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Monday – Mubarak’s Mood May Move Morning Markets

Is it safe?  

I asked that question at the end of November in "Timid Tuesday – Is It Safe" and here we are, 60 days later and up 7.5% and, on the whole, feeling less safe than we did back then, when the Market Oracle and I seemed to be the only people concerned global inflation and sovereign default risks rising rapidly.  Although we were playing the market bullishly, with our aggressive $10,000 Virtual Portfolio (and make sure you check out our brand new $25,000 Virtual Portfolio that begins today with a $100,000 goal by December 31st) we decided to try to take from $26,000 to $50,000 by Jan 21st (we only made $35,000), our Breakout Defense Plays (5,000% in 5 Trades or Less) and our Secret Santa’s Inflation Hedges – it was with one hand on the exit door at all times.  As I said at the close of Timid Tuesday’s article: "This house of cards is teetering folks – please be careful out there!

That was 60 days ago.  We’re a lot older now and have learned a lot about the World since then.  We learned that China, Japan and the IMF are all ready, willing and able to buy the bonds of various EU nations.  We learned that the Dollar can still fall 5% (was 81.44 on November 30th) further down despite Europe’s very obvious problems and Japan’s MASSIVE 200% Debt to GDP ratio.  We learned that Uncle Ben will never stop printing money (until forced) and we learned that commodities can rise much faster than even our aggressive "Secret Santa" plays anticipated, with every one of our hedges (XHB, XLE, DBA and XLF) already over our year-end targets, all on track for gains well over 100%.  

After watching our Alpha 2 pattern break (as I predicted it would on Monday morning) for the week, we went a lot more bearish on Thursday when I said in that morning post: 

Keep in mind that gold and silver are our defensive plays. In Member Chat yesterday, Jromeha mentioned he’s 80% in cash and 85% short the market on the 20% in play and I said I thought that was an excellent way to play what I felt was a blow-off top after the Fed. We added 2 disaster hedges yesterday, a TZA spread that pays 500% if we get to $17 by April and a QID play looking for a quick 66% if they hit $11 by March. That’s in addition to our very short play on the Dow so we are SHORT in the short-run – DESPITE all the foolishness out of the Fed.

This is what hyperinflation looks like folks – you’re not supposed to pick 4 commodities and make over 100% in 60 days on what were not even particularly risky trade ideas.  If everyone can make this kind of money, what good does it do you as it’s just funny money being spit out by a broken system that will, eventually, become meaningless once that money begins to circulate again and people begin to realize just how much of it there really is flowing around (and how relatively worthless that makes it).  

In this week’s Stock World Weekly, Elliot and Ilene ask if The Bernank has cried "Havoc" and let slip the dogs of hyperinflation:

These are strong words, no question. But on January 5 the Food and Agriculture Organization of the United Nations released a report that shows the “FAO Food Price Index” going from 167 in July 2010 all the way to 215 as of December 2010, an increase of over 25% in just five months. If we accept the International Accounting Standards Board’s definition of hyperinflation as being 26% per annum over three years, then we are arguably seeing the beginnings of genuine hyperinflation, at least in the price of staples such as foodstuffs.  

Many people around the world spend 40% or more of their income on food, so food price increases significantly affect their lives. Many are already struggling with the problems of unresponsive governments, rampant corruption and cronyism, and weak economies.   Skyrocketing food prices may be the proverbial “straw that breaks the camel’s back.” In just three weeks, over one hundred people died in violent riots in Tunisia and over one hundred were reported dead in Egypt, as the regime struggled to maintain control of an unhappy populace.

Look at that chart!  We are PAST the point where they broke the World last time!  Also in Stock World Weekly (You don’t subscribe??? REALLY?), we have this lovely map, giving us a nice visual representation of the RESULTS of these rising food prices with riots, protests and Government troop actions spreading like wildfire across Asia and Africa and knocking right on Europe’s door, much as Genghis Kahn’s army did 800 years ago.  

At the time – I’m sure that the "modern" Europeans of the 13th Centrury never imagined that riotous looters in Asia and the Middle East would ever have an effect on their daily lifestyle but Giovanni de Plano Carpini, the Pope’s envoy to the Mongol Great Khan, traveled through Kiev in February 1246 and wrote:

"They [the Mongols] attacked Rus, where they made great havoc, destroying cities and fortresses and slaughtering men; and they laid siege to Kiev, the capital of Rus; after they had besieged the city for a long time, they took it and put the inhabitants to death. When we were journeying through that land we came across countless skulls and bones of dead men lying about on the ground. Kiev had been a very large and thickly populated town, but now it has been reduced almost to nothing, for there are at the present time scarce two hundred houses there and the inhabitants are kept in complete slavery."

Why then, are the first 3 trade ideas for the $25,000 Virtual Portfolio bullish ones?  Well, as I said to Members in last night’s Alert, at the opening of the Asian markets (we have Members all over the World, of course): "It’s a busy data week (see Stock World Weekly) with tons of earnings. Not too much to be made of the early trading other than to say that it doesn’t look like anyone is panicking but we’re not hitting Egypt’s sphere of influence yet so it’s up to Europe to carry the ball in a few hours." 

Well, here we are, a few hours later (8 actually) and Europe did just what we wished on Friday that the markets would do today – a sharp spike down at the open to test our 2.5% lines (FTSE and CAC) and bouncing back sharply.  That was all it took for the Hang Seng to get a nice "stick save" into the close, jumping up 150 points right on the EU open (3am), almost as if there was some kind of program that triggered a buy on all the international markets simultaneously – AMAZING!  At the same time (coincidence I’m sure) the dollar got mugged and fell from 78.3 all the way down to 77.8 – something we used to call an amazing move in the currency markets for a week but what we now call — Monday morning.  

So, why do we make bullish bets when it looks like the New World Order is hanging by a thread?  Because we’re not stupid!  We know it’s a joke of a fixed market so we play the very funny fixed-market game and you can argue and say the markets aren’t fixed and this is all a great coincidence but our premise that the markets are fixed and our actions based on that premise seem to work out pretty darned well so we’ll stick with that theory thank you – until the evidence no longer fits our assumptions.  Which could be a while the way things are looking…

I was going over the news and data this weekend and wondering why "THEY" would want to be jacking up commodities this weekend with Egypt on fire and many other nations reaching the boiling point.  We figure "THEY" are the Gang of 12 (GS, MS, JPM, DB, CS, etc – picture by Elaine at working hand in hand with their top 1% clients and their pet Governments so why would they want this level of instability to the point were they jacked oil back to $90 on Friday, up 5% in a single day?  

Could they WANT violent revolution?  Could they WANT political instability?  Could they want war, starvation and death?  Wow, you really do need a history lesson if you think they don’t!  That’s where you make all the money people!  Chaos, instability, panics, market distortions – it’s a party to the IBanks!  While we reserve the right to morally condemn them for their actions – we certainly aren’t going to bet against them and, as I cautioned in Wednesday’s post, where I noted that the Government/Gang of 12 plan was to screw the bottom 99%:  

In conclusion – you’d better be out there making an assload of money because you’ll need it to keep up with rising prices for things you buy and declining values of your US assets. We aren’t going to be able to afford to retire/run away to the Caymans if we have to count on US dollars to support us unless we have an obscene amount of them!  

It’s only 3 trading days later – I haven’t changed my mind about that.  It’s all going according to plan, even though the plan is HORRIFYING and it’s up to you to choose whether to play the hand that is being dealt, or watch from the sidelines while monkeys with a dartboard can rack up trades that make them 100% in 60 days while the dollars you keep "safe" in your bank or tied up in Dollar-denominated assets, drop another 5% in the next 60  days.  

We remain nimble and ready to go either way.  Friday we went, as planned, very short in the morning with QID and TZA plays in the Morning Alert to Members (also published for free on Seeking Alpha as we didn’t want our readers to get burned by the drop) that are obviously already doing well but we cashed out our short-term DIA puts, kept our long-term ones, took a long play on F (buying the F’ing dips!), a short one on NFLX (we’re with you Whitney!), a long on IWM (selling this weekly puts – very aggressive) and added/reiterated an EDZ hedge so we’re playing both sides and not ashamed of it!  

It’s going to be a crazy week – be careful out there.  

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  1.  Happy Monday everyone.
    Y’all gonna love this one (but not as much as me) !
    Those short NFLX 215 calls I (we) sold on Friday afternoon.
    Well, I refused to cover into the ramp and take assignment.  We talked about how BS the ramp was to max out the calls and kill all weekly puts.
    Then on Saturday, we get some news about AMZN competing w/ NFLX.   Just the catalyst we need.
    I check me accounts Sat and Sunday … and …. no assignment.
    Then this morning … assignment in one account.   I cover below 215.
    Still nothing in my other accounts.
    Finally at 8:30, assignments hit the other accounts.  I immediately cover below 214.   Profit over $1 on the assignment.
    Very rare …
    Somedays the house beats you, and somedays you CRUSH THE HOUSE !!
    ROFL !
    (got lucky of course – but we knew NFLX was ridiculous at these levels)

  2. Phil, question reg your $25,000 portfolio first suggestions… I’m seeing them for the first time (Basic member), so they may have been up for some time and maybe I’m missing something. It’s an hour before Monday opening, but looking at the XLF $16 March 2011 calls, they are not $1.40 as you write, but .67 so I am assuming that you really meant to buy the $15 calls, which ARE around $1.40 (but you said to offer $1.00).  Can you clarify – did you mean to suggest the $16 callers no matter what they cost, or did you mean the $15 callers? 

  3. @Cap
    Your "heart soars like a hawk". 

  4.  That was a $4 turnaround as the calls close $3 in the money.

  5.  Oooh; now they are pumping NFLX back up … 215 now

  6.  Futures this morning:
    Moody’s downgrades the Egyptian debt because of political risks – these guys, one week late and one notch short!
    The dollar is below the 78 line… Danger! The euro has been bouncing between 1.36 and 1.37 for the last week. Gold is down on what? Fears that the Egyptian looters will flood the market with stolen gold! And oil is stable despite the unrest in Egypt – at least 30% of the world oil transits through the Suez canal.

  7. if people think the muaslim brotherhood is going to back the moderates past gettimg the present government out, they are buying into MSM bs.

    those guys are going to make a move at so,e point and it is going to get ugly fast.

  8. For those wanting to keep up with the 25K portfolio, I have created a spreadsheet here.  Please bookmark it and I will do my best to keep it up to date.

    Congrats to those in DEPO, those bull call spreads or $7.5 calls are gonna be nice.  I will most likely buy some stock as well as sell puts along the way, much like we did with QCOR and JAZZ last year.  This stock should be in the mid-teens in the next few months, if ABT does not take them out entirely.

  9. Great idea Pharm, thanks!

  10. phil can you cut and paste bounce levels please

  11.  Pharm, what do you think of SNY giving the poor showing of their drug trial last week?  I have a Buy/Write position on them with a small profit(after last week’s pullback), and am wondering if I should take it down or ride it out.

  12. Sam – read this….should be able to calculate from there.  On the SPX, we are sitting on 1276.

  13. Morning Pharm – for those who weren’t in the bathroom on Fri at 11:47 :) would you recommend an entry early this morning? that’s in DEPO.

  14. Pharm – Will you change the prices for C and XLF once we see at what price we fill this morning? These prices were Phil’s target I believe. 

  15. DEPO Sept 7.5/10 BCS for 1.10 or better.  Selling the 7.50 Ps for 1.50 or better puts one in for a 40c credit on the 2.50 spread.

  16.  Keeping open that NFLX short. Lets see the action throughout the day. 

  17. OREX getting pumped into PDUFA…..Oh that one is gonna fall down hard if it gets rejected….

  18.  Pharm  -  
    Are those official $25KP entries in your spreadsheet?  If so, when did Phil post them?

  19. stj – I am using the prices listed and leaving in the sheet OPEN POSITION.  I will see if it gets filled and will note fill date.

  20.  wow; should have stayed short those NFLX shares !!
    oh well; I was happy to cover those… still short bunches of calls.

  21.  Interesting that AMZN is down also

  22. Thanks for the spreadsheet Pharm, but can u specify whether we are long or short in the position?

  23.  Now they are killing the NFLX weekly calls !

  24. acd – yesterdays 25K post at the end of the article.

