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Thursday: Durable Goods and Jobs, Oh My!

Lions and tigers and bears don't bother this market so we'll see what data does this morning.  

We are already right back to where we were on March 9th, when we flipped bearish on Crashiversary day.  The market did sell off the next day, BEFORE the earthquake but, as we often do – we went down too far, too fast and by Tuesday, the 15th, I was already flip-flopping and titled that morning's post "Duck this Fip!" and the next day was, as predicted, "Whipsaw Wednesday" as we got our final spike down where we went on a major shopping spree, picking up the following longs in Member Chat:

  • HIT ($47, now $54), GE ($19.20, now $19.53) and SHAW ($31.50, now $33.87) – From the main post
  • FAS Apr $32 calls for .80, now .45
  • TBT June $35 puts sold for $1.72, now $1.23
  • TBT June $32/37 bull call spread at $1.90, now $3
  • NCR Oct $16 puts sold for $1.10, now .86
  • EWJ June $10 calls at .58, now .93
  • FCX Jan $45 puts sold for $5.85, now $4.15
  • BTU 2013 $50 puts sold for $6, now $5.40
  • BTU Jan $65/80 bull call spread at $6, now $7.20
  • QQQQ 3/31 $53 calls at $1.48, now $2.73

Most of those trades are stocks we track all the time.  We were mainly in cash and we were READY, WILLING and ABLE to take advantage of the sale that was being thrown that day (read post for the set-up logic on the day).  This is simply following Warren Buffett's advice to "Be greedy when others are fearful."  Today, as we get back to the levels we were last fearful at to the upside – I will remind members that the rest of Mr. Buffett's statement is "Be fearful when others are greedy."  Today is a great day to take some cash off the table as we retest our Breakout levels – just in case we don't make it!  

Cash is nice, cash is good – cash leaves us flexible and allows us to take advantage of unexpected opportunities like the one we had last Tuesday and Wednesday.  Panic is for people who are fully invested and under-hedged – NEVER be one of those people, please….

The cycle on the right has been true for hundreds of years but only recently have our markets moved from Despondency to Euphoria on a weekly – sometimes daily – basis.  You can blame the light-speed of the modern exchanges, the 24-hour news cycle, the global markets, the MSM or the Bankster market manipulators, who don't care which way the market goes as long as it forces people to churn their accounts – it doesn't really matter – what matters is you don't let your emotions run your trading.  

I spend a lot of time in Member chat talking people off the ledge.  Notice Capitulation is just on the other side of hope but most retail traders have a very hard time gutting out that part of the cycle as it's always "different this time," no matter how many times we cycle up and down.  Unfortunately, the same traders have just as much trouble taking profits at the top of the ranges.  Notice the quote in that area: "Temporary set back – I'm a long-term investor" – That's fine when you are one but not when you have a call that expires in 3 weeks!  

There's a reason we constantly repeat in our Education Section and in the various Sample Virtual Portfolios, "Plan the trade, trade the plan"  - When you pick up trades like the ones we made last week and they go up 20, 40, 60 percent a week later – TAKE SOME PROFITS!  We were hoping the market would recover to these levels in a month – the fact that it recovers in 5 days doesn't change the plan and the fact that something goes up 10% in 5 days does not mean it will go up 100% in 50 days – that's another cartoon I can't repeat often enough!  

We were wary yesterday heading into a Durable Goods report we were sure was going to be a miss and, of course, it was a huge miss – down 0.9% in February and down 0.6% ex-transportation vs. up 0.2% and up 0.5% ex-transport that was expected by "expert" economists who OH MY GOD, WHY DO THESE PEOPLE STILL GET TO BE CALLED EXPERTS?!?!

Oh, sorry – just had to get that out of my system.  382,000 people lost their jobs last week and that's only 12,000 more than expected and about the same as last week so all is well there, I suppose.  Look, with 135M people still working, it's not shocking that 0.3% of them lose their jobs in any given week.   That's a person getting fired, on average, every 6 years and I know quite a few people who blow that curve for everyone else so it's not the job losses that are an issue – it's job creation.  We'll be getting Non-Farm Payrolls next week and we have to create 150,000 jobs a month just to keep up with population growth and it will take 5 straight years of 300,000 jobs a month being created just to get us back to 5% unemployment – THAT'S a number we need to pay attention to.

We still have the same inflation that bothered us 2 weeks ago, we still have the same unrest in the Middle East (and now Brussels!), we still have an irradiated Japan, we still have struggling consumers (now movie box office receipts are down 20% from last year), we still have $105 oil, we still have an unresolved Federal budget, we still have dozens of states and thousands of municipalities struggling to balance their own budgets and we still have EU debt issues getting out of control with Moody's just this morning downgrading 30 Spanish banks.  

Does all of this really not matter just because some blowhard on CNBC sings "Sunshine and Lollipops" while their trained chimp tells you to BUYBUYBUY stocks that already have p/e's above 50?  Come on folks – let's play the markets that are real – not the markets we wish for in either direction…   

When in doubt, we play our levels and we'll be watching them closely today – especially the Nasdaq as they try to get back to 2,750 and, of course, the hyper-critical S&P 1,300 line while 815 on the Russell has been a good flip indicator.  Remember – our bullish premise is simple – INFLATION.  Whether the economy is good or bad, things will get more expensive and that includes stocks.  Just like the gallon of gas you buy for $4 doesn't get you any farther than the gallon of gas you bought for $2.50 last year – the MCD company who's stock is at $74 doesn't really make much more than they did last year at $60 but the rising tide of inflation lifts all ships and we'd better be on board or we will most assuredly end up under water.  

Stay dry!  

 


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  1. Good morning!  Ain’t it nice when you have the PP’s and the SPY R1 is already breached BEFORE trading begins. Hey Cap, in your own words please,

    WTF?



  2. I second that emotion.

    WTF – lol my iPad auto corrects “WTF” and capitalizes it.


  3. Phil -
    TZA puts -
    what strike do you like selling into this bs.


  4. I think that there is no hope there for a while:
    http://ftalphaville.ft.com/blog/2011/03/24/525841/calculating-the-size-of-a-portugal-rescue/
    When the interest in 15 year bond approaches 10%, you might as well go for broke… and go broke! 


  5. StJ – you might as well buy the bonds, b’c the crap they pull in this market is not going to make anyone $$, well, at least not us 90%ers.


  6. Funny quote from the front page of the FT this morning regarding Lloyd’s testimony; "Mr. Blankfein also said that it would have been a disclosure of material information to reveal in mid-October 2008 that the bank was expecting its first loss. When asked why this was significant Mr. Blankfein simply replied,
    "We generally make money."


  7. WOW, OPEN at all time high.


  8. The other thing to remember is ‘they’ need to drive it up to keep retail and get ‘more’ retail in the game.  Since ETFs are the way to play, positions are being taken on the short side, using the ETFs as the poor mans game of driving the prices higher.  Just like Lewis Black said Tuesday night, "The house always wins".


  9. Good morning! 

    You know it’s going to be a good day when CNBC has my favorite guest on:  Hugh Johnson.  Every time they say his name I crack up.  

    As noted by Pharm, it’s so convenient when they pop resistance in pre-markets.  Now we only have to see what sticks without all that worrying about if we are going to make it over…

    We’re still on Monday’s chart but you get the idea – we’re going to be green on the S&P (ignoring the Durable goods numbers so far in futures) and maybe 2,720 on the Nas so still a long way to go.  No one is threatening the 100% lines (other than the RUT and Nas who are already over) so it’s all about the S&P and NYSE holding the lines while the Nas gains ground.  

    If that happens – we have no choice but to be bullish.  If NOT – then we damn well better get more bearish fast.  

    So let’s stay on our toes today – there’s bound to be some selling into this pop as I can’t be the only guy who is going to take the money and run into this pointless pop.  

    As a flyer – I like the DIA $121.75 puts at $1.20 – they closed at $2.15 yesterday and the Durable Goods numbers really should matter to someone.  

    Other quick news:

    At the open: Dow +0.32% to 12124. S&P +0.37% to 1302. Nasdaq +0.59% to 2714.
    Treasurys: 30-year -0.23%. 10-yr -0.21%. 5-yr -0.15%.
    Commodities: Crude -0.01% to $105.74. Gold +0.06% to $1438.80.
    Currencies: Euro +0.24% vs. dollar. Yen -0.15%. Pound -0.42%.

    Japan crisis… Portugal’s near-certain need for a bailout… Crude oil prices at 29-month highs… "One would think the overnight news would be hurting risk throughout the world in both stocks and bonds,” Guggenheim Securities’ Andy Brenner writes. “But the complaceny continues and equities grind higher.”

    In an open letter, ten former members of the President’s Council of Economic Advisers warn the combination of an aging population, rising healthcare costs and a hefty budget deficit will encourage bond markets to turn against the U.S., "leading to a crisis that could dwarf 2008."

    Not Yemen, not Bahrain, but Brussels, where security forces usewater cannons and tear gas to disperse protesters at a EU summit. One of the goals of the summit will be to create a "Euro pact" whose aim, among other things, is to lower wages for workers. 

    With Irish bond yields again jumping to new highs, LCH.Clearnethikes margin requirements to 35% from 30%. Irish borrowing costs have surged this week on renewed concern debt payments cannot be met, the 2 year note now yielding 10.5%. 

    "The cycle is quite advanced … the prices have already gone up a lot, you need to be careful," says the CEO of privately held Grosvenor Group as the company scraps 2 property deals in Hong Kong. Property ETFs with Hong Kong exposure: TAOWPSDRWIFAS.

    slight fall in March eurozone composite PMI does little to dent the view that the economy grew smartly in the 1st quarter. A bit more worrying, the survey shows manufacturers raising prices at the fastest pace in the 9 year history of the report. Full report here

    The resignation of Portugal’s PM comes as a 2 day EU summitbegins to hash out details of the permanent rescue facility. The euro recovers from a moderate drop and shares are higher as the Portuguese action was far from unexpected. Euro is flat at $1.412. Stoxx 50 +0.5%.

    U.K. retail sales fall by a more than expected 0.8% in February, up just 1.3% Y/Y. Earlier, retailer Next warned about the outlook, "retailing will feel like walking up the down escalator – we will have to work hard to stand still," said its CEO. Cable is off slightly, at $1.6184.


  10. Pharm, Unless you are Donald Trump!


  11. Do those DIA 120.75 puts look good to anyone else at .75? If so, is there a plausible on/off switch? Thanks : ) happy (safe) trading


  12.  DIA – That was the 3/31s – sorry! 


  13. GMCR/All – huh, look at GMCR dropping in a rising market. The emperor has no clothes!


  14. Ignore my last post now : /


  15. BSDM moving…..Yeah for us….


  16. @samz3700
    But will it "Socialize" it?


