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Technical Tuesday – Charting our Future

XLF WEEKLYFundamentals don’t matter so let’s look at the technicals.

As you can see from David Fry’s chart, there’s a good reason that XLF was my Trade of the Year in December 25th’s "Secret Santa’s Inflation Hedges."  The full force of the US Government is backstopping this play, in which we took the Jan $12/13 bull call spread at .80 and sold the Jan $11 puts for .40 for net .40 on the $1 spread.  I said, just 37 days ago, that this could  be the easiest 150% you ever make.   

Just 5 weeks later, the bull call spread is .90 and the short puts are .30 for a net .60 – up 50% in 5 weeks.  That SHOULD help keep us ahead of inflation, right?  Keep in mind this was a trade, among others, that I published for free to the General Public on both our subscription site as well as Seeking Alpha and then it was syndicated on Yahoo Finance, Google Finance, MarketWatch, AOL, etc.  I’m told that about 250,000 people read my free public posts when I make them available, so it’s not like these trades were so secret.  

Yet, however many people decided these were good trade ideas and followed them – it didn’t matter because our counter-party wants to lose!  Yes, that’s right, we are riding on the coat-tails of the Banksters, who are taking our future tax dollars from the Federal Reserve and betting them on rising commodity prices and monetary inflation.  In order for us to bet on that, we need some idiotic counter-party to take the other side of that bet – one that assumes falling commodity prices and no inflation.  

Even in under-educated America, who would be foolish enough to take such a bet?  Why it’s us, of course! Well, it’s the Federal Reserve Bank of the United States of America who are spending $100Bn a month buying Treasury Bills at the lowest rates every (assuming no inflation) while trying to justify their misuse of our money with BS statistics that we’ve stripped away in "How the US Government Manipulates Inflation Data" along with this helpful video:

The Fed is using YOUR money, through debt, taxation and devaluation, to buy notes that a rational investor wouldn’t touch with a 10-foot pole and the ONLY way you can prevent yourself from getting screwed by their action is to join up with the Banksters and bet against them.  Yes, it’s totally insane, dangerously inflationary and, ultimately, disastrous but – hey – it’s what we voted for so no used complaining about it now.  Now is the time for playing the hand we’re dealt.  In case this point is not sinking in, please play with this interactive graphic from Barry’s site:

 

 

If that doesn’t convince you something is wrong, I don’t know what will.  In my year (1963) the average yearly income was $4,848, not even $100 per week but a median new home was $12,650, 2.6 times a year’s salary and about $69 a month paid to cover an $11,500 mortgage payment at 6% over 30 years.  Fast forward about half a century and where are we?  The median salary is now $26,530 but the homes are now $232,880 – 8.7 times income!  Using the same 10% deposit and making a $210,000 mortgage for 30 years we see that it takes $1,259 a month to cover the mortgage – that is 18 TIMES MORE than it cost in 1963 to cover a mortgage and also 1/2 of a person’s total salary.  

Now, follow this logic without getting all upset with your political/world view, OK?  If your father used to own a home and paid 70% of a single week’s salary for his home but you now have to work 2 full weeks to pay your own mortgage – what happened?  As they say in Washington – we follow the money and the money goes to the bank, doesn’t it?  Who owns the banks?  The top 1%.  Who do we work for then?  The top 1%.  Come on people, this is not that complicated.  

This is how over 50% of the Middle Class’ wealth has been transferred to the top 1% in the past 30 years.  Inflation is the mechanism that allows the banks and other financial speculators to reach into your wallet and remove your wages so, defensively, we need to go along for this ride because it’s very clear which side our government and all of their guns and tanks are on.  

 Even as I write this, the US Dollar is down at 77.45 in the Futures.  The dollar was at 81.5 at the beginning of January so that’s a 5% drop in a month, which has allowed the US markets (other than the Russell, which is down 2%) to post 1% and 2% gains for the month of January.  Jim Cramer tells us that a strong January means a strong year and we should ignore all the bad news and BUYBUYBUY!  Jim Cramer is an idiot.

Does Cramer also mean that a 5% drop in the US Dollar in January – the thing we get paid in and the thing we value our assets in – means we can look forward to continued declines this year?  The Federal Reserve is buying Treasury Bills (Government Debt) on our behalf at a rate of 2% over 5 years.  They buy about $120Bn of these per month.  2% interest per year is less than 0.1% per month so that’s how much the 5% drop in the dollar was offset in that note.  

So, the Fed lost 4.9% of $120Bn of our money this month or about $6Bn.  That’s 1,000 bionic men a month!  It’s also an entire Madoff Ponzi scheme every year and the victim is YOU!  That is, of course, assuming the Dollar "only" declines 5% over the next 5 years and, of course, we’re also assuming the US Government does not default on its mounting debts.  Even the so-called inflation-fueled recovery is in question.  "While the recovery is underway, it is not the recovery we wanted," Strauss-Kahn said in a speech at the Monetary Authority of Singapore. "It is a recovery beset by tensions and strains – which could even sow the seeds of the next crisis."

"We see a worrying development: the pre-crisis pattern of global imbalances is re-emerging. Growth in economies with large external deficits, like the U.S., is still being driven by domestic demand. And growth in economies with large external surpluses, like China and Germany, is still being powered by exports. As the IMF warned in the years leading up to the crisisand as the G-20 has emphasizedthese global imbalances put the sustainability of the recovery at risk," Strauss-Kahn said.

Worrying is right.  I see a worrying pattern too.  It’s the pattern of MSM BS that tells you how great everything is while ignoring anything that isn’t.  Jim Cramer tells you to buy NFLX but neglects to mention that AMZN is coming out with a competing service.   We went short on NFLX at about $215 yesterday because we read and discussed an article over the weekend in our Member Chat that Amazon would be rolling out a FREE movie service for their Prime Members ($79 a year for free shipping too).  We waited all day for CNBC to mention this news but there was nothing.  We listened to Cramer, waiting for the NFLX pumper in chief to at least address the issue so he could negate it but no, not a word about it.  Do your own homework indeed!  

So – Charts!  That’s right, I said I would put up some charts but my brief commentary turned into a rambling essay.  Imagine that?  Anyway, here’s what our markets look like priced in Yen.  The Nasdaq bounced off the 50 dma at what was essentially 2,675 on the index.  Now they need to re-take the 2,750 line to get back on track but 2,700 was our breakout level so they are still bullish over that line (until the 50 dma breaks it – then it’s not good enough, of course).  The Dow finished bang on the 20 dma at 11,900 but we need 12,000 to believe in that index and the S&P came right to the 1,287 mark our 5% rule predicted but failed to hold that so far – an issue that should be rectified at the open and we go back to testing our old 1,295 this morning but anything less than 1,300 is now disappointing after last week’s pump job.

Not so bad, right?  Now let’s see how we look to European investors

What???  This can’t be right, can it?  Our markets are mighty, our markets are strong, our markets are invincible!  All true, when priced in a weak currency.  Unfortunately, no one (other than our Federal Reserve) pays money at the box office to see "Superman Versus the Girl Scouts," do they?  We are pitting our pitiful stock markets against the weakest currency on Earth (weaker than Egypt, and they are rioting!) and acting like we just beat the World.  

Click to ViewIn truth, the only thing we beat by believing this nonsense is ourselves. It’s an illusion, it’s a game – a reflection of someone else’s name.  When you wake up in the morning, you’ll find that there’s a hole in there somewhere.  Oh, sorry, was channeling Phil Collins there for a moment…  Anyway, so this is like sending your kid to Munchkinland and bragging to your neighbors that she’s the tallest one in her class.  Maybe you even believe it’s something to be proud off but, if you put your money on your kid to beat Kobe Bryant Jordan in a game of horse, she’s probably going to lose.  

So let’s not get too excited about our "strong" chart until we see it hold up against a strong Dollar.   As we have a commodities-based rally, that is very unlikely to happen, which is why EDZ is a very good hedge for us as commodity exporting countries would take a double hit from their relative value against a rising dollar as well as the diminishing cost of their Dollar-denominated exports.  

We’re going to make EDZ the key hedge in our $25,000 Virtual Portfolio today – with an option spread of course. We’ll see how it opens up in Member Chat but hopefully we’ll catch it around $21.50 as the pre-market pump job (we always get this on the first of the month) herds the next round of sheep in for the slaughter. Keep in mind, we’re looking for a short-term correction but we also feel it’s far too late to put the inflation genie back in the bottle so our long-term bets remain to the upside. Here’s a great final chart illustrating what over $8Tn worth of stimulus, bailouts and Federal Reserve tinkering has bought us so far – let’s enjoy it while we can!

Click to View

Let’s be careful out there!  


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  1. I’m not sure why you keep writing that we did this:
    "….hey – it’s what we voted for so no used complaining about it now.."
    Can you clarify?  I don’t anyone who "voted" for this, much less anyone who understands it, what the FED actually does.
    Why blame the voting majority for causing that which they didn’t?


  2.  Good video Phil .. LOL … and sad …


  3. Inflation / Phil – I checked out the app as well last night and it was interesting to note that some stuff did move along with salaries like coffee and steak, but I was surprised to see the price of electricity so high! And the app doesn’t calculate the cost of education or health care – that would probably scare too many people! And no one seems to care….


  4.  I apologize Flips, the Fed just magically appeared out of nowhere I suppose.  Their policies have no oversight, nor do the actions of our government that led up to this catastrophe and are now continuing it.  We, the people, allow this to happen by voting on issues that don’t matter at all and then copping out by saying that the economic issues are too complicated for the poor voter to understand.   Well we also voted to defund education and make it so our voters would not have a firm grasp of economics because, as Henry Ford observed many years ago: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

    Thanks Cap. 


  5. Well I’m just glad we had our correction Friday and now we can get back to Normal! Lol.

    Pharm- another great call on Orex!


  6. RE: forcing people to invest….
    The distaff side of this household has kept a lot of money tied up in a 6 month rollover CD at about 1.5% interest for the last three years. Had those dollars been instead put into the DXY they would have risen as high as 88 in 2009 from the 77.5 the DXY was at 3 years ago. We are within .25 of the original 77.50 value now, in essence having gone nowhere, and having missed the dollar’s decline relative to the basket of currencies. 
    Many dividend plays in the 5-10% range were also lost opportunities. Meanwhile the Whole Wheat pita bread we bought for 2.10 three years ago is now  $3.10. The Purchasing power of the dollar has dropped at least 10% or more during the last three years.  When I casually mention this to her she points to the increase in the balance (about $3,500 pre tax)  as her proof that she hasn’t lost money. She’s a graduate of University of Michigan.
    I don’t think theBernank is all wrong to force the money out of "savings" since relatively well-educated liberal arts and other majors are content to ‘lose’ money thinking in their benign ignorance that they are at least staying whole with 1.5% interest earned. I don’t think she is alone in this thinking having talked to others who feel their money is safe and the sale of Treasuries to fairly sophisticated investors.
    While it appears risky to invest in a dividend payer or at the other end of the spectrum, selling puts and calls (let’s leave the vehicle out of it for a minute) it is even more risky to leave money alone as well.  I tell her no matter what she does or doesn’t do she is taking a risk, one is active and the other is passive. But still a risk of equal or greater proportion.  She asks for an explanation and I tell her it’s like driving. You don’t think twice about getting in the car and driving to West Virginia. But those cars whizzing by you at 80 mph are basically missiles aimed slightly away from you. One false move…..


  7. Pharm / OREX:  Yeah, Pharm, I’ve been staying away from bio-techs and just watching from afar, but kudos for being exactly right on OREX. You nailed it.  Seems like Stevey Cohen at SAC could’ve used your advice!  He had loaded a 5% stake into the announcement!  And they always say he uses insider information!


  8. @Phil
    Actually the FED did appear out of nowhere, the literature of early 1900s abounds with just how it happened. You’re kidding, right?
    As for education in economics what does funding have to do with courses taught?  Surely economics can be easily substituted— for the same dollars— as the feel good majors and courses in high school put together by the liberals who devised today’s easy curricula. 


  9. BIDU – up to 118 pre-market.  Going to watch it this morning to consider a short of 130C weekly.   May also short the 105P weekly if the premium stays above 1.00.  Usually like to do these on Wednesday but if there’s a pop that’s worth it this morning, I’m going to go for it.


  10. Pharm – any thoughts on IBIO?  No options available so makes less interesting.


  11. Cramer’s newest take on NFLX. What a goof! 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?
    http://finance.yahoo.com/news/Facebook-Could-Turn-Netflix-paidcontent-3749624395.html?x=0&.v=1


  12. Phil, I have done some reading on screening for fundamental values and have written up on some criteria outlined in 2 of the books:
    http://lemoyne-mappingthemarket.blogspot.com/2011/01/fundamentals-what-to-screen-for.html
    It seems that we concentrate too much on P/E when other criteria seem to have more predictive value in the long run based on many studies conducted over the years. Some pretty compelling evidence I have to say. 


  13. Normal
    0
    21

    VIX FLASH CRASH???
    Phil, can you please explain what has happened yesterday with the VIX. I think that’s worth a thought. How can the VIX crash down by over 10% and back up over 10% within 15 minutes? It almost reached the bottom levels of Friday morning. How on earth is this possible since the VIX is not a traded contract but an arithmetic index that includes the entire option trading of all S&P500 stocks?  Can there really be such huge plays and of what kind can these be?


  14. OREX………OREX……..OREX……  Those Puts are gonna be oh so sweet.

     

    Now it is time to start accumulating ARNA for a VERY small position.


  15.  Phil, is it time to cover the DIa mattress?  I am in the Jun 121′s and have been uncovered, but they seem to want to pump this back up to 12,000.


  16. That would not be good for me:
    http://gizmodo.com/5748438/did-apple-just-endanger-ipad-ebook-apps
    I would switch to an Android tablet quickly if that turned out to be true…. 


