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Monday Market Madness – Gold $1,600 Edition

As we expected on Friday morning, the EU stress tests were not good

My comment to Members at 3:41 on Friday, as we had an "incredible" (as in NOT credible) rally into the close was:  "Notice how we went down on very heavy volume but we went up on two massive spikes – one at 2:45 and on at 3:05 and the rest was just suckers being reeled in to follow the move who got sold right back into.  I’m still liking SQQQ, Aug $22/23 bull call spread is .55 now and you can sell the $21 puts for .50 for net .05 on the $1 spread.  LOL – CNBC is surprised. Bill says "Hey, look at that, a rally in the last 20 minutes!" It’s only surprising when there isn’t one…"

After the bell, we discussed the fact that you can still trade the index puts after hours and the QQQ weekly (7/22) puts at .70 looked attractive too.  That left us a bit bearish going into the weekend (as planned) so last night (yes, Sunday) I sent out a 10:16 Alert to Members to with trade ideas to go long on the Futures (Down, S&P, Nasdaq and Russell) while taking the short position on oil (/CL) at $97.50 and gasoline (/RB) at $3.15.  By midnight we had our highs for the morning and at 2:49 am I commented it was time for the 3am trade (bullish on markets as the Dollar pulls back) and we set our stops at 4:46 and went back to bed and the market topped out 20 minutes later and gave us yet another bullish reload back at our levels – NOW, at 8am.    

What were the bullish levels?  Today there were for futures crosses above 12,375 on Dow futures (/YM), 1,306 on the S&P futures (/ES), 2,345 on the Nas (/NQ) and 623 on the RUT (/TF).  We’re not to proud to make the same play over and over and over again – as long as it keeps working, right?  This is the great thing about futures trading – it lets you make little adjustments to your virtual portfolio LONG before the rest of the market is in play.  Had the markets gone straight down – we would not have needed to chase as we took the aggressive puts into the close but, as they found a floor – we were able to add longs, knowing we already had adequate downside protection.  At this point (3rd time long) we have tight stops as we still expect a weak open based on the "sloppy M pattern" I pointed out in Member Chat this morning.   

After seeing Friday’s prop job, we think anything can happen this morning and, frankly, we’d love to see them take it back to the midnight highs in the futures, which was S&P 1,315 and Russell 830, so we can get a chance to set up some more bearish hedges (we already did the Nasdaq and use the Dow for a long-term hedge) as we approach what John Nyardi calls "T Minus 5 and Counting to Economic Armageddon" (way to sugar-coat the title John!).  

S&P 500 (SPY)

The key for the S&P is whether or not they can hold that 200 dma.  If they cannot, they will pull that 50 dma sharply lower and that will likely cause an infamous "death cross" around the end of August and that will not bode well for the end of the year and, in fact, will begin to look very much like the Fall (and I do mean FALL) of 2008.  Every day the S&P spends below that 50 dma tugs it lower – so even a move down that "successfully" tests support of our -2.5% lines, will actually be LESS encouraging as we really can’t afford a triple test of our lows:  

 Over in our Chart School, Declan Fallon has a more bullish take on the action, saying:  "While it takes little to scare traders on the daily chart, there is little of real concern on the weekly chart. Yes, last week’s volume ranked as distribution, but all key indices are trading inside well defined channels.  The Nasdaq eased away from 2,887 resistance, but weekly support is down at 2,700, some 90 points away from Friday’s close."  We are, of course, long-term bullish, based on our premise that inflation will take hold and send everything flying higher over time.  Declan’s weekly channel on the Nasdaq bottoms at 2,700, which is below our -2.5% line but his Russell channel bottoms at 775, right on our -5% line.  Overall though, we see essentially the same range bottoms and now it’s up to our clueless leaders to "fix" the EU and US debt crises.  

But what if they don’t want to fix it?  What if, for example, one of the key participants stood to make a great deal of money by NOT having a debt ceiling agreement and putting the US into default?  What if that someone was the GOP’s Chief Debt Negotiator, Eric Cantor?  That’s right, Eric Cantor has bet more than a month’s salary on TBT – the ultra-short Treasury ETF and not only refused to abandon the position when conflict issues were raised but has apparently INCREASED his bet on a US Debt Default over time – the very Debt Default he is SUPPOSEDLY negotiating to avoid.

"Cantor’s involvement in the fund and negotiations is not ideal," TMF’s Matt Koppenheffer said. "I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short. We can only guess how much he understands what’s in his virtual portfolio, but you’d think a politician would know better. It looks pretty bad."  

 Because of this and other Republican idiocy, Jonathan Alter wrote an article in Bloomberg this weekend explaining "Why Obama has Already Won the Debt-Limit Fight."  Meanwhile, my gal Michelle is looking like the front-runner in Iowa – a fantastic illustration of what a complete farce the Republican party is!  Sadly, it won’t matter if Obama wins in 2012 because, if the Republicans still control the House and we have 4 more years like this one – it’s all over anyway.

I pointed out to Members this weekend that we had an opportunity to study Republican Logic 101, which is: "We can’t get a $4Tn deal done so let’s complicate things further by pushing for a $9Tn deal that will also never happen" – Coburn of Oklahoma to Offer $9 Trillion Budget-Cut Plan to Spur Debt Talks.  We are finally getting to the end game where the Bankster puppets (in both parties) begin to push for our Federal Government, like Greece, to sell off our nation’s assets – as if we were already bankrupt and had given up on America’s future.  THESE ARE OUR "LEADERS" PEOPLE – THROW THE BUMS OUT!!!  

I’m all for giving back Alaska to Russia, of course.  After all, we bought it for $7.4M and, even in today’s market, we should be able to get out with a slight profit.  Maybe the Russians in Sarah Palin’s back yard would like to buy it back?  We got Louisiana in 1803 for about $15M, which is $220M adjusted for inflation.  At the time, France needed money to fund their idiotic military budget too and they had just held their own Tea Party back in Paris so raising taxes was also off the table.  Manhattan, of course, was purchased for $24 but that was actually 60 Dutch Guilders, which was 24 ounces of silver, now $960.  What’s my point?  Was there EVER a time in which a Sovereign Nation sold off their assets and did not regret it later?  You would know the answer to this if they still taught history in schools but they don’t teach history anymore because people who know their history would never put up with the IDIOCY we have in today’s politics!  

So Grrrrrrrrrrrrrrrrr!  I’m still bearish because our planet is run by fools and the only real "hope" that is keeping the markets up at all is that these fools are SO incompetent and SO bad at math and SO bereft of ideas that they will give up and hand out MORE FREE MONEY in a 3rd attempt to paper over the mess they have made.  That’s why gold is at $1,600 an ounce this morning on this Global Ship of Fools….


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  1. Black Monday?

  2. This is a FAS Money recap after the first 4 weeks. It took some work to untangle all the trades as my “vacation” in France didn’t allow me to track is as closely as I should have.
    Let’s recall the premise of this setup – we buy 2 FAS diagonals, long January 2012 calls and puts and short weekly options. You could also see it as a long strangle as a hedge against crazy moves and short weekly options collecting premiums against that strangle. The long strangle cost us about $4.85 and with 30 weeks to go, that means that we need about $0.17 a week to come out even and about $0.34 to get a double in 7 months!
    The original trade was initiated on June 20 as follows – Phil’s proposal then actual trade in parenthesis:
    Long strangle:
    Buy FAS Jan $28 calls for $2.55 (we got $2.40)
    Buy FAS Jan $18.33 puts for $2.30 (we got $2.40)
    Short weeklies:
    Sell FAS weekly $23 calls for $1.15 (we got $0.80)
    Sell FAS weekly $24 puts for $1.05 (we got $1.20)
    Phil also proposed a more passive trade:
    Sell FAS July $26 calls for $0.65
    Sell FAS July $22 puts for $1.10
    This trade will sell only monthly options and we need to sell about $0.70 per month to come out even and $1.40 to go for a double. That more passive trade worked out well as both puts and calls expired worthless. That trade shows a profit of $1220 for 10 contracts (premium received minus the long strangle decay) for the 4 weeks (excluding commission). So mission accomplished for the first month with $1.75 of premium collected. Looking at a 250% return over 7 months!
    Back to the weekly trade – on Thursday 6/23, we bought back the short calls for $0.35 ($0.45 profit) and then on a spike, bought back the 24 puts for $0.83 ($0.37 profit). So we collected over $0.80 the first week. On track for a triple!
    On Friday 6/24, we then sold the 23 Calls for $0.95 and the 24 Puts for $1.20. That same day, the calls fell to $0.70 so Phil advised to buy back the call for a $0.25 or 20% in one day. They actually dipped further later and patient traders got over $0.30. Before closing, Phil recommended selling the 24 calls for $0.28. On Tuesday 6/28, the runup got us a bit nvervous and we covered the calls for $0.45 (losing $0.27). The 24 Puts expired worthless on 7/1 giving us $1.20 of profits. So for this week, the calls were a wash, collecting 0.25 and losing 0.27. But the puts brought in 4 times what we need so a profitable
    On 6/30, we sold the 25 Calls for $1.05. Traders who didn’t cover the 24 calls this week were looking at a roll from the 24 Calls to the 25 Calls for a loss of $0.81. We also sold the 26 Puts for around $0.80. By 7/7, the 26 Puts were worthless, netting us another $0.80 for the week. However, the call side was in disaray, with the 25 calls at $2.40. Phils recommendation was to roll them to 1.5x the July 27 calls at $1.00. So $1.35 loss but $1.50 more in premium. As luck should have it, we got a dip on Friday 7/8 and we able to buy back to the 27 Calls for $0.37, netting $0.63 of profits. We then sold the 26 Calls for
    $0.83. The 26 Calls were bought back on 7/12 for $0.18 which gave us another $0.65 profit. On 7/12, we also sold the 24 Puts for $0.70. Some of us missed these 24 Puts and sold 5 25 Puts at $0.90. On 7/13, we then sold the 25 Calls for $0.62. And based on MBI news, Phil advised to buy back these calls on 7/14 as they had dropped below $0.10. On 7/15, the 24 Puts dropped to $0.40 and were bought back for a $0.30 profits. The 5 25 Puts were rolled to 10 23 Puts for an about an even roll.
    So currenlty, we are short 10 23 Puts and no short calls.
    So in 4 weeks, the weekly trade brought in (on average as I can’t track everybody’s trade):
    Week 1 – $0.82 of premium collected ($0.45 call side and $0.37 on the put side)
    Week 2 – $1.18 of premium collected ($-0.02 call side and $1.20 on the put side)
    Week 3 – $0.40 of premium ($-0.40 on the call side and $0.80 on the put side)
    Week 4 – $1.47 of premium ($1.17 on the call side and $0.30 on the put side)
    So far, $3.87 collected in the first 4 weeks against that $4.80 long strangle. Or a potential 600% over 30 weeks. Keep in mind that these results are the best case scenario. For example, this week, some of us are rolling the Puts even so less premium. Last week, some had a loss on the call side with a roll. But even with these, you should be looking at around $2.50 for the first 4 weeks. Or close to 400% for the length of the trade. 

  3.  Oil Line
    R3 – 98.55
    R2 – 98.3
    R1 – 97.83
    PP – 97.58
    S1 – 97.11
    S2 – 96.86
    S3 – 96.39
    We are currently at S3 so looking for support around here! 

  4. Matt/Back in Black,
    I was wondering the same thing.  However, it’s hard to imagine that with the amount of manipulation that goes on these days that they would ever allow a total meltdown. 

  5. Phil/20 Min Rally,
    I’m bewildered……how and the hell they do move the markets at will in a Billion dollar industry. 
    Any idea how???  It would have to be orchestrated between all the big boys and that would certainly be leaked causing a major scandal that the media could frenzy over… how does this happen?

  6. exec- this is the guy who runs it all!!

  7. pstas, thanks for the link.  Obviously my father’s court injunction barring the use of that photo didn’t work!

  8. Hi Phil do you have any recommendation on AAPL trade before earning tomorrow. thx

  9. FAS Money / Phil – So far we have sold 10 23 P for around $0.80 (now $0.75 or so). Any suggestions on Call sale? Also, for the more passive trade (monthly options), do we want to sell the August strangle this week? Maybe a 21/25 August strangle which brings about $1.90 of premium. There is no September option (?) available on FAS so hard to tell about rolls yet besides going to October which is not really part of the plan.

  10. An Investment Manager’s View on the Top 1%
    "The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. "

    "I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic."

  11. Phil/Cantor
    "Actions speak louder than words"……… Isn’t is WONDERFUL what our representatives can do to enrich themselves ??? Cantor reminds me of the hot head little frat boy…. whose cure in life is to be knocked on his a**….

  12. Good morning, 


    IWM   80.73, 81.22, 81.57, 81.82,  82.22, 82.49,  82.81,  83.07,  83.34,  83.59,  and  83.88

  13. AAPL:    Cashed out 2/3 of my long calls.  Huge profits on this.  Will likely buy back before day is out, as run-up to Tuesday’s earnings report is still not over. 

  14. UTHR/Pharm   Good premium for the Sept. $55 strangle

  15. Buying TZA here !!

  16. stjeanluc,

    For those of us who aren’t in this trade, would you advise getting in now? If so, what’s the best way to join in?



