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Which Way Wednesday?

SPY 5 MINUTEWheeeeeeeeeeeee!  

I love the smell of capitulation in the morning (illustrated nicely by David Fry).  It smells like — opportunity.  We haven’t had a good bottom-fishing expedition in ages and it’s amazing to think that less than two weeks ago I was having to tell our Members NOT to BUYBUYBUY at the top.  On Friday, July 22nd, when Jimmy Cramer was crowing Thursday night over "29 of 30 Dow Stocks" closing higher as if that meant you should buy everything that wasn’t nailed down, I was warning that the new EU rescue fund only indicated things were worse than they seemed.  My comment that morning (7/22) was:

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.  

I was wrong (so far) on shorting gold as our GLL Aug $22 calls have fallen from .50 to .10 (we rolled down to the $20s but those are not faring much better at the moment) but that was much more than made up for with the MASSIVE gains on the short futures as well as huge winning spreads like that morning’s Alert to Members, where my trade idea was to buy the SQQQ Aug $21/24 bull call spread for .90 and sell the AAPL weekly $375 puts for .80 for net .10 on the $3 spread.  Of course the AAPL puts expired worthless and SQQQ is now at $25.29 and the spread is $1.85 so up 1,750% so far (and half off the table with stops on the rest at this point, of course).  

THAT’s why we love our disaster hedges – they really help balance out your virtual portfolio in the event of an actual disaster with every $1,000 hedged paying $17,500 on that play.  We then turn around (like today) and cash out that money and use it to buy more longs or roll our existing long positions.  If we break down further, we simply add another hedge that pays us 1,000% in a down market so we can buy MORE longs at the next possible bottom.  As I have been saying all of July – we are short-term bearish but long-term bullish.  This fast bottom test is PERFECT for our bullish premise!  Assuming we do recover, of course…  

At 1:36pm on the 22nd, the market was still heading up and the pundits on CNBC were foaming at the mouth that oil was going back over $100 and the indexes were about to make new highs and snake oil would cure baldness – whatever the sheeple would believe – but I warned Members that earnings looked good but guidance did not, saying:  

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...

Doonesbury

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. 

Am I saying all this to brag?  Of course I am – what’s the fun of being right if nobody pays attention.  I am also going over this to remind our Members that I am about to call a bottom for the same reason I called a top – TOO MUCH, TOO FAST!   Should we have sold off – of course we should have – that was my (very accurate) fundamental call and I was 100% in disagreement with the punditocracy.  In fact, that Friday we were joking about how many times CNBC could say "China" in a single segment so they could steer another boatload of retail suckers into the very top of a rally (EDZ was another great short hedge for us).   

NYMOUNTIL AND UNLESS we break below the bottom of our range – we have no reason to be bearish at our -5% lines.  The -5% line is the same support level (adjusted for the Dollar) that we predicted last Summer (July 25th), when we called that turn on the nose and again on Feb 19th of this year, when we called the top of that rally.  

So I am doing this as a time saver because I know all day it will be "Cramer said sell" and "the technicals clearly show DOOM" and "the last guy on CNBC said to buy gold" etc…  I am just humbly pointing out that MY levels, which are based on market fundamentals and not technicals – have been holding up fine since March of 2009 so I’m really not inclined to dump them this morning.  

SPY WEEKLYI already sent out an Alert to Members this morning with long ideas on the futures with the Nasdaq (/ES) over the 2,300 line (already had a quick win this morning and a chance to reload), oil over $93 ($93.50 already) and gasoline (/RB) over $3 (still $3) ahead of inventories at 10:30 but NO WAY do we risk oil inventories, which are likely to be bearish.  

We are, at this point, cashy and cautious.  We made a ton of money on our bearish plays and now we will watch to confirm that our lower levels are holding.  If we get a good spike down at the open, we will want to do some bottom fishing but, if we drift down slowly, that would be more bearish.  The dollar is very low at 74.10 and, as I said on BNN yesterday, the BOJ has TOLD US the WILL intervene on the Yen and that means boosting the Dollar and boosting the Dollar means knocking down the PRICE (not value) of equities and commodities.  

I am expecting at least a bounce, between now and Friday, back to test our 2.5% lines.  If we can’t get that, then things are going to be very scary heading into the weekend, especially as we expect oil to sell off below $92.50 next week and that will hit the energy sector and maybe even drag metals lower as well.  The Yen is testing the 77 line this morning (way too strong) and the Nikkei was off another 2% this morning, down to 9,637 and that’s down 8.5% for the year.  

I would expect 9,500 to be strongly defended by the Japanese government as the last thing they need is a market collapse on top of all their other problems BUT surely they know that pumping up the Dollar will tank the US markets and that won’t help them either so maybe, just maybe, they will hold off long enough for us to find some support. 

After all, it’s only Wednesday.

 


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  1. FAS Money Positions
     
    Long strangle – Jan 12 18.33 Puts (2.40 now 2.67) and 28 Calls (2.40 now 1.53). So the long puts are up (thankfully)
    Short Weekly – 23 Puts (1.00 now 2.27)
    Short Monthly – 26 Puts (1.75 now 5.30). We bought back the 25 Calls yesterday which put $0.80 on our pocket. 


  2. Oil Lines
    R3 – 97.61
    R2 – 96.64
    R1 – 95.01
    PP – 94.04
    S1 – 92.41
    S2 – 91.44
    S3 – 89.81
    Yesterday’s high and low – 95.68 / 93.08
    Breakout lines – 99.88 and 86.27 


  3. europe is not in a stronger position thn we are…thats just silly..the ecb is paralyzed..the efsf is a no show..and lilputian cyprus is laying bare just how fragile the entire system is…the mrket participants have quickly realized that a plan for a program is not a PROGRAM…and the ECB led by idiot in chief jean clod (sic) resolutely refuses to enter th emarket..so for 18 straight weeks they have had zero bond purchases…the markets are going to test the limits of ecb;s non intervention..i am pretty sure that the problems in cyprus isnt going to quantiatively  add to the overall mess and euro crisis..it is a ‘black feather’ that amplifies just how little f”up room many euro area countries have.


  4. Gas tax/Phil
    Your post at 7:37 about putting a $1 tax on gas a gallon was a similar idea though not as much that Jimmy Carter gave a speech on in 1979 saying that money would be used directly for the people for alternative energy so we are not dependent on oil and he set up a commission for that.  Then when he lost the election, the first thing Reagan did was dismantle that commission.  Funny how when you look back in history how different it looks.  Carter was actually forward thinking and saw alot of the problems we have now but inflation killed his chances of serving another 4 years.


  5. phil i sent oyu that requested piece


  6. Phil,
    What did you mean yesterday when you said that my indicator is just too big? Did you mean the claim to predict the future is too big?
    or did you mean the resolution of the graphic?  ;-)
    I’m at least able to provide something for the resolution problem:
    http://www.pentaxon.com/psw/viyindicator.html
    In my opinion the most important message of the current chart is that you shouldn’t miss to pick up some long positions now or in the next couple of weeks.

    Also: I updated the „SPY in world currency” chart. As predicted last week the strong resistance of the 3(!) MAs and the resistance line created a fly or fail situation. Obviously it did the latter. Apart from that I think stocks start to look attractive now seen from an inflation point of you. What do you think?
    http://www.pentaxon.com/psw/spy_vs_worldcurrency.png
     


  7. Morning Phil.
    On TBT I am short the Aug 36 calls at 0.64 (this was a roll up from the July 34 call for a 0.35 loss when TBT was moving up and we discussed this move).
    Short the Aug 36 puts at 3.19
    Short the Jan12 40 puts at $7.90 (sold over a year ago)
    Long the Jan 12 40 calls at $4.00 ( bought over a year ago)
    I have been selling puts and calls against the Jan12 positions for some time, with marginal success.
    I will need to scrub the Jan12 positions for a loss. The August 36 straddle may be adjustable.
    I know it’s a mess, and thanks for any advice Phil.


  8. Vegas update
    It is a go —we have 10 deposits and 4 firm commitments—rough agenda as follows
    Oct 8th— meet for dinner
    Oct 9th—meet at cafe moda for enlightenment by the Maharishi of Futures
    Oct 10th—-at Cafe Moda trading together


  9. I do like Dunkin coffee & I see they are now selling single serve. My Keurig is happy. How ’bout a woot for the /CL reload at 92.80 mentioned at 7:32 this morning. Did any of you guys get back in after the nice profit we had earlier in the morning?


  10. To bad I’ll miss the Vegas trip, sounds fun! I’ll be there the weekend of Sept. 23rd.


  11. Gas Tax- Sure. What a great approach.. So your theory is that by making gas more expensive this will somehow help the economy?  Very progressive thinking. All of the things Phil mentioned in his morning post can be done now willingly by corporations Do you really think adding a tax does anything other than hurt the consumer??  Sounds like a great way to lose a few more jobs in Alaska. Glad your not running the country.


  12. This is really, really scary!
    http://www.theatlantic.com/politics/archive/2011/08/the-legislation-that-could-kill-internet-privacy-for-good/242853/
    Better not log in to PSW, they’ll think I am a commie!
    Somewhere J. Edgar Hoover is smiling….


  13. Good morning….PP for today.

     

    AMAG – well, that would be silly if the capital partners bought them out.  

    DEPO – just read over the press release and looked at the SG&A.  Overall, I think they are in fine shape with 165M in cash.  Launch of Gralise is in October, so they are behind on that (my mistake), but it still makes sense when they were counting on ABT to launch it, thus they were unprepared.  It will be 1 yr to see how the product is picked up.  I need to look into what other trials they have going for Gralise, but there should be a few.

    SGEN, ARIA, IMGN – wow, were they all taken out to the cleaners…..going to have to start accumulating them again.


  14. Carter – Oh please. I read some silly things on here but thinking he was even close to being a good enough pres to have a 2nd term is laughable. Inflation was only one of that guys problems.


  15. /CL. Yes, 93.50 was the sell line. Out of oil for a few minutes anyway.


  16. but carter has been the best EX president ?


  17. We’ll see how oil handles the 93.50 line and go from there


  18. On Squawk box this morning, while speaking with Wilbur Ross, Joe Kernan stated that there is now "racism" when the media, (using MSNBC as an example) describes the Tea Party.
     
    Joe and Michelle Caruso Cabrerra (sp) heads nearly exploded when they asked Wilbur if he would mind paying more taxes and Wilbur stated: "Sure, I wouldn’t mind"….
     
    Wilbur went on to state that the Middle Class is and will continue to suffer the most.  Joe and Michelle just sat and smiled…


  19. dday, went back in @ 93.06 and staying greedy this time… ;-)


  20. CNBC / 1020 – Please make it stop….. 



  21. Angel- Don’t think so.  BTW, it’s interesting to me how comments made on this forum by members are taken as fact. Reagan raised taxes many times during his presidency (including gas). In 1982 (under Reagan) the Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year and the Highway Revenue Act raised the gasoline tax by another $3.3 billion. It has been reported TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history. An increase of similar magnitude today would raise more than $100 billion per year. All you have to do is listen to a liberal to get good homespun propoganda. Okay. I’m done talking truth. Just waiting for the spin attacks to begin. Thank God I’m out the rest of the day.


  22. Pharm, last year you said about CYTR – "If the stock gets back to 65c, might be worth a flier…."   We are now well under .65 due to an offering at .52, thoughts at this price?


  23. angelcur – I’ll give the man credit for being better out of office than in it.

    Pent-Good luck. I’m holding off until it can break this little annoying range it’s in.


  24. JRW 8EMA Settings Question – Anyone out there know what the settings on TOS should be for JRW’s 8EMA?  I assume it’s the MovAvgExpRibbon study and the settings in question are 1) base length, and 2) increment or multiplier. If I’m on a 3 minute chart, do you know what these settings are?  TIA.


  25. Phil/AAPL
    Good morning
    How about a short term really leveraged low cost hedge for my AAPL shares that I cannot sell?


  26. You look back on Carter and he wasn’t bad at all.  I was just a 7 back then and remember how reviled he was but then Reagan came in and put social security in a general fund for the govn’t to borrow from it, appointed Regan (GS guy), lobbyists ran rampant and gave birth to Jack Abramoff and tremendous power to Grover Norquist who is now responsible for all the tea baggers, and started the country on the road to fiscal irresponsibility and opened up the gates to the wealth distribution we have now.  Looking back, the fed was responsible for the interest rate swings more than Carter and Reagan.


  27. I had resistance at 76.52, now hope we only stretch the rubber a little. Next good resistance is, sit down, 74.01!
    Hope JRW has some  other stops.


  28. Phil / Oil    Down big even with weak $     Does this mean the boys already have the inventory build info?  Take my loss now rather than waiting for inventories?


  29. Phil – sorry, I must have misspoken about my TBT. I sold Sep 32 puts (not calls), and had rolled half to 2x Sep 30s. I just bought them all back, I don’t want to risk it going down to 25. Lesson learned on stopping out. 


  30. Pharm/DEPO
    I found this on Yahoo. FWIW I thought it was interesting. Kind of confirms what you were saying.
     
    Weighing on my mind is how literally investors have taken the info coming from DEPO. Serada is a perfect example of this.

    Assuming the trial results are positive and then assuming it gets through FDA, the drug won’t be on pharmacy shelves for a minimum of 18+ months from now. DEPO hasn’t partnered the drug, so they need to at least be mulling over a marketing strategy. Since there is no current partner, they’re publicly talking about going it alone, similar to Gralise. What would you expect them to say at this juncture? If nothing else, giving the appearance of planning to market it solo creates negotiating leverage versus being reliant on having a partner and no backup plan (sound familiar? hint: Gralise). What gets lost in all of this is that in reality DEPO management has no idea how this plays out. I appreciate that they are planning for a worst-case marketing scenario, but for the market to accept that as cold hard facts at this time is just stupid (of course, it’s always easier for investors to see the glass as half empty when everything else is collapsing).

    Which brings me to Gralise. ABT walked and there was no backup plan in place, other than pray that someone else would swoop in. In addition to that, a clone may be right behind it but labeled for hot flashes. No one with half a brain would make a deal for Gralise until they knew more about Serada or got them both, and there’s no reason to pay up for Serada with the high placebo effect that makes the trial results a coin flip. Hence, DEPO has a choice of watching Gralise rot on the vine or begin to harvest what could be a bumper crop. Logic prevailed, and since it’s currently unpartnerable for reasons mentioned above, they ramp solo up to get the revenues flowing. Two benefits arise from that action--the obvious (sales) and negotiating leverage (once again). How would you maximize that leverage? You’d say things like "we may be looking for a junior partner" or "we think we can best utilize a salesforce by licensing complementary products". Those are obvious things to say, it doesn’t make it Plan A.

    One thing I know about DEPO and their Board, they’ve been to hell and back. They are not about to spend the bulk of their cash on some potentially high-risk opportunity to put something additional in the bag of a minor (by industry standards) salesforce. It wasn’t that long ago that they were almost wiped off the map from lack of funds. (Big credit here to CP for building up the significant liquidity they enjoy now--which also means that they are not at anyone’s mercy and can play the "go it alone" card.)

