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Thoughtful Thursday – What’s Our Money Worth?

How low can we go? 

I made a bottom call on the Dollar at 73 (and a top call on the markets) last week, not because the Dollar is strong but because the alternatives aren’t so hot either.  While we have dipped a bit below that line, we are in serious danger of recovering now and I say danger because – as I have pointed out in Tuesday’s post and discussed yesterday as well and as we have long been discussing in Stock World Weekly, the recent equity and commodity gains are nothing more than an illusion based on the fact that their value has been calculated in an ever-weakening dollar.    

This is not a small correlation – this is almost an exact correlation between the Dollar (using the UUP ultra-ETF), the S&P (red), oil (green) and gold (gold – that one worked out).  I couldn’t put silver (SLV) on the chart because silver is up a ridiculous 120% in the same period and distorts the rest (was 170% last week) but you can view that set here.  Note how we’re pulling back this week just because the Dollar STOPPED going lower – what will happen if it actually goes higher?

As I pointed out on Monday, silver was beyond ridiculous when you look at it in terms of the value of your home. The "value" of your home has dropped 78% when priced in silver in just 3 years. Are we to extrapolate that in 3 more years you will have to accept an pound of silver for your home?  Surely you have more silver IN YOUR HOME than that!  

Homes are something people NEED, food is another thing people NEED, fuel is something people WANT, while metals are things people DESIRE.  Thus, as we move from NEED to DESIRE, prices are able to get less and less realistic.  This is, in part because we do not have enough metals or even fuel to fulfill everyone’s desires but food is grown and houses are built as the need arises.  Yes there are occasional gluts and shortages but, Malthus aside (and, over 100 years later, can we finally put that aside?), we make enough stuff to fulfill people’s needs – most shortages are a distribution problem – including starvation in Africa, a problem that was addressed accurately by the late Sam Kinnison:  

Of course pricing, supply, demand, production, etc. is all very complex – I hear they have entire Masters programs studying this sort of thing but, unfortunately, something goes very, very wrong in these schools because the only thing you can count on when you survey Economists is that none of them will have a clue about what an economic number is going to be. In fact, you would think that these jokers actually have a degree in Bistromathics rather than Economics, the way they routinely miss EVERY SINGLE projection on EVERY SINGLE economic data point.  

Gold Certificate SealAnyway – so what is the VALUE of a Dollar?  The Dollar, like all World currencies, is a "fiat currency" which is a fancy way of saying "totally bullshit."  No one likes to talk about this (except gold bugs) because, to the average citizen, this is a fairly shocking concept but the money you have in your pocket and all those digital Dollars, Yen, Pounds or Yuan you have in your bank accounts are nothing more than arbitrary numerical records of transactions and each individual note is literally not worth the paper it is written on OTHER THAN the faith you have in the issuing government not to "cheat."

After World War II, the Brenton Woods Accord fixed the value of a Dollar at 1/35th of an ounce of gold and other major currencies had similar fixes.  The Dollar became the global reserve currency because Europe (including Russia) and Japan were effectively broke and has massive rebuilding to do (so deficit spending) and China, at the time, was a non-entity while the US was able to do massive stimulus spending on infrastructure, which provided millions of jobs and paved (literally) the way for decades future growth.  

Unfortunately, in the late 60′s, the US went to war in Vietnam while, at the same time, Nixon cut taxes, this quickly snowballed into a disaster that made it impossible to maintain the Dollar peg to gold as the amount of gold in US reserves (Fort Knox, etc) fell from 55% of the amount required to cash US currency at 1/35th of an ounce to just 22%.  Washington’s solution to deficit spending at the time was to print more money and we quickly got into an inflation spiral to which Nixon reacted with wage and price controls as well as a 10% import surcharge to help balance our Trade Deficit (also made worse by the weak Dollar).

As the war dragged on, the money kept going overseas and gold began to skyrocket to the Dollar, running from $15 an ounce in 1969, when Nixon took office, to over $70 an ounce in early 1973 and, at that point, Brenton Woods collapsed (the "Nixon Shock") and the S&P 500 fell from 120 in January of 1972 (the market was in a huge inflationary rally) to 63 in July of 1974 (down 48%).  Keep in mind this was THE SAME THING that is happening now:  Tax cuts 1968 (108), market crash 1970 (70, down 35%), money printing, inflation and market rally 1973 (120, up 70%), followed by another crash back to 60 over the next 18 months (down 50%).  It’s a good thing we learned our lesson and would never do that again, right?

So that’s the background to where we are now.  I’ll have to finish this discussion tomorrow, or mainly on the weekend as we try to determine the "right" value for our currency but, at the moment, it’s a game of relativity.  It has been apparent to us for most of April that Japan, China and Europe are in no better shape than we are and we pressed our short bets in the $25KP last week and took many disaster hedges to cover a RISE in the Dollar, which we though would be catastrophic for the markets.  

Don’t forget UUP, which has an almost even correlation to the S&P and oil, is an Ultra ETF, which moves 2x to the Dollar so a very small move in the Dollar of 5%, can send UUP 10% higher – if the correlation remains intact, we’re looking at a 10% S&P correction off a 5% bounce in the Dollar, back to 76.65.  If the Dollar recovers to 80 – the S&P can wind up down 5% for the year all of a sudden.  

As we expected, the ECB did NOT tighten rates – they can’t, for reasons we have discussed for weeks in Member Chat.  Not only that but Trichet gave no indication that he would be raising rates soon so the Dollar bears have almost nothing to hang their hats on – other than the very pathetic state of our own economy.  German factory orders fell 4% in March vs a 0.4% gain expected by "Economists" but a 1,000% miss is par for the course in "the dismal science."   

We are going to have a weak open and, if the markets don’t recover during the day, we’re going to have a big problem in the morning as the Nikkei has been closed since Monday and will reopen tomorrow with the Yen under 80 to the Dollar and 82 is about the level that causes exporters to go into a dive.  Not only that but the Nikkei closed Monday MORNING from our perspective so the last they saw, the Dow was at 12,900 in the futures so down about 300 as of this morning means we can look for a similar snap in the Nikkei down from that critical 10,000 mark – a gap down rejection that will not sit well with the technical traders after their silly gap up to hit 10,000 on Monday.  

In fact, if people see that, they might get the impression that these market movements were bullshit….

Be careful out there! 


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  1. Phil/Dollar Bottoming
    If your right……how bad do you think the equity sell off will be? 
    Perhaps it will track the advancing dollar, however, panic and fear seem to multiply the downward trends… will it outpace the a dollar advance?

  2. Phil, 25K USO, DIA, and FAS.  I will be out of town tomorrow afternoon until Wed night, with very limited access to making trades.  I understand I should go fully covered (neutral) by selling puts.  Am I better selling next weeks weeklies or going out to May? USO 42? FAS 29? DIA 124? What about XRT? Thanks.

  3. Phil—what is your prediction on PCLN earnings tonight? The weak dollar should help them but their stock has gone through the roof leading up to the report. Will they pull a CMG/NFLX or a GMCR???

  4. Phil/anyone — A few weeks ago I sold EDZ Oct $18 calls for $2.30 (now $3.30) and bought EDZ Oct 14 calls for $3.90 (now  $5.10). I’m still grappling with the dynamics of rolling things over, sitting tight, etc., and am wondering what — if anything — I should be doing with this now. Also, I’m down big time on some UUP May 21 calls (I’m thinking should have rolled these over a while ago…) -- to what at this point? If you think the dollar is at/close to its low for the time being, presumably UUP would be the vehicle to play a rebound. 
    Thoughts much appreciated.

  5. PP For Today


    Trend lines are barely intact……today is the deciding day.

  6. Phil,
    Is it time to cover DIA puts?

  7. Phil,
    I have small pos in June UUP $21 at 0.6. I am thinking to double it, is it a good idea?

  8. EDZ/kimi – sit tight with those.  Nothing to do as they are a hedged protection.  You are up a little, bu they have much more to go if things play out.  UUP, you are going to roll those most likely to June or Sept.  I would do the June 21s for 8/9 c, which gives you a bit more time. 

  9.  Jabo / PCLN – It doesnt matter what we think, sadly. It could go up 50, down 50, or be flat. So, just save any money you wanna play on them and take it to Vegas. :)

  10. @Felipe
    Fuel is something people want?
    I hate to be all black and white about it, but isn’t some fuel essential, for things like heat in, say, Canada, or the Arctic, or Syracuse, Anchorage, and Erie, Upstate Maine? 
    How would mothers heat their baby ‘s bottles without fuel? Sit on them till they reach body temperature? 
    Guess if you don’t  mind freezing to death, fuel couild be considered something we want.
    But if living is important to us—it is to me— in certain climates fuel is a life saving necessity.
    After I sold my GMCR shares, I sold September 67.50 calls.
    What is the best way to protect the ‘gamble’ that it will not move up to $80 and I will be called?   Can the likelihood of being called to provide the shares be measured between now and September?  In your experience,does the call buyer exercise the option on a random basis? For instance, why wouldn’t I be called right now with the shares at 75? 

  11. Pharmboy — thks v much --

  12. Phil,
    Regarding selling puts on stks you  want to own (KO, IBM, JRCC, etc), assuming you expect a 20% drop how far out in time would you go  for a strike (20 % below here) at which to sell puts?

  13. Phil/FAS
    Roll the May 21 calls 30 (1.29)to June 30(1.64) and then roll the weekly 29′s (.53)covers to 1/2 29′s (.99)?

  14. Good morning!  

    Wheeee, what fun!  Oil at our $105 goal line and we bounced so that is it for the Futures trades and congrats to all who took that ride down from $112.  Below the $105 line we can establish another short play, of course but not cashing out the current win is just nuts!  

    The VIX is still not too high at 17.81 but those bullish trades are winners too.  Clearly we are not in a "panic" sell-off with the VIX under 20 but, as I suggested last week, it seems that the "smart money" was using the low VIX to load up on puts while they were cheap so they have no reason to chase now and the retail traders are so programmed to buy dips that they don’t even recognize a sell-off when they see one.  

    In the $25KP, we have $1.75 on the USO May $43 puts so a stop at $1.60 (.15 trailing but below $105 that becomes the stop with a .25 trail) and the DIA July $127 puts are $4 and we want to cover those with the May $127 puts, now $1.85 ONLY IF they go to $1.75 on a bounce.  FAS tomorrow $29 calls are back to .60 but that’s .20 of premium and I’d rather not pay it so we’ll play that one by ear.  

    On the upside, IWM NEXT WEEK $81 calls are $2.10 and just .30 in premium so we want to play those ONLY IF IWM crosses over $83, probably for $2.40.  20 of those in the $25KP with a stop below that line so for day traders only but, if we do get a stick, they should do well.  

    Overall, I’m expecting a bottom here and a bounce back up but I’m certainly not ready to flip bullish.  

    Other than that, we need to watch and wait to see of we get a bounce or not and if that bounce sticks.  

    Watch that dollar, it’s at $73.75 right now and if they get over 74, we should get a further leg down. As long as those 100% lines hold up, the market is not that bearish but, as I hope I have made clear this week – it’s all up to the Dollar.  

  15.  Phil, have +40 USO May 43 puts covered with 20 USO May 45 weekly puts. You suggested closing out the 45 puts yesterday if Oil dropped below 108, but since it dropped overnight, could not do that. Any suggested adjustments? Roll the long puts to June and roll the weekly putters to next week?

  16. Volume not so hot in relation to the flip but, if we look at the low VIX as a true indicator then we could say that there just are not that many sellers despite the technical trouble, which could be a bullish sign if it holds up.  The Financial are not matching the rally and the Dollar should be higher so I’m not really buying the move up yet.  

    Keep in mind we don’t WANT to cover, so we aren’t going to fold unless we are really getting burned, not just a poke up to our stops.  That’s a tricky call of course but watch the FAS most closely – if they don’t recover, then the other "recoveries" are probably BS.  I have to set levels because, if I don’t, no one ever stops out and all the gains are blown.  Also, I can’t communicate day trades fast enough the way this market moves but PLEASE consider that this is the area where we need to make our decision and we should lean on the side of caution but, if it looks like a spike up and you think you can hold it – give your position a chance to work.    Having too tight a stop cost us $7,000 on INTC longs and I regretted those stops right after I set them – let’s not blow these! 

