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Flip Flop Futures Thursday – What Next?

You got to be crazy, you gotta have a real need

You gotta sleep on your toes and when you’re on the street

You got to be able to pick out the easy meat with your eyes closed

And then moving in silently, down wind and out of sight

You gotta strike when the moment is right without thinking – Floyd

You have got to be crazy to play this market!  

Forget dogs – it was the early birds who made money this morning as I finally had a web connection at home and, as we expected due to the time changes, our usual 3am trade came late in the Futures as relentlessly bad news (see Member Chat for details) sank the indexes all the way back down to Tuesday’s close.  

We reviewed all the news, both good and bad and I decided it was worth taking a chance on some futures long plays at 3:48 in Member Chat, saying:

The RUT futures are holding 715 so I like a long there (/TF) with tight stops below. 

Nas Futures are holding 2,275 and I like a bullish play (/NQ) with tight stops on that line.  

Oil is at $91.37 and that may be the low but it’s gasoline we like to get bullish on into the weekend and gasoline (/RB) is down to $2.5999 so let’s go bullish there over $2.60 with tight stops.  

EU opens in 10 minutes and their futures are down 2.5% and I could be wrong but I think we’re being manipulated lower into the ECB meeting and the Merkozy statement on Greece. 

As you can see from the chart, that was pretty good timing and we stopped out 3 hours later, at 6:31 with the Russell at 733 (up $1,800 per contract), the Nasdaq at 2,330 (up $1,100 per contract) and Gasoline we set a stop on at $2.615 (up $630 per contract).  That was good enough to pay for our Egg McMuffins and we’re off to a fine start today but poor Europe had to watch that happen to their portfolios while most of you slept.  

The DAX, for example, gapped down about 150 points (2%) and is now up 100 points (1.5%) and we may whip back and forth another few times before the day is done as rumors fly around the ECB and EU meetings.   We have been moving back to cash in our White Christmas Portfolio (updated this morning with a 41% gain in our first two weeks!) as we’re almost at our $25,000 goal already and these markets are just TOO DAMNED CRAZY!  

SPY DAILYOur strategy of making a series of small, short-term plays that we take quickly off the table is just perfect for this market but our low-touch Income Portfolio is still looking good so I guess the best way to play this insanity is to either be super nimble and surf the daily ranges or just go play golf and ignore the whole thing – which is the strategy we play for our retirement portfolio.  That’s why the title of our last Income Portfolio review was "Don’t Just Do Something – Stand There!"  That was from October 15th and, as you can see from David Fry’s chart – our retired members didn’t miss anything by playing golf as we grind out more profits from the premiums we sold in our mellowest virtual portfolio.  

 With our September’s Dozen Portfolio winding down and the holidays fast approaching, I think it may be time for another round of Secret Santa’s Inflation Hedges.  I’ll work on that when I get back from my own vacation.  Last year’s batch is doing very well despite Dr. Bernanke’s claims that inflation is "under control."

XHB was our slow, 2013 play from that set and, as we expected, real estate isn’t recovering yet but there’s already a nice profit.  Our oil inflation hedge, XLE, is way in the money and looking good for a 733% gain on the year – keeping us nicely ahead of the Fed’s claim of 2.8% inflation!  Food is another form of inflation the Fed ignores and our DBA hedge was a simple short of the 2013 $25 puts at $1.90 and those are down to $1.15 already (up 39%) and right on track to pay for a year’s worth of groceries.  XLF, of course, has been a wild ride but looks good to make the full 150% potential this January, which soundly beats the interest they pay you for keeping it in the banks – congrats to all who played that one, as well as all of our bullish financial plays this year as I relentlessly pounded the table on that sector every time they got knocked back down to those lows. 

Even yesterday, while Bernanke was doing his Q&A session after the lame Fed Statement and even lamer statement by Uncle Ben – we went long on Financials again when Benny said the magic words

"We are prepared to do more and we have the tools to do more."

It was exactly what we hoped Ben would say and, at 2:50 in yesterday’s Member Chat, I said: "That should be enough for the bulls."  Our trade ideas to play off that statement at 2:52 were:

  • IWM weekly $73 puts can be sold for $1.35 with a stop at $1.50. 
  • IWM Nov $72/73 bull call spread is .60 and can be a 2:1 spread or nice 66% gain potential on it’s own.
  •  FAS Nov $12 puts can be sold for .75, Nov $12/14 bull call spread is $1.15 for net .40 on $2 spread.  

We were worried about them at 3am but fortunately, you can’t trade options at 3am (and, just as fortunately – you CAN trade Futures!) so it was a good exercise in "don’t just do something, stand there" and now the Futures are up 1% and all is well (8 am time-stamp in case we’re down 2% at 9 am).  As I said to Members yesterday – BALANCE is the key to trading this market.  You HAVE to have trades on both sides and you have to have enough faith in your ranges to take profits off the table on both sides – another point we hammer home in our White Christmas Portfolio, as we did with the $25,000 Portfolio before it.  

Bernanke’s comments “left little doubt that the Fed is still not satisfied with growth, not satisfied with its growth projections and included towards providing additional stimulus over the next several months,” said Ward McCarthy, chief financial economist at Jefferies & Co.


Bernanke indicated that the Fed was prepared to ease again if the economy was falling “sufficiently short of our objectives.”  “Unless the economy surprises us all and springs to life, further quantitative easing seems inevitable,” said Greg McBride, senior financial analyst at Bankrate.com.  Bernanke also called for assistance from Congress in helping boost job growth, stressing that the Fed has said in intends to hold rates close to zero until “at least” mid-2013.  In its policy statement, the Fed said that growth had strengthened somewhat in the third quarter but that “significant downside risks” remain.

8:30 Update:  Let’s keep those "significant downside risks" in mind today but, at the moment, the Futures are flying as the ECB cuts rates (as expected by us but, apparently, not by others, who are freaking out) while our Jobless Claims came in-line at 397,000 lay-offs for the week.  

That’s not particularly good news for the markets as it strengthens the Dollar but, as I always tell you, a terrified worker is a productive worker and US wage slaves cranked productivity up ANOTHER 3.1% in Q3 while taking a 2.4% pay cut and THAT is something for the Capitalists to celebrate as we get ready to crack the whip in Q4!

As we learned by watching Gone With The Wind and the Ten Commandments, nothing makes the people at the top richer than not paying the people at the bottom.  That’s how we manage to get the Global economy to the point where 29.7M people (0.5% of the population) have 38.5% of the World’s Wealth ($89.1Tn) while the next 8.2% (369M people) have another 43.6% of it ($100.6Tn) leaving just $41.1Bn for the other 4.1Bn adults and even they can’t divide it equitably as the bottom 3Bn get just 3.3% of the wealth while the 1Bn people above them take 14.5% (4x).  

As I said on BNN last week, we are the 99.9% and even within the top 0.5% (see last week’s chart) there is great disparity but the bottom line is we draw a cut-off on this chart at over $1M and if we were to take just 10% of that $1M+ from the top 29M people, we could DOUBLE the lifestyle of the bottom 3,000,000,000, who have less than $10,000.  

That means, in simple terms, that we can HALVE their starvation, HALVE their infant death rate, DOUBLE their EDUCATION, DOUBLE their health care, DOUBLE the amount of clothing and shelter they can afford. And versus what? We have to make due with just the one vacation home? We suffer with imitation leather couches or (gasp!) fabric. We buy a $95 bottle of wine instead of a $100 bottle?  

As Bill Gates said in his own interview last week: "Once you get beyond a Million Dollars, it’s still the same hamburger."  Gates is one of the many top 1%’ers that is answering our call to support raising taxes on incomes over $1M per year.  In fact, a new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.   

You wouldn’t know it from CNBC, who had Sam Zell on as their "special guest" today and it was a full hour of how the Government sucks at everything and he should pay less taxes and poor people have their hands out – you know, the same crap we get on CNBC 24/7 as if it’s the majority opinion – because that’s what they are paid to tell you by the 32% of the top .05% who want to pretend they are in the majority.  The reason it’s funny when Zell says it is because he looks like he answered a casting call for Scrooge -  "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner."

We are the 99.9% and we’re not buying this BS anymore!  

 


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  1. This is crazy indeed, I wake up a 4:30 and check the market on my iPad and futures are down 100 points. Go back to sleep and they are up 50 points. It’s just unreal now. How does the little guy make any money in this market! 


  2. Oil Lines

    R3 – 96
    R2 – 94.9
    R1 – 93.36
    PP – 92.25
    S1 – 90.71
    S2 – 89.6
    S3 – 88.06

    Yesterdays’ high and low – 93.79 / 91.14

    Breakout lines – 98.07 / 84.20 


  3. "How does the little guy make any money in this market!"
     
    Wrong question! It should be: How do  the market makers make  money from the little guy? And then it all makes sense.


  4. Indeed Jmm, indeed…. 


  5. Good morning Phil
    Should we short USO again?


  6. PP for today:

     

     

    On another note, MDVN prostate cancer treatment meets goals, stock soars. 


  7.  Phil
    I do not currently have a futures account, so have not been able to take advantage of your occasional 3 a.m. recommendations.  Can you please suggest where to open a futures a/c.   Thanks


  8. Another nail in the coffin of DNDN, as pills will trounce anything IF the pill is = to or superior to treatment (DNDN type, injections, IV given, etc.).  JNJ and MDVN will have an edge.


  9. That didn’t take long:

    http://ftalphaville.ft.com/blog/2011/11/03/725081/ecb-cuts-rates-25bps/

    And Trichet just left yesterday…. Merkel can’t be too happy about that I am sure.


  10. Pharm / GILD and CELG – do u like these at current levels?  Thx.


  11. Phil/USO, I take it we are just waiting on the Nov 35 puts? Thanks


  12. Easy Street
    "Bernanke indicated that the Fed was prepared to ease…"
     
    It seems to me that this is a rather clever tactic, to threaten to ease without actually doing it, thus acting as a deterrent to shorting the market lest that triggers QE3.
     
    Interesting theory that Papandreou took a bung from shorts to throw the referendum wrench in the works. But he IS a natural born American, fully qualified for the White House, so surely that makes him incorruptible. Of course, he could be CIA too.


