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Just Another Cyber Monday (Manic Edition)


That’s what we have today (and what we’ve been having all month) as the markets celebrate the fact that neither the US consumer or the Euro is dead – yet.  Holiday sales are apparently up 16.4% from last year with 10% of those sales being IPhones and Ipads so we can thank the actually dead Steve Jobs for saving the markets from a total meltdown this month as we were on track for the worst November EVER until today.    

The DOOM meter was certainly set to 100 and, in fact, 100 is about how low the McClellan Oscillator went on Friday – to a state of oversold not matched since August 8th, when the Dow bottomed out at 10,600 so holding 11,200 in this protracted sell-off was a victory, of sorts, for the bulls and certainly a victory for those of you following our Big Chart – which made us perhaps the ONLY newsletter that was bullish on Friday, when I laid out my bullish case and right in the main post – for free – suggested long ideas on:

  • Oil Futures (/CL):  Was $95, now $100 – up $5,000 per contract
  • Gasoline Futures (/RB): Was $2.50, now $2.54 – up $1,680 per contract

And, in Member Chat – our Morning Alert had the following trade ideas:  

  • FAS Dec $48/55 bull call spread at $3, selling the $40 puts for $2.40 for net .60 on the $7 spread. 5 in the WCP on that one.
  • FXE Dec $132/135 bull call spread at $1.20, selling the $129 puts for $1.10 for net .10 on the $3 spread.
  • JPM Jan $25 puts can be sold for $1.20
  • AA 2013 $7.50 puts can be sold for $1.28.
  • VLO June $17 puts can be sold for $2.05

We also speculated on an aggressive AMZN long play with the Dec $200 calls at $2.50 but, overall, we take this 2% bounce after a 10% drop with a grain of salt.  As I said to Members in the alert:  Just like we watched with amusement while things fell earlier this week, we should take a move up just as lightly until we cross back over our Must Hold Lines – to some extent, we have selling fatigue driving this move – keep in mind my bullish discussion on hyperinflation is more of a macro thing – we won’t miss much by waiting a bit

For the whole story of how we flipped from bearish to much less bearish (I wouldn’t call it bullish just yet) – check out Stock World Weekly, which reviews the week nicely.  One comment I made in Thursday’s post that I re-read this weekend in SWW that bears repeating is my thoughts on why we planned to go bullish on Friday:

Technically, of course, we’re breaking down. Fundamentally, I’m not so sure. The fear is palpable as Europe looks terrible and clearly all these austerity measures are taking a toll on the Global economy but it’s simply NOT showing up in the data yet. PMI’s are dropping across the Globe but the Purchasing Manager’s index is a SENTIMENT indicator that reflects the OPINION of the buyers about business prospects

We talk about data sources all the time and whether or not we should trust them but it’s also important that we UNDERSTAND our data sources – especially the sampling and timing of the information we’re looking at.  As I noted above, we were looking at forward looking SENTIMENT based on past concerns – it wasn’t hard data and the outlook could change on a dime with a deal in the EU or MORE FREE MONEY from the Fed.  

Speaking of the Fed – Ambrose Pritchard makes the case that the Fed should save Europe because US Money Markets are no longer willing to lend to over-leveraged EU banks.  He cites a $2Tn funding gap that is taking the Euribor spreads back to Lehman-like levels, saying:  "Unless Germany agrees to the full mobilization of the European Central Bank very fast, the eurozone will spiral out of control. As The Economist put it, “The risk that the currency disintegrates within weeks is alarmingly high."   

Bernanke touched on the theme in a speech in November 2002 – “Deflation: making sure it doesn’t happen here” – now viewed as his policy `road map’ in extremis.  "The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt. Potentially, this class of assets offers huge scope for Fed operations," he said.

In more free money news (and MORE FREE MONEY is pretty much our bullish premise):  La Stampa reports the IMF is considering loaning Italy up to €600B to give Mario Monti’s new government a 12-18 month window with which to push through fiscal reforms.

As this would put a strain on IMF resources, the report suggests assistance from the ECB, i.e. the idea previously floated of the ECB lending to the IMF which in turn lends to needy EU states.  

Even Belgium was so excited by this idea that they formed a Government.  That’s right, after going without one for 530 days (and a real victory for Libertarians everywhere), the King has asked the Socialists to form a Government – not coincidentally at the same time Belgium needs to sell $2.7Bn worth of bonds in a terrible market.  

Now the Euro-zone leaders are negotiating "a potentially groundbreaking fiscal pact" aimed at preventing the currency bloc from fracturing by tethering its members even closer together.  The proposal, which hasn’t yet been agreed to, would make budget discipline legally binding and enforceable by European authorities.

Officials regard the moves as a first step toward closer fiscal and economic coordination within the currency area.  In other words, now, in the EU, when a country fails to hit their numbers and their citizens are forced to give up their property and to endure labor-camp conditions – the EU Authorites can now use the excuse that "they were only following orders."  Good to see the World finally making some progress, isn’t it?  

So, while we enjoy the rally – we will remain cautious as it’s a long way back to our Must Hold lines (11,590 on the Dow is most likely to be tested first) and that is only the top of the LOWER end of our expected trading range so – nothing to be impressed about here – more like relived.  Relief is good, though, relief can be the first step towards optimism and a real rally – but let’s not get ahead of ourselves just yet – as you can see from Elliot’s excellent chart from Stock World Weekly, mostly what we have is an oversold bounce.  They can be good to play short-term, but not much of a predictor for the long run.  


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  1. $100 Oil Lines

    R3 – 99.82
    R2 – 99.18
    R1 – 98.76
    PP – 98.12
    S1 – 97.70
    S2 – 97.06
    S3 – 96.64

    Yesterday’s high and low – 98.54 / 97.48

    Breakout lines – 100.25 / 94.70 (already tested this morning!) 