    I think the odds are better than not that DEPO announces a significant partner for Gralise (and hopefully Serada) within 6 months after Serada trial results are released. Even if that’s not the case, it seems to me that the dramatic difference in style between CP & JS is being badly misinterpreted as a lack of opportunity and potential for what the company already has in hand. One CEO made lots of promises (few of which came to fruition) and played investors like a fiddle, the other prefers to let results do the talking. It’s a new style of leadership the market hasn’t warmed up to yet. Hence, they hang on every word as if that is the only possible outcome. My gut tells me that JS will surprise some people, but it won’t happen overnight.


  31.  stj – do we have a plan to sell calls on weekly FAS money? What about the sold 23 put? The roll to August 22s is no longer even, but maybe still makes sense?


  32.  Looks like the dump and pump in oil….


  33. Italy-Europe: The gift that keeps on giving.
    9:26 AM The punditry completely misread yesterday’s selloff, Art Cashin says. It was all about Italy and the fear that it was on the verge of imploding, and might even do so overnight. "We bounced in the futures this morning simply because it didn’t happen." Italy stabilized amid rumors that Berlusconi would announce a program of privatizations and tax adjustments.


  34. Good morning,

     

    IWM   73.80,  75.33,  76.69,  77.34,  77.84,  78.13,  78.64,  and  78.98

    I’m playing for a bounce, but I believe we are going lower !!


  35. CYTR/mrm – damn….UR memory is superior to mine!  Yes, I like them here for a flier.  Not sure I trust anything under a buck, but for 47c, not a bad risk reward for a 1/10 round 1.  The only thing I don’t like is the 150M shares outstanding…which is more than ALTH! 


  36. JRW – how much lower?


  37. JRW / Shadowfax – I have a question on the 8EMA in TOS (originally posted at 9:42AM).  I assume it’s the MovAvgExpRibbon study and the settings I need to determine are 1) base length, and 2) increment or multiplier. If I’m on a 3 minute chart, do you know what these settings are?  TIA.


  38. Good morning! 

    Not looking so hot on the Futures but we have ISM Services at 10 and that’s a biggie.  If that comes in bad (51 expected, below 50 is negative, was 55.3 last month), then you will not be able to get away from recession talk this week.  We also get Factory Orders at the same time and that could be good if up as the bad data may be seen as a blip (Auto Sales were good yesterday).  We have normal Unemployment tomorrow but the Big Kahuna, Non-Farm Payrolls for July, is Friday at 8:30 with only 50K expected this time so hard (and tragic) to disappoint.  

    So CAUTIOUSLY optimistic that we crawl back to our 2.5% lines (1.5% to 2% bounce) by tomorrow lunch but then a probably sell-off ahead of Friday’s jobs report, the results of which will set the tone for next week.  Oil already stopped us out this morning as it fell back below $93.50 and that is just pathetic.  Watch that Dollar (74.24) as it’s so low it’s dangerous but a move up in the markets that ignores a move in the Dollar over 74.40 would be bullish.  

    What we DO NOT want to do is fail another 5% level.  We’re not officially bullish until/unless we retake 3 of those -2.5% levels but blowing 3 of the -5% levels = BAD.  We’re about 1.5% away from those levels on the S&P, 2.5% on the Dow and 2.1% on the Nas so it’s going to take a lot of damage before we throw in the towel on expecting a bounce.  

    Remember, these levels are not made of glass, they are trampolines and they are expected to bend when hit.  If they fail to bounce as expected (20% of the drop retraced) THEN we begin to think they might be broken.

    I expect some panic selling into ISM and then either we are over 52 and a huge relief rally or we’re under 51 and we test those -5% levels on our holdouts.  No reason to make a major commitment until we get the facts but oil is already testing $92.50, where we do want to take a long flyer so let’s say USO weekly $36 calls at .55, 20 in the $25KP with a stop at .39.  

     Wednesday’s economic calendar:

    7:00 MBA Mortgage Applications
    7:30 Challenger Job-Cut Report
    8:15 ADP Jobs Report
    10:00 ISM Non-Manufacturing Index
    10:00 Factory Orders
    10:30 EIA Petroleum Inventories 

    Notable earnings after Wednesday’s close: ATMLATVI,AUYCARCHMTCLWRCVIDRYS

    HIGMDRNGDNWSA,ONNNPRUPXDRIGSOLRTSLATSOWESWFRWLT,WMB 

    At the open: Dow +0.13% to 11,882. S&P +0.15% to 1,256. Nasdaq +0.28% to 2,677.
    Treasurys: 30-year +0.05%. 10-yr -0.07%.
    Commodities: Crude -0.53% to $93.29. Gold +1.44% to $1,668.50.
    Currencies: Euro +0.81% vs. dollar. Yen +0.40%. Pound +0.65%.

    Market preview: S&P futures +0.6% after the ADP jobs report beats expectations, while gold continues its record run as the eurozone debt vortex spins ever faster. RIMM +3.5% after unveiling five new phones; Emdeon +13.5% on a report it’s to be bought by Blackstone for $3B. MasterCard +3.9% after reporting strong transaction growthLater: ISM non-manufacturing, factory orders.

    Now the debt limit has been increased, the Treasury can cheerily get back to borrowing more money. Next week it plans to sell $72B of notes and bonds, comprising $32B of three-year notes, $24B of 10-year notes, and $16B of 30-year bonds.

    July ADP Jobs Report: +114K vs. +86K expected and +145K prior (revised from +157K). "Today’s report shows modest job creation for the month of July at a rate of half what is needed for meaningful employment and economic recovery," ADP CEO Gary Butler says.

    More on the ADP jobs report: Employment in the service sector grew 121K, marking 19 consecutive months of gains. The goods-producing sector fell 7K, the second decline in three months. Manufacturing fell 1K. (PR)

    July Challenger Job-Cut Report: 66,414, spiking up from 41,432 prior to a 16-month high. Job cuts at Merck, Cisco, BoSci, Borders and Lockheed Martin accounted for 57% of the total. "[T]he pace of downsizing in 2011 remains slower than 2010, but it is quickly gaining ground."

    Quick take on the ADP jobs report. As it did with June, the July ADP soundly beat forecasts. The June figures prompted economists to increase their predictions for the month’s nonfarm payrolls, so it was somewhat of a shock that unemployment rose and payrolls grew a measly 18K.

    This does not bode well: China’s service PMI, as calculated by HSBC, falls to 53.5 in July from 54.1 previously. The decline is led by fall in work backlogs and a drop in the employment index to its lowest level since May 2009.

    But, then again:  The U.K.’s July services PMI jumps to 55.4 from June’s 53.9. It’s the highest level in 4 months and a rare recent solid data point for Britain. (Full report). 

    And then there’s:  The eurozone July services PMI drops to 51.6 from June’s 53.7. It’s slightly higher than the flash estimate of 51.4, but the lowest print since September 2009. Of note is previously speedy Germany continuing to lose its growth momentum. (Full report)

    Reuters reports the EU Commission will make a statementlater today about the situation in markets, but there is no discussion on a bailout for Italy. Italian and Spanish shares are both green on the day, bouncing about 3% from their early morning lows. 

    Italian PM Berlusconi pushes back the time of 2 important addresses until after European markets close – speaking to the nation at 11:30 AM ET and the Senate at 1:30 ET. He is expected to talk about a plan to address the country’s teetering finances. After big swings in both directions, Italian shares are flat. 

    The punditry completely misread yesterday’s selloff, Art Cashin says. It was all about Italy and the fear that it was on the verge of imploding, and might even do so overnight. "We bounced in the futures this morning simply because it didn’t happen." Italystabilized amid rumors that Berlusconi would announce a program of privatizations and tax adjustments.

    Bob McKee updates his charts in wake of the debt deal, saying the U.S. debt/GDP ratio will surpass Italy in 2016 instead of 2014, while not moving past Greece until 2018. Unlike the PIIGS, the U.S. has currency devaluation as a tool, and QE3 is on the way. He remains short the dollar.

    Appearing on Bloomberg, Barton Biggs says stocks – particularly big-caps like Caterpillar (CAT), Deere (DE), Proctor & Gamble (PG), Coke (KO), and Intel (INTC) - are a buy this morning. QE3 is on the way, likely in the form of buying mortgages and single family homes.

    What Consumer Slowdown:  MasterCard (MA): Q2 EPS of $4.76 beats by $0.53. Revenue of $1.7B (+22% Y/Y) beats by $0.12B. Shares +3.2%. (PR)

    More on MasterCard’s (

  39. Phil

     

    What Consumer Slowdown:  MasterCard (MA): Q2 EPS of $4.76 beats by $0.53. Revenue of $1.7B (+22% Y/Y) beats by $0.12B. Shares +3.2%. (PR)

    More on MasterCard’s (MAQ2 results: Processed transactions +17.4% Y/Y, and gross dollar volume (GDV) +16.4%. U.S. GDV +9.9%, international GDV +31.8%. Effective tax rate declined to 31.8% from 35.7% in Q2 2010. $387M in shares repurchased during quarter. MA +2.5% premarket. (PR

    EU regulators are now reportedly investigating nine antitrust complaints against Google (GOOG), five more than have been disclosed. The new cases, which come from small companies and national regulators, could increase the pressure on Google to settle.


  40. carter/i just meant he has done good things as a human being….i couldnt stand him and still cant…..


  41. 52.7 on ISM – that’s good!  Sucks but better than expected, let’s see how far this pops us.  


  42. well david you were a day early with MA assumming no one on th eboard was an idiot and held..i however did so thanks fo rth eidea..sometimes being forgetful pays off!


  43. Factory orders down 0.8%, that sucks.  Could have had a really nice move up if not for that but I think the pessimism is understandable and we bring in some bottom fishers here.  


  44. MRK a hell of a deal right now.  I would sell the Jan13 2013 $30 Ps for $3.40 or better.


  45. FAS Money / Kurtww – I posted the entire FAS Money position this morning as requested by Phil because he wanted to have a clear picture before making adjustments.  


  46. I can’t see the huge spread between Brent & WTI holding up. One of them will have to give.


  47. /CL buy 92.41


  48. AAPL / Iflan….  selling puts here?


  49. Phil, does it still ‘smell like opportunity’?


  50. Phil / Cashin   Looks like he’s right.  It’s all about Italy now and Europe is spooked.  Where does this lead?  Is this the moment the Euro dies?


  51. Feels like Groundhogs Day (the movie of course).


  52. Note RIMM up 2%, that’s a possible bottom at $24 (finally!). 

    Not too much volume, 27,000 at 10:12 on the Dow (ie. meaningless).   The big danger is the Dollar – it’s just too low to give us a break and the data is not strong enough for us to go higher.  We need an external event to move us up and the Fed is not speaking so it’s going to be rough to get traction this morning.  

    FAS Money:  $23 puts are a non-issue.  Next week comes out tomorrow so we may as well wait.  On the monthies, we’re down $3.55 at the moment and we can sell the Aug $21 calls for $1 (now $1.20) if we HAVE to to knock our loss down by 30%.  As to the calls – no urgency but the Sept $22 puts are $2.80 so if we can make that roll for $2 (now $2.50) we should do it.  

    If you need a downside hedge:

    • TZA FRIDAY $42/43 bull call spread is .50 so up 100% if the RUT goes a little lower.  Can be offset with sale of IWM Aug $79 calls for .55 as that’s where the 200 dma is 
    • REMBER – ANY offest will do and, while we are dropping, it’s not necessary.  
    • SDS FRIDAY $22/23 bull call spread is .48, selling RIMM Aug $22.50 puts for .47 is .01 on the $1 spread. 

  53. Feed from TD is terrible anyone else having issues?


  54. /CL. Added at 92.10


  55. Leg 3 91.76


  56. Total meltdown coming….


  57. jcaesar / EMA
     

    Just select Exponential Moving Average from tools, and set the period at 8 !!


  58. Phil:
    If there is little risk of interest rates going up anytime soon, is NLY still a good entry here? Thanks.


  59.  CNBC sound like someone has died! 


  60. Early Bottom Fishing (early entries that may be rolled to 2x a lower strike!):

    • RIMM Dec $22.50 puts can be sold for $2.50
    • IMAX 2013 $20 puts can be sold for $5.50
    • JPM Jan $37.50 puts can be sold for $2.50
    • VLO 2013 $20 puts can be sold for $3
    • BAC 2013 10 puts can be sold for $2.10

    Nasty sell-off at the moment and we will get to see if our 5% lines hold (these plays are only if they do, of course!).   Volume not very exciting (40M at 10:30).  

    EIA Petroleum Inventories: Crude +1M barrels vs. consensus of +1.1M. Gasoline +1.7M barrels vs. consensus of +0.1M. Distillates +0.4M vs. consensus of +1.7M. Crude futures slip further, -1.6% to $92.28. 

    That’s going to take us lower!  $91.90 already!  

    This is technical hell now – not sure if anything can save it if we don’t bounce very soon. 


  61. why the meltdown? Is this Europe dragging the our indices down?


  62. Whatever central bank spent a lot of capital to knock down the Swiss Franc in the middle of the night is about to have its investment wiped out.  It just appears to me that all of the old central bank tricks are just not working anymore and is just costing a lot of capital.


  63. This is fun:

    A prominent Chinese academic calls for the U.S. to "provide provisions for foreign-exchange loss in our investments in (Treasuries)." China may be realizing its helplessness, given much of its wealth is tied up in an asset it has no control over. One item it does control: The yuan, whose peg assures a continued accumulation of greenbacks. 

     July ISM non-manufacturing index: 52.7 vs. expectations of 53.5. June reading was 53.3. The employment index sinks to 52.5 from 54.1. New orders fall to 51.7 from 53.6. Prices paid drops to 56.6 from 60.9.


  64. Phil / Italy   Is this collapse all about Italy?


  65. Phil- Pharm       AGN   stock for the top 1%.. still making lots of money selling botox to rich, wrinkly middle aged women.


  66. 30-year Treasury at 3.80%!  Wow!  Would you lend money to a free-spending debtor for three decades at under 4 percent?


  67. Where’s matt ?????????????


  68. with current level of leverage,
    as we head lower I bet a lot of margin calls are coming, which can drag us even lower than we want to believe


  69.  JRW – Matts driving in NC today


  70. Phil –

    I need some help on the following…I have sold puts on LVS and LULU and a Bull Put Spread on AAPL all for August expiration.

    I have sold $43 on LVS…I have sold $55 on LULU…and I have 380/360 Bull Put Spread on AAPL…

    I sold LVS at 0.50 now at 1.20…I sold LULU at 0.55 now at 1.30…I sold AAPL at 3.50 now at 5.20.

    Not sure what to do…


  71. Phil
    Is it time for a naked capitulation index put play?
    Strether


  72. CNBC holding a funeral for the markets.  

    Friggin” Europe panicking into the close EVERY DAY.  Down 2.5% in London and Germany and down 1.4% in France as they head off to vacation with Italy and Spain completely up in the air.  I guess they guys who were panicking last week were right!  

    Keep in mind this is the 1.25% follow-through to the downside we expected yesterday after finishing down 2.5%. If we finish today down 1.25%, then tomorrow we are likely to fall 0.625% (see the pattern) but it’s still a bottom-forming pattern unless we accelerate to the downside so this is the critical area to watch which is, of course, the 3 of 5 rule at our -5% lines.  If we finish 3 of 5 below for 2 days, then we have to draw out the next 5% drop and this line becomes the new "Must Hold" area BUT, as I said this morning, this is an over-reaction so I don’t think we’re going to go that far.  