  13. GILD/CELG terr – I would try to pick them up under $40 & $60 respectively.  Maybe sell some puts OTM to pick up premium and if put to you 10% off of where they are now, then sure.  I would do 1/4 entries.


  14. Phil
    Thanks for the EDZ hedge from yesterday….I am covered if Greece leaves the EU today OR what ever happens.  Getting better at balancing as you instruct.  Also making a good bunch today off your weekly suggestions yesterday for IWM.  Have a terrific vacation! 


  15. AA Money Recap

    Long strangle:

    Jan 13 12.5 calls – $1.27 now $1.50
    Jan 13  7.5 puts – $1.04 now $0.86

    Short:

    Weekly 10 calls – $1.48 now $0.87 (41%)
    November 11 puts – $0.85 now 0.52 (38%)


  16. Wow, reading about AMRN….they are screwed.  Patent protection is a must in Pharma, sounds like they will not get it, or the patent will be so watered down, that actual protection will be minimal. 


  17. Phil—-thank you so much for giving me Scott’s name at TOS—- he was so helpful and a pleasure to deal with
    Have a wonderful trip
    Btw I was able to get in on the /RB trade and made some $—-snooze you lose on the others—-once again merci


  18. Productivity & Labor costs – So I guess we have 50 million people too many, plus or minus 25 million or so.  What a crazy world this is. 


  19. Phil – It is entertaining when angry billionaires take to the airwaves to bitch and moan, but after watching that little curmudgeon Sam Zell, I feel the need to grab a bar of Irish Spring and take a shower…..


  20. Pharm,
    What is your take on IMUC now. They are getting buzz about their ICT -107 vaccine. 
    http://seekingalpha.com/article/303953-immunocellular-s-ict-107-touted-as-a-stand-out-therapeutic-vaccine
    I still own the stock and was wondering if I should wait for the fireworks…
    TIA


  21. wouldn’t be suprised if we see the overnight lows at ES 1215 again, pretty soon.


  22. We are getting there in a hurry Pentax! 


  23. Good morning!  

    I hope people are selling into the excitement – how many times do you have to see it to understand why we only have two rules and that’s both of them?  

    It’s all about holding the Must Holds today.  I’ll be heading to the airport this afternoon and, of course we have Non-Farm Payrolls tomorrow morning and those are big market movers so Cashy and Cautious remains the plan – as you can see from the White Christmas Portfolio Update (see comment section or Morning Alert for updates) - you don’t need to leave money on the table to do very well in this market and you DON’T need to make one-sided bets either.  

    We play both sides but not randomly, we pick strong stocks when the market is weak and weak stocks when the market is strong.  Take DECK, for example – down 1% this morning despite the pop at the open.  I stand by my $110 target on those because that’s what the FUNDAMENTALS tell me.  

    As I said earlier this morning, we were down at 11,650 on the Dow in the futures and now 11,950 at the open and pulling back and maybe we’ll test 11,700 again because these markets are getting yanked back and forth by Dollar action which has become totally unhinged from the reality of being the basis of $300Tn worth of Global assets (2/3) and moves up and down 1-2% a day – as if something some Greek Finance Minister says is worth $3-6Tn…

    At the moment, the Dollar is rocketing back to 77.50 as the EU rate cut knocks the Euro down below $1.37 and you know the BOJ is pushing the Yen off the 77.80 line (now back over 78) and the Pound was soundly rejected at $1.60 yet again as EVERYONE tries to manipulate everyone else’s currency in this prelude to hyperinflation we will fondly recall as "the good old days of market stability" in a few years.  

    Still, overall the news is good and what Bernanke said is great so I’m still pretty bullish but still VERY cautious, especially into the weekend.  

    EDZ is still the best hedge against a Global meltdown and you can play the Dec $19/25 bull call spread at $1.30 and that can be offset with the sale of CHL Jan $45 puts at $1 for net .30 on the $6 spread or the now silly-low RIMM Nov $18 puts that can be sold for $1 or the Dec $17.50 puts that can be sold for $1.75 to make a credit spread with a net entry on RIMM at $17.15.  

    ISM numbers were not good and I still like my USO puts (Nov $35 puts are .90) as well as DIA Nov $116 puts at $2.  Let’s do 10 of the DIA puts in the WCP with a stop at $1.75


  24. The dollar was at 77.66 when we made the lows of the night in the futures. We just made 77.58.

    On the other hand, over the 2 weeks, 1230/1231 has acted as support and resistance in the S&P futures.


  25.  china sov cds +11%, euribor-ois exploding +13 bps to 99 bps…new cycle high
    we are setting up for a qe3 begging window


  26. IMUC – we bought into them a while ago and got out on a pop.  I need to refresh my memory on them.  I would hold, but not add.


  27. Why even bother picking stocks or starting a hedge fund. This is where the money is:

    The winning bidder is expected to pay owner Frank McCourt in excess of $1 billion for the team, its stadium and the surrounding parking lots….All summer and into the fall, McCourt — who purchased the Dodgers for $421 million in 2004 — sought to maintain control of his team by taking it into bankruptcy.

    That’s 12% a year and this guys keep on complaining about greedy players and the fact that they keep on losing money. And let’s not forget that in many cases they get tax breaks from the local governments. Let’s get together and bid on them… 


  28. STJ, I wouldn’t mind watching the game from the owners box…..


  29. Crazy/StJ – You just have to embrace the hit and run trading and enjoy the madness – it’s like watching a multi-car pile-up in progress – it’s chaos but if you are a cold bastard, you can watch the carnage with detachment and bet on the next car that will get smashed up with pretty good accuracy…  

    Good point JMM!  

    USO/Celest – Yep, don’t wait for me to tell you those kind of things, $94 was the top of our range and a great place to jump back in.  

    Futures/Kermir – I love the way TOS does futures.  For me it’s very easy to control and straightforward with good tracking screens.  

    Dollar rejected at 77.50 so far – maybe we turn back up or maybe consolidating for big drop – hard to say.  

    USO/Jomp – Not sure what $35 puts you mean but, if you still have some, I’d hold them for now, probably over the weekend unless you have a profit, in which case why risk a weekend? 

    Corruption/JMM – You could not have done anything worse than what Papandreou did to screw things up.  He’s either incredibly stupid or he knew exactly what would happen and didn’t care, which makes little sense unless he had some incentive to tank the Global markets.  Hey, maybe he put Greeces GDP into Futures shorts and now he’s going to announce they just made $1Tn overnight and don’t need a bailout.  

    Thanks Russell! 

    AA Money/StJ – We’re going to want to roll those weekly calls (now .72) to the next weekly $10s (now .82) for .10 or better.  With a $2.31 basis on the long end, we’re totally fine with making .10 per week (about 200% a year) on each side!  

    I know – it’s sooooo boring making money like this, isn’t it?

    Good morning!  

    I hope people are selling into the excitement – how many times do you have to see it to understand why we only have two rules and that’s both of them?  

    It’s all about holding the Must Holds today.  I’ll be heading to the airport this afternoon and, of course we have Non-Farm Payrolls tomorrow morning and those are big market movers so Cashy and Cautious remains the plan – as you can see from the White Christmas Portfolio Update (see comment section or Morning Alert for updates) - you don’t need to leave money on the table to do very well in this market and you DON’T need to make one-sided bets either.  

    We play both sides but not randomly, we pick strong stocks when the market is weak and weak stocks when the market is strong.  Take DECK, for example – down 1% this morning despite the pop at the open.  I stand by my $110 target on those because that’s what the FUNDAMENTALS tell me.  

    As I said earlier this morning, we were down at 11,650 on the Dow in the futures and now 11,950 at the open and pulling back and maybe we’ll test 11,700 again because these markets are getting yanked back and forth by Dollar action which has become totally unhinged from the reality of being the basis of $300Tn worth of Global assets (2/3) and moves up and down 1-2% a day – as if something some Greek Finance Minister says is worth $3-6Tn…

    At the moment, the Dollar is rocketing back to 77.50 as the EU rate cut knocks the Euro down below $1.37 and you know the BOJ is pushing the Yen off the 77.80 line (now back over 78) and the Pound was soundly rejected at $1.60 yet again as EVERYONE tries to manipulate everyone else’s currency in this prelude to hyperinflation we will fondly recall as "the good old days of market stability" in a few years.  

    Still, overall the news is good and what Bernanke said is great so I’m still pretty bullish but still VERY cautious, especially into the weekend.  

    EDZ is still the best hedge against a Global meltdown and you can play the Dec $19/25 bull call spread at $1.30 and that can be offset with the sale of CHL Jan $45 puts at $1 for net .30 on the $6 spread or the now silly-low RIMM Nov $18 puts that can be sold for $1 or the Dec $17.50 puts that can be sold for $1.75 to make a credit spread with a net entry on RIMM at $17.15.  

    ISM numbers were not good and I still like my USO puts (Nov $35 puts are .90) as well as DIA Nov $116 puts at $2.  Let’s do 10 of the DIA puts in the WCP with a stop at $1.75

    Scott/Savi – Oh great, I’m very glad for you, thanks!  

    Too many/JC – So many of our problems could be solved by moving to a 4-day work-week.  

    Zell/1020 – I know!  I wanted to throttle the little troll.  You could play that segment in Zuccatti park and they’d have another 100,000 people there by the weekend ready to riot.  

    1,230 bounce on the nose StJ – we’ll watch that line closely as it tied in with 77.50 on the Dollar and 720 on the RUT and 11,800 on Dow Futures (which are about 55 points below the Dow average, indicating negative sentiment for the Q).  

    Interest/Angel – They can’t stop the inflation.  Every time they try to stamp it out, it pops up somewhere else.  

    Dodgers/StJ – Well, it may occur to someone that they aren’t worth $1Bn.  The salaries are out of control.  If I were the MLB – I’d let the Yankees ($202M/yr), the Phillies ($172M) and the Sox ($161M) buy up all the expensive players and then write them out of the schedule.  The Kansas City Royals field a team for $36M and the Rangers spent $92M to get to game 7 of the World series – it’s just nonsense.  Same as CEO salaries – things are simply unrealistic because there are people at the top of society who literally don’t know the value of a dollar (and, in fact, wouldn’t bend over to pick one up.  

    Woops, Dollar plunged back to 77.17 REAL FAST – so much for DIA puts but I don’t want to chase bullish positions here – better to wait for clarity as the EU closes.  