  17. jeah, I have a lot Orex 4/3 aprill P spreads and some naked 4P ,  for approval case I have insurans 12/14 C spreads.  Happy day:P


  18. What am I missing in the Fed’s asset graphic? The bottom brown area is the treasury bills right? Why isn’t it on a vertical path up?


  19. 1st day of the month…. we should have loaded up yesterday at 3pm…what was I thinking?


  20. IBIO – Similiar to PLX with a twist.  B’c of the non-options trading, I find them hard to cover ones position JIC it tanks.  If anything, I would ease into them, and I mean ease.  With stocks under $3 and no options, there is pain when they tank.  >5, can really damage a portfolio.

     

    I am going to be dancing with the big boys again today (seems to be a regular Tuesday event), so I will be sportatic through out the day.  I will update the $25K this p.m.  If the positions do not fill after today (XLF/C), I will leave them but most likely put cancelled, as I am not sure that Phil wants to chase, or allow things to move against us over time, so OPEN will change to CANCELLED.


  21. jabo – yeah, we should have reminded ourselves yesterday of that.


  22.  Phil, you were comparing this tape to last Jan’s. How about last April’s? Candle to candle. Day of reckoning is coming!


  23. flip / forced investing — Nice diatribe. Where is your money?


  24. From Rosie:

    A COUPLE OF PROBLEMS WITH Q4 U.S. GDP

    The temptation, of course, is to look at the huge growth rate in final sales and the drop-off in the inventory line as a reason to boost first-quarter GDP estimates. Here’s why it may be important to resist that temptation:


    First, Q3 saw a massive boost to GDP on the inventory line, so the Q4 reversal has to be seen in that light — it is quite possibly that Chinese firms rushed to catch the export rebates that ended in June. So, an alternative take on Q4 that has been put in front of us is that part of the ‘surge’ in retail spending was due to retailers realising they had over-ordered last winter/spring, when everyone thought the economy was on a V-shaped recovery, and thus ended up slashing prices to get rid of the excess (which also helps explain the lack of any growth in the price deflators). This would also explain why there hasn’t been much follow-through since Thanksgiving, which was clearly their best chance to rebalance their stockpiles.


    Second, the question must be addressed as to how the GDP deflator slowed from 2.03% annualized in Q3 to 0.26% in Q4. Indeed, the key point here is that nominal GDP was up only at a 3.4% annual rate. What is normal for the sixth quarter of post-recession recovery historically? Try 7.3%. As a loyal reader pointed out to us, this comes to $42 billion per month when we are adding federal debt at a monthly rate of $125 billion. How long can this arithmetic of federal debt rising at triple the pace of nominal income growth remains stable is truly anyone’s guess.


  25. Congratulations Pharm. Fabulous picks over the past few weeks. Wish I had participated, but enjoyed seeing you win on a lot of these.
    As a former ARNA loser I am curious about what you would buy (ARNA) at this point. Is it your thought that safety still takes precedence over all other issues and once ARNA clears the last FDA objection they should be a shoe-in? (if there is any such thing in bio!) Thanks. Thank you.


  26. pentaxon / VIX — Thanks for asking that. I saw the crash happen and didn’t get around to asking the same question. It certainly looks like a nice way to manipulate option prices though.


  27. Jabo,
     
    Loaded up on what?


  28. Phil,
    What is your take on HEAT? Undervalued or no future?
    Thanks!


  29. d – ARNA showed a cardiovascular endpoint that was GOOD.  The thing holding them back is the cancer angle, that is bogus from my perspective.  Regardless of the tumor issue and prolactin, the drug has been in Monkey tox for a year and showed no issues.  Now, I am not a tox expert, but when the experts in the field are telling the FDA that this is not something that is related to humans, then I would tend to believe them (although the FDA does not seem to care)…..I think ARNA will have a chance by year’s end or sometime early next year to get this on the market.  It’s novel, and if prescribed with phentermine (speed), should help others lose weight easily.


  30. Pharm
    Thank you for the quick synopsis. So, would you start to accumulate stock here? Or should one wait for the dust to settle from the OREX denial.


  31. exec—anything that gives the most bang for the buck. I am a foolish long-term bear but have watched the market fly on almost every first day of the month for too long now.


  32. Options on BIDU surprisingly dead, no premium to sell.     Going back to NFLX…..sold the 225C weekly for .75.


  33. I am going to see where they settle by EOD and then decide.  I think they could head back to the 1.20 area.  Someone noted a spread a while ago, and I think that may have some merit when it goes down a bit more.


  34. Thank you Pharm


  35.  Pharm – I got a fill on IMGN trade this morning from the weekend Stock World trade.


  36.  Phil – you’re teaching me well.  I decided to take a flyer on the buy the close of the last day, sell the open of the first day of the month theory and here are the results.
    2:59 pm CST 1/31 bought 20 QQQQ 26 Calls for $0.50,
    8:42 am CST 2/1 sold 20 QQQQ 26 calls for $0.72, figuring holding for more than 50% was probably just flat out greedy.
    I probably could have done a little better had I not had my three year old screaming for more Mickey Mouse clubhouse while my mother-in-laws dog pooped on my kitchen floor and I was shaking snow off my coat from the first shovelling of the day….supposed to blizzard here in Chicago today.


  37. As a follow up to a post this morning on fundamental screening, I used the criteria I described in the post to create a custom screens. The results are posted at:
    http://lemoyne-mappingthemarket.blogspot.com/2011/02/fundamentals-screen-results-2-1-2011.html
    Not an endorsement to run and buy these businesses. At this point, it’s only an exercise! 


  38. stjeanluc
    Thank you for your efforts.


  39. Rev – Those take a while.  I am still trying to get mine filled….


  40.  And now for my comeuppance….I was celebrating my little success when Hope(my daughter) paused from her Mickey Mouse and told me, "No dancing Daddy….You’re not good."
     
    Game over.  So back to trading……thoughts on another DBA trade?  Old Ben sure doesn’t look to give a crap about the rest of the world, so we’re not going to see an end to QE2 anytime soon….and now countries with shaky situations are going to start hoarding…..just a thought….Also, potential spill over to MON or DD as food demand from the "prevent the rioting" strategy takes hold?  Hate chasing, but this markets fixed anyway……and that direction it up in USDollars.


  41.  Pharm – I had them on all day yesterday and only got 1 contract filled.  I managed 4 this morning.  Sticking with a small position as I dive into a new area for me.  I enjoy your posts because it is an interesting field.  I only know about psychopharmacology in my world.


  42. Good morning!  

    Let’s shift our attention today to the levels we lost last week.  Obviously, we need to take them back and then not get rejected harshly again and those were (removing the spikes):  Dow 12,010, S&P 1,300, Nas 2,757, NYSE 8,220 (and look at the moon-shot this morning!) and, of course, our beloved Russell 8-0-0.

    NOT making these levels only puts us back to the same very precarious situation we were in before BUT, last week, the dollar was over 80 and we were worried about it bouncing back and trashing the markets.  This week, the Dollar is at 77.50 and we should be MORE worried, not less, that the dollar will bounce back and wreck the markets.  

    The Dollar is kept weak by Fed idiocy but the Republicans are making a lot of noise about tightening the budget screws ahead of raising the debt ceiling.  Will they squander that leverage or try to use it?  If they try to use it, then that will possibly raise the perceived value of the Dollar to foreign investors and our markets might crash.

    _chart_of_the_day_518x

    Also, if anything happens to go wrong in Europe or Asia and their currencies begin to fall, then that will raise the relative value of the Dollar and our markets may crash.  Only if none of that happens, are we likely to bust the dollar below 77.50 and back to last year’s low of 74, which would be another 5% of your sidelined cash devalued so keep that in mind and look for that upside play on XLF.  

    Today is the day of the Million Man March in Egypt and so far, so calm over there.  If it goes off without too much violence then oil will pull back fast (now $92.10) so I still like that for a short as well as yesterday’s XLE short play.  In fact, XLE went up so now I like that one for a $25KP play:

    XLE/$25KP –  Buying 5 March $70 puts for $1.10 ($550) with the intention of rolling up to the $72 puts for .35.   Why .35?  That’s the price of a roll from the $68 puts to the $70 puts so I figure that a $2 move up in XLE (if we get one) would give us a similar opportunity there.  At that point, we would likely also double down and maybe do a half sale of Feb puts but let’s get to step 2 before worrying too much about steps 3 and 4.  

    By the way, as someone observed yesterday – the best way to enter these trades, especially if you have a limited portfolio, is to wait for us to enter a trade and have it go against us.  THEN you can get in for a much cheaper price on your first round.  I’m trying to pick trades at prices early enough in the cycle for many people to participate in.  Many, many of our entires are going to be early because if this.  If you wait for us to roll or DD or wait for one of our entries to fall 20% when we decide to ride it out (like NFLX), then you have a much better chance of getting a good entry and making a nice profit.

    Speaking of NFLX, the $210 puts are down to $2 (down 20%) and it’s not looking good.  Since they are weekly options, the prudent thing to do is bail and take the $200 loss and just admit we missed the timing but I just told 250,000 people about the AMZN deal that CNBC has been hiding and I am egotistical enough to think this may gain some traction today so my target remains $210 on a dip but once we get to $3, we’re going to be inclined to take it with so little time left on the trade.  

    At the open: Dow +0.3% to 11928. S&P +0.48% to 1292. Nasdaq +0.68% to 2718.
    Treasurys: 30-year -0.52%. 10-yr -0.38%. 5-yr -0.24%.
    Commodities: Crude -0.16% to $92.04. Gold +0.27% to $1338.10.
    Currencies: Euro +0.56% vs. dollar. Yen +0.5%. Pound +0.5%.

    Redbook Chain Store Sales: +1.8% Y/Y vs. +2.3% last week. "Severe weather in the East and South are keeping shoppers at home," hurting store sales. 

    ICSC Retail Store Sales: -1% W/W, vs. -1.2% last week. +1.6% Y/Y, vs. +2.8% last week. Soft sales for a fourth straight were was due to heavy cold weather. Based on this, the Y/Y sales growth forecast for January is trimmed to +1.5-2%.

    Tuesday’s economic calendar:
    Auto sales
    10:00 ISM Manufacturing Index
    10:00 Construction Spending

    Notable earnings after Tuesday’s close: AFL, APKT, BRCM, BSX, CCK, CHRW, ERTS, LEG, MEE, URI, WFR, WU

    Market preview: A spate of strong earnings reports diverted attention from Egypt’s unrest, sending stock futures higher. S&P benchmark +0.6%. Archer Daniels Midland and UPS are among shares gaining premarket after issuing earnings beats. Oil prices are modestly weaker while gold creeps higher. Still ahead: ISM manufacturing, construction spending, domestic auto sales. 

    Meredith Whitney’s apocalyptic vision of municipal bond defaults isn’t backed up in her research, Bloomberg says, as a copy of her report doesn’t mention sizable defaults amounting to hundreds of billions of dollars. Meanwhile, January muni bond sales fell to their lowest level in more than a decade, exacerbated in part by investors spooked by Whitney’s pessimism. 

    Whuck?   Credit Suisse upgrades Greek equities to "benchmark" from "underweight," citing cheap equity valuations and a range of supportive macroeconomic factors. Greece’s ASE Index, up 18% so far this year, jumps another 4.6%. NBG +5.8%.

    Banks face new accounting rules, after the FASB and IASB jointly call for banks to anticipate losses earlier, leaving more time to plug financial holes. Banks call the rules overly-complex, but the boards want to avoid a repeat of the financial crisis when loan-loss recognition came ‘too little, too late.’ 

    Nothing to worry about?  Wall Street: loathed by Main Street and terrorists alike? Security officials are warning that al Qaeda terrorists in Yemen may be trying to plan attacks against major Wall Street firms or their leading execs. 

    In addition to its earnings beat, Pfizer (PFE) announces plans for a $5B share buyback, bringing the company’s total repurchase authorization to $9B. Shares have pared earlier premarket losses; -0.8%

    Also, congrats to Pharmboy on an excellent call to short OREX!  Thank goodness he’s on our side

    Following the FDA ‘s rejection of Qnexa and lorcaserin, Orexigen (OREX) makes it three for three, as the FDA issues a Complete Response Letter for Contrave, saying it wants another trial to rule out cardiovascular risk. After a halt, shares are down almost 70% premarket. 


  43. Hi Phil — what do you rec on adjust on BIDU position you were rec last month, short 5 Feb 110, and buy 4 long march 120 call— you mention adjust to a bull call spread if Bidu go up, do I roll everything to June option and what strike should it be 115-130 june bull call ? thx 


  44.  Phil, POT hit 181. Any adjustments to the 175 callers? +4 Jun 175C, +5 Mar 190C, -10 Feb 175C


  45. Phil re XLE – with oil rather high would you suggest a dd, roll or taking the loss?


  46.  Phil,
    I’m holding some Feb. $71 puts on XLE from yesterday’s chat.  Stick in there or roll into the $25KP trade for March?


  47.  Oops, construction spending down 2.1% and last month’s positive 0.4% turn out to have been a "mistake" and now they are printing -0.2%. It’s only a 150% change in official Government data that moves the markets.  Why make an issue of it?  Notice CNBC will say nothing about it after the fact of the figures even though last month they turned the 0.2% gain into an hour-long special about how strong the economy is looking now. 

    Dec. Construction Spending: -2.5% to $787.8B/year vs. consensus -0.4% and 0.2% prior (revised). 

    ISM, on the other hand, came in at a strong-looking 60.8 vs 58 estimated and 58.5 last month but this too is affected by the BS statistics we talked about yesterday.  Notice that prices are up OVER 10% in a month.  When prices are up 10% in a month, orders get shoved in to get ahead of the price increases.  This, of course, is Bernanke’s plan to "improve" the economy – inflation forces consumers and corporations to buy now "or else."   

