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Mega-Merger Monday – T Can Be “Heard Now” by 40%

Didn't we break these guys up?

Oh anti-trust, anti-trust, wherefore art thou anti-trust?  Don't get me wrong, I love T as an investment, we just made a play on them last week with their big, fat, 6% dividend.  Now they are using debt to finance a $39Bn purchase of DT's T-Mobile division as the German-based company is sick and tired of getting paid in worthless dollars, which add nothing to their Euro-based earnings.  Although one may think regulators would actually wake up and say "Huh?" to this deal – AT&T was confident enough to put up a $3Bn breakup fee and you don't do something like that unless you've already spent $300M buying all the votes you need ahead of time.  

"AT&T anticipates regulators will require it to divest wireless spectrum and subscribers as a condition for approval," said a person with knowledge of the situation.  These things are all worked out long before they are announced but let's hear it from the little guy anyway:  "The combination of the second-largest wireless carrier with the fourth-largest is 'unthinkable',” Gigi Sohn, president of Public Knowledge, a Washington-based advocacy group, said in a statement. “We know the results of arrangements like this — higher prices, fewer choices, less innovation.”  Isn't he cute?

In addition to surpassing Verizon Wireless, AT&T could leave Sprint Nextel Corp. (S) as a far weaker No. 3 player in the industry, said Rebecca Arbogast, an analyst for Stifel Nicolaus & Co. in Washington. “AT&T was broken up and now it’s back with a vengeance,” said Bert Foer, president of the American Antitrust Institute, a Washington-based non-profit researcher that challenges what it sees as abuses of concentrated economic power. “We have to decide if we’re happy with the idea of going back to monopolistic treatment of the telecom industry. AT&T has come back to monopolistic power just like the Terminator.”

 

Is T calling a bottom to the dollar?  Probably.  You don't spend $39Bn to buy a 40% market share in a country with declining revenues.  T is also calling a bottom to lending rates and probably making a bet on inflation as well – all in all, pretty much exactly what we're playing the market for so, from a T shareholder perspective – I love this acquisition.  Nothing makes money like a monopoly (just ask Carlos Slim) and, as Steve Colbert illustrates above, AT&T has already proven to be an unstoppable monstrosity of a Corporation that cannot be killed by earthly means.  So we may as well learn to love them.  

Another monster that's hard to kill is our friend Qaddafi, as our very strange logic in aiding Libya's rebels is that we will ground his air force (mission accomplished already, by the way) but we won't aim our little guided laser pointers at the big man himself – bad form I guess.  

We will not leave our oil to America or France or Britain or the enemy Christian states,” Qaddafi, who has ruled since 1969, said yesterday. “We will fight for every inch of our land and liberate every inch of it.” 

That was the $270M statement of the day as crude oil shot up $3, back to $104 per barrel so, if you think you don't care about this little police action – keep in mind that Global Consumers buy 89Mb of oil daily so every dollar oil climbs is almost $100M PER DAY out of the pockets of already-suffering Global Consumers and diverted away from other businesses – which was a major topic of discussion in this Weekends Reading Post.  

UK Defense Secretary, Liam Fox, is far less shy about the objective than we are, saying Colonel Gaddafi himself could be targeted by air strikes if there is no risk to civilians.  He told BBC Politics yesterday: "There's a difference between someone being a legitimate target and whether you would go ahead with targeting.  You would have to take into account what might happen to civilians, we don't simply – with a gung-ho attitude – start firing off missiles."  In other words – "we'd love to kill him – we just don't have a clean shot…"

Corporate takeovers, regime changes – are you sensing a theme here?  As we learned from Highlander – in the end, there can be only one!

economists_survey2.top.gifThe one concern that topped a poll of economists surveyed by CNNMoney was "High Oil Prices" but number two will surprise many Conservatives (and no liberals) as the second biggest risk facing the US Economy is "Cuts in Government Spending," chosen as the #1 threat by 6 of 23 economists and #2 by 7.  Strangely – the threats of "More Government Spending" or even "Higher Taxes" didn't make the list at all.  

This mirrors what we observed in our weekend post as we looked at "what's really wrong with the economy" and, according to 30% of small businesses surveyed – LACK OF SALES is the problem the face – and that is up 200% from August of 2008.  The Fed worries about labor cost but labor costs don't bother small businesses, who hire 70% of US Workers – labor costs bother big businesses – who put 70% of small businesses out of work by outsourcing their labor and manufacturing.  

I don't know how many different ways I can explain that the Fed's policies are pretty much the exact opposite of what our country needs to get back on it's feet.  Perhaps this chart from Toby Connor will help as we see what is now a potentially MASSIVE technical breakdown in the Dollar as not even G7 intervention last week has managed to get the Dollar back over the 77 line and, in fact, this morning we are all the way down to 75.75 – the lowest value of US currency since early November and, before that, November of 2009.  

Not surprisingly, the markets are flying on the doomed Dollar, with 1% gains across the board pre-market and the prior Dollar dives gave us our November spike to S&P 1,227 (were were down 50 by the 16th) but did the trick of punching us through 1,100 in November 2009 where we gained another 50 points by January before falling 100 points back to 1,044 in Feb of last year.  

So it looks like we'll be taking the money and running if we can't take out our levels (again) as a weak dollar is a pretty poor long-term investing premise – especially when commodity prices have consumers on the ropes – which was not the case in last November, when oil was $85 a barrel and not in November of 2009, when oil was $80 per barrel.  Today we are STARTING at $104 – that's up 22% over $85 and we've already seen the reports that tell us that worker compensation is actually losing ground to even Uncle Ben's CORE CPI – so imagine the pain being felt by the bottom 90% as we ratchet up energy by 25% on top of the 30% increase in food prices they've already been socked with.  

Recovery?  I think not…

 


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  1. Pharm,
      Have you heard anything about NWBO? Stock down to $0.37 on apparently no news. ?DD. Thanks.


  2. Ugly morning for me I have a buy/write on S. Fortunately, I closed the sold put Friday.


  3. Tx Phil for the help on my positions


  4. Not sure that’s a great deal for Deutsche Telekom – they paid $35 bn back in 2001 for then Voicestream and now sell T-Mobile for $39 bn after all the investment they made. AT&T is probably paying half of what DT paid per customers then! Still it comes out to more than $1000 per customers. T-Mobile had a net income of $1.35 bn last year or $35 per customer! I guess synergy should enhance that! 


  5. Pharm,
    Nice call on CRIS up 13% premarket.


  6. Phil--25KP  --on Friday I bought back the Mar 28 FAS calls but did not roll to the Mar 25, 29s—should I roll to the Mar 25,  30s today?
    Tx


  7. Good morning: 
     
    Phil / Russia – see 11:19 pm comment
     
    1020 / Who’s the angry white dude, dude ?  Well, at least you can admit 2008 was a big mistake (not that mccain would have been so wonderful, what poor choices we have).
     
    Phil / 1020 — man, when it comes to politics, you guys are so closed minded.  Its like nyah, nyah, nyah, I can’t hear you.
    Phil, the 70′s were 40 years ago, bro ?  Great for music, but not for dusting articles or covers to try to make a point.
     
    1-2-3 What Are We Fighting For ?   Whose side are we on ?  Anybody but Khadafy ?
    Talk about a rush to judgement !
     
    I know you acolytes can’t stand it, but you know its the truth.
    ———-
     
    On to markets.  Schwab buying Options Express.  Anybody use Options Express and have some thoughts or comments about it ?


  8. USO Apr 39P – would you roll them to 40P? (and may be cover by Weekly 40P?) – or just take loss?


  9.  Commodities are soaring.  Fertilizer stocks should start to roar this week.  POT is already out of the gate.


  10.  Time for another No Fly Zone:
     
     

    Syrian army deploys around Deraa city after protests in which five civilians died, according to residents
     
     
    And isn’t Syria more of a terror sponsor, and an implacable foe ?  Its still on the State Sponsored list, not Libya.  And they are killing innocent civilians too !  And Assad is a bad guy dictator too.
     
    What are we waiting for ?
     
     
    Regime change in Syria would be much more impactful for American interests than Libya.  (except for XOM and BP interests)
     
     


  11.  USO; Look to sell $44 calls early today …


  12. PHIL
    Good morning,
    On the DIA 25kp.  Whats the official position,  I,m holding the 16  May 114 Puts , bought back the Mar 120 on Friday for $1.80.  Should I try to sell the weekly 118p or 119P, I noticed on Pharmboy’s spreadsheet that he  has closed the 118′s  puts also. Thank you


  13. I predict another doji kind of day.  Of course it should be down.  Way down.  But I’m turning the brain off so as not try and  fight it.  They are just ratcheting the market  up as inexpensively as possible.


  14. Today’s Move on CRIS has the stock breaking out of a 8 year trend line from back in 2003!


  15. Pretty sad if this is true. Don’t know how old it is, but thought it would be of interest for those of you (including me) that are underwater on a home loan and are looking for options out. I am saddened by what our country has become.
    http://www.youtube.com/watch?v=ssl5yb7FewA&sns=em


  16. Phil
    DIA $119 puts @ .97  anyone?


  17. Good morning!  

    It’s a pretty heavy POMO week after today but the T Merger and diving dollar are taking care of things this morning.   Up to $33Bn of Fed firepower is aimed at the markets this week (see Stock World Weekly for chart) and keep in mind it is very easy to push the indexes around between their levels so it’s nothing for us to rocket up to test our Major Breakout Levels again but it doesn’t mean a thing until and unless we get over them and hold them for 2 consecutive days.

    Meanwhile, we’re not even going to make 2,675 on the Nas on the open so let’s watch that line carefully but the Russell should blast right through the 800 level and that means it’s now the Nas dragging our indexes and that is understandable, given the supply issues in Japan. 

    AAPL can rock and roll the Nas much higher if we get word that they don’t expect any particular disruptions.  Clearly every IPad in North America is sold out already so it’s not like they’re sitting on unsold inventory.  