  17. Phil / Unemployment   We’ve been discussing the non-recovery for a while.  Today’s payroll # and Trichet’s recognition that things also stink in Europe likely means ZIRP and QE continue indefinately.  The only thing holding back a slide from 20% real unemployment to Depression and 30% unemployment is rising asset markets.  Ben is in  ’hard place’ and can’t remove the prop.  We all know it’s a Ponzi, but isn’t it still too early to ‘fight the Fed’ by going short? 

  18. Phil,
    Do you have a smart way to scalp Silver on the way down. Would buying puts be better then a Bear Put spread as the Volitality in Silver may increase as it continues its decent to the 34 mark (100 SMA)

  19. tuscadog:
    I agree. I don’t see any other way out of this at this point. They essentially boxed themselves in to one choice.

  20. How bad/Exec – It’s going to be about 2x down on the S&P in percent to the Dollar move.  The Dollar index is at 73 so a move to 76.65 is 5% and that would kick UUP up 10% and drop the S&P the same (1,223)  the declining 50 dma on the Dollar is 75.50 though and that’s going to hopefully (for the market’s sake) make a stop on a run up – at least until it consolidates.  

    SOX and Transports are green.  SOX still happy from yesterday, Transports happy about low oil.  XLE holding 75 so far, that’s a key line today as is $105 oil – if those two break, it’s not that likely the market can hold up.  

    Oops, IWM just popped, dollar being knocked down, good time to buy back the FAS $29 calls in the $25KP, for .50 and we’ll watch for a sale for next week later

  21. dclark41    As Phl has explained there is another better choice, fiscal/structural programs like nat gas for vehicles nationwide, which would employ millions, and, mercantilist policies (eg Trump), but the GOP are focused on austerity at exactly the wrong time.  God help us.

  22. Tuscadog
    I tend to agree with you. It seems both parties have views that benefit agendas rather than what is good for the country. Very sad to watch this. I don’t know why, after all this nonsense, we can’t get enough traction for a third party whose platform is, simply, using its brain!

  23. Phil/FAS
    As you have always said: It’s hard to pick the bottom!

  24. Phil what about the UUP May 21 calls, my cost .92   Also have the June 21 UUP @ .44  (10)
    Also are we going to roll the May XRT 51 puts out?  Mine are at 1.83.  Would it make sence to sell something to recover some premium?   I have 8 xrt contracts.

  25. SPY 134.13 is proving to be tough support.

  26. FAS is at .40, is that a trailing stop?  

  27. Phil
    I have the SDS June 19 (3.24/1.65) 22 (1.63/.47) BCS. This is my only short at this point (besides XRT). I would like to increase my exposure 2x in SDS. Good idea? And any suggestions of where I should go? Thank you.

  28.  Phil: open puts
    I apologize for asking for clarification on a post from yesterday, (I’m still in the remedial reading group),  But I didn’t understand your last comment re: adding 1x the longs and putting tight stop on current puts.  Do you mean the putters, the longs or the spread?  TIA
    "You have no premium at all in the July $120 puts so why not take that $30 off the table and grab 2x the Jan $75 puts at $9 and then you can roll the May puts to 2x the June $90 puts at $6, which will cost you $6 but your longs are well covered and you pushed the puts into all premium.  That’s a PLAN but you don’t have to do anything right now, maybe they bounce but I’d still add 1x the long puts and at least put a tight stop on the current puts for now."

  29. WOW – USD move was a good spike. I have been playing DX and indxs all week, actually since big spike down a little over a week ago and gaining steam on it all. There was a pattern which is now broken. Huge gains overnite, excellent indeed. Been playing NKD and europe at nite and ours in day off USD via  manipulations and almost no equities except OPEN on earnings and silver short on eminis. Commodity pullback is pretty amazing but necessary. Silver is a complete manipulation and margin gyrations show clearly how gov can influence all markets which is not necessarily a good thing unless you are JPM and others? The banks own all markets and gov, should be quite clear to all . Slept in this AM and stops/sell orders kicked in on USD pop, sweet !  

  30. Phil—Tx for the Open and Pot trades—took them both off for a good profit—

  31. When does CMG get included in the S&P? Or has it been done already?

  32. Phil – The OPEN trade more than paid for your fees and then some, but I was already on to them largely as a probable candidate so I can’t give 100% credit to you but on the fees yes, because I made more than 100%. So a big thnx for confirmation ! Lots of info here and that is the name of the game, that and paying attention ! Lots to absorb . 

  33. $25KP/Ross – When in doubt, take the money and run.  This was a nice sell-off and you can cash USO and FAS and cover the DIAs and then you don’t have to worry until Wed.  We were net .70 on the FAS calls, now net .40 so just keep a .05 stop and be happy, we’ve paid for those long calls already with our short sales so we just hope for a bounce next week but $105 oil is a gift after testing $115.  

    PCLN/Jabob – I don’t see how they can make enough to justify $535 but they are down from $565 already (5%) so it’s a tough call.  You are right about the weak dollar boosting earnings as most of their growth is overseas and fuel surcharges are helping them and hotels have been doing pretty good too so I’d just stay away as it’s a roulette spin.  If you want to try a bearish play, I’d sell 4 June $555s for $21 ($8,400) and buy 3 July $570s for $21 ($6,300) for a net $2,100 credit spread.  The net deltas of the July (3x .38 = 1.52) and the 4 Junes (4 x .43 = 1.72) are close enough to keep you out of trouble (and only a move up is any trouble at all) for a pretty good run.  Anything under $555 in June and you are up $2,100 plus the retained value of the July calls.  

    EDZ/Kimisk – When you take a vertical spread, it’s very targeted, you have virtually no advantage on your caller and, in fact, he will maintain his premium longer than you as you go deeper in the money so it’s all about sticking with your targets on those trades – you are either on track or off track but you can’t use them expecting to get short-term payoffs, they really pay very poorly right up until the last couple of weeks so they make a TERRIBLE hedge against short-term movements.  UUP is extremely beaten down and, very strangely, only up .19 today despite a .70 (1%) move up in the dollar (so up should be up .43).  That means it’s simply not adjusting dynamically during the day and, if we assume the Dollar makes 74, then UUP should snap back to $21.60 which means the May $21 calls are a great bargain at .25.  I’m not pressing in the $25KP, though tempting as we’re in for net .58 but, if you are much higher than that, I’d DD.  

    DIA/Vic – No trigger on the covers yet.  Just a BS pump to throw off the bears so far. 

  34.  QQQ TOMORROW $59 puts at .50 still a good downside trade.  

  35.  Took the money and ran on the USO puts/putters. Was up nicely this AM since only half covered.

  36. Equity markets certainly putting on a brave face

  37. I like that when in doubt answer KISS ! Been greedy too many times and or stupid.

  38. THX  for 3 Qs, I’ll take it .

  39. Phil,
    Regarding selling puts on stks you  want to own (KO, IBM, JRCC, etc), assuming you expect a 20% drop how far out in time would you go  for a strike (20 % below here) at which to sell puts?

  40.  OMG. Look at that chart on AGQ. BRUTAL! Whew. This is why i dont play metals. Eeek.

  41. Somebody asked about IB yesterday and so far I like them but these margin hikes are so fake I have a major problem with it especially from IB on top of commodity exchanges ? I will compalin to them and see what happens / Probably won’t even get an answer except canned answer. If it continues I will leave, simple, if there is a better place to go? Many have said TOS has lots of program/technical problems ? Feedback ? 

  42. UUP/Vic – See above, I think we get back to .60 but, of course, that means a DD should pay off as well.  Just make sure you stop 1/2 back out at net even on the new basis – greed kills!  

    And what Pharm said.

    And what Hanna said.  

    Boy, you guys are getting good – I think I can take a nice vacation this summer!

    Oil $104!!!  

    Fuel/Flips – There are 5Bn people who live on this planet with virtually no fuel.  That makes it a luxury, not a necessity.  Obviously, we in the developed World could all cut back considerably if properly motivated.  Don’t mistake your personal addictions for necessities…

    GMCR/Flips – Where can you roll the Sept $67.50 calls to?  They are $13.40 and can roll to the 2013 $85s even.  Of course you don’t WANT to do that but that means that, in a realistic time-frame, $85 is your tolerance limit.  I would just use a line like $76 to cover with short-term calls as momentum trades along the way as the May $72.50s, for example, at $4.50, have a higher delta than the Sept $67.50s so you cap their gains and pocket that money when you stop out and, hopefully, then they pull back.  If not, you take a new short-term call with tight stops over the next line of resistance and all you need to do is make .50 here and there and that’s plenty of money to roll the caller higher.  That should be your goal – making $1.50 on short calls pays for the Sept $67.50s to roll up to the $70s etc.  

    Puts/8800 – Given that it’s now looking more likely we’ll get our drop, I’d go very light on put sales and go long in time (lower delta) and low in strike.  Keep in mind that even if you, for example, sell KO 2013 $55 puts for $2.90, they are still going to go up to $6.50 if KO drops $10 to $56.  That’s fine if you are scaling in and won’t get freaked out if KO hits $50 (after all, your net entry is $52.10) but it will still make your portfolio look like crap and cost you margin (but no more than owning the stock, of course) so be careful not to overdo it, especially with such a crappy VIX, that is giving us very poor prices for put sales.  

    FAS/$25KP, DC – No rolls yet, not with them heading down.  They are essentially free positions and once we are done with the short $29 calls, now .37 (so stop at .40 now), we really want to see if we can hold out for a bounce unless that look hopeless.  

  43. Hanna – If you were on the right side of AGQ , PUTs, it would be excellent indeed would it not ?

  44.  Out of USO Thanks Phil! 

  45.  Phil, Damn I have kind of the same situation as Mampcs with USO (long 60 July 45 P’s and short 50 May 45 P’s)… would you cash in the longs and expect a bounce or roll down the shorts? 
    FAS I got a fill yesterday to buy back 1/2 the 29′s at $1.00 so I am long 80 May 30′s short 40 weekly 29′s. Are we rolling these and adding more or buying them back and staying naked?

  46.  Amazing. All i have are POT spreads (May-June) in my portfolio and my portfolio is up 10% today although there is nearly no change in the price of POT. All about the premiums. All my June options are positive today (both the puts and calls). That explains the 10% rise. However, surprisingly, VIX is up only .5 today.

  47. USO/$25KP, Mampcs – Didn’t we talk about stopping out the short puts yesterday?  Oh well, too late now with oil at $102 (and they just bounced off $100.50!) and those May $43 puts hit $3.06 and that’s a full stop out at $2.80 for $25KP players.   Since you covered 1/2, you should stop out half and roll the $45 short put to the next week and deal with repositioning your longs after the weekend since it can’t get much worse.  

  48. Phil, I think UUP just tracks the dollar, not at 2x. Dollar is up 1% as is UUP, so a bounce to 21.60 seems unlikely.

  49. Got out USO puts at 2.62! Thanks Phil!

  50. Phil,
    Thanks for the  perspective/counsel on puts

  51. USD may be topping just above 74 it appears

  52. SpringHeel Jack: Blowing up this 60min chart to show the shorter term picture there are a number of interesting aspects to this. The little H&S I posted yesterday morning has obviously broken down, and the neckline was retested overnight. The target is 1320 and I’m expecting to see that target hit in the context of the larger channel. The second pattern however is a broadening descending wedge which should limit immediate downside today to the 1328-30 area if the support trendline holds. I’ve also marked up the chart to show the triple resistance area in the 1346-8 range. If that breaks up without first hitting the 1315-20 target I’d expect to see a bounce into at least the 1360s before another wave down to hit the main channel target

  53.  I wouldn’t think USD will top so easily.  There an awful lot of people on the short side of that trade, and those were some pretty ugly numbers from Germany.

  54. Sorry, that picture is too small.  Link.

  55. MoMos flying as usual

  56. Ugly number from Germany only makes me want to get back in on the FXE short.  PIIGs are still an issue for the EU, and the Euro is WAY overvalued.

  57.  $25KP – Let’s sell those DIA May $127 puts for $1.92, cover all 16, stop on 8 at $2.30.