  25.  Pharm – thanks

  26. Good morning!  

    I’m not feeling it to the upside.  They should have been able to do much better than this on an opening pump so I’d take money and run on short-term bullish plays like IWM from Friday but they can be re-played off $77.50, using that line as a stop.  

    To the upside, we need to retake our main breakout quintet of:  

    To the downside, we’re expecting strong support at S&P 1,267.50 and IWM $77.50, which is about 775 on the Russell.  If that breaks down, big sign of trouble.  

    Also signaling trouble would be Dow Transports, now 5,012, failing 5,000 and XLF failing $16 and VIX over 20 – all big signs of instability.  Copper is over $4.42 so technically bullish but oil can’t hold $90 and makes a nice short below that line.  

    USO Feb $37 calls can be sold for $1.30 and that’s about .90 of premium and the March $36 puts are also a nice play at $1.05 but note that USO is not yet ridiculously high enough for me to want to make it a $25KP play – maybe on Wednesday’s inventory or if Egypt gets worse.

    I did the 5% levels on Friday and we determined that the key bounce levels we expect to test today are Dow 11,865 and S&P 1,284 – anything less than that is nothing more than a weak bounce off the dip.  Keep that in mind! 

    Reprinting my 12:52 comment from Member Chat: 


    On the DIA, we fell from 119.80 to 118.00 so $1.80 down and we look for a 20% retrace (.36) to $118.36, which should be Dow 11,865 so that’s what I mean by a weak bounce on the 5% rule (for day-trading purposes).  Moving on to the SPY, which is generally more predictable, we closed yesterday at 1,299.54 so we give it 1,300 and then we calculate:
    1.25% = 1,284, bounce to 1,287
    2.5% = 1,267.5, bounce to 1,274
    So the zone between 1,274 and 1,287 should have strong support and 1,274 is the key breakdown while 1,287 is the key recovery point.  Anything below that line is a weak bounce and closing down there is a strong indicator we follow-through to the downside.  Unfortunately – anything during the day between those two points is a pretty easy slide other than a "speed bumps" at 1,284 (where the S&P is trying to test now).  
    With the 5% rule, we expect each point of resistance to get stronger and stronger the further the index drops without a retrace with 2.5%, 5%, 10% and 20% being so powerful that their 20% retrace lines are significant resistance, even before they are crossed on the way down.  That would be 1,274 for S&P.  


    We’ll be watching those levels closely today but, as I said, I’m just not feeling it!  

    Also note there was a typo in the $25KP, now corrected and it’s the March $15 calls we want for $1 on XLF, not $16s.  The $15s are now $1.44 so not too likely we get them.  

    Now, let’s have some fun! 

  27.  Bad news out of INTC !  heads up

  28.  Interesting. INTC halted. They had a chip design error. Revised estimates to reflect impact of fix. Still halted.

  29. MEE: not sure I understand your point: "There’s not  much you can do on a buy-out other than wait it out as it crushes your long premium (because the price is set now).  This is why I developed the buy/write strategy, it actually benefits from a buyout."
    In a buy/write – stock + same price straddle – the short call would now be deep ITM – so the rise in stock price likely would be offset by the rise in premium on the short call. I had a synthetic buy/write with LEAPs replacing stock and buying an additional 1X LEAPs.
    I presume that the stock price only moving to $63 when the buyout is valued at $69 represents risk of the deal not closing.
    If I roll my 35 Jan 12 short call to a 55 Jan call (cost to roll at about $11.50 but getting $20 difference in strikes) if the deal does close mid-year 2011, will the $35 Jan 13 long call be netted out against the $55 Jan 13 short call for a net credit of $20 – or is it not that simple.
    Sorry for questioning your logic, but as synthetic buy/writes are critical to my strategy I want to make sure I am not deluding myself.

  30. Where is the link to the 25KP? I don’t see it.

  31. Volume surprisingly low – just 21.5M on Dow at 9:50.  Certainly not getting any panic selling.  

    NFLX/Cap – Nice job.  They are hanging tough so far.  

    $25KP/Jerconn – Right, thanks. It was the $15s.  

    Soars like a hawk/Flips – Sure, haven’t you heard Cap’s theme song?  

    Futures/StJ – On the whole, I think this all falls apart on the FOREX.  "THEY" can’t keep the Dollar down if the OPEC boys start to panic.  They are doing an amazing job (and they includes The Bernank here) of trashing the Dollar so far – better than I thought they could but if the Royal Families and Dictatorships of OPEC begin to stock up their safe houses around the World, there will be a huge demand for dollars that local TradeBots cannot keep a lid on.  The Dollar has always been my main bearish premise and now would be a funny time to abandon it.  

    Speaking of looters – I hope that we’ve learned our lesson from Iraq and put beaucoup guards at the Egyptian museums.  It would be a real shame for another 5,000 year-old civilization to lose half it’s artifacts overnight and it will be sad to once again see a bunch of Government morons standing around saying "Wow, we didn’t think they would loot the National Museum."  

    $25KP/Pharm – Thanks, that’s great!  Let Elliott and Ilene know too as they were planning on doing something to track it.  

    Food/StJ – Very bad, isn’t it?  

    IWM WEEKLY $77 calls at $1.21, expecting move back over $77.50, out if it doesn’t happen by 10:15.

  32. Sorry, Phil the above comment was for you and your reply from yesterday.

  33. make – you should be able to clic on the Phil tab at PSW home screen

  34.  selling some NFLX weekly 225 calls now (would have liked to get higher prices but did not jump at the open)

  35. I am a new member, great site I only wish it was little easy to follow, for exmple the new $25KP is there a tab or some place in the site that I can go and see the positions without reading three pages? in the intrest of time.

  36.  Too many spikes in the futures markets. Market is edgy.

  37. DEPO trade working out very nicely, thanks Pharm!  

    C, XLF/Morx – OK, you may be missing the point there.  If we don’t get that fill price – there is no trade!  

    INTC – Still stopped and CNBC mum on the issue so the Nas is a good short here (IWM calls are dead): SQQQ Feb  $28 calls at $1.70, hopefully a nice pop and we can sell the $29 calls, now $1.30, for more and have a free $1 spread.  Of course if there’s a big move and you make more than .50 on the calls fast, there’s no point doing the spread.  

  38. Phil / $    Don’t the Opec countries already hold most of their reserves in $, so I don’t see how diverting the reserves offshore, in anticipation of ouster, boosts the dollar?

  39. Phil
    this is the first time i will be following you in a portfolio.   just to be clear on the three trades, i put the orders on at your prices an then wait ?  
    currently i am waiting on all three trades at the prices you quoted.  based on pharma’s spreadsheet i missed the .65 SPWRA trade  would you sell at the current price of .57?

  40.  Cap/NFLX, I had rolled my $215s from last week to this week’s $225s.. working great so far :)

  41. Phil / Gold   I"m short gold.  How do you feel about ZSL to short silver, targeting $25.   Also, PNC looks cheap relative to other banks with good prospects of a dividend raise?

  42. Pharmboy-- how do  I get your spreadsheet. thx

  43. Getting burned on the NFLX $200 weekly puts from last week @ $1.55.  The cost to roll to the $210s is about $2.25.  This still the best option?

  44. gucci,
    There is a link in his post
    For those wanting to keep up with the 25K portfolio, I have created a spreadsheet here.

  45.  NFLX – Let me just summarize, to make sure i’m not missing anything. NFLX goes up $7 on friday on no news. Over the weekend we hear that one of the biggest and richest internet companies in the world, with a highly trafficked site, will set up a cheaper streaming video alternative to NFLX. Details to be announced soon. In response, NFLX is down $3.80. 

    What sense does this make? I wouldnt expect shorts to cover here and drive the price back up, and absent that I cant think of who would be buying here. Oh well. I guess not everything makes sense. 

    Meanwhile, still short AMZN with the Feb 180 puts, little premium, so good profit potential on the continued downside trend.

  46.  This will be a nice chance to buy INTC, by the way.  Problem not big enough to really hurt them but should get a nice knee-jerk sell-off. 

    MEE/Winston – Well if the deal has a stock component then there is arbitrage on the forward price of the merged stock.  Yes to the net on the roll but you have to check with your broker to see how they handle it.  Also, why would you accept $11.50 for a $15 roll when the money is a virtual sure thing?  You are just throwing $3.50 out the window to get $11.50 now, that’s a pretty expensive loan to make yourself.  

    $25KP/Make – You can usually find Portfolio-related articles on our Main Page (and if it’s by me, you can click the tab that says "Phil" above) or by clicking the "Portfolio" button on the top of this page if it’s been categorized there (usually, a few days after publication).  Not to mention that pretty much every time I say $25KP in the main post, it includes a link to it.  

    And what Morx said. 

    NFLX – $25KP: That play from Friday landed us in the $210 weekly puts at net $3.45 ($1.55 entry on the $200 puts and $1.90 for the roll).  Those puts opened at $4.50 and are now back to $2.90 so it shows how much you have to keep on your toes with these guys.  In the $25KP, I want to make an official entry of 4 at $2.50 and that’s only good for today as this one is too volatile to leave overnight unless we’re pretty sure.  

    Unfortunately, our other tries at C, XLF and SPWRA are all missing as the boys are getting away from us.  

    INTC – $25KP – 10 Feb $21 calls at .47 ($470). 

  47. PHILL,
    you are moving markets. Just look at those SPWRA puts !!

  48. It really is interesting watching the Bots.  As soon as the volume slows, they take over and push it up.  It’s really silly trying to fight them.

  49. 25KP / Pharm – Thks for the spreadsheet. A couple of things, the C calls should be $4.50 strike not $4, and do you think you could specify there if the position is long or short?

  50. I’m just not getting how they can be slamming the dollar this hard.  Is this the weak-hand "flush"’ you were talking about? or do all these pesky world riots mean that they need to trash the dollar into smithereens by next week to keep a lid on things?

  51.  Welcome/Rrahbar – Yes, Pharmboy is keeping a spreadsheet and no, you do have to read the whole post – it’s part of our whole brain-washing thing we do here to make you learn something when you trade!  Once the main post is written, most updates are in comments like the one above and those are collected periodically and put under the main post so we can keep track of them.  

    Dollars/Tusca- They get a lot of dollars and divest into a lot of metals as well as Euros and Yen but, historically, when they panic, the dollar goes up fast.  Of course it is contrary to their interests as collectors of dollars so maybe that explains the big move in the Euro today ($1.356 to 1.373).  

    SPWRA/Willie – Ah you are right, those did hit .65!  Sure, the point isn’t to make every trade, there will be over 100 of them this year easily. Each one should stand on it’s own merit so if you miss one, you can catch the next one.  Or, you could just be patient because who’s to say they don’t come back to .65 again.  The only way you’ll learn that you don’t need to chase things it to take a leap of faith and not chase things.  No, I would not sell for .57 because it costs money to make the trade and if you pay your commission and pay another .08 – what’s the point?  Don’t work for your broker – work for yourself.  Wait for deals that are as good or better than what you were looking for and you will do as good or better than you would have done otherwise.  

    ZSL/Tusca – Very interesting.  I like how they held up since $9.65  at the beginning of the year.  I don’t think I’d short silver this week though but if they get back to $10, I would like to get in myself.

    NFLX/JMiles – I’d offer the $1.90 we got it for. 

    NFLX/Hanna – Don’t worry, they are trying hard to hold it up but it’s not working.  

    SPWRA/Urmana – Yes, I have to be careful to pick things that are fairly liquid. 

    Poor Pharm – this is why I hate keeping spreadsheets!   8-)

  52. 25K/Pharm, Nice job on 25K> How often do you update it? I see 2 new trades. Thanks

  53. We posted an article over the weekend titled  " Basics of Credit Spreads and Iron Condors" on the "Income Trader" section. We are encouraging everyone following our trades to take sometime to read the article.


  54. Phil / MEE – I am getting close – just one point for clarification: You said
    MEE/Winston – Well if the deal has a stock component then there is arbitrage on the forward price of the merged stock.  Yes to the net on the roll but you have to check with your broker to see how they handle it.  Also, why would you accept $11.50 for a $15 roll when the money is a virtual sure thing?  You are just throwing $3.50 out the window to get $11.50 now, that’s a pretty expensive loan to make yourself. 
    Why is the money a sure thing? 20 $30 long 2013 calls – are offset by 10 $ $35 short 2012 calls (so the max gain on this is $5), and the other 10 are offset by 10 $55 short February 2011 calls (so the max gain on this is $35).