  30. I tried to get a bunch of people together to buy the Red Sox in 2002 with the intention of taking them public for about $700M, which included Fenway Park, which was worth $300M alone in my opinion and also 80% of the New England Sports Network.  Unfortunately, so soon after 9/11, it was hard to get a group together and then we were given a very hard time by MLB, who didn’t want an LLC to buy a team as it would set a bad precedent,. which was total BS as it was a trust that was selling the team in the first place.  The whole thing was a mess and the AG’s office ending up investigating the matter.

    Dollar smacked down to 77.07 and we’re almost back to the pre-market highs.   Europe all fixed again (bailout referendum scrapped), in case anyone’s keeping score.  Euro back at $1.377, Pound over $1.60, Yen below 78, oil back to $94 and good for a re-entry and gold $1,768.  TLT coming down nicely…


  31. AA Money – OK, rolling the calls to next week’s 10 Calls. Based on what I see now, might be tough to get $0.10, but we’ll try. Not much volume or OI either right now.

    And I like a boring 200% as much as anyone! 


  32. AA Money – Got my $0.10 roll. Bought back for $0.80 and sold for $0.90. I have to say that I found it better (if not more risky) to leg in with TOS as they seem to have trouble handling a straight roll. 


  33. Phil:
    Is this uptick in USO just because of the dollar drop or do you think it has anything to do with the re-hashed story below making the rounds again?
    http://news.sky.com/home/world-news/article/16101552


  34. QQQ TOMORROW $57 puts at .35 are a fun way to play for a reverse here.  


  35. S1 for the dollar is at 77 so we have to be careful going gangbuster bullish now! 


  36. AA Money Recap

    Long strangle:

    Jan 13 12.5 calls – $1.27 now $1.47
    Jan 13  7.5 puts – $1.04 now $0.82

    Short:

    Next Weekly 10 calls – $0.90
    November 11 puts – $0.85 now 0.54 (36%)


  37. And now back to the Italian problem:

    http://ftalphaville.ft.com/blog/2011/11/03/725091/approaching-the-italian-endgame/

    I guess the news cycle never ends. 


  38. Israel attacks Iran/DC – LOL – How many times can they run that thing?  This is what Barnum meant when he said there’s a sucker born every minute, you can run the same con over and over again and there’s always a new bunch of people who will believe it.  Well, it’s our job NOT to be the suckers and to bet against them.  

    Dollar bounced off 77 again – let’s see what happens next…

    We’re so balanced in the WCP I can’t find anything to adjust into the weekend.

    AA Money/StJ – Yes, they take ages to fill but, in the up and down gyrations, they usually do.  Always better if you leg it but, of course, a bit riskier.  So now we sold $1.75 worth of puts and calls for Nov and all we need to do is finish between $10 and $11 an we collect .75 in premium against our $2.31 long (32% in a month). 

    Italy/StJ – Oh yeah, I remember that crisis!  That was so Tuesday morning though…


  39. Phil/ANR
     
    Thanks for the advice on the ANR bull call spreads last week. When the stock popped $3 (12%) this morning, those 20 call spreads looked very nice indeed. Now if DECK can just dive a little…


  40. Phil – the Iran thing is legit….


  41. jromeha, got a link?


  42. David Frum makes the argument that Germany profited the most from the euro:

    http://theweek.com/bullpen/column/220985/pay-up-germany/1

    And should not feel bad about having to help now…

    Imagine a world in which Europe had proceeded with economic unification, but did not create the euro.

    In such a world, as in our world, goods and workers would move freely from Warsaw to Lisbon. Europe’s internal investment barriers would have largely vanished.

    What then?

    In such a world, Germany as the most productive economy would have begun to rack up large trade surpluses. As those surpluses accumulated, the value of the Deutsche Mark would have appreciated against Europe’s other currencies. The cost of doing business in Germany would rise relative to, say, the Czech Republic or Slovenia. Investors would shift their operations out of Germany. Jobs would be created outside Germany and destroyed inside Germany.

    The poorer European countries would face a very different environment in our non-euro world.

    Investors worried about currency risk would charge significantly higher interest rates to countries like Greece. More expensive credit would have constrained their ability to run budget deficits.

    Now back to the real world.

    By folding all of Europe’s currencies into the euro, Germany prevented its neighbors from reducing their costs — thus enhancing German exports and preserving German jobs. [...]

    But the less competitive countries did get something out of the euro: Lower interest rates. The currency arrangement that enabled Germany to sell more enabled Greece, Italy, Spain, and France to borrow more.

    It would be nice to get some feedback from our German members!


  43. Phil AA some how I hold the weekly 11 call sold for .43 now .07 looking to run to worthless tomorrow . selling the 11 call for next week brings me .25 cents selling the 10caller would be .90 cents but but only 8 cents premium do you expect the stock to fall near 10$ or should I stick to the 11 caller ?


  44. AA Money / Phil – Like I did for FAS Money, I’ll recap our moves every couple of weeks as a learning tool. 

    I still think that this week we missed a move on Tuesday when we opened drastically lower and we had a 74% win on the 10 calls. It’s water under the bridge now, but still $0.40 lost. It happened a couple of times with FAS and we have a lot more time on AA and no risk of reset (and we’ll make our 200%), but would it make sense to buy back short options when we have 70% on hand (better than 100% in the bush) with 3 days to go in the weeklies (and no roll available for the next week). I mean Tuesday was the poster child for excitement! Oh well…


  45. NFLX back in favor – good for our short puts. 

    DEC still not really getting much interest on a green day. 

    You’re welcome JMM! 

    Iran/Jrom – It’s always legit, they do it every other week and they have been for the past decade or longer.  

    Germany/StJ – They understand that, that’s why they voted something like 600 to 60 in favor of the EFSF – the Germans are thrilled with the EU, no matter how much they complain about it (they would be more thrilled if they got to call all the shots instead of having to pretend someone else is in charge).  

    11:00 AM On the hour: Dow +0.94%. 10-yr -0.25%. Euro +0.11%vs. dollar. Crude +1.32% to $93.73. Gold +1.77% to $1760.25.

    October ISM Non-Manufacturing Index: 52.9 vs. 53.5 expected and 53 prior (>50 denotes expansion). Prices index declined to 57.1 from 61.9. Employment rose to 53.3 from 48.7. New orders fell to 52.4 from 56.5. Business activity declined to 53.8 from 57.1. 

    Sept. Factory Orders: +0.3% ($453.5B) vs. consensus -0.2%, +0.1% in August (revised). Ex-transport +1.3%, shipments +0.3%, inventories +0.1%.

    The Bloomberg Consumer Comfort Index fell to its lowest level since Q1 of 2009 as it a punched out a reading of -53.2 for the week ending Oct. 30. A whopping 95% of the respondents surveyed had a negative opinion about the economy. - If I could make this flash I would!!!

    Stocks and the euro are doing the "V’ thing on an AP report that the Greece bailout referendum has been scrapped. Anyone following the news for the last several hours has alreadyknown this, but with the EU crisis again solved, markets are bursting higher. 

    More U.S. retailers report disappointing sales in October, as Macy’s (M -0.6%) sales rose a weaker-than-expected 2.2% and JC Penney (JCP +1.2%) sales fell an unexpected 2.6%. Teen shops such as Hot Topic (HOTT -10.4%) and Wet Seal (WTSLA -17.1%) trimmed outlooks after sales declined. Among 17 retailers that have reported October sales results, ~80% missed.

    Black Friday deal experts say the hype generated by midnight sales from retailers such as WMTMTGT, and KSS is just that…hype. "Stores seem to be just pushing the early envelope to create an urgency, hoping people will buy early before realizing they’ve spent too much," notes one insider. A better deal? Online sellers including Amazon (AMZN -0.2%) and BestBuy.com (BBY -0.6%) are coming in with nifty free shipping offers that may cut into the big numbers brick-and-mortar retailers hope to post.

    Paul Krugman writes that the Fed is failing to honor its dual mandate of price stability and full employment by "proposing doing…nothing" in response to the forecast for three years of high unemployment. He appears to be another convert - joining Goldman Sachs’ Jan Hatzius – to the economics camp that believes GDP targeting is the best option for the Fed.

    Freddie Mac reports the average 30-year fixed mortgage fell to a flat 4%, while the 15-year variety shed 7 points and now stands at 3.31%. Chief economist Frank Nothaft says to thank Greece for lower house payments: "Market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates."

    Spain sells €4.5B of 3 and 5 year paper, with the 5 year priced to yield 4.85% vs. 4.49% at last month’s auction. In the secondary market, Spanish yields rose sharply along with Italy and France, but have since fallen right back amidst rumored ECB purchases.  - So the average US homeowner can borrow money 20% more cheaply than Spain?  

    The collapse of MF Global can be traced back to the myththat Goldman Sachs (GS) produces the best risk takers, according to industry buzz. The mantra at MF Global: "Ratchet up the risk. Let us Goldman guys fix this." Ex-employees say Jon Corzine’s cozy relationship with risk traces back to his Goldman days. The man himself on risk: "You can’t achieve the kinds of returns we want just by buying on the bid and selling on the offer." 

    Vitaliy Katsenelson says Hewlett-Packard (HPQ) is the "world’s most hated stock," so does that mean it’s time to buy? H-P is either no. 1 or very strong in every business in which it competes, and most of its formerly dysfunctional board has been replaced. And the current price discounts a 10% decline in free cash flows over the next 10 years, "an unlikely scenario."

    Tesla Motors (TSLA +7.3%) gains after reporting a less-than-expected loss for Q3. Revenue jumped 85% Y/Y on a 22% increase in sales of its Tesla Roadster, pushing total sales for the car above 2K for the year. Separately, BofA Merrill Lynch ups its price target on the stock to $36.

    InterActiveCorp (IACI +7.5%) surges after reporting Q3 revenue of $516.9M (+25% Y/Y) and EPS of $0.69, beating consensus by $23.3M and $0.16, and declaring its first quarterly dividend ($0.12/share). "I think it’s an outdated and somewhat inane concept that high-growth companies shouldn’t pay dividends," asserts CEO Barry Diller.