  2. Fun and Folly – Hey, all. Don’t miss the homophobe exchange back on Black (Just Once – You’ll Never Go Back) Friday post. Anxious for the related Michael Moore and OWS take to emerge.

  3. Bone Smokin’ (which I’ve head can be quite pleasurable) – In all honestly, Im sitting here busting a gut at how insanely stupid-funny the defense was, PD. Back to bidness – sweet bull calls last week. Loving those.

  4. QQQ – Holy crap! Here she comes. Like a freight train. Just give me a piece of that futures bump. Phil’s 55 Ws are gonna rock. Grazie.

  5. Bones – I guess I’ve “heard” – but who would complain about a little don’t-ask-don’t-tell “head” anyway?

  6. Phil
    Isn’t this bounce a little extreme? This seems like a rumor that Italy MIGHT be "fixed".  Should we be selling calls this morning?

  7. FAS looking to open close to 54 which will work out well for our FAS Money portfolio! 

  8.  My question is sell?, sell even sooner?, or sell at the open?, because I’m long, locked and loaded —  and other than chart squiggles and the fact that even the U.S. looks good compared to Europe,  I’m notsure that pepper spraying at WalMart represents a fundamental turning point for the U.S. economy.  But then I’m not a sociologist [thankfully].

  9. russellb73 / Italy — I don’t think Italy is the reason, I think it’s the Euro zone proposal driving the bounce. Still not approved though so a rumor nonetheless.
    The proposal, which hasn’t yet been agreed to, would make budget discipline legally binding and enforceable by European authorities. Officials regard the moves as a first step toward closer fiscal and economic coordination within the currency area. That would mark a seminal shift in the governance of the 17-nation euro zone.

  10. Phil,
    Do you think this is the beginning of the year end push (Santa Rally) that the money managers need to get the market green to make there yearly numbers?
    I’m thinking you have to go long here.  What do you think?

  11. Lowest since March of 09, maybe its a bottom…
    An index of U.K. retail sales unexpectedly fell in November at the fastest pace in almost three years, led by grocers and department stores, the Confederation of British Industry said.
    The gauge of annual sales growth dropped to minus 19 from minus 11 in October, the lowest since March 2009




  15.  Phil – I bought EDZ Dec 25/30 BCS @1.45 last week for weekend protection, now at 0.75 – should I make any adjustments? or wait to see where this bounce is going?

  16. GM to all.  PP, which are not in play today due to the gap up…but here they are:

  17. A possible Minsky moment in Europe…

    Named after the economist Hyman Minsky, the phrase describes a situation where investors who have borrowed too much are forced to sell even good assets to pay back their loans. 

  18. Buying AAPL Dec 370 calls

  19. Trick has been to push Euro and AUD higher after 10:30 AUD/USD up 2.50% now…looks like its going to be a bumpy ride


  21. Dr. John Faessel recap from this morning:
    EuroLand Bond Yields Retreat
    Italy 10-year bond yield – 7.11%
    Spanish 10-year bond yield – 6.52%
    Fear not! The IMF is preparing to throw $799 billion at Italy
    The McClellan Oscillator is deeply OVERSOLD @ minus 301
    You know who contributes the most (17%) to the IMF? Oh Yea… Uncle Sam does… somehow I knew that was coming… Will that fix it?
    One minor problem; the IMF has only $390 billion left in the till… Ho, ho, ho…
    It’s just more debt, but it greases the machine that kicks the can down the road a bit further…
    I’m sure that Professor Irwin Corey, “The World’s Foremost Authority” would approve of the above mentioned mechanism to allay all the worries that we could ever have… In fact he may be working behind the scenes in Brussels in his quest to save the world.
    Item of note: The S&P just downgraded Belgium: The firm is worried about the Belgian government’s ability to keep its debt load from rising further, given the extent of private-sector deleveraging within both Belgium and key trading partners. It’s also concerned about the de facto nationalization of Dexia’s Belgian bank division. S&P’s outlook is negative.
    And some real good news is that Black Friday retail sales were up sharply. The averages shopper spent $33 more than last year, spending $398. (alcohol sales?) 
    In any event the S&P futures are up 35 points and the shorts are running for cover. We could have a really big day today coming off horrid sentiment and deep oversoldness… 
    On Friday the stock market in a “holiday” short session again put in lower lows on little volume. It was the 10th consecutive day of lower highs and the abrupt downstroke took about 8% from the indexes. The market is extremely oversold.
    The McClellan Oscillator (my favorite measure of overboughtness or oversoldness) posted a slightly higher read of an OVERSOLD minus 301after posting a hyper Oversold minus 326 on Wednesday; that was the second lowest “pattern” registration of the year, only to be “out-done by the all time lowest ever McClellan Oscillator posting of a minus 426 that occurred on August 8th. The minus 426 was one the top ten lowest readings ever and all came at major bottoms.
    I said on Friday that, “the severe deep McClellan read suggests that we should be buying today.”
    The (SPX) closed on Friday at it lows (and support) at 1158.67
    S&P 500 (SPX) support at the August 8th lows is at 1101.
    Support at the October 4th lows is at 1074.
    Short term price resistance is at S&P 500 (SPX) 1163 then at 1172
    More formidable resistance is at (SPX) 1199 – Then at (SPX) 1222 and 1232.
    The 50- moving average "now" resistance is at (SPX) 1206.
    The 200-day moving average resistance is at 1267.
    Price resistance at the top- tick of the near four month old consolidation is at 1292 then at 1277.
    Last Friday’s key indicators and metrics:
    ·     McClellan Oscillator is OVERSOLD @ minus 301       
    ·     VIX – 34.47


  23. Phil- Let me get this straight…intervention measures/rumours have been flatly denied by Germany, ECB and IMF, yet we are up 3%?



  26. angelcur / IMF — Are you saying that congress has approved the IMF contributions to begin with? I would have figured the fed just provided the money as they have the ability to buy foreign debt without the consent of congress.

