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Fully “Fixed” Friday – Extend and Pretend Edition

SPY 5 MINUTEAll fixed!

Greece is getting another $229Bn at 3.5% with about 30 years to pay it from the EU (ie. Germany and France) and private bond-holders will share about 1/3 of the pain by "voluntarily" renegotiating their own notes.  Sounds like a really great offer, right?  BUT WAIT, THERE’S MORE!  Another $630Bn of already promised emergency aid has now been places into a very slushy fund that will now allow the EU to throw money at any nation that so much as sneezes – WHETHER OR NOT THEY ASK FOR ASSISTANCE.  This will allow them to play economic Whack-A-Mole, putting out all the little Euro-zone fires until that money runs out (about 6 months at the EU’s current burn rate).

All this fantastic news from Europe has sent the Dollar down to test the 74 line and that was down from 75.37 just ahead of yesterday’s open and that’s a 1.8% drop so we would expect our indexes to go up at least 1.8% – BUT – none of them did.  In fact, the Nasdaq only gained 0.72% and the Russell was up 1.07% and the Dow was up 1.21% and the S&P was up 1.35%.   The NYSE, which had been our perennial laggard, did the best yesterday – gaining a close, but still no cigar 1.57%.  

Will we make it up today or is this an indication that things may not be quite so good as they seem?  After the close yesterday, I did a news round-up for our Members and there is still plenty to worry about and we took a stab at some SPY Weekly (today) $135 puts at .79 for our aggressive $25K Virtual Portfolio on the off-chance they "fix" the US debt ceiling and accidentally make the Dollar strong again.  At the moment, we are still playing our short lines in the futures, where we’ve been scalping nickels and dimes since my 3:23 am Alert to Members (if you are not a Member, you can sign up here), where I said:  

I like shorting the Futures here:  S&P (/ES) at 1,346, Nas (/NQ) 2,415, Dow (/YM) 12,720 and Rut (/TF) 842.6 – as long as 74.20 hold on the Dollar, we should get a bit of a sell off so these are levels to look for as the Dollar heads back over that line but we can scale into position between 75.20 and 75.10 but, below that, too dangerous!   Oil is good too below $99.50 with tight stops (now $99.66 so a patience game) – couldn’t quite get back to $100 ahead of the EU open.  

We’ve had a couple of nice, quick hits already but we are, of course, waiting for the big one.  I think any pre-market earnings miss by a big player would do it or, of course, some solution of the US debt issue that involves budget cuts, which should strengthen the Dollar.  See – this is not complicated logic, is it?  Anytime we get a good drop, we can set our stops and scale out the same way we scaled in – quickly leaving us ready to re-load on the next leg down while we wait for the market to open so we can collect our SPY profits as well if all goes well.  

There’s no data today but we do have earnings from: APD,  CAT,  COLCPX,  DOV,  FLIR,  GE,  HON,  MCD,  RAI,  SLB,  STI,  USG,  VOLVY.PKVZ and XRX - so plenty of chances for a major miss.  GE is, of course, the Big Kahuna this morning with CEO Jeff Immelt acting as Obama’s right-hand man on the President’s Jobs Commission.  As Bill Gunderson pointed out, this is kind of ironic as GE CUT their work-force from 323,000 employees in 2008 to 287,000 last year.  I guess Obama was impressed that "only" 11% of GE’s work-force was laid off – that’s much less than the US’s real unemployment rate of 21%.  

8:30 Update:  We just had a nice dip, down to 12,670 on the Dow Futures (50 points at $5 per point = $250 per contract), 1,341 on the S&P (5 points at $50 per point = $250 per contract), 2,400 on the Nasdaq (15 points at $20 per point = $300 per contract), 837 on the Russell (5.6 points at $100 per point = $560 per contract) and $98.90 on oil ($0.60 at $10 per penny = $600 per contract) so the winner this morning is – OIL!  Over all, it’s a very nice morning’s work and, like last Friday, our trading day is already over and the rest is just for fun (although we’ll be very happy to reload once again if our conditions reset).

Gold (/YG) shot up to $1,605 and that’s the next thing I like for a futures short as that’s a good line to stop back out at.  Watch the Dollar, of course and if it can’t hold 75.40, that’s the signal to give up on gold shorts.  For stock and options players, GLL at $21.33 is the Ultra-Short Gold ETF and we like those Aug $22 calls at .50 with a month left to play.   

Our pals at Fitch are back on the case, with their usual amazing timing, announcing this morning that the plan for private-sector participation in the Greek rescue would constitute a "restricted default," noting the proposed debt exchange implies a 20% net present value loss for banks and other holders of Greek government debt. Once new bonds are issued, Fitch will issue new ratings which will likely be below speculative grade. 

GE came in with a small beat with l infrastructure orders were up 24%, reflecting robust strength in equipment orders, up 33% but we will have to find out how much of their earnings were boosted by a weak Dollar.  MCD also has fantastic earnings with revenues up 16.1% year over year – very impressive but, of course, MCD is cheap food and we’ve already seen other US Restaurants doing very poorly so it looks like families are trading their meals down – not really an economic booster.  It looks like only 1% of MCD’s gains came from a "currency benefit." CAT earnings were a miss but they have an excuse, saying:  "The disaster in Japan had a $200 million negative impact on second-quarter sales."  I guess we can give them that one…

On the whole, the news today is not so bad and Factory Orders in Europe ticked up 3.6% in May (but that was May, not June!) so we can sit back and give the market the benefit of the doubt as long as we hold onto those technical on our big chart (see yesterday’s post).  

Have a great weekend,

- Phil


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  1. Good morning Phil question on AAPL I have done very well on my plays but now I am looking at longs OCT 395 c long bought for 9.31 now 17.20 I have used these calls to play against selling short call. However OCT is coming up fast and my thought is to roll these calls out as far as Jan 13. I as well was lucky enough to stuck my gun to the long OCT 415c which were very much down at some time but I was lucky enough to close them at a profit. It is my intention to carry on playing AAPL so your thoughts are apreciated. thks

  2. Oil Lines
    R3 – 103.63
    R2 – 101.90
    R1 – 100.67
    PP – 98.93 (we are here)
    S1 – 97.71
    S2 – 95.97
    S3 – 94.75
    Also, yesterday’s highs and lows – 100.16 / 97.20. I also have daily Resistance Fib lines at 100.97 / 101.99 (also R2) / 104.95 and daily support Fib lines at 93.43 / 92.41 / 89.45. I mention these lines because a couple of days we had breakouts and these lines actually held.

  3. I love those 3am Alerts!  Thanks Phil, that big one just came in.

  4. FAS Money (Weekly) – We are short the weekly 25 Calls (1.21 – unchanged) and the weekly 26 Puts (1.01 – unchanged as well)
    FAS Money (Monthly) –  We are short the August 25 Calls (1.15 now 1.93) and the August 26 Puts (1.75 – unchanged)
    Looks like we are going up in early trading!

  5. Matt -
    Re your "Retiring at 50 when in Greece comment in yesterda’s post" - just wanted to give you some some anecdotal evidence  – From 2009-2011 I went to a military grad school… We had 20-30  foreign officers (some of the best and brightest Saudi Arabia, Turkey, Greece, England, Australia, Tunisia, Egypt, UAE, Iraq, etc had to offer) there each year… We had two Greek Officers in our Cost Analysis program. I made a comment when the Greek Crisis originally happened about their early retirement compared to the rest of Europe and instantly got an earful. That early retirement is the exception, not the rule. Their officers have to serve 35 years before they can retire while I only have to do 20. Sure there are loopholes allowing them to retire early but I know the Scandinavian states have similar laws/loopholes. My point is, from what I’ve read I don’t think Greece’s social safety net much different than any of the other European countries…..

  6. Wow, nice beats by VZ, MCD and GE but profit falls a little short by CAT and the market drops?  I smell a bear trap.  After looking at the 12 month charts last night I came away thinking we are in a pattern very similar to last year this time.  If so, we should see another day or so of potentially nice gains.  One of those should include the announcement of a debt deal.  Monday?  Maybe the Dow would make a new high but none of the others.  Then, a nice long down spell.  I am looking at this drop as a gift and will sell my TZA and cover my short TNA position until proven otherwise.  GL-

  7. Phil / Anyone - To all you big futures players out there, do you ever trade options on futures?  Sorry if this is a neophyte question, but I’m wondering why you’d buy/sell equity/stock options and not futures options.

  8. stjean – How do you come up with your lines for oil?  Why don’t you use Pivot Points?

  9. jromeha, the quote you’re using didn’t come from me.  It was an excerpt from the article.  However, I think it’s a fairly wide held belief that the Greek system is more generous then the German one.
    Cha-ching!  TZA sold. 

  10. Phil—maybe for after hours-- but I opened a paper trading acct at TOS for futures and made $400 on the oil call but have no real feel for how I did it—I should do this every day without thinking too much  :-) --is there a good tutorial on futures trading you would recommend ?

  11. matt1966 -  I noticed the same pattern

  12. Phil excellent pick on shorting /CL this morning early bird call!!!

  13. matt1966/ anyone
    PUT (IWM) ISHARES TR RUSSELL JUL 29 11 $83  at 0.75
    Should I sell today and take this slight drop at the open or hold these until next week?  Think I should just sell now.  Worried get a bounce higher due to U.S. debt deal…and then like matt1966 said..
    "Maybe the Dow would make a new high but none of the others.  Then, a nice long down spell."

  14.  Phil: Futures
    Is there a post that recaps your essential points re:futures?  I’ve been paper trading and  I already know your emphasis on the tight stops getting in until catching the bigger moves helps me vs what I used to do.  I’m not sure the timeframe to be looking at for moves above or below the lines, 1min, 3min?

  15. PP for today.

  16. Lines / Jcaesar – They are the floor pivot points calculated on a 5 minute chart on the continuous contracts. The Fib lines are based on yesterday’s prices.

  17. russellb, I would defer to Phil on all option activity.

  18. Thanks stjean!

  19. $25KP, selling 15 SPY today $136 puts for $1.50 to cover our $135 puts.

  20.  Market heading up of course, watch Dollar 75.40 as a sign to kill the trade but it looks like they are jamming us up (again).  

  21. > our trading day is already over
    I understand you’re trying to make the non-members feel like they’re missing out on something big, but I’ve been seeing this a lot lately. I guess there’s not much benefit to being a premium member anymore unless you’re up at 3am?

  22. Guess those ONTY ‘rumors’ were just that!  Down she goes……..

  23. Happy to take the 20 SPY $135 puts off the table now at .82, hopefully no one took those short $136s as the Dollar popped the minute I posted that but, if so, just get back out even in the bounce off the expected rejection at 75.50 but, if the Dollar breaks over that, then best to take a .20 loss and bail.  

  24. Financial not doing well this morning! XLF back down to 15.30… 

  25. So I guess the other PIIGS need to use the Grecian Formula to get their needed haircuts!  Ha! 
    Sorry, very corny, and really doesn’t make much sense (other than both having to do with hair).