    Travel bookings site Orbitz (OWW +16.6%) rallies after posting Q3 revenue of $202.9M (+4% Y/Y) and EPS of $0.15, beating consensus by $4.6M and $0.09. With shares still down 60% YTD on account of market share losses to PCLN and EXPE, investors aren’t bothered by the company’s Q4 revenue guidance of $170M-$174M, which is below a $178.4M consensus. (.pdf)

    CRASH!  Abercrombie & Fitch (ANF -21.7%) shares slide afterreporting Q3 sales in line at $1.07B and citing unfavorable comps outside the U.S. While the teen retailer posted a 7% gain in same-store sales, an acceleration in the U.S. was hurt by slowing sales in Europe, including negative sales in its flagship stores there. Japan and Canada sales also were negative.

    Syms (SYMS) shares surged 27% yesterday and are up another 3% today, after declaring bankruptcy. Huh? Turns out the company is worth more dead than alive; it believes the proceeds from liquidating its $236M in assets, which far exceeds its $94M debt load, will pay creditors in full and provide recovery to shareholders.

    Shares of Wet Seal (WTSLA) fall off a cliff, declining 16.6%after the firm reports comparable store sales fell off 9.7% in October. The year-to-year comparable suffered after the company eliminated Halloween merchandise in order to expand fall sportswear. After the tough month, the firm now sees Q3 EPS falling in at $0.04, below its prior guidance of $0.05-$0.06.

    Is VMware (VMW) at risk of becoming the Netflix of the enterprise world? A recent survey of virtualization users found 38% planning to change their primary virtualization platform over the 12 months, with cost cited as a reason 59% of the time. It’s already been speculated that a backlash to a recent change in VMware’s pricing model could give rivals MSFT and CTXS a lift. (also

    Dendreon (DNDN -27.6%) "risks fading into irrelevancy" following the unexpected rise in Provenge’s costs and admission that sales of the prostate cancer therapy are slowing. Dendreon will not survive long with a 10% gross margin, or as cancer consultant Michael Becker quips: "Dear Dendreon, ‘We lose a dollar on every sale but make it up on volume’ is not a viable business model."


  46. Who predicted this one last Christmas?  RealD (RLD) continues to plummet, now down over -21%after saying late yesteday that Samsung Electronics had withdrawnfrom an agreement to manufacturer TV panels using its technology.

    Yay, more toys!  Apple (AAPL -0.3%) will "completely overhaul" its product lineup next year, including desktops and laptops and iOS devices, DigiTimes reports, citing anonymous sources in the "supply chain." For starters, Apple is planning an upgrade of the iPad 2 that may ship this quarter, to be followed by an iPad 3 model in Q3 2012. 


  47. AA – i bought back on Tuesday but then i (too hastily) followed the advice given to Willie to sell Nov calls, so i will miss this coming week trade. Guess since i have nothing to do till then i will take a cruise. Phil, you got a vacant couch?


  48. USO – I’ve got 10 (WCP?) Nov 35 Ps – entry was .89.  I elected to sit (based on watching relevant chat since purchase) and removed my modest stop.  I stil like this play – unless you say I’m nutty, PD – so I’m going to add another 1/2x, cost down and see where we are tomorrow or thru weekend.  


  49. Good morning,  it’s raining in paradise !!!

     

    IWM   71.33,  71.87,  72.56,  72.96,  73.51,  74.04,  74.59,  and  75.37


  50. Gmarts- no link, I’m just a lowly DOD member and hear stuff from friends…. Plus, this is how the build up went before Iraq… Whether it be Iran’s ‘plot’ to assassinate the Saudi diplomat or their pursuit of nuclear weapons…

    Phil- will you have an Xmas buy/sell list in Dec? My all expenses paid year long vacay to Iran’s eastern neighbor is rapidly approaching and I definitely won’t be able to manage my acct daily…


  51. Phil, it’s my understanding that, by Greece accepting an EU bailout, the greeks would then have EU bureaucrats in Athens, dictating where money could be spent.
     
    Wouldn’t that be akin to China looking over our shoulders here in the US?


  52. I have to wonder if the Nas is spiking just trying to get rid of our $57 puts, now .24.  It jumped way higher than the other indexes and yes, I still like that play although now the $58 puts are getting very appealing at .67 so worth a roll for .40 to make net .78 and then a planned DD at .42 for a .60 avg.

    So for the WCP, let’s pick up 10 of the $58 puts at .67 ($670) and plan to DD at .53 for a .60 average entry on 20 ($1,200).  

    That economic data (Retail Sales, ISM, Consumer Comfort) is just NOT GOOD.  Unless NFP is better than 120K tomorrow, I don’t see how we sustain this move into the weekend no matter how fixed Europe is.  

    AA/Yodi – As I mentioned above, we play not to care so we just sell $1.75 worth of puts and calls and we make money between $9.25 and $11.75.  If you are just selling calls, it’s wise to give yourself a little cushion.  

    AA Money/StJ – Did you know on Tuesday that we wouldn’t go lower?  I though the point was NOT to make so many trades as we did with FAS Money?  I can go either way but we need to decide what we’re trying to accomplish.  

    Couch/Morx – It’s a suite so I imagine so.  8)  

    USO/NF – Those came off the table on the last dip but I like them again, now .70.  The 20th is contract rollover so things should get interesting into expiration.  I would not be quick to add as you can roll up to the $36 puts for .36 so you can pick up $1 in position on ALL of your puts for less than you will spend to reduce the basis of the $35s by 6 cents.  

    Good morning JRW!  Think we’re topping? 


  53.  JRW,  Mahalo for the lines today.  Was at Mauna Kea last week (Big I) Don’t worry about the rain , the sun is probably not even up


  54. Pharmboy,
    I short MDVN @ 38 . What’s the fair price to cover?


  55. Barry got some ammo on the corporate tax avoidance – the greatest scandal of our times…

    http://www.ritholtz.com/blog/2011/11/tax-avoidance-on-the-rise/ 


  56. AA Money / Phil – True, I don’t want to day trade the positions, but at the same time, there are some days just crying to make us move like a 300 point down day. And we are not stopping people from making the trade if they want to as Morx did and jump back in when we do. In any case, 65 more weeks to make the money… On to next week!


  57. jmm1951 / threat — "It seems to me that this is a rather clever tactic, to threaten to ease without actually doing it, thus acting as a deterrent to shorting the market lest that triggers QE3".
     
     
    Greenspan was a master at that tactic. The front runners win either way unless the QE isn’t enough to get back to the entry point.


  58.  USO/Roll-to-36 – Nice.  Learning.  Like that a lot.  


  59. What do the dates 1826, 1843, 1860, 1894 and 1932 have in common? They’re all years when the Greeks defaulted on their debts in the last two centuries. Greece has been in default for approximately 50% of the time since it gained independence. The Greeks aren’t even particularly remarkable with this track record. Over the same period Venezuela and Ecuador have each defaulted ten times.

                                              

    There’s little appetite for austerity or reform in Greece, a country where civil servants can retire at 49, and so reluctant to modernize that on the deaths of those civil servants, their pension can be left to any unmarried daughters. It’s obviously mad to put serious money from still relatively solvent countries behind a rescue plan that would require greek cooperation. The Euro area may well be dodging a bullet with this referendum, which is apparently unlikely to be held much before Christmas, so the period of uncertainty about this is likely to last a while.


  60.  Yo Phil! You mentioned a retirement portfolio? What does it consist of and what time frame are we looking at holding the trades. I know STJ did a good piece recently using the 200 day SMA as a basis for holding stock or ETF’s.
    I’m looking at setting up a trading plan that would use the IWM as a buy write for a portion of my portfolio that would enter the market on short term trend confirmation and hold the position for a few days to a max of two weeks or whenever I get a sell setup. What are your thoughts?


  61.  Phil,
    What is your current opinion on Best Buy? I have sold JAN 12 $29 Puts after rolling down several times.


  62. Phil AA I am playing puts and calls just for info


  63. Newbie-to-Newbie/Deciphering – From one rook to any others:  tho I’ve found it rare that a trade reco is unclear, in addition to understanding the "mindset" that gives rise to the reco, I’ve found the easiest additional way to confirm you’re reading it right is to just match-up $ in the reco with what you see in the option chain.  I know – duh – but if its 10x Dec ABC at .35 – better to check the context and do the math.  Or you can ask, Phil – at your peril.  And remember, every time you do ask, be sure to say something very positive about NFLX – he digs that.  lol.


  64. Why is it the banks are all red, and the market is up 0.8%?  If the EU kicks Greece out, they lose.   Merkel said that it was their job to save the Euro, not necessarily Greece.  The PM of Greece must be very rich by now, as he can time the markets and have it yanked around like a yo yo.


  65. Timing / l4real  - I am finally completing a follow through article on backtesting the method over the last few years with various instruments. It’s taking me longer than I thought because I need to dig for some numbers manually and also I got busier with my real job. I am hoping to finish this weekend. And then I need to backtest the other method…


  66. MDVN – if you are up on the shorts, I would get out.  The stock is very manipulated by hedge funds….of course, which one is not, but MDVN is the antithesis of manipulation.  (Antithesis – a Greek word!)


  67.  Good info! Thanks STJ


  68. Our economic policies might be related to this:

    27c2c88a-97dd-49e5-8756-d059fb8cd4eb


  69. does anybody know why TRGT December calls are so expensive?


  70. Phil- Are we keeping the IWM bull-call spread into the bad news tomorrow?


  71. Good morning from the NV desert. The Greek PM appears to be saying “Never mind!” about the Greek referendum. So now what? Is this a slow burn relief rally? Agamemnon appeared less confused.


  72. Pharmboy
     
    If today is Greek themed, more like the epitome of manipulation.


  73.  JRW, If you are in Maui, one of the best snorkleing areas on the island happens to be at the beach near Black Rock.
    The snorkleing is better there than many of the paid excursions in my opinion. There is usually free or low cost parking within 1/8th of a mile and you can walk along the pathway past the shops, Hula Grill, Marriott and Sheraton to reach the good part of the beach, where you can put on the gear and walk in and start snorkleing. It’s also kid friendly, so the little ones can safely follow or be towed on an inner tube or raft with relative ease!
     
    Thanks for the IWM lines and enjoy!


  74. Phil / Topping

    No, I think "they" will take us to +/- 1257 on SPX  this move  (buy the rumor) !!