  55. Phil $25KP Questions:
    On the C, XLF and SPWRA I don’t have fills.  Would you place those purchase orders as a GTC or Day order only?
    The NFLX trade is purchase of 4 $210 weekly puts, right?

  56. Phil,
    With the INTC Feb 21 calls:
    I am unable to constantly monitor the trades on here.  Would you suggest setting a stop to sell once a 20% profit is attained?

  57. Phil, I got filled on SPWRA Feb. $13.00 puts for $0.69.

  58. Sorry, it’s $0.65 for SPWRA puts.

  59. Phil, quick question just to make sure I don’t do or not do something stupid here. 
    MEE: I have some Jan 12 $30 short puts originally sold for $7.00.   Now seem to be running at around $.70.   Would you recommend doing anything with this position? 

  60.  Very confused by this action:

    1. Would expect some sort of a flight to safety, with dollar strength. 
    2. Would expect a drop in TBT as a result. 
    3. Why is the market up?
    Conclusion : DIA puts, and TBT puts. Both ATM, now, for a daytrade.

  61. Phil / MEE correction. Typo – it should read max gain $25 not $35
    Why is the money a sure thing? 20 $30 long 2013 calls – are offset by 10 $ $35 short 2012 calls (so the max gain on this is $5), and the other 10 are offset by 10 $55 short February 2011 calls (so the max gain on this is $35).
    Sorry for the confusion

  62. No new posts in 18 minutes. Everything OK in New Jersey?

  63. just a test

  64. Phil,
      In the 25K, are all the recommendations intended to be like this morning’s C and XLF picks, where you either get them at the price you indicated or forget them, or is there a tolerance of a couple cents or percent to allow for market movements from the time of your post to the time we can execute? I got the Feb INTC $21 Calls for .46, for example, which seemed in keeping with the play.

  65. Pharmboy: Thanks for the spread sheet. Its very helpful for people like me who get to check the site only twice a day. It would be very helpful as well, if u can add a column indicating Long/Short as well.

  66. Pharmboy: have you heard anything about  a penny stock called Advanced Cell Technologies (ACTC)? Working on something with blindness/macular degeneration? Thanks

  67. Does anyone out there know where I can find historial EUR/USD open, high, low, close, at 1 min intervals in a txt file instead of a chart?
    A friend and I are working on an automated FOREX trading bot.  We have about a year of data at the 5 min interval, but we want more to backtest. 

  68. Sell signals
    Since 11:29 I have seen 3 sell signals and bounced off IWM 78.05 3 times.

  69. Pharm, were you around when phil used to do the spreadsheet?  I give you six months with the spreadsheet.  Anyways, nice work and good pick on depo – just been watching.
    Sold MEE 60 Jan 2013 puts for 10$ for ghetto hedge fund/arbritrage trade.  I don’t think ANR goes down much further and I would be comfortable rolling these puts.  Like i said yesterday – worked well with XOM.

  70. Phil,
    I poked around on the Wiki, but I didn’t see a mechanism for entering commentary, as it seemed geared to ticker symbols. I had the idea to create the ticker BOOK, which I searched and did not get a hit on, although a hungarian company apparently uses it in connection with an online book selling website, and use that as a mechanism for ideas/comments about the book. Would that work out, or would after hours posts, or some other alternative make more sense? Please advise.
    BTW, is there a means of attaching Word or Excel documents to a post, or is the only mechanism via links (I don’t have a site that I can  create links)? You were kind enough to offer to have a look at the mutual funds that are all I can choose from in my Deferred Compensation. I sent them once, but it was late on a Sunday and you probably didn’t see them. While they looked fine after I pasted them from a spreadsheet, upon submission they were all garbled, so it’s probably just as well they weren’t seen, although I’m sure your response would have been entertaining! 

  71. Phil: Can see only 6 posts in the last 30 minutes.. Help! I Think I got stuck in some computer back water, reclassified to basic membership or whatever.
    Would Cap, Rav or someone post me to see if I can read you? Thanks.

  72. SPY BOTS
    They watch us, I post they buy to prove me wrong!

  73.  Dolllar flush/RDN – I think so.  There’s no logic to selling off the dollar from here.  It’s not like Europe or Asia seem particularly strong and I don’t see Congress approving new  spending and Bernanke seems to be out of ammo for the moment (other than ongoing POMO).  

    Thanks Income Trader – Nice job!

    MEE/Winston – I’m talking about rolling your calls higher, not the callers.  Yes, you want to push them higher but you have no reason to take a $15 loss if position for $11.50. 

    $25KP/Danosu – ONLY if you get your entry price.  Same on NFLX, ONLY if we can get the $210 weekly puts for $2.50 TODAY! You need to get used to NOT getting things.

    Oops, Brent Crude broke $100 – that put our oil over $90 and this is very dangerous to the Global economy.  Notice it came AFTER EU trading finished.  EU markets finished pretty flat in the end.

    INTC/Danosu – Yes, if you can’t watch something, then take 20% and run or at least set a trailing stop to lock profits.  

    SPWRA/Bob – Good job.

    MEE/Leon – If you need the margin, no point in waiting but, if not, then why give up the extra .70?  

    18 minutes/Jbur – Fine over here, just busy reading and stuff. 

    Tolerance/Kevin – That’s an individual decision but I will not count a trade unless we hit our marks.  If I intend the mark to be flexible, I will say so.  As a rule of thumb, I’m willing to give up 5% if I really want something but usually not more.  If you think of the implications of giving up 5% on each end of each trade you’ll see why that’s a bad plan.   If find that, 9 out of 10 times, you are better off waiting patiently than chasing.  INTC calls, now .44, case in point. 

    Book/Kevin – Please remind me after hours and I will hook up with you and Kwan and we can get something rolling on that. Thanks!  You can send that Fund stuff to Greg and I’ll be happy to take a look but best to do on a weekend, when I actually have time.  

  74.  Jbur – not so many posts. i think you can see all of them. dont worry. think we’re all just waiting for something to happen…

  75. Phew! Thanks.

  76. Posts/Jbur – I’m not seeing any kind of delays.  Try logging out and back in.   

  77. Phil,
    What’s up with these 12:00 moves everyday?

  78. Anyone,
    Sorry for a dumb Q
    In the 25K, are we BUYING the INTC Feb 21 calls for $0.47?
    I thought so, but not sure…

  79. Seriously, we have major uncertainty EVERYWHERE and the dollar is down!!!? Such BS.

  80. Verry strong Pivot level at 78.39
    I don’t have a strength number like JRW but it comes up multiple ways between 78.38 and 78.40.

  81. Maya1/INTC, yes, it’s buying the INTC 21 call for $0.47.  I got them for $0.43. at 11:33am.

  82. Phil
    You think it’s a good use of margin to sell MEE puts?

  83.  Wow. What a strong market!

  84. IWM 80.65, 79.71, 79.35, 78.71, 78.39, 78.08, 77.50, 76.76,75.49 74.00

  85. Phil, is it time to DD on USO Feb 37 calls? it’s $1.96/$1.97 now.  Thanks

  86. Will NFLX close up for the day? Say What?!!>!?
    Why is the market so strong now? POMO? Egypt ;~)

  87.  Phil,  
    Do you think oil continues to rise from here?  What is the next resistance level?  It makes no sense that it would go up so much when Egypt is not one of the major suppliers of oil.  I also like how CNBC is constantly saying that OPEC will have to pump more oil out to help bring the price down.  I might have it wrong but isn’t it Goldman and their merry band of thieves speculating oil higher?

  88. Is there a target for the INTC calls for this month in 25kP? Or we put a stop when we get 20% profit a let it ride?

  89. Holy cow, oil at $91.50 now.  They are really going for it.  Meanwhile, the Dow is up 60 as if nothing is wrong while oil is spiking like the World is ending.  Will be interesting to see how this resolves.   Meanwhile, nat gas just fell from $4.46 to 4.31 (3.3%) since the open – no logic at all to this action.  

    12:00 /Exec – Like the 5% rule, the random selection of times by many, many people ends up being one big move at key times of day.  12 is pretty obvious.  

    INTC/Maya – Yes, buying. 

    Damn, should have given those IWMs more time!  

    MEE/QC – Sure if it’s a reasonable pay-off.  MEE was way underpriced anyway.  

    USO/Bob – No, you don’t want to press something that goes so harshly against you when your upside risk is unlimited.  The put side is another matter and it is tempting to DD on the March $36 puts at .60 (now .70) as we can always sell weekly $37 puts for .10 or the $38 puts for .30 and use that to roll up a notch (the March $37 puts are $1.02).  

    QID suddenly waking up.  Think how ridiculous it is when the dollar drops and the rates we pay to borrow money in dollars stays low.  It’s like some idiot will keep buying TBills in a declining currency at virtually zero interest forever.  Oh wait, we do have an idiot like that…

  90. For all following the spreadsheet….link it….I will update as much as I can.  If it is a call it will say C, put will be P, look at the date for a long/short on the timing.  I will use Pair if there is a pair trade, STO means sell to open…….  Otherwise, U’d better keep on URself.  SPWRA did fill at 65c this morning. 

    Jo, oh yeah, I was here and remember well….might be a disaster! 


  91. Keep waiting for oil to pull back a bit so I can buy for the push into close but it’s not happening…. Kicking myself for cancelling my buy order at 88.70 this morning…. Not sure what I was thinking….  I guess I was thinking that b/c everyone thinks oil is going to go up b/c of this mess that the bots would tank it…. That’s how mixed up they got me…Often I second guess my second guesses! arghhhhhhhhhhhhhhhh…… Missed a 3$+ move…

  92. Phil idoit
    Carefull Blankfien got a big raise!

  93. Pharm 
    I appreciate your effort on the spreadsheet  is there any help i or the board can give ?  i suspect it is difficult to catch every post .   

  94. Hello Phil, Several weeks ago I bought OSK (on your recommendation). The stock moved from 31.25 to 38.20. Is this already a time to sell, or it makes sense to hold? They announced earnings on Friday pre-market (beat on earnings, improved margins but missed on revs and provided a gloomy 2011 outlook).

  95. will – thx.  if it gets too much, then I will let all know.  I am here most of the day, and will update by days end. 


    Meanwhile….GENZ and SNY agree to some terms.  Stock (and our short Ps sold are doing well). 

  96. Phil / Cash   I’m stuck in cash.  Everything I consider buying looks expensive relative to our growth prospects.  Speaking of patience,  I don’t know if I’m the cat or the mouse.  We have (commodity inflation excluded) virtually no growth, 20% unemployment, UK double dipping, guaranteed austerity, China et al tightening, ME tensions building, housing dd, middle class/working class consumers squeezed globally.
    It’s all about how long the Bernanke can fuel the mkts (and who could really stop him?).  So far it’s been dumb to bet against him.  What could overwhelm Ben’s trillions $ check book?  Gov’t stats are fabricated, otherwise inflation and employment stats would have spooked the mkts by now.  I’m thinking though that the rising unemployment in the public sector and the consumer pullback in face in forced spending on necessities like gasoline and food could signal a serious negative read on US  consumer discretionery spending ahead.  Will the unemployment stats begin the slide on Friday? (or will they fudge the #’s again?). 
    What’s out there that could overwhelm Bens check book which is underpinning stocks and Treasuries?  And when?
    Consumer discretionary shorts?:  Supermarkets (margin erosion, volume decreases), dept stores, clothing chains, restaurants, travel and vacation (though the rich may underpin?), etc?

  97. phil
    bounce:     i see the bounce level you calculated for the S&P is right on.  I show 1287.17 for high on S&P  i just hope we break through.  Nice Job. :)

  98. Shadow, 
    What is the pivot point on the IWM, a resistance? Thanks

  99. Phil
    Good morning
    What do you think of selling the weekly $16 puts AND calls for $0.31 each?
    Worst case, on Feb 4, I own F at net $15.38. Down from their high of $18 from two weeks ago!
    If it stays above $15, make $0.62 in 4 days.
    Can buy stock if it starts to go above $16

  100. Monday’s economic calendar:
    12:00 PM Fed’s Lockhart speaks to Miami Dade College
    3:00 PM USDA Ag. Prices

    At the open: Dow +0.22% to 11850. S&P +0.27% to 1280. Nasdaq +0.29% to 2695.
    Treasurys: 30-year -0.31%. 10-yr -0.05%. 5-yr +0.01%.
    Commodities: Crude -0.68% to $88.73. Gold -1.18% to $1325.90.
    Currencies: Euro +0.7% vs. dollar. Yen +0.11%. Pound +0.38%.