    That doesn’t mean I’m gung-ho to buy but, if we hold this and break over the -2.5% lines, THEN I will be enthusiastic so I’m planning on a new Buy List over the weekend to trigger if we’re over the -2.5% lines next week.  This is EXACTLY the drop we wanted to give us some proper bottoms.  


  73. PHil, does it make sense to take out (sell) the long leg of the Jan 12 SCO bull call spread at this point?  – Up 54% at this point, as oil going down…


  74. CL average is 92.00. Legging out the first 2 legs @ 92.20. +.20. Back to my original contracts now.


  75. FAS Money (Monthly) – The August 21 Calls are now under $1.00 (that was quick!). This is moving very fast and making adjustment now might be premature as this could go either way fast. The rolls to the September 22 Puts also just got more expensive! 


  76. TLT at 103 and TBT taking it on the chin again today printing briefly a 27 handle! Panic…. 


  77. Just got 25 free trades from TD give them a call if your having issues


  78. stjeanluc
    FAS I think we better wait until all the sheep have jumped over the cliff from – 150 now – 96 it is loco


  79. bonds are not going down..stocks .rally today.put/call 1.43…hard to gauge though because the action has been so violent and caught hedgies off guard based on latest exposure data…possible we get forced selling this afternoon….gut feeling is we bounce though….i can’t believe euro is up today with how euro equities are trading…i may put more euo on.


  80. Sold the rest for 92.40. +.40. I’m done for the day.


  81. Someone in Congress just heard some screams coming from Eric Cantor’s office – "Sell, Sell, Sell…." - http://www.youtube.com/watch?v=S8H2FIf1oH4


  82. Thanks JRW.


  83. Just on Bloomberg Companies buying back their own shares!!!!


  84. TBT $28!  

    USO Friday $36s held .45 – that’s a good sign. 

    Indicator/Pentax – Just the size of the chart, I can’t use it in a post due to the size.  Shorter one very nice, thanks!  On the SPY chart (thanks!) this is exactly what I mean.  We see PRICE but this chart is VALUE and are we really so dire that we should be back to 2008 crash levels (in Dollar-adjusted terms)?  That’s just silly:

     

    TBT/JBur – Well no danger of having to pay the Aug caller at least.  I would roll the $6 short Aug $36 puts to the 2013 $30 puts ($6) and forget about those.  You can roll the short Jan $40 puts to 2x of those as well and, in 2013, maybe you’ll have to roll to 2014 $20 puts – so what?  You still have the net $3.25ish you sold them to so you are long on TBT at net $27.75 on that move.  As to the $40 calls, I’d buy the  2013 $30s for $4.35 and sell 1/2 Jan $31s for $1.86, which gets 1/4 of your Jan puts back and then just see how it plays out.  You can always sell another half but, hopefully, you’ll be rolling to 2x a higher strike. 

    Nice job on oil DDay – Hope you caught this wave, now crossing $92.50 again!  


  85.  Now THAT was a flush by the way! 


  86. that should hold its a v for aleast a few days..i am giong to short some bonds here…so tbt’rs have at it


  87. Using the July 2010 highs and April 2011 as anchors, the following lines are 38.2% Fib retracement:
    IWM – 76.12
    SPY – 123.66
    DIA – 116.36
    QQQ  is on a different scale. It made highs this July and has not corrected as much. There is a 23.6% Fib line at 55.51 but not that strong… But that market is fixed anyway! 


  88. GMCR bouncing nicely, recovered to its high. The new wonder stock.


  89. While You Weren’t Paying Attention… Brazil Was Blowing Up Too!

    Read more: http://www.businessinsider.com/brazil-financial-problems-bovespa-selloff-2011-8#ixzz1TylFH4RG


  90.  Now THAT was a flush by the way! Sorry I missed it went to the bathroom!!!!


  91. brazil has been blowing up for months


  92. Best ex-President/Angel – Here’s a video for you.

    Kernan/1020 – That guy is off the deep end these days.  


  93. i love that video too funnybrazil -23% since nov 4 high


  94. IMAX looking good, hoping to get another point in it before saying goodbye.


  95. Phil / IMAX – nice call on those puts!  stock already up a buck from low.  Thx. 


  96. Brazil / Angel – It’s getting hard to keep up with all these blow up! Here is today’s in Europe… http://ftalphaville.ft.com/blog/2011/08/03/642436/meltdown/ 


  97. Nice to see the vix down 6.66% today!


  98. Silly Europeans, making us worry.  Glad to see everything’s all better now!


  99. GMCR @ 52wk high!


  100. fundamentals and banks are sold says asshat silvio..kiss of death


  101. guess I should have said all time high for GMCR, but that’s nothing new is it?


  102. angelcur - Not sure what that last post of yours meant.  Complete(er) sentences have their merits!  ;-)


  103. Yeah GMCR insane, picked up a few Aug puts as it crossed 110 …


  104. Death cross on the indexes shortly


  105. PHil, sorry, I suppose I should have given all the details of the SCO Bull CS, it was the Jan ’12 51/56 suggestion from a few weeks ago, selling $37 P’s as offset.  The $51 C’s are up over 50% but I don’t know if to see this as a temporary bottom and sell, or if we say that this BCS is "on target" and leave as is.  My guess tho is the former (sell the longs)…


  106. They can’t get the Dollar below 74.20, it’s stopping the bounce.  

    AAPL/Maya – Did you not cover with those calls?  That was the cheapest and best way to lock in your gains by a mile.  How about (since you have the stock) selling the Jan $400 calls for $28 and buying the Jan $445/400 bear put spread for $29.70 so you are $1.70 out of pocket with a call away at $400 but you have $45 of downside protection below $400 AND, if AAPL below $460, even if you are called away, you get bonus money.  

    Carter – I don’t want to get into a big thing but people who badmouth Carter get very low marks for historical knowledge in my books.  He got elected DURING a recession when Ford’s big idea to fight inflation was to wear "Whip Inflation Now" buttons and, as soon as he was elected (Feb 1977) he proposed creating a cabinet level Department of Energy which was shot down by Reps in Congress.  In his first State of the Union Address, he said the US must tackle energy conservation at the "moral equivalent of war" and he worked hard to stabilize the middle east but CIA (Bush CIA) trained militants overthrew Iran and held US Embassy people hostage and oil spiked through the roof (all retaliation on Carter’s attempt to conserve energy) and that tied him up for most of the next year.   Much like Obama – Carter was handed a Republican-created disaster and before his chair was warm in the White House – he was blamed for it.   Hearing the commentary on this board – I understand why the Republicans think such blatantly obvious attempts to manufacture history would work – BECAUSE THEY DO – on their target audience, at least…

      "And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. ‘Who controls the past’ ran the Party slogan, ‘controls the future: who controls the present controls the past.’" 

      "Day by day and almost minute by minute the past was brought up to date. In this way every prediction made by the Party could be shown by documentary evidence to have been correct; nor was any item of news, or any expression of opinion, which conflicted with the needs of the moment, ever allowed to remain on record. All history was a palimpsest, scraped clean and reinscribed exactly as often as was necessary."  - 1984

    Oil/Tusca – Good job taking the loss.  Once your premise is blown, it’s best to just cut and run and wait for the next good opportunity.  

    Belisconi speaking now – sadly, it’s up to him to save the markets!  


  107. about berlusconi’s presser caesar YOU of all poeple whould be watching!!


  108. about berlusconi’s presser caesar YOU of all poeple whould be watching!!


  109. Oil is having a tough time with the 92.41 S1. In effect, it’s now R1…. 


  110. And the bad PR on Carter may even come from the same source that is deifying Reagan. My mother’s family was a bunch of midwest architects – the Wright family – and they had one black sheep that nobody liked but who had really great PR, Frank Lloyd. My grandfather and uncle both knew him, didn’t like him for several reasons, and while appreciating some of his ideas, were of the opinion that he couldn’t engineer his way out of a paper bag, and felt a lot of his ideas came from places like the arts and crafts movement. Compare Falling Water and the Gambill house, for instance. Anyway, enough for now; we’re in working hours.


  111. If it’s down to Berlusconi, we are doomed! The guy sure can organize a nice orgy (from what I hear) but the financial markets might be harder to whip in shape than a 17 year old hooker! 


  112. phil your so meannn!…carter is a good fello but he was a pedan..i know you like him coz yu were hot  for roslynn…but he was just ordinary and dweeby and we don’t like him..there were lots of republican pres like that too…ford was at least a nice guy carter was a prick


  113. @ Phil, FTR is taking a hit today because of earnings, do you like them here or have you changed your overall opinion on them? 52 week low and an awesome dividend…thanks!


  114. stjeanluc
    Berlosconi Give the man a chance a crook always knows how to pull his head out of a sling


  115. now that hes buuilding habiat homes and winning peace prize he’s easting his metamucil and shellin peanuts


  116. Did Berlosconi just tell everyone to go to CMG and eat burritos??
    FU Berlosconi!!!


  117. As the representative of ancient Rome here, it is Berlusconi not Berlosconi. Thanks.  ;-)



  118. jabobeast
    I don’t think they have burritos in Italia the eat spagetti!!


  119. Relief rally when Berlusconi’s done talking?


  120. JCaesar – In France, they call him Berlusconnerie…. Connerie being a dumb thing! 


  121. yah relief that he’s friggin done…(sorry about the spelling Caresar!!)


  122. Stjean – I guess the French nailed that one.


  123. Correct Spelling – Et Tu Angelcur???


  124. Phil/IMAX It looks that IMAX saw your last week advice about advertising their relationship with China (see the newest company announcement at finance.yahoo.com) and got the market reaction that you predicted.


  125. Why is the VIX not higher even though there is panic in the market?? Does this say something?




  126. JR/Matt
     
    He probably went all in long on Monday and is now chewing his leg off.


  127. Phil,
     
    This market does have the feel of a capitulation sell off.


  128. Phil BAC sold 10/20/10 113 15 puts for 4.35 now trading at 5.72 what would you recommend?  only .07 cents premium left thks


  129. VIX / Pat – I think part of the issue with the VIX is that it was inflated due to fears about the debt deal, and has been letting off some steam over the past couple of days.  Working against this (and why we’re down) is of course our crappy economic situation and the collapse in Europe.  Despite what I said in my first sentence, I would still have expected the VIX to be higher, if only a little bit, right now. Strange.


  130.  Out of  yesterday’s ABX calls w/ 29%, waiting for reload after the dollar strengthens somewhat.


  131. NLY/DC – If you are going to hold them for 10 years and average in – absolutely.  At $17.59, you can buy them and sell the Jan $17.50 calls for .65 and the 2013 $17.50 puts for $3.40 for net $13.54/15.52.  So, if you start with 1x, then worst case is you end up with 2x at $15.52, then you sell 2015 $15 puts and calls for $4 and you’re in for $11/13 on 4x if they hit Jan 2015 below $15.  If you don’t REALLY want to own 4x at net $13 (25% off) then you don’t want to buy 1x at $17.50 but, otherwise, it’s a great entry. 

    Central Bank/SS – It was the Swiss that did it, they can afford it.  Anyway, all they do is print a ton of Francs and flood the market – no skin off their backs if they increase the money supply and their money stays strong as it all ends up in their vaults again anyway. 

    Italy/Tusca – That’s the spin because this collapse is really about the Dems bending over and accepting this POS austerity deal that’s going to destroy the bottom 90% of our society but, as I said yesterday – SUCKS FOR THEM!  This is not a bad thing for the US markets – if it was, we would have never recovered from our bottoms.   This market shook off the 270M losers when Bernanke announce he was going to buy $600Bn worth of TBills last August because the S&P now does more than half it’s business overseas and it does 80% of it’s US business with the top 20% so what the Hell do they care if the bottom 80% burst into flames unless it costs them money and the deal that just pushed through Congress makes sure it won’t cost rich folks one red cent.  Italy is a great distraction as it stops people from talking about the screw-job the lower classes were handed.  Also very clever not rallying right away – as if this debt deal is sharing pain with the investing class.  HA!  

    AGN/Stock – Sounds great.  I’d like to know what Pharm thinks about it.  They seem on track for some solid growth.   My concern would be what competition they may have.  

    Momentum stocks you sold puts on/David – Wow, you got screwed betting Momo stocks would keep going up – what a shocker!  LVS is $45 and LULU is $59 so now’s the time to see if you have the balls to stick to your conviction or not.  NEVER sell naked puts in a stock you don’t really, Really, REALLY want to own at the next price.  If you are excited about owning LVS below $45 or LULU below $59, then you don’t have a problem, you just wait and see if you get assigned or the expire worthless because your "loss" is only on paper.  All you can do is roll them out in time to lower strikes but then you will carry the margin longer so you are better off waiting to see if we blow our 5% levels or not and THEN you should be very worried.  Same with AAPL, there’s a reason I hate bull put spreads – you are trapped in a trade where the risk/reward is 2:1 against you.  Also, it’s the same deal, AAPL is at $389 and all your losses are on paper – if you don’t have the conviction to ride these things out – you need to know that BEFORE you make the trade and just set your 20% stops and get out.  In any case, once you are down 50% it’s time to take action and you are well past that.  You could roll the $360 puts ($1.80) out to the Sept $340 puts at $2.60 and plan to roll the $380 puts you sold ($5.85) to the Sept $360 puts (now $5.70) for about even.   You don’t WANT to execute the 2nd roll but you NEED to do it before it costs you more than $1 so you’d have to watch it very closely.  

    Seems to be a pattern of retailers selling off an big boys calling a floor so far.  

    Naked capitulation/Streth – Good 10:47 call!  

    SCO/Jercon – Not and leave the naked calls unless you are going to do so with tight stops.   We don’t have any indication that oil is forming a bottom as it can’t get back over $92.50 and our next support is $87.50.  

    We need to make a stand here if we are going to get a positive close.  

    11:00 AM On the hour: Dow -0.79%. 10-yr -0.04%. Euro +0.81% vs. dollar. Crude -1.6% to $92.19. Gold +1.7% to $1,673.

    The CFIB’s July index of small and medium-sized business confidence rises 2 points to 68.3, breaking a 2 month string of declines. Energy-rich Alberta had the highest reading at 74.9, while Prince Edward Island clocked in with the lowest of 60.3.

    Brazil’s June industrial output drops a greater-than-expected 1.6% bringing the Y/Y gain down to just 0.9%. Combined with another report showing Brazilian exporters losing market share abroad, it’s more evidence of the real’s strength putting a significant bite on the economy. Brazil ETF: EWZ -2.7%. Real ETF: BZF flat.

    Duh!  Now speaking, Italian PM Berlusconi sticks to standard script, denying a problem and blaming the current crisis on international speculation.  He says the nation’s banks – having passed the stress tests – are solid, and recent fiscal reforms put government finances on sound footing. Live video here.

    Now moving onto investing advice, Berlusconi says the nation’s banks are selling below book, and the entire Italian stock market value is underestimated. Watch live here.

    Egan-Jones downgrades 2 Italian banks - Intesa Sanpaolo and Banca Monte de Pasci – to BB+ over concern about non-performing loans and the state of the government’s finances. Doesn’t this shop have a reputation for being ahead of the curve?

    "Tensions in bond markets reflect a growing concern among investors about the systemic capacity of the euro area to respond to the evolving crisis," says EC chief Barroso in a statementin which he voices support for Italy and Spain, but offers no ideas for stemming the continually re-flaring crisis. 