  58. Hanna, wanted to thank-you for your counter-point to Phil’s advice on managing my AGQ short puts.  At first, I simply couldn’t consider capitulating into what looked like a peaking surge downward, with all the volatility premium built up, etc. and knowing that it was feasible to manage this trade.  However, last night, after CME raisied margin reqs. for the fourth time, I realized that I HAD to capitulate or commit a large amount of capital and time to managing back to B/E or profit in a completely unpredictable market that looks very suspiciously manipulated.   Took an outsized loss on what was originally a small trade, but relieved not to lose 25 more points today, and with a little contemplation on how to manage my capitulation aversion (which seems to be hardwired into me), I’ll be getting back on the saddle soon.   

  59. Zero, it may not but all indxs acted that way almost immediately ? but it was first neg tick and so far held and I got in all indxs and already up large. time will tell, so far so good ?

  60. IMGN – I like them a ton (who doesn’t know that?).  The Jun $12 Ps can be sold for 65c or better.  That HUGE bar on 4/7 should provide stiff resistance.

  61. Phil:
    So what now the market moves up with the dollar??????
    Look at FAS go!

  62. What a morning-  Go Bucky Go!

  63. Institutional Action.

  64. when will i learn to just BTFD???

  65. with all the hedgies loaded up on commodities its hard to see how we dont get some stock weakness this afternoon..but msb trying hard!

  66. Back to yesterday’s close.

  67. DXY up over 1% and the market is rallying?

  68.  lvmoda – thanks. i found that i had the same problem, and when i started, i would have great trades and big profits, only to turn around and lose it all on a huge one time loss. Opt always makes a great point : great traders are those that can keep their losers small and let their winners run. this is how you will make money over time. he mentions that he used to be in a trading group where they would congratulate each other on taking losses, never on winners. it is an interesting thing to think about, as we always congratulate each other on big winners, and offer condolences on losses. yet, booking the loss in a trade-gone-wrong is the hard, but correct thing to do sometimes. 

  69. It appears 74 was the magic number and alll jumped in , see if it holds. And yes teh USD is the new proxy. Has been for a few days

  70. every single swoon is immediately met with buying….even on down days we always bottom by mid-day….either that is related to qe2, which is going away soon, or its sign of crazy complacency.

  71. Fighting the Fed/Tusca – It depends on what fight you are picking.  Easy money only gets you so far in the market because once the money is recognized as REALLY weak (not short-term weak as the dollar is now perceived), then the money that corporations are making becomes suspect if it’s in Dollars.  Just think in terms of the joke of saying "I’ll give you one Billion Zimbabwe Dollars for your car."  By the time that was true, you wouldn’t take a Billion Zimbabwe Dollars for a cup of coffee – the Zimbabwe stock market went up one Billion percent but nobody ran to invest in it, it was pointless.  The Fed can’t afford to let things get that far and they are walking the line right now.  Don’t forget their member banks have all their assets in dollars too and those deposits don’t grow just because the dollar gets weaker so a bank like C, with $2Tn in dollar deposits, is at the NY Fed screaming for them to stop because now they have to lend an airline $100M a month to buy the same 1M barrels of oil but their deposit base isn’t growing and the rates aren’t climbing so they are able to make less loans for the same money – that’s bad.  When the people fighting the Fed begin to include the member banks – then you don’t have to fight the Fed and that’s about where we are.  

    Silver/Rehat – Silver is now dropping because the exchanges are tightening requirements, not because it’s still way overvalued at $38, which is 1/40th of gold, not too far off the historic average of 50 so, at $32, silver is actually a buy again.  I would not chase silver lower hear at all, more I’d be looking for a spot to go long as long as gold and copper don’t collapse.  It was an easy short last week, now we’re in between so let it become an easy short again or an obvious long but betting the middle is a coin flip.  

    Speaking of silver, those AGQ June $150 puts are only $55 out of the money now at $10.50!  Now the AGQ June $450 calls are $1 and they were $28 last week!  

    UUP/Lori – As I said above, I would do that DD to lower the basis and get the hell out even.  The May $21s are at .29 now and that drops you to net .60, which is, I think, a realistic target.  The Junes you can leave for additional upside as they are even at the moment.  Dollar now 74.15 by the way!  

    XRT/$25KP, Lori – We turned those into a spread, selling the May $53 puts for $1 and rolling to the June $53 puts for .90.  That same spread is still available but at a less-favorable rate now as the move was from Monday.

    FAS/$25KP, Bruce – Yes, I hope you got out at .40 on the short puts.  I’m inclined to stay naked now and see what happens.

    SDS/DC – I would not chase.  The spread is now $1.03 and $1.17 in the money so I like it for a DD if you can get that price.  Or, you could spend $1.40 to roll the $19 calls to the Sept $18 calls so you are buying 3 months for .40 and $1 of intrinsic value for $1 and that increases your chance of success by giving you 3 more months of calls to sell.  

    Woo-hoo, IWMs up $1.10 at $3.20 so .25 trailing stop on those in the $25KP!  

  72. could not agree more Hanna just learnig that as well

  73.  Crude down 6.66.  Mark of the Beast.

  74. Phil,
       What would you recommend to do with EGLE May $4 calls? Roll to June or later $3 Calls?

  75. EGLE is realy cratering. it worries me.
    what do you think they are worth long term phil ?

  76. Focusing on losses is way more important than gains. The gains solve themselves and need no help except when to cash out.

  77. Phil- Why do you think they have been increase margin requirements on silver and gold? Conspiracy theorist in me feels that someone made a phone call to Comex etc as it’s an easy way to diffuse the inflation expectation/dollar down talk. Am i missing something?

  78. Hanna -  yes, I agree that losing a big one after working hard to gain on many smaller trades is very tough.  A few lessons learned.   Options on 2x or 3x ETF’s are very difficult to analyze and manage other than for a quick day trade.  Especially if the risk is not defined in advance, either by using a spread or with a firm stop identified.  I also agree that crowing about gains is much less useful than analyzing failed or broken trades and discussing them with others.  
    The trade I took was actually a fade of a successful short call taken (AGQ 570), assuming that once the margin increase was discounted into the market there would be a bounce or slow move down into May expiration.  I gave it 80 points selling the 250 put when the spot price was 330, gapped down from 375 the day before.   Thought the premium crush would offset any price fade into expiration.   Clearly (now), I didn’t have a firm exit plan or defined risk since I thought I always could roll or convert to a spread easily….NOT!   I think the multiple margin increases by the CME, especially the 17% raise last night, caught everyone who was long (or short puts) and put a bullseye on the little guys. 
    Anyway, it’s nice to be out.  although looking at the volume moves today, I think capitulation will be over today or tomorrow, and will probably bounce.   I just hope it doesn’t bounce back to 250…lol!

  79.  Is there a peak volume price indicator within the TOS studies set? If there is, I can’t figure out what they call it. 

  80. FAS seems to have topped out at 29.50..  Its very tempting to short those 29 weeklies again for the 25kp.  Are we still gonna keep our FAS position naked?

  81. Looks like we are gonna hang in a very tight +74 USD range. Took profits on ES?NAS?RUT as soon as ticked down and will wait and see what gives. Thtas what I like anout eminis in this environm,ent you can get in out cheap and wait without premium. They are a huge compliment to options as both serve a different purpose.   Pulled 5hun cost $6 total and out to watch. Phil has been saying to watch the USD and he was quite right.

  82. Phil  missed that trade.  I have 8 XRT 52 puts at 1.83.  What should I do now? Thanks.

  83. Phil
    Got the RUT 820( you had called for the 825 at $1.15) trade from yesterday. sold the puts for 1.15.
    Let it expire tomorrow? Or would putting a stop be better?

  84. LYG talking a nose dive. any trades there for us ?

  85. Reminder: Citigroup (C) reverse stock split will be effective after the close of trading on May 6, 2011.
    Citigroup Announces Reverse Stock Split
    The Citi Reverse-Stock Split: How it Works With Options

  86.  Oil service:  HAL and SLB down between 6-7% week on week. I’m nibbling.

  87. OPEN/Lincoln – I meant you could cash the July $120 puts out (the ones you own).  Buy 2x the Jan $75 puts at $9 (net $18 so $12 in your pocket) and roll the May puts to 2x the June $90 puts at $6, which is $6 of the $12 back out of your pocket so you end up with $6 in your pocket and a new spread with loads of time to roll.  That is THE PLAN but, as I said, you can, for now, just add 1x the long puts (the Jan $75 puts at $9) and put a tight stop on the July $120 puts and that flips you bullish if OPEN moves back up.  When you get nervous about it turning back down, then you can buy more long puts and do a 2x roll of the putters.   As they took very little damage on today’s sell-off, it does look like they have good support here at $90.  

    USD/Goober – I’m sure many people will be shocked to see it’s not dead yet.  

    Congrats Savi!  

    CMG/Jabob – I’m pretty sure that was the middle of last month.  

    You are welcome Goober.  And don’t worry, I’ll straighten you out on that political stuff too.  8)

    Oil can still be shorted below $102.50 in futures with tight stops.  

    Short puts/8800 – I think I’m having deja vu… 

    TOS/Goober – I love them.  Maybe it depends on your account level but they are great, helpful and very rarely technical issues, most of them were during the transition when Ameritrade bought them but no hassles since.  Of course IB gives you huge amounts of buying power through margin (so they should be nervous!) so make sure TOS will match that if you are using it. 

    USO/Willsons – You are very welcome.  That was a very unpleasant trade though – wend down to the wire but that’s what I mean by rolling and sticking with a fundamental trade.  You have to commit to keeping yourself in the right place so that, when it’s the right time, you are ready.  

    USO/Amatta – I KNOW you and I discussed stopping out the short puts.  Again this is an example of why this kind of trading is not for you.  Anyway, same idea as I had above applies to you – cash out you long, naked 1/2 and go with the flow on the rest of the spread.  Either it bounces or you’re in a long-term work-out.  On FAS, I have no idea why you are 1/2 covered but the bottom line is we are naked after taking out the last of the $29 callers at .40 and we’re waiting for tomorrow to see if we get a bounce.  

    UUP/Rpme – Holy cow, no wonder it doesn’t do what I expect!  Well that sucks but at least it explains the pathetic moves and that means their decay runs at about 0.2% per month, which is inexcusable on a straight fund.  

    USO/Etrad – Congrats.  

    Dollar/ZZ – It’s just like buying on the dips.  The dollar makes a big move and the perma-bears think it’s a great opportunity to short some more.  Given the way the Dollar has been for a year, who can blame them?  

    IMGN/Pharm – Good one!

    FAS/DC – Now we get into violent swings until we break one way or another off the drop we expected yesterday (0.6% follow-through was scheduled today) but this looks like a weak bounce again and we’re right on target to continue falling if the Dollar holds 74 or goes higher.   Big Jobs numbers tomorrow likely to disappoint but Europe may be worse and, of course, Japan still needs to get their freak-out when they open back up. 

    Rally/Jabob, Angel – Everyone in MSM is pushing the idea that the dollar is blowing out the shorts ahead of a collapse tomorrow on terrible NFP data so rise in Dollar not being taken too seriously yet.  Like Bernanke’s inflation, it’s "transient".  

    Good point on taking losses Hanna.  That’s IBD’s number 1 rule and they say NEVER lose more than 8% on a stock and I say never lose more than 20% on an option but, because of scaling in, that can take quite a while to happen!  Opt scales in and out of positions as well.

    EGLE/$25KP, Kevin – Those were rolled to Sept $4 calls for .10.  Just a finger cross now on a recovery.  

    Margins/SNS – The brokers look at capital at risk and they pull the plug when it gets out of whack.  Obviously, Lloyd can get the ball rolling with a phone call – just another tool in the manipulators belt and it’s up to us to figure out where that breaking point is and stay ahead of the game.  

    Oil back below $102 – who are the poor counterparties on these futures shorts?  

    FAS/Etrad – When in doubt, sell half!  

    Tight range/Goober – And you made that determination after observing the Dollar above the 74 line for 2 hours.  That is AMAZING!  You really have to get your head out of those short-term charts my friend…

    XRT/Lori – I’d pay for the roll and stay naked.  I think we’re weak into the close.  If not, then sell and cover.  

    LYG/Micro – They are too messed up and too intwined with the UK to figure out now.  Very tempting down here but I’d rather wait until $2.50 and sell puts and, if not, then bully for them but no thanks.

  88. Pharm
    Do you subscribe to I have this guy on my radar, I think he has a lot of good info.

  89. Phil, on USO I know we discussed to stop 10 short puts every $1 move down from 109.50 but the move happened overnight all the way down to 105 when I checked in today… So same thing as Mampcs…

  90. vic – No, I follow someone who posts it on his blog roll.  I think JRW follows the same (Cobra).  There are a ton of good technical traders out there, and I just use their charts for my own knowledge. (Not that it helps on some of it).