  75. @JRW III
    Presumably they couldn’t have defaulted if some entity wasn’t lending money to them.
    Who are these entities and what is it that they know that keeps them lending to a confirmed deadbeat country?  Have they all lost all their money in each of the 5 times that they have believed that Lucy would not yank away the football?


  76. Iran/Jrom – Well it would be funny to go to war with Iran on shaky intelligence so Obama can tell the voters we can’t switch horses in the middle of a war.  I would be disgusted but would also laugh my ass off.  

    Greece/1020 – They don’t hate the EU, just Germans.  

    Gotta love Barry, he gets all the good data!  

    LOL JRW – Great pic.  

    Retirement/L4 – That’s what the Income Portfolio is.  I started it when my Dad died and I realized what poor returns my Mom and her friends were getting from regular investment accounts.  The goal was to take $500K and make $4,000 a month to live on without digging into the principal.   The way this market trades, no single strategy is going to work – it’s just not, so don’t fool yourself.  I think anything where you say "I intend to do this one thing for a long period of time" is very dangerous.  CASH is the best strategy and put some money into diversified longs that you intend to build up to over time (as the market becomes, hopefully, less uncertain) and then take a little of the cash to play with shorter-term.   The key to a buy/write is you don’t believe the thing you are buying will drop more than 40% or, if it does, you will be willing to hold it for a few years while we ride out a collapse.  Is that how you feel about IWM or are you just gambling?  

    BBY/Kevin – I think they have a serious problem as everything they sell gets cheaper all the time.  They are brilliant at combating it by selling services and insurance with everything but the Retail numbers we’re seeing today make them a pretty scary thing to hold.  Watch that 200 dma at $28.50, if they fail that – the party is over.  

    AA/Yodi – Then I like the way we’re playing them in the AA Money.  

    Good advice, NF!  Did you see that news item this morning on VMW – that they risk becoming the Netflix of the enterprise World.   LOL – NFLX is already being used as the prime example of a company that flames out!  

    Banks/Pharm – Some will get burned on a full default and, since we don’t know who – all are suspect.  

    Good chart StJ!  

    TRG/Lol – Probably a study due at that time.  

    IWM/SellP – I don’t call every trade you know.  If it’s not for a portfolio, don’t expect me to call and exit.  Plus I’ll be away tomorrow and this afternoon so use common sense.  The weekly $73 puts are down to .45 with IWM at $74.15 so can IWM drop $1.60 (2%) tomorrow and wreck the trade?  That’s the basis on which you have to base your decision.  Is it worth the risk when they are already up .90 (66%) with just 33% more to gain – not at all the same trade we entered yesterday.  On the Nov bull call spread – again, IWM is $1.15 in the money and the spread was .60 and is just .68 now but if you take the short puts off the table for a .90 profit then the 2 long spreads (assuming you did that entry) are net .15 each and currently at .68 so if you set a stop at .45 (.15 trailing) it’s still a nice win you can take a chance on.  

    Never mind/ZZ – That’s because Merkozy said "If you don’t play, we don’t pay" – end of story there.  

    12 more points/JRW – Well I think we can ride that out if that’s it.  

    Lucy/Flips – But Ricky always gave her more money for those crazy schemes.  


  77. Agree with l4real on Black Rock on Ka’anapali beach, Almost always turtles and eagle rays there. It’s also a great shallow shore dive if you scuba, there are 2 scuba shops right on the beach, Trilogy Sports and the shack at the Sheraton.


  78. Amazon continues to think long term via content versus short term selling of devices. They just gave Prime members another freebie: access to a lending library with thousands of titles and 1 free read a month. I think that alone pays for the prime membership fee, not even considering you already get free 2 day shipping (and reduced rates for 1 day shipping) plus access to their video library.


  79. NFLX $87.50 puts at $1.85 are a fun momentum play with a stop at $1.50.  


  80. Look at that move in JEF.  JR, I must throw out a referendum on today. I think they take us even. I think the top is in for the day.


  81. TGRT – I posted on them Yesterday.  Data are due out anytime for their depression drug….which worked in Phase 2b trials.  We are in the Feb 20/25 bull call spread.


  82. Flips / Losing money

    Why do people invest in airline stocks ??



  83. L4 – Used to live on Ohukai St., Kihei, still miss my cherry mango tree, Aloha!


  84. Well, I guess that just solved that referendum……


  85. Phil- with regards to Iran attempting to acquire nuclear weapons, it is a fact. The potential for an Israeli strike is the main reason i dont short oil futures anymore and stick to USO puts. If we were going to invade anyone in 2003, it should’ve been them. That being said, I will be leaving the armed forces if/when we invade Iran… 17 months overseas is enough for me, especially now they I have a young daughter…


  86. Closing in on IWM 74.59; be ready to take profit !!  74.28 would be a stop (if you use them)


  87. NFLX – Really? A mini momo-bull reco? I wasn’t going to admit – partially based on a simple positive comment (from Phil) earlier – that this morn I played the 80-85 nov w bull put spread for tomorrow – just to see if I could get that $.57 real quick. And you went out a couple weeks to 87.50? What happened – you read that boomers don’t get streaming and are gonna need those mailed DVDs (as do the studios) for another 10 years? Love ya, man.


  88. Phil
    What do you think of doing this spread on SCCO?  No rush to respond.
    Sell put SCCO NOV 19 strike $31 at about $0.25
    Buy put SCCO Nov 19 strike $26 at about $1.00
    For approx. $0.75 net?


  89. NFLX – Oops! Reading chain AFTER my comment: you got that price for tomorrow’s 87.50? Brass, baby, that’s brass.


  90. NFLX – One final: really the only reason I but the lower strike is to free up margin on the 80-85. Cost a nickel.


  91. Phil
    SORRY…..
    Phil

    What do you think of doing this spread on SCCO?  No rush to respond.
    Sell put SCCO NOV 19 strike $26 at about $0.25
    Buy put SCCO Nov 19 strike $31 at about $1.00
    For approx. $0.75 net?


  92. /DX bounced nicely off of 77.


  93. You would think market would be up more with no referendum considering this is what caused an almost 600 point fall.


  94. rustle123

    The choice is referendum or revolution !!


  95.  Anyone doing the GSVC play for GRPN IPO?


  96.  Phil,
     
    As usual, good info regarding the "Income Portfolio". I need to look at it closer to determine the risk management aspect and see if I can utilize some of the reco’s. 
    And for the record "Ta Da!" I’m sitting on a "Boat load" of cash earning a whopping .1% ! Nothing to brag about!
    I’m also about 2% invested long term and use approx 1.75% for ultra short term trading.
    And I agree with you 100% about not staying in this market for any extended period of time! But as I look at the charts, I see that if you stay within the short term trend and manage the risk, the returns are better. 
    As far as the IWM long position is concerned, my thoughts are to use the otm calls as a way to minimize the minor retracements in route to a 6% to 8% profit during the short term uptrends and go to cash as the trend flatlines or reverses. Losses will be kept small. I still need to determine if the cost of the otm calls are worth the expense within the trading timeframe.


  97. JR/Paradise
     
    Where you at?
     
    Nice photo….it sure is nice having a government that is considerate enough to fulfill everyone’s sexual needs!!!


  98. AMZN/Kwan – I guess they must get a lot more business out of Prime customers so they are just incentifying people to join any way they can.  I know I often think – why get up and go to the store when I can have it shipped for free in 2 days?  

    Jobs/Rustle – What the bottom 99% need is a PR firm/Think Tank that makes it clear to those 1 in 500 that they make MORE MONEY when more people are employed.  That is true for most of the "job creating" class.  

    Airlines/JRW – That’s on Buffett’s "no way" list.  

    Dollar 77.005.

    Iran/Jrom – Yes, it’s always a fact though.  Nothing new.  You could also say "Sun Running out of Fuel" every week and probably get the "peak solar" crowd all excited and that too, would be absolutely true.  I don’t see this administration going to war without provocation but if Perry gets in – you’d better quit before the day he’s sworn in because, the day after, they will be telling you to pack your bags again.  

    QQQs hit our DD target and we’re still shy of JRW’s S&P goal.   Volume at 1pm is 72M on the Dow – light – and we know what happens when we rally on light volume, right?  

    76.94!  


  99. Wow, 77 didn’t offer much resistance the second time ’round.


  100. TNA & TZA are in lockstep w/ FXE, with just enough time delay to turn me into JRW. It’s been going all week, sure fun while it lasts!


  101. exec,

    Staying with freinds on the north shore of O’ahu !!  Heading back to California on Saturday  8-)


  102. From
    Reuters

    "Jefferies has a lot of short-term debt so it’s vulnerable to be taken down."

    First MF, then JEF, then MS.  This is gonna get very fuggly.


  103. Phil – do you recommend a stop on the qqq puts?


  104. SCCO/Russell – So it’s a Nov $26/31 bull put spread where you risk losing $4.25 to make .75?  What do you think I think of it?  They moved .90 TODAY and you are giving them 15 more days to burn you if we head south.  I like the company and I think copper may go up but if you like them, then why not buy 4 $30/31 bull call spreads for .75 and sell the Dec $32 puts for $2.60 for a free trade on $4 if they hold $31?   At least that way, your worst case is you own them at net $31.80, which is the current price.  

    NFLX/NF – They just looked toppy and I think the market is toppy and I’m pretty sure that was the last push with the "official" announcement that Greece is fixed – again.  

    SCCO/Russell – Well that’s the exact opposite.  I think SCCO is a good company and I think copper is cheap and, if they Euro pops and the Dollar drops you lose .75.  Why bother selling a put for .25 when all it does is trap you in the trade?  Also, the spreads are too wide to get out of easily – always look at that before getting involved in something you are not positive you will hold through expiration.  

    76.90!   Not getting a big pop off it though…  

    Long-term/L4 – Someone asked if I will make a new portfolio and please remind me when I get back and I will put something together for bargain shoppers.  I think being 95% cash is too much – you have no inflation hedge.  Surely there must be something you would buy if it were cheap like MO at net $18.75 (now $27.28)?  If so you can sell 10 2013 $20 puts for $1.25 and put $1,250 in your pocket for a year against about $2K in margin but even if you had to hold out 50% ($10), that’s still 12.5% back on your money – surely you can’t hate stocks that much that you can’t find a few of those to put 10-20% of your money to use?  On IWM, as long as you are exercising loss control it’s not too terrible but it’s very volatile and not for the feint of heart.  