    Jan. ISM Manufacturing Index: 60.8 vs. 58 consensus and 58.5 prior. Prices index 81.5 vs. 72.5 prior. Employment 61.7 vs. 58.9. Inventories 52.4 vs. 51.8. New orders 67.8 vs. 62.

    Still, it’s good-looking data so the market can rally on it.  


  48. Sorrry – i was also referring to the Feb 71s.


  49. Phil Good morning your AMZN riddle Do you mean they will go up to 210????
    I just told 250,000 people about the AMZN deal that CNBC has been hiding and I am egotistical enough to think this may gain some traction today so my target remains $210 on a dip but once we get to $3, we’re going to be inclined to take it with so little time left on the trade.


  50. Phil
    EDZ just hit $21.50.


  51. Sorry to be such a negative guy this week.  I guess I tend to react to the bullishness of the MSM and go the other way to get some balance.  Anyway, to new Members – I am generally an optimistic guy, really I am!  

    So yay on NFLX! 

    No to covering the DIA puts and, in fact I like the Feb $119 puts for $1.32 at the moment but too risky for the $25KP at the moment. 


  52. Pharmboy,
     
    Can you comment on the JAZZ news and put that into perspective for us? It seems their main drug can kill patients, but it recovered quickly…….thanks.


  53. From Barry’s site, some analysis on this week’s action:
    http://www.ritholtz.com/blog/2011/02/9090-down-days-followed-by-rally-then/ 


  54. @rainman
    Pretty broad mix but I can tell you where it ain’t:  in CDs paying 1.5%
    Brazilian CDs paying 5%, minimum.  Been exceptionally good for two years with the BRL rising in value to the $.
    The rest scattered among div. payers, commodities (soy beans, cotton--cocoa & sugar-- i love hershey’s kisses--)some in Phil’s blue ribbon portofolio and of course play money in the options here.
    The lady of the house wonders where I get the money to do stuff she can’t, like shell out $2-3,000 a year here, shiatsu massages, and happy endings.


  55.  Frustrating market if you are not a drinker of Uncle Ben’s magic kool aid.
     
    Just put on a COF short.
     
    Also sold some FCX calls (124) and PCX (30)


  56.  flips, I try to keep lots of cash available for those moments when the market creates superb opportunities.. I don’t think there’s nothing wrong in keeping some dry powder (in my case a lot) because I do deploy it whenever an opportunity arises in the markets.. I don’t think then in terms of that money earning 0.5% a year or else the feeling from it could cause me to mis-invest that money..


  57.  Phil
    I am in XOM stock via a Jan 12 buy-write, bot at 61, with 62.5 puts and calls sold. Just pulled the putters off yesterday, and looking to roll to a spread to take some cash out – any suggestions? Thx


  58. Phil / terrorists and Wall St — Interesting. That might be a good recuitment scheme. Swaying some of the americans that have been particularly hit hard by the crisis…


  59. Hi Phil, what are your thoughts on JNJ (10% off its April highs; seem to have a reveral at 60)? Do you like the company’s long-term perspectives or you think that recent production problems are a sign of worsening management? Thanks.


  60. Phil / ISM  How can this be highest since 2004 when we have 20% unemployment?  Is the increase all inflation?


  61. Very nice article on Fundamentals StJ!   Thanks.  I’ll have Ilene contact you so we can get stuff like that up in Favorites.  

    VIX/Pentaxon – It’s down now as well and making for an attractive play.  The VIX trades on sentiment and that can change moment to moment and often does.  There is no underlying fundamental in the VIX, it’s a calculation that is made that reflects the projected volatility of the market over the next 12 months based on the prices paid for put and calls over that timeframe.  So, in short, it means nothing but the opinion of VIX buyers about the opinion of traders on the possible direction of the markets.  If the VIX gets back down to $16.50, it’s a buy again.  

    Mattress/Trad – June is the operative word here.  If the premiums of the shorts were more attractive, I would feel differently but we don’t get paid much to cover and the June $121 puts are still $5.50 so not a lot of damage there.  If the Dow pops 12,020 – that’s going to be another story but not worth selling puts when we really don’t believe they have even 50 more points to gain before pulling back again with 3 weeks to expiration. 

    AAPL/StJ – Throwing their weight around.  Indicates to me they can’t increase the supply of IPads in the near future so they are only interested in selling to people who are going to buy their stuff, not others’.  

    Fed/Rain – They only began buying TBills in QE2 in December.  That’s going to go up 50% by June!  

    3pm/Jbob – My bad too, I forget that end of month thing all the time.   Then the hard thing is remembering to ignore it while it’s happening.  I want to go back to Exhibit A in case anyone is thinking the market has been running straight up all year:  

    It’s the HYPE folks.  You just feel like you are missing something major.  Sure, 1% is a nice gain in a month but it’s not the same as "missing" a rally.  Today should bring us back to those highs for a 3rd test of that 2.5% line but the severity of the first two pullbacks should not make you complacent about approaching the top yet again.


  62.  Look at AA & FCX go !


  63. Phil, 
    DIA. I re-entered (with 10 instead of 40) DIA 122.75 Feb Puts yesterday, expecting (as you concurred) that there would be some uncertainty today in the markets because of Egypt. Got in at 4.50. I got in with the intention to make it a mattress play if things didn’t work out. Which is the case at least up to now. What would be the cover and at what point, and when do you roll and adjust?  I have not followed you on your mattress plays in the past, so I am trying to learn how to manage them on my own. 
    Thanks


  64. flip / 2-3k — how many happy endings does that provide for? Gotta work some shiatzu into my budget! 8)


  65. IWM lines…
    Anybody have figured JR’s IWM lines for the day? Shadow, you were pretty on the ball yesterday… 


  66. Xyrem from Jazz appears on the FDA Adverse Event Reporting system.  Anything can kill you at the right concentration…..including salt and water (sorry, just being cynical).  I think it is more of a ‘cover UR ass’ note from the FDA.


  67. Unrelentless pounding of the SPY…ok, I am out for a while.


  68. I think its time to short TBT… it has not failed in the past to come crashing down from 39.50….


  69. PCLN??? the best Momo today other than BIDU. Insane, Big Ben, or 1st day of the month?


  70. Stem cell and IP Brick wall –

    The profit motive can--yes, shockingly--drive biotech research. But, according to a report by the AFP news agency, this same drive to make money is actually putting the brakes on embryonic stem cell research. With the research already set back years due to government research bans, U.S. scientists now face roadblocks because other universities or companies have secured exclusive rights.

    The AFP report quotes Bob Lanza, chief scientific officer at Advanced Cell Technology, which is studying human embryonic stem cells in finding cures for blindness, as saying the patent "minefield" is causing patients to suffer.

    "When I came to ACT to try to do it with stem cells I couldn’t because the rights to use embryonic stem cells for diabetes had been exclusively licensed to Geron," Lanza tells AFP. "Here I was, a scientist trying to cure diabetes and I couldn’t use my entire lifetime of expertise to try and develop that technology."

    Lanza was referring to Geron Corp., which last year became the first company to start clinical trials of embryonic stem cells in humans. Geron is using them on a patient with spinal cord injuries. ACT plans to use embryonic stem cells in trials on macular degeneration. Lanza is the first to admit, though, that his company, too, has "blocking IP" so it can remain free to pursue its own technology.

    The article asserts that this is different from the growing pains of previous IP consolidations in other industries, since it is private companies now, rather than NIH-funded universities and labs at the forefront of this research. And with research increasing in adult stem cells, too, the patent race is on while many scientists fear that innovation will decrease while everybody works behind their own proprietary walls.


  71. Good Morning Phil,
     
    Thanks for your advice on profit taking.  I watched my TZA calls melt from 65% gain down to nothing a couple of weeks ago.  I didn’t repeat that dumb mistake this time.  Got out yesterday with 25% and getting ready to reload even cheaper than before.


  72. @ravalos
    That’s the point: you are active.  At a gathering during the holidays a woman was frustrated that her money wasn’t ‘growing", what did I suggest.
    Told her it’s no different than a garden. (echoes of chauncey gardner). If you think in today’s world that you can just plant it and forget about it, like the last quarter of the last century, you may wake up 50 years from now and have a bundle but the risk is just as great that you will be broke.
    It requires at least a half hour a day of your time to monitor your cash, no different than the time it takes to eat  breakfast and should be just as much of a ritual. She thought that was too much time to be worried about it everyday of her life.  It isn’t worrying when you make it one of your routines and make moves that eventually become second nature. Yes, there is a learning curve, but the only time we genuinely seem to get anywhere is when we struggle, try or attempt to do something.  Anything worthwhile. Money management, if money is important to you, is no different.,
    I don’t know that she did it, but I stand by it.  You simply have to watch the basket and make adjustments accordingly.


  73. Article / Phil – Thanks. Tell Ilene she can grab what she wants from the blog and post it if she wants as long as she also includes a link to the blog. Might need to edit the text as English is not my first language! She can also contact me at stjeanluc at gmail.com.  


  74. Dollar in a free fall – down 0.5% for the day… 


  75. Yodi / Mexico   I understand you live in Cancun, which is not representative of Mexico mainstream, but I assume you travel.  Will high food and oil prices hit the Mexican consumer and thus companies harder than the USA, setting up a short opp with SMK?  Meanwhile oil production at Pemex continues to fall, threatening the Gov’t main source of funding.  Not having reserve currency status like the US, they can’t just create money to prop up consumer spending.  Is increased kidnapping and extortion by the narco gangs discouraging the rich from making fixed investments in Mexico?  How do you feel about the valuation of the Mexican index?


  76.  $25KP/Pharm – No, no chasing is planned.  I would put it up as a new trade.  

    April chart comparison/Praiz – Hmm, I’ll have to look at that if I have time later.  

    HEAT/Make – I don’t think they are too undervalued as they are swallowing an acquisition but they are a nice company and at a very attractive entry for a long-term hold.  You can buy them for $4.85 and sell the Sept $5 calls for .85 and that right there is a good deal (net $4 with a 20% upside).  You can also add the sale of the $5 puts for another $90 and that gives you a buy/write of net $3.10/4.05 so a very nice 61% if called away at $5 (up .15) and 19% downside protection makes for a nice play.  If you don’t want to commit to 2x, you can just sell the Sept $5 puts for .90, that may be about $1 in net margin to make .90 in 8 months – never a bad plan!  

    Nas flying but NFLX still down.  Getting worried it won’t last so be careful! 

    QQQQ/Hoss – Excellent job.  Yeah, it does look like your calls were holding the Nasdaq down but now it’s taking off.  Still, 50% will buy you a nice cup of cocoa, right?  

    Good list StJ – We’ll see if we can find a couple of plays there. 

    DBA/Hoss – I think the dollar is due for a bounce and I don’t think the Ags have that much further to run because people simply cannot afford the food.  You can’t just keep raising prices if your customers can’t afford it.  We have all seen businesses go bankrupt and they don’t go bankrupt because the didn’t realize they could just raise their prices to make mre money, right?  Those are fundamentals that are completely ignored by speculators and, sadly, many people like us because WE HAVE MONEY.  

    It is very hard for the 10% of the people who have money to understand the life of the 90% of the people wo don’t have money.  What is a person who has maxed out their credit cards (or has no credit cards) supposed to do when one part of their monthly allocation of their paycheck like food goes up in price.  If a person takes home $1,500 a month and pays $500 for rent and $100 for utilities then they have $30 a day to spend on stuff (assuming no health care or retirement savings).  If $100 of weekly groceries goes up to $130, then they have 4 days a month worth of other stuff that they simply cannot buy anymore.  If a tank of gas on their $2,000 car with $1,000 a year insurance goes from $40 every other week to $55 every other week – that’s another day of stuff lost.   

    When you see ALL commodities pressing higher and you see manufacturers and retailers saying "Well, I guess we’ll have to raise prices" but you don’t see jobs or wages rising to match – then something is going to collapse.  Either that or maybe the bottom 10% can turn to crime to balance their budgets.  It’s not a question of if, it’s a question of when – unless jobs come back and wages go higher.  Friday is non-Farm payroll but last week’s unemployment numbers did not make that seem encouraging.   

    BIDU/Gucci – The Feb $110 callers are $8.40 and I don’t know what the entry prices were but you can roll them to the March $115s at $6.75 and roll yourself to the June $125s at $7.30 so you are spending about $5 to move to that spread.  You can offset it by selling June $95 puts for $3 and that all gives you April, May and June to continue rolling the caller so you just have to pick up a little bit of premium each month to be in good shape. 

    NAK almost $20!  

    XLE/Morx – I would suggest waiting for the Egypt march to end and for oil inventories tomorrow.  

    POT/Mampcs – Sure, I’d roll ‘em to the March $185 calls at $7.30 as that costs about $2.70 and pushes them $10 higher.  Then you have to invest in moving the March $190s ($5.30) to the June $200s ($7.80) and I’d stop out the $175 calls ($19) if POT fails $180 and just add more $200s, turning it into a bearish diagonal spread.  

    XLE/Rev – I like the current play as I really think they get rejected at $75 but you do have to wait another $1.  That roll to the $72 puts is down to .50 already so we just need a bit more spike to get it.  

    DIA/$25KP – OK, now I cannot resist buying 4 Feb $119.75 for $1.50, very happy to make .25 ($1.75) and absolutely taking .50 off the table at $2. 