  26. jvest
    Well if you do not see any benefits of the site just let it go I find a lot of good info during the day and you have any questions just ask and you will be answered

  27. russellb, you might want to make a move right now if you haven’t already

  28. Big Explosion Rips Through Government Block In Oslo — Many Reported Injured

    Read more:

  29. pcln cmg crm wynn bidu lulu …. fu!!!

  30. Thx Phil--got out with a .10c gain on the 135  puts 

  31. exec, BTFD!

  32.  Good morning!  

    Big craziness already in the futures with the Dollar toying with our 74.50 line (not 75.50, of course).   If that breaks, then everyone goes down most likely (great for our gold shorts!).  The Nas is slow to drop and the SQQQ Aug $21/24 bull call spread is .90 and that pays better than 3:1 so a hedge is not really necessary BUT you can sell an AAPL next week $375 put for .80 and that’s net .10 on the $3 spread that is pretty certain to be in the money if AAPL drops 3.8%! 

    We are pretty darned technically bullish as long as we hold 3 of 5 of those 2.5% lines.  RUT is the most likely to fail first at 835 so we’ll watch them closely and then the Nas would confirm below 2,809 and once the S&P fails our famous 1,333 line, it will be all over for the bulls but lovin’ the Nas puts as soon as the RUT fails 835 for the duration. 

    Not much news today so enjoy the chart – we already had a nice futures win into the weekend and the last thing we want to do is screw it all up by speculating on mid-day direction.  

    Dollar flying now at 75.56 so it looks like those levels will be failing – nice RATIONAL bearish finish to the week if it holds – we’ll just have to see what sticks (oops, shouldn’t have said "stick"!).

  33. Damn.  Carried to big a load overnight and now my daytrading buying power is really crimped.  Had to buy to cover some of my TNA short instead of buying it outright.  Short shares are hard to come by and I don’t like giving them up!  Still a 1/4 net short exposure to the RUT.  But unless my premise is wrong, and it often is, we should bounce here.

  34. Phil / Euro    Is this ECB deal kind of like a $Trillion QE3 from Europe?  If so, doesn’t this money effectively find it’s way back into the banking system and create yet more liquidity, again boosting all risk assets?  They’ve effectively backstopped all the dumb bank loans to the PIIGS.  Seems the only thing now standing in the way of JRW’s ‘Moon shot’ is a debt ceiling agreement?  Seems we may have to wait another couple of months until it sinks in that the global economy is now moribund and we have no job creation in the US, Europe and Japan.

  35. matt1966
    Closed out my put at .81…Thanks : )    Small victory but good profit from yesterday.

  36.  Europe: this is world war three and germany is winning  the nationalists should love it they get to rule europe — finally

  37. tusc – I also think if the ‘austerity’ and tax issues are passed, and the middle class loses its deductions based incentives for buying a house, pretax-healthcare funds and childcare/education funds (which are on the table from what I understand), the pain is going to be that much worse!

  38. Good morning,


    IWM    82.59,  82.75,  83.07,  83.37,  83.61,  84.21,  84.47,  84.84  and  85.60

    We have fallen out of ssdirk’s rising channel but indicators are for a move to 84.47 !!

  39.  Angel:  I hypothesize that Germany is moving toward a new German axis with EEurope providing labor, Russia materials/energy, and Germany capital and tech.  Russian, Poland and Germany have moved closer together, planning gas lines across the Baltic, etc.  The peripherals — including France — will simply be left to their own devices, while Germany moves to oppose Chinese domination in Eurasia.  My take, anyway.

  40.  Phil/TBT
    Phil, I have a TBT sept 34/40 bull call spread from a few months ago and have gotten killed.  Net cost of that was $2.65  Now the spread is worth $.9.  I also sold sept 36 puts now down 59%  I have been selling some monthly TBT 32 puts to offset some loss.  What do you suggest that I do with this position?  Should I roll the caller down and out to offset some more loss.  

  41. zeroxzero, interesting-
    russellb, nothing wrong with a profit!

  42. zero – I don’t think you are too far off.  But if they move manufacturing out of Germany, then they may have a problem.

  43. AAPL/Yodi – If you didn’t take the money and run at $400, I’m not sure what I’ll be able to say here that will help you do the right thing.  I hear, "Dear Phil, I made 84% on AAPL calls after thinking I may lose a fortune but now I’m too greedy to cash them in so I’d like to turn them into something much riskier, hopefully trading in my intrinsic value for premium so I can go back to being the sucker again."  

    At this nosebleed level, if you MUST play AAPL then of course you think they are going to $480 (otherwise there are about 1,000 other stocks that are FAR more likely to make 20% over 18 months), so the 2013 $420/480 bull call spread at $19.50 pays a lovely 3:1 all by itself but a real AAPL fan would sell the $275 puts for $14.50 and that’s net $5 on the $6 spread with 1,100% upside at $480.  I like selling the puts naked too as my theory on AAPL’s $72Bn is that they do intend to buy a distressed company with it and that distressed company will be — AAPL, when Jobs dies and their $360Bn cap drops to about $240Bn ($250) and that $75Bn buys them almost 1/3 of the company back.

    You are welcome Chaser – congrats!

    FAS Money – Those Weekly $25 calls need to stop out if FAS goes over $25.60 (maybe .65) but, otherwise, we can hope to get out for .20 so worth the gamble to risk .15 (from .50) make .30 more – you should always think about your trades that way – what are you risking compared to what do you expect to get.  If you are 2/3 sure you will win and you ALWAYS take 2:1 odds, you have a much better chance of success, even if you are wrong half the time!  

    Good point Jrom! 

    Futures options/JC – We do once in a while but most people don’t have the margins for them (to sell premium) so I stick to calling the regular index ETFs.  Also, people with relatively small accounts can trade futures and, although it’s dangerous, it’s a valuable skill to learn so I have, this year, decided to discuss it more as it allows us to stay on top of this pre and post-market BS where 90% of the action is these days.  Also, with this insane market chop – the low-cost in and outs of the futures are more efficient than paying options spreads and commissions for intraday momentum trading.  

    OH NO – IT’s BOEHNER!!  You know they only come on TV to kill the dollar for their Bankster buddies!  

    Time to get more bullish!  

  44. TBT flying already! 

  45. The finger pointing from "our" government is simply childish .

  46. Nice call Matt on the bounce…missed it myself due to a biz call..grrr.  At least I was able to close a high end residential lot deal for a 50% gain over what I paid 1.5 years ago.  God I love rich people…you can’t go wrong owning that in which the wealthy want!  Phil you really should start a land fund…the land bubble is unbelievably lucrative…I just produced 2.5 years of my old engineering salary in less than 40 hours of work, and will pay only 15% capital gains taxes…crazy… 

  47. Uh-oh.  Don’t tell me TODAY is the day they want to get real about the situation we are in!  WE KNEW THEY WEREN’T CLOSE TO A DEAL FOR WEEKS!

  48. Son of a bitch.  I hate these friggin manipulators!  Wait till everyone’s on board and then pull the rug out- 

  49.  Pharm:  Those are German workers making BMWs, not Chinese.  The Germans aren’t dumb enough to bribe their population with cheap Chinese goods at the expense of high German unemployment — especially given what happened the last time German unemployment went off the charts.

  50. phil: 
    I have the NFLX put spread that u had suggested a week or so back. L DEC 220 put + S AUG 240 put (Basis 5.86) .  Although the spread is profitable as of now, it would take NFLX a good 12% fall in next  3 weeks for the short leg to expire worthless. Do u think its better roll the AUG leg or should I wait for more time? What is it that you are looking for when you are playing such far-out out-of-the-money spreads?

  51. Phil, what’s your take on CMG short term? is it a good idea to take loss exiting shorts and re-enter when it’s going crazy high (like $350)? thanks,

  52. Phil AAPL thanks you realy know how to hammer it home well taken

  53. GLD/ PHIL…  any new thoughts on GLD here??..   
    Long 20 Sept 142 puts @ .65  .. 

  54. Platinum is still grinding slowly higher, over a week now without a dip.

  55. RUT as usual given up the most.  For a change so has the DOW (thanks to CAT).  Interestingly the NAZ the least.  Anyway, my premise is blown.  Again.  I’m net short so it’s ok.. just left a lot of money on the table by covering a big chunk of it.
    Phil, do you see any positive catalyst for a bounce today?  …not that they need one but if we’re going up I don’t see the point in all the selling this am-

  56. Long DIS.
    Earnings Aug 9

  57. FAS Money / Phil – Right now we have about $0.25 of profit in the 25 calls. XLF still showing some weakness so I guess we can hold for now. Of course as I write that they are killing the dollar so we could always take the money and run to live another day.

  58.  SPY/Phil – Thank you. The SPY play paid for my subscription this month!

  59. CMG goes up 65 points in the month prior to earnings, then MISSES earnings, and now it is almost higher then when they reported! WTF???

  60. Gold-dollar/Phil – "Watch the Dollar, of course and if it can’t hold 75.40, that’s the signal to give up on gold shorts. " Are you now bullish on gold? And to echo topher7, does this change your view on on the GLD Sept 142 puts? 

  61. Anyone know what the rank and file Dems want in terms of immediate revenue increases?  I assume it’s not enough to let the Bush tax cuts sunset.  They want more, right?  Would a cap on mortgage deductions suffice?  I think the combo of those two should be enough.  The mortgage deduction is a huge giveaway for the high end.  But it’s essential to the middle class and home price stability.  Any home under $700k should be safe.  It’s the million plus homes that will get hit… as well as second homes (which include rv-s and boats).

  62. zero it could be maybe…but i think things will get so bad that it all blows up in spectacular fashion…and it raises the longer-term probability of a disintegration of euro…who knows though…"never let a good crisis go to waste" rules the  day

  63. Matt – oh dangerous ground man! this just isn’t the place for us to be stating what the rank and file dems want, is it? ;-)

  64. iflantheman
    What do you see with DIS. Are you long Aug or Sept. calls? Thank you.

  65. Phi/AAPL/Jobs/Cash/Buyback: Incredible thinking-that scenario has the ring of high probability.
    What about a play to build a position in AAPL leaps (puts) by selling weekly premium?

  66. matt – Who cares about rank and file Dems?  I say that in all seriousness.  The Democratic leadership (especially the Pres) seems to be pursuing a compromise that his base would find repugnant.  It seems like the Tea Party is the only "base" being listened to.

  67. Phil
    Regarding AAPL calls
    If APPL would be toward  the bottom of your list, which of those thousands of other stocks would be toward the top of the list to buy calls in case it rises 20% ?

  68. Phil,
    SCO from yesterday…still a viable trade? Currently net credit is $1.60
    Thank you

  69. oknoman
    Phil has a very centerd view on JObs I think the man is slowly faded out. The man is not the company but these are just my views

  70. ‘BASE" is a perfect moniker for both of these strutting grandiose arrogant mediocrite asshats..who are charged with leading us and to  pursue a brighter tomorrow…they both will stand down the sooner the better..

  71. /CL is still fighting it’s way up !