  17. Phil, If Eric Cantor is right and TBT takes off, what happens to the dollar?

  18. lflantheman
    Just only close one AUG 250 c looked like piranas are aftyer them.

  19.  pharmboy / NABI
    what do you think about them now? I’m down 7.5 k today  :(

  20. Good time to stock up on NLY stock 17.85 and sell Jan 13 17.5 c for .87

  21. Larry -

    How high is AAPL going to go before earnings?


  23. rainman – thanks for the article.

  24. Good morning!  

    Nice flush at the open and then a jerk back up to flush the longs and now we’re heading down again.  The Dollar is back at 75.75 after topping at 76 so plenty of bullish firepower if they can keep this thing sliding down or a very bad day for the bulls if they can’t keep it under 75.80 (even worse – 76!).  This is certainly NOT a move up I would trust, especially if the Financials are not joining in (now $14.75 on XLF).  

    Most important is watching those 1.25% lines – they need to hold and that’s around Dow 12,350, S&P 1,320, Nasdaq 2,775, NYSE 9,385, and Russell 825.  So that’s 1 over, 2 under and 2 right on the line but the NYSE is WAY under and needs to retake the Must Hold line at 8,280 before we even consider looking seriously to the upside.  Generally, I think we still have a long way down to test ALL of our 2.5% lines again.    

    The Nasdaq is flying as AAPL makes new highs at $369+ on the news that their patent suit is going well so a good chance to pick up the short plays on the Nas if you missed them on Friday (see this morning’s post for trade ideas)

    If you didn’t read it this weekend, I strongly recommend Phil’s Favorites from this weekend as we had so much good stuff there I don’t even want to take up the space listing things.  Nice job by Ilene and our authors over there!  

    Today is a watch and wait day as we’ll have to see which way things break but the VIX zooming up over 21 speaks volumes for the real sentiment out there.  OK, quick news review and then I have to go to work:  

    Monday’s economic calendar:
    9:00 International Capital Flow
    10:00 NAHB Housing Market Index
    11:00 Financial Stability Oversight Council Meeting 

    Notable earnings after Monday’s close: IBMLNCRMOS,PKGSWKSTLDWYNNZION 

    At the open: Dow -0.44% to 12424. S&P -0.38% to 1311. Nasdaq -0.43% to 2778.
    Treasurys: 30-year flat. 10-yr +0.06%. 5-yr +0.04%.
    Commodities: Crude -0.99% to $96.28. Gold +0.64% to $1600.30.
    Currencies: Euro -0.5% vs. dollar. Yen -0.06%. Pound -0.34%.

    Market preview: Benchmark S&P futures -0.6% andfollowing Europe lower as gold passes $1,600/oz for the first time, as Washington and Europe can’t put debt issues to rest. News Corp. -4.9% on the continuing phone-hacking scandal and Hasbro -1.4%despite earnings beating forecasts, although Halliburton +1.7% andGannett +4.5% after doing the same. Later: NAHB housing index, IBM earnings. 

    The House is due to vote tomorrow on a GOP "cut, cap and balance" program that would condition increasing the debt limit on a constitutional amendment requiring a balanced budget. However, it’s unlikely to pass the Senate. 

    Senate Debt Plan Promises Months of Budget Wrangling. With few signs of movement over the weekend on negotiations to raise the federal borrowing limit, Senate leaders are planning this week to unveil a back-up plan that would force more budget wrangling before the end of the year. 

    Complete US Debt Talks Update.

    Business economists pare back estimates for U.S. growth this year. Only 11% of economists polled by the NABE see GDP over 3%, down from 37% in the last survey. On the positive side, firms reported a slight uptick in hiring for Q2 with the same percentage saying they plan to increase hiring in the next 6 months.

    Global Consumer Confidence at Lowest Since Late 2009Global consumer confidence fell in the second quarter to its lowest level in a year and a half as an uncertain economic outlook, a deepening euro zone debt crisis and rising inflation made people more cautious, a survey showed on Sunday.

    Why Goldman Sachs(GS) Just Downgraded The US Economy.

    Car makers report assemblies of light motor vehicles in Q2moved lower to 7.6M vehicles from 8.2M in Q1 after adjusting for seasonal swings. Backlash on the global supply chain from Japan’s earthquake slowed production, but analysts see a pickup in production in Q3. 

    EU: Stress Tests Fail to Convince AnalystsEuropean banks may have to raise as much as 80 billion euros ($113 billion) of additional capital as the stress tests failed to allay investor concern about a Greek default and governments’ ability to bail out their lenders.

    Jean-Claude Trichet reiterates that the ECB wouldn’t accept defaulted Greek bonds as collateral, potentially cutting off funding for Greek banks. In contrast, Angela Merkel again insists on private sector involvement in any new bailout, which would probably cause a "selective default." 

    EU Summit Looms to Snap Debt Crisis Deadlock as Contagion Threat PersistsEuropean leaders will this week seek to revamp their debt crisis-fighting strategy and snap a deadlock that is spooking investors and prompting warnings of contagion from the International Monetary Fund.

    Italian 10-year government bond yields rise back up above 6% and towards danger levels as Italian banks shares slump around 4% after the EU stress test results fail to allay concerns over their stability. The five banks tested passed but they have €164B ($230.4B) exposure to their country’s debt.

    European shares are lower for the same reasons why gold has passed $1,600/oz. – impasse in the U.S. over debt and impasse in Europe over debt, not to mention the results of EU bank stress tests that seem to be reassuring nobody. STOXX Europe 600 is -1.2%.

    The True Elephant In The Room Appears: Trillions In Commercial And Industrial Loans To Europe’s Insolvent Countries.

    Goldman(GS) Bet Against Entire European Nations – Who Were Clients – The Same Way It Bet Against Its Subprime Mortgage Clients.

    U.K. Economy to Grow Less Than Previously Forecast on Consumer, Greek Risk. Ernst & Young LLP’s Item Club will cut its U.K. economic growth forecasts for the second time this year as weak consumer spending and Europe’s sovereign-debt crisis cloud the outlook for the recovery. Gross domestic product will increase 1.4 percent in 2011, compared with an April projection of 1.8 percent

    Bank Yield Spread Quadruples on Bad-Debt Risk: China Credit. The premium investors demand to hold bonds issued by Chinese banks that lend to promote official policies quadrupled in the past eight months as Moody’s Investors Service said local governments may owe more than was estimated in a national audit.

    A Must-Read Report On China’s Municipal Debt Problem.

    They don’t like Warren?  Well wait until they get a load of Cordray!  Pres. Obama will formally nominate today former Ohio AG Richard Cordray as the new chief of the Consumer Financial Protection Bureau. Elizabeth Warren recruited Cordray, an outspoken critic of the banking industry, to the CFPB in December.

    Meet Richard Cordray: An Undefeated Jeopardy Champion and The Man Obama Wants to Run The CFPB.

    Deutsche Bank’s Chris Whitmore expects IBM toannounce FQ2 revenues above consensus today. Whitmore’s channel checks indicate strong demand for IBM’s mainframes and proprietary servers, and server share gains against Oracle (ORCL). However, Whitmore is worried about a dearth of recent services deal announcements. 

    AAPL a day: ChangeWave Research’s June survey of North American smartphone buyers has 46% claiming Apple’s (AAPL) iOS is the OS they prefer for their next phone, compared with 32% for Google’s (GOOG) Android and 4% for RIM’s (RIMM) BlackBerry OS. In addition, 70% of iOS users claim to be "very satisfied," compared with 50% for Android and 26% for BlackBerry OS.


  25. Wow what a Dollar move……

  26. AAPL:   Got to be careful trading this over the next two or three  days.  Most shares are owned by institutions.  A lot of this will be "smart money".   They have already purchased their shares, as we have.  AAPL will probably blow the quarter away, see a spike from purchases by "dumb money" , and at that point the institutions will take profits.  So be nimble.  Huge money to be made here in the next 72 hours I beliieve, but play it smart.

  27. FAS Money / Peedlew99 – There is no reason why you could not get in this trade this week. You still have 26 weeks or so to pay for the strangle (and it’s actually cheaper now at around $4.25). If and when we initiate a call sale this week, I guess you could start then and Phil could suggest a put to cover then as well. I’ll keep you in mind when that happens.

  28. David/AAPL:  I wouldn[t be surprised at 375 + before earnings. 

  29. And did I say Wheeeeeeeeeeeeeeee?

    Thanks for the FAS Money update StJ!  Did we do an August spread on the slow trade?  

    Rally/Exec – When the volume is low, they can do anything they want.  I don’t know if you ever caught one of my "used car lot" examples of market pricing but it only takes the mispricing of a few thousand shares of a stock to inflate the APPARENT price of millions of others.  That’s why I spend a lot of time telling people to ignore spikes that are not confirmed by volume spikes – not only is it easy to move the needle but, as Cramer once explained – it’s very profitable as well.  

    ROFL – Oil back to $95 – the gift that keeps on giving!  

    AAPL/Gucci – See the end of Friday’s post – I answered that early this morning.  

    Dollar testing 76 again – maybe a bounce if it gets rejected but OH NO if it doesn’t. 

  30. Part of iron condor RUT AUG has been filled at 1.20 still waiting for 1.30

  31. Getting ugly out there. BA and T are breaking down.

  32. NABI/tch – whoa…..well, vaccine against an ‘active ingredient’ in tobacco…..what do I think of them now?  Sorry.  I was not in them, so was not following closely, but salvage what you have and move on.

    UTHR – I like it, November $55/60 BCS for $1.95, selling the $50s for $3.30 for a net credit of 1.35.

  33. Phil:
    Want to roll XLF $14 2012 (in 3.04/ now 1.36) long position to 2013. Would you roll to $14 or $13? Thank you.

  34. Phil -

    Long oil off the $95 line?

  35. Out of oil futures. Gained about 1.50 on CL contracts. That was fun! Guess I have some extra cash for opening weekend at Saratoga Springs race track this weekend.

  36. Leg #2 down? Dollar gaining strength over $76.

  37. @ Phil, do you think the market is setting up nicely for a relief rally when the debt deal finally gets done? Also, i know everything around the globe including the US is fundamentally horrible, but are you still bullish for the second half of the year? I think this year might follow last year´s pattern (a lot of volatility during the summer and a vertical rally from september to december) Thanks!

  38. One chartist’s view on AAPL earnings.

  39. Pharm:
    Is there a way to make that chart larger or more clear? Hard to read the small text. Thank you.

  40. HGSI/Pharm        Do you think that docs will start prescribing Benlysta?  My niece has Lupus, and there are not many options for treatment other than prednisone.  HGSI chart looks bad.

  41. JRW
    Do you have lines below 81.82? Thanks

  42. I dipped my toe in. USO Jul38 calls for .28

  43. Good Morning!
    The sun is shining, the birds are singing…
    …and the headline on CNBS:  "News Corp in Chaos"
    Sweet…. :)

  44. Getting out of TZA with @95 cents and buying 1/3 TNA off a buy signal and being at the 1 1/4% move level !!

  45. Holding on the TNA; mixed signals

  46. FAS Money/StJ – This is kind of nasty at the moment and we’ll have to see if $14.50 holds (and I know it’s torture watching).  If not, we have to be defensive and sell the $22 calls to protect (now .98) as we are then selling $1.78 of premium on a $1 spread and that gives us a .78 buffer to either side but I think we should at least get a bounce here and we’ll be a little quicker on the trigger to cover on the way up.  On the monthly, now is the time to sell the Aug $21 puts for $1.22 but, like the weekly, let’s wait on the calls.  

    Top 0.1%/Rain – That’s a great article.  I got bored pointing out the difference last year so I ended up just saying top 1% again but, in reality, these are the guys we mean (and it includes Corporations, which no one else seems to mention).  

    Cantor/Acobra – I’m just amazed.  I wrote to a friend in DC and asked if there weren’t rules about this but there aren’t – these guys are literally above the law.  

    Dollar/Rpme – That’s going to be a strange dynamic as the Dollar should go up if we don’t get a debt agreement as it means we can’t borrow more.  Also, people will freak out and run to cash – also Dollars, so we could find oursleves in a very odd-looking situation with a strong Dollar keeping our long-term rates down – for a while.   But then, if it drags on that way – the Dollar will begin to collapse as the US on the whole becomes very unattractive.  

    Dollar 76.075!  Hopefully, this is the panic spike but we still have an hour to go on EU trading and they are off big with FTSE down 1.25%, DAX down 1.45% and CAC down 1.75% so call it 1.5% on the average – same us our lows so far.  This is a good spot to take a bullish poke at things and a good time to take profits on the weekly QQQ $58 puts, now $1.05.  

    A nice, mellow upside play off S&P 1,300 is the SSO Aug $51/53 bull call spread at $1.05, selling Sept $44 puts for $1.07 for net .02 credit  on the $2 spread (10,100% possible upside) with SSO at $51.50 now so a $6.50 drop is more than 10% so a 5% move in S&P below 1,235 is what you would be betting against (the puts are rollable, of course).  

  47. Phil, at what point does NWS become a buy?  Book value is a little over $11 a share.

  48. shadow,

    81.57 and 81.22; see 9:43 post !!

  49. Lflan- At what point would you say enough is enough on AAPL, and close out pretty much everything long going into earnings? 380?