  77. GLW – Phil, i have a bull call spread/put combo on GLW from before it’s rise. performing nicely as originally setup, but given the significant advance in the stock price, is there any modification that SHOULD be made? here it is:
       bot 10 Jan 2013 $12.5/15 bull call spread @ 1.89
       sold 10 Jan 2013 $15 puts @ 1.58
    everytime i look at it, it seems that the only extra gain will be only what i spend to modify, or vice versa, what i take out only reduces by same amount the final expiration payoff.. i’m happy to leave it, but wonder if i might be missing something sensible.


  78. Phil, Europe closing 1.6% across the board… what has caused this complacency? 
    Are we DD on the SQQQ Feb 28s? ($1.7 now .80) 


  79. Phil / POT thoughts on short POT calls?


  80.  Cap – thank for the NFLX trade yesterday morning. Sold $225 calls @ .95 cents, bought them back for .40 cents.


  81.  Nicha — you are welcome.  Nice trade.
    I am still holding short for now.


  82. Pharm / Geron    Your comment seems to indicate that Geron have a big IP advantage which will be tough to catch?  Especially if they crack diabetes?  You bullish on Geron at this point?


  83.  stjeanluc – great link for Fundamentals. I am going to start reading Your Next Great Stock.


  84. Phill, that Dia 119.75 is the put , right/


  85.  Insanity Phil


  86. Highlights of NYS Budget for 2011-2012:

    reduce the state’s workforce by 9,800 positions through layoffs and attrition in order to trim state spending by $550 million.
     
    Funds decrease of nearly $1 billion ($982 million), or two percent, in Medicaid spending in 2011-12.
     
    The Executive Budget proposes School Aid of $19.4 billion for the 2011-12 school year, a year-to-year reduction of $1.5 billion. 
     


  87. amatta
    I was up in pain and then overslept catching up and will post some numbers soon. 


  88. Phil,
    When you say:
    DIA/$25KP – OK, now I cannot resist buying 4 Feb $119.75 for $1.50, very happy to make .25 ($1.75) and absolutely taking .50 off the table at $2.
    You refer to the put? Because calls were never 1.5 today


  89. Nicha – Thanks. Some good ideas in the book. I am going to post some more screening ideas on the blog. 


  90. Phil / Cash   Still waiting to deploy into shorts, but you keep reminding me of how fast my US$ is depreciating, so I hope you’re right about a $ rebound!  Since you feel ermerging mkts are even more overvalued than we are, parking money in their (appreciating currency) indexes makes no sense.  Though, the RMB has to appreciate substantially at some point, so that does reduce the risk of China stocks focused on their domestic market?


  91. Talk about a FMD.  This market is crazy!


  92. Food riots, but why? Look at the corn and wheat futures since August. Making 52 week highs today or in the last week or so. Crazy!
    http://lemoyne-mappingthemarket.blogspot.com/2011/02/food-riots.html


  93. Thanks shadow!  Damn they are taking us up to the stratosphere, hope their is strong resistance on your IWM lines at this point…


  94. @Phil
    "…what is person who has maxed out their credit cards…"
    I’m not going to touch one with a ten foot pole…


  95. $25KP / Oburlacu & Phil – I went ahead & bought the puts; it makes sense – lol, hope I guessed right. And Phil, how about INTC? Over 60 now, so sell or trailing stop?


  96.  AMZN/Yodi – No, I was talking about NFLX going down to $210, not AMZN going up. 

    EDZ/$25KP Thanks for reminding me DC!  OK, so, to protect bullish plays, we want to sell 5 EDZ March $20 puts for $1.40 ($700).  According to TOS, this has $1,100 in margin.  This is not a good play if your margin requirements are much higher than this!  Using that $700, we can buy 10 April $18/23 bull call spreads for $2 ($2,000) so net $1,300 in cash and $1,100 in margin set aside for a play that pays $5,000 if the global markets fail on us.  Once we have this trade in place, then we can afford to look for some aggressive upside plays above our breakout lines (assuming we hold them for a day).  

    Good chart StJ, thanks: 

    Barry also did a video on why they expect a 5-8% correction from here (here being before today’s nonsense).  

    XOM/Deano – I’d take the $82.50 off the table and roll the caller ($20.50) up to 2x the 2012 $75 calls at $10 each and then you can buy 2x the 2013 $85 calls for $6.45 and sell the $65 puts for $3.80, where the worst they are doing is making you re-enter at net $61.20.  If XOM breaks $85, you can buy 1x more leaps and if XOM breaks $90, you can buy another 1x and then you are open to do a 2x roll on the callers again.  

    LOL Rain!  I’m surprised domestic terrorists haven’t done anything. 

    JNJ/Alik – They just keep screwing up so I don’t trust them too much but $60 is a very nice-looking price.  How about owning them for $52.50 or less?  You can sell the 2013 $55 puts for $5.10 and buy they Jan $52.50/60 bull call spread for $5 and just set a stop at $2.50 and owning JNJ for net $52.50 in 2013 becomes your worst case.   If things hold up this year and you collect your $7.50, then net $47.40 becomes your worst case and you can do another spread in 2013.  

    ISM/Tusca – Yes, these measurements are broken because they assume mild inflation at most.  If inflation is at 5% and the ISM measures 5 price sensitive indicators through the system (new orders, production, employment, inventories, delivery times, prices, export orders, and import orders), then they see 25% growth in activity – that sort of thing.  

    As you can see, we always get a big correction after a big spike, the math of the index makes that kind of inevitable.  But, then there is always a pullback too, back to that 50 line generally and, again, no jobs and no money for the bottom 90% makes me think that point comes sooner than later.  

    DIA/Amatta – I would not do anything based on a single day’s move.  Keep in mind that the last time we hit these levels was last Thursday and we woke up on Friday with a 200-point drop.  I think that was a dress rehearsal for what may happen if anything really goes wrong in the middle east.  We get ADP tomorrow morning and a lot of data Thursday and Friday and we’re at the very top of our range again.  I don’t think we’ll have to guess which way things are going if we are patient enough to wait a couple of days.  

    Good call on TBT Amatta. 

    Wow, there are simply no sellers right now.  Really amazing.  

    Still no story on CNBC about AMZN and NFLX. 

    Good job taking profits Exec!

    Thanks StJ! 


  97. Phil
    25KP .- INTC feb 21 call its at $ 0.60  , I believe this was your original target. Should we sell at this point?


  98. tuscadog
    Mexico,
    The status here in Mexico as I see it, is very much different than the US. I am possible not the rigth guy to ask as being German I do have over my 20 years hear still a hard time to accept the corruptness of mexican officials in most positions. here you have to haul with the wolves to stay alive and personally would never recomment a non Mexican to invest here. Even that the oil production is fallen the people at the fountain are still filling their pockets. I trust what comes tomorrow is not important to them. Food prices are high here as well if you want to live like a foreigner, they say they higher than in NY. Electric higher than the US. You happy with tortillas and beans and some chicken and fish your cost is down. We do not have the mortgage problem as in the US mostly you pay for what you buy so you do not get in to any problems. The price of gasoline is controlled here and increases ever month a little no violent swings. I have now for two month a note hanging out for a female to clean the house free housing foot and wage, no takers!!! Still do not know why they all run to the US. People in general are dosile and like a flock of sheep. They like to sit home and play with their flock of chidren which they produce uncontrolled.
    Why do you think Sim is the richest man in the world? He is not but Salina Gortares is as he stole all the money he could get and Slim is his cover. I do not see the narcos as such a big problem as long as the Americans are buying.
    The police here gets killed because the want to extract more and more money out of them. The peso is holding it’s one 12/1 US so I do not see greater problems. To invest here is the same as asking is NFLX going up or down no one knows. But I think BIDU is going the same ways as GOOGLE up.
    I trust this helps do not pass on my opinion.


  99. INTC / Phil – ok, I take the question back after looking at the chart…I think I’ll let that puppy run a little while.


  100. tuscadog
    PS Mexico,
    Just paid for my anual car licence 500.00 they fill their pockets with it but not the holes in the street!!!


  101. Phil / Ben   He and Lloyd are now forcing all of those pension fund managers to put it all in equities or they’ll be fired at the next monthly review meeting!  They must be scaring the cautious retail investor crowd, like me.  Is it now pedal down, hyperinflation full speed ahead time? He’s got the check book to do it and Lloyd and friends have their 9/1 leverage?  It’s worrying that bad news is now irrelevant.  If Friday’s unemployment news is bad they’ll just (correctly) assume massive QE3 and pump some more?


  102. 25KP – EDZ margin
    Normal folks margin in the -5 EDZ Mar20P is $1686 –
    Do you have a play for us?


  103. IWM 80.86, 80.19, 79.66, 79.38, 78.84, 78.56, 78.05, 77.52, 76.93


  104.  A trend up day. All dips are being bought. Like on Friday, every rise was being sold into. It should close much higher today. Guess it does not look like April-May after all!


  105.  If I wasn’t aware about the market being rigged, I would think I live in a bizarro world.  Construction spending down, Egypt in chaos, hyperinflation, 11%of houses empty, a horrible winter and massive storms that will no doubt cripple retail spending, oil approaching $100 a barrel again which when at the high started the spiral to begin with, US Manufacturer’s warn of rising input costs, China PMI point to slowing growth, and warning that terrorists might be going after heads of Wall Street  (different terrorists) and Wall Street itself.  All this in the last 24 hours and the market is up huge.  Again, a bizarro world.


  106. Phil,
     
    What does this market know that we don’t know???  It shrugged off Egypt like a total non-event.


  107.  On cue Phil; they are gonna speak about the AMZN NFLX street fight on cnbc


  108.  Yodi/Mexico, LOL! As a native mexican, it makes me laugh how you have to deal with all these things I grew accustomed to.. specially the holes on the streets! ROFL!! Hey, but at least good news the property tax on cars will be abolished in 2011.


  109. Phil,
    My options requirements on the EDZ play are a little bit higher than what you suggest in the post.  Would you suggest just doing the 18-23 bull call spread alone in that case?
    Thanks,
    Dan


  110. Phil and all,
    Being new to your kind of thinking/trading and having followed this site for only a year, perhaps I have no write to make suggestions.
    However, cannot help but notice some confusion among members about whether it’s puts or calls you talk about.
    Some memberss are occasionally confused about whether it’s a buy or sell. For instance, Maya’s Q yesterday about INTC call at $0.47.
    What do you think about abbreviating? Buy/sells/calls/puts to
    bc, sc, bp, sp after the suck symbol?
    This will make your life easier, reduce redundant questions on. The post!?


  111.  BDI school – new territory at 1107. The last time we we’re this low was between 10/27/2008 – 2/2/2009.
     
    And back then, UUP was 25.61 to 26.88, over 15% ago (meaning today’s 1107 really 950). Their must’ve been a new, secret, fuel free way to ship goods that was invented because otherwise this number should cause concern (assuming you actually pay attention to fundamentals, which I know is a laughable theory in the modern age).


  112.  Cap – i forget how to change the link in PSW handle and keep seem to figure it out — any suggestions?


  113. Sorry about the spellings… Doing on the fly on my iPhone


  114. INTC / Phil – but not that much longer – I’m out at .64


  115. I’m trying to find bull plays I like but having trouble.   Maybe AXP if they hold $42.50.  

    Waiting for the RUT to show us the money.  

    GLW/Scott – There’s not much you can do with a vertical if it pays off early as the caller will always have more premium than your call does.  The spread looks like $1.95 now out of a possible $2.50 so you are up 529% out of a possible 706%.  The question is, as it always is, do you have something better to do with $1.95 than make a very easy-looking .55 (28%) between now and next January?  So you are right, be happy to leave it because getting 28% is very nice for a year and even nicer since it’s another .55 off your .31 basis and that’s ANOTHER 177% of your basis left to gain.  If you want to make it more exciting, you can sell the $15 puts for $1.10 and spend $1.50 on the $25/30 bull call spread so you risk .40 but you’ll won’t be sad anymore when GLW goes up and all you make is another .55 on your original spread.  

    Europe/Amatta – It’s the global acceptance of the fact that we are heading into a massive, inflationary cycle and there’s nothing any government is going to be able to do to stop it.  

    POT/Ajay – Yes, we did want to short them at $180 and they’re at $182.50!  Of course, that means be very careful but you can buy the March $190 puts for $12.80 and sell the Feb $180 puts for $4.10 for net $8.70 on the $10 spread and, if POT heads $10 higher, then you can sell March $200 calls (now $2.50) for $5 and that will pay for you to roll up $10 higher to a very aggressive short.  

    DIA/Rrah – Yes that was the $119.75 PUTS in the $25KP, now $1.37!


  116. Phil, FYI     My IP address is on a list that is not allowed to access the Molycorp (MCP) web site.( HTTP Error 403.6   address rejected )  Previously, I had been on one message board commenting about MCP .  I guess "big brother" is watching me now.


  117. INTC – In at .43 now have a stop at +30% = .56. Sad to think so many people actually work for a living.


  118. I need help.
    When I put the order for selling 5 edz MAR 20 puts on my option xpress acct. It shows me a total option requirement  of $5,828.00.  You guys are talking about  a max. of a cuple 1000′s dollars.  What’s wrong with my acct?


  119. cnarbais
    I would guess that yu are trading in an IRA which requires 100 margin


  120. ravalos
    You still belive in father Christmas re car taxes. Not here


  121.  Insanity/Cap – It’s just like ’98-99.  Wake up every day and the market is going up and you ask "why" and every day it’s because of this or that thing that actually makes no sense but people go into a buying frenzy and there’s nothing you can do about it and it doesn’t pay to stay out, even though you know it will all blow up in everyone’s face.  You just have to play hot potato with everyone else.

    NYS/Nicha – Not too bad but I doubt that "fixes" the deficit, does it?  

    DIA/Obur – Sorry, was the puts. 

    Cash/Tusca – As I’ve been pointing out, you do need to have 10% of your cash in something inflationary that can at least double.  If that works (as our Santa Hedges are) then you just need to look at the next set for your next 10%.  With our leverage, we make 100% of 10% every time the dollar drops 10% for sure and that way, our cash stays even or ahead while we wait.  

