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Wacky Wednesday – $100 Oil Equals No Inflation Says Bernanke

openingimageHave you no shame?  

That's what the Senators should have said to Ben Bernanke as he hemmed and hawed his way through his ridiculous testimony yesterday.  What was it that that Joseph Welch said to Joe McCarthy when he tried to lie to the Senate?  "You've done enough!  Have you no sense of decency, sir, at long last?  Have you no sense of decency?"  As Mr. Welch said about McCarthy, the same can be said about Bernanke: "I think I never really gauged your cruelty, or your recklessness…"  

Maybe it was the atmosphere of the Senate hearings that made me think of it but I was so sickened by the farce going on at the Senate yesterday, punctuated by the joke of oil rising to $100, even as The Bernanke told us inflation was under control, that there was little left to do but dream of an America long past – when people of moral conscience stood up – not because it was profitable – but because it was right.  

In Bernanke's official testimony to the Senate, the Fed Chairman justifies his action with Bullshit – there is no other word for it – it's total Bullshit: 

 

Inflation has declined, on balance, since the onset of the financial crisis, reflecting high levels of resource slack and stable longer-term inflation expectations. Indeed, over the 12 months ending in January, prices for all of the goods and services consumed by households (as measured by the price index for personal consumption expenditures (PCE)) increased by only 1.2 percent, down from 2.5 percent in the year-earlier period.

To quote Moneypenny from last night's PSW Wrap-Up show: "Are you freakin' kidding me?"  This is so ridiculous I can't even bring myself to comment on it anymore – just screw it – we'll see what happens at the House today in day two of Bernanke's crap-fest but what's the point?  The fact that Bernanke was allowed to leave the Senate chamber without being handcuffed says it all, doesn't it?  As David Fry pointed out: "Bernanke gave his senate testimony and mostly lied his way through it. I’ve given up trying to be ambivalent about this since the lying and spin should upset everyone. The “core rate” nonsense is a manipulated smoke and mirrors diversion from the truth. Inflation is rising and we see it in our real daily experience."  

Fortunately, that non-existent inflation gave us a huge winner yesterday as our longs on the oil futures (mentioned in yesterday's morning post) were huge winners, as was our TZA cover (also mentioned in yesterday's morning post) and our VIX longs, which we cashed out in the $25,000 Virtual Portfolio for another $1,230 gain, bringing our virtual cash total up to $28,761, up 15% in our 4th week and right on track for our $100,000 goal for the year.  Having dumped our VIX covers into yesterday's excitement we are left with EDZ as our primary hedge in the $25KP and now we are certainly tilted bullish so we'll have to watch those Breakout II levels very carefully to make sure they hold (see chart in Monday's post).  

If those lines don't hold up, then we're going to get a lot more aggressive, which was why I killed the VIX spread yesterday as it's NOT BEARISH ENOUGH to cover the disaster that awaits us if this downslide begins to snowball.  We played bullish off the lines and I'm not schitzo – but the markets are and that's the way we have to play them with our short-term moves.  Longer-term, we went long on our beloved TBT again as they tested $37.50 and we bought YRCW as planned even as we pressed EDZ with a new trade (not for the $25KP) and added short positions on MOO and BAL, which dropped like a rock after our 1:24 entry.  

Actually, my 1:24 comment to Members is a fine example of how crazy the market is.  EDZ is an April-targeted short but we're paying for it by selling puts in stocks we want to buy on the dips.  BAL is an aggressive bear put spread – already 100% in the money thanks to yesterday's dip and MOO is an April speculative put.  At the same time as we picked those 3 short plays, at the bottom of the same comment, we rolled our FAS play in the $25KP to a more aggressive position, looking for a short-term bounce in the financials.  Later we picked up an even shorter-term upside play on the QQQQs, using the weekly calls to maximize leverage, looking for a bounce into the open today. 

Inflation, Cost of LivingWe also went long on TBT, long on AAPL (weekly into tomorrow's announcement) and long-term long on WMT – so lots of fun shopping on both sides of the fence as we test our Breakout II levels.  While oil and gold may be rising on mid-east tensions, we believe we are now at the point where more money for oil simply means less money for other products – whether it's commodity purchases by speculators or or necessity purchases by cash-strapped consumers.  There just is not enough spare credit capacity to pay for it all this time around – we can't all dip into our home equity to fill up the gas tank anymore – the money will have to come from somewhere else

Maybe it will come from hedge funds as the top 10 hedge funds made $28Bn in the second half of last year.  That's $2Bn more than the net profits of Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Barclays and HSBC combined.  Even the biggest hedge fund have only a few hundred employees and often just 100 clients to divvy up the winnings, while the six banks employ 1m between them.  Isn't that just FANTASTIC!    Warren Buffett is on CNBC this morning trying to explain how the top 1% are making 10 times more money PER YEAR than they made when Reagan was elected and they are paying 50% less taxes, accounting for a full 1/3 of the entire $1.8Tn annual deficit all by themselves (with the war accounting for the rest).  You could hear the crickets chirping in the CNBC studios when Warren pulled out his report as clearly that was a conversation no one wanted to pursue with him – so he dropped it but kudos to him for timing it after 8pm in his interview.  

Not that Buffett is a saint, mind you as it's Corporate Tax Revenues (or lack thereof) that are really driving a stake through this economy and he remains numb on that subject – perhaps as it's a fiduciary duty to his shareholders not to pee in that particular pool.  Steve Forbes was on Bloomberg this morning calling for an end to Corporate Taxation and Regulation.  He wants things to go back to the way way they were when Bush 1 took office, just as Reagan's policies were creating a new class of hyper-wealth while grinding the Middle class into the dust.  

It's sort of a joke now, that we get all our information from people in the Financial Sector and that the President gets his advice from the Financial Sector and the Republican Party gets 40% of their campaign contributions from the Financial Sector and that the largest chunk of lobbying expenditures come from the Financial Sector and that the Financial Sector got Trillions of Dollars in bailouts and collected hundreds of Billions in bonuses all base on a crisis that they created, which had destroyed the lifestyle of the non-Financial segment of society (ie. everyone else) except those who are in the ownership class and can afford to keep their money with and/or pay fees to those self-same "financial professionals."

How willingly the lambs go to the slaughter…  In fact, willingly just doesn't describe it, does it?  Listen to the $15 an hour construction worker in Wisconsin telling the $18 an hour teacher how horribly overpaid they are while the $1M PER WEEK Rush Limbaugh tells us that's what's wrong with America.  Today we get more lies from Bernanke and it's going to be a whopper as he's already calling for backup from Hoenig, who delivers a speech on Economic Outlook this morning and Lockhart, who speaks 10 minutes after the Beige Book is released at 2pm to take the sting of what is likely to be a downer of a report.

Mortgage Applications were off 6.5% for the week despite the 30-year mortgage rate falling back to 4.84% from 5% and Challenger Job-Cuts reported 50,702 planned layoffs in February, up from 38,519 in January and the worst it's been in 11 months.  The ADP report, on the other hand, once again is pointing up, with 217,000 jobs added by the private sector in February.  Unfortunately, replacing well-paid government workers with more burrito-fillers at Chipolte is not really a path to prosperity – unless, of course, you are the Chairman of the Federal Reserve – in which case it's: Mission Accomplished.  

Watch those levels today – we expect a bounce up but how high?

 


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  1. Good Morning!


  2. Does anybody care about what Uncle Warren has to say these days?……


  3. I’d rather listen to Jim Rogers. Made some money with his recommendations.


  4. From Barry’s site:
    http://www.ritholtz.com/blog/2011/03/gop-more-madoffs-please/
    You would think that with oil at $100, gold closing on $1500 and speculation on every other commodity at all time highs that it would be a good time to make sure that the CFTC is fully funded and staffed. Apparently, the republican congress is OK with no oversight…  And I am sure that taxpayers will be on the hook when the next bubble burst! But as we know, government is the problem. 


  5. @Phil
    I think theBernank is reading old economics texts wherein Inflation wasn’t considered aborning until WAGES were moved up to counteract the effect of the rise in price of a basket of goods, and then prices rose and then wages rose……etc, ad nauseum.
    Reading about the inflation of the late 70s early 80s when Paul was in charge of containing it the salaries and wages of workers, particularly the professional class rose to the point that CDs were paying 20%, mortgage rates in the high teens, and generally a faster velocity and speed of chasing prices.
    It is not arguable that wages and salaries in this latest scenario have, instead of rising, been under pressure for ten years.
    Short version: Price rises do not constitute inflation in his selective reading or definition of what inflation is.  We need to ask him to define his terms.  Or just ignore him.


  6.  FYI – I pad users -
    CNBC has a new app – hated old one – this one is pretty nice with free real  time quotes and futures – the initial set-up is good so if you want something quick instead of logging into a brokerage account (pain for me bc I then get logged out if I swithch apps) its seems handy. 
    Have not had time to really explore but worth a look.
    Any other suggestions on apps for following stocks – welcome – perhaps we could add it to the wiki? Investment sites we like?


  7. Good morning,

     

    IWM 83.15, 82.82, 81.93, 81.36, 81.10, 80.54, 79.72 and $6 Bil of POMO !!  (80.54 is key support)

    The US dollar could possibly breakdown from this descending triangle pattern, which in turn will be good for stocks. But, normally the dollar tends to overshoot support levels before bouncing. We still have support at 75.60, but it could get ugly here on further weakness. Just something to note, keep it on watch:

    Also, I can tell you that people in Europe have doubts about the Euro and more about the Dollar; everyone is moving out of cash, so the flight to safety argument for a move up in the Dollar seems a bit hollow !!


  8. Chipotle Mexican Grill Raised To Mkt Perform From Underperform By Morgan Keegan


  9. I may be off-line today as my daughter did not weather the trip home well !!


  10. CNBc iPad is great for when I’m running around and need a quick market view. Bloom berg iPad is pretty good too….logging into a brokerage when I’m running around is a pain.


  11. JRW – Thanks for the numbers. I hope your little sweetie feels better!  :)


  12. Hello Phil, do not you think that it is a time to short oil on 1)increasing Saudi production that is supposed to compensate for the loss of Libyan oil 2) absence of anything resembling a revolution in Iran or Saudi Arabia  3)the consumption of oil probably at least did not grow.


  13. HCBK/Phil: Oof! Looks like they caught a downgrade and took a spill.  Buying opportunity mayhaps?


  14. Phil/All – What are you thoughts on an exit point for the $350 weekly AAPL puts we sold yesterday? I like $2 per contract.  Just curious if anyone is going to hold out for a possible Steve Jobs appearance?


  15. Good morning all, and welcome back JR.


  16. 1020, Thank you !!

    Nothing new, this is still where we are !!

     

    Good hunting !!


  17.  IPad – CNBC -
    Preset with Int. Indexes, Pre-Market, Commodities, Currencies, Bonds – not bad
    My go to is Bloomberg – but i think futures are delayed


  18. Fat fingers in the cocoa futures yesterday:
    http://lemoyne-mappingthemarket.blogspot.com/2011/03/fat-fingers-in-chocolate.html
    I guess the CTFC will be investigating. Oh wait, they are being defunded by Congress. Nothing to see here, move along. Just the free market at work!


  19. hello Phil,
     
    what do you think about XRT short ?


  20.  Couple of trade ideas for today….
     
    Sell USO weekly 42 calls for 25 cents or better
    Sell AMZN weekly 165 puts (around 88 cents now ?)


  21. Good morning! 

    Thanks to JPM for upgrading the SOX today!  That’s a nice boost to our Qs!  Timing is everything, right?  

    Won’t mean much if we don’t break over 2,750 on the Nas as we REALLY don’t want to see that becoming upside resistance. Same goes for 815 on the RUT.  

    I’m loving the level chart – saves me a lot of time.  NYSE should be red at 8,312 and watch that very critical 8,250 as a very serious break-down level.  As it stands now, though, all this is a double bottom test of our breakout levels and nothing at all to be concerned about as a long-term bull.  

    We have crude inventories at 10:30 and that’s a spike (hopefully) we’ll want to sell into but we’ll have to play that one by ear.  I think the end of Ben’s testimony this morning.

    Still, let’s buy back the FAS $32 WEEKLY calls for the $25KP, now .17 as there’s no sense locking ourselves into the spread to make .05 per day.  If we get a good bump, then maybe we’ll make another move.  I’ll be updating the $25KP later this morning

    All is going according to plan at the moment so nothing to say we didn’t cover in chat.  Don’t ask me why we’re going up or why we went down – it’s all BS – so let’s just enjoy the ride.  


  22.  Phil, I never got a fill on the Weekly FAS Calls for the 25K which I think was the case for most others… what do you recommend we do now?
    Thanks


  23.  Anybody know what time is AAPL’s announcement? nail biting time for me here trying to time exit of naked short puts and long calls….
    Thanks 


  24.  Does Ron Paul question Bernanke today?  Hoping there’s at least one voice of sanity.


  25. Amatta – check this mornings post on the tuesday chat. His answer to me (if the question is the same) was sell something you want to own like JPM.


  26. Phil’ Any ideas why SVU has been weak


  27. I am surprised anyone even listens to Evercore Partners? (HCBK)


  28. Pharm – This looks interesting. Not sure if anyone is already at work on these projects.
    http://www.wired.com/dangerroom/2011/03/radical-military-medicine/


  29. Amatta – I believe the announcement is at 10am PST.


  30. Good article on CLDX.  I still like our May 5/4 C/P buy/sell combo for 30c credit.


  31.  Manimal, ok thanks…Not much movement on them! 


  32. Morx, thanks. Well not sure there is anything at this point I’d like to own.


  33. Phil, some ideas on corporate tax reform:
    http://www.offthechartsblog.org/what-should-corporate-tax-reform-look-like/
    If we could only go back to the % of GDP that they were under that socialist GW Bush, it would add close to $200 billions of revenues. And they are fighting to cut $300 millions on food stamps!
    We said it before, the problem is mostly revenues, not spending!


