about it now? What we should be doing is celebrating the sheer stupidity of the situation and enjoying the ride as this stock market roller coaster clacks up the tracks – towards a drop that is certain to have investors screaming all the way down but, for now, let's listen to what the Bernanke Bears have to say in their latest cartoon about the Bank America crisis with WikiLeaks as well as their advice on NFLX and CRM:

Now, what could be more simple than that?  Just take all your money out of bank stocks and put it into NetFlix.  Well, maybe not NFLX as we were shorting them this week and it does look like we'll be rewarded as they got a spot of bad news (that we expected, hence the short) as the FCC proposes net neutrality regulations that  endorse the concept of usage-based pricing and that would be TERRIBLE for NetFlix's model, which is based on being able to hog up about 1/3 of the entire bandwidth of the Internet for free.  What a shocker that this plan my not pan out, right?  Even Jim Cramer is abandoning the stock, telling his viewers to sell half in last night's broadcast.  

While last night's video may confuse the people who took Jim Cramer's advice in this one, that NFLX was "unstoppable" at $185 (video removed by CNBC/Cramer but we saved the text!) at least it's up $15 but I'd be selling all at this price before we're back at $170!  Of course those Oct 27th viewers will be nowhere near as confused as the Nov 30th viewers (yes 2 days ago!), who Jim told to BUY NetFlix at $208, which was the same time we were buying too, only it was the January $155 PUTS at $2 that we picked up in NFLX – we'll see how that goes but we're very thankful to Cramer for his quick 180 turnaround – usually it takes him several days to be proven wrong (and months to admit it, if ever).  In fact, the above cartoon bears mention how great it would have been to have not listened to Cramer back in March of '09 and bought some banks stocks.  They forget to mention how great it would have been to listen to ME!  I was, in fact, on TV that same crash day telling people to BUYBUYBUY: BAC ($3.13) , XLF ($6), FAS ($14), the RUT ($390), GE ($7) and 8 other stocks – pretty much "buying the f'ing dips" when everyone else was panicking out of the market (video on the left is my March 6th, 2009 appearance on LiveStock and here is the summary of that week's events).  

THAT'S the kind of dip you buy on, now these little pullbacks!  Meanwhile, the anti-Cramer trade is still one of the most sure-fire ways to make money in the markets but the downside is you have to actually watch Cramer – which is something not many people are willing to do anymore as is evidenced by Mad Money's 24% decline in viewers since last November, down to just 41,000 people a show according to Nielson (the ratings guys, not the cool Coconut Song guy).  CNBC has, overall, a 36% drop in ratings caused, perhaps, by 36% of the people who listen to their advice losing their homes with the Fast Money crew dropping a precipitous 56% in the past 12 months but still holding onto the same audience (41K) as Cramer.  

Why is CNBC failing in the ratings?  Because they put people like Kudlow and Cramer and Adami and Najarian on TV instead of people (yes, like me) who are going to give you the real news and attempt to actually inform you.  Now, here's the thing you need to think about – what kind of TV show(s) have you ever heard of that lose half their audience in a year and remain on the air?  The answer – PROPAGANDA!  

Only a show that has an AGENDA other than making money could possibly stay on the air while it's driving viewers away in droves.  It takes years to build up a viewership but, as CNBC has proven, only 12 months to drive half of them away.  Fast Money is not the only CNBC show that would have been canceled a year ago by any responsible programming executive – "The Call" is down 37%, "Power Lunch" is off 47%, "Street Signs" is down 45% and hour one of "Closing Bell" is down 43% while poor Maria drives another 8% away in hour 2.  

So, is it a sign of a market top when CNBC only has an average of 47,000 suckers tuned in at any given moment?  Sadly, in these thin market volumes, 47,000 sheeple mindlessly following Cramer off a cliff can still move the markets, so we have to torture ourselves daily and pay attention to what CNBC is saying as neither Fox Financial or Bloomberg have managed to match CNBC's impact for moving the markets.  Even now, when I go to visit brokers on Wall Street, every office has TVs tuned to CNBC (maybe they are not Nielson families), even though, clearly, the broadcasts did nothing at all to help Wall Street avert the last crash and, in fact, many would argue that their mindless trend-following and their constant cheer-leading for the latest bubble greatly exaggerated the damage done in the markets as people tune in expecting news and instead get nothing but PROPAGANDA that leads them to making very poor investment decisions.  

We try not to make poor investment decisions, of course, but we also realize that sometimes we do.  That's why PSW stresses virtual portfolio management techniques, position sizing as well as fundamental analysis.  It is ridiculous to tell viewers to "do their own homework" and then rattle off 20 trades in a 5 minute "lightning round" that sends the tickers flying.  There's really no way to reconcile television to responsible market discussions in an hourly format, which is why I have thus far declined all opportunities to make a fool of myself in some sort of show.  If I ever did TV or radio, I would want a show from 8am to 5pm where we did pretty much what we do in Member Chat now – observe and talk about the markets live and, occasionally, share trade ideas.  Would anyone watch?  Probably not, which is why I'm writing and not broadcasting this morning but if you ever see me with an hour show or jammed into a regular "segment" on some other show, you already have my permission to call me a sell-out and I can only pray that day never comes!  

To me, CNBC is just re-running the script from 2008, when we were teetering on the verge of disaster but GE had a lot of real estate loans to dump and military contracts to get signed so CNBC was on from 4am to Midnight telling you how great everything was and to pay no attention to that man behind the curtain while they funnel away your investments and sell your country down the river, signing you and your family up for a future of 3 generations of debt and a broken safety net.  We like to trade FUNDAMENTALS not whatever mental patients are trading!  That's very hard when you're in a market where cartoon super heroes can say "just buy the f'ing dips" and you start thinking – "hey, this guy knows his stuff!"  

It's all fine to follow the trend if you are a hit and run trader – that's the kind of trading we've been doing since we cashed out last month but, to make real money, you need to take a stand.  We're trying to make 100% in 2 months with our $10K-$50K virtual portfolio so we need to take a stand and our stand was a bearish one that we dug into yesterday with 4 bearish trade ideas in the Morning Alert, including the XRT Jan $44 puts, that were my Free Trade Idea of the Week in the morning post, which came in at just .80 on the morning spike. 

As the market stayed strong we strengthened our Mattress Play (more bearish) and shorted oil (also mentioned in morning post) shorted China, shorted the Russell, shorted PCLN (again) and shorted TM, which seemed like a super-obvious short to me as they disclosed very poor sales numbers at about 1:20 and they just ran up from $69 to $79 in a month so we aggressively played the $80 puts for $1.60, which can make a very fast 50% or more on a $1 pullback we expected once the Nikkei opened (looking good this morning).  THAT's how you trade the market – wait PATIENTLY for opportunities to present themselves and use our FUNDAMENTAL knowledge of the market to quickly identify good trading opportunities.  You can't do that in a TV show because you are constrained by the time of your segment and that means you will be forcing trades, rather than waiting for good ones to present themselves – that's why no one on TV can tell you anything useful about the markets

Maybe we're wrong, maybe we'll get burned but our decision was based on the trends we were following all month – the Dollar's move, the EU situation, the economic numbers, the retail sales, the commodity pricing…  So many things to watch but today it is about the dollar holding 80.50, something we discussed in last night's Member Chat so I won't get into it again here.  We didn't think the EU was really going to run a QE2, which is what rallied the markets yesterday and the afternoon rumor was, not only will the ECB run a QE Program but the US would pitch in through the IMF, which sounded like complete and utter BS to me so we held our short positions even while the market strongly disagreed with us in the afternoon.  

The ECB met this morning and Trichet did not announce any major policy changes and the IMF rumors were already shot down and that is dropping the EU markets quickly.  We'll have to see what sticks but it looks like NFLX and TM should be treating us well this morning and, who knows, maybe if we hold our bounce levels again we'll be motivated to buy the f'ing dips.

Isn't trading fun?!?


Tags: , , , , , , , , , , , , , , , ,

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. NET $ +.31%,  dx/y = (.16)%


  2.  Good Morning Phil,
    Would the correct takeaway from your intro be that you would endorse a Buy/Write on BAC at this time?
    Thanks


  3. Futures overnight:  high = 1211.75, low = 1202.75, current = 1209.75


  4. Interesting statistics on CNBC. 
     
    So the million dollar question is:  Who is funding them?  Obviously they would be cut immediately if they didn’t have a solid view base and based on these figures, they don’t.  So who is behind the curtain?


  5. NET % +.25%, dx/y = (.17)%
    F =1207.75
    10yr = +.78%,  30yr = +.54%
    oil (.27),  gold +1.90


  6. Anyone
     Jobless Claims – when ADP says the US added 90+K job – is that net? Does it take into account the 430+K jobs we lost.
    Thanks 


  7. Behind the curtain ???….. Dr. OZ from the Oprah show….


  8. Behind the curtain!


  9. NET $ +.53% rising here
    F fell to 1204.75


  10.  EUR/USD breaking down. Guess they did not like the jobless claims. ‘Buy the dip’? :-)


  11. Trading GOOG:    We all like to report our winners, but we also need to report our losers, so that we can learn from them.   I went long on GOOG a few days ago, one day before the correction brought on by the stories about Groupon acquisition rumors and European inquiry into possible monopoly.    Fortunately, I followed my usual rule of starting with a small position (position sizing!)  but the Dec 600 calls dropped 75% in value after the aforementioned.  Should have waited for a good pullback, as Phil again alludes to above.  Most of these up up up stocks that we trade WILL have a good pullback now and then, if you just wait for it.  This time I didn’t, and paid the piper.    Want to get into a trade?   Wait for a pullback, even on a really good stock.  And start with a small position. 


  12. @Phil
    The other day I told a few people that the "F" word is, 1) now so omnipresent that it is losing its sting, 2) is one more sign of the mental laziness and atrophy that comes part and parcel with the increased coarseness and steady decline of our culture since Gloria Steinem burned her bra and 3) will pass into the ether as useless to convey its former meaning.
    But when I viewed the video on "Buy the F’iing Dip" "You Stupid…"   I found myself, after the 5th repitition, first smiling, then LOL by the end.
    And some of the best advice (had it been being followed religiously since March 2009) when I had 1000 NFLX at $30.00 in June 2009.