  17.  Some updated Fibonacci studies for IWM, DIA, SPY and QQQ (I know, one less Q). Looks like we bounced from our long term first support line following the "Japan" crisis. But both SPY and QQQ are below their 50 day MA. SPY is almost against it today – it’s at 130.63. QQQ is really the laggard right now!
    http://lemoyne-mappingthemarket.blogspot.com/2011/03/bouncing-off-our-levels.html


  18. PHIL
    Good morning
    Im long 16 DIA MAY11 121 Puts at 3.39,  and I closed yesterday the 16 shorts 3/31 120 P for a small gain as per your recommendations at the close. Should I try to sell them again today or you are expecting the market to go down. thank you


  19. And for those playing the lines in oil (/CL)
    R3 – 108.31
    R2 – 107.32
    R1 – 106.35
    PP – 105.36
    S1 – 104.39
    S2 – 103.40
    S3 – 102.43
    We have already been bouncing between PP and R1 this morning.


  20. Volume/StJ – Good point but maybe they find something else to trade the hell out of? 

    TZA/Samz – I wouldn’t be too aggressive but collecting $2.05 for the May $35 puts is pretty good.  

    Portugal/StJ – Spain is worse.  If the EU steps in here, they are essentially committing to bail Spain too.  

    LOL Manimal. 

    Black/Pharm – He’s great. 

    DIA/DC – The lower puts work too but the higher puts pick up delta more quickly on the way down and are really great when we have a proper break-down.  

    DIA/Cnar – if that’s in the $25KP then they stay naked as we are, if anything, too bullish in that portfolio.  If we get a good power dive and find a floor – then I might want to cover for a bounce.  

    10:00 AM On the hour: Dow +0.26%. 10-yr -0.18%. Euro +0.35% vs. dollar. Crude -0.06% to $105.69. Gold +0.21% to $1441.00.

    Warren Buffet tells CNBC the collapse of the euro is not "unthinkable," although "huge efforts will be made to preserve it." The EU "(has) to get (its) fiscal houses in reasonable harmony."  The euro dips slightly, before returning to near session highs at $1.4135. 

    Defying expectations for an increase, Irish GDP falls 1.6% in Q4, bringing to a close a 3rd consecutive year of economic contraction. Irish shares rise along with the rest of Europe, +1.1%.

     Where the earnings are: S&P 500 earnings are estimated to grow 12% Y/Y in the upcoming earnings season, then is expected to dip slightly from Q1 to Q2 and increase by 15% in Q3 and 15.5% in Q4. Sectors expected to grow by more than the S&P as a whole: energy, materials, industrials, tech, financials. Underperformers: telecom, utilities, health care. 

    The U.S. ranks near the bottom of developed economies in terms of financial stability and will stay there unless it addresses its growing debt problems, according to a new study. "Americans are used to rankings and they’re used to ranking very high, but frankly in this area we rank very low," says David Walker, who headed the study.

    The risk of a Yemeni civil war grows as a divided military clasheswith each other and the UAE seizes a shipment of 16K guns bound for the country. President Saleh’s offer to step down by the end of the year is "too little, too late," says an analyst.


  21. sold some of the GMCR $60 puts at 2.45, still hanging on to some.  Phil, nice call to DD yesterday. 



  22. Phil:
    Does it make any sense to roll the 25k  EGLE calls to May for .10 or less?


  23. why is TNA 60 cents too rich to IWM this am?


  24. Phil, from yesterday: ADBE/Amatta – OK, that was clue number one.  Now how about tell me which ones you have?  Are they the same as the $25KP?
    YES I mentioned they were from the 25K and that I had not gotten fills…
    As to DIA’s, from the beginning I never entered any of them on the 25K,  what is the current position? 
    Thanks


  25.  GMCR - Days after announcing a deal with Green Mountain Coffee (GMCR: 61.07, -1.99, -3.16%) to make K-Cups, Starbucks (SBUX: 36.74, +0.05, +0.14%) revealed it will soon offer single-serve brewing machines that will rival the popular Keurig system
    .


  26. GMCR – Um…..U’d better take that money and run…..or at least sell 2 or 3 of the 5.


  27. GMCR – "he who hesitates is lost" :(
    but maybe not :)


  28. GMCR out at $3.00. Thanks Phil. Especially for yesterday’s roll. Made good out of bad. Being patient can be just as exhilarating as acting like a trading fool! :)


  29. 2 – 6.9 earthquakes in Myanmar and Thailand.


  30. GMCR/Ultguy – Congrats!  Not sure why they are down but happy to see it.  Just token support at $60 i f sentiment is changing – bounce to $60.70 would be expected as weak bounce figure $61 to see if they get rejected but now market getting a general buy lift again so might save them (for now).  

    The reason we don’t want to leap out of GMCR in the $25KP is because it’s a 1x entry that we’re happy to roll longer and also we need the bear-side bet as we’re not ready to go gung-ho bullish yet.  

    EGLE/$25KP, DC – There is no reason not to roll to the May $4 calls for .05 but I’m not too keen on paying .10.  

    TNA/Lapper – Just sentiment. 

    ADBE/Amatta – LOL, and now you want me to go look up your basis again?  Is it really so difficult to say, I have 5 ADBE July $35 calls at $2.30 or whatever it is?  I mean really, I can’t imagine the point of not just putting it down so I can quickly give you an answer.  On ADBE – the $35s are now $1.15 and not having sold the offsetting calls (twice) simply ruins the trade as we were BEARISH on ADBE into earnings but you took a BULLISH position instead.  

    Long-term, I think they recover but I’m not super-bullish on them but you can sell the ADBE Apr $33 calls for .55 and spend .70 to roll down to the July $33s as a start towards getting them even.   That’s such a clever move let’s make that official in the $25KP.  

    More earthquakes?  Oh no… 


  31. Phil, Sold 10 GMCR for a net $635.  Worried about the Uso, Own 20 April $41′s at 1.59.
    Any thoughts?  


  32. More from Buffett on CNBC: "It isn’t the end of the world, but a lot of adjustment would be needed if the euro proved to be in real trouble," he says. For now, Europe’s fiscal woes won’t have a huge impact on Berkshire’s (BRK.A) businesses, as "currencies have been fragile things for centuries."

     Moody’s warns on the U.K.: "Slower growth combined with weaker-than-expected fiscal consolidation could cause the U.K.’s debt metrics to deteriorate to a point that would be inconsistent with a AAA rating." Sterling slips on the news before bouncing a bit. FXB -0.5%.

    Stocks are cheap right now (III)… oh really? "The cheapness argument falls on its face once we realize that pretax profit margins are hovering close to an all-time high of 13.3%, almost 58% above their average of 8.4% since 1980," Vitaliy Katsenelson writes. When the Fed stops easing this June, then "we will see what kind of legs the economy and stock market really have."

    Dollar just got smacked down to 75.89 – this is clearly desperate manipulation aimed at trying to get the markets moving up.  Not sure how to play it as the manipulators seem to be fully in control – we’ll just have to see how it plays out for now.  


  33. Phil- Thanks for all your time and help to educate us as to trading strategies. I’m slowly picking it up and pretty sure the answer to this question will come with experience, but how should we have handled the early drop in GMCR. I rolled my Apr 50P to 60P and I’m in at net 2.71. It went up to 3.15 this morning. I could have sold into excitement (+16%) or even sold a 55P or 50P (.53) to lower my cost or do nothing. Obviously, you can’t give us second-by-second instructions, so what’s the proper move in that situation?


  34.  I do want to point out that many of us here (including me) were pretty annoyed at the long grind up from Sept to January/feburary. So, on this dip, i added considerable longs in GOOG, F, GS, AKAM, and several other companies. Keep in mind all, that, if we do pop phils levels we may be in for another long climb up to S&P 1400 / DOW 13000 and we should all be prepared for this (and making money off it!). I even added some momo stocks. Now, i can be excited when they go up! 8-)


  35. Phil, would you short Redhat (RHT)? Up 17.5% to 47 after earnings, yet P/E is 93. All-time high is 49. Not really planning to short it but curious what your criteria would be here.


  36. USO/Lori – You can sell the next weekly $42 puts for .60 and spend $1.25 to roll out to the May $42 puts, now $2.05 which buys you a month and improves your strike by $1 for net .65.  If you have to roll the putter on the downturn you have lost faith in, then the April $40 puts are .49 so that’s the roll target you don’t want getting away from you.  

    GMCR/LDM – It depends on your PLAN for the trade.  As a stand alone, Rule #1 (and there are only 2) is: "ALWAYS sell into the initial excitement."  Clearly we were wrong in our original entry and we had to put new money to work so, in the VERY LEAST, you want to take 1/2 off the table to lower your basis the second the momentum dies because you may never see that price offered to you again.  If you take 1/2 off you lock in some gains and you can always DD and roll later.  That’s the proper way to trade and even in the context of the $25KP, that would be the right way to play but if I called out moves like that every time we went back and forth, that would be all I do all day!  In the more hands-off context of the $25KP, the GMCR puts are bearish balance that we are willing to roll and stick with as a downside hedge.  Today’s move confirmed that they do make good protection on a market dip so, if anything, I am more inclined to DD if they run back up to yesterday’s lows as nothing has changed in my fundamental outlook.  

    Good plan Hannah. 

    RHAT/Jvest – I have no reason not to like them.  I don’t short people just because they are expensive – I want to see a weakness in their business that is not generally being discussed.  I would think RHT would do well as more companies seek to get away from the MSFT fee machine.  Maybe not as well as they are being priced for but NFLX is at $230 and GMCR is $61.50 and OPEN is $96 – those are stocks I can get motivated to short!  

    Yawn!  EIA Natural Gas Inventory: -6 bcf vs. consensus of -5 bcf. Futures +0.5% to $4.36.

    The debt-related fate of Spain and Portugal, joined at the hip through 2010, continues to diverge. Recent sovereign CDS pricing showslittle to no correlation between the neighboring countries. Either Spain is out of the woods, or its CDS are priced too low. 

    An AT&T (T +1.2%) takeover of T-Mobile (DTEGY.PK) would transform it into a "truly wireless-first carrier," which could be worth an additional $5/share, Sanford Bernstein’s Craig Moffett writes. In contrast to skepticism about regulatory approval, Moffett thinks the deal “has a real chance of approval,” given the skills of AT&T’s regulatory team.


  37. Dollar broke below 75.80!   Gold $1,450.  Silver $38.10 – MADNESS!  

    Copper, however, is down from $4.45 to $4.41 and Nat gas is down to $4.32.  TBT is back over $37 and XLF, once again, is coming off the floor.  