    10:00 AM On the hour: Dow +0.09%. 10-yr -0.04%. Euro +0.73% vs. dollar. Crude -0.49% to $88.90. Gold -0.97% to $1328.70. 

    11:00 AM On the hour: Dow +0.33%. 10-yr -0.01%. Euro +0.78% vs. dollar. Crude +0.32% to $89.63. Gold -0.82% to $1330.70.

    11:11 AM The Fed buys $7.72B in Treasurys maturing 2013-2014, of $37.238B offered by dealers, in a permanent open market operation. Monetization watch: Nearly $3.7B of that went to a single CUSIP issued just a few weeks ago. Bonds stay lower: 10-year Tsy yield +0.03 to 3.345%.

    12:00 PM On the hour: Dow +0.26%. 10-yr -0.05%. Euro +0.75% vs. dollar. Crude +1.41% to $90.60. Gold -0.66% to $1332.80. 

    1:00 PM On the hour: Dow +0.43%. 10-yr -0.25%. Euro +0.67% vs. dollar. Crude +2.53% to $91.60. Gold -0.34% to $1337.10.

    Dec. Personal Income and Outlays: +0.4% in-line with expected, +0.3% prior. Personal spending +0.7% vs. +0.5% expected, +0.4% prior. PCE core price index 0% vs. +0.1% expected, +0.1% prior. 

    Chicago PMI: 68.8 vs. 64.5 expected, 66.8 prior. Employment 64.1 vs. 58.4 prior. New orders 75.7 vs. 68.7 prior. Prices paid 81.7 vs. 78 prior. 

    Texas-area manufacturing holds steady, with the Dallas Fed’s production index at zero (unchanged output from December) after four months of growth. General business activity slips to 11 from 16, company outlook down to 13 from 17, but new orders up to 13 from 11. All future activity indexes rose this month.

    Dollar-killer of the day:  Atlanta Fed President Dennis Lockhart: Economic expansion’s got momentum and should prove sustainable – but let’s not overstate it, Fed accommodation should continue. Expects gradual firming of underlying inflation through this year and next.

    With 40% of Q4 results in, revenue growth has shown surprising strength: As of Friday, about 72% of S&P 500 companies had beaten analysts’ revenue estimates, up from an average of 56% since the start of 2009. It’s an important shift from the robust profit gains and lagging revenues that marked the initial phase of the recovery.

    Oh yeah, things are just great: Shipping lines are canceling trips to U.S. ports as inflation in China is pricing many of its goods too high for Western buyers. A continuation of the trend is likely to ease the $275B trade imbalance, but a slowdown in trade is rarely good news for any economy. 

    Todd Harrison reboots an article from 3 1/2 years ago as a reminder that the risk today isn’t Egypt any more than it was American Home Mortgage in the summer of 2007. The risk is contagion.

    Egypt and Tunisia are the first of a new era of global food revolutions that expose the weak grip of authoritarian regimes in poor countries that import grain, Ambrose Evans-Pritchard writes. Middle East rulers must get "ahead of the curve" or face similar uprisings, Pimco’s Mohamed El-Erian tells CNBC; many countries are buying up grain as fast as they can.

    "Go long agriculture and water and go to the beach," says BlackRock CEO Larry Fink, "put those investments in the bottom drawer for 10 years." Noting Israel’s recent gas discovery, Fink believes energy will be less profitable. "They’re finding lots of ways to find new energy." PHO +0.9%

    Loose monetary policy and trade imbalances are worse now than at the start of the crisis, Barrie Wilkinson warns, but his is a lone voice of dissent among Davos optimists. He fears that banks, unwilling to accept lower returns on equity resulting from higher capital requirements, may fuel a new bubble by chasing high returns in commodities or emerging markets.

    Brent crude hits the $100/barrel mark for the first time since Oct. 1, 2008, another indicator of growing global demand. The IEA expects emerging-market consumption to drive a 1.6% global increase this year. Meanwhile, NYMEX futures are up 2.5% to $91.68.

    Home inventories keep swelling, as with seized homes unoccupied, the U.S. home-vacancy rate rose to 2.7% last quarter, the Census Bureau reports. The share of people who own their homes has dropped to a 10-year low of 66.5%.

    Disappointing December sales have forced Wal-Mart (WMT -1.3%) to take drastic steps to clear stores and warehouses of excess goods, according to NY Post. Wal-Mart is hitting up vendors for cash to offset the cost of markdowns in a bid to shore up Q4 earnings, the report says, and is canceling or asking for discounts on later orders until older stuff is sold.

    The WTO formally rules that billions in subsidies to Boeing (BA) were illegal, fleshing out its interim report from September. Combined with a similar ruling against Airbus (EADSY.PK), it likely presages a negotiated settlement between the U.S. and EU. 

    Intel (INTC) says it identified a chipset design error, and is implementing a solution. The chip issue will reduce Q1 revenue by ~$300M, but the company is still raising its Q1 revenue guidance to $11.3B-12.1B vs $11.46B consensus and up from $11.1B-11.9B prior guidance. (PR

    Borders (BGP -10.2%) will delay January payments to some third-parties, as the cash-strapped company tries to preserve liquidity. The move comes despite Borders’ success last week in securing a commitment for a conditional $550M credit line from GE Capital (GE). 

    Chrysler reports a 2010 net loss of $652M, mostly because of $1.2B of interest charges on its debt. Its Q4 loss widened to $199M, and it burned through $1B in cash during the quarter as it launched new vehicles. Looking ahead, Chrysler sees a net profit of $200M-500M for the year. 

    The fate of Research in Motion’s (RIMM -0.2%) BlackBerry data service in India is unclear after the firm failed to comply with a government deadline to let it monitor encrypted corporate emails. India cites security reasons for its demand – but RIM says it lacks the technological capacity to comply.

    Phone-hacking claims from at least seven pending lawsuits from celebrities against one of Rupert Murdoch’s tabloids threaten to tarnish News Corp. (NWS) just as it seeks U.K. government approval for the purchase of BSkyB. The charges are "poisonous" and may show that "the Murdochs aren’t in charge of their empire,” a media institute director says. 

    Three lunchtime reads:
    1) Room for Debate: Was the financial crisis avoidable?
    2) Icahn: Shareholders benefit from my activism
    3) The China domino

  101. VIX just took a plunge.

  102. Phil – there are now 400k+ oil contracts for March, assuming we get a peaceful resolution to this Egypt thing, when are these a**holes going to have to roll their contracts? Around the 15th?

  103. z401
    Phil’s 12.87 is correct but watch my recalculated IWM 78.43 and DOW 1284, I don’t trust today’s action!

  104. Pharm/ NUVA – do you still like that Jan 2012 $25/35 bull call spread?  it’s up about $1.40 from where you recommended it but still looks okay at $3.50ish if I can get it at that level.   

  105. Hi Phil,
    SINA up nearly 5$ today In one play I have Jan 12 75 c long and Jun 11 65 c short The deltas do not play well the Jan 12 long has a delta of .70 as the short now has a delya of .87 At this stage I am holding the balance with a Jun 11 60 short put. Actual positions Jan12 75c bought for 9.10 now 21.25 short Jun11 65c sold for 9.01 now 22.60 due to delta lagging one $ behind Jun 60p sold for 6.88 now 1.72 What change do I have to make thks

  106. Pharmboy"/C
    $25 k spreadsheet shows C calls at $4 instead of $4.50

  107. z401
    Dow 12,884, tremmors and typing don’t mix well.

  108.  Phil, what should the plan be for the POT Feb 175 callers in case POT continues to run up? Roll to 1.5X 180 callers for even, roll out to March, or sell some puts maybe? I presume it’s too early to adjust right now, but just wanted to make sure the suggested adjustment does not get out of hand.

  109. dlfam – thx. Updated.

    Luv NUVA….so yes if you can get it.  Spreads are wide.  Selling Ps along the way is also VERY nice.

  110. I am DD on my SVNT play for 95c (original 1.80).  Again, spreads are wide, so just let it sit.  Jan13 $10/15 BCS.  Selling the Jan13 $10 Ps will reduce costs further.

  111. How do I find 25K spreadsheet?

  112. Hi all, just checking in.

    IWM floor for today seems to be 78.05 now, and resistance at 78.81 (then 79.10, an 18 strength) !!

    Good hunting !!

  113. $25KP – phil, for the official NFLX of 4 weekly $210 puts at 2.50, our entry is to be buying or selling these at $2.50?  i was assuming a sell at 2.50 but I see from friday’s play you said you like to buy these….
    price is currently at $2.00 and dropping, not clear on this.  not in it at the moment.

  114. Phil – do you like treasury futures or TLT here ? Seems like they should bounce going into close considering there will be a "million man march" in egypt tomorrow?

  115. scottmi/NFLX, it’s BUY 4 NFLX weekly $210 puts.  I got in for $2.39.

  116. The reason we keep on getting screwed by the banks from Barry’s site:
    Barry’s summary:

    I guess I need to spell this out evenmore
    -When the Bush administration rescued Fannie and Freedie, they stopped their lobbying.
    -When the Bush administration rescued  C/BAC/JPM/MER/GS/MS they did not stop their lobbying.
    That was the decision that administration made — they could have imposed the Lobbying restrictions as a condition of the bailouts. There was window then, and that window is now closed.
    The result? The full force and fury of the bank lobby was brought to bear on the reform efforts, effectively neutering them.
    As was noted in comments, the Bush administration is the gift that keeps on giving . . .

  117. TBT at the magic $39 mark again.  Money flying out of Bonds but maybe heading into the markets.  We’re over 11,865 and 1,284 at the moment and everyone is acting like Egypt is "fixed" except, of course,  NYMEX traders and the 1M people who are marching in Egypt tomorrow.  MADNESS! 

    USO is at $38.62 and oil is right on the $92 mark.  The Feb $37 calls are $2.13 and the March $36 puts are .70 and I still have faith in both (short on the calls) but the march tomorrow may turn violent and that would send oil way up.  A peaceful protest could let the air out of the balloon very fast.  

    NFLX/$25KP – The weekly $210 puts hit our $2.50 mark, now $2.35.  I’m very bearishly encouraged by the lack of move in the Nas in general.

    Oil/Rustle – Over $90 is a free ride to $100 if they can hold $90.  $100 is a total global catastrophe so I have to assume they can’t hold $90 but you never know.   Egypt controls the Suez canal and pretty much all of the oil goes through there, that’s why this is a big deal although the connection between riots in Cairo and shutting down a canal are tenuous.  

    INTC/Obur – Our targets are always to make 20%.  If I don’t think we can make 20% I don’t bother but I do think we can do better on the $21s as they were .66 this morning and .86 on Friday so I don’t see why we can’t get back to .60 on a bounce, which is about a 30% gain.

    Regrets/Jrom – Yeah, still wish we would have grabbed USO off Friday’s open but now it’s way higher than it should be, up from $85.10 in early Friday trading is almost 10% in 2 days.

    Blankfien/Shadow – That salary is meaningless in terms of his total comp.  I can’t believe he would even bother putting the spotlight on himself for another Million but it shows you what kind of guy he is. 

    Great slide show and interactives on the protests in the WSJ

    OSK/Alik – It depends what you were looking for.  It’s up more than 20%, which is a lot for a stock but they had strong earnings and are in a good recovery spot.    They don’t pay a dividend but, if you are willing to stick with them they you can sell the stock for $38.25, buy the 2012 $35/40 bull call spread for $2.50 and sell the 2012 $30 puts for $2.25 so you are taking your very quick 20% profits, leaving just .25 on the table with $4.75 of additional upside and the worst thing they can do to you is give you the stock again at net $30.25.