  13. huge change here
    NET $ (.61)% dropping fast,  dx/y + .18%


  14. NET $ (.94)%, dx/y = +.28%
    C =1209.88, F =1200.25
    VIX (2.23)%
    oil  (.16),  gold +2.0
    10yr = +1.08%,  30yr = +.45%


  15. Phil, Great cartoon! LOL….


  16. Wow, so much to read and watch today! 
     
    So Trichet says we won’t go all crazy with QE like the Americans and what does the Euro do?  Go down.  The dollar goes up.  That makes NO sense whatsoever other then ‘they’ are once again taking the other side of the argument, no matter how pathetic their side is, and forcing us to listen because ‘they’ have the money.  F-ing ridiculous.
     
    Mike ‘Mish’ Shedlock has a great article on what is wrong with our country.  I think we share a brain or something.  Only he is making meaningful contributions by writing great articles with facts.  All I’m doing is ranting on a blog.  Anyway, he says WikiLeaks should be praised and not scorned.  I would have to agree.  At first, I thought Asange’s actions were treasonous.. but now, I see it perhaps as our only hope of wresting back our government.  How else would we ever have proof of the things until now we could only suspect?  Phil said yesterday, you can f over the public as much as you want but don’t even try to f over a corporation.  Well, with it well known that BAC is going to be the next target of Wikileaks… I am concerned that Asange might ‘disappear’ before the dirt comes out.
    http://www.philstockworld.com/2010/12/02/amazon-drops-wikileaks-on-request-of-sen-lieberman-lie-of-the-day-from-hillary-clinton-how-not-to-stop-leaks-why-we-have-leaks/


  17. Here we go again.  Kill the dollar to push it past the level.


  18. Good morning!

    More MADNESS ahead.  The EU may understand what Trichet is saying (or not saying in this case) but it’s not swaying our futures so far, which took a big dip but quickly recovered as the puditry went into emergency spin mode.  This is annoying as now we have to DD on positions we should have had an easy win on and perhaps wait for next week to get what’s coming to us.

    No changes in strategy from yesterday’s 1050P update on those positions.  We will DD as planned if we can. 

    AAPL is flying up and that’s typical when they are trying to paint the Nasdaq but let’s just keep an eye on our various levels and apply our 3 of 5 rules for going long or short off the lines:

    • Breakout LevelsDow 11,500, S&P 1,220, Nasdaq 2,600, NYSE 7,750 and Russell 725
    • Watch Levels: Dow 11,220, S&P 1,185, Nas 2,500, NYSE 7,550 and Rusell 715 
    • 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 

    Keep in mind that we were all green but the Dow last month so Dow 11,500 is our expected hold-out, even if the others get that high.  

    The bottom line on the markets is there is a huge amount of rumors and misinformation driving things right now  and it will take a while to sort things out.  We read the BBook yesterday and the media is generally ignoring that and trying to celebrate "just" 436,000 jobs lost this week.  We get Non-Farm Payroll in the morning tomorrow and that will give us a better view on employment.  

    On the whole, I think the market is wrong or in denial this morning and it’s a fine time to pick up any puts you might have missed but it’s a risky play with jobs tomorrow and the Irish vote on Monday, both of which can be latched onto as market movers so, as always – CASH IS KING!  

    Be careful out there.  


  19. Phil, 
    Are we expecting NFLX to continue drifting lower? I am still short 6 Dec 190 sold at an average of 12.00… so now above water…
    Thanks


  20. Good Morning!  Nice work Phil, Thank You!


  21. Phil:
    Based on your morning update, DD on the DIA Dec 110Ps (@.68)?
    Funny cartoon!
    Cheers!


  22. lol, I am one of the sucker who watch CNBC.


  23. BAC/CSL – I liked them a few days ago and I put up a play last night on them long-term that I like (a buy/write with 2013 $10 puts and calls) because I think the bear makes a good point and they are not just too big to fail, but also profitable and profits mean not bankrupt and not bankrupt means they are good to buy at net $8 or less.  

    CNBC/Exec – Well GE of course, the company that had declared a $50Bn income over the past 3 years and paid a total of $4Bn in taxes.  You don’t get to get away with that without doing a lot of favors for people who sit on committees that might investigate you.  It’s not just the tax-free income GE enjoys but they also were one of the biggest US receivers of bail-out money, even though they never had a losing year.  They get government contracts for about 1/3 of their US income and get 60% of their income from other countries, including other government projects so more favor-currying all around.  Imagine the power of controlling an entire television network and then think about the fact the Rupert Murdoch owns one in virtually every nation on earth!  

    ADP/Samz – That’s net payrolls they are processing, it’s probably better than government except it doesn’t really track small companies, most of whom don’t use ADP until their staff is in the 20s and it doesn’t track bigger firms, who do their own payroll but still – compared to the government’s data – I’ll take ADP every time (assuming, of course, they don’t have their own reporting agenda – you never know).  

    Dollar all over the place this morning.  Was 80.40 at 5:45, shot up to 81.05 at 9 on Trichet’s lack of stimulus but now down to 80.65 again on who knows what and does it even matter anymore why they do these things?  

    GOOG/Iflan – Very good point.  Thanks for sharing.  

    11,300 on the Dow!   XLF testing $15, RUT is lagging at the moment but I just can’t get behind a long there.  


  24.  Phil     Any opportunity to short FCX at these levels?


  25. Hi Phil,
    I see no comments on the DIA 110 Dec long bought for .85 now .53 good loss


  26. Good Morning Phil,
    Where do you stand on the TZA spread?


  27. Phil, 
    So its a DD on DIA’s at .54 right? 


  28. Matt,
     
    Like you, I also thought treason, but the more I thought about it, what other recourse is there to fight the Government or big Business.  It is interesting how they are all circling the wagons in an attempt to silence him and more importantly anyone else who might be contemplating similar actions.
     
    I think the internet and the power of information it brings to the masses scares the hell out of politicians and government in general.  They are so used to being able to control the media and cover up information, either by claiming some bullshit law or simply covertly threatening anyone that dares expose them. The thought of having anonymous leaks of documents and information truly has them shaking in their boots.  Think about it, there are hordes of people that know about things that would never dare say a word because of potentially compromising their jobs.  Having a means of secretly blowing the whistle could have a snowball effect which could change everything about the way our government does business.
     
    In some respects the Tea Party movement is another threat because for the same reason.  There is no head of the snake to corrupt or buy off.  They can’t control them like they can the other political fragments.  Whether it’s the gays, the blacks, the environmentalist, the unions or other lobby groups, they all generally have a central leadership base that can be controlled.  Not so with the Tea People, the are a vast group with no clear leadership and the fact that they can unite on a common theme via the internet has them concerned.


  29. 2 days erases an entire weeks worth of losses.  That is B.S. in Cap’s words.

     

    PCYC, BSDM are not performing, which is disappointing.  Gonna have to hold these for a while (as expected for these biotechs). 

     

    Anyone still in JAZZ or QCOR?  I was out when they hit 12.5, but they are way higher….that is my premise on PLX, and the bull call spread is still good.


  30. If we eventually surpass the breakout levels, once again, I will have missed the initial turn of the corner and rocket ride up.  I don’t think I’ve ever caught one.  I think they purposefully get you turned around backwards and then force it up so quickly that you just can’t buy into it being real.  I’m just not that easily convinced and miss out on the big money.  Where’s that kool-aid…


  31. F word/Flips – Yeah, I’m not a big fan of profanity but the repetition made it funny there.  I went to see George Carlin do a relatively clean show somewhere and he was about the funniest guy I ever saw but then we went and saw him in Tahoe and he did a show that was totally filthy – much less funny I thought.  I have the same issue with Stern, I liked him better when he had censors…  

    Pending home sales down 20.5% from last October but they revised the September down and that makes Oct a 10% improvement over what is now a completely dreadful -1.8% in September.  This is, of course, boosting the markets and now I wish I did those RUT longs!   

    If XLF breaks $15 it’s all over for the bears. 

    Dollar down to 80.49, big test there.  

    Updating 1050P positions:  

    • 5 CMG $230 puts at $1.35, now $1.40 – fine
    • 5 NFLX Jan $155 puts at $2, now $2.65 – fine
    • 5 QID $11 calls at $1.30, now $1.15 – DD at .70 if possible.
    • 10 DIA $110 puts at .90, now .82 – time to pull the trigger on DD at .53.
    • 5 XRT Jan $44 puts at .80, now .77 – fine, no DD plan
    • 5 USO Jan $35 puts at .97, now .84 – DD at .73 if possible.  

    Lots of very tempting shorts as we get near 1.25% but if we hold that, then we expect another 0.75% before we turn down and that’s about 11,450 on the Dow and 1,230 on the S&P so we have to be patient.  XLF right at $15, watch that closely.


  32. Hi Pharmboy, what is your take on PARD?  Should I cut my loss?   Thanks.


  33. So…..are they hording in the last of the suckers before they pull the ripcord, or is this for real?


  34. The rate of rise since this started yesterday leads me to believe we might have another day of this before we pull back.  Going back in the chart.. seems to happen in 3 spurts.. today looks like another FMD.  Could be possibly have another tomorrow before sanity peaks its nose out on Monday?  This is nothing but a squeeze.  But a BIG ONE.
     
    Phil / Pending home sales, thanks for the clarification.  With CNBC saying they unexpectedly surged in October it’s as if they are lying to our faces.  Will they ever say "pending home sales were unexpectedly revised down a lot for the previous month"?


  35. PARD/bob – that is a blast from the past….um, yes.


  36. POMO helping maybe? At least NFLX and CMG are down again ;-) I still can’t understand why we rallied over 300 points these last 2 days???


  37. Tea Party/
    It remains to be seen how effective the Tea Party members will be in Congress and whether they "Soft Sell Out"… My guess is the bark will be louder than the bite…… We shall see….


  38. Asange/Matt – Well, you know Interpol is after him now, right?  He’s accused of rape in Sweden and I can’t help thinking he’s being set up so they can discredit him – kind of like they did to Al Gore a while back.  AMZN cut his hosting off the other day so you can see that strings are being pulled all over the place to take him down.  

    NFLX/Amatta – I say we go for it on those.  I think they may get to $170 on this news and those are Jan puts so we can give them a day or two.  I haven’t heard anyone say the ruling will NOT be a problem yet and look how poorly they are doing on a 1% up day.  Of course, if you were freaking out before and now "saved" perhaps lightening up would be a good idea?  