  91.  Priceline is up.  Suicide to short it?

  92. VPOC/drcraig:  There is no specific VPOC (Volume Point of Control) indicator in TOS, but the Volume Profile study does plot the VPOC.

  93. Phil - I look at all time frames and I was quite right this AM took profit and got out. I think that is what you are supposed to do? No? ………………It all says something

  94. Boehner Says No Debt Ceiling Hike Without "Real Spending Cuts And Budget Reforms"
    I am not going to go into politics on the subject, but wouldn’t that be very spooky for the Markets?

  95. TSRX – we bought back in at ~$5.06.  Sell 1/2 if you wish.  I still think they go higher, but not worth the risk.

  96. Phil you are still sounding pretty bearish for the week, what do you think of the tommorrow QQQ 59 puts at .40c?

  97.  Phil to be clear on USO: 
    I have 60 long July 45′s so sell 1/2 (30). And keep the 50 short May 45′s correct?  Trying to visualize what would be the move to do if it keeps going down?

  98. Sorry Phil , put in for the roll to June 53′s , but how do I cover?

  99. Good question Morx – I was just going to ask that.

  100. I can’t find the articals you did on 25 k, 100K and 250K portfios,about 9months ago.  You went over risk paramiters on accounts.  Think I need to go over that again.  Thanks.

  101. ARIA – our yester year wonder is holding its own, bouncing around b’w 7.45 and now 8.66.  For a go away managed play, the January 2012 7.5/10 BCS, selling the 7.5 P makes the play free.  They could move down, but I would be happy to own at 7.50.  Remember, their drug WORKS, and MRK owns the rights to it.  They are waiting filing and then approval.  the mTOR inhibitor is best in class from my recent readings.

  102.  I am playing the Euro for a bounce off of 1.455  if anyone is interested.  I think we get a decent bounce late night, or tomorrow.  

  103. @Pharmboy … Any thoughts on ARRY? I think it has a pretty good support at $2.70

  104. Phil I am deliberately trying to hone my day trading right here and JRW has been a very big help in finding indicators even though my approach with eminis is a bit different. No doubt day trades ar a different animal. I keep saying it, I like both the options for longer and eminis for shorter. They compliment each other very well.Your dollar focus has been my dollar focus and it worked . Probabaly will go up from here but right above 74 was the magic number this AM for a bit and I pounced. remains to be seen how much it moves up today and I can simply watch and see, safely .

  105. UUP/Double Down – just had a shiver thinking this may be like the siren song of going two times with UUP.. once for today and once for tomorrow because it’ll be going away…
    (a bit of a trippy version)

  106. Found
    Thanks Pharm

  107. Support in here.  They need to hold it.


    ARRY – better price than mine, and I like them for a pop when data comes in.  For their MEK inhibitor, patients started enrolling, but we are not expecting anything for a while.  They have a ton of things in clinic right now, some alone, some partnered (NVS has the MEKs).  Just a matter of time.

  108. Pharm – If you don’t mind divulging, how are you playing EURO, on apair trade or future or ?

  109.  Between Dow Puts, shorts on oil which I covered half today, my naked OPEN calls and EDZ and TZA which I took profits on then reentered at 34.80 today, this has been an incredibly profitable week.  Thanks, Phil.  Do you still think we go down to 12500 and test support there?

  110. OIH/ZZ – We expected that after RIG earnings.  Our trade from last month was the May $164/159 bear puts spread at $2.20, good for the full $5 now.  I don’t think they make a good long yet at $150.  

    USO/Amatta – They did break below $108.50 yesterday and this morning the USO May $45 puts opened at $3.20 and, as you said, VERY CLEARLY should have been stopped out.  They held that price until after 10 but you are right, there’s nothing you could have done, it is the universe’s fault.  Come on Amatta – PLEASE listen to me and STOP trading short-term positions.  You shouldn’t have covered ANY of the puts at all but you said you were not going to be around to watch them and I specifically premised the position saying that we had no intention of covering but, IF you wanted to get revenue neutral, then 1/2 cover.  Even that would not have been bad if you used stops but this happens all the time with you so you need to know about yourself that you are not going to make the right decisions in short-term trades and they are not things you should get involved in.  It’s not a failure of you as a person – it’s just not a trading style that suits your temperament.   Now, in your current situation, I would take the money and run on whatever long July $45 puts (now $5.30) that you have uncovered.  I would leave the July/May $45 spread on the rest, looking for a bounce over the weekend or a roll down to the June $43 puts (now $3.35) for $1.20 or less if you HAVE to, let’s say if the roll goes over $1.35 but I hate to give you a hard number because you don’t make any effort at all to differentiate between a quick spike and a trend that’s breaking.  

    PCLN/ZZ – Not up enough, I want to see $550 to sell short calls, maybe the May $560 calls for $20 (now $13.50).  

    Time frames/Goober – What?  

    Boehner/Vic – I know it spooks me every time someone reminds me that guy has power!   8-)

    QQQ/Morx – The Tomorrow’s are too much of a coin flip now, I prefer the next week $58 puts at .27 as they shouldn’t take too much damage until the Qs break 59 (tough nut to crack) and they have a delta of .29 so they double up with a $1 move down in the Qs. 

    XRT (I hope)/Lori – I think XRT has room to fall so the roll is naked for now as I expect weakness at the end of the day and maybe tomorrow we head lower still (on the Japan thing).   The articles you asked about are titled "Smart Portfolio Management" and, surprisingly, are indexed under the Portfolio tab at the top of the page.  

    Eminis/Goober – Well that explains your time-frame!  Can’t watch those from 1,000 yards or you can lose $100K before you notice the tick!  Still, you really should get into the habit of flipping to 60M and 1 day and 1 week views whenever you are trying to look at supports or resistances – what looks "obvious" on a short-term chart often turns out to be nothing when you pull back a little.  

  111. ARRY/asa – you could buy a small lot here and sell the NOV $2.5s for 40c, which is UR next lot at 2.10, if they make it there.

  112. Gosh darn it, I love TLT. 

  113.  Scottmi:  Who knows, but it seems right.  There is big unhappiness over the Portugal package, finance committee members in Germany calling for them to sell their gold reserves first.  The Portuguese 10-year now yielding 9.65%, almost 650 bp. over Germany.  Tough fiscal conditions are thought to guarantee a Greek default down the road,  The Portuguese package needs to be approved by the various European parliaments, and, with Germany in the middle of an election, we are guaranteed much sturm und drang over Euro bailouts.  Conclusion: Euro has topped for now.  

  114. Pharm – TLT, wish i’d listened to you.

  115. Phil  -I always look to the left on longer time frames before I do anythting and then go to shorter time frames. For whatever reason this AM as soon as 743 was reached , many piled in on slght pull back on USD and volume spiked indxs for a good gain although short and sweet. didn’t last long but teh day is not over and I am safe, so you have taught well on USD and IO ahve paid attention.

  116. TYPO  740 not 743

  117. Phil are you saying there is a powerful Boehner in Washington?

    TLT, Pharm Im thinking back to you have a price target?

  118. Phil, I’m tempted to sell some SLW puts here, what do you think?

  119. Phil, 
    On FAS I have the 1/2 as yesterday on the chance I had to check in I saw a post by another member asking if buying back for .96 or so do so on 1/2 would be a good idea and thought I saw a response indeed if we got another chance to take it, but I guess that changed as the day progressed…. Then since I am overseas with limited access to the blog, I missed this mornings comment to buy at .40. 
    I am actually catching a plane back in 3 hours so, not sure if buying back the other 1/2 (now .65) As I won’t have a chance to cover if you guys do so later?

  120. Thursday’s economic calendar:
    1:15 PM Fed’s Kocherlakota: Contingent Planning for Monetary Policy
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet 

    At the open: Dow -0.16% to 12703. S&P -0.23% to 1344. Nasdaq -0.56% to 2813.
    Treasurys: 30-year +0.38%. 10-yr +0.18%. 5-yr +0.09%.
    Commodities: Crude -3.26% to $105.68. Gold -0.63% to $1505.80.
    Currencies: Euro -0.84% vs. dollar. Yen +0.88%. Pound -0.15%.

    12:00 PM On the hour: Dow -0.35%. 10-yr +0.23%. Euro -1.62% vs. dollar. Crude -5.88% to $102.83. Gold -1.8% to $1487.80.

    01:00 PM On the hour: Dow -0.3%. 10-yr +0.22%. Euro -1.71% vs. dollar. Crude -6.36% to $102.29. Gold -2.12% to $1483.20.


    Q1 Productivity and Costs: +1.6% vs. +1% expected and +2.6% prior. Unit labor costs +1%, in-line with expected and vs. -0.6% prior

    Initial Jobless Claims: +43K to 474K vs. 410K consensus. Continuing claims +74K to 3,733,000.   How do continuing claims rise more than initial claims?  

    EIA Natural Gas Inventory: +72 bcf vs. consensus of +67 bcf. Futures plummet, -6% to $4.30.

    For the first time in 2 years, US 10 year Treasury notes at 3.19% are yielding less than their German counterparts at 3.21%. What looming debt catastrophe?

    Canada’s PMI falls sharply to 57.8 in April from 73.2 previously. While a powering currency may be taking a toll on Canadian business, recent readings above 70 were not likely be sustained for long under any circumstances. The loonie is weaker, but more likely due to this being a ‘risk off’ day. FXC -0.6%.

    It’s official, according to a new Clear Capital report: Home prices have double dipped nationwide, now lower than their March 2009 nadir. Foreclosure sales hit 34.5% of the market, resulting in national price drops of 4.9% quarterly and 5% Y/Y. Prices have fallen 11.5% in the past nine months, a rate not seen since 2008

    Mortgage rates dip to match their YTD low, Freddie Mac reports, with the average 30-year fixed-rate loan slipping to 4.71% from 4.78%. The 15-year rate fell to 3.89% from 3.97%. Weaker economic reports let Treasury yields decline and mortgage rates fall for a third week, says chief economist Frank Nothaft, but housing measures like pending sales are looking up. 

    World food prices rise a bit in April, but remain below the record level hit in February, according to the FAO. Sugar, beef, pork, and milk are among the foods whose prices dropped. Grain prices continued their march higher, but more recent market action offers hope of some relief.

    The IMF gives Portugal a teaser rate on its bailout loan, charging 3.25% for the first 3 years and 4.25% after that. The IMF is supplying one third of the €78B package with the rest coming from the EU, which has yet to set its interest rate.  And who puts up 40% of IMF funding? 

    Saying the bailout of Greece has failed, Timo Soini of Finlandreiterates his party will not support a similar exercise for Portugal. Right or wrong, his reasoning is refreshingly clear: "It simply doesn’t work … (the debt) just doesn’t go away." 

    QE3 isn’t likely, Fed’s Lockhart says, adding that the Fed "will set a high bar" to adding to its already bloated balance sheet. On the debt ceiling, Lockhart said Congress and the White House shouldn’t "play chicken" with capital markets. 

    Minneapolis Fed’s Narayana Kocherlakota says if things keep going as expected, a modest rate hike is called for by the end of 2011 - or by July or August, if there’s an upside surprise in inflation. But he hedges his bets by saying a slowdown in inflation means QE3 might be needed.  Inflation – what inflation? 

    As expected, the Bank of England leaves policy unchanged, keeping its benchmark rate at 0.5% and the QE program at £200B. Sterling remains flat on the day at $1.6495.

    The euro falls off a cliff as Trichet signals the ECB may remain on hold in June, putting off the chance of a hike until the July meeting. Euro -0.75% at $1,4715.

    Intervention time again? It being a "risk off" day (so far), the yen is rising, pushing dollar/yen below the ¥80 level at which the Japanese seem to get very uncomfortable. The greenback has now given up nearly all of its gains following the "successful" post-earthquake intervention.

    Spain’s debt auction is a bit weak, the country selling €3.4B of 5 year paper against hopes it could move €4B worth. The yield on the notes rises to 4.55% vs. 4.39% at a March sale. The Spanish/German 10 year bond spread widens a couple of tics to 198 basis points.