  27. Nice turn-around and now right on the trend-line in the adjusted charts:
    Also my option volume indicator predicts the lowest prices around 28.-30. Nov. (but actually it shouldn’t be nailed to a certain date)

  28. Good morning!  

    We got a wild one today and let’s not forget our Rule #1 is "ALWAYS sell into the initial excitement."  We only have 2 Rules so it’s not so much to expect you to know Rule #1 and Rule #2 is the same rule but "When in doubt, sell half."  In other words, if you think this is only the beginning of a 1,000,000-point rally – then fine – just take half off the table in case you’re wrong and you’ll still catch 500,000 points worth of gains.  

    Now selling doesn’t mean selling right away – just setting reasonable stops and stopping out doesn’t mean you can’t get back in – just that you will miss a small gap between where you get out and where you next decide to get in.  In a more realistic 500-point recovery for the Dow, for example, we just flew from 11,250 to 11,500 and we KNOW we hit heavy resistance (the Must Hold line) at 11,590 so, in the very least – we need to have our finger on the trigger there to either take some money or cover or SELL?  

    What does SELL mean?  Well, in the WCP, for example, we took the this week QQQ $55s at .48 last Wednesday and they are now .55 so not very exciting but better than .23 on Friday so that’s up 100% in a day.  The fact that we entered at the wrong time should not affect our decision to get the hell out of this trade if it falls back to .45 because we should be THRILLED to take a small loss so let’s call it a .15 trailing stop with a hard stop at .45, which is just .10 at the moment.  

    Oh yes, so we set a stop but what else could we do?  We could SELL the $56 calls for .22 to give ourselves cover and take 1/2 off the table or, if in doubt, we can just sell half our position for .55 (.07 profit) and cover the rest for .22, which would leave us in the $1 spread for net .08 on 10.  That’s what I mean by ALWAYS SELLING – find some way to make it work for you – even if you are too greedy to take $140 and run after narrowly escaping being down $400.  

    This rally SHOULD have legs and I do expect the Dow to get over the Must Hold line.  The real test is going to be the Nas (2,600) and the S&P (1,235) and they both are about halfway there at the moment.  STILL – keep in mind that this is nothing more than a weak bounce off the 10% drop until and unless we cross the 50% retrace which is, not too coincidentally, our Must Hold lines!  

    Not for the lagging NYSE and Russell – they need to get back to their -5% lines so, overall, there’s nothing "strong" about the market right now – just a relief rally, nothing more and that’s a great reason to SELL – just to be safe!  

    Dollar above or below the 79 line (now 79.09) will tell the tale – we need the Euro to do better than this to keep a rally going but, of course, that’s not at all what the BOJ wants and they took advantage (wisely) of this rally to jam the Yen up to 78 this morning – doing a Yentervention on a day when it wasn’t likely to hurt the market – very wise move by the BOJ!  So, that means that we are currently, although up 3%, artificially depressed this morning by the Dollar not dropping as much as it should. 

    As long as we stay over 2.5% – there will be no technical worries and we’ll look strong but under 2% makes this look like a failed attempt to rally off support and that will give the bears fresh meat to chew on.  The bulls know this and hopefully they won’t let that happen.  Even now – ALL 500 S&P components are green – how fake is that?  Not one stock is not a BUYBUYBUY according to the Bots – we can pretty much trade off the heat map today – when something goes red – the rally is over.  

    No clever plays at the moment – you either went bullish on Friday or you missed it, end of story.  This is why we bottom fish – to protect ourselves from exactly this happening.  We’ll just have to sit back and see how it plays out.  

    Monday’s economic calendar:
    8:30 Chicago Fed Midwest Manufacturing Index
    10:00 New Home Sales
    10:30 Dallas Fed Manufacturing Outlook

    At the open: Dow +2.2% to 11232. S&P +2.40% to 1159. Nasdaq +2.90% to 2151.

    10:00 AM On the hour: Dow +2.77%. 10-yr -0.48%. Euro +1.03% vs. dollar. Crude +2.09% to $98.8. Gold +1.77% to $1718.45.

    European shares leg up to new highs on the day, the broad Stoxx 50 +5%. The best performing market is France, +5.1%. The laggard is the U.K., +2.9%. The last rally of this sort was Oct. 27, before that, July 21 – both world-class selling opportunities. Will today be different?

    Market preview: Thanksgiving weekend sales appear to have been strong but may not have been, another plan to save the eurozone is in the works but may again amount to nothing, and a report says the IMF may lend to Italy but it won’t. Not to worry, it’s the thought that counts, and shares surge in the EU and U.S., with S&P futures +2.9%. Later: new home sales, Dallas Fed.

    Barry Ritholtz advises ignoring of what he considers little more than spin emanating from retail trade associations regarding Black Friday sales. They may not be complete fabrications, but the numbers are based on unreliable surveys and make little logical sense when studied closely

    October Chicago Fed Midwest Manufacturing Index: +0.7, at a seasonally adjusted level of 85.5 (2007 = 100). Regional output +7.3% Y/Y, national output +4.5%.

    Oct. New Home Sales: +1.3% to 307K vs. 315K expected, 303K prior. Months’ supply 6.3 vs. 6.2 prior. Median price $212,300. 

    The U.K.’s CBI November retail sales survey tumbles to -19 from -11 previously – it’s the 6th consecutive month in negative territory and the lowest reading since March 2009. Retailers expect further declines in December, but for the rate of decline to slow.

    The Economist print coverMagazine cover alert: From the front of this week’s Economist, "Is this really the end?" with a picture of the euro going down in flames. Thanks for the tip, but it would have been nice to know before adding to those euro and euro-stock shorts on Friday afternoon! MSCI Europe ETF: VGK +5.2%. Euro ETF: FXE +1.1%.

