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Freaky Friday – Alpha 2 Says “Cliff Ahead”

This is fun, right?

We had a nice opportunity to buy the F'ing dip yesterday as well as an interesting opportunity to test the prudishness of the hundreds or web sites that syndicate my articles as I saw every possible variation of "F'ing" popping up in titles that were pinged back to me.  Social mores aside the move was so well telegraphed that we were able to take a non-greedy exit on our QID position – leaving us, thankfully, with just the DIA shorts in our $10,000 Virtual Portfolio.  That means, we are going to be able to start our brand new $25,000-$100,000 Virtual Portfolio right on schedule next week.

We began "Turning $10,000 into $50,000 by January 21st" on June 11th and we're not done yet but we're well over $30,000 – even looking at our wrong-way (so far) short bet on the Dow.  We could have killed that one yesterday as well but, as today's title says – we just have to give the old Alpha 2 a chance to fully play out as we would just hate ourselves if we get get that 500-point drop in the Dow right after we bail on the shorts as that would be our $50K right there!  

So up only 200% or so in 7 months is a failure but, to be fair, we did take a couple of months off as I didn't like the market enough in October and November and we already had $26,000 so it didn't seem worth risking 260% to make another 100%.  In the final month, we decided to "go for it" but it was a messy way to make another 20% as our overall premise – that a drop was "right around the corner" simply did not pan out.  

Frankly, looking back at the original 5 picks makes me want to cry as we could have just left those on the table and gone on vacation!   They were:  

  • 10,000 YRCW at .21 (we doubled down at .11), now $3.76, up $35,500 (a Bazillion percent, I think but there was a reverse split…) 
  • 20 C Dec $3/4 bull call spreads at .62, closed at $1, up $760 (up 61%)
  • 20 short C Dec $4 puts at $1.08, close at $0, up $2,160 (up 100%) 
  • 20 TASR Jan $5/7.50 bull call spreads for .35, now $0, down $700 (down 100%)
  • 10  short TASR Jan $5 puts at $1.30, now .35, up $950 (up 73%)
  • 10 BP Jan $30/34 bull call spreads at $2.20, now $4, up $1,800 (up 81%)
  • 20 FAS Jan $21/29 bull call spreads at $1, now $8, up $14,000 (up 700%)
  • 10 short XLF Jan $15 puts at $2, now $0, up $2,000 (up 100%)

So there's $56,470 in profits for a $66,470 total IF WE HAD JUST LEFT THE DAMNED THING ALONE!  [Actually (8:30 update) I realize that the reverse split on YRCW means that it didn't go up that far on an adjusted basis - so maybe we didn't do all that badly compared to leaving it alone.]  Oh well, we didn't leave it alone because when we make a lot of money early (as we did with YRCW) we take it off the table and then we hedge to protect our profits and some of our later plays were not as clever as our first set but $30,000 is nothing to be ashamed of, is it?  Still, it's a very good lesson that we can take with us into the new virtual portfolio and I urge Members to go through the Virtual Portfolio tab and review all the moves we made over the past 6 months as the $25K Virtual Portfolio won't be much different at first as it's also a small virtual portfolio where we have to manage our small bets very carefully.  

Aside from today being our target date to close these trades out, I mention the virtual portfolio this morning to remind our Members that we are NOT missing anything by waiting to be sure of the breakout.  We waited for a nice dip and what we felt was a solid move up before initiating that $10KP and we had a rocky start as the market did take another 10% dip in late June but that was GOOD news as we hadn't over-committed and we doubled up on YRCW and pressed some other bets and by October we had $26,000 and decided we'd rather lock in those gains (the purpose of the virtual portfolio was to have a nicer Christmas than planned) than risk our gains right into holiday shopping season.  Was our $10KP responsible for America's strong holiday shopping numbers??? 

We intend to do better in 2011 than we did in 2010 and step one in hitting our $100,000 goal is BEING CAREFUL WITH OUR ENTRIES!  As noted in last week's Stock World Weekly, we have been rolling along this month right in line with the TradeBot's Alpha 2 pattern that they ran last year and Elliot sent me an advanced copy of this week's newsletter where he cleaned up the chart to match out the expiration dates.  I believe you will see why I still have a slight concern:

Spooky, isn't it?  Don't forget, we identified this pattern on the 3rd and we targeted 11,850 on the Dow and 1,285 on the S&P as the adjusted tops of our ranges and, so far, Lloyd and da Boyz have been firing on all cylinders to paint a picture that is just as pretty as the one they painted last January, right into expiration day, when the VIX ran all the way down to 17.50 (from 30 in November) as complacency reached extreme levels.  The tip-off at the time, that we were about to drop, was a sudden pop in the VIX on that Friday, back to 17.99, and by the next Tuesday we were back to 18.68 and, by Tuesday the 21st, panic was back in fashion and the VIX finished the day at 22.27 – on the way to 27 the next day.  Now THAT's a sell-off!  

DIA DAILY Is it "different" this time?  How much are you willing to bet on that?  We're not betting much, we're cashing out the $10KP and we'll see what happens next week, confident that we KNOW that if the market goes down – we can make money and if the market goes up – we can make money but we can make so much more if we wait for the right opportunity before placing our bets.  

As David Fry notes on his DIA chart, POMO does make this time different and it does seem like we are being hard-wired to buy those F'ing dips.  That's OK, we can accept that if that's how we have to play it but please Lloyd, show us that you are willing to break the pattern first – then we'll be willing to step a little closer to the edge of the cliff.  Forgive us, of course, if the idea of standing next to you at a cliff when we know that you might make a Dollar for pushing us over gives us the creeps – it's just that, well, we know you!  

Speaking of people who are willing to sell their country out for a Dollar – GE had excellent earnings and I got my daily "WHUCK?!?" moment this morning when Obama named Jeff Immelt the head of his Economic Advisor Panel, replacing Paul Volker who quit when he realized this country is totally being controlled by Souless Corporate Interests who are embodied by none other than – Jeff Immelt.  

Yes, it's the same Jeff Immelt who just signed a deal to transfer America's Avionics Technology to China's State-owned Commercial Aircraft Corp. of China who (and I mean who, not Hu, althogh it's easy to see how this is confusing) intends to go into direct competition with Boeing, who is not only a top US military supplier but our nation's largest manufacturing exporter BY A MILE – so much so that Durable Goods have to be measured ex-Aircraft to smooth out their shipping cycle.  

General Electric Co.’s CEO Jeffrey Immelt Boeing sells $68Bn worth of airplanes per year and has over $300Bn worth of orders for the 787 backlogged.  The company directly employs 157,000 employees, mainly in the USA and, as they build their planes here and tend to use American parts, they in turn employ roughly 1M more people, accounting for close to 10% of our nation's total manufacturing employees.  As I mentioned when the deal first broke – the technology GE is turning over to China represents 100 years worth of advances in American avionics and, just because GE legally got their hands on the patent rights over the years – does not give them the right to put a bow around them and had them to Hu (not "who," this time I literally mean Hu).  

There's a word for what GE is doing.  It's right at the tip of my tongue.  Oh yes, TREASON!!!  Oran's Dictionary of the Law (1983) defines treason as "…[a]…citizen’s actions to help a foreign government overthrow, make war against, or seriously injure the [parent nation]."  Well, the supreme court just decided that our Corporations are citizens and have the right to give politicians unlimited bribes contributions as they exercise their right to free speech.  Why then do we not hold them to a citizen's standards when they clearly take actions that are against the best interests of the United States of America?  

I wonder if a Paulson-like immunity from prosecution comes with Immelt's job as head of the President's Economic Counsel and I also wonder Hu benefits from having their main man firmly inserted at a desk in the White House?  Surely the timing of the appointment to coincide with China's visit is not a coincidence.  As an M&A consultant, I have seen this happen a million times – a company (or country, in this case) is having trouble paying it's bills and their balance sheet winds up in breech of loan covenants which prompts a visit from the President of the bank (in this case the PBOC) who wrangle some additional concessions and guarantees and, in extreme cases – the Bank asks that one of their boys be given a seat on the board so they can "keep tabs" on your progress.  

That scenario is bad enough when your bank is just a bank but when you borrow money from a competitor and put yourself in that position, you may as well pack it in because you essentially just spilled blood in the shark tank.  It's only a matter of time before all your thrashing around, trying to stay afloat, turns into a selachimorpha version of a piñata game.  

Is this the beginning of a long and glorious partnership with our Chinese Masters or simply step 2 in the dismantling of America as Immelt Presides over the transfer of the rest of America's Intellectual Property to China so we can cut out the middle (class) man as our Global Corporations expedite their operational shifts more and more overseas.  With only two years until the next election – there is the danger that the American people will wake up and demand action so, as happened during the final days of the Soviet empire – we can expect big moves like GE's partnership with China to come fast and furious over the next 24 months.  

What are we doing about it?  Well, as I told you yesterday, we're BUYING GE, as well as JPM and, if you can find any more loathsome Corporate bastards who have top-level access to the White House and a pocketful of Congressmen and Judges – we'll invest in them too because the first step towards working your way up the ladder in a Corporate Kleptocracy is to realize you are living in a Corporate Kleptocracy.  Once you accept that – the rest is obvious…

So have a great weekend – the news doesn't matter – we'll just keep an eye on the Bots and continue to go with the flow, even if we have to hold our noses while we're riding it out.   

Be careful out there, 

- Phil


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  1. Ok, WFMI is indeed expensive, from Jan 3rd thru yesterday I’m spending an average of $180 PER WEEK! and it’s just me.. The seafood is what kills me… A pound of norwegian salmon is $15 dlls, that’s a lot! The pound of grey sole filet is $20.. Damn no wonder the stock is $53 now

  2. Hi Phil,
    Just a quick correction on the YRCW numbers as they did a 1 to 25 reverse split making the $3.76 equivalent to a $0.15 ‘old’ stock price.

  3. @Ravalos
    If you want those expensive seafoods you won’t find them any cheaper in Pittsburgh whether it’s at WFMI or a fish store.
    I buy grey/dover sole from a Friendly Fish Monger as soon as it arrives from Dover and it still costs that much or more so I don’t think it’s going to be any cheaper to buy it right off the wharf. WFMI charges fair prices for that little bit of luxurious dining sometimes it’s even less.
    Ditto Norwegian salmon.  It’s a bit cheaper at Costco but not very much.  It wouldn’t even pay for me to drive across town to do it at my FFM. 