    This market is totally nuts…


  38. Phil / Gold , silver    Silver now over $37.50 line, time to dump my 1000 shares of ZSL and 2000 DGZ and take my losses?


  39.   Did the Bernac just install extended capacity toner cartridges??? 


  40. Phil- just got back from some presentations from credit focused hedge funds…some interesting macro takeways (1) re interest rates on 10yr T : we are 45-60 days away from seeing the 10yrT yield rise (coincides with anticipation of termination of QE2), yields should get 4% by end of 2011, no expectation for a spike rise in yields because (a) a majority of fixed income buyers are funds that have a specific mandate to buy bonds so options are limited, and (b)  every country is trying to exporttheir way out so will do what it takes to depreciate relative to dollars; (2) re inflation: (a) everyone looks at the 9% unemployment figure as the basis for why there shouldnt be wage inflation but unemployment among college grads is 4.3%, so potential for wage pressures in more highly-skilled jobs, (b) things could get ugly for Fed and individuals if inflation expectations materially increase…ie, people rush to buy a basket of goods today (not just real estate/commodities, but consumer soft/hard goods as well) so that they avoid paying higher prices in the future; (3) re US debt: US is paying artificially low interest rates, Right now we’re borrowing short term, but need to begin extending our maturities to avoid a scenario where higher short term rates consume too significant of a portion of our govt revenues, no need to worry too much about paying back the debt as the plan is that inflation will take care of reducing the porportion of debt to GDP (i hope it works out as planned); (4) economy as measured by ISM and FCI (financial conditions index) is actually responding quite well to QE2 and no need for QE3 as QE2 not going away (funds will be reinvested). Bottom line: higher inflation to stay, lower dollar to stay,interest rates will go up but not dramatically (ie, bearish on bonds but perhaps more the 2yr notes as US looks to roll its maturities, more than the 10yr bond). 


  41. rollin, rollin, rollin, May DIA puts… great prices. 3 for a dollar


  42.  Phil….ok so last week I uncovered my gold and silver miners and let them go naked long on the strong pullback.  Today, I recovered them to return them to spreads instead of longs, following your advice of sell into excitement.  However, I’m wondering about reselling some of my others that I uncovered last week that haven’t moved so much, like MSFT and GLW.  Anything wrong with leaving those naked long for a bit and see if this rally develops legs?


  43. oil keeps breaking my heart.  testing @stjeanluc R1 level posted above.


  44. Any idea why PCLN keeps moving higher and higher?


  45. PCLN? How about "why is the entire market moving up"?


  46. Phil, your thoughts on PDM & ADM. Thnx


  47. market crazy is it b/c pre — earning season????


  48. Oil – jjflash / That R1 level has pretty much held all day so far!


  49. Who said yesterday that this would be a down day? 


  50. Oh FYI and FWIW – there is an 86% correlation with the expansion of the fed balance sheet and this thing we call the ‘market’.


  51.  Browser wars – lets not start a war during market hours – however there was quite a bit of discussion about browser speed yesterday, and I just tried IE9 for the first time. My first impression is that it is at least 10-20 times slower than chrome.
    Here are some more speed test results - http://lifehacker.com/#!5784396/browser-speed-tests-firefox-4-internet-explorer-9-chrome-11-and-more


  52. PHIL
    USO/25KP  . rolling the APR 41 P to APR 42 cost 0.48.  The Apr Wk1 41 P can be sold for the same money. Is this a good move?


  53. Phil:
    April 1 $29 FAS calls can be sold for ~.95-1.00.


  54. ZSL/Tusca – The dollar is at 75.70 so silver is not up because of it’s value, it’s just reacting to the Dollar, which may plunge to 72 if this keeps up so if you can’t take silver hitting $40 then yes, you should get out.   2,000 shares of ZSL are $46,000 and you can get out and sell 20 May $20 puts for $1.20 so all you do there is skip the next $4.20 of losses and/or collect $2,000.  If you are willing to bet the dollar normalizes by August, then the Aug $20/25 bull call spread is just $2.20 so you get $46,000 off the table, agree to buy back in at $40,000 and spend $2,000 out of pocket for 20 of the spreads, which can pay you as much as $10K back if ZSL gets back to $25 at Aug expiration.  DGZ has no options but I’d want to see $1,450 broken and held before I stopped shorting gold.

    Toner/Otto – Maybe more like this.  

    Meanwhile, while looking for that last clip I saw this really cool one.  Amazing what they do with graphics these days.  

    Rates/SNS – No surprise there but I really appreciate the rundown.  

    MSFT/Hoss – Nothing wrong with letting them and GLW ride if we hold our levels.  You know you love them all decade so no big deal if they take a dip and we also know they are probably down on Japan uncertainty, which will diminish over time so no major need to cover as long as we’re over S&P 1,300. 

    PCLN/Jabob – I think that one is legit as airfares are way, way up and they make a percentage.  It’s an inflation play and a growth play.  

    ADM/B1 – I still like them but they are way higher than our last entry but you can still go artificial and sellt he 2013 $30 puts for $3.15 and buy the $30/40 bull call spread for $5 for net $1.85 on the $10 spread that’s $6.28 in the money.  PDM is a small REIT I don’t follow and if you do not do a very thorough analysis of a REIT’s holdings, debt structure, cash flows etc. you may as well just go to a casino and bet on black so I have no opinion on them.  

    Now that we are back at the morning highs, I like the QQQQ NEXT WEEKLY $56 puts at .41 as they were $1.42 yesterday and make a nice DD or roll into weekend protection, even if the Qs do keep going higher. 

    USO/Cnar – I don’t like having a spread that close in time unless there’s a damn good reason for it.  Those puts are just 2 weeks apart and USO is just at $42.37 so you are inviting disaster if oil takes a big tumble overnight, which may seem like it never happens but it could from this level.  You know I don’t believe in $105 so I’m standing pat at the moment but they are not paying enough money on the short puts for me to want to give up my downside.  

    FAS/DC – I think we can do better.  


  55. TSON + 43% on FDA approval
    i’m out
    Gordo


  56. Good morning, nothing new.

     

    IWM  79.82, 80.34, 80.70, 80.97, 81.36, 81.72, 82.54  and 82.82  (and $6.5 Bil of POMO)

    Anyone else getting bored with this predictability ? Shorted the open, saw the dollar collapsing, switched to TNA; looking for IWM 81.72 !!


  57.  QQQQ NEXT WEEKLY — strikeout Phil! It’s now QQQ not QQQQ  :)


  58. UUP
    I got into bigger then intended position of UUP MAY 21.0 C at net of .99
    Any suggestion how to scale back?
     


  59. Remember that’s QQQ. :)


  60. Phil – I have a question on a DIA put position I’m holding. On both Monday and Wednesday we had some nice gains on DIA $119.75 puts.  I was good about taking 90% of my gains off the table on both days however I left open a very small 10 contract position with an average price of $1.04. They are trading today at $0.40. Is it even worth rolling to a higher strike or DD-ing these into next week or would you just kill the trade?  I can’t find a speck of good news on CNBC (or anything I read for that matter) but I’m not interested in fighting the fed either.
    Otherwise I’m 85% cash!


  61. Dow One Year Daily

    Conclusion:

    Above charts show a bullish picture and as long as DKIA is holding above 12000 – 11950 this market will rally further. The VIX needs one more down day to strengthen the sell signal. There is no need to fight the trend. In addition I do have a buy signal on HUI as well but that should be highlighted in another article

    Gratitude:

    My thanks go to Trend Channel Magic at Public Charts – Stockcharts.com – as he did a fantastic job sharing with us his charts.


  62. Great Super Friends video!


  63. Phil,
    I have some FAS July $32/37 bcs that I need to adjust into better position. I can buy back the $37′s for $1.10 profit and roll the $32′s to the 29′s for $1.30. Would you cover that with a sale now or ride naked for awhile?


  64. Phil,

    What is your take on LKQX, interesting small used car parts company with good groth. Thanks.


  65. Made $2.50 on TNA; selling a break below 81.36 or buying one over 81.60, wash, rinse, repeat  8-)

     


  66. Phil, the QQQ weekly’s , are those the April or March?  How do you tell the actual date on TOS? Thanks.


  67. Don’t know if this is a top in silver or not but shares of Sprott Physical Silver Trust (PSLV), a closed-end fund holding only silver bullion, are trading at 23% over NAV. Alas, no options to short. An article at SA has a pair trade idea of short PSLV and long SLV that wins either way the spot price goes.
     
    http://seekingalpha.com/article/259989-incredible-silver-pairs-trade-if-you-can-find-the-shares-to-short?source=hp_latest_articles


  68. Phil
    What do you think about shorting the India market as a whole, and is there a bellweather India stock or ETF to do so?
    Thanks
    Strether


  69.  Phil,
    I have a 100% gain on 2 long XOM $50 2012 calls — what’s the best way to take profits?  Sell them or is there a way to roll them to capture some profit but still benefit from a continuing run?


  70. pakdog, that idea is great!  Same as shorting GOOG at $10,000/share, and watching short squeeze take it to $15,000.  It’s only shares priced according to supply/demand.  This is called modern market.  Logic out the door, bigger the money bag -more control of the asset price.  Simple.


  71.  

    Tokyo Weather: Rain Mixed With Radioactive Iodine and Cesium

     

     

  72. LOL – I wonder how many times I said "I prefer HMY" when people asked me about other ways to play gold?   This sucks though – now I have to go dig up something else that’s undervalued.  See a fundamentalist hates it when their stocks go up – it means we have to sell them and do more work!  

    Nice one Gmarts!  

    Dollar held 75.70 – whoopeee…   Copper leaped back to $4.45 like a rocket.  

    Boredom/JRW – You’ve gotta love it.  This is how they transfer the wealth to the investing class.  All we have to do is ignore the MSM and bet against the retailers on both ends of the range.   

    Qs/JVest – Damn it!  That’s going to take me at least a year…

    UUP/Lol – It’s only bigger than intended because the Dollar went down 0.5% today and not up, right?  The May $21s are still .77 so taking your loss is one way to go.  It’s not a good ETF to sell calls against unless you are in a way longer time-frame. 

    DIA/Manimal – It’s important to set stops (mental) on the "let it ride" portion of you bet so you don’t give up too much of the gains.  50% is a good max rule of thumb.  At this moment, I would rather have the puts than .40 and, that being the case, I would rather spend .20 to improve to the $120.75 puts as well.  That gives you a nice speculative short position over the weekend with a lot of data coming next week.  Keep in mind there has been NO volume this week and these last 3 days (incl tomorrow) are about the biggest 3-day run of POMO we’ve had yet.  I’m still working under the theory that the hole in our pool has gotten bigger and that will be very obvious as soon as the ease off on the money spigot – even just a bit.   That’s why the end-game move here to put window dressing on the Q is to destroy the dollar – which pumps up the price of stocks and commodities so they can put it in their Q1 books and tell future investors how much money they made because no one sitting in a broker’s office comes with their own comparison charts to see what BS their returns are.