    Forget the pundits’ take on Italy and Black Friday sales in explaining today’s early spike, Art Cashin advises; it’s the result of a "very oversold market" and another short squeeze. The U.S. is a key player in the IMF, and using U.S. funds for a European bailout is "unthinkable" in the current political environment; he says; also, "look what was said about last year’s Black Friday last November."

    It doesn’t matter if they deny it because they were going to rally the markets anyway and this rumor was just the excuse to rip people’s faces off in the futures:  German officials deny a story from Die Welt that they are considering so-called "elite bonds" to be issued by the EU’s 6 AAA states. The paper would serve the double purpose of stabilizing the stable countries and raising funds for the needy states.

    Lots of chatter about greater eurozone integration, but without a watertight no-bailout clause and strict financial penalties, any initiative is likely to fail. Another option, a unified debt management agency, seems even more unlikely. So what exactly are investors cheering this morning?

    We’re poised for growth,” and the risk of another recession is "negligible," Dallas Fed President Richard Fisher says, thus he’s "more comfortable" in seeing no need for further easing. Fisher contrasts with Bernanke’s view of a “frustratingly slow” recovery and San Francisco Fed projections of a better than 50% chance of recession early next year. 

    Nice. Operation Twist still underway, a survey of primary dealers (21 left after MF Global’s fall) finds 16 them prepping for QE3 to begin at the start of 2012. This program will take the shape of MBS purchases, with a few of the dealers so bold as to estimate the size, about $545B

    BoJ’s Shirakawa sticks to the view that Japan’s economy will eventually resume a moderate recovery fueled by demand in emerging nations, but cautions the country’s shorter-term outlook is being clouded by Europe’s sovereign debt woes and the yen’s rise. The central bank stands ready to boost monetary stimulus if economic risks increase

    Italy’s borrowing costs continue to climb. The country sold €567M ($758.4M) of inflation-linked bonds set to mature in 2023 and carrying a gross yield of 7.3%, a far cry from the 2.9% in a previous auction in March 2010.

    It’s "BTP-Day" in Italy today as banks and businessmen encourage citizens to buy government paper, the lenders even waiving purchase fees. "This is the beginning of a new Ponzi, with banks and authorities trying to increase (retail participation by) cutting visible fees on securities that are down massively," write analysts at one brokerage. 

    Monte Dei Paschi – the world’s oldest and Italy’s 3rd largest bank – its shares sinking under the weight of its stash of government debt and the likely need to raise €3B in capital in 2012, is in talks to avoid giving up a majority stake on a capital call against a €1B loan. The nearest solution would be a sale of assets into a weak market.  

    The brilliant Greek idea of instituting a new real estate tax and tying it to citizen’s electric bills stumbles as many can’t or won’t pay and electricians organize to reconnect power to anybody who has their juice shut off for non-payment. "This thing on top of all the other taxes and salary cuts has made people snap," says a suburban Athens mayor, fighting the bills in court.

    The OECD adds to pressure on the ECB, calling on the bank to cut interest rates and increase its bond-buying. The organization warns a "large negative event," such as a sovereign default or euro fragmentation would send the OECD area into recession. As it is, the eurozone is already in such a situation, it said. (PR

    CHINA! Not news that sell-side firms and "sell" ratings are unfamiliar with each other, it’s doubly so for China. Forensic Asia finds brokerages offering 19.2 "buy’ recommendations on Chinese shares for every 1 "sell," compared to a 10.5:1 ratio for U.S. stocks and 7.3:1 for Asia ex-China."At sell-side firms there is overwhelming pressure to believe in the ‘China cannot fail’ story." 

    CHINA! China’s highly-competitive online gaming market is forecast to grow from $5B in 2010 to $8B in 2014, according to Pearl Research. Tencent (TCEHY.PK) is the market’s hands-down leader, with an estimated $1.4B in 2010 revenue, and is followed by (NTES), Shanda Games (GAME), Perfect World (PWRD), and Changyou (CYOU). Perfect World was crushed last week following its Q3 report

    CHINA!  (it never gets old, does it?): Shares of Wynn Resorts (WYNN) gain 4.7% premarket after nabbing an upgrade from Keybanc to Buy from Hold along with a $145 price target. Analysts with the firm point to a "robust" Macau gaming market as buoying the gaming company’s prospects.

    $100 gas anyone?  A government safety investigation into General Motors’ (GM +3.1%) Chevrolet Volt could cast a shadow over electric cars until consumers get a better understanding of the minimal risks with electric batteries, according to industry insiders. GM will reportedly begin its damage control by offering up an exec on a CC this morning to address the issue. 

    For a bit of an insight into where global economy is today and where it might be going, air passenger traffic in October rises 3.6% Y/Y but cargo demand falls 4.7%. Since mid-year, cargo is almost -5% vs. -1% for world trade. "Air freight is among the first sectors to suffer when businesses confidence declines," says the IATA.

    Cameco (CCJ) gains 4.1% after stating it will allow its C$4.50/share offer for fellow Canadian uranium miner Hathor Exploration (HTHXF.PK) to lapse. Barring regulatory holdups, Cameco’s move paves the way for Rio Tinto (RIO) to acquire Hathor, courtesy of its C$4.70/share offer. RIO +6.2%.

    Bank Of Ireland (IRE) shares jump after announcing strong progress toward meeting its commitments to deleverage its huge balance sheet by selling a nominal €590M worth of North American and European loans to Sumitomo Mitsui Banking Corp. IRE +14.5% premarket. 

    Shares in banks from both sides of the pond are having a fine time of it, apparently boosted by the latest (doomed?) attempts to stem the eurozone debt crisis. BAC +4.6%, C +5%, GS +3.3%, MS +5.6%, JPM +4%, DB +10.4%, UBS +7%, BCS +8.6%, RBS +7.5%, HBC +5.5%, LYG +7.9%. STOXX Europe 600 Banks index +5%.

    Long and wrong on the financials in 2011, Dick Bove pens a letter discussing his mistakes. Turns out he didn’t make many, it’s just that investors have yet to see the light. He remains wildly bullish on the big banks. Wall Street’s a big industry, are there any other bank analysts?