  4. Interesting that IGT and SHFL, both Vegas gaming makers, missed……how good then will MGM, LVS, etc. be?

  5. Phil looking to open a position in AMSC Stock at  27.65
    Selling Jan 12  puts for 4.20
    Buying 25/30 spread for 2.00
    2.20 credit so worst case is stock assigned at 22.80

  6. @flips
    I agree.. that seafood is a bit luxurious, but man does it taste great.. it’s worth it though. Other than that, other things I buy at WFMI are fairly priced. I use to get Tilapia more often than not as that fish is cheap but still quite tasty, but lately they don’t have any! I wonder how different would it taste when you get it fresh right off the wharf!

  7. Phil and crew—do you think this pop will last or do you think the excitement fades?

  8. @Phil
    Re: GE
    The other day a member posted an interview with Kissinger.  Hank said that it is not the responsibility of corporations to ‘manage’ or in any maximize the american (or any other country’s corporations) economy for its people and certainly isn’t China’s fault.  All the blame for the deterioration can be placed at the feet of the Americans.
    I guess he would considering how he and Nixon were lionized when the opened china to trade.
    But as much as we detest the shamelessness with which they buy our government (recently upheld by the Supremes) I have to agree— with my nose held tightly closed— with him that corporations are amoral, a-ethical, and free to float wherever the opportunities take them. 
    ‘We have met the enemy…..

  9. Love the AH crush on shorts.

  10. Alpha 2 / Phil – my statistician genes are kicking in – look how much tighter the candles are in 2011. Normally (Gausianally) that would suggest much higher numbers reducing the variability. In this environment, though, I’d bet it’s that a lot of the more variable players have dropped out, leaving mindless robots who all think the same. An interesting complement to your chart would be the volume comparison. By the way, we stat types call those box plots, not candles, named by the hallowed statistician Tukey (a very strange guy; he did a visiting scholar thing at my grad school).

  11.  Phil, would you cover the jun 199 mattress or leave it naked over the weekend?

  12.  I meant 119!  sorry

  13.  Good morning!  

    Do or die on the DIA in the 1050P so we have the 40 Feb $119 puts at net $3.55 (.65 credit from short DIAs) and those are down to $2.45 with a .64 delta.  Spending $2.10 takes us up to the Feb $122.75 puts (now $4.55) and they have a .86 delta so much more bang for the downside buck on those and, if we get nervous, we can sell the $119 puts for $2 and then we can roll out to March.  This is, of course, very aggressive in lieu of just shutting it down with a $4,400 loss but we held on to play the pattern and this is the end of it.

    Watch that 10,850 line – if that does hold I’ll be more inclined to capitulate this afternoon but earnings have not been great outside of the multinationals – who we expected to do well as they had very favorable conditions.  Notice gold is still weak, copper is still weak, oil is still weak, even silver is at $27.02 (and congrats to those who took those SLW and futures shorts!). 

    The dollar is at 78.57, down 1% from yesterday’s open so of course the markets are higher but if this is all they can do and if commodities ARE FALLING ANYWAY – what is going to happen if something turns sour in Europe or Asia over the weekend?

    DIA Jan (today) $118.75 puts are .38 – those are a fun day trade too!  

  14. Pharm,
    They are right. Corp’s are not people (even people w/o feelings of patriotism). So it follows that is also crazy to grant them rights under the constitution (i.e. freedom of speech) that should only be attributed to people!

  15. sorry Pharm, I meant Flip!

  16. phil, what are your thoughts on bac’s earnings. i chickened out and sold jan 17.5 ge calls that i had from a losing leap – it was too much of a all or nothing roll of the dice, plus i have other ge 2013 leaps which i gonna ride out!

  17.  Phil/ISRG, with the exceptional numbers they delivered yesterday, the stock crossed the 200MA since 8/11/10. What do you think of selling a $300 put on Feb’s expiration to take advantage of the momentum and crossover? (200SMA is $303)..

  18. Phil / DIA puts   Yesterday you replied that Russell had the most downside of the indexes and was your preferred short.  Just wondered why the focus on DIA puts?  DIA has biggest international focus while Russell more domestic focus – with troubled consumer.

  19. ZMH – the Feb 55 Cs are now moving nicely.  Put a trailing stop on them of 20c.  This move should make the Mar 65s a free ride (or close to it).

  20. Reversed triggers
    VIX down 6.6%!

  21.  Phil, 
    DIA’s the Feb 119′s are 1.90 not 2.45… is that a typo? 

  22. Goood morning,


    IWM 79.46, 78.78, 78.29, 78.02, 77.78, 77.44, 76.91, 76.41 and another $8 Bil of POMO !!

  23. Not caught up yet, but did I just hear Arron say that GE only owns CNBC for one more month? Must be their reduction in finance focus! Who owns them next? GS?

  24. JRW are you buying TNA?

  25.  Treasuries/Reza – 4 point spread?  That is just huge!  


    Earlier this week, the spread between two-year and 30-year Treasury yields hit a record-wide four percentage points, notes RBS Securities. At the same time, the implied annual inflation rate over a five-to-10 year horizon, based on Treasury yields, has moved up above 3% and towards levels last seen before the Fed’s previous rate-rise cycle began in mid-2004.
    Investors, in other words, don’t expect the Fed to be as aggressive as in the past in raising rates—even as they see inflation on the rise.  "I think the Fed’s credibility is in question here," says Priya Misra, head of rates strategy at Bank of America Merrill Lynch.
    Or perhaps investors simply realize the Fed has put itself between a rock and a hard place. The U.S. unemployment rate is currently 9.4%, after all. It was at 5.6% in June 2004.  In a twist, the best scenario for the U.S. now is that interest rate increases in China, Brazil and other emerging markets rein in global cost pressures, giving the Fed—and the recovery—some breathing room.


    WFMI/Rav – I’m sure they very much appreciate your contribution.  I’m guilty of buying the salmon too…

    YRCW/Lotter – Yeah, I realized that and amended the comment but not enough time to redo all the math.  I’ll look over the weekend.  As I said, that’s why we took the money and ran – it’s really a question of regrets or no regrets and I wasn’t going to regret doing the right thing and taking profits off the table and hedging.  

    Dollar/StJ – Good one to watch today (now 78.54 but it depednds which index you watch):  

    Fish/Flips – That’s why I was liking WFMI – they USED to be more expensive but now all food is getting expensive and they are not enough more for me to bother going to A&P (my local favorite) as the food is clearly better at WFMI.  We still buy staples at A&P but more and more, we end up eating our dinners and lunches from Whole Foods.  

    Food inflation/StJ – Well they are already rioting in India and they are low on the list so imagine the lid China has to try to keep on:  

    By the way, I put up a really cool chart comparing a lot of economic indicators since the recession began near the end of yesterday’s comments (you can’t miss it, it’s huge) – well worth taking a look when you have time.  

    IGT/Pharm – I think they are kind of discretionary as casinos tend to set replacement schedules for the machines that are pretty aggressive.  Let’s say they usually scrap a card machine after 100,000 deals and that’s 3 months to insure they always have perfectly working equipments.  All the casino has to do is decide that they can afford to go 120,000 deals or 150,000 deals instead and those guys take a pretty big hit.  If they fall a lot it might be worth taking a look for a long-term play into the next up cycle.  

    Dow getting popped at 11,900 now with GE up a whole buck and BA up $1 and BAC didn’t even go down and XOM and CVX are up… ISRG up 10% today, big S&P mover…  XLF is flying – watch that $16.50 line.

  26. Is anybody in the 1050? I see only 100 122.75 puts bought  of which 40 are mine???

  27. Phil/Zion, From my post early am:

    January 21st, 2011 at 8:14 am | Permalink  
    Phil/Zion, what do you think of a Buy/Write on Zion. Buying at 23.74, Selling  2012 22.50 puts for 2.85, Selling 25 calls for 2.65. OR, would you do a BCS? Didn’t you say a long time ago they were the canary in the coal mine? Chart looks great. Thanks

  28. We have issued a trade alert "Income Trader" section.

    Recommend closing 870/880 credit spread for $0.05 or less.

  29. That’s weird dollar dropping…DOW dropping.  Isn’t that backwards?

  30. jabobeast / TNA

    Just like yesterday, this time off my IWM 77.78 line; but I’m back to cash now as they couldn’t break through at 78.05.

  31.  Phil
    I afraid when/if VIX increase it will hirt our 2012/2013 long positions, any idea how to hedge it?

  32. JR/IWM
    Someone is selling into the bounces.

  33.  AMSC/A64 – Very nice but I’d sell the 2012 $22.50s for $3 and buy the $20/25 bull call spread for $3.20 so you’re in the $5 spread for net .20 but your worst case is still $22.70 but your b/e is down at $21.35 and you only need $25 to make $4.80, which is 10% lower than they are now, as opposed to needing them to make 5% to give you a full pay-off.  Also, the margin is a little lower.  

    Fish/Rav – They don’t buy it if they don’t like what they see.  I love that about them.  In NY you have lots of places to get good fish but you have to fight with the sushi chefs to get the really good stuff.  You live in NY, right?   If you’ve never done it, you should go down to the market at Hunt’s Point one morning at 3am and watch the carnage.  They don’t get them off the boat anymore – trucks come in from wherever but all the restaurant people are there  It’s worth the trip if you bring a cooling bag as they have a retail market too.  

    Pop/Jabob – I was thinking it wouldn’t but the sellers are absent this morning, even with a nice 105M traded in the first 45 mins on the Dow.  Still, look at the chart – they popped it to the Max on the Monday after expiration day last year and by Tuesday, it was too late to get bearish if you weren’t already.  

    VXX/StJ – Actually today is one of the few days I would play VXX (or VIX) up.  Good FT article and interesting point by Krugman.  

    Corporations/Flips – Yes that’s true but is it right?  Corporations act that way because we let them.  Many of them are clearly thieves, yet we do nothing to stop them.   If you play a game where the bullies always win, then all the surviving players need to learn to be bullies and, as I’ve often said – the American people are just the kids they steal the lunch money from every day.  The joke is that we are brainwashed into voting for the continuation of this system.  

    Box plots/Snow – Hmm, they look like candles to me.  That’s one of those things where you may be right but if I begin saying "box plots" instead of candles, we’ll get 100 Emails a day asking what box plots are!  Volume this year is about 2/3 of last year and I don’t want to clutter up the chart.  I’m very pleased with that study on the whole, very cool for tracking these pattern overlays (I drew those last 2, by the way, Elliott will do a nice one for the weekend newsletter).  