    In the $25KP I mentioned that IF we get a chance to get 1/2 out of FAS Apr $32 calls even at $1.50, we want to take that exit.  Also, on our USO Apr $39 puts, which I think I missed in the update – I like doubling down at .70 to 20 as there is no reason to change our target of $95 on oil in the next 10 days (USO $37ish).  

    Existing home sales at 10 and the Chicago Fed was already disappointing – especially after such a huge Philly Fed:  

    Chicago Fed’s National Activity Index ticks down to -0.04 in Feb. from -0.01 in Jan. Employment-related indicators made a +0.30 contribution, while consumption and housing category contributed –0.45.

    Other big news:

    Citigroup (C) announces a 1-for-10 reverse stock split, and says it will reinstate its quarterly dividend at $0.01/share following the May 6 reverse split. Outstanding shares will be reduced to 2.9B from 29B. Shares were +1.6% premarket before the move was announced. (PR

    Efforts to cool the pools holding spent fuel rods at the Fukushima nuclear reactors appear to be working, the temperatures having fallen below the boiling point. Japanese markets were closed on Monday, but Nikkei futures are +2.9% The yen weakens to ¥81.25.

    Swiss Re (SWCEY.PK), the world’s 2nd largest reinsurer, estimates $1.2B in claims from the Japanese quake. A Vontobel analyst sees the amount above expectations, but remains bullish on the shares as reinsurance rates should be "positively impacted." Swiss Re shares+2.0% in Europe. 

    GM (GM) says it has halted all nonessential spending while it tries to get a better handle on the potential impact of Japan’s crisis. GM is trying to ensure adequate supplies at all U.S. plants, but a spokesman says "we’re just assessing the situation day by day." (see also)

    Tiffany’s (TIFstrong Q4 bodes well for sellers of luxury goods. Gross margin rose more than two points to 60.9%, "with the increase primarily reflecting the recapture of higher product costs through retail price increases." Ex-forex fluctuations, worldwide sales surged 12%, and comps were up 8%. TIF +5% premarket. (PR

     Boeing’s (BA +1.2%) newest 747 passenger jet had a successful maiden test flight yesterday. Assuming no snags, Boeing expects to deliver the first 747 by year-end. It’s a much-needed victory for Boeing, whose Dreamliner and 747 Freighter program are both years behind schedule. 

    The AT&T (T)/T-Mobile (DTEGY.PKcombo makes sense on many different levels, Roger Entner writes: "At 7.1x Ebita and about $1,000 per sub, AT&T has struck a great bargain. DT, which acquired VoiceStream for $24B in 2001, is profitably exiting a growing headache." And Sprint (S)? The merger will allow (and force) it to clearly define itself as the value leader in the U.S. market.

    Deutsche Telecom (DTEGY.PKwill receive $25B in cash from AT&T (T), and the remainder in shares – giving it an 8% stake in the U.S. carrier. JPMorgan (JPM) will lend AT&T $20B for 18 months to fund the cash portion. The value of synergies created "is expected to exceed the purchase price," AT&T says. (PR

    World central banks could launch another offensive on the yenas soon as Monday following Friday’s late-day gains. Weekend tensions in Libya could be a boon for safe-haven assets, including the yen.

    Analysts say every $10 increase in the price of a barrel of oil shaves another 0.5% off global growth. With Western forces nowpounding Libyan targets, Reuters’ oil price/GDP calculator may be useful for projecting this year’s world GDP.


  18. OXPS to be bought by Schwab


  19.  Cap – re:OXPS
    I use them, fairly good tool, executions suck. My play is buying the Sept 12.5 calls at 5.4 and selling the 17.5′s calls & puts -for 2.8. Phil may have something better, but I think both need each other so this goes through.


  20. Good Morning!
     
    Cap, there you go again…. :)


  21. CCJ, DIS, IBM, MMM, RIMM, XOM    I have calendar spreads on all of those companies that are currently naked.  I did a good job last week of rolling down my longs and I basically let the callers expire.  I know "when in doubt sell half", but which would you let run a bit and which should I be looking to cover sooner rather than later? 


  22. Cap/nyah nyah
     
    Actually, for you it’s now http://www.youtube.com/watch?v=K8E_zMLCRNg
     
     
    Have a nice day…..


  23. Phil, in 25K recap this morning you left out the roll and DD we did Friday on INTC to Apr 20C .
     
     
    20 INTC Apr $21 calls at net $1.04 ($2,080), now .18 – Roll to $20 calls for .38 and DD at .55 for 40 Apr $20 calls at avg .985 ($3,940 – looking to get all out even).


  24. CRIS has a long way to go, but when in doubt…sell 1/2.

    What’s up with TOS today?  The spreads are ridiculous and my P/L on my accounts are all screwed up…..


  25. Pharm – Do you have ShadowTraders levels to post this morning?  Thanks.


  26.  TOS: They’ve also wiped out all my groups. Their restore instructions don’t work.  They’ve stopped responding to support requests.
     
    They seem to have a new software release about every other day. Each one is Russian roulette.


  27. Phil,
     
    Thanks for the futures answer yesterday.  For today, I need a new disaster hedge — took profits on all of ‘em the last drop.  What’s the hedge du jour?  Thanks!


  28. Netflix, Inc.: Open-market Sale made by company Directors on Feb 24th, at trade price (US$177.26). Disclose date: Mar 18th. Read Full Report: http://www.insiderslab.com/PR/032111A/NFLX/Netflix (NFLX, Trade )
    First Solar, Inc.: Open-market Sale made by company Directors on Mar 18th, at trade price (US$150.19). Disclose date: Mar 18th. Read Full Report: http://www.insiderslab.com/PR/032111A/FSLR/First-Solar (FSLR, Trade )


  29.  Some weird symbols in my TOS….no apparent reason…throwing off the P/L.


  30. PP from today.


  31. Damn, now we get to 12,000 – I hate being off by a day!  

    Nas popped right though.  I guess I’m old, used to be a 25-point move in the Nas was massive for a single day….

    S/Judy – Being taken out and shot this morning.  This was not something they needed but, long-term. I do think T will have to make some competitive concessions that may benefit them. 

    You are welcome Savi! 

    DT/StJ – They are getting the short end of things too but what can they do?  When they bought DT, the Dollar was about 30% stronger than it is now – they are just capitulating as the revenues they collect (priced in Euros) get worse and worse and worse against the Euro-priced loan they have to pay off.    Now T is getting a loan priced in Dollars to buy them out – SMART!  Keep in mind that companies like T think LONG-term so if it costs them $35/year/customer to borrow the money and they collect $35/year/customer in revenues then they are buying the DT customer base for free (and eliminating competition and saving internal costs) and inflation will turn that into profits eventually (maybe very soon).  

    CRIS/Pharm – Nice call. 

    FAS/Savi – Well that worked out nicely!  Now you can just sell 1/2 the March weekly $30 calls for .80 but no need to rush as long as we are all green on our Breakout 2 lines.  Just make sure XLF gets back over $16.50 and then that’s your "safe" line.   $30 on FAS is a good watch too.  

    Sorry Cap, couldn’t hear you…

    USO/Lol – See above, if I didn’t think they had a good chance of popping higher, I would have bought more in the first place.  $105 is our expected top – that’s when we’re likely to roll but, for now, another round at .70 is a gift. 

    POT/Mariner – GS never fails to give them an upgrade when the market needs a boost.  

    Syria/Cap – That’s next week, I think. 

    DIA/Cnar – We couldn’t get out at our price so we did the roll to the 16 short DIA March 31 $118 puts but they are down to .60 already so not much point.  I would wait and see how our levels hold up at this point, if we keep going highger, we’re going to roll up the May puts at least $2 and sell some new puts to offset that cost.  Right now the $120 puts are $1.15 but if the dollar comes back the Dow won’t hold 12,000 so we’ll have to watch the action.  

    Doji/Matt – Very possible, especially if there is currency intervention later.  

    Indymac/DC – Crimes in progress!  DIA puts tempting but not with the Dollar below 76 (still 75.89). 

    Runners/Eph – They are all good.  XOM I would be most careful with and IBM may be a bit toppy and RIMM is a wild card on earnings.

    INTC/$25KP, Doro – Thanks I will amend that to 40 Apr $20 calls at avg .985. and we’d better get a big move in the Nas to get out of those even.  

    TOS/Pharm – I think the early move up and rapidly dropping VIX makes havoc on mornings like this. 

    TOS/Chaps – Yeah, I had to redo all my charts this weekend. 

    Disaster hedge/Wass – Everything is coming up roses today, I would not be spending much money on the downside until we are back below Breakout 2 levels.  I still like shorting GMCR but they are really the new NFLX, which is good as the old NFLX is down today.  GMCR June $60/55 bear put spread is $2.10 and you can pay for that by selling Jan $35 puts for $1.90 for .20 on the $5 spread.  I don’t think they go BK – just come down to earth.  


  32. Existing home sales fall 2.8% y/y despite a 5.2% y/y decline in prices.  MMmmmmmm… Healthy!


  33. Phil,  CSCO seems like an oppty, yes/no?  If so, do we have a suggestion for a trade?


  34.  Feb. Existing Home Sales: -9.6% to 4.88M vs. 5.15M expected. Inventory of unsold homes +3.5% to 3.49M; months supply 8.6. Median sales price -4.2% Y/Y to $157,000. Home sales are constrained by "unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," NAR’s Lawrence Yun says. 


  35. Escohen5, I am having the same problem with TOS, with no response from support after 45 minutes. Very odd for them.


  36. Tx Phil


  37. bryan5452 / CSCO – I am in the Jan 2013 15 / 17.5 bull call spread.  If csco holds 17.5 you will have a double in 21 months.


  38. CSCO / bryan5452 – I know that Phil likes them long term, but at this time, it is all down arrows… I would wait until the next earnings to get a direction on that stock. The last 4, let’s face it, were not impressive!


  39. Phil and Yodi: Thanks for response to my question yesterday on writing on a full, mature stock position. Have a good day.


  40.  Some options orders not getting filled on TOS, or, if they are filled, they are not showing up as being filled.  Hard to tell.