    76.88 – 76.815 was the morning low that gave us a top (and we’re not there yet on the S&P or the RUT but the Qs and the Dow are over their pre-market highs despite the devastating retail reports.  Just a bit strange to me…


  105.  Zeroxzero,
     
    Good points on the TNA, TZA, FXE correlation! 
    Also agree on Black Rock, it’s a great location! 


  106. Had a nice 100+% gain from a member on here with CF Nov200C…Thanks for the heads up!


  107.  NFLX – I’m a dips**t.  Guess your stop was a clue – and you’re savvy – that you weren’t shorting the 87.50 tomorrow.  D’oh!  K – I’m back to more paying attention, less commenting on the fly.  I would agree they seem "toppy" – that’s why I thought a short P was brassy and, obviously, out of character.  I’m gonna go buy that puppy P too.  If market falls even a bit, I can;t see them hitting and holding 87.50.  Thanks for he reco.


  108. QQQ/WCP, GBor –  In the WCP, we are in 20 at net .60 so a 20% stop would be .48 and they are now .55.  If we can get 1/2 out for a small profit today (.65-70) then I’d be happy to let the other 10 ride over night at net .50 or less but, of course, they will decay very quickly tomorrow morning so you have a pretty high risk on the overnight.  So, bottom line is we take the $240 loss at .48 if we have to and we’re simply wrong in guessing we topped out.  Of course, if we’re wrong and the market heads higher, we have $800 coming to us on the FAS short puts and $120 on the NFLX short puts so not to terrible overall. 

    Congrats Sage! 

    I would not jump out of shorts until the Dollar falls below 76.80.  


  109. RVBD – Any thoughts?  I’m long the stock.  Up about 6% after 6 weeks.   Was thinking about selling on the 3+% bump today – and-or just selling a tight set of cover calls to let it get called away. Why?  I don’t know them that well – the recos I’ve read tho are good.  And it seems absent (my-other) enthusiasm, it’s a good one to convert to cash.  No rush.


  110. Here we go, Alert from the economist:  

    China’s looming slowdown

    It can be hard to decipher the economic data coming out of China at the moment. Some recent indicators suggest that Asia’s economic juggernaut is still doing well, while others say a downturn has begun. But while both bulls and bears can justify their views, we believe that China’s overall outlook is darkening. The property market is showing signs of distress, and various factors could make it tricky for the authorities to cut interest rates or loosen credit. We think Chinese growth will slow to just over 8% next year.


  111. Sorry, I guess that was restricted material.  Try this


  112. Prepare to take profit here; or at least moving stops up to IWM  74.55  !!

    Target appears to be 74.86, then 75.15.


  113. the dollar mover must have heard you. :(


  114. RIG taken out to the woodshed.


  115. RVBD/NF – Good niche player but priced for what may be unrealistic growth.  I sure wouldn’t hold them unhedged.  

    This is why you don’t set hard stops, a stop is really the place at which you force yourself to re-evaluate and make a new decision…  Now we need to see the Dollar move back over 77 as easily as we failed it or it’s time to cut losses on bear trades – that goes for WCP too.  I’ve got to get ready to go but I do expect profit-taking into the close ahead of NFP at 8:30 tomorrow.  


  116. ARRY on the march.  Since our entry (DD) at $2, one should be even or slightly down.  Get ready to sell 1/2 for even as it has reached stiff OH resistance.


  117. Now buying TZA, as Phil said, FXE falling.


  118. SPY finally hitting resistance right at the 200 dma of the chart in the main post ($126.51) so there’s the line in the sand for the Bears.  


  119.  Phil,
     
    As far as the income portfolio is concerned, do you recommend any entries at this point or is it best to wait?
     
    Thanks


  120. Greek Gov’t Bond Yield….230%


  121. Greek Bon/Pharm – WOW! How do i buy?!


  122. And out. Gotta hit the road, Bon chance, tutti!


  123. SPY 126.51?? did you mean 125.61?


  124.  I’ve got it!  Issue each Greek family $100,000 in Greek bonds.  This will align everyones interests!  


  125. Phil,
    I bought some 205 AMZN puts for Nov exp and am under water 50% now. What are your thoughts on AMZN and how would you suggest exiting with the least pain in terms of either rolling or just getting out completely?
     
    Thanks


  126. Phil
     
    Just getting into the AA trade.  Yesterday you said to sell the weekly 11 strike but earlier you recommeded rolling to the 10 strike.  Is one better than the other.  I bought the jan 13 longs. will wait for your answer.


  127.  Pharm, Nice yield on those Greek Bonds!  Is there a way to hedge them? LOL!


  128. Think we get a stick today?


  129.  Greek Bonds / Pharm – They better pay 230% as they price in a 50% haircut. Better make sure you collect your monthly coupon on these!


  130. Stick / Willsons – A stick on top of a stick? More chances of a broken stick now! 


  131.  I was being facectious.  


  132. OK – Now I’m going to Disney! 

    Income Portfolio/L4 – When I get back, I’ll do an update review prior to expirations.  Like last time, I will identify entries, if any, that are still attractive.  

    230%/Pharm – OK, at this point I have to say I’m interested in buying Greek debt.  $10,000 at 230% compounded for 10 years = $1.5M - I’d say that’s a reasonable risk/reward ratio!   Of course, unfortunately for Greece – do that with the $500Bn they need to borrow and they are fooked.  

    Good solution Peedle – Let’s get you out to that EU meeting pronto!  How about if Greece borrows $500Bn of it’s own debt for a year and collects the 230% interest and uses it to pay everyone off?  

    AMZN/Gingbaum – Welcome!  You’re lucky there’s still 50% left.  I sure wouldn’t bet against AMZN into the holidays, you can get some stunning numbers out of them.  So I wouldn’t roll, I’d take the loss, read our Wiki and Strategy section and learn not to buy premium like a carnival rube.  Then the lesson will be worthwhile!  8)  

    AMZN/Willie – Not the same thing, I think I said you could sell the Nov $11 puts and calls, that is different than the current trade where we’re rolling existing $10 calls.  Don’t blindly follow trades – think about what it is we are trying to accomplish.  

    Stick/Willsons – We’re up very nicely already, would be a waste of a stick, I think.  

    OK guys – gotta go – should be on no problem tomorrow morning. 

     

  133. TASR flying past huge $5 support today on new orders by law enforcement distributors.  I hope some of the 99%ers got some TASR shares, so that  if you get zapped, at least thats money in your pocket.


  134. "support" = "resistance"


  135.  Wait Phil!
    Are we holding out shorts overnight?


  136. looks like there are plenty of sticks to go around and they dont mind wasting one


  137. PHIL/CHINA much worse than suspected by most…hey oil cos need oil over 100 what better way to get it done thannn a few bombs lobbed..talk about th eoil LOBBy


  138.  Phil,
     
    That’s great info on the MO puts!  And you are right. I should be at least 10%-20% invested.
    Part of my aversion and skittishness is from having been 100% invested in stocks during the 2008 meltdown and watching my portfolio quickly drop an astounding 50%!  It’s a sobering experience!
    The portfolio subsequently recovered during the 2009 rebound, but then to add insult to injury, we had the May, 06, 2010 "Flash Crash" at lunchtime, where the market loses close to 1000 points in minutes  and recovers, while i’m watching, completely dumfounded with a partially eaten chili and beef burrito in my hand with no logical explanation from regulators who were supposed to be on top of that kind of crap!
    At that point, I said "F**k This!  If the SEC and other regulatory types have no explanation for this type of sudden market movement other than lame excuses that rival what the government use to tell people when they saw UFO’s,
    " It was the planet Venus"." You probably saw some swamp gas or a weather baloon!" "A rougue Trader with a big order"
    I cannot leave all of my hard earned dough on the table with the possibility of it being wiped out because of
    "Market Shenanigans"!
    I appreciate your site because there is a diversity of opinion and various styles of trading and investing with the bottom line being that of managing risk and making decent profits!


  139. JRW – how are you positioned right now buddy?


  140. lflantheman - where is AAPL going to pin tomorrow, I’ve got a 400/405 weekly, trying to decide whether to keep or close 8) .


  141. what a crock of sh!t, where is my anti-stick!?


  142. mrmocha….AAPL.   Are you crazy?    No, just kidding.   It’s this market that’s crazy, and AAPL just goes along for the crazy ride.  I , for once, have no idea where AAPL will be at EOD tomorrow.   I just sit on my  AAPL long-term bull call spreads and my short-term put sales and wait this craziness out.    


  143. samaras saying paps is a liar..has to resign at once and snap elcetion in 6 weeks…gosh these are my people…more ouzo!!


  144. mrmocha….If you have any profit right now on that AAPL weekly, I’d sell it.


  145. Light volume….ha!  Easier to push up.


  146. IWM  75.15 !!!!!!!!!!

                                

    And another 9% day !!  (could have been more, but I didn’t wake up in time for the early morning TZA play)  Smiley


  147. 9% day/JRW – you make a very compelling case to learn/adopt your program!!  :-)


  148.  Someone help!
     
    Did Phil want us out of shorts if they took out that 126 and change… which they have


  149. Peedlew – remember Rule #2 "when in doubt, sell half"


  150. peedle, I think that was for the QQQ puts, I think he still believes in the USO puts, which are still behaving O.K.


  151.  gotcha,  thx


  152. Programs, get your programs here !!   Smiley


  153.  I’m net long… but getting tired of throwing money away on being so F’ing hedged


  154. Phil—how do you respond to a guy who sends you this to read…???
    http://www.nationalreview.com/articles/282040/who-are-these-fat-cat-few-top-victor-davis-hanson


  155.  Hey guys, I am having trouble acting on my hedges. At this point I have NOV  DIA 116 PUTS and 114PUTS (10 total) which are 50% negative. I made money on the long side but the puts are cutting into my profits noticeably. What is a good way to ‘fix’ these up? I can take the loss and still be positive but somehow that does not seem to be the right thing to do.