    Netflix (NFLX) +5.3% premarket after a Barron’s weekend article highlights Whitney Tilson’s change of heart: The stock could become "the BP of 2011," he says, with a price that could double in a few months and whose downside is low. Shares are upgraded to Neutral from Negative at Susquehanna.

    Amazon (AMZN) reports Kindle sales increased 4X over last year’s Black Friday haul as consumers loaded up on its line of e-readers that it’s selling at a loss in order to gain content customers. ComScore confirms Amazon’s big day, saying tallied 50% more visitors than any other retailer’s website. Shares +3.9% premarket.

  29. Pharm Hi SVNT 2.44 up .15 today is there still any hope for this stock ?

  30. Moody’s is moody/StJ – No surprise.  

    I hope you got that all out of your system, NF.   

    Speaking of the Qs – In the WCP, now that we got .65 on the QQQ $55s, let’s just take it and run.  We have plenty of bullish plays so we don’t mess around with a weekly!  

  31. "What does Sell mean?" – F!  That is gooooood stuff – concise, perfect for my ADD.  I actually paid around .40 for those 55s the other day – so I took it all off at .61 a bit ago.  Thank you, sir. 

  32. sold half my DIA calls from Friday.  Good times, good times.

  33.  Phil,
    any tweaks to the TNA Dec 35/40BCS , entered at 2.10 net(4.27/2.17).

  34. bought back some SCO at 39.04, this has been a really nice trade over last couple weeks.

  35. Phil—scaled out of the QQQ calls——thanks

    Rustle—-took 2/3off on the DIA calls—thanks

  36. Thanks, Phil, went big on your "this is getting silly" comment, portfolio up 7.6% today and I sold today into whatever kind of excitement this is.  I took the FXE shorts down to 25% of my peak position on Friday,  now pushing it up to 35%. 

  37. Phil,
    Are we keeping with GNW now a slight winner vs. loser last week

  38. Bounce/Russell – Nothing extreme about it, we fell from 12,200 to 11,200 and now we’re at 11,550 – it’s not even a Fibonacci retrace yet and the 5% Rule demands a 20% bounce to 12,440 so that’s the real test on a pullback.  If we make it there, then we look for a move to 12,590 (Must Hold) and then 40% is 12,660 and 50% is 12,700 and THEN it’s a little extreme so, without some solid bullish Fundies to back it up, I’d start betting against it at that point. 

    PS -How DARE YOU ask if we should be selling calls this morning!  (see Rule #1) 8-)  

    I still have that stupid Lady Gaga song stuck in my head from Friday!  

    LOL ZZ – But it does indicate an increase in the sale and use of pepper spray.  All part of the "New Economy", which includes riot gear, armored cars and, of course, my beloved TASR!  

    Chinese stocks selling off like BIDU, SINA…  Maybe good time to re-cover open EDZ longs and turn them back into spreads.  Same with SCO shorts, of course.  

    Santa Rally/Exec – I think I don’t think anything based on a single day – certainly not based on an hour’s worth of trading at not eve particularly strong volume.  "THEY" NEED a Santa rally and "THEY" will do whatever they can to create one but even Dr. Frankenstein had a few failures before he finally got his monster to come to life so let’s not get too excited by a couple of twitches on the table.  

    Bottom/Kustomz – Are things worse than they were in March of 2009?  No, they are not.  That’s a pretty simply premise, right?  

    FAS Money/StJ – It was never our intention to have so many puts, we were reacting to the move against us so I would buy back the short $54 puts (now $2.87), as they have the most danger of burning us and the week is still young!  That one is a good ALWAYS example as we were forced into that position so we absolutely ALWAYS look to lighten up – like when we DD and get a chance to get half out even.  

    IWM Money/StJ – I still think we go higher and the RUT was way oversold so I don’t want to bet against it.  

    AA Money/StJ – This tracking system is great, by the way!  Here I have great confidence in the short $9 puts so I’m inclined to leave it but, for the margin challenged – it’s smart to bring it back down to a manageable size because YOU NEVER KNOW.  Not to interested in covering long under $10.  

  39. FAS Money / Phil – OK, buying back the FAS 54 Put (now 2.96)…

  40. Outta My System – Sometimes I wake up on the same side of the bed as you do, PD.  Not literally of course.  Love ya – in a dude way.  Lol.


  42.  Given your handle, Netf***, perhaps you can expound on the "dude way of love."

  43. Morning Phil-- As a hedge I had purchased  20 TZA Dec 35/50 bull call spreads for $3.82. it is now at $2.40.
    Bought the $35 C  @ $5.4 which are now $3.20.
    If we are headed higher should  I roll these down to something lower like the 32 at this point?

  44. QQQ / Phil – Sold half and covered the rest. Max loss now is less than commissions while the max gain is +100% of the initial investment. Nice trick.

  45. AA Money / Phil – Glad you like the new system. Makes it easier for me to remember where we are! A bit more work at first but with the spreadsheet now set, I can track any setup!

    The link for those who don’t have it yet us: 

  46. NF – LOL LOL LOL

  47. Lady Gaga / Phil – It’s been haunting me as well.

  48. @Pharmboy
    What do you think of AIS or AKRX?  Do you follow either?

  49. German finmin says….
    German aim is stability for euro, not to make Europe “speak German”

    Like children in a playground

    Egan Jones also cuts Italy to BB from BB+


  50. zero/"dude way" – ha ha.  However, in the interest of expounding, I guess its a chest bump or NFL slap on the ass kind of thing.  Tho this keyboard is as close as I ever want to be to Phil’s ass.  lol.