  50. LDK halted.

  51. Damn, no confirmation on the 3 minute; getting back into TZA !!

  52. DClark, just right click on the chart and then click on "view image" from the pop up box. The chart will then open up full size.

  53. doro:
    Thank you.

  54. Thanks JRW!
    Sorry missed that early post.

  55. Dive dive dive

  56. wynn and CMG still green—earnings today and tomorrow I think.
    I hope the MoMos dive after earnings (and before)!

  57. drcraig/AAPL…..380 would be about all I could take, and I’d probably just do Phil’s trade at that point, or something similar.   He posted a bull call spread of Jan 12  365/415 earlier this a.m.  If we got to 380 I’d move that spread to higher strikes and just wait for it to mature.  There is certainly a lot of excitement arround AAPL at the moment, but with the markets overall looking shabby this ‘trading against the grain’ will likely die down within a few days of earnings.  So, yeah, 380 and I’m mostly happy just to watch for awhile, and count cash.   

  58. Phil it is about time you start producing your artificial gold bar in your garage !!!! 1604.00 my long putters do not look so good today!!

  59. jabobeast / momo — Add TZOO to your list. +5%!

  60. I updated the AAPL chart above for those with tired eyes…..I don’t like to make them too big, as they mess up the chat boxes.

  61. Getting out of TZA for another 19 cents !!

  62. XLF/DC – I don’t like doing rolls like that without collecting some cash so I’d look to sell the Jan $15s for .80 and then go to the 2013 $13s, now $2.60 for net .50 out of pocket and I know it’s only a $2 spread but you have a year to roll and, at this point, you should be TRILLED to get even.  If it heads lower, THEN you can DD and drop your net $3.54 basis on the 2013 $13s to perhaps $2.50 or less (if you DD below $1.50).  Now if you don’t WANT to be in 2x the 2013 $13s at net $2.50 (the price they are at now) then DON’T spend .50 on the roll, right?  

    Nice job DDay!  Good idea on USO calls, worth a flyer off the $95 line.  

    Bullish/Asaenz – I’m bullish on the PRICE of the market, due to inflation, not the VALUE of the market, due to fundamentals.  

    NWS/1020 – Amazing isn’t it?  

    Mixed/JRW – I think we have to wait for the EU to close to get a good move up but this is a nice accumulate point (810-812 on Rut futures) for a bounce back to 815 at least.  BOJ accomplished their mission of closing the Yen over 79 into the EU markets – they don’t try to do that for the US close – they don’t have the firepower but, once we close, it’s game on again. 

  63. Pharmboy / chart — that embedded cart doesn’t show on IE9. A few others you’ve posted in the past haven’t either.

  64. Pharmboy……I can’t see that AAPL chart, probably because I’m at work and they filter anything they think my mind can’t tolerate.  Can you give me the gist of it, verbally?   Thanks. 

  65. Did the market hit bottom? Very mixed signals all cash. What next?

  66. Link

    to chart.

  67. Phil:
    I do hold the XLF Jan $17 short (in at 1.29 now at .20). I was just going to let those expire and then pick up a new 2013 short position to complete a new BCS. But, I see your point. No harm in rolling the 17′s down to 15 and get at least something for the roll to the 13′s. Thank you.

  68. Phil
    Thanks for the JRW comment, of course it shows up after I click submit!

  69. More info for all on AAPL.

  70. Phil,
    RE my WYNN question over the weekend… you responded: 
    You already sold 2 Aug $150s for $5 so pretty screwed there at the moment at $16 but you can roll them up to 2x the $170s (now $9.35) to put $1.35 each more in your pocket and shove them up to big premium.  If you want to cover, let’s assume WYNN misses or disappoints but nothing terrible and they fall back to the 50 dma at $145 (200 dma is $130) – then you can sell the Sept $150 puts for $5.60 as long as you don’t mind rolling those along if WYNN gets a big pullback (Jan $125 puts are $5.50).  
    Were those October 170′s? (Now 10.30)… 


  71. This does not look like a market that is going to bounce.  On the contrary, it looks like a market that is being propped up.  Europe has fallen then more then we have on the day.  I see follow through after they close.  After all, it’s our debt ceiling debacle!  And I see no bounce once the ceiling is lifted.  I think it’s bond positive.  Not equities.  It will be a sell on the news event. imho.  BTW, I’m now less then 1% away from even after having been underwater for over 2 weeks from that ridiculous end of quarter run-up.  So FU manipulators!!

  72. Yodi/RUT:  Yodi, I filled the put side of some Aug IC’s on RUT. The call side was filled on June 30th, which was just a little early. Today, I sold the Aug 710/720 bull puts for 0.65. I know, waaaaaaaay OTM with delta of .09. But I don’t trust this market one tinkers damn and I want to sleep at night.
    Thanks for NLY update.

  73. FAS Money (Monthly trade) – We sold the August 21 Puts for 1.21 or so earlier. They are now 1.25 so still a good trade! No calls short open so far.

  74. Jbur
    The other day IT warned not to sell the play out of the condor I think the margin as well will be much higher.
    I am trying to get 1.28 to 1.25 for the rest of the condor. It the market is down for one day is no reason to scream insurance as we have seen with the JUL play what goes down SHOULD come up again, mostly ha ha

  75. NWS/Rustle – I wouldn’t touch them right now, it’s chaos over there.  You can gamble, of course, they probably won’t go BK as they don’t arrest corporations – just people but they might fine them about a decade’s worth of earnings.  It’s only July and they are down from $18 so the Jan $16/18 bull call spread at .70 is not bad and IF they collapse, then you can sell a short put for .70 to mitigate the loss and establish a long-term position.  The Jan $12 puts are already .50 so if you want to establish a 1,000 share position then why not just spend $700 on the spread and see how that goes first.  If NWS zooms back up, you can always buy 1,000 at $16 ($16,000) with the call away at $17 and sell the $15 calls you own for $2+ to knock your entry down to net $14 or less – see how nice it is to have an entry plan?  

    Didn’t get to 815 on that last RUT pop in the futures but 814.40 was a very nice ride – this is what trailing stops are for!  I still think it’s a good re-load on the EU close but let’s make sure the Dollar is going to stay below 75.95!  

  76. Italian banks closed LIMIT DOWN!!!

  77. RUT / Jbur and Yodi – I bought back my 900/910 call spread today for a good profit. However, I am not jumping in the put spread right now as I am worried we still have ways to go. Too much uncertainty in the market right now. Actually, following the advice in the book we all read, I’ll be looking at opening spreads with a much longer expiration like October in  couple of weeks. Adjusting in the last couple of weeks was too hectic given the fact that I was traveling and not in front of my PC all the time. The idea is to sell with about 8 weeks left and buy back before the last 2 or 3 weeks! It should be easier to monitor and adjust. 

  78. Pharmboy….Very nice chart and tabulation of AAPL resposnse to earnings report.  Bottom line… probably won’t do another GOOG move, so if you’ve made significant profits on AAPL over the past few weeks, or even the past week, either be content and watch/wait for a pullback to come back in later, or do a safer future play like BCS or selling puts.    Having said that, I would not be surprised to see AAPL move significanly upward after this earnings report.   And sometimes for fun, when I have such an intuition I’ll take a TINY bit of the cash that I’ve just earned and buy some bare bones weekly calls…….just for fun.    

  79. Jbur – I like your Aug 710/720 sale. The margin though is prolly the same. So in terms of risk reward it’s not great but pretty sure it’s free money if u have the margin. See, now inal talking myself into it :)

  80. Phil
    Is there  SPY equivalent of that SSO bull call spread ?

  81. Pharm- curious as to your thoughts on onxx and cigx at these prices? Thx

  82. yodi – why sell the call side of the trade. The credit is only 10 cents.

  83. XLF at the edge… $14.49! 

  84. NWS/Phil
    Wasn’t thinking of doing anything with them now, was just wondering at what level it might look attractive, but you’re right, with fines, it’s unknown and better to wait and see.

  85. Gold/Yodi – There is a very mistaken impression that a global panic will go to gold.  Maybe if the US defaults but, once we don’t default – I think money will fly back into the dollar and tank commodities (and the markets). 

    TZOO/Rain – That’s funny as no one is actually traveling (see Airline and Hotel earnings).  

    RUT back below $812 but patience is key (have to scale in (one at 812, one at 811.6, two at 811.2, two at 810.08, four at 810.04…) and expect to take a stand down around 810 but then take your losses if they can’t hold that and also, of course, don’t buy anything while the Dollar is going up (now 75.985).  

  86.  Oops – Also, don’t forget that, when we scale in, our goal is to scale out on the way up to as we try to lower our basis as much (and as often) as possible.  You don’t need a lot of shares to make a lot of money in the futures once you catch the right direction…  

  87. FAS/Phil – time to sell those July $22 Call covers yet?

  88. Stjeanluc
    Hi yes we are talking about two different condor plays the IT play is always one month ahead and the book you talking about is right as you said is two to three month ahead. The condor you sould always take profit and close the play if at any time you make 50%. The better condor play is with SPX it is good to have about at least 3.00 plus credit. You do not get this with RUT keeping to the delta .10 line. I as well play the futures in corn wheat and oil three month out these are always longer plays with lots of patience. Just close the Sep CL strangle for 1.19.

  89. nicha
    The trade was set up by IT obviously you can raise the caller side and drop the put side of the condor but it is not a good thing to look at it for one day RUT will go up just as fast and you find it very hactic to adjust every 5 minutes. It is not a day trade!

  90. IBM reporting after hours today--reports say customer checks are solid but services sales an unknown

  91. ONXX/jro – they have fallen back nicely, huh?  From our entry many moons ago, they are right back in the spot.  I would be very cautious right now with biotech if it is/was a high flier, as the big boys are pounding them.  DCTH, PLX are all down from a recent run up, and ONXX is a high flier at $33.  Scaling is going to be the key here, and would wait for the stock to move down a bit more.


    CIGX – me no likey ikey.  That star is going to fall IMHO.  Not rich enough to short though.

  92. scottmi
    FAS I am not sure today is a day to sell any calls VIX is up and one sells puts buy calls back and buy stock my two cents.

  93. TLT down along with the S&P!!  no way they bounce together…one has to change direction

  94. TZOO — up 6.24% on an increase in sales to government workers that snatching up last minute international travel bargains as an insurance policies in case they fail to come to an agreement to increase the debt limit. A spokes person for  company said "we’re thrilled to provide this service to our government whether or not they can come to an agreement to increase the debt ceiling" :)

  95.  Phil, do you have conviction on /TF futures still. It does not look to me like they held 810.

  96. Here an other condor play on SPX SEP sell 1400c buy 1425 sell 1125p and buy 1100p betrween 3.80 and 3.50 margin
    841.00 PM

  97. Someone please remind me to follow my own system; ssdirk probably bought TZA at 9:45 and has been enjoying a nice brunch all this time !!  8-)

    Watch out for 1293ish on SPX as firm support !!  (IWM 80.75)

    Longer term ????????

  98. HGSI/stock – not sure of the sales, and yes, there is little out there for Lupus.  I think it is all up to the sales numbers.  The stock is at a 52 wk low, but what are the sales going to come in at?  For a $3B/yr drug, what is HGSI’s take?  The numbers will speak volumes on this high priced med.

  99. Earnings are coming up for DNDN as well (8/2).  Another high flier that needs to show sales.  I am still bearish on them……

  100. Phil one day you will agree people do not trust paper money any more!!! Easy to print

  101. JRW - yawn…at least you got up, even if you didn’t follow your system at 9:45….I just missed $8k by sleeping in late due to staying up to 3am setting up my home theatre…damn!  So were do you stand right now, cash?  1/3 TNA for me…

  102. Phil/PSW service upgrade - So when do you offer the concierge call to wake us late nighter up for early morning trading?  What I wouldn’t give to not need 8 hours of sleep…your 4 hour requirement is priceless…don’t take it for granted, as some of us can’t function without 8 hours…grrrr…

  103. JRW: How many times do I have to remind you to stick with your rules!

  104. JRW Follow your own system!!!!!!!!!!!!!!!

  105. You guys with your TNA girl friends I do not think you should look out for her today just buying all my AUG 83 calls back for 3.70 poor premium but I sold them the other week for 7.50

  106. yodi
    You greedy SOB, give that money back to the loosers!

  107. shadowfax
    Just give me the pass word of you Bank acc !!!

  108. JRW – a wise man once told me to "Trade what you see, NOT what you believe" in regards to TNA/TZA.  I have it posted on a sticky not below my monitor…thinking about having it framed!  Still in TNA 1/3… 

  109. yodi
    ????????????????? is a cult!!!!

  110. Troy
    Be careful the 81.22 line is weak!

  111. shadowfax
    You need to be clearer can not read the numbers??????

  112.  RIMM fiasco
    Phil - 
    I got trapped in the 25KP RIMM play at the end.  I wound up with the following
    -16 Jan13 22.5P basis 3.6 now 4.18  - net margin required $10,280
    Loss to date $5538
    Would you adjust this?  I have been selling calls against this position.

  113. JRW, I’ve pretty much given up following your system because I don’t have a fraction of the discipline you have to follow it.  Instead, I’ve rededicated myself to get my flippin program up and running.  Even a spineless weasle can code a trading warrior-  I shall call it.. ALGORISM!

