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Tumultuous Tuesday – The 1% Strikes Back

70 protesters were arrested last night as police cleared Zuccotti Park.  

At least 400 New York Police Department officers dressed in riot gear surrounded the park at around 1 a.m.  Mayor Bloomberg's administration did not give advanced warning of the police sweep but did send out a message on Twitter at 1:19 a.m.: "Occupants of Zuccotti should temporarily leave and remove tents and tarps. Protesters can return after the park is cleared."  If protesters are allowed to return, it will be without the equipment they have used to keep warm in the cold weather.

Some protesters turned away by police said they were heading toward the famous statue of a bull at Bowling Green. Others went to nearby Foley Square but were quickly dispersed. "We're trying to regroup," said Caroline Buster, 32, a writer from Brooklyn. "They're trying to disperse us and we're trying to stay together."

An hour after the raid started, most of the structures that had come to define life inside the protest encampment over recent weeks were dismantled by Department of Sanitation workers in green uniforms. The tents holding the library, media center, legal aid, information and sanitation areas were all broken down and placed into rolling trash containers.  More likely than not, this will only escalate matters.  It is rumored that unions will now be joining the protesters on Wall Street this morning.

While our Brothers in Alms were fighting the good fight, we were making more money early this morning as I sent out a 5:51 Alert to Members to short the Dow Futures as they crossed below the 12,000 mark.  We got a nice run down to 11,910 which, at $5 per point per contract, works out to a gain of $450 per contract and our Egg McMuffins are paid for!  Of course, we were shorting the Dow since yesterday morning, when those DIA Nov $120 puts were an easy entry at our $1.05 target (see morning post) and we took $1.40 and ran for a 33% gain during Chat.  

I also updated our White Christmas Portfolio this morning, where we began on October 24th with a virtual $15,000 and a goal of hitting $25,000 by Christmas (up 66%) to put a little extra joy under the tree or maybe fly Grandma in for the weekend (Christmas Day is Sunday this year) to make it extra special for the kids.  The portfolio was pretty well-balanced and did great on my week off, gaining another $2,960 and giving us a virtual net (including unrealized gains) of $24,250 – up 61.66% and just $750 short of goooaaalll!!!  

8:30 Update:  We have a nice reversal of fortune right now in the Futures as we got some very nice US Economic Data to offset continuing doom and gloom out of Europe (Euro-zone GDP was up just 0.2% in Q3, within the statistical error range of Recession):

  • Oct. Retail Sales: +0.6% vs. +0.2% expected, +1.1% prior. Ex-auto +0.6% vs. +0.0% expected, +0.6% prior. 
  • Oct. Producer Price Index:-0.03% % vs. -0.2% expected and +0.8% prior. Core PPI 0.0% vs. +0.1% expected and +0.2% prior.
  • Oct. Empire State Survey: Manufacturing +0.61 vs. -2.6 expected, -8.48 prior. New orders -2.1 vs. +0.16 prior. Prices 6.1 vs. +4.49 prior.

Keep in mind that Crude Goods were down 2.5% in October as oil began the month at $76.25 but it hit $94.65 by the month's end with a huge leap up from $87 on the 24th.  With oil now at $97.50, crude goods may be up almost 10% in November so prepare for a "shocker" of a PPI report a month from now.  Still investors react to reports as if they are current, no matter how old they are or how much the situation has completely reversed since it was compiled and we got a nice bounce all the way back to the 12,000 line in the Dow Futures (/YM) where we can – SHORT THEM AGAIN!  

As long as the Dollar stays over the 78 line, it's going to be very hard to break over 12,000 so we have two solid stop-lines to watch.  Also, we've been tracking the NYMEX very closely and not only are traders stuck with 155,000 open contracts as of this morning, representing 155M barrels scheduled for December delivery into slowing demand – but they only have 3 days left to roll them before being stuck taking delivery and the longer months are getting CHEAPER!  

Click for
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Dec'11 98.04 98.35 97.56 97.60 06:39
Nov 15


-0.54 25503 98.14 155648 Call Put
Jan'12 98.11 98.43 97.66 97.71 06:39
Nov 15


-0.51 12469 98.22 311696 Call Put
Feb'12 98.11 98.30 97.65 97.69 06:39
Nov 15


-0.46 6144 98.15 85548 Call Put
Mar'12 98.05 98.22 97.62 97.80 06:39
Nov 15


-0.30 4919 98.10 84922 Call Put
Apr'12 98.08 98.08 97.68 97.77 06:39
Nov 15


-0.22 1823 97.99 37317 Call Put
May'12 97.50 97.63 97.50 97.63 06:39
Nov 15


-0.21 1336 97.84 37147 Call Put
Jun'12 97.83 97.84 97.23 97.55 06:39
Nov 15


-0.08 2731 97.63 83067 Call Put

That's right, like a gigantic scam game of hot potato – NO ONE wants to hold long-term oil contracts at these ridiculous prices.  In fact, the longer you go, the cheaper they get – all the way down to $92.17 through March of 2016!  THAT's how ridiculously priced oil is at $97.50 today!  




89.35 * 17:20
Nov 14




92.17 10 Call Put
Dec'15 92.08 92.08 91.94 91.94 06:39
Nov 15


-0.24 30 92.18 25684 Call Put




Nov 14





Call Put




Nov 14





Call Put

We have been expecting oil to take a big dive this week but, so far, it's not cooperating and we'll have to move our bets along to next month and we'll see if the NYMEX boys will be able to keep this game going through the end of the year.  In 2009, there was a Thanksgiving crash in oil as it fell from $82 to $68 but last year we got a big pump into Thanksgiving up to $90 and didn't fall back to $85 until January.  Like everything else, it's all about the Dollar but I still like playing the oil futures (/CL) short at the $97.50 line with very tight stops above it (now $97.96).  We just need that line to break and we're off to the races…

We're still a bit bearish until the market proves us otherwise – we had a fun day yesterday and so far, so good this morning.  We WANT to get bullish – really we do but there's still so much scary stuff out there and the Yen is back below 77 where the BOJ may be compelled to intervene (Nikkei is also testing 8,500 again and it used to be neck and neck with the Dow) so it's going to be a rough ride getting the Dollar to roll over the 78 line.  We can still hope that the market can pull itself together for a Santa Clause rally this year but, with just 9 days until Thanksgiving – it's going to be ho-ho-hopeless if we fail to hold the Must Hold lines on the Big Chart!  

Let's be careful out there.


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  1. Phil/Occupy,
    Do you really believe this occupy event is a movement or a political stunt? 
    I can’t help but believe that this was a stunt that was orchestrated by the Democrats or their operatives as the first volley of the class warfare campaign which appears is going to be the basis of their platform for the 2012 election.
    It’s comical to watch the politicians who were originally on board with this "grass roots movement" as the run for cover to distance themselves from the protesters now that they are becoming unpopular.

  2. BTW,
    Did anyone happen to catch the piece on 60 minutes about political inside trading.
    Why can’t we just throw these hypocrites in jail?

  3. Phil – Look at the October Producer Price Index. We’re deflating.  Doesn’t look like the inflation/hyperinflation spiral you were warning of.  At least to me. 

  4.  Phil,
    Heard through the grapevine that there are long oil and short nat gas trades on due to hedge funds that were trading/clearing through MF Global had opposite positions before losing access to their accounts in MF Global meltdown. Premise is that oil will trend up and nat gas down until CME clears the account situation. i’m still looking for more details…

  5. Unaffordable Oil Lines

    R3 – 101
    R2 – 100.11
    R1 – 98.91
    PP – 98.05
    S1 – 96.85
    S2 – 96
    S3 – 94.8

    Yesterday’s high and low – 99.25 / 97.19

    Breakout lines – 102.58 / 91.79

    Huge volatility…. 

  6. Gartner’s latest smartphone market analysis:

    Android making a big jump and RIMM losing ground! 

  7.  Numbers seem to be mildly heading in the right direction here in the US for the Fed to continue to be more accomodative, especially with retail sales up 7% y/y.  While over in Euroland,  the ECB may have the politicians right where they want them, manipulating their fear buttons by moving yields (or not, via inaction) depending on what they see and hear from the ‘democratic’ legislatures.  

  8. I guess there are 2 levels of AAA:

    The market seems to think so…. 

  9. Exec/OWS – I have disagreed with Phil on OWS tactics and long-term legs – but it’s no Dem stunt.  In some cities, esp with Dem governments, The refusal of OWS folks to be co-opted by Labor and Dem operatives has helped push mayors et al to shut down camps and push back.  Dems spend their money on services that make money for their consultant industry – ads, etc.  On OWS-type things, they poll, check the wind and try to catch-up while it serves a purposes – obviously.  While I don;t think its a movement at all, its surely no stunt.

  10. For those of you who like to look at numbers and charts, the Lisbon Council has published a nice PDF with tons of data on the European zone:

    A lot of great information, I just wished they had included a comparison with other large economies. 

  11. Good morning Phil and thanks for breakfast money, NG flying!  Do you have an exit price in mind?

  12. Exec
    I believe this is one of the issues that the OWS people are angry about.  They seem to me to be a group of people who are mad that the system is broke and no one (Politician or voter) is doing or talking about it.  I seem to recall your displeasure with the system and lack of action by our politicians. 
    I don’t know if you read the rolling stone article yesterday but it seems that war was declared by the other side many decades ago.  by the republicans.
    It seems to me if you think the sysem is broke this would be a forum to lend your support regardless of being a democrat or republican or independent.

  13. @Exec, its definately not a stunt.  The Occupy movement in Washington DC is based out of McPherson square which is where the front door of my office lets out.  I go talk to them all the time.  Yesterday they were talking about how Rupert Murdoch controlls everything you see on the news.  They are a bit disorganized but they are pissed off about corporate personhood and how little the uber rich pay in taxes.

  14.  NF/OWS  - Very good point.  Actually seems like all the violence occurred in dem controlled cities, especially Oakland.  Even the most cynical observer wouldn’t think it was a scheme just to foment riots.  However, the next phase of OWS could become quite political.  Now that I think about it, all the 60′s antiwar violence happened in dem areas too…while LBJ was in office.

  15. RIMM absolute numbers are actually positive, but % of market decreased.
    Barry Ritholtz currently guest host on Bloomberg radio…

  16. Ivmoda / OWS – The more pertinent observation would be that those cities have higher rate of unemployment and lower standard of life…

  17. lvmoda/LBJ – On the money. And that would be fine with me. While I don’t hope for another Nixon, he was by far the most Labor-friendly president of the last 40 years – his record on same destroys Clinton et al – who was not a friend of Labor – we were friends of Bill. Labor is at it’s worst with a Dem in the WH. Unions love to feel important and loved and do lots of WH visits. But the real organizing happens when we’re the opposition.

    Speaking of Clinton. We were at Little Dix Bay for spring break recently (don’t ask). The entire Rubin posse was there too. One day waiting for the tennis pro, I sat on court-side bench while Bob Rubin sprayed balls all over the court (he was not bad actually – and in very good shape.). When he was done, we sat together for a few minutes. I asked about his daughter-in-law’s book “The Happiness Project” (desperately trying not to be a dick: “Step One to being happy – find and marry the sone of a universe master, then…). He asked about my background. I mentioned my Union work.

    Rubin: “Oh – Labor. You guys didn’t like NAFTA much did you?” (exact quote)

    Whether NAFTA was good policy or bad, one thing is clear: no Republican could ever have passed it. Only a labor “movement” enthralled with Big Bill could roll over for that. Suckers every minute, er, election cycle, indeed.

  18. RIMM / Brooklyn – That is correct, they have a smaller percentage of a growing market so more handset, but the trend is not good. It doesn’t mean that they go BK, but they are not on my list! 

  19.  Oscar/OWS – Agreed.  But my point was that the political response in these Dem-controlled areas would have not been as confrontational and motivated to clear the camps if it were a Dem stunt.

  20. @exec.
    Nancy Pelosi is scum.   She is of course, not alone.  I’m certain both parties have their own dogs they lie with.
    But Steve was intimidated, inarticulate, and seemed cowed by her.  He was the worst person 60 Minutes could have selected for that question about her investment and blatant conflict of interest.
    It’s lond past time to talk about indictments.  If only their constituents would throw them all out then maybe a chance to at least throw a monkey wrench into their fraudulent dealings would be possible.