  51.  PHIL…
    Dividend Collection Time. Got a question for you. If you were to construct a trade to own a stock collect on the dividend only with minimal lost for CTL what would you do?
    Div-Ex is Dec 2, my plan was after the november window dressing, Dec 1 might be a sell off and I could grab the stock before the div-ex and then sell it after the weekend.
    CTL has a market capitalization of $22.05 billion. The company employs 49,250 people, generates revenues of $7,041.53 million and has a net income of $949.13 million. The firm’s earnings before interest, taxes, depreciation and amortization (((EBITDA))) amounts to $3,493.24 million. Here are the price ratios of the company: The P/E ratio is 20.07, Price/Sales 3.27 and Price/Book ratio 1.18. Dividend Yield: 7.79 percent. The beta ratio is 0.72.

  52.  Phil/EDZ – You mentioned recovering.  I bought a 18/24 bull call spread on EDZ offset with EDZ puts, and then stopped out the $18 call, and purchased the Jan 22/26 BCS.  So I am naked the December $24 Call.  Would you recommend buying the December $18 call again?  To turn my original position back into a spread?

  53.  Rustle123:SCO
    Do you play SCO like others would /cl futures?   I recall you said futures are off limits for you.  In other words is it mostly short term trade or do you ever use it longer term?  TIA

  54. Phil
    Is this a good time to invest in IEV iShares S&P Europe 350 Index Fund, or wait  ?
    If yes what would be a good trade to start with 

  55.  Hi STJ, I’m getting a "doc doesn’t exist" message when I try to access your link.  Anyone else having probs?

  56.  Nice rejoinder, Nettie!

  57. @Lincoln
    More short term but at times I have held partial positions more than a couple weeks.  Remember, I scale in the scale out and keep reducing my cost on it.  Then when oil drops hard, take all profits off table and look to rebuy.  In last week, sold at roughly 42 bought back at 39.80, sold at 42 then rebought at 39.04 today.  If it gets to 42 again, will sell half.  All those sells and rebuys were half position.  Still think oil can see under 95 before end of year but if not, will continue making money trading it.  I also have written 37 puts for this month and 36 puts for this month on it.

  58.  Market’s confidence regarding a Euro fix is fading, this morning’s call reload [March 125s] already up .05. 

  59. STJ that link says not valid could you provude again, thanks!

  60. 79.14 by the way!  

    EDZ/Yshen –  Chasing is bad.  If they are a hedge I’d be inclined to spend a buck and roll your call out to the Jan $28s as you’re going to want protection over the holidays, even if we do rally and you can certainly sell something else in Jan for $1 after the December caller expires (assuming it’s worthless).  Waiting is obviously good to but don’t let a roll get away from you.  If we stay strong the EMs could fly tomorrow and the plan would be to take a cheap roll to a lower strike on a big rally but again – assuming this is a hedge.  If it was a bet – it didn’t work, plain and simple and then you want to pull the calls (still $1.60) and turn the risk bullish for now – until/unless we break back down.  

    Minsky/StJ – That’s a good one.  

    AMZN $200s at $4.80 after spiking to $5 – congrats to those players and that’s why we take a double off the table – it’s just a natural pullback point.  You can always get back in but it’s better to do so AFTER you cash out and look at that lovely CASH in your account and THEN make a rational decision about whether to and how much do re-deploy.  By the way, that’s also a great poker tip – try to fold a hand or two after you have a big win – it’s hard not get careless just because you are feeling good about your last bet! 

    LOL Angel!  


    Fassel/Rustle – That’s useful stuff. 

    IMF/Angel – SOMEONE has to do SOMETHING.

    At the 2009 G-20 London summit, it was decided that the IMF would require additional financial resources to meet prospective needs of its member countries during the ongoing global financial crisis. As part of that decision, the G-20 leaders pledged to increase the IMF’s supplemental cash tenfold to $500 billion, and to allocate to member countries another $250 billion via Special Drawing Rights 

    Rumors/SNS – As they said about Liberty Valance – "When the legend becomes fact, print the legend!"  

    Hopefully we can get back into that trading range Pentax:  

    SPY in world currency

    Good job, NF.  The DD was the way to go in a more aggressive portfolio and it was my fault for being cocky (watch it!) in the WCP and going for 20 in our first round.  Had we started with 10 – we would have had a much better outcome.  

    TNA/Jasu – Just on track at the moment.  I’m still monthly bullish, just not willing to risk naked weeklies off this rally. 

    SCO/Rustle – Yes, a wild ride. 

    You’re welcome Savi.  

    Wow ZZ, nice move but how did you sleep this weekend?  

    GNW/WCP, Sage – I still think we hit goal in Jan but not if this rally fades before we get to must hold so depends how the week goes.

    Not that there’s anything wrong with that, NF. 

    TZA/Ban – The spread was $4.30 on Friday and the calls were $6.60 and now the $50s are .80 so I’d take them out and see if we sell back off.   The spread was too wide, it wasn’t a hedge, it was gambling and you were up 20% on Friday but you didn’t take that off the table but now that it’s down, you are worried?  The real advantage the house has over you is that they never quit playing and neither do gamblers – EXCEPT WHEN THEY LOSE.  

    Since the game is A) You lose and they keep your money B) You win and play again C) You break even and play again and D) You lose all your money and don’t come back until you have more – that is the real house advantage.  There is a reason that casinos offer free rooms and dinners and show tickets and even private jets to the people who win their money – the KNOW that, as long as they keep you gambling, you will eventually lose and you have a limit to your losses while they can keep playing no matter what.  

    Options are no different.  When you go up 20% – you have beaten the house.  But the only way you really win is to take the money off the table – if you continue to gamble, you are now making a 120% bet on the same 50/50 chance you risked 100% on earlier only now it’s 20% higher than what you were willing to risk 100% on – does that make sense??  

    As a hedge it’s OK as long as your longs are doing much better than what you’re losing on the hedge – then it’s simply the cost of insurance.  Notice your reaction – up 20% – no questions, no thoughts of stopping but down 30% and you are "in trouble" – that’s not investing or hedging – that’s gambling!  So, the real question is – do you need a hedge and is it the right size for your portfolio (you should be making twice as much as you lose on your hedge)?  