  34. Amatta – i was having the same quandry so i just  went w JPM.


  35.  what happened today with HCBK?
    Phil do you still like them?


  36. Morx/Ammata
    Selling some puts on your own wouldn’t count as part of the 25kp. I didn’t get the fill for the weekly puts but I rather wait for PHILS instructions in order to follow the 25kp as close as possible


  37. Warren/1020 – He says a lot of smart things actually.  Too bad more people don’t listen.

    Defunding regulation/StJ – This is a really bad trend that will end really badly.  

    Definition/Flips – We know his definition, it’s core CPI minus wages.  Wages are going down and core CPI, which itself is offset by housing declines, is barely budging.  It’s like me saying my method for measuring the Sun’s temperature is to hold a thermometer up in the sun’s direction and, from that I can tell you definitively that the Sun is 73 degrees and I have bodies of evidence that prove the accuracy of my thermometer so don’t even try to argue with me that this situation is different.  I wish "ignore him" was a choice but he is making decisions based on a totally false premise that we will pay for for decades – again, burying your head in the sand is really not a valid way to deal with poor policies…  

    Good idea Samz – A page of favorite links would be nice.  

    Dollar/JRW – That idea looks right this morning with the dollar at 76.69, down the usual .05 since 2:15 (the "3am trade").  Silver is testing $35, Gold $1,440  and oil right on the $100 line but copper having trouble at $4.50.  Gasoline is right at $3 too but those refiners aren’t making much money selling $100 barrels for $3 a gallon ($126 barrel after moving and refiining).  Sorry about your daughter, those international flights are real flu incubators!  

    Shorting oil/Alik – I can’t wait to short them.  I figure $41 is high enough though so let’s take a poke at the Apr $38 puts at .98 and just plan on rolling them up and doubling down if they go the wrong way by 33% (.65ish). 

    HCBK/Kinki – Absolutely, as a long-term play they are fine.  Getting $1.10 for selling the Jan $10 puts is al you need to do really but you can pick up the Jan $12.50 calls at .25 just for fun.  

    AAPL/Manimal – I figure their thing is at about 1pm but those puts are already up 30% ($1.50) so you have to protect $3 so call it a .50 trailing stop at this point.  

    Klackety, klack – up we go again!!!


  38. Phil – Thanks for the AAPL weekly play took it off the table 


  39. Morx, thanks. Yea I have too much exposure with C, HCBK and the FAS naked calls.
    Damn, AAPL not getting any love… 


  40. cnar – his other response to me yesterday was "keep your fingers crossed". i decided (which is often the wrong thing for me to do) take another approach. As an old carpenter used to tell me when i was starting out, "do something, even if its wrong" :)


  41. Darpa/stj – interesting….bu the technologies are there.  CERS is a good one for the blood cleaner…and we already own them.


  42. Phil
    This morning, gas $3.59, diesel $4.01, up .40 since Friday!


  43.  Hello all! I’m back from a trading hiatus as I ended my search for a new practice location in Bangor, ME! Very beautiful up here, although kinda cold. Having lots of local cross country ski trails is fun. 
    I entered a little daytrade on AAPL today (calls), although the bullish momentum isn’t very convincing- consolidation at best. 350 is a 61.8% Fibo on the 30 day chart. If we start to fail the previous day close, which seems to be a bottom for the day so far, I’m out. Have an ascending trendline at 348.11 (currently) based on the 10 day, and a 50% fibo at 345.51 (also 30 day chart). 


  44. Thanks Pharm! 


  45. Phil, 
    Anything changed in your mind on HOV with their earnings release? It didn’t make much difference at all to hold out for the sale of the 2012 $5P’s… Looking for a fill at $1.65.


  46. LOL StJ – That’s the plan right.  No money to fund the regs means the Banksters can roam free.

    XRT/Urman –  We’ve liked that for a while off that $50 line.  A little dangerous here as they test the 50 dma at $48 but, if they blow that – then it’s a clean shot for another 5-10% drop.  I’d sell the Apr $49 calls for $1.30 and buy June $51 calls to cover at $1.25 and you can go 4:5 (4 longs) or 3:4 if you want to be more bearish.  It’s a nice mellow way to establish the short position in this uncertain market.  

    USO/Cap – I must respectfully disagree with naked call selling on USO – there’s always the possibility that oil flies up on some event – it’s not worth the risk.  I like AMZN if the Nas is back over 2,750.  

    FAS/$25KP, Amatta – Well we killed the calls anyway so just .23 missed.  Otherwise we sit tight in the March $32s with a $2.06 net basis (not counting the .23 gained), now .85 and our next roll would be to collect $1.15 from the March $31 calls (now $1.25) and use that money to roll out to the Apr $31 calls (now $2.30) to buy a month.  Hopefully we won’t have to and I’m keeping an eye on the net of that roll, which is .30.

    Nas got rejected on first try at 2,750 despite 1.6% gain in SOX so not a good sign and out of the QQQQ $56 weekly calls, now $1.25, if we can’t crack it on this attempt.  

    Ron Paul/Rustle – Only for 5 mins or 10 if we are lucky..

    SVU/B1 – Their numbers were weak and they got a pop because SWY did better but the inflation is getting worse and it will be no easy time fror them to turn things around.  

    HCBK/Jabob – When people are nervous they’ll listen to anyboday.  


  47.  Phil – sold ISRG Jan 13 $270 put for $33, now $38. Can I make any adjustments to it?


  48. Phil: Feel like a guy with one leg in his pants who has lost his balance and is falling over. Opened the HCBK position buying stock at 11.27, selling 2012 $12.50 puts for $2.07. Was waiting patiently for stock to pop back up to cover. So, currently no cover. Would like to do something proactive and not feel like the proverbial deer in the…  Suggestions? Thanks.


  49.  Phil / HOV
    what do you recommend to do with our Mar 3.5s calls (25k) position?


  50. drcraig--Welcome back ! Didn’t know where you wandered off to.


  51.  Holy Cow, Bernanke’s view of fiscal stability is to "maintain" the current level of debt to GDP !
     
    That is insane !


  52.  Just hit 20% on the QQQQ weeklies from yesterday.  


  53. Corp taxes/StJ – Don’t even get me started again… 

    HCBK/Tcha – See above. 

    Good job Wilsons!  That was the LOD at $3.50 – doesn’t pay to be greedy, does it?

    Gas/Shadow – I mean futures, not the pump price.   The retail prices have gone totally nuts and this is usually the low time of year.  It’s going to be one hell of a summer.  

    Welcome back Dr. Craig!  I’m sad to see you already forgot your lessons here and bought premium.  Our trade yesterday was to sell premium by shorting the weekly $350 puts for $5 – AAPL goes nowhere and we make money – BRILLIANT!  If you buy the calls – AAPL goes nowhere and you lose money – not brilliant.   Also, I think they MIGHT pop into the announcement but I’d sure sell into that move.  

    HOV/Amatta – No, it was petty much what we expected.  I still love them long-term but there’s no expectation of them suddenly jumping up to $5 or anything.   The 2013 $5 puts can be sold for $1.95 and the Jan $5 calls are .40 so that’s a nice combination as you have a free ride up and the worst case is you are in at net $3.40.  

    LOL – Now CNBC wants to solve the insider trading problem by eliminating Corporate Boards?!?  Why don’t we just leave this country now and give them the keys….

    ISRG/Nicha – Wow, you’ve held if for what – 1/24th of the time-frame or 1/12th?  Clearly you don’t REALLY want to own them for net $237 so you should take the loss and get out because it’s not the kind of trade you can, or should adjust unless you have a compelling reason to believe your target (still $50 away) is likely to fail.

    HCBK/Jbur – NOW I would do nothing.  You already blew the chance to sell the $12.50 calls for $1.10 last week, which would have dropped your net to $8.10/10.30 with a 50% profit if called away at $12.50.  Since you were so greedy that a 50% upside wasn’t worth protecting yourself, now you have to look at it as a net $10.85 holder of the stock with 2x.   If they go higher, you can sell calls and even lower puts and if they go lower…  Well, if they break $10 you should be concerned. 

    Yay!  Popped the Nas that time!  Now all we need to do is hold it.  


  54. ISRG / Nicha – I don’t know what Phil thinks, but these puts are still $50 in the money! And your put to price is about $90 in the money. I would ride it out for now! 


  55. AAPL, Phil would you sell the 350 or 355 weekly calls against the 7 long march 355 (net 8.25) and -2 weekly 355 Puts (net 4.90)… in case we don’t get a pop into or with the announcement? thinking of selling 7 @ 1.80 or so… 


  56.  Jbur- I was working on starting a practice in the NY area (Great Neck/Manhasset), but my business partners turned out to be truly nuts and totally unreliable. I found a great opp here in Maine with 16 weeks of vacation. Plenty of time to play around in the market, enjoy my late thirties (heading to Europe in a few weeks), and the cost of living up here is low enough we’ll always be able to survive (knock on wood!). 
     
    AAPL defended the ascending trendline nicely and didn’t fail the previous day close. Now let’s see that 61.8% Fibo hold.


  57.  Bought FCX March 19 52.5s a few minutes ago, rising.  I know gold is not favored on this site, but methinks there’s enough global turmoil and generalized fear of currencies to hold it up.


  58. phil, your DBC Jan 26-30 Vertical is doing fine. Any thoughts on another Vertical here as nothing  is happening  which questions your original thought.


  59. drcraig, what kind of doc are you?


  60. Out of QQQQ for 35%. Thank you Phil.


  61. HOV/$25KP, Tcha – Waiting and hoping for an upgrade or a big market rally at the moment but doubtful.  

    Nice Rev!  

    Son of a bitch, CNBC cut away from Ron Paul!  


  62. Phil/ level chart :  Nice work. EZ to read quickly.


  63. Phil – sorry, just got scared to see the total portfolio value going down. 
     
    stjean – thank you.


  64.  Ron Paul on one of his crazy filibuster rambling statements.
    Put on CSPAN


  65. Ron Paul is on


  66.  Jomama- Interventional pain medicine/anesthesiology. I do 100% pain. The vaca plan comes from sharing 2 physician jobs among 3 docs. It’s a great plan. The clinic operates at close to 100% efficiency, and we all get a lot of vacation. All at a cost of a pretty significant hit in pay, but we still do well since we have an efficient practice model. Thanks to the vacation time I get to diversify my work, and spend more time at home.   


  67. AAPL:   My take is…….I agree with Phil.  They will probably pull back after the announcement.  Only thing would prevent that is Jobs doing pushups as he talks about iPad attributes that are heretofor unseen.   Not likely.  So I’m out of all SHORT TERM plays (March calls, etc.).  If they zoom, my long term plays are still there.  If they tank, then a buying opportunity. 


  68.  TOS/ delta and hedging – My short term question is about the delta values TOS shows for inverse funds.  Since EDZ is a call spread, TOS shows my position as having positive delta, but it is an inverse fund, so it seems to me that it should have negative delta like a put.  Am I off base here?
     
    I have a longer question that may be more for after hours about the how people use delta values on their portfolio for hedging.  Do any of you look at the greeks, especially delta, to determine how much you want to be hedged?  Just curious because one of my struggles right now is being over or under hedged at the wrong time.


  69.  Great QQQQ call yesterday Phil, it’s in the bank, thanks!


  70.  Missed Ron Paul, did he say anything different?  It’s not like CNBC to cut away from someone who might shed some truth on what’s happening.  They are usually fair and balanced like Fox News.


  71. drcraig, i thought about pain, but just stick to passing gas.


  72. Ever since they changed the definitions of CPI back in the 80s the readings haven’t been accurate. It worked pretty well as long as commodity prices stayed low, but that isn’t the case anymore. Perhaps a few hearings from now some congressman will present Exhibit A: a loaf of bread, Exhibit B: a gallon of milk, and so on and ask the Fed chairman to explain the rapid price increases. I remember there was a study that came out in the late 90s that predicted the world economy couldn’t handle China as a western-style economy, first and foremost because of the strain that would put on commodities. Anyone who denies that the rising Asian and Eastern European economies have been the main contributor to the commodity price runup of the past decade is seriously misguided.

    What will be even scarier is when they begin publicizing poll results of Upper and Upper Middle class Americans that will show they are increasingly fearing public unrest that will inevitably be partially directed at them.


  73. Phil – Great call on the QQQQ’s yesterday! Out of AAPL weekly puts as well with a nice gain. Cha-ching.


  74. rev:  I think delta only takes into account the movement of the option in relation to the underlying stock.  In order to account for the movement of the stock in relation to the general market, you might have to factor in beta.


  75. @Phil
     
    Great call on QQQQ!! Out with 42% gain. Thank you!


  76.  Jomama- sometimes I miss the excitement of anesthesia, the teamwork of the OR… the sleeping patients! I have found the most satisfaction in the detective work of pain. I love figuring out a problem that has often vexed both the patient and other doctors for months, or even years. We have ultrasound at this practice which is especially cool. Using your knowledge of anatomy you can really localize muscular trigger points, painful bursas, etc and hunt them down with a needle. Even better- you can prescribe more accurate and successful PT exercises once you know exactly where the problem is. Fun stuff!


  77.  Bernanke spouting about how oil is very faintly indirectly for inflation but higher oil is not inflation itself.    And oil prices going up is all the fault of emerging markets, not weak dollar or speculators jacking it up.  How does he have any credibility anywhere in the world???  This is a really bad joke.  How can he discount the average person paying almost 25% more for gas in the last few months not count as inflation?  Anybody who commutes knows that’s a pretty big expense.