    DIA Mattress/Trad – No, like the 1050P, I’d go for the $1 roll up to the June $121 puts ($6.40) and wait it out. 

  34. Phil
    I don’t know much about oil.  If the market falls, as you think, will it drag oil with it or will oil continue up after option expiration continuing its pattern toward $100 per barrel ?

  35.  Phil: DBA
    Adjusted a DBA spread in November and have let the callers get away from me, still messing this up but didn’t contemplate DBA being so active, no premium and .95 delta so not sure of where to roll to.  Should I bring the Long Jan 33′s back to july and lower strike while rolling the Apr callers up and out to July, not very attractive rolls.  DBA seems a little toppy to me now so I don’t really want to get into a more bullish position.  Seems I’m  handling this poorly even when original premise was sound :(  
    Basis is Long 10 Jan 22′s @ $4.51 , short 20 Apr 29 @ $2.10, and long 10 Jan 33′s @ $ 2.50
    November 3,
    DBA/Red – The 2012 $22s are about $8.50 and the Jan $25s are $4.80 so no real premium on either now.  I’d use the 100% delta you have on the longs and buy 1x the 2012 $33s for $2.50 as they have a .43 delta and that will let you roll the callers to 2x the Apr $29s at $2.15 for net .50 out of pocket there, which would put them in more than 50% premium with a .59 delta vs. your average .71.  So you can’t be hurt to the upside and you can stop out the longs below $29 for about $8 and than you have your profits off the table with a bearish flip that you can adjust as needed.  Doing that, there’s no need to sell puts until after they have a downturn if you seek to establish a new position on the next turn

  36. exec
    There is a lot more happening than just the selling into IWM bounces, like they are not selling into FAS or the S&P and the VIX was down 7.5% but now 3.4%. The big guys are changing game?

  37. Until I saw this, I never thought I would actually consider Trump for President.

  38. Shadow,
    So you think they’re buying banks?

  39. GOOG is struggling to keep its gains. AAPL is looking pretty weak. Even NFLX is down again. Am I crazy to think that the market gains should fade?

  40. Currency / Phil – Amazingly enough, the pound has actually bounced better than the euro…
    I guess the austerity measures are helping! If only they could stop the students rioting in the streets! 

  41. exec
    Only not selling themselves!

  42. JR/Streetsmart
    Do you every trade using streetsmart or do you use a different platform for executing your trades?

  43. Iphone owners
    Never fear the screw change inexpensive security screw bit kits available MCM electronics also allows you to tamper with new car stuff.

  44.  rustle123, that’s a GREAT video with Donald Trump REALLY nailing it.. case in point, we just heard of Evergreen solar (one of the few solar companies TRYING to keep manufacturing plants in US soil) of being FORCED to close the plant here in the US and move it over to China due to costs.. american businesses simply CAN’T compete against China and I wonder who or what will stop that carnagge.. I believe that video that once went around this board with a China’s professor macking a mockery of the US to a classroom full of Chinese students.. pathetic!

  45. shadowfax // car stuff — Does apple have a car unit? Guess that’s one of their items on deck if not.

  46. Hi Phil,
    It is hard for you to say BUY OR SELL it really depends if the market goes up or down so saying nothing you could not be wrong either way
    DIA Jan (today) $118.75 puts are .38 – those are a fun day trade too!

  47. Phil,
    I have 10 SDS Jun $25 short puts at $3 now $3.5. Should I roll or sit tight?

  48. Pharm,
    Would like to get your opinion on the following for 2011 and any suggestions on how to play them: KERX, AMAG, HGSI, SVNT, ARIA (leukemia drug). Thanks

  49. rav / fish — fresh fish that is taken from water to table in a day is amazingly different than fish that is never frozen and takes days to make it to the table. Fish that is taken from water to table in a day never smells or tastes "fishy". Love it fresh, ambivalent about it any other way.

  50. rainman car stuff
    APPL, maybe as I have used them to get into ignition, computers, and most reciently the air bag inflator in my 94 Dodge PU, the laugh is on them as the screws cost way more, difficult machining and you can get the keys. These are our last freedoms along with removing those mattress tags. I must stop big brother run by corps is spying on us just check the VIX 17.62 now down under 2% after Phil posting 17.99 was last years tipping signal. Watch out!

  51.  BAC/Jo – They took a $2Bn goodwill charge and had some nicely improving metrics otherwise.  Every time I look at them, they seem to have taken out some more reasons for me to avoid them but C is still better and cheaper and XLF hasn’t gotten away yet so I’d make sure I had those filled first before speculating on BAC, who still have to tip-toe through a mine field on the way to $20 but I think I’m beginning to see a path…

    ISRG/Rav – They have proven that they are not immune to getting pulled down with the market.  However, as long as you REALLY want to own them at the net (and you can roll down to longer $250 puts) and have margin sitting around doing nothing then yes, I like this as ISRG is a long-time favorite.  I was kind of hoping they’d miss so we could buy them…

    DIA/Tusca – Because we analyzed the earnings cycle of the Dow components and next week looks rough for them.  Also, it fits in with the pattern and the RUT already dropped and the DIA did not and this isn’t a horse race – it’s gravity – so when you see one ball drop to the floor and stay there like the RUT, you will often do better betting that the ball that’s still floating will come down rather than betting that the ball on the floor will drill down to the basement.    I picked the RUT as first and most likely to fall – now that they have, I switched to the Dow as likely to follow the others lower.  

    DIA/Amatta – Wasn’t a typo at the open.  As to is anyone in, I think most cashed out by now and I’m glad about that.  I had warned on many, many occasions that these were aggressive adjustments to be made.   That was way before we rolled to Feb or doubled down, when the losses were down around $1K and easy to kill.  

    ZION/Jomp – We played them last year and they were very slow to get going and then they went nuts and we got out and then they fell 50% again so a really crazy stock that no one seems to know how to value.  I’d go very light with an entry as you may have to DD at $20 or less, over and above your forced double at $22.50.  

    Income Trader/Kojo – Please tell Ilene your box should be blue (like Optrader’s and Scotts) when you comment under my post.  It makes it easier for people to recognize.  Also, your name should link back to your section.  Great job on first spread!  

    Dollar/Exec – It’s more like Dollar dropping and preventing Dow from dropping much more (for the moment).

    VIX/Tcha – You hedge it by not looking.  It doesn’t matter what the position looks like as long as your underlying is on track to wipe out the putter – that’s all that counts.  All they can ever do is force you to DD at a lower price so just wait patiently and hedge the shorter plays if you get worried.  Those Feb DXD $11s are .45!  

  52. @rustle123
    Don’t know if I could take 8 years of that hairdo (don’t) everytime he’s visible, but his idea for tariffs to get Hu back to the negotiating table is not  exactly unknown to theBamster and more importantly, his men behind the curtain, and the men behind the Senior committee members in the Senate, who are being bribed into kingdom come to stuff that easy solution in the trash can.
    You can bet the next person of any stature to create a National Referendum on doing precisely that, even if they do it state by state, legitimarely--i.e.  slapping a 25% tariff on all imports— will be crucified by Wal-mart, and every other big box retailer and jobber in the country, all the while the populace votes unanimously FOR it. 
    Guess who wins in that contest?

  53. matt etc
    FAS has a very significant pivot at 29.92, next support 28.82

  54.  I used to think that if we elect someone that doesn’t need money and can’t be bribed and shames others into not making the right decisions, we’d have the perfect candidate.  Residing in NJ, I voted unfortunately for Jon Corzine using that rationale, didn’t factor in the Goldman factor.  But then again you have Bloomberg doing a good job in NYC.

  55. VZ following ATT pension moves

  56.  Oil/Willie – I think $90 oil and the food prices are what’s killing the markets now.  The World simply can’t afford it.  Money spent on food and fuel is not spent on other goods  - the Fed can’t print money fast enough to feed the inflation beast on multiple fronts – not in this round, anyway.  

    DBA/Red – Well the 2012 $22s are now $11.60 and the $33s are $3.70 and you have the short April $29s, now $4.65.  It would have been nice if you had done something since Nov 3rd as DBA blew through $29 but you have a huge time advantage and the Apr $29s can be rolled to the July $31s for $1 and those can ultimately be rolled to the 2012 $33s which would put you in a $11 vertical on 10 and a $2 vertical on 2 and you only spent an average of net $1.90 for the positions so you would be looking at gains of $9.10 and .10 on your two verticals.  Well "wah, wah" – I feel awful for you!  As I said, you cannot be hurt to the upside.  You COULD have rolled sooner and done better but this is not a big deal.  I’d wait until next week to see if the prices stick and then we can look for a good combo to roll out to.   Right now, those callers are really good weekend protection. 

    Trump/Rustle – Yeah, I like that guy!  

  57. Phil, have you noticed the slow steady climb in HD? any thoughts. i have a uncovered leap that was originally a vertical.

  58. Japar -  my take

    KERX – bull call spread going into ASCO

    AMAG – risky, and I want to see earnings.

    HGSI – how about selling a few the Jan12 $20 Ps, lots of action there but the trend is down.  Otherwise wait for it to turn.

    ARIA – we are in them for the May $3.5/5 spread and sold puts along the way.  I want to see how they do over the impending sell off, thus my not recommending anything but a few swing trades here and there.  We are well stacked in biotech for now.  I am watching a few others and still going through the JPM Conference info. Lots to digest.

  59. BOTS selling big in IWM, VIX18.01!

  60. Here we are IWM 77.44, be careful, if we don’t bounce we should drop nicely !!

  61. Shadow,
    Just curious.  How do you determine it’s the BOTs selling?

  62. JRW
    My 29.92 on FAS is not holding either, I think you call that confuense sp.

  63. exec
    If you use a system builders program and build your own you can change lots of things like mutipliers.

  64. Jo, I love HD but think it may be getting close to topping here. Working on picking up a gorgeous 5k sq home for 65sf and  (just bought) 2 commercial buildings for storage. The house needs about 20k worth of work, the buildings need paint…HD is my supplier. Real estate is cheap and getting cheaper,  there are a few million homes that have been neglected for 2+ years..I like HD long term.. neglect and cheap real estate make me bullish on HD..

  65.  JRW - I see IWM right at the bottom of a nice regression channel from the August lows:
    Danger or opportunities?

  66. shadow / FAS

    I have support at 28.72 FWIW

  67. JRW
    I forgot your 2/10% in the direction BOTS trade them all!

  68. JR,
    Where you sitting right now?

  69. stjeanluc / Danger or opportunities?