    Shipping stocks take a beating as overcapacity, slow demand and price cuts on large commodity transports kick in to pressure profits. Analysts at Deutsche and Jefferies add to the negative mix with sector downgrades. Select shipping stocks faltering: OSG -6.1% DRYS -4.2% NM -5.8% PRGN -3.6% DSX -1.9%.

    The Dow Transportation Index was down ~4% yesterday, and Barry Ritholtz notes that if there is any silver lining in the market turmoil, it’s that the Transports usually lead crude oil prices down, which lowers gas prices for consumers. Transports -12.2% since July 7, with crude barely moving, so Ritholtz expects a catch-up trade to the downside for crude in the next few days. 

    US Airways (LCC +6%) bucks negative comments about faltering bookings from (Gang of 12 Member) JPMorgan and trades higher after reporting record July load factor on a 4.9% increase in traffic. Higher fares also resulted in an 8% increase in passenger revenue per available seat mile – a key profitability metric for the airline. - So the Transports took a tumble in a report from JPM that was clearly CLUELESS on airline revenues.  Interesting

    U.S. state and local governments this year will lose at least $10B in sales taxes not collected by internet retailers, and Amazon (AMZN) is working hard to keep it that way. Credit Suisse estimates that if Amazon were forced to collect sales taxes in all states, it would lose as much as $653M in sales this year, or 1.4% out of an estimated $45.5B in revenue.

    Good picks: Shares of Coca-Cola (KO +2.1%) are the biggest gainer in the Dow today, and could be set to move even higher according to S&P strategist Alex Young. He names KO as one of six stocks poised to benefit from a falling dollar and growth in emerging markets, joining fellow global large-caps: CAT DE AXP IBM JNJ.


  132. MUR has been thrashed…..


  133. Pharmboy, GILD below $40.  What do you think?


  134. Vix/Pat- Thats a great question. VIX should be going higher after the drops we’ve seen.. Could trading in the vix itself be regulating the market indirectly through derived plays on various s&p derivatives. Maybe it’s the PPT’s new secret weapon.


  135. Savi, it doesn’t matter to me, but I just found out that Oct 8th is Yom Kippur so don’t know if that affects anyone who is going to Vegas or if they knew that.


  136. David Did the same trade on AAPL they are still looking good. At this point I think they will hold
     


  137. At least we are getting some volume but the panic seems to have stopped. 95M on the DJI going into halftime.


  138. GILD/cwan – I am going to say….not interested.  Maybe sell a few puts to establish a position (Sept $35 Ps are nice and easy to manage for 75c).  MRK, BMY and GSK are my players of choice.  GILD needs to expand their reach, and I think they go after someone mid-tier.  UTHR would be a nice fit…..come’on boys!


  139.  I sold out of all DIA puts, went (longer) TBT calls, and still carrying some MoMo puts just in case it all falls apart, they will fall apart the fastest so it’s all the oh-sh*t protection needed.
     
    Now nibbling on TNA calls too. Scary time right now though ….


  140. @Felipe
    Are you aware of an ETF that has gathered together the stocks of Financial Services like V, MA, DFS and similar?  


  141. @ Pharm YMI, i have a little stock position on those at about 2.70 average, would you at a little more here? Thanks!


  142. YMI – ouch.  Risk is definitely off.  I would wait and see where things settle.  That is a big red candle.  Probably sell some calls against.  How about the October 2.5s for 30c for a full cover. I will do that as well with mine, as I am in at about the same price.


  143.  Will TBT do a V-neck?
     
    Probably worth 10 calls to find out….


  144. JRW
    What is your feeling, up or down? Thanks


  145. looks like it all about breaking 76.65 in IWM


  146.  still wondering who is staying where in Vegas


  147. Phil/oil – playable for a longer term trade (days, months) off these levels?


  148.  Stratdaddy:  Off hours question:  you have/play strats?  Off hours answer fine.


  149. They are doing a bang up job holding down the $


  150. lol730
    Failed 76.65 5 times, that is more than a failure. What I am wondering is do we hit it again or just go down, I am inclined to short. What are you thinking?


  151. PHARM, 
    I apologize if you did answer already and I missed it, but I didn’t see an answer on the couple of ocassions I posted the following question:
    I am short BSDM Aug 5 Puts (sold for 1.90)…. what would you recommend?
    Thanks!


  152. VIX is still strangely calm at 24. 

    Cantor/StJ – Ha, I forgot about that.  That does cheer me up.

    GMCR up 4% – Freakin’ incredible.  It’s like BIDU was for a while – just doesn’t go down no matter what.  

    IMAX/Terra – You are quite welcome!  IMAX has replaced WFR as my favorite banging the table value stock.  

    Thanks StJ:

    SCO/Jerconn – Oh that one.  That’s way longer than the one I was thinking off. It’s on track for a 1,000% gain.  The $51s were $6, now $9.50 and yes, there is some logic to taking it off here as + $5 is the best you could do on the two positions BUT keep in mind it’s VERY dangerous to leave the $56s naked as it’s just a 5% drop in oil away from being in the money and that’s our $87.50 short-term goal.  I’d say yes but with a stop on 1/2 the $56 calls at $8 but it would still make me very nervous.  

    Architecture/Snow – LOL, that’s quite the specialized topic to rant about!  Reminds me of discussions like this.  

    Carter/Angel – We’ll have to stage a proper debate (limited to 15 index cards, of course).  

    FTR/Asaenz – I love them long time.   Investors are pretty much idiots, actually.  Q2 was $1.3Bn in revenue, down a bit from Q1 but Q2 last year was $516M.  If GMCR was growing like that THEN I would believe in them!  The big jump in revenues was from their deal to share lines with VZ and they lost money investing in broadband and lost some of their internal customers to VZ, which was to be expected as part of the deal, of course.   They are not going to be a big growth story – it’s a utility stock but it’s a utility stock that is having no trouble paying it’s 10% dividend!  As a new entry, I like the stock at $6.90, selling the 2013 $5 calls for $2 and the $7.50 puts for $2 for net $2.90/5.20, which makes the .75 dividend 25.8%.  

    IMAX/Alik – See, that’s the kind of crap I used to get paid to do… 

    VIX/Pat – I think I mentioned yesterday, the VIX is mainly a reflection of the put/call ratio and, as far as I can tell, smart fund managers (like us) were buying all our puts at the July highs and we just rode down the drop and now money is flowing back into the markets.  I may be ahead of the curve but I’m not a contrarian – my strategy is just to do what I think the Big Boys will be doing before they do it.  

    BAC/Yodi – Well, you effectively own them at net $11.65 so no harm in rolling to 2x the 2013 $10 puts at $2.16, which will take $1.40 out of your pocket and leave you in 2x the short 2013 $10 puts at net $1.47 and only down about .65 on each put.  If you want, you can sell 1x the 2013 $10 calls ($1.57) as an offset and then you have your money back but you’ll want to cover by buying BAC if they go over $10.  

    ABX/ZZ – Congrats.  Nice timing.  

    People who are in HMY might want to take the money and run at $15.  

    Yom Kippur/Rustle – You guys won’t see me until 6 that day.  I’m not super-religious but I do fast and I don’t work that day.  I will be VERY hungry at dinner!  

    Volume just 105M on the Dow at 1:25, washing out to a fairly normal day. 

    Financial Service ETF/Flips – IYG and IAI

    Oil/Brook – I still like those Friday $36 calls, now .35 on the possibility we get a run into the NYMEX close but it’s very weak and next week the inventory cycle begins again so we expect a sell-off.  


  153. shadowfax
     
    Depending on what chart you are looking.
    on 15 min it’s just second attempt


  154. thanks Pharm, will do! good luck….


  155. Very large doji forming on TLT at this level.  If it ends here or lower might have a positive impact on us TBT players.


  156. Specialized rants/Phil – thanks for that, rotfl!


  157. lol730
    I watch the 1 and 3 minute but run a 20 minute SMA which is rising to about where it turned twice, we will know soon. I want it to make a new HOD.


  158. Good Afternoon
    rustle—re the Jewish holiday--yes everyone knows about it
    warning everyone that this might be the market low— I am so sick of some of my positions I am selling now--which means we go to the moon after this


  159. QE3 basically announced.  need some bullish plays Phil!!!!


  160. BSDM/amatta – I think I said roll out to Feb12s.


  161. QE3!
    new targets:
    AMZN 300
    NFLX 400
    PCLN 600
    AAPL 450
    Facebook IPO @ 150B
    GMCR 150


  162.  Income Portfolio: 

    • Let’s cover the 100 IYR Jan $50 puts with 50 Aug $57 puts at $1.05.
    • Let’s cover 50 DIA March $110 puts with 50 Aug $116 puts at $1.40.  

  163. Phil / Hilsenrath    Is this article Kustomz linked the reason for the bounce?  You always said some form of QE3 was inevitable as there’s no fiscal policy the GOP will support.  Ben just won’t sign off as the author or the 2nd Great Depression.


  164. hope you all …remmeber because hedgies were caughtgot long and shorted some bonds..its amazing isnt it!! enjoy it i think it lasts about 4 days…remember hedgies coaught off guard watch acc and distribution jrw has that nailed..and don’t  be shocked if we have some forced selling late


  165. While CNBC throws out bullshit stories…the market skyrockets off news that one can only get from the dark shadows at Zero Hedge!
    Hilsenrath: Fed’s Kohn Says Will Give "Very Serious Consideration" To QE3


  166. Income portfolio—so now we have full covers?


  167. Rustle, 
    Man you’ve been firing on all cylinders. Fantastic call on IMAX, right at the bottom! Thank you!


  168. 2:12 the first buy program filtered out the QE3 news…12:21 the second buy program kicked in…what a joke this market has become…


  169.  Not to touch a sensitive point, but QE3 = AU up, n’est pas?  Flat, not talking my book.


  170. WOW…..QE3 really?   More bond buying??


  171. topher7/AAPL:  Yes, I’ve been selling Aug 5 July 395 puts on the downturn.  Plan to keep the $ in 2 days if they are at 395, or just roll them to the next weekly or monthly if not.  This I would do on Friday afternoon.  My low number for buying calls is 380, almost breached this morning. 


  172. CNBC still doesn’t know what the hell happened after "talking to the traders" just now…BAHAHA…useless!


  173. topher7 ….that should read Aug 5 395 puts ( I inadvertently typed in "July" ). 


  174.  Pharm, 
    Thanks!


  175. Phil Thanks for your advice on BAC I am not such a great believer in doubling as I am already 113 puts short. The same I did with HOV at a 5 $ short put where I have now over 400 puts short at 5$ Sure the rolling puts a bandaid on the situation but can put you in to much more debth. I can hear you say do not sell a put if you do not like the stock. Actually we set this play up together at the time as I lost very heavy on BAC and as well on HOV. I helt BAC for 40$ before the nice crash. Thanks


  176.  Phil, I have to say THANKS in such a big way.  I layered on the shorts last week, then rolled out of them Friday and yesterday.  This morning, I dumped the last of them and went long for the bounce, and just now sold the longs to return my portfolio to neutral.  Also, this morning, I sold puts against two more stocks I have identified to be core positions, BA and CSCO.  It’s a bit more work staying one step ahead, but hearing your thoughts and impressions of the selloff and where we are now.
     
    This was AWESOME because I made money, without touching the core dividend positions.  I traded around them using the DIA puts/calls(just keeping it simple).  Also, I took the FTR play you recommened as I have been watching them for a while, but not sure how to structure a good play.  Thanks for that also.


  177. Busy morning, I beleve the target is something over IWM 77.95, maybe 78.13; resistance at 77.36, and over is 78.64 of course !!


  178. Pharm- question for you on DEPO- I bought some more stock on this drop but I have the Sept 7.5 calls net at about 1.90 cost (after the short calls taken out on the spread). Barring a miraculous short term bounce, looks like these area toast. Given your comments, I take it anything substantial is 6 mos to a year out. Any suggestions on the Sept calls?
    Also have the Sept short puts (7.5′s) – will roll those out later.
    Thanks,


  179. AAPL/Iflan..   roger that..  thanks


  180. i am sorry about that last post if i get an i m while i am typing in the box then my typing defaults to the aim and i have to recontruct i meant to say hoep you all are long and taken a scalp in tbt..but keeping in mind thast hedgies were not positoned for this fall there could be forced sellinginto the close


  181. shadow / direction

    I just posted the current  best guess, I’m in TNA of course; if we close here or higher, we should take off tomorrow !!

    I am buying more calls as well !! 


  182. TBT/BDC – Good call on the day move, back to $29 again.  As I said yesterday, when everyone starts freaking out about it – that’s the time to go long!  TLT missed my $105 shorting target by just a bit. 

    Vegas/BDC – I usually stay at Caesar’s and, much as I intend to try another hotel, that’s where I’ll likely end up since they take such good care of me (but I really do intend to stay somewhere new).  

    Someone needs to kill the Dollar.  Break below 74 and we can be up 1% or more in a tick. 

    QE3/Kustomz – It’s like a magic word.  Better than CHINA!  

    01:47 PM Former top Fed official Donald Kohn tells WSJ‘s Jon Hilsenrath he expects the Fed to give "very serious consideration" to a new round of bond purchases if it determines after the Aug. 9 FOMC meeting that the recovery is really losing steam and if inflation is coming down. Kohn, Vincent Reinhart and Brian Madigan put the risk of a new recession at 20%-40%.

    QE3/Terra – Sometimes another guy comes out an hour later to contradict the first Governor so I’m not going to be too excited until we break 3 of 5 of our 2.5% lines (which was the plan, right?).  

    Very conservative targets BDC.   8-)

    QE3/Tusca (see what a frenzy it causes!) – The Fed already said that if we get weaker its on the table so why should this be a surprise to any rational market participant.  I included it in my targets but, apparently, no one else does.  At this stage, it doesn’t matter whether it’s true or not, when we’re this oversold, a rumor does the trick.  

    ROFL – look at CNBC trying to do a 180 with their commentary.  I can’t wait for "Mr. Gloom and Doom this morning" Cramer to come out at 2:30 and tell us how he called it – could be a new record for the old flip-flop and cover-up combo! 

    Income/Savi – Full cover on the DIA, 1/2 cover on the IYR.  

    Doubling/Yodi – You need to start with much smaller portions.  You should always PLAN on having to DD twice when you enter a position.  They keeps you to less than a 20% loss on a 40% dip and, if they are still going down from there – THEN you take a 20% loss on a full allocation (no more than 10% of your portfolio) and trade something else.  

    You’r welcome Hoss – sounds like you are riding this bronco market like a pro – great job!  

    Let’s keep our eyes on the prizes folks: Dow 11,985 (-30), S&P 1,268 (-11), Nas 2,672 (+15), NYSE 7,866 (-43 (-5% line)) and RUT 774 (-4, also 5% line).  It’s not at all impressive if we can’t pop the RUT and the NYSE over the -5% lines!   


  183. Most volume in a long time !!  Critical time now as we either break through or ……………………..


  184. @ JR what calls are you buying? thanks!!!


  185. JRW III
    Thanks, I’m holding on to TNA at a small loss. Just got a couple buy signals!


  186. QE3= short lived adrenaline rush. Fed action has proven twice that its nothing more than a sugar high forcing money into anything but the dollar. All they do is destroy value. Japan has had easy money for decades, we are so fooked. Just used a GW to light my cigar, man they burn fast!! FU Bernake!!