  78. Out QQQQ   +35%.   :)


  79. drcraig: Sound like you have a lifestyle pretty well planned out with plenty of time for yourself. Seems partners are frequently nuts. I only had one partner for the first several years of practice, then swore it off. The next 27 years were solo practice.


  80.  drcraig, 
    Sleeping patients are the best kind


  81. drcraig, I could use you to look at my sciatica!  I only get it when I get back into regular work outs.  It’s a huge deterent to staying healthy.  I haven’t been to the Dr yet because I’m afraid of bad news-  as in, there’s nothing we can do for you. 


  82.  dmci- I agree! In this practice we don’t prescribe narcotics, which cuts down on a lot of pain for us. No more rednecks coming in begging for their "oxycotin" fix. I did a CME a few days ago that referenced a study indicating that 75% of a large sample of patients on chronic narcotics had evidence in their urine screens of inappropriate use of the meds. These guys ruin it for the legitimate patients. 
     
    AAPL pausing.. I’m at 15% so far. May need to bail if we don’t get back over the 8EMA soon. 


  83.  Phil, 
    HCBK-- they are looking into an OTS action which might impact their interest risk… so buy on the news sell on the rumour? I have the 2012 buy write 10 P’s sold for .70 now 1.20 and 12.5 calls sold for .70 now .25… would you buy back the callers and wait for a bounce?


  84. Shares of Hudson City Bancorp Inc. (HCBK, $10.22, -$0.68, -6.26%) slumped after it disclosed in an annual filing that it expects to receive an enforcement action from regulators due to its interest-rate-risk position. The bank says it is working to bring interest-rate exposure down to Office of Thrift Supervision-approved levels. OTS may require Hudson City to shrink its assets, raise capital and/or cut its dividend.

     


  85. @ Phil:
    Any suggestions on UUP? I’m long Mar 22 Calls and short Mar 23 Puts. Thanks


  86.  drcraig,
    I have my own teleradiology practice covering multiple hospitals. I’ve caught patients showing up in one ER for flank pain getting a CT then 2 hours later getting a CT for flank pain at a second hospital. The funny thing is they will never be able to figure out how they got caught, but are shocked when the doc throws them out of the ER. 


  87. AAPL/Amatta – No, I would take the money and run instead of trapping myself with yet another foolish risk on a trade that hasn’t been working since you picked it up. 

    Sounds like and overall good lifestyle choice DrCraig.  

    Gold/ZZ – As I wrote last night, there is a flight to gold led by 3rd world dictators and followed now by retail investors being herded in by the commodity pushers who are smart enough to cash out their chips on this fear-driven event.  Fun for a ride while it lasts but keep you eyes on the exits at all times.  Copper over $3.50 is a more important line than gold for FCX.  

    DBC/Drum – That was my 12-month target.  When you hit your 12 month target in 2 months, pressing the bet should not be the first thing on you mind.  As I said above, people are running out of money and this run is likely to exhaust itself soon.  If we get over all of our 100% levels – THEN we can go for another round but not here.

    Good job DC!  

    Chart/Dflam – That’s Elliot’s work at SWW.  

    Value/Nicha – If you don’t sincerely want to own ISRG at the net and you can’t afford the assignment in your portfolio – then a trade like that can break you!  If you set aside a rational amount of money (like 50%) to cover the remote possibility of being assigned and you can afford it – then what do you care what the "value" of the putter is at any different time?  That put is worth ZERO until and unless ISRG is below $270 in Jan 2013.  In all other cases, it could list at $30 or $3 or $300 but it doesn’t matter because it can never do more than force you to buy ISRG for net $237.  I used to sell AAPL $85 puts whenever they dipped – sometimes they would go up and sometimes they would go down but my downside was owning AAPL at $85.  If AAPL went to $45, my plan would have been to buy another round at $45 to go with the round forced to me at $85 for an average of $65 on 2x and if AAPL fell to $25, then I would have doubled down again and been in 4x at an average of $45 and if they fell to $15 – I would have doubled down again and had 8x at avg $30 and maybe people would have said I was crazy but really, the original commitment was $85, then  $45 then 2x $25 ($50) and then 4x $15 ($60) so a total of $155 in additional spending to buy 7 times more AAPL than I bought for $85.  If I don’t like AAPL enough to buy 7x for $155 – why on earth would I buy 1x at $85?   

    I flipped to CSPAN – let me know if anything exciting happens on CNBC. 

    Good take on AAPL Iflan! 

    TOS/Rev – You are right, they are not smart enough to figure that stuff out, which is why I don’t use those things.  I don’t like to say ignore the greeks because I used to obsess over them and now I know them without looking so it would be ridiculous for me to say "I don’t use them" as they are part of my thought process BUT I find it much more useful to OBSERVE my portfolio and how it behaves on up and down market days and then have my own benchmark – Ie.  "If the Dow drops 100 points, I lose about $15,000" – from there you can decide how big of a drop you feel you need to protect against and set up appropriate hedges that way.  Of course when you change your portfolio – you need to benchmark it again but you don’t need a machine to tell you something you can observe with your own eyes.  

    Congrats ZZ – Good timing too! 

    Ron Paul/Rustle – Focused on the S&P’s value measured in gold to illustrate this "recovery" is an illusion as Ben robs America’s wealth to prop up the markets.  Ben had a decent answer, saying:  People don’t buy gold with their money, they buy food and clothing and homes so that’s how you measure the value of money, not against an arbitrary metal.  Obviously, there are two sides to that viewpoint but it’s interesting in that Bernake is saying that the value of money should be measured in it’s product exchange value – that means we just need to "educate" him as to what products real people buy and what they don’t perhaps…


  88. Champ, Same here… looks like we are doomed on those, not looking like anytime soon there’s a rebound on the dollar. Let’s see what Phil recommends, but probably pain and suffering at this point 8-)


  89. Phil/FAS.25k – i was not able to roll the FAS Mar 34C earlier this week. Any suggestions? Thanks.


  90. Phil, 
    AAPL. Actually, I was able to buy back the short 200 shares for almost even on the pullback and then the short 355 puts for even on the move back up, so I was in the 7 long 355 calls for free (as I had collected on short callers 360 and 370 callers a few days ago). So I sold 7 355 call weeklies for 2.10. And will enjoy a ride up to 355 or have a $2 cushion down on my longs… if that happens then I will look to sell something else to compensate. 
    So I am with Iflantheman!
    Feel like I am getting the hang of managing trades (Selling to other suckers!)
    Thanks 


  91.  Just wrote some March 52 QID puts for 1.85.  Too much premium to ignore.


  92.  Matt- focus on your core exercises, back extensions, abdominals. That’s the best thing you can do protect your discs, assuming you have a bulge that’s pressing on a nerve root. An epidural steroid injection might help as well. If your leg pain doesn’t radiate below the knee, the problem may not be related to nerve compression in your spine. It could be arthritic, or even a muscular spasm.
     
    Out of AAPL.. it just looks weak, and we’re heading into lunch, as well as the announcement. 


  93. Steve Pearce (R – New Mexico) tellingly calls "the people on the other side of the aisle" regulators and tells Bernanke to "tell them to leave us alone." 

    CPI/MGr – Good point.  The numbers are crap and everyone knows it and it’s a terrible thing to see not one person other than Ron Paul has the spine to call him out on it.  

    Nice to see so many people scored on the Qs and even nicer to see people sensibly getting out!  8-)

    Gas/Rustle – That’s the really scary part.  Our economic policy is based on a false reality.  Gas is a small part of the top 1%’s spending and those are the only people who Bernanke sees on a daily basis.  He has no idea how much his limo driver pays for gas either but those are just excuses because he’s a brilliant guy and he absolutely knows, or should know what this is doing to the average American and what he’s doing is more criminal than just stupid.

    HCBK/Amatta – Yes, I would take out the callers but make sure they hold $10 first.  Either way, for .20 you may as well if they take it. 

    UUP/Champ – Not much to do at the moment but see how the week plays out.  

    FAS/Ross – Well you can certainly roll them now.  It’s cheaper.  

    Selling to suckers/Amatta – Good man but don’t go crazy with diagonals – that ruins the point.  

    QID/DrC – Great call on those.  


  94. Phil / USO — I understand why you don’t like the short call play on USO but why Apr and why the $38′s? Just trying to get a sense of what Lincoln is telling you ;-)


  95. DrCraig – Did not know there were so many docs on the board -
    Wife is a psychiatrist in NYC – very hard to move a practice but I wish I could get her to make a move like you have -
    Cost of living in NYC is killing us – Maine sounds nice – denver – anywhere but here – just too expensive -
    Congrats 


  96. Phil
     
    ON the FAS roll, could you sell the Mar11 29.00 for 1.15 and buy the April 30.00 for 2.58  a little more room on the downside


  97.  Looking back, I’m pretty sure the market has fallen 100% of the time when oil has been at above average prices for even as short of a period as months.  This is going back to the 70′s and if you remember even around 2000, oil went from the teens to $50 a barrel and of course a couple years ago.


  98. Wow that rally fizzled quicker than a las vegas lucky streak….


  99.  Matt – Had sciatica for years.  Finally destroyed L1 on a misguided mogul run.  Had surgery, they just took out the pieces lodged against sciatic nerve which had me crawling for a month.  No spine fuse.  Long recovery; took to the pool.  That was 10 years ago.  Daily pool work has kept me 100% pain free for the last 8 of them; I can pick up children, mountain bike, play any sport — but the lower abs maintenance is a constant.  Bottom line, you can return to normal.  Plus a flat stomach is a nice rarity these days.


  100. Phil/ISRG – this will break my back. A stupid bet on my part. Chart does not look good. Should I get out now or wait?


  101. Qs /Phil – oh yeah, paying attention – had to take my wife to the train station to go to work, so missed the first ‘get out’ call at $1.25, and simply watched the chart – got out at $1.33, thank you.


  102. PHARM, what’s the dealio on NVAX?  big moves up and down?


  103. Phil:  Do you think today’s weakness in BA is an opportunity, especially with the tanker deal in mind? Thanks for your thoughts.


  104.  I was wondering the same thing on BA.


  105. JohnC! – I was thinking the same thing.


  106. BA just broke through the 50 DMA. I would wait.. my 2c


  107. Phil—any opinion on NEM?


  108. drcraig, thanks!  I am focusing on my core strength.  Never have before but as I get older I’m getting wiser!  I have a very sore medial glutimus muscle.  I think it could be a trigger point instead of nerve sciatica but not sure.  It does stop mostly at my knee.  Only every once in a while do I get tingling in my toes.  Always in my glut/hip and often in my knee.   I would love to do more abdominal work but since those muscles are connected to the one in my hip that hurts it makes it difficult.  Sit-ups are out as are bicycles in the air.  Guess I need a PT to help me isolate my core without aggrevating what hurts. 


  109. These 1 minute congressional speeches to the TV cameras expose how many blithering idiots have been elected to Congress.


  110.  USO flying for past 90 minutes.


  111.  Samz- Bangor is a great place to be a doctor. Plenty of patients- the draw area is huge. We have folks who travel 3-4 hrs to see us. Cost living is great. You can buy a very nice house for $300K. You can build a dream house for 500-750K. There are some nice restaurants up here as well, although the food scene is no where near Portland, Boston, or NY. I cook a lot, so that keeps me happy. Schools up here are excellent as well from what we’ve heard. The direct flight to LGA leaves several times per day and takes only 1 hr!!


  112. zero, thanks for the words of encouragement.  I do love my moguls!  My dad was a huge advocate for swimming but I prefer jogging until I can’t anymore.  Hope I can just get smart with my strength training and fend off surgery.


  113. Let’s all extol the The Meadow, a green design senior care community in Rhode Island.
    Lets all honor the Meadow.
    Thank you Congressman for such a valuable contribution to the nation’s business.


  114. $25KP Update – Day 20  

     

    Pharmboy’s spreadsheet is updated (thanks Pharm!) at $28,761 at the end of yesterday.  We cashed the 6 VIX March $17 calls for $3.50 (up $780) and bought back the 6 VIX short March $21 calls at $1.25 (up $450).  This is very good as we already had a nice win on the VIX short puts.  Today we bought back 20 FAS short March Weekly $32 calls at .17 (up $460) as well so that’s $29,221 of realized balance.  We rolled the other FAS too.      
     
    That leaves us with the following outstanding positions after our first 20 trading days:        
    • 8 DIA May $122 puts at avg. $5.11 ($4,088), now $5. 
    • 8 short DIA March $123.75 puts, sold for $2.10 (-$1,680), now $4.20 – still considering roll to the Quarterly (3/31) $122.75 puts, now $3.70.   If 12,000 fails, will be very tempting.  
    • 10 EDZ April $18/23 bull call spreads at $2 ($2,000), now $2.85 – This is a $5 spread and makes good protection.  EDZ is currently at $22.24 so it’s at least a $4.24 spread right now – $2.85 is just not a temptation.      
    • 20 EGLE March $4 calls at .40 avg ($800), now .17 – The BDI is holding up well despite the market drop so I’m holding out hope.  Roll to Apr $4 calls is .08 (.17 to .25) so worth no more than $200 to buy a month on this roll.   
    • 20 FAS March $32 calls at avg. $2.06 ($4,120), now .80.  We were supposed to sell to make a roll cover but let’s see how the day plays out on this one.  
    • 20 INTC March $22 calls at avg .35 ($700), now .20 – we did the DD at .22 – if we were shorting puts I’d be thrilled, buying calls really does suck, which I suppose is why people who buy them are suckers but margins are a rich man’s game and this is a poor man’s portfolio.
    • 10 HOV March $3.50 calls at .80 ($800), now .50 – Earnings did not work out, giving it one day and then out. 
    • 10 C Apr $4 calls at .70 ($700), now .62 – Dying with the FAS play…

     So it’s a darn good thing we booked $4,200 in profits because the FAS play is threatening to take it all back!  Right now, we are re-testing the XLF bottom of last week and we ran from there right back to $17 (and then failed that) so that’s what I’m hoping for.  I didn’t catch Bernanke taking any major hits so the setting is right for a relief rally, so we’ll remain bullish for the moment until we blow our levels. 