    Cash/Tusca – Yeah that’s getting scary with the dollar on the 77.50 line today.  The Dollar is the only thing that can undo all of this pumping but you can see from my news post that Lockhart stepped up and said "MORE FREE MONEY" to make sure no one had any reason to fear that runaway commodity prices and runaway markets were going to make the Fed stop the madness.  Also, note that PCE core prices showed no growth in December.  I had many derogatory things to say about that but I was literally so sickened by that BS that I couldn’t bring myself to comment on it so I just left it alone but it’s a very sad joke that our government can tell us that there was no inflation in December while the whole planet is falling apart, isn’t it?

    1,287/Z4 – Oh thanks, I was wondering why 1,284 fell so easily but I got mixed up, that was resistance on the way down but not the main one!  Too many numbers in my head I guess. 

    F/Maya – They are pretty volatile but as long as you’re willing to own to cover then why not? 

    VIX/Rain – Sure why not?  After all – what is there to worry about? 

    Oil rolls/Jrom – usually it’s the week before expiration so yeah, around the 15th but if they’re under 250K by then, they’ve got it under control so you have to watch and wait.  

  118.  vic55
    see Pharmboy’s 9:09 post for link to spreadsheet

  119.  ok, let’s confound the SPY Bots:
    BUY BUY BUY NFLX, Its going to $220 today !

  120. usd testing 78

  121. vic55 and others
    If you would just scroll thru each  days comments from the beginning many of these questions will be answered (:

  122. Abby Joseph Cohen
     @clusterstock A Goldman Partner Explains The Value Goldman Sachs Is Adding To Society 

  123. Oil is testing that $92 resistance line… Closed at $91.92 on 1/12, the high for 2011! 

  124. SINA/Yodi – Well it’s a very bearish play isn’t it?  Why would you be surprised to be hurt by a move up?  You burned all the benefits of the Short put already and their delta is just .11.  Doesn’t matter though, you were in for a net credit of $6.79 and now the trade is a net credit of $3.10 so you’re still ahead and the trade is not working so just give the $3.10 back and walk away or kill the spread (pay $1.35) and wait for the putter to expire and you’re up $5.44 – not bad. When you take a spread like that you are limiting your downside risk and limiting your upside gains so don’t go feeling all cheated when the stock jumps $20 and you only make $5. 

    POT/Mampcs – Depends on the VIX and stuff but yes, too early and they make a great short here but I’d wait for $180 to go after them again.  

    Welcome back JRW!  

    FSLR moving up nicely.  Can’t wait to short them again!  

    NFLX/Scott – I’m generally assuming people playing the $25KP don’t have margin so there will pretty much never be naked sales and, if there were, I’d be talking about the margin requirements (as with the short put play on SPWRA).  So the NFLX were BUYING 4 puts for $2.50, even better at $2! 

    And what Bob said!  

    TLT/Jrom – As a short.  If violence erupts in Egypt, gold and the dollar will fly, not good for TLT, nor is TBT over $39.  Treasury is desperately trying to hold that $90 line and not doing a great job of it overall. 

    Good quote StJ. 

    Cohen/Cap – I can’t even look at that right now, I’m sure I would go off on a major rage…

  125.  Phil, i bought SKX Apr $20 Calls a few weeks ago for $2.45, now $2.25.  It hit $22 and now has fallen back to $20.92.  How do you like selling the Feb $20 puts for .65?

  126.  Phil, 
    Is your feeling we get a stick or a drop into the close? Markets don’t like uncertainty so you would assume a drop into tommorrow’s march no? And a spike in oil into the close? So perhaps waiting for the USO play. BTW the Feb 37 calls hit a hi of 1.87, not sure where you got the 2.13? 

  127. But intraday high for Oil in 2011 is $92.58 on 1/3. Looks we are gunning for that!

  128. Shadow,
    Is the Pivot point you refer to a Resistance? It looks like it hit it and its hovering there now. You expect it to turn back down from here?

  129. Phil
    My comment wasn’t just the salary but His bonus was something like $58 mil for 3 months.
    Thank god JRW checked in with 2 levels to fine tune mine I was off .o1% on the upper level and exactly .4% on the lower meaning I judged direction wrong by his .2%, IT WAS A SUPPORT NOT RESISTANCE!
    Thanks JRW!

  130.  Let’s try again … BUY NFLX BUY NFLX  wooooooo
    Phil / ya gotta read the abby jo piece

  131.  ravalos … you & I are gonna make that baby an ATM machine … every damn week !

  132. The new normal – British pound goes up 200 pips since this morning, the euro goes up 140 pips then retraces 80 pips back! These are crazy mofo moves in Forex! In the futures market, a 200 pips move in the British pound is a 50% profit on margin! Nuts…

  133. This from Jason Goepfert at Sentiment Trader:  91% of gains in 2010 came on the first day of the new month; 61% of the whole rally was due to gap up openings on the first day of the month or, in other words, after about 12 seconds of trading. 

  134. $25KP – Phil, thank you for the clarification of NFLX and general intention!

  135. amatta
    I calculated 78.43 as a key pivot S or R point which it is holding below so far. I bought IWM 78 puts, now up to 22,802 contracts today. The BOTS continue to spy on PSW or so it seems.

  136. Well that felt like a blow-off top to the day to me with oil blasting to $92.70 into the NYMEX close and XLE testing $73.  

    XLE $71 puts are .65, were $2 last Monday. 

    SKX/Raj –  Sure, I like them at that net ($19.35).  Buying calls is a suckers game there, just sell the puts when they dip. 

  137.  Cap/NFLX, I’m with you on that!

  138. amatta
    I have a sell level at 78.08 on the 1 minute chart, I was closer than I thought to JRW’s 78.05 but made a bunch of post mistakes because I have them on 2 charts now instead of only the 3 min. I agree with his 78.81 top and 78.05 bottom.

  139.  Phil, do you plan to DD on the INTC call ?

  140. Close/Amatta – I’m thinking drop.  Do you want to let things ride with 1M Egyptians taking to the streets tomorrow?  That’s the kind of thing that can set of a world-wide string of incidents.  On USO, I guess either TOS is ripping me off or you are looking at the weeklies.  

    You’re getting there Shadow.  

    Cap – Hopefully – BYE NFLX BYE BYE NFLX!  I promise to read Abby later but I need to keep my head in the game at the moment.  

    Forex/StJ – This is VERY, VERY unstable action.  Not the kind of action you usually get in a market rally.  More like what you see when things are about to get very, very bad.  

    First day/Fortep – I think that expectation is holding us up today.  

    Krugman losing it:  

    Raising rates now would be a huge mistake, and the Fed and ECB must resist external pressure to do the wrong thing, Paul Krugman writes. "Yes, commodity prices are up," he says, "but that’s no reason to perpetuate mass unemployment. To paraphrase William Jennings Bryan, we must not crucify our economies upon a cross of rubber."

    Chicago PMI up so much I question the entire report or maybe the economy is just the best it’s been in 23 years – hard to tell….


    That’s Illinois, you know, the state that’s pretty much in shut-down mode at the moment…

  141.  Shadow, 
    OK I see, thanks… It looks like it was a good resistance point. It sure feels like we are heading down now..

  142. My lower sell is IWM77.50, 2 charts was a mistake for sure.

  143. Sold half those 78 puts at $1.67

  144. Phil/Anyone,
    If I bought a PFE Feb 18 call for .43, and on Feb. 2 it goes ex-dividend for  a .20 dividend, would the call lose .20 value on the ex-dividend date and be worth .23 – all other things being equal?  Or, is it already baked into the cake?

  145. Wow, remember I mentioned Nat Gas fell off sharply today.  Well they "FIXED" that too:  CME says a technical issue has halted natural gas futures trading, with a reopening planned for 1:45 p.m. At last check: natgas -0.12% to $4.318. (MW)

    Big Deal Court Decision in Spain – Banks should be VERY worried:  In a Friday statement, the rating agency dealt with a recent ruling by a judge in the Spanish province of Navarra, which said that giving a mortgaged house back to a bank is sufficient to cancel mortgage debt, even if the house has negative equity (H/T mh arb). This is rather different to what normally happens in the Spanish system, with banks able to go after the assets of defaulted borrowers for up to 15 years.

    Point, counterpoint:  “Many people … believe that the future road that China takes is like Tunisia," says a Chinese blogger. Gordon Chang writes that the Chinese are losing fear of their leadership who themselves look fearful by trying to censor "Egypt." Could a 3rd Chinese revolution be on the way?.  Evan Osnos has lived in Beijing and Cairo and brushes aside concern that China could be the next Egypt. He notes the sclerotic nature of Egypt where living standards are little improved from 3 decades ago vs. the dizzying and positive change occurring in China – it’s imperfect, but hardly reason to revolt. 

    With cotton prices at 140 year highs, instead of bringing their crop to market, Chinese farmers are storing it, in spare rooms of their houses if need be. Without calling a top, it’s worthwhile to note that nobody hoards at market bottoms. The cotton ETF (BAL) is up 14.7% in January and 148.1% in the last year.

    For gold to keep rising, it may take a weak greenback, inflation fears, or more demand for a safe haven. "We don’t see any of these in 2011," says a strategist from a school of thought that says the yellow metal’s price isn’t justified even considering higher raw material costs overall.

    Newly released data show foreign exchange volumes hitting records in the U.K. and U.S. in the fall, with cross-border investing showing investors increasingly ignoring borders in a search for returns. 

    Banks are "significantly more upbeat" about the quality of loans, according to the Fed’s Senior Loan Officer Survey. "Moderate to large net fractions of banks reported that they expected improvements in delinquency and charge-off rates during 2011 in every major loan category," the Fed says, and banks continue to make it easier for large companies – but not smaller ones – to borrow.

    A Greek newspaper reports the EU, IMF, and ECB have concluded a Greek debt restructuring is inevitable. The plan being discussed would allow a 35% haircut to existing paper, convert the rescue fund loan to 30 year bonds (from 3-7 year), and increase the size of the bailout. FXE +0.5%.

    This happened fast:  The iPad’s (AAPL +0.8%) worldwide tablet market share dropped to 75.3% in Q4, down from 95.5% in Q3, says Strategy Analytics. Contrarily, Google (GOOG -0.1%) Android-based devices in Q4 rose to 21.6% market share, up from a mere 2.3% in Q3. In 2010, 14.8M iPads shipped, and 2.3M Android units – mostly Samsung’s (SSNLF.PK) Galaxy Tab. 

  146.  Oil might have peaked for the day….

  147. Phil /  Chicago PMI bs    Do they only talk to the big cos?  Guess they don’t talk to anyone in construction?

  148.  Nat Gas / Phil – Just as Forex, this was a crazy roller coaster this morning, up $0.13, down $0.16 and now up $0.12. Keep in mind folks, it’s $100 per penny on the futures market for $5400 of margin. $0.41 of swings in one day is 76% on your margin. Someone is printing money or losing the house!

  149. Cramer
    He said buy Micron I bought 12 more gig of micron DDR3 boards last week because the price was down 43% since December and I have run out of working mem a few times, now maxed out at 24 gig, only $150 including an extra heat sink and 2 fans. I say short Micron!

  150. I see another leg down on NFLX is coming.

  151.  Judy, 
    The dividend is unrelated to your call, it will potentially affect the underlying which in turn would affect your calls but not a direct relationship otherwise. 

  152. IWM 78 puts over 24,000 contracts traded today, spying?

    iwm 784  dow 12884  are you saying if we break above iwm 784 we should go to 12884 on the dow?

  154.  BUY NFLX – LOL

  155. Forget selling puts
    Bots sold into some buyers at 14:42!

  156.  On NFLX we get out at $3 ?

  157. 25K:   Phil, I may have missed it; are we holding the nflx puts overnight;  I am up 20%  2.42 to 2.97, don’t want to be an oinker.

  158. I got my 20% for the day on NFLX.  Trying not to be greedy and out.  Hey, this 25K portfolio is fun!  I certainly doubled my salary today.

  159.  INTC/Smala – It’s not a day trade so I’m not inclined to do anything without waiting a day to see what’s up. 

    PFE/Judy – Generally the stock will gap down around the amount of the dividend that is paid as it’s cash out of the company, decreasing the company’s implied value. It’s not an exact science and it depends on how certain a dividend is (PFE’s is very certain) and what percentage of the stock price it is (PFE’s is a relatively large 1% per quarter).  What you should do look up Historical Prices on Yahoo, write down the last dozen dividend dates and see what happened on those days.  