  187. stjeanluc
    FAS are we still no calls on the play. Or did I miss something thks


  188. Good job by Obama letting people know what crap this FAA thing is.  Expect Reid to step up quickly and say Dems are ready to go.  

    01:00 PM On the hour: Dow -0.86%. 10-yr -0.38%. Euro +0.82% vs. dollar. Crude -2.48% to $91.46. Gold +1.48% to $1,668.90.

    02:00 PM On the hour: Dow -0.09%. 10-yr +0.27%. Euro +1% vs. dollar. Crude -1.83% to $92.07. Gold +1.04% to $1,661.60.

    The stock market is wildly oversold, according to Birinyi Research, and nearly all S&P sectors, excluding tech and financials, are at “absolute buy” levels based on how much each sector has swung from its 50-day moving average. Barry Ritholtz expects a similar rebound but reaches a different conclusion, seeing more sense in selling the bounce

    The market’s volatility gauge records high volume, even if VIX spikes didn’t quite reach levels some analysts forecast as a Treasury default loomed. Volume of the Barclay’s S&P 500 Vix Short-Term Futures ETN (VXX +2.4%) reached peak levels, and VIX options in general have only been out-traded recently by S&P 500 options.

    U.S. home prices increased 0.7% in June, the third consecutive monthly increase, but a 6.8% drop from June 2010 marked the 11th straight month showing a Y/Y decline, according to CoreLogic. Excluding distressed sales, the Y/Y decline was 1.1%.

    Carnegie Mellon prof Adam Lerrick expects the U.S. economy to show weak growth for years.  Arguing the U.S. government has had a "social policy" rather than an "economic policy" in recent decades, Lerrick thinks businesses will remain hesitant to invest in the face of uncertainty about future tax, regulatory, and social spending policies. 

    Despite all the hoopla over the partial shutdown of the FAA, safety inspectors and air traffic controllers – the ones directly charged with ensuring the safety of commercial aircraft – will continue to be paid. The closure only affects non-essential airport facilities inspectors, plus research and grant management personnel.

    The FAA stalemate boils down to two issues according to both Republicans and Democrats: (1) subsidies to rural airports; (2) airline unionization. The latest word is that no deal will be reached before September, as both sides ratchet up their rhetoric and draw farther apart.

    Canada’s interest rates are dropping along with the U.S. – the 30 year bond hitting 3.16%, the lowest yield since at least 1970. Of interest is the shape of the yield curve. Both the U.S. and Canada have 10 year rates around 2.6%, but the U.S. 30 year is at 3.9%. – giving the U.S. a 10/30 spread of 130 bps vs. Canada of 56 bps.

    When you are a discounter, there’s always going to be someone willing to sell lower than you!  Wal-Mart’s (WMT -0.2%) sees weaker store traffic, losing out to rivals Dollar General (DG +0.3%), Kroger (KR +0.5%) and Target (TGT +1.1%) according to a leaked internal memo. A Morgan Stanley analyst notes the firm has lost its lowest price mystique and faces a "price-perception problem," helping account for the loss of store visitors. 

    While Research In Motion (RIMM +4.1%) is bouncing on the release of 3 new BlackBerrys, analyst enthusiasm is fairly limited. Wells Fargo, MKM, and Caris are reiterating neutral stances: while believing the new models can give RIM a near-term lift, the firms think competition and pricing pressures will continue weighing on the company.

    Three lunchtime reads:
    1) America is merely wounded; Europe risks death
    2) Is deflation back?
    3) The four scariest economic graphs I’ve seen this year

    bad1.png
    bad2.png
    bad3.png

    bad4.png


  189. It’s really looks like a fight.
    They try to prop and somebody sells really heavily into it


  190. asaenz / Calls
     

    Sept 78′s

     

    If IWM 76.69 fails at this time of day, go 100% short !!


  191. please, if its not too much trouble. pump up the volume !


  192. FAS/Yodi – Still holding out hope that XLF pops back over $14.50  New calls to sell tomorrow morning for more money anyway.

    By the way – Yeah, let’s blame Obama for the above charts.  He took office in Jan of ’09 and caught those falling knives – by far the worst economy since the 60s.  

    Oil had a lame finish.  $91.77.  

    Dolllar broke below 74.20 so let’s go for it again.  Watch the last floor at 74.08 if we get there, that topped us out on the last run.  


  193. FAS Money / Yodi – No calls sold so far… Not that today would have been great for that. And the Puts are coming back to us now. A small pop tomorrow would find us in decent shape for a roll somewhere. 


  194.  LOL – CNBC calls 45M people on Food Stamps "startling new facts" – only to them!  


  195. Economic numbers / Phil – The buck does stop at the president’s desk my friend. Unless it’s a republican president, in which case you have to blame the previous democrat one even if that means skipping one! 


  196. stjeanluc
    Thanks as well Phil that makes sence on the call however the weekly put has only .05 of premium roll to Aug or hang in? thaks


  197. Food stamp / Phil – Did you see the jump in recipient in Alabama?
    http://www.zerohedge.com/news/food-stamp-use-surges-most-years-alabama-foodstamp-recipients-double-may
    They will of course be happy to know that their Alabama Senators and Congressmen want to cut food stamps budget in order to create incentives for them to look for jobs and fill that inequality gap!


  198. Secret revieled!
    My sister now has a free cell phone from the government for being below the poverty line!!!!! does she need it? NO!


  199. Cut subsidies that help, give out phones that help Verizon!


  200. lol730
    "It’s really looks like a fight.
    They try to prop and somebody sells really heavily into it"
    They = gang….somebody = funds???


  201. shadowfax
    free Phone that shows you why we have problems in the US send her to MX and she might get a kick in the behind


  202. Shadow – Alas, now we know where all the budget savings would have come from!!!  The "unnecessary cell phone for people below the poverty line" line item.  I’m sure there’s good $5B we could have saved right there!


  203. I wonder how our elected leaders (no matter who they are) can make informed decisions when they are not given the correct set of facts:
    http://www.economist.com/blogs/freeexchange/2011/08/fiscal-policy
    Key section:

    President Obama was inaugurated on January 20th, and a stimulus bill was introduced in the House of Representatives on January 26th. A stimulus package worth $819 billion passed in the House just two days later.
    Two days after that, Americans received grim news about the economy: in the fourth quarter of 2008, GDP contracted at a 3.8% annual pace—the worst quarterly performance since the deep recession of 1982. More bad news hit on February 6th, when the BLS released new labour market figures. It reported an employment decline of 598,000 in January, following on revised drops in employment of 577,000 in December and 597,000 in November—a three-month drop of 1.8m jobs. On February 10th, the Senate passed its version of the stimulus, worth $838 billion. In conference committee, the bill shrank to $787. On February 17th, Mr Obama signed the bill into law.
    In the months and years that followed, Washington provided additional support to the economy, perhaps ultimately contributing approximately $1 trillion in total stimulus. But that first bill was the big bite at the apple. The White House looked at the economic situation, sized up Congress, and took its shot. Unfortunately, the situation was far more dire than anyone in the administration or in Congress supposed.

    Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

    Not sure it would have changed the debate, but it would be nice to have the facts straight! They had shot of getting back on track in 2 years with what they did… It was almost depression like numbers. Obama’s fault, of course.


  204. can Ben and Loyd save the day? they have to go for 45 minutes!


  205. Weekly/Yodi – There will be new puts tomorrow (next weekly) and, maybe we head higher.  

    Alabama/StJ – It’s bad everywhere, we’ll be hearing this story in many states.   Maybe that’s why CNBC is pushing that 45M number – it’s old and we could be over 50M at the next count and that starts to sound bad – even to Republicans!  

    I like this one!  The Treasury Borrowing Advisory Committee, the group of bond dealers and investors that advises the U.S. Treasury, said the dollar’s status as the world’s reserve currency "appears to be slipping." “The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices,’” TBAC says.

    The wilful ignorance that has dragged the US to the brink (The Independent)

    Our Sputtering Economy, by the Numbers (Pro Publica)

    Who gains from debt deal? The Pentagon, for one (McClatchy)

    UBS analyst Art Cashin says high frequency trading contributed to the market’s steep drop, triggered by a breach of key technical levels. If Cashin’s hypothesis is correct, computers – not investors – are behind the downswing and evokes memories of the 900-point flash crash on May 6, 2010 that continues to haunt regulators.

    15-year and 30-year mortgage rates are making new lows, but that’s not doing much to increase buying activity or lift prices in adepressed housing market, as unemployment, tighter credit standards, and underwater mortgages continue taking their toll. Pending banking regulations could worsen matters by raising the cost of lending. 

    More people borrowing from 401(k) accounts (McClatchy)

    The economics of humiliation (Market Place)

    WTI crude (USO) settles -2.1% at $91.72/barrel, like equities, giving up its gains for the year as economies around the planet look to be rolling over. Brent crude (BNO) remains nicely higher in 2011, still benefiting from Libyan supply disruptions. USOvs. BNO in 2011

    Moody’s is assigning a negative outlook to Bank of New York (BNY) and JPMorgan Chase’s (JPM) debt, suggesting a higher likelihood of a ratings cut in the next 12-18 months. Moody’s is concerned about the impact of a downgrade of Treasurys, and the potential for diminished government support thanks to Dodd-Frank.

     

    From Barry:  Interesting graphic from the NYT today:

    Over the last three decades, fewer and fewer American nonfinancial companies have received Standard & Poor’s highest rating for long-term debt. Only four now hold that distinction: Automatic Data Processing, Exxon Mobil, Johnson & Johnson and Microsoft. Here are Standard & Poor’s long-term debt ratings of companies in the S.& P. 500-stock index, which includes most of the country’s largest companies.

    Click for larger graphic


  206. Boy, things must be really tough out there in Smallville. right.
     
    MA gained 8.5% to 323.85 at 12:27 p.m. on the NYSE, the biggest rise since June 29 and the highest since the Company’s initial public offering in May 2006.
    Net income rose 33% to US$608M from the same period a year earlier said today in a statement. Earnings per share of 4.76 exceeded the 4.23 average estimate of 29 analysts surveyed as net revenue increased 22% to US$1.7-B.
    MasterCard’s U.S. debit-card spending surged 19% to US$98-B from last year’s Q-2 and US credit- card spending climbed 6.1% to US$129-B, according to the statement.
    MasterCard’s stock had climbed more than 33% this year through yesterday, compared with an almost 19% gain for San Francisco-based Visa, which posted net income of US$1-B on July 27.


  207. Food Stamp Increase - Interestingly the chart shows the increase starting in 2007. Must I remind you all that that was when the Democrats took Congress and Barack Obama started running for the Presidency!!!   Those facts just speak for themselves.  We know who to blame.  Right stjean?
     
    I should be a writer for Fox News.


  208.  They are getting ready to throw the Dollar off a cliff to boost us into the close!  


  209. such BS but it is what it is!


  210. Just the "fair and balanced" facts Jcaesar, just the facts! And when they don’t match your narrative, just change the facts! 


  211. Quote of the day:

    "Investors are looking past the budget situation and realizing this is an austerity plan," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

    Ya think! 


  212. Commentator on Bloomberg thinks numbers will not be so good on Friday !!!!


  213.  i think tradable low maybe …possibly low until fall…depends on europe bond buying effectivness…we are still on red alert for europe


  214. spain is going through with auction tomorrow..people thought they may cancel…i am sure they have buyers lined up


  215. Cell Phone/Shadow – That’s interesting.  Does having a phone qualify as a basic right?  It’s likely the government doesn’t pay for the phone but requires the telco to provide them as part of a public airwaves license.   They used to do it with regular phones so it makes sense.  

    Good note StJ – Won’t change any Conservative opinions but I think that and the above graphs paint a pretty clear picture of the total Chaos Obama walked into.  

    Save/Jthom – Just being back from the morning crash is a nice save.  Action of the past 48 hours will paint a pretty bottom picture on a long-term chart.  It’s just very hard to call them while they are happening and take the right action (hence my morning lecture). 

    That’s right Flips, MA doing well means there aren’t any poor people, not that they are out of money and maxing out their cards while the top 10% go on a wild shopping spree charging Lamborghinis and what-not.  Thanks for clearing that up for us.  

    Volume 150M at 3:30 on the Dow – someone is selling into the stick.  Won’t be easy…


  216. Phil one would have to be suicidal to go long the $ with Bernanke’s itchy trigger finger. We’ve reached stagflation nirvana, corporations cant pass higher costs to consumers for longer than a few Q’s as the data shows. What happened next, they cut jobs…I got to say Bernanke has made a mess of things chasing after inflation..


  217. lets start a pool on the site re qe3!


  218. like an office march madness pool..only theres not 64 possibilites only two no or yes


  219. i am saying no..becasue if it happens it will be a disaster…how would you like that diaster with more debt or just the way it is now?


  220. Phil all
    I believe it is no more than Payday loans, 400 minutes and then they slam you, I warned her yesterday and now she is mad at me, it is only 400 minutes.


  221. @Felipe
    ‘….. freely chose to’ walk into’,  by submitting his candidacy for POTUS’.  Such a  self-sacrifice.
    "Won’t change any Conservative opinions but I think that and the above graphs paint a pretty clear picture of the total Chaos Obama walked into."  


  222. With a little push they could close HOD!


  223. Phil/AAPL
    Sorry, did not cover with call yesterday.
    Was still thinking when all this drama happened today.
    But appreciate the ‘options’ provided by you


  224. This FAA thing is a good issue.  Dems should all show up ASAP and demand Reps join them – would be a great visual…

    Spain/Angel – I imagine China agreed to buy in. 

    Mess/Kustomz – Oh they have trashed this country.  I would not be terribly surprised if we never recover.  If a Republican President takes office or if the Reps win the Senate next year I would be willing to bet that by the end of the first term we’ll be in a full-blown depression.  Going to be hard to avoid as it is but if the people in power don’t think the bottom 80% of this country have anything to do with the economy other than being minimum wage bodies to keep the machines running – there’s no hope at all that America will recover because that fantasy is how 100 Empires have collapsed before and this time will NOT be different.  

    QE3/Angel – Well they floated a test balloon and it worked so they’ll likely jawbone it until that loses it’s effect and then Uncle Ben will bless it – I doubt they want to do it before Jackson Hole but if we fail to retake Must Hold levels by mid-month, they may not have a choice.  As far as I know, today’s comment by Kohn was a violation of their quiet period into next week’s meeting – so that let’s you know how dangerous they think a drop from here would be.  

    400 minutes/Shadow – That makes sense.  The Government gets a deal for the poor and VZ turns around and figures out how to screw them over.  It’s the same as anything else, phone is like a drug – give it away for free, get them used to using it and then threaten to take it away if they don’t pay for over minutes (and I’m sure they have a nice plan to sell her once she does go over to "help").  

    Case in point Flips. 

    No problem Maya – now you  have two ways to go.  

    Dollar not going down – too bad.  


  225.  Angel:  "A QE by any other name would smell as sweet."  ]Wm. Shakespeare?]
     
     The only problem with your bet is defining the terms.  Of course there are 64 possibilities — 64 possible means to obscure, obfuscate, bury, screen, or deny that it’s happening.  But, in respect of "yes" or "no", there is only one.