  21. PP:

  22. craig/OWS-DC – In the interest of full disclosure, you or I should share the “Style” section coverage of McPherson Square in the Post from this past weekend. No stunt. But no juice either I’d say. Almost seems like a high schoolers government project – from the right side (Left) tho. Wiggle your fingers if you agree – or disagree (pointing down). Or just don the one-man veto thing. Cute stuff.

  23. Ivmoda / WOS -  Sorry,  I missed your point.

  24.  flipspice – the right-wing propaganda machine has worked ceaselessly to engender hatred toward Nancy Pelosi.  Looks like they succeeded with you.

  25. Rubin / NF – That NAFTA comment is right now as in the last 15 years or so it seems that Dems president have been willing to make decisions going against their base (for the right or wrong reasons – NAFTA, cuts is SS, Medicare and others still to come) while GOP guys just keep on pushing for their 1% base (forget about the rest of the base – just election fodder for them).  That should tell you something!

  26. What’s up with the spike in crude?

  27. AA Money Recap
    Long strangle:
    Jan 13 12.5 calls – $1.27 now $1.25
    Jan 13  7.5 puts – $1.04 now $0.91
    November 10 calls – $0.56 now 0.42
    November 11 puts – $0.85 now 0.74 

  28. FAS Money Recap

    10x 2013 XLF 11/15 BCS –  $2.06 now 2.01
    1x Nov FAS 61 Put – $2.05 now 2.07
    2x Nov FAS 68 Call – $1.94 now 1.40

  29. IWM Money Recap
    6x 2013 70/77 BCS – $3.64 now $3.62

    1x Dec TNA 48 Call – $4.40 now  $4.00

  30. Phil/WCP – Nov $105 calls were sold for $6.60 not $7.50.
    [Phil] - (26-Oct-2011 03:40:38 PM) – DECK/John – They were on our Long Put List because I thought they were toppy at $90, now they are $105.  I think they are way overpriced up here and if you want an earnings play I’d sell 5 Nov $105 calls for $6.60 ($3,300) to some other sucker and buy 4 Jan $115 calls for $6.25 ($2,500) for a net $800 credit on the spread.  If they do well, then the premium disappears and you don’t owe the $6.60 back until they hit $111.50 and if they go higher than that, you can add 3 more long calls and do a 1.5x roll on the short calls.  If they go down – easy $800 plus whatever value is retained on the long calls.  Let’s do a set of these in the WCP!  

  31. Willie,
    You’re probably right. 
    It may just appear to be a stunt due to the politicians nature to view everything through a political prism and react accordingly. 
    So in this case, instead of seeing the protestors for what they really are, they immediately try to find a way to politicalize the event and use it in a way that they believe may help them get reelected.

  32. Are they going for $100 oil in in hour here… It’s not the dollar as it has stayed in the same range! 

  33. Phil—is there a USO play out there that you would recommend?

  34. OWS/all – I’ve become involved with the nascent Occupy Pasadena group, and it’s not a tool of any political party. I’d advise any and all to go to your nearest Occupy and spend some time learning about it, because you’re sure as hell not going to get a straight story from the mainstream media.

  35. stjeanluc – Nail on head. Single-minded purposes will out. That’s why Labor won in Ohio. Not because people gave a shit about preserving CB rights for government workers. But because Labor threw everything into one issue where it might make a difference. We got nothing of the sort in the way of purpose on a national scale. Never have. Never will.

  36. Good morning!

    Still watching and waiting.  Gold and silver and oil flew up and THEN the Dollar made a dive back to the 78 line so somebody knew something (probably some Congressmen) and put bets ahead of the manipulation.  Still, didn’t this happen yesterday and all it did was give us a good entry on those DIA puts?  We’ll see what happens this morning but all the big data is behind us already and, even though it’s October Data – it won’t stop the retail crowd from BUYBUYBUYing as if they’ve discovered a trend 45 days later.  

    Tuesday’s economic calendar:
    7:45 ICSC Retail Store Sales
    8:30 Producer Price Index
    8:30 Retail Sales
    8:30 Empire State Mfg Survey
    8:55 Redbook Chain Store Sales
    10:00 Business Inventories

    Notable earnings before Tuesday’s open: COV, DKS, HD, SKS, SPLS, TJX, WMT

    Notable earnings after Tuesday’s close: A, ADSK, DELL, PPDI

    WMT missed, in case anyone’s paying attention to such things but SKS beat so Yay Rich People, I guess…  The other reports were pretty good and the overall Retail Sales were good so generally keeping with our premise that the US is not in too bad shape if we can only get away from Europe and China and Japan.  It used to be so easy to ignore the rest of the World – that’s the downside of the information age – all news is local now.  

    Oil is popping up to $99 at the open and I still think they are trying to shake the shorts but hope is not a strategy and thinking is the enemy of the day trader so we’ll have to make adjustments to our open SCO position in the WCP if we don’t get a big re-trace by lunch.  Actually, scratch that.  $100 oil is not happening so let’s pick up 10 SCO Dec $38/43 bull call spreads in the WCP at $2 and we’ll look to cash out our Nov $45 calls later, leaving the $48 caller to expire worthless or, if not, then woo-hoo on the new spread! 

    The Dollar is now below 78 so that’s our watch line but it’s bullish as long as they can keep it going down.  We’ll just have to watch and wait to see what sticks but Europe has made a very sharp V recovery since noon-1pm for them (6 for us) and they are now at the day’s highs but still red.  .

    USO Dec $36 puts at $1.02 are the way to short oil as a straight play.

    I still like the Dow Futures (/YM) shorts below the 12,000 line with tight stops and, of course, that correlates with DIA  Nov $120 puts at $1.05 for the futures-challenged but safest to make sure the Dollar crosses back over 78 before taking bearish bets.   

    On the upside, I still like yesterday’s FAS trade with XLF still at $12,94.

    At the open: Dow -0.25% to 12049. S&P -0.18% to 1250. Nasdaq -0.28% to 2335.
    Treasurys: 30-year +0.23%. 10-yr +0.07%. 5-yr -0.616%.
    Commodities: Crude +0.56% to $98.77. Gold +0.26% to $1783.05.
    Currencies: Euro -0.62% vs. dollar. Yen -0.13%. Pound +0.31%.

    Market preview: S&P futures -0.6% and paring earlier losses following EU shares after better-than-expected retail sales, PPI and manufacturing data. But eurozone debt yields are going haywire again, with Italy’s 10-year yield creeping past the 7% mark that scared everybody last week. Wal-Mart -1.4% and Staples -6.3% following earnings but Home Depot +1.3%. Later: business inventories.

    Monetizing government debts "is tantamount to inflation" and "not feasible," says ECB member Yves Mersch, speaking to ideas it’s up to the central bank to hoover up the sovereign paper no one else seems to want. This "reduce(s) incentives for governments to tackle their debt burdens," and "raise(s) the risks of even higher future inflation."

    U.K. October inflation 5% (5.1% forecast) vs. 5.2% in September, with the fall due to lower food, transport and gasoline costs. 

    French 10 year OAT yields soar 20 bps to 3.63% as German Bunds slide 3 bps to 1.75%. The spread between the two hits another euro-era high of 188 bps, bringing the contagion that started with Greece 2 years ago firmly into the core of the EU. France is the world’s 5th largest economy.

    Spain sells €2.6B of 12-month T-bills at a yield of 5.022%, up from 3.608% in September and the highest since 1997. The bid-to-cover ratio was 2.1. The country also sells €558M of 18-month paper at 5.159% vs. 3.801, with the sale six times subscribed. Next up is a 10-year auction on Thursday.

    Italian CDS spreads jump above 600 basis points for the first time, now at 601 basis points as yields on the country’s 10 year paper rise above 7% again. For reference, Irish and Portuguese CDS pricing was at 600 basis points in mid-April. 

    "It’s not just an Italian problem," Blackrock chief Larry Fink tells CNBC. "It’s all the eurozone debt other than Germany … There’s been asymmetric selling, liquidity is vanishing in Europe." 

    China’s (FXI, PGJ) fiscal policies foster high savings and a high risk of capital misallocation and asset bubbles, IMF warns in its China stability report. China’s largest banks face systemic risk under the IMF’s most severe scenario – a point Beijing took little time to dispute.

    Capital One (COF) says delinquencies rose in October at its U.S. credit card business for the third straight month, to 3.73% from 3.65%. U.S. charge-offs edged up to 3.96% from 3.9%; internationally, charges-offs rose to 6.24% from 5.65%.

    Harrisburg, the capital of Pennsylvania, last night missed a final deadline to come to an agreement with creditors over $318M of debt related to its incinerator and avoid a state takeover. The council will now go before a federal judge next week for a hearing about whether its bankruptcy filing can proceed.

    More from Gartner: Total mobile phone shipments rose an estimated 5.6% Y/Y in Q3, to 440.5M units. Nokia (NOK) remained the market’s top vendor from a shipment standpoint, with 23.9% share – that’s down 430 bps Y/Y, but up 110 bps from Q2, thanks to strong sales of low-end phones. Samsung (SSNLF.PK) came second with 17.8% share (up 60 bps Y/Y). (PR)

    Android (GOOG) accounted for 52.5% of global smartphone sales in Q3, according to Gartner – that’s up from 43.4% in Q2, and just 25.3% in the year-ago period. The iPhone’s (AAPL) smartphone share fell 320 bps Q/Q to 15%, ahead of the 4S launch, while Research In Motion’s (RIMM) share fell 60 bps Q/Q and 440 bps Y/Y, to 11%. Total smartphone sales rose 74% Y/Y, and made up 25% of phone shipments. 


  37. DIA 120′s @ 1.05 again ? Maybe if we get over 78 on the dollar?

  38.  I agree with you snow,  If there is an Occupy movement near you, just go out there and talk to them and form your own opinion.  
    @NF**X,  I didn’t read the style piece.  I will have to go find a copy.

  39. SCO – if you have the margin, selling SCO Nov $39 puts should burn off pretty fast.

  40. Nvm… Bad timing

  41. exec/OWS   So, you must be the guy on the bottom/RIGHT on Phil’s morning cartoon…..

  42. Snow,
    What is the fundamental point of the movement?

  43. 1020
    LOL…..actually no….If the movement is actually designed to right some of the wrongs of our system then I’m all for it.
    I’m sorry if I’m cynical…..I’ve witnessed  too much over the years to believe that manipulation of the masses for political gain is not beyond them…..and by them I mean both parties who are about them not us.
    The 60 minute piece is a classic example of how they political elite have completely elevated themselves above the common man.  They pass and exempt themselves from laws that the private sector would be jailed for.  Until we fix our political system….it will be very difficult to fix anything.
    Enough politics.

  44. craig/Style – Not saying its a good piece.  But, as predicted, when Moore and Hollywood enter the picture, it signals the end of long-term movement cred – and stories get moved out of the news section – and into the "oh isn’t that cute" SECTION.
    Taking 10,000 arrests this week would bring us back to front page – but Dems and Labor will have none of that.  And it seems the cities are coordinating closely to make sure there isn’t "mass" push back.

  45. OWS – Fundamental point: Tear down the ‘Wall’, but seriously one of the key points( most important in my opinion) is taking the money out of the political process.

  46. Flip/Pelosi  I thought it looked as though Pelosi was inarticulate.
    Maybe you thought that’s how it appeared after watching the "unfiltered" clip on fox news…..

  47. Good morning, still nothing new:


    IWM   71.33,  71.87,  72.56,  72.98,  73.24,  73.51,  74.14,  74.61,  74.86  and  75.37

    The key is IWM 73.51 as it is also now the location of the 377 SMA, long term key line !!

  48.  france cds +9%…another new record…but really they are aaa.

  49. France / Angel – If you look at the PDF from the Lisbon Council that I posted about earlier, you can tell that France is not AAA anymore… They actually rank them between Spain and Italy in that paper with Spain being in a better shape if you can believe that. Lots of good stuff in there. 

  50.  3m euro basis swap -6.15 bps to -119.12 bps…worst since right after lehman blew up.