  115. pictures of new ipad at http://www.appleinsider.com


  116.  Matt- you need a good pain or sports medicine doc to hunt around in your gluteal area with a needle and some local anesthetic, if he’s got ultrasound to help guide the needle, all the better. This is more fun than it probably sounds. Especially for the doctor. It would be interesting if your leg pain disappeared with a single local/steroid injection in your glut medius. Tingling in your toes could be compression of L5/S1 nerves anywhere along their course, but I’d be curious to see an MRI of your lumbar spine to rule out compression that might respond to an epidural steroid injection. 
     
    Looks like bailing on AAPL was a good choice as they’re retesting 350, and looking like that might fail. Ascending trendline is now at 348.90. Hmmm.. puts?
     
    IWM had an interesting run. It just grazed the 81.36 line before heading back to 80.54, where it seems to have found support again. 


  117. Dr Craig/pain,
    Can’t help to tell you my fun story.  My left knee used to give me so much trouble that every time I stand up, I had to wait for it to mobilized itself.  After 3.5 weeks vacation without sitting in front of the computers, the pain is totally gone.  So work less, trade less and be pain free!


  118. PHIL
    EGLE/25kp.  The highlited roll to APRIL 4 C..Is for us to execute or jus a comment.


  119.  USO/Rain – They have a pretty low delta, which makes them a good put to stick your toe in the water with when you don’t have a lot of conviction yet.  In fact, USO shot up since and they are still .84 so enough said.  Meanwhile they anchor a roll to a more serious play like the $41 puts for $1.30 more or a retreat like the June $39 puts, now $2.55 which, of course, would be accompanied by a sale to make it much cheaper.  

    FAS/Willie – That’s a good one, worth considering. 

    Oil Rustle – Good observation.  Even XOM is not liking this move to $102 oil.

    ISRG – Yes, it’s the wrong kind of bet for you.  If they go lower you will HAVE to buy them back at the worst price.  Keep in mind short puts like that are NOT short-term bullish bets, they are value bets for the long run.  ISRG is a crazy stock and that’s why it pays so well.  Anyway, take a small loss and then sell something for THAT amount to get the loss back.  It’s very easy to make a little money – very hard to make a lot…

    Nice job Snow.  Sometimes luck is in your favor and sometimes it is not so, on the whole, I don’t worry about it….

    BA/John – I like them long-term no matter what but it looks like they are heading to test the 200 dma at $66 so why not let them?  If they pop $70 first – that’s a bull signal to get in.  

    And what Linux said!  

    NEM/Jabob – Yes, I like ABX, HMY and NAK better. 

    EGLE/$25KP, Cnar – It is to be exectuted!  (roll from March $4 call to April $4 call for net 0.08).


  120. BA — I’d agree that BA is a wait until the 200 dma (ema is nearly the same). Looking at the yearly chart, every time BA has dropped below the 50, it stops around the 200′s (ema and or sma). Both are around 66.75 so I’d buy/write at 67.


  121. ABX,HMY,and NAK have all rallied while NEM has dropped 10%.
    Maybe, that shows why you are very smart to like the other 3 better ;-)


  122. EDZ / Phil – Phil, I’ve still got the EDZ April 22/26 play looking for a fill at 0.9, to make up for missing the original entry in th 25KP. Hang in there with it, wait for the fill?


  123. Matt: sciatica
    I’m not a doctor but have had the pain you described down the leg, (glut/hip tightness) and a great PT with specific stretches totally relieved the problem.  You can google sciatic pain and you will probably see the stretches but first might need the PT or deep muscle massage to loosen things up.  My $.02 


  124.  Salesform (CRM) upgraded to $170.


  125.  Politics vs health topics
    So pleasant when all the off topic back and forth is sharing health issues :)


  126.   redlog/Health -much better topic. People are more compassionate.


  127. Phil, 
    VIX March 16/19 with the 27 VXX puts sold (net 1.74), right on track but I am a bit worried that if we have a week of gains we’ll back to 16 on the VIX… do you recommend taking out the calls and wait for decay on the 19′s to take hold (or perhaps take 1/2 off?). 
    Thanks


  128. Health is ok we all have issues.    It is religion and politics that you are supposed to stay away from.   On the other hand I am begining to question whether to forget the political correctness and call a wrong a wrong.


  129. Steve Jobs on Stage at the iPad event


  130. There goes AAPL, tanking on the news. Not. 


  131. CNBC coverage of the Ipad launch:  "Jobs has a strong voice" 
    That should be good for a pop, ha. 


  132. Wow looks like fireworks on AAPL’s volume on the announcement… screen is lit up. Don’t have a screen to watch. What is the rubdown?
    Thanks 


  133.  Phil: TLT
    I know short term the Fed is in control but I would like to build a longer term position shorting the 20 yr.  Does buying some Jan 12 or Jan 13 puts offset with sales of font months like a mattress play make sense,( I’ve been doing this on small scale already )?  Scaling in so if TLT goes higher until QE/whatever is done I just keep scaling into my final position?  how about selling calls when if it gets back towards 100?  isn’t there an upper limit to TLT, (unlike stocks) since interest rates can’t go below zero? I’m also in some TBT spreads.   TIA


  134. matt zeroxzero
    You need an MRI and a great rdioligist to read it, not doctors with their agenda. Everything else is a guess or their business. I have had neck surgery that stopped pain there. Have had at least 50 streoid injections in my  neck, middle and lower back, the injection at T7/8 worked the other 49 did not. I got the others because surgons insisted I try steriods again first. I have a missing piece out of L5 and lots of bulging discs. Which toes go numb is very important, the big toe is very different from the rest. I agree with zerxzero the most because I have had so many operations to repair this and that, all the rest are band aids. The best way to rid yourself of pain is get it fixed, nothing else really works. Never fear the knife if something is actually wrong, it is a real solution.


  135. Miners/Jabob – I still think HMY is a great value play.

    EDZ/Snow – I’d take the $22 calls and wait on the sale as long as they hold the $22 line. 

    VIX/AMatta – Well we dumped out of our VIX yesterday but the base was higher.   March expiration is a long way away so it’s a big risk to ride them with so little premium left.   

    Steve looking good!  You would think that would give AAPL more of a boost than this….

    AAPL coverage here:  http://www.engadget.com/2011/03/02/live-from-apples-ipad-2-event/


  136. anyone get the egle roll ?  
     
    can’t seem to find a taker


  137. Phil / HCBK – I shorted ten Jan ’12 12.5 puts at $2 back in Jan and also hold 1,000 shares of the stock.  I’m down $1k on put and $1k on stock.  should I roll the put?  i doubt the stock climbs 25% after just two quarterly earnings reports (2Q and 3Q).   Thx. 


  138. occasionally when i enter a price for a trade I get a message telling me the price is invalid. They are asking it to be rounded by 5s. (roll of EGLE) Do others have that issue?


  139. Morx
     
    not on egle


  140. New IPad is thinner than IPhone – those guys rock!  

    • Dual Core Processors 
    • 2x Faster CPU
    • 9x Faster Graphics 
    • Same power requirements.  
    • Black or white
    • 1.3lbs vs 1.5lbs 
    • A gyroscope 
    • 2 cameras
    • HDMI output
    • Same prices 

    Also very impressive – AAPL has paid out $2Bn to App developers already.  Nice way to start a brand new industry!  


  141. morx
     
    as a calendar spread


  142. Phil / HCBK – correction, i guess it would be 3 quarters.  thx.  


  143. Morx / Williex
    I did the Eagle roll for 0.10 ?


  144. One dip below JRW’s 80.54 line but bounced right off my 80.20 from yesterday. If you dismiss the dip we are holding the lower trend line and holding above the tripple SMA cross at 80.88 would be good along with TBT has held gains. Looking like a decent close.


  145. On the whole, AAPL is a buy at $350!  

    TLT/Lincoln – We shorted them at $105, that’s where I put my foot down and said they could go no higher.  Between here ($92) and there is so wriggle room but if you look at it as a trade where you keep rolling short callers higher – it’s fine to do.  I just picked the short sale of TBT calls yesterday on the same logic – how low can they go?  Right now TLT is just weak bouncing off the drop from $105 to $88 (16%) and I will be very surprised if they get back 50% of the drop to $96ish as we go another $150Bn in debt every month.  

    AAPL June $340/360 bull call spread at $11.50, selling March $360 calls for $4.30.  That’s net $7.20 on the $20 spread and you should hold value well into earnings.  If AAPL breaks over $360, you can spend money to roll the June callers higher to give yourself more headroom and roll the short-term callers up as well.  


  146. Nicha, in addition to your actual P/L on a position you should consider your psychic costs.  In the case of ISRG, the stress that the position is causing you means that it’s probably time to close it.   I had this happen to me once when I shorted AMZN based on valuation…every day it kept climbing and the margin requirement was eating my portfolio alive…it was brutal.   The day I sold it, a huge weight lifted off my shoulders, and I always remember that incident.  "When in doubt, sell half"…. "Sell until you can sleep at night"  and other trading aphorisms get to the same point…you can’t do a good job if you are sweating a postion.


  147. HMY p/e 218.70 according to yahoo finance, higher than usual suspects


  148. I hate my iPad now… :-(


  149.  morx, etrade sucks like that.


  150. iPad2 / Phil – Impressive indeed! I love my current iPad, but honestly, my next tablet will be an Android tablet as I can’t stand the heavy handed commercial tactics that Apple is using with it’s content provider. Good for them if they can extract 30% from the content providers, bad for us as we’ll pay more for content. Seems like robbery to me – suppose you spend 6 months to write a book. You publish it on iBooks and Apple wants a 30% cut just to display it! Gimme a break! Of course, more power to them if they can get that money. It’s a free market. Just don’t have to like it…


  151.  How low will the old Ipad 1′s sell for ?
    Who will buy them at current prices now ?  That’s silly.


  152.  ephmen – agree with you completely. I have a sell order in but the bots took the price higher as soon as I put it in. Will wait till EOD and see. Thanks.


  153.  USO … selling 42 calls more of a gamble now than I expected, but still a decent and rollable play.
    42′s can get 36-38 cents
    43′s are 16×17 cents


  154.  Cap – i believe BBY stopped selling the iPad 1. 


  155.  every time I went in a BBY, they didn’t seem to be selling any of em anyway.


  156. Now this is the follow through I was looking for today!  Whheeeee!
     
    Dr.Craig, thanks again!  That’s some of the best advice I’ve gotten on this dang site 8-)   But seriously, maybe a shot would help?  My boss got one in his shoulder and it fixed him up right.  I’ll have to research cortizone/steroids to see what the actually do.  I don’t want a pain killer.  I want it strengthened and/or fixed.  Guess I’ll pick up the phone and make an appt.  You’ve given me plenty to have an intelligent conversation now.  A quick anecdote, what’s confusing to me is that about the same time I started working out again.. I cleaned the gutters on an investment property in 10 degree weather.   I only had 1 water proof glove so of course I did the whole house (2 hrs) with the same hand in the same position.  When I finished, so was my back.  But that pain went away in about 4 weeks only to move over to my hip problem (which I’ve had before).  So, I don’t know if I had 2 different problems to begin with, one problem and now a new problem or just a different version of the original problem.  Like I said, I’ll pick up the phone.  Thanks-
     
    RedLog (Lincoln), Shadow – Thanks!
     
    I’ve been waiting on the iPad2 because of the cameras but haven’t seen any mention if whether the screen size is the same as the original one.  I know it’s thinner, which to me is no big deal- I love the feel of the original one, but what’s critical is that the screen is the same size or larger.  I do not want a super sized iPhone.   Anyone know for a fact if it is?  Thanks-  If so, I’ll be snatching one up pronto. 


  157.  How well does the iPad work with TOS?


  158. EGLE/$25KP, Willie – They are dropping but the Apr calls are hodling value so far, just need to be patient as the Aprils are thinly traded and the March calls are mainly us.  

    HCBK/Terra – Congrats!  It looks like you will be able to buy 1,000 more for net $10.50!  There’s nowhere to roll the put to so at least wait until they print 2013 (maybe July) unless you didn’t REALLY want to own them.  Also, now call sale?  Why would you sell puts and double downside risk without selling calls?  

    LOL Bob!  Actually I’m happy with mine.  I don’t want it to be any sharper (thinner) as it might cause some damage and it’s fast enough for me so, other than the video calling feature, I can get by with my clunky original until the IPad 3 comes out (or until my daughter’s birthday as I think Tina promised her my IPad at some point).  I can’t believe still no ADBE support – that sucks. 

    30%/StJ – It’s a lot less than a regular publisher takes.  It’s very easy to put up content on AAPL, they distribute it to 100M people instantly, handle all the billing and collecting for you and cut you a check for 70% of the proceeds.  Have you ever tried to publish a book or software?  Good luck clearing 70%!  Wait until bands start going direct to ITunes – bypassing the recording industry.  Then authors will follow.  

    Built-in cover that turns into a stand and also cleans the screen:

     

    Uh oh!  Beige Book still showing price pressure on input costs not being passed on to consumer


  159. This does not bode well for the Bears………………


  160. New TOS iPad app is AWESOME imo


  161. I hate a guy who gloats !!

    0302-dollar


  162. Phil so I take it you would hold on to the VIX spread as I have it? Close the VXX puts right? Perhaps roll them up for more premium? 