    A big miss for Australian retail sales, which fall 0.5% in March vs. expectations of a 0.5% gain. A bit more starch comes out of the aussie, now at $106.67 after garnering a $110 handle 72 hours ago. Shares bounce a bit, +0.3% after a tough run over the past month.

    Meredith Whitney is back, defending her prediction of widespread municipal bond defaults: “States have been spending at two-and-a-half times their tax receipts. The states then are cutting off aid to their local governments which rely on them for over a third of their monies. The local municipalities have nowhere to go and their bias is to save their constituents before they save their bondholders.”

    Global PC chip shipments were up 7.4% Y/Y in the first quarter, IDC reports. The group forecasts full-year shipments will grow 10.3% and market revenue will grow 17.6%, to almost $43B. For the first time, IDC is listing not just chips compatible with Intel (INTC) but also ARM processors (ARMH). 

    Gold prices are at record highs, but Harmony Gold (HMY -4.1%) – Africa’s No. 3 gold miner – is having trouble taking advantage, withnine-month production down 10% and new forecasts that are lower than a previous 1.45M-1.5M ounces. An especially rough third quarter came amid technical plant disruptions including a conveyor belt failure.

    Checking in on the great commodities fire sale (or, if you prefer, "blood bath"): the CR

  121. Who’s the Bernank work for….
    “No one’s interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit,” Bernanke said today in a speech in Chicago. “Regulators must aim to avoid stifling reasonable risk-taking and innovation in financial markets, as these factors play an important role in fostering broader productivity gains, economic growth, and job creation.”

    Every time he opens his mouth I’m compelled to go long the markets and short the dollar

  122. That’s not the one.  It was not a specific trade prtfoio it was a general sort of risk management haw to , in general, trade a portfolio at set amounts.  !00K  25K and another higher one.  I did look under the indexed portfoio tab of course.

  123. Pretty obvious he works for the banks and triad unholy alliance. FED/Banks/gov all same entity now it sems

  124. Is a naked roll when you keep the original position also, in addition to buying the next month out.

  125. TLT – yes, 97, then 101, then 105 possibly. 

  126. Good morning,

    Traveling today; lines from yesterday should work well enough. IWM 83.83,  83.42,  82.98 etc.


    Be very alert when you see three black crows appear on a chart. Their appearance indicates a period of powerful selling pressure. If on the fourth day the market cannot gather strength, then lower prices are likely ahead.

    Translation: if we start to fail "sell the bump" !!

    The only caveat is if Ben has ordered The Last Great Bear Trap  8-)

  127. PHARM – see my 1:29 PM question to you ?

  128. goob, FXE.  I have not initiated yet.

  129.  Phil:  I bought a bunch of June FXE calls, up between 50-87% at this writing. I don’t want to get out, but setting stops doesn’t work overnight.  Do I roll to another month, sell half, or just pray to the market g-ds?  I’m unaccustomed to success with options so it comes as a shock to my primitive conceptual framework.

  130. Wow listen to this professor (Robert Auerbach), I cant believe this hasn’t gone viral on financial blogs.

  131. JRW III (premium)

    I will be trveling tomorrow (not available), so, I expect a push up in the mornig; if it fails, short !!

  132. Thx Pharm

  133. 145s fxe, june are what I am watching.  Lots of OI there.  Probably sell the May 145s for 1.15 or better.

  134. Oops, 144s.  I am out the rest of the day. 

  135. Silver has fallen 25% in 5 days.. anyone think we might see a short move up? Is there a good way to play it?

  136. stick or failed stick today?

  137. Wow, oil back under $101 – if they fail $100, things could get very ugly.  

    12,500/Rustle – 12,600 at least but the Japan thing could spike us to a low open tomorrow.  Germany rallied back to flat today and the FTSE was down 1%, finishing at the day’s low as did the CAC, right on the 4,000 line, also down 1% so, if Asia has a bad Friday, then Europe is not likely to go up and that means it’s very doubtful that we’ll head higher into such a scary weekend situation and likely people will take money and run before tomorrow’s close.  

    Paying Attention/Goober – I will inform the President he can count on your vote then.  8-)

    Dollar holding 74 easily so far.  Euro at $1.456, Pound $1.64 and Yen was driven back to 80.22 from 79.558 at 7am.  Japanese traders would freak out if they wake up to sub 80 Yen to the Dollar.  Gold is $1,478, silver $36, copper $4, oil $101 (I’m not rounding, everyone is on a line!), nat gas $4.275 and gasoline $3.12.  This, of course, allows the Fed to say prices are coming down in May and there is no inflation…..   See, they told us so!  

    Boehner/Kustomz – More like a soft-headed one that they keep trying to use anyway, very sad, doesn’t impress anybody and certainly doesn’t get the job done…. 

    SLW/Jercon – I would not play craps with the Dollar.  Could be a mother of a short squeeze and, at 80.2 Yen to the Dollar, BOJ has Trillions of reasons to buy Dollars fast.  

    FAS/$25KP, Amatta – You will be back tomorrow and you have a 1/2 cover on FAS netting out at about the same price as you sold it, right?  Leave it alone then.  We are risking naked BECAUSE we made a profit, you did not make a profit so not worth the risk.  Our decision process is we made 80 x .30 on the short calls and that pretty much pays for a roll to June so we can afford to wait for a bounce and, if we don’t get that, then the roll is cheaper and we still have a long time to wait for a bounce and/or sell more puts and roll lower.  

    Who’s the Bernank work for/Kustomz – Were you thinking of this

    Portfolios/Lori – You have to be talking about those, you are hitting the button to go to older portfolios, right?  Scroll down this list to Smart Portfolio Management.    

    $100.17 on oil, bounced off $99.15 – NYMEX crew must be freaking out!  Check out the volume today, well over 100% of open interest.  Still over 600,000 barrels in the front 3 months that were 15% higher on Monday!  

    Click for chart
    Session   Pr.Day   Options
    Open High Low Last Time Sett Chg Vol   Sett OpInt  
    Jun 11 108.78 109.38 100.65 100.91 May 05, 14:03
    -8.33 489399   109.24 321820   Call Put 
    Jul 11 109.32 109.85 101.20 101.46 May 05, 14:03
    -8.27 98927   109.73 235195   Call Put 
    Aug 11 109.41 110.10 101.50 101.74 May 05, 14:03
    -8.26 42151   110.00 82744   Call Put

    Naked roll/Lori – Now you are just making things up, right?  A roll is just shorthand for selling what you have and buying something else and the net cost of the two is the roll price.  You can dress or undress them at your leisure…  

    FXE/ZZ – You should have gotten out yesterday, greed kills and now how much of your gains do you plan to give up?  If they can drop 2% in a day and the 50 dma is another 2% down from here and the 200 dma another 2% below that, what trade do you think is a better idea than pocketing your profits and waiting for a more obvious opportunity to play?  If you want to be bullish on FXE (I do not),  The Jan $135 puts can be sold for $3.40 (so someone thinks they drop another 10%) and you can buy something like the Sept $141/147 bull call spread for $3 so a free ride to another $6 profit if they just get back to $147 but, if you don’t believe enough to REALLY, REALLY want to own FXE at net $130 – then what the hell are you doing being long at $145?  

    Auerbach/Kustomz – Amazing how few people talk about that.  

    Silver/Etrad – That’s a very expensive falling knife to try to catch!  

  138. Kustomz - thx for video, incredible stuff. All I have been saying for a long time and finally coming out. I knew an academic would come forward eventually on this and other issues, GOM and Japan radiation are next on the list. I hope Phil is on this video like flies on stink. Auerbach says it all straight up, excellent indeed

  139. ARRY/Pharm – isn’t a debt reduction and extension good news? why down? add more? your take, please…

  140. Oh no, $99.75 on oil again!  That’s the NYMEX close at 2:30 too so selling off all the way into the close – NOT GOOD!  

    XLE amazingly still at $75 amazingly.  OIH at $149 – both are way overpriced if oil heads lower.  OIH July $129 puts are $2 and I like them as a speculative short with a stop if oil holds $100 tomorrow.  

  141.  etrading – the answer is "who knows!?". But, against my better judgement i have picked up a handful of calls in SLW. Since they are a company and not a metal, and should be good even with silver in the low 30s. But, not making it a big position at all. 

  142. Is everyone profiting from oil’s fall and therefore no one commenting on it… amazing at 99.75

  143. Phil – Haven’t you noticed the pres is part of the triad, unholy alliance yet? what is it gonna take for you ?

  144. Phil, not sure if I read you correctly reg SLW, which is Silver Wheaton, a highly regarded silver streaming company. They don’t mine, they hold royalties in a number of mines.  Are you saying that if the dollar zooms up, then PM’s are going down and therefore you don’t recommend selling puts at the moment?

  145. Phil-- I have been scaling out of my uso puts all day--have just  a few left --keep or get out— oil under 100 you said it could get ugly—-I know, I know greed

  146.  Sorry, Phil, my inexperience doesn’t even allow me to communicate correctly.  I bought calls below the money yesterday and some at the open – June 143/144s yesterday, June 139/140s today.  They are all rocking.  Of course I’m greedy, which is rather the point of doing this.  I am trying not to be stupid.  Take the money, reload on a rebound?  Apologize for the hand-holding.

  147.  Goober : "Phil – Haven’t you noticed the pres is part of the triad, unholy alliance yet? what is it gonna take for you ?"
    this is the kind of comment that fills up space during the trading day without teaching anyone anything.

  148. CCL/$25KP – up like rocket today. close it?

  149. Amatta- Phil’s being too nice…. It IS a failure of you as a person!!! You don’t f$cking listen to a goddamn word Phil says!!!! I’ve been a member for almost 2 yrs and it’s been the same thing since day 1 of your membership. I mean wtf are you paying him for if youre not going to take his advice… I mean his political rants are awesome but I’m not thinking that’s what you originally intended to pay him for… Sorry, I know I’m being an ass (probably bc mon/tues I covered my oil short at 113, my /tf short at 869.7, and my /hg short at 4.257 just missed filling), but my words are true. Do yourself a favor and don’t daytrade, not even with a small amount of your $$

  150. POT/$25KP – nice profit on the short calls. close them out or let ride?

  151. POT/$25KP – i’m inclined to let those work a little more…

  152. CCL/$25KP – had to take the 43% gain and close it. :-)

  153. And….Wheeeeeee

  154.  AGQ down another $50! Oh My! And, look at Oil! AHHHH!

  155. dollar headed higher.. tend to think a bad NFP number will be bad for stocks..but im not sure it will be that bad….i have a feeling asia gets killed tonight…they are more sensitive to our jobs and commodities than we are.

  156. So have all the technicals been broken yet???????  What is the canary in the coal mine telling us?  Is this what we’ve  been waiting for?  Just a HUGE move in the dollar today.  Commodities CRASHING.  The buck consolidated for a while before this move.. I have a hard time believing this is a short  term event.

  157.  JR- Caw, caw caw…

  158. matt remember lots of people trained TBTFD, but with margin at multi year highs….wheres the money going to come from?

  159. OMG – Oil $98.62!  I called it and I can’t believe how hard they are falling!  Could have had another $1 on the May $43 puts, now $4…   This does not bode well for tomorrow. 

    Silver down to $35.35 – if we don’t bounce tomorrow, we could be looking at a major failure.  

    Triad/Goober – This is your problem, you don’t see the big picture.  Obama not part of anything, that’s why nothing got done under his administration.  When Bush was elected, they passed every dumb-assed thing he wanted and anyone who stood in the way was steam-rolled.  Not for Obama and Clinton went from one "gate" to another and Carter got a hostage crisis (and Ahmadinejad was one of the hostage takers) and Kennedy caught a bullet – not exactly "in with the in crowd" are they?

    SLW/Jercon – Yes, not a good time to make any kind of metal investment.  You must look at 2008 chart right now before buying anything and make sure you are comfortable holding whatever back to that low – it’s very possible that’s what will happen if there’s a global panic back into the Dollar.  

    USO/Savi – No, that’s the right way to play.  Not likely enough that USO will pop back over $100 to not leave a few on just in case but you could roll to the June $37 puts at $1.10 so you take most of the risk out of what remains.  

    FXE/ZZ – As I said, take money and run – it’s a big move, you are ahead, we don’t know what will happen tomorrow but cash (Dollars) is getting more valuable and stocks are dropping, that’s an opportunity forming.  

    LOL Angel!  