  51. stjean / France – Someone must avenge the sacred honor of France!  Such calumny and insult shall not stand!  That little Lisbon Council….incroyable!  Indicible!

  52. smartphones/stJean:  Wow.  almost as pleasing as the Android #’s (big GOOG fan, hehe) is how shocking the Symbian # is.  I had no idea that had that much marketshare.  Food for thought: Those Symbian #’s will probably one day become MSFT marketshare.

  53. Now I feel bad JC… They will probably refuse me entry there when I go back. 

  54. exec
    No special treatment for the politicians and removing ALL special interest dollars their pockets (including unions) is something we should all agree on.  :)

  55. @1020
     I don’t watch Fox, listen to Limbaugh, or Hannity or Glenn Beck, they are all charlatans. Nor do I any other talking head channels, and confine my boob tube viewing to only that which entertains, or frightens me.  .
    The only reason I caught Steve’s poor performance was because mi esposa is addicted to certain programs, in this case, 60 Minutes.
    They were both inarticulate.  But Steve’s fumbling --for the level of journalistic integrity that they are noted for seemed completely inept, clumsy, and unprofessional.  He started out o.k .  with the question, but finished badly.

  56. "from" their pockets… :)

  57. Symbian / Kinki – You hope so for MSFT. My guess is that a lot of them will migrate to Android! We’ll see. 

  58. @flip
    Yeah, Steve Kroft is no Mike Wallace….

  59. 1020 / Flips – And Steve Kroft is certainly no Chris Wallace.  ;-)

  60. Pharmboy
    Any updates on DEPO?  I was just assigned some shares and trying to determine an option to cover. Thank you.

  61. Occupy/Exec – It’s not a political stunt.  That is just complete talk radio spin that’s not even worth debate.  Why does it amaze Conservatives that people who’s incomes have gone down for the past 30 years are pissed off a the people who’s incomes have skyrocketed?  Do you really think the people below you are THAT stupid?  That they can’t comprehend that their lifestyle is not as good as it was 20 years ago while they see their bosses living better than their bosses did 20 years ago by leaps and bounds?  No on gets raises, no one gets benefits but the wives of the executives are charging up a storm at Sacks and TIF etc..   You expect no resentment?  

    60 Mins/Exec – Yet another reason for the entire bottom 99% to get serious about rallies – things are totally out of control.  Remember how I mentioned on several occasions how much money a Congressperson could make by simply delaying a budget bill that freezes Government and crashes the market.  They’re allowed to go short on the indexes in the afternoon and then filibuster a bill in the evening that gives them a double in the morning – sweet gig if you can get it!  

    Keep in mind that it’s hard to make the markets go up but very easy to knock them down if you are a politician.  That’s why they hate Bernanke – he can make the markets go up as can stimulus programs or jobs bills…

    Deflation/JC – One month does not a trend make – especially when our PPI is a complete outlier to the rest of the World.  

    Oil/Kallen – Something strange is keeping oil up but it won’t last – you can see it from the futures strips.  Nat gas up at $3.466 now, gasoline $2.584 with oil at $98.96. 


    RIMM surprisingly undamaged in subscribers.  

    Lisbon/StJ – Thanks.  

    You’re welcome Checho.  Futures trades are momentum trades – the trick is to just keep moving up your trailing stop as it goes along.  At this point, /NG is a stop-out as we hit $3.483 and then pullbed back below $3.47 after a run from $3.43 – it’s the same 20% of the run pullback target we always use for the 5% rule.  If you want to be greedier, you can pull 1/2 at 20% and the rest at 40% pullbacks to give yourself more slack and you still capture 70% of the max gains that way.  

    Class warefare/Willie – Good point! 

    Dems/NF – Kind of like "Only Nixon could go to China." 

    FAS Money/StJ – Very well named, amazing how fast you can make a nice profit!  

    DECK/Nicha – Thanks, I’ll adjust it next time. 

    MSM/Snow – On CNBC this morning they were saying that they all caught diseases from the OWS crowd when they went down to interview them and one of the anchor girls claimed there were TB outbreaks in Zuccatti Park – the Conservatives FEAR this movement and they are pulling out all the stops to put the brakes on it.  It’s a good thing because you can see which master these talking heads serve…

  62. OWS/exec – I’ll be very brief, since it’s trading hours – the spark for the movement is the wide and widening wealth gap – and Phil’s shown us charts of gini coefficients that you’re familiar with that. There’s also a strong sense of disenfranchisement – here’s my favorite Occupy sign:
    A large part of what we’re doing right now is establishing an alternate process, an egalitarian way of doing things (that as a Quaker, looks to me very like Quaker Process ( I think a large part of the movement is spreading this as a different way of governing.
    Finally, there are a lot of ideas being developed, but as you’re probably aware the movement is leery of setting up targets for the right to shoot down. That said, take a look at some of the leftie sites – and  – you need a broad perspective in your reading (Phil tells us this all the time, right?).  You may think those sites are nonsense, much as I regard Free Republic or Matt Drudge, but you owe it to yourself to be broadly informed.
    For future hopes, there are a number floating around on places like alternet – here’s one of my favorites:

  63. TARP Warrants:  I stumbled across a reference to TARP warrants the other day, and found the opportunity quite intriguing. As part of TARP, there are heavily traded warrants with 2018 and 2019 expiries in BAC, C, JPM, WFC and a few other banks. The strikes are a bit odd, but the BAC January 2019 $13.30 warrant (call) and JPM October 2018 $42.42 seem the most interesting. It is rare for retail traders to get access to such long dated options, and it seems there are many ‘safe’ long term premium selling strategies that could used against long warrant positions. But really, the kicker is that they have built in dividend protection (with certain thresholds) which means that the strike price gets reduced if the banks pay certain dividend levels.  This is much better than say the 2014 LEAPs in which big dividend payments by the likes of JPM would mean the calls lose value as a lower level of dividends is currently built into the option pricing. Anyways, I haven’t yet put any trades on, but was interested if anyone else held positions or was using the TARP warrants to sell premium against.

  64.  Michael Moore Top 1%’er – This is a picture that I’m sure Michael Moore did not want on the front page of newspapers.  It was on the front page of the National Post (Canada) today with the headline "Michael Moore’s $2M hypocrite house: film director lives like the 1% he criticizes."  He should be honest and accept he is a 1%’er.  Denying it just damages his credibility.  It first appeared in the Daily Mail in the UK.  
    By the way for $2M in Michigan you can get a pretty good compound.

  65. Phil / Inflation – Yes, you may be vindicated someday (we’ll get hyperinflation), but I really, really, really doubt it.  Today, inflation seems to be driven by commodity prices, as opposed to the wage/price spiral type we used to have in the old days.  That means we may get a period of time where we think inflation is out of control followed by a short period of deflation, and that is in fact what we’ve seen over the past few years.  Here’s a nice short blog post by Krugman on the topic.

  66. GTHP – putting an order in to buy back the ones sold the other day for 85c.  Good place to start a position as well FWIW.

  67. Phil, do you still like SPWRA long term? If yes, what would be a good option to play?

  68. Phil,
    did you mean this trend earlier this morning ?

  69. Michael Moore – He has a large home on a lake, BFD.  Moore, like myself or our host, never said he was not part of the 1 percent and like myself and our host, believes in what OWS stands for….
    I cannot understand the notion some have, that you are somehow a hypocrite if you are part of the 1 percent and don’t live in a van down by the river….

  70. Moore/NF – The knee-jerk rejection of anything associated with Michael Moore by the Right is a fascinating thing.  I guess that’s what happens historically to Social Gadflys but it’s an amazing thing that even supposedly intelligent people pretty much put their fingers in their ears and chant "Nah, nah, nah – I can’t hear you" whenever he speaks – as if listening to what he has to say will somehow destroy your belief system.   I have met him and personally like the guy but it’s futile to defend him (I’ve learned that).  Did you know he released a movie for free in 2008 to encourage voting?  His own time and money, not a stunt – just something he believed in.  He’s won Oscars for his work, he’s the highest-grossing Documentary filmmaker in history yet, at heart, he’s just a political activist and spends almost all of his time on the ground, fighting for what he believes in.  Yep, THAT’s the guy you should be disgusted with…

    EU production/Pahurik – Hey, that is scary!  

    Good article Snow.

    TARP warrants/Never – That is interesting but who has time to figure them out?  

    Moore/Stu – So how does having money stop you from considering yourself to be with the bottom 99%.  You can’t believe in something because you have money?  This is what I’m talking about – now Moore’s house is a big issue?   Conservatives are getting very desperate and you can see how they call on their media lackys to work the Dittoheads into a frenzy – ANYTHING to distract you from the actual issues.  FDR fought for the rights of the poor and you know what – he got the same crap from rich assholes who couldn’t understand how "someone like him" could care about "them".  That just goes to show you how disconnected from both reality and common human decency the 1% have become.  

    And what 1020 said!  

    Inflation/JC – Money Supply up 200%, movement of money down 51% equals deflation.  If money never moves again, you may be right but I’m betting one day we have a few transactions and good luck putting that money supply genie back in the bottle before we get some MoFo inflation numbers.

    SPWRA/Jop – I still like them but universal austerity is just not good for the sector as it’s simply not cost-effective without subsidies yet.  You can buy yourself a cheap entry by simply selling the 2013 $7.50 puts for $2.50 – why do anything else when the ROI there is 50% on 100% margin and TOS says ordinary margin on the short puts is just $1 so 200% on margin that way.  As long as you plan to DD at $5 or $4 if we hit a recession – then you’ll have yourself a nice long-term position in a stock that should do well for the next couple of decades.  


  71. somehow "you’re" a hypocrite….
    time for "moore" coffee…. :)

  72. Phil / OWS -- "On CNBC this morning they were saying that they all caught diseases from the OWS crowd"…
    Are you kidding? Better grab that video clip before it disappears.

  73. “It is no use relying on the Government…You must only rely upon your own determination …Help yourselves by standing together…strengthen those amongst yourselves who are weak …band yourselves together, organize yourselves…. and you must win…“ [Charles Stewart Parnell, James Joyce’s hero]

  74. Moore – Damn, PD.  Why cast me as the Moore hater?  I’m sure he’s a nice guy – I’ve run in the labor circle that adores him (okay – small circle) and have collaborated thru and with him and them – but who cares?  I’m just talking about what he signals – and, yes, it’s an unfair caricature.  Moore/Hollywood are not good for this kind of "movement" – whatever he does for charity, no matter how many of his own movies he can’t seem to not star in (lol), no matter how lucid – he is not a credible spokesperson for something like OWS.  
    Here’s an interesting take from non-blockhead Frank Bruni on the Hollywoodization (I use that loosely to include Moore) of OWS – I meant to sent it last week, but until I went cash-heavy (thank you) I was too focused on market twitches every hour – ah the freedom!:

  75.  My stock screen is a real mix of red and green today.  Not much correlation going on.   LNKD down 7%, GMCR up 7%, with healthy distribution of ups and downs in between.

  76. Evans just put another nail in the coffin, Santelli foot..Evans mouth..

  77. On a trading note, we are riding a descending trend line now at IWM 72.68, I believe we will break lower into the next channel and retest the recent lows. I am looking for  a short term low soon on EURUSD and equities, followed by a Santa rally, and then a very significant high, probably in late December or early January 2012 but perhaps later, followed by some very major downside on EURUSD and equities. This is the scenario that I was leaning towards in any case, so I’m going to be working on the assumption that is what we are going to see until demonstrated otherwise.

  78. Phil / Inflation & Wages – Yeah, I’m betting velocity isn’t going to happen (in fact that’s the problem with the economy), and the Fed can pull money out of the economy (a la Volcker) if necessary.  We may just disagree on that . 

    Where I think we all agree is that wages for most consumers stink and they are losing buying power.  That’s just bad in so many ways.

  79. No squeeze in the Euro going into Europe’s close..WOW.. looks like our boys are going to have carry the load on this one.

  80. Looks like they will try and take out the stops at 1.3484

  81. EU production – interesting who did show growth.. jumping out at me is that sweeden is big for Armaments, and Slovenia, Clovakia and Poland for ammunition and components. that may not be it, but sure struck me.