    Copper $4.55!

    Riots/StJ – We just need to teach hungry countries to hedge Ag futures.  

    10 foot pole/Flips – I’m sure one that size gets charged extra for the happy ending…  8-)

    INTC/$25KP, Snow – Thanks for reminding me.  That’s goal kids at .65.  At least 1/2 out here (5) and then a .05 trailing stop on the other 5, which can be expanded to .10 at .75.


  122. amatta
    If I was up on time I would have sold those 78 puts, I am looking for a top to double down making it a full position for me. My best  point is 80.19 about 800 on the RUT and Phil’s breakout. That resistance may be 79.86 because I think on up I should add .2% but maybe I shoud subtract .2% because it’s a top. Lets hope JRW has a minute to clear thinks up today. I am pretty sure my other levels are close. This way too fake today!


  123. Thank you edro00
    Its not an IRA. I will give them a call.


  124.  chris … I don’t know … would like to change mine also.
     
    IWM 800  ROFLMAO    SPX 1307.58
     
    F U Uncle Ben !


  125. Phil:
     
    What do you think of ARRS?
    VIX -10.4%@ $17.50
    VXX -5.72% @$30.20
    Interesting . . .
    TIA


  126. Ag futures / Phil – No, Phil, WE need to start playing the Ags futures to make sure that we are not the next ones in the streets! 


  127. Phil have the same situation like the other day where my long caller CF Jan12 bought at 16.40 now 18.60 delta .52
    short call May 135c sold for 13.55 now 14.70 delta .59 stock trading at 138.55. May 125 putters sold for 10.52 doing well. But while I am still ahead shall I close both callers. If stock goes further up the delta of the may caller will always be ahead of the Jan 12 c Your thoughts please. Thks


  128. Does anyone know how to find volume on the NYSE using TOS?  Thanks


  129. And we’ll know where to go when food riots start in this country:
    http://gizmodo.com/5748769/kraft-has-a-400000-sq-foot-underground-cheese-cave 


  130.  IF there is any letdown to this move, I think NFLX comes down to Phil’s 110 rather quickly!


  131. What the hell is with the MM buying 1 option???  Who buys 1 option???  What a bunch of BS.
     
    Does anyone put limit restrictions on the number of options that can be bought?


  132. Phil—I know someone who was told today to buy a structured S&P note from Credit Suisse (15% cap and some sort of protection on the downside). I remember reading one of your posts where you said these structured products are basically rip-offs offered from the banks? Is that so? Why is that so, if that is what you think?


  133. wow, we have 15 inches of snow on the ground in tulsa, ok.  that is unheard-of for a single snowfall here. not to mention the blizzard warning only the second time in tulsa’s history to have one of those.


  134. I know that Jrom was talking about giving TOS a shout about adding rice futures, but how about VIX futures? We might actually have a chance to track the VIX rather than using the useless VXX…. 


  135. GERON/tusc – I think stem cells are a slippery slope….and if things begin to be challenged in court on those, then the stocks in this area will rocket or crash.  I think of stem cells like DNA, if it comes from you, me or whomever, but it is in nature….then how can you patent a gene???  Stem cells are from many different sources, and when they are ‘put’ into a patient….well, that remains a legal question as to the patent position. 

     

    I hope people bought into the DEPO dip…that one is gonna fly like an eagle….


  136. Phil / Fear    Is fear of not participating in this bubble going to pull everyone else in now?  It sure is frustrating watching this from the sidelines.  Patience is an exhausting quality!


  137. Wow, this is impressive! …but about as fun as watching paint dry!
     
    How come I never have a position going in my favor when things are this methodical? I’m usually holding onto the rope of the bull. Even Rut 800 didn’t cause much excitement.
     
    Are the sell bots off for the day or still at lunch? Look at all those green bars below! Not one sector under +1%?!?  


  138. z401
    WOW blizzards, thought we have global warming, low here was -25 and now up to -10F.


  139. Comcast, Time Warner TV-Everywhere deal announced
     
    "Comcast digital cable customers will have access to hundreds of hours of current and library content from signature Turner shows On Demand and online"


  140.  Pharm, what do you think is going to happen to DEPO? Is it too late to buy some calls? Strike/Month?


  141. Phil
    XLE your play was 70P at $1.1 and roll to 72 for .35 net 1.45, 72 are now 1.40, would that be better?


  142. SPY – the daily 3 min chart shows many mini bull flags.   Amazing.


  143. Pharm, what’s your recomended DEPO play?


  144.  Wow, CNBC finally covers the AMZN story on NFLX and they ask a NFLX only bullish analyst what he thinks about the deal and he says "I don’t cover AMZN but I think they are a long way from being a threat."  Interestingly he points to HULU as an example of how hard it will be for AMZN to get more content but isn’t that also true for NFLX?  Oh well, you can’t win I guess (or NFLX can’t lose in this case).   

    Dollar at 77.12, bounced at 77.085.  Dollar down 1%, market up 2% – this is not difficult to follow people. 

    FSLR getting juicy!  $160 and I may have to add another put play to the $25KP!

    Thanks for the overview Yodi.  Maybe add "Free satellite TV" to that sign and you’ll get some takers (it works for hotels).  

    QE3/Tusca – Sadly yes.  It’s still "just buy the F’ing dips" – no other strategy seems to work so we’ll have to play along until this broken slot machine finally stops paying off. 

    $1,686/Edro – Does that include the $700 cash you collect?  Even so, that’s an acceptable hold because we sure don’t plan on getting below 1/3 cash pretty much ever.  

    Different terrorists/Rustle – LOL, that was good and I needed the laugh after reading the rest of your list!  

    What does it know/Exec – The market knows nothing and the most dangerous thing you can do is to start to believe it does.  The market knows as much as a baby that’s trying to touch a flame – they go after whatever looks interesting and don’t know they can get burned until it’s too late.  Also like babies – you can warn the market and investors 100 times but they never really listen until the burn themselves…

    EDZ/Danosu – As I said above, if it’s less than $2K then fine and, also, is it accounting for the $700 cash you get back? 

    Abbreviations/Maya – If I didn’t think it would confuse me, I’d say yes but I know it will.  This is like being a new nurse and joining an operating team and trying to tell them you just came out of school and they have much better ways to refer to instruments and procedures during an operation and all the 20-year veteran surgeons should learn your new system instead of you learning theirs.  

    BDI/BDC – Yes scary but the new market order says you don’t actually have to ship things for them to be sold and Samsung just showed us that you don’t have to actually sell 2M tablets to book the sales and that then let’s 100 analysts talk about how strong tablet sales were and that makes the SOX go up 2.5% on the day – MADNESS!  

    Link/BDC – Just click your name right over the comment box (where you make a comment).  That should take you to the right place.  

    INTC/$25KP done with other 5 out at .66 so average exit on 10 was 65.5.  


  145. DEPO – current play is the Sept 7.5/10 BCS for ~ 1.10 or better, selling the 7.5 P for 1.40 or better so 30c credit for a 2.50 spread.  Ease into it by buying small lots over then next month.  Selling Ps along the way to reduce costs should help as well.  Current price is about $500M for a formulary of Neurontin – a $3B drug for PFE…..that is $$$$.  Once a day, lower dose….


  146.  cnarbais:  edz margin
     
    Fidelity also shows similar margin amount, they are usually very fair but probably because this an Ultra margin required aprox 50 % .  


  147. INTC/Phil
    In at .44, out at .70
    However, only 10 contracts.
    Should I have done 100?, if I have the margin?
    Nonetheless, thanks to Phil.
    Given resistance at $22 for the stock, could have possibly squeezed another $.25 or so, but that would have to have been balanced against premium decay and market gyrations.
    Correct, Phil?


  148. Phil
    With the extreme positive ticks today--does this suggest this is a pop, with more  follow-through coming, or a top?
    Or neither?


  149. Phil/ new system
    Totally get it.. Just a thought.
    Thanks.


  150. exec / one — That one contract was the bots trying to get you into a game of chase.


  151. Rain/Bots,
     
    I know….the bastards……I’m buying not selling so that makes it even worst.  Who sells 1 TZA option.
     
    Their tactic might work because I’m tempted to chase them.  TZA April 15′s are down .90 from yesterday.


  152. exec/1 option   I don’t know about a MM, but I buy/sell 1 lots all the time…one of the nice things about using TOS


  153.  I wonder if all these blizzards (record) occurring all over the country will cause a temporary setback in the restaurant industry (specially CMG!)


  154. EDZ margin in 25KP
    I was wrong – the TOS magin for -5 Mar20P is $6559 less the $725 collected for a BP effect of ($5,834)
    I don’t think we can short naked Ultras in the 25KP


  155.  MCP/Silent – Are you not allowed to say anything bad about them?

    Working/Pak – I feel I am doing my patriotic duty by helping people not to work, thus freeing up jobs for other who like that sort of thing.  8-)

    EDZ/Cnarbais – That seems kind of extreme.  They seem to be charging you like you have a 401K or something.  Best to call them and maybe call another broker like TOS, who don’t do crazy things like that.  

    SPWRA having another strong day – very encouraging.  

    ARRS/Reza – I don’t know them well enough but they don’t seem very cheap for an infrastructure play. They seem past any strong growth phase but they have a pretty high multiple so not too sexy to me.  

    VIX/$25KP – Selling 3 Feb $17 puts for .70 ($210, margin $1,200), buying 6 $17/19 bull call spreads for .65 ($390) is net $180 with possible $1,200 at $19.  


  156. shadowfax
    it’s 10 F now  0 forcast for tonight . 13 F for a high and -3 for low tomorrow.  wind chill even worse. that’s cold for us.


  157. Phil, any thoughts on CMI?


  158. WYNN pressing 120 again… too tempting not to sell another 5 115 C…


  159. Xenoport signed a deal with GSK a few years ago, and they were rejected for restless leg syndrome….the drug they were rejected on…..Neurontin….I thought they would get approval for it, and don’t remember the details, but DEPO should be able to capture that market as well.  XENO was using the large intestine and its ability to ‘transport’ the drug across the barrier at a higher concentration than the drug alone.  How creative are scientists??? Oh well, enjoy the profits (and some losses along the way).


  160. Phil/Others:
    In my TOS account, selling 5 EDZ 20 puts for $1.40 will tie up 5809.50 in my account.  I called TOS and they said that this is due to it being a 3X ETF and that is what they require. Is this the "margin" you are referring to?
    Anything I need to change?


  161.  danosu/EDZ – me too. I get the same margin requirement.


  162.  Phil….yea, I guess my calls were holding the NAS down….lol…too bad.  Seeing it now @ $1.20 doesn’t make me feel bad though.  I had a premise for the trade, buy the close and sell the open, I stuck to it and I did very well.  To have changed that premise this morning, would have been difficult as I knew I would be out all morning, so I’ll just take my 44% and buy hot chocolates for Hope and I.
     
    And, my point on the DBA request was to look at possibilities.  There’s no reason the dollar’s going to pull back.  We now have enough liquidity sloshing around, and people jumping in, that even riots in Egypt won’t turn us around.  Ben’s a criminal IMO for what he’s doing, but he’s not stopping, and His Holiness the Second Coming doesn’t look like he’s going to fire Ben anytime soon.  In fact, Big O is merely lining his cabinet with MORE corrupt bankers/corporates cronies…..which brings me to an insight….
     
    I’m basically a fundamental/value guy much like yourself.  But lemme pose this question, if Ben Bernancke’s stated goal is to "do everything possible to prevent another Great Depression" because "frankly the Fed didn’t do enough in the 1930s to prevent that Depression", then what he’s really saying is that fundamentals do NOT matter.  He, by turning on the largest printing presses the world has ever seen is attempting to deny the fundamentals you and I and so many others see.  So WHY THE HELL WOULD I CONTINUE TO TRADE FUNDAMENTALS ?  That’s like standing in front of an onrushing train and wondering if it will hurt me because by all rights it should stop, after all I am a pedestrian in my assigned walkway.  Hence, BTFD continues to work, and probably will until most of the world is in flames and rioting.  Sad truth.
     
    Your take on the market is so correct, we HAVE to keep trying to make more because we have to stay ahead of inflation.  It’s a nasty, horrible, ugly reality, but we must survive for there to be anyone around afterward to pick up the pieces.  Personally, I would hope it’s people like us that see the evil for what it is and will do something to prevent it.
     
    It truly is insane.  I think there is a way out, but I’ll save that for after hours.  Meanwhile, loving the great calls thanks for your insight and continued diligence even though it gets so frustrating sometimes. 


  163. ephmen85 / TOS — one contract — what’s your comission?


  164. Phil:
    I made 90% on CSCO trade you helped me with back in December. Like CSCO but like cash better here. Thank you for the trade.


  165. z401
    Winds are predicted 25 to 30 mph and colder’, wind chills to -50 and our ttemps are about 40 below normal today, Warming? lower tonight, last night -25 and it is coming your way.


  166. when i enter the $VIX trade, Etrade rejects it with no explanation. Anyone know what i am doing that i shouldn’t be?


  167.  Ephmen — silly question man … no matter what happens … storms, war, depression, boom bust …must eat more burritos – everyone !  LOL
     
    BTW, thanks for the e-card
     
    NFLX; covered most, but not all of my 225 short calls for Friday at 29-31 cents … free up margin for higher profit sales.


  168.   morx/etrade
     
    Are you entering the symbol as $vix?  I was able to buy some options last week and used symbol: VIX


  169. TOS help – how does one determine margin requirement for, say, selling 3 VIX Feb $17 puts before hitting the submit button.


  170. re vix – if i enter just vix it tells me there are no options available. guess i’ll riing um up.