    Those are nice charts JRW, thanks!  

    Super Friends/Doro – I put that on for my kids and they looked at me like I was a total loser for having watched that.  It’s funny how lame the old cartoons are compared to what they are used to.  My little one (9) said "Dad, they don’t even match up the mouth with what they are saying!"  

    FAS/RJ – July is a long way away so I would first pay $1 to roll down to the $29 calls and then offer $1 to roll to the $27 calls  and IF that roll fills, then I would look to roll the caller to something that pays another $1.  That way, you roll down $4 for $1 and make up some by selling more calls and if you gain +$2 against your caller for each dollar you spend, you’ll be in pretty good shape when and if we ever do turn back up.  

    LKQX/Bob – Well I don’t know if the car parts are Goth or not but this is a very nice company overall.  I think GPC is a better company and what I don’t know is whether either one is going to have supply issues from Japan.   On both of them, I’d wait for a more catastrophic sell-off to get in.  

    QQQ/Lori – The other March contracts are quartelies (Thurs) not weeklies (Fri).  In the brackets on TOS it tells you how many days and also says Quarterlies and Weeklies right next to that.  & Q.  

    Silver/Pak – I’d be interested to know how that works out.  

    India/Strether – I think India is worse than China for finding out what’s going on over there.  I don’t like playing with things I can’t quickly find news on while sitting on the couch with my IPad.  We used to play the Indian Banks but the lack of proper information is very frustrating.  As a short bet – I think China is a much bigger bubble than India.  India doesn’t have a dozen empty cities and 60 empty airports littered about their country. 

    XOM/JBaker – I would A) Take the money and B) Run.  AFTER that, if you are still so foolish as to play XOM up from here on the premise that oil will go to $150 and all will be right in the World and XOM will become a $1Tn company – then you can just pick something like the 2012 $80/90 bull call spread at $4.50 with a stop at $2.50 so you risk $2 to make $5.50 more at $90.  If you don’t like that trade, which is $2.80 in the money to start – why would you be in this stock at all?  


  73. WTI down -0.40 to -0.59 …. USO doesn’t want to be red.


  74. Phil / $   There is no political will in Germany to bail out the falling PIIGS.  This could quickly get out of control.  Why isn’t the Euro sliding rapidly against the $?  I have a very uneasy feeling and I’m chaffing to get out my ‘short’ knife.


  75. Phil - HMY replacement – FWIW I’ve been reading a lot of gold articles at night and AUY lots of fans, plus dollar strikes…


  76. As you can see, nothing in the way of 1315 on S&P. (Chart from Pug)

    IWM 81.72 is the last resistance for the Russell

    The only thing holding us back is sudden dollar strength (if one can call it that)  8-)


  77. @JRW – WHat charting software/site do you use?


  78. 11:00 AM On the hour: Dow +0.63%. 10-yr -0.26%. Euro +0.75% vs. dollar. Crude +0.36% to $106.13. Gold +0.56% to $1446.10.

    11:12 AM Treasurys dip still further after the Fed buys $6.987B worth(maturing 2013-2015) of $27.260B offered by dealers – $4.9B for this month’s fresh new three-year PZ7. The 30-year yield +0.025 to 4.48%; 10-year +0.04 to 3.39%; 5-year +0.035 to 2.09%; 2-year +0.01 to 0.67%.

    12:00 PM On the hour: Dow +0.61%. 10-yr -0.26%. Euro +0.77% vs. dollar. Crude +0.35% to $106.12. Gold +0.6% to $1446.60.

    01:00 PM On the hour: Dow +0.53%. 10-yr -0.2%. Euro +0.6% vs. dollar. Crude -0.43% to $105.30. Gold +0.08% to $1439.10.

    1:06 PM The Treasury sells $11B in reopened 10-year TIPS at 0.92%(.pdf). Bid-to-cover ratio of 2.97, vs. a recent average of 2.79; indirect bidders take 25.2%, vs. a recent 44%. Direct bidders take 7%, vs. a recent 2.5%. 

    Treasurys are staying down after some decent demand in theTIPS auction; the 10-year yield +0.03, 5-year +0.03. TIPS breakevenswidened to 245 basis points with the new supply. Auctions next week: $35B in 2-year notes Monday, $35B in 5-year notes Tuesday, $29B in 7-seven notes Wednesday. 

    Freddie Mac says inflation numbers (mainly in food and energy) are helping lift mortgage rates, now 4.81% for the average 30-year fixed-rate loan vs. last week’s 4.76%. The average 15-year rate rose to 4.04% from 3.97%. 

    The era of cheap Chinese pricing is over says the CEO of Li & Fung, a supplier of product to retailers such as Wal-Mart (WMT) and Gap (GPS). As higher raw material and labor costs get passed on, William Fung calls it the "end of China-led deflation for the world economy."

    The Philippines joins the list of countries hiking rates to ward off inflation, boosting its benchmark 25 basis points to 4.25%. Inflation recently embarked on a new leg higher, jumping to 4.3% in February after averaging 3.8% in 2010. EPHE is flat, but -9.6% YTD. 

    The poor state of Japanese sovereign finance, interest rates already at 0%, and slower worldwide growth make Japan’s recovery from this earthquake more problematic than the 1995 experience, says Mohammad El-Erian, providing a compelling counterpoint to the reflexive buy-the-dip consensus.

    Fitch downgrades Portugal to A- from A+, citing "Parliament’s failure to pass fiscal consolidation measures and the resignation of the PM on 23 March." The euro keeps surging right through the bad news.FXE +0.6%

    The hope for a big U.S. wheat crop to take pressure off prices takes a blow from the worst drought in Texas and parts of the Midwest in decades, Additionally, beef prices could rise even more as the drought forces cattle farmers to reduce herds. JJG -0.1%COW +0.4%.

    Another one of our old favorites we’ll have to move on from:  IMAX (IMAX +12%) soaring after it signs a 75-theater deal with China’s biggest operator, Wanda Cinema Line, to start taking advantage of the disposable income coming from the country’s growing middle class.

    Mark Miller of William Blair gives a bump to his rating of Amazon.com (AMZN +3.3%), to Outperform – and downgrades Target (TGT) and Wal-Mart (WMT) to "Market Perform" – after comparing the websites and finding AMZN can keep up even with low-price performers because it carries so many more products than even Target.com and Walmart.com. 

    Apple (AAPL +1%) can keep riding the mobile wave to 50% sales growth over the next two years, says Forrester founder/CEO George Colony. In revenues, "they’ll be bigger than IBM next year, and they’ll be bigger than H-P (HPQ) the year after that," headed toward $200B.

    Three lunchtime reads:
    1) Commodity prices in pictures
    2) Beware the bond pundits
    3) The road to fiscal crisis


  79.  Tusca:  What’s your evidence regarding Germany bailout sentiment?


  80. The following are stocks up more than 4% with more than 10% of their float sold short.
    No. Ticker Short as % of Float % Change
    1 TLB 22.50 26.88
    2 GLUU 14.50 11.67
    3 QPSA 17.30 10.53
    4 ARIA 11.20 7.40
    5 OCLR 11.60 6.01
    6 CAR 17.70 6.01
    7 WAVX11.70 5.43
    8 AMRN 35.45 5.37
    9 CIEN 32.60 5.33
    10 MCP 22.70 5.32
    11 NTSP 10.60 5.31
    12 YONG 16.90 5.26
    13 CBEH 33.30 5.22
    14 VIVO 11.00 5.15
    15 MELI 13.60 4.66
    16 TTMI 12.40 4.62
    17 STEC 23.20 4.61
    18 GCO 12.50 4.57
    19 BYD 31.90 4.56
    20 GME 24.20 4.55
    21 SOLR 13.90 4.23
    22 OSBC 15.30 4.17
    23 ARUN 17.30 4.04
    24 CAAS 12.67 4.03


  81. Nice chart JRW!


  82. Nice little pullback on oil to $105 and silver to $37.25 – both giving up a whole 24 hours’ gains in 10 minutes.  

    Euro/Tusca – I can only conclude the move in the dollar is unnatural.  That’s why I refuse to react to it until it holds for a few days.  You can manipulate anything for a day or two but once you cross 3 days – things usually start to get real. 

    Not a good headline to be seen, so why are stocks up 0.75%today with every sector gaining? Art Cashin of UBS calls it the "Dorothy Gale rally," after the Wizard of Oz character – a little magic’s all you need. Looking out the window, traders don’t see tornado-whipped nuclear reactors and Libyas, but instead "Laszlo Birinyi, who hinted the yellow brick road that we call the S&P might be a longer road than many thought.

    AUY/MrM – I will take that under advisement.

    817.20 on the button in the futures JRW!  Thanks for list.  


  83.  i own AAPL May $355 calls at $18 and May $360 calls at $18.9.  Both are seriously underwater now due to potential iPad supply issues from the aftermath of the problems in Japan.  However, the international launch is still expected to go ahead this Friday and analyst have pegged their potential value to hit $420.  Should I hold till May or try to get out now?


  84.  


  85. Thanks Phil


  86. Good note from Barry on Demographics and the Labor Force:  

    I perked up when I got one of my daily WSJ alerts yesterday, as the headline really caught my eye:  Baby Boomers and the Labor Force.  Finally, the demographic theme that I’d written about hereherehere andhere – beginning well over one year ago — was going to get some attention.

    Except not so much.

    The Journal reports — as TBP readers knew long ago – that, “The recession has taken a toll on participation rates for nearly every group, with one exception — older workers. More people 55 and over are staying in the labor force, and the participation rates for older workers are the only ones that rose in recent years.”  A few of my graphs made that abundantly clear, especially the first one at this post.

    But while the CBO provides a laundry list of reasons for Boomers lingering in the workforce — see the Journal’s excerpt — I believe they totally whiffed on identifying the most important one (emphasis mine):

    About 65 percent of baby boomers age 60 and older believe that they can’t afford retirement, according to a new survey by CareerBuilder.com, the online job advertising site. That’s down from 72 percent who said the same thing last year — an improvement, but still a big number.

    It is disappointing that the CBO chose to ignore the devastating and ongoing consequences of the recession (decimated investment and real estate portfolios) and focus instead on “improved health” and “fewer jobs requiring physical strength,” among other things.  It serves as yet another stark reminder to me (as if I needed more) of what a tremendous disconnect there is between Main St. and Washington.