    DIA/Reza – Yes, see above.  I do hope it is understood that you do let the momentum play out when we hit a target, not just mindlessly buy when something is moving against you

    FCX/Wilsons – I think so.  Now gold is up because there is a report that China HAS BEEN buying insane amounts of gold.  Now, to me, that explains the idiotic run-up we’ve already had but certainly doesn’t make we want to be the sucker coming in AFTER China distorted the market.  If you have HMY or one of our other upside gold plays, then FCX is an excellent offsetting short in gold as the copper is going to get very heavy near $4 (where they are now).  

    I like the FCX Feb $90 puts at $2.70, they were $6.70 two weeks ago!  


  39. @Phil
    You refer to XLF as being extremely important. Why do you consider it a significant bellwhether?


  40. NET $ +.31%,  DX/Y = (.33)%
    c =1215.79, f =1215.25


  41. Really heavy volume today in both FAS and FAZ.  Way above average for this time of the day.  FWIW.


  42. bobhu/CNBC  I watch it as well, I just keep the volume off…. :)


  43. Hi Phil clarification I trust if you say I like it is still buy the call or put or can this be both directions
    I like the FCX Feb $90 puts at $2.70, they were $6.70 two weeks ago!


  44. Check out SWC, making bigger and bigger moves as a proxy for palladium prices. Palladium itself has run up 70.00 in the last few days…


  45. Phil,
     
    Did the dollar always move around this much or is this some new phenomenon?


  46.  NFLX and CMG getting some comeuppance today … more beatdown needed … much more.


  47. I hate to say it but it sorta looks how it did beginning of September.  Maybe ‘they’ squeezed us hard with the announcement of QE2, then took us down to shake loose hands and now with Europe firming up a little figure it’s safe to take us up again.  Maybe QE2 is now going to benefit the market?  A lot of ‘if’s’.  That’s why we have Phil’s levels!
     
    Boy, it’s quiet in here.  Is everyone under water or just counting their stacks of POMO cash?


  48. Marc on CNBC ought to be glad the station isn’t owned by GS. He’d have his mouth washed out with soap!


  49. CCJ  Any thoughts about the next year?  I’ve got a spread that needs adjusting and I wonder if I should buy more longs and do a 2X roll of my shorts or whether I can get a way with overselling callers.  I’m getting a bit margin constrained so buying longs would be more prudent


  50. Matt,
     
    I’m underwater on TZA.
     
    Just jumped in on Phils DIA puts at .52……those are green!!!


  51.  Matt -
    I for one am licking my self-inflicted short wounds – would have been much better following Phil’s advice for mostly cash with limited positions but I could not help myself.


  52. Phil
    Is the FCX PUT play only a hedge if we have upside plays OR is it an independent BUY ?


  53. mindlessly buy when something is moving against you!
    GOT IT!  :-D


  54. DECK heading lower at least!

    TZA/Cars – Which one?  

    Internet/Exec – Speaking of which, think about what net metering will do to curtail free speech as a person sitting at home who has a PDF that would be of interest to millions of people must first figure out how he will pay to distribute it.  There will be no more free blogger or WordPress sites – it’s a great way to put a muzzle on tens of millions of bloggers before they get any big ideas about informing people or something.  

    BS/Pharm – So what else is new? 

    AAPL went red!  

    Kool-Aid/Matt – Don’t worry, if it’s at all real, we have a nice clean shot at a 10% gain, 5% at least.  

    Does anyone notice how having DD targets makes it much more relaxing to watch a spike move against you.  Like Oil, for example, almost hit our $87.50 target but those USO puts didn’t fall below .79, which is frustrating from a DD standpoint but makes you realize how little a move like this (Oil $1.50 against us) really matters when we have a trading plan.  

    Herding/Exec – Surely you’ve seen double tops before, right?   That’s all this is if they can’t pop 1,227 on the S&P and hold it.

    3 parts/Matt – That’s right and it’s 2.5%, 1.25% and 0.625% with a spike up to the 5% line and a rejection back to the 4% line the day 2 high) and then we see what’s what.

    Pending Home Sales/Matt – Yes, here’s the chart they are all excited about.  Note September fell off the cliff and October bounced back to "just" 20% lower than last October and, of course, we are working with ridiculously low total amounts of homes now anyway so it’s all distorted:  


  55.  IWM – anyone have any levels way up here?


  56. yodi,
    I asked this question a couple days ago regarding the nflx purchase. If Phil says "I like" and doesn’t specifically say sell, then he means buy.


  57. April 23  high was 1217.28, which we took out early NOV
     
    1225.85 was the cash S&P high on 11/5/2010, intraday was 1227.08


  58. Kidding aside, point is well taken. I was going to buy some at .67 right at market open.
    Cheers!


  59.  Cap, indeed.. they both (NFLX & CMG) need to fall A LOT more.. 


  60. Any suggestion on how to play (short) OPEN @72.22 (-.21) would be great.
    Thanks Phil!


  61. NET $ +.59%,  dx/y = (.39)%
    Dollar is really being held down by the Franc, $$$/Frac = (.77)%


  62. "NFLX chairman’s comments was some support for “usage based” prices by online service providers"… game changer??
    http://247wallst.com/2010/12/02/what-is-net-neutrality/


  63. judy
    Thanks how difficult it is to say buy or sell instead of "I like"  In my case I am sitting on a hotel hear I like to sell it!!!!


  64. Good Morning Phil,
    if you have time, I have a question
    instead of buying bull call spread , we can sell short put and buy lower strike put (to minimize risk). As I see this strategy for long term portfolio produces much higher reward.
    For example:   sell  T jan12 27.5 puts  /   buy T jan12   22.5 puts
    instead of        buy  T jan12 22.5/27.5 bull call spread 
    and if I am correct in the event of market downturn it is easier to roll puts further.( ?)
    Question: are there some hidden pitfalls?
    Thank you


  65. Jromeha – Yes my stop is still 208 on the USD / HUF… Hope to see an nice reversal soon on this one.


  66.  Phil/DECK, I changed my not-so-good play of 6x short Mar $70s / 6x long Jun $75s to 3x short Dec $85s (I gave myself a bit of breathing room) and 1x short Mar $70 puts.. this gave me a credit of $560 dlls.. and as you say, I started the put side with just 1x so I can scale, thinking that if I need to roll, I would double down (2x, 4x, etc) in order to reduce the price.. because really I do want to own DECK long-term if I can buy them at $50 or below.


  67. Phil
    You see any trades in MOT or SYMC ?
    thanks


  68. Phil / Euro cooked !
     
    It sure is, and you ask if the US is reaching in the same direction similarily – yes, however I can see some hope for the US, as our economy CAN recover, if we just get the right decisions out of Washington, and some of the Statehouses. There are many differences between us and the Euroland, that gives the US the edge – although debt is equally as ominous.The US still has some entrepreneurial spirit – we just have to properly set the table. In Europe – much like Japan, as there is no hope for a has ben old society tat can not work their way out of the debt problems.


  69. Hi Phil,
    The TZA calls 18/20 spread with sale of 18 puts.  What was the other TZA spread?


  70. Phil/Metering
     
    I was thinking the same thing.  You know they’re going to find a way to stifle the unregulated and free information stream.  I’ve been waiting for it for years for the simple fact that it is bankrupting the post office. 
     
    But you’re right.  They don’t want the general population to have the ability to reach out unabated to billions of people and as sure as God made little green apples they will stop it.  You can bet that they’ll pull out there standard class warfare playbook to ram it through. In this case, it will be the ol big business is screwing the little guy who hardily uses any bandwidth to get Johnny lunchbox and Grandma Jones to believe that passing a metering policy will save them money.


  71. Hi Phil — you mention RUT is behing, but I notice that level today break above April high — will this indicated bull signal or need to hold for a day to see direction.  thx


  72. Quick!  Someone buy the f-ing dip!!


  73. "…. There will be no more free blogger or WordPress sites – it’s a great way to put a muzzle on …"
    Wouldn’t the newspaper industry love that outcome?
    Go long WAPO? NYX?  Network TV?


  74. Oh, and now that XLF is over 15, it’s over for the bears?  So we get bullish?


  75.  If you want a simple answer for jamming the markets higher ….. POMO — 60 Billion this week…… every day.


  76. @Phil
    Any interest, and if so,  any play in RIG?


  77. Huge move here into the Europe close
     
    NET $ (.14)% huge drop, dx/y = (.28)%
    almost all on the Swiss Franc,  the $$$/Franc (1.21)# now
     
    C =1218.57, F =1218.50
    10yr = (.17)%,  30yr = (.25)%
    VIX (8.13)%
    oil +.44, gold +10.5


  78. Phil:
    We going to reload on UUP when /DX hits 80.0?
    Internet Metering:   That will become another Tea Party winner, if they (the supposed liberals) push it.


  79. They’re going to bring the dollar under 80


  80. Phil, take a look at the /6e chart with 1 min candles for the last half hour.  I count 23 seperate spikes down to exactly 1.3132.  What the hell is going on?


  81. Craig,
     
    Which chart?


  82. copper near $4 — has broken above 4 three times since 2003. May 2006, May 2008 – quick spike to 4.26, and now.


  83. its the EUR/USD futures.  Under TOS its /6e.


  84. Thanks Craig…..did you figure out what’s going on?


  85. I looked through the order flow and someone keeps selling 1 future contract at exactly 1.3132.  My only guess is that there is a person who has a stop loss at that point.  They keep spiking it down to trigget his stop.  Costing him 1k every time they do it.


  86. Understanding/Jabo – Don’t try to understand ‘em, just rope throw and brand ‘em…   

    Tea party/Acorbra – As soon as a politician decides they want to be re-elected, their fate is sealed because they are in Washington, cut off from their local support base and they need "friends" and there are plenty of professional friends in DC!  

    XLF/Flips – Because it incorporates both economic outlook and fears.  You can’t have an easier situation than the banks have with all this free money being thrown at them and they have way lagged the indexes so lots of room to run in that sector if the rally is real.   That’s why I keep keying on them for long plays.  

    FCX/Yodi – That is buying the puts to be short on the stock.  Note the answer to the question.  