    With the $50s at .80, I’d buy them back and see if we go lower and, if we don’t, I’d look to sell the $37s (now $2.50), which is enough money to pay for you to roll to the Jan $33s – assuming you want to keep a hedge through the holidays.  

    QQQ/Pack – That’s the proper conservative way to play them but don’t forget you should really stop out the spread if it drops 50% to preserve more gains. 

    CTL/ITrade – That’s a good one.  It’s a $2.90 dividend and they didn’t miss – even in 2008 and 2009 so pretty solid and they pay decent premiums so a very good pick.  At $36.54, you can just sell the 2013 $35s for $3.70 and the 2014 $30 puts for $5 for net $27.84/28.92, which makes the dividend 10.4% and a nice 20% discount if put to you.  In case you are wondering – there is no point in selling the 2014 $35s because they are only $4.30 but the 2013 $30 puts are just $2.90  so worth a year for another 66% on the short puts –  especially because if CTL should get bought out (always a possibility with Telcos)  - those puts expire with the sale and you collect early. 

    EDZ/Palotay – I think we may have timed that just right.  Bottom line is you can well afford to wait (although I would have taken out those short puts last week) as the short puts offset the short calls and the premium is ticking down in your favor.  The Jan spread should hold at least half its value and you took good money off the table at the top AND the Jan spread makes another good hedge if both of the short Dec contracts expire worthless, right?  

    IEV/QC – Friday I would have said yes as we re-tested the Aug lows and things were just not as bad as they were in August but they’re not that good either.  I’d stay out of Europe – it’s VERY speculative at the moment. 


  61. Spreadsheet link / Sagem and Rdn – Interesting as this is the link provided by Google. Let’s try again: 

  62. Spreadsheet link doesn’t seem to work when you click on it, but does seem OK when you cut and paste in the address bar of your browser. Let me know otherwise. 

  63. Phil -

    Everyone on the board is saying SCO…but I am thinking UCO. This Middle East crisis is not going away, and if we are going to have a couple good days…they will definitely take oil over 100…maybe 105.

    What do you think?

  64. Phil/Frankinstein
    I hear ya, however, I think they’re going to close the year in the green just because they can…and sometimes you have to just go with your gut.

  65. Pharmboy, YMI just hit your buy price of 1.20, are you picking up some here?

  66. The BOT’s are preventing any significant drop.
    This is shaping up to be a major short squeeze into the close if they don’t pull back before 2:30.

  67. 11:00 AM On the hour: Dow +2.71%. 10-yr -0.43%. Euro +0.88% vs. dollar. Crude +2.09% to $98.8. Gold +1.58% to $1715.25.

    11:44 AM All of the bullish rumors have been denied, but that doesn’t stop European shares from closing on their high ticks of the day. One suspects 15-20% declines since Oct. 27th blowoff were of more import to today’s move than any news. Stoxx 50 +5.3%, Germany +4.6%, France +5.3%, Italy +3.9%, Spain +4.5%, U.K. +3%. Euro +0.8% to $1.3341.

    12:00 PM On the hour: Dow +2.78%. 10-yr -0.38%. Euro +0.73% vs. dollar. Crude +1.68% to $98.39. Gold +1.77% to $1718.35. 

    Whuck?  Nov. Texas Fed Manufacturing Outlook: Business Activity Index 3.2 vs. 2.3 prior. Mfg. Production Index -5.1 vs. 4.1 prior. New orders -5.1 vs. 8.3. Capacity utilization -10.2 vs. 2.8. Shipments -1.1 vs. 2.7. Employment 9.0 vs. 15.1.

    U.S. consumer debt fell 0.6% Q/Q in Q3, to $11.66T, according to the NY Fed. Mortgage balances fell 1.3%, and new foreclosures fell 7%. However, the overall delinquency rate rose 20 bps, to 10%. An increase in credit account inquiries in spite of a decline in open accounts suggests tighter credit is playing a bigger role in curtailing consumer debt than deleveraging efforts.

    Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities, according to WSJ‘s Q3 survey of housing market conditions in the largest U.S. metro areas. - And that is how they calculate "Owners Equivalent Rent" in the CPI so they can tell you that there’s no inflation (it’s 40% of the CPI)!  

    Bloomberg continues to mine the 29,000 pages released by the Fed about transactions made during the financial crisis. Newly discovered in the data dump: banks made ~$13B of income by taking advantage of the Fed’s below-market rates.

    Moody’s warns that the eurozone debt crisis threatens the credit ratings of all European government bonds, and that the probability of multiple defaults "is no longer negligible." Such defaults would increase the chances of one or more countries leaving the eurozone.

    The IMF says it is not in talks with Italy about providing the country with a loan. La Stampa had reported that the IMF is considering lending Italy up to €600B ($797B). (previous)

    Saying Europe’s AAA countries cannot carry the EU debt rescue alone, German finmin Schauble describes as "fabricated," today’s report of "elite bonds." He also nixes ideas floating about Ireland of eased terms on that country’s debt load. 

    With bond investors spooked, European lenders are facing a funding gap of $241B in 2011. Though some deleveraging is to be expected, banks are "being sent on a crash diet that will have wider implications," says Morgan Stanley’s Huw van Steenis, and a European credit crunch would have a "knock-on effect" on the U.S. and Asia. 

    Kokusai Asset Management, Japan’s largest mutual fund company, says it has unloaded all of its Italian, Spanish, and Belgian bond holdings, lowering the level of euro-denominated paper in its flagship fund to 15.9% from more than 30% two months ago. Hopefully not auguring the next trouble spots, the fund is redirecting assets to the debt of Canada, Australia, Sweden, and Norway.