    (At some point I will update the graphs in the related posts.)


  87. Phil / HMY – Thx for that call!  big winner for me.  I was in the August ’11 $10 strike calls which I had uncovered on the dip in January.  Also sold the Jan ’12 $10 puts which I will prob hold until they expire worthless unless you have better idea to roll them up to $12.  Thx. 


  88. Phil – Thanks for the explanation, much appreciated.


  89. Phil / HMY - re my cost basis, I sold the jan ’12 $10 puts for $1.0 back in Nov.  Thx.


  90. Now gold drops $20 like a rock.  That’s why I love the smell of capitulation in the morning!


  91. RIMM  Any thoughts on today’s earnings?  My position is + 3 Jun 57.5 / -1 Mar4 65 ….wonder if I should sell another $3 in premium and go to 2/3 cover 


  92. Pharm / DCTH – seems to be holding $7 now.  would you uncover the calls?  I’m in the june 8/10 and sept  6/11 bull call spreads.  Thx.


  93. Pharm / AEN – moving nicely.  much bigger volume than the January move up.  looks like maybe we hold here, but volume was bigger a year ago and they did not hold.  what do u think?  any news?


  94. Well, it’s back into TNA; mixed signals for the last hour and a half !!

    Yesterday we got our pullback right back to the important 800 level, that was your buy signal:

    The Russell has been extremely helpful in marking turns and I continue to look to it when trying to determine market direction. It was the only index that made a higher low after the Japan crisis, and would have kept you in the game. Don’t underestimate Mr. Russell.


  95. This may be a better view :


  96. At least one person is listening to his investment advice…
    http://www.wired.com/dangerroom/2011/03/gadhafi-relies-on-glenn-becks-investment-advice/ 



  97. Phil I see you remarks on XOM above I am holding 5x Jan 12 55c for 13.46 long now 28.20 against 2xJan 12 72.5 sold for 5.63 now 12.67 and 3x Jan 12 c sold for 6.70 now 14.67 and 3x Jan 55p sold for 8.12 now 1.02 showing a paper profit of 5,720.00. It looks like you think XOM will go down again. Question shall I leave the position as is (let the tree still grow) as both short callers do have still good premium. thks


  98. VXX is poor instrument for bet vix rise, but very good for selling calls on buying put spreads panic days. I buy VXX may 35/30 put spread 2,5 and  today spread is up 50% one week later.


  99. That has to be the quote of the century:
    John Stossel on Fox: "Why is there a Bureau of Indian Affairs? … No group in America has been more helped by the government than the American Indians."
    Custer is ROFL! What a buffoon this guy is! 


  100. WMT really got a shot in the arm today up 1$$$$!!!! The middle class must have received an other bonus!


  101.  Phil – I am away from a PC tomorrow – what do you think about a cover for FAS APr 30 calls?


  102. Germany/ZZ – I didn’t think that was in dispute.  The German people are kind of like the Republicans – they don’t want to spend a dime bailing out other EU members.  

    That was a short trip to oversold:

    AAPL/CJJ – Ah, well you committed cardinal sin #1 of option investing – you are the sucker paying the premiums.  Don’t be that guy or, well this, is what can happen to you.  Down 50% is hard to "save" but AAPL is something you can stick with.  I’d start by selling the Apr NEXT WEEKLY $345s for $3.80 and spend $4.50 rolling both your longs out to the June $455s, now $14.85.  If AAPL drops below $340 – you need to sell the Apr $345 callers (now $8), buying back the Weeklys for whatever and take the extra $5ish and use that to roll down to the June $340s and so on and so on until you make progress.  Feel free to ask along the way as it’s a good learning experience if you can afford it.  Generally, any time AAPL moves up or down through a $5 bracket, you have a decision point.  

    You are welcome Strether.  

    HMY/Terra – I like them long term as something you can always sell calls against but $14.50/15 should be a short-term top.  In Jan, I would be thrilled to own the for $10 so no hurry to get out unless you need the margin.  Congrats on the position, very nice!  

    You’re welcome Manimal.  

    RIMM/Eph – Be very careful.  The probably sank a boatload of cash into R&D to keep up with AAPL so I would go with a bit more cover.  

    I think you are right on that RUT chart, JRW – it’s like the Dow one I drew on Monday and we are almost exactly retracing the entire drop, day by day, which means maybe gap up tomorrow to close the week with a big bang.  

    S/Randers – Book won’t do them much good if nobody wants to buy them.  I keep looking at them but can’t find a compelling reason to go long other than "maybe they get bought by VZ".  If they don’t get bought, they are probably screwed if the T deal goes through.  If VZ pays a premium for them just to pick up their share – it’s probably not a good use of $20Bn for them and I would rather roll the dice that T has problems and use $10Bn of that $20Bn to grab as many dissatisfied TMobile customers as I could.   VZ has 94M subscribers and the new T would have about 130M and Sprint has 50M, about 40% more than TMobile so cheap at $20Bn but no way VZ pays what T paid.  By comparison, AMX has 153M, Telephonica has 160M and VOD has 252M – those guys can afford to pay up for a US presence but, at over $1,000 per subscriber – if I were VZ – I would just give away IPhones with 3-year contracts to new customers.  

    LOL StJ! 

    He’s a conspiratorial madman with apocalyptic visions of his beloved country being internally subverted by traitors — traitors who must be expunged. His long-winded diatribes expose his arrogance and buffoonery. But Moammar Gadhafi’s similarities to Glenn Beck don’t stop there.

    KO/JB – Didn’t I just say that?  

    XOM/Yodi – Sure, I don’t think XOM is going to $60, just that $82 is a bit much.  On the other hand, you probably have as much profits as you ever will in your Long $55s at $28.20 so how about rolling them out to 2013 $80s at $10.20 and see if XOM calms down.  If they don’t and they pop $85, you can DD on the longs (still $8 off the table) and roll the short calls up to 2x whatever works.  The Delta of 2x the 2013 $80s is $1.12 so you can’t lose a penny to the upside once you DD so pretty low risk to take all that cash off the table.  

    Good use of VXX Pahurik.  

    Stossel/StJ – That is pretty amazing.  

    FAS/Yshen – Not high enough for me.  As the market is so pokey and as tomorrow may be a  gap up, I’d rather wait.  


  103. here comes GMCR almost back to even


  104. Speaking of VIX – back down to 18.  

    "Crony Capitalism Strikes Again" – by David Stockman

    Someone has to stop the Fed before it crushes what remains of America’s main street economy. Last Friday morning alone it launched two more financial sector pumping operations which will harm the real economy, even as these actions juice Wall Street’s speculative humors.

    First, joining the central banking cartels’ market rigging operation in support of the yen, the Fed helped bail out carry traders from a savage short-covering squeeze. Then, green lighting the big banks for another go-round of the dividend and share-buyback scam, it handsomely rewarded options traders who had been front-running this announcement for weeks.

    Indeed, this sort of action is so blatant that the Fed might as well just look for a financial vein in the vicinity of 200 West St. [Goldman Sachs (GS) headquarters], and proceed straight-away to mainline the trading desks located there. In fact, such an action would amount to a POMO [Permanent Open Market Operations] – so it is already doing just that!

    In any event, the yen intervention certainly had nothing to do with the evident distress of the Japanese people. What happened is that one of the potent engines of the global carry-trade – the massive use of the yen as a zero cost funding currency – backfired violently in response to the unexpected disasters in Japan.

    Accordingly, this should have been a moment of condign punishment – wiping out years of speculative gains in heavily leveraged commodity and Emerging Markets currency and equity wagers, and putting two-way risk back into the markets for so-called risk assets. Instead, once again, speculators were assured that in the global financial casino operated by the world’s central bankers, the house always has their back – this time with an exchange rate cap on what would otherwise have been a catastrophic surge in their yen funding costs.

    Is it any wonder, then, that the global economy is being pummeled by one speculative tsunami after the next? Ever since the latest surge was trigged last summer by the Jackson Hole smoke signals about QE2, the violence of the price action in the risk asset flavor of the week – cotton, met coal, sugar, oil, coffee, copper, rice, corn, heating oil and the rest – has been stunning, with moves of 10% a week or more.


  105. St Jean- I actually like Stossel( even though he was way better when he was reporting for Hugh downs and Barbara Walters on 20/20) and am going to have to disagree with you on this ONE point. What we our ancestors did 200-500 years ago to Native Americans was terrible, but that time has passed. the amount of special privileges they get is so far above and beyond what the average American gets it’s ridiculous. Fishing rights, health care, subsidized everything…. I grew up in a community next to a reservation and got to witness it first hand. Had a lot of good friends on the res, but I still feel it’s time to start weening them off the Govt and cutting back some of these special privileges…same thing with the reparations argument…. It’s BS… God i feel so dirty whenever I find myself on the same side of an issue as most republicans!lol.


  106.  KO/Phil – Yup!  I should have commented "As Phil has been saying …" before pasting the article and link.  Just adding more back-up to your case.


  107. Jrom – Most of them live in frakin’ reservations for cryin’ out loud… I am not even talking about 200 years ago! By the way, it’s more like 100 years but who is counting. I know, they have the casinos and all, but life expectancy for an American-Indian is probably 20 years less than you! I don’t feel that great about what France (and that was before my time, my dad fought in Algeria during the independence war – I mean against it) did in its colonies but similarly it has to leave some long term lingering effects.


  108. CAT is off in space, 20% of the Dow’s gains today at $108.50.  Imagine what will happen if they actually start building homes again!  

    Markets are celebrating Dollar not making it back to 76, now 75.87 after much contention at 75.95.  

    GMCR/Abel – What a day on those.  

    Indians/Jrom – Gee, I don’t know.  If China took over our country and took 99.99% of our land and handed out blankets infected with small pox to wipe out the Americans who were too peaceful to go to war, where they could use guns against our sticks to slaughter us – I think I’d still be a little ticked off about it 200 years later but maybe that’s just the way I hold a grudge….


  109. Europe / Phil – From The Economist:
    http://www.economist.com/blogs/freeexchange/2011/03/europes_debt_crisis_0
    And a quick conclusion from Kevin Drum in MoJo – as it is in the US, it seems that bankers are driving politicians…
    It’s easy to say this from a distance, but Merkel and other European leaders have their heads in the sand. They don’t want Greece, Ireland, or Portugal to default because that would mean big losses for banks in their own countries, which would then have to be bailed out. But they also don’t want to directly bail out the insolvent countries, because voters wouldn’t like that much. So they’re kicking the can down the road with half measures and hoping that somehow things turn up. It’s a recipe for stagnation at best and disaster at worst.