  163. Old ones/Cap – They are very smart with that stuff, they’ve been rolling over IPods since 2001.  I wouldn’t worry about it.

    TOS/Oak – I didn’t know TOS was on the IPad.

    Cool chart JRW.  I agree, there are certainly signs that things are picking up.  That plus undeniable (except by Ben) inflation means that long-term bullish is still the way to go.  

    VIX/Amatta – I would just close it.  Wait for a move down and take a new spread in a longer month later.  

    Steve Jobs is STILL standing.  I"d be tired after an hour and 15 minutes…


  164. JRW – I’d like to know what he was thinking at that moment…… :)


  165. Phil/Ipod   My wife is giving hers to the kids when they get home….. :)


  166. IWM didn’t like the first poke at 80.88, too early for a stick?


  167. oakd/TOS on iPad, I am using TOS for TD Ameritrade, it’s ok, not good as it’s on a PC(gave you mush more information on one screen) but it’s workable, my 2 cents.


  168. TOS/iPad -- they just updated the app….very slick.


  169.  "This is worth repeating. It’s in Apple’s DNA that technology is not enough. It’s tech married with the liberal arts and the humanities. Nowhere is that more true than in the post-PC products. Our competitors are looking at this like it’s the next PC market. That is not the right approach to this. These are pos-PC devices that need to be easier to use than a PC, more intuitive." – Steve Jobs


  170. Matt/Dr. Craig
    I’m not a doctor and did not stay at a Holiday Inn last night, but will relay my experience with cortisone, etc for what it’s worth. Developed a bad case of medial epicondylitis (golfer’s elbow) several years ago. Over the course of 18 months, I received 5 cortisone injections (three of which worked like magic for a month or so) but eventually had so much pain I couldn’t open my car door. Two elbow surgeons recommended surgery, but as a competitive golfer, I hesitated due to the long rehab. As a last resort, my chiropractor recommended a sports medicine MD (http://www.craneclinic.com). Using ultrasound he identified the problem area in my elbow tendon. After a series of five ‘regenerative injection therapy"  ultrasound-guided injections, I was 90% pain-free and remain so after four years.  I’m sure it depends on the type of injury, however, as I tried the same therapy for minor rotator cuff tears without success. Good luck!


  171. Cortizone – do some longevity calculations before you get started. I had my first in my shoulder abt 20 years ago. Since then i have had 2 more and my physician said that’s the last! What do i do for the next 30 years? Had i realized that i might have tried to go longer between shots instead of just trusting the Doc.
    I have found that large dosages of fish oil seems to help.


  172.  I Pad is definitely cool device, but, it still remains that very few people actually "need" one.


  173.  Matt- You likely have more than one problem, hence the varying triggers. A shot with local anesthetic and steroid would be both diagnostic and therapeutic. The idea being that if they hit the right spot, you should have 90-100% relief of the usual pain immediately (and until the local wears off). The steroid would help reduce any inflammation in the area, stabilize jumpy nerve endings, etc. This would permit you to train the muscle in ways you couldn’t before due to pain. That would "fix" the problem. If you don’t get EXCELLENT immediate pain relief from an injection containing local anesthetic, they didn’t hit the right area. Lots of docs don’t include local with their steroid injections, so you never know if the injection was in the right spot. I would investigate this first on the phone before seeing someone. Plenty of docs do "injections", only a few do them thoughtfully and well. Where do you live? Perhaps I know someone in your area.


  174.  I NEED one…been holding out for the new model. Ordering it today whenever the apple store gets back online.


  175. Phil--do you like PBR ?--if so any suggestions would be appreciated.
    Tx


  176. Phil/WAG:
    any idea why the drop in WAG today. Thinking of adding to IRA


  177. champ87
    I had elbow surgery, instant fix for pain, and 2 months better than ever. I could also move my 2 smallest fingers, pinched ?ungar nerve, I foget all names.


  178. life would be pretty dull if everyone just bought what they "need"


  179.  Champ87- These "regenerative" injections are basically relabeling of what used to be called "prolotherapy". The idea is that you inject something irritating that provokes an inflammatory reaction that — you hope — will heal whatever is wrong. The majority of these injections are worthless, however there are cases here and there that seem to work. One example would be "platelet rich plasma" for elbows (so I’ve heard, I haven’t read the data myself). I’m not sure what your chiro injected, but you got better, and that’s what matters. 


  180. Maybe ulnar nerve?


  181. Phil / HCBK – I sold puts first and have been slowly accumulating the stock.  Just bought my final 300 shares today to get to 1,000 shares.  what calls would you recommend selling now?  Thx. 


  182. Hello Pharm, what do you think about AKRX – unlike most biotechs it has sales of approved products, not just a pipeline. Also, it did not do bad at all during recent pullbacks, and had insider buying. I would appreciate your opinion. Thanks.


  183. Publishing / Phil – I don’t disagree, publishers and record companies are crooks. But Google will tack on only 10% compared to Apple 30%. Apple had no competition for the iPod so they have 90% of the market, but newer Android tablets have specs just as nice as the new iPad. Competition is good I guess… And Google will not drop out of this like Sony with the walkman.


  184. champ, that’s good stuff.  Thanks for the info!  I’ll look into that site-


  185. IWM WEEKLY $81 calls at .70 good if we hold 81 on IWM.   


  186. Oh look.  We’re all better now.  Not me.  The market.


  187. Dr. Craig
    Yes, my ultrasound-guided injections (by an MD, not my chiropractor) were indeed platelet-rich plasma injections for what the doc called a "gooey tendon" in my elbow. I’ve seen this referred to variously as prolotherapy, PRP, regenerative injection therapy.


  188. Poke 2 at 80.88 passed and TBT flying!


  189. Phil,
    What is a good trade on TBT at this point? I really want to bet on inflation but give myself enough time for the short-term denial to play itself out.


  190. drcraig, I’m in the DC area on the southern more genteel side!  Using the anesthesia sorta like a tracer round… pretty cool!


  191. WIKI
    Is it me or the Wiki needs some work? I have tried several times to look up past commentary by phil on some plays… For example now I am trying to find the WMT play from yesterday and clicking on the WMT link only gives me a couple of entries all the way back on Feb 15th and last Friday???
    Thanks  


  192.  Okay Phil.. craps roll time on the IWM weeklies. I’m out if we break 80.90.


  193. WMT Jan $52.50 calls are $2.80 and that purchase can be offset by selling the Jan $47.50 puts for $2.20 for net .50 with the stock at $52. 


  194. Does anyone know when AAPL’s earning are?


  195. oops. my bad


  196. AAPL…..  :)    :)    :)


  197. AAPL to announce on 4/19 but not official yet


  198. Well I don’t know how you closet short players are doing but ‘;m up almost $20k on AAPL today and it was all long positions!!


  199. Cap/need, your are correct about not too many people "need" an iPad, I was the first within my friends who own an iPad, but when my friends saw how fast and easy to get information(specially for Chinese search) on iPad, three of them got iPad and much more were waithing iPad 2.


  200. Highlander/$20K profit, YOU HAVE TO BUY an Ipad 2. ;-)


  201. Cap,
    My take is you are getting a little behind the tech curve. The iPad has become personal computing period, and that includes industry as well. Even the lookalikes are in a very weak position to catch up after this. AAPL has the suppliers tied up for the next 2 to 3 years


  202. bobhu,
    Yah, my little girl wants to trade in her "old" one already so I guess it will become the car appliance. We have wifi hot spot device in the trunk!


  203. Having trouble with the 11:25 81.18 SMA cross.


  204. Phil
     
    What about FAS?  To roll or not to roll, that is the question?


  205. Phil, 
    SKX has been getting no love even on up days… I am in the April 20/25 with the 20 Puts (Net .95) not looking good at this point….you think they get their act together in the next couple or quarters?  roll out the play out? What would be the move, or give them a little time before rolling?
    Thanks


  206. Beige Book Summary – Keep in mind these are anecdotal reports given to the Fed from various regional contacts and then they spin it as best they can so you have to filter out a lot of BS to get through this report but the report pretty good – I can tell that in the first glance and the markets should like it.  Generally, green is good, red is bad and purple is me pointing out couching language:  


    Reports from the twelve Federal Reserve Districts indicated that overall economic activity continued to expand at a modest to moderate pace in January and early February. Both Kansas City and San Francisco noted that their economies expanded further. Boston and Philadelphia cited conditions as improving. New York, Cleveland, Richmond, Atlanta, and St. Louis described activity as modestly improving, while Minneapolis and Dallas experienced moderate growth. Chicago reported that although there was an increase in activity, it was at a pace not quite as strong as during the previous reporting period.

    Other than Chicago then, growth really coming back.  That’s very good. 

    Retail sales increased in all Districts, except Richmond and Atlanta, although Boston, New York, Philadelphia, Atlanta, and Kansas City noted that severe snowstorms had a negative impact on merchant activity. Retail inventory levels were described as desirable in New York, Cleveland, Dallas, and San Francisco. Tourism improved in Richmond, Atlanta, and San Francisco, while New York and Kansas City noted a slowdown in activity as hotel occupancy rates declined. Some Districts reported a slight increase in the level of residential real estate activity, although all Districts maintained that the overall level of home sales and construction remained low. Several Districts indicated improvements in commercial real estate sales and leasing activity, including Boston, Richmond, Chicago, Kansas City, Dallas, and San Francisco. Most reports characterized nonresidential construction as weak.

    All Districts, except St. Louis, experienced solid growth in manufacturing production, and new orders improved for Philadelphia, Atlanta, Chicago, Kansas City, and San Francisco. Most regions observed an increase in nonfinancial services. Boston, Philadelphia, and San Francisco reported that sales advanced for services related to information technology, while Kansas City noted softer sales of IT services.

    Not so bad and not so bad is great for the market as it’s not good enough for the Fed to stop making FREE MONEY.  

    Changes in loan demand were mixed across Districts, with Richmond, Dallas, and San Francisco experiencing increased loan demand and Kansas City noting a decrease. Lending standards remained tight across most Districts. Labor markets modestly improved across the country. Boston, Richmond, and Chicago reported more permanent job placements occurring in the market, while Atlanta businesses reported a continued preference for hiring temporary workers rather than permanent workers. Several Districts described an increase in demand for staffing services, especially for high-skilled IT positions. Adverse weather conditions continued to hamper agricultural production in many Districts, but strong prices helped producers of cotton, corn, soybeans, wheat, poultry, hogs and cattle. Energy production expanded or remained stable, according to reporting Districts.

    Non-wage input costs increased for manufacturers and retailers in most Districts. Manufacturers, in a number of Districts reported having greater ability to pass through higher input costs to customers. Retailers in some Districts mentioned they had implemented price increases or were anticipating such action in the next few months. Homebuilders in Cleveland and Atlanta had limited ability to pass through cost increases to buyers. Most reporting Districts noted continued strong agricultural commodity prices. Wage pressures remained minimal across all Districts; although Philadelphia, Dallas, and San Francisco noted that most wage increases were for workers with specialized skills.

     

    "Non-wage input costs"???  Wow, whatever you do, don’t call it inflation!   Notice the Fed is joyous that the non-inflationary, non-wage input costs are being passed onto the consumers.  It’s a Festivus miracle!  What the Fed is doing here is ENCOURAGING people to raise prices and DISCOURAGING the need to give raises.  Manufacturers can’t raise prices unless everyone does it and everyone can’t collude to do it so they need a middleman, like the Fed to give the signal and then they can all jack up their prices together.   You say potato, I say racketeering…   

    Consumer Spending and Tourism
    Retail spending strengthened compared with a year ago across all Districts except Richmond and Atlanta, where sales were reported to have softened modestly. Boston, New York, Philadelphia, Atlanta, Kansas City, and Dallas commented that severe winter weather in January had a negative impact on retail activity. New York, Chicago, and San Francisco observed that consumers are still responding to promotions and discounting. Meanwhile, Cleveland noted that some of their low- to mid-market segments are still struggling. Some Districts observed an increase in discretionary spending; luxury and big-ticket item sales increased in Cleveland, Chicago, and San Francisco. Inventories were at desired levels in New York, Cleveland, Dallas, and San Francisco, while contacts in St. Louis had mixed views about their inventory levels. Boston and Atlanta reported tight inventory management. The outlook among all Districts was for a modest increase in retail activity.

    Automobile sales increased compared with a year earlier in most Districts. Chicago and Dallas observed that auto sales held steady, while Kansas City’s contacts said sales softened because of inclement weather but expected them to rebound in the near future. Cleveland and Chicago noted increased availability of auto financing, and Cleveland reported an increase in leasing activity. Philadelphia, St. Louis, Kansas City, and Dallas indicated that vehicle inventories were at appropriate levels for the current sales rate, while inventories were mixed in Cleveland and lean in New York and San Francisco. All Districts conveyed optimistic outlooks among their auto contacts.

    Tourism reports improved in the Richmond, Atlanta, and San Francisco Districts. Atlanta observed a strong increase in international visitors. Kansas City noted a slowdown in tourism amid severe weather but added that ski resorts benefited from the snowfall. New York reported a larger-than-usual seasonal slowdown in tourism with decreases in hotel occupancy rates and Broadway theater attendance, although the level of activity remained fairly high.

    Strange about NY tourism but we saw yesterday a very strong improvement in auto sales.  You have to be careful here as retail sales includes gas sales and the Fed loves to count those gas sales as a positive as well as sales by the energy producers – even while they choke the life out of the consumers.  