  82. CHK, short Dec 23 puts for .73. If assigned you get the dividend and one of Phils favorites

  83. Hypocrites – I guess from a pure definition stand-point, one might argue that some of us (by virtue of our standard of living) or Moore et al (by virtue of theirs) are hypocrites on an issue like OWS.  Not sure the definition is so clear in this respect – but it’s probably fair for "others" to perceive our private lives as not being consistent with our public views.  Still, I think hypocrisy is only a credibility issue – not a end-all attack.  One can be a hypocrite and still be right as a matter of fact, argument or opinion.  But 1%-ers that publicly support OWS shouldn’t cry foul when the hypocrisy argument is leveled at them.  Just gotta fight harder.  Like Joe Hill says – with my little tweak: "Don’t cry – organize."   I’ve found it much less useful to "appear" in public than to disappear into organizing at whatever level I can.   A talking head is a talking head is a talking head.  

  84. JRW, thanks for the great info. Are suggesting that the pre-Santa short term low should be built somewhere around SPX 1150? I.E., we crash through the 1220-1250 support zone even before Christmas? Thanks!

  85. Stock market bulls need to punch through current resistance levels and reach escape velocity or else risk a"terminal event."

  86. Oil – A quick calculation of the decline of Oil from the high of 115 to the low of 75 recently gives a fibi 61.8% retracement at 99.5ish.  How important is this level and does oil follow the fibi trends or totally disregards it?

  87.  Lunch time reads on OWS   (put me in the camp that this is a new progressive movement that is angry at Democrats and want real change.  They are organized differently from parties and social networking savvy.  They don’t need anyone’s money to operate:  From there I think Rich and Sachs say it better)
    Frank Rich wrote this piece in New York Magazine a few weeks ago drawing parallels between OWS and the "Bonus Army" of WW I veterans who constructed Hooverville in Washington DC (who were eventually dispersed by gunfire by none other than Gen. Douglas MacArthur).  It is a very long read but worth it.  He concludes:

    Over the short term, meanwhile, the Democratic Establishment is no doubt wishing that Occupy Wall Street will melt away with the winter snows, much as its Republican counterpart hopes that the leaderless tea party will wither if Romney nails down the nomination. But even in the unlikely event that these wishes come true, it is not likely to be the end of the story. Though the Bonus Army was driven out of Washington in the similarly fraught election year of 1932, the newsreels they left behind turned out to be previews of coming attractions for the long decade still to come.

    For a liberal view that this is a new movement that the Democrats will not be able to control, here is Jeffrey Sachs from the Sunday NY Times Review:

    Those who think that the cold weather will end the protests should think again. A new generation of leaders is just getting started. The new progressive age has begun.

  88. Tarpoon88 / SPX 1150

    I think we could base as early as SPX 1241; but the point is that we retest then climb before the fall !!

    Here’s the Big Picture:

  89.  NF**X  – Great post on hypocrisy and the importance of organizing over posturing.  

  90. what pushed the mkt higher? Evans?

  91. jabo its 12…lunchtime ramp job and Euro holding important support lets just hope our boys have the ammo to take the Euro higher and keep it there

  92. Wow, a little early in the day for this,  but it did show up in my chart:

  93. revtodd64 – Frank Rich is just excellent.  What a score for New York mag – which is highly underrated and should be read widely – like the NYT – but not a daily.  Sure – plenty of NYC-specific stuff, but the pol writers – now with Bruni – are outstanding.

  94. Phil- I like Moore as well but his movies distort the truth as much as some of Limbaugh’s or Beck’s rants… He is someone we want working behind the scenes, he is far too polarizing…

  95. jromeha – Don’t mention that you like Moore to your military buddies.  You’ll be labeled a commie!!!  I got that enough when I worked at the Pentagon.

  96.  On a non-political topic:  Where does PSW stand on oil prices right now?  They seem to be about the only price that’s not in a 1:1 link with Euro movements.

  97. iflan/PD/AAPL – Trying to be smart – and not just trae for the sake of trading.  And sticking to things I sorta know – or I know oithers here know very well.  So in my all-cash $25K portfolio, I’d like to make a wee bit of money this week.  My proposed play is AAPL Nov 375/380 bull CS – prob for $4.  Perhaps a 13% ror – and I think I won’t have to look much until Thurs late-ish.  It or similar would likely be my single trade in this account for the week.  I guess i could sell a related put too.

  98. wow JRW—what does that mean ?—-camel- dog--wall street is just a zoo —:-)

  99. JRW…..That’s a live cat, opposite of the ‘dead cat bounce’.  Means we’re going higher.   :)

  100.  JRW – I’m guessing it is the dreaded Dragon chart formation, ready to breath fire.

  101. @JRW, I think you should trade mark that indicator.  Is it a kitty cat or a Dragon?

  102.  Okay, That’s it! This site has gone to the dogs! Thanks JRW! Ha!

  103. JRW – that doesn’t look like either a bull or a bear, more like a cross bet a lion and a camel…what’s it "roaring" about?  And doesn’t that red line on the right look like the handle of a "cup and handle" thingie?

  104. That’s a putty-tat.

  105. Iflan – AAPL going higher also, doesn’t this sort of blow a hole in your interim bear theory for AAPL? Or you’re still sticking to it?

  106. Moore
    I don’t understand everyone’s issue with hypocracy when there is a reasonable explanation.  moore is a 1% but declares the system is unfair and needs change.  He has been lucky and made money.  I see no problem. 
    reminds me of Ross Perot:  As a candidate he told the truth NAFTA would be bad for the american worker.  As CEO he was preparing to take advantage of NAFTA free trade zone and admitted it.   Everyone screamed hypocrite and abandoned his presidential candidacy.  The even stupider thing was after they abandoned him no one complained about NAFTA and it passed and everyone regrets it.  Ha Ha Ha……..  
    Same thing with Warren Buffet.  Does things legally and tells everyone the gov’t should not allow it and he is called a hypocrite. 
    Like everyone has never been pulled over for speeding (breaking the law) and been given a warning instead of the ticket and driven away.  Should you not have said I broke the law give me the ticket.  I don’t want to be a hypocrite.
    Wearing two hats if it is declared and reasonable reasons given many times can be accepatble hypocracy. 

  107. jerconn….I hold no long AAPL positions.

  108. Geron (GERN) – many asked me about them and their ‘stem cell’ technology.  They were a high flier for this exact reason…well, not any more.  This is why I am not a fan of stem cells (yet).  Very hard to do….and I mean VERY hard.

  109. Jcaesar- hahahhaha good call! I was labeled a commie long ago! I even have ‘commie’ as my fb political party since 75% of my friends are conservative…they think b/c repubs vote for increased military spending and bigger (and unsustainable) pay raises they are ‘supporting’ the military. The only way they are ‘supporting’ us is ensuring we are always busy and gainfully employed! The sad part is, often in these packages they cut benefits for veterans on the backend… Unfortunately my friends don’t see this and continue to vote for te morons who got us in this mess.

  110. The breakout is real (for now); all in TNA now !!

    Target IWM 73.51 or better.

  111.  Hi Pentaxon,
    You originally showed your VIY indicator going back to the market peak in 2007, which showed the 5/08 drop that I believe most closely mirrors the drop that  JRW is expecting.  Would it be possible to include that period again on your chart?  Having studied your indicator quite a bit, it looks like we may be getting close to a sizable drop.  You’ll note that in that instance the indicator was premature by almost a month.  In my mind, I’m waiting for a decisive cross below of the 20 dma by the 5 dma to indicate that such a drop has begun.  Right now, all of the indexes besides the Dow are toying with crossing today, but I sort of expect things to hold together until after this week’s opex.  Since the VIY has started to turn up for December, that also would line up with JRW’s playbook.  By the way, thanks again for continuing to post and update your charts.

  112. Nice voume spike in IWM @ 12.24. Haven’t seen anything like that for some time.

  113. DEPO/dc – basis is (the $9 puts from eons ago)?  How about the June $6s for 50c if your basis is near there.  Otherwise, I would hold naked until they pop $6.  That is what I am doing (I have the Dec $5 calls sold from a long time ago, so may buy some back – rest is uncovered).

  114. Phil,
    In the ‘what if’ dept – while we wait – what would be your best thgts for index spreads with covers to participate in a move
    (1) back down to Oct lows if we break this current consolidating triangle to the downside ?
    (2) up to the Jul highs,if we break out northward
    Thanks in advance

  115. In TNA before JRWs post!

  116. Ok, what got fixed this time?

  117. JR – don’tcha think that the mutual fund boyz ‘n’ girlz need their bonus.  It is tied on the market performance and beating the averages of their peers?  Santa rally absolutely, and at 1300 SPX, I go all short…..well, except for biotech.

  118. jromeha / commie – I’m sure you have some stories to tell.  Glad you consider all those conservatives as friends!  I was a contractor, and working with my blue suit superiors (it was the Air Force) was a challenge sometimes.  So much simplistic thinking and that bloody echo chamber.  Half the time I shut my mouth, and the other half I didn’t.  Some guys treated the situation as a "we got a real one here" opportunity to make fun of the commie.  But you’re a true member of the band of brothers, so I’m guessing they cut you some slack. 

    I did see some really awful emails sent when Obama became president (some were quite racist).  Made me question their belief in civilian leadership.  But hey, that was only my experience and I’ve been told that you see differences across the Services.

  119. Pharm / Bonuses

    That’s the plan, SPX 1282 – 1325 !!

    But then……………..well, you know  8-)

  120. Wow, even Tom Coburn (US Senate (R))doesn’t that we should help the 1% 

  121. I’ve got a daily target now of IWM 74.14 – 74.48, after the retest of 73.51, fwiw !!

  122. Big bullish turn in the indexes – not sure why other than EU close at day’s highs.  

    Going up despite the Dollar holding 78 will be impressive if it sticks. 

    Still time to play XLF bullish if you need balance.  

    Moore/NF – Well if you’re not, you are a terrible supporter!  Why does a man of conscience (one of the few I could name in the public eye) supporting a movement signal the end of it?  Only for people who already refuse to watch his films for fear they may see something they don’t want to accept.  That’s why the right fosters such violent anti-Moore hatred – there’s a real danger that if some of the Dittoheads actually went to see one of his films, they may wake up and learn something so the peer-pressure is ratcheted up to 1,000 around Moore to make sure anything connected to him is immediately blasted and anyone who supports him is condemned along with him – that’s what cults do when confronted by non-believers. 

    WTF with the Nasdaq?  

    A la Volker/JC – Good luck with that one.  

    CHK/Jomp – Good call. 

    Talking heads/NF – That I totally agree with.  I hate to be "in charge" of these things – so much better to be the guy behind the curtain.  The one thing I have in common with Dick Cheney. 

    $99.50/Checho – Hopefully we get a double-top there and we’re done with this nonsense.

    Good analogy Rev.  

    Good chart JRW – Clearly a triangle squeezy thing forming.  

    Polarizing/Jrom – In order to get to "fair and balanced" someone has to tip the scales a little to the left.  We’ve tried moderation for 40 years – it’s a losing game.  

    Oil/ZZ – I stand that we still can’t afford $100 oil and the current pricing is foolish.  Doesn’t mean it can’t last or go higher – just a bigger crash when it’s done.  

    Good point Willie, however, the right-wing brain is very black and white with no room for gray.   

    Now CNBC adding "drug dealing" to reasons to clear Zuccotti park.  Next they’ll find anthrax or radioactive material…

    No real volume on this move up, very tempting to short the Nas – maybe selling SQQQ Nov $19 puts for .70 as a sell into the excitement play.  

    USO Friday $39 puts at $1.03 are a nice trade – 10 in the WCP with a stop at .90, just looking for a quick .20+


  123. Wow, now claims of drug deals at OWS. Not like drug deals don’t go down in NYC parks when the OWS crowd wasn’t there. Hell, I use to drive into the city and go to the parks for the free entertainment (people watching). Drug deals were common. Even happened right under the noses of the mounted police (I think they knew, just didn’t want to deal with it).

  124. GLW is poised for a breakout.

  125. Looking at the oil chart, I had R1 at 98.9 (call it 99) and that’s not holding great, but yesterday’s high was 99.25 and that has been the place to short so far today.  They are making a run at it now… if we go through that, they’ll push for 99.5 or even 100. 