  110. All (specially matt)

    From Trader Mike:


  111. KO/JB –  If you are interested, here’s my October interview with the CEO.  

    Bankers/StJ – For sure.  I don’t know what everyone has against default.  We borrowed too much, we can’t pay it – end of story.  Next time – DON’T LEND US MONEY  - that is how we learn to live within our means.

    GMCR makes a nice, fresh entry on those $60 puts for $1.90.  


  112. Gee, what happened to gold. Not the dollar as it is stable. Maybe Gadhafy is preparing his exit strategy and selling the 145 tons he has stored somewhere…. 


  113.  Selling RSX on news of BP-Rosneft deal halt by arbitrators.


  114. 2:00 PM On the hour: Dow +0.62%. 10-yr -0.29%. Euro +0.69% vs. dollar. Crude -0.75% to $104.96. Gold -0.31% to $1433.60. 

    3:00 PM On the hour: Dow +0.64%. 10-yr -0.39%. Euro +0.66% vs. dollar. Crude -0.21% to $105.53. Gold -0.51% to $1430.60.

    Yemen President Saleh is negotiating a plan with the recently defected top military leader, Gen. Ali Mohsen al-Ahmar, for both to resign within days with power to be transferred to a civilian-led transitional government. Both men are intent on stopping any further bloodshed.

    If parts plants affected by the earthquake don’t get back online within 6 weeks, global auto production could be cut by 1/3, or 100K vehicles/day, according to IHS Automotive. Already, 13% of production is down, and IHS doesn’t see the largest impact until the 3rd week in April.

     New-vehicle retail sales show stability through the first three weeks of March, J.D. Power reports, and no sales drop due to events in Japan has been felt in the new-vehicle market. "In fact, retail sales in March may be benefiting from the uncertainty around inventory levels, as consumers flock to dealerships to secure their choice of vehicle as availability decreases."

    Best Buy (BBY -4.8%) had benefited from early buying on the back of better-than-expected earnings, but the stock tumbles deeply into the red after a disappointing conference call. Consumers are facing increasing pressures from unemployment and higher gas prices, which may lead them to curb spending, the CFO says.

    Gotta love those ADRs:  Ebix (EBIX -22.9%) is "not a Chinese fraud, but a house of cards nonetheless," a newsletter claims, citing several factors from a history of auditor turnover and accounting red flags to a "controversial CEO [who] appears to demonstrate a history of misrepresentation." Shares, which had hit 52-week highs this morning, plunge 20% in the past hour.


  115. Europe / Phil – And by the way, austerity doesn’t seem to be huge hit either. There are downward growth revisions everywhere (UK, Ireland, Portugal, Greece, France, etc..) now which means less revenues, which means more cuts, and on and on… It seems that we are caught in that death spiral and there is no way out!
    http://www.telegraph.co.uk/finance/economics/8403896/Moodys-warns-Britain-over-triple-A-credit-rating.html
    And A. Sullivan’s conclusion:
    There are two cycles possible here: spending cuts that restore confidence in a country’s fiscal health, leading to more growth and lower deficits; or spending cuts that depress growth which increases debt that forces new cuts. Britain does not have the luxury of a reserve currency to sustain the kind of long-term debt the US manages. But the data so far are not encouraging about the wisdom of short-term slashes in spending.


  116. Amatta, check out your FMCN $28 April calls (if you still have them) – they popped today


  117. optionsXpress reports:

    (UUP) Thursday. Shares of the fund, which track the US dollar against a basket of foreign currencies, hit new all-time lows of $21.62 a few days ago. Today, UUP is off 7 cents to $21.71 and one investor buys 100,000 June 21 puts at 16 cents per contract. The position looks opening (volume exceeds open interest) and a bearish bet on the buck. The contract is 71 cents out-of-the-money and, at 16 cents, has a downside breakeven at $20.84 at the June expiration, or 4 percent below current levels.


  118. Hello Phil, I have a losing position in BAC ( unhedged Jan 2013  10 calls). Would you recommend 1) holding and hoping that the situation eventually improves; 2) selling and waiting until BAC stabilizes and then buying back; 3) selling and moving the money to something like WFC, PNC, C or XLF (I have a large position in JPM already) or 4) something different? Thanks!


  119. Phil / Gold silver   I took your advice and held on to my shorts, what a call!  Larry Edelson is forecasting a big correction and has all his gold positions hedged and is shorting silver.


  120. Do you know any way to play on ‘higher level’ cars manufactures – like BMW?
    my friends in dealership says that they have fantastic rise in sales recently


  121. Wash, rinse, repeat, another $1.40  8-)


  122. Well, I may have exited too early again, but still 7% on the day !!

    Phil,

    I agree, a gap over would make sense; maybe 2 1/2% by EOD for SPX tomorrow ? !!



  123. Hello, is this on ?


  124. What is chasing money out of commodities all of a sudden?  Maybe just that they couldn’t break the floor on the dollar?  

    Silver back to $37 now, Gold $1,427, oil $105.07 (still a short below the line), copper back to $4.41 – as I said before – MADNESS!  

    RSX/ZZ – Will be a great play if oil fails.  

    Good article, StJ.  You can’t save yourself out of a recession – it’s ridiculous, especially when your major problem is debt.  Individual people can do that because their lack of economic activity and steady income means the formula can succeed but societies are more complex than that and cutting back on economic activities, even welfare, leads to further erosions in the economy, less spending by those who could previously afford it and even less revenues.  I learned this in Jr. High school economics but, unfortunately, they don’t teach economics in lower schools anymore (because it’s not on the SATs) and it’s an elective in College. 

    UUP/Lol – Maybe he was selling them short?  

    BAC/Alik – There’s that word "unhedged" coming to bite you in the ass again!  I haven’t liked BAC for a long time – ever since the started acting guilty about whatever WikiLeaks might have and then, when it turned out to be nothing, their stock still didn’t improve.  So I would go for XLF if you are only going to have one bank play.   The 2013 $13/17 bull call spread is $2.30 and pays back 174% if XLF gains 5% by then – that’s a fair way to play.  Of course that can be offset with JPM 2013 $25 puts at $1.30 to knock the net down to $1 with a $3 upside.  

    Silver and gold/Tusca – Nice job hanging on!  

    BMW/Lol – You need to go for a foreign exchange.  Not hard if you are motivated.  Ask your broker – they might have them.  

    Excellent job today JRW and right back at 817.20 again.  Not 2.5% tomorrow but 1.25% very possible as a gap – later in the day – who knows – they need a big finish for the Q next week.  


  125. on/JRW – tapping and blowing is the accepted protocol. followed by squealy feedback.


  126.  Marc Faber is bullish on Japanese stocks amid the reconstruction work that will be needed: "the government will have to monetize, will push money into equities." He also sees Middle East turmoil as a boon for gold, oil and other commodities, given his pessimistic view of the situation, and think U.S. stocks have begun a correction that could culminate in “a more significant setback in May, June."


  127. JRW
    I almost feel like I am failing compared to you, but oonly down 2 days in a month is way better than last year. I got out at 80.81, another good day. Join me for a scotch!


  128. That was IWM 81.74 out so we beat the 817.2 and then sold off. !.25% tomorrow, did you get that program PHIL?


  129. @JRW – I have been trying to follow you today.  Could you summarize the buy/sells you play off of the RUT chart/levels


  130. JRW – Great charts, very helpful. You going to hold any longs overnight for a gap open or is cash the better play?


  131. $25KP:

    FAS – let’s sell 40 NEXT WEEK $30 calls for .50 and roll our 80 Apr $32 calls down to the $31s for .30 so net .05 per long to improve ourselves.  


  132. Manimal
    I am 100% cash but hope to buy on open although it might be TZA first.


  133. UNG recommended 2013 4/7 call vertical aready looking good.


  134. UNG/Drum – That’s a good inflation hedge.  

    The CME hikes margins on silver by more than 5%, trying to keep a lid on speculation after a spectacular move in which the metal has risen 40% just since February. Silver falls $1 after hitting another post-Hunt Brothers high earlier today. SLV -1.2%SIVR -1.1%AGQ -2.1%.

    Caterpillar (CAT +1.7%) notches another 52-week high after saying it will invest $5B in expansion of its production capacity, centering on a near-tripling of machinery production in Asia; "they need all the things we make, and we’re in a position to provide it," CEO Doug Oberhelman says. Also, Jefferies raises its price target on the stock to $125 from $120. 


  135. jjflash

    I believe I posted everything, but if I did not, please ask a specific question.

     

    Manimal

    The only positions I hold overnight are mid-term option plays (with rare exception) and I refrain from posting those as I am not the expert at options, Phil is !!


  136. Thanks JRW/Shadow.  Cash is king.


  137. Damn, missed the FAS cover and roll before the market closed.  That’ll teach me to eat lunch ;(
     
    Hopefully I can get close in the morning as the plays aren’t filling at the moment


  138. Phil/St Jean- I understand your points but there comes a time where enough is enough.. since most of the people in this nation cannot trace their roots back to the people who committed these offenses I really don’t feel that we should be paying…

    Anyways, I hate this market and the puppetmasters pulling the strings!


  139. daveo
    First rule, never do anything while day trading! Hungry is better.


    • shadowfax (premium)

      daveo
      First rule, never do anything while day trading! Hungry is better.

      And always keep an empty cup by your desk  8-)


  140. @JRW – Sorry, it was an open ended question. 
    I went back and studied all charts/times and your messages.  It’s more clear to me what you did and when.  Do you generally buy the TNA versus IWM?  Also, do you generally buy options versus actual ETF?


  141. PHIL
    FAS 25kp .  I did the 40 Wk1 30 call coverfor $0.50 , but didnt get a fill for the roll of the 80 Apr 32 to 31. Should I live the order in for Monday?  Thank you


  142. JRW
    That is why I fire up the laptop, WIFI "N" works over 200 yards, to bad it’s small. Maybe I should design that triple folding large 3 screen that Phil wanted, maybe you need one too.


  143. jjflash,

    Please read this, and then I would be pleased to answer any question.


  144. Do you guys know how to make this page to refresh automatically . I’m setting in front of the computer all day long clicking the refresh bottom hundreds of times but I often miss Phil’s trades by minutes. Is there some solution to this problem other than clicking 1000’s of times? Thank you


  145. shadow / WIFI

    Thanks, but I don’t want to be in a position of choosing between order entry or toilet paper  8-)


  146.  cnarbais – what browser are you using?


  147. cnarbais
    I stumbled on it, don’t remember how last year but really it sucked! Kept refreshing while reading, trading, and yes it did loose me money. I also have turned off all automatic updates, same reasons. For some reason Phils posts almost always come later than stamped. I’m hopeing when he loads Windows 7 it will be better.