    We shall see 8-)

    Very nice site BTW !!

  70. kustomz, good point – when people walk away fom their houses, they usually rip out all of the appliances and leave the place a wreck. many people have also put off much needed home repairs.

  71.  Crazy/Jabob – You don’t have to be crazy to play these markets but it does help make sense of things!  8-)

    Pound/StJ – They look good relative to the Euro.  I saw Merkel yesterday and she was pounding the lectern which let me to make an unkind comparison to another German Chancellor who had the same habit that I will not repeat in public but this video always makes me laugh (language warning).  

    China commercial/Rav – Yes, that was a good one.   Here’s a nice little background on the Chinese economy.  

    DIA/Yodi – If I mean sell, I usually say sell and logic would dictate that we could easily BUY calls if we were betting it up but, when in doubt, just ask.  As it stands now, you didn’t miss much as they are only .44 now. 

    SDS/Japar – I’d wait as June is a long way and we do think the S&P will pull back.  Just keep an eye on the roll you would want, which is the 2012 $22 puts, now $3.15 and make sure that doesn’t get away from you, say over $1.   

    Trump/Rustle – I wouldn’t trust Trump not to sell out.  Bloomberg would be a better choice and Trump could be his attack dog VP.  Unfortunately, the great qualities of "it’s my way or the highway" that Bloomberg brings to the table also make him unelectable as he just rubs too many people the wrong way and is not likely to change that just to get some votes.  

    HD/Jo – I think they are up on strong snow sales.  I like them but they are getting a little up in the run but I would like them on a pullback to the low $30s.  

  72. JRW
    The next level would be gust under 28. I am afraid to do any more changes now, I have had to reboot from CD twice and loose everything saved esp. my BIOS settings, takes hours. This has been fun but I am not trading and that doesn’t pay for the system.

  73. And here is why Phil has not capitulated !!

  74.  JRW – Thanks!

  75. Meanwhile I’ve got IWM support at 77.33 then 74.00

  76. Also out of TZA on the break back over 77.44 !!

    Busy morning !!

  77. GRW
    Thanks for the great charting and by the way I have that 74 line also, that is the lowest for me.

  78. Sorry JRW not GRW                   Brain fade!!!!!

  79. And this is why Phil thinks the rally of the last two months is BS !!

  80. Phil,
    AAPLl has over 33k 330 Call contracts expiring today and the babe on CNBC is expressing surprise that the price is sagging.. It is like that they just don’t want to admit that many times, especially on light to normal volume,  the tail wags the dog on expiry.

  81. Details on the Bearish divergence here !!

  82. Phil
    I think the Chinese are just following the same plan the Japanese did as far as American products.
    You need to correct the Japanese and the Chinese by just having the same policies they use.
    In Japan you cannot sell American products without a partner, and then you will also have issues in customs.

  83. JRW,
    Are you back in TZA on that move on IWM below your 77.44 line

  84. IWM/StJ – I’d say danger until we retake that red squiggly line in the middle.  

    Reboots/Shadow – Just get an IMac.  I love mine, no need to touch it (and no way).  

    70-year/JRW – Yep, I guess if we break out on that one it will be time to give up and put on some horns.  

    LOL – Now Nas, RUT, SOX, Trans all down but Dow, S&P and NYSE holding up.  If you remember my old tugboat example, this is like half the tugboats pulling one way while half pull the other way.  Keep in mind though, gravity is a bitch!  

  85. Phil--I loved that tugboat example!
    Is there anything over the weekend that could go wrong in Europe or China? ;-)
    GOOG is even red now.
    But how could we be bearish when there is a POMO every day? Diminishing returns? Very confusing if you ask me!

  86.  Phil / Anyone -
    You have any insight into the drubbing that the dollar is getting? 
    The correlation between market / dollar / commodities seems to have broken down.

  87. rehat / TZA

    No, IWM 77.33 is a confluence point for me so I’ll sit back and see if they try for a recovery !!

  88.  Peter D/Phil, howe about making a short strangle on ISRG 300 Feb put / 370 call for $3.62 credit? critical resistance points are $340, $360 and $370.. on the way down $310 and the almighty 200MA at $303 now.. 

  89. Phil, 
    Any adjustment to the AAPL spread (Feb sold P/C, Mar bought P/C’s)?

  90. Phil,
    Cook says that the new MacAir has (or wlil soon have)  instant on like the i-pad (flash mem)
    BTW here is greatt site that gives detailed bio’s of key AAPL players who will be given consideration for replacing Jobs by the board.

  91. Phil,
    Did well in the market the last two weeks selling a call on NFLX and AAPL at a higher price and using the money to buy the put for the same amount at a lower price.  What are your thoughts knowing we’re coming into Feb about selling a Feb 119 call on the DIA and buying a Feb 117 put?

  92. That’s great – CNBC talking about good days for the DOW and S&P. In the meantime the Russell 2000 has been falling of the a cliff the last couple of days and is down again today!
    Oh! And has Dennis Gartman been right once in his life? 

  93.  Highlander -
    The new mac air only comes with flash memory – the basic model has a small drive – 128 gig - 
    For someone does not need to work with large files or uses the cloud – I guess it’s great – my wife wants one because of how light it is.

  94.  Wish i had the time to compare Gartman’s call on air with the actual trades in his fund.

  95. At the open: Dow +0.39% to 11869. S&P +0.35% to 1285. Nasdaq +0.51% to 2718.
    Treasurys: 30-year +0.03%. 10-yr flat. 5-yr -0.01%.
    Commodities: Crude -0.26% to $89.36. Gold -0.54% to $1339.20.
    Currencies: Euro +0.62% vs. dollar. Yen +0.4%. Pound +0.46%.

    10:00 AM On the hour: Dow +0.66%. 10-yr -0.04%. Euro +0.62% vs. dollar. Crude +0.04% to $89.63. Gold -0.33% to $1342.00.

    11:00 AM On the hour: Dow +0.38%. 10-yr +0.16%. Euro +0.82% vs. dollar. Crude -0.25% to $89.37. Gold -0.21% to $1343.70. 

    11:25 AM Treasurys have picked up gains in the wake of a POMO that sees the Fed buying $8.36B in Treasurys of $18.959B offered by dealers. The 30-year yield now -0.02 to 4.59%; 10-year -0.02 to 3.43%; 2-year -0.01 to 2.04%.

    12:00 PM On the hour: Dow +0.34%. 10-yr +0.22%. Euro +0.79% vs. dollar. Crude -0.4% to $89.23. Gold -0.23% to $1343.40. 

    The ECRI’s growth gauge hits its highest point since May, rising to 128.9 from 128.1, while annualized growth (a moving average) hits 4.1%, up from 3.6%. 

    By pegging the yuan to the dollar, China cedes monetary policy to the U.S., thus making a choice to import inflation. Fiddling with reserve requirements and domestic rates does little because the peg requires China to print yuan with which to soak up dollars earned by their exporters. 

    Let the era of Total Corporate Rule begin!  Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS) and other banks have met with Treasury officials to pitch their idea that private companies, perhaps even themselves, should become the new housing finance giants helping to bundle individual mortgages into securities – complete with an explicit government guarantee. 

    Policy makers work behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the public employee pensions, NYT reports. This would raise more questions that it answers, Barry Ritholtz writes: "Why should anyone lend money to states again?

    The number of states facing budget shortfalls in 2007: one. The number in 2010: 48. Just one of the myriad ways the U.S. has changed since the start of the Great Recession, depicted via dozens of charts

    General Mills (GIS +3.3%) raised prices on snack bars some 7% last week, according to a Goldman Sachs research note, as companies attempt to cope with global food inflation. Goldman expects slow increases across the packaged food space throughout 2011, helping lift revenue and keep margins stable. Kellogg (K +1.2%) boosted snack bar prices in December.

    EU regulators come up with a surprise rejection of Biogen Idec’s (BIIB -2.7%) multiple sclerosis drug Fampyra (Ampyra in the U.S.), which also knocks shares of the drug’s developer Acorda Therapeutics (ACOR -16.7%). 

    In order to benefit from rising emerging market incomes while avoiding their high stock valuations, BofA creates a list of U.S. and European retail companies poised to benefit. To make the cut, the company has to have a market cap greater than $10B and 30% of sales must be to emerging markets. 

    Bank of America (BAC -0.2%) shares crawl back from early losses, as investors begin to find bright spots in a disappointing earnings report: better-than-expected asset quality (lower net charge-offs and non-performing assets), and improving loan growth and investment banking. Its $0.16/share loss would have been a $0.04 gain if not for a $2B goodwill charge. 

    The investing climate still looks good to David Tepper, though his optimism is tempered by the prospect of tightening in China and another 10 years of high unemployment. If the Fed exits easing programs in a way that pleases the markets and Congress starts cutting the deficit, "the U.S. looks pretty darn good." He mentions Dean Foods (DF) and Micron (MU) as stock favorites. 

    If you want to get a handle on final demand in the U.S. economy, watch the transports, Pimco’s Tony Crescenzi says. Despite some recent softness, the Dow Transportation index still makes it look like the U.S. is "achieving escape velocity." Transports today are largely flat, with heavy dollar volume in rails (UNP, NSC, CSX). 

    On the other hand:  "There’s never just one cockroach in the kitchen": While bad news hammers many individual stocks as broader impact remains limited, growing numbers of stocks with collapsing charts bodes poorly for the market as a whole. The market looks tired from a macro view too, as three yellow flags warn of a slowing economy

    Three lunchtime reads:
    1) China’s currency: The rise of the redback
    2) Beyond BRICs: The new ABCs of global investing
    3) S&P 500 and Dow: Tale of two markets

  96. That said – I kind of like Gartman - 

  97. Phil Reboots
    I turned this monster on Dec 24 rebooted 2 days later and again on 1/1 all because I pushed luck instead of smart research. All ok since then but I save dumb stuff like buy the f ing dip on my laptop. Once burnt twice caution, twice burnt 200 times caution. No Mac or prepared PC can do this stuff, especially AAPL, they are control freaks besides having serious computation limitations, I tried one last March and returned it even though I knew how to program their system because it wouldn’ let me do what I wanted. Two months ago I knew nothing about PC basic machine operation, the best part is it is unlimited, the bad point is Micro soft, Intel, etc gives no clues but I was a master at machine level programing 35 years ago. HA HA ! Lots of things to play with including a change I hope to make by next week boot or not, it wil at least require multiple restarts. I may burn a bunch of DVDs first to go back with changes so far.