  126. What if/8800 – I am more bullish than that, I think we test our Must Hold lines and go higher.  If you think we fall to October lows – look over the old Long Put List as you can do very well there.  To the upside, I put up a FAS play yesterday that makes 29,900% if the market goes higher – do you need something more aggressive than that?  My downside play would be oil (SCO spread above and my upside play is the FAS spread – very simple. 

    Coburn/StJ – That’s interesting.  

    FAS Nov $64/66 bull call spread is $1.05 for some reason with FAS at $65.70 so 10 of those in WCP.  

  127. On Capital Hill, Rand’s "Atlas’ Can’t be Shrugged Off.


    On another note…INCY….Dec$15/20 BCS for 90c.  Sell the Nov 12.5s for 30c.  PDUFA date is Dec 5….and data look good.  This is an all or nothing trade…so do so wisely.

  128. Waxing Nostalgic — I recall when heading to Lincoln park, I would stop and get a large can of beer. The guy at the register would slip it into a fitted paper bag, roll down the bag to the can top and open the beer before I could even get my wallet out! We would sit on the benches in the park and the mounted police would pass right by the bench where we were sitting, looking down at us, knowing damn well that we were breaking the law.
    Rally flying in the face of /DX.

  129. AUD/USD outperforming EUR/USD by a large margin I would be careful here..EUR/USD should have been around 1.356 by now

  130. Pharm / Ayn Rand – Just reading that story made me ill.  I don’t think she was malevolent, but boy have her ideas been destructive. 

  131. Woops, looks like they are trying hart to hit $100 on oil.  I’m still pretty sure it’s a blow-off top. 

  132. AAPL jamming up 2.25% – that’s pushing the Nas nicely.  So funny how they push it down so they have dry powder to pop the Nas when they need to.  

    No volume on this rally (nor was there yesterday) with just 66M shares on the Dow at 1pm.

    11:35 AM European shares close lower after another ugly day in the sovereign debt markets in which Spain, Belgium, Austria, and even France move further in Italy’s direction. Stoxx 50 -1.4%, Germany -0.7%, France -1.7%, Italy -1.3%, Spain -1.3%, U.K. +0.3%. Euro -1% to $1.35. [

    12:00 PM On the hour: Dow -0.25%. 10-yr +0.15%. Euro -0.79% vs. dollar. Crude +0.77% to $98.97. Gold +0.08% to $1779.85.

    1:00 PM On the hour: Dow +0.47%. 10-yr -0.08%. Euro -0.65% vs. dollar. Crude +1.09% to $99.3. Gold +0.24% to $1782.75 

    More FREE MONEY!  A forecast of continued weak growth, stubborn unemployment and "undesirably low inflation" suggests that more easing steps may be needed, San Francisco Fed’s John Williams says, adding that further easing could come in the form of additional asset purchases or further communication about the Fed’s future policy intentions.

    Even more FREE MONEY!  Recently dissenting at the FOMC because he didn’t think Fed policy was easy enough, Chicago Fed chief Charles Evans tells CNBC he’s more worried about the central bank’s mistakes from the 30s rather than the 70s. Seeing 2.5% growth in 2012 and 3% in 2013, he says this isn’t strong enough and continues to urge more accommodation.

    More Fed bond purchases could fuel inflation risks, even though they would be a forceful measure to spur growth, St. Louis Fed chief James Bullard says. If further monetary policy accommodation proves necessary, the Fed should use the tool of promising not to raise rates until a specific date, he says, even though it isn’t clear how credible such commitments are.

    This is what seems to have moved the market:  Mario Monti wins the support of Berlusconi’s People of Liberty party, paving the way for him to form a new government. The FT’s Chris Adams reports sources as saying his cabinet is to be named tomorrow.

    And this:  This morning’s surprisingly strong retail sales data inspires Macroeconomic Advisers to raise its forecast for Q4 GDP growth by two-tenths of a percentage point to 3.1%. It’s fodder for the notion that the U.S. is somehow decoupled from what goes on in Europe, which is sinking into recession while the U.S. thrives. (earlier)

    More on the Empire State Survey: Though the headliner number moved up nicely, Nouriel Roubini dissects the report to find the details are actually much weaker and point to a lower ISM number. On the inflation front, the prices paid index fell back to 18.29 – the lowest level since Nov. 2009.

    The better-than-expected retail sales report was led by a strong 3.7% jump in revenue at electronics stores – marking the segment’s best month since Nov. 2009. The report shows that households are spending enough to keep the U.S. out of recession, says TD Securities’ Eric Green, who adds that the numbers tip toward strong retail sales growth this holiday season.

    Germany’s ZEW economic sentiment index for November fell to -55.2 vs.expectations of -52.5 and -48.3 previously. It’s the lowest level since October 2008. For the eurozone as a whole, sentiment declined to -59.1 from -51.2. – I guess we’re rallying as people FLEE the EU?   

    Fiat money has its benefits as the U.K. joins Germany and Switzerland as a destination for safe money flows in Europe. Ten year Gilt yields drop to a record low 2.13% (against 1.76% for Bunds) even as inflation trips along at 5%. Not since the 70s have investors accepted such a high negative real rate to lend to the British government.

    The National Bank of Hungary warns it may need to hike interest rates to combat inflation risks from the tumbling forint as the government is forced to pay 6.7% to raise $172.6M in 90 day bills. Hungary’s troubles are spreading to its major creditor Austria, whose rate spread to German debt has risen to record levels over past days.

    The shocking 60 Minutes report on the apparent legality of widespread insider trading by Congressmen and their staff gets a second look from law professors who cite a published paper by Donna Nagy. The article finds that members of Congress are in fact breaking the law by trading inside info if you apply either the "classical theory" that finds Congress has duties not to trade on undisclosed information or the "misappropriation theory" which makes it illegal to deceive the people who entrust Congress with confidential info. 

    "Raise your hand if you plan to invest your money in the ‘social media’ ETF (SOCL)," asks Josh Brown. "Great, now take that hand and slap yourself across the face with it." The index is destined to go nowhere as "half the components … will be competing with the other half … If you want tech, just buy the QQQs or something." 

    Beazer Homes (BZH -2.9%) trades lower as top-line numbers beat FQ4 expectations on higher closings Y/Y, but operating EPS and core gross margins came in below Street estimates. Analysts are viewing Y/Y revenue gains in homebuilders with a sceptical eye, as results are skewed from slumping sales last summer following the expiration of the federal home buyer tax credit.

    AMR (AMR -7%) shares tumble after the American Airlines parent tries to end its labor stalemate with a contract proposal that offers pilots smaller pay increases than they had sought in bridging a "wide gulf" between the two sides. AMR is urging a rank-and-file vote on the first full contract proposal in more than five years of talks. 

    Three lunchtime reads:
    1) Patience grows thin for banks’ foreclosure excuses
    2) Is America following Japan? Two things to remember
    3) One secret Buffett gets to keep

  133. @Felipe
    re: the NOV FAS combo of yesterday is up nicely.   In the calls at 1.62 and sold the puts for 1.80.
    Are you sticking with it, closing it or rolliing it?


  135. FAS/Flips – They are on track as long as we’re holding $13ish on XLF.

  136. Isn’t Estonia where a ton of Tech went into (esp. code writers, etc.)?  I find it interesting from the picture Phil put up here, that the industrial production fell off a cliff there….but there is very little debt.

  137. Buybacks Surge as S&P 500 Trades at Discount (Bloomberg)

    Could India Go the Way of Greece and Italy? (The Street)

    Supreme Court to hear dispute on health care law (USA Today)

    New Documentary Says Gulf Oil Spill Crisis Isn’t Over (Forbes)

    Very good articles on how we think and act in society

    The Backfire Effect (You Are Not So Smart)


    • The Misconception: When your beliefs are challenged with facts, you alter your opinions and incorporate the new information into your thinking.

    • The Truth: When your deepest convictions are challenged by contradictory evidence, your beliefs get stronger.


    The Quiz Daniel Kahneman Wants You to Fail (Vanity Fair)

    Monoculture: How Our Era’s Dominant Story Shapes Our Lives (Brain Pickings)

  138. SPY – the Calendar 129 calls, well those are nicey nice.  Riding out until EOD, or buy back the sold calls and hold on to the long ones until EOD or IWM targets are reached (JRWs….).  

  139. Get ready to take some profit, IWM 74.14, first target AND R1 !!

    You can buy TNA back at IWM 73.89 in an hour or so.

  140. USO $39 puts right at .90 but I’m not into stopping out – let’s risk another $100 (.10) before deciding to quit in the WCP.  No hard stops, of course, as I said, I think they are trying to hit $100 on oil to trigger short covering (including us, who probably caused a lot of volume today).  


  141. I thought Sen. Coburn’s "Back in Black" was the most realistic deficit reduction plan from the Republicans this summer….

  142. Moving too fast to get out; lucky me !!  8-)

  143. Phil / Vampire Squid

  144. Taking 5% profit here on TNA !!

  145. Back around Monday’s open except for NYSE, which is way lagging by about 1% and, since they are the hardest index to manipulate – I’d be very suspicious of the movements of the others.  Still, very impressive job by the bulls – didn’t know they still had this kind of action in them – especially that stunning move on the Nas today but 2,700 is going to be a tough nut to crack I think and that’s still 1% below the 5% line.  

    Dollar not likely to just roll over and die under 78 either just because 2 Fed doves said something doveish.  

    Last week, we popped on Tuesday too and then dropped like a rock on Wednesday with 12,200 acting as a tough barrier all around.  Still 100 points to play with though so let’s not count the bulls out too early but I want to stick with the USO puts in the WCP, now .86 and a DD at .70 or .60 would be recoverable as USO is at $38.55 so we are only 1/2 premium.  

  146. Looks like 10M shares traded on the Dow in the past hour so figure $500M to push the index up $35Bn – 70:1 leverage is not bad when you can make it work…

  147. QQQ Friday $57 puts at .29 are a fun overnight trade as they were .56 this morning and could easily pop back to .45.  

  148.  i have also noticed we usually rally on days hedgie 13fs are out….

  149. is it me or does lloyd have the face that was a big shovel target  (shovel ready face?) in high school?

  150. Are the NYMEX boys going to take advantage of this pricing and sell into the close??

  151. angel / shovel — No, I think Cramer has a lock on that.

  152. Remember that chart I posted yesterday:

    Right on target this week… I guess tomorrow is down! 

  153. I guess if the facts don’t match the narrative, just kill the messenger:

    According to Gingrich, the CBO should be done away with because its analysis shows that, as enacted, health care reform reduces the federal budget deficit. This means that repealing it — as many in the GOP base to which Gingrich is appealing wants to do — will increase the deficit and, therefore, require spending cuts or revenue increases to offset the impact. That, of course, will make the repeal effort much harder and far less likely.

    But instead of proposing those offsets — that is, instead of doing the budget equivalent of taking steps to lower his blood pressure by losing weight, using less salt or taking medication — Gingrich wants to kill the CBO budget doctor so he doesn’t have to hear any more bad reports. 

    Sounds like a good idea though…

  154. Pharmboy/ DEPO
    They were $8 puts sold. I now am the proud holder of shares at $5.70. They are shares I want so,certainly not a problem.

  155. NYMEX/Button – The trick is to call their bluff.  They pretend to offer to buy oil for $100 because it’s a closed little club and there are no takers – when we agree to sell it to them for that price they will first try to shake us out of the position but, if we don’t back off and keep accepting their offers to buy oil for $100 – it becomes a very expensive game for them to keep the prices up.  When we see that the next 4 years are trading below $95, it’s a good time to call their bluff when they jam the front-month to $100 but it’s always a dangerous game.  

    Day chart/StJ – Yep, Tuesday’s the winner once again.  

    Gingrich/StJ – That’s some real Presidential thinking!  

    Protesters, Police in Standoff Near Park

    Hundreds of protesters gathered around the closed perimeter of Zuccotti Park, returning hours after the protesters’ early-morning eviction.  A state judge issued a temporary restraining order prohibiting the city from evicting protesters.