    Oil/StJ – NYMEX done at 2:35, usually not much movement between that and 6pm futures open.  

    Chicago/Tusca – I haven’t looked into it but that’s just ridiculous.  How can any survey in the US come up with those results?  Possibly the fact that they are very big in agriculture trading there and also other commodities somehow skews things as tremendously bullish as prices escalate but that’s A) Giving them the benefit of the doubt and B) Trying to justify what still would be, therefore, a distorted and unreliable market indicator.  

    MU/Shadow – Good point! 

    NFLX – Good chanting Cap! 

    IWM/Shadow  - Not spying, that’s what our guys do sometimes.  

    NFLX/Obur – Not yet, depends on the close.   Again, the $25KP is VERY AGGRESSIVE – if it were an ordinary trade and you make .50 that fast, of course you get out.  

  160. obur/NFLX, I am out on NFLX on $2.90 for nice 20%.  Don’t forget it’s WEEKLY.

  161. Spying
    I post at 14:51 Bots but at 52!

  162.  ObamaCare mandate ruling just came down in FL — Unconstitutional but no injunction against the law.

  163. BOTS Buy at 52 t and y too close together.

  164. Cap
    Unconstitutional doesn’t mean a thing just like billion dollar theft!

  165. Thanks amatta and phil

  166.  Wow the pump job has resumed with a vengeance! Preparing for a suckers finish down…

  167. Hi, Phil,
    Last Friday, I bought NFLX Weekly $200 puts at $1.05, which are expiring end of this week.  They are now about $0.78 or so.  The delta is not as good as the "official" $210 puts.  Do you suggest holding onto my $200 puts, or rolling up to $210 puts or something else?

  168.  NFLX – New article in WSJ:


    Christmas has come early for Netflix bears.
    A weekend blog report fueled talk about‘s plans to launch a streaming-video subscription service to compete with Netflix. According to Engadget, Amazon may launch the service with 5,000 titles free for customers who subscribe to its Prime free-shipping service.
    It’s debatable how successful that will be. It would need far more titles to be a serious rival to Netflix. Moreover, a movie-streaming service is no natural extension for the $79-a-year Prime subscription, which offers free shipping for any Amazon order. Netflix’s streaming service, in contrast, was an obvious complement for a DVD-by-mail rental service.
    That said, the Amazon buzz underlines the threat of serious competition to Netflix. Last week, The Wall Street Journal reported that Hulu, the video-streaming service owned by several entertainment companies, including Journal parent News Corp., is considering launching a virtual cable service. Such a service would offer online access to packages of TV channels similar to those from cable operators, possibly at a lower price.
    Not one mention today on CNBC about AMZN competing with NFLX – something you would think viewers would have an interest in since they usually can’t shut up about either company. 
    Real disposable income increased 0.1 percent in December, compared with an increase of 0.2 percent in November. Real PCE increased 0.4 percent, compared with an increase of 0.2 percent.
    In other words, we’re spending more than we make (again), and when one subtracts out inflation there is no meaningful increase at all in personal income.
    That’s bad. What’s worse is how we’re getting there. Let’s look at the raw numbers:
    Disposable personal income (DPI) — personal income less personal current taxes — increased $47.3 billion.
    There’s the number: $47.3 billion. What did the government borrow and spend in December 0- that is, how much did the government hand out that was not received in taxes?
    Now you can argue all you want over the $47 billion being "good," but in point of fact more than three times as much as borrowed and spent by the government, which went to people and, incidentally, shows up in GDP too — every dime of it.
    As a result, I hope you’ll excuse me if I’m less than impressed with a personal income and outlays number that reflects not only massive government support, but would be in all-on collapse were it not for that support.


  169. I hope this formats right:

    Defense Budget Breakdown for 2011

    Defense-related expenditure 2011 Budget request & Mandatory spending Calculation
    DOD spending $721.3 billion Base budget + “Overseas Contingency Operations”
    FBI counter-terrorism $2.7 billion At least one-third FBI budget.
    International Affairs $10.1–$54.2 billion At minimum, foreign arms sales. At most, entire State budget
    Energy Department, defense-related $20.9 billion  
    Veterans Affairs $66.2 billion  
    Homeland Security $54.7 billion  
    NASA, satellites $3.4–$8.5 billion Between 20% and 50% of NASA’s total budget
    Veterans pensions $58.4 billion  
    Other defense-related mandatory spending $7.5 billion  
    Interest on debt incurred in past wars $114.8–$454.2 billion Between 23% and 91% of total interest
    Total Spending $1.060–$1.449 trillion  




  170.  Phil – From Opt – on those 2.3 Million Samsung Android tablets that supposedly dropped the iPad’s share …
    January 31st, 2011 at 1:32 pm | Permalink  
     When is a tablet sold not actually a tablet sold? When it’s a Galaxy Tab, apparently. As The Wall Street Journal reports, those two million Galaxy Tabs that Samsung reported it had "sold" in the fourth quarter of last year were apparently not actual sales to consumers, but simply sales to distributors (which is a different matter altogether). Even more surprisingly, Samsung’s Lee Young-hee further explained on an earnings call on Friday that so-called "sell-out" sales to customers were actually "quite small," but she wouldn’t provide a specific number. Somewhat confusingly, however, she also later noted that while "sell-out wasn’t as fast as we expected," Samsung still believes that sales to consumers were "quite OK," and that it is "quite optimistic" about 2011.

  171. Phil APU slow moving stock holding B/W originally stock at 40.00 today 50.04 sold 45 caller against it for 1.04 now 5.20 just about all intrinsic value do you think it is worth rolling the same say to march 55 stk pays 5.6% div. On the div I (German) pay the US on LP partners 35% tax no deduction on losses!!

  172. Phil
    Those numbers tell all and again, How do you keep track of all this? 10,000 times multitasking?

  173. Phil / SKX  I’d go slow on selling those puts.  I expect Feb 18th conf call to be bad.  Maybe around B/E for 4th qtr on low shipments due to huge inventory overhang of Shape-ups, lower margins due to huge toning discounting and retailer markdown assistance.  1st qtr will also be a disappointment as up against huge Shape-up comps LY, but retailers still have high stocks. Core fashion athletic down.  Average SKX selling prices down 23% past 4 weeks contributing to a week 30% y/y sales decline.  I see a better rentry at lower stock prices ahead.  On any short term strength maybe opp to buy puts or sell calls.

  174. Chicago, one word…Canada

  175. Could you share ?
    "MU/Shadow – Good point! "

  176. partha
    Excellent post like I have been saying for a month hightech isn’t selling to consumers!

  177. b1ll
    Check post at 2:43.

  178. that 243 post not visible to me   8(    thanks sfox

  179.  Phil,
    theyre trying to nail your levels, right on the spot now with Dow at 1865 and S&P 1284!

  180. phil
    what is the stop loss on the INTC play , and where is the DD ?
    thank you

  181. MU
    Another point I bought the older now slower boards the new ones were down over 50% down last week, selling at $44 under MSR per 4 gig board.

  182. Phil - RE: "This happened fast" @ 2:38 pm:
    Samsung says Galaxy Tab sales to consumers actually ‘quite small’ 

  183. thx Sfox, I trade MU alot  …. try to garner all info about it

  184. OK guys – now we’re screwed – My 10 year-old says "Guess what Dad, New Jersey is broke – we were talking about it in school."  

    Good job Rev! 

    Egypt says they will hold talks with opposition, here’s the rehearsal.  

    NFLX/Cwan – I’d do the roll for $1.90, which is what we rolled for last week.  The $210 puts have a way better chance of getting your money back. 

    NFLX/$25KP – It’s risky but I think we test $210 so I think we hold on overnight.  

    Samsung/Partha – Thanks and thank Opt for good info gathering.  I thought that was a very quick slip for AAPL.  I was just looking at the Samsung yesterday and wasn’t too impressed.  It’s way too thick for one thing.  Maybe I’m just spoiled by my IPad…

    APU/Yodi – Solid dividend payers, no reason to get out, right?  Not clear on if you ever sold the puts or what your basis is or what month the caller is but I’m sure they can be rolled along. 

    Numbers/Shadow – I just follow threads until I come across something worth telling you guys.  As I’m sure you’ve noticed, there’s a lot of stuff going on in my head and having conversations with smart people all day is great as it gets me motivated to look here and there, which I’m pretty good at, and get better and better info.  

    SKX/Tusca – Wow, that’s a big turn-around from you.  You don’t think they’ll hold $20 or just that there will be a better entry? 

    Canada/Kustomz – Good point.

    Cool, someone landed a Cessna on Route 80 in NJ!   I would have enjoyed flying much more if I was allowed to do that…

    Wow, someone hit the BuyBot button at 3:30! 

    INTC/Z4 – The stop loss and DD are to be determined.  Since INTC is stock I would not mind being 10% or even 20% of the Portfolio long-term, I’m not going to get too worried about what happens in 4 hours. 

    Thanks Diamond – Damn, you guys are good!  

  185. Good for another 100 point rally:
    It looks like Egypt’s dissidents got a major boost for their emerging revolution. The Egyptian Army reportedly issued a statement saying it will not crack down on the thousands of protesters, ahead of a planned general strike tomorrow that seeks to put a million Egyptians in the streets. 

  186.  Phil , good pt about CNBC AMZN NFLX   — WTF is up wit dat ?
    BUY NFLX !!

  187.  30 QID April $10 Calls — Keep them into the close of Cover?

  188.  Now, that’s a banking crisis:
    Fraud and mismanagement at Afghanistan’s largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.
    Keep in mind, Afghanistan’s GDP is only $15 billion! This is 6% of GDP. It would be like Citi losing $1 trillion! Go big or go home afghan style…

  189. Wow, I’m on Cokes Xmas list now!  They just sent me their Superbowl commercials and some crap to review.  I can see why writers suck up to these big companies – their PR department offers all sorts of perks…  Maybe I should say something nice about GS and I’ll get a beach house for the summer!  

    What’s up with that/Cap – I do not know.

    QID/ITrade – April?  Sure, they have time. 

    $900M/StJ – Call me when it’s $9Bn.  Less than that isn’t even a blip from our boys. 

    3:00 PM On the hour: Dow +0.25%. 10-yr -0.3%. Euro +0.59% vs. dollar. Crude +3.16% to $92.16. Gold -0.88% to $1329.90.

    An investor buys 108,000 Citigroup (C +1.3%) January $7.50 calls expiring in 2012, Steven Sears reports – noteworthy because it’s the first time "in recent memory" that a major investor has created a significant position that envisions Citigroup trading above $7. Up until now, most of the betting has centered on the stock trading above $5. 

    WSJ‘s latest quarterly survey of housing market conditions finds that prices declined Y/Y in all 28 major metro areas tracked during Q4. Home values dropped most in cities already hit hard, such as Miami, Orlando, Atlanta and Chicago, but price declines also intensified in several markets that had escaped the worst, such as Seattle and Portland.

    Ireland is better positioned than the rest of the euro-periphery for a quick bounce back to growth. Some of the same conditions that led it to become a European Tiger remain in place: a young, well-educated, competitive work force and the lowest corporate tax rates in Europe. IRL +1.3%

    Van Eck suspends creation orders of its Egypt ETF (EGPT) until the country’s stock market resumes trading. Tuesday will mark the third day in a row the Egyptian bourse will be closed. Van Eck will still permit redemptions of EGPT. The lone Egypt ETF is in the midst of a 6% snap-back rally on eight times its normal daily volume. 

    The stock market mostly shrugs off the Egypt-driven surge in oil prices, and the Dow Transports are up. Why? The jump in energy costs could benefit railroads, Dave Kansas observes, since it is usually cheaper to ship by rail than truck when energy prices spike. Today, KSU +2.3%, CSX +1.6%, NSC +1.3%, UNP +0.8%.

  190. superbowl – i heard SKX has an add. Maybe that will boost their sales

  191. Phil – "Maybe I should say something nice about GS and I’ll get a beach house for the summer!"
    LOL … put a good word in for me!