    Dollar/Exec – No, new, now it’s trading like a 3rd world currency.  There are about $100Tn worth of dollar-denominated assets in the World – do you really believe that, on a daily basis, they gain or lose $1Tn worth of value?  The mass of the asset base should, logically, give the dollar relative stability, even something as blatant as the Fed printing $1Tn shouldn’t move the dollar much.  This has nothing to do with fundamentals but I’m still surprised that it can be pushed around to this extent.  Meanwhile, the market still reacts to the dollar as if it is a stable and reliable indicator – a lot of programs have been written based on that assumption and they use the dollar as a key indicator to weight buy and sell decisions so whoever is pulling the strings on the dollar gains de-facto control of the entire market.   That means GS (or someone) can dip the dollar .5% and drive the future up 1%, sell $10Bn worth of stock and drive the market down 1%, then raise the dollar 0.5 and send the market down another 1%, then buy $10Bn worth of stock and then lower the dollar and raise the market back up and then start selling stocks again.  That’s how GS can make $100M every single trading day…

    Money flying into the Yen – down to 83.8 to the Dollar.  

    CCJ/Eph – Wow, I like them but not this much.  Maybe time to take a break on them.  What do you have? 

    FCX/Chakra – I think as a hedge to gold longs.  Very dangerous as a straight short. 

    LOL Reza!   On OPEN, that’s another insane stock but they are in such a strong uptrend, I’d wait for a retest of $75 at least.  We caught a good dip on them last month but, since then, I haven’t liked the risk as they held the 50 dma well (now at 65.50) 

    Gold $1,400!  Copper $4, Oil $87.50, NYSE 7.700, Nas 2,575, RUT 750, S&P 1,220, Dow 11,350 – let’s see how these do

    T/Lithu – It’s very hard to adjust those spreads and it looks to me like you are very screwed at $22.50 as you owe the $27.50 putter $5 and your own $22.50 calls are worthless so what are you really protecting?  As you unable to sell naked puts?  Why play T at all if you have no conviction it will head higher?  The premiums with VIX 20 are not good enough to make a selling plan worthwhile.  The stock is at $28 and you can simply buy the 2012 $22.50/27.50 bull call spread for $3.80 and sell 2013 $25 puts for $3.10 so net .70 on the $5 spread and if you don’t believe T is going to hold $25 through 2013, why the hell would you be buying it in 2010 for $28.50?  

    DECK/Rav – Much better plan. 

    MOT, SYMC/QC – Both interesting but I’d wait for next week so see if we are popping or dropping.  

    Europe/Gel – Well the same can be said of us vs. China, Singapore, Vietnam, Korea… All running circles around us. 

    TZA/Cars – We had a few of them in the past month.  There’s nothing to do here, we’re holding the $18 line and its a more or less free trade over $18 so, with 3 weeks to go, we wait.   You can add more $18s or roll down but that’s all more risk and the idea of this trade is, worst case, you roll the putter.  

    Metering/Exec – I love it when the government comes up with ways to eliminate my competition!  

    RUT/Gucci – I don’t get the RUT at all but 750 is the key level and, over that, 764, which was the fall ’08 high.  This run loks very much like the Spring run at the moment but we had the flash crash after the top then and this time we’re having a 4% pop instead of a 10% drop so I have to assume we would have had this move (to 750) in April had not the flash crash happened so I’m waiting patiently to see ALL of our breakout levels confirmed.  It shouldn’t be hard, they were all green a few weeks ago except the Dow.  

    Long papers/Flips – I think the quality of the WPO prevents me from buying but NYT could be good for a nice run if they break $9.25 BUT, Mr. Murdoch is doing everything he can to wreck them so they are a very dicey short-term bet.  

    XLF/Cars – Well if they are still over tomorrow then probably. 

    POMO/Cap – Yeah but I figured that was baked in – silly me!  There will be POMO all month so I guess we may as well put on our S&P 1,300 hats if that’s the case.  


  87. jromeha
     
    I’m looking into http://www.curencee.com as an interesting support concept. Check it out and let me know your thoughts. I understand you can get a consensus of directional trades from 15,000 traders, and then see if you are a contrarian, ( or maybe just dumb, like me ) Also the leaders expose their trading strategies – very interesting !


  88. Phil / Europe, China
     
    Yes, but we still have the reserve currency, which is a big advantage.The emerging markets will have the advantage in the end, as manufacturing will be rotating to the cheapest labor market, and we are stuck with a lot of "no longer needed" unions and the associated overhead.


  89.  CAP – good call on NFLX Dec Week-1 200 put. Out at 7.50.


  90. NET $ +1.01% highest I have seen, dx/y = (.71)%
    E/$ = +.78%
    E/Y = (.08)%
    Y/$ = +.71%
    $/Franc (1.29)%
    $/Yuan = +.02%
    C =1218.07, F =1217.50


  91. Peter and those interested in MNKD – Merck & Co is prepared to pay up to $500m to purchase SmartCells, for its novel insulin candidate yet to be tested in humans, is likely to encourage and worry MannKind and its investors in equal measure.

    On the one hand it shows a clear appetite from big pharma for novel insulin products, offering encouragement to MannKind in its quest to find a partner for its inhaled insulin, Afrezza (Event – MannKind holds its breath as FDA decision approaches, December 1, 2010). However, the fact a potential big pharma partner has opted for an injectable, pre-clinical candidate over one which could be on the verge of gaining marketing approval might be cause for concern.
     



  92. There’s 87.50 on /CL — Unreal.


  93. matt1966 – When it comes to Assange’s future (or lack thereof), do not overlook the Russian angle …
     
    With Russia In Assange’s Sights, Is He In Theirs?
     


  94. optionmonster guy just said NFLX is a buy on the dip on CMBC.


  95. CCJ/Eph – Wow, I like them but not this much.  Maybe time to take a break on them.  What do you have? 
    I started the day +1 Jun 31 C/+1 Jan 12 22.5 / -2 Dec 32s.    I rolled up my Jan 22.5s  -> 2 Jan 30s (for a 4.85 debit), so my current position is + 1 Jun 31, + 2 Jan 12 30 / -2 Dec 32s.    I can certainly roll 2 Dec 32 --> 3 Jan,  Mar 36/37s and pick up premium, but wonder if I should be more aggressive.  I don’t think I want to take the margin hit of a 2X roll which would leave me with 3 longs and 4 shorts.


  96. RIG/Flips – No interest in any longs until we break and hold our levels.  Very hard to like RIG at $70 when our last entry was the low $40s.  They are probably good for a move to $80 but you want to see which way oil goes over the weekend – don’t forget we are in the early part of the contract cycle on the NYMEX and the numbers are not real now.  You have to wait until after the 10th to get an idea of what’s a legitimately tradeable price for oil.

    Dollar 80.225, bounce off 80.11 but a real problem that they can’t pop us over levels with a dollar dip like that.   Europe had an insane close with the FTSE and CAC finishing up over 2%, all from an after lunch move (our open) and the DAX is up 1.3%, gaining 1.5% after lunch in a massive pelvic thrust.  

    UUP/Humvee – Oh good one, I forgot!  I like selling the March $23 puts for .55 and buying the Jan $23 calls for .45.  

    Euro/Craig – Seems like there is prog buying at that level keeping the Euro up but there’s zero justification for it after the ECB’s failure to take action although the contract size is so lame it could just be one idiot with a standing order.  These blow-off tops always amaze me with how long they can sustain themselves.  I think they are able to hold almost anything up until the manipulators make their exits and then it becomes amazing how hard and fast something can fall…

    India/Mike – I think that’s right, India has some big inflation issues brewing too.  (and I finally re-upped my FT subscription!) 

    $87.50 on oil is now good to short on breaks back under in the future, using $87.50 as a stop line so try not to lose more than .05 on a cross!  

    Russia/Diamond – I’d stay hidden too!  


  97. Phil, just dd on my dia puts and thinking of going back into SCO after making 15% in it a couple weeks ago.  It’s now at a lower level than I originally bought it.  Do you think oil has room to go higher or hitting resistance now?


  98. Adding to my energy stocks – Bought SDRL ( Seadrill ) buying stock and selling July puts. This one pays 7.36% dividend, and owns the worlds most advanced fleet of of offshore drilling rigs capable of producing the most complex deepwater fields….. not much risk, and strong growth in dividends.


  99. Phil, 
    As per your comment above, re watching the trend for DD… I am unable to stay at my computer for the rest of the day. Should I still set the DD on the QID and the USO? Or do you feel now the there is no trend reversal?


  100. Phil, 
    As you requested I am reminding you about UNG… (see about entering or not the 2012 6 UNG Calls--as I sold the Jan 6 Calls at 6.05, and still hold the Jan 8 short Calls and 6 Puts)
    Thanks


  101. NET $ +1.04%, dx/y = (.66)%
    I have no idea what is going, but something is, its like everyone decided to use the Swiss Franc to hammer the dollar lowers
     
    I added a Jan 1215 S&P put here at 30.30, looking for a roll to the 34.70 area


  102. Phil, while playing oil, why not sell calls on USO. You could sell the Dec. $38 call now. $38 has been resistance for the last 6 months and off course, they are rollable to Jan $40.


  103.  Phil: Lithiunian and T
     
    Not sure I understand your response to his 2012 bull put 27.5/22.5.  Assuming the sale of naked 2013 25p’s in either case it seems the bull put has lower breakeven and more gain @27.50.  is it the delta’s that make it harder to adjust?  you mentioned 22.5 calls in your answer but I assume that was typo.  TIA


  104.  These USO $38 calls were 0.13 a week ago – $.62 today.


  105. HOV has gone wild


  106. what is happening with gold anybody?


  107. Phil Thanks a very clear to read information.
    UUP/Humvee – Oh good one, I forgot!  I like selling the March $23 puts for .55 and buying the Jan $23 calls for .45.  


  108. Phil
    1050p 5 USO Jan $35 puts at .97, now .84 – DD at .73 if possible.   Still OK?


  109. Need to keep the crown jewels secret:

    Courtroom Sealed for Some Testimony in Aleynikov Case

    http://online.wsj.com/article/SB10001424052748703377504575650673838921624.html


  110.  reza … OPEN …. sell 75 calls ?


  111. RJ – I hold Jan13 calls on HOV and Mar11 and Jan12 calls on CME as two of my bigger LT plays


  112. You can bash CNBC all you want but the real blame should be placed at the feet of GE. Turns out they were secretly bailed out by the Fed and wouldn’t you know that during yesterday’s coverage on NBC to the public of the bailouts they forgot to include themselves on the list! 
     
    http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html


  113. NET $ +.84%,  dx/y = (.60)%
    C =1218.44, F = 1217.76


  114. Pharmboy – ‘Anyone still in JAZZ or QCOR?’  I’m still in QCOR, until January because I bot the JAN 9 calls at 10.40 and then half-covered with DEC 13 calls at 13.50, which I’ll roll next week.  So very happy with the trade, thanks again for your suggestions!