  156. Looks like someone has decided to accumulate GLW. Is that you Warren? Yesterday the stock was trading up when all around was doom and gloom.
    I bought 10  November $15 calls yesterday for $0.50 and was able to cash out today for $0.75, a nice 50% overnighter. Where do you get application forms for the 1% club?

  157. CVX – oil spill?

  158. Interesting tomorrow as Lacker (big hawk) speaks at 11:15, followed by Rosengren (big dove) at 12:45.  We have MBA Applications, CPI, TIC Flows and Industrial Production before the bell (and global IP has sucked), then Housing Index at 10, oil inventories at 10:30 and then Fed speak.  

    Arvind Sodhani from Intel Capital speaking – I applied for that job back in 1999!  

    Oil held $99.40 into the close – still looks fake to me.  USO $39 puts are .87 and I think we can keep them overnight, hopefully we won’t regret it and the FAS calls are a nice offset anyway.  


    2:00 PM On the hour: Dow +0.5%. 10-yr -0.11%. Euro -0.65% vs. dollar. Crude +1.47% to $99.66. Gold +0.12% to $1780.45.

    Knocking 24 points off the Dow:  Shares of Chevron (CVX) trail off – now down 3% after being in positive territory most of they day – on increased chatter that an oil spill in Brazil may be larger than first reported.

    Sources say the USPS is considering major restructuring options as it faces a possible default on its heath benefits and might not have enough cash to keep delivering mail in 2012. With labor and retirements costs devouring 80% of its budget, a proposed plan to close 3.7K post offices and slash 220K jobs by 2015 doesn’t go far enough bring the agency to profitability.

    Top 1% are mad as Hell and they’re not going to take it anymore (or at all):  Goldman Sachs’ (GS +0.2%) Lloyd Blankfein predicts his army of customers will take up the firm’s cause with regulators over the impact of the so-called Volcker Rule. He admits the firm plans to make the interests of its clients a centerpiece in its fight over new regulations. 

    Sovereign default is almost always a choice – a matter of appetite to pay, rather than ability," writes Andrew Lilico. He notes Italy "simply has no history of peacetime sovereign default. It doesn’t do it." This proves nothing about the outcome of the current episode, but highlights a key cultural and historical difference between Italy and Greece.

    What oil shortage?  Surging oil output – 464K barrels/day in September – from North Dakota’s Bakken shale formation makes the state the country’s 4th largest producer, and nearly big enough to earn a spot in OPEC. Rick Mueller from ESAI Energy says it’s just getting started, with output slated to jump to 700K-1M barrels/day within 5 years. 

    Midwest farmland values surged in Q3, according to the Chicago Fed: At 25%, the Y/Y gain in agricultural land values was the largest in more than three decades; and, at 7%, the quarterly increase in the value of "good" farmland matched the highest since the late 1970s. 

    Radio Shack (RSH -2.3%) trades lower after S&P cuts its debt rating to BB- from BB, three notches below investment-grade. The ratings agency expects Radio Shack’s poor operating performance, manifested in a weak Q3 report, will continue into 2012, given weak macro conditions and strong competition for Radio Shack’s wireless business. 

    Staples (SPLS -4.2%) is having a bad day after missing FQ3 revenue forecasts and providing tepid FQ4 sales guidance. A 12% decline in European same-store sales is likely also raising eyebrows. Oppenheimer is maintaining a neutral stance; the firm is worried about U.S. and European macro troubles, but is impressed with Staples’ expense controls and strong cash flow. (transcript)

    The mad rush of retailers to push open their doors on Thanksgiving for Black Friday shoppers is backfiring, according to Minyanville. Instead of stirring up excitement from eager Turkey Day shoppers, chains are facing criticism for the insensitivity of bringing in workers on a national holiday. Case in point: An online petition on aims to deliver 500K e-signatures to Target (TGT +0.9%) in the hope of pushing back its Black Friday opening time back to 5:00 AM on the day itself. 

    Getting a great deal on a car is one thing, but keeping it running is another. So which cars are cheapest to maintain? Toyota (TM) gets the top spot for reliability, followed by Hyundai (HYMLF.PK), according to CarMD, which collects repair data from its network of 3,000 U.S. mechanics. Rounding out the top five: Honda (HMC), Ford (F), GM.

    Green Mountain Coffee (GMCR +10.5%) remains volatile in the wake of last week’s post-earnings crash, rallying sharply today after selling off yesterday, even as it’s reported major hedge funds pared their stakes in the company. With 23.2% of Green Mountain’s float shorted as of Oct. 31, and many of those shorts now sitting on big profits, more volatility could be on the way.

  159. CBO/Stj – Nuck Fewt as my old neighbor’s bumper sticker said; but he’s not wrong that the CBO should be eliminated. As I understand it, the CBO, at best, serves to offer misleading cover for legislation as it is constrained to only use the numbers/assumptions that congress provides with bills.  The GAO on the other hand, is one of the few remaining orgs with any shred of legitimacy left. And congress is now trying to kill the GAO in the 2012 budget: "the [GAO] is being unfairly singled out with both excessively deep cuts and overly burdensome new mandates that will consume the agency’s more limited resources for no apparent benefit.”
    Congressional CBO report from 1994: "CBO’s track record is abysmal if not embarrassing.."
    (the CBO is not a new problem and many more examples exist)

  160. With the dollar this high and weather in the 60′s in the Northeast, this is such a snow job on oil.  I bought in the last 20 minutes SCO calls at 39 for this week.  I’m all but 7 of the volume.  Pressing it into tomorrow.

  161. CVX/Pharm – GS must have unloaded a lot of Nov 105 puts on their clients.

  162. CVX/Pharm – yes oil spill in brazil is the story.

  163. GLW/JMM – That one always seemed like a no-brainer to me.  No matter what phones or laptops sell, they make the glass.  

    RIG getting hit hard too, must be contractor for CVX spill.  

    Oil/Rustle – Very frustrating when they do this, isn’t it?  

    London to Seek Eviction of Occupy Protesters

    City’s announcement comes as protesters head for U.S. Embassy, where they plan to protest the forcible removal of the Occupy Wall Street camp.

  164. False report of an oil well leaking, what else can they try and pull out their hat this week.

  165. Seems like CVX spill is overstated somehow, now CVX popping and Dow leaping up for a nice pop into the close – just a coincidence, I’m sure!  

    Meanwhile, if these numbers are right, then the NYMEX boys didn’t roll barrels today, which is crazy – like a big game of chicken and Friday’s rollover is the cliff:  

    Click for
    Current Session Prior Day Opt’s
    Open High Low Last Time Set Chg Vol Set Op Int
    Dec’11 98.04 99.84 97.51 99.45 14:55
    Nov 15
    1.23 239304 98.14 150312 Call Put
    Jan’12 98.11 99.86 97.61 99.50 14:55
    Nov 15
    1.21 121915 98.22 312363 Call Put
    Feb’12 98.11 99.73 97.65 99.42 14:55
    Nov 15
    1.20 51572 98.15 85489 Call Put
    Mar’12 98.05 99.62 97.60 99.34 14:55
    Nov 15
    1.17 30938 98.10 84922 Call Put

  166.  QQQ 57 puts can be rolled up to the 58s for .25

  167. QQQ/Deano – I would rather do the roll tomorrow if necessary – no sense in adding more premium into overnight decay.  

    On the whole, I’m just not seeing news to support this move – very much like last Tuesday, when we went up and up into the close for no good reason and then gapped down almost 400 points the next morning – be very careful!  

  168. Pharm, In estonia prod. fall is monthly not Y/Y. Mainly its Ericsson export to Sweden and Germany. Our GDP grew 7.8% in 3. third quarter. Of course, if export markets go down, prod. decreases.

  169.  Phil, whats a good downside hedge to bet against this move into the close in case we repeat last wednesday? Thanks!

  170. Phil- I heard something that supercommittee is making progress as reason for move up…did you see that on any of your feeds?

  171. GOOG $625/620 bear put spread at $3.10 is a nice downside play – figure risking $1 to make $1.90. 

    MMM $82.50 puts are $1, also a good trade for a crash tomorrow. 

    WYNN $130/125 bear put spread at $1.90. 

    XOM $77.50 puts at .21 are a fun play too.  

    Still shorting oil is my favorite bet at the moment.  

    Well, I guess I’m not bullish…

  172. "Super" committee/SNS – They kicked the can into December by passing the amount of cuts and rev increases (the balance) without specifics as to what will actually be cut or increased – MADNESS!  

    Protesters Move North, Arrests Follow

    A group of protesters pushed out of Zuccotti Park staged an impromptu rally at a square on Canal Street. Police cleared the area, arresting several journalists.

  173. WCP SCO Put
    Are you holding on rolling the short $42 puts in the WCP down to the Dec $38 puts? Or waiting to see how it goes tomorrow?

  174. Thx pahurik.

  175. So we are back to hoping for FED action? Is that what this bump up is about? If not, what else is there?

  176. It’s very possible we don’t repeat last Wednesday, as that was caused by Berlusconi’s resignation – even though that was then decided to be a good thing, which rallied the markets 400 points Thursday and Friday.  So nothing so earth-shattering likely tomorrow but, as I said – what is so good now that we should be back here?  Oh well, we’ll see tomorrow…

    SCO/WCP, Zipla – Yes, that sucks and we’ll have to roll it – not too likely we get a winner now but also not likely we will be more screwed on inventories so no point in not waiting.

  177. USO – pretty much a straight line up since 10/4……

  178. EARTH MOVERS// in my mind nothing but europe matters intermediate-term because it can bring everything down….and the situation has deteriorated meaningfully during this equity rally

  179. JRW- predictions on tomorrow and rest of week? has xmas rally begun?

  180. Distracted today, but hanging with Phil’s oil short through a straight and largish purchase of SCO, agree logic.  Offset with MRO, which is looking good, and my perennial Euro shorts, which look even better.  Luck, everyone!

  181. S&P forming a triangle thingy…

    We usually break up or down from here! 

  182. THETA/ If an option has a theta of say .06,  when does the actual decay occur, during the course of a market day or overnight? 

  183. 3:00 PM On the hour: Dow +0.5%. 10-yr -0.12%. Euro -0.67% vs. dollar. Crude +1.36% to $99.56. Gold +0.21% to $1782.15

    "Today we’ve seen probably the most worrying day of the crisis so far," writes Mike Riddell, as the contagion spreads to France which "sees a full blown run on its debt," the 30 year yield climbing to 4.43% (against Germany at 2.45%). A debt downgrade is near as French CDS are past the point at which Ireland and Spain received their first cuts

    Who has the better central bank, Europe or the U.S.? Ezra Klein ponders the question, writing that while the Fed has been willing to test the boundaries of what it can do with policy to preserve stability as financial institutions fail all around them – across the pond the ECB focuses more on pressuring failing institutions (and politicians) to reform themselves without trying to save the economy all by itself. Also in the mix, the Fed has a giant backstop in the form of the U.S. Treasury but it’s unclear who backs up the ECB.

    European internal market commissioner Michael Barnier backs away from his Orwellian plan to ban sovereign credit ratings in "exceptional circumstances" following "a long discussion" with his fellow commissioners. Mr Barnier was thrown a bone in the form of some other reforms, but on his key wish, was blocked.

    Rochdale’s Dick Bove cuts his rating on Credit Suisse (CS -3%) to Neutral and his price target to $28 from $34, citing the ongoing fight with the IRS in handing over client names suspected of evading U.S. taxes, a potential ratings downgrade, and the need to build capital to meet Basel III requirements. The latter "is a big one," Bove says, as it will constrict the bank’s ability to grow.

    Little has changed in world of bond ratings, even after Dodd-Frank was supposed to shake it up. Moody’s (MCO), S&P (MHP), and Ftich still dominate the business – 98% of the municipal market vs. 94% in 2007) and have plenty of pricing power. "We don’t look to compete on price," says Moody’s. No wonder Warren Buffett likes it. 

    It’s another multi-month high for WTI crude, which nudges up to $100/barrel before pulling back a hair to $99.46. Just another risk asset tightly correlated to the S&P for most of the year, crude has shot higher in the past month as stocks push just a bit over the flatline. USO +1.5%

    LinkedIn (LNKD) investors will sell 6.2M shares once the lockup expires on Nov. 20. Bain Capital is dumping all of its 3.7M shares, while LinkedIn will throw another 1.3M shares into the pot to fund further development and possible acquisitions. At $75.50 (-3.8%), shares are still well above the IPO price of $45, but well below the open of $94. 