  156.  So,  Staying short on USO overnight, huh?  Any opinions?


  157. 1) After the ump-teenth time not breaking 90 playing golf, I’m giving up the damn sport and instead printing out JRW’s strategy and learning what the heck he’s talking about!  (Although giving up golf is easy since I’m moving to Nicaragua where there aren’t any courses in 9 days)
     
    2) TASR.  I think Phil recommended the following TASR position a while back.  I have it in my port:
    Buy 2000 stock at $5, sell 20 of the Jun12-5put, sell 20 of the Jun12-5 call for $1.20.


  158. JRW - you didn’t post a single trade today, next time share with your friends please 8).


  159.  94 has been a good place to sell oil for the last week or so…  


  160. Phils premise on USO was that there are a large number of contracts for delivery that need to be wittled down before NOV expiration


  161. lflan / AAPL - Very crafty!  You know that I’m the consumate anti-trader and make stocks go opposite, so by telling me to get out you know AAPL will get to 405 tomorrow for you.  Muhahahaha. 8) I did get out, actually, so 405 here we come…


  162. dmoroz….how about covering all of your puts with Nov 113 puts?.    Then you still have some hedge but won’t lose so much if the market continues upward.


  163.  dmoroz,
     
    That’s the bitch of hedging.  Sure cuts into the satisfaction of the winners!


  164. Smiley broken? 8)


  165. Works sometimes, other times no.  Need a smiley button on the toolbar…


  166. Peedle – USO staying ON.  I have sold 1/2 next weeks 35 against the Nov 35s, and will roll up and out on the next push.  Employment tomorrow will be telling, and everything is seasonal hiring and less wages….go figure. 


  167. mrmocha re JRW 3:56 post.  Oops!   I think you are right.  JRW didn’t share!   I will not share any more Halloween candy with HIM!      :)


  168. mrmocha / Trades
     

    I teach you how to fish; I don’t get paid to serve fish here !!  Smiley
     


  169.  JRW,
     
    You have a great system!  I am still learning and seem to have a good grasp on the bulk of your concepts!
    I had a decent day using your system but find that one my faults is not staying in the trade long enough to maximize my gains!
    I know you posted
    " Don’t own the position, if if moves against you and the indicators would have you in the opposite ETF,  you’re wrong, exit"
    Doing my after trade analysis, I find that I am entering a bit later than you when you post, which is not too bad as the trade still makes a profit! It means I need more work on recognizing the entry and exit setups!
    What concerns me most is my after trade analysis shows me exiting the position on minor retracements in price, for example, I exited this morning on a TNA Long setup that moved against me .0004% of the trade size for a small loss, but 5 bars later the position would have a small profit!
    Another example are the two TNA setups I traded today. Both were profitable, but both were exited to soon with the trend still intact.
    Do you have a percentage that you use in addtion to the system indicators to exit a trade and how much deviation do you tolerate while in the trend?
    And BTW, I like the "Mission Accomplished" Pic!


  170. JRW – i always preferred the fire analogy to the fishing one.  What’s the fire analogy you ask :D .
     
    BUILD a man a fire and you will keep him warm for a day.  SET a man on fire, and you will keep him warm for the rest of his life.
     
    We are all just waiting to be set on fire ;)   of course, there is no cool emoticon for that, but, we live in an imperfect world.



  171. 14real,

    The purpose of my daily line post is to give you potential turning points; you should be ready at all of them !!

    I will also exit on a break (convincingly) of the 3 minute chart 8-9 EMA detailed here:

    The setup that will probably be the most help to you is my 3 minute conformation chart, as my 1 minute has proprietary software. Basic settings are 2 day, 3 min, candlestick chart of IWM (I never watch TZA or TNA). Overlay TBT on the chart and add pivots, 40 and 200 SMA’s, Bollinger Bands, an 8 or 9 EMA and my daily confluence lines. In sub-screen 1: MACD,Stoch/RSI14momentum and Signal line. In sub-screen 2: Volume.
    This will give you good results by simply changing position based on a breaking engulfing candle followed by another engulfing candle on the new side of the EMA. You will be late on entry and exits as compared to the one minute chart, but you will have fewer false entries !!
    Also, understand that I have 6 screens and am  always watching dollar futures, Weiss Order Flow, and a myriad of other contributing factors as mentioned here.
    I would highly recommend paper trading until you are comfortable with the system !!

    Good hunting !!


  172.  Scotbraze,
     
    Funny analogy about using fire versus JRW using fish!  I’m not so sure i’m down with being set on fire for life!
    It reminds me of Richard Pryor describing his "Free Base" incident, where he attempted to smoke it and immediately caught fire because of ether!
    He described this on stage by lighting a match and moving the flame quickly to his right and said to the audience
    "This was me, running down the street on fire" He also said that what pissed him off the most  about the experience was not the fact that he was on fire and no one offered help him, but the fact that the bum he ran past insisted that he stop and stand still long enough to light his cigarette!


  173.  Thanks JRW! That is very helpful!
     


  174.  Double top shaping up?  Or the Santa rally we all want?  


  175. JR/O’ahu
     
    Nice…..the wife and I are heading that way in January.


  176.  There’s really nothing better than a market rally with a high VIX….  PLEASE MANIPULATORS!


  177. exec / O’ahu

    Just a nice stop-over on the way home !!


  178. Hi,
    How do you know whether a stock will be pinned to a particular price on the expiration day? Do you look at the open interest across the strike prices on both side and the volume or is it something on the technical charts?
    Thanks.


  179. Whenever I go to the local grocery store, I reckon that at least 50% of the people in front of me at the check out pay with food stamps, and also that at least 50% buy lottery tickets. Often there is an overlap in these Venn circles. Since the Greeks don’t like paying taxes, maybe they should just have to buy mandatory lottery tickets with all retsina, ouzo, beer, cigarettes, worry beads, and gasoline purchases. I think the budget gap would soon be filled.


  180. pat_swap – Frequently stocks get pinned at prices that cause the most pain to option buyers (due to manipulation).
     
    Try one of these two sites to find MaxPain:
     
    Option Pain Calculator
     
    Strike Pegger


  181. Phil,
     
    I know you aren’t going to like this…..but I think he might be right.


  182. exec are you serious, should we also be thankful for the unwanted antibiotics which come with our mass produced food?…Please!
    Corporations need to be just as thankful for the consumers without them they are nothing. What those people are protesting are the lobbyist that allow those corporations to poison our food and change public policy to help themselves not the people for which they are elected by…people not corporations;which really are not people much to the surprise of our esteemed members of the Supreme Court.


  183.  The extremist majority on the Supreme Court is nothing but a branch of the extremist Republican party.  I have no respect whatsoever for the Supreme Court – that’s what the next protests should be about.


  184. anybody on here use the "all about Trends" tab for trade ideas?  Does a subscription come with being a premium member of PSW? Thx


  185. i am a liberal but you guys are just as one sided as the gop shills…this is the problem there is no moderation of opinion its like that idiot steel worker guy talking about taking over bridges and shit today..when guys making 400gs a year start inciting violence it becomes a playground for someone like robespierre to emerge..and we all know the middle class is getting banged..so where are we going form here..mayem? anarchists delight?..i pray everyday a leader emerges..but then i realize we are the problem..sad…at least we have ways of making a living…i hope all of you are rememebering your soup kitchens and the homeless this holiday season..maybe we should all give a days trading profits to a charity that actually will filter it down to the needy… this is a  particularly rough time of year for the needy..this would be alot better than all of us frothing about shit we are at an arms length from..imagine how much we could give..cripe if jrw has a million dollar account he’s making about 1.6bil a year..lets all give..100 bucks to 10k..we can do it!!..we can name our group something non political that says helping all those who need it..i am in..savi you are an organizer supreme..and i know we have a couple of labor cats on the site who may know where we can best help..LETS GO..put our passion to a real test!


  186. angel – Just because someone expresses an opinion doesn’t make them "one-sided".  Most of us on this site, including the conservatives are pretty thoughtful people from what I can tell.  I actually wish we had more passion from liberals / progressives in this country.  I think you’re tainted by your European origins, where you can have mass demonstrations and riots at the drop of a hat (almost at least).  Note that I don’t support rioting, I’m just saying this country lacks passion from the left, if you haven’t noticed.  The US has pretty deeply rooted conservative and anti-intellectual tendencies.  It’s very much unlike Europe.  

    Also, what kind of person when presenting their opinion in a forum like this would write long essays in which they say "on the one hand people like me think this for these reasons….on the other hand I can understand why my opponents believe what they do for their reasons…".  People just don’t  write short posts like that.  It doesn’t mean they are unable to see the other person’s point of view.    


  187. well jc i htink most poeple on this site are quite rabid one way or another..and there is plenty of off the wall drivel posted( myself included.)…so thats my opinion and i am stickin to it…and its true that most greeks would rather kick ass and argue about an ancient question than sit and hold a sign up that says ‘free willy’….however the most important part of my note was…about giving a day’s profits to a far needier group than ourselves….what’s that speech henry the 5th gave ay aigencourt?..at any rate lets get this band of brothers and sisters to get together and do somehting for the group we most care about…please lets not start wrting longer posts….either that or let’s have a tab ’manifesto goers’


  188. http://www.bloomberg.com/news/2011-11-03/u-s-intelligence-report-calls-china-world-s-biggest-cyber-thief.html
    i am sure this is no surprise..our response thus far has been nearly apathetic


  189.  1) Yes, there are two sides to these issues.  But that does not mean, as the namby-pamby would have it, that they are morally equal.  If they are not, we must speak strongly.
    2) Like most of us, I donate regularly to the food kitchens and homeless here in Portland.  If my donations went instead to a group located elsewhere, my local people would have less, so I will stay local. 



  190. Good morning!

    All is well in the Magic Kindgdom this morning and all looks well on the Global Markets so far but none of that matters until we get NFP at 8:30 as well as Greece’s confidence vote on Papandreou.  

    6:00 AM Overseas: Japan +1.86%. Hong Kong +3.1%. China+0.80%. India +0.49%. London +0.71%. Paris +0.62%. Frankfurt+0.22%.

    Asian shares rally after Greece abandons its referendum plans, although investors remain cautious ahead of the country’s parliamentary confidence vote today, and due to doubts about whether it can be rescued.

    Papandreou has cut a deal with his ministers to step down if they help him win tomorrow’s confidence vote, according to government sources. Power would be handed off to a coalition government. "He was told that he must leave calmly in order to save his party."