  171. shadowfax
    ouch now that is cold. it sounds like the artic. :)  i was thinking you live on the west coast but not sure where. if you don’t mind me asking where are you ?  stay safe


  172. NFLX starting to move down… 
    Phil, I had entered on the previous play (200P’s) and rolled to the 210 before you called the 4 for the 25K. So I am in for 12 at net $3.18… what is the plan if we don’t get at least back to $3.00 today?
    Thx 


  173. In the confirm and send dialog look at B/P Effect ( that is buying power effect = margin required).
    Also you can rclick the trade and do analyze and look at the bp effect on the midle slice


  174.  I’m trying to do something with this
     
    So far not much going on. Suggestions of what you guys want to see?


  175. SPWRA / Phil – I suspect that there is a strong relationship between oil prices and the move we are seeing in SPWRA. I am short 2012 P so good stuff, but we need to see where oil will be in 1 month or so. I am not sure that these solar guys can counts on subsidies for much longer… They’ll have to do it based on energy cost getting higher. 


  176. amatta – phil will have better advice then me. but, NFLX has been weak in a very strong market. so technically, looks good for some more pullback if conditions allow. that being said, i am in the feb 220s, so i have a little more breathing room then you…


  177. Phil – CELG for the 25K looks mighty juicy….


  178. Snow – When you hit Confirm and send, you will see a dialog box listing the cost of the trade (in this case a credit) and a Buying Power Effect. Add up the 2 and you have your margin requirement. For example, selling 10 Feb 17 P, gets you $700 with $700 of Buying Power Hit. $1400 is your margin (roundabout).


  179.  Snow – Buying power for 10 17 P on VIX is actually $2900 so margin would be $3600. Sorry!


  180. snow
    Once you set up your play under the trade tap you see delete and a confirm and send box hit the confirm box and it shows you the result of you action you have the choice to queue edit delete or send when you press the send button here it goes to the market. always drop at least a nickel so you do not get filled and always make it limit order so you can always correct. Before check what the bid and ask is before placing an order


  181.  Can’t make the vix trade either. Did a symbol search and came up empty. I guess I need to change online brokers.


  182. Crap! Cramer just mentioned CMI!


  183.  morx, yeah, calling them up is best. They are making a few upgrades and a few things are still wonky.  Like real time quotes no longer work in my portfolio view, even though I have it turned on.  THey’ll be getting a call from me one day.
    Are you able to buy/sell options for other symbols?  It’s funny if that works and the vix don’t


  184.  augrusot,
    it’s funny cause I can see the snapshot/options chains/charts, etc by using straight up: VIX   in the get quote field up at the top.


  185. re $VIX – it is a level 4 trade. I am still a lowly level 3.


  186. BP effect in TOS – thanks oberlacu, good tip!


  187. Phil/ PFE
    I like the stock long term and for the dividend. I bought 1000 shares of  stock at $16.61 and sold 2012 $15 C  for $1.88 (now $4.30 ) and P for $2.93 (now $.57 ) .Also sold $10 Sept. $17 P for $.59 ( now $.39) Roll it all to 2013?


  188. rainman
    CMI do not get Cramer here what did he say is he pumping the stock or running it down I still hold the Feb 110 c short hoping to cash still in thks


  189. plus etrade doesn’t do weeklies. Why haven’t i switched?


  190. I didn’t actually hear what cramer said. I just heard Aaron say "what about Cummin’s"? to Cramer and I immediately stuck my fingers in my ears and started yelling "I can’t hear you! La la la la…" :-)


  191.  Damn, looks like everything is closing tomorrow due to the big storm. Got 6 inches so far. 12 more inches of snow expected tomorrow.


  192. z401
    I live in Alta Wyoming 1/2 mile east of Idaho line, last night was the coldest since I moved hear 1995. Used to live in Helena Montana it regularly held -30 for a high for almost a monthmy lowest I experienced was -56 east of Bozeman about 1980. Thought I left that and the 105 summer highs, but 2009 the all time high in Jackson was broken, I think about 95, about 100 here. Maybe the Bernank is doing this!


  193. Where are you nicha?


  194. amatta – Albany, NY


  195. Phil, 
    Never got an answer about the SQQQ’s from a couple days ago (bought Feb 28 C’s for 1.70, now .65) is it a DD or a roll up?
    Thanks


  196. CF/Yodi – It’s the $135 calls and CF is at $138.07 so that caller has $11.63 out of $14.70 premium to give you.   I don’t see why you’d want to close them out so early (unless you have something better to do with the money) but you sure can and just leave the put.  If you think CL is very strong, why not take the $14.70 you were going to give the caller and spend it to drop back to the 2013 $130s, which puts you $5 below the caller at net $7 with an 18-month spread.  

    TOS/Button – There’s all kind of indexes under the MarketWatch tab. 

    OPEN at $82.50 – AMAZING!

    Cheese/StJ – That’s exactly where I feared that stuff comes from!    I got my kids to stop eating those by having cheese and cracker parties for Sunday football games – now they are cheese snobs and don’t go for the singles anymore (except in a lunchable).

    Limits/Exec – You can do that but I use it NOT to see stuff.  It’s not very effective if you are trying to get rid of things.  I think they do it so they can "tag" you – ie. they can now see by your offer size that they already poked you. 

    Structured notes/Jabob – Ask me on weekend or after hours but I’d need to know the note terms you are talking about in order to give you a proper answer.  Short answer is you give me $100,000 for a year and I’ll pay you back $115,000 (or less) at the end of the year.  Gosh, can you think of anything you can do with $100,000 to make $15,000 for the year?  How about if you are an IBank and can lever that money 10:1?  

    VIX futures/StJ – That would have to be a wild contract!  

    Fear/Tusca – Yes, that’s what happened in 1999.  It was just so frustrating for about 18 straight months for people who were not in the Nasdaq so more and more cash got put in at the top, causing it to rise faster and faster into the end.  

    Blizzards/Shadow – Warm oceans push more warm air up north and the frigid Arctic air is squeezed into a smaller than usual zone and, once in a while, it pops out and jets down to the south, pushing ridiculously cold air to places it usually never goes.  So the extreme cold is a perfectly natural result of Global Warming.  

    Comcast/Pak – Somehow, this will be spun as being good for Netflix!  

    XLE/Shadow –  If it’s a new entry, you can go in at $1.40 and it’s better but yesterday those puts were $2+ so we took the $70 puts for $1.10 (half!) and committed to spending .35 more to roll up for net $1.45.  Had we known for sure that XLE would go up $1.50 the next day and we could have just waited to buy the $72s for our target price – we would have done that.  

    INTC/Maya – You should do whatever is appropriate for your portfolio size but I would appreciate it if those of you who are playing with large amounts not crowd out the $25KP positions.  Yes to $22 but, as I observed in the comment (see $25KP post) on the play – .70 was yesterday’s high and you don’t go into a short-term trade like that expecting the option to make new highs so you set realistic expectations and get out.  Our goal in the $25KP is to make a little bit of money a lot of times.  

    Ticks/Strether – I think it just indicates that the TradeBots are switched to "Buy" all day on the first of the month and that nobody gives a damn about the news today or tomorrow.  Dec 1st, Sept 1st , Aug 2nd, July 7th were all hug moves up.  Generally, there is momentum to the upside the next day.   We’re looking for that cycle to break, of course but, if not – it’s time to buy. 

    Blizzards/Rav – Bad day of storm but then people who didn’t shop all go out and people who were stuck in house and dying to leave all go out.  

    EDZ/Edro – That is miles off what I see.  I wonder what the diff is?  Why do some people get the far lower fee?  I don’t think it’s PM – the account I’m looking at doesn’t have it.  Even the PaperMoney account, which has no margin at all, says the net buying power effect is $3,199.  $6,559 just sounds ridiculous.  

    NFLX goes up as soon as Cramer comes on screen, just in the hopes he says something. 

    CMI/Rain – We talked about them yesterday.  Great company, very good earnings but not cheap right now. 

    WYNN/Amatta – Lots of tempting shorts but I think NFLX was the right one as they are down 1% when the Nas is up 2% today.  

    EDZ/$25KP, Danosu – If it ties up that much margin (more than $2,000) in your account, don’t do it.  You can just buy more spreads and keep a tighter stop (same cash loss limit).  

    Why trade fundamentals/Hoss – Because many many men have jumped off cliffs strapped to makeshift wings and said "I will do everything possible to escape the fundamentals of gravity" and none have succeeded in flying (gliding yes, flying no, fighting gravity, no).  Just because the fundamentals don’t seem to be working, doesn’t mean they aren’t there.  Bernanke’s money drop is just another fundamental factor that overrides, but does not negate others.  It is frustrating but you need to just learn not to take it too seriously – realize it’s a very silly way to earn a living and enjoy yourself.  

    CSCO/DC – Congrats!  

    NFLX/Amatta – I’m debating whether or not to kill it.   In for 12 in your case would suck but it’s either take the loss at $2ish or turn it into a Feb $215/210 bear put spread (now $2.40), looking to get the $5.  

    The Bernank/BDC – It’s funny but if you want a lot of people, I doubt many understand why he should stop buying bonds.  Certainly needs a cartoon gallery with all the best talking toons explaining the Fed and what they do and a video of "The Creature from Jeckyll Island" etc.  Maybe you can get an AMZN account and link people to books on the subject for commissions. 

    Solar/StJ – Maybe but that’s also an inflation story and Obama is pushing it so some legs and I like SPWRA as a company long-term.  


  197. BP / oburlacu – thanks, I do see it in the analyze middle slice, although not in the confirm & send dialog – guess that’s enough, though. Doesn’t look like those puts are going on sale for .70 for a little bit though.


  198. rainman Crammer
    He said cummins will be $120 in 3 weeks but look what happened to IWM since he opened his trap, if it can’t get over the 79.69 level soon I think we will stick down.


  199.  Pharm/CLDX – sold the May $4 Put for .68 and bought the May $5 call for .55. Any adjustments?


  200. Nicha,
    I live down in Weston (South FL), and although I don’t like the weather and the fact that it is not a real City, it is now 70 degrees and sunny… Happy to be hear for a change! 


  201. They keep buying the goddamn dips! 


  202. Buy program no BOT selling may be an indicator of close up.


  203.  PFE/Dflam – Well you went conservative and you are on track to make your conservative pay-off.  If you take out your puts now, that’s about $2.50 off the basis of the caller so net $1.80 let’s say and you can just roll the $15 callers up to the $17.50 puts and calls for $3.65, which takes net $1.85 off the basis of your stock and you are down at $14.76 with a $17.50 call away and next time just pay attention so it doesn’t cost you more than $1 to roll the Jan $17.50s ($2.40) to the 2013 $20s ($1.70).  

    CMI/Yodi – You really just have to wait to see if the broader market breaks up or down.  How does anything Cramer says effect the real value of that stock for the next 3 weeks? 

    SQQQ/Amatta – What a catastrophe they are.  I’d just get down to the $26 calls for .85 rather than DD.  That puts you in the $1.55 calls for net $2.55 and they have a .62 delta so just retracing today’s move would get you even.  If everyone breaks up, then  you have to sell the $27s (now $1.10) and roll out to something like the March $24s (now $3.40) so that’s what you are committing to by spending .85 to roll down.  


  204. CLDX/ nich – none thus far.


  205.  amatta – you are lucky indeed. I have had to shovel snow out of my walkway thrice already. Thankfully I got someone to plow the driveway. And the weather is close to 0 degrees.
    My dream/goal is to move down south, preferably FL or TX. 


  206. PHIL.
    I think the magin difference on the EDZ puts . has something to do with the account value. I put the same trade on my optionxpress  virtual acct with a higher acct. value and gave me a much lower margin requirement


  207. nicha
    Where do you live 0 degrees, Wyoming is double digit below 0.


  208. Another indicator is BOTS have been buying the f ing dips since 3:00.


  209. shadow – Albany, NY. 


  210.  BioChris …. I F-in love it !!  You go man ….
     
    Suggestions; post some of the cartoons; all the stories confirming Fed manipulation (like some of the Zero hedge stuff).
     
    I am going to put it out on Twitter for you !
     
    Public Mockery of Ben is what is needed to bring this to an end.


  211.  cnarbais – I think that is it. The more money in your account, the lower the cost to trade ultras.


  212.  Phil: Adjusting posotions
     
    Earlier today you recommeded a play for Deano/XOM, " I’d take the $82.50 off the table and roll the caller ($20.50) up to 2x the 2012 $75 calls at $10 each and then you can buy 2x the 2013 $85 calls for $6.45 and sell the $65 puts for $3.80,"  this is similar to adjustments you have suggested to me and and still am not clear what the path to profit is?  How is having basically a 2x calendar bear call spread an improvement on what was a long, but albeit boring, bullish position on XOM?  I’m not doubting it is a good adjustment just can’t see the 2nd and thirds moves down the road.  It’s like we’re playing chess and you telling me you will have me in checkmate in 3 moves and I believe you will, but I still don’t see how :)   TIA


  213. Cheese / Phil – Please let’s not call these Kraft singles cheese… As born in France, I would take it personally! 


  214. 10:00 AM On the hour: Dow +0.6%. 10-yr -0.41%. Euro +0.49% vs. dollar. Crude -0.21% to $92.00. Gold +0.09% to $1335.70. 

    11:00 AM On the hour: Dow +0.78%. 10-yr -0.47%. Euro +0.68% vs. dollar. Crude -0.52% to $91.71. Gold -0.33% to $1330.10. 

    11:08 AM The Fed dips into TIPS in today’s POMO, buying $1.735B in inflation-protected Treasurys of $4.043B offered by dealers. Treasurys overall stay in the depressed state they reached after ISM manufacturing: 30-year yield +0.05 to 4.62%; 10-year +0.07 to 3.44%; 5-year +0.08 to 2.02%; 2-year +0.05 to 0.61%.