    Real Estate and Construction
    Recent activity in residential real estate varied, but overall sales and construction remained at low levels across all Districts. The Richmond, Atlanta, and Chicago Districts reported a slight improvement in the level of recent activity, while Boston noted that activity was mixed across New England. New York described the housing market as stable with some pockets of improvement. Demand was unchanged according to reports from the San Francisco District. Philadelphia, Kansas City, and Dallas described recent activity as sluggish, and St. Louis noted sales continued to decline. Construction activity was described as flat or down by Cleveland, Atlanta, Minneapolis, and Kansas City. Philadelphia and Atlanta contacts attributed weaker buyer traffic in January to inclement weather, and Philadelphia noted a pickup in early February. Richmond, Kansas City, and Dallas also indicated an increase in buyer traffic. Reports on home prices were mixed. Atlanta and Kansas City observed persistent downward price pressure. Home prices continued to fall according to Philadelphia reports, but mainly at the high-end of the market. Cleveland and Chicago contacts described prices as little changed. The outlook for residential sales and construction improved marginally, although activity is expected to remain at low levels. Kansas City contacts anticipate a seasonal surge in sales activity this spring. Atlanta, Dallas and San Francisco also expect modest improvement, while little to no sales growth is expected among Philadelphia contacts. A slight uptick is expected in Chicago and San Francisco construction.

    Commercial real estate activity showed signs of gaining traction according to a number of District reports. Boston, Chicago and Dallas reported that commercial real estate activity improved overall, while Richmond, Kansas City, and San Francisco noted increases in leasing activity. Kansas City described the market as stabilizing, while Philadelphia and Minneapolis reported that markets were flat overall, and New York described conditions as "slack" and St. Louis as "soft." Nonresidential construction remained weak according to most accounts. The Boston, Philadelphia, Atlanta, Chicago, St. Louis, and Dallas Districts reported weak levels of construction activity, while Chicago noted a slight pickup. Cleveland District contractors cited increasing inquiries, and unexpected growth in commercial construction was noted in the Minneapolis District. Overall, contacts anticipate a slow recovery in commercial real estate markets.

    Keep this in mind when listening to the punditry – the commercial construction that is "improving" is RESIDENTIAL construction.  This is not about business activity improving – it’s about so many people who can no longer afford to live in homes that they have to build new apartments to house them all.  There is NOTHING positive about that!  

    Manufacturing
    Reports from eleven of the twelve Reserve Banks indicated that manufacturing activity improved since the previous report, while St. Louis attributed a decline in manufacturing activity to several factory closings. Cleveland, Atlanta, Minneapolis, and Kansas City noted solid expansion in production, but Chicago observed a more moderate rise in output than in its last report. Cleveland, Atlanta, and Minneapolis indicated that adverse weather conditions temporarily disrupted production. Philadelphia and Atlanta noticed that a higher percentage of contacts indicated that production levels would increase in the near term. Boston, Cleveland, Kansas City, and Dallas also described the manufacturing outlook as optimistic.

    Philadelphia, Atlanta, Chicago, Kansas City, and San Francisco reported more rapid improvement in factory orders. Chicago cited steel, automotive, and heavy equipment manufacturing as sources for significant new orders growth, while Dallas noted that orders for high-tech goods had accelerated. Philadelphia and Atlanta suggested that increases in orders were more broad-based. Cleveland and Richmond observed that orders were increasing at the same pace as in their previous report. Demand from abroad, particularly Asia, was cited by several Districts as a driving force in new orders.

    Benefits of our weak dollar policy!  

    Nonfinancial Services
    Districts reporting on nonfinancial services noted increased activity. Philadelphia, Richmond, Minneapolis, and Dallas observed rising demand for general professional business services, with several reports singling out accounting firms. Dallas noted that much of this rise in demand for accounting services was related to consulting and transactional work. Several Districts also cited increased demand for healthcare, insurance, and legal services. The New York District, while reporting that legal hiring had picked up a bit, observed that it was from very low levels. St. Louis reported overall strength in business services, although contacts in government services and religious organizations announced plans to decrease operations and lay off workers. San Francisco also saw improved demand for consumer and business services, but countered that providers of healthcare, legal, and accounting services reported that demand remained largely flat. Information technology and telecommunication providers experienced increases in sales, according to the Boston, Philadelphia, and San Francisco Districts. Kansas City observed softer sales by IT firms, especially those tied to federal stimulus spending, but noted that activity generated by data centers and e-commerce were characterized as strong.

    Transportation services firms in the Cleveland, Atlanta, and Kansas City Districts reported an increase in shipments. Cleveland contacts hinted at the possibility of hiring more drivers but also expressed concern over the tightening of the labor pool. Transportation firms in several Districts expressed concerns over rising fuel costs.

    Only in several districts?  Well, overall this is a pretty good section.  People are buying stuff and shipping is picking up.  Remember – 90% of the people still have jobs and retail already dropped 10% so this kind of recovery is "normal" – just don’t read too much into it.  

    Banking and Financial Services
    Loan demand varied across District and loan category. Richmond, Dallas, and San Francisco noted improvements in overall loan demand, while Kansas City observed a decrease. Demand for residential real estate loans increased in Philadelphia, Atlanta, and Dallas but was weaker in New York, Cleveland, St. Louis, and Kansas City. The New York, Philadelphia, Richmond, Chicago, and San Francisco Districts reported improvements in commercial loan applications. The Dallas District experienced mixed commercial loan demand, while St. Louis noted that demand was unchanged to weaker. Cleveland reported business loan applications were beginning to pickup but demand for consumer loans remained soft. The Philadelphia District expected little change in loan volume as consumers remained reluctant to borrow.

    Most Districts reported that credit standards were unchanged to tighter. Kansas City reported standards were unchanged for all types of loans. New York noted some tightening of commercial loan standards but little change in the standards for residential mortgages or consumer loans. The Atlanta District reported increased standards for residential mortgage loans. St. Louis indicated standards had tightened somewhat for commercial mortgages, but were unchanged for C&I loans, and were unchanged to somewhat tighter for residential mortgages. San Francisco noted relatively restrictive standards for both consumer and commercial loans.

    Community bankers in the Chicago and Dallas Districts cited increased competition for C&I lending from large banks. Atlanta noted improvements in credit conditions for all loan segments except those related to residential construction and real estate. Cleveland, Richmond, Chicago, Kansas City, and Dallas indicated steady to improving credit quality, and New York reported steady to lower delinquency rates. San Francisco reported that venture capital financing was improving with increased investor interest and IPO activity.

    That’s all good stuff.  When there’s an early-stage recovery, this is what we want to see – money waiting to be loaned out and looking for opportunities.  Unfortunately, it’s also an early sign of inflation pressure building up in the financials as that money can burst out like a damn breaking if the Fed doesn’t soak it back up in time (doubtful). 

    Agriculture and Natural Resources
    Adverse weather conditions continued to hamper agricultural production in many areas. Extremely cold and/or dry conditions negatively affected crops or livestock in the Richmond, Atlanta, and Dallas Districts. Kansas City also reported poor growing conditions. St. Louis described mixed results for production in many crops, but large increases in rice and cotton production were noted. Most reporting Districts noted continued strong commodity prices were benefitting producers of cotton, corn, soybeans, wheat, poultry, hogs and cattle while there are also some reports of rising input prices, particularly in fertilizer and feed prices. San Francisco observed some boost in export sales for timber companies.

    Too bad we don’t have a rain forest – I’ll bet we could sell out!  

    Energy activity expanded or remained stable since the last report. Kansas City and Dallas noted strong drilling activity, while Cleveland and Atlanta reported a decline in permit issuance. In the Atlanta District, drilling activity remained below pre-Gulf of Mexico oil spill levels, although up slightly since October 2010. Coal production remained above year-ago levels in the St. Louis and Kansas City Districts and held steady according to Cleveland. Kansas City reported that oil and gas production increased, while Cleveland noted that production held steady. San Francisco reported that global demand supported oil extraction, while Minneapolis experienced stable oil exploration.

    Prices and Labor Markets
    Manufacturing and retail contacts across Districts reported rising input costs. Manufacturers in many Districts conveyed that they were passing through higher input costs to customers or planned to do so in the near future. Homebuilders in the Cleveland and Atlanta Districts noted rising material costs, but acknowledged little ability to pass through the costs to buyers. Retailers in some Districts mentioned they had implemented price increases or were anticipating such action in the next few months. There is little evidence of wage pressures across Districts. Wages remained steady in the Boston, Philadelphia, Cleveland, Kansas City, and Dallas Districts, while moderate wage pressures were reported in the Chicago, Minneapolis and San Francisco Districts. Philadelphia, Dallas, and San Francisco noted that most wage increases were for workers with specialized skills.

    Labor market conditions continued to strengthen modestly, with all Districts reporting some degree of improvement. The Boston, Cleveland, Minneapolis, and Dallas Districts cited noticeable improvements in the manufacturing sector, and the Boston and Cleveland Districts also observed increased labor demand in the healthcare and medical sectors. New York reported little or no hiring in the manufacturing sector, although their factory contacts planned on increasing hiring in the coming months. The Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and Dallas Districts received optimistic reports from staffing agencies. Dallas said that staffing firms experienced continued strong demand, particularly for high-skilled IT positions. The Cleveland District staffing contacts noted some growth in the number of new job openings, with vacancies concentrated in healthcare, manufacturing, and professional business services. Chicago reported that a large staffing firm reported solid growth in billable hours for both industrial and for office and clerical positions, as well as increases in both temporary-to-permanent job transitions and direct hiring of permanent employees. Boston, Richmond, and Chicago noted increases in the conversion of temporary to permanent hires and permanent job placements, while contacts in the Atlanta District reported a preference for hiring temporary staff. Employers in the Boston District reported difficulty in finding qualified candidates for high-skilled jobs. Despite the improvement in most labor markets, some Districts such as New York, St. Louis, Minneapolis and Dallas also noted layoffs in the region. 

    Overall, a better report than last time but there are certainly mixed indicators here, especially regarding who will and will not be able to pass through higher input costs.  Inflation is real and undeniable – no matter what the Fed calls it and that is going to lead to a very uneven recovery.  

    This shouldn’t bother us as the last BBook was Jan 12th and we were at 1,270 on the S&P at the time so a nice 5% run since then.  This is pretty much more of the same with wages low and prices going higher (if they can ram them through) so Gooooooooooooooooo Business!


  207. Highlander / ipad — I agree that cap might be getting behind the curve a bit but I don’t agree that the lookalikes (android, windoze) are that far behind. I think you might be blinded slightly by your love for apple. There will never be a "winner" and all 3 platforms will exist for a long time to come. There are pros and cons of each platform but there are customers for each as well. I must admit however that I personally do not like apple because of their closed model and therefore have chosen to buy an android phone. And while I don’t "need" it, I have been able to do many tasks with my phone that I previously would have sat down at my PC to do.


  208. By MarketWatch
    SAN FRANCISCO (MarketWatch) — Apple Inc. investors were treated to a double dose of good news from the much-anticipated iPad 2 event, with the unveiling of a feature-packed second generation iPad and Chief executive Steve Jobs as master of ceremonies.
    Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 353.54, +4.23, +1.21%) also managed to keep the price of the WiFi-only version of the new iPad, available on March 11, at $499, a move that would further pressure its rivals, who have yet to unveil a tablet at prices that can match Apple’s. Pricing has become one of its major competitive advantages, as well as the wow-factor of its sleek and increasingly thinner designs. The launch date of the new iPad was also sooner than expected. See Apple iPad 2 news here.
    “Nearly 100 competitive tablets have been announced or introduced, yet none eclipse (or arguably even match) Apple on pricing without compromising markedly on screen-size or component-quality,” said Sanford Bernstein analyst Toni Sacconaghi in a note Wednesday before the event. Read “Apple’s iPad price advantage.”

    Steve Jobs amps up features for iPad 2
    Steve Jobs presents all new features for iPad 2 from the thinness and weight to front and back facing cameras.

    While rumors had floated that the new iPad would have a front facing camera, the new iPad in fact has two cameras. IPad 2 also comes with Apple FaceTime for video calling and the battery life is still 10 hours. Content creating applications will now work on the iPad, such as Apple’s iMovie and GarageBand for music; they will cost $4.99.
    “This will define the category for years to come,” said Jobs, who created a buzz of surprise and applause when he appeared, his first official public appearance since he went on medical leave in January. Jobs took turns with other Apple executives on the stage, and said in conclusion that competitors, who are looking at the tablet as the next PC market have the wrong approach. “These are post-PC devices that need to be easier to use than a PC, more intuitive,” he said.
    Jobs said that 2011 is going to be the year of the iPad. It looks like he might be right
    — Therese Poletti


  209. Highlander, AAP 20K on a 1.25% move? Wow that is ballsy… you must have had 60 Deep in the money contracts…And here I was worrying about it with 9 naked contracts…


  210.  Good summary Phil, thanks.  I have suggested through another medium that Bernanke’s shenanigans are all about a weak dollar policy.  Admittedly it has its downside. But I continue to believe that "European austerity" is wrongheaded, and the strength of the Euro will prove fatal, in a region that is already inherently inflexible in its labor policies.  After spending most of the last ten years in Spain, I can assure you that the over-fifty crowd are sitting at their desks, getting paid to do nothing because it’s too expensive to fire them, while the young are living with their parents with no hope of working.


  211. $ 16 billion in 2010 to U.S $ 46 billion in 2014.
     
    “The growth pattern like this has ever happened before,” said Dmitriy Molchnov, an analyst at Yankee Group. ”The curve tablet computer sales rose even faster than HD TVs, game consoles, and MP3 players,” he said.
     


  212.  Phil: Chchchanges
    I thought I would make my name change official, and easier.  I also like "Lincoln" since I am quite often told by women that I’m handsome like him.