  114. Whuck? Is this logic backwards or am I dense?: Data firms unite to kill deceptive home price data
    "Using Radar Logic’s home price data, Andrew Davidson will create an index of non-distressed home sales prices to prevent property values in individual markets from being skewed too far into the negative due to an influx of discounted real-estate owned properties."

  115. After checking I have confirmed that sell programs have dropped the market while buy progams have been side ways. Money has been net out although XLF is in, buying the dip or dips buying.

  116. BTW, this is so going to sell off-

  117. Shadow/TNA – out for .52 on that bounce…bathroom break…LOL!

  118. Condors / Yodi – I know you are looking at getting $3 as is suggested in the book but I look at percentage of margin and protection rather than the actual amount. For example, the September condor that you setup on SPX (1425/1400/1125/1100) brings in $3.20 but with $21.80 of margin (about 15% of margin). You can setup a RUT condor at 910/900/690/680 that brings $1.75 for $8.25 of margin (21% of margin) with deltas a 10. And you actually have more upside protection with the RUT than SPX in these 2 trades – might not be needed but look at the meltup last month. The issue is the trading system and I do find it frustrating with the RUT as it’s not done electronically. But that’s another issue!
    I need to study this a little more to see what index brings in the best premium with good liquidity. 

  119. How about that Theory:
    today Treasury auctions off $27 billion

  120. im with you matt, in TLT..keeping it tight…markets bent over..not sure whether to pull itself by the bootstraps or to kiss its ass goodbye.

  121. stjeanluc
    RUT SPX you looking at the cash loss on the play of SPX 21.55 the margin is only 8.63 on PM

  122. Matt/ALGORISM – ROFL…where can I buy a copy, and can I get it in blue-ray?  JRW’s method takes a lot of pratice, I’m just starting to get decent at it, and it took 1,200 trades over 3 months last year of experience to even begin to make any money.  Interesting part is looking at almost 50M in trades last year over those three months, all my gains were in TZA, even though the market was going up the entire time over those three months.  Of those 1,200 trades, the only entity that made a fortune was my broker!  Point is, it is very hard to "de-program" as I WAS in your "reality camp" in the past, but now I’m in "fantasy camp" and I’m starting to trade "What I see, NOT what I believe"…and it works!
    Also, don’t overtrade JRWs method…I’m now doing 3-5 trades a day, versus 20-30.  "Day Trading" wasn’t working, it is really more of a "Momentum Trade" method IMO…looking for quarters and dollars, not pennies.  Again, hard to break from my 100 trades/day daytrading ways a long time ago.  De-programming is hell…and takes thousands of trades andmonths of practicing, at least from my experiences.

  123. Those same rules (on the futures) apply to day trading or momentum trading as well, even with options but it’s much easier (and cheaper) to play these kinds of games on the futures.  

    XLF/DC – I’d take the $1.09 profit and run.  It will take you 6 months to make .20 more (.03/month) while you will blow the opportunity to sell 1/2 those same calls for .40 on a spike in the very least.  If you want to go the other way, you can just set a stop at .30 but, of course, very strong chance they get triggered.

    Wow, how rich do you have to be to have a woman who is found bound and gagged and hung from your balcony ruled a suicide?  

    No problem Shadow – The good news is that you are seeing the same inflection points I am, then next trick is getting the hang of what they mean.  

    WYNN/Amatta – I’m not sure, sorry I missed that but the point is the Aug $150s are now $17 so you look for SOMETHNG to roll to at $8.50 or more and, at the moment, I’d go for the Sept $165s at $10, which puts $1.50 in your pocket x 2 so you are then net $6.50 per short (2x) and your break-even is $171.50 on 2x, which is a damned sight better than your current $155 on 2x, right?  

    Wow, lightning dollar dive makes the RUT a nice winner already!  Don’t forget to take profits…..

    VIX 22!  

    SPY/Streth – Sure, you can go with the Aug $128/131 bull call spread at $1.83 and sell the Sept $120 puts for $1.57 for net .26 on the $3 spread and that’s about S&P 1,200 on the bottom with a 1,000% gain at 1,310ish.  

    FAS/Scott – Oh have a little faith!  8-)

    IBM/Streth – Big Dow booster if they do well but well is already priced in, I think.  

    LOL Rain, makes as much sense as any bullish premise on TZOO.  

    /TF Futures/Jvest – Gotta watch 75.90 on the Dollar but yes, I think we’re primed for a nice move up but you have to take profits along the way (as I noted above) not shoot for the stars in a choppy market like this.  

    LOL JRW – It is annoying when we don’t take our own advice….

    Sleep/Troy – You could always move.. That’s one of the pluses for me in considering retiring to the Channel Islands, they are 6 hours ahead so I can have a nice breakfast and play the US futures and be done for the day by noon.  

    NFLX down 4.5%

    RIMM/Edro – RIMM is at $26.52, not $18.90, which is your net entry.  I don’t even know what I can say to you if you think this is a $5,538 loss as you’ve been here long enough to know better!  You can’t trade options if you fixate on the PRICE of the position, which can go up or down 20% daily – you have to understand the VALUE of your positions and whether or not they are on or off track.

    So, thanks Edro for pointing out that you can sell the RIMM 2013 $22.50 puts for $4.20 ($4,200) and just $10K in margin (although TOS say net margin is just $2,250) as that makes a lovely offset to bullish plays.  

    Homes/Rain – Well it does skew the market but so does not including them.  I suppose the NAR is asking for more positive-looking data (as are tax assessors) and they are the main buyers of that stuff so, just like the way ratings agencies changed their practices to make the banks look better – these data firms will skew to whatever sells.

    $27Bn/Lol – Was that scheduled?  

    Eric Cantor doing well today – TBT back to $33.26!  

  124. Troy,

    I’m 2/3 TNA currently (from 12:05), having left money on the table pulling my TZA early !!  Smiley

  125.  RIMM
    I do realize the Jan13 22.5s are a good position, I was hoping you would have a suggestion that would not take 18 months to play out.
    And, you are welcome for the new trade :-)

  126. Yes,
    it was scheduled
    Next one is July 21st – 13B
    Here is Treasury auction schedule for the whole year.

  127. troy matt
    I have been making more on TNA and net loss TZA. The last week has been reverse, my big mistake is when to fold, when to hold, and making .50 get out. Then if I try to get back in it turns fast and ugly on me .50 or more in a minute and then it fills outside the bid and ask. The rubber band effect is hard to identify, hold or fold, is make .50, net 0, or make 2.00? JRW seems to hit it on the big moves. Is that because he continuously tries and I give up?

  128. Phil / Homes — You’re right. I forgot the fundamental tenet "follow the money".

  129. Phil/Channel Islands – so your retirement spot is Jersey?!? =)  The real problem with sleeping in too late is when you do not have to get up, it is easy to get extremely lazy and irresponsible…=(

  130. Channel islands/Sleep move – and for those who can’t quite buy into the Channel Islands there is Iceland or Portugal…

  131. Phil
    Got it. Thanks

  132. 27b auction, indirect took down only 20%
    The bid-to-cover ratio, an indication of demand, was 4.44, Treasury said

  133. Would it be possible for someone to point to the link/post where JRW’s trading system rules are described? Would appreciate any help.

  134. Shadow/JRW big moves - I’m guessing it doesn’t hurt that he is so far ahead on trading TNA/TZA…that it helps build confidence to hold as he has already made so much on the trading method, a daily loss is irrelevant.  At least that is the way I mentally approach my land trading investments.  I’m so freakishly ahead, that I’m able to take huge risks and sleep like a baby at night.  It probably also doesn’t hurt that my father taught be to only invest in land (and never owned a stock), and JRW had a career of owning a financial company (and probably had a father who taught him the markets).  One often follows what they are good at in which is familiar, and excels accordingly. 

  135. CIM – anyone have any insight to CIM getting knocked over the last month or so?

  136. Phil/Jersey - "Jersey link fixed!"

  137. Troy and the rest
    I made most in real estate also but that went bust. I expect it to stay down for a long time because the average working person has been behind for so long. We need to boost demand by increasing wages first, force multinations to come back or go away, and go back to progressive taxes. Velocity will go up and presto sustainability! I would love to start paying income tax again, poverty income is very old and no fun at all, at least for me!

  138. RIMM/Edro –  If you are impatient, you can roll them to the Oct $26 puts at $2.55 and do a 2x roll or a 1x roll and sell Sept $30 calls for $1.12 since you’ll be pretty happy to see RIMM back over $30, right?  

    Treasury/Lol – Damn, they do those so often you lose track.  Thanks.

    TNA, TZA/Troy, Shadow, Matt – I play one or the other as I find it much more relaxing to just pick a damned direction and wait for an entry.  Of course, I prefer the futures but it’s the same thing – wait for the bottom of the short-term channel (if you are bullish), buy there with a tight stop.  If it holds and moves up, tighten your timeframe and take the resistance points seriously as profit-taking opportunities and if it fails – get the hell out, widen your time-frame and wait for the next good support test.  As Shadow notes, if you play both ways all you do is make your broker rich – it’s hard enough trying to call a bottom properly without pressuring yourself to call tops and bottoms over and over again.  

    Like now, for example, we’re geting another crack at 810 on the /TF.  If it holds, great and, if not, then out at 808.50 (prior low was 808.50 with a loss of:  1 at 810.40, 1 at 810, 2 at 809.60, 2 at 809.20 and 4 at 808.60 for an average of 10 at 809.26 and a .76 loss.  So that’s the trading plan for an entry at 810.4 which you can ride all the way back to the lows and get out with a $760 loss if you are totally wrong about calling the bottom (assuming that 810 will hold).  

    Jersey/Troy – Yep, it’s my current escape route if this country goes to hell.  Not actually part of the UK but protected by it.  Self-sustaining and very close to anything you want in Europe.  I doubt I would sleep any later, just that I would have my afternoons free, which is about as retired as I think I’d ever want to be.  My Grandpa Max ran his business until he was 85 and regretted selling it for the next 13 years!

  139. JRW/Puts
    What’s your outlook for "baby sitting" your IWM Puts… ???

  140. Got into TNA
    Fold for a quarter or hold? That is the only question!

  141. .50 fold or hold?

  142. AAPL turning upward for the …………………………..?stick?    :)

  143. Phil/Channel Islands
        When I was looking into offshore accounts a few years ago, the Channel Islands came up as a possibility. I assume from your comments about the Islands that it’s a life style choice… but could be some added benefits.

  144. Ah, finally breaking up on the RUT (and others).  Let’s see how far we can go now. 

    01:00 PM On the hour: Dow -1.21%. 10-yr 0%. Euro -0.63% vs. dollar. Crude -2.16% to $95.14. Gold +0.87% to $1604.00.  

    NAHB Housing Market Index: 15 vs. 13 expected, 13 prior. NAHB’s David Crowe views the rise as a "correction from an exceptionally weak number in June that was at least partly attributable to negative economic news and the close of a disappointing spring selling season."

    Don’t expect any pent-up demand for housing, as the U.S. in mired in a "demographic depression," Scott Sumner writes. Surely we’ll soon need to build more houses, to meet our growing population, or so the argument goes. "If only that were true," Sumner says. "Unfortunately, as sharply as housing construction has fallen, household formation has fallen even faster.”

    In spite of government efforts to keep China’s red-hot housing market in check, prices continue to move higher, with the National Bureau of Statistics estimating Chinese home prices rose 4.2% annually in June. However, prices in two of the most expensive markets, Shanghai and Beijing, rose by a more modest 2.2%.

    Mortgage insurer MGIC (MTG) is down 18.7% afterreporting revenues and adjusted EPS of $367M and ($0.11), respectively. These numbers beat consensus estimates of $341.6M and ($0.11), but investors appear bothered by growing expenses related to defaulting mortgagesRDN -10.3% and PMI -10.2% in sympathy. (PR

    The case that going easy on the banks would help the broader economy "just doesn’t hold together," Paul Krugman writes. The claim that resolving the mortgage mess quickly is the key to getting the housing market back on its feet "would just accelerate foreclosures [and] mean more homes offered for sale," pushing prices even lower.

    Elizabeth Warren loses her bid to get the top spot at the CFPB, but keeps fighting for the financial watchdog. She writes: "I remain hopeful that those who want to cripple this consumer bureau will think again and remember that the financial crisis — and the recession and job losses that it sparked — began one lousy mortgage at a time."

    Ben Bernanke seemingly waffles on QE3, but Mad Hedge Fund Trader takes a much firmer position on the chance for a third round of quantitative easing by the Fed saying, "No, not on your life, not a snowball’s chance in hell." 

    Silver follows the same upward track as gold, topping $40/oz as a cheaper alternative to the safe-haven favorite. Shares of select silver companies also gain: Silvercorp Metals (SVM +3.7%), Silver Standard (SSRI +1.8%), Silver Wheaton (SLW +2.5%). 

    Shares of Bank of Ireland (IRE -12.9%) and Allied Irish Bank (AIB -11.9%) continue to seesaw dramatically as worries about European sovereign debt re-emerge again with a vengeance, and give back some of Friday’s post-stress test gain.

    BofA (BAC -2.7%) needs to increase its capital cushion to as high as $50B to overcome mortgage losses, analysts say. The extra settlement and writedown costs may put a monkey wrench in the plans of CEO Brian Moynihan to reward shareholders with a dividend hike due to the new  capital ratio regs now in place.