  41. Pharm – Thanks. Maybe JRW or anyone can answer this when they have a minute. I spent most of Saturday reading JRW’s section in PSW and back testing some of the lines on IWM (as opposed to drinking and watching the tourney).  If the market opens up +200 and slices through all three resistence lines, does R3 then serve as support for the day? Also, is there an advantage to trading the TNA equity vs. the option? It seems JRW mainly trades shares.


  42.   There are pricing problems at OPRA. Causing problems with options. It’s street wide.


  43. TOS definitely sluggish today. I had an order in for USO April $40 puts for $1.10 and the ask price fell to $1.08 and it still did not fill! Ended up just canceling the order, since who knows when it will fill…..


  44. Yes TOS is in bad shape this morning orders do not get filled. Even my AAPL weekly no go


  45. Phil how do we know if we are buying or selling a position. Sorry I know we have been over this.


  46. lori13
    This is a big problem with Phil. He does not like the word BUY so he says I like it (I use this normally in other terms)
    and if it is a sell he calls it sell !!!!! Hard to change him many tried!!!


  47.  TOS: My orders aren’t filling either. These guys really sh*t the bed this time. Too many hookers and partying from all that TD Big Brother money. Welcome to the machine!


  48. Chaps/Yodi
     
    Have to agree my orders are not filling either.


  49.  what is wrong with HEAT? it is in free fall again today


  50. SPX 1300 – LOL
     
    What a joke …


  51. Just managed to speak to some one at TOS their complete system is F up this morning They try to fix it very soon what ever this means Just be careful I cancelled all orders as for example AAPL weekly I put in an offer for 1.50 even at 1.60 my offer does not get filled Open interest over 3000!!!!


  52. Maybe it’s time to consider other brokers. In the recent Barron’s online brokerage survey, TOS fell from #1. There were several others ranked higher, several new ones that I never heard of were ranked highly. Just a thought.


  53.  Phil,
    i have the FAS MAR25  29Call sold to cover the long APR32 Call, do you think it’s better to roll the short call or wait ? 


  54.  Hello everybody!  I am working on my Forex article for the week and need some ideas.  What I plan to do is write up a description of several different strategies, including some suggestions from you guys, then I can code them up and we can start backtesting them to see if they are any good.  So, I need some suggestions as far as strategies are concerned.  Anyone have a strategy they want me to try and automate?


  55. Thanks Yodi!   So oif it doesn’t say sell in the 25K it was a buy.  Tring to catch up, just started trading last week.


  56. TOS no you can not even cancel and order very risky


  57. minimal
    From my experience TNA TZA options are too crazy except Phil’s spreads using limits. They also are too thinly traded for day trades. If you want to use options use IWM. I have tried all and the safe way is trade the stock, commisions are lower and you don’t get trapped in expiration and premium decay. You make and loose the least but 3% per week is 150% per year, you can make 10% per week if gutsy and fast. You really need about 4 monitors to do it safely. Good lluck!


  58. Phil,
    I’m ready to capitulate on the FAS 32 calls. FAS is way up, but the call is down because of time value, etf decay and/or vix decline. 
    In fact, I’m thinking about a new rule for myself is to stay away from the less predictable leveraged etfs.
    For me, I want to be a little less aggressive and get more predictable results.
    So even if capitulating doesn’t make sense for the 25kp, maybe it does for me.
    Anything I’m missing?


  59. Good morning,

     

    IWM  79.80, 80.38, 81.20, 81.89 and 82.53  (and $2 Bil of POMO)

    I’m in TNA; we’ll see what happens at IWM 81.20

    it’s not so much T as the $

     

     

    So it’s 1325-30 I guess on SPX !!

    Good hunting !!


  60. Phil, 
    On the TZA hedge from last week short 44 puts(closed 1/2, friday for even and got assigned 1/2) you still like the roll to the April 38 puts? or since we are blowing past the levels just wait to see to put up a hedge?


  61.  CSCO/Bryan – Yes, we have been buying them on the dip.  Not too bad at $17.50 and you can just buy the stock for that price and sell 2013 $17.50 puts and calls for $5.90 for net $11.60/$14.55 which is a nice, safe entry or you can go artificial with the 2013 $15/20 bull cull spread at $2.10, selling the $15 puts for $1.85 for net .25 on the $5 spread that’s $2.50 (1,000%) in the money and worst-case is you own 1x of CSCO at net $15.25.  

    Buying or selling/Lori – Not sure what you mean.  If it’s something I’m pointing out as a trade idea, like CSCO above, then notice I specify sell when I mean to sell something.  If not sure, you can always ask but there’s also the context of the trade as well.  If I like something, then it’s more likely to be a buy, right?  And, yes, Yodi is trying to change me but it never seems to stick. 

    Volume just 56M on Dow coming into 11:30:  Never have so few moved the market so much with so little…

    Good time to Roll the DIA May $114 puts to the May $118 puts for .95 in the $25KP and also BUYING back the 3/31 $118 puts for .59 to leave the position 16 NAKED May $118 puts.  

    Also, as a short-term trade, I like the 3/31 DIA $119.75 puts at $1.05.  

    FAS/Smala – I’d wait.  FAS actually weak considering the general move.  Insurance still hurting us.  


  62. I have a mush hold level at IWM 80.97 or we retrace to JRW’s 80.38 level. In cash now.


  63. Phil, I have a long term b/w with AMT which is getting trashed as a result of T merger (as less competition less towers to be built)…. would you move on from that play or you think they come back after the dust settles?


  64.  Phil sorry on the TZA question I meant to say just sell the TZA shares for a loss now ($2.50) and wait to sell the 38 puts or lower? or hang on to the TZA shares for now? BTW I have as a balancing trade a roll from last week’s DIA 118.75 short puts (got out with a small profit) to the 115.75 expiring 3/31 (sold for .90). I guess we are not expecting any move down to that level so even though that one is up 60% leave it alone right?


  65.  TOS problems
    I have +7% today, you mean it is not real????? :)


  66. CYCC/Savi – I am going to have to look at the targets and mechanisms.  Few interesting compounds, so an initial, small entry is fine.


  67. Phil, CCJ up 2.58 today do you think it is time to get in to this stock again? thks


  68. Tx Pharm


  69. Hi — does nay one can get through TOS today — TOS — i am unable to close any option today— thx


  70. XRT going nutzO with higher input prices (cotton/labor) and NKE saying things ain’t so great. 


  71. TOS
    None of my option orders traded today including the 25KP adjustments.
    I did have a futures order execute.
    Fidelity has been able to execute options trades today


  72. Tcha – TOS must have transferred that 7% from my account to yours…..


  73. Fidelity and WFA have executed option trades today


  74. Question on TOS users Do you experience a problem of stock simbles being changed and you land up with a fat loss.
    Example BRK/B changed to BSHYS
    Just being advised to restart computer ???


  75. Phil / Cash    Can you update the % cash we should be holding?  And net long position on the balance invested?


  76.  TOS – had an order for stock fill nothing with options that seems to be where the issue is. Opened a support tab and no response after over an hour


  77. why are C and BAC getting killed today? Not in step with FAS at all


  78. Manimal / TNA options

    A bit thin for me; I use IWM or SPY, (10X the volume) for mid term positions.


  79. Trading problems ubiquitous it seems. 


  80.  Pharmboy
    give me your credit card #, I will send it back :)


  81. TOS still not working correctly


  82. Seems to be letting us little players holding the bags since we cannot trade or cover our positions.  Nice…



  83. @_Phil


    GM (GM) says it has halted all nonessential spending while it tries to get a better handle on the potential impact of Japan’s crisis. GM is trying to ensure adequate supplies at all U.S. plants, but a spokesman says "we’re just assessing the situation day by day." (see also)

    Why is GM engaged in "Non-essential spending" in the first damned place??  
    I swear these executives need to be waterboarded.


  84. AAPL players any one selling any weeklies looking at Mar 345 for 1.52 any comments?


  85. My USO puts at .69 did not fill even though the price went down a couple cents below.  Can’t figure out how to rest my trade to the lower price.


  86. Phil,
    OPEN, I have the April 85 puts (now naked as the March 85 Puts expired worthless). Is your premise still that they head down after earnings? If so what cover do you recommend now? 
    AAPL same story I am in the 340/360 June spread (Net $7) with the short March 360′s expire worthless friday. Would you sell something else to cover or just leave the vertical as is… 
    Thanks 


  87. Other brokers/JBur – If you have a large account and trade short-term, it’s crazy not to have an alternate broker.  

    IWM/Shadow – Good suggestion!

    FAS/Judy – Our current plan is to keep using that position to generate cash selling front-week calls but yes, it is a stressful position to stick with and you have to get used to the very violent moves.  

    TZA//Amatta – We have a 2.5% rule, where we strongly expect a 0.5% bounce off the 2.5% line so it doesn’t make much sense to get out of a position at 2% down in a day without at least waiting for a confirmation that the 2.5% line won’t hold.  What you do want to do is see if there’s a way to SELL into the excitement.  You have TZA put to you at $44, now $39.70 less the whatever you sold the contracts for.  You can sell $39 calls for $3.10 and, if you are willing to risk it, sell May $40 puts for another $5 and that drops your basis by $8.10 and keeps you with the TZA-bullish hedge.  If IWM pops $81 (over now) you can always cover off that line with the Apr $80 calls (now $2.47) if you are worried but the point of any hedge is that your longs should be making at least twice as much as you are losing on the hedges and, if so, then they are doing their job.  

    AMT/Amatta – Due to changes in technology, I think AMT’s days are numbered anyway.  I wouldn’t panic out of them but I would look for an exit. 

    TOS/Tcha – No reason not to try to take it off the table!  

    CCJ/Yodi – Now is chasing a bit. Last week I said if they break back over $30 and they popped it this morning but already $32 is a big price to pay for being slow on the trigger.  I know you really wanted them and I would say that you can still sell the June $32 puts for $3.20, which is back to $28.80 for an entry so not too bad and you can still go for the Jan $25/30 bull call spread at $3 if you want to be more aggressive and then you have a .20 credit on the $5 spread that’s 140% in the money to start with.  I’d rather have 2 of those than one riskier play.  

    TOS impossible to work with at the moment.  Very bad!  