    CCL/$25KP, Scott – No, they are down from $47 on oil going from $95 to $115 since Feb so why get out at $40.88 after just one day back under $100?  It’s worth taking a chance since it’s pretty much a free long.  

    POT/$25KP, Scott – Those are totally going to expire worthless so no reason to pay at the moment.  Huge winner. 

    EDZ almost at $19 already and we haven’t even seen Asia yet!  

  160. cme just expanded oil limit to $20bbl!…NOW THATS FUNNY

  161. csfb mortgages subpoena

  162.  12,500 already!  UGLY…

    I was 2 weeks to the day too early with "How to Make 500% on the Next Market Crash" but I sure hope people have these hedges in place or some of the others we’ve taken in the past couple of weeks. 

  163. No volume to this sell off in the DOW

  164. now WHO has realized the damage commodities are doing and WHO is pressuring cme…titillating yet ahhh shall we say dangerous game though.

  165. Phil/SCO – I have a 34/37 bcs offset by $34 puts. Does it make sense to roll the 37′s to Dec $42′s (and then sell the 34′s?).

  166. I’m liking SLV at 34.25

  167. Phil you always say "then just throw on some TZA". is this such a time?

  168. Phil, if there was ONE stock/ETF you would play for a bounce tomorrow what would it be? I’m doing great today(woulda been better with my oil short!!) but I have some sick feeling that we will open UP tomorrow… I’ll still be net short just looking for a small bounce play that I can sell tomorrow if we open up…

  169. 2:00 PM On the hour: Dow -0.55%. 10-yr +0.27%. Euro -1.86% vs. dollar. Crude -8.36% to $100.11. Gold -2.46% to $1478.00. 

    3:00 PM On the hour: Dow -0.72%. 10-yr +0.33%. Euro -2.11% vs. dollar. Crude -9.67% to $98.68. Gold -3.03% to $1469.40.

    ATTENTION PSW MEMBERS (some more than others):  Vanguard data on investor returns (as opposed to total returns) show an interesting effect: The more patient investors outperformed the rest by a meaningful amount – suggesting that on an aggregate level, market timing still isn’t for everyone. 

    As crude oil takes out $100 to notch new lows at $99.70, all 20 Dow Jones Transport stocks move higher. Among the leaders, UAL+5.6%DAL +5.3%FDX +3%JBHT +2.2%CSX +1.8%. The big debate for oil – and thus the transports – is whether the retreat in oil prices is driven by global growth fears or is a recalibration after the runup from MENA crises. 

    The day’s session has officially ended, but trading continues in crude and it is still plummeting, now threatening to drop below $98/barrel, at $98.30. USO -9.8%.

    Silver punches below $35, giving up a month’s worth of gains in just four days. July futures recently -11.5% to $34.80. iShares Silver Trust ETF (SLV-10.5% to $34.26. 

    ROFL!!!  Goldman Sachs analysts predict a glut in rare earth supplies by 2013 as new mines open to take advantage of massive price increases. The bank’s view is in direct contrast with rare earth producer Lynas (LYSCF.PK +6.9%) who says the world’s major exporter (China) is on the verge of becoming a net importer. MCP -3.7%AVL -7.0%

    Pimco’s Tony Crescenzi sees the bright side the of end of the "tulip-mania" move in silver, saying it will limit other commodity price increases and the resulting harm to the economy. This will "keep the game going longer" as it allows the Fed to continue with its foot on the monetary pedal. 

    Ten year Treasuries take out their low yield for the year, now sitting at 3.17%. Amid S&P downgrades, famous short sellers, and chatter about a default if the debt ceiling isn’t raised, money finds its way into U.S. government securities when trouble arises. 

    Hanging in there for most of the day, U.S. equities begin to move lower, with the DJIA -1.1%. The NASDAQ, green until a short time ago, -0.4%. Two schools on falling commodity prices: they allow the Fed to keep the party going, or, as in 2008, they’re signaling something worse.

    Not surprisingly, volatility is spiking – with the benchmark VIX index +11.65% to a still very mild 19.07. iPath S&P 500 VIX Short-Term Futures ETN (VXX+3.4% on massive volume of 23M shares.

  170. 1333 Phil!!!!!!

  171. BIZZAROS! 3M t-bill yield ZERO now! PHIL! Find the ETINOTPYRK!!

  172. "Sell in may and go awaY".

  173.  Phil,
    Do we keep hedges in place over night?


  175. flip—did you mean sell in May and buy the Momos?

  176. Phil / pomo   We’ve just had two nothing days.  The next 4 are all $7 or $8B.  Will they be back to pumping again starting tomorro? Time to lighten up on hedges?

  177. Tx-- Phil

  178. OK, Sold AAPL 345 Callers this morning for $4.85 and bought them back for $2.54. Not bad for three hours work.!! God but it is hard to take winnings off the table! I finally just hit the button and told myself that Phil  would be proud.

  179. CME/Angel – As I said earlier, they have to pull in margin because their clients can start going broke with 10:1 leverage and CME ends up covering the bets.  This is how the exchanges raise cash and why buying commodities in a very low VIX environment can be so dangerous – we don’t need a conspiracy to pop a bubble, any prick can do it!  8-)

    SCO/Brook – Man, those took off like a rocket!  Why would you want to do anything to a clear huge winner?  Am I missing something?  What month is the spread?  If it’s May – enjoy the cash, the trade is no longer obvious. 

    TZA/Morx – Not at the 12,500 line, that was our goal although if you don’t have any disaster hedges and need cover, you do need something but chasing today is just not a good idea down 150 on the Dow.  

    Bounce/Jrom – Well we’re playing FAS in the $25KP, its our last major position now.  June $31 calls are $1.22 and were $1.75 yesterday so I do like those but you can’t beat oil for potential to run and USO June $41 calls are $1.30 and they were $4.85 yesterday so I guess I’d go with those for a speculative bounce into the weekend that you can roll or add to for over the weekend even if they take a hit.  

    In fact, let’s go for 10 USO June $41 calls at $1.30 in the $25KP

  180. Phil: OK, so I’ve been waiting and watching the possible roll on the TBT May 37 putters. Still have 0.15 of premium left with 15 days to Xp. The rolls straight across to June don’t look so hot, but of course we still have lots of flexibility.  Would you roll now or be patient for a possible pop in TBT?

  181.  Just got back from 3 different Apple stores in MetroWest Boston looking for an Ipad-2 for the wife and nobody has anything!!
    Nor do they have any idea when more will show up.
    All said best chance to get one is show up at the door at 9 am in case some land during evening  hours.

  182. Wow, UNG giving up 6.5% on huge volume.

  183. Phil:
    OMG – Oil $98.62!  I called it and I can’t believe how hard they are falling!  Could have had another $1 on the May $43 puts, now $4…   This does not bode well for tomorrow.
    What do you mean "This does not bode well for tomorrow." Market will go down or?

  184. @Phil
    If you suggest a trade for the $25kp, would you also recommend for a single trade?

  185. ban2 has more to do with supply constraints (Japan) We know they literally sold out of them last earnings

  186. PCLN?

  187. Phil — thks --

  188. I’ve got a pocketful already Angel.  

     Hedges/Trad – Depends how much you are up.  If you are up over 200% in a 500% hedge, then good to cash some out at least, we can always adjust the hedge tomorrow.  When you make money very quickly, always remember it can be undone quickly as well.  

    POMO/Tusca – Well it’s really leading credence to the idea that the market is all about POMO, right?  I think it’s all about the Dollar but tough call when they happen at the same time. 

    I am proud High – Congrats on taking profits (something else we need to talk about more often).  

    TBT/JBur – I’d wait.  Can go to $32 but will still go back to $39 one day.  Keep putting yourself in the right place and it will eventually be the right time. 

    Wow, what a wild day!  Congrats to all the shorts and especially the long-suffering $25KP players.  What a relief!  

    Tomorrow/Rick – If oil goes lower than this then it will drag down OIH and XLE and those guys are 20% of the market and then there will be margin calls, covering, scrambling for cash by selling other equities, etc. – that kind of not boding well…

    Single trade/Flips – Of course but keep in mind the $25KP is very aggressive.  

  189.  kustomz
    I asked about that but they’re not admitting to it.
    Best I can tell they get several dozen per day and they go!!

  190. pcln all over

  191. Ban2- really!? I just moved to Boston and was about to buy one of this bad boys! West as in? Winchester? Woburn? Brookline? I’ve been living in a hotel trying to find a reasonably priced place near Hanscom and I’ll call ads the day they are posted and they will already be rented!

  192. Wheeeeeeeeeee!  Thank you Phil, I think I made JRW kind of money today.  I finally sold my Intel calls and got out of oil at the close as well so my $25K portfolio has turned into a new car at this point.  I was playing with a bit more than $25,000 but following the trades as you rolled and doubled down.  I remember you saying the best time to enter a trade was in the rounds when you roll or double down and that was the best advice you ever gave.  Thanks!  

  193.  jro
    Framingham – Chestnuthill- Braintree

  194.  That "sell in May" homily is so mindless, hackneyed and indiscriminate that I am simply amazed that it seems to work every year.  Thinking can often be your worst enemy when investing.

  195. PCLN flying now—figures

  196. anybody has live Tokyo futures feed?  how bad is it?

  197. Hanna – Just replying short and sweet to Phil earlier
    Phil – I don’t have a problem with my vision , perhaps you do ? I think I see it pretty spot on. The banks control it all and Obama is part of that, tehse are his policies  inhis admin are tehy not?.How can that not be perfectly clear at this juncture. I’m not the only person that sees it for sure. Auerbach video today, Mexican gun running  wan to keep going ?? 
    Another excellent day all determined on USD action and DX. Thx Phil for the 3 Qs as well. And Hanna I posted a bunch of stuff I did today from beginning to end thta all was beneficiial to a great day and could well be learned from . I did for sure ! So enough you guys negatives just because sombody disagrees with your politics and all based in reality not BS !

  198. What a day – indeed. i keep making money when i close out transactions, but it’s the stuff i’m holding that makes it all look not so good. CSCO.. CVX…PFE..PWE..GE…GLW…CCJ…(and various metals plays.. which i still believe in!).  i really do need to work on not trading what i believe.. and just go with the trends.

  199. Lapper –  Nikkei down 95 not sure what you are referring to ?

  200. Stockman on Bloom saying both sides palying class warfare, I think he is quite right.

  201. Phil/SCO – it is way up but the delta on the 37′s flew up so there isn’t much of a spread so I would have to hold to expiration  while the maximum effect on the 34′s may be now. SCO $42 appears to be roughly equivalent to oil at $106 earlier in the month, but as an etf it is a function of rolling monthly contracts so that relationship may change (would $42 SCO equal crude at a lower number if the forward contracts are lower?)

  202. Phil / theChaser:   You should start a Double Down Portfolio:  It only picks up trades when you are at your double down point!

  203.  theChaser:  can you explain what you mean by "the best time to enter a trade is when you’re rolling or doubling down?"

  204. Phil
    Can you suggest some new buy write possibilities that have exposed themselves down at these levels. Congrats. on your trades. Fun to watch-can’t afford to participate in all. Wish I could, but congratulations to all who did well today.

  205.  jro
    Bedford/Hanscom is a HIGH rent area surrounded by Bedford, Concord, Lincoln, Lexington
    Not sure what your looking for but Waltham is well located has high and lower areas of rent  and has great downtown area for dining. Think there’s some nice apt’s that run along the Charles River downtown.
    Take a ride downtown and chk it out 

  206. US Dollar went NUTS today – from a low of 72.8 earlier today all the way up to 74.2, currently at 74.164. From what I can tell from the news, Trichet said that the European Central Bank would not be raising rates at this time. This was interpreted as being a "dovish" stance on the Euro, so the Dollar took off. 
    In other words, Trichet said that nothing is going to change, and that popped the Dollar. 
    "In today’s news, nothing happened. U.S. Dollar pops 1.9% on non-news, commodities tumble, markets in turmoil on reports that nothing has changed from the way they were yesterday. Here’s Tom with the weather…"
    Am I missing something here? Because this just seems a bit unlikely to me.

  207. lots of delicate sensibilities on this site..but neverthess everyone herein by the bump of we hiss but we dance together!