  148. JRW
    Never thoought of that problem, thanks for the warning! Today I missed 2 buys because I can’t bring the charts with me. I have only sold in the can!


  149. NFLX getting hit?


  150. More homework for tomorrow:


  151. TASR popped 7.5% today! Not that anyone noticed….   :)


  152. Shadow fax / Nicha
    I use internet explorer. Thank you for the advice Shadowfax. It is very annoying to see the trades go away from you and thinking that it is always ones fault. There should be some software or something to make refresh the page of your choice only. I think of using a second computer just for this page and setting it to refresh automatically, that might do the trick . Thank you again


  153. stoessel / sjeanluc – MIssed this one earlier, my gosh what an idiotic thing to say. Reminds me of when Barbara Bush remarked after Katrina refugees moved en masse into the Houston Astrodome, that "so many of the people in the arena here, you know, were underprivileged anyway, so this is working very well for them." Must be something in the air these people breath up there from where they look down on the world.
     
    http://editorialcartoonists.com/cartoon/display.cfm/6066/


  154. cnar – There is an auto refresher available for IE.
     
    I use Chrome and the refresher for it is awesome


  155. Police forces seem to like the TASR camera. It makes for some interesting videos
    as well.


  156. cnarbais
    I use inernet explorer 9 now much faster, it did work on erplorer 8. Too many computers involves too many keyboards and mice, if you can add another monitor you can run multiple explorers, I use 6, one is Phil and the dollar, the buck is auto refresh split screen 2 IE9s Phil gets most of it on overlap leaving just the current dollar.


  157. That’s 6 monitors and a laptop to eat or go to the bathroom, I only turn on the laptop when I can’t watch the big system.


  158. randers
    If your stopped by the cops remember you may be on camera with full audio, got to be cool now, they use them in the RED States!



  159. JRW
    Thanks I only check the trends on weekends. Looks like we could take it out tomorrow.


  160. Shadowfax,
    Do you need any special hardware to support multiple screens. I have a laptop (dell) with windows 7(ultimate) and intel i7 chip with 12 GB of ram. Not being a tech guy like you, how do you set up something like that. Granted, my ISP is Verizon (DSL), but do have plans to get on Comcast Cable soon. Got to make some steady gains like you and JRW to finance this rocket launcher you keep referring to.
    Thanks 


  161. Been gone for the rest of the day in meetings and I see that they continue the relentless ascent …. RIMM gives subdued forward looking statement, and still the market moves up.  Commodities are eating into the bottom line, market moves up.  People aren’t buying houses, market moves up.  That makes sense.  I don’t care about inflation if stagflation is underway, as my earnings are not going up….so someone is going to bite the bullet…..Oh, and that spike up in the /ES, /NQ – what was that?

     

    High yield bonds continue to go up.  Why is that if the ‘market’ is a better place to be b’c of forward P/E > historical average.  I still don’t get it Phil.  Inflation is going to inflate the market…when the little people can’t afford to buy things?  IF we had wage inflation, yes….but I don’t see it.

     

    Vet med is a huge business opportunity now as people are treating their pets like little humans.  I am starting a vet med business…..people aren’t going to be able to pay for their own meds, but they sure as hell will pay for the animals.  (I really am starting one …. so stay tuned)

     

    Ok, done with that. 

    • DCTH – I am still 1/2 covered.  But I bought a lot more on their dip.  That one is going to make me or break me – much like ARNA. 
    • CRIS moving back up and holding that $3 range.  Looking for 4.50 or so over the spring. 
    • CERS – see CRIS, although -50c. 
    • ARRY – I am trying to find out when their data comes out, but I do know that big pharma and mid-tiers are swirling around them for different projects, so we need to stay nimble on that one.
    • NWBO – holding that 35-40c area. Looks like they will get the 40c for the offer, so I would DD on dips into the 30s.
    • DEPO – new article on them here.  I think they are a nice winner and move up to 15 by year end. As a new play I like the stock with the Sept11 10/9 C/P strangle for 2.60 or better.  That is a nice 15% off our current price.
    • IMGN – on track.
    • OPK – Up after our DD.
    • IRWD – on track.
    • MNTA – on track.

    I think that sums up most of my positions.

    AEN is up 10% b/c Ashely Bush joins SAB?  Oh, wrong Bush.  He is a neuroscientist.  OK.  Anyway, not really interested in them, as the pipeline is less than stellar in my mind.  Zinc for a main product? Talk to the makers of Zicam (MTXX).


  162.  nicha
    I also use Chrome and just installed the re-loader you referred to. Every interval setting reloads the page to the top of the page and not to where the cursor was when the reload started. This is more trouble than it’s worth unless there is a fix?


  163.  nicha
    I withdraw my comment, something just corrected itself and it seems to work fine.
    Thanks for your input


  164. At the close: Dow +0.7% to 12171. S&P +0.94% to 1310. Nasdaq +1.41% to 2736.
    Treasurys: 30-year -0.57%. 10-yr -0.46%. 5-yr -0.32%.
    Commodities: Crude -0.46% to $105.26. Gold -0.45% to $1428.50.
    Currencies: Euro +0.62% vs. dollar. Yen -0.19%. Pound -0.74%.

    Market recap: Stocks pushed higher as investors again looked past the litany of global problems, focusing on strong earnings from tech firms and better-than-expected jobs data. The euro rose to four-month highs even as Portugal’s crisis simmers. Crude oil settled lower after topping $106; metals slipped after notching highs. NYSE advancers led decliners nearly two to one.

    A former programmer at Goldman Sachs (GS) accused of stealing code got a longer jail sentence than a man convicted the same day in the attempted rape of a 16-year-old girl. The harsh sentence underscores uneven justice; Dave Weidner advises future thieves that "these things are better done from the top. Landing a spot on the Goldman board might be a good start." 

    Speaking of the Gang of 12:  The FT reports Barclays (BCSas a focus in the LIBOR-fixing probe being conducted by banking regulators. At question is whether the bank’s traders and treasury department violated the "Chinese Wall" prohibiting certain groups from sharing information. CUBS, and BAC have also received subpoenas. 

    Breaking with tradition, Bernanke will hold press conferences four times a year after FOMC meetings, the first coming April 27. No amount of transparency is likely to make Fed tea-leaf-reading any easier, but at least the move will put the Fed in line with its European and Japanese counterparts. 

    It looks like the IMF has finally gotten the memo, declaring in a blog post that government bonds are not the risk-free asset they once were. The main implication being that sovereign paper now assumes the characteristics of a credit instrument – the price mainly reflects probability of default.

    Some top Republicans in key tax positions in both houses of Congress are reluctant to push a tax holiday advocated by Cisco (CSCO), Google (GOOG) and others to repatriate foreign cash hordes. Rep. Dave Camp, Sen. Orrin Hatch and Rep. Patrick Tiberi prefer to focus on repatriation through "a comprehensive look at rewriting the U.S. tax code." 

    Ten former chairman of the White House Council of Economic Advisers from both parties call for tackling the long-term budget deficit: "There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention." 

     

    With the situation "deteriorating," the military says airstrikes havefailed to loosen Gaddafi’s siege of  Misrata. The city faces a humanitarian emergency as loyalist forces cut off water, electricity, food, and medical supplies, take control of hospitals, and position snipers throughout the town. 

    In a deal to be sealed shortly, NATO agrees to take overcommand and enforcement of the Libyan no fly zone from the U.S. The U.S. will have just limited participation in the so-called Operation Odyssey Dawn going forward.

    Research In Motion (RIMM): Q4 EPS of $1.78 beats by $0.02. Revenue of $5.56B (+36.2% Y/Y) misses by $0.08B. Gross margins of 44.2% vs. 43.5% consensus. RIM sees Q1 EPS of $1.47-1.55 vs. consensus of $1.65, noting customers are shifting to lower-priced models. Shares -10% AH. (PR

    Research In Motion (RIMM) hits targets for EPS and shipments, but weak Q1 guidance crushes shares AH. In an unusual move, RIMM also offers full-year guidance, and those numbers look good – and that could be the problem, since investors may not believe RIMM can hit its lofty full-year projections in light of its weak Q1 forecast. RIMM -10.8 AH. (live analysis

    Darden Restaurants (DRI): FQ3 EPS of $1.08 beats by $0.03. Revenue of $1.98B (+5.7% Y/Y) in-line. Shares +1% AH. (PR)


  165. cslanson2
    Downloaded the refresher but how do you make it refresh PSW ? thks


  166. Sorry, DEPO link.


  167.  Yodi,
    Until now, with Windows-7, I right click and his "refresh" which reloads the page and brings me back to where the cursor was before. With the reloader it comes back approximately back to where I left off.  Go to the "wrench" icon on the top right hand area of the screen and click the circular icon to the left of it to set the time intervals.  If you are going to type a message like this however, you should disable it first because you will lose all your typed content when it refreshes and you haven’t sent it.


  168. cslanson2
    Thanks on this computer I do have Window XP I do not see a wrench icon but on the right I see the time setting and on off I set it to 1 minute but nothing happens. any idea thks


  169. jasu1
    You need to check with dell on direct connect, the power supply may burn up. There is a device that plugs into a UBS port that doesn’t overload the power supply. I’m not sure who makes it, it may be available through the Apple on line stoore. That will maybe start you in the right direction I foud it on the web but it was a year ago about when I tried an IMAC that I didn’t keep. I do remenber it included software, another issue, you could stack them to add many screens. I bought parts from newegg and tiger direct, tiger has a 800 help line, newegg is cheaper but very lame in help, web only. It may have been either of them also, sorry I don’t remember what I don’t need. If you want to build a desktop with PCI express cards, I can save you lots of trouble by not double buying things like power supplies and motherboards. Let me know what you find and decide, I will remember this time, Good luck!


  170.  Yodi,
    Unfortunately, I no longer have an XP machine as I’ve upgraded everything to Windows-7 so I cannot replicate your situation.


  171. @jasu1
    "….Granted, my ISP is Verizon (DSL), but do have plans to get on Comcast Cable soon…"
    I have VerizonFIOS.  Why are you switching to Comcast?


  172. cslanson2
    Thanks for trying


  173. cslanson2
    Well I got it I had to put PSW in to the google webpage than it works great thanks


  174.  flipspiceland,


    One of those irritating things in life….No Fios available in the Wyomissing, PA area, but they keep advertising and sending out mailers in the Reading Eagle. So, after 10 years with Verizon DSL, to move up in speed, I’ll have no choice but Comcast…. out of the frying pan…….etc.