    Cash/Tusca – I still like 65% cash and 20/15 bullish.  Keep in mind though that bullish can mean $28,000 worth of longs with $8K of short puts and calls in buy/writes and the bear side can then be a small disaster hedge to offset a $5,600 loss (20%) and then $10K for short-term betting that only needs to lean to the bearish side (to error on the side of covering).  

    C/Drum – They are doing a 1:10 reverse split.  Not sure what’s up with BAC.  

    GM/Flips – I’m pretty sure they mean anything not directly related to holding steady.  They have essentially shut the lines due to parts constraints.  

    AAPL/Yodi – On a 2% up day in the markets with AAPL off from $360 at $338 you want to sell weekly $345 calls?  Good luck!  

    USO/$25KP, Lori – Don’t chase, we could be at $105 tomorrow.  It’s not like we were down so drastically at .70.


  88. Doee anyone know if the official GMCR trade still stands as long the Apr 50 puts? In at 2x. Just want to make sure I didn’t miss a change in plan. Thanks.


  89. For those that think this rally is because Japan is fixed, this from Jesse……………..

     


  90. PHarm I second this I think might as well go to the beach. Good day for option sellers IF YOU CAN  get anything filled!!!


  91. Yodi, AAPL I was thinking of selling to cover my long April 350′s, but I think if there is any news from Japan that the supply chain issues are better than expected they can surge 10+ points.. (and that was actually what Highlander who follows AAPL closely had to say about their suppliers-- that actually they wouldn’t be affected by this as they had redundant suppliers that were ready to pick up the slack)…


  92. yodi…BUY some weekly calls on AAPL!   If a complete meltdown of a reactor in Japan comes out it goes down.  .  If the supply line news comes out +++ then it screams up. 


  93. Pharm, two weeks ago we were buying the BMRN APR 25 calls but they’re looking pretty sad at this point, do we capitulate or roll out in time?  I think it’s hard to make a case for a DD looking at the current chart.


  94. Amatta Just got a fill from TOS AAPL weekly 345 1.60  just putting my toe in nothing more, Not like you with 10 at the time! I read that one of Apples suppliers is in a range of 20 Km from the atomic plant. They will not be running in a hurry. I think it will be difficult to get an other supplier overnight. You have to be set up for an order like Apple.
    TOS is still not running correctly. Some of my accounts have a funny reading on the stock and the Acount does not show any Option buying power so no orders get accepted!


  95. Sometimes it’s a GOOG thing when one of my orders doesn’t get filled.  :)


  96. Now THERE is a genuine Freudian slip.


  97. TOS just filled my USO trade at .03 less than my limit order.  I got got the 39 put at .66.
    So if I put in a limit order and it goes lower is it usual to get the lower price?


  98. BMRN/mrm – yeah, those are very sad indeed and I DD at 50c.  I am going to kill the trade and wait.  The 5d MA is down, and this was a swing trade.  The rest of the spreads are too wide.  The Oct 22.5s are not such a bad deal, but if this market moves down, so will BMRN.  To make some up, I am thinking of selling the 22.5 Apr Ps…but waiting to see who it reachs.  Maybe event he $20s Oct if they blow 22.50…..


  99. GOOG followers
    did GOOG pop this morning because of the GOOG voice w/ sprint or is it something else?


  100. PHIL
    I’m holding 40 "C"  Jan12  2.5 Calls bought for $2.39 now $1.96.  Im wondering what’s going to happen to this calls with the reverse split and if its a good idea to keep them or ??.  Thank you


  101. OPEN/Amatta – I still think so but they are not looking like they intend to at all, are they?  It’s a big gamble on earnings and you can sell 1/2 May $80 puts for $3.20 and plan on rolling to July $80 calls (now $5.50) down the road but you would be in good shape on a drop as your deltas match and they have 2x your premium with 1/2x as much theta decay.  AAPL is just a matter of being on or off target but there you can risk selling some weekly $345s for $1.50 but just 1/2 as those can be rolled up to super-high Aprils if it goes the wrong way.  

    GMCR/JBur – Did I miss something?  I don’t remember going DD in the $25KP but do correct me if I’m wrong.  

    TOS/Lori – In a perfect world, that is what should happen but it rarely does.  Getting good fills on a regular basis is the reason I’m very loyal to TOS.  

    GOOG/Z4 – I think any excuse would have done it for them off $560.  It’s been ages since I liked them and I couldn’t resist on last week’s dip.  


  102. CERS is up 10% today as well….ahhh, patience…..Now, ARRY get your booty on.


  103. Option Monster’s box just came back so I imagine the exchange issues are fixed now. 


  104. NWBO – DD in here.  They have an offering for the stock at a % of 20d MA.  So ‘they’ will make it cheaper to get in.


  105. @Phil or Anyone
    Have you ever used, or currently use, an Iron condor to good benefit?
    Thinking of entering one for BMY or other underlying that does not move very much either up or down, which seems to be the general consensus of the best use for this strategy.
    Any one who has used these to good effect, appreciated   


  106. Is this guy for real??


  107. @CAP
    I’ve been with OpEx for three years. No complaints.  I can’t vouch for their rates compared to other trading houses but the overall experience has been nothing but positive.
    If you have any specific questions, I’ll try and answer.


  108. Phil/GMCR: I guess it wasn’t an official DD in the 25KP, but I went ahead and did it after reading these two posts from 3/18.

    smala766
    March 18th, 2011 at 10:56 am | Permalink  
     Phil,
    is this the time to DD on the GMCR APR11 50 PUT in the 25K ? …. now is 0.55$
    Thank you.
    GMCR/Smala – Sadly not in the $25KP as I’m being careful with cash but, as a stand-alone, I would do it.


  109. lflantheman
    AAPL well this is a real two sided answer. Even from Phil I know they can move 10$ in a day but if they stuck with that plant there I do not know they come off that fast. I am always a looser on long plays. I remember only one play where we bought a putter on BIDU I had a gain. Look at USO 50% down on the long. The short callers one can always roll.


  110. Good trend signal chart from Allan

    DJIA & Friends


  111. Phil--do you have an opinion on CAST?


  112. At the open: Dow +0.62% to 11932. S&P +0.71% to 1288. Nasdaq +1.23% to 2676.
    Treasurys: 30-year -0.59%. 10-yr -0.54%. 5-yr -0.4%.
    Commodities: Crude +1.29% to $103.16. Gold +0.79% to $1427.30.
    Currencies: Euro -0.02% vs. dollar. Yen -0.28%. Pound +0.31%.

    10:00 AM On the hour: Dow +1.67%. 10-yr -0.52%. Euro -0.13% vs. dollar. Crude +1.64% to $103.52. Gold +0.93% to $1429.30.

    11:00 AM On the hour: Dow +1.65%. 10-yr -0.57%. Euro -0.07% vs. dollar. Crude +1.35% to $103.23. Gold +1.05% to $1430.90. 

    12:00 PM On the hour: Dow +1.63%. 10-yr -0.47%. Euro +0.08% vs. dollar. Crude +1.44% to $103.32. Gold +1.17% to $1432.60. 

    1:00 PM On the hour: Dow +1.53%. 10-yr -0.31%. Euro +0.13% vs. dollar. Crude +1.11% to $102.98. Gold +0.82% to $1427.70.

     "Something out of the blue like this … really creates a buyingopportunity, I don’t think Japan will be an exception," says Warren Buffett. With EWJ just 6% off of its pre-quake price, investors may want to have a look at less well known EZJSCJDFJDXJ, or these JapaneseADRs.

    Well-trained investors rushing to buy the dip do not fully appreciate the level and nature of the losses facing Japan, says Carl Weinberg, who predicts greater declines in share prices. Weinberg also sees the oft-predicted JGB bear market beginning the minute the BOJ ends its money market injections.

    The WHO warns radiation levels in food in Japan is more serious than previously thought and not just confined to the 20-30km radius around the troubled nuclear plant. "The few measurements of radiation reported in food so far are much lower than around Chernobyl in 1986, but the full picture is still emerging."

    In response to the high level of radioactive contamination, Japan comes up with the natural governmental response – it raises from 6K CPM to 100K CPM the level at which people must undergo mandatory decontamination. The government says this change will not endanger health. 

    After unleashing $150B worth of liquidity into the banking system, the BOJ may be set to do even more, with rumors of $100B of emergency JGB issuance by the government to be directly purchased (with freshly printed yen) by the central bank, which, until now, has been reluctant to monetize government debt.

    ECB member Yves Mersch continues to set the stage for a rate hike next month, warning of inflation risk and stating the central bank stands ready to act. The euro, at $1.4168, remains flat on the day, but close to breaking out to levels not seen since 2009. 

    Looking at a "notably improved" market, the Treasury will startselling about $10B a month of the $142B in mortgage-backed securities it bought in a stabilization effort during the crisis. It expects some $15B-20B in taxpayer profit (but no real debt-ceiling reprieve).

    The Supreme Court upholds the court order giving the Fed five days to release details of its 2008 emergency lending, over the vigorous objection of the big banks that got the loans. The Fed says it will "fully comply" and is preparing the unprecedented disclosure. 

    After a lot of tough talk about not backing down, Ireland willconsider changes to its corporate tax code in order to win concessions on the bailout terms, according to a report in the Irish Times. "We will look at all these things in the round," says the deputy finance minister.

    Wednesday’s vote on austerity measures could topple Portugal’s government and drive the country into seeking a bailout. Currently, PM Socrates does not have the votes for passage, but his people are furiously working members of the legislature to turn things around.

    After violently disbursing protesters and launching arrests of opposition group members and sympathizers, the King of Bahrain thanks foreign (mostly Saudi) troops for helping put an end to an "external plot" against the country. Tensions continue to mount, with the Iranian charge d’affaires expelled on Sunday. 

    Events moving very quickly now in Yemen, where 3 senior army generals have defected, deploying their tanks into the streets of Sanaa in support of the protesters. Talks get underway for a peaceful way to end the tenure of President Saleh.

    Western oil companies privately fear losing their operations in Libya as payback for air strikes should Gaddafi prevail. The head of Libya’s NOC says firms that have repatriated staff due to the crisis should get back to work or risk losing future contracts to rivals from China, Brazil, and India. 