  226. Why markets must stay elevated..posted one from last week that showed Cali, Arizona did just as well

    The changes will come on the heels of the fund’s second best annual investment performance in its history. In fiscal 2011, a year when Treasurer Tim Cahill ceded the chairmanship of the board to his successor, Treasurer Steven Grossman, the fund earned 22.3 percent, or $9 billion, with its balance finishing the year on June 30 at $50.3 billion. In fiscal 1986, the fund’s earnings rose 28.1 percent.

    http://www.masslive.com/news/index.ssf/2011/08/massachusetts_pension_fund_pos.html
     


  227. @Felipe
    They aren’t just doing well they blew the doors off.
    I don’t think MA accepts Lamborghini purchase price levels. And you don’t need hyperbole to remind us once every hour of the plight of poor people.   You’re doing fine without it.  Every other day would still keep us ever mindful of the needs of others.
    What the increase in MA DEBIT activity tells me is things for the vast majority out there aren’t nearly as hopeless as many chicken littles have been screaming about for two years. 


  228. Getting ready to take the days TNA profit !!


  229. TNA out of sync with the RUT and even TZA today.


  230. Fund/Kustomz – Imagine the gambling they must be doing with people’s pensions to get that kind of return!

    Come on Mr. Stick – PUSH!!! 

    Yes Flips they are all fine.  Did you even read what RevTodd wrote about this weekend or was that the "other" day when you don’t want to hear about it?  

    Seems like a long way to come to fall short of my 775 on the RUT – 4 mins left..


  231. Job numbers – At this point, bad jobs or decent jobs numbers could lift the market as it would probably confirm QE3. Great job numbers could be a problem, but little chances of that! Just as they were looking for excuses to go down and flush the longs, they’ll be looking for an excuse to go higher and flush the shorts now. Rinse and repeat… 


  232. flip – an alternate view to MA’s good numbers could also be the middle class is so stretched that they are putting most purchases on credit cards and carrying a balance longer.


  233. Phil / Barton Biggs   Did you catch his fct that mkts will bounce 6 to 8% from here, being crazy oversold?


  234.  Phil & JRW
    What’s your read on tomorrow’s direction? 


  235.  Oops, my bad, it was 774 – I’m getting greedy!  


  236. Yeehaaaaaaaaaah !!  12% on the day !!

    Have a wonderful evening all !!


  237. I don’t see how we get a rally of any substance unless the financials can join in and they are sick sick sick- as they should be with no business model that works


  238. roses/0×0 – "A QE is a QE is a QE" – Gertrude Stein


  239. tomorrow I will sell more so that the market can go up again  :-)


  240. Thank you Savi… :-)


  241. @Felipe
    The ‘ignore this user’ button was one of the best things ever to be put on this board to screen out the irrlelevant, iterative, constant bemoaning of social injustice that has been a goodly percentage of the posts on this board. I use it to screen out all of them.
    The only one I can’t ignore is yours because your Wizardry in helping advance my personal financial goals (and sometimes just to satisfy a certain natural bent to riskiness and larceny) is too precious (and paid for). 
    We all get it, and RevTodd notwithstanding has added nothing new to the plight of the poor.  It’s like tomorrow’s news:  you can write it today because it’s only going to change at the margins and no matter how much it makes you angry, mad, insane, your posts won’t do a damned thing about it. 


  242. Flush/StJ – Good point.  

    Stretch/Nicha – Don’t forget gasoline was around $2.50 (wholesale) in Q1 and was generally $3.15 in Q2 (up 26%) and that’s a tax on the poor that they can’t avoid paying so out come the Credit Cards.  

    Biggs/Tusca – Based on what? He’s saying not only do we recover but break to new highs?  I love people who make TA predictions that completely ignore what’s actually going on in the World… 

    Tomorrow/Deano – Asia should be very happy, Europe is a tough call but pretty oversold and Trichet loves to move the markets so maybe we have a 1.5% gain in Europe at our open and we’re up half a point or more in the Futures UNLESS the BOJ steps in and intervenes so – TOO CLOSE TO CALL!  

    12%/JRW – Congrats.  I know you hit your target top but when did you step in?  

    Business model/Jthom – They have a great business model – QE3!  

    Thanks Savi – we really appreciate that.  8)


  243. A DISasTER A COMPLETE DISasTER IF THEY DO QE3..BTW I THINK THe PRESIDENT IS GOING TO BE RELECTED..THERE IS NOT A STRONG ENOIUGH REPSUBLICAN CANDIDATE…just my take but really who?romney is generally disliked..huntman is a dweeb pawlenty pawleese..bachmann’s iq is lower than whale crap pallin like th emoney of private life..perry..maybe…maybe biden steps aside and hillary runs..not sure i never thought i would vote for o right now why wouldnt i?.. core euro cds up big again today…we still have to be very nimble…i still think most investors underestimate what is going on in europe


  244. i think when we say qe from now on it needs to be like a pig farmer calling the herd to trough…QEEEEE  QEEEE!!!


  245. Savi, Phil and anyone else, staying at the VDara in Vegas from 10/7-10/11 which connects to the Bellagio.  My travel agent got an awesome rate (will give contact info if anyone wants to book through her, she beat the web price by a couple hundred) and attaching link to the room I got.  Looks very cool:
     
    http://www.vdara.com/suites/city-corner-suite.aspx#


  246. @Nicha
    Take a closer look at the detail of their numbers.
    Debit activity was up a huge percentage, admittedly on a smaller base than the Credit card business but nevertheless, that is not Credit Card Activity (borrowing money)
    They are spending disposable income AT RECORD LEVELS over 2006, pre-crash. This can’t just be swept under the rug because of this website’s bias against Conservatives, republicans and anything that turns right.
    I’d even bet that Phil has disconnected his right turn signal.
    It ain’t as dire in Mudville as it sometimes appears here. 


  247. She also said, book quickly because rates should be going up soon there.  Think there’s something to do with NASCAR that’s happening that weekend also.


  248. Angel/Obama- Betcha a beer he is a one term wonder. The most devisive sitting Pres since Bush. Americans across the board are pissed at Washington and will want heads a rolling. That goes for both of the crap party choices that are offered.  Maybe Jimmy C should give it another tr?. According to Phil and a few others he was one of our finest !


  249. hahaha on jc he was a guy form a kkaaarazzzy family so he did ok…ill bet you a fiver..but its form the existing pool so if perry enters we get to walk away lol!..don’t pick on phil..he’s a v big teddy bear who honestly would give you the shirt off his back..he jst thinks things are effed up and they ARE..i just think it was a group effort..he doesn’t..lcinton pushed nafta..that worked huh?


  250. Angel-Using current pool kinda stacks the deck against me but I’ll still take the bet !  If he (obama) chooses to withdraw from the race early the bet is also cancelled.


  251. Revenue rose 22 percent to $1.67 billion for the three months ended June 30, up from $1.37 billion a year ago. About 3 percent of revenue growth was due to acquisitions.
    About 60 percent of MasterCard’s revenue comes from outside the U.S.


  252. Phil--do you think PCLN will have blowout earnings tomorrow?


  253. Angel/Obama- He’s a Dem, Many dem’s these days seem to be compelled to publish their "stuff" on the internet. So if Barry’s get posted and he withdraws from the race your off the hook.  I’m just saying, it could happen….


  254. Today’s levels.


  255.  Phil:  Now that you’ve mentioned pension funds today, I wonder what you think in that context.  I’ve previously set forth my belief that:
     
    1/ U.S. large caps, in the aggregate, are an order of magnitude wealthier that American "rich people", and much more single-minded about extracting profits from their businesses, at the cost of U.S. jobs, income, consumption or the country’s future — since that is what their managements are both legally bound and paid to do;
     
    2/ The ownership of U.S. large caps is spread far beyond "U.S. rich people;" close to half their ownership is foreign, and a larger percentage of their shareholders consist of pension fund investment than the individual "rich."
     
    3/ Those pension funds overwhelmingly derive the funds they invest from middle and working class Americans; U.S. rich people are very unlikely to have much of their wealth withheld from their salaries and given to pension funds.
     
    Ergo, the principal tormentors of the American middle class, which, I agree, appears to be sinking fast, is quite decidedly not "evil rich Americans", but are instead:  A/ U.S. multinationals, who will export jobs or replace them with machines quite bloodlessly, as they are charged to do, and B/  which corporations, to the extent they are owned by Americans at all, are largely owned by middle class and working Americans on a derivative basis through their pension funds.
     
    I realize this might take all the fun out of blaming the impoverishment of the American middle class on a small [1% or less] flesh & blood group of mean, bad, heartless rich Americans, but isn’t it possible that this is largely nonsense, and the principal problem is rather that the aggregate pension contributions of the middle class are funding the entities that are contributing to their economic demise?  I am not making an ideological point — simply a structural or mechanical one, which, I admit, is not nearly as satisfying as finding someone to hate, but which seems to be more likely to be the root of your grievance.?.


  256. @angelcur
    That is the damn funniest thing I have read all day…….QEEEEEE  QEEEEEE!!!!
    It sure seems ODD that Kohn violated the new quiet period rule (seems like he did)…I wonder if he gets a pat or a slap by his peers for that?  I am guessing for a pat since he seems to have saved the markets today.


  257.  Savi/Vegas – I’m interested. Do you have any more details to share (e.g. What’s the deposit?)
    As a recent PSW re-Newbie, I came into this thread late.


  258. http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo,21059/
     
    This will make you feel warm and fuzzy- glad to know we are in such good hands!

     


  259. Onion / JT – Their writers are always very creative… They really do a good job making up stories that sound true even though it BS! Funny though… 


  260. Zerox
    Interesting take on the structural influence of pension funds!


  261. Wow, that’s really nice Rustle!  

    MA/Flips – US Debit Card spending went up 19% ($18.5Bn) and credit card spending went up 6% ($7.7Bn).  And I believe I mentioned gasoline was up 26% and food about the same so let’s not assume this was voluntary spending.  Do you use debit cards or credit cards?  Debit card growth is from people who can no longer use credit cards.  Globally, their growth was 16% ($98Bn) so the US generally lagged the growth trend.  This had nothing at all to do with US economic health as MA is 1/3 the size of V, who had relatively poor numbers.  That’s what I found when I took a closer look – funny how you concluded this was some massive Conservative victory – I guess your signal is disconnected…

    And what Kustomz said.  I know manipulating figures to prove a point and telling people to "look it up" is how Rush Limbaugh wins an argument but let’s try to show a little higher standard here as you are talking to people who actually do know how to "look it up" and, as you can tell, when I have to look something up just to find out where those BS numbers/conclusions came from – I am not happy about wasting my time.  

    PCLN/Jabob – I think they will be good but not so good that they pop.  Very hard to figure out with them as they are expanding so much in Asia but, then again, Asia had a rough quarter and the Middle East is closed…   We have one in the $25KP, I bet we should have taken it off the table on today’s dip as they hit $500!  Why risk earnings?  

    Big Chart – That’s a very nice move by the NAS!  Huge tail and formed a whole candle over the -2.5% line!  Unfortunately, everyone else ground to a halt at resistance but, if we  gap over tomorrow and finish at Monday’s close – all will be forgiven, right?  Kind of scary when you see how well these lines work – think of how long we’ve been using them.  No moving average, no slanty BS no redrawing them with new levels every day – that’s the 5% Rule!  

    Note also the last time we sold off hard, it was the Nas that led us back over the 2.5% line and stopped at about the same place it stopped today so look for that June 28th candle to repeat if we’re on the way to a healthy recovery.  It makes sense that the RUT fell out of favor as the reality of earnings favors the Nas and is not good for the RUT – who have mostly US revenues.  That’s why TZA was our primary hedge at the top.  Now we have to figure out how much actual damage was done to the RUT’s prospects by Q2 earnings.  

    I’m still very concerned that we’ll get a Yentervention and it’s going to be very difficult to pop resistance off a strong Dollar.  

    Pensions/ZZ – Wow, I would be so impressed if A) Pension funds and 401Ks were not elaborate fee-scraping scams set up by Banksters to fool citizens into thinking they are participating in Corporate ownership so they DON’T complain the way they should when those Corporations turn around and rape them or B) if your figures were accurate.  I don’t have the time or the inclination to pull multiple studies but a nice one was done on the oil and gas industry (a staple in anyone’s fund) in 2007 and they found:

    Across the oil and natural gas industry, 1.5 percent of the total outstanding shares of its 

    public companies are owned by the officers  and board members of those companies 

    (“insiders”), compared to 29 percent owned  by individual investors who manage their 

    own holdings and who are not insiders, 42.7 percent owned or held by mutual funds and 

    other asset management companies that have mutual funds, 18.1 percent owned or held 

    by asset management companies that do not  have mutual funds, and the remaining 8.7 

    percent owned or held and  directly managed by pension  funds, insurance companies, 

    endowments and foundations, banks and other financial institutions. 

    • The data show that this general pattern also holds across the three main oil and natural 

    gas sub-industries

    So that’s LESS than 8.7% owned by Pension Funds (lumped in with other very large holders).  I’m sure you will argue that Mutual Funds are pension funds but an actual corporate pension fund would invest in a mutual fund.  You can put your 401K money in a mutual fund but that’s not the same thing.  I’m quite sure, if you analyzed who invests in mutual funds, you’d get about the same breakdown as the above investors other than the MF’s.  

    Bernanke/Jthom – I love the lead: 

    SEWARD, NE—Claiming he wasn’t afraid to let everyone in attendance know about "the real mess we’re in," Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood’s Corner Tavern about how absolutely fucked the U.S. economy actually is.

    Customers at the bar told reporters the "shitfaced" and disruptive Bernanke refused to pay for his drinks with U.S. currency, claiming it was "worthless." Witnesses also confirmed that near the end of the evening, Bernanke put money into the jukebox and selected Dire Straits’ "Money For Nothing" to play five times in a row.  "This is what it’s all about," said Bernanke, who reportedly danced alone in the middle of the dark tavern. "Fucking love this song."

    Cramer’s new theory is that oil going lower made the markets go higher and, of course, Kudlow agrees.  So that’s the spin, not that all the poor retailers were margined out with CNBC screaming for them to run for the exits ahead of a planned move back up…


  262. Bots: there has been some discussion about being detected by the bots in the market, including strategies of only deploying 1/3 and not leaving standing bids. Could someone please explain how bots detect standing bids. I imagine its because they are at I banks or other institutions that have seats on an exchange or can otherwise see bid activity. Or perhaps thisinformation is availble elsewhere I am not aware of (I have seen it available on YahooFinance for options but not ETFs or stocks). Also, on the scaling not to get detected, what approximate amounts are we talking here? Not that I really care, I am just curious as sometimes I will move a decent amount (though not by Monte Carlo standards, which may make the bots irrelevent to me?).


  263. Vegas Hotel/Phil
     
    That hotel is the Vdara.  It’s connected to the Bellagio, that room has views of the fountains and is cheaper than most of the places on the strip.  It’s 811 sq ft.  It was built originally to sell as condos but timing was horrible and now they are using them as hotel suites.  The rate (which I got cheaper again from travel agent) includes gym and spa also.


  264. Bots/Jack – Gotta save that for the weekend but yes, the bots stand between you and the exchange so they "see" everything you do essentially.   It used to be that if you were playing small amounts you were not affected but that is no longer the case – they have algorithms now that can profitably drill down to any individual trade – it’s all about stealing a nickel – essentially the role the Market maker used to have by working the spreads.  In liquid options and stocks – it’s not a big deal as there are so many transactions at every penny strike that, as long as you are buying a "normal" sized block of shares – it will scarcely effect you but – if you are playing with thinly, you’ll often find that both the bid and the ask are artificial constructs that will get moved as soon as your "real" trade hits the wire.  