  72. scottmi, you’re right!  I guess I can go there because I’m so detatched from it.  Politics that is.  Wish I could be the same way about the friggin market!
    jcaesar, it does look like Obama might be lubing up again to bend over his base doesn’t it?

  73.  Angel:  I think Germany would declare a national holiday if it could get back to the Deutschemark.  Hell, look at the Swissie!

  74. matt - eliminating the AMT costs $1.7TRILLION alone over 10 years…  And no, the Dem cap was $500k/mortgage last I read…plus it won’t be indexed to inflation as that is beyond the average taxpayers attention span and understanding.  Don’t woory though on the debt ceiling as its a nice day to start again….
    L8er guys…out of here…taking the family Avengers sit down lunch movie theater…yumm, pecan porter.  Good luck with the madness today…

  75. Dclark/DIS. Check yahoo News on DIS from 7/21

  76. Dclark. Aug 40 calls

  77. Bad day to be short any momos, look at those babies go!  Rant away, jabobeast.

  78. Iflan:
    Thank you. I will check it out.

  79. WTF, terrorist attack in Oslo, Norway! 

  80. Now I guess Obama will go on TV and yell at everyone again.  Reminds me of trying to get my kids to clean their rooms if they want to go out to the movies and all they do is point fingers at each other and say the other one made the mess.  Meanwhile – no one gets to go to the movie…  

    My beloved CROX making new highs.   That’s one I used to have to stamp my foot on like WFR or CSCO…

    Futures Tutorial/Savi, Lincoln – I don’t know of one but I’ll be giving a seminar in Vegas.  Remind me on weekend and maybe I can point out some basic things to watch for.  

    Thanks Yodi – hope it was clear enough for you.  ;-)

    When in doubt, sell half RussellB!  

    3am/JVest – Actually, you could have caught that trade at 7:30 as well since we rolled up and down in between.  I am trying to make non-futures players feel like they are missing something because you need to put in a solid year of paper-trading practice before you should even touch a live futures account and, if you aren’t motivated to start now, I will continue to make you feel like you are missing out on something until you do.  I post 50 other trade ideas during an average week – am I supposed to stop calling a good trade when I see one for other Members because you are asleep?  As to being done for the day – that’s good advice – when you have a huge win in the Morning it’s good to take the day off – one of the perks of being a trader but, you’ll notice, I’m still here answering your complaints anyway…

    LOL JC – I almost went with a similar joke but decided it was too corny – I admire your commitment to comedy!  

    Thank you Yodi!  

    Oslo/Rain – Can you believe the lack of reaction we have to terrorism these days?  

    You’re welcome Savi – I would have liked to gut it out but on expiration day it was just too risky. 

    ECB/Tusca – Not really because the Fed was giving money to the banks at 0.25% so they could buy TBills at 2.5% and make 2.25%.  The EU is forcing Greece to borrow $190Bn at 3.5% so they don’t default on their other $400Bn worth of debts.  In the end, they’ll owe $600Bn plus whatever deficits pile up over the next few years as well and will be no better off at all.  It’s good for the banks that lent them money at 20% and 30% because, even if they take a 20% haircut – that’s only giving up a year of interest!  Meanwhile, Greece is forced to cut back and their economy will get worse and so will Italy, Portugal and Spain but the German exporters don’t care, just like our exporters don’t care because their real customers are China and Italy anyway and their cheap labor will be the 25% unemployed Greek, Irish, Italian, Portugese and Spanish people – it’s everything Karl Marx ever warned us about as the Capitalistic System evolves over time.  

    Uh-Oh – Obama leading off with Commie talk about workers being paid enough money to actually live a dignified life!  I hope the Secret Service are on their toes!  

    That should stop the rally, at least until he’s done. 

  81. CRIS breaking OUT??

  82. LOL!  Phil said he said Commie talk!
    thanks enni_82, that was well written and makes perfect sense.  Unfortunately, only to a sane person.

  83. Jabo, never mind, I see now that you got your first rant in bright and early today!

  84. Obama"there is too much debt on america’s credit card"….that is why we MUST spend more.

  85. I cannot believe CNBC cut away from Obama!  Any time he says something conservatives might not like….

  86. soemone wake me up why can’t clinton be dictator for life..thhink hed start wearing red kercheifs?

  87. CNBC bearish today.

  88. Phil / Impasse    Clearly the GOP are dug in in this no tax bs.  And Obama seems to be getting seriously pssed.  Shouldn’t we be shorting into the weekend as this this gets more ugly before it’s settled at the 12th hour?

  89. CNBC should try cutting away in China—we may never hear from them again   wow !!

  90. LFLAN -

    Looking at the LONG DIS, are you hedged on it at all?

  91. mrmocha-- i will only rant about CMG today--maybe ;-) I just want to know WTF they are at all-time highs after a miss (I thought a miss was impossible for these momos)? Remember, this POS short has been considered "overvalued" here since it was UNDER $200!!!
    FU CMG!!!

  92. Phil / Impasse   Though I don’t understand what this apparent standoff will do to the $?

  93. matt Im in the market and I have spoken to literally hundreds of people that have tried to negotiate new terms with their lenders and not one positive outcome. The guy that cuts my grass was worth over 2M on paper back in 06, today he’s talking about filing bankruptcy and hasn’t paid the mortgage on his home since 08. He invited me to come fishing on his boat!! Not kidding. Not one day goes by that I do not have contact with someone in a similar situation.

    I’ve met probably a handful of aggressive real estate investors in the past year compared to 09/10 when there was more competition. One day this will all come to a head but, today banks do not want to deal with the problems as that would mean buying back billions in bad mortgages and marking to market reveals how truly dire the situation is for middle class America as most retirees still think their homes have value while their neighbors short sale and get foreclosed on!!

  94. Chevron [CVX] has most call option volume right now.  Bought CALL (CVX) CHEVRON CORP NEW AUG 20 11 $110, moving up fast.

  95. David/DIS. Nö Covers on DIS right now. Straight up Long calls

  96. Obama saying cut military and tax the rich (corporations), in case anyone is missing it.  Getting thundering applause from a college crowd – Reps are so screwed if he wins over the youth vote.  

    Good take ZZ! 

    TBT/Kyw – No big deal but you should do something about a vertical if you are down 50%, not 65%..  I would roll the $3.65 Sept $36 puts, which I guess you sold for about $1.50 to the Jan $33 puts at $2.80 so you still have a net credit of .65 but you gained 10% in position.  You could make an even roll to 1.3x of the Jan $33 puts and that drops your net collected to about $1 so you are break-even at $32.  On the bull call spread, I’d take the Sept $34s ($1.05) and roll those to the Jan $32s at $3.15 for net $2.10 and you can pay for the whole roll by selling the Jan $35 calls (now $1.90) which would (net .20) drive your net on the entire trade up just .20 other than the 0.3x additional Jan $33 short puts.  Unfortunately, that would be net $2.85 on the $3 spread so kind of dull so I’d risk losing .50 and hold off on selling the Jan $35 calls until/unless they drop to $1.25, which would drive your net up to $3.50 but, hopefully, you can get $2 or more for the $37s (now $1.35) on a good pop.  

    For those of you not watching Bloomberg or some other real network – Obama is still talking and laying out a great case for why Republicans are total tools….

  97.  Muddy Waters is now taking on Chinese solar.  I saw an interview a few weeks ago with the CEO regarding Sino, and I came away with "slimy opportunist."  Anyone have an opinion rather than just an impression?

  98. Phil
    Not a cnbc fans , but Obama is running fine from the web site

  99. Phil/ Ddip   Great explanation by Edward Harrison and Ed Lees of UBS of why Europe and the US will Ddip, while China will have a hard landing.

  100.  "You can’t go wrong owning that in which the wealthy want!"/Troy – That is dead on!  I was just talking to some investors about that yesterday.  They were asking what kind of real estate was safest and I said the most exclusive and rarest because there will always be someone with money willing to pay for the best of something but "value" properties are literally a dime a dozen.  Real estate is getting fun again – that’s why I’m doing that PPM to restart my old title operation, it makes incredible money in an up market and pretty good money in a flat one too!   No need to risk money on land when we can make money on the turnover….  

    Manipulators/Matt – So why expect them NOT to do it?  

    CSTR flying too – another one of my old value favorites – not much left to buy at this rate… except maybe WFR, RIMM, GE, MO, CSCO…

    Obama done now – let the running of the bulls continue!

  101.  Phil, thank you for your last comments.  Next Q: sitting on CMG combo -3/2 AUG C 34/DEC C 40.  Since CMG continuing rise, can roll AUG 34C to SEP 34C for 3.25 credit.  More kicking the can down the road, i think that’s not a bad idea expecting CMS to crash one day. Your thoughts? Tks

  102.  Phil, apologies CMG 310/340 not 34/40.

  103. GLD/Phil..  
    Thoughts here ??  Long some Sept 142 puts?? (20 @ .65)

  104. Phil / Manipulators:  True.  They are equal direction offenders! 

  105. Great SPY put recommendation Phil! I took the day off today and the fam and I are taking a day trip to Martha’s Vineyard…your recommendation just paid for the trip so thx! ’bout to board the ferry, have a great weekend all!

  106. Phil—have the following bcs—-pwer  long Jan 7.50 calls @2.00—-short jan 10 calls @ 1.00—-short jan 7.5 puts @ 1.10—suggestions on adjusting?

  107. kustomz, it’s only a loss if you sell!  It’s only when you are forced to sell does it become a problem.  Removing mark to market takes away the incentive for banks to unload their bad assets.  That’s why we are years away from a housing recovery.  If ever.

  108.  hemas03/Phil…….CMG……..Here is a hypothetical question which I sometimes use to determine whether I want to go long or short a stock.  If someone MADE you place your entire portfolio into this stock for one month, and you could go long or short, which would you choose?   I know this stock is overvalued, but Geez, we’re talking food here.  People love food and they love CMG.  Look at the one year chart.  Does this look like a stock that is going down?   Call me your CMG contrarian for the day.  I know you WANT it to go down, but seems to me it’s just going further UP>       I hold no position,  

  109. And why debt ceiling discussion will go nowhere as long as the GOP keeps on moving the goalpost:
    Paul Ryan is a fraud! 

  110. XLF moving up

  111. And Done.  The crooks have turned the RUT green.  Good going boys!

  112. Watch out at IWM 84.20ish !!

  113. Phil / Oil  Do we short now at $99.89?

  114. not exactly proof ryan is a fraud..without significant entitlement cuts and revenue increases we are screwed..period why is this news?..meanwhile china hacked into imf computers and no one makes a peep..

  115. sky news- widespread reports of attack on children’s summer camp in norway

  116. And out of TNA for $2.03 !!

    1/3 in TZA !!

  117. Phil – sold ABX $46 calls for $1.30, now $4.30. What to do?

  118. gunshots not bomb

  119. CMG/lflan – and that is EXACTLY why I don’t touch CMG.. !   i could  not put whole (or any) in that either way…! i just say NO!