    Cap’s new buddy agrees with him: Saying the U.N. resolution resembles "medieval calls for crusades," Vladimir Putin joins China in stepping up rhetoric against the coalition campaign. With such reservations, it’s unclear why Russia and China abstained from the resolution vote, instead of using their veto to block it. 

    After being closed since January 27, the Egyptian stock exchange finally looks set to reopen on Wednesday. Officials’ acceptance of the reality that it’s okay for stocks to fall appears to be the last stumbling block to have been removed. EGPT -2.5%

    New York Times (NYT +3%) shares rise after Citi raises its rating to buy, expressing cautious optimism about the company’s paywall plan. While the plan has risks, the number of paid customers "required to offset lost advertising revenue [from readers who will not pay to read the site] is surprisingly low." The move from print to tablets will be "manageable," Citi says. 

    J.P. Morgan downgrades Kraft (KFT -0.4%) to Neutral, highlighting the dilemma of keeping customers while maintaining high prices to cover commodity costs; the unit "will be challenged this year to produce the sort of growth that will help drive earnings and share price."

    In more market aftereffects of the AT&T (T)/T-Mobile (DTEGY.PKtie-upcell service-tower companies tumble on the prospect that one less 4G network will need to be built: American Tower (AMT-6.9%; Crown Castle (CCI-4.9%; SBA Communications (SBAC-8.1%. But RBC says buy the dip, rating all three Outperform and expecting new site leases will keep coming.

    AT&T’s (T +1.8%) purchase of T-Mobile USA (DTEGY.PK+12.9%) means Sprint (S -12.3%) is further eclipsed by Verizon (VZ+3.1%) and the new AT&T; "three out of every four wireless subscriptions [would] belong to those two companies [and] puts [Sprint] into a much weaker no. 3 position," likely forcing it to compete more aggressively on price to differentiate itself and attract subscribers.

     


  113. Will THIS TIME be different ?? From Chris………..

    Click to View
     


  114. Phil--what are we doing with TIF?  sorry if I missed the post


  115. Current Decade of Job Losses vs. Great Depression; How Did Quasi-Public Jobs Fare? Who is Whining?

     

    It may surprise you to learn that job losses in the most recent decade ending February 2011 are reasonably comparable to the job losses from 1929-1939. Moreover, if we exclude government and "quasi- government" jobs, the latest decade is the worst ever, by far.

    Please consider A Decade of Labor Market Pain by Mike Mandel


     

    More here from Mish !!


  116. PHIL
    Regarding DD GMCR 25kp.  your answer to Smala last Friday:
    GMCR/Smala – Sadly not in the $25KP as I’m being careful with cash but, as a stand-alone, I would do it.


  117. C/Cnar – Well reverse splits are a pain in the ass.  The biggest problem is you currently are paying net $4.89 with C at $4.42 so .47 in premium is 10%.  It’s not very likely that when C flips to $44.20 that there will still be $4.70 of premium on the long calls.  If you look at JPM, for example, at $45.40, their 2013 $25 calls are $21.10, so net $46.10 and "just" .70 in premium, so you could be looking at a loss of the premium between $4.70 and .70 on the reverse split – very nasty.   This is a fine example of why paying premium is for suckers!  8-)

    CERS/Pharm – VERY nice! 

    Iron condors/Flips – I do them when the market is super boring.  Not a big fan when we’re volatile.  

    Oil/RJ – Total loon.  

    GMCR/Jbur – That’s fine.  I do like them still but this is a real "Emperor has no clothes" kind of stock where you don’t know when someone will finally point it out to the crowd.  Meanwhile, they parade around as if they are finely clothed…

    CAST/Jabob – Well, they have no recent income statement and I know nothing about them.  I really don’t like these ADRs at all – you have almost no way of knowing if it’s a real company or just 2 guys in the back of a noodle shop with a fax machine.  They sure do sound good but if they are not covered heavily in the US like CMED, BIDU et al – it’s not the kind of thing I’d trade. 

    Dollar near lows at 75.74.  Oil barely holding $103 though.  Silver just crossed the $36 line where we like to short the futures and copper already fell from $4.36 to $4.27.  

    TIF/Savi – Do we have TIF?  I lost track…


  118. Flip/ BMY,
    Other than the 27/28 C / 25/24 P condor there is not much premium to play for and that trade looks a little dangerous from a probability point of view. But on the "flip side" you can get 0.40 and risk 0.60 – which is a decent risk return. 
    What do you think?
    TIA


  119. the oil hype on cnbc is unbelievable.  they seem to take pleasure from the higher prices.
    Phil – still have a feeling to hold april USO puts for a while?


  120. TBT is fading fast and that intraday 80.97 is showing resistance now.


  121. JRW
    What is your take? Up or down?


  122. PHIL--on TIF short April 60 calls @2.70  (now 2.30)—--long Aug 65 calls @3.20(now 3.00)


  123. Glad I shorted oil in the morning.  Phil, what is the support line on oil if it breaks 100 which I expect when Libya is settled?


  124. shadow,

    I’m in cash now; they’re pushing down the dollar but with no effect. Let’s see what happens at 2:30.

    I would buy a break above 80.94 !!


  125. yodi….I said (rather flippantly) to buy AAPL weekly calls.  But I haven’t bought any myself, so that tells you something.  Who knows what will happen in Japan, and to the chip material it supplies to AAPL and other companies, in the next few weeks.  It could go either way.  Only thing I have in AAPL right now is long term ITM calls, but no short term plays.  I just don’t know how this will all pan out over the short term.   But I do believe I know what will happen to AAPL long term.  Thus the ITM calls several months out. 


  126. Oil hype/JJ – It’s so relentless I don’t even notice sometimes.  Truly amazing that this nonsense is allowed.  

    TIF/Savi – They are right at $60 so it’s on target.  That one was an even spread, right?  Obviously, it was net .50, now net .80 so a profit and can be ditched but plenty of time to roll and sell more calls too so a matter of personal preference if you want to stick with something like that.  

    Oil/Rustle – $97.50 should be good support, then the $92.50-95 range but below that, a pretty quick trip to $85-87.50ish. 

    Dollar $75.69 – Bang, Pow, Biff!  


  127. Thanks JRW!
    I loose confidence fast, also all cash.


  128. lflantheman
    Yes I do agree with your views as I said before I just putting my toe in the water AAPL is more like one of my few gambling stocks and selling one or two callers against my far out long callers will cost me no margin and if needed can be rolled.


  129. As I have said, we either go UP or DOWN from here !!

    This from Tim Knight:

    Market Anthropology

    A Sloper wrote me this morning about his web site, and there was a particularly interesting chart from it, which he said I could publish here:

    0320-meridan


  130.  Radiation Levels explained


  131. Phil / $ weakness    Logic says that foreign central banks are crazy to hold the $ when inflation is now high and the relentless $ decline is killing the value of the holdings in their own currencies.  But, the only 3 big alts are Euro, Yen, Pound and their economies are in as much trouble as the US.  So, I can see why the Chinese, Arabs, Brits and Japs (the biggest holders) could rationalize continuing to buy and hold $ Treasuries vs the big alternatives.  There is also the export protection issue which drive continuing intervention and buying.  Yes, there are smaller alts like Brazil, but there just isn’t the liquidity there to satisfy central banks.
    Strikes me that the other 3 are uncompetitive at these fx rates, so if anything we should see a bounce in the US $  
    US Treasuries still look like poor value vs stocks given the rate of inflation.  But, I guess the foreign central banks can’t really load up on US stocks instead?  UUP still looks like it’s good for a bounce?


  132. 2:00 PM On the hour: Dow +1.58%. 10-yr -0.31%. Euro +0.28% vs. dollar. Crude +0.88% to $102.75. Gold +0.78% to $1427.20. 

    I hope everyone is aware of this insanity:  Not the first time the story has been told, this news show from Australia about China’s empty cities and shopping malls visits some new spots. "It’s the modern equivalent of building pyramids, it doesn’t really add to the betterment of lives, but it adds to the growth of GDP."

    With Canadian property in "bubble territory," analysts at BoA explain why the downside poses little risk to the financial system. Among the reasons are government mortgage guarantees, lower leverage, and full-recourse mortgages – it all sounds nice until prices actually decline, says Tracy Alloway.

    Three-quarters of Americans say rising gas prices are making them defer spending, and more than 62% say they won’t be spending generously until next year or later, according to a new survey. More are saying they’re headed for discounters and dollar stores. (earlier: Wal-Mart and gas)

    So let’s take more stuff away from consumers!  Trying to protect profits threatened by debit card fee caps, JPMorgan Chase (JPM) says it will end debit-card rewards for nearly all its customers. A Fed proposal caps interchange fees at $0.12/transaction (compared with today’s formula that averages $0.44) and would cost JPM about $1.3B in annual revenue. (previously)

    The fate of job-seeking college graduates indicates the economy’s high levels of unemployment are cyclical in nature rather than structural, giving hope that stimulative policy can have a positive influence in helping firms create new jobs and bringing down U.S. unemployment, according to a San Francisco Fed study.

    Japan denies a report it is planning to issue more than $100B of debt to be directly monetized by the BOJ. Typically prohibited by law, such a move would be allowable under special circumstances (such as now), but the government feels it to be unnecessary.


  133.  Sprint [S] must be turning into something useful at -15%+ today.  Takeover candidate?


  134. Phil --
    Do you have any opinion on BKS on the short side?  I think the rest of book retail is going the way of Borders.  BKS is already beaten down (and a lot in the past month or so), but it may be the next shoe to drop.  I’d just sell the calls, but I’m concerned that if they get low enough, someone might buy them out suddenly at some higher price.  Any ideas would be appreciated.