    Here’s an expert to explain it properly to you:  




  265. Super helpful Phil, thanks from a rookie.
    I saw your interview on the business network, something you should post again, particularly your parts abouts the BOJ intervention, the defense buget and oil.


  266. At the close: Dow +0.25% to 11896. S&P +0.51% to 1260. Nasdaq +0.89% to 2693.
    Treasurys: 30-year +0.29%. 10-yr +0.04%. 5-yr -0.08%.
    Commodities: Crude -1.97% to $91.94. Gold -0.34% to $1660.60.

    Currencies: Euro +0.81% vs. dollar. Yen +0.29%. Pound +0.73%. 

    Market recap: If former Fed officials are talking about QE3, so must those on the inside, and that line of thinking helped shake stocks from their losing streak. Tech stocks powered the rebound, leading all S&P sectors. Oil prices slumped, and oil stocks were laggards. Gold closed at another record high, and Treasuryscontinued to rally. NYSE gainers led losers three to two.

    JPMorgan’s Michael Feroli slashes his Q3 GDP estimateto 1.5% from 2.5%, looking at early survey measures that suggest activity may have stalled amid the debt ceiling rancor. He sees unemployment remaining at 9% or higher for another year. Yesterday, Feroli cut his 2012 GDP forecast to under 1% net of fiscal adjustments

    The sputtering U.S. economy, by the numbers: Total jobs lost since Jan. 2008, 8.7M; total jobs recovered, 1.8M; number of unemployed in June, 14.1M; jobs added in June, 18,000; job creation needed to reach 5% unemployment, 6.8M; and lots more. 

    Stock mutual funds suffered their biggest outflows in more than a year, as Investment Company Institute data shows an outflow of $10.09B in the week of July 27. Stock funds have been bleeding money for 14 weeks in a row, totaling more than $51B.

    Full of "gimmicks and questionable baselines," says Morgan’s David Greenlaw of the U.S. debt deal. He says his clients who have met with S&P analysts are convinced a credit downgrade of the U.S. is coming. 

    And so it begins:  Lawmakers friendly to the defense industry look to land on a special 12-member joint deficit reduction committee soon to be appointed by Congressional leaders. On the agenda to be discussed is a whopping $350B in defense spending cuts, with another $500B at risk as deficit reduction moves forward. - Whopping???  Out of $10Tn in planned spending over 10 years?  Are the friggin’ kidding?  

    It’s called "expansionary fiscal contraction," and its champions point to a string of cases where government austerity led to economic recovery. Critics say it only works when combined with devaluation – not currently available to the PIIGS, nor to the entire West at once. "We can’t all devalue together and export to Mars."

    On the other hand:  Inflation is the key to solving the debt crisis theorize a few economists willing to knock aside conventional dogma. Their offbeat – and almost certain to fail – ideas include: (1) convince a stingy Congress to print more money; (2) distribute $10K to every American directly to promote hyper-growth; (3) raise the target inflation rate set by the Fed. 

    Hedge fund titan Paul Singer delivers a 14K word "manifesto" against U.S. and EU policymakers. The Fed: "A group of inbred academics," who are distorting the price of just about everything. Europe: Germany can only write so many checks before "elected officials are dragged out of the Reichstag by voters, or until German credit is on the verge of collapse."

    Strapped states are cutting unemployment insurance, with several now sending payments for less than 26 weeks – "a threshold that had served as a standard for all 50 states for more than half a century." Indiana changes its formula for calculating payments, dropping the average check to $220 from $283/week. - Those must be the people Flips says are out charging up a storm!  

    House Majority Leader Eric Cantor says it’s time for Americans to "come to grips with the fact that promises have been made that frankly are not going to be kept for many," and young people must "adjust" to a future with fewer entitlements. Straight talk for a change, or a betrayal? 

    The Carnegie Endowment views the Russian economy as a mixed bag going into next year’s elections, with GDP growth and a healthy fiscal position offset by factors such as capital flight and a reliance on inventory accumulation. Reducing oil dependency and strengthening financial regulations are seen as critical issues facing the next President.

    As fears grow that U.S. economic weakness will hurt a Brazilian economy struggling with inflation and weakening exports, Brazil may have a "security blanket" in the form of China. Chinese demand for Brazilian commodities is likely to remain strong in the face of U.S. economic weakness, as is Chinese investment within the country. 

    Google’s (GOOG) Chief Legal Officer berates Apple (AAPL), Microsoft (MSFT), and Oracle (ORCL) for their litigiousapproach to dealing with Google and its Android partners, which he says is "driving up the price of patents … to insane levels." A look at InterDigital’s (IDCC +13.8%recent price movements makes it hard to argue. (more on IDCC)

    A look at the career paths of onetime Enron directors – many still in business, academia or serving on corporate boards – indicates that the former directors of Bear Stearns and Lehman Brothers may not have much to worry about, Steven Davidoff writes.

    Told you so!   MEMC Electronic Materials (WFR): EPS of $0.29 beats by $0.21. Revenue of 745.6M (+66% Y/Y) beats by 45.8M. Shares+8.7% AH. (PR).

    More on MEMC Electronics (WFR): Q2 results easily beat expectations. EPS tripled estimates as the company responded to a sharp slowdown in the solar wafer markets with aggressive cost-cutting measures. The company also says it’s acquired the U.S. subsidiary of solar-plant operator Fotowatio Renewable Ventures for $112M. Shares +4.4% AH.


  267. WFR sold off, got to do some digging on this one later..


  268. rustle—-I was looking at Dvara also—maybe I should check with your travel agent--i was looking at expedia--it would be nice to know someone else staying there


  269. rustle – 811 sq ft? You should let me stay with you. I was looking at a Best Western or something…


  270. stratdaddy--please see 9.04 am post today--non-refundable deposit of $150 via paypal
    e-mail
    savi_ted@hotmail.com


  271. There are smaller rooms that are still suites and have kitchenettes there for less.  Give me email and I’ll give you contact info so you can get cheaper rates and book it if you’d like.  The deluxe suite which is over 500 sq ft is less and the same or cheaper than Bellagio, Caesar’s, Mirage, Venetian, Planet Hollywood, Mandalay Bay, Wynn, and some others.  I’ve stayed I think about every hotel in Vegas, this Vdara is really nice.


  272. Im sure Bernanke will encourage some more QE3 talk tomorrow..
     
    Nikkei jumps more than 1 pct as yen falls on intervention


  273. sorry Vdara


  274. rustle—send info to savi_ted@hotmail.com
    thx


  275. Phil- actually any reduction in thr DOD is a “big reduction”, we arent used to getting our funding reduced. In that 335 billion is a provision drastically reducing our retirement benefits…. Well, they will reduce officers’ benefits greatly, enlisted members who dont serve 20 will actually benefit.

    Do you like the dollar here going into the jobs report, and Italy’s auction tomorrow? I’m tempted to go long here…


  276. Phil:  There are no accurate numbers that indicate who actually owns the U.S. corporations.  But you did not dispute that said corporations have a disproportionate influence on public policy.  That is a starting point, and a move away from "rich guys are ruining America,." a proposition for which there is a vanishingly small body of evidence.


  277. that auction is more set up than a cocktail waitress on an oil rig…you think they would even think of having it otherwise…jayzus its the end of western cilvilization as we know it…


  278. Phil,
     
    A while back I entered the following Sprint trade that was mentioned by you in a paper account.  I am curious to see what the adjustment is.  Here was the trade:
     
    Purchase S @ 5.95, sold the Jan 12 $6 calls ($.74) and puts (.86) @ $1.60 for net $4.40 / $5.20.
     
    I realize that there was a big event a few days ago, and were this a real account, I would have already asked.  That being said, the stock is now at $4.14.  If left to my own (and assuming that I wanted to stick with the stock long term), would this be an acceptable next step.
     
    Double down buying another 1x position (I would now own 200 shares of S) and buy back the Jan 12 puts and calls for about $2 selling 2x the Jan 13 $4 puts and calls for ~1.80×2=$3.60 for a net credit of $1.60.  This is where I get a little fuzzy on how to figure things.  I now have a 2x position at (4.40+4.14)/2 =$4.27 but, I also i have a net credit, so that would put the new lower basis at 4.27-1.60=$2.67, or?…..
     
    This should put the new basis at $2.67 / $3.35. 
     
    At a minimum, is all my math correct? :D .  I am still trying to figure out how rolling works.  This seems to be a decent adjustment, but I suspect that had I reacted immediately on the day they dropped, it could have been better.  Anyway, I will be very interested to see how this very out of whack trade might be adjusted.
     
    thanks in advance,
     
    Scot.


  279. Phil,
     
    It’s late, and it would appear some of my arithmetic might be slightly off (5.95-1.60 != 4.40, oops), but in general, I am asking if my math correct, even if the numbers are a little off.  Thanks again.


  280. yentervention.


  281. Benefits/Jrom – Those bastards!  So they will keep burning up the cash by handing it to defense contractors and outsourced military (those guys must really piss you off) while screwing the enlisted men – typical!  Dollar long was our plan (see below).

    Corporations/ZZ – They ARE rich guys.  They are owned and operated by rich guys for the benefit of more rich guys.  There’s an astonishingly huge body of evidence that will not go away no matter how many times you say it.  Who owns GS?  Rich guys.  Who invests in GS?  Rich guys.  Who runs GS?  Rich guys.  Who does GS take money from?  Rich guys.  OK, how about XOM?  Who owns XOM (see above study)?  Rich guys.  Who runs XOM?  Rich guys.  Who invests in XOM?  Rich guys.  Who does XOM take money from?  The public.  So, essay question – who is more evil, XOM or GS?  Sorry, it’s a trick question because GS manipulates the price of oil so both they and XOM end up screwing the public.  How about WMT?  Rich guys, rich guys, rich guys, public.  

    Here’s your model.  I own the Yankees (rich guy) and my investors are hedge funds and trusts and family money (rich guys) and my top 30 employees make an average of $5M each but I open up a pension plan so the other 1,000 employees, most of whom make $40,000 a year or less put 5% of their money into my stock.  Aren’t I just so selfless – I LET them buy $2,000,000 worth of my stock in a drip, all year long, whether it’s a good time or a bad time to buy while me and my insider friends carefully time our entries and exits.  After 40 years, my employees have accumulated $80M worth of my company stock – removing it from circulation and increasing the value of my $1Bn worth considerably.  Yep, I am just a friggin’ saint to the poor, aren’t I?  

    Meanwhile, when I want to condemn the neighborhood near the stadium where 50 of my employees live so I can build a brand new stadium (right next to the old one) using THEIR tax dollars to fund it – I get those permits rammed through and when they go to court to try to stop their homes from being torn down – my company’s lawyers (oh sorry, it’s OUR company, because they own stock too) run circles around them and we kick them out of the homes they’ve had for decades and don’t even give them enough money to live in the same neighborhood at the new prices.  I’m sure all those Yankee employees were just thrilled to know that their $25,000 worth of stock went up 20% thanks to their very valuable sacrifice while the owner made $200M.  

    Yankees stadium enters third year, Bronx ballfields still months off

     

    On Opening Day for the New York Yankees, the New York Times today takes a look at how the new ballfields on the site of the old Yankee Stadium are coming along … or not:

    Next to the stadium is a lingering eyesore — a protracted construction project that was supposed to have been transformed into three public ball fields months ahead of opening day. Instead, some coaches and neighborhood residents say, it remains a joyless Mudville…

    "We’ve gone five years now with no ball fields here," said Sean Sullivan, 55, the principal of All Hallows and a coach of its baseball team, which has spent five years scouring the city for home fields. ‘They took the parks away from my kids, and now our team is a bunch of gypsies."

    Yankees garages headed for default by April 1

     

    Last September, the New York Daily News’ Juan Gonzalez warned that the non-profit owner of the Yankees‘ new parking garages was nearing default on its bonds. And now, it looks like that time is at hand: Crain’s New York reports that "all signs point to a default" when Bronx Parking Development Co. is faced with a $6.8 million interest payment to bondholders on April 1.

    What would that mean? The way the bond deal was written, taxpayers won’t be on the hook for the bond payments, so they won’t be stuck with the entire $340 million garage construction cost, but rather face losing only $43 million worth of future rent payments if Bronx Parking goes under.

    That’s not good, but it’s far better than things would look for bondholders, whose only recourse would be to seize possession of a bunch of money-losing garages. River Avenue Blues notes that the garage operators are responding to as many as 800 cars a game opting for the $5 parking at the nearby Gateway Mall by hiking their own rates to $35 and up, which seems to betray a basic misunderstanding of microeconomics. Bronx Borough President Ruben Diaz Jr., meanwhile, wants to build a hotel nearby to help goose the parking numbers, but lord knows how much that would cost in city subsidies, or if it would even increase the number of cars by all that much, especially when there’s plenty of mass transit available at the stadium.

    What seems likely to happen at this point is that the bondholders take a large bath, city taxpayers take a small one, and the garages sit mostly empty until somebody realizes it’s time to admit they’re a sunk cost and lower rates to match those down the block. Or maybe the city could just buy the Gateway Mall and raise the parking rates there to reduce competition — it’s already shown a willingness to throw money at that project, so why stop now?

    Yanks to Brodsky: Stadium documents will cost you $5m

     

    The New York Yankees have a new defense against state assemblymember Richard Brodsky’s pursuit of documents related to their stadium deal with the city: a $5 million invoice. "If he wants the documents, the standard rule is he pays for them," team lawyer George Carpinello told state Supreme Court Justice John Egan Jr. yesterday. "That’s the law in New York. That’s the case law." Brodsky disagreed, and said the Mets managed to provide the requested documents without referring matters to the billing department.

     

    OK, back to the markets – looks like a little Yentervention tonight with the Yen up (down) 2.5% at 79 and they did it without knocking the Dollar up too far (74.58) so that’s good.  Futures holding steady, up about 0.4% from the close so we should get the gap up we expected in the morning AND they have fuel to move us higher as the Dollar is back up and can be taken down.  

    The Nikkei is loving it with a 220 point gain off the lows, back to 9.760, but only up 80 off yesterday’s official close. 

    Oil (/CL) is back down to $92.15 and still makes a nice bull play off $92.  Gasoline (/RB) is way down at $2.92 and a good upside play into the weekend.  Gold, amazingly, is still $1,670 and XLF hit goaaaaaaaaaaaaaaaaaaal at $14.50, which should be close to $22 on FAS!  


  282. S/Scott – The T/DT deal is pretty much scaring people out of S but our premise was they were likely to either be a takeover candidate themselves or the anti-trust folks would reign in Super-T and some of the scraps would go to Sprint.  SO, that hasn’t changed but the fear factor is extreme on the stock.  They actually posted a good Q with nice metrics.  Your $6 caller is toast at .10 so you buy those back.  You don’t DD, you sell more puts.  

    If you have 100 shares at $5.95 and you sold the Jan $6 puts and calls for $1.60, you are in for net $4.35/5.18.

    The stock is now $4.15 and you should already anticipate you are going to have 100 more shares put to you for an average of 400 at $5.18.  You buy back the calls (.10) and now you have 100 at net $4.25 and a pending assignment of 100 more at $6.  