  120. same time as bombs in oslo

  121. Equipment financing confidence strengthens.
    Mass layoffs continue to trend lower

  122. NFLX/Etrad – The Aug $240 puts are $3.85 and the Dec $220 puts are $11.40.  Your delta on the Dec $220 puts is just .19 so a $10 move up in NFLX will cost you about $1.90 so I would risk the loss on earnings and roll the Aug $240 putter to the July 29 $245 puts for $1 as those expire quicker and then you see how things shake out next week.  Of course that’s the aggressive way to play.  If it’s a large trade and you care about the money – you take it and run ahead of earnings!  

    CMG/Ethan – I can’t believe they are still at $333.  Still, they got a slew of glowing upgrades yesterday and that’s all they can manage so I’d be patient.  What short play do you have?  

    AAPL/Yodi – As long as you learn something!  8-)

    GLD/Topher – You can see from today’s action, we’re trading for a US default.  Once that is off the table, we should get a proper drop.  Meanwhile, we’re back to $1,605 and that’s a re-enter on the (/YG) futures below that line with tight stops and those GLL Aug $22 calls are .40 so 20 of those in the $25KP

    Bounce catalyst/Matt – That was a good question and Boener saved the market once again.  That gag never gets old, does it?  

    DIS/Iflan – I like that one.  

    FAS Money/StJ – Absolutely the right instincts at 10:39.  WHEN IN DOUBT – SELL (or buy back) HALF is Rule #2 (of 2) for good reason…  

    You are welcome Dsheara and congrats!

    Gold/Scott – I’m not bullish on gold at all but you have to respect the Dollar’s ability to fall and make everything else go up – whether merited or not.  The Dollar’s drop from 76 to 74 (2.6%) over the last week has masked gold’s weakness as it "flatlines" at $1,600.  Without the Dollar’s 2.6% drop, gold would be $1,558.  Oil responded properly to Dollar weakness and so did platinum but gold has A LOT of sellers at this level and will have a Hell of a lot more if the Dollar begins to head back to 76.  

    Dems/Matt – They would be happy with just the $1Tn (against $3Tn in cuts) that they thought they had a deal on a month ago.   Not that the Reps have been such jackasses, the Dems are getting a little more pissed and may not want to come back to the table on that one.  The public is turning against the Reps on the "corporate jet" issue which is the big Dem talking point now and their unwillingness to give up even this joke of a tax break does make the Reps look like evil Corporate flunkies.  The Dems didn’t want the mortgage thing, that’s how the Senate is trying to compromise to get SOMETHING on the table the Reps will vote on but, as I pointed out this weekend, 95% of them have signed the No New Taxes pledge and their constituency is holding them to it.  Someone on TV made an excellent point that the Reps have engaged in so much gerrymandering of districts that their districts don’t poll anything like the nation so 2/3 of Americans may feel we need to raise taxes but just 10% of the people in a carved-out Rep district may feel the same way.  

    Keep in mind that the loss of an interest rate deduction is more likely to force interest rates to be more competitive.  That’s why the Dems don’t hate it because it’s really just a huge transfer of wealth to banks, who get to charge people 35% more than the market would bear in interest, simply because it’s "deductable."  The crack spread on interest rates, even at "just" 4.5% (which no one really qualifies for) is still at near record highs to what the banks are borrowing for.  They used to be happy to mark up rates half a point – AND GIVE YOU A TOASTER! 

    Spectacular Blow-Up/Angel – That’s what will happen if they really can’t come to an agreement.  What’s the point of bailing out Greece’s $400Bn debt if the US goes and defaults on $15,000Bn two weeks later?  

    AAPL/Okno – I’m not into shorting companies I really like.  I’ll be catching the falling knife on AAPL if they drop but I’m not betting on the demise of a guy who has $10Bn and every medical science geek in America thinking of ways to save him. 

    True JC, Obama is taking a big risk with this "compromise" but I think the game is he knows the Reps won’t compromise – he’s just backing them into a corner where the people see them for what they really are.  The last thing they ever expected was to have 90% of their demands met and now their bluff is called and people can see they never meant a word they said.  

    List/Streth – See above WFR etc…

    SCO/Jasu – I think so.  People still can’t afford $100 oil, even if you give Greece $190Bn (1.9Mb of oil) or even if the US votes to continue borrowing $140Bn a month (1.4Mb of oil) so we can PRETEND that we’re not in the middle of a crisis that is every bit as serious as Greece’s with the sole exception being that we don’t have to ask anyone else before we hit the "Print" button on another Trillion Dollars….

    AMZN/StJ – In the end, there can be only one.  

    Shorting weekend/Tusca – Sure, if we finish high, I’d go for some speculative shorts.  

  123. We are either testing IWM 84.06 as a floor, or should see 83.86 at least. (Probably the former) !!

  124. Phil, i have CMG AUG19 320 Put bought at $12.11 now $4.70. thanks,

  125. oslo – rumor is that gunshots were at a youth camp  where the PM was

  126. Phil, if we don’t have a deal in place, and do default on anything, I understand that pushes the dollar lower which generally will make the the market climb, but in this situation, wouldn’t it affect spending (no social security checks, possibly), banks on notes they hold, general state of the economy knowing our credit rating would go down so cost on debt would increase substantially, and basically cause a collapse in the market even with a lower dollar?

  127. Phil,
      Any thoughts on WYNN. I have 155 Aug sold against Oct 165.

  128. The euro area’s new aid to Greece reveals "negligence" toward taxpayers’ interests and an unacceptable lack of accountability for indebted states, the vice president of Germany’s taxpayers lobby said.  "The EU decision that the bailout fund in the future can buy debt of states in crisis by itself seals the transformation into a liability union," he said.

  129. JR- Thanks for the IWM call this AM (84.47). Got into $84 weeklies at $0.14, sold out for a double. Kicking myself for bailing on some weekly GOOG 610s… would been a 4-banger now.. arrgh! (but we NEVER break out through lunch.. ha ha..)

  130. Yodi/AAPL: Thanks-love the company (who doesn’t), but I do think there will be a major shock to the stock at some point related to Jobs. As a stockholder, ardent user and fan of the company, however, I hope Steve Jobs lives to old age and continues to lead.

  131.  Jrom:  Gotta do it:
    FU Martha’s Vineyard!!!
    They put me in jail the last time I was there.  For making the mistake of passing through with a stun gun in my checked luggage, legal in 42 states inc. all west of Mississippi.  My law school roommate has lived in Gay Head [excuse me, "Aquinnah"] all his life, says "the billionaires are ruining it for the millionaires."  Private beaches — gated, locked.   Have fun, I’ve no desire to detract from your trip, it is beautiful in summer, but a nastier, more elitist venue I can scarcely imagine.

  132.  at least 4 shot and killed at camp…many shot county official says…kids jumped in lake to swim away from gunman

  133. Phil…see coment to Angel
    "Spectacular blow up"?  (If no agreement)
    Markets react postively to U.S. Debt default?  This because dollar dropping like a stone?   Please elaborate for a rookie when you have time.

  134. Well 84.06 held and I’m out with 6 cents !!

  135. What’s the stick rumor?

  136. FAS Money / Phil – Well I didn’t pull the trigger at 10:39! Interestingly enough, TOS Risk Profile shows that our maximum gain will be at 26 as we are somewhat bullish with the current setup. We might actually get a better chance of cashing in the puts first!

  137.  another prime example of how dumb this market is…bloomy just ran a story about iphone being sold by china unicom/china telecom by 3q….that story has been out all morning.

  138. came out on caixin originally

  139. zeroxzero, good stuff!

  140. TOS on MAC OS lion/ Kurtww
    I installed it on my backup machine and am working with TOS support to figure it out. will update on the chat when I get it to work.

  141. BBC Norway coverage:, one arrested at youth camp.

  142. Hi Phil,
    What do you think about bearish gold play with buying bull debit call spread GLL $23/$21 and selling $20 put?
    What is your general rule of choosing strike of an option to sell to offset the debit spread.
    I would look at the its delta to determine the probability to rich the strike and overall my sentiment on the stock.

  143. Kurtww/rehat –  I’m running TOS on Lion. Upon starting TOS, the Lion had to re-install install JAVA, then all was well. Haven’t noticed any other difference from Snow Leopard yet.

  144. Phil – I just joined the site.  How about a trade idea to make back that membership fee? ;-)

  145. JRW
    You may be paying someone to do this for you. I am running SLA quad threaded to quad process and 3 way high speed ram running windows 7 professional. When I try to combine multi linked data to real time indicators I can only do it in a refresh typ moment in time without auto real time changes, also almost anything locks up the system. My questions are you doing similar computations, using windows, or something completely different? I may be at my peter principal point. Thanks!

  146. Going long if they can just get over !!

    After all, "they" are doing all "they" can !!


  147. Phil/GLL — As much as I like trading silver, I think you’re right about the debt-deal risk; if there’s a deal, there could be some pain in the metals.  I also note that in that last week of April, the top in silver, ZSL bottomed at about $13…it’s now at $13.40.  So, I’m looking at something like a September BCS at 13/17 at $1.40, paid for by selling the Nov 11 puts (rollable) at about the same price.  Silver down to $35 is about 12%, the ZSL (2X) up 25% is about $17.50.  Am I putting this on correctly?

  148. sense like people waiting

  149. Re: OS X Lion for Mac users. It’s really cool if you have either an external or built-in trackpad. Makes OS X desktop very iOS-ish. If that’s a a big draw, I’m not sure its much of a change otherwise.
    One more important thing. PowerPC apps aren’t supported in Lion anymore, so if you have any old favorite apps, they may not work.  I haven’t been glued to Mac blogs recently, so found this out the hard way.

  150. shadow,

    You are WAY out of my leage !! I use 7, have no problem with real time (except this site) !! Maybe it’s that you are doing everything on ONE computer ??  Good luck !!

  151.  Thanks Rain:  


    That’s the key to this thing – we caught a good Q as Japan’s problems boosted our manufacturing and the dollar tanked, sending our exports flying and, of course, oil got jacked up and our energy and commodity pushers made a fortune at the same time as Obama pumped 2% back into people’s paychecks to fake a consumer recovery.  It was a very nice sugar rush and now comes the crash...  

    Standoff/Tusca – Well if there is no deal, the Dollar MIGHT go down simply based on our increased borrowing costs BUT it also might go up because we will not be borrowing anymore money (bad for markets).  Also, of course, although many Conservatives would argue otherwise, lack of Government spending is also bad for the markets as are millions of people not getting paychecks and benefits.  On the other hand, a debt deal will lower our borrowing costs (not that they are high now) and, if paired with budget cutbacks, should also strengthen the Dollar so, either way, It’s not the best time to go long on the market.  

    Homes/Kustomz – Good point.  We have swept a terrifying amount of stuff under the rug already.  

    CNBC going for a record for how many times you can say China in one interview.  "Forget America and Europe’s troubles – China, China, CHINAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!!"  

    CVX/ZZ – Watch that $98.50 line on oil. 