    FREE BRITISH MONEY!  The U.K. will lay out a series of programs tomorrow to spur growth, including £30B ($46.3B) for investments in infrastructure and as much as £40B for small business loan guarantees. Impact is unclear, as eurozone headwinds are growing and bond investors may get spooked by any move that veers away from austerity. 

    Citigroup’s (C +5.8%) $285M settlement with the SEC over toxic mortgage debt is rejected by New York federal court judge Jed Rakoff. A new trial is now set for July 16, 2012. Citigroup had agreed last month to settle an SEC claim that it misled investors in a $1B CDO linked to subprime residential mortgage securities.

    This will make sure the next guy toes the line!  Andreas Georgiou, who was brought in to lead Greece’s new independent statistics agency, is facing a criminal investigation and possible life imprisonment for allegedly "betraying the country’s interests." His crime? Revising up Greece’s 2009 budget deficit figure to 15.8% of GDP from 13.4%, a revision accepted without reservation by Eurostat.

    Chip stocks are joining other tech names in rallying today (SOXX +3.8%), but Nomura’s Romit Shah recommends staying on the sidelines until 1H 2012, citing a weak macro environment and tough Y/Y comparisons. Focusing on analog names in particular, Shah expects the likes of TXN and LLTC to see another round of downward EPS revisions in January, given weak bookings. (earlier)

    Kellogg (K -0.2%) is one of just two decliners on the S&P 500 after BMO Capital cites the cereal maker’s move to back away from some recent cost cuts in downgrading shares to Market Perform from Outperform. While the reversal of cost cuts was understandable, BMO says, it sidetracks positive factors such as new products and higher selling prices.

    Monsanto (MON +3.8%) shares move higher after Reuters reports that France’s highest court cancels all decisions banning the use of the company’s genetically modified maize cultivation in France. 

    SINA shares bounce back from a decline of more than 10% as Muddy Waters tweets, "There is NO report forthcoming. MW has done zero work on SINA." The outfit is responding to a WSJ report that the Chinese online concern was to be MW’s next target. Shares -2.7%.  - And where was this rumor?  It’s not Drudge – it’s the WSJ!  

    Shares of Madison Square Garden (MSG +10.5%) trade higher after the NBA announces a labor deal which if passed by owners and players will preserve a 66-game season after the prospect for a washout of the entire season loomed. [

    One of my old favorites:  Coinstar (CSTR +5.8%) shares are "attractively valued for a year-end long trade," JPMorgan says, raising its outlook based on conservative near-term guidance heading into a strong Q4. But CSTR is no buy-and-hold candidate: “We believe the DVD kiosk rental opportunity will be saturated by late 2012… 68% of households are already within five-minute drive-time of a Redbox kiosk."

    Bucking the Street’s dim view of Research In Motion (RIMM +1.7%), Scotia Capital’s Gus Papageorgiou calls the stock "absurdly oversold," as its $1B-plus in quarterly service fee revenue ensures continued high profitability. But Sterne Agee’s Shaw Wu cuts shares to Neutral and trims 2012 and 2013 estimates; there’s still some value as a takeover target, the only reason it isn’t yet an outright Sell. 

    Genworth (GNW +13.9%) is the hottest stock on the S&P 500, as Citigroup upgrades the mortgage insurer to Buy because of an "attractive relative valuation that… substantially overdiscounts the challenges the company faces.” Concerns about a possible bankruptcy have swirled as rival PMI Group struggled, but Citi says bankruptcy is “not a realistic threat" to GNW.

    It looks like Apple (AAPL +2.8%) can be added to the list of retailers to have turned in a strong Black Friday (I, II). Piper’s Apple Store checks found iPad sales to be up 68% Y/Y, and Mac sales up 25%. Meanwhile, citing a company source, 9to5 Mac claims Apple blew past its internal Black Friday forecast by 7 P.M. Sizable discounts (by Apple’s standards, anyway) doubtlessly played a role. [

    Apple’s (AAPL +2.8%) strong Black Friday iPad sales are partially attributable to a trend of the device being used by an increasingly younger age group of kids – to the point that one researcher now accuses parents of using the device as a "digital pacifier." The iPad’s touch interface is "intuitive" for children who can’t yet read, making it a natural toy for toddlers and helping the iPad position itself firmly as the most requested holiday gift for the second year in a row.

  68.  rustle123: Thanks

  69. NIce /DX stick.

  70. Phil / Texas – I saw those numbers.  Very odd.  One of the only industries that really seems to be doing very well is fossil fuels or businesses that serve that industry.  Therefore I find those Texas numbers hard to believe.  Do you think that is just measurement error? 

  71.  Exec:  Those bots will have their work cut out for them with the Euro continuing to have shaky knees.

  72. YMI – since I am already in them, I am picking up more (1/4 more), but a good place to start a position and forget about them.  I am liking their pipeline, but these guys are going to be a LONG term hold.  Also, still need to look at the cash position, so start small, and let them sit.  Lots of biying in the January – July $2.5 calls.

  73. YMI/Thanks Pharm good advice on taking it slow.

  74. Good morning, nothing new:


    IWM   67.70,  68.11,  68.95,  69.30,  69.74  and  70.09

    I’m short off the 69.74 line at $34.08 !!

  75. Phil
    I keep hearing that Obama is going to say something (soon) on the European debt crisis. I am waiting to adjust an EDZ hedge. Is this just another bit of vocal support or something real? Have you heard anything?

  76. @Lincoln
    Just sold the half of SCO that I bought this morning.  Didn’t think it would come back this quickly and if market comes back, SCO can go back to 39′s.  I’ll take the 1.60 for the day and be happy.

  77. Tagesspiegel:

        German Economy Minister Philipp Roesler said he rejects joint euro-area bonds "in whatever form." Roesler, chairman of Chancellor Angela Merkel’s Free Democrat coalition partner, said his party won’t support any kind of euro bonds or "elite bonds". The minister said the path to currency stability consists of intensified and automatic penalties for states who break debt rule

  78