  208. Hi Phil, a little adjustment advice please.  Last week I bot SCO JUN 46/48 call spread for .15 (.40/.25).  Today it’s worth about .70 net so after I took the money and ran per your advice on a few of them, I want to adjust the rest.  I can roll the JUN 48 callers (-3.65) to MAY 46 callers (-3.30) for .35 debit, that leaves me a JUN 46/MAY 46 spread where my basis is .60 (.15 + .35)  covered by a -3.30 credit, with a month to roll.  Another other strategies that you like better?  Thanks!

  209. Is it just IB or is anybody else having lots of NO SHORT icons popping up on differernt items  in last few days along with the new margins in commodities?

  210. My girl Maria B is looking rough today:(

  211. ib is quite notorious for that colonel mc goobs..i use then for futures primariliy for just that reason..btw it also has a margin for ag at 50% higher than the mandated initial its got a great platform AND fairly dry access to anything exotic..(like shorting??)

  212.  Phil had said that people following his aggressive portfolio trades could do much better by waiting and only entering trades when he is calling for a roll or a double down from an initial position.  I took that advice to heart and it’s been amazing.  I also only enter trades that Phil helps to adjust for other people on the same basis.  It works so well I have no desire to enter anything until it goes the wrong way first, my name was my whole problem and Phil fixed it with that advice.  Thanks again Phil!

  213. Angel – Thx for feedback. I wasn’t gonna short via stocks but I have noticed a lot of funny business in last few weeks over and above commodity exchanges and was not sure what to make of it ?

  214. PCLN kills all the option buyers.

  215. Today’s levels

  216.  Ja, angel, mucha sensibilidad.  Can’t figure why.  Thought we were just burning time, waiting for a clear shot at a rabbit.  No one’s running for office here, are they?

  217. Wouldn’t it be ironic if tomorrow, the one year anniversary of the "Flash Crash", the market decided to shoot up 300 points?  Just sayin… ;)

  218. Elliot – I posted numerous tid bits about what you are saying /asking today check it out. USD was in control of all markets today and has been for a few. Today was clear as a bell as dollar went up and when hit to 74 it controlled every move up and down and there were many. It can be played  for sure. I have no idea how long this new proxy will last, but I think it is part of a new paradyme to run markets in any direction desired but that is just my opinion. I have been paying very close attention to this as Phil has been mentioning USD for days now and he was absolutely spot on ! Check out my post as the information worked well for a while now,  today was excellent but only for very short time frames. I have been doing same at nite on NKD and euro markets. If you pull up a 2 week DXS chart you will see the patterns for other markets as well.
    Personally I don’t want to make any longer term plays(more thaqn a few days, pretty crazy) until I see something stabilize for fear of getting chewed up in the changes , thus day trading and short term focus for now. But I am still reading and studying all longer term option thesis by Phil and others for sure( have some papaer trades) and will be ready once I am comfortable with market conditions. No idea when that may be? Perhaps a long while ?

  219.  U.S. flags burning in Pakistan signal the inevitability of a bin Laden revenge attack somewhere in the West, MENA countries are [still] undertaking parallel revolutions.  Perhaps oil prices have overshot to the downside on a risk-adjusted basis.  Options don’t seem to reflect the political VIX.  A dollar-neutral trade might work.

  220. At the close: Dow -1.08% to 12586. S&P -0.9% to 1335. Nasdaq-0.49% to 2815.
    Treasurys: 30-year +0.76%. 10-yr +0.41%. 5-yr +0.22%.
    Commodities: Crude -9.34% to $99.04. Gold -0.76% to $1470.10.
    Currencies: Euro -2.03% vs. dollar. Yen +0.55%. Pound -0.66%.

    Market recap: Stocks were caught in the downdraft of a broad commodities selloff and dollar rally sparked by dovish comments from ECB’s Trichet and a jump in U.S. jobless claims. Losses in oil and silver extended to extreme levels, with the dramatic drop in these leveraged markets forcing selling in more liquid markets, such as equities, to cover losses. NYSE decliners led advancers three to two.

    The bond market has hinted at a recalibration of the global growth picture for the past several weeks, Dave Kansas notes. This week, economic data has become spottier, key sectors such as chipmakers have warned of a slowdown, and the jobs outlook has turned from guarded optimism to rising pessimism. Tomorrow’s employment report now looms large.

    The removal of the word "vigilance" from Trichet’s opening statement this morning and a nod to Geithner/Bernanke talking up the dollar was more than a signal the ECB was going to pause its rate hikes, says Steve Liesman. It could be the ECB is waiting for the Fed to make the next rate move. FXE -2.0%

    Kraft Foods (KFT): Q1 EPS of $0.52 beats by $0.05. Revenue of $12.6B beats by $0.30B. Shares +1.2% AH. (PR (PCLN): Q1 EPS of $2.66 beats by $0.20. Revenue of $809M beats by $30M. Shares -1.5% AH. (PR

    Visa (V): FQ2 EPS of $1.23 beats by $0.03. Revenue of $2.2B in-line. Authorizes new $1B share buyback program. Shares -1.5% AH. 

    PCLN no big deal, I’m not worried about $550 holding.  

    New car/Chaser – That’s great but I really would rather not hear about people playing big money in the $25KP, it is supposed to be for gambling money only and we are purposely aggressive to practice rolling and saving positions in the virtual portfolio.  But, thank you very much for reminding people that THE BEST THING YOU CAN DO if you are following trades is to wait for a trade that goes against us (plenty do!) that we decide to roll or double down as we’ve had time to watch them and think about them and we still like them and you will be getting a much better entry than the original one I liked.  

    Mindless/ZZ – So are most market participants – keep that in mind.  Sometimes our biggest failing is we think too much…

    Nikkei/Lapper – They actually bounced right off a 300-point dip at 9,690 and back to 9,775, pretty much following our stick into the close.  Yen too strong at 80.168 though so there may be a sell-off although that country is so messed up right now that a strong Yen may literally be the least of their troubles.

    Obama/Goober – So he comes out of Chicago, 48 years old, having only been out of the Illinois Senate since 2004 and he’s immediately sitting at the table of the people who pull all the strings?  I guess this must have been his initiation before they put him in charge of all banking and finance.  

    Trends/Scott – I don’t really agree with that.  All the stocks you list are great long-term plays.  The trick is to cover, and play with short-term hedges to smooth out market swings and use that cash you make on the downturns to accumulate more of your companies (not CVX!) when it gets cheaper.  Do you really think that 10 years from now, you’ll be sorry you own CSCO or PFE or GE or GLW or CCJ?  Yes, I know Ieft out PWE.

    Class warefare/Goober – Well not much of a war if the other side doesn’t show up.  It has been Middle Class slaughter for the past decade and maybe, finally the sleeper has awakened.  

    SCO/Brook – Let’s start from scratch.  What exactly did you enter these positions at?  I must not be thinking of the same thing as you.  Again, what month are you talking about?

    Double Down Portfolio/Matt – Good idea but please find someone else to do it – I’m maxed out.  

    Buy/Writes/DC – I have nothing on my mind now.  I wouldn’t do a thing with new capital until Monday or Tuesday next week.  Per the levels we’ve been charting this week – we’re kind of in the middle now with no clear direction and, as you know, I prefer to play the top and bottom of the ranges.  

    Dollar/Elliot – No, that’s what I was saying yesterday (and for a week or two).  "THEY" have been pounding the Dollar down to keep the markets up because, at these prices, even $8Bn worth of daily POMO isn’t enough to keep things floating.  To do that, they had to have all their puppets come out and dis the Dollar and they had to float rumors and get MSM "analysts" to get on TV and say anything and everything they could to force a technical breakdown in the Dollar.  The problem with that game is, if they fail to get their technical breakdown – they can end up forming a technical base.  As the EU "guaranteed" to raise rates was one of the drivers of the weaker Dollar, Trichet not doing so today took a major weight off the Dollar’s value.  The BOE held doveish too and no one thinks the BOJ is going to tighten and China simply isn’t big enough (in money supply) to have any real effect on global markets, no matter what they do.  So now, the weak dollar story is based on our debt, the debt ceiling and Ben’s printing press.  Without QE3 and with some agreement on the debt ceiling – the dollar bears will be sitting on a one-legged stool.  

    Classic Angel!  

    SCO/Mr M – I simply don’t understand the concept of adjusting.  You have a free $2 spread that’s .70 in the money.  You set a stop at .50 and be done with it.  Either it goes up and you make $1.30 or it goes down, you stop out and THEN you can buy a new spread once it settles down.  Why do people have to complicate things?  I mean, really, the question boils down to "Phil, I made a 366% profit in a 5 days but I am not satisfied – how can I instead turn this into something where I can lose money instead?"

    No shorts/Goober – I imagine people are desperately trying to cover.  Just last week they were telling us we were going to the moon on a golden rocket full of free money that would be dipped in $200 oil and everything was going to be great.  

    Good summary Chaser.  All should realize that I am trying to pick targets ahead of the curve otherwise everyone says I called it too late and they missed it so it happens VERY OFTEN that we enter too early.  That’s fine if we’re scaling in but, it also means that a more patient person (and nice job becoming one) will do much better waiting for something we decide to press our bets on when they get cheaper (go against us).  

    PCLN/Bob – Doesn’t kill our backspread!  

    Flashiversary/Kinki – Or wouldn’t it be ironic if they do it again?  It would be like rain on your wedding day or good advice that you just didn’t take or a traffic jam, when you’re already late or ten thousand spoons, when all you need is a knife….

  221.  goober, the exchanges can impose "short sell restrictions". You can see various alerts here (NYSE Trader Alerts):

  222. Oh by the way – don’t forget what is urgently needed to cash in a commodity – US Dollars!  

  223. Kraft Cuts Full-Year Profit Forecast, Citing Commodity Costs
    "Kraft Foods Inc. (KFT), the world’s second- largest food company, lowered its full-year earnings forecast because of surging commodity costs and the loss of the Starbucks Corp. (SBUX) distribution business.

    Food and beverage companies such as Kraft, Sara Lee Corp. (SLE), and Kellogg Co. (K) have raised prices on many products to cope with rising costs for commodities such as wheat, corn, and coffee. Kraft, led by Chief Executive Officer Irene Rosenfeld, said today that price increases helped to make up for those expenses.

    Sara Lee, the maker of Ball Park hot dogs and Senseo coffee, today lowered its full-year earnings forecast, partly because of “extraordinary headwinds” in commodity costs, CEO Marcel Smits said. Sara Lee now expects those expenses to rise by $650 million this year, more than triple the amount predicted in August."
    There you go. Phil has been shouting this from the hilltops since last summer and the rot is finally spreading downwards.

  224. AUG – even thru all the ups and owns in last few years and much further downs, I have not seen so many no short symbols at IB ? I don’t think it is because they don’t have the stock, at least they aren’t saying that. They seem to be simply shutting off the short spigot when certain entities get to certain levels ?    tHX FOR FEEDBACK 

  225. pHIOL Not being a smart ass but some of the commodity exchanges now take gold as a trade vehicle instead of or as well as USD .

  226. Kind of a long winded article by Soros but interesting none the less. As usual comments section at ZH is about as good as the articles themselves with lots of pro and con, different takes on all things.

    Whether you like the guy or whatever , he and Jim Rogers have been very successful over the years and tehr can be no doubt he is still quite lucid at his age. 

  227. Phil/SCO: Hmm. At the close it sems more in line with the original set up – bought May11 34c @ $2.77 now $12.75 & sold May11 $37c @ $1.16 now $9.90.

  228. What a day.  It wasn’t nice what they did to silver.
    I went short on silver a few days ago…long SLV puts, long ZSL calls, but I just cannot deal with AGQ!
    Thanks for the hedges, Phil, I came out ahead.

  229. "you don’t see the big picture.  Obama not part of anything"
    Phil, quite the contrary- here is a little history fable for your edification: 
     We’ve got the Chronicles of Barack. And though I’ve had to read them to you in the past, it appears I’ll have to do it again. So gather round my friends — you, too, Donald Trump — and let’s fill our Hopium pipes and talk of how Obama truly came to be.

    Some chroniclers say that as a child, he had to be tricky and devious, so that his enemies couldn’t catch him. And others tell of the magical weapons he was given by the South Side gods, including the magic dust to sprinkle on the foreheads of journalists, so as to cure them of skepticism.

    But in the beginning, he was alone.