  213.  Matt- Ugh.. the DC area. I could do much better telling you who NOT to go to. But not publicly! I would find a well trained ortho or PMR who does US guided injections. 


  214. AMATTA,
    JUST KEEP LARGE PORTION BEYOND THE APR EARNINGS DATE AND KEEP EYE ON THE DATE. AAPL SURPRISED EVERYONE BY MOVING IT FORWARD BEHIND THE EXPIRY DATE LAST TIME.
    HOPE THEY GOT THAT BS OUT OF THEIR SYSTEM.
    SOMETIMES THEY DON’T REALIZE THAT ALL THEIR SUPPORTERS  CAN AFFORD THEIR STOCK AS OPPOSED TO OPTIONS.


  215. JRW
    Seems to me the correction factor is now about .09%. Penny for your thoughts.


  216.   Lincoln/redlog – now i am confused.


  217. PBR/Savi – I do kind of like them.  Would have liked them better at $30 but $41 not so bad with hedges.  How about selling 2013 $35 puts for $4.55 and buying the $30/45 bull call spread for $7.50 for net $2.95 on the $15 spread.  Worst case is you own them at net $37.95 and the upside is you make $12 on a 10% move up in the stock.  TOS says cash and margin is $11 so a very nice ROI for this one and your break-even is about $34, which is 15% lower than current.  

    WAG/Dflam – Very good idea.  Somebody is retiring and that seems to have them selling off but a good time to get in, I think.  How about selling Apr $40 puts for $1.05 and buying the July $40/44 bull call spread for $2 for net .95 on the $4 spread that’s $1.82 in the money?  Should tie up about $7 in margin through Apr but then you get a shot at making $3 by July.  

    Oops, just saw you said IRA – well, that’s much duller but you can buy them for $41.76 and sell the 2013 $40s for $7.10 and if you can also sell the $35 puts for $4, that’s net $30.66/32.83 so 21% off if 2x is put to you and 32% upside if called away – still very nice.  

    HCBK/Terra – I’d wait.  If the whole market goes lower, the VIX goes up and the sales are better and if we recover, you might get .50 more for whatever you sell.  You can alway short them off the $10 line with tight stops while you wait. 

    Gross/Leon – He says he sees the 10-year at 4% – very nice for TBT!  

    TBT/Make – It’s hard to imagine TBT failing to hold $36 short of a major financial crisis in Europe or Asia driving people back to TBills.  I like selling June $36 puts, which are very rollable at $1.35 and you can use those to buy a Jan $35/39 bull call spread for $2 so net .65 on the $4 spread that’s $3.37 in the money now.  If you clear the June caller, you have 6 more months to sell more puts.

    Wiki/Amatta – I have no idea how often it gets updated.  


  218.  Strange action on the Russell. Did the guy running te tradebot have too much chili for lunch?


  219. NVAX/jo – that’s the manipulation of the dollar stocks.  They can force big blocks to go through and we don’t even know about the dark pools.

     

    AKRX – generic company that sells lots of opthomology products. I will have to look into the area and cash flows, but on the whole looks interesting.  Options are thin, so not sure how to protect if one buys in at 5.80.

     

    GO CLDX.


  220. drcraig
    TradeaBot 3000 has changed the got ya factor! Trying to get a fix on it but we now have JRW back and TradeaBot 3000 is no match!


  221. Down a little on IWM worth holding overnite?


  222. a sell off into the close that stinks


  223. williex
    I would and have been out since about 3:00. I expected an up stick, not happening.


  224. AAPL/Jabob – Next earnings are probably mid April usually expiration week.  

    Nice job Highlander!  

    FAS/Willie – Tomorrow.  

    SKX/Amatta – I’d take the bull call spread off the table ($1) and be happy if you clear the puts.  They’ve been disappointing but I still like them for holding the $20 line. 

    AAPL/Rain – Maybe I’m out of it but I don’t see how Apple’s "closed model" is any detriment to me.  It doesn’t crash, I don’t get conflicts, everything just works right away and the software updates itself and keeps getting better.  Oh please – save me from AAPL’s closed model… 

    Someone remind me to look at GLW tomorrow.  

    Europe/ZZ – Well maybe but at least the parents still have homes to live in!  8-)

    ROFL Lincoln!  

    IWM/Willie – What?  That ran up to .84 (20%), you should have stopped out at .80.  Wasn’t meant for overnight, it was a play off the line.  

    What we got there was a failed stick but volume is dead so hard to draw a conclusion. 


  225. CMG - upgrade police hit today so I closed that short, and NFLX as well, because you can bet that the NFLX upgrade is coming tomorrow from the same MoMo-ronic crowd of analysts…


  226. Shadow how did you determine not stick today?


  227. AAPL $ VOLUME WAS HUGE OVER 7.5 B (AND YET IT HELD 352) SOMEONE IS PUTTING THEIR MONEY WHERE THEIR MOUTH IS!


  228.  Nicha: Redlog
    Redlog kept making bad trades so I changed his name.  Kind of an Orwellian move.  Like when the Bernank changes the name of what we all think of as inflation. :)


  229. williex
    IWM couldn’t hold 80.18 a cross of SMAs at 11:30 AM.


  230.  Failed stick… ah, yes. All that volume without a direction and longer than normal wicks. I was hoping for 81.36, but we got stuck at 81.18. I stopped out at 0.76 with a contingent sell at 81.15 based on a fail at 81.18. Have to keep reminding myself to take those 15-20% winners off the table when I’ve got them!


  231. williex
    81.18 not 80.18.


  232. Phil / APPL — You are absolutely correct. You are one of the apple customers. As I said, different strokes for different folks. I’m not saying there is anything wrong with Apple.  


  233. For those interested in product comparisons:
    http://www.engadget.com/2011/03/02/ipad-2-vs-motorola-xoom-vs-hp-touchpad-vs-blackberry-playbook/
    The competition is getting hotter…. 


  234. PHIL,
    INTERESTING COMARISON!
    AAPL PE IS 19 VS
    79 FOR BIDU,
    67 FOR AMZN,
    53 FOR CY (AN AAPL SUPPLIER AND A DRUNK AT THE HELM),
    46 FOR SPWRB,
    45.55 FOR MOT (IWEAK IPHONE & IPAD LOOKALIKE), 
    24 FOR EBAY
    23 FOR GOOG (MAKES MONEY BY GIVING AWAY ONLY COMPETITION TO AAPL OS
    20 FOR BRCM (ANOTHER AAPL SUPPLIER)


  235. RAINMAN,
    YOU MISS THE POINT, IT IS WHAT IS THE MATTER WITH THE OTHERS! AND IT IS A GROWING LIST NOT A SHRINKING ONE. I CRASHED TWO OF THEM (I-PAD LOOKALIKES) WITHIN 3 MIN AT A PHONE STORE HERE IN AUSTIN. DEAD SLOW AND VERRRRRY SLOW (ALMOST PC LIKE) POWER UP!


  236.  Highlander, you are funny.  How would you know if I was behind the tech curve ?  Whatever that means …
    Lessee, 2 desktops; 2 laptops, 1 Imac, I I pod touch, Wii, 2 DS, 3 phones, 1 crackberry, super high speed connection, wifi, 2 blogs, twitter, you tube, etc etc and so forth.
     
    But … no Ipad  (and always said I would wait for v.2, even tho I don’t NEED it).  
     
    So I am behind the curve !   LOL.
     
    20k on AAPL today ?  Nice job …
     
    :wink:


  237. What a day!   Too busy to read news until now:

    At the close: Dow +0.07% to 12066. S&P +0.16% to 1308. Nasdaq +0.39% to 2748.
    Treasurys: 30-year -0.88%. 10-yr -0.41%. 5-yr -0.21%.
    Commodities: Crude +2.72% to $102.34. Gold +0.22% to $1434.40.
    Currencies: Euro +0.62% vs. dollar. Yen +0.04%. Pound +0.36%

    11:12 AM The Fed buys $6.689B in Treasurys maturing 2015-2016, of $32.152B offered by dealers, and the bonds stayed down overall: the 30-year Tsy yield +0.03 to 4.51%; 10-year +0.03 to 3.43%; 5-year +0.02 to 2.12%; 2-year +0.02 to 0.665%.

    U.S. policymakers should start preparing the market for a lifting of interest rates back to 1% to avoid future inflation problems, KC Fed President Thomas Hoenig says. “I really want to take away the punch bowl before the room gets drunk, because this punch is, I think, a little bit spiked,” he says. “I’m not for tight monetary policy, I’m for non-0% monetary policy."

    Treasury yields that are about 150 basis points too low may be unable to sustain demand for U.S. government debt, Bill Gross writes. "Bond yields and stock prices are resting on an artificial foundation of QE2 credit that may or may not lead to a successful private market handoff and stability in currency and financial markets." Zero Hedge’s interpretation: "Pimco just issued a sell rating on everything." 

    Warren Buffett tells CNBC that the U.S. doesn’t need as much fiscal or monetary stimulus as it is getting now and is "following policies that will lead to lots of inflation down the road unless changes are made." Buffett says he remains on the prowl for a big acquisition but doesn’t see a "high probability" of a deal soon. Of course, the guessing game goes on: I, II

    EIA Petroleum Inventories: Crude -0.4M vs. consensus of +1M. Gasoline -3.6M vs. consensus of +0.1M. Distillates -0.8M vs. consensus of -1M. Futures +1.1% to $100.7.

    Market recap: Stocks clung to gains at the close, as still-rising oil prices weighed on a rebound. Nymex crude settled above $100 for the first time in more than two years, gold and silver posted new highs, and the dollar tumbled. Techs were strong as Steve Jobs took the stage to introduce iPad2, and JPMorgan upgraded the semiconductor sector. NYSE gainers led losers five to four. 

    Chip stocks (SOXX) show early strength after JPMorgan upgrades the sector. "The inventory correction appears to be mostly over as demand from several end markets appears to be improving," analyst Chris Danely writes, naming Texas Instruments (TXN +3.8%) as his top pick, and raising ratings on Xilinx (XLNX +5.3%) and ON Semiconductor (ONNN +4.6%) while remaining cautious on Intel (INTC +0.6%). 

    It looks like the first-trading-day up streak broke yesterday in part because so many people moved out ahead of the trade in the last two days of February.

    Doug Kass issues a mea culpa for being "far too cautious and dogmatic" in his bearishness, and the recovery in corporate profits "has been so strong as to offset some of my concerns." He says he’s not bullish, and some of the economic strength is based on "recession fatigue." Nevertheless, "conditions are not as bad as I had once feared."

    Ben Bernanke begins his day of House testimony facing the freshmen: GOP newcomers who in the past wouldn’t get a word in edgewise are getting favored time from new chairman Spencer Bachus. And Ron Paul takes issue with the zen take on inflation: "Inflation is exploding and interest rates are going to go up and we are going to have one heck of a problem in the future."

    Unemployment may fall faster than Fed and White House projections, according to two former Fed officials. An aging population will hold down the supply of workers as a growing economy lifts demand, potentially pushing unemployment down to 7% by the end of 2012.

    Close to $100B of municipal bond defaults may occur over the next five years, Nouriel Roubini’s consulting firm says – significantly more than in recent history, but not as dire as Meredith Whitney’s apocalyptic prediction. "Defaults will continue to be isolated events," the report says, affecting mostly special projects and revenue generating entities that aren’t considered viable. 

    Financial regulators including the Federal Reserve and FDIC are said to be pushing to require a minimum 20% down payment on home mortgages that would be exempt from new risk-retention standards for banks. Some lawmakers say the new rules might make it too hard for homeowners to qualify for less risky, and less costly, loans. 

    Travel on all roads and streets rose 0.6% Y/Y in December, the Department of Transportation reports. Cumulative travel for 2010 totaled nearly 3T miles, up 0.7% Y/Y and the most vehicle miles traveled since 2007, but miles driven has remained below the previous peak for a near-record 37 months. 

    A Seeking Alpha post speculates that OpenTable (OPEN) might face competition by a free reservations system from the National Restaurant Association. StreetInsider.com counters that it contacted NRA, which says it is “not currently exploring the development of a proprietary online reservation system.” OPEN shares, which fell 4% yesterday on the speculation, are flat today. 

    Soaring cotton prices have led department stores to begin raising prices in a trend that could lead to weakening demand, Morgan Stanley says. “While it is likely too early to see a negative impact on demand, we think it is just a matter of time before consumers pull back on number of units purchased… we see both risk to EPS estimates and multiple contraction in 2011.” 

    News on the iPad (AAPL) is expected within the hour, and iSuppli expects hard-drive makers to feel it right on their income statements – with drive shipments expected to drop 3.9% Q/Q as tablets continue taking market share from laptops and even netbooks. Seagate (STX +2.2%) and Western Digital (WDC +1.5%) are up today but have fallen 16% and 11% YTD respectively.

    Three lunchtime reads:
    1) The investment lesson of Buffett’s career
    2) Fed watch: Driving by the rearview mirror
    3) The imaginary public sector pension fund crisis


  238.  Highlander — WiFi Trunk hotspot device ?   Pls explain what that is & how it works …
     
    I understand what it would do; but haven’t heard of or seen one ….
     
    Maybe I am falling behind the curve …..
     
    :wink:


  239. Phil/Apple/30% --
    I’m in the music business (record company, music publishing, and law) and I can tell you that no one, but no one, complains about Apple taking 30%.  In fact, iTunes sales are the "best" sales, in comparison to other digital "stores" like eMusic and the subscription sites like Rhapsody and Napster, where the net is much less.  If you’re not making physical product (and with no record stores, no one wants to anyway), $7.00 of a $9.99 album is fine.  So is 70 cents out of 99 cents on a single download (which is the way most people buy music).  And, yes, thousands of bands are going direct, without record companies…through aggregators or "portal" companies like CD Baby or TuneCore.  The major labels are reeling…massive cuts, and, out of four of them, one has been taken over by a bank (Citibank took over EMI) and another is for sale (Warner Music Group).