  115. Good morning,

     

    IWM    71.09, 71.62, 71.98, 72.50, 72.72, 73.43, 73.91, 74.48, 74.78, 75.03 and 75.44

     


  116. Thursday’s economic calendar:
    12:00 PM St. Louis Fed’s Bullard: The Economy and Monetary Policy
    12:20 PM Philly Fed’s Plosser: Economic Outlook
    2:00 PM Fed’s Duke: Consumer Credit
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet
    8:00 PM Cleveland Fed’s Pianalto: Economic and Monetary Policy

    At the open: Dow +0.08% to 11265. S&P +0.1% to 1207. Nasdaq +0.1% to 2552.
    Treasurys: 30-year -0.05%. 10-yr -0.11%. 5-yr -0.07%.
    Commodities: Crude -0.27% to $86.52. Gold +0.13% to $1390.10.
    Currencies: Euro -0.21% vs. dollar. Yen +0.02%. Pound -0.54%

    10:00 AM On the hour: Dow +0.53%. 10-yr -0.22%. Euro +0.2% vs. dollar. Crude +0.48% to $87.17. Gold +0.14% to $1390.30. 

    11:00 AM On the hour: Dow +0.74%. 10-yr -0.14%. Euro +0.24% vs. dollar. Crude +0.12% to $86.85. Gold +0.32% to $1392.70.

    12:00 PM On the hour: Dow +0.82%. 10-yr +0.08%. Euro +0.71% vs. dollar. Crude +0.39% to $87.09. Gold +0.77% to $1399.00.

    01:00 PM On the hour: Dow +0.81%. 10-yr -0.1%. Euro +0.5% vs. dollar. Crude +0.85% to $87.49. Gold +0.01% to $1388.40.

    Initial Jobless Claims: +26K to 436K vs. 423K consensus. Continuing claims +53K to 4,270,000.

    Nov. Monster Employment Index: -2 to 134, with growth +13% Y/Y. Seasonal trends accounted for part of the M/M decline, but the outlook "continues to be one of modest recovery with job availability generally higher over the year across most sectors as we approach 2011.” 

    Oct. Pending Home Sales: +10.4% to 89.3 vs. flat expected, -1.8% prior (revised). Pending sales fell slightly in the West but rose in all other regions. "The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market" will help, NAR’s Lawrence Yun says. 

    EIA Natural Gas Inventory: -23 bcf vs. consensus of -26 bcf. Futures trim gains, +0.8% to $4.31.

    Bullish sentiment among individual investors rises 2.3 points, to 49.7%, according to AAII’s survey – the 13th straight week bullishness has been above its historical average. Investors are getting off the fence in the other direction, too: Bearish sentiment gains 1.5 points to 26.2%. 

    There’s a gaping hole in efforts to undo the massive federal deficit: Where’s the call from Washington for real pain at the banks, in the markets and in consumer spending, Karl Denninger asks. The plan from the deficit reduction commission offers not a word on the subject. 

    The yield on the 10 year Treasury is above 3% for the first time since late July. One of QEII’s stated goals is to reduce long term borrowing costs, but since the program’s start, 10 year yields have climbed about 50 basis points, making big winners out of holders of (TBF) and (TBT). 

    Ineffective!  The Fed buys $8.3B in Treasurys, of $27.7B offered by dealers, in its latest open market operation. Stocks arrest a short decline and return to session highs, with the S&P 500 +0.9% to 1,217.

    Mortgage rates rose for the third week in a row, with the 30-year fixed-rate loan averaging 4.46%, Freddie Mac reports. Fifteen-year fixed-rate loans averaged 3.81%. Rates are following Treasury yields higher, but home prices continue to trend downward.

    The recovery will continue to be "painfully slow, but there is not much that the government can do about that,” Lou Crandall says. One of his favorite indicators, the Architecture Billings Index, which tracks U.S. commercial construction, tells him that there should be an upswing in 2011.

    The U.S. commercial paper market shrinks to its smallest on record (with available Fed data reaching to 2001), to $1.021T outstanding. The decline was led by the financial unsecured segment, down $33.2B. Now if the Fed were still holding up that market… 

    A full 25% of the U.S. homes sold in Q3 were in some stage of the foreclosure process, reports RealtyTrac, below the 37% peak in Q1 2009 but a world away from the 1% of 2005. Foreclosed properties sold for an average of 32% less than non-distressed properties. 

    Pump up the Jam: For the first time since 2008, Goldman Sachs goes positive on financials, upgrading its rating on the sector to Overweight and making the KBW Bank Index (BKX) a factor in its "top trades." The firm sees improvement in loan demand, capital clarity and capital markets activity, and expects pressure on long-term rates to subside. (earlier

    Pump it up: Among Goldman’s (GS) first five "top trades" based on its optimistic 2011 growth picture, the most interesting call may be its bullish view on commodities. Goldman envisions an inflation problem building in emerging markets and more aggressive tightening measures by China and other countries, with commodities rising regardless because a better U.S. economy will lift demand for oil. – Wow, what a crazy thing to say today, it would have huge impact if it happened to be backed up with some other bullish-sounding news on gold….

    Imports of gold into China are soaring in 2010. Through October, China imported nearly 210 million tons, roughly 5 times the amount imported in all of 2009. QE in America, rising inflation in China, and new investment vehicles open to the Chinese are adding to demand for the yellow metal. 

    Markets seem disappointed by what they heard out of the ECB today, but might take heart to know that Trichet spoke of "an overwhelming majority" behind the decision to continue the existing bond purchase program.

    Watch what I do, not what I say. As Trichet spoke, ECB trading desks were in the market buying large chunks of PIIGS debt. Bond spreads on the periphery have narrowed sharply, and European stocks look to reclaim their highs of the day.

    The joke was "What’s the difference between Iceland and Ireland? One letter and six months." At this point, Iceland’s looking a bit better – but its decision to force bondholders to pay for a banking collapse isn’t likely to be a path that Ireland follows in settling Europe’s burning question of who bears the cost of failures.

    Demand was strong at today’s auction of Spanish bonds, sending a reassuring sign after intense contagion speculation. Spain sold €2.468B of bonds to investors, paying 3.717% to borrow for three years – much steeper than the 2.527% it paid in October, but lower than the 3.95% rate Spanish government bonds traded in the market yesterday.

    These are not the derivatives you’re looking for: The SEC is said to be in preliminary talks with several major banks over a possible settlement that would end a broad probe into the sale of MBS and CDOs. Talks could still fall apart, but it seems both sides want to avoid a repeat of the SEC-Goldman showdown.

    Or these: U.K. regulators close their eighteen-month probe of the circumstances which led to RBS’ (RBS +1.1%) bailout, saying they won’t take any enforcement action. Regulators had found lots of bad decisions but no actual wrongdoing. 

    After Glass-Steagall, "the largest banks had to spin off certain risky activities, and this created smaller, safer banks," writes KC Fed’s Hoenig in a NYT op-ed. Doing the same today would restore the integrity of the financial system.  "Financial strength follows economic strength," not the other way around reminds FOMC member Thomas Hoenig, as he argues for reducing the size of the largest banks. 

    Philadelphia Fed President Charles Plosser: Contrary to Boston’s Rosengren and St. Louis’ Bullard, he thinks the Fed may have to cut QE2 short, if growth is faster than what he anticipates – which is 3% to 3.5% over the next two years. Expects subdued inflation but no real risk of sustained deflation: Nominal growth is far higher in U.S. than in Japan’s lost decade. Treasury could accomplish portfolio balance without the Fed, by issuing fewer long-term bonds.  And as QE2 skeptic Charles Plosser expects (hopes?) the Fed might not buy a full $600B in assets, St. Louis Fed President James Bullard reiterates that the central bank will likely go through with the whole program. Rising rates don’t mean monetary policy is failing, he says: Easing has its biggest impact with a lag of six to 12 months.

    ‘Usage-based pricing’ that allows broadband providers to charge extra to web bandwidth hogs running video and other content makes sense, says FCC chair Julius Genachowski. However, in its proposed net regulations, the FCC also wants to bar carriers from deliberately slowing web traffic. 

    Netflix’s (NFLX -3.5%) push to pay big bucks to stream movies and TV shows may not be sustainable, said Time Warner (TWX +0.9%) CEO Jeffrey Bewkes, in a recent interview. "It’s hard to see how that kind of economics can fit into a service that charges $8 or $10 a month because the math doesn’t work." 

    Nomura Securities initiates coverage of Motorola (MOT) and Research in Motion (RIMM) with a Reduce rating and Neutral rating, respectively. In the smartphone wars, Nomura claims Motorola will be squeezed by Apple (AAPL) in the U.S. And RIM is losing market share rapidly, and probably will be hammered on margins, too.

    The FDA’s advisory panel overwhelmingly rejects the use of Merck’s (MRK) Proscar and GlaxoSmithKline’s (GSK) Avodart to prevent prostate cancer, airing concerns the drugs might actually increase the risk of the most serious kinds of tumors.

    Toll Brothers (TOL): FQ4 EPS of $0.38 beats by $0.30. Revenue of $402.6M (-17.3%) vs. $393.2M. Shares -0.8% premarket. (PR)  - Gave our HOVs a nice pop finally.  

    Three lunchtime reads:
    1) Roubini: A Spanish inquisition
    2) Cheap bonds are in the eye of the beholder
    3) Reich: The big economic story, and why Obama isn’t telling it


  117. matt / Kool Aid

    Something for you to consider 8-)


  118. Samz3700/Gel – I dont really think I am a contrarian, yesterday I had originally meant to go long Oil but when I got up early in the morning it was already up 1.50…When it went up around 2 is when I started shorting it and it just kept going up. I was just trying to scalp 20-50 cents.
    Anyways, Gel, thanks for the currency update. I got in at 211 so Im not down too much right now. Havent traded at all today and wont be trading tomorrow….Im finally getting SOMETHING done on my thesis! Plus it’s nice not to be stressed out…


  119. Pharmboy
    What do you think of Endo Pharmaceuticals Holding Inc ENDP ?
    Any trade 
    Thanks


  120. Phil, How about a housing bearish play?  Lennar is up 7% on the NAR news, but before that TOL  said that their 4th q orders dropped 27%, and forecast a continued "flat to worse" demand environment for 2011. 