    Chinese Solar/ZZ – I don’t know why anyone would ever invest in something half a world away where you can’t even read the daily news about the company consistently.  It’s hard enough trying to figure out which companies in THIS country are BS’ing you or not – trying to figure out what’s going on on the ground in China, you may as well just flip a coin to make your decisions although, with Chinese companies, you’d better make sure the coin doesn’t have two heads!  

    CNBC/QC – Do you mean their web feed continued to carry him when the network cut away?  That’s strange.  

    DDip/Tusca – Thanks.

    CMG/Hemas – If you sold 3 Aug $310s and bought 2 Dec $340s, then I would roll the 3 Aug $310s ($26) to 5 Sept $330 calls at $16.40 for a small credit and you can add a Jan $360 for $20 to keep it from being too dangerous.  

    Very nice Jrom – have a good, free weekend!  

    PWER/Savi – Not really as the rolls are not attractive.  Solar out of favor this month but wait until Aug at least before getting too worried.  The proper move is to roll out to 2013 if you intend to stick with it but no 2013 yet.  

    CMG/Kustsomz – Yes, people LOVE food so much they gave CMG $509M in Q1 (don’t see Q2 numbers in YHOO), which is $43M more (10%) than the year before.  And how much did they earn on this extra $43M?  Nothing, they earned $80,000 less than they did last year.  Their ENTIRE gain in earnings is due to the $109M worth of stock they bought back last year as well as the $13M they bought in Q1 and whatever they bought in Q2 – about 1.5% of the $10.4Bn market cap (on $200M in earnings!) so a current p/e of 56 and a forward p/e (for the END of 2012) of 39 vs. MCD at 19 (forward 16) or BWLD at 29 (forward 21) or CAKE at 22 (forward 16) ALL of whom are both projecting and executing better growth rates than CMG.  CMG is BS – it will crash and burn – either that or every other restaurant is the greatest bargain in stock history. 

    Speaking of bargains, SONC screwed up an aggressive expansion plan in 2008 and has never been forgiven.  They are a great chain with 3,500 stores (too big too fast) vs. CMG’s 1,100.  SONC dropped just 5% to the bottom line last year but that’s because they were stupid and spent their money on growing the business rather than buying back their stock to make their profits look good.  In fact, SONC was so crazy as to SELL $2.5Bn worth of stock over the last 3 years so they could outbuild CMG 5:1 and buy up all the cheap, prime real estate that was laying around.  They also paid down 30% of their debt but changing over to a franchise system has cost them revenues (but will pay off later, hopefully).  So it’s a tale of a company that invests in the future vs. a company that invests in making investors think they are growing.  I like SONC, thanks and you can buy them for $11.05 and sell the March $10 puts for $2 and the $12.50 puts for $2.10 for net $6.95/9.72, which is aggressive but pays 79% if they hit $12.50 by March so let’s buy 2,000 in the Income Portfolio!  

    Ryan Fraud/StJ – That’s a very good article. 

    Oil/Tusca – I prefer $100 but close enough.  If you are going for more than one then you can go 1 short at $99.90, one at $100.10 and 2 at $100.20 with and average of 4 at $100.10 and a stop at $100.26 so the risk is 4x .16 or $640.  

    Camp/Angel – That’s sick, is it true?  

    ABX/Nicha – Well, don’t be bearish on ABX would be my suggestion.  If those are Aug calls, may as well wait until next week to see if we head lower.  If not, I see rolling in your future….

    Dollar testing 75.40 and if they can’t get below it, this should be a top.  

  152. stratdady
    Java has a to me unknown copy protechtion that seem to require a double load to run. My suspition is it automaticly double checks when it sees any operating changes. I have reloaded Java I can’t count many times. Hope this helps.

  153. AAPL and Hulu – Looks to me like the losers if Apple were to buy Hulu would be the studios and not necessarily Netflix. Apple has been pretty shrewd negotiating fees for iTunes from the musics and TV guys. This might actually help Netflix somewhat if Apple could pressure the studios in lowering licensing fees for content. In any case, it’s all speculations now. I would think that Apple might have better places to invest their cash!

  154. JRW
    Thanks! I built this monster so I could do this with a quad processor. Multiple computers would need a custom buss to run the data from more than one program at the same time. I have done it but after a long set up it runs just one moment in time, then its wash, rinse, and repeat when it really needs to run with real time continous data. Some day I may get it and make my billions selling it, fat chance.

  155. Quote of the day (from Barry’s site)

    “Economists who adhere to rational-expectations models of the world will never admit it, but a lot of what happens in markets is driven by pure stupidity – or, rather, inattention, misinformation about fundamentals, and an exaggerated focus on currently circulating stories.”

     Taken from a Bob Shiller article (

  156. SONC / Phil: You want to buy the shares and sell 2 sets of puts, $10 puts AND $12.50 puts??  Or maybe it’s a typo?

  157. Phil:  THe CMG 310/340 Spread was a 25kp trade.
    Is the advice u gave on that official 25kp roll?
    "CMG/Hemas – If you sold 3 Aug $310s and bought 2 Dec $340s, then I would roll the 3 Aug $310s ($26) to 5 Sept $330 calls at $16.40 for a small credit and you can add a Jan $360 for $20 to keep it from being too dangerous.  " 

  158. Evaluating the risks at BAC:
    And apparently, WFC is not in a good spot either! 

  159. phil—your analysis is probably right on CMG but isn’t it the same as when you thought it was a good short 150 points ago? Can’t they just keep the illusion going by continuing to buy back their shares like you said?

  160. stjean – I read that Shiller article this morning – very good.  Don’t know why he doesn’t write more (like Krugman).

  161. WFR finally making a turn. Jan 7.50′s still fetch 10%+ putting you in at $6.70.  Should release earnings in the next couple weeks.
    Look at /CL go!

  162. CMG/Ethan –  You need to decide to move when you are down LESS than 50% – it makes it much easier.  We got earnings and no one seems to care so you can sell the $330 puts for $8.20 to some other sucker and roll out to the Dec $300 puts at $18 (and you can do a 3/4 cover to cut costs) and just hope that people don’t wise up by Aug expirations.  

    Norway/Rain – Man, they really hate that PM!  

    Default/Rustle – See above, I don’t think either outcome is going to be a market booster other than a likely "USA is fixed" rally we’re bound to get the day they announce it.  All the CEOs are saying "if only they would fix the debt ceiling people would shop and hire and stuff" so it will be put up or shut up time once it’s actually over.  Remember in 2008 they told us that if TARP passed all would be well.  In March 2009, 6 months later, we were way worse off!  

    WYNN/Rkpag – I’d let the premium burn off (still $2) and keep an eye on the Sept $160s, which are currently less than $1 to roll to so, as long as it’s less than $1.50, that’s your escape route.  If you are so gung-ho bullish on RIMM that you are worried about getting burned, you can always sell the Sept $150 puts for $3.30.  

    Negligence/Angel – That didn’t take long.  

    Nastier and more elitist/ZZ – Try the Hamptons!  New money elitism is so much more despicable than old money elitism…

    74.38 on the dollar is a big break for the bulls.  Gold stopped out (/YG futures, not options) but may head for a reload at $1,605 if they can keep the Dollar down.  VERY LOW VOLUME moves up, kind of insincere but it got oil over $100 so mission accomplished as soon as gasoline is back over $3.10 (now $3.0933) for the weekend.  

  163. And wow, apparently tech companies are now cheaper than industrials on a P/E basis: 

  164.  AAPL October bull call spread390/400 for under $5.  Pays double if AAPL over  400 in October (duh!) and gives some DSP to the trade (buying back the callers on a pullback).   Got a bunch. 

  165. cwan120 – its the $10 calls I assume.  the $10 puts are less than $1. 

  166. etrad/SONC. I’m pretty sure he is talking about the March 10 calls and the March 12.5 puts

  167. I dont agree with Barry, Its about leverage and how much of it they want to use. Its never been cheaper to leverage up than it is today even with all the issues the world faces money flows because its cheap! News and fundamentals are used  as ploys which may or may not determine direction. Traders aren’t stupid they’re just greedy.

  168. Sorry, my post was for Cwan. Long day.

  169.  Phil:  Thanks for China comment, I agree entirely: I’ve never bought a single Chinese share.  I’m a "EM-exposed" company buyer — Nestle, Colgate-Palm., anything that taps Chinese mistrust of putting anything in their collective mouths manufacturer in China, need I elaborate?

  170. Shiller / Jcaesar – I agree, I like the guy as well and he sometimes shows up on CNBC, but he probably makes too much sense for them and the print media! 

  171.  Phil
    If there is a  debt "fix" bounce this weekend or next week, what do you think of the $90 August QLD calls?

  172. Done for the day driving to myrle beach made 1000.00 picking off nicles and dimes shorting oil

  173. Oil drifting to $100. Yesterday’s high was $100.16….

  174.  TZA showing a little mojo.

  175. Phil I listened to AMD CC last night and bought 10k shares 6.68. It took quite a while to get the shares. Im curious, with such large short interest in the stock why wasnt it dumped since they project growth of 12% give or take 2%? I know how you feel about AMD and I understand INTC lets them survive but, buying them when market cap falls below 5b has always been a winner for me. Whats your take?

  176. Pharm – you mentioned preferring MRK and BMY and not PFE.  I have some long time old (and at a loss) PFE that i continue to be underwhelmed with. I am considering rolling it over to MRK or BMY. Can you expand a little on what you particularly like about MRK and BMY?

  177. Blow up/Russell – No one is really expecting a default.  The banks could drop like a rock and insurance companies would follow and then everyone else who has lots of bonds.  That would cause a scramble for liquidity and stocks and commodities would crash and, even worse, the Dollar would get stronger  and make things look even worse, possibly leading to panic selling while Reps and Dems stomp their feet and point at each other.  

    AAPL/Angel – That’s a sell on the news-type item except it’s AAPL.  

    Wow. 102 degrees outside…   My kids said it’s too hot at the pool!  No break tommorrow but back to normal (high 80s) after that. 

    GLL/Petro – That’s fine but keep in mind you will not be happy if the US defaults and gold goes to $1,900.  That’s why I like the limited loss of the calls for now.  

    Welcome/JJ – I’d do the sonic trade for 125% of the fee.   

    AAPL, AMZN, GOOG, MSFT, BRCM, QCOM, even ORCL and CSCO are driving the Nas into a frenzy just under the 5% line (2,877) at 2,861.  SOX are up 2.64% but all the other indexes are flat so far so watch the Nas to either run out of gas (and we can short again) or pop the 5% line (doubtful) and spark a massive rally as the others move to catch up.  

  178. kustomz
    I would be careful with all chip stocks, the real problem is the consumer is tapped out. INTL processors are so much better they can charge more and they have no interest in the lowest level bidding war. Outlook for them is down now with lower price targets. To me the action makes sense.

  179. Pharm:
    If you got chance, I like to get your opinion on TRMS, it’s trading between $2 & $3.
    Is this stock worth holding long-term? Thanks! 