  175. FAS/Daveo – Hopefully we’ll gap up and you’ll be better off.  I just thought it was silly not to protect ourselves with what is essentially a free .50 but we are giving up our upside over $30 (we should be so lucky).  Meanwhile – if you are short-term trading and you plan on missing ANY of the last hour of trading – eventually that will bite you in the ass.  I generally eat lunch at some point between 10:30 and 2:30 – only when it’s slow and, when I say lunch, I mean something from the fridge that can transferred to my desk in 5 mins or less!  The way JRW trades, you do need an empty cup or a catheter…

    Enough/Jrom – I think proper reparations were never made, that’s all.  Maybe now they have with casino tribes as that’s pretty much the same license to print money the Fed has – you can’t ask for more than that.  

    Roll/Cnar – It’s a dangerous trade without the roll.  If it was .31 or .32 it would have been worth it vs selling the short puts out of position so yes, do make the roll tomorrow.  

    Folding laptop/Shadow – Looking at the screens on the new IPad – that’s all we need – normal main laptop screen and the ability to clip on or even stand next to it tow IPads that are treated as monitors on the same mouse and keyboard (they come with their own stand now).  So now it’s a simpler issue – figure out how to slave 2 IPads as aux screens to a laptop.  That would be very cool, you could have a decent trading set-up anywhere you go…  

    Refresh/Cnar – I just hit the F5 key when I’m ready to read more.  Also, the main thing I do that I find useful is I have one window (tab within a window) open that I comment in – so the box is always there – and another window (tab on a different window) that I run chat in.  That way the chat is always tabbed to wherever I stop reading and I hit F5 whenever I am ready to read the next batch of comments (at the end of the scroll down).  Also, it worries me that you click and click looking for trade signals – you should concentrate on learning what those signals are and watching the charts yourself and then, when we get near an inflection point – that’s when you should say: "I bet Phil or JRW are saying we should make a move now" and the reading should CONFIRM what you expect.  It will take time but you’re not going to learn much if all you do is wait for someone to tell you what to do.  

    Later than stamped/Shadow – By how long?  That’s not going to be fixed by my browser as I’m just using the same on-line box you are and I hit submit and a second or two after I hit submit it’s right there on the Web.  I’m pretty sure that’s totally independent of the browser.  Maybe you live a few minutes further west than you think?  8-)

    SPY/JRW – Oh dear, that does look like it’s going to pop, doesn’t it?  

    TASR/Jvest – Another one of my sleeping beauties!  They got another nice order and they’re doing a share buy-back. 

    Good cartoon Pak – I never heard that at the time. 



  176. Sorry again about the size !!


  177.  Hi Phil,
    Just want to thank you for your advice on XOM and oil earlier.  I’m out.  Got some cash now for a dip or other ways to ride the rising tide of inflation.


  178.  cslanson2 – click on the ‘Permalink’ link and then reload. You will be reloaded to the last post.


  179. There you go JR.  When you paste in the picture, you can specify the size (width) in the past window before closing. I always choose 600 or 650, then the depth will resize automatically.


  180.  A big WTF to end the day, and futures of course are GREEN.


  181. Phil:
    I have a buy/write on HRB. Stock at 12.75 (now $16.50) and sold 2012 calls at $2.2 (now at $4.65). The calls only have .65 premium left so I am looking at the 2013 $15′s for $4.10. I have already collected $200 on sold puts and will probably do another round of those later (for balance reasons). Do you see a better move on the sold calls? Would appreciate your thoughts.


  182. cnarbis:
    don’t worry too much about jumping right in when Phil suggests a play. Someone a week or two ago – I think it was lflantheman – pointed out that you can often do better by waiting a day or two or even longer. Put in a GTC bid, say 10% under what Phil suggests; you’d be surprised how often it’ll fill if you wait a bit. And be careful about the tendency to jump in immediately. Some of us were doing that at the start of the 25KP, and that’s like blood in the water for the trade bots; they’ll be all over those bids. So spreading those trades out works out better for everyone.


  183.  I know currencies are not a favored trading vehicle, but  I’ve been messing with them since Soros & sterling, so I’m familiar with ‘em.  They are not macroeconomically predictable but are loyal little trend followers once they get up a head of steam.  Looking at Swedish Krona vs. Euro and/or Dollar for up to 6 months.  I’ll split between the two.


  184. Buy/Write vs Collars – Phil, I have been reading Garreth’s book and he highlights collars (buy ATM put, sell OTM call) when buying a stock. I understand your favored play is the buy/write (sell ATM put, sell ATM call) when buying a stock. Strikes me that the collar is more conservative (no obligation to buy another load of shares if price is lower for example).  Are there situations where you would prefer a collar to a buy/write?


  185. P.S. – Gareth’s book being "Secrets to Tame Volatile Markets Exposed" by Gareth Feighery, aka OptionSage.


  186. Phil/HMY,
    I bought 600 shares @ 10.67 and sold 6 Jan 10 puts + later sold 2 more puts for average of 1.12 – now .40. Sold 6 Jan 10 calls for 1.86 – now 4.65. What would be the best way to deal with it now? Thanks


  187. Size matters/JRW – You can add a link to the chart you post to the full-sized version.  Just click on the image and add the link.  

    You are welcome JBaker!

    Depth/Pharm – No wonder your images are in 3D and mine aren’t.  8-)

    HRB/DC – I’m going to guess those were $12.50 calls you sold.   How about you buy 1x the 2013 $17.50 calls for $3 and roll the caller to 2x the 2012 $15s at $3 so it’s net $2 out of pocket and you push your callers into 50% premium.  If HRB keeps going up, then probably the 2012 $15s can be rolled to the 2013 $17.50s, cancelling 1x out but you will net another $2.50 to the upside.  Meanwhile, you remain well protected and maybe you do it again in 2014 and roll to $20 down the line.  Picking up $2.50 a year off the $10 basis is not a bad way to go!   Also, on puts, If you don’t mind owning 1x more HRB at net $10.20, there’s no reason not to sell the 2013 $12.50 puts for $2.30.  I know you want to wait for a pullback but what if there isn’t one – by having 2x the $15 puts, you have pretty good protection, especially if you stop out the long calls on a move below $16 (you can add more long calls to offset the puts and flip it to a bearish spread).   

    Actually, as a new position, HRB is very attractive at $16.47.  You can sell 2013 $15 puts and calls for $7.70 and that nets $8.77/11.89.   You can also do a nice artificial buy/write with the 2013 $7.50/15 bull call spread at $4.80, selling the $12.50 puts for $2.30 for net $2.50 on the $7.50 spread that’s 130% in the money and your worst case is you own 1x of the stock for $14.80 and the break-even is $11.15 on 1x (because you have the $7.50 calls).  TOS says net margin on the put side is just $137.50 so that plus $230 cash is putting aside $367.50 to collect $750 as long as HRB doesn’t fall more than 10% by Jan 2013 expiration – not a bad way to go for a double.  

    Very good point Snow.  

    Krona/ZZ – I think CAD is still safer.  Notice this evening’s very strange flatline on all currencies.  What’s up with that?  

    Collars/Scott – I am not a fan of collars myself and that book was written when markets were more normal than they are now.  A collar is preferred if preservation of capital is your primary concern but you forfeit pretty much all of your upside.  Looking at the above trade on HRB, you can do a buy/write that makes about 80% at $15 and has a 2x commitment at $11.89 or you can do an artificial that makes 95% at $15 with a 1x commitment at $11.15 or you can do a collar of say buying the stock for $16.47 and selling the 2013 $17.50 calls for $3 and buying the $17.50 puts for $4.50 and you are in for net $17.97 and you are guaranteed to lose .50 but at least you can’t lose more???  Why would you do this unless you were getting some incredible dividend.  This is a great example of the old adage – you have to risk money to make money.  I’d rather take 10% of what I was going to waste on a collar and go for the 100% (10% on the full amount) and keep the other 90% in cash than tie up my money in a trade that is guaranteed to do nothing but tie up my money for 2 years. 

    HMY/Jomp – Well the puts are toast at .40 and you can count that as money in the bank and roll the $10 calls to the 2013 $12.50 calls for about .60 and once the Jan puts expire you have your whole $1.12 there and then you can sell more 2013 puts and roll the caller up to the $15s if things are still going well. 


  188. Phil,
    On the HMY roll to 2013 12.50′s you suggested at .60, I see it cost 1.95. Am I missing something or do I roll at that price? Thanks


  189. Levels Update from Elliott:


  190. @jasu1
     
    whew..thx…thought I had to switch.


  191. Good morning!

    HMY/Jomp – I see the 2012 $10 calls are $4.40 and the 2013 $12.50 calls are $4 so that’s net .40 to roll them, I can’t see any possible way you can get a quote of $1.95 and I would seriously consider switching brokers if that’s the kind of spread they try to get you for.  ALWAYS look at the last sales on rolls and NEVER pay the spread between the ask of your caller and the bid of the longer call you want to roll him to, which is how most systems quote it but, even if you did on this one, it would still be $4.90/$3.30, which is $1.60 (still outrageous) vs. the lasts of $4.40/4 so, WORST CASE, you should be paying somewhere in between the two at about $1 but I would generally split the $4.40/4.90 bid/ask on the Jans at $4.65 and then split the $3.30/4.20 bid/ask on the 2013s at $3.75 and that would be THE MOST I would offer but, since the lasts were .40 apart and there’s no emergency at all – there’s no reason to think you can’t get a fill at .60 if you are patient.

    When are you likely to get the roll?  The short calls have a delta of .82 and the longs .67 so you have the advantage when the stock is moving down.  If I were trading it and calling a top like I did yesterday and I wanted to be aggressive, I would sell the 2013 $12.50s at what I believe is a top (and someone did sell them for $4 yesterday) and then I would keep a very tight stop on the 2012 $10s (which did sell for $4.40 and $4.30 yesterday) and play the short Jan $10s like a momentum play and try to buy them back as cheaply as possible. 

    Running a trade like that is something you do IF YOU HAVE TIME.  So, if your other trades are under control and you think you have a good opportunity to improve your position in one stock that has gone way up or way down – this is a very good thing to do, rather than mess around with other random day-trades.   


  192. Hey Phil, the What’s up with that video reminds me of some of your discussions with conservatives!!  They never had a chance!!  Just kidding! 


  193. I don’t know exactly why but that is my favorite thing on SNL.  I guess it’s the random silliness of the thing but I especially like the white guy in the jogging suit who leaps in from the side and dances like a maniac the whole time.  The sound quality on Hulu is great too – blows YouTube out of the water.  I can’t believe they can’t do a better job marketing that thing.  


  194. Phil, 
    AAPL making a nice comeback! I have AAPL naked Apr 350 C’s (net 10.30) and the June 340/360 spread… would selling some premium (next weeklies) be in order?