  121. NET $ +.80%, dx/y = (.56)%
    C =1218.46, F =1218.25
    10yr = +.34%,  30yr = +.24%
    VIX (8.94)%
    oil +.81,  gold+1.40


  122. Cap
    Re shorting OPEN – possibly! Verrry tempting!
    Perhaps early next week or after Fri jobs number pump job.


  123.  Esco
    I’m calling Mandalay Bay today - 


  124. rdn4evr/housing  Lennar is entry level housing, Toll is high end, the last segment to recover….


  125. How do you like TIVO at these lower levels? The premiums are humungous.


  126.  Anyone have another hotel in vegas to suggest?


  127. EndoPharm/qc – lots of little things for pain and an attractive P/E.  They have a few items in the pipeline but will have to look into them.


  128. Pharmboy
    Thanks


  129. AAPL traders……..Watch the AAPL movement and the weeklies the rest of the day.   Could be a chance for a profitable long straddle or strangle on the 320s,  a 24 hr. trade.  


  130. deano / Bellagio

    http://www.bellagio.com/


  131. LasVegas/
    FYI -  For those with access to US Airways… after you check flights and hotels…. you might want to review "vacation package" to Nevada, Las Vegas under the US Airways reservations section…. chances are a better combined price and you can arrange transportation to and from airport.  Also, you might want to check Monte Carlo Hotel (recently renovated) on the strip…. not as pricey as Ceasars, Mandalay Bay’s Hotels, Paris, Wynn Hotels for those interested in price AND it is on the tram towards other end of the strip to the Bellagio (Mandalay Bay – farthest out).   


  132. Hi Guys what is going on with CMG no chili today ????


  133. Deno / Vegas — both bellagio and mandalay are MGM properties. MGM and Harrah’s pretty much own the entire strip so you might be able to find one rep at each to talk to and they might be able to tell you what you’re looking at for most of the strip.


  134. What the – Netflix is now willing to offer 100K PER TV EPISODE in order to stream them across the web. They’ve spent 350 million to date on digital rights.


  135. Eck gads! $88 on oil?


  136. OptionMonster/Bob – Well fortunately for us, no one watches Fast Money! 8-)

    Goal on USO!  

    CCJ/Eph – I’d just roll the callers to 2x the March $38s ($3) and you can roll the June $31 to 2x the 2012 $40s and you are pretty well covered but I’d still keep stops on the $30s.  

    Oil/Rustle – Right now it’s way up on GS’s call that it will AVERAGE $100 next year (which starts in a month).  This is, of course, how they get to unload all those backed up barrels on suckers to collect their gains while the taxes are still low but it works every time so don’t enter any kind of oil short you aren’t prepared to roll and scale into.  

    SDRL/Gel – That’s an interesting one.  

    Doubling down/Amatta – I’d go with the USO puts, they hit our mark.  If QID $11s hit .70 (now $1.10) then we may have changed our minds on shorting the Nas by then!  I’m surprised how well those calls are holding up…

    UNG/Amatta – Yes to that.  The fundamentals suck now but we got our sell-off back to $4.20 and the VIX is nice and low and you can pick up 2013 $5 calls for $2, which should last you a while and have a strong .72 delta.  

    USO/StJ – Sell oil calls?  No thanks.  You shouldn’t sell calls in things that can jump 20% overnight.  

    T/Red – This is a good weekend discussion of comparative trade merits but I’m saying buy the 2012 $22.50 calls for $6 and sell the $27.50 calls for $2.30 = $3.70 and sell the 2013 $25 puts for $3.10 so net .60 cash and about $5 of margin to make $5 at $27.  This is a nice ROI no matter how you slice it and, as I said, it’s based on having some conviction that T holds $27.50 long-term and the even nicer thing is, you can collect $5 in Jan 2012 and then buy another bull call in 2013 and do it again!  

    Gold/Lapper – $1,389, they fell down fast to there and then died at about 1pm.  

    Oh no – it’s Bill Gross!   

    USO/DD – Sure, didn’t I say that?

    Aleynikov/Deano – Man, is that still going on?  Do terminal cancer patients realize they can commit all sorts of financial crimes and they’ll probably never even get to trial, let alone see a jail cell….

    HOV and C both making my day as those are huge longs from way back.  

    GE/Matt – Well of course it’s GE.  That’s what I was saying, they are willing to lose money on CNBC because that’s not what the station is really used for.  

    Housing/RDN – Makes sense but too scary!  How about the SRS Jan $20/21 bull call spread for .25 offset with the sale of 1/2 the Dec $19 puts at .46 so net .02 on the $1 spread as a speculative short on commercial real estate, which did not sound good in the Beige Book.  

    TIVO/Drum – I do like them down here, good catch!  I like the 2012 $7.50/12.50 bull call spread at $1.65, selling the Feb $8 puts for $1.10 and that’s net .55 on the $5 spread if they hold $8 through Feb and then you can relax and hope for a 10-bagger.  

    Vegas/Deano – Hard Rock and Mandalay Bay I think are best for small conferences.  At the Hard Rock we could get a couple of cabanas on Sunday and have lunch poolside!  Plus any hotel that has Nobu room service is always going to be a favorite of mine!    

    Cramer’s back, let’s see what he can pump today.

    Woops, oil at $88!


  137. Vegas/Deano --
    Yes, please do.  Not getting anywhere with Caesars……


  138. Nobu room service?  As in a massage?  lol!


  139. matt — they all have massages - "hot girls to your room in 20 minutes or less". Is it free if they take 30 minutes to show up?


  140. Phil… no way lunch poolside… I attended conferences in LV in January for years… froze my ass off. and a short distance away you can snow ski !!


  141. Do they still have the "Rent-A-Babe" counters in LV…. just past the rent-a car counters.



  142. Phil… I like your UUP play… could not get filled… maybe tomorrow !


  143. futures have not budged, since the 2:30-2:40 infamous crash time


  144. All/ Vegas- do I need to rent a car?


  145. gel1 Phil
    I went to Las Vegas for Consumer Electronics Show the first week of January 2 Rainy 40s, 2 85 to 95, and the rest 55 to 65 sunny othe rthan the rain days. 1976 snowed 2 inches in San Francisco, roads closed, a zillion accidents, not due to repeat for 66 more years. Gel sorry about your luck!


  146. Anyone thoughts on that insolvent article and the banks?
     
    I all ready knew that part, but doing some of the math on the article charts, looks like .08/.09 on some of the collateral positings
    trying to see if I am understanding right
    if so, they are many time more insolvent then I all ready think


  147. JR,
     
    What does the Ex first of month represent?


  148. shadowfax… No guarantees in January. I was there either the first or second week of January…. always a "gamble" ( weather ).


  149. TEVA – getting sued (again) for patent infringement.  Buying the 45/50 Jan12 bull call spread and selling the 45 Jan12 Ps is a net credit of 40c.  TEVA has not been below 45 for over a year and they are the best in the generic business.


  150.  Las Vegas,
     
    I am game, but I need to be getting a date set if I am going to be able to attend.  I am happy to help anyway I can.  You can email me at drdanwilliams@mac.com


  151. You guys see KR, WFMI not affected and going higher!!


  152. nicha… The "rent-a-babe" counter is all in one…. otherwise it is always cab or limo in LV


  153. Phil,
     
    I’m in DIA 110P at 52.  Do you typically set a stop on or ride it out?


  154. AAPL trade for the day:       Assuming you own the Jan 300s (or want to buy them)
    Jan 300 calls     buy 4    @about 24.75
    Dec 320 calls     sell 3    @about  1.15
    Dec 320 puts    buy   3    @about   2.80
    Cost  $10,392  
     
    Overall risk (short term) maximum  is 1.2% or $124
    Potential profit    unlimited as stock moves down or up.  


  155. Average temp in Vegas in January – 57 F…. and 34 F at night! Perfect for me, but poolside! 


  156. CSCO back to 52 week low


  157. Lost my patience   out of GILD and went long on XLF selling puts .


  158.  The always funny Stephen Colbert:  The estate tax is an injustice to the children of the obscenely wealthy. Watch.



  159. iflan / AAPL
     
    Nice strategy… might also consider the Feb calls.


  160.  Pharm, I like your TEVA play.. I had made a similar play way back when TEVA reached below $49.. I was waiting for a pullback below $50 again to consider the same play..  I’m just a bit tied up with CMG at the moment with my margin so I will open a very small position here.


  161. Phil- what to do with DIA $110 puts?


  162. Phil / TIVO — why does TIVO look good while it’s bleeding money? I really don’t know much about them but recall a $5/month fee from DirectTV to use one (on top of standard fees). Why not use NetFlix as your TiVo?


  163. Phil – how do you play out a buy/write like you described for BAC 2013 $10 put/call?



  164. Vegas- I’ve been goingthere for the last 20 years in January and have never seen weather warm enough to be poolside but have seen it snow several times. Feb is probably a little warmer.


  165. I am an idiot -
    Not only did I manage to pick the one commodity that went down – Nat. Gas – thank you very much!!!
    but I am also shorter than I have ever been. Cannot win either way.


  166. Call me crazy but I was concerned on Tuesday that NFLX and CMG would fly if the market turned positive. Instead, the market goes through the roof and those two momo stocks get hammered! WOW!


  167. Look at AMTD go, these guys have been hounding me the past month to put more money into my account..I dont take that as a good sign.


  168. CMG/Yodi – Woo hoo!  About time!  

    $100K/Kwan – That seems like a real lot!  The immediate flaw in that model is that there are 26 episodes a season so they are going to pay $2.6M per show per year?  If they offer 50 shows (1/3 of prime time) that would cost them $130M a year and they’d need 13M subscribers at $10 just to break even so figure after costs (not including bandwidth) of  50% (they currently drop just 10% to the bottom line so that’s very generous) wed be looking at $4 profit per subscriber and they need 33M subscribers just to break even.  Give me a break!  

    Nobu/Matt – As in great sushi!  Although they do have places in Japan where you eat sushi off naked women – I’ll bet you can get that in Vegas…

    January/Gel – Ah, that must be why I don’t go to Vegas for CES – I likes my swimming!   Comdex is what, November?  I used to do those and it was usually warm.

    S&P/JRW – Wow, that is messed up!  

    Vegas/Nicha – Cars are a waste in Vegas.  They have a monorail and taxis everywhere.  