  180. QQQ TODAY $60 puts are .35, virtually no premium, I like them to risk a dime loss to make more on a sell-off into the close.

  181. So whose day was it to control the NAZ?  Seems they didn’t get the memo that it was supposed to be a flat day.  Huge divergence between them and the rest.

  182. JRW: Wow, that is some line (84.19)

  183. tight, tight, tight, gotta bust one way or the other

  184. CMG up $7.50???
    Must be the company buying shares (48 hours)??

  185. Jbur / Line

    Indeed !!  If they can’t break it by 3:00 we may fade to close and gap over Monday !!

  186. Captain America…two thumbs up!
    Phil/USO puts – stopped out while I was gone for a small loss…are we playing oil over the weekend?
    JRW – throw me a bone, got some making up to do…although just booked 1.4% on MSFT bounce.  I’ve got to diversify to get anywhere near your EOD percentages!

  187. I here you shadow but, AMD has been on the brink for years yet somehow they survive. After years of listening to these guys this past CC was the most revealing they’ve been about future prospects. I just think about all the headwinds they’ve past recently and they’ve lowered LTD to just 2B from 6b three years ago while they sit on 1.6+ in cash and climbing with a better product mix and tech that’s probably a few % points off INTC best chips.

    With that said Im a DT by nature and have taken my profits. Im just tinkering with the idea of buying lots more next time around.


  188. In other news, Ben Bernanke appointed Muhammad Saeed al-Sahhaf (Bagdad Bob) as the new Fed Information Minister.
    Speaking on the markets as a whole, Al-Sahhaf said: "This market will never go down….. NEVER!!!!"
    Pointing out the Fed’s position on shorts and naysayers, Al-Sahhaf said: "Our initial assessment is that they will all die"
    There you have it. SPX to 1600+ in three weeks time at the latest.   Smiley

  189.  JRW  Could you please clarify "gap over Monday".  Deos that mean you think it will continue to fade and you would hold over the weekend?  Or gap up on Monday.

  190. JRW/Monday breakout.   Breakout based on your previous IWM chart with the squeezy thingy?

  191. FAS Money / Phil – Last hour of trading for the week. XLF has been treading waters for the last 2 hours and only decay is helping us. We are still short the 25 Calls and 26 Puts (both slightly positive). Do we keep them open for the weekend? TOS Risk profile shows profits between $24.50 and $27.40.

  192. ss / bone

    Well, I’m only at 2 1/2% today, but if this moves at all, we should ride it to the close for a few more !!

  193. LOL JRW!!!

  194. A lot of IWM sellers stacked up at 84.20 on the level II

  195. Watching for that 3pm buy program…or head fake program.  Usually starts a few minutes beforehand…

  196. Troy/tradebot – look at /dx

  197. here comes the stick

  198. Real or fake?

  199. Phil,
    Suggestion. A standard format for expressing moves might eliminate much confusion, and perhaps save your time explaining things.

  200. "Feels" head-fake-ish!  Caution…

  201. loopster, Jbur

    "They" will have their way eventually; if they haven’t got the firepower to do it now in open session, they will do it pre- market next week, (gap over) probably using a debt deal as the excuse imho !!

    Of course there is always the possibility of one of Japan’s islands sinking or Iceland attacking, which might put it off a week !!   8-)

  202. gmarts / Sellers

    No, that’s just me !!  8-)

  203. Phil,
    When you suggesting the fixup trade on TBT for Kyw you wrote "other than the 0.3x additional Jan $33 short puts.  Unfortunately, that would be net $2.85 on the $3 spread" Could you explain for me where net $2.85 came from?

  204. JRW….. Nice  :-)

  205. We are in an acending channel but the vix doesn’t look good…

  206. JRW
    Airing my question made a difference. Made another try and the system told me I need a SLI cable to bridge. These dam computers are smarter than me X10000000000000000000000000000000000000000000000000000000000000!

  207. Dollar/JRW – Good chart, looks like the rising wedge is holding for now.  

    ZSL/Esco – I like that trade but it’s kind of far out for playing a fix to the debt, you won’t make much quick money and anything can happen over another 3 months.  I’d go for the ZSL Sept $11/15 bull call spread at $2 and sell SLW Sept $44 calls for $1.20 for net .80 on the $4 spread with 400% upside at $15 and silver has to go up 10% before you have any trouble with the calls and that would be below 67 on the Dollar (assuming they are in-line) and about $1,800 gold.  

    AAPL/Strat – That explains the design of my trackpad, which recognizes multiple fingers and stuff, when I bought it 6 months ago I thought it was designed a little overboard for what was actually available, now it’s a necessity.  Great marketing, cheap software upgrade sells millions of $69 trackpads – I LOVE my trackpad!  

    Shiller/StJ – Good point. 

    SONC/Cwan – Sorry, that was selling the $10 CALLS and the $12.50 puts

    CMG/Etrad – Not yet in the $25KP, I want to see if the market hold up next week.  

    By the way, GMCR trade from this morning’s Alert still good: GMCR Jan $92.50/77.50 bear put spread is $6.30 and you can sell the Sept $100 calls for $4.50 for net $1.80 on the $15 spread.  I really think Sam is onto something – there’s certainly a lot of smoke and maybe there is a fire!    

    CMG/Jabob – Yes they can and we abandoned the shorts 125 points ago and now we’re going to try again for a 5x opportunity and, if they go up 125 more, we’ll try again for a 5x play at $500 – we only have to be right once, they have to be right 5 times…

    AAPL/Iflan – I like that one. 

    China/ZZ – That’s the way to play it.  Plenty of companies with properly audited books have tons of business in China.  

    QLD/Streth – I don’ think they are close enough to be bullish.  The "fixed" bounce will likely be very short-term, especially if the Dollar rallies and, over the weekend, you may never see the gains.  

    AMD/Kustomz – There are fine as a niche player in the space and 12% growth is nice.  People thought it was going to be a disaster and the shorts abandoned ship on the earnings, pretty normal other than the size of today’s pop.  

    Whoops, CNBC just said China, China, CHINA again – Stay tuned after the break and they promise to say China at least a dozen more times!  

  208. THat bomb story just on CNBC may have the few human traders a little "Vixy"…coincidence?

  209. trying to post today’s Doonesbury which is on target with your views Phil, can’t seem to do it.

  210. JRW - in 1/3 at 32.13…pulling the plug at 32.15 pullback…

  211. Kustomz
    INTL has made money in December and more so April/May. I expect it will do it again. AMD is gust problem processors to me.

  212. 20 bodies at norwegian camp..helpeers of the global jihad claim responsibility

  213. JRW- bounced the 200sma…like clockwork!

  214. Out…vix reversal

  215. Snow/DX -thanks…looking at the 60min as we speak…interesting!

  216. IWMers – not enough volume to trade safely…but I’m suspecting I got flushed

  217. Anybody got any favorites?  I’m drawing  a total blank, not a single coherent idea

  218. IWM 84.20ish is now RESISTANCE !! All my screens say

    So we are probably going to make a NEW HIGH !!


  220. Favorites/ZZ – buy some HL.. more CIM.. or try some CTL

  221. We are at the lower limit of a 12:30 channel…which means nothing in a manipulated Friday closing as one gigantic buy program or leaked-news-leak and to the moon!

  222. Oh yeah, TZA 2/3 !! (VIX Chart)

  223. Watch IWM 84.06, 83.96 and 83.84 !!

  224. USO/Troy –  I’m fine with puts over the weekend but futures can really burn you.  

    FAS Money/StJ – I hope you mean next week’s $25 calls and $26 puts and calls!  Those couldn’t be more on target with FAS at $25.50 so what’s to adjust?  If we get a pop or a drop we don’t believe in next week, then we can remove the losing side otherwise, our goal is always to let time decay work it’s magic.  

    Format/Sparky – I try to be standard but I’m just typing as fast as I am thinking, not editing and formatting.  As it is, I’m only getting to your 3:03 question at 3:30 so, like any good operating room, perhaps it would be better for the operating team to learn to understand the surgeon, rather than demanding the surgeon stop each time and do everything the way they were taught in each of their medical schools.  

    TBT/Vic – If you remind me after hours I can go look it up again and do the math.  

    Doonsbury/Rustle – Non-admins can’t post pictures.  Just put up the link.  

    Wheeeeeeeeeeeeeeeeeeeeeeeee!   (how do you say that in Chinese?)

  225. Phil/weeee - Chinese say "Weee"! =)|zh-CN|weee

  226. Doonesbury on target

  227. CNBC
    Not just China but now the economy is going to EXPANTION in the 4th quarter. BUY buy buy!

  228. QQQ $60 puts are .50, DON’T BE GREEDY!  

  229. If you look up the word PURGERY in the dictionary………….

  230. Did I just hear CNBC say China? 8)

  231. FAS Money / Phil – Next week of course… All set then! 

  232. Scott:  Thanks, bought all three, lotta news, no direction, interesting; might break.

  233. Lucky to get out with 6 cents; too late in the day anyway !!

  234. China 9 times in 2 minutes!

  235. NFLX opinion.
    I am long NFLX Sep 300/250 Vertical Puts from a couple of weeks ago, prior to joining this forum. Have about 35% profit. Should I close, or hold through earnings? Thoughts appreciated.

  236. 2 1/2 hours /TF it was in rage of 1 point
    Nobody wants to dump – waiting for "debt ceiling" rally rally

  237. Damn, nice call PHIL on those QQQs…priced jumped to .38 when I entered my .36 order so I cancelled…dumb, dumb, dumb of me…grrr

  238. 2000 $60 QQQ’s moved on that drop…hoping you guys had most of those!

  239. Only a 98% gain on those puts…holy cow!  Not bad for a 1.5 hour hold!

  240.  Bought mine.

  241. woops…39%…still amazing

  242. Nice stick coming in for last 20 mins. 

    Job creators/Rustle – LOL, that’s my new favorite talking point!  They aren’t called "rich" anymore, they are called job creators as in "some job creating bastard bought up all the beach homes and had it declared a private beach" or "There are so many job-creating morons at Christies that you can’t find a bargain anymore."  


    FAS/StJ – When you are playing a premium-selling strategy, you don’t try to outguess the market, just keep selling as much premium as possible over and over again and you will be rewarded.  

    SODA having some ride today…

    NFLX/Sank – I don’t like them but it doesn’t seem to stop them from going up all the time.  I wouldn’t risk a 35% gain into earnings.  

    QQQ/Troy – Not dumb, not chasing saves you .05 EVERY time, make up for missing quite a few .15 gains and even more losses…

    Congrats to the Q players – nice exit!  

  243. Sank1/NFLx. Tweet tweet in hand Beter than Tweet Tweet in bush. Tafe 35 % and Fly away. :)

  244.  Phil/Trackpad – That’s exactly what I thought…cheap cosmetic OS upgrade has $70 upsell potential for all pre-2010 or so installed base. It’s a "well paying" dividend of IOS, and another feather in Job’s genius cap. 