  135. Phil:
    On my EDZ hedge: April 23/25 BCS in at (1.83/1.23) now (.85/.52). Any advice on an adjustment? Thank you.


  136.  Phil / HEAT
    do you know why they fall so hard today? didn’t find anything in news


  137.  Anybody still having trouble with TOS? My orders are not going through even though they are below bid.


  138.  Sprint II;  AT&T will have to jump through some divestiture hoops; while it’s probably a done deal, the regulatory price they’ll have to pay isn’t,


  139. Advice appreciated:  Gainskeeper or Tradelog?


  140. Nice chart JRW.  

    Dollar/Tusca – You would think but failing 76 is a big technical break that can get very ugly (down 5% to 72) if we don’t bounce very soon.  I’m wondering if this is just a slower-motion version of the shakeout that the Yen had last week before turning down against the Dollar?

    S/ZZ – I would think so.  I don’t find them compelling here but if they get back to $3.70s, where we couldn’t resist them last time, then I think it would be worth a trade on numerous upside possibilities.  

    BKS/Esco – Hard to say because Boarders went BK and that may make them a better competitor or it may give the market to BKS.  I live in the Northeast, where people still read books, so it’s hard for me to tell as most of our BKS are pretty busy places.  I don’t see anyone buying them – it’s a dying business and they went with a strategy of having huge stores – not too many things it would be practical to convert them into other than auto showrooms and who needs those anymore?  On the whole, I think they are too low to short though.  

    EDZ/DC – Well it’s down from .50 to .33 on a huge move up in the market so I hope your longs did well enough to more than offset it.  If so – keep in mind that these hedges are insurance and we EXPECT to lose money when our main trades do well.  If you still want insurance, you can take advantage of the dip to roll the $23 call to the May $22 call ($2) for +$1.15.  It’s a similar strategy to the mattress where you are "banking" your insurance by investing in lower, longer strikes until, one day – they finally bounce and you collect the cash.  Once the $25 caller expires you can pick up another $1.20 for whatever in May and then you are set up for your roll to July.  

    HEAT/Tcha – Looks like a flush to me.  They put their financials up on Friday and maybe there was something there some major investor didn’t like the look of or maybe they are following the solars down or maybe it turns out there’s no real company here at all and it’s just two guys in the back of a Shenyang noodle shop with business cards and a fax machine who suckered you into giving them money.  But that isn’t true right because you’ve checked them out thoroughly and know exactly what products they are selling to what markets and this company passed all your tests as well as any US or EU corporation, right?  

    TOS spotty at best Nicha but try restarting and then check your orders carefully.  I think part of their problem is a forced upgrade that is messing everyone up on a busy day.  

    "Greenspan is an ex-Maestro; his reputation is pushing up the daisies, it’s gone to meet its maker," Paul Krugman writes of the ex-Fed chief. He "saw no evil, heard no evil, refused to do anything about subprime, insisted that derivatives made the financial system more stable, denied not only that there was a national housing bubble but that such a bubble was even possible.” 

    More from Cap’s buddy:  Publicly clashing over foreign affairs for the 1st time, Russian President Medvedev slams as "unacceptable" PM Putin’s description of the Libyan resolution as a "crusade." Putin has hinted he may run against Medvedev in next year’s presidential election. 


  141.  Krugman should send his apologies to Monty Python.


  142. nicha
    Same problem even phoning th desk does not help they do not answer lots of musik.


  143. TOS: Just had silver blow through a stop limit sell going up, then blow through a higher stop buy on the way down (after I cancelled the first one).  Five minutes later, BOTH fill — I ended up selling my long, then making $100 on the short side as luck would have it.  BE CAREFUL WITH YOUR ORDERS!!!!  They might not be cancelling like you think.


  144. Err, that should be a second stop limit sell on the way down.


  145.  Silver/Wass – Bad day to play on TOS.  They have not been behaving themselves anyway – staying above $36 despite sell-off in gold but Dollar finally (maybe) found bottom at 75.60 and may bounce a bit.  

    European finance ministers reach agreement on the details of a permanent rescue fund – the ESM – of €700B. It will replace the existing €440B EFSF in January 2013. An injection of €80B in capital will be used to raise the remaining €620 through a debt sale. 

    Renewed global turmoil, a powerful currency, and looming elections combine to melt away expectations for more rate hikes by the Bank of Canada. Once thought to be a sure thing by summer, the chance of a bump has been pushed into the fall. The loonie is hanging around multi-year highs at $1.022.

     Meredith Whitney an optimist? She still sees a strong likelihood of muni bond defaults and another 10% drop in housing prices, but calls the U.S. economy “dynamic and strong” and predicts a group of states in the heartland – Kansas, Missouri, Iowa, Texas – will benefit from higher oil prices and generate an "emerging markets of the U.S." growth story.


  146.  wassellc – had similar thing happen to me with a set of options, my order got doubled up from cancelling and re entering


  147. Hi Phil, TBT was strongly rejected at 37, and there will be a lot of POMO this week. Would you support the idea of shorting TBT (short term)?


  148.  Phil—I have some SDS Jan12 $24 short puts that are a DD from a hedge we had on last year. Net is $4.10 with the $24′s currently  trading at $4.80. I was looking at moving down to the Jan12 $20 puts and also selling some Jan12 OTM calls to make up the difference, however the position is in ETrade and they won’t approve me for naked calls. I could transfer the position to TOS but I’m afraid I might miss an opportunity in the time it takes to transfer. I’m not too keen on doubling the number of contracts as I’m already up to 20x. What would you suggest. Thanks


  149. I wish these DIA puts would do something to help my trigger finger. In at $1.04 and hovering around $1.16. Stick vs. anti-stick?


  150. Phil:
    Earlier when u said, "Also, as a short-term trade, I like the 3/31 DIA $119.75 puts at $1.05.  " , am I right in assuming this is not for the 25kp portfolio?   I am looking to exit this at $1.25 if we get there.  Would you choose a different exit?
    Thx


  151. Manimal
    Very dificult to tell but volume is very low and it could. I always take the profit and run I have sold on .10 and .15 up. may try again if nothing before 3:30 get out for whatever that is worth.


  152.  Phil—I have some SDS Jan12 $24 short puts that are a DD from a hedge we had on last year. My net is $4.10 with the $24′s currently trading at $4.80. I looked at rolling to even # of contracts down to the Jan12 $20 and selling some OTM Jan12 calls to  make up the difference, but the position is in ETrade and they won’t approve me for naked calls, unless maybe I press them further. I could transfer the position over to TOS but I was afraid I might miss an opportunity during the time it takes to transfer (as if I haven’t missed some opportunities already). I’m not too keen on doubling the number of contracts as I’m already up to 20x. What would you suggest? Thanks. 


  153. 5% Overview:


  154. WOW – TOS is really screwed up.  Same to me on the SPYs where I was net short weeklys and made a bit as the stops were frozen.  Done trading today.  That was tooooo scary.


  155. TBT/Alik – I would not short it.  Pretty much we buy it at $36.50 and sell it at $39.50.  If $36.50 breaks, we will probably get more aggressive.  This is not the first time there has been a lot of POMP – that story is getting old but the US demand for $140Bn a month is not.  

    DIA/Etrad – If it were for the $25KP, I would certainly say so and specify a number of contracts.  $1.25 is good but it’s for 2 weeks so not a panic out if we look weak (when in doubt sell half and all that).  Still, making .20 on the day is nothing to sneeze at.  

    SDS/Fortep – Your net entry on SDS is $20 and SDS is currently at $22 so I’m not sure what all the fuss is about?  I’d say leave it along and, if the S&P breaks over 1,300 – you can go long on SPY or something as a momentum trade over that line.  Did you know that you can roll the Jan $24 puts to the 2013 $20 puts and, despite my pesky Mayan calendar, I’m reasonably sure that those can be rolled to 2015 $16 puts and 2017 $12 puts so, unless the S&P is never going to go down again – there’s nothing wrong with keeping the hedge and rolling it along when you HAVE to.  


  156. Hi Pharmboy
    Any idea why the 8% up on OPXA


  157. Oh man!  I was busy on my day job, and couldn’t pay enough attention to my positions.
    Phil, I bought NFLX April 180 puts at $3.00, on the day GS upgraded them.  That was when you recommended to short them.  I am still holding those puts.  Should I just get out now?
     
    Man, I’ll try (VERY HARD) to refrain from playing those hot stocks next time!


  158. IMGN – one of my favorite plays, and we have a few of them.  I need to update my spreadsheet, but TOMORROW, if one can buy the stock and sell the May 9/8 C/P combo, should be a nice 15% gain for a little over a month if called away.  Otherwise, wash, rinse and repeat. 


  159. BBY
    What’s your take on BBY?
    I was bearish – since it’s not high end and should suffer diminishing buying power.
    On the other hand – Cramer was bearish on them today, so …
     


  160. Another .22 on half position and out for the day. Percentage under 1 but I will take $300 any day.


  161. OPXA – just another day at the park….no idea why, but someone is buying.  The stock price bounced off the 200d MA.


  162. The IMGN July 7/8 BCS selling the 8 Ps is a free play on them (or maybe even a credit of 5 – 10c)….FWIW.  That was an original play a while ago.


  163. Phil/Russia     Putin v. Medvedev   Who didn’t see that coming?…….
     
    Wanna know the winner?  ;-)


  164. Out of TNA for 50 cents more and 2 1/2% for the day !!


  165. NFLX/Cwan – You can sell the weekly $200 puts for .82 and roll up to the $190 puts at $2.81 – that’s about the only realistic alternative to just taking the loss. 

    BBY/Lol – No real competition anymore.  In fact, they opened up another store under a different name in my area just to give people the impression that there is an alternative.   I just don’t see a particular reason to be bearish on them.  Keep in mind it’s Cramer and the General Public who are just figuring out Retail is weak – we’ve known it since we did our own surveys back in November/December.  Much as I wish it were true – we’re not the only people who know how to analyze a market and I don’t think that consumer weakness is not priced in to most retail stocks although RTH at $105 indicates it’s not priced in enough.  

    Medvedev/1020 – I think I see a "cold" coming on…


  166. JRW
    You did excellent on a no move day, if I had not slept the first hour I would have aboout 2%, needed the sleep more.


  167.  I thought this AAPL release date spreadsheet was interesting…


  168. Man, what a buying opportunity Berkshire was last week! 

    YRCW with a spiffy comeback too off those "bankruptcy" rumors.  