    WSJ Gets into the Momo game:  WSJ spotlights "five stocks you’ll wish you’d bought in January" – not just "woulda-coulda-shoulda" stocks that have seen their best runs, but top S&P winners with "plenty of potential" to keep rising: Netflix (NFLX), Chipotle Grill (CMG), Cliffs Natural Resources (CLF), Philip Morris (PM), Kraft Foods (KFT). 

    Boeing (BA -2.6%) closes in on seeing the first 787 launchafter a long drawn-out process to produce the fuel-efficient widebody aircraft. The firm sits on $163B of 787 orders, as it tries to push an aggressive production schedule in the face of labor disputes and retrofitting complications.

    RBC’s Mark Sue doesn’t believe the bleeding is over for Cisco’s (CSCO) switching business. Sue thinks "intense pricing pressures and increased competition" could cause the switch market to decline in value, with Cisco’s high gross margins suffering as itfends off the likes of Juniper (JNPR), HP (HPQ), and Brocade (BRCD).

    Now they censor their enemies?  Google (GOOG -0.5%) plays hardball in a legal battle with a Belgian newspaper consortium by removing them completely from its search engine after it loses the right to republish news excerpts on its site. The overreaction by the company could compound a relatively small issue into a bigger mess.  More on Google’s (GOOG -0.5%) battles in Europe: Hitwise reports the firm dominates the search market in the U.K. with 92% market share, a stat not likely to help in its ongoing fight with European anti-trust regulators.

    BGR‘s sources claim Apple (AAPL) will be launching two iPhones this summer, with one being a low-end model selling for $350 or less without contract. Deutsche Bank previously speculatedon a low-cost iPhone arriving, and Piper Jaffray suggested last weekthat Android’s surging growth drove home the need for a cheaper iPhone.

    Two bullish previews are out ahead of Apple’s (AAPL+1.1%) earnings release tomorrow. JPMorgan’s Mark Moskowitz tells investors to "get ready for the return of the wow factor,” raising Q3 EPS estimates to $6.58 from his prior $5.55 on revenue of $27.4B from his prior $24.8B on "soaring" iPhone demand. Baird’s Will Power is only slightly less bullish.

    According to the WSJ, Apple (AAPL) is closing in on a deal to offer the iPhone via China Mobile (CHL). However, the deal’s timing depends on whether Apple produces a model for the carrier’s 3G TD-SCDMA network, or waits to offer a 4G model that can be sold globally. Speculation has been rife over whether Apple will partner with China Mobile or rival China Telecom (CHA).

  145. I bailed for .60.

  146. acobra65 / puts

    Sold 20% last week; but I don’t think the selling is over !!

  147. Stick is dying

  148. Added benefits/Jbur – Really?  Gosh, what an "unexpected" bonus….  ;-)

    Goaaaaaaaaaaaaaaaaaaaaal on the RUT at 815 – anything from here on out is your own greed! 

  149. shadowfax
    Look out for today’s green shoots TNA here I am coming. Waiting  to sell my calls again!!

  150. Phil,
    I wanted to get long on BA with a BCS and an offset put.
    Which do you like better
    Jan 12 65/70 BCS offset by the 62.5 Puts for a 0.15 credit 
    AUG 65/67.5 BCS offset by the 67.5 Puts for a 0.20 debit
    BA has earnings on 7/27 and a dividend of .42c on 8/10

  151. Phil, how do you do that?  You keep telling us you are not a TA guy but you give perfect technical entries and exits before the trade even begins?  Thanks by the way, it’s really amazing.  

  152. yodi
    Waiting to sell your calls is plain and simple GREED!

  153. Phil/Breaking News - look like they finally drove Elizabeth Warren out of DC…good for a mini rally today?  I’m long DC corruption…

  154. i am sick of the daily stick!
    FU stick!!!

  155. AAPL:   The pattern on the chart has undergone a distinct change the last 5 days compared with the previous 10.   Every morning up compared with the day before.   Hold your options overnight!!!

  156. shadowfax DOW -122 still a long way to go 1 3/4 hour we will see

  157. Will they hold the Euro up going into the afternoon..too risky I think

  158. Condor / Yodi – I was looking at the Buying Power Effect as calculated by TOS, not cash loss. Not everybody has PM on their account. Truly, these condors are an even better trade with PM… In any case, the RUT condor is still a more profitable trade (in percentage) with more protection. That was the gist of my post. But it is also more volatile than SPX therefore the higher premiums! But that is one of the reasons why I am looking at establishing condors with longer expiration to give me more flexibility to adjust.

  159. Phil,
    What do you think of the markets mid-term (2-3 weeks)?  More downside risks?

  160. stjeanluc Well I set up both condors and will see how they work out

  161. Phil,
    Today’s action left my account down over 1% even with hedges to protect my longs.  The hedges are all Vertical spreads for Aug, Sept and Jan, all now quite profitable and I understand if we stay right here they will be even more profitable by expiration.  My concern is that I don’t feel I have enough "short term" hedges in particular to protect my long positions in the event of a big sell off this week or next.  Any hedges (disaster hedges) that you like right now?

  162. Condors / Yodi – Looking forward to your input. What strikes did you use for the RUT? The ones we used for comparison? 

  163. Go Lizzie Warren!  Getting pissed off about the Banksters on CNBC!

    BA/Rehat – I prefer having time to adjust on those.  If we get a short-term sell-off you have a chance to improve the Jan position while, on the Aug spread, you’d be scrambling for a save. 

    TA/Bruce – I just do what anyone can do – I look at the big giant chart on the top of the page where it says (column 5, row 4):  Russell 815!  See, that’s not hard, is it?  As to the bottom – I just watched the early morning action and 810 seemed to be a consolidation point and then oil hit $95 (where people want to make it go up) and the Dollar hit 76 (where people want it to go down) and the Yen was failing to hold 79 (too strong), which was going to help shove the Dollar down and the EU and the Pound and the other indexes and the lack of any news that would countermand the technical trend….  That’s all.  

    Warren/Troy – See the news on her replacement above.  Cordray was Kennedy’s law clerk and an AG in Ohio and is already on Warren’s team and the Banksters are freaking out about him worse than they were about Warren and, of course, their pet Senators have already vowed to block him but he’s squeaky clean and young and it’s going to be tough to stop this one. 

    Gotta learn to love the stick, Jabob.  

    Bonds/Pharm – Oh yeah, everythings going to be just fine…  

    Ireland 2-Year Government Bonds

    Euro/Kustomz – They overshot support so they can afford to let the Euro drift down of it’s own accord.  First they’ll want to get the Dollar below 75.80 to get a rally of some sort but I’m not sure that will work – or at least not for long.  

    Rest of the month/Cwan – Huge risk in either direction.  Europe could crash or be "fixed", US could crash or be fixed, China could crash and, if they do – there’s no way to fix that mess!  Japan still radioactive.  The thing is, whoever looks the most fixed first will get a pretty good market pop, most likely as money has to go somewhere and right now it’s running around chasing the latest rumors (or running from them).   

    02:00 PM On the hour: Dow -0.96%. 10-yr -0.1%. Euro -0.52% vs. dollar. Crude -1.39% to $95.89. Gold +0.8% to $1602.80

    Europe’s stress tests didn’t adequately address key worst-case scenarios. According to Credit Suisse, 27 European banks face a combined €82B shortfall in Tier 1 capital if Greek, Irish, Portuguese, Spanish and Italian government bonds are written down in line with market prices. (DB -4.2%), (CS -4.5%

    The Philadelphia Semiconductor Index (SOXX) is down 15% since the end of April, compared with a 4% drop for the Dow and NASDAQ. Factors pressuring chip stocks include economic weakness, sluggish PC demand, and high customer inventories.INTCALTRXLNXSNDK, and QCOM are some of the big chip names reporting this week. 

    Advanced Micro (AMD -3.6%) is one of the big decliners among chip stocks, as ThinkEquity cuts its price target to $8 from $11, reflecting a softer demand outlook in the consumer PC market. But the firm continues to recommend buying AMD based on its new product ramps and "relative" health of the overall computing market. Also: SNDK -3%MU -3.1%TXN -1.7%.

  164. stjeanluc
    I used the RUT as set up by IT AUG 910/920 and 745/735 you could use today as well the call 890/900 but possible the next day you will be sorry to go to close to the fire

  165. JRW/Shadow - 7/14 line of 83.59 seems to be resistance. Just broke below the acending channel…

  166. "Lizzie" Warren is great. I love her passion….
    Phil, you may want to consider dropping Ms. Warren a note to see if she would be willing to do some guest commentary on PSW…. :)

  167. Matt/Program,
    What program are you developing?

  168. Rest of the month / Phil – Actually, the plan is to crash Europe and the US every week (or alternate to make it less obvious) and fix them on the weekend! It seems to have worked well so far, so why change a winning combination! We have not tried China yet… Could be interesting! 

  169. Phil/FAS Money – Should be be considering selling the $23 call for 0.45 now?

  170. Troy
    My current bet 1/2 TNA is we hit 81.60ish again, then I want to buy some Aug 79 puts @ 1.40. Will I get my wishes?

  171. yodi / stjean – You guys comfortable playing those condors right now?  It seems like we’re heading into a pretty volatile time.  Or are you just counting on being able to adjust within the two-month timeframe?  By the way, that’s a good book by Benklifa.

  172. Shadow/bet – bet is the correct term as I’m not seeing any strong tells on my screen…although stick 1304 EOD would be easy enough, yet 1293 is possible. 1:51 and 2:42 buy programs seem to have disappeared.  Hey JRW, were those two points "sig rune" on your charts?

  173. Hi Phil — I may not have enough downside protection… would you rec to add more hedge down at this point or wait till tomorrow, or if need add more down side would you add more tza bcs please rec a spread. thx

  174. 1%/Button – Keep in mind the problem with verticals as protection is they don’t pay off UNLESS the index STAYS at your goal line.  I’m sure if we flatlined from here – you’d do quite well as your callers and short puts expire.  You can simply add a few more long calls to your existing protection (with tight stops) but the real key is to reinvest those potential profits.  In other words, if I have $100,000 worth of stock hedged with $20,000 worth of short puts and calls that protects me to a 20% drop in the S&P then I’m really only hedging for a drop of more than 20%.  So let’s say I had bought 20 of the TZA Oct $32/37 bull call spread for $1.50 ($3,000) and now TZA is up $3 to $35.75 but the spread is just $1.70.  So my insurance "isn’t working" although my $3,000 spread is $7,540 in the money at the moment.  That means, if we flatline or head lower here, I have about $4,500 coming to me (5%+ of the $80,000 I have invested).  Ideally, I want to take that 5% FIRST and IMPROVE my positions.  That way, if we spring back, I have more or better longs that will gain more than 1% on the way back up.  Since a further drop in the Russell from here will net me ANOTHER $2,500 on the same spread, the $4,500 I put into improving my positions is already well protected.  Once I establish a larger base to protect, THEN perhaps I want to look to adding another layer of protection, perhaps (assuming I did it now) the TZA Jan $40/46 bull call spread for $1.  Since you are only worried about not having MORE than $7,500 worth of protection, you are anticipating a greater than 25% drop from here and that would shoot TZA up 75% to the $60s so no issue there that another $1,000 would get you $5,000 on that drop and, as TZA goes higher, you can add another $1,000 from that $2,500 you have coming to you on your original spread.  Managing your hedges is all about making these little adjustments along the way.  

    Warren/1020 – We should invite her in!  

    China/StJ – Oh that would make it annoyingly complicated.  

    FAS Money/Palotay – I want to wait for the EOD stick – things are still looking like they could push us higher at the moment.  Keep in mind FAS is down $2 from Friday’s open so playing with fire selling $23 calls for just .45.  

    Volatile/JC – Yes but earnings tends to knock us violently up AND down and, in the end, we don’t go anywhere.  

    Does the VIX still measure market fear accurately? That’s the question some analysts are pondering after seeing a large growth in VIX-related products for investors eager to hedge risk. The VIX is+10% today on obvious market fears, but derivative traders say the VIX hardly flinches unless major market news hits.

  175. Condors / Jcaesar – No! Yodi just sold a couple, but I am waiting a couple of week to sell some October condors. Too many uncertainties now!

  176. jcaesar As you have read the book there are obviously certain roles to observe Time frame VIX Delta etc. Do not enter with 5 or 10 plays just start with one or two better on paper. As long as your stock stays between the short put and call you theoretical home and dry but observe the role of the delta it runs over .25 or .30 you better think about doing some rolling. Have a plan before you start.

  177. shadowfax
    I am seing DOW -110 or 108 now one hour to go wach out

  178. shadowfax
    Going for -90

  179. AAPL…..Yeeeeehaaah!!    The cash is flowing out of my computer screen.  I went back into straight-up long calls at the turn-up.      Lots of them.  

  180. Still time to get your calls.  This baby is like a train….you can’t stop her easily.

  181. flantheman
    Watch the glass does not crack I am sitting tight

  182. Thanks Phil.  Basically I need to be layering in additional hedges when my verticals start to get more in the money.

  183. Iflan…. AAPL….    which one’s make the most sense now????

  184. Phil re FAS and TNA to early to sell any calls I think

  185. toper7…….any long calls.   who cares?    Seriously, August, slightly out-of-the-money.