  98. Hey ravalos,
    I’m not good at short strangling the individual stocks as those are rather risky.  A +10%/-10% on ISRG doesn’t seem to be sufficient or a short strangle.  If you really believe in them, then you can apply a long term bullish bet.  That would be selling Feb 310 puts for $3.85, or Apr 280 puts for $4.65, and buying Jan’12 380/390 call vertical for $3.1.  Hopefully, by Feb or April expiration, your short puts would expire worthless and you get the other vertical for free.  You’d be very happy if ISRG drops after your putters have expired as you can sell a new put to finance a lower vertical, say Jan’12 350/360 for the same price, and also rolling the 380/390 vertical down.  After 2-3 of those drops, your call verticals could be in the 330 range.  So if ISRG recovers to the current price, you might have lots of free verticals that earns $10 each. 

  99. after the next VIX run I’m putting this one on my radar and getting into some put spreads pretty heavy. Maybe by March.

  100. Did someone wake up the IWM bots?

  101. Phil
    Wyoming may be 49th state soon, they have spent their reserve fund and now dipping into the energy reserve for reclaiming devistation, esp. coal extraction! They cut teacher pay and benifits to the point that noone wants them. Like Washington and the military, expansion and raises for the cops!

  102.  By the way, have you noticed how fast Obama’s poll numbers jumped once he started kissing corporate ass?  Yep the GE/NBC polls and the DIS/ABC polls and the Fox/NWS polls and the VIA/CBS polls all showed massive improvement in his approval – proving even Presidents respond to conditioning!  Skinner would be proud!  

    Nice charts JRW!  I love that Bearish Divergence Chart.    

    AAPL/High – Nope, they’ll never talk about pinning because that’s admitting the markets can be rigged one day and, if they can be rigged one day, then maybe they can be rigged all days.  As long as they don’t make that initial connection – they can count on their viewers being too dumb to figure the rest out. 

    Policies/QC – Yes, this country is operating under the insane logic that a trade war can hurt us.  A trade war can only hurt someone who is currently winning.  We are currently getting our asses kicked.   If we banned all exports and imports, we would SAVE $650Bn a year and that money would circulate in this country and add perhaps $2Tn to the GDP.  Obviously, we need oil and that screws the whole thing up but we wouldn’t need oil if we took that $650Bn and traded in every car that gets less than 25 MPG for one that gets 40 or more.  We import 10Mb per day now and produce about 9.5 but we could keep the NAFTA partnership with Canada and Mexico and that would keep 6Mbd of our oil imports flowing (and NAFTA is net positive for us without oil) and the rest we wouldn’t need if we can save just 20% of our fuel consumption.  

    Wow, Obama at a GE plant.  It’s like a whole GE day today – no wonder they are punching towards $20!  

    Weekend/Jabob – There are about 20 things that can go wrong in Europe or China over the weekend.  They have earnings too, for one thing and this inflation thing didn’t magically go away because oil ticked below $90 this week (also, check out DBA!).   We have earnings from every bank in the World in the next few weeks plus a lot of international bond auctions and  ag prices are up 2.5% this week (so pretty much metals and energy went down so food could go up) and Hu goes home where we’ll see what deals he really cut with Obama as China doesn’t mess around with Congress – as soon as Hu sits at his desk, laws will be passed and changes will be made.  

    Oops, there’s DBA at $39.50!  

    Dollar/Samz – Well the Euro flew up to $1.36 and the Pound is $1.60 and the Yen is back to 82.6 so, legitimate or not – the dollar is getting hammered this week, down about 4% since the 10th!  So, if the market isn’t up 4%, then it’s losing ground to foreign currencies and we know that’s not good..  


  103. 8 Billion POMO, Obama bounce, CNBC BS, maybe the kitchen sink will work if really try!

  104. Speaking of our Chinese buddies.  Nice Bomber!

  105. exec / Bots

    Same as yesterday at 1:53, and again on little volume; but they did punch through a trend line. I’m just not sure we are done testing the bottom (IWM 77.33)

    I’m in cash BTW, will go long over 77.55ish; short under 77.30ish if the signals are right !!

  106. With the RUT diverging from the DOW, a good day to just watch premiums decay.

  107. And the problem with states and munis might be overstated – except in some cases (CA, IL, NJ):
    These talks of state bankruptcy seem to me like a backdoor way to get out from the weight of public employees benefits. It might seem like a good plan now, but long-term implications have probably not been explored properly because once the public unions have been screwed once it will be difficult to sell them the long term "little pony" in exchange for cuts now!
    Barry had a good post this morning -

  108. ravalos:
    ISRG. I think most people here who do short strangles will avoid them on individual stocks one month out. I do SS on AAPL, GOOG, and AMZN regularly. But I generally maintain SS in two different monthly groupings – the nearest no closer than two months out and the other about four months out. All strikes are quite far out of the money.
    I then hedge against a significant volatility increase through artificial buy-writes on SDS.
    I do these, because the premium decay on these options is relatively consistent and gives a good return on (portfolio) margin employed. Premiums are high on these stocks because they’re difficult to value.

  109. S&P at 1,284.95 …..
    now we quantify just how clairvoyant Mr. Phil really is ……

  110. Do you think they try to pin TNA to 70 or is it too hard to do with a leveraged fund (and instead pin IWM)?

  111. Volume very low – Just 162M on the Dow, only about 60M since 10:15.  

    ISRG/Rav – Why?  Why do you want to play a stock that could move $30 in a morning for $3.62?  Is there really nowhere else in the entire stock market where you can make $3.62 in a month on that kind of margin?  

    AAPL/Amatta – Nope, they are right in range.  

    Macs/High – I think everyone will go that way.  Another thing I like about my IPad…

    DIA/Rustle – I think it’s very dangerous right now.  Look at today’s action.  I like the puts but I don’t think I’d want to compound the failure by selling short calls at the moment.  

    Reboot/Shadow – I’m just bustin’ your chops.  Actually I think it kicks ass that you can get under the hood like that.

    IRBT hitting new highs – that’s an old favorite! 

    China/StJ – Main article is interesting: 


    Posted by Michael Riddell on 21 January 2011 13:02:00 GMT
    The interbank lending rates (Shibor) in China have gone ballistic in the last three days, with the 1 week Shanghai Interbank rate soaring from 2.6% on Monday to 7.3% today.  The worrying move has been put down to a combination of Chinese New Year (there is traditionally a bit of a movement around Chinese New Year but not this much) and the most recent increase in Chinese bank Reserve Requirement Ratio (the fourth in three months) catching banks by surprise.  Rumours of a rate hike didn’t help either.  Following the increase in the Reserve Requirement Ratio, Chinese banks slowed or completely stopped interbank lending, which left some banks desperate for cash to pay the reserves.  Domestic news reported that two banks failed to raise enough cash to pay the new reserve requirement ratio so the People’s Bank of China made an unusual reverse repo to these banks (ie took collateral from the banks to make a cash loan).
    It looks like the spike is being driven by technical factors and should return to more normal levels post  Chinese New Year in the second week of February, but unusual bank liquidity events are definitely worth keeping an eye on.


  112. JR
    13:44…..would that spike be a sell program?

  113. stjeanluc
    Yesterday 193 mafioso went to jail that will save NY, NJ, and R from overchargesI, but consumer spending will go down. Will Washington allow that? They were not broke or unemployed and CNBC hipped bullet proof black cars to replace sales to their best customers. It’s all tied together and co-dependent.

  114. exec
    I didn’t catch a sell program at 13:44, maybe JRW did.

  115. Phil / $    You mention $ is down 4% since the 10th.  I’m mainly in (this devaluing) cash now (US$) as I share your concern about a correction soon.  Sit tight for now? Or are you looking at specific foreign mkts with better currency prospects?
    BTW When I travel to Europe and observe the costs, I just don’t understand how Europe can possibly compete at $1.36 to the Euro.

  116. CMI appears to be another in a stealth breakdown.

  117.  Yeah, I forgot about Chinese New Year – that’s keeping things happy in China for now but once that party is over, the people will have time to focus on their food issues again.  

    Wyoming/Shadow – Did you read the article on austerity measures.  It’s going to get very ugly out there.  

    Bombers/Exec – The avionics they got from GE were the missing piece there.  The logic GE was using is "well they figured out the shell of the plane – all we did was sell them the engines and the cockpit."  

    Little pony/StJ – LOL!  

    Rav – And what Chaps said!  

    When did DECK sneak down to $73.50?  

    Clairvoyance/BDC – I’ll be impressed with myself if the Dow pins 11,850!  Although I still think we’re primed for a sell-off but we haven’t had an expiration day sell-off in so long I’m not even sure what we’d do with it if we saw one…  

  118.  Hello Chaps,
    Could I trouble you to give a real life example of short strangle on one of the stocks you mentioned that you currently have running and also the structure of the artificial buy-write on SDS.  Seeing the actual position(s) makes it much easier to lock into my head.
    Thanks in advance

  119. JRW/ IWM,
    Wow, your 77.33 line is a real dark line. and what a candle at 13:56. they don’t want any breach of the 77.33 IWM line.
    This is fun just watching…

  120. exec / 13:44

    Not a Sell program, just a sale   8-)

  121. Phil,
    Rest assured, Jeff Immelt speaking from his own personal CNBC network, looking well tanned thank you, says they know how to protect their intellectual property in deals with China. Famous last words from many american companies in dealing with the eastern world.
    I bet the Boeing guys are sorry in teaching GE anything!

  122. cslanson/ss:
    I’ve been in AAPL Feb 280/400 and will roll to March next week. Also AAPL April 230/410, and will roll to May. When entering a month, I’ll look to sell something for between $2-3, roughly. I’ll flip putters to callers or visa versa to maintain delta neutrality and balanced margin usage for each month separately. Will sometimes roll closer to the money within a month, but that increases risk.
    SDS. Generally, they’re about two months out. I’ll often buy a $5 bull call spread that’s just a little out of the money and pay for most of it by selling puts. Close out the bull call spread when it loses 50% of it’s value. Roll the puts if the market heads up. Since the market has been up so much, I currently just have short putters that provide enough protection. If the market goes down, I’ll roll those in and resume buying bull call spreads.

  123. Phil
    Did read asterity measures and I can tell a hit from a fu-fa. I love to give all apple pies crap. Apple has done wonderful but because they don’t help Americans work they are another company that has to be stopped. I also think they are very close to running monopolies and that and false advertising has to stop to save us little guys. I see ipads at cat shows but the only other one was at the verizon store and the guy pulled out a wireless mouse and keyboard, what was that other christmas present from Tina?