  169. Shadow – Same here, except sold 1/2. Its a few hundred I didn’t have this morning!


  170. Well that was super fun!  
    Up about 2% on the day not bad to start the week.  Tomorrow is little news day so maybe they keep going but then it’s the 5% rule all over again and we’re back to testing this level anyway, most likely…
     
    At the close: Dow +1.5% to 12037. S&P +1.49% to 1298. Nasdaq +1.83% to 2692.
    Treasurys: 30-year -0.31%. 10-yr -0.41%. 5-yr -0.34%.
    Commodities: Crude +1.06% to $102.93. Gold +0.02% to $1426.70.
    Currencies: Euro +0.27% vs. dollar. Yen -0.1%. Pound +0.47%.
    Great timing: On the day housing numbers show a sharp dropboth in price and sales, the Treasury’s move to start unloading its portfolio of mortgage debt likely will add one more pressure point to a housing market hardly in a position for more stress. "They’re going to have a hard time unloading this without moving rates higher," Peter Cardillo says. 
     
    Investors pump record amounts of money into Japanese ETFs and equity mutual funds. Joe Weisenthal’s take: "Investors remain of the mindset that every dip – even something as epic as an earthquake and possible existential crisis (the nuke plant) – is a buying opportunity… While this is incredibly bullish for now, it would seem to raise the prospect of a huge air pocket if things go wrong." 
     
    And then they all went to court!  Microsoft (MSFT) says it is suing Barnes & Noble (BKS), Foxconn and Inventec for patent infringement related to the bookseller’s Android-based (GOOG) e-reader and tablet devices. The patents at issue cover functions that allow speedier Web surfing and interacting with e-books.   

  171.  Phil pushes for "balance" in a portfolio.  Since I’m overly opinionated, I dislike balance.  But what happened with TOS today happened to me last Friday, 1/2 before the close.  My redundant high-speed internet connections — both of them — went down for over an hour, trapping positions I fully intended to close over the weekend.  Not my happiest 1/2 hour, you might say, fortunately no children within earshot.  
    But I was pretty well balanced, despite my natural inclinations, so nothing bad happened, net net.  Eventually it will happen to everyone, even if it’s a flat tire at the wrong time.  Balance is cool; boring, but cool.


  172. Phil, is this the premise under which you are now posting as Aurorus?  "they opened up another store under a different name in my area just to give people the impression that there is an alternative" 


  173. Manimal
    If I can make $300 every day, one week is what I get from disability per month. In the past month I have only gone up, slow and steady wins the race. I even like the day I made $47. Keep up the good work.


  174.  There’s a spread to play between Aurorus and Phil, they don’t always agree.


  175. zero
    Maybe you can call TOS for a trade, it used to cost me $50 extra but I got that down to 0. Try it!


  176. That was my bad Mr. M.  I was fixing bad characters on Phil’s comment but was logged in as another user I was helping with an account issue.  Phil has been pasting from a different browser and is causing some font problems which we are trying to address.  


  177. Greg and all
    Noticed the font. 2nd loaded explore 9 and it is 10 times faster than 8, absolutely no problems.


  178. Craigzooka – How about buy=low, sell=high?  j/k
    Where did you post the code for Craigbot 1.0? I’m headed to Georgetown next weekend and I’m going to look it over with a colleague of mine.


  179. Thank you Shadowfax, I’ll see if we can get Phil on that.  


  180. Wow, this article pretty sums up my feelings for the last year or more.  If only gold paid a dividend..  guess I could sell some calls on GLD- 
    About golds rise:
    Surprisingly, many traders said it means an almost nihilistic rejection of our global market system. It keeps going up because more and more people don’t want to play in a capitalist system where banks are still too big too fail, the Federal Reserve buys Treasuries in the open market and countries openly, and in a coordinated fashion, try to devalue paper assets right before our eyes.
    “I think of gold as a protest vote in the ballot box of capitalism,” said Nicholas Colas, ConvergEx Group chief market strategist. “You don’t necessarily think your candidate is going to win, but you want the people reading the election results to know you aren’t happy with any of the pre-packaged choices.”
     
    http://www.cnbc.com/id/42200235


  181. Pharmboy
    25kp. spreadsheet   minor correction.  The  4 CCL  longs are the JUL 42 calls


  182. Good work Shadow.  I’d take those returns, too.  So do you make use of JRW’s sig rune indicator (others)?  Or do you more or less just  watch the lines?  I’ll check in later tonight.  Thanks.


  183.  Flip / Others – thanks for the options express feedback … I guess it will be a while b4 schwab closes the deal and integrates whatever they offer.
     
    Today:  Traded very light.  Sold a lot of stock bought cheap last week.  Sold some AMZN 155 puts early today before the stock ran up, so that’s good.  Sold some USO calls (weekly 44′s).  Small $$ but part of my weekly strategies.
     
    Bought an IWM put spread at the close.
     
    I don’t use TOS and had no problems trading ….
     
    Thats about it.


  184.  Meredith Whitney – she must be working on her image and try ing to avoid having to testify b4 Congress !


  185.  cwan; since I sold a NFLX April 1.80 put for 1.45, I would say you should get rid of them … but you could hold out for another down move to get a better price.   I don’t think NFLX will see 180 near term.  Maybe if we get a huge selloff in the market going.
     
    Then again, you never know.


  186.  BBY — no competition perhaps; but no compelling reason to be except as a place to look at products before buying them elsewhere.
     
    Their pricing sucks, their service sucks.  They will get killed by the internet.   I just bought a TV through Dell about $200-300 cheaper than BBY or circuit city.  Got it in less than a week.
     
    BBY sells HDMI cables.  Priced at 129, or 79, or 49, or even 29 for different kinds.
     
    I went on AMZN and bought cables for $2.40 and $9.99.
     
    BBY is toast.


  187.  Gotta go … meeting my buddy Vlad the Impaler for drinks …
     
    :wink:


  188. matt
    I use trend lines but the sig rue when totally correct is more powerful, it must point up with confermation of EMA, RSI, and 20 minute moving average. JRW has a way better feel and I believe he does better by knowing when to move before total confirmation. In addition I believe we are haveing lower highs and lower lows and just because today was up I expect a declline if we don’t have up closes tomorrow and Wednesday. I am a technical whatever and some think my view is BS but all I say is we are in a downtrend confirmed for about 2 weeks.


  189. @rehat
    That’s the only play.  There isn’t any other.   The math doesn’t look like it’s worth the time to execute.  But i’d be interested to learn from anyone else their experiences with a greater payoff.


  190. @iowahawkblog Obama has now fired more cruise missiles than all other Nobel Peace prize winners combined


  191. Fox News lies and smears fellow journalists. How low can those guys go?
     
    http://www.cnn.com/video/#/video/world/2011/03/21/tsr.robertson.libya.fox.claims.cnn?iref=allsearch


  192.  From FT: [link only for subscribers, so I clipped it]; I think we can expect more of the same, with an elevated oil price sustained by worsening uncertainty, while Yemen’s govt. [and U.S friend] goes belly up.

    Rift over command of Libya campaign
    By Daniel Dombey in Washington and Peter Spiegel in Brussels
    Published: March 21 2011 20:50 | Last updated: March 21 2011 20:50

    French attempts to sidestep Nato at the outset of military operations against Libya have divided the international coalition enforcing a no-fly zone over the country, western diplomats said.
    The French moves, which western diplomats said included launching the first attack on Libya without fully informing its allies, angered US and UK officials and are hampering efforts to transfer command of the operation to Nato, officials said. Relations grew so tense on Monday that French and German ambassadors to Nato walked out of a meeting of the North Atlantic Council, the alliance’s decision-making body, after Anders Fogh Rasmussen, secretary-general, criticised Paris for impeding Nato involvement and Germany for not actively participating.
    Turkey, a Nato member that has expressed reservations about the military intervention, also blocked a move to give the alliance command and control responsibilities during a Sunday night meeting. The Turkish government was upset that its representatives had not been invited to Paris for a summit on the crisis. Other non-European Union members of Nato, including Norway, were included.
    “There are major tensions between the US-UK and the French,” said a western official, who added that Nato countries had been working for weeks to have the alliance assume effective command of the mission. “As we got closer and closer to closing the deal at Nato, France suddenly blocked everything, which confused us at first … But then it became clear – [French president Nicolas] Sarkozy wanted to announce strikes just as he was walking out of his meeting in Paris where he was leading the show.”


  193.  French and Italy don’t want Libyan refugees showing up; and France already has a huge Muslim underclass, largely from North Africa, and that creates a bunch of other pressures and political concerns.


  194. GMCR – what do you think about selling June 70/60 C spread for $4 (Breaking even if they under $64)
    If it doesn’t work, what would be possible way to adjust it?
    Or any other idea on them with selling premium?


  195.  My wild guess is that this turns into a lovely oil strangle.  It has "stalemate" written all over it.  Even thick-as-a-brick Gaddhafi will realize that the smartest thing he can do is nothing.   Just let the Grand Coalition argue, spend huge sums maintaining an overseas military presence, and wait ‘em out.  The doctrinal purity of  "no boots on the ground" guarantees that Gaddhafi ain’t going nowhere, since his choices would be to face an international tribunal for war crimes or a long Zimbabwe holiday.
    So Muammar sits tight, raving at Western reporters in his Tripoli tent. Benghazi forms an alternate "free republican" proto-government and its disparate interests jockey to control its formation.  Every once and while there is a Libyan shootout, conducted out of sight of a the remaining skeleton "No Fly Zone" crew.   And oil remains elevated in price throughout 2011 as the rest of the Middle East continues its generational conflict played out on Twitter and Al Jazeera.  
    Back in the West, a sustained period of $95-$105 oil, with the wind of a weak dollar at its back, carves away at global GDP while commentators scan the horizon for the return of the Chimerical Double Dip, And nervous investors buy Brazilian bonds and Russian equities, now that Medvedev was made to drink the polonium Kool-Ade.



  196. this gaddafi air assault is scary. at our urging, he dismantled his budding atomic prospects and CBW capacity. if he still had these weapons, there would no aerial invasion. the lesson, writ large, is that no other nation will unilaterally give up these weapons. it’s over. 