  186. Phil- Does a weak close get us a weak China?

  187. Here is a Stock for you guys HRBN bought at 18 went down to 5 and is up again to 19.19 and that all in one month!!!!

  188. exec, well, I’ve abandoned my strategy and am now intent on implementing JRW’s.  The problem will be in figuring out how to filter out the noise throughout the day and lock in on the longer runs.  It will probably result in a few small losses and one or two larger gains.  If not, it will beome yet another piece of  ’shelfware’.

  189. Iflan/AAPL – expectations are too high… will you get out befor earnings or ride them.

  190. yodi/HRBN – that is some conviction.

  191. nicha
    HRBN no I did not like to sell for 5$

  192.  Anyone playing BAC earnings tomorrow?
     I had long term puts (2013 Jan $10P) from several months ago, sold for $1.99, covered today for $2.1, selling $7.5 strike instead (net debit $1.1).  
    Looks like short term BAC may hold $10, and so interested in short term play while hoping that longer term $7.5 strike holds and I can leverage into a debit call spread on way back up above $10 (Looking at weekly 9/10 spread for $0.67)

  193. TZA./Gucci – See above, applies to any hedges.  

    Layering/Button – Yes but you also want to do so in a way that you stop out your lower calls on a turn if possible. 

    AAPL/Topher – I only like the long position I put up yesterday.  I wouldn’t chase these crazy premiums.  

    Calls/Yodi – I think we should get a stick otherwise what was all that other nonsense for earlier?  

    China/Jthoma – They were flattish and we are down but 1% is not very much so more about whatever data and announcements we have overnight.  Weekend action is easier to count on.  

    03:00 PM On the hour: Dow -0.82%. 10-yr +0.01%. Euro -0.41% vs. dollar. Crude -1.28% to $96.00. Gold +0.98% to $1605.70. 

    No, no foul play here – just another one of those coincidences that surround the very, very rich – move along now:  The News Corp. (NWS -3.9%) scandal takes a tragic turn after Sean Hoare, the former News of the World reporter who was first to allege that Andy Coulson was aware of phone hacking by his staff,is found dead at his home in Watford, England. Preliminary reports show no evidence of foul play, but police are continuing to investigate.

    I want my TBT!  Rep. Eric Cantor says the House will vote tomorrow on the "Cut, Cap and Balance Act," which would cut spending from the 2012 budget, cap future spending and require Congress to pass a balanced budget amendment before raising the debt limit. Pres. Obama promises a veto.

    Moody’s is cutting its credit rating on Sears’ (SHLD -0.7%) debt to Ba3, three notches below investment-grade. The agency’s reasons for the downgrade include operating margin pressure, market share losses, and weakening credit metrics. Moody’s also warns another downgrade is possible if earnings continue to erode.

  194. ..wonder if they’ll try and continue the melt up to take advantage of an IBM pop overnight thus turning it into an ‘apparent’ reversal.

  195. nicha….I’ve another 32 minutes to decide. 

  196.  Matt – how are you writing this program? Something like Craigzooka’s, or something else? I’d be curious to hear about it. 

  197. shadowfax
    Even With sun glasses it does not look very green to me now

  198. Iflan,
    Would you be selling puts here also on APPL like the 325 Aug? Looks safe.

  199. nicha.  I’ll get back with you in 20 to 25.  Not sure yet.

  200. I would consider selling August 325 puts very safe, yes.

  201. expectation for BAC results,
    are they hi or low now?

  202. lflantheman
    AAPL only reports after hours tomorrow

  203. yodi….yes.

  204. FAS Money – We have to keep in mind that tomorrow morning before the open, the following financial companies release earnings  - BAC, GS, AMTD, WFC and 3 or 4 other banks! XLF could really fly either way…

  205. Phil,
    Ok. Well I had an IWM 89 / 85 August Put spread that I sold for a profit of $1.06 even though there was a potential for an additional $.65 by expiration.  Turned around and bought the Aug 82 / 79 spread for that $1.06.  Right thing to do??

  206. And one to watch after the close (besides AAPL and a couple of others) is CSX. I like to hear their guidance as they ship a lot of what we buy…  A pretty good indicator for the economy I think!

  207. Right there.  One, well timed buy and it completely changes the dynamic of the close.  Why is volume so low?

  208. rehat
    AAPL 325p save yes but not when the stock is going up I sold the same  put for 16.20 and still holding now the margin will be to high as well.

  209. Thoughts on CMG?

  210. I’m out with a cool 5.5% and got my puts @ $1.39!

  211. gsankaran--tomorrow earnings…
    FU CMG!!!

  212. gsankaran
    Their tacos will be toast

  213. Yodi, did you sell those 325 when they were ITM or close to the money- good and gutsy move. I was also contemplating it when APPL was done to 315 not too long ago — oh well — it’s only money

  214. BAC/DrM – You would think bad news is already priced in.  Very tragic if not.  Short-term, anything can happen but long-term I like the gamble playing them up because things might be bad but not $10 bad (we hope!).  

    Yay!  We finally remembered to play for the stick and it does not disappoint!  

    Either way/StJ – As it’s already flown down – I’m still liking up.  If not, will be a valuable lesson for all of us…  

    IWM/Button – Yes, I like that!  If it’s protection and your protection is free – what can be better. 

    CSX/StJ – Good point on them.  

    815 hanging tough against the RUT making progress as is 1,300 in S&P futures – not very bullish.  

    CMG/Gsank – They are entirely dependent on US sales so I think they disappoint but scary to play.  

    And what Jabob said…. 

  215. BTW Me thinks IBM is a miss! TECH TROUBLES!

  216. Die, Die, Die!!
    kurtww, InteractiveBrokers has an API you can use to program with java, c++, VB or even excel.

  217.  Would love nothing more. Any thoughts on a quick earnings play? Thanks.

  218.  STJ / condor
    it is great strategy, but how Phil likes to say: it works until it doesn’t
    I played it for years and one week (end of 2008) I lost half of my capital, because when market get creasy it is not possible to adjust condor ( just nobody wants execute spreads – bit/ask spreads so huge even in liquid markets like SPX and RUT)
    much less stress to play income strategy like Peter doing it:
    buy put spread for protection (1$ for 10$ spread) and sell just puts and calls
    I like to buy spread closest month and sell puts and calls next month, and because calls are not protected I sell them half amount of puts
    but key here is money management – you need to have enough margin to DD possibly twice

  219. Shadow - Fun watching them tweak it to 1304 EOD !  Although boring.
    JRW – you still in the game?

  220. rehat
    AAPL put 325 sold 6/23/11

  221. Phil, I am really starting to believe in your lines…do we hold the Must Hold?

  222. Anybody shorting VXX here?
    I got burned playing VXX long.  So, maybe it’s time to short them?  Do you notice that when VIX goes up 10% in a day, VXX only goes up 5%.

  223. OK, 10 min till close.  Here’s my plan on AAPL.  Huge profits today, so closed out 3/4 of my positions.  Holding 1/4 August 375s overnight.  That’s it.  I think we open higher in the morning.  Gee Willikers!!!

  224. Shadow – the buy program algorithms are very much like an advanced HVAC controller for a new home.  It looks at past history, and turn on the "juice" early and at varying degrees and amplitude to ultimately end at the requested final set point.  My engineering side is starting to see patterns on the size and frequency of the buy programs.  The sell programs are not nearly as predictable… 

  225. Phil:
    So, we just start this charade all over again tomorrow? What a bunch of BS. Perhaps the BOD market provide the "real" picture and the EOD market is the "fake"? In between just push the dollar where you need it to go. But the dollar affect is getting less and less. What kind of day would it be without AAPL?

  226. Awww pi$$ on it.  Small net short overnight.  We’re not done going down.. but I think they might take a pause for their cause before resuming. 

  227. iflantheman:
    I envy you today. But a long time ago I decided that chasing was not for me. It seems the market knows me when I do that….and doesn’t like me! Congratulations, however, on your success.
    I will be interested in what you do after earnings.

  228. AAPL/dclark – i’m with you. if it try to get on that wagon, the wheels WILL come off.

  229. Cwan -VXX=SRS…a long term widowmaker unless you short it
    Shadow/JRW – Nice parking job Goldman!!!  Another perfect quarter of proprietary trading…

  230. How the HELL is Copper still up at 4.40!!?

  231. Troy, RE VXX,
    That’s what I have in mind, shorting it.
    Have you sold naked calls on VXX?  Do you think it’s time to short?

  232. scottmi:
    That "wagon" is in my garage and I cut the wheels off of it!

  233.  WYNN beat handlily but stock not moving much. 1.60 vs .99 and 1.37 B vs. 1.26 B…

  234. scott, dclark – same here. That is why I didn’t want to jump onto AAPL even though I thought this afternoons dip was a good chance.

    Iflan, on the other hand is the man.

  235. Boo-ya!  Dollar smacked down to 75.65 – THAT should give us a pop over resistance!  Gotta love Mr. Stick -that guy’s got a million tricks…

    CMG/Gsank – My idea from the weekend was as follows:  

    CMG/Troy – That’s our bear premise on them – they don’t have the buffer of foreign sales and $324 is kind of ridiculous.  You can sell 5 Sept $330s for $16 ($8,000) and buy 4 Jan $340s for $26 to cover ($10,400) for net $2,400 on the assumption CMG doesn’t screw up so badly that the long calls fall below $6  or you could be more aggressive and just cover with 3 ($7,800) to net a $200 credit to start but, as with any Momo – you never know what kind of insanity may drive them.  That’s a fantastic consumption chart, thanks!  

    I’m not sure where they are now – too close to close to check. 

    No luck getting over resistance at the bell – it’s all up too earnings now….

    Charades/DC – It’s all a game.  Generally they pump up the futures (no volume) and sell into all the retailers they pull in all day long.  

  236. Condors / Tchay – That is true, they are tough to adjust, but in an IRA account you can’t sell options on margin, so the condors are a less flexible cousin to the strangle! At the same time, I think that going for longer expiration as opposed to the 4 weeks that most people go for gives more flexibility to the trade. I would look to close the trade early and not ride it into the last 3 weeks before expiration where adjusting becomes impossible… 

  237. Troy
    I have to go home before freeze time, I bought a new heat pump to replace my my oil boiler 3 years ago, parts disapeared and I waited for them to come back. Didn’t happen and I need to drink that coolaid. It does all those algo things but bottom line is oil is out of control and electricity  is .065 per KW, equal to below $2.00 per gallon!

  238. IBM a bit above expectations – stock a little lower AH…

  239. Cwan/VXX - I’ve only played the VXX for one night or over the weekend, but no naked calls.  It is so terrible at following the actual VIX, typically I avoid unless I’m extremely confident of a market reversal…and get ALWAYS get out with whatever profit the following day.  Playing fear is a true gamble…I trust my craps table techniques better!

  240. Even IBM is squeezed rev up EPS down, even that is better than I expected, don’t buy it or even APPL! The last half will be worse than expectations, hopefully the shadow knows tech.

  241. At the close: Dow -0.74% to 12387. S&P -0.81% to 1306. Nasdaq -0.89% to 2765.
    Treasurys: 30-year -0.37%. 10-yr -0.01%. 5-yr +0.01%.
    Commodities: Crude -1.29% to $95.99. Gold +0.32% to $1607.50.

    Currencies: Euro -0.29% vs. dollar. Yen -0.01%. Pound -0.5%. 

    Market recap: The European debt crisis rages on with no end in sight, and there’s no apparent progress in the U.S. debt ceiling fiasco, so investors scurried away from stocks. All 10 S&P sectors fell, with banks, at the most risk from the troubles, hit the hardest. Gold notches its 10th-straight gain; oil retreated 1.4%. NYSE decliners led advancers four to one.

    Warren Buffett calls the debt ceiling debate a waste of time for Congress, telling Obama to push for a big solution – instead of a quick-fix compromise. Buffett doesn’t see a Treasury default, saying, "that’s a level of immaturity that I don’t believe even this Congress is up to." 

    Nouriel Roubini ("Dr. Doom") offers a solution to the Greek debt crisis involving a restructuring of the debt based on par value, a move to maintain the balance sheets of European banks. In order to make it work, Roubini notes maturities would have to extend out 20-30 years, and interest rates set well-below current market rates.

    iSuppli sees nearly 23% of all notebooks shipped in 2015 running on chips featuring ARM (ARMH) CPU designs, due to hit the PC market next year with the arrival of Microsoft’s (MSFT) Windows 8. Strong demand for ARM-based systems is especially seen among sub-$700 notebooks, where cutting-edge performance isn’t demanded.

    Quick take on iSuppli/ARM: If accurate, iSuppli’s forecast translates into billions in lost revenues for Intel (INTC) and AMD. However, it presents a huge opportunity for Nvidia (NVDA) and Qualcomm (QCOM), who are developing ARM chips for the PC market. The opportunity becomes larger if Apple (AAPL) and others use ARM chips in high-end notebooks, due to their low power consumption.

    Some say Bank of America (BAC) shares are oversold a day before Q2 results are out, but the stock was similarly oversold the last time it reported quarterly results; it fell 2.4% that day, and gapped even lower the next session. BofA -2.6% at $9.74, off a two-year low of $9.53 intraday (also). Financials (XLF -1.5%lower across the board; European banks fare even worse.