    12:00 PM On the hour: Dow +0.9%. 10-yr -0.41%. Euro +0.85% vs. dollar. Crude -0.91% to $91.35. Gold +0.02% to $1334.80.

    01:00 PM On the hour: Dow +1.19%. 10-yr -0.36%. Euro +0.97% vs. dollar. Crude -0.34% to $91.88. Gold +0.66% to $1343.30. 

    02:00 PM On the hour: Dow +1.17%. 10-yr -0.27%. Euro +0.99% vs. dollar. Crude -1.15% to $91.13. Gold +0.26% to $1338.00.

    03:00 PM On the hour: Dow +1.22%. 10-yr -0.41%. Euro +0.93% vs. dollar. Crude -1.63% to $90.69. Gold +0.36% to $1339.30. 

     

    Egyptian President Mubarak will say in a speech later today that he will not run for re-election in September but would stay in office until then, Al Arabiya TV reports.

    Brent crude stays over the psychological benchmark of $100 for the second day, but NYMEX futures have eased up (-0.7% to $91.60/barrel) after Suez Canal officials say traffic is normal and even a bit above average. 

    S&P could soon overhaul its method for rating banks, according to a proposal it is circulating. The rating agency would pay less attention to a bank’s bottom line, instead scrutinizing whether the bank had put away enough capital for a rainy day. The changes could lead S&P to downgrade credit ratings throughout the banking industry.

    The Fed is beyond reform until we "end up with a real crisis," Ron Paul tells Business Insider. "I’m not optimistic that all of a sudden the Fed’s going to be restrained, but when this inflation hits us and we see prices going up and interest rates going up, I think then they’re going have to [change]." 

    State tax revenue during Q4 increased 6.9% in 41 states so far, fastest growth rate in nearly five years, as the improving economy and higher taxes in some states propelled a pickup in collections. But states such as California still face steep budget cuts, as collections remain below pre-recession peaks and federal stimulus funds are no longer available. 

    As Egyptian markets stay closed, traders have bid EGPT far above its quoted net asset value. Fund manager Van Eck, unable to figure the actual asset value, has stopped issuing shares, so folks are just flipping the ETF amongst themselves.

    Russian talk of resuming grain exports might just be that. Last summer’s drought cut production by 40% and still leaves much acreage too crusty to plant. With food security now a major political issue, don’t expect any grain to leave the country. Grain ETFs (GRU) (JJG) are up about 70% since the export ban last summer.

    Daimler (DDAIF.PK) Jan. U.S. sales: +14.2% to 17,631 vehicles. Mercedes-Benz up 11.4%; Smart up 28.8%. (MW)

    Chrysler (FIATY.PK) Jan. U.S. sales: +23% to 70,118 vehicles, vs. Edmunds expectations of +32%. A tenth straight month of Y/Y gains. Cars -22%; trucks +38%. top seller Ram pickup +22% to 12,197. Dodge Caravan +82% to 7,813. Town & Country +45% to 6,552. (PR)

    Ford (F) Jan. U.S. sales: +13.3% to 127,317 vehicles, in line with Edmunds expectations. Retail sales up 27%. Cars declined 0.4%, but utilities up 16.8% and trucks up 24.6%. Among top sellers: Fusion up 18%, Escape up 30%, F-Series pickup up 30%. (PR

    Honda (HMC) Jan. U.S. sales: +13% to 76,269 vehicles. Based on daily selling rate: Honda division +13.2%; Acura division +11.6%. Cars -7.4%, trucks +46%. Accord -27.7% to 15,012; Civic -0.4% to 14,634. (PR

    Kia Jan. U.S. sales: +25.6% to 27,789 vehicles. Sorento up 10% to 8,116; Soul up 149% to 5,345. (PR)

    Nissan (NSANY.PK) Jan. U.S. sales: +14.8% to 71,847 vehicles. Nissan brand up 15.4%; Infiniti up 10.3%. Crossover Rogue marks fifth straight Y/Y record with 9,423. But Altima down 11.7% to 16,454. (PR

    Toyota (TM) Jan. U.S. sales: +17.3% to 115,856 vehicles. Toyota division +23.7%; Lexus Division -17.1%. On daily selling rate basis: Light trucks +29.5%, passenger cars +8.3%; Camry +14.9% to 18,145; Rav4 +41.8% to 11,196; Tacoma pickups +5.8% to 7,140. (PR

    With Orexigen’s (OREX -72%bad news, the near-term pipeline for obesity drugs is rather thin: Novo Nordisk (NVO +1.5%) and Amylin (AMLN +0.7%) look to be the next candidates to offer a new FDA-approved option for the disease, while companies like Isis Pharmaceuticals (ISIS +1.8%) and its antisense-based candidate are likely at least 10 years from market approval. 

    With the 2011 Advances in Genome Biology and Technology conference getting underway tomorrow, life sciences companies may get a little extra attention. Major presenters/participants include Illumina (ILMN), Life Technologies (LIFE), Caliper Life Sciences (CALP), Agilent (A), Pacific Biosciences (PACB), and Complete Genomics (GNOM). 

    Three lunchtime reads:
    1) Officially out of recovery and into expansion: not
    2) Biggest corporate stakes in Egypt’s power shift
    3) The case for ignoring the stock market


  215. Better late than never
    IWM 79.86 was significant as I related to amatta this AM should have added it to the levels.


  216. Phil market and CMI I think after a day like today we can expect a drop again. I wish I had all in cash what my account is showing today.


  217. Are the DIA 119.75 puts (now $1.28) still good for the 25KP… or should we hit a higher strike, or cancel the trade?


  218.  Hoenig says more QE to be discussed.
     
    OMG !!


  219. All – echoing yodi’s comments above:
    is it better to get out of a position (buy writes, sold puts) when you have 20% of the profits anytime or should you wait till expiration. Likewise should we get out or roll if we have a 20% loss?
     
    I know Phil has said before that 20% is good enough but he also says to see whether we can do anything better with cash.
     
    I am raising this question because I have been consistently watching my invested portfolio value go up 10% one month and then the next month it will go back to break even.


  220. Cheese – we buy cheese at our local farmers’ market from this guy:
    http://www.cheesecorner.net/
    Fortunately for our budget, that’s only once a week, but that is the real stuff. I’m very partial to the Red Dragon and the apple-smoked cheddar at the moment, but I also love the blues and the goat cheeses. *sigh!* wonderful stuff. There’s a baker in the same market who’s from Provence.


  221. lot of hopes on WFR tonight. up 4+%


  222. Fundamentals / Hoss – Fundamentals still matter and always will but you have to add time to the equation and no one ever knows exactly how much time. Fundamental research and value investing make so much sense that it’s difficult for more rational people like ourselves to adjust expectations to the irrationality that usually governs the markets in the short term (or even long term). But isn’t it ultimately irrational to believe we can resist the craziness with our more rational approach! Isn’t it rational to try to understand and adjust our thinking and expectations to the circumstances rather than beat our heads against the same wall over and over?

    After the collapse in 08 I was so disgusted I nearly gave up on active investing altogether. How could I hope to succeed against such corruption and incompetence? But then I read about some smart people who made tons of money off the collapse using their smarts and discipline to win big even with the deck stacked so much against all of us. About that time I came on Phil’s columns at Seeking Alpha so now I’m here. Corruption, stupidity, charging herds of wild-eyed lemmings can be obstacles to our goals or stepping stones. If we know the game is rigged and we know the herd is ignorant, why fight it? Play it how it lies.

    During the height of the dot-com madness my mother told me she wanted to become a day trader! Stretch your imagination to it’s limits and you won’t be able to picture how absurd that was. I talked her out of it, of course, but my first thought actually was, "This run must be nearing its end, watch out." Now I’d want to figure out how to make some money when the bubble finally bursts.

     


  223. The Cheese Cave / stjeanluc – What made you look that up? Maybe some creative member could do an XTRA normal with a commodities speculator explaining his business to someone with the Chesse Cave as the setting.


  224.  Account value/Cnarb – Well that makes sense and to that I say, GOOD!  As I said in the post for the portfolio, this is not supposed to be the way someone plays the only $25,000 they have, this is how you play $25,000 allocated to a high-risk strategy against a conservatively invested $200,000.  The simple solution is DON’T take those very aggressive margin plays – the brokers discourage small account-holders from buying them for a reason.  

    Checkmate/Red – Well so much depends on what happens for the next 12 months.  Forget the stock, the stock is gone so it’s just a spread where you buy XOM 2013 $85 calls for $6.45 and sell the $65 puts for $3.80 and the 2012 $75 calls for $10.  So it’s a net $7.35 credit on a $10 spread and the most you can possibly lose to the upside is $3.65 as you’ve got cash in your pocket and calls to cover.   To the downside, the worst thing that can happen is XOM is put back to you at net $57.65.  So you risk losing $3.65 or owning XOM at $57.65.  Don’t forget that’s being done in order to cash out $82.50 without having to pay back the caller so it’s designed to accomplish a specific goal.  Since the upside loss is max $3.65 and you have a year to roll the 2012 caller if he does end up in the money – the trade depends on your faith in collecting another $3.65 from the caller over the course of another 12 months in 2012 but I wouldn’t have suggested it if I didn’t think XOM will be back in the mid $70s by then, making this trade a very nice winner.  

    Cheese/StJ – We are in agreement on that.   In America the kids use it on top of everything.  

    Wishes/Yodi – When in doubt, sell half!  

    DIA/Wassel – Better for you than they were for us so far!  I still like them.  No Russell 800 – we’ve seen this movie before.  

    Hoenig/Cap – OMG!!!

    Exits/Nicha – See Strategy Section.  You need a trading plan when you enter.   If you expect to make at most 100% in a year and you are up 20% in a week – it is probably a good idea to take the money and run but NOT if the move was so serious or news came about that gives you GOOD reason to believe that it’s a very safe 80% you will be holding for (like our XLF play discussed in morning post).  You must keep in mind that there’s a safety issue with your stock in play that you don’t have with cash.  When I say can you do anything better with cash – I mean cash that is allocated for deployment, not your cash that is on the sidelines because the market is too scary.  Just do an experiment (and you’ll see this in the $25KP) and take all your 20% gains off the table until you have 10 and then see how your portfolio looks.  Work the losers (if they make sense to work) and take all 20% gains right off.  Once you realize that actually works, you will become a better trader – even on the ones you let ride occasionally.  

    Cheese/Snow – That’s nice.  I just go to Whole Foods and overpay. 

    WFR/Morx – I love those guys but I kind of hope they miss to give us a great buy-in.  

    NFLX really testing my patience!  It’s just too weak on a strong Nas – I can’t let it go….

    Good point Pak!  


  225. Phil/25KP, DIA Feb, $119.75 put is down 20%, $1.50 in, now $1.20, should we DD?  Thanks. 


  226. Did anyone get the EDZ BCS to fill for $2?


  227. @Phil
     
    ”….. Warm oceans push more warm air up north and the frigid Arctic air is squeezed into a smaller than usual zone and, once in a while, it pops out and jets down to the south, pushing ridiculously cold air to places it usually never goes.  So the extreme cold is a perfectly natural result of Global Warming"
    Or not?    http://yowusa.com/earth/2010/earth-0810-01a/1.shtml


  228. Pharm / EDZ   
    Filled at 4.08 / 2.08 for 2.00 spread soon after Phil posted


  229.  Pharm/EDZ – I got that filled for $2.


  230. Thx.


  231. Make of it what you will broadbase selling into close except the DOW, close to 7 mil shares bought in last 3 minutes, 4 mil in last minute, not so good for the bulls. Another small POMO day tomorrow.


  232. Phil, put the NFLX story in your tomorrow morning write-up!


  233.  Thanks Pak……Yea, I was just commenting that the fundamentals are on hold as long as our regime can stand it.  IMO, all the going up and up guarantees is the going down will be that much harder, further and lonlier as we are now alienating so much of the world.
     
    It’s sad, but hey, not much I can do about it, I’m just a house husband who trades to keep his mind sharp and make a little spending money.  Phil’s right, gotta keep my sense of humor.
     
    Plus, according to Hope, "Daddy, you really can’t sing either.  Why don’t you just go away."  As she put her thumb in her mouth, pulled her blanket up and closed her eyes for nap.
     
    Blizzard’s here in Evanston finally…wow. lots of snow in 30 minutes.


  234. DIA/$25KP, Bob – Is a wait and see for now.  We have time.

    Loop/Flips – I don’t have time to worry about that.  We were set for crazy weather anyway, I think this is just more of the same.  

    NFLX/Jordan – If you see something newsworthy let me know but they look very done today, maybe don’t need help.  


  235. Phil / RUT   So it flirted with your $800 for a moment and ended at $796.  I guess that means we continue stay on the sidelines with cash since we haven’t captured all levels yet?


  236. A few ones to put on our watchlist, BIIB and CELG.  ENDP looks good for swing trade….


  237. "Daddy, you really can’t sing either.  Why don’t you just go away." / Hoss – She’s learning this somewhere…


  238. @Phil
    Dealing in XOM.
    You mention that the stock is already gone, so I presume you mean that it has  very little upside remaining and more likely a return to the 70s in 1-2 yrs. 
    Would you then advise looking elsewhere for a conservative investment? 
    I have been asked to manage an account for a friend who owns a hundred shares of XOM and 3,000 BMY with $100,000 in it. What would be your thoughts as fresh entries at this point? Sell and remain 80% in cash and tickle the other $20K?