    Insolvent/Mike – They are all technically insolvent if we make them mark to market but that’s not going to happen.  No one seems to mind although there was data yesterday that foreclosures weren’t even selling anymore and if we leg down another 20% in housing ($6Tn lost) then who’s going to fill that hole?  So don’t start worrying about it or you’ll get depressed…

    DIA/Exec – Riding it out.  If we don’t get a drop by Tues we roll or get out.  

    Colbert/StJ – He’s very good with that stuff.

    DIA/Nicha – Just have to wait at the moment.  

    TIVO/Rain – They are bleeding money on new products and R&D.  They won patent cases and will likely make deals with sat and cable cos to be the DVR provider.  Keep in mind that those providers won’t be pushing NFLX, will they?

    BAC/Scott – You sit on it for 18 months and then see how your’re doing.  Maybe adjust if there’s a 40% swing before then.  

    SEC/Mike – That is news?  I thought everyone agreed on that already?  

    Oh no!  CMG fails $250!  (I still can’t believe I’m writing $250 next to CMG)


  169. jakester / Vegas
     
    You must take into consideration… it is all relative – Phil’s pool at home has ice on it, and in Vegas it is moderately warm in comparison, poolside.


  170.  Well, my weekly NFLX option selling program continues to work, although it was a bit stressed the other day:
     
    Here’s what I did earlier this week:
    Sold NFLX weekly 200 calls for 2.12.
    Sold more yesterday for 4.00
    Closed today for 0.36.
     
    Sold for expiration next week 210′s for 1.51.
     
    Did not have the best sale entries as this crazy stock ran up to 210, but worked out well in the end.
     
     
    CMG now below 250 …. still a lot to drop … hopefully 230 or lower over the next 2 weeks.


  171. Market is up 1% but the MOMO stocks are dropping.
    CMG down 3.6%
    NFLX down 3.3%
    DECK down 2.5%
    FFIV & CRM down less than 1%
    Are these the "canaries in the coal mine"?


  172.  Gee someone jumped the gun by a minute on the daily buy program


  173.  Guys
     
    Calls in to the Mandalay and the Hard Rock – awaiting the return call from their group sales staff. Keep you all posted. I am setting it up with arr. Fri 1/14, and departure flexible 1/16 or 17, room, meeting room with internet for sat & sun, and looking for a dinner fri and suite for cocktails sat. and maybe a breakfast sun. I anyone else wants to investigate others, have at it, I’d suggest to keep the parameters the same so we can compare. Calling us phil’s group – for reference.


  174.  button, looks like there is a rotation into crappy stocks that have not risen much yet – thus the upgrade by GS regarding the financials.  


  175. Phil:
    In May,  bought VLO at $17.64 and sold 2012 $17.50 calls for $3.75 for net $13.89. Vlo now $20.52  and calls are $4.80 for net $15.72. Since delta on calls are .74 should I roll to 2013 $20 at $4.50 ith delta of .62, stay for the ride, or cash out and move on to a new trade since VLO is past the sweet spot of $16. Thank you 


  176. Phil / sushi — you can get anything you want in Vegas… for a price.


  177. Have to run all
    thanks for your thoughts on the articles Phil


  178. Phil / Vegas
     
    CES is always a "sell out" for Vegas, and rooms are scarce. I was there usually the week after, and the convention center had three major conventions running at the same time in the same building… Reservations are needed the whole month…. sooner the better… I still think Mandalay Bayis the best choice, as not too many tourists stay there, and it is for the more serious, purpose driven folks like PSW members ( fun and profit )


  179. gel/Vegas – you still going to costa rica? Any chance you can join us?


  180. 2:00 PM On the hour: Dow +0.82%. 10-yr -0.2%. Euro +0.5% vs. dollar. Crude +1.13% to $87.73. Gold +0.02% to $1388.60.

    3:00 PM On the hour: Dow +0.89%. 10-yr -0.29%. Euro +0.5% vs. dollar. Crude +1.31% to $87.89. Gold -0.13% to $1386.50.

    The latest case for optimism from The Atlantic’s Derek Thompson has four points: Big corporations are set to hire, small firms are set to invest, consumers are set to consume, and indicators show green shoots everywhere! (Don’t look at housing!) 

    Don’t look at food either!  Kroger (KR -9.2%) CEO David Dillon warns that the economic recovery – "slower and weaker than we anticipated" – is hurting grocery sales, consumers are “cautious in their spending,” and deflation persists except for meat, dairy and produce items. Kroger shares swoon to their biggest loss in a year. 

    Don’t look at China:  The OECD leading economic indicator for China is flashing a warning signal. Albert Edwards of Societe Generale notes the last time it got this low was at the peak of the 2008 commodity bubble.

     

    I’m seeing Taleb at a conference on Sat:   Europe is ahead of the U.S. in its debt crisis in that it at least has identified the problem and is taking steps to correct it, Black Swan author Nassim Taleb tells CNBC. Instead, Bernanke is "trying to bail out those who made mistakes with retirees’ money," he says, subsidizing "those who made a mistake, taking money away from those who are innocent."

    Still think one trader can’t knock commodities for a loop? A mystery buyer holds between 50% and 80% of the copper stock at London Metal Exchange warehouses – more than 177,875 metric tons, about $1.5B worth. Could be an upcoming ETF, or an options trader who has to make delivery, but the effect may be visible: Despite a stronger dollar, copper’s rebounded recently. Today: futures +0.7%

    Las Vegas Sands (LVS -3.2%) sinks after Macau’s government rejects its request to acquire exclusive rights to land in the lucrative Cotai area. LVS has spent at least $100M in pre-construction costs and is expected to ask for a review or appeal the decision in court. (8-K

    Nasdaq delists Rino International (RINO), based upon the company’s admission that previously filed financial reports were unreliable, it had not entered into certain previously disclosed contracts, and failure to respond to Nasdaq staff requests for information. Shares of Orient Paper (ONP -5.6%), also the subject of a Muddy Waters report, are under pressure.

    And more pumping:  The Fed’s report on its $3.3T bailout of the global banking system shows that the financial crisis is finally over, banking analyst Dick Bove says. "They stopped a run on American (and European) banking companies and earned what may be $60B in profits for the combined entities – a taxpayer windfall of unusually large dimensions."

    In action reminiscent of the 1990s, Microsoft (MSFT +3%) jumps after T2 Partners’ Whitney Tilson touts the stock as a cheap deal during a hedge fund conference today, forecasting a target of $35/share. The software giant is still a cash-generating machine that trades at just 11x earnings, about half the valuation of Google (GOOG) and Apple (AAPL). 


  181.  MO – evil stock but a nice dividend payer, down today and consistently for the past month.


  182.  OPEN … sold Dec 80′s for 0.85.


  183.  deano … Vegas …. I MIGHT be able to hook us up w/ LVS …. gotta talk to a friend of mine who can get VIP treatment from Shelly.  He went out there last week; need to see how it went.


  184.  FOOD … the hell w/ Kroger.  People need money to spend on I phones, I pads, NFLX streaming and CMG burritos.
    LOL


  185. PCYC – 3500 $5 Dec Ps at 30c just went through.  Someone calling a bottom?


  186.  deano – i think we are going to see many public health policy initiatives that are really going to have a negative impact on smoking here in the US.  So, i would recommend a internationally focussed tobacco co.  IMHO


  187. VGR/ Gel1   I ‘ve been watching this one since you mentioned it a while back.  Options are bad but it sure took a fall today.
    Thinking of an entry today.


  188.  MSFT … plus they still have the Zune !
    Does Whitney have a Zune ?


  189. KR – wow, that is a big miss.  They were killing it over the past few years.  Hit the 200d MA.  Might get in  when they hit $20.


  190. Phil,
      Regarding the discussion on monthly income, as much as I like the many positive attributes and elegant simplicity of buy/writes, they generally seem to take a while to develop, with profit at the end. Do you have any strategies or recommendations that pay you up front, like naked puts or short duration covered calls (besides those vehicles, obviously)? Rev Todd had a short lived series of covered calls with a goal of 3% monthly that had some success along those lines.
     
    For those who don’t have the time or inclination to dabble in your day trading vehicles, a monthly income type substitute would be most welcome.


  191. Remember in the good ol days of the internet bubble when company’s would pump and dump or cook the books to boost the share prices.  Didn’t the Government chastise and send them to jail for such egregious behavior?
     
    Now a days, it’s standard operation procedure for the Gov and their investment wing GS to use this tactic.  Even worst, they simple skew the numbers intentionally or don’t even bother to include key items when reporting……for example…..inflation……to make the numbers say what they want them to say.  This world is getting more upside down every day. 


  192. Out ofCMG  Dec 230P @ $1.90 for a 24% gain.  Helps ease the pain of the DIA loss…….. (so far)!! 


  193.  CMG ….. good!
     
    NFLX …..  great!
     
    PCLN – dud! c’mon man, get into the game. $350 by Dec 15th?


  194. Try and try again.  If we are in a recovery (cough), the NUVA $25/35 for $2.25 and selling the 20s for $2.6 or better.  Think of them as a poor mans ISRG.  I know Phil does not like all premium, but this is mellow and NuVa has not been below $20 in a long time.


  195. Put a fork in it.


  196. Well, it’s too bad we dumped the FAS in the 1050P, that would have given us a GREAT day.  Good lesson that balance is more important than trying to be right!  

    Short/Samz – If you don’t feel like capitulating, then it’s not the top yet! 

    AMTD/Kustomz – Yeah, that’s certainly not encouraging.  

    Relative/Gel – That’s true, I am happy to swim as long as the pool is heated.  Heck, we swim outdoors at ski resorts in the winter, right?

    NFLX/Cap – Nice job, you were more aggressive than me and a nice payoff for it.  

    Wow, SUN just snuck up to a new high!

    Canaries/Button – I’m not sure about that.  I was telling people last week that you have to think that owning CMG at $250 prevents you from buying 5 other stocks in the same space that are much better values.  If people think the whole market is moving higher – they know they’ll now get more bang for the buck by diversifying so the high-flyers take a hit while the slow movers (see MSFT today) begin to take off.  I’m not backing that premise yet but that can easily explain MoMo sell-offs in a good market. 

    And what Jo said! 

    Sounds good Deano, when we have a venue we’ll set a post up to track who’s coming etc. 