  124. Phil/Bombers
    That was nice of GE selling them those insignificant items.

  125. CVX making ATH!  That’s interesting and good for 8 Dow points today (XOM good for another 8). 

    Cash/Tusca – I prefer GE or KO or MO to protect against dollar devaluation, not foreign currencies.  You can get whipsawed around and you can make up a 10% drop in the dollar with a relatively small bet on something like ABX or HMY as we know we can make 30% on hedged plays on those.  In fact, didn’t I just do a whole inflation hedging portfolio?  If you can use XLF to make 500% in a year – then 0.2% of your portfolio in that trade guards against a 10% drop in your money without messing around with currency investing.  

    CMI/Rain – That’s a little disturbing. 

    Immelt/High – Yeah, I think Julius Rosenberg said the same thing right before they electrocuted him….

    Thanks Chaps! 

    Wireless/Shadow – On an IPad?  That’s a bit much.  I did get a cool travel cover that unfolds into a stand and keyboad for the IPad – very cool too.

    Bomber/Exec – That’s NOT what they said before they threw the switch on the Rosenbergs.. 8-)

  126. The only way they are going to save this thing is through blatant manipulation.

    Oh no !!

  127. XOM popping 52-week highs too.  Something must be up or maybe it’s how they are punching the Dow as XLE is flat and oil is down so what the hell are they so happy about?  

  128.  SS/Phil, Chaps, Peter D.. I understand your points. The reasons for this specific play is that I already got to see the numbers from Q4, their outlook, the market’s reaction, the ranges, etc. So I feel it could be "safe" to trade that range given the margin required and the timeframe.. but I understand that these stocks move so much in any given day, but that doesn’t mean they will stay at those levels all the time (just like NFLX flew all the way to $209 shortly and has never been back). My premise is a reasonable trading range/valuation based on the latest numbers.. and the fact that this is an individual stock makes me want to do this short strangle on a front-month rather than many months further.. I just wouldn’t like to risk it because the more time you give them, the more it easily moves $50 in one direction or another. I do know that temporarily this would not be a winning bet if the VIX shots up but the idea is to hold the position until expiration.. I know this seems a bad choice but I do these movements with stocks I understand their behavior and have followed them for more than 2 years now.. every day. I understand that a SS on an index is completely different because indexes do not move that fast to one direction or another and you can play many months further away..
    Anyway, I will look around to see if there’s another way to get that return in that time frame for that a lot less margin or better yet, with less of a risk (with a company that already announced numbers). Thanks for your input.

  129. Phil
    Other economic indicators. I bought a waterpic for Arlyn for christmas she needs carple tunnel surgery, she tried to buy me a pair of blue jeans but I insisted she return them and put the money towards her heat bill. Nothing not even a tree and I don’t care. All I want this year is to keep all accounts even, havent since 2008 and maybe pay the deductable to get her hand working. I know people way worse off, the part time job at Burger King was filled before the ad came out, $8.75 per hour only 16 hours per week! How the hell do you even eat on that?

  130. Phil Ipad
    Wireles yes the same as I got on the returned Imac last March!

  131.  Thanks Chaps,
    Sorry to be a nuisance but if/when you open a new positon(3) if you could post the details, I would very much appreciate it. I would like to do the math and see if this a path I may wish to follow also. I suspect I’m speaking for several other followers of this board although I don’t know for sure.
    Thanks in advance

  132. qid – with the 11c at 3-4 cents and the  EFT at 10.99, anyone want to take a chance?

  133. Shadow,
    Not to worry, the Republicans Tea Party fringe will fix everything and that preexisting condition can be used to drop your coverage! By the way, I was diagnosed with Carple Tunnel  and did not do anything due to fear of the knife and then lost a very few pounds and it went away, in complete contrast to the advice given me that it was only going to get worse and would never get better on its own.

  134. cslanson2: Chaps information and posts are so good that on my Word Document with copy and pastes, I’ve given him his own color..  :)

  135. Barclays controlling commodities
    then remember Goldman controls the storage at LME too

  136. ravalos/ss:
    JMO: You face event risk with any individual stock, which are not necessarily limited to earnings announcements – and a good event can be very bad with a short strangle. I usually have these things going on about five stocks at any time.
    Front month vs. further out: I maintain these trades on an on-going basis – month in and month out. For me absolute value of gamma is just too high on front month short strangles. That means the position can get out of hand very quickly on an event, because the further the stock moves, the worse the gamma effect. It’s a stochastic calculus vicious cycle/snowball effect.
    The farther out in time your position, the lower the abs value of gamma. That means events, earnings or otherwise, just doesn’t affect the position nearly as radically.
    As mentioned, I adjust every stock/month ss regularly to maintain delta neutrality and balanced margin hit. So I’m regularly adjusting the strangle brackets to keep the position out of the money.

  137. Phil / Cash    Bit confused.  While in this cautious waiting mode, what % cash are you advising? (I understand that this % could change radically as early as next week based on key mkt signals).

  138. tuska / cash

    Nothing wrong with 5% or less in puts and the rest in cash !! Next week has the potential to be quite ugly IMHO !!

  139.  chaps/SS, "adjusting the strangle brackets to keep the position out of the money".. does that mean that when you adjust a SS you roll them into a further month out in order to keep the same spread? Or you do it within the same month? (if it’s the latter, wouldn’t you increase the risk because you will have to narrow the spread in order to not put any cash out of your pocket during the adjustment?)

  140. JRW / Cash   Thanks.  That’s makes me feel less isolated!

  141. Phil
    Do you ever fear a less than rational response from China if we do tighten the screws on them with trade policy? I agree that something more should be done, but I worry about an irrational response from China rather than a rational one. Has the Chinese government really evolved that much where they would not resort to nationalistic measures to justify a harsh counter response to any action we take?  Are we really in a position to play hard ball with anyone?

  142. Phil, 
    Any adjustment necessary to HMY play (24 May 13/15 /12 Jan 2012 10 Puts) for Net .035 
    Thank you 

  143. dclark41 / Trade Policy

    It’s the same thing we did to Japan in the 30′s, what could go wrong ?  8-)

  144. Phil / GE – I am short five Jan ’12 $15 calls which are above $5 and you advised me this was the time to roll.  what do you think – go to the 20s next year or something else?  I hold the stock and am short the Jan ’12 $15 puts.  thanks. 

  145.  PHil, you recently wrote: Good time to adjust.  I’d sell 2 March $305 puts for $3 and roll the callers up to the March $345 callers for +$6 and buy a July $370 for $19.25.  That gives you a .78 delta plus the puts to the callers’ $1.10 but a good time advantage and you can wait them out.  If they STILL go up, then you have to roll the April callers back and roll them up again.  Down is fine as long as AAPL holds $300, which they sure should. 
    You mention "Down is fine" though I was wondering if I should lighten up on the Apr and Jul 370 calls. They are both down and likely to stay down unless AAPL bounces back to 345+.

  146. JRW / CASH  I’ll defer to Phil and you on technicals and I hope you’re right.  But, as I said in an earlier post, sht term I think it will take an external ‘event’ to trigger the correction (eg Irish default), given the pomo/gang of 12 manipulation and control.  Medium term, cost inflation and the trashing of the US consumer / citizen will bring the mkt back to reality (Rosie has that right).  But, as Phil has warned, this ponzi could still run a while yet.

  147. Phil / HMY – I’m down 20% now in twenty long august ’11 $10 calls and ten short jan ’12 $10 puts.  I’ve already rolled the calls once.  just sit it out or adjust?  thanks.  

  148. tuska

    All I’m saying is that if we’re going to have a sudden 7.5% move in the market, it’s more likely down than up !!

    Besides, it’s nice to get a good nights sleep  8-)

  149. Phil:
    In my non IRA,bought GE at $15.18 and sold 2012 $17.50 C at $1.52 for net of $13.68. GE now at $19.86 and C at $ $3.19 for net of $$16.67. Considered converting a vertical,but not sure with your concerns about  market decline.Any suggestions? than k you. 

  150. ravalos/ss adjustment:
    Within the same month, but I don’t decrease the spread and I don’t take money out of my pocket. Let’s say I have AAPL March 270/390 and then AAPL heads down. My delta is becoming positive, abs value of gamma increasing, my margin hit becomes unbalanced towards the put side, and the 270 put is getting closer to the money.
    I can alleviate this by flipping some number of 270 puts to calls – 390 or even higher strike. I can sell a different number of calls than I buy of the 270 puts. I do it so that the trade is a credit (including commission.)

  151. JRWIII
    Interesting article on the subject of the worse case scenario. There is irrational and then there exists really irrational! Let’s hope it’s neither.

  152.  Phil -
    What do you think about getting short gold here considering it has dropped along with the dollar

  153. ravalos/ss:
    There are other ways of adjusting w/o taking $ out of your pocket – e.g, roll down some puts and pay for it by rolling down calls. You can just roll puts and pay for it by selling more than you buy back (doubling down is a special case), but then you’re increasing the number of contracts you’re committed to honoring. Or various combinations of the above, etc. Depends on what people are paying for options and what your risk comfort is.

  154.  Phil
    USD is down almost 1% and yet the NAS, RUT are down, and Dow, S&P are slightly up – is the connection between the $ and the market broken?

  155. ISRG/Rav – How many months in the past year did ISRG NOT move $30?  That’s your risk…

    Indicators/Shadow – Right this minute they are food rioting in Algiers but not a word about it on CNBC.  Not a little riot – people are dead.  

    Does anyone realize that GE lowered guidance?  No, I guess not…In all the companies that reported this week (about 100) I see 9 that raised guidance and 5 that lowered.

    • Monday morning is BOH, HAL, MCD, PETS, SEE, ST, STLD, TWIN and WTFC.  
    • Monday evening  (highlights):  AXP, AMGN, CSX, ETH, STM, TXN, VMW, ZION
    • Tuesday morning (all highlights now): MMM, AKS, ALK, BHI, BLK, EAT, CNI, COH, GLW, DD, EMC, HOG, JNJ, KEY, KMB, ERIC, BTU, DGX, RF, SHW, TLAB, TRV, X, VZ, WAT, WFT, GWW
    • Tuesday evening: ALTR, BXP, CBT, ,ELY, DV, GILD, IBKC, JNPR, NSC, RFMD, SYK, YHOO

    You get the idea – busy, busy next week with plenty of consumer stocks to possibly upset the applecart.  