  192. Phil / SKX  I don’t like shorting stocks which trade only a couple of bucks above B/V, since there’s a pschological underpinning.  I don’t know how the mkt will react to the bad news on Feb 18th and they don’t provide guidance, so everyone will be left guessing.  I’m watching their shelf and floor space allocation weekly (been decreasing alarmingly for 6 weeks) as well as the pricing trends on Shape-ups.  No need to rush as Feb 18th gives time.  But, if I don’t see pricing firm up and shelf space/floor space share improve, I will suggest members go short into Feb 18th meeting, either selling calls or buying puts as a sht term trade, as that would mean 1st qtr will also disappoint.
    They have the Kardashian superbowl ad coming for Shape-ups, so I also want to see if that helps them grab shelf space.
    Medium term their growing full margin workshoe business, great kids business and accelerating international business will offer compelling value, hopefully at a lower re-entry point.

  193.  Ah there goes INTC!  I love news trades. 

    SKX/Tusca – I just like them for a long-term hold.  Seem reliable enough around $20 to sell premium at that line but we’ll see. 

    OK< that was lots of fun with the Nasdaq finishing (coincidentally, I’m sure) at exactly 2,700 but the S&P a tad short at 1,286 and who knows what the Dow is thinking at 11,891.  NYSE can’t get 8,200 back yet and RUT 781 is, of course, pathetic.  

    Dollar finishing up at 77.895, copper $4.446, oil $91.87, gold $1,332, silver $27.995, nat gas $4.41 and TBT right on $39 – VERY interesting.  

  194.  Wow, CNBC just reporting that Android/Samsung is kicking AAPL’s ass – what a scam. 

  195. Phil
    Over the weekend when I told my Mom I couldn’t leave Tuesday because I fell down and can’t stand up she asked if I was ever going to a professional football game. She thinks I should add the superbowl to my bucket list, tell them I will start drinking coke and continue for the rest of my life for 1 ticket, the cheapest would be fine as what I want is to hear the noise and feel the excitment, watching is better on TV.

  196. INTC
    I don’t buy the Cramer new sandybridge as more than a name change but their processors are way over AMD and now they have the graphics secrets from NVDA paid for. I did buy 20 INTC 21 C at .47 and felt bad as it went o high 30s but closing at .54 is great. Held half the IWM 78 puts so I expect an open down,1,000,000 protesters, somethig is bound to go wrong, some prisoners still loose.

  197. Shadow, hope your wish comes true and I guess it is all relative. My family had Seahawks season tickets one year (in the cheap seats) and I can tell you, it isn’t as good as watching it on TV(if the reason for going is to watch the game).

  198. I don’t see any new trades for the $25K, so should be up to date.  Lemme know.  Dow up 2.7% for Jan ’11….

  199. jromeha
    I know actual at the game is not as good, I went to the Taladaga stock car race early 80s and all I got was the noise. Was worth it once as was a Yankee, Red Sox baseball game even though I put baseball only above golf and watching cement cure. Thanks

  200. $25KP Update

    OK, day one in the bag an let’s see what happened. 

    In the main post, we were looking for the following and these remain active: 

    • 20 C March $4.50 call for .25 (.30 was day’s low, now .38) – still waiting for fill. 
    • 5 XLF March $15 calls at $1 ($1.44 was day’s low, now $1.54) – not going to happen…
    • 3 SPWRA Feb $13 puts SOLD for .65 (.67 was day’s high) now .54 – on track

    So that’s one of three of our "wish" trades triggered.   That’s fine, we ask for prices we’d LOVE to enter at and if we get one of 3 out of each set, that puts us in one REALLY good entry each time.  I’d rather have one really good entry than chase 3!

    And, from the Monday post:  

    • 4 NFLX Weekly Feb $210 puts at $2.50 ($1.95 was low, $4.50 was high at open), now $2.26 – iffy, tomorrow we’ll be happy with $3 but I am hoping NFLX makes $310, which should be $3.50. 
    • 10 INTC Feb $21 calls at .47 (.35 was low, .70 was high at open), now .54 – I guess we should be happy with .60 unless they blow through it and then we’ll set a .07 trailing stop.

    Not bad for a first day.  I’d say the $195 from SPWRA looks good and INTC seems like it’s not likely to be a loser which means we only have to worry about NFLX so now we make a plan for them other than "gosh I hope it goes up."  

    As they are a weekly, it’s pretty much do or die tomorrow.  It’s a very volatile stock and kudos to those who took .50 and ran today, I wish we had but they didn’t quite get back to $3 after our entry so we stuck it out.  It’s very expensive to roll NFLX to the Febs but we can sell the $210s to someone else for $2.25 and roll to the Feb $205 puts at $4.70 but that’s a – $5 spread x 400 so $2,000 at risk is a bit much so we want to avoid rolling if possible – hence, the take .50 and run strategy tomorrow.  

    Not a bad first day.  It would be nice to get a good win under our belts so we have a little breathing room. 

  201.  GOOG vs BIDU: Bidu had a good report, but here’s some perspective on this company vs GOOG.
    GOOG : Has 37 billion in cash (~105/share). 2011 Est EPS of $34, implies PE of 17.6 ;  2012 Est EPS of $40 implies PE of 15. Revenue of 27 billion this year, so company is trading about 7 x revenue. Growth rate is about 20%. 

    BIDU : Has 1 billion in cash (~3/share). With aggressive growth 2011 Est EPS of 2.60, implies PE of 45 (trailing PE is close to 90). Quarterly revenue was a big beat at 371 million (chuckle). Full year aggressive revenue target lets say is 2 billion, so the company is trading more then 20x forward year revenue. And, keep in mind this is already a 40 billion dollar market cap….not a small company anymore.
    With todays move alone, they add another 3.5 billion to their market cap! Thats 10x the revenue they made this quarter.
    So, whos investing in this thing here? What are we missing?

  202. All haveingcomputer problems like TOS by yourself!
    I have been working with computers since 1972 and for the last 10 to 15 years most problems are caused by in house wireing, not haveing a home run, cate5E or cat6 from your computer modem to the Dblock, where your wires come into your house. If a cable connection not up to RG6/U with a solid copper, not copper coated steel, center conductor. The second most common reason is not enough RAM memory and last would be running less than a duo core 2 gighz processor, but that only slows things down. If your one of them check it or have someone check it out and don’t believe those that say your stuff is good enough and that guy is full of it because they are! Proper wireing makes a huge difference!

  203. Phil, I’ve been itching to get revenge on the Russell after (ignorantly) riding TZA down $10 a share last year… you have a resistance level for the Russell that you believe in?

  204. Phil / Denninger    According to Denninger we’re only getting 1.2% growth last qtr (excluding commod inflat.) and no jobs for a 10% annualized budget deficit.  Having trouble getting my brain around this fundamental disconnect.  Why (who) would any private institution buy 10 year Treasuries which are being used to finance this disasterously inefficient spending outcome?  Surely it must now be clear to our Washington elite that the trillions are not creating jobs (as they’re not addressing our structural decline, trade).  And, with the GOP austerity path, no structural initiatives are possible. 
    22% of the population are surviving on savings and Gov’t transfer payments.  Without food stamps for 50 million we would be Cairo.  Still struggling with the timing for the collapse of this ponzi.  When do savings run out?  When does unemployment benefit extension (finally) end under the GOP?  Will it end?  My sense is that consumer spending will fall off a cliff rather than follow a slow slide, especially as housing prices continue to tank.  A good tell is that the QE2 pump on stocks has not been able to restore the feel good factor to housing.
    The biggest risk is a collapse in consumer spending, then Ben will not be able to support the equity mkts with POMO, as corp profits slide? 
    Second risk is no one but the Fed buying Treasuries.  Can Ben buy enough to keep rates low as the only buyer?  Is this technically possible?  If he can’t and rates soar, the Great Recession morphs quickly into the G Depression.  How can we have massive money creation, which causes global inflation (velocity escape), while maintaining low rates?  Wild card extending the ponzi could be the other corrupt central banks buying each others Treasuries to extend and pretend, thus keeping global rates low, but increasing inflation?
    The call on the extent of Gov’t intervention in capital mkts is now the key investment decision, not fundamentals.  In previous decades I’d have been shorting this mkt like crazy, but now I’m thinking that I’ve got to forget the 10% deficit and it’s source of funding and just count on hyperinflation ahead and buy commodity stocks and guns, while maybe shorting low end consumer discretionary?  I’m just not seeing any political way out of this economic disaster nor any leadership – other than the comment from Trump on stiffing China.

  205.  Tina’s friend made this on Xtranormal about NYC hotels – pretty funny.  

    I’m thinking we should get our whole chat room to work like this.  Maybe in a few years when it’s faster.

    Oh man, that was way too easy, check this out:

  206.  tuscadog- SKX-  appreciate your comments on this one. I was looking around at the displays, etc. in various stores during Christmas shopping season and could not help but note the lack of display space and in a many cases, the displays were is poor shape and / or stuck in a corner. This gave me pause about entering any position but sold a few puts and did OK.  With these retail stocks, sometimes it really pays to just see for oneself. 
    In any event, you are anticipating more negatives on SKX near term – what is your current read on the fitness/shape-ups category? You note there are other categories which offer promise going forward but is the shape-ups category losing its cache?

  207. Computers
    Another thing  happens with proper wireing is when you call your internet provider and tell them you upgraded to whatever, they actually will come out and really fix it because they know THE BIG PROBLEM but will not argue with stupid know it alls!!!!!!!!!!!

  208. pstas / SKX   They pissed off some of the key retail accounts as they tried to clear excess Shape-up inventories into discount channels like Costco, Steinmart etc and crashed the gross margins.  So, they cut their open to buy for SKX and now Reebok has 51% share when 3 months ago SKX had 67% share.  The toning category will remain relevant, but they’ve blown their mkt leadership with stupidity.  The key is watching to see if they can repair pricing and then regain shelf space.  Until we see this you cannot risk buying the stock.

  209. C, etc. / Phil – Better early than never I’ve been holding those Jan 12 7.50′s for awhile. However, I bought early last year before my first PSW subscription so I might have done better with what I’ve learned.

    Also, with all we’re hearing about the billions of aid we give to Egypt each year it’s useful to know that most of it is for military. Last year over $1.5 billion was contributed of which $1.3 billion went to defense. Approximately $40 billion since the 1979 peace treaty. What’s truly inspiring is that the biggest beneficiaries are the US corporations who supply all the hardware. So when we read "Made in USA" on pictures of teargas cannisters or see impoverished Egyptians gazing upward at the jets and attack helicopters buzzing their protests, we can admire the wonderful circular nature of it all. I’d be interested to see how the money flows. Does it ever come under Eqyptian control or does it pass from Treasury directly to the corporate welfare recipients? I’d hate to see any inefficiencies or fraud involved in these  transactions.

  210. tuscadog, I saw a bunch of sketcher’s at Costco yesterday. 

  211. Phil all
    You really need to put that on youtube if you can I still can’t post my charts constructed with etrade pro and other linking wanting URL numbers that I fail to find. Any secrets anyone knows would be greatly appreciated,,thanks. Sorry all, the more my pain goes up the more problems with typping or even pecking or spelling, pain is overwhelming at the top of the charts for those that know them, worse than after surgery. This site is my deversion technique or afew stiff shots!

  212. Phil / Mexico  The ongoing decline in Pemex production, narco gang ascendancy and now corn/wheat price inflation in a poor country is a looming disaster.  How about a short on the Mexican market.  If rising unemployment in the US also closes the border to illegal immigration, remittances will also fall.  Definately a candidate for potential chaos?

  213. Yahoo!
    I was only able to check in after lunch today.  I saw Phil’s reco of INTC Feb $21 calls.  And it was at the day’s low $0.36, I grabbed a few immediately.  I then set a limit order to sell at $0.45, as I had to go to another meeting.
    I just checked back in.  The limit order was filled at $0.45.  20% in a day!  While I was away!
    Thanks Phil!  Sometimes it pays to wait until your recos dipped even further.  8)

  214.  SKX- that is beyond stupid. I had something similar to that happen to me a few years ago. I had developed a sizable market for replacement commercial water filters in restaurants- a great business with good margins and repeat sales. The mfg saw what was happening and came in behind me and sold my customers direct, thus cutting me out . They had the balls to ask me to continue supporting their products but you can guess what my response was. They eventually lost most of the business to competitors. Very tough to get that back once it is gone. We shall see if SKX can pull it off. 