    "Papandreou is trying to convince us he almost destroyed (the) universe to get my consent," says a peeved Antonis Samaras,upon hearing the PM’s spin that the referendum idea was a way toget opposition support for the bailout package. Samaras rejects a coalition government, calling for Papandreou to step down and elections within 6 weeks.

    Why?  More FREE MONEY!!!  The G20 may let the IMF print up to $250B more in SDRs, its special currency, to help resolve the eurozone crisis, the WSJ reports. The SDRs would theoretically help assure investors that countries such as Italy had a pool of reserves they could tap in an emergency, and so lead to lower borrowing costs. 

    As I said on BNN last week, stimulus trumps everything and it looks like we were wrong to assume the stimulus train was stopping with Bernanke’s kind words.   This is what Hugh Hendry (main page) is so pissed about as he’s betting on reality (kind of like our TBT bets) but the rates are being kept artificially low, which allows bad-acting countries like Greece and Italy to simply dig themselves a deeper hole and, as Hugh says, it will all end in tears – but when?

    Italy’s transfiguration into Greece takes another step, with the former agreeing to allow the IMF and EU to monitor its progress in meeting pension, labor and structural reform goals, Reuters reports. "We need to make sure there is credibility with Italy’s targets," an EU source says. Ah, just like with Greece.

    The Bank of China’s Li Daokui isn’t opposed to rescuing the eurozone, but he sums up why his countrymen might not be overjoyed about it. "We cannot say that we give you money and you spend the money at will. You are the rich, you borrow money from the poor. It’s not right for you to continue to lead a luxurious life," – Communism for EVERYONE!

    So this is getting interesting.  China has a chance to flex their muscles and tell us what we’re doing wrong and the EU gets more oversight (not that they’ve caught or stopped anything in the past decade) and we’re all set to extend and pretend through the holidays. 

    Jamie joins the 99.9%:  "Banks got bailed out, we got sold out," Seattle protesters chanted last night as Jamie Dimon (JPM) told business school students he sympathized with the frustration: "In general, the big institutions of America let them down… America has become more inequitable in the last 10 to 20 years." Dimon’s hourly wage is roughly $10,000, vs. ~$23 for the average worker.

    The corporate tax rate is 35%, but a study of 280 of the largest U.S. corporations suggests that many aren’t paying anything close to that. The real tax rate paid averages closer to 18.5%, according to a new report that paints the corporate tax code as filled with loopholes and subject to lobbyist influence. Among firms that escaped tax liability for each of the past three years: BARGE.

    Not a surprise but, REALLY???   The U.S. Senate fails to advance Pres. Obama’s $60B infrastructure plan that would have provided direct aid for highway and rail projects and set up a new infrastructure bank. The vote fell short of the 60 needed to bring the bill to the floor.

    China is planning to spend $160B to create underground subway systems in 28 cities by the end of the decade. Major cities already have metros, so this spending will target smaller towns whose residents will wonder why billions should be spent by already heavily indebted local governments on what will surely be a money-losing operation.

    The beauty of the European debt crisis is that it’s created an enormous amount of volatility, says Royce & Associates PM Frank Gannon. While volatility is frustrating, it also creates tremendous opportunity for longer term investors. So, during these times like these, look to add to those sectors of the market that are getting hit the hardest. That’s where you’ll find the best valuation opportunities. (video

    Air Force One barely touched down in France before President Obama received a personal appeal from Nicolas Sarkozy to help with the Europe debt crisis. "We need the solidarity and support of the United States of America," the French President said at a joint appearance. Obama – for his part – pledged to offer U.S. support to help Europe but also strategically steered the conversation back to the growing nuclear threat of Iran. 

    The current rally in the Transports supports the fall "melt-up"thesis for stocks, says Pension Partners Michael Gayed. Just as the sector acted as a precursor to the market’s August selloff when it turned down in early July, its current uptrend appears to be confirming a bigger move to the upside for the general market.

    Cullen Roche keeps an eye on rail traffic, calling recent readings "consistent with an economy that is not booming, but also not collapsing." The AAR reports U.S. railroads showed 1.7% (Y/Y) more traffic in October, while trailers and containers shot up 3.6%.

    It’s probably a sign of how downbeat solar outlooks (III) have become that Trina Solar (TSL -2.4%) can cut its Q3 shipment guidance by ~25%, and sell off only modestly. Citi is staying bullish, calling Trina "one of the better positioned" industry players, but Ticonderoga is less sanguine, shuddering to think of how low shipments might fall in seasonally weak Q1.

    A huge wheat harvest is pushing prices to 3-year lows – down 21% YTD – with analysts calling for another 6% drop before the end of the year. Bigger plantings in the U.S. and Canada, along with a recovery from a severe drought in Russia and Ukraine, led to the increased production. Companies looking to improve margins with cheaper wheat input costs: BGSGISTHSRAH.

    Shhhhhhhhhhhhh:  Will Meredith Whitney’s apocalyptic predictions of municipal defaults be proven right in the end? Moody’s says that in Q3, the 5.3-to-1 ratio of muni bond downgrades to upgrades was the highest since the financial crisis began. Also, "a rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades."

    A seemingly minor-sounding three-cent financial transaction tax proposed by Sen. Tom Harkin and Rep. Peter DeFazio would produce a dramatic impact, according to research conducted by Tabb Group’s Adam Sussman. The payback would hit investors as ETFs, mutual funds, and brokerage house play pass the buck with a whopping $17.6B in new charges they would realize under the proposed legislation. - Yes but that’s out of Trillions in transactions!   This is like saying a penny per gallon gas tax would cost consumers $3Bn a year – sure it would but it’s still a penny…

    MGM CEO James Murren tips off where the casino operator may find new revenue in an earnings CC, saying the company is positioning itself to capitalize on legalized online poker. He says Congress is considering proposals and argues "technology has matured to a point where Internet poker can be appropriately regulated." MGM has reached a deal with bwin.party to provide the back-end of an online poker platform should favorable legislation be passed. Shares are flat in AH trading.

    Corporate insider selling came roaring back In October after two straight months of near-record lows, selling $21.43 in U.S. stock for every $1 purchased. The lesson for retail investors, Dan Burrows says, is that when the market was swooning in August and September, insiders held tight.

    Alpha Natural Resources (ANR +11.2%) is taking off, as the market gives a thumbs-up to its Q3 beat. Investors might also be pleased with Alpha’s expectations for strong global coal demand in 2012, including for the company’s expensive metallurgical coal. Other coal stocks moving higher: BTU +2.1%ACI +2.8%CNX +3.4%.

    Bank of America (BACdrops 1.6% AH after it’s disclosed in a 10-Q filing that the company might issue common stock to raise funds to buy back preferred shares. Such a move would likely dilute existing common shareholders.


  191.  

    See why I love these guys?  Chesapeake Energy (CHK): Q3 EPS of $0.72 beats by $0.06. Revenue of $4B (+54% Y/Y) beats by $860M. Shares +6.4%AH. (PR- And that’s on crappy nat gas prices!

    More on Chesapeake Energy (CHK): Q3 blows outestimates on all fronts as the company reports a 54% jump in revenue Y/Y, primarily due to windfall profits from hedging operations and a 9% jump in liquids production. Separately, the company says it’s selling a 25% stake in a portion of its Utica Shale play – 650K net acres – in a joint venture to undisclosed buyers for $3.4B. Shares+7.4% AH.

    Looking good:  Genworth Financial (GNW) reports a largely in-line Q3, but operating income was better than anticipated, coming in at $0.21 per share compared with $0.06 per share the year prior. The Street was looking for $0.18 per share. Shares +2.3% AH.

    Shares of Hovnanian Enterprises (HOV -6.4%) dip after S&Pdowngrades the company, saying its latest offer to exchange debt technically constitutes a form of default. 

    LinkedIn (LNKD) is now down 12.2% AH following its Q3 report (III), after the company announces it’s filing for a $100M stock offering, in part to "facilitate an orderly distribution of shares and increase the company’s float." LinkedIn’s IPO lockup period ends on Nov. 15. 

    Starbucks (SBUX): FQ4 EPS of $0.37 beats by $0.01. Revenue of $3.03B (+7% Y/Y; +15% on comparative 13-week basis)beats by $80M. Same-store sales up 9%. Raises quarterly dividend 31%. Shares +1.7% AH. (PR)

    SunPower (SPWRAgains 8.5% AH after reporting Q3 revenue of $705.4M (+28% Y/Y) and EPS of $0.16; the former missed by $7.2M, but the latter beat by $0.10. Though the solar module vendor is now guiding for 2011 revenue of $2.4B-$245B (well below a Street forecast of $2.79B), it looks like that piece of bad news was baked in.

    CRE doing well:  Vornado (VNO): Q3 FFO of $1.20 beats by $0.05. Revenue of $727M (+6% Y/Y). Shares +0.55% AH.(PR)

    Unfazed by a sluggish leasing market, Minskoff Equities closes on a $160M loan to build what will be the only office buildinggoing up in NYC without a tenant. The 430K square foot building is due for completion in Spring 2013. Expectations for a big leasing year in the city were optimistic as 2011 figures look to be coming in about the same as 2010.

    After a long journey (and a buzzy week), Groupon (GRPN)prices its IPO at $20, above the expected range of $16-$18 – valuing the company at $12.65B. Next up: Nasdaq trading tomorrow, where flying high or fizzling could have implications for the sector.

    Great excuse if you miss a meeting or anniversary:  Another mishap for Apple (AAPL) (previous): The iPhone 4S’ enthusiastic assistant – Siri – is suffering from an outage hitting owners across the nation. An Apple supervisor pins the blame on a network outage.


  192.  Jabo – RE: What to say?
    You always seem to have the right words for any occasion.  I’d just say to trust your gut.  :-)


  193. i am thinking that the FOMC is going to resume purchases of agency MBS as soon as its next meeting on Dec 13..Yellen Tarullo Dudley and Evans are all on the record for supporting such acton….housing is a big problem.


  194. kongen/portland maine?


  195. Good Morning!
     
    Big drop of long-term unemployed…. I guess for those, the checks have stopped coming….


  196. another sad number but it might ice the fed for awhile…sigh


  197. Unemployment…..just a bit outside…..


  198.  portland, oregon (where young people come to retire)