    QID/Drum – Tempting but it’s been so long since we did anything but flatline into the close.  Note this is 2,700 on the Nas on the button and 1,285 on S&P – pretty powerful lines.  I’m surprised at the Dow though but they have 45 more minutes to pin it.  

    BCS/Mike – That’s why the Gang of 12 has an international membership.  BCS, CS, DB and Nomura all help out the US Banksters.  

    Cash/Tusca – I’m still favoring about 75% cash, 2/3 is fine if you are hedged in buy/writes but you must be able to ride out a 20% drop and be happy to DD on your positions on a 40% drop – hard to do if you are 50% invested.  If we fail our Breakout 2 levels, then you need to be ready to slap yourself delta neutral ASAP.  

    China/DC – To some extent the argument could be made (and I think Trump made it above) that WE hold all the cards with China – just none of the balls!   I’m sure you know the saying that if you owe your banker $100,000 then you’d better be worried but if you owe your banker $100M, then HE better be worried.  That is very, very true.  China is way too wrapped up in their "partnership" with the US to extricate themselves if we decide to change the deal on them.  The critical strategic mistake we are making is not demanding more from them and allowing them to build other partnerships and slowly extricate themselves from their ties with us.  

    At a certain point, when losing our partnership becomes less important to them – then they can put the screws to us but, right now, 10% of their population is working to build things we buy and we owe them 50% of their "reserves" and we supply them with food and materials and we treat them with "Most Favored Nation" status even though they are in clear violation of half the clauses.  We could shut them down tomorrow and it would impact us far less than the 2008 crash did but it would wipe China out very quickly.  America is like a bully that just got beat up for the first time, now we’re scared of everything and, if we don’t get it together soon, all the kids we used to pick on will begin to attack…

    HMY/Amatta – Well not looking good for the May spread so the question is, is it worth putting money in to chase or just wait to see if we get a $10 assignment (which would be just fine) in 2012.  I’d roll the May $13s out to the Aug $10s for $1.50 as that buys $1 of intrinsic plus 3 more months but then you want to have a gold hedge if it’s a significant position as I think gold is still going down to $1,150 and that should take HMY even lower.  

    GE/Terra – Yeah the $15s aren’t doing you any good, are they.  You can pick up $1.40 rolling the puts to the 2013 $17.50 puts and you can buy the 2013 $20 calls for $2.40, so +$1 so far and then you can roll the 2012 $15 caller ($5.10) to 2x the 2012 $17.50 calls ($3.15) and that puts $1.20 back in your pocket so the whole thing is a net .20 credit and you add the $20 leaps and push your callers up $2.50 where they still give you good protection and they can, in turn be rolled out to 2013 if GE starts to look solid over $21.

  156.  JRW — What could go wrong, playing hardball with China as we did with Japan in the ’30s?  I dunno, Japan invaded China, maybe we could get China to invade Japan, that might not work out badly.

  157. Phil,
    Well, I just closed out 100 contracts of AAPL Jan 330 Calls @ $0.04 which i bought at 11:30 @ $1.50. These option guys (the ones who actually write them) are flying this magnificent  $305 B Corporation like a twenty year veteran on a Jumbo Super Heavy! You have to admire the crooked bastards. But nice to play the game with them sometimes

  158. Well, the last 4 hours were a waste; 4% on the day, have a good weekend all !!

  159. phal,
    sur be nice to hav fare foxx spel cheak worke on this webb sight !

  160.  well this expiration wraps up a nasty 6 months for me. 
    Now that they’ve pinned things through expiration Monday gets really interesting. With the exception of POMO there is nothing keeping this market from going down 10% and the remaining high-flyers to take their respective 25-30% crushes.

  161. Highlander – I hope you mean you sold them for $1.50! 

  162.  AAPL/Ajay – Oh I thought we were playing mystery stock there until the end!  I’m all for taking your highest delta calls off the table and trying to get delta neutral on the coverage (you have a theta advantage so let that be your gain).  You don’t want to expose yourself too much to the upside as the 2nd worse thing that we could imagine happening to AAPL (he’s not dead yet) has happened and that didn’t stop them so betting against them is not likely to be a clever play.  

    Ponzi/Tusca – What you need to consider is how low the dollar can go.  It’s very tough to hold it down once they get to the mid 70s because your international premise has to be that Europe and Japan look safer than the US.  That sentiment might work for a week or two but something usually happens to screw that up.  

    HMY/Terra – August is a long way and as long as you REALLY want to own them for $10 – they’re at $11 so you aren’t behind at all UNLESS you change your mind cash out.  

    GE/Dflam – Let’s get through next week without a flash crash before getting all aggressive.  

    Volume finally comes in and down we go!  

    Good one DC! 

    Gold/Samz – The same things that make us think the dollar will pop are also things that will chase people into gold short-term.  All the rioting has a lot of top 1%’ers in Europe and Asia hoarding gold and making a lot of trips to open safety deposit banks in foreign countries (great for PCLN!).  I was talking to someone down in Florida who was telling me that women are routinely moving $500,000 worth of jewelry on a trip and that can go up to $1M+ with diamonds.  

    Wow, that was a very interesting mixed close.    RUT 773 – wherefore art thou Russell 8-0-0?

    Have a great weekend everyone! 

    - Phil

  163. Have a great weekend guys! You too Phil! Crazy week to say the least!

  164.  And these AAPL 330 calls were $10.00 2 days ago… That was a week for Apple!

  165. st jean,
    Good point! Yes, I did short them!

  166. The Oil Cartel might put out a hit on this Tim Evans guy from Citigroup if he keeps refuting their data.

  167.  Dollar/Yshen – I think the break is a mounting desperation to support the markets against tremendous downward pressure.  I think the Dollar IS supporting the markets and our markets would look like the $XEU examples in the multi-chart if it weren’t for the collapsing dollar and notice, priced in Euros – we just broke below the red 50 dma mark with a weak finish at the end.  At this point, the more the Euro goes down, the worse our market looks to half the money in the World.  How long can we ignore that? 

    AAPL/High – Wow, next time you have the urge to blow $15K like that, call me and we’ll go to Vegas!  

    Spell check/High – Chrome spelling works fine.  

    "With the exception of POMO"/BDC – That’s a pretty big exception!  

    AAPL/High – Oh you shorted them?  Well, good man!  In that case you can take me to Vegas! 8-)

    Evans/RJ – Thanks, that says it quite nicely:


    Other analysts have pointed out that thanks to new investments in supply, the difference between what the world can produce and what it actually consumes is about 5 million barrels a day. That’s much higher than the 1-million-barrel-a-day margin seen in 2008, when oil hit a record $147 a barrel.
    Those analysts argue that there is no supply problem, and the rising prices are instead due to rising interest in crude oil as an investment.
    "Demand is not outpacing supply in the physical market," said Tim Evans, a futures analyst at Citigroup. "Demand is outpacing supply in the paper market, in the futures market."
    Evans said supply growth actually outpaced demand growth in 2010, and noted that oil inventories are still above average, an indication that OPEC production caps are not restricting supply.
    "The market focus is on how much more they can bleed consumers," said Evans, not on what price is needed to ensure an adequate supply in the future.


  168. highlander
    Carpel tunnel. I had my left hand repaired after a month and it was an instant fix. My right hand I waited 6 or 8 months and when I gave in it took 9 months to improve. Age and injury make a difference. My self and Arlyn were involved in  horrific accidents, the steering wheel caused it, she has been suffering since April, wears a brace most of the time and is maybe 10 lbs overweight. BTW I had to have both shoulders fixed and my left elbow fixed for pinched nerves and other injuries. I was canceled on private insurance 3 times and if they take away medicare I will buy an outragious sports car right before going to the hospital until they can take my house before I die. Another newsbite not on CNBC is medicare has lowered the pay so low that the docs and hospitals refuse, I was refused a colonoscopy because medicare pays $300, not enough to keep the doors open. They have aready nailed spending cuts, don’t pay enough = no cost at all! That stops those blood sucking intitlements, insurance companies already wow by preexisting condition which turned out I needed to put in a claim before I got hurt or it is preexisting! WOW what great fixes. Lets screw the muni-bondholders next!!!!!!!!!!!

  169. Phil
    So over time, we should see some type of equilibrium return to the oil patch? In other words, prices falling to reflect the surplus supply. Or is this the "new way" for the oil patch-where the trading value of the commodity is more important than the value attributed to supply and demand forces?
        "All this is well and official. But how today’s oil prices are really determined is done by a process so opaque only a     handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who     selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”
        With the development of unregulated international derivatives trading in oil futures over the past decade or more, the     way has opened for the present speculative bubble in oil prices.
        Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices     has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”
        A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising     oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of     speculation in the current market has significantly increased prices.”
        What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil     derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing     in ramping oil prices through the roof in recent months. "

  170. I don’t know how they managed to hold the nasdaq to a 14 point loss, with AAPL and GOOG being decimated??

  171. Phil, 
    I closed some of the long term plays that were 70% up in a few months today, really looking for that drop we have been expecting… (well not that drastic just a couple hundred points on the Dow and not much on the RUT so the Condor Play doesn’t suffer, cause that one is really scary at 50 contracts…). In any case, I am looking to replace with some new shorter term plays, one of which is TASR June play that you had recommended at 4.85 selling .95 worth of 5 puts and calls…. You still have faith in this one? 
    My UNG puts expired so I made a little money on it after bailing my 6 calls with a loss. Do you still like UNG for long term play? I was hoping it would finish closer to the $6 line and wait a little so it came down below $6 to buy some $5 calls and sell some puts… but now at $6.40 what do you recommend if anything with them? 
    Thanks and have a very good weekend!

  172. Highlander – it’s friday, after hours, you brought it up and i can’t help it:  it is standard practice among doctors to refuse colonoscopies to any patient they suspect is too full of sh!t. ;-)

  173. Margin allocation by expiration – for fun I pulled my option positions with maintenance requirement into a spreadsheet and sorted and subtotaled by expiration date. Was interesting to see how much was committed to the various dates. April was highest with 34% of total magin available committed. Next was Jan 2013 with 11% (and overall have 63% of option BP committed). It’s interesting to look over, but brought up the question – are there any particular schemes that suggest desired margin allocations when viewed by date? for example, should one not have more than 10% committed to leaps, or working from front month out should one have, say, up to 30%, then 20% then 15% then 10%…etc..  I would be interested to know if there is any existing modeling for this and accompanying theory.   I imagine it would vary greatly by whatever strategy you invested by, but are there any "rules of thumb" here?