  239.  Margin on Ultras:
     
    FWIW:   I’ve got plenty of margin available with Fidelity and pretty good size account with no complaints that they have higher margin requirements on Ultras.  EDZ, TZA etc.  I look at it conservatively that I would rather not get overleveraged with an etf that can move 3X against me.  And it’s my understanding that the margin requirement could change quickly and I would rather not worry about keeping track of margin requirements on something that can move too fast.  So with the EDZ trade my cash return can be the same just not as high a % return.  I understand for the $25KP exercise you wouldn’t want to commit $5,000 in margin to the trade. 


  240. AMZN vs NFLX PCWorld story today:
    http://www.pcworld.com/article/218410/5_ways_an_amazon_prime_video_streaming_service_could_best_netflix.html
    brings up a good point that the Amazon Prime membership can be shared with up to three "family members"



  241. Phil – Your daily wrap-up show is GREAT! :-)


  242.  Hey guys, I need some travel advice.  I am going to be in the Detroit/Windsor area For a Fri/sat/Sun around Feb 21.  Does anyone have any reccomendations for places to eat and stuff to see.  On the list so far,
    1) Roast, in detroit, (michael symon’s restaurant)
    2)  Ceasars in Windsor (I love to play poker).
     
    Thats all we got so far.


  243. NFLX / AMZN / Phil, Jordan – Good articles. Best case for NFLX is significantly reduced margins which Hastings claims he’s unwilling to sacrifice for the sake of growth. Good luck with that. Tthe hard core competition has begun. Got to like Amazon’s chances integrating this with their giant retail machine.
    Phil – Speaking of adding value, the daily wrap-up show is winner although don’t think you should lead with it in any promotions just yet.


  244.  Didja know that "pump and dump schemes undermine the integrity of our stock markets" ??
     
    http://dealbook.nytimes.com/2011/02/01/stockbroker-accused-of-pump-and-dump-scheme/?smid=tw-nytimesdealbook
     
    What ?  Our Stock Markets have INTEGRITY ????
     
    So we can expect to see Uncle Ben & Timmy and Lloyd frogmarched any day now ?
     
    Not to diminsh the crime apparently committed in the story linked above; and kudos for SOMEONE being arrested, but enough with the small fry …  Our markets have no integrity and nobody of substance is being held to account !


  245.  ENDP- Pharm- what are you seeing on the chart on this one for swing trade? I must be missing something. 


  246. If you guys are trying to pick a winner between NFLX and AMZN, don’t. They both suck on fundamentals…
    http://lemoyne-mappingthemarket.blogspot.com/2011/02/amazon-vs-netflix.html
    AMZN has been skating on a 70 P/E for a long time and I just don’t know how long that can last. They’ll have to deliver one day and getting into the business of video streaming might not do it especially if they have to face "net neutrality" hurdles like NFLX! 


  247. Winner / stjeanluc – I don’t care if they both crash and burn. Interested in how the streaming competition plays out and in shorting NFLX.


  248. QE3 is on the way.  S&P 1500 by October is still very much possible according to J. Grantham of GMO (see his latest outlook). 
    http://www.zerohedge.com/article/here-comes-qe3-hoenig-says-more-quantitatve-easing-be-discussed


  249. PhiL:  I love the wrap up show; that alone is worth the price of admission!!!


  250. Drove from NYC to DC and the roads were packed with trucks, I mean packed.


  251. wrap up / Phil – what a hoot! I absolutely love it, and you’re having way too much fun ;-)


  252. Phil
    You are right about our guys make a difference rather than spys.
    On the other hand at about 7:30 MT time I called and asked Arlyn if I came to her place would she go to the store because I could not do it. I also told her that I ranted on this blog and to expect the cops to follow me. They did right up to her driveway. That spooked her for 30 minutes. She has no car, went to the store, and the cops were still watching my car waiting as she came out. As expected and to me proof the spys are on me not PSW because a religious SOB said I was violent along with Arlyn’s Mom that was going to jail for crimes she pplead guilty to but would rather kill herself. Sept 08 Arlyn and I arrested, we were page 2 and half of page three, drug dealers with guns. 18 months and $30,000 later, did the paper say we both tested negative for drugs, the pills were legally prescribed, and the guns had to returned? NO! Last fall these same cops left a large package of meth on their bumper, loosing it after a dog training exersize. Their excuse to the DEA was we didn’t think we had to report it, the idiot that lost it didn’t report it, went on vacation, and no disiplinary action. After they were nailed on that there excuse was the dogs somtimes need to be trained to find large amounts, what, why, or as most believe it paid for that vacation.They are being sued for $1 million for tasering someone too many times in his car at a traffic stop, their excuse was he kept screeming, everyone knows why. This and a few friends going to gail for pot over 40 years is why I say stop the drug war, 30,000 dead in Meico, all other wars, give these people pink slips as government cost cutting, they produce nothing but more costs, and all the other cutting is total crap. 4 PM a phone call, the cops are patroling Arlyn’s house again, and when I stopped for gas guess who was there with all lights flashing, it could be a hold up but was nothing. THE REST OF THE TRUE STORY, now up to date!! It is hard to believe the law wants my problems on their watch, hold my BP meds as drugs, and call paramedics. I hope the unexpeced happens to the control freaks, because they had the chioce.


  253. Cap
    Where do you find these things? We know what is happening and again get the guy on the bottom of fraud to show they care. About their jobs and secret bonuses maybe?


  254. Phil—I think the structured note that I mentioned before was on the S&P with the upside capped at 15% and the downside either at 5 or 10% (I want to say 10%).
    My comment to him was that those firms hedge out any risk and the brokers get paid nicely to sell them. It might sound good but there is a reason they push these products on high net worth retail clients (and it isn’t because they are looking for the client to make the highest return possible while limiting their risk).
    Even if the firms didn’t lever it up, I still think these products smell bad. I was hoping you could give some insight as to why?


  255. Google Android counts include rival Chinese variants
     
    "Hot on the heels of Samsung admitting that it had exaggerated sales of its Android tablet to consumers, it is becoming clear that Google’s Android platform definition is being stretched to include Chinese rivals, including China Mobile’s Ophone and Tapas OS, a project run by the former president of Google China."


  256. Apple denies claim that Sony Reader, Kindle in danger on iOS App Store
     
    "Apple issued a surprisingly timely response to a claim made by the New York Times that suggested the company might bar iOS apps that sell content outside of Apple’s software market within iTunes."
     


  257. Wrap up is a daily must!


  258.  Shadowfax: spys
      You better be careful they may be picking up your transmissions when you say things like, " I hope JRW stops in, his lines are better than mine" :)  Maybe you should invite the police in to watch while you plot pivot points on the RUT all day, that should give them something to talk about back at the station.  Funny, people think of  Wyoming and Montana as the land of personal freedom, sure doesn’t sound like it in your town.  hope your heat stays on.


  259.  Oh Man, this is No Good.  BioChris, help !
     
    My wife got an invitation to the following from the Citizens Budget Commission (surely an oxymoron)
    79th Annual Dinner
    March 2
     
    2011 Annual Award Dinner
    Honoring
    Ben S. Bernanke
     
    UGH
     
    What does the CBC do:  Its ‘Celebrating 79 Years as NY’s Non Partisan Voice for Effective Government"
     
    ROFLMAO
     
    What a useless organization of suck ups this must be.
     
    Anyway, Phil, Chris, if you want to go, Wed March 2 at the Pierre.  Dinner at 7 pm.
     
    http://www.thebernank.com


  260.  Cheapest seat is $2,000 per person.
     
    Phil, maybe you can kick in for a table for us.
     
    LOL


  261. Craigzooka:
    Andiamos-Riverfront (Italian) always a favorite: 400 Renaissance Center, Detroit
    Wolfgang Pucks Grille at the MGM Grand Detroit is also very good: 1777 Third Street, Detroit
    Foxtown Grille nice little haunt near Comerica Park: 2203 Woodward Avenue, Detroit
    Greek town is also in the vicinity of Cobo Hall if you like….well…Greek food. My favorite is Pegasus: 558 Monroe Street, Detroit
    I don’t know what your transportation situation is but if you can get to Ann Arbor there are a variety of nice restaurants on Main Street. 45 minute drive from Detroit and makes for a nice night if its not too cold. Many things to do there also-a tad safer than Detroit.
    Not sure what you like to do. There are many casinos if you like that and a few decent bars and clubs near Comerica Park. No Red Wings or Pistons that weekend. Be careful around Detroit. May be best to go to bars and clubs at the casinos unless you know where you are going. My wife likes the Detroit Institute of Art if you are in to that. You can also check out the concert schedule for the Palace in Auburn Hills. Hope this helps. Let me know if you need anything else.


  262. ENDP/pstas – note the big candle, 5d MA is starting to point up, and the trend that is not broken.  Volume is ok, so it is something real, not great, but real.   I think they could go up another $1 at least, if not more than that to the top of the trend.  If things are going to go bullish, then that is the way I would play them. 


  263.  We may in for a hot time, I would guess.  Mubarak isn’t stepping down.  Yeah, 9 months ….it’s a joke.  Does he think everyone in the street is going to go home and wait?

    Jordan is suffering demonstrations.  The president of Turkey — imagine — has come out in favor of the demonstrators.  Israel is horrified, understandably.  Libya and Syria are worried.  Saudi and the Emirates must be likewise.  This is not calming down, on the contrary. Israel’s 1979 peace treaty with Egypt may be in the balance. More radical regimes – and when you are talking about Saudi and the Emirates, nothing could be less radical — will push to use oil as a weapon.  Why not?  I would, in their position.  

    SU, PBR, obviously, the latter relatively cheap, and I will have to think about oil service companies, because offshore drilling [Arabs don't have navies, do they?] may become the new vogue, and the BP disaster be damned.
     
    From Al Jazeera: 
    http://english.aljazeera.net/news/middleeast/2011/01/201113177145613.html


  264.  I was referring to RSX as relatively cheap, left it out of the sentence.


  265. redlog
    I never had a bad word in liberal Montana but Idaho and Wyoming are the reddest and second reddest states in the country, Idaho is 80% morman, Wyoming is too proud of their famious mormon row, almost everyone is from Utah, and those people want you to join their church and pay 10% before taxes. They control all law, politics, most newspapers, and business, just like Washington. I closed our business in 2001  because there were  not enough others to sell to, I had 50 small claims court  cases that the court never inforced because I sold Direct TV and Verizon, they signed up and never paid a month so I got what are called chargebacks of mostly $255 for breaking the cotract, the subsidy not to mention never getting back the phone or dish receiver that I paid for. I stopped selling both because I refused 1 and they called the cops. They will not buy anything else from non- members. All my physical porblems are the result of one of them that almost killed me,drunk, but his brother was the sheriff, he got away free, I got screwed, paid for 25 surgeries ended up totally disabled, and then they had me arested because I got SS Disability that pissed off a few of them that were diqualified, welfare is easy, SSD is auto disqualify because you really can’t do anything. They are sure I am a wall street and government  criminal. I right letters to the only newspapers that publish me and get this, the week before the election I revieled what was going on locally and only one place put out the paper.  2 places will sell you beer and call the cops, they won’t make coffee at Burger King.  I could go on for twenty pages and then turn Arlyn loose and she refuses to stop cussing them out, The DVD of her being arested is XXX Hollywood, teling the female cop to feel some real tits you flat chested  f    ing lesbien.  Why don’t you gest shoot me you ass  f     ing hole twisted inbred everything above. The cops finally asked me to help calm her down, they isolated her in jail, put her on suiside watch, and she never let up until bailed out. We tried to hitch hike because I  couldn” walk home and the cops came up and said it was not legal in Wyoming, she went off again until they threatened to take her back to jail. They gust can’t comperhend we are not crazy, only  mad as hell for all the trouble, expense, and humiliation they caused for nothing. Local respect is never returning in this tiny area. The newspaper editor loves my letters, says everything will be published, and as soon as I get to my parents house I will continue from afar, the power of the internet at a cost of only time and like Phil my problem is stopping once started. A couple of my letters made it to the east coast, the biggest I know of Knoxville TN. Sometimes I travel over 100 miles to shop without detection, if I can get Arlyn to go and be my legs, push the cart etc.


  266. Good morning!  

    Egypt didn’t have much violence – YET – but the speculators are still milking it. 

    Yemin also tossed out their guy and Jordan is changing the government as well.  

    On the bright side, Wall Street Pay Hit’s New Records!  

    Here’s the morning report:  


  267.  ENDP- Pharm- I see that now. Also, it is trading on a much longer channel going back to Mar/April. If valid, could be at the bottom of that range and consolidating for a larger move up. 


  268.  Well, that was quite a storm last night. Have not ventured out but looks like 3′+ drifts in the driveway. Winds have died down a bit but now the temps are forecast to drop- below zero for tonight. 
    This will put a crimp on business for a few days but likely will be offset by the very brisk retail sales – groceries/hardware etc. prepping for the onslaught. 
    Have some "emergency" type service calls to make but not sure if we can get the trucks out to the main streets. 
    What a mess. 


  269. pstas – ditto here on the 3′+ drifts. our site is closed for today so we’re working from home. definitely a mess out there.


  270. I hope everybody hold NFLX 210 weekly puts got out this morning at $3+.  Good trading.


  271. something is wrong, nobody post between 7:51am to 9:52am???


  272. lol, my bad, wrong day.


  273.  Syria may be going off too, Al Jazeera reports social media calls for demonstrations in Damascus this weekend and Yemen’s president has pledged not to seek another term nor pass the reins to his son.
     Egypt’s Mubarak has at least a bettor’s chance of staying in office by doing what Iran’s Ahmadinejad did after Iran’s last elections — hang onto power by hiring Basij thugs to beat demonstrators senseless.  Mubarak’s using riot police in civilian clothes who have been dropping Molotov cocktails off a bridge onto the heads of protestors this evening. Predictions?  Just that It ain’t over ’til its over. Not that one would expect global equity markets to notice, it should be added.