  240. CAP,
    NO INSULT INTENDED, IT IS JUST THAT YOUR BRUSH OFF OF OF A VERY COMPELLING TECHNOLOGY IS UNLIKE YOU AND UNUSUAL FOR A HIGH TECH INVESTOR.
    MY 20 K DID NOT HOLD BUT I HAVE RESISTED DAY TRADING ON THIS POSITION AND I AM STILL UP 10K.


  241. CAP,
    SPRINT HAS THE 3G/4G DEVICE IT IS $30 PER MO, SELLS AT BEST BUY AND FITS IN YOUR TRUNK AND ALLOWS ALL YOUR DEVICES TO WIFI ACCESS ITS 4G ACCESS.


  242. I know I sound conspiratorial here but I don’t think that was a failed stick.  I think the whole 12pm bounce was by design to rope in more bagholders to sell to in the afternoon.  They have to support the price as they sell.  Otherwise, since it’s really just big fish out there they would absolutely crush the price.  That’s why they sold so hard yesterday.  They had 1st of monthers lined up to buy from them.  Yes, I was one of them.  They are absolute masters at taking up the price on little to no volume and supporting the price on much higher volume selling.  It’s very tuff to scalp unless you have a very short time line.


  243. Dr Craig, sorry but when you say ‘ortho’ do you mean an orthopedist?  And I have no idea what a PMR is… thanks for all your help.  Kinda like I went to the doctor TODAY!


  244.  matt- ha ha.. ortho would be an orthopedic surgeon specializing in sports medicine. PMR = physical medicine and rehabilitation doctor, also specializing in sports medicine. I would tend to look for the latter, particularly if you can find one that trained in good places. Surgeons tend not to believe in muscular pain problems- it’s ingrained in their training. They always seem to act as though problems don’t exist unless they have a surgical solution. Sure, you have some that are enlightened, but they’re few and far between. 
     
    I would give these guys a call, and tell them you heard from a graduate of the pain medicine fellowship at UC Davis that they train some of the best physical therapists in the country, and you want to find out who they trained that works in the DC area: http://www.folsomphysicaltherapy.com/therapists.html
     
    Michael Moore at Folsom PT is simply amazing, and they train some of the BEST physical therapists around. If you’re looking for an excuse to visit JRW, this would be a good one!
     
    I would tend to agree with you on the manipulation. I have to wonder though, to what end? This only makes sense if they plan to tank the market. When is POMO over?


  245. lincoln/redlog – nicha keeps making wrong moves too, maybe he should change his name!
     
    Actually in India there is a lot of superstition. Astrologers convince people to change their names (adding an additional letter, so it is spelled differently but sounds the same), use specific numbers in their dealings, etc. Maybe I should look into that. ;)


  246. Tx Phil


  247. drcraig, thanks so much! 
     
    As for propping up the market, perhaps they are over extended and the values have gotten too rich.  Especially given the fact that the entire Middle East seems to be like a tinder box these days.  And despite what JPM and the Bernank say, $100 oil is a detriment to peoples’ spending.  The top 10% can’t carry the entire load.  Then, there is the whole input cost thing not being passed on to consumers and therefore eating into profits.  Finally, POMO didn’t start in earnest until November.  Prior to that, in July it was ‘just’ the ‘reinvestment’ of maturing MBS principal into Treasuries.  Anyway, the market took off September 1st.  So, the way I see it, they spooled up 2 months before the Fed started buying.  And that means they’ll start unwinding at least 2 months before the cash runs out in June.  So to me, we could quite possibly have topped for the year unless QE3 is announced or rumored.  I know not many people share that opinion and frankly I’m only about 50% sure of it myself.. but there is certainly an endpoint to this madness.  We aren’t simply going to get inflation and the market continues to go up due to it.  Inflation is a bad thing for the economy.  It will really hurt spending.  And since we’re 70% consumer driven.. that’s a lot of hurt.  That’s why Buffet says to look for companies with pricing power.  They are the only ones who will be able to continue to grow profits as a result of inflation.  Unless of course we get wage inflation first.  ROFL!


  248.  Highlander; I didn’t take it as an insult, so don’t worry.
    Thanks for the info on the wifi stuff … … 
    Just saying my own personal view, backed up by some research, is that the Ipad is cool but not really a necessity.  Its a cool, expensive, gadget.  in fact, one of the reasons why the new mac book pro is expected to be popular is that people aren’t ready to give up laptop functionality.
     
    I do think I am going to get an Ipad-2 however, even though I don’t NEED it !   LOL


  249.  And Highlander, if I may, when you see a 20K profit; take it … don’t turn it into 10k, there is always another oppty.


  250. Cap, I would love to take you up on your advice!


  251.  PeterD- Strangles- looking ahead to possibly close out some March positions if we get a Vix decline this week- considering some Mar Quarterlies- 1390/1150: and/or April 1400/1125. 
    Put verts at  1250/1240?
    March is shaping up nicely so far. 


  252. Phil
    I have been looking over AKAM. They have no debt and they seem to have good growth (at this time). By looking at their last 3 quarters, they should report good yoy growth for the year. Their p/e is 42, but their forward p/e is 21. The low target for 19 analysts is $37.50. Their Option Premiums are pretty good. A buy/write at the current price of $38.11 with the $40 2013 Puts and Calls @ $16.60 is tempting. At $21.51/30.76 the possible return @ $40 is 86% with a discount at the 2x price of $19.3%. What glaring weakness am I missing for their premiums to be this high?


  253. pstas,
    Those are nice plays, although I don’t usually play the quarterlies due to low volume and they don’t usually give a lot higher premium burn rate than the next month.  The put verticals are $1.9, which is relatively costly to the $3.85 credit for SPX 1125 put.  So either do less number of contracts for the put verticals, or play the 1150.  Yeah, March has been great.  If the premium sellers get our wishes, VIX would be held constant at 35.  JRW, can you call Lloyd?


  254. http://www.zerohedge.com/article/china-moves-making-renminbi-reserve-currency
    this is great!  this will accelerate inevitable.  should we talk again about $200 oil or should we start talking about $10000 oil?  good bye dollar, nice knowing ya.


  255. re: The investment lesson of Buffett’s career
    Phil, kind of funny that you linked to this article considering the goal for the current $25KP is to grow 400% to $100k within the year.
     
    "Claims of 100% per year, and more, are commonplace. … My advice: You should run, not walk, the other way from any adviser making performance claims of that magnitude. … Think about it this way: Whenever you come across an adviser making performance claims this high, you know one of three things is going on:

    The adviser in question is a far better investor than Warren Buffett

    The adviser in question is lying

    The adviser is accurately reporting his historical performance, but it was produced over such a short period of time that regression to the mean will quickly cause his return to come back to Earth."


  256. Utilities in my home city up 9.5%.
     
    Nope, no inflation here …..


  257.  Illinois state income tax up 67%. Nope, no inflation here either. 


  258. i wonder when our infamous not so knightly hightness opens his newest shrine  to gaze upon preists and wayfarers traveling due north will it be aa grand as its name implies …. and will it be the maker which our chartmasters have been wating for.


  259. AMRN – well, their data is due out in Q2 sometime.  With a few weeks left in March, I am looking at playing them in the coming days both ways.  The stock has pulled back off highs. 

     

    The company has a glorified fish oil that lowers LDL for very high subjects.  GSK has a prescription fish oil that sells 800M/yr.  My question remains, will someone pay a premium for fish oil (4g/day).  Either way, I think there is a way to capture both sides of the play, and I am looking at selling the 7.5 Mar Ps, buying the $5 Jun Ps for free.  The call side would be the 7.5 Jun C sellling the $9 Mar then April 9 or 10s. 


  260. EGLE - Q4 EPS $0.05 vs est $0.03, Q4 rev up 72 pct to $72.4 mln vs est $62.8 mln.  Popped as high as 4.22 AH from a close of 4.04, let’s see what tomorrow brings.


  261. Good morning!

    30%/Esco – Thanks for color commentary – it’s great to hear from people with real-world experiences.  I hope more of our Members will share on their various topics of expertise. 

    Highlander – What’s up with the caps lock?  I know it’s hard to get Cap to listen but don’t "shout".  

    Failed stick/Matt – I think you may have had almost the right logic but the wrong conclusion.  It’s more to rope in the bears and to flush out the weak hands on the dip before they once again light up the pre-markets before ordinary mortals get a chance to participate.  Global markets all opened up on strong US employment data.  What data?  It was the ADP report – apparently now considered a major benchmark by foreign investors, even though it’s been completely misleading 3 out of 4 times.  

    Numerology/Nicha – Hmm, perhaps you have a point.  Your number (from Nicha) is 8, which has a destiny to: "Struggle with opposition, delays, failures, humiliation."  Nicho would be a 5: "Lucky, soft and sensuous, non-committal, love to explore all of life…

    Pricing power/Matt – That’s a good point but the kind of inflation we have now is totally insane.  It’s a top-down inflation where the top 10% (us) are speculating and having a good old time while the bottom 90% are forced to decide what new thing to cut out of their lives each day in order to keep the lights on and put food on the table.  Of course the bottom 90% in America lives better than the bottom 90% in Tunisia but, then again, they also have greater expectations than the Tunisians.  

    Where is the breaking point for each country’s lower classes?  Apparently, Bernanke is looking to test this out in his Global petri dish but China and India, who’s lower classes are in the same $2,500 a year boat as starving Arabs, can’t afford the gamble – only the fact that 90% of their bottom 90% are still farmers and able to feed themselves is keeping their countries from getting very ugly.  Then you have Europe, with high expectations of comfort as well but we have people in Greece and Turkey whose standard of living is barely distinguishable from Algeria, where they tossed out their leaders as well.  

    How far can we push before the next set of Nations reaches the breaking point?  Even in this country, they can’t cut unemployment benefits while the number of unemployed is larger than the number of people who can be deployed by our armed forces – we’re stretched too thin to fight a third war on the streets of Detroit or wherever….

    I have mentioned before that the French Revolution began this way.  France was the peak of civilization in the late 1700s but the Government had a lot of war debt (and "The Mississippi Company" failed and had to be bailed out!) and they began printing money which, shockingly, caused inflation.  The King tried to pass taxes on the rich (aristocracy, clergy and merchants) to pay for it but they would have none of it and the man who proposed the tax increases was deposed in 1788 and replaced with a flunky but he too concluded taxes had to be raised but was rejected by Parliament, which had been taken over by the upper classes. 

    The King tried to push the taxes through and the Parliament cried foul and the King called for their dissolution.  The PR machine turned on the king and made it a "people’s issue" and they ran a smear campaign against the King’s wife – claiming she has said to/of the poor "Let them eat cake" – which never actually happened but it was such a good-sounding story that Cap posted it on his tree and visited all the chat taverns and, before you knew it, everyone believed she said it…

    From that point it just snowballed out of control.  There was an election but the newly elected Parliament were effectively the "Tea Party" people and the merchant class who were "looking out for the little guys" and they proved this by voting titles (and land) for themselves at their first convention.  This was insane as they still hadn’t paid his bills and the King sure wasn’t going to start handing over land and everyone lost faith in France’s ability to pay its debts and food prices began to skyrocket while the currency devalued – trapping people in France as they didn’t have the exchangable money to leave, even if they wanted to.  

    In short – elections were in January, Parliament convened in May and the revolution began on July 14th.  That’s how fast the World’s second most powerful nation descended into chaos that led to an all-out civil war 4 years later (red states vs. blue states) that led to Napoleon taking over the country and turning it into a war machine – pointing all that rage outward and unleashing it on the rest of the World…

    As the Germans said in 1920 – "Hey, we may have a lot of inflation and a huge wealth gap, but at least we’re not like those French."

     

  262. AKAM/RJ – I do like them now that they’ve dipped down to a more reasonable level and I agree with your trade idea.  The premiums are hight because they just fell 40% so their internal VIX is high – good to take advantage of!

    China/Lapper – That’s doing the trick, the Dollar gapped down to 76.60 from 77.46 yesterday!  

    Buffett/Jvest – There is no way you can pull those gains with a large portfolio (not responsibly and don’t think for a second that our $25K portfolio represents responsible trading!).  It’s a whole different ballgame when you try to make 100% on $1M but I do intend to test it next year, as I intend to try to turn our (hopeful) $100K into $250K and then I will at least try to double the $250K in 2014 and again in 2015 – kind of my personal quest to turn $10,000 (last year’s start) into $1M in 5 years…

    LOL BDC and Pstas –  But they expect us to be able to shoulder the burden of price increases without wage increases…

    Not so knightly/Thatway – Are you going for Chaucer or Don Quioxte with that statement?  Perhaps Moody Blues?   8-)

    EGLE/MrM – They are a very solid company.  I’m very surprised they are underperforming like this.  

     

    • Q4 EPS $0.05 vs est $0.03
    • Q4 rev up 72 pct to $72.4 mln vs est $62.8 mln
    • Qtrly fleet utilization rate of 99.8 pct.
     

  263. Phil, you had something in mind for GLW this morning. You asked to be reminded.
     
    Nice drop in oil and copper  there as the 7:30 shift comes online.


  264. Pharm, 
    Thanks for your input on the Pharma A’s ;-0
    If you are around… I am reshuffling my longs a bit, need to put in a LONG-TERM B/W or Synthetic healthcare play here. What would be your best bet for a 2012 or 2013 play. 
    Thanks much again….


  265. just trying to have fun with words like big apple, grand funk station …; if they do open there as birds have been tweeting …