    VLO/Dflam – It’s a bit early to give up protection.  You never sold puts?  That’s too bad.  I think making $2 more on $15 (13%) in 13 months is not too bad so, unless you REALLY have something better to do with the cash, you may as well let it ride and hope for a better roll.  Maybe offer to do the roll for a .50 credit or something and see if you get a bite.  The caller still has premium to work off and you are well-protected.  

    MO/Deano – Lots of sin taxes on deck, might have people worried.

    Shelly/Cap – Now there’s a guy who can get you some naked girl sushi!  

    Wow, check out WHR despite very poor showing for durable goods in BBook yesterday.  In case you’re wondering why I don’t bother talking too much about the Fundamentals lately – this is why – they would only confuse us!  In general, if we break up, we can just buy anything that was hot in 2007 (banks, housing, things that go in houses, commodities) as they are running the same playbook.   Look at SHW already blowing away to the 2007 highs by 20%!  Yeah, that makes perfect sense on (and I’m not kidding) 30% less profits…

    Monthly Income/Kevin – Sure but you need to start with a bargain stock, like BAC and then sell calls.  You have to be very careful in your selections but remind me next week and we’ll try a few.  

    Upside down/Exec – Yep, it’s a Wonderland market.  

    Whuck?  CNBC has Zapatero on again?  Well, I guess it worked yesterday so now he just comes on every afternoon to say "everything is fine" I suppose…

    CMG/Button – Oh good job, that was goal!  


  197. Phil, Comdex? why did you go? were you in computer business?  I was in Comdex every year since 88 until 2003(I guessed).  It’s a good time for me…..


  198. IWM daily chart has 11 straight green candles.  I couldn’t find another instance in the last 320 days.


  199. Matt,
     
    Did you trade FAS today?


  200. Damn, I just realized that the DIA $112s WERE for the 1050P, I though it was a loose trade I called.  I knew we shouldn’t have been so bearish.  Sorry about that, did ANYONE pick those up?  My bad for not tracking it but you guys need to pipe in when I forget one!  Moot point now as they made a ton and should be off the table but that is the cash you’re supposed to use to DD and roll and then you set another line to go long tomorrow if we have to.  

    Comdex/Bob – I was once Director of Network Sales at IE, back in the days when you had to know something to build a network.  Usually every other year I hit COMDEX for fun but it started going downhill and I haven’t been in  a long time.  At some point I decided I would see more stuff and get better answers to my questions by dedicating a day or two to just looking through web sites to see what’s hot.  

    IWM/Exec – Crazy stuff and the Qs are making new highs into the close.


  201. For all the veterans here who have routinely made triples and 1,000 % gains in a day or two, this won’t sound all that great, but this has been my first and I doubt  would have ever done so had I not run into Phil Davis.
     Sold  AAPL 1 Wkly 310  puts @ .66 yesterday :: worth .16 today.   It’s not much money, no matter how you cut it,  but it just feels great to say, "I quadrupled my money!",  and I don’t feel the least bit greedy about it.
    Thanks again, Phil.


  202. OK, now we officially know it’s 1999 again:

    Bulls are bingeing on Krispy Kreme call options today after the firm sweetened its outlook for 2011 operating income to a range of $17 million to $20 million, up from previous estimates of $13 million to $17 million.  

    KKD?!?  Are they freakin’ kidding me?   Didn’t those guys go from $12 to 0.12 already?  

    Nice job Flips!


  203. Deano/Vegas – I’ve firmed up my trip to Asia in January.  Sorry to miss it  :-(   but count me in for next time.


  204. exec, No. I traded FAZ today.  Nuff said!


  205. From Barry:  

    Pro Publica has been maintaining a list of bailout recipients, updating the amount lent versus what was repaid.

    So far,  938 Recipients have had $607,822,512,238 dollars committed to them, with $553,918,968,267 disbursed. Of that $554b disbursed, less than half — $220,782,546,084 — has been returned.

    Whenever you hear pronunciations of how much money the TARP is making, check back and look at this list. It shows the TARP is deeply underwater.

    >

    >

    Where is the Money?
    Pro Publica 
    http://bailout.propublica.org/list


  206. Phil,
     
    You lost me on the DIA $112 post above.  I picked up the 110P today.


  207. DIA/Exec – Too late now, follow the link, when we closed the FAS I had said we should pick up the $112 calls (20) if we crossed 11,250, which we did on the next spike.  That was supposed to be the cover play for our shorts.  I was kicking myself for not calling a cover play in the 1050P because I thought I had just put that one out as a general cover so I never added it to the list.  

    I need people to remind me of these things – too much stuff going on for me to micro-manage moves.  


  208. If we’re bragging… ;-)

    FNSR Dec 18 ’10 $20 Call
    Purchase Date   Paid    Last    Change   Today %   Total %
    10/28/2010      $0.35   $3.10  $2.30    287.50%   763.97%
     
    FNSR Dec 18 ’10 $22.50 Call
    Purchase Date   Paid    Last    Change   Today %   Total %
    10/28/2010      $0.10   $1.20   $1.05    700.00%   994.56%
     
    Wish I’d thought to buy more of the $22.50′s yesterday when it was still $0.15.  Or multiple times in the last 5 days when it was still $.10. ;-)
     
    reinharden


  209. Phil, that is a long clip of you on LiveStock to wasde through to see if Syke’s girlfriend is on it so I’ll just ask.. is she on it?  If so, when!


  210. Found her!   2:42:00.   Tig ‘ol bitties!


  211. money coming out of CMG and going into KKD….
     
     
    8)


  212. Flash back to 1700′s:

    And this month, Tea Party Nation President Judson Phillips went back even further when talking about Americans’ voting rights.

    He explained that the founders of the country originally put "certain restrictions on who gets the right to vote." He continued, "One of those was you had to be a property owner. And that makes a lot of sense, because if you’re a property owner you actually have a vested stake in the community. If you’re not a property owner, you know, I’m sorry but property owners have a little bit more of a vested interest in the community than non-property owners."

     

    There was no evidence to suggest he was kidding. 


  213. Interesting article: WikiLeaks: Clever PsyOps?
    http://www.thedailybell.com/1561/WikiLeaks-Clever-PsyOps.html
    It kinda seemed strange that there are only major leaks coming from US. Nothing from Europe, nothing from Asia, nothing from Middle East.



  214.  msf – what does he think about slaves voting?
     
    :O)


  215. Finding it hard not to rant about that teabagger.
    People should be seriously offended.

    He would hate all of us shorts – seems like worse than not owning anything.


  216. Amazing the insight to our founding fathers intent that some of these folks have channeled.


  217. I wonder if women’s vote is now at risk… About all of us immigrant who became citizens in the last 100 years?  


  218. Voting back in the day – well, any official government function where a vote is taken is considered "voting".  So who was the first non-white, teenage, and female to vote, and when?


  219. Guys

    Calls in to both Mandalay and Hard Rock since 3:30 today – both have my cell. So far no response. When we’re discussing how to fix the country, sometime we should discuss customer service! I’ll keep you all posted, and hopefully Cap has a good connection.


  220. There are over 3000 Grass Roots Tea Party Groups in the country, its easy to pick a nut to criticize and then generalize to the whole; sad and disingenuous.


  221. Good article on market valuation http://www.businessinsider.com/so-is-the-stock-market-cheap-2010-12
    Just in case fundamentals and value still count in this market…


  222. I find the political back and forth here interesting but every time I start to write on it I get too enraged and just delete what I wrote. But this tea bagging is just so idiotic at times. It’s possible that the guy is smart and cynical enough to put outrageous nonsense like that out to draw attention or just get a rise out of the people he hates so much. Or maybe he’s just an imbecile. You truly hope it’s the latter. Here’s the rant I’m not deleting this time. Everyone of age gets to vote for many reasons but the most important on the federal level is that the people you elect can send you and your loved ones, friends and neighbors to war. We keep learning the hard way that we should really care a lot about that.
    I fully expect one of these tea-sotted nut jobs to advocate public stoning for adultery and teen pregnancy any day now.


  223. Humvee – You’re right – unfortunately there are too many "teabaggers" willing to stand up and make fools of themselves. What are the rest of us "normal" folks to think?
     
    Instead of criticizing us, why don’t you denounce these frequent, stupid remarks and move on….
     
    That’s how your "party" will start to earn the respect you’re looking for!   HARUMPH!!!


  224. Phil / tax decision – Dec 15th is key day for tax-related selling. if not extended, do u think we will see sell off similar to last time cap gains rate went up?
    http://politics.usnews.com/news/blogs/washington-whispers/2010/12/2/delaying-tax-vote-could-crash-stock-market.html


  225.  1020 – It’s tough to understand sometimes as we are not from "real" America!


  226.  lflantheman ,
    would you please explain your exit strategy to limit loss to $124
    the prices for Dec options probably for those  that expire 12/03. what  if APPL will be pinned tomorrow at 320?
    If AAPl is up 10 tomorrow morning--are you planning to close all Call positions? and loss will be less than $125? For unlimited profit you can’t close puts, and you may lose 3 * 2.8 =840 also. I know you are very good in short  trade strategies. I’m sure everyone will benefit from your explanation.
     
    December 2nd, 2010 at 3:00 pm | Permalink  

    AAPL trade for the day:       Assuming you own the Jan 300s (or want to buy them)
    Jan 300 calls     buy 4    @about 24.75
    Dec 320 calls     sell 3    @about  1.15
    Dec 320 puts    buy   3    @about   2.80
    Cost  $10,392 
    Overall risk (short term) maximum  is 1.2% or $124
    Potential profit    unlimited as stock moves down or up.  


  227.  Lflan,
    I second ed3524 request. Could you post it after hours though so basic members could see?
     
    Thanks


  228. @pakdog
    If you believe the  "…people you elect can send you and your loved ones, friends and neighbors to war.." then you need to bone up on just who runs this country.
    It’s decidedly NOT those you elect. Read Dwight  D. Eisenhower for a primer on who actually decides on a belligerent offense.  Hint: it’s not Bush, theBamster, clinton, or any other single politician.


  229. Tom Friedman Rocks.  Phil, why do people feel that America has no leverage with China and the Saudis?  China needs us to pay our debt and provide consumers and the Saudi’s need us to buy their oil.
     
    I know I’m asking a stupid question but, have we no leverage at all? How can we’ve been so reckless?……
     
    I’ll frame your answers for my kids.  :)


  230. 9.8% unemployment.  Where’s the jobs Mr. Boehner?  Any volunteers for the Ways and Means committee?….  Anyone?
     
    Wimps.
     
    Back to the market……