  245. Billionaire Howard Marks On The Debt Ceiling And The Inevitable Decline In Relative US Living Standards
    "In addition to balancing the budget and growing the economy, I think we have to accept that the coming decades are likely to see U.S. standards of living decline relative to the rest of the world. Unless our goods offer a better cost/benefit bargain, there’s no reason why American workers should continue to enjoy the same lifestyle advantage over workers in other countries. I just don’t expect to hear many politicians own up to this reality on the stump."

    Read more:
    The entire letter is worth reading.

    Read more:

  246. 2 1/2% on the day, 13% on the week; have a great weekend all !!  Smiley

  247. JRW – in at 32.13…flushed out at 32.18…5 pennies to your 6…damn…but hey, great experience, right!

  248. Phil,
    Afterhours remainder.
    When you suggesting the fixup trade on TBT for Kyw you wrote "drive your net on the entire trade up just .20 other than the 0.3x additional Jan $33 short puts.  Unfortunately, that would be net $2.85 on the $3 spread"
    Could you explain for me where net $2.85 came from?

  249. IPad nice for browsing but hard as hell to type on.

  250. NFLX/Phil/Iflantheman

  251. 163% on my cash "Trading" account this week…finally beat JRW for once…I can count land sales, right?  I need to cheat somehow to keep up with you gurus!  Have a great weekend guys and gals!

  252.  Phil
    Thanks for the QQQ – nice dinner tonight when its too hot to cook.

  253. Troy / 5 cents

    At least it’s not a loss !!  8-)

  254. Troy / 163%

    Congratulations !!  Smiley

  255. Today only proved that I really am a better trader when I don’t trade.  Read and think, show up 3 PM, set it, forget it.  Maybe I need four screens. :)

  256. First day in months I havent payed attention to the dollar. It didnt effect my trading at all today.

    Enjoy the weekend!

  257. Phil,
    Agree. Everyone needs to try to understand the context, and work at this themselves.  I may be pretty sure from the context that if you "like" a certain put that you are buying it, but "buy"  would be very clear, and is even one less letter. I think you do an amazing job considering the pace of trading, and I am trying very hard to understand you.

  258. JRW/163% – Thanks JRW…in about two months after the closing, I should have enough firepower cash to be dangerous to my firepower cash… =)  Still not at JRW levels…perhaps someday!  Have an excellent weekend!

  259. Enough nonsense for the week. I am sure that the weekend will bring more cheery news to push the market up next week again!
    Have a good weekend everybody! 

  260. Hey Pharm,
    Congrats on getting bought out.  Well done!  More money for selling options premium and may be speculation on biotech I’m sure.  My old company got bought out 6 years ago too.  My $1.2M options got paid out at a full … $8,000 (yes, just $8k).  When sharing the pie, the people in charge would bring lawyers and accountants to make sure that their portion is much more than yours. 

  261.  JRW – I’m a relative newcomer here and I’ve seen a couple references to your trading system. 
    Do you happen to have any posts on PSW or elsewhere outlining your methods/strategy for me to read up on?

  262. Today’s levels.

  263. HOV – Phil i am still (foolishly) holding the aug 2.50 calls from the 25K but i see your update is not. guess i missed the exit. Do you expect i will just have to eat it?

  264. stratdaddy – I found some posts on it under the educational archive section of the site.

  265. Hi, Peter D,
    How have been lately on the SPX strangles?
    What do you mean $1.2M options bought out for $8000?  Where did that $1.2M figure come from?  I hope that it wasn’t from your pocket?!

  266. Well, got busy and pulled away from the close.  Just as well I guess.  Nice little pop at 3pm to real in a few more bagholders before dropping.  But, I would put an up day on Monday at about 80% so it should pay off.  Especially if we get a deal over the weekend.  Of course it won’t be an official deal.  The House is taking the weekend off!  …but really, how the heck are they going to announce something positive on Monday when the House is off over the weekend and Boehner doesn’t really speak for the House (even though he’s the speaker)?  Who knows.. but I"m sure they’ll come up with something.  20% Net Short.  I couldn’t sleep if I weren’t!  Have a good one all-

  267. I was digging through my files and found one of my favorits, enjoy
                  Buffett’s tips for individual investors
     Keep things simple. It helps to talk about a company’s stock in a charming, folksy manner.
    Meanwhile, behind the scenes, quietly accumulate the company’s publicly traded debt,
    swapping fixed rate obligations for inverse floaters with five-year maturity at a 6% floor with no cap.
    By the time your “by-golly-shucks & dang” act wears thin you’ll have the poor bastards
    leveraged 36 times LIBOR plus 50 bps, pouring Maalox in their coffee in the morning,
    and keeping a barf bucket by their bed at night, worrying about which unsecured tranches
    they default on next. That’s when you move. First, take down as much of their preferred stock
    as you can through your Cayman hedge fund shell. They’ll never see it coming.
    Next, feed the floating rate swaps back onto the open market.
    This will create a sense of panic in their senior secured debt, which you wanna buy.
    If you get a CFO that thinks he is Charles Bronson, send him a cadaver’s finger in the mail.
    That will make everybody in corporate accounting jumping. Nobody says Jack after that.
    You might get some COO talk smack to you. but send him a note saying his finger’s next,
    watch him shut up real quick. Now, CEO’s usually know better than to mess around after
    you flush their stock down 15%. If you get one that’s giving you static, he probably thinks
    he’s a real cowboy, so you qotta break that S.O.B. in two. If you wanna move on the takeover
    and he’s not budging, squeeze him on their short-term credit facilities. Tell him his pension liabilities
    are next. After that he’ll tell you if he wears ladies underwear.
      I’m hungry. Let’s get a taco….

  268. Well that was totally fun!  

    Standards/Rain – There isn’t enough rubber in the World for everyone to own a car – it’s just that simple.  Goes for a lot of things like refrigerators, air conditioners…  It’s a material issue and everyone cannot afford this lifestyle and, if they did, then the price of the lifestyle would rise to make it unaffordable anyway.  America, even more so than Europe, had a tremendous benefit last century of being ready, willing and able to exploit the World’s natural resources in an orgy of consumption but now there isn’t enough left for the other 6Bn people and now those people are finally in a position to WANT electric toothbrushes and cable TV and… electricity!  So we have to compete for resources and our lifestyle will go down but the good news for the other 6Bn is that we consume about 80% of the global resources and the bottom 6Bn consume about 20% so a 25% drop in our lifestyle is a doubling of theirs – after that – WWIII.  

    I’m optimistic though.  I think that by mid-century we should have usable fusion and, from there, we’re only another 50 years away from matter manipulation and then we will have a proper round of global prosperity.  The trick is surviving to see it….

    TBT/Vic – Well he had the $34/40 bull call spread at net $2.65 and had sold the $36 calls for $1.50(ish).   My idea was to roll the puts ($3.65) to 1.3x longer puts at $2.80.  $2.80 x 1.3 = $3.64 so it’s an even(ish) roll and that side of the trade is done with the original $1.50 per $36 call collected diluted by 30% (more than net $1 each actually).  So what does he have left on the other side.  The bull call spread was $2.65 and my idea was to spend $2.10 more to roll out to the Jan $32 calls (now net $4.75 on the Jan $32/Sept $40 spread).  Ignoring the .20 that is left on the short Sept $40 calls (very likely to expire worthless), the sale of the Jan $35 calls for $1.90 would drop the net of the Jan $32/35 spread back to $2.85 and, of course, he still has $1.50 per Jan spread in his pocket should the short Jan $33 puts expire worthless so this trade is still a nice winner at $33 or more with a break even at $32.  

    IPad/Iflan – Dragon works very well but the room has to be quiet.  I wish they would integrate it right into apps, hopefully down the road you will just be able to talk to the damn things – probably you already can but Jobs wants to give everyone a reason to buy the IPad 3.

    Nice week Troy, Congrats!  

    Trading/ZZ – Even the IBanks got burned in this choppy market.  Just gotta take those quick profits while you can and get back to cash because nothing is safe if you leave it in play…

    You can always ask Sparky.  Remember, there are no stupid questions – only stupid people….  8-)

    That guy is good StJ but he butchered the monologue about halfway through…

    HOV/Morx – We went to cash last month and just killed everything (or left nickel options like HOV as dead).  They are close enough to $2.50 to give some hope – but not much. 

    Obama says deal is dead, talks cancelled – no way to compromise with the Reps.  Nice job waiting until the futures closed at 6!  

    LOL Vic! 

    Well, try to have a nice weekend everyone, I’ll be calling a realtor in Jersey (Channel Islands) before the exodus from this country begins!  

  269. Phil – turn on CNBC…Pres Breaking news…Repubs walking away…not good

  270. Pres just moved the futures by saying "we have to extend the debt ceiling until after the elections in 2013.

  271. Just made 0.16 on TZA in AHs…and to think I use to not ever watch politics…politics is profitable and amusing…no wonder you guys follow this video crack!

  272. I still get the scary feeling that the Prez will lose his backbone and cave in to Boehner and his merry gang.  Hoping he holds tight, the public is in his corner for a change even if the media has now swung more to the right.  Even Uncle Rupe is against the ropes right now and has to be careful.

  273. Tonight on Charlie Rose…Paul Krugman vs David Brooks!
    As they can’t directly debate each other in print, I guess TV is ok.  It should be interesting.

  274. Pres just threw down the blame card at the end…not good as he is going to lose the deficit "blame polls" if he can’t control his emotions better. 

  275. Hi Cwan,
    The first week of August has been good with short strangles.  I still have mostly August and patiently waiting.
    As for the company, it was sold for $15M.  My unit generated one third of the revenue and profit, a $5M worth, and there were 4 of us with options, worth $1.2M each.  The problem was the CEO belong to the other 2/3 of the company, so he devised a way to make us worth just $8k each.  Wow, nothing is bullet proof with these greedy guys.

  276. At the close: Dow -0.35% to 12680. S&P +0.09% to 1345. Nasdaq +0.86% to 2859.
    Treasurys: 30-year +0.65%. 10-yr +0.25%. 5-yr +0.14%.
    Commodities: Crude +0.71% to $99.83. Gold +0.09% to $1603.00.
    Currencies: Euro -0.4% vs. dollar. Yen +0.05%. Pound -0.21%.

    Market recap: Stocks meandered to a mixed close, as euphoria over the Greece bailout faded and the clock on the U.S. debt ceiling fight ticks down. Strong tech earnings boosted the Nasdaq, while Caterpillar’s results dragged on the Dow. Oil gained again, Treasurys rebounded, and precious metals moved up. Winners and losers on the NYSE finished roughly even. 

    Even assuming a debt deal is reached by Aug. 2, Peter Morici says "angst will begin anew" next February when the 2013 budget comes out, and bond rating agencies will see that the U.S. does not have a credible plan to bring its debt under control. Only strong agreements to regulate health prices and hike the retirement age will cause the raters to take deficit reduction seriously, Morici says.

    Even if immediate catastrophe is avoided in debt crises on both sides of the Atlantic, the deals being struck are "almost guaranteed to make the broader economic slump worse," ensuring a "Lesser Depression," Paul Krugman writes. "The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable."