  197. Phil:
    When you get time can you give us an update on the CCL and EGLE 25K trades. Are we pretty much cooked on the EGLE trade (now at .05)? Thanks.


  198. Phil:
    Which do you like better as a buy-write on GLW: 2012 Selling 17.50 calls and puts at (4.52/1.31) or the 2013′s at (5.80/2.42)? Thanks.


  199. Good morning! 

    Good note on balance, ZZ. 

    Yes, Mr. M, I’m also JRW!  ;)

    Explorer/Shadow – Good suggestion but apparently I need a whole new computer at this point as mine is an old Dell XP server, which was cutting edge a few years ago.  Unfortunately, I do not have time right now to deal with all the annoyances of upgrading so, like TEPCO, I will put it off until there is a disaster.  The fonting errors we’re getting are coming because I am sick of using IE to browse the news feed as it always ends up locking up my computer but when I open the news feed in another Chrome window – it picks up strange fonts when I paste.  I don’t think the fonts were all that bad so, barring huge objections, I’m just going to keep using Chrome.  

    Speaking of TEPCO – UP 15% this morning!  That is just crazy.  The Nikkei is up 4% overall but the Yen is below 81 yet again. 

    Rejecting Capitalism/Matt – That’s an interesting take. 

    AMZN/Cap – Watch that sales tax thing – could be trouble for them at some point.  

    Moore/Cap – At least he’s consistent.  Not like "whatever my President does is OK with me."  Did Clinton never get a prize?  He fired a LOT of missiles – ask Monica…

    Fox/Pak – I don’t think much of the CNN reporter who says "I didn’t expect lies from Fox News" – clearly this is not an observant guy…

    Meanwhile, that video reminds me that I want to develop a video server for the Web that guarantees no ads will be shown before the video come up.  Someone register AdFreeVideo,com and we can have a business model that makes money off the ads that run around the video when it’s running but not in the friggin’ video where it annoys the crap out of us!  

    NATO/ZZ – Civilization is such a thin veil, isn’t it?   Good summary of likely future events.  

    Mauldin/Yshen – I’m not getting an article.  We like John, usually run his stuff on weekends. 

    Weapons/Drum – Two different issues I think.   He is murdering people, that’s a no-no.  Has nothing to do with the previous reason he would have been invaded.  

    CCL/DC – That’s a spread we are going to play out.  EGLE went up .12 in 2 days and we need .60 in 30 days to hit our mark.  If we could DD at .05 that would be $200 to drop the b/e to 0.20 so maybe that’s the way to go but I’ve only seen that price go off once so far with the rest at .10 and, with a month left, I’d certainly rather spend $200 than give up and collect $200.  Also, the roll to May is net .05 and that buys another 30 days so certainly not a position I’d bail on so early.  

    GLW/DC – I like the 2012 because you are not getting paid enough for another year although I think I’d prefer selling the 2013 $20 calls for $4.50 as you have the same $4.50 protection (.14 less delta) and you can sell the 2012 $17.50 puts along with those for a net $14.97/16.24 entry with a nice 33% gain if called away plus whatever you sell 2013 puts for.  

    You can also go artificial with the 2013 $12.50/20 bull call spread at $5, selling the $20 puts for $3.50 and that’s net $1.50 on the $7.50 spread and while you do risk being assigned at net $21.50, it is 1x and that would only happen if GLW was below $12.50 and then you could DD to net $18 or less so not much worse of a 2x worst case.  Of course, since you own the $12.50 calls, above $12.50 the break-even is the average of $21.50 (net put to) and $12.50 or $17 so about the same as the buy/write but only 1x committed. 


  200. Now that the crisis is passing – damage assessments are beginning to pour in:

    Japan’s nuclear crisis has amounted to a radiation increase equal to a prolonged dental x-ray, James Altucher says, and the media owes everyone an apology for overhyping it. Equally, the media should apologize for overhyping and then ignoring many recent events, including the Greek debt crisis, which is now worse than ever. 

    The Japanese quake and tsunami have knocked out 25% of global production of silicon wafers, according to iSuppli, warning that suspension of operations at the Shin-Etsu and MEMC’s (WFR) Utsunomiya plants “could have wide-ranging implications” for global chip production. Semiconductor ETFs: XSDSMHPSI

    Japan-related parts shortages are already leading to cancellation shifts or even plant shutdowns in Europe’s auto industry, including GM, Peugot (PEUGF.PK) and Volvo (VOLVY.PK). Due to lengthy shipping times, shortages of some parts have yet to even be felt. 

    Warren Buffett may be seeing a buying opportunity in downtrodden Japan, but he’s not so comfortable with electronics makers: “We held very few in the past and we’re likely to hold very few in the future… Even though Apple (AAPL) may have the most wonderful future in the world, I’m not capable of bringing any drink to that particular party and evaluating that future." 

    IHS Automotive estimates Japan automakers will lose about 65%of their vehicle output – roughly 338K cars – in the 1st two weeks following the earthquake. Lost production outside the country is minimal, but will rise "exponentially" as components for vehicles become less available. 

    When the facts change, I change my mind. War the Middle East and a big blow to Japan have occurred since the ECB put an April rate hike on the table, yet the bank gives no indication this has affected its thinking. Could a rate hike under these circumstances be a "reckless decision?"

    Mr. Bernanke, raise interest rates now to boost the economy, Andy Kessler writes. It’s counter-intuitive, but it will work, he claims: Oil, wheat and commodities will see a 20%-30% drop in price as speculators run for the hills – a de facto tax cut for consumers.

    In Elizabeth Warren’s trip to Capitol Hill last week, Republicans were hoping that "if they threw enough mud, some of it would stick," Paul Krugman writes. "Nothing could be worse, from the point of view of bankers and the politicians who serve them, than to have consumers protected by someone who knows what she’s doing and has the personal credibility to stand up to pressure."

    Hans-Jörg Rudloff of Barclays gives the European version of Charlie Munger’s "suck it up" speech. The executive at the bank whose recent success, if not existence, is due to government largesse, says Europe can solve its debt issue only by halving social benefits and making everyone work longer hours and longer years. 

    Despite oil’s rise, airline stocks (IYT +2.2%) gained altitude today, as Maxim Group’s Ray Neidl expects a spring rally in airlines with the worst winter weather behind the industry and strong demand allowing carriers to pass through increased fuel costs to consumers. "Fuel costs may be near their top, which should provide U.S. carriers with a very strong 2012 as fares continue to rise." 

    Tuesday’s economic calendar:
    7:45 ICSC Retail Store Sales
    8:55 Redbook Chain Store Sales
    10:00 FHFA Housing Price Index
    10:00 Richmond Fed Mfg. 

    Notable earnings before Tuesday’s openCCLCMCDGWAG

    Notable earnings after Tuesday’s closeADBECTASDFSJBL


  201.  


  202. Moody’s Investors Service has weighed in on life insurance companies with exposure to Japan, sounding relatively upbeat about their exposure to the devastating earthquake and tsunami. Despite some panic last week among investors, Moody’s estimates that these companies will sustain “moderate but manageable” losses, but not enough to prompt credit rating downgrades. 

    How’s that 1956 "peak oil" theory tracking so far?

    00

     


  203. Good morning! 

    Yes, the dollar CAN go even lower – now 75.53 as the Euro tests $1.425 and the Pound blasts off to $1.64.  Amazingly the Yen is at 81.07 so apparently the BOJ is supporting the Pound and Euro while letting the Dollar die.  Makes sense, our consumers don’t have enough money left to buy Japanese goods anyway.  

    Goldman put out a letter this morning telling clients to watch out for inflation (so quick those guys!). 

    Not bothering the international markets and our futures are flat at the moment (7am):  

    Overseas: Japan +4.4%. Hong Kong +0.8%. China +0.3%. India+0.9%. London +0.3%. Paris +0.5%. Frankfurt +0.1%

    Not a big climb to pop the S&P over the Major Breakout line at 1,300 and it should bother us if they can’t do it.  Like yesterday, the Nasdaq has some work to do and keep in mind that our other indexes are right on those lines so any downward movement is going to be bad.  

    Maybe it’s good to see the Nasdaq lagging.  There’s a very interesting article in Wired Magazine that reports on a study that indicates that strong correlations in stock movement are good indicators that a crash is coming.  It makes sense to me since that’s the kind of fake Bot trading that we know is going to lead to disaster anyway.  

    Yemen is really heating up with a bunch of Generals joining the rebels now.  Syrian protesters are ignoring curfews and taking to the streets and, for some reason, Israel decided today would be a good day to call an air strike on weapons manufacturers in the Gaza strip – I guess they were feeling left out…

    Keep in mind that these are all, by themselves, things that would usually make the markets nervous and probably pull back.  Even SNE is not down and they are flat out telling people that they have been forced to halt production at several plants with no firm re-start dates.  

    EWJ WEEKLYAre we already back to a market where bad news "just doesn’t matter" – even when we now have an estimate of 18,400 deaths in Japan – more than 4 times what we lost on 9/11 yet they are having a V-shaped recovery in a matter of days?  

    They had a 6.3 quake this morning which, of course, "just doesn’t matter" and, as I mentioned last night, we have now moved into the phases of quantifying the damage and most estimates fall under the "Oh, is that all?" category, like insurance:  

    Moody’s Investors Service has weighed in on life insurance companies with exposure to Japan, sounding relatively upbeat about their exposure to the devastating earthquake and tsunami. Despite some panic last week among investors, Moody’s estimates that these companies will sustain “moderate but manageable” losses, but not enough to prompt credit rating downgrades.

    The MSM and the punditocracy may not be very concerned with what’s going on but I am.  I think that we’re experiencing a sort of stock market survivor’s high, where investors are so relieved we didn’t crash that they are ignoring the fact that there’s another cliff just ahead.  Let’s make sure we have our disaster hedges in place and keep at least one hand on the emergency exit – just in case we don’t breeze over our levels. 


  204. Anybody have that SDS hedge from Friday, not coming up on the Wiki…
    Thanks