    Hmmmm - Newly released emails from Solyndra executives show that the Department of Energy pressured the failed solar energy company to postpone announcing layoffs until after the 2010 midterm elections, Washington Post reports. 

    Clean Energy Fuels (CLNE +17.6%) takes off after Jim Cramer hosts CEO Andrew Littlefair on Monday evening’s broadcast of Mad Money. Cramer mentioned during the broadcast that he’s a fan of the company, which provides natural gas for transportation fleets. Update: Shares also appear to be getting a boost from the introduction of a bill to provide increased support for natural gas-fueled vehicles.

    Though Gartner estimates the iPhone accounted for only 3.9% of mobile phone sales in Q3 (15% of smartphone sales), a survey of 4,500 consumers in 9 countries finds a third would prefer an iPhone if cost wasn’t an issue. 10% want a Nokia (NOK) phone, and just 7% want a BlackBerry (RIMM). Apple (AAPL) is pitching the 3GS as a low-cost option, but at $375 unlocked, it’s still costly for many international buyers.

  184.  Theta/Brook – I don’t know what’s SUPPOSED to happen but I see decay the next morning when we’re this close to expiration.  

  185. Wow, a small sign of rational selling into the close?  

  186.  Phil, bought SCO at the day’s market high against this overall move. What’s a good time frame/price zone for the SCO play on a $39 entry?

  187. sns1 / Tomorrow

    We are still in the middle of a range, so we’ll have to see; But, as always, I’ll keep you posted !!

    Lines worked well today, even if I was a bit too cautious on the TNA play; see you tomorrow !!

  188. SCO/Tarpoon – Not sure what you mean.  SCO is bearish to oil and now $39.39.  I don’t see $100 oil standing up so I like them here, at this price.  Any combination that bets them up from here is one I can get behind, especially the trade idea from the morning alert, which is cheaper now.  

    DELL seems to have been a bit of a disappointment but not a market mover.  AAPL was the Nasdaq story today with a 2.5% gain.  

    Volume was 1/2 of normal, 2nd day in a row.  

  189. We are going to be replaceable soon:

    It may be a bit on the Uncanny Valley side of things to have a computer chip that can mimic the human brain’s activity, but it’s still undeniably cool. Over at MIT, researchers have unveiled a chip that mimics how the brain’s neurons adapt to new information (a process known as plasticity) which could help in understanding assorted brain functions, including learning and memory. The silicon chip contains about 400 transistors and can simulate the activity of a single brain synapse — the space between two neurons that allows information to flow from one to the other. Researchers anticipate this chip will help neuroscientists learn much more about how the brain works, and could also be used in neural prosthetic devices such as artificial retinas. Moving into the realm of "super cool things we could do with the chip," MIT’s researchers have outlined plans to model specific neural functions, such as the visual processing system. Such systems could be much faster than digital computers and where it might take hours or days to simulate a simple brain circuit, the chip — which functions on an analog method — could be even faster than the biological system itself. In other news, the chip will gladly handle next week’s grocery run, since it knows which foods are better for you than you ever could. 

  190. I closed the GOOG Nov 19  605/610  bcs   for   +30% in one week on 100 contracts.   It could have made a lot more if I held but I would not be surprised to see a pullback tomorrow or rest of week.  Greed kills.    I like Phil’s QQQ put trade, although I didn’t do it.   I don’t see us up tomorrow, but who knows?  

  191.  Phil, sorry, a bit new to this:  does 
    5 SCO Nov $45/48 bull call spreads at $1.10 ($1,100)
    imply a price target of somewhere between 45 and 48 on SCO by end of november, meaning if I entered SCO today (the actual equity, not an option) thats the level and time frame I should be looking for? Sorry for the novice question…

  192. On the 5 min Oil chart I can see a bit of divergence (MACD and the price). Does anyone see it?

  193. Stj:  I know quite a few people that would benefit having a single properly-functioning brain synapse.
    On a less serious note, while Bill Gross’s impeccable timing on his U.S. Treasury short disqualifies him permanently from being a Great Seer, but I think it’s safe to say he’s stating the obvious here.  From FT:

    Markets Insight: Bill Gross – Take flight from Europe’s policy foodfight

    Euroland’s fingers are pointing in all directions, each member believing they have done more than their fair share to resolve a crisis that appears intractable and never-ending. The world is telling them to come together; they’re telling each other the same; but as of now, it appears that you can’t tell any of them very mucha

  194.  "much of anything."

  195. Wow. futures continue the sell-off.  

    Replaceable/StJ – Reminds me of Hitchiker’s Guide:

    "No, no," said Frankie, "it’s the brain we want to buy."


    "Well, who would miss it?" inquired Benjy.

    "I thought you said you could just read his brain electronically," protested Ford.

    "Oh yes," said Frankie, "but we’d have to get it out first. It’s got to be prepared."

    "Treated," said Benjy.


    "Thank you," shouted Arthur, tipping up his chair and backing away from the table in horror.

    "It could always be replaced," said Benjy reasonably, "if you think it’s important.

    "Yes, an electronic brain," said Frankie, "a simple one would suffice."

    "A simple one!" wailed Arthur.

    "Yeah," said Zaphod with a sudden evil grin, "you’d just have to program it to say What? and I don’t understand and Where’s the tea? Who’d know the difference?"

    "What?" cried Arthur, backing away still farther.

    "See what I mean?" said Zaphod.

    "I’d notice the difference," said Arthur.

    "No, you wouldn’t," said Frankie mouse, "you’d be programmed not to."

  196. Good move Iflan.

    SCO/Tarpoon – That’s not end of November, that’s Friday!  Not a good bet right now at all.  Note the Morning Alert trade is for DECEMBER at a much lower strike.  We are stuck in the $45/48 trade from earlier in the month but it’s certainly not something you want to jump into now.  

    Oil chart/Pat – I’m not a chart guy, just looks overbought to me.  

    At the close: Dow +0.14% to 12096. S&P +0.53% to 1258. Nasdaq +1.05% to 2366.
    Treasurys: 30-year -0.1%. 10-yr -0.1%. 5-yr -0.763%.
    Commodities: Crude +1.3% to $99.5. Gold +0.27% to $1783.25.
    Currencies: Euro -0.76% vs. dollar. Yen +0.04%. Pound +0.6%.  

    Market recap: Stocks came off their best levels but still eked out a gain in thin trading, following reports that Italy’s PM-designate Monti said he will form a new government and after a handful of better-than-expected economic reports (I, II, III). Crude oil futures closed above $99, highest since July. NYSE advancing issues outnumbered decliners two to one.

    The Pension Benefit Guarantee Corporation (PBGC) reports a record deficit of $26B for the year ended September 30 as the economy leaves the insurance fund with growing exposure to weak companies. The agency plans to make up the shortfall over a period of years by raising premiums and through better investment returns.

    Bridging the gap between the Solyndra fiasco and Congressional insider trading, Sen. Dianne Feinstein and her husband invested $1M into Amyris Biotechnologies (AMRS) – a "green" energy company – in 2009, shortly before the firm received a $24M grant from the DOE. The company went public a year later, and it’s unknown how much the Feinsteins profited.

    Dell (DELL): Q3 EPS of $0.54 beats by $0.07. Revenue of $15.4B (flat Y/Y) misses by $250M. Sees FY12 Revenue at lower end of 1% to 5% growth (1.7% Street consensus). Shares -0.5% AH. (PR)  

    More on Dell’s (DELL) FQ3: Sales hurt by 6% drop in consumer revenue (1% growth in FQ2), and 2% drop in government revenue. Bolstered by 4% growth in sales to large enterprises (1% in FQ2). Server and networking revenue +13% Y/Y, and services revenue +10%. However, desktop PC sales were down 6%, and notebook sales down 2%. $600M in shares repurchased. Dell -1.9% AH. (PR)

    Chinese mobile phone manufacturer Zoom Technologies (ZOOM) plunges after cutting FY11 sales guidance to $250-$255M against expectations of $331M. The company sees FY12 sales of $360-$380M vs. $404M consensus. Shares -23% AH. (PR)

  197. 10 year note auction coming in this week. There can be a pullback to get the yields on the Treasuries down to reduce the interest payment.

  198. 10-year TIPS auction, not the same thing.  

  199. Thanks for pointing that out Phil! Sometimes you read what you want to read and not what is actually written. Need to be unbiased while looking at data.

  200. It’s interesting that the 2 broader indices (NYSE and Russell) are the ones lagging and still below the Must Hold lines. But then again, broad indices are harder to manipulate. 

  201. Hey guys, I’m new around here so I’m just lurking and reading a lot.
    Just saw this:
    Apparently they just found some more oil they had misplaced or miscounted or whatever:
    SAN FRANCISCO (MarketWatch) — Crude-oil supplies unexpectedly climbed by 1.3 million barrels for the week ended Nov. 11, the American Petroleum Institute reported late Tuesday.

  202. Good handle Droptimator, just hope it doesn’t indicate a market direction! 

  203. Brain / Zero – Actually, they are waiting to have a system with 2 synapses to replace the current GOP presidential candidates! 

  204. Thanks STJ, hard to tell what is going to happen with the market with these low volume rallies in this consolidation.

  205. Direction / Drop – I don’t know that anyone can tell you where we are going now… And the low volumes do make it harder to guess. Cash is good or any market neutral strategy with lots of protection on either side! And that’s tough to play as well as we discussed a couple of weeks ago because options don’t pay you enough for the upside risk. 

  206. Interestingly enough, gas prices don’t seem to match the rise in oil:


    Which is not a bad thing and maybe, maybe oil prices are being manipulated. And that also means that crack spreads have taken a tumble:

    Not good news for the refiners!

  207. Phil, my 9 year old daughter is doing a paper on the BP spill, that link you provided today from Forbes is scary reading, I just printed it out for her. So your also contributing to 4th grade science projects, thought you would like that.

  208. ST JEAN/gas  The price of gas futures are stable but the prices at the pumps have been rising I buy gas everyother day and average price is 3.45 which seems about 20 to 30 cents to high to me

  209. Jcaesar- yeah, usually it’s all in good fun…. It was definitely fun to see their gloominess when O was elected. I never seen any racist emails about him… The questionable ones usually focused on the typical republican talking points like dems weak on national security, don’t support troops, etc… Yeah, it must’ve been tough working for us blue suiters:)!. I’m at Hanscom (at least I will be again when I get back in Jan 13), and all the competent people are contractors.. One of my contractors had to show a GS-14 and 2 GS-13s (with probably 70+ yrs exp btw them)how to copy from excel and paste on a ppt slide!!!! There is PLENTY of fat to be trimmed from the civilian workforce….

  210. Gas prices / Bertll – It does seem high to me. I don’t recall what the retail price is as compared to the price of the futures but can’t be that much. Of course, it depends on your state as each one has different taxes.

    Speaking of, when I was in the UK last week, gas (petrol I guess) was 1.34 BP per liter. At the current exchange rate, that would make it $8 per gallon. I would not want to fill up a Hummer gas tank at that price… I guess $3.45 a gallon doesn’t seem that bad anymore. 

  211. Troop support / Jrom – I was reading your previous post and it’s interesting that you mentioned the fact that Reps like to keep you guys busy and then cut veterans funds. A cynical friend of mine once told me that we usually found plenty of Reps at military funerals but not many helping veterans… I also wonder how your friends can keep on believing these crap talking points about the Dems weakness on security when they look at all these guys that avoided fighting the so call "good fight" in Vietnam. And rag on real vets like Kerry and Cleland. It’s beyond me… But then again, when facts get in the way of the narrative, change the facts! Plenty of Cognitive Dissidents there. 

  212. In the meantime, dollar back at 78.5 and Dow futures are below 12,000 again down 100 points since the close! S&P futures are down over 10 points as well. Oil is off $1 and below $99 now and the euro is below 1.35. Fun evening so far! 