    Nomura’s Bob Janjuah says the market will enter a "big and painful" bearish period as investors come to realize what he’s been saying all along: Post-crisis growth in developed markets is fueled by debt, and emerging market growth is slowing too. "It’s as simple as three words: weak trend growth." 

    As I was just saying:  "Buy the dips, and sell the rips," Doug Kass advises, expecting a volatile U.S. stock market contained in a relatively narrow range of S&P 500 1250-1350. "More important, this environment is likely not suitable for investing (buy-and-hold), but it is likely an ideal setting for opportunistic traders."

    While U.S. firms are off to another round of strong earnings, Europe is on track toward its worst earnings season in a decade. Of the 49 companies reporting so far, Bank of America says 36.7% have beaten and 53.1% have missed. The sectors which have outperformed in the U.S. are doing the worst in Europe: discretionary, industrials and staples.

    U.S. consumers are increasingly using credit cards to pay for basic necessities, as rising costs of food and gasoline with no positive catalyst such as an increase in wages leave less money to spend on discretionary items, slowing the pace of the recovery. The dollar volume of credit card purchases grew 10.7% Y/Y in June; the number of transactions rose 6.8%

    Americans are again losing confidence in the economy, as new Gallup data shows levels harking back to March 2009. Poll respondents saying the U.S. economy is getting better dropped to 26% last week, and more than two-thirds now say the economy is getting worse.

    Felix Salmon sums up the Greek bailout: It "looks like a deal which can quite easily be scaled up and used as a framework for future default/restructurings." Holders of Portuguese and Irish bonds, or even Spanish and Italian bonds, can’t feel that they’re home safe. "Greece will be the first EU country to default on its debt. But I doubt it’ll be the last." 

    Republican lawmakers push for a five-member commissionto run the CFPB instead of a single director, as the battle over who lead the nation’s financial watchdog rages on. 44 Republicans now say they will oppose Obama-nominee Richard Cordray, after Elizabeth Warren initially raised their ire

    Silver could more than double to $100/oz. if the current bull market follows similar patterns seen in the 1971-80 period, Citigroup says. “While the high so far this year was at the same level as the peak in January 1980, we are not convinced that the long-term trend is over yet.” 

    With Yahoo’s (YHOO) search revenues down 15% Y/Y and Microsoft’s (MSFT) Online Services division losing a stunning $2.56Bin FY11, it’s safe to say the search partnership between the two isn’t going smoothly. Analyst Mark Ballard puts much of the blame on Microsoft doing a poor job of delivering ads for inexact queries.

    YRC Worldwide (YRCW -8%) says it has completed its financial restructuring plan, and it will be dilutive to current shareholders, who will be reduced to holding ~2.5% of YRC outstanding stock and will be subject to further dilution by a proposed management incentive plan and the conversion of new convertible notes. (PR

    Spotify stands as a rival to Pandora’s (P) music streaming service, but will it pose a serious threat to iTunes? A Harvard blogger thinks so, saying Apple’s (AAPL) music business model is "about to be blown up completely"  – just like iTunes destroyed brick-and-mortar music stores ten years ago – from Spotify’s large pricing advantage and slick interface. 

    A review of Verizon (VZ) and AT&T’s (TQ2 results shows the former outpacing the latter: While Verizon added 2.2M total subscribers and 1.3M retail post-paid subs, AT&T added 1.1M and 331K, respectively. AT&T did beat Verizon in iPhone activations, though this was likely impacted by AT&T having a larger iPhone user base to draw upgrades from.

    Wireless Intelligence sees China reaching 1B wireless subscribers by Q2 2012, with a quarter using 3G phones. Still, China’s wireless penetration rate will only be 74%, leaving room for carriers China Mobile (CHL), China Unicom (CHU), and China Telecom (CHA) to grow further. MMISPRDAAPL, and QCOM are some tech names poised to benefit.

  277. Good for Obama!  Time to call these assholes out…  

    We can discuss this tomorrow – time for me to enjoy my kids (and call that realtor!) 

  278. Here’s my question: At 2:30  you bought (liked) 2000 QQQ $60 puts at .35 and sold them one hour later at 3:30 for .15 profit, or $30,000? How would you characterize the downside worst senario risks on that transaction, and at what point would you have sold those puts if the trade were not going your way?

  279. Hi, Peter,
    Oh, well.  At least, you got $80K.
    A few years ago, one of my college classmates started a company and asked other classmates to invest.  Two classmates contributed $$$ and they got some kind of certificates.  Some years later, the company was successful and was bought out.  Guess what happened when the 2 investors went and asked for their money?  The founder said that their certificates were fake and refused to acknowledge that they were investors at all.
    The 2 investors had to go to the court.  They won the lawsuit and got their original investment money back.  Even though the founder lost the lawsuit, he still walked away with all the profits.
    Talk about friendship!
    Fortunately, the founder never approached me about investing in his company.

  280. jcaesar, thanks for the tip-off on the Charlie Rose show tonight, could be interesting…

  281. Grand Bargain Talks on Debt Collapse

    Obama and Boehner tried for weeks to hatch a deal that would fix the U.S.’s budget woes for decades. On Friday, the effort collapsed, sending Washington into a weekend of talks over how the U.S. can make good on its debt obligations.


    Barry’s Succinct summation of week’s events:


    1) EU steps up with more help for Greece, Portugal and Ireland as EFSF becomes super TARP and Greek bond holders finally take a hit, but will it be enough?

    2) July Philly mfr’g bounces back into positive land but still weak at 3.2 (was 43 in March)

    3) MBA said refi’s bounce 23.1% off 10 week low, finally responding to low rates

    4) Single and multi family housing starts bounce, multi we need more of, single we don’t right now

    5) NAHB home builder index bounces 2 pts to 15 but off very depressed level

    6) Corporate earnings so far, so good but guidance mixed


    1) Preliminary HSBC mfr’g index in China falls below 50 for 1st time in a yr

    2) Euro zone mfr’g and services composite index falls to lowest since Aug

    3) German IFO business confidence drops to lowest since Oct

    4) French business confidence down to 7 month low

    5) US initial jobless claims rise more than expected, now above 400k for 15th straight week

    6) Existing home sales fall to lowest since Nov and months supply rose to 9.5, most since Nov

    7) Still no US debt/deficit deal

    8) After falling from $3.98 to $3.56 per gallon of gasoline May thru early July, its back to $3.70.

  282.  Phil:  Thanks for the encouragement.  I had an awesome week — but I lost money on the one day that I was actually online more than I was off.  I’ll learn.  What, exactly, remains to be seen, by definition.
    Not talking my book, cuz I’m flat, but Europe’s "debt solution" is exactly what they don’t need — to take pressure of the Peripheral governments to make real and painful cuts in government spending.   For example, it is thought that for every Euro the Spanish central government [Madrid] has cut, the Autonomous Regions [not a euphemism] have just replaced with local spending.  The central government cannot legally control this.
    There is a political antagonism, among regions – regions that were mostly sovereign nations at one point — toward Madrid that goes way beyond U.S. eastern/western/northern/southern/urban/rural head-butting.  Four different languages, all used predominantly in their respective regions, underlines the point – Castilian, Gallego, Basque {Euskara} and Catalan.  
    And that’s just Spain.  Italy has its "Mezzogiorno", a south that couldn’t be more different, culturally and fiscally, than the industrialized north.  Germany and France are quite homogeneous by comparison.  Forget Portugal and Greece; it’s in Spain and Italy that the Euro’s future will be determined.  I wouldn’t load up the bets just yet, but I would stay real loose.

  283. Zero- i think you have me confused for a highroller or something! I have like 18k total in my trading accts which has to put me in the bottom 5-10% on this site… I’m not anywhere close to being a millionaire so the billionaires have ruined nothing for me:). Just took the day trip to (hopefully) create some memories for my soon to be 3 y/o daughter before I leave for a year… It was very pretty… We spent most of our time on the state beach and have no complaints about the beach. Definitely will be packing our lunches next time though, I can’t justify spending $65 for 2 hamburgers, grill cheese sandwich off the kids meal, and two cups of soup….. They were delicious though and tasted even better knowing Phil’s spy puts play payed for them. Have a good weekend…

  284.  jromeha
    I still owe you that beer but in the meantime – check out the Newes from America Pub or better yet Chesca’s in Edgartown, and if you like books, Bunch of Grapes Bookstore in Vineyard Haven. State Beach is good for the 3yo.
    Have fun - 

  285. stratdaddy / System

    Here !!

    This may also be helpful; it’s not in the main post !!

    The setup that will probably be the most help to you is my 3 minute conformation chart, as my 1 minute has proprietary software. Basic settings are 2 day, 3 min, candlestick chart of IWM (I never watch TZA or TNA). Overlay TBT on the chart and add pivots, 40 and 200 SMA’s, Bollinger Bands, an 8 or 9 EMA and my daily confluence lines. In sub-screen 1: MACD,Stoch/RSI14momentum and Signal line. In sub-screen 2: Volume.

    This will give you good results by simply changing position based on a breaking engulfing candle followed by another engulfing candle on the new side of the EMA. You will be late on entry and exits as compared to the one minute chart, but you will have fewer false entries !!

    Also, understand that I have 6 screens and am  always watching dollar futures, Weiss Order Flow, and a myriad of other contributing factors as mentioned here

  286. zeroxzero, interesting.  You make it easy to agree with the point you are trying to make.
    jrom, sounds great.  but wow, those are some expensive burgers.
    Phil, thanks for the link to Jersey.  Looks incredible.  I can almost taste those mussels..  For fun I mentioned your plan to my wife.  She is a person who has never lived outside the Commonwealth of Virginia and now lives no more then 10 blocks away from her mother.  I teased her by saying she’d never undertake such a thing.  To my delight she countered that she would.  But if we were going to go we would have to go big.  Meaning, she’s not down with moving to another town or state but a new country would be ok.  Go figure!  So, I need to know..  How much of your desire for Jersey is because of Jersey and how much is because you hail from the newer portion of it? 

  287.  Phil: Rudimentary futures
    While getting more comfortable with futures now could you share what the basic chart settings are for the contract you are looking to trade.  TIA
     I know you are watching /dx and /cl /yg and others for a general sense of what is going on.

  288.  Hi Phil,
    I am newcomer on this website. I had subscribed to Report membership and Voyeur membership for the past 3-4 months but first time with the Basic one.
    I enjoy reading your posts and trade ideas. Lots of unbiased information about  option trading, fundamentals, market participants, market manipulations, economic data effect and market levels.
    I have a very low balance in my trading account (probably 0.01 % of the members here). Since I cannot trade most of your trade suggestions, I try to understand them. Now that I can post (yee…) I will bug you with pretty beginner questions. Do not ignore me :-)

  289. Deano- we did hit up the bunch of grapes store but didn’t have time for much else… it was nice though.

    Matt- damn straight they were expensive burgers! But I was starving and it was about 100 out so the combination led me to the first restaurant I could find in Vineyard Haven….