    The Jan $6 puts are $1.95 and, rather than buy more stock, you can roll the puts to 2x the 2013 $4.50 puts at $1.10 ($2.20) for a .25 credit.  That drops your basis to 100 at net $4 and you have the possibility of being assigned 200 more at $4.50 for 300 at $4.34 avg.  S doesn’t pay a dividend so not much to be gained by owning the shares.  

    The problem with your math is you had 100 shares at $4.40/5.20 (close) and you bought back the puts and calls for $2 but you forgot to add it back to your basis as you were left with 100 at $6.40, not $4.40.  Add $6.40 to another 100 at $4.15 is 200 at $5.23 average and if you sell 2 puts and calls for $1.80, you drop the net to $3.43/3.72 – still not bad but you risk owning 400 at $3.72 ($1,488) vs 300 at $4.34 ($1,320) BUT I didn’t sell any calls.  

    If we sell the $4 calls for $1.05, we drop the basis to $2.95/3.99 so $1,197 for 300 worst case.  Obviously, I like the smaller commitment with more flexibility as you can wait a while to sell calls and, if S takes a big dip, you can still sell $4 calls AND 1x the $4 puts (now .78) for another $1 (est) to collect at least the same net $300 and then you’re back to possibly owning 400 at net $4 ($1,600).  Very little additional risk, much more flexibility.  


  283. I know DNDN is a favorite around here. Good to see I’m finally right about what a crap load of sh*t that company is.


  284. I don’t talk politics here much because I’d rather make money.  But, I seemed to have some time on my hands for a second.  Speaking of the back-n-forth concerning Carter.
     
    "…he was elected (Feb 1977) he proposed creating a cabinet level Department of Energy which was shot down by Reps in Congress." 
     
    Sure the Reps may have voted no but the Dems had control of both Congress AND the Senate in both 1977 and 1979.  So it’s the Reps fault that the 292 Dem Congressmen voted down the bill as well?
     
    "he worked hard to stabilize the middle east"
     
    Yet JC sent a letter to the Shah to remind him of the importance of political rights and freedom.  So what happened then?  The Shah proceeded to release 350 Islamic fundamentalist prisoners who later played part in the Islamic Revolution and the Hostage crises.
    He also did this in 1978.  His advisors recommend he tell the Shah that the U.S. would back him up AND recommended he talk to the revolutionaries to try and calm tensions.  JC did neither.  The aftermath is still felt and has showed in our ill relations with Iran along with countless lives lost in the ME.  
     
    "Much like Obama – Carter was handed a Republican-created disaster and before his chair was warm in the White House – he was blamed for it."
     
    Blamed by whom?  The Dem controlled Senate & Congress?  And much like Obama Carter could do nothing with total party control over the government.  Weak leadership and inability to build coalitions and relationships with even his own party was JC’s downfall in the end and it may be for BO as well.  And apparently it’s common knowledge that only Dem. presidents take over messes left by their predecessors. 
     
    "Hearing the commentary on this board – I understand why the Republicans think such blatantly obvious attempts to manufacture history would work – BECAUSE THEY DO – on their target audience, at least…"
     
    Kind of like when every Dem or left leaning person on this board decides to post something from the news or an interview, it is selected from a range of liberal media and is taken as fact.  Yet if something is said against this Presidency or the policies therein, those reports are taken as Rep. lunacy and a distortion of the truth.
     
    Well that’s my political thought for the day and like it was on PSW in the past which has somehow eluded the board in the present, it was written after the "trading day".  And no, I’m not a diehard Rep., the one-sided slant just becomes irksome and at the same time laughable, especially when trying to filter through the propaganda in order to find actual trader talk. 
     
    See you in the oil pits.


  285. /CL.  Looking for 91.50.  Will buy there.


  286. Tricky oil play DDay as the Dollar is 74.68 but it is tempting to go long after 3am if they leave the Yen alone.  

    As to the DOE, you are acting like the Dems failed to pass it but it did pass on 2nd attempt (August) so I guess that some mystery man build a coalition and reversed those 292 votes!  

    It’s interesting that you say that Carter did not back up the Shah as I’m sure that you know Papuashvili said:

    The two countries were really close to the extent that Jimmy Carter and the Shah together celebrated the new 1978 year in Teheran. The American President danced with Shah’s wife Farah and the Shah’s twin sister Princess Ashraf. William Sullivan, the then U.S. Ambassador in Iran, later recalled: “The President was in excellent mood. In his speech he said: ‘Under the Shah’s brilliant leadership Iran is an island of stability in one of the most troublesome regions of the world. There is no other state figure whom I could appreciate and like more.’”2 This was their last meeting. In spring Iran was hit by a revolution which altered the relations between the two countries beyond recognition. The revolution started because the policy the Shah was pursuing had failed to bring positive changes to Iran in general: only 10 percent of the population profited from it. While Teheran was a developed city by European standards the provinces remained crisis-ridden. The impoverished people turned to local Muslim clergy for consolation; the mosques became the places where the Muslims could always find compassion and advice.

    In late October and early November 1978, the anti-Shah movement intensified putting a military government on the agenda. The United States that were recommending political means rather than the use of force confirmed that the White House was prepared to accept the Shah’s judgment if he formed a military cabinet. Despite advice from all sides the Shah did not want to use force. He was convinced that it would be a prelude to permanent suppression of popular unrest preventing him from passing his throne to his son because after his death the people would sweep away his dynasty. His vacillations were partly explained by President Carter’s indecision: he wanted to support the Shah and had to observe the human rights principles. The objective factors, too, were against the Shah: in the last months of 1978 the world received contradictory information from Iran. There was no clear picture: sometimes the government’s positions seemed to be strong, at other times they looked shaky. In the course of anti-opposition struggle the Shah had set up a powerful repressive machine and the secret police; the prisons were packed, the nation was increasingly dissatisfied.

    Little by little the U.S. government was becoming convinced that contacts with the Shah’s opponents were desirable and that power should be switched to the opposition or, at least, moderate opposition involved in the government to lessen the radicals’ influence. President Carter feared that the Shah would interpret contacts with the opposition as a betrayal. Khomeini was inclined to talk to the United States: in one of his interviews to The Washington Post he openly said that there was no reason for the U.S. to fear the Shah’s abdication. Both sides—the United States and the opposition—wanted to preserve the Iranian army. Khomeini wanted to freely sell oil and to have American investments. But the top military split and this complicated the situation: some of the generals vowed to assassinate Khomeini as soon as he came back from Paris, others were knocking a delegation together to speak to him. The Shah was forced to start negotiations with Shahpur Bahtiar who represented moderate opposition. Washington approved though its embassy in Iran did not take the man seriously.

    Your ability to cut through all that and firmly place the blame on Jimmy Carter is truly astounding.  Please give me your link about the release of 350 Islamic fundamentalist prisoners as Google fails to find a reference and I love to learn new facts.

    I agree that, like Obama, Carter did squander full control of Congress but that’s the problem with Democrats, isn’t it.  They want to be FAIR and COMPROMISE so they dither about with legislation, trying to reach a consensus when they should just do what the Republicans do and tell the other side to go F themselves and slam through any asinine crap they want (see Bush, Bush, Bush, Bush and more Bush).  

    As to your last point – I don’t know if it’s common knowledge that only Democratic Presidents have to clean up the messes left by Republicans.  Let’s see, we had Hoover (Depression), then Roosevelt.  We had Ike (Vietnam) and they shot Kennedy before he could fix that and Johnson didn’t make the war better but the 60s sure were fun.  So much fun in fact, that we elected Nixon because he was funny.  Turned out not to be so funny and I hope there’s no need to list that mess and then we talked about Ford and the oil crisis and the inflation and the recession…  so we’ll skip to Reagan/Bush (First S&L crisis, recession) and then Clinton had to clean that up and then Bush 2 (2nd S&L crisis, much bigger recession, 10M jobs lost) and now Obama has to clean up that mess.  Come to think of it, I guess that is pretty common knowledge to anyone who thinks about it…

    OK, time to go watch some liberal media.  Should it be Redstones Viacom/CBS or GE/Comcast’s NBC or Murdoch/NWS Fox or Disney’s ABC?  So many independent choices it’s hard to know where to start…


  287. Phil,
    Re your remark that: "You guys won’t see me until 6 that day.  I’m not super-religious but I do fast and I don’t work that day.  I will be VERY hungry at dinner!"
    Far be it from me to volunteer unsolicited advice regarding your religious practices (you see, I’m not even asking if that dinner you’re planning on eating so hungrily is Kosher), but if you’re already going to the not inconsiderable sacrifice of fasting on Yom Kippur, it seems a shame to "blow it" during the last hour. Be advised that the fast doesn’t actually end until 6:53 PM in Las Vegas. See attached link:
    http://www.chabad.org/calendar/candleLighting.asp?c=285&tDate=10%2F8%2F2011&weeks=4
    Have an easy fast, and spiritually revitalizing Yom Kippur!


  288. Don’t forget we get some rate decisions in the morning from Europe and Britain. If JCT leaves rates alone…$ may jump…then sell off as usual.

    The ECB announces its rate decision at 1:45 p.m. in Frankfurt and President Jean-Claude Trichet holds a press conference 45 minutes later. The Bank of England will keep its key rate at 0.5 percent today, according to another survey of economists. That decision is due at noon in London.


  289. /CL.  Crap, missed my entry by .01 red cent and it cost me .50.  Oh well, it’ll be back.  I need to make up my losses yesterday evening caused by a wife’s "need" for a new car.  My speech to her about a vehicle is just a conveyance and doesn’t have to be bright and shiny fell on deaf ears.
     
    And Speaking of the DOE.  Our consumption of foreign oil was 35% of our total usage at the time of the DOE Grand Opening and is 60% today.  So much for their goal to reduce our dependence on foreign oil.  Bang up job boys, and thank you JC for starting the ball rolling.
     
    Interesting read.
    http://www.redorbit.com/news/politics/1819355/democratic_and_republican_presidents_have_had_similar_economic_records/
     
    My alma mater vs yours (you’re a UMass grad right?).  Holy Cross vs UMass Sept. 1st, football under the lights.  We’ll settle our dispute on the 50 yd line as a half time show.


  290. dday97 – I saw it just missed 91.50 and wondered how you managed. You’re hear every night just working /CL? What kind of site is redorbit?


  291. pakdog – slow night, haven’t traded anything yet.  I’m pretty disciplined in the lines I’m looking for entry.  It’s been jerking around in the 92.60 – 92.90 range for awhile so I’m in a holding pattern until I see a potential breakout.  Yes, I trade /CL pretty much exclusively but I will dabble in Gas/Silver/Gold when I see the opportunity.  I have nothing else to do in the middle of the night except busting Phils balls so what the hell.  
     
    redorbit is just a news site that sometimes has good interviews with academics. 


  292. And on that note, it’s workout & eggs time.  Be back in an hour or so.


  293. I’ve just started tuning in here late at night, trading at this time might suit me but the low volume is a concern. Don’t want to be the sucker at the poker table. Just using TOS funny money for now. The political talk here is great side benefit, and a good way to keep sharp. Gotta bring some game or Phil will swat that weak sh@t into the cheap seats.


  294. i’m out…


  295. @Felipe
    Talk about assumptions……
    "….. Do you use debit cards or credit cards? ….Debit card growth is from people who can no longer use credit cards." 
    Both, as do just about most everyone else on the planet.
    Yesterday I had a crown replaced, ran about $700.00 FRNs. I never carry more than $150.00 in FRNs. I Never carry a checking account balance for more than routine monthly bills. Looking at my bank statement, and my TD Ameritrade account, 90% of all my necessities and porn downloads is spent using my DEBIT card (cash).  The other, like the crown, is on a credit card, which I may or may not pay off upon receipt of the statement.
    But I guess that’s because I am a fiscal conservative, so I’m backwards.  
    I am not proclaiming some conservative victory by citing MA’s huge sales increase.  What I’m deducing from that is just a confirmation that I have observed of very little  panic, doom, and gloom that is supposedly affecting the middle classes, at least as I experience it here in Pittsburgh, San Diego,Toronto, New York, and Dallas all cities I have visited in the last year. The highways are busier than all get out at 5:30 a.m. with people hustling to work and just as jammed as ever at 5:00 when they head home.
    I don’t doubt for a minute that there is going to be a real catastrophe one day that we will never have seen the likes of in our lifeltimes but it ain’t happening now.  My Wife’s 401K is nearly where it was in 2007. I imagine she is not alone in that. 
    My signals may be mixed but I’ll ASSUME that my Debit card usage is the same as every other’s and NOT as you surmise that it is indicative of having maxed out their credit cards. It is their cash substitute, their own and not borrowed money.
    Funny how two people can look at the same data and draw completely opposite conclusions based on their propensity for deciding how things are that only conform to their confirmation bias.


  296. CL. In at 90.75. Leg 1


  297. Pak- 26,797 contracts have been traded. Low volume isn’t an issue most of the time. Just start in legging with 1 contract. I buy in groups of 2 or 4 to start and try to leg in 3-5 times until I have from 8-20 contracts depending on the flow & strength of trend. Then leg out the same way


  298. RIG down big today


  299. Good morning!

    Yentervention takes it’s toll as the BOJ couldn’t leave well enough alone and dumped the Yen all the way back to 80.22 at 6am.  That popped the Dollar to 75.16 and gave us a huge drop in the markets but that’s probably over now and we’ll see how much of that dip we can win back now.  

    Gotta like oil (/CL) over $91 and gasoline (/RB) over $2.90 but they keep costing us our stops as they head lower and lower.  It’s like a slot machine, we hope they will pay off one day…

    Dow (/YM) is our lowest index at 11,728 and I think a trip over 11,750 deserves a bullish bet.   11,700 would be a bad futures fail, as would 760 on the RUT (now 761.5) or 1,240 on the S&P (1,244).  

    Gold hanging tough at $1,667, silver $41.63 and copper took a big dive at $4.29.  Nat gas has inventories today and is just $4.10.  

    Dollar over 75 is bearish – very simple today.  Under should be bullish.  


  300. And good morning to you, Phil. I am on an Amtrak train headed for Washington D.C., to lobby the U.S. Senate on a little cause of mine. I don’t think I’ve actually ever met a politician. And may not today, I would think I’ll be handed off to some staff member. But if the good senator makes an appearance, is there an apparently innocuous but devilishly clever question I might ask for our collective benefit?


  301. Depends which Senator, they’re mostly on vacation until the 8th so I hope it’s a Democrat or there’s pretty much no chance they’ll be around.  I hope you have an appointment.  Lobbying without a lobbyist is frowned upon in DC as no one gets paid and my top question for a Senator right now is why the F they let the FAA funding expire on construction work in the middle of the summer that lays off 90,000 people.  Are they stupid or just heartless?  


  302. Hope everyone has their puts in place. Indexes are looking brutal.


  303. Phil
    AWESOME calls and commentary!!!!!…… on Japan’s intervention,  Former Fed. breaking the rules and speaking before FMOC meeting "QEEEEE", your 5% rule and charts, speaking the truth about how screwed anyone but those in the top percent economically are,…..THANK YOU!! 


  304. Good advice, Phil, I’ll see if I can find a lobbyist in the yellow pages. :)


  305. Phil/SSO: need your help on this SSO position:
    Buy 30 Aug $48 C @ $3.10,now $$1.02
    Sell 30 Aug. $50 C @ $1.87,now $.45
    Sell 30 P  Aug. $47 @$1.24 ,now $2.60
    Thanks