  213. As an antidote to the running inane political commentary, I humbly provide some inane humor. My better half received this email today:


    I just discovered this important info below. Please share with all your
    I don’t know WHY I didn’t figure this out sooner!!!!!
    It’s the shampoo I use in the shower!
    When I wash my hair, the shampoo runs down my whole body, and (duh!)
    Printed very clearly on the shampoo label is this warning,
    No WONDER I have been gaining weight!!!
    Well! I have gotten rid of that shampoo and I am going to start using
    Dawn dish soap instead.
    Its label reads,
    Problem solved!
    If I don’t answer the phone . . . I’ll be in the shower!

  214. stjeanluc – what do you mean replaceable *soon*? I saw today a robot controlled a human arm to make it play a ‘cooperative game’. I wish I were making this up…

  215. Just listened to the Jim Grant interview. from which I conclude that currencies are the mechanism by which governments must now aggressively redistribute income and selectively reduce prices. In the present environment of national bankruptcies,  currencies will be newly-minted or printed in direct proportion to the political dynamics underlying this redistribution.
    What will those dynamics be?  I expect to one of two things.  The first would be the printing of money to fund massive job creation projects of a Works Projects Administration type, in which the money printed to pay workers will reduce the real incomes of national populations but redistribute available wealth more evenly among the working population through the redistribution of the newly-minted bills.  This printing will also support the corporate sector through the purchase of basic materials, transportation, manufacture and construction equipment.  The owners of capital will seek to control these dynamics.
    The second would be printing money to fund wars of a regional, national or international type, in which the money printed to pay soldiers will reduce the real incomes of national populations but redistribute available wealth more evenly among the working population through the redistribution of the newly-minted bills.  This printing will also support the corporate sector through the purchase of basic materials, manufacture, transportation and construction of weapons of war.  The owners of capital will likewise seek to control these dynamics.
    I rather think we shall see a mixture of the two, although I’m always willing to be optimistic and settle for a sort of benign global hyperinflation and hysterical purchasing of gold, CHF, CAD, JPY and other phenomena that appear likely to preserve purchasing power until the world economy aligns its ability to produce with its propensity to consume.  But the commission of irreparable errors is also possible.
    As a epilogue, I am curious as to PSW’s take on the chance that the gold, the useless rock with such a firm hold on humanity’s historical imagination, will not soar to levels far beyond any item of conventional utility?  
    This process has limits set by investor psychology.  Given the existence of at least a 1/2 likely fellows among world currencies from which to choose, we can expect an Easter Egg hunt for currency stability among dollars, Euros, Yen, Yuan, Swissie, Pound, AUD, CAD [not a bad choice, there] and not many others. Gold, silver and energy equities probably quality as a "currency" within this investor dynamic.  Basic materials I find puzzling; while private demand is surely shriveling these days, There is a hyperinflationary point, as we saw at least a few times in the 20th century, at which 

  216.  Sorry, last paragraph a draft that I attempted to delete — it only applies in the shorter term, I decided.

  217.  And the downward curve goes non-linear….

    Britain and Germany clash over euro crisis
    Roland Watson, Political Editor and Charles Bremner in Brussels
    Last updated November 16 2011 12:01AM
    David Cameron faced a deepening rift with Germany over the future of Europe last night, while at home Nick Clegg scorned the Prime Minister for his hopes of looser links with Brussels.
    Close allies of Angela Merkel, the German Chancellor, turned on Mr Cameron after he called for the European Union to rewrite its rules after the debt crisis. Days before he meets Mrs Merkel for talks, the parliamentary leader of her Christian Democratic Union party told Mr Cameron he would not get away with opposing the new financial transaction tax branded by George Osborne as a “bullet aimed at the heart of London”.
    Volker Kauder also accused Mr Cameron of being self-centered, saying that it was unacceptable for Britain to ignore its “responsibility for making Europe a success”.
    The anti-British sentiment came on another turbulent day for the eurozone countries as debt contagion threatened to spread westwards from Italy with new trouble for both Spain and France.
    · The cost of Italy’s borrowing was pushed back up, close to the critical level of 7 per cent, as Mario Monti, the incoming Prime Minister, raced against time to persuade the markets that he could remedy the country’s ills.
    · Five days before the general election in Spain, Madrid’s borrowing costs soared to 6.25 per cent for ten-year government bonds.
    · Paris was hit by fresh pain on the bond markets and is now paying 3.683 per cent for its ten-year borrowing, more than twice as much as Germany. France also suffered a blow after a report by the Lisbon Council, an influential Brussels think-tank, said that it no longer deserved its triple-A credit rating.

  218. Wow, so much for the day’s gains – pretty much wiped out in the futures.  

    Dollar up to 78.50 and oil down to $98.50 but it’s early yet so we’ll have to see how things shake out in Asia and Europe.  

    Welcome Droptimator!  

    Refiners/StJ – I think someone just downgraded TSO.  

    Science/Rpme – Glad I could help but we don’t want to give the kiddies nightmares…

    LOL Pstas!

    Robots controlling people/Kwan – Isn’t that what the stock market is all about?  

    Grant/ZZ – I wish it were true but the people who have the power are the people with the money and they aren’t willingly going to agree to a redistribution of anything.  That’s why Uncle Ben has been jacking up the money supply into an epic slowdown of the movement of money.  This way, when the velocity of money shifts back into high gear – no one has to vote for a redistribution of wealth – it’s just going to happen as wages must move up (see China) in a rapid inflationary cycle.  Anything the Government does is just a bonus but it’s Bernanke that’s betraying the Banksters by giving them the FREE MONEY carrot that ultimately sends them down the inflationary hole.  

    As to gold, I’m a simple guy.  The money supply has doubled since the crash and gold is up 3x so 1x is fear ($600) and 1x is a proper adjustment of value.  If the economy takes off or appears to take off through inflation, then fear subsides.  Also, the return on stocks will be better than the return on commodities and you will get 10% for putting money in the bank – all reasons not to speculate on shiny bits of metal.  WHEN gold breaks $2,000, THEN I will be happy to make a momentum trade as it will be like oil when it went from $100 to $140 – it doesn’t need a reason, it just goes up until the bubble pops.  

    I like that Angel:  

    "You know how screwed up Europe is when you have a German pope and an Italian central banker," says Kyle Bass, arguing a massive debt restructuring is coming to the continent. Germany has its own issues – an 81% debt/GDP ratio, "and they haven’t recapitalized their banks yet." Forget about the idea, he says, that the Germans are going to backstop their neighbors’ debt.

    Wednesday’s economic calendar:
    7:00 MBA Mortgage Applications
    8:30 Consumer Price Index
    9:15 Industrial Production
    10:00 NAHB Housing Market Index
    10:30 EIA Petroleum Inventories

    Notable earnings before Wednesday’s open: ANF, SBH, TGT, TYC

    Notable earnings after Wednesday’s close: AMAT, CIM, LTD, NTAP, YOKU

    Fed paper: Chance of 2012 U.S. recession tops 50% (Reuters)

    AIG Resists ‘Back-Door Bailout’ for Banks in Obama Mortgage-Refi Proposal (Bloomberg)

    Krugman vs Summers: The debate (Reuters)

    These May Be The Droids Farmers Are Looking For (Wired)

    Ethically Challenged Congress Needs Law or Code Banning Insider Trading (Daily Beast) see also Spencer Bachus’ real sin isn’t insider trading (Salon)

    Key To Long-Term Dominance? Marketing Fades, But Product Always Lasts (Fast CoDesign)

    The Inefficiency of Local Food (Freakonomics)

  219. To be fair, the Republicans also like to spread the joy:  

  220.  Phil: Agree with your assessment of gold over 12 months.  How about 12 weeks?  I’m an options tyro, but isn’t your "1% fear premium" [$600] expandable to 2% [$1,200, ergo, $2,500 gold] over that period if Europe’s non-linear move in sovereign bond yields triggers an exodus?  I don’t disagree with your fundamental analysis in the slightest.  I would just hate to miss an epic trade over a period of time in which a 10% bank time deposit won’t mean much.  But I think you answered the question already — crack $2,000 and your willing to fly on Ozone Airways.  Right on.

  221.  And this pops up ust now in my email: [From Options Express newsletter] —  Lot’s of interest in breakout, apparently.
    "Technically, The December Gold contract needs to cross above the 1800 level to recapture bullish momentum. Otherwise, the market could find itself trapped in a 100+ point trading range between the high 1600′s and 1800. Traders may look to go long the appropriate December futures contract (micro, mini or full sized) on a solid breakout above the 1800 level."

  222. Gold/ZZ – I think that fear is already priced in.  Fear of Europe, Fear of China, Fear of inflation – a 50% bump in the price of gold is a lot, not a little.  This goes back to that whole Fundamentals thing – to me, these are not random numbers, gold is worth about $1,200 so when it’s at $1,800 – I don’t start thinking it can just go up 20% because Libya is rioting or India had 9% inflation – it’s been there and done that.  Same with oil – when oil goes from $97.50 to $100, I don’t start thinking it can go to $102 – I just think it’s a better short than it was at $97.50 because it’s even stupider-priced at $100.  

  223. Thanks.  I’ll return to normal.  My massive Euro and large SCO short will keep me calm.  

  224. You know, Glenn Beck does help me become more religious:  

    Put on the whole armour of God, that ye may be able to stand against the wiles of the devil. For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places. Wherefore take unto you the whole armour of God, that ye may be able to withstand in the evil day, and having done all, to stand.  

    It’s scary how good he is at twisting everything around and the production team shoots him just like a gospel preacher but it’s all lies and half-truths aimed to lead his followers down a darker path…

  225. well cameron is reading for another round of blitzkreig from the venal hun…i think it amazing that the germans and french actually think cameorn gives a berliner what those irascible and shiney examples of teutonic and norman fiscal probity think..i am pretty sure that angela has a little marzipan thong and some DM pasties tho

  226. Speaking of damnation:  

    Some 33,000 MF Global customers are stuck with no access to their cash.

  227. the euro is going to the teens maybe lower it went to 119 a couple years ago without any of this  debt angst…i wonder if the campaign spot phil shared of Huntsman is actually just one actor doing all three characters (klump revival)..once you get that GOP ‘freshness’  into your voice box the faces and hairlines recede to the message..huntsman on the other hand looks like a vampire pedarist swimming in tiberius’ minow pond…i think i need to go to sleep now the EU better pull somehting out of their dupas tomorrow or it could get be a shitstorm…ad line made a new high since the oct lows..seasonality argues for higher prices but how can we believe EU won’t crash and burn..these guys have had a lot of practice rejoicing in theri neighbor’s misery (ok i am paraphrasing voltaire)

  228. phil you are so right i wish glenn would just put that hockey mask back on!!

  229. "It is dangerous to be right in matters where established men are wrong." – Voltaire

    Good night Angel! 

  230. Wow, the World made so much more sense when I went to bed!  

    COMPLETE reversal of the sell-off and we’re back to yesterday’s close with the Dollar slapped all the way back down to 78. 

    "Good" news this morning is Mario Monti names a new cabinet – I guess that’s worth $500Bn in the global markets (1%).  

    Technically, of course, this is causing damage as we make toppy action along those 5% lines.  China dropped 2.5% and they have got to be pissed now as they closed before they could see the EU markets run up 1.5% on essentially the same news that sent Asia flying down. 

    The Euro itself is up 1% to 1.352 but not the Pound and the Yen is below 77 so still time for all this to reverse again and we’ll be back to where we were last night (down 1%).  

    Nas Futures are my favorite short (/NQ) at 2,365 with a stop at 2,371 and that’s $20 per point so be very careful.  Oops, silly me – oil (/CL) is my favorite short at $99.50 with a stop over that line. 

  231. Phil – Huntsman spreading the "joy" commercial – Not exactly Reagan’s "Morning in America" approach to campaigning!  American culture generally likes their prophets to be apocalyptic (Beck), but politicians to be optimistic.  The scary guys frighten people towards the smooth talkers with easy answers who make empty promises.  That’s why Cain and Perry are more popular than Huntsman, even though they have performed so poorly in debates.  Reason, logic and sound policy analysis have so little to do with elections any more.  

  232. So much for a different world Phil….Big reversal of the reversal! But good call on the shorts. I guess you didn’t expect them to go so well (25 points on the /NQ). Looks like we could have shorted anything but gold and the dollar at 5:00 AM!