  174. dclark
    Your comment is addressed to Phil but I will voice my view on this and other similar issues. My theory is the traders in the pits are acctually some form of representatives of big oil. They are not playing with their money right. GS or whoever are gust agents of someone. Now we must ask who has the money? Answer is the oil producers the Exxons are getting the same per cent commition only on a larger dollar amount = rising profits but not the big money. Exec asked a question today about non-selling of FAS, the banks, and I answered the BOTS controled by the ????? are not selling themselves (yet). The same thing for a different reason, it being they are getting the free money from the FED to buy treasury bonds = more free money as interest. Are they paying off bad debts? no Why loan money at risk when the margin or profit has no risk in treasuries. The fly in their short sightedness is inflation is going to eat up that profit not to mention they loose more by the dollar devaluation. Should they care? yes Do they care? no All they know is big bonuses and anything past arms reach they can’t see anyway because they are extremely short sighted wearing thick glasses or contact lenses to read the monitors written by their lawyers. Do you really think the pentagon is spending over a trillion a year SUPORTING OUR TROUPS? Maybe most goes to General Dynamics, Norton, and the rest including those retired consultant generals who were never in any danger at all. Maybe I’m wrong but nobody has released anything to prove otherwise on these any other serious issues. Now our country is selling out to China, what’s next? The big money is moving and where? no country, too dangerous floating around in the oceans. When the military gets an IOU they are the easy target, those same shortsighted greedy ————-!!!!!!!!!!! Noone is safe eventually.

  175. scottme
     I need that colonoscopy because of polups removed in 2006. It may not be common practice but where I live it is a fact. Do you really think I am full of S____? Wnat to trade places?

  176. shadow – well…i though it was highlander’s comment about himself ergo addressing it to him, but would have cracked the same direct to you or anyone so nothing personal..! just having fun with an obvious slapstick punchline and i do hope you would not have thought it was anything other than a lighthearted joke.  and no, i surely do not want to trade places. My apologies for any consternation.

  177. scottmi
    I don’t take offense but this thought process is a problem. I feel compelled to contribute a view that I’m sure few have a clue esp. on this site. Some think JRW is a fake by Phil but he would have to be superman to do it all. What gets me riled is what I call the blame game the the religious right is the worst offender. The greatest thing about Phil is he backs up everything he says and our conservative members have never backed up anything with fact, I find it ammusing. I will never allow anyone to get it all, but I live in Alta WY and anyone wanting to see proof of what I say come on out. I will show you my modified equipment , the 400 watt OTL tube amp, my scares, my living conditions, my wheelchair car plates and my shadowfax computer that says coolmaster on the case. I will show enough to prove I have outdone most to a point but in my opinion anyone who wants the real deal needs to pay real worth and this stuff is not cheap. Bring your computer and try side by side to get into it or try on my Acer. It will not work! I don’t even understand how they block you out or how to override any of it but you can build your own and the government allows inovation so far.

  178. shadowfax – I don’t know your particular situation but I have been listening to your physical issues here in chat and have a suggestion for you to try yoga. There have been some highly publicized cases where people have gotten completely cured of all their physical as well as mental ailments (depression, anxietly). There is a really popular Yoga teacher in India by the name of Ramdev who had full body paralysis for a number of years and after practicing yoga for only a year or two (am not sure of the exact time) has completely cured himself except for the left lazy eye. Now he is teaching yoga the world over. Unfortunately no documentation of the cases have been kept which is why some people don’t believe it.

    I am certain if you find a good teacher you will get relief. Just my two cents.

  179. nicha
    Can’t afford it and have tried too many snake oils that don’t work. In fact from C1 to L5 I have I think, doctors lie, 8 broken smashed vertibra and polips in my colon. I have been told that C2 to C6 should have been fused but I died on the operating table so the surgen stapled me up, the code blue team revived me 2.5 hours later in unconceivable pain and they are the only ones that really tried. My plan is see if I can get help at MASS GENERAL hospital if I can just get out of WY. Thanks for your concern but very few understand what happened and they refuse to talk for fear of leagal action even though I have offered to relieve them from everything. Medical in America has turned to total BS.

  180. nicha
    I should not post this but don’t care, I offered a $10,000 cash bonuse in advance to just try to a doctor, I will never tell who because he kept the offer confidential and I respect his reasons which I also won’t ever reveil. I do have a liesion on C4 that only —-- cell research might fix, but right now is blocked by those religious right types. Better than cancer!

  181. Shadowfax – I am extremely saddenned about your condition and the failure of the “best country in the world in medicine” to help you. I have a small back problem that causes pain on and off but compared to what you are going thru, life is good here.

    I know you are wary of snake oils but I am going to give it a shot and try to see if someone can help you. No promises but will give it a try.

  182. nicha
    I am going to another sate mostly to help my parents I will not post some things because of privacy conserns but with  care I hope you can help and I will accept any attemps  and I promise a sincere attempt to find relief as I am miserable 99% of the time. Phil’s stock world and interaction is the only thing left and that is why I my last dollars out to develope a system to beat the lazy rip offs. I have no idea how to disect the data I am getting but my hope is eventually  I can share how to beat a now unbeatable situation. I am convinced I can do it because I started with sabre and sent a post on how to fix the 2000 date solution in 1972, it really is that simple, a few lines of code but it is economically unacceptable. American Airlines used to own sabre and now they are made as hell about letting them loose and now they don’t get first option with reservation agents even though they don’t give the best prices. Tough         !!!!!!!!

  183.  Highlander …. that was one ballsy move ….
    The play of the day that I missed …. GOOG puts !    630′s could have been had for as low as 0.25.  Ended the day at $18 !
    625′s as low as 0.05; end of day $12 !
    Damn …. I did sell some ISRG’s 340 calls for 0.50 and 0.30, and rode them to 0, but that’s just lunch money by comparison.

  184. Cap, yes good catches, it hurts when one sees what could have been. You seem to have very good short term trading success and that is what is killing me (following the 1050 during the last month and a half when it has just gone down has not helped at all). 
    Do you have any ones in the crosshairs for next week? The entries are what is tough to pinpoint… 

  185. CLDA gets approval of their antidepressant FWIW.  Next up is OREX.

  186. Pharmboy
    Do you follow  MR or WX  ?

  187. Cap, How do these opex shenanigans work?  It seems like all the action occurs in the 15 minutes after close, and does that mean that Schwab wouldn’t automatically exercise the options if they didn’t go ITM until after the close?  Both Google and Deck show dramatic price drops after hours from what the daily charts show the closings were on Schwab.

  188. qc – both are CROs, where WX has a bit more in the pharma front.  Right now, I am inclined to wait.  WX is an interesting play and they are moving aggressively into the pharma sector.


    Otherwise, I am going to be laying low for the the next few weeks.  As I noted, Pharma is sniffing around everywhere, and I am involved in other things.  I should be around in the early a.m. and after trading hours.  No more positions to add unless something is compelling.

    On another note, I am not very impressed in the action of the small cap Biotech/pharmas.  I think investors/speculators/etc are getting out of the riskier assets now, and thus could be moving for a bigger event in the coming weeks (volume is up on many, while the stock is down).  Hedging, reducing or just getting out with small gains/losses is probably the better way to go. 

    I will keep CRIS 1/2 position, if they hit $3 again, reduce by another 1/2. 

    IMGN, just in the puts for now (FEb 10s), will probably roll down and out. 

    DCTH – I was assigned the $9s today, so selling the $9 calls is the way I will play them if there is a boost this week.  Still have the $8 Feb Ps. 

    NWBO is so small, not much to do. 

    PLX – holding steady as the date is Feb 26.

    GXDX – small position, may buy some front month Ps to protect it.

    ONXX & PDLI -both fine for now.

    IRWD – fine, waiting for them to move down a bit for selling Ps. 


    Most of these are 1/2 to 1/4 positions that I have not added to b’c of Phil’s warnings on a pending sell off.  I have been early at shorting this market, but am starting to build a short position.

  189. amatta:  you used that now forbidden word  "crosshairs"  ;  no one will tolerate such inflammatory and inciting talk on this website…..   just kidding
    did you see earlier this week that CNN talking head apologized for one of his guests using that word; what the hell sort of Alice in Wonderland do we live in?

  190. Good evening all!  I am working on a new TA book (updated) and have posted the first chapter for many of the new members here

  191.  Pharm: 
    That chapter of your TA book is restricted. I have a basic membership and was turned away.

  192.  Pharm – link to TA book does not work.

  193.  amatta … next week ?  not yet.
    rdn4evr …. on stocks like GOOG the only thing that matters is the official closing price.
    Indexes (and options) trade to 4:15, so the 4:15 price (which is often different than the 4pm price) matters.

  194.  1020 – Getting close to kickoff … are you out there somewhere breathing into a paper bag?

  195.  Phil – Dont know if you are checking this posting or the 25k portfolio one. But, got a trade i’m putting together and wanted your advice. You have suggesting some similar trades in the past as a stock replacement strategy for AAPL. 

    Here goes: Buy Jan 2012 300 Calls, Sell Jan 2012 400 calls ; i’m offering net $38 for the call spread (50). Then, sell 10 Jan 340 calls for $55. If AAPL continues down, I would sell another 10 calls for $65. in the first case, it would be $135k net,  breakeven Aapl 327at year end. although i would still get assigned the 1000 shares (thats OK). Max trade value would be 500k at AAPL 400. 

    In the second case, if I could sell a second 10 puts for $65, the net trade cost would be 70k. 

    I decided to use the puts that were basically at the money because their premium is HUGE. I played with other ways. The only restrictions are that I dont want to get assigned more the 2k shares of AAPL. 

    Any one else on this site have any advice? The concept was to play the apple run-up, as i think it will be 380 to 400 by year end, and if not i am comfortable holding it. 

  196. Seattle Times reported today on recent changes in Washington state’s trade with China that suggest serious long-term trouble. 

    China is Washington state’s biggest foreign customer, with a shopping list long dominated by Boeing planes and aerospace parts worth close to $4 billion annually.
    Yet the nature of that trade is subtly changing, reflecting China’s appetite for materials to feed its booming industries.
    What we’re shipping from Seattle to ports such as Shanghai are more raw materials, food and basic commodities, things such as timber, copper and silicon.
    "It looks like we’re a Third World country," said Trade Development Alliance of Greater Seattle President Bill Stafford.