    General Motors (GM -2.6%) adds North Carolina and South Carolina to the list of states where its Chevy Volt (93 mpg) is available. The growing green market for cheaper electric cars is led by Nissan (NSANY.PK) with its Leaf model (99 mpg), although consumers still fret over the driving range. 

  242. Hi Phil: I bought 200 shares of FDX at $91.85 and sold 2 Jan. 2013 $92.50 C at $15.65 for net $76.20 with the intent to to get 13 % annual plus small dividend in my IRA account. (Can’t do vertical spreads in this account ).
    The $92.50 C  is now at $11.75 and $90 C is at $12.80. If I roll down to the $90 C, my adjusted cost is $87.95 and my new net is $75.15. I still get the 13% annual return for the next 18 month,but at a lower cost.Do you see any thing wrong with this approach? Thank you for educating me.

  243. There she goes.  IBM now at $179 and moving.

    Phil, I didn’t know if you seen Sen. Tom Coburn’s "Back in Black" deficit reduction plan. I just saw an interview with Sen. Coburn and Dylan Ratigan. 
    Looks like a decent place to start…..

  245.  STJ / condor
    I agree 100%,
    to sell condor less than month till exp. even more stressful and harder to adjust

  246. Sorry Phil, missed your comment from… 5AM pst…..

  247. Phil – in all fairness, Cantor CANT be the only jerkoff politician who owns TBT,  Im sure there are plenty of my spineless Dems who have 10K plus in TBT holdings as well. It’s like that video you posted recently about all the portfolios of these pr!cks going WAY up during 2008-2009… It’s unbelievable that there isnt some rule/law to keep these A$$HOLES from investing anything but mutual funds and bonds….

  248. Just another 100 pt move from top to bottom, bottom to top, or whatever way you decide to look at it.

  249. Wynn up and up
    I hope these other MoMos don’t follow
    gooble gobble

  250. Matt- Thanks for mentioning IBM. Bought a single 175 weekly call for fun!

  251. Chart 1.

    Chart 2.

  252. @Cwan, I played VXX today.  I sold some SEP 29 CALL’s for $1.28

  253. Today’s Levels

  254. News Alert
    from The Wall Street Journal

    Borders Group said it would liquidate after failing to receive any offers to save the bookstore chain.

    Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. The U.S.’s second-largest bookstore chain said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.

    Borders’s liquidation of its remaining 399 stores could start as soon as Friday and the bookstore chain is expected to go out of business for good by the end of September, the company said.

  255. I will miss borders.. 

  256. one more Plus for Amazon and Kindle..

  257. Boy, that’s a bummer as BKS sucks!

  258. craigzooka
    Where is your exit if vxx will flash up?

  259. Two good clips from the Daily Show:  One is the overview of the Debt thingy:


    Two is Mitch McConnell saying something real (very educational insight into what this is really all about):  

  260. Damn, had I known I would have bid a couple of buck for Borders – I love book stores!  I don’t see how E-Readers are going to replace the experience of walking through stacks of books and flipping through them.  

  261.  Now that the market’s closed, I have a question for a TA expert.  I see that the S&P’s 5,20,50 and 100 day Moving Averages are all converging here, and in fact today’s trading range covered all of them, while closing below at the end of the day.  I haven’t seen that before, and the lines on my Schwab charts don’t go back that far, but it looks like something similar might have happened in 12/07.  Does that mean anything from a TA perspective?

  262. Hi, Craig,
    Just saw your post on your VXX play.  Thanks!
    Like roma, I’m also interested in your exit plan.

  263. rdn4evr- see the chart here.
    Could mean a lot or nothing.
    Place your bets.

  264. Pharm
    Nice charts, I love the Miami Dolphin colors! :)

  265.  Seeking Alpha’s  Inflation Trader article says
    M2 is surging—which will push up bond yields soon--but right now debt ceiling news crowds out this bigger risk for stocks

  266. Bought GS AH into earnings..buyers remorse is beginning to settle in

  267. Well, only 4% on the day, but the new system with Jake in charge worked !! (Jake is my summer assistant so that I can scan more info, or in this case, take my wife to lunch) !!  8-)

  268. JRW – how about a free assistant? :)

  269. nicha,

    While I would like to save the $12.00/Hr, the commute might be a stretch for you !!  8-)

  270. JR/summer assistant – man you know I would have taken that job pro bono.  I am hurt that you didn’t think of me.
    Phil/Book Stores – I agree 100%.  I can get lost for hours in a book store, big or small.  When I was a semiconductor engineer in the early 90′s I always said that the advances we were making were not necessarily for the better.  My mantra was that we were making the world more convenient, but certainly not better.  I still believe that till this day.  Everything has become so removed from personal interaction.  A funny story, when I lived in Italy I was talking to an ederly lady about the US and how grand things were.  We got on the subject of large retail stores like Wal Mart.  They have a few of their own like "Il Gigante".  She responded "the problem with these stores is that they don’t have chairs!".  I replied "Well of course they sell chairs".  To which she looked at me with a sad grin and said "no, not to sell, but to sit and visit with your neighbors and friends."   Not only must we endure all of the destruction from financail engineering, but we must also bare the fruit of a progressive world hell bent on corporate profits over common decency.  I sold my company 12 years ago and joyfully rejoiced in the monetary gain it afforded my family. But, honestly, I would give it all back to have a world where ………….  Ok, I am putting the limencello down.

  271.  Borders?Phil — that’s exactly what we said about record stores and CDs…..exactly. "People will still want to go to record stores, for the experience, for the social gathering point, for the new releases, for the artwork, for …."  And now?  No more record stores.  Thousands of stores, out of business.  It turned out people didn’t want to go; it was so much easier to click your mouse and buy (or, some some, pirate) music.  And buy the song you want, not the whole album you didn’t want. And physical sales fell 95% in ten years.  That’s right, 95%.  From a peak of about 45 million CDs per WEEK in late 2000 to about 3 million now.  
    Is it any surprise that it’s happening to books?  In Santa Barbara about six months ago, both Borders AND Barnes & Noble shut down — across the street from each other, on the main street!  No business for books, even in an upscale community. Now they are both corporate clothing stores.  And how about pricing?  These stores still don’t get it.  Both Borders and B & N were full-priced stores; in fact, when Borders in Century City was shutting down a few months ago, they wouldn’t even discount more than 20%…and the price was still more than Amazon’s regular discounted price!  With no tax and free shipping!  Borders just didn’t get it, and neither does Barnes & Noble.
    My point is:  never underestimate the the public’s capacity to stop showing up to purchase physical media.  That goes for books, DVDs, magazines, CDs, newspapers, or whatever else.

  272.  @roma / cwan120,
    My exit plan is if the trade makes more than 50% before expiration.  Earlier in the year we talked about how USO has $1 of decay built in each month because of the roll.  Well, The last time the vix got up to $22 was 15 days ago.  At that time VXX was at $25.  So in 15 days the VIX went from 22 to 15 back to 22.  VXX went from 25 to 20 back to 24.  So it looks like VXX has almost $2 worth of decay built in each month.  So, if it touches my strike price I have more than enough margin to double down 2 or 3 times.  As long as we dont have another end of the world scenario with the VIX at 90, we should never need an exit strategy that isn’t take profits.

  273. Perhaps another reason to start collecting sales taxes on AZMN?

  274. etradesignals – I have a note about JRW describing his system from Jul 15th 2010, but every time I try to browse through the archives the page crashes. This is happening in safari and chrome, so not sure what it is. Something on the 2nd page of results for that day is trying to access my flip4mac player ( (Phil, May worth having Matt look at.)
    If I could access it I’d add it to the Wiki :)

  275. I am sorry, but this is not good…..and coupled with the more corn going for EtOH production is crazy…

  276. @Felipe
    E-books vs. books
    I have dropped my Kindle twice and the second time I cracked the frame.  I have never dropped and broken a book…
    The Kindle offers the ability to review many books before you actually buy them.  I have used it to rule out 90% of the books I may have bought due to someone’s suggestion.  That’s it’s best feature. I really dislike the tactile feel of it compared to the ‘warmth’ of a real book almost ‘heating up’ the better it gets. The Kindle is a cold an lifeless thing. The second advantage is carrying the Kindle with a hundred books loaded in it, vs carrying evern a half dozen paperbacks and hard covers.  Less weight and bulk to drag around.  Though many times I would rather have left clothes behind than a book a I was really interested in finishing.
    The Kindle aftermarket  offers a light that snaps (very poorly) onto the margins of the frame. Good luck keeping it there.  Whoever desgined this ought to suffer the same fate of an Investment Banker without a Secretary of the Treasury to save his sorry butt.  
    When you turn it on the glare from the light shining on the glossy screen bounces back into your eyes unless you find exactly the right angle to read from. Cannot for the life of me figure out why the battery they use can’t be made more formidable to handle a back light.  I understand some other e-readers do.
    All in all there is a place for both in my life, but I now find I am back to ordering used, old-fashioned books from Amazon and donating them to the local library, which is also something you cannot do with Kindle, but as I learned recently the Carnegie  Library as it turns out offers their books on Kindle for free once you sign up in person for the service. A distinct benefit for a traveler who must cut down on the bulk he travels with.    

  277. Phil
    Borders is in my backyard! (Ann Arbor, Michigan) Sad to see them go. My company did a lot of work with them before they were huge. But as the world turned, they insisted on paying less and less for more and more until, finally, I walked away. That whole experience left a bad taste in my mouth. So one side of me is feeling a little bitter sweet about their demise. On the other hand, this is only the beginning of change for the bookstore businesses. On Monday, I received a chapter 11 notice for Nebraska Book Company (more textbook related). I don’t know if books will disappear completely, but the more I observe the younger generation’s reliance on computers and smartphones, the more I believe that books may become another "thing from the past".
    Perhaps bookstores can evolve to content Hot-zones. Great atmosphere, good drink, good food, great comfort but without physical books or music.  Instead, you would get full access to a store’s unique and easily-accessible content to enjoy, or to purchase (either digitally or hard copy) for future use. If the bookstores were smart they would offer their content in a very creative manner and try encourage interactivity between their patrons. In addition, the stores layout would be used to attract guests for a small fee to pay a fee similar to a movie ticket. In a nutshell going to a bookstore to read would be as similar as going to the movie theater to see a movie. Investment opportunities available. 8^)

  278. In regards to CSX: The American Association of Railroads reported that total carloads actually declined YoY, down 8000 carloads to 438,000 YoY, or a -1.8% YoY decline for the week ending July 9. Intermodal traffic (a proxy for imports and exports) was down 300 carloads, or -0.2% YoY. The remaining baseline plus cyclical traffic was down a little less than 8000 carloads, or -3.2 YoY%. This series, which has been deteriorating for months, is now negative for the first time.

  279. Whitehead article – the Military Industrial complex.  "Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $15 billion a month (or $20 million an hour)…"  and more goodies. Only question is why does he use/buy into the government unemployment stats and not something more realistic?

  280. Books /     Kids don’t read books anymore, they just text each mindless messages and stay up all night at ‘sleepovers’ sending silly texts to their friends so they are too tired to function the next day.  I know from observing my very smart grandaughter.  They have zero knowledge of what is actually going on in the real world.  Phils kids are an exception not the rule.  US parents are too busy working long hours to fix this.  It’s all called the ‘dumbing down’ of America.  Hopefully, with the spread of ‘smart phones,’ Chinese kids will spend as much time on mindless activities like texting and gaming as American kids and ‘dumb down’ accordingly. ’Brave New World’.

  281. JRW/Jake - you put a $12/hour person in charge of day trading your cash account!  Is it an auto-trading platform…do tell!
    ssdirk/JRW Pro Bono – Don’t feel bad dirk, last year when I was studying and experimenting with JRW’s method, I emailed him my phone number and offered to gift him (TAX FREE) half my profits for a day, up to $10,000.  I can still hear him laughing at me…something about a single wheel on his Rolls cost more than my trivial offer!!!…(J/K about the Rolls wheels…but not the $10k gift…). 

  282. Pharmboy/Food Inflation - Here is something to cheer you up, fun facts on corn (5lbs corn consumption/consumer/day!!!) and statistical breakdown on U.S. corn use and consumption.  Note that it is from 2008, and the 28% ethanol use is now almost 40%.  Shocking that one semi load of corn (1000 bushel max) can only provide for 30 citizens per year in America!
    Another neat corn fact site  Per my own farms, depending on location, I can produce between 91 bu/acre (drought year, lowest quality fields) to 300 bu/acre (perfect rainfall timing, best quality fields). The truth of the matter is that genetic modification isn’t increasing production yields leaps and bounds…we are close to hitting the maximum.  I don’t see any way we can put more ears and/or weight per stalk…let alone the linear relationship between yield and the huge amounts of chemical/fertilizer/etc "inputs" needed to increase such yields.  And if the general population knew the experiements that seed companies are currently running in abandoned underground coal mines "sealed" chambers…if the genetic modifications get above ground and cross pollinate existing corn hybrids…lets just say we won’t have to worry about the ethanol scam, or corn for that matter…
    Corn production per acre in the U.S. has increased from 24 bushels in per acre in 1931 to 74 bushels in 1965, to 134 bushels in 1998, to 154 bushels per acre in 2008. This was achieved mostly through genetically modified varieties and synthetic fertilizers.
    And for anyone thinking they will get rich growing corn…here is the truth about who really makes the money once the end consumer buys the product made from corn:
    The value of corn in a $4 box of cornflakes (at $6.00 per bushel) is about 9 cents. The farmer that grew the corn received less than 2 cents


  283. Good morning!

    3am trade went off a bit early with Dollar topping off at 75.80 at 2am this morning.  Now we’re down to 75.65.  The spike up at 2am was caused by RBS (I think) saying there are conditions for a "near-death experience" in the Euro – that dumped the Euro early and screwed up the usual timing of our trade so it’s simply a "no play" for today – if what you expect to happen doesn’t happen – you walk away – no sense in trying to fit a square peg in a round hole.  