    As an infant, the tiny Obama was placed in a reed basket, which floated gently down the Chicago River. The current carried him to the South Branch of the river, to the Kingdom of Bridgeport, where the women of the Daley clan found him bobbing against the far bank.
    And he learned his lessons well:
    Not the politics, just the corruption, I said then, wishing silently that he had decried it all, that he’d stood up years ago and pointed to the list of sleazy deals, pointed an angry finger at the Duffs, the white, Outfit-connected drinking buddies of Daley who received $100 million in affirmative action contracts through City Hall.
    That’s an easy political commercial for the Republicans: Mobbed-up white guys party at the old Como Inn with Daley, and they get $100 million in city affirmative action contracts and Daley doesn’t know how it happened and Obama endorses the mayor in the name of reform.
    Obama had nothing to do with the Duff deal. But he kept mum. He has endorsed Daley, endorsed Daley’s hapless stooge Todd Stroger for president of the Cook County Board. These are not the acts of a reformer, but of a guy who, as we say in Chicago, won’t make no waves and won’t back no losers.
    Obama the reformer is backed by Mayor Richard M. Daley and the Daley boys. He is spoken for by Daley’s own spokesman, David Axelrod. He was launched into his U.S. Senate by machine power broker and state Senate President Emil Jones (D-ComEd).
    It is all quite predictable. 

  230. Zero – your oil comment ? Here is a big if? what if people knew a big surpise was coming in ME and those people could perhaps drive oil and commodities down and create a lower entry point knowing the events they are aware of will have hyper effect shortly ? stranger things have happend. not basing this premise om any news from friends in ME, just my own thoughts and reasonings to be hyper vigilant at this point in time. anyhting can and will happen. 

  231. pstas – I agree there is a lot more to the story. I could fill the pages here and some would still turn a blind eye with many evidences of skullduggery glaring in their faces and shouting what is real. Fact is it is all unravelling slowly but surely and reality is catching up as it always does. PRAVDA is very powerful and can slow that speed of reality for a while at least. In the end those that insist on contiuing in the illusions do so at their own risk, but cannot fore stall the inevitable indefinitely. Just as gravity always win out no matter who you are or what you think or insist to be true and or valid !

  232. Phil-- I hope you could help me with this structured note question (like you, I think these are pad my broker’s pocket plays--but I am always being solicited and asked how to do better).
    Is there a better replacement option with FCX?
    Morgan Stanley is coming out in a few weeks with a FCX 1 yr note that will have a 14-16% coupon payable w/ 4 coupon payments.
    The trigger occurs if FCX drops 20% 
    It is callable if FCX is higher than the set price when they check it .
    See below  (if it comes out)
    Underlying stock: Freeport-McMoRan Copper & Gold Inc. common stock
    Aggregate principal amount: $
    Stated principal amount: $10 per security
    Issue price: $10 per security (see “Commissions and Issue Price” below)
    Pricing date: May 24, 2011
    Original issue date: May 27, 2011 (3 business days after the pricing date)
    Maturity date: May 24, 2012
    Early redemption: If, on any of the first three determination dates, the determination closing price of the underlying stock is greater than or
    equal to the initial share price, the securities will be automatically redeemed for an early redemption payment on the third
    business day following the related determination date.
    Early redemption payment: The early redemption payment will be an amount equal to (i) the stated principal amount plus (ii) the contingent quarterly
    payment with respect to the related determination date.
    Determination closing price: The closing price of the underlying stock on any determination date other than the final determination date times the
    adjustment factor on such determination date
    Contingent quarterly payment: • If, on any determination date, the determination closing price or the final share price, as applicable, is greater than or equal
    to the downside threshold level, we will pay a contingent quarterly payment of $0.35 to $0.40 (3.50% to 4.00% of the
    stated principal amount) per security on the related contingent payment date. The actual contingent quarterly payment will
    be determined on the pricing date.
    • If, on any determination date, the determination closing price or the final share price, as applicable, is less than the
    downside threshold level, no contingent quarterly payment will be made with respect to that determination date.
    Determination dates: August 21, 2011, November 21, 2011, February 21, 2012 and May 21, 2012. We also refer to May 21, 2012 as the final
    determination date.
    Contingent payment dates: With respect to each determination date other than the final determination date, the third business day after the related
    determination date. The payment of the contingent quarterly payment, if any, with respect to the final determination date will
    be made on the maturity date.
    Payment at maturity: • If the final share price is greater than or equal to the
    downside threshold level:
    (i) the stated principal amount plus (ii) the contingent quarterly
    payment with respect to the final determination date
    • If the final share price is less than the downside
    threshold level:
    (i) a number of shares of the underlying stock equal to the
    product of the exchange ratio and the adjustment factor, each as
    of the final determination date, or (ii) at our option, the cash value
    of such shares as of the final determination date
    Exchange ratio: The stated principal amount divided by the initial share price
    Adjustment factor: 1.0, subject to adjustment in the event of certain corporate events affecting the underlying stock
    Downside threshold level: $ , which is equal to 80% of the initial share price
    Initial share price: The closing price of the underlying stock on the pricing date
    Final share price: The closing price of the underlying stock on the final determination date times the adjustment factor on such date

  233. One more question for allI am sure— sorry;
    PCLN opinion?

  234. Ban2- thanks! I actually haven’t looked much at Waltham yet… Although I make decent money (compared to the avg American, probably not compared to people on this board), things are really tight for me right now. My girlfriend and daughter are staying in Dayton for the year while she finishes grad school and I’m covering all their expenses….Additionally, they will be out here for 3 mos in the summer and she has a cat! Further, Im about 100% sure I will be deploying to Iraq or one of the ‘Stans in December so I need a military clause in the Lease… All that adds up to a lot of rejected rental applications and countless hours trying to find something with around 20 minute commute to the base within my price range…looking at Woburn right now. Boston is an awesome town though and most people are VERY friendly… Surprised with your guys reputation and all! Lol

  235. Phil I found the articals when I got back from running some errends.  How do you cover  xrt puts?  I’ve only been trading 6 weeks or so.  Managed to lose about 20% so far.  Finally sold out all my USO with a $3500 loss a week or so ago.
    I get some of the things I did wrong, use smaller starting positions for one, but just learning the more complicated stuff.

  236. BTW goober, I’m not even responding to your posts anymore (this will be my last response) and suggest other members do the same to your non trade related posts. You seem to have ATTEMPTED to take the conservative torch from CAP while he’s been away. Here’s the difference, CAP makes sense!!!! He may be wrong or misguided, but his arguments are coherent! Your rambling conspiracy filled diatribes are not…..BTW as a military member I found your comment a couple days ago alluding to you being one of the few members with the guts (or whatever you want to call it) to actually kill Bin Laden pretty friggin humorous…. I suggest you stop talking out of your rectal data bank…

  237. any hope tomorrow that PCLN is down tomorrow?

  238.  Not sure if anyone is playing along at home, but that bounce in EUR/USD is happening.

  239. Jromeha
     I know how you feel.  I sold my USO at the totally wrong time.  It’s hard to be playing with the pro’s when we are fairly new.  I think Phil forgets a lot of his readers just are not that experienced.  Hey, I’ve been following the economics of the country for 35 years.  It’s not the same as trading options.   I didn’t even want to play today- did my rolls and left.
    Thanks heavens the market dropped and the dollar popped.  I think the chaser may have the right idea.  I think it was Hanna that also suggested one way to be more conservitive is to go out a month.  Not sur how that works with premuim.  What do you think Phil?  Thanks.

  240. What is forecast for tomorrow oil movement? what would be line for weak bounce?

  241.  Phil:  I wanted to make sure you caught rpme’s remark of this morning on UUP.  You erred in at least three places today in your commentary in respect of UUP.  It’s not a 2X, it’s a straight play.  You even commented with Kimisk on how "very strangely" UUP had moved relative to the forex.  You have UUP confused with EUO, which is a 2X short PowerShares ETF, perhaps.  The double "U" is kinda subliminal.

  242. lori:  I think the way to play as a beginner is small and smaller.  I’m one; and I like to swing for the fences.  Big mistake.  You don’t stage in correctly, you don’t get out when you’ve got the chance, and an abrupt move sees you diving to cover a position that reverses within a few hours because you couldn’t afford the loss.
    Since I can’t do any of those things — plus a couple dozen more I know I don’t know, never mind the "unknown unknowns" — I’ve concluded that playing with smaller positions,ller is a better teacher of technique than dozens of panicky lurches made in response to expensive mistakes.  
    I think that, when you get a lot better at this, there are times when you know you can throw your wallet on the table, particularly because you have figured out how to protect it against a wipeout.  Until then, it’s tough staying humble.  My two cents.

  243. Superman – well since the superman vid was put up earlier, i thought y’all would be intersted that Superman is renouncing his US citizenship.  Perhaps he figured out that "truth, justice, and the American way" had at least two contradictions, at least lately …  maybe he’s going to go for "appeasement, negotiation and the UN way". At least it’s consistent!

  244. Jromeha – thats fine with me . we are all entitled to out point of view. I find it odd that if one disagrees here with Phils point of view there are people like you to immediately step in and defend a defense less posoition. Phil almost always brings up the political stuff and if a response that is not in agreement come forth then an attempt to scold or humiliate that person is the next act to induce submission. I won’t play that game . My thoughts and information are completely coherent and based in fact but I understand where you are coming from , that is clear enough. I am quite sure others here see that as well. I was in the military as well and that was my refernce point and I can assure you there was nothing funny about my experiences that gave me the perspective I described. If you are honest , then you know I was speaking in truth as a "few"
     Just because you are currently in the military does not give you any mandatory knowledge nor better perpsective than others or a prerequisite on anything, including my thoughts on Osama. I totally agree with your right to think as you wish and would expect the same, without any brownie points, as I stand on my own two feet quite well and always have. Honestly I don’t recall you ever responding except for once and that was to say you did not twist what I said, and I did not respond ? I do not need your approval to retort  to what I perceive to be unfair or disengenuos statements and it is clear many here do not necessarily agree with you or me for that matter. So be it. If you don’t like what I say don;t read it ! That’s fine. I do not know Cap or have any knowledge of his dealings here, so I assure you there is no connection speaking of conspiracies. Perhaps in spirit though. As all anti conservers ( which you defined not me) , some day you will have a different view of many things, I am sure. Everything I have said and posted here is based in fact and verifiable whether you acknowledge that or not is not up to me. I have noticed that when good points are made, the first reasoning is an attack of some sort ? whats up with that ? apparently you are OK with that  ? I’m not………………..Good luck in all things . 

  245. Scott- even superman dissents in the eyes of what was once America, tragic indeed

  246. Lori -keep your trades small and paper trade along side  until you gain more confidence. Your paper trades could be the ones you don’t want to put up the money quite yet for but you will still see the results and learn a lot from that and it will speed up your learning curve a bunch for free ! I agree there is a lot to try and absorb here for a newbie so be patient and trade small and keep reading , it works. Even if your broker does not offer paper trading account you can still do it on a piece of paper. DO NOT trade because you fell pressured or think you have to. Wait for your confidence and you will ease into it over a little time. Good luck.

  247. Jromeha -  I just reread your comments to me and would add. I was in one of the Stans (although likely not one you would be deployed to) in 2005 working for an arm of the US military .

  248. The CFTC commissioner on CNBC this morning sounds pretty pissed off at the activity in the commodity markets, suspecting manipulation.   Gee, really?

  249. Goober- You are correct that many on this site are drinking the "Phil" kool-aid and will attack anyone that has a slightly conservative political viewpoint. There are a view of us that have joined this site looking for a healthy investment exchange. Unfortunately, you are correct, it is typically Phil that inititiates most of the liberal propaganda that permeates this site (It is the reason I have decided not to renew my membership when it expires).

  250. Zero Zero, Goober, think you are both right.  Small positions and paper trading more complicated spreds.

  251. jakester – You’ve got it wrong when you say there are some that will attack anyone with a "slightly conservative political viewpoint".   Most of what is discussed is plain ‘ol common sense.
    If some of you would come out from behind the goal posts, you would see that some of these opinions are so far right of the 50 yard line (guess who’s ready for football) that any reasonable argument appears to be a "radical" view from the left. It’s not.
    Have a good life.  :)

  252. 1020- You area perfect example of all that is wrong with this site and you make my case. "Common sense" doesn’t exist in your world. I subscribe to an investment site. What I have received is a forum for a bunch of fringe left wing radicals such as yourself that do NOT represent the masses (thank god).