  215. cwan120
    I limit ordered at ..47 and missed the lowest and I know your busy and did well but INTL closed at .54 so if you can watching is always best as I did not this AM being too busy with IWM levels after oversleeping. BTW I was dreaming of escaping the annoying warning buzzing, my cats woke me up the alarm was screaming for 30 minutes, it happens after loosing sleep for 3 days.

  216.  OK, I think we have a winner for the PSW Cartoon Commentator Contest:

  217. SuperBowl / Shadow – If you up for it this might be a good year for you since the stadium will seat about 102,000. I expect prices to come down leading up to the game as many who were priced out earlier and didn’t make travel plans so the scalpers get panicky. On the flip side both teams have religiously devoted followers for whom $3000-$5000 to watch their team in the ultimate game and experience the SuperBowl will seem like a bargain. You could play it like we do every day here, make your travel arrangements with an understanding that you’ll cut your losses as soon as necessary (defer the plane tickets for a later date for a fee or maybe even sell them to someone else trying to get to the game for a profit) and in the meantime work on getting a ticket. The "cheap seats" are going around $2500 and up, and it’s getting close so seems promising for a big drop off depending on how much you’d spend.

  218. This is only a rant but I don’t know anyone that cares. Last year I stoppped taking Cymbalta for pain, ? worked, and depression and started sertraline (spelling on both) This year on Friday they refused to fill because 250mg was too much according to medicare blue RX. My doctor aready ranted about filling out forms for diovan (high blood presure) and last years change because cymbalta was too expensive. BTW we tried many alternatives that didn’t work for HBP that cost $100 doctor visit each, I am going to cold turkey sertraline which my pharmacist say should always be withdrawn slowly. Isn’t our government and insurance great! Now a second president that considers drug wars more important than pain, a vital sign, and paying so little that doctors and hospitals refuse to fix causes because it is not enough to keep the doors open. I should have moved to Canada 4 years ago, I actually have lots of family that moved there in the depression 1930s when my grandfather ran boose in a small boat to feed the family and stay here, never got caught and died 38 years ago. I also went to high school wit a rich kid that was in the mafia sweep a couple weeks ago. Maybe I went the wrong way after my first run in college, should have followed Fred and had pain pills till the biggest bust. What a country, please take my social security disability away so I can get direction on  what to do next, don’t ask what that is!

  219. Phil / Pharmboy

    I’m new to this part of the site. and was late to the 25kp suggested trades , I got filled on the 10 INTC calls but missed the other ones. should I keep the orders open for tomorrow (xlf, nflx, spwra,c) or tomorrow is going to be another game. Pharmboy thank you for the spread sheet…. on your notes you show C and XLF as "Open Positions" do you mean “open orders” because as I understand it they never triggered. thank you.

  220. BTW rant
    For most that don’t know medicare says deppression is a mental heallth problem so they pay 80% of 50% of what the doctors won’t accept because it is too little to keep the doors open when most others don’t pay at all. Never cut the military or stupid drug wars because the rich war machine owners will not make as much llike Belkfien $58 mil for 3 months is cutting it close, instead take my $1,500 a month, not his $20 million per month, not yet, maybe a million protestors in NYC will make a point and what revtod said about arrests at his mission last weekend. YEY USA!

  221. Bootlegging / Shadowfax……not only did your grandfather not get caught, my great-grandmother earned her living running a bar in the Broad Ripple area of Indianapolis, including throughout Prohibition and never had the slightest trouble. However, she was jailed three times – for marching for the vote!

  222. Cn – yes, the C and XLF open positions/orders have not been filled.  I would NOT chase in the 25K unless the prices are better than in the sheet and sometimes not even then.  Just ask.  NFLX is a weekly, so very dangerous.

  223. A well balanced account from an improbable source (El-Erian from Pimp&Co)

  224. CBS evning news
    Oil through the suez cannnal has gone from 1 to 1.8 million barrels per day plus 1.1 mil through a pipe, over $92 per bar. and DOW up 68 pts, obease is going to cause healthcare coost to skyrocket, eat vegtables that Joe 12 pack  won’t stop self medication to afford. Everything is OK in the USA if we just get rid of these lowlife bumbs including me. The fat, the drunk, and the unemployed that refuse to pay ALL the taxes for the rich!

  225. Shadow you’re a smart guy.
     Never give up… or in to despair.

  226. This must be the low point, 2 degrees not dark yet -18 predicted low 25 to 30 mph wind through Wednesday, wind chill under 30 below, less than 4 inches oil in a 1,000 gal tank,, $3.60 per gal oil, $500 min delivery cash only here. I have reserve money but at the current rate out in 2012. I need to make at least 50% on investments this year to hold  level and Idaho  thinks computers can replace teachers, Wyoming thinks the solution is lock them up. The next step is in your neighborhood, GOOD LUCK! The problem in Newark NJ is not less cops but as crime rises the reason will be less cops. I say F    them give the money to the people and watch as before crime goes down, pay games, REVOLUTION! 1,000,000 protesters in NYC and ? in 28 other metropolitan areas and don’t forget the rural guys have guns!

  227. bps2002
    Not being able to take care of my parents is the last straw!

  228. Pharm,
    What do you think of BMY at this level?

  229. More bad news for NFLX:  Canada now has a metered cap of 25 GB for internet usage.  Certain to hurt not only NFLX but all internet users
    Riots in the streets if they try this in the USA   (mobile co’s already do this)

  230. shadowfax:  sounds like things have really hit a low point; i hope that you can get things turned around.   Remember that the best revenge is to live a good life. 

  231. Cap
    Riots in streets are coming, right now I am rolling the dice because I haven”t had any bread or eggs since Friday. I am not close to the worst off and I believe the shit will hit the fan in NYC first, your home town. Wish I could say anything better but I see it I tell it. Hope all goes well for you, BTW I can understannd why you don’t quit smoking, not now, even though I never smoked, MAYBE I SHOULD TAKE IT UP EVEN THOUGH IT COSTS WAY TOOO MUCH. Safety first, god save you!

  232. humveeforme
    A good life is in the past, but I will not give up just to piss anyone off! Hope we meet up next time.

  233. I was friendlly with a Mormon, I know his wife and family are history and left a message to call me, he is a good man as well as a pilot for SWAirlines, but the shit has hit the fan and paying for god has failed, god only knows why but I hope he calls me because we both need someone to talk to, he drove to his former house 30 minutes ago and was turned away never turned off headlights and left, I know he misses his kids!

  234. BMY – wait to see how low they go.  Trend is down, and downgrade police will be in full motion on those earnings.  I would enter by selling some Puts further out JIC U need to roll down.  Jan12 25s are 2.50 or so, and could be rolled 2X to the 22.5s.

  235.  Hang in their Shadow.
    What can we do to help you out ?

  236.  Has anyone played a WTI/Brent spread?  How?  Does it make any sense?  I just located the following.
    "… West Texas Intermediate crude price, on Thursday traded at a record discount of more than $12 to Brent, the North Sea benchmark.
    WTI investors are suffering from its futures contracts too. They are in steep contango, meaning it costs much more to buy oil for delivery further in the future, unlike Brent.
    This is not just a little local difficulty. WTI is the most heavily traded commodity futures, over a third of the S&P GSCI. Brent is only 14 per cent of the index. The WTI discount and contango has a huge effect on oil-tracking exchange-traded funds. The US Oil Fund, for example, is down 8.5 per cent since the start of last year, even as the price of WTI for delivery in a month has risen a tad to $87. Front month Brent futures, by contrast, are up 13.7 per cent to $98 because of their exposure to global demand; Brent ETFs are up as much."

  237. SVNT – Did not fill.  Now we know why they are down…..should bounce back nicely.  This morning Savient Pharmaceuticals said that they would offer $125 million in Senior Convertible notes. The company said that they plan to use the net proceeds to commercialize Krystexxa.


    NSPS – met PIII endpoint.  Shares skyrocket in flight…afternoon delight…


    OREX – still waiting.


    AMRN – will have to look into their compound.  This morning Amarin said that they would be completing the ANCHOR trial ahead of schedule and that Top-line Results are expected to be released in Q2 2011.

  238. Phil – RE: 5:48 pm … ROFLOL!!!

  239. Revenge/Jamb – A dish best served cold.  TZA is one of our disaster hedges.  You can sell the Jan $12 puts for $2.50 and that gives you a net $9.50 entry.  You can use that money to buy a July $14/24 bull call spread for $2.25.  That gives you a $10.25 upside if TZA gets back to $24 (up 60%, down about 20% on Russell) at July expirations and your worst case is it’s assigned to you in January at net $11.75.  

    End game/Tusca – It may not end.  I said years ago that hyperinflation was the only logical solution for US debt.  My objection is to the way they are generating hyperinflation, which is top down, as opposed to bottom up.  Bottom up inflation is job creation through infrastructure building or whatever and then the people put the money to work in the system and we crank everything back up based on demand from the masses.  Top down inflation has speculators betting that the inflation that’s making them feel good will eventually make the little guys feel good (trickle down) and they push prices of commodities up in anticipation of that event.   This can go on for as long as the Fed keeps pumping money into the system and that can go on for as long as people are willing to pretend our currency isn’t a total joke.  

    I said a long time ago – too many wealthy, influential people have too much of their wealth tied up in Dollars to allow the US to fail.  Even Saddam had millions of dollar bills walled up in his home.  I do think we’ll go up and up over time based on inevitable inflation but, short-term, we could have some nasty corrections.  

    "I’d hate to see any inefficiencies or fraud involved in these  transactions."/Tusca – Er, I would then suggest not looking as that’s about the only way you won’t see it! 

    Youtube/Shadow – Working on it.  Just messing around at the moment.  Have a new one for tomorrow’s post:  

    Mexico/Tusca – You can’t even short EGPT when they’re rioting so i’m not sure I want to short Mexico.  Yodi says things are nice there. 

    Nice job on INTC Cwan – that’s just the way to play it.  

    Canada/Shadwow – One of the reasons I’m tempted to head to Europe is to save on health care and college for the girls.  

    $25KP/Cnarbais – Welcome!  No problem, you got the one that’s working!  Don’t worry, there will rarely be a day that goes by without some new trades.  Just make sure you read the $25KP post and comments under the portfolio tab and, of course, what we write in chat every day.  

    Suez/Shadow – 1.8M is less than I thought.  So silly to run up prices on that basis.  

    Brent/ZZ – Brent always trades at a premium but this is a very wide gap ($10). They have ICE over there and ICE makes NYMEX look like saints by comparison!  As to USO, they are just a terrible ETF to go long-term long on, which is why we love to short them.  

    China/Reza – We should just give up and pay them $250Bn a year to defend us.   Would save us $750Bn a year!  

  240. China / Phil – Good luck selling that one!

  241. The last xtranormal was epic.  I’m pissing myself laughing.

  242. USO/Phil,
    If USO loses value long term why not sell the 2012 or 2013 calls at around 45 or so?

  243. Cramer’s newest take on NFLX. So the valuation of social media companies effects the value of NFLX. If linkin or facebook is worth ($) than NFLX is worth that ($$) because compared to those social media companies NFLX model is better………Uh……..OK!
    I guess this assumes that no one else will/can compete for NFLX’s business! The link is below. I have had enough of him for a month! Can the people who listen to him really be that dumb?;.v=1

  244. English hedge funds that were formerly shorting Spanish banks are now recapitalizing them.  Maybe Euro austerity-cum-German bailout standby works better than the Bernanke liquidity pump after all.
    Hay dinero para la banca: británicos compran el 60% de la ampliación de Sabadell
    La carrera por reforzar el capital prosigue con la ampliación de capital que esta mañana ha cerrado Banco Sabadell. La entidad catalana ha captado 410 millones en una colocación acelerada, de los que 250 proceden de la City de Londres. Marshall Wace, fondo que apuesta a la baja contra Sabadell, ha suscrito una parte de los nuevos títulos.
    Banco Sabadell [I have an account there] is a Barcelona-based Catalan commercial bank that was as devastated as any by excess  Spanish real estate lending.  They are pretty well run, and based in Catalunya — which has the highest per capital income of any country [it's a province] besides Switzerland.