    Murdoch testifying this morning but only for one hour?  Damn it’s good to be a Billionaire – too important to waste time with Parliament?   Testimony will be about 9:30 this morning (2:30 London).  

    Oil flying back to $97 all commodities up as Dollar jammed back down to 75.60 – way off yesterday’s high of 76.115 and the markets are up half a point – what a coincidence!

  284. In the words of Moe, "it soyt-enly is".
    Btw, morning sunshine! 

  285. FDX/Dflam – You are giving up $2.50 in potential upside for $1.05 so it’s fine if you have 2.5:1 fear that FDX can’t hold $90 I guess but, if that’s the case, why stay in the stock?  At some point, you have to actually believe in something, not just trade the stock on long-term trades.  Is FDX worth $92.50 in 18 months or isn’t it?  If you don’t think ABSOLUTELY yes, then you have to assume it could go up or down 20% from it’s current price ($90) and then the question is, how does having the $90 caller help you when the stock goes down to $72?  Also, what will it do for you at $108?  Given your restriction in the IRA – if you want to make a short-term bet that FDX goes down – then roll to the 2013 $80s at $18.60 (+$7 for $12.50 in position) as those will give you a .69 delta so, if FDX takes a nice drop, you can take them off the table and then sell something with more premium but that move would have been better as they tested $100 two weeks ago, rather than back at $90 today.  

    On the whole, I’m not sure why you’d choose FDX over UPS anyway.  UPS moves almost lock-step with FDX but pays a 2.8% dividend and, when you have a straight-jacketed account like yours, getting a dividend vs. not getting a dividend makes all the difference in the World.  $250,000 with no dividends over 20 years is……  $250,000 while $250,000 over 20 years at 3% is $451,527.81.  That’s $201,527.81 MORE (80%) money to be made holding stocks that pay dividends.  If you are going to put your money in an account that leaves you virtually no trading options – throwing out another 80% advantage means you have to be better than Houdini to get a good return over time!  That’s not to even mention the 1.6% ($1.45) you are throwing away by trying to get an extra dollar because you lost faith in your FDX trade.   $250,000 making a -1.6% decision per year for 20 years = $181,068 – probably something you want to avoid as well!  

    Please people – Do not make me lecture you on the value of INTEREST/DIVIDENDS – that’s investing 101!  

    Speaking of interest:  10-year Greek Debt just popped 18.39%.  2-year Irish at 23.24%

    Coburn/1020 – What’s his plan?  Take a hatchet to everything?  This is all fine if you assume that A) The Government does nothing worthwhile and B) That cutting $1Tn in annual spending doesn’t throw 20M people (at $50,000 each) out of work somewhere down the line.  What if Coburn’s plan was to have consumers spend $1Tn less per year (6.6% of GDP)?  Would that be a brilliant plan with no economic consequences?  How about if business spent $1Tn less per year?  If spending $1Tn less per year causes no economic damage than why not TAX the businesses (who have $2Tn in cash sitting around not counting the banks who have $1.6Tn in excess reserves from the Fed give-away OF OUR MONEY) instead?  

    Who is MORE likely to take $1Tn and hire American workers – Big Business or the US Government?  If so – then which one do we (the American People) want to take money from and which one do we want to give money to?  This is NOT a complicated concept – I simply don’t understand how Republicans get the upper hand in this debate other than the MSM’s constant repetition of "Government BAD, Business GOOD" to the point where Americans are like members of a cult who can’t even bring themselves to question the wisdom of Big Business.  

    How about we raise $900Bn a year by taxing citizen and businesses 15% more ($600Bn) and cutting Government spending by $300Bn a year WITHOUT screwing over the old, the poor and the sick and without gutting our regulators and environmental protection agencies (Koch’s run wild!) while still educating our children and policing our streets and building bridges and fixing potholes and generally getting on with the business of running the country in a reasonable manner.  I’m all for cutting waste, etc and I’m ALL for cutting the military down considerably but how about SPENDING $1Bn a year to form a bi-partisan commission with private experts as well and go over the entire federal budget line by line and evaluating EVERY program with a goal of saving at least 5% ($150Bn) a year for 3 or 4 years in order to REASONABLY bring costs down.   AFTER we get things running smoothly, THEN we can see if we have a surplus enough to roll back the 15% tax hikes.  

    Cantor/Jrom – I’m sure they do, it’s a reasonable hedge against TLT holdings BUT it’s NOT AT ALL the same thing when you are the guy in charge of negotiating an agreement that has a huge effect on the price of TBT, is it?  If Obama owned TBT, the press would be inciting street riots at the White House over the blatant conflict of interest.  

    Notice on the Big Chart that we had nice spike tests of resistance levels – that’s pretty bullish, especially if we break over resistance levels going the other way now so 12,500 is going to be critical along with 1,317 on the S&P, 2,775 on the Nas, 8,300 on the NYSE and 825 on the RUT.  

    Books – I like going to my local Barnes and Noble on winter weekends and just randomly walking around and grabbing books and skimming through them.  I go with the kids, who also love to pick out books and they hang out with me for hours there (and they have a SBUX too, with a lounge, which is nice).  The problem with consuming things on an IPad or Kindle is the same problem as there is with music too – there are SO MANY choices that you end up focusing on what you already know.  I have that whole issue with the Intenet – the reason society is becoming so polarized is because there isn’t much middle – people generally only read what they agree with and right-wing (or left-wing) sites have links to even more right-wing sites and those link to even more extreme sites and they all confirm your point of view to the point where you think you are a "moderate" just because you are 90% to the right and not 99.99% like some of the things your favorite sites link to.

    "Fair and balanced" is a joke these days.  Everyone watches the news they like to hear from people they like to listen to, etc.   There’s no learning in that.  With books and music we see the same thing – the programs are even designed to say "If you liked this book, you should like these books."  While that is nice, it’s like getting trapped in the Goth Horror section for the rest of your life just because you once read Interview with a Vampire (TIVO does this too!).    The whole point of a book store or a record store is the serendipity of browsing – they still don’t have browsing right on the Web and I think it’s going in the wrong direction – funneling people into whatever narrow interests their previous habits have indicated.  Of course, creating a consumer that is narrowly defined and isolated in their interests is ideal for Corporate America because they can be your "friend" who understand your needs better than other people you interact with and that will lead you to spend more time (and money) with Big Brother, who "understands" your special needs than with actual people who may (gasp!) disagree with you at times or not have the same tastes.  

    SSDirk’s comment on the Italian woman who sees shopping as a social experience hits the nail on the head.  Americans are trained to "celebrate our individuality," which you don’t even think about as ISOLATION unless someone like me says so and, even then, it seems like I am somehow being anti-American or, even more evil – LIBERAL!   There’s no money to be made from women getting together and chatting for hours so it is discouraged.  Teenagers can’t drink anymore and they raise the driving age so they can’t get together as easily and they cut back on all sorts of community programs and after-school activities so all there is for young consumers to do is go home to their isolated little boxes and consume media.  This trains them for a life of mindless consumerism.  Have you guys seen the games that little kids play on the computer like Roblox and Youville?  The goal is to shop and build houses and put stuff in the houses!  This is some really sick stuff but there’s no Government agency to say no to this sort of thing anymore and the Mommies and Daddies are too busy plugged into their own computers to worry about what the kids are doing on theirs.  

    If we had seen a science fiction movie about life in 2011 back in the 60s, we probably would have been mortified at how polarized society had become and how isolated individual people were in their daily lives.  It would have been one of those dystopian cautionary tales staring Charlton Heston as a man trying to reconnect with the real world while his friends and family think something must be wrong with him…

  286. Nice rant today Phl.
    Phil knows stocks
    Bo knows sports
    Inflantheman knows APPL

  287. oops,
    JRW knows TNA/TZA

  288. @Felipe
    Isolation vs Socialization:
    Sartre once said, "Hell is other people".
    Is it media that has made people seek more and more, "Bowling Alone", or have people found other people to be a great disturbance, inconvenient, and obnoxious? Not worth their time?  Too oppositional?  Traitors?
    Living in a small community has been interesting as I have seen a dozen relationships change over time; BFFs become complete EFFs.  And a hestitation, then a turning away from forming new BFFs. I don’t think our community is much different in that respect than Bevery Hills, Scarsdale, Nyack, or Miami.  My own parents and their friends became increasingly distant from each other to the point of just acknowledging one another should they pass on the street, not bothering to catch up on their life changes in the last 30 years of their lives.
    Introversion has seemingly ‘won out’ over extroversion. It may be merely a symptom of a more prosperous society to huddle among those who think alike, look alike, act alike and in what increasingly becomes a shorter and shorter life to settle for that.  And a sign of lessening prosperity that forces unlikely assemblies for a common purpose?
    Who has but more than a few lifelong friends and associates? Who seeks out strangers but a small fraction of ‘adventurers’ just for the pleasure of ‘the new’?
    One of the ‘consequences’ I read about because of a dwindling middle class is an increasing necessity to form communities simply for the abillty to survive in the coming Economic Winter. That is looking more than just a possibility for hundreds of millions of families.

  289.  Flip – I would be interested to see if anyone is studying this phenomenon.  From anecdotal evidence, I see how isolated people become because of poverty.  Shame, lack of resources and instability create isolation.  Running programs for the homeless makes this very apparent to me.  i see more people who are homeless not because of mental illness or addiction, but from "economic distress."  They lose jobs or their unemployment runs out.  This is very hard on relationships and families.  Many of the people we work with just seem lost.  Of course, I’m looking at the bottom 25% economically.  
    Many people actually prefer the homeless shelter for human company.  Of our 60 beds, probably 25 to 30 people are fairly permanent.  We have actually had people who have apartments come to the shelter for a few nights because they were lonely.  We have helped a few people get their own place and they mess it up and are more comfortable living in the shelter.  I also run a 58 room transitional housing program where people who have been homeless can live for up to 2 years.  The number one factor in the success rate once we place someone in permanent housing is the number of social contacts and "community supports" people have.  There is a fair amount of research done with people suffering from addictions and severe mental illnesses that bears this out.  It is why people who go to AA stay sober.  They have a community of like-minded people that they regularly turn to for support.  
    FWIW, our agency is watching the debt ceiling debate closely.  We have a significant number of people who pay their rent from their social security disability.  It will probably affect our payroll.  Social security is not just for old people.  The mentally ill and physical disabled will also be hit hard.  Emergency rooms are going to be very busy with stressed out  people going off their meds if the problem lingers for any length of time.  I’m thinking this won’t happen, but have to be prepared.

  290.  SS, Esco, Flip, dc41, Tusca:  I was wandering through the stacks of Barnes&Noble until closing last night, they had chairs, lots of them, with actual people in them. My wife’s studying at Columbia this summer, her class is composed of one Brazilian, one Russian, her, and 29 Chinese.  Infecting them with the privilege of mediocrity will be tough — they are too poor, and understand that it is not a viable survival strategy.
    Individuality has been conflated with fashion — to be "different" in color, dress, music….everything but thought, which is the only kind with any survival  value.  -- ask any lemming.   Perhaps holding a "book" will become a new sign of individuality, a "boutique" item — certainly Tusca’s slppery, glare-prone, battery-exhausting devices won’t survive a mountain hike, nor be very readable on the peaks.  America has a lot to unlearn; it was built on sacrifice, but when the need for sacrifice was removed by millions of sacrificing foreigners, it became a Roman orgy of mindless consumption.  Didn’t work out for Rome very well either.

  291. Revtodd64
    It became apparent to me years ago that Media was creating—-particklelerly with the advent of Television in everyone watching it—-that the only people the watchers found interesting to associate with in real life were those that had a significant abillity to Entertain, amuse and were some other distractive use to them.
    For one reason or another, I was not one of them. I have, during the last three year for the first time been watching re-runs of Seinfeld, Frazier and other series that dominated the tube in past decades. I have never seen a complete newscast on network or cable television.  I owned a used TV my dad didn’t want and rarely turned it on for 10 years. During those years I was doing things that would be considered as socializing,old  with friends
    (who more and more ended our get togethers earlier to go watch some what I considered a then stupid show like Seinfeld or Friends or some other mindless program), making new ones, and discarding and being discarded by old ones due to changing circumstances including relocations, or  driven by huge variances in economic circumstances, or simply a change of scene.  I have remained closest to friends that are the farthest distance away from me. Odd, but they tell me the same thing. We pick up right where  we left off when we do assemble. 
    It may be that good friends are like fish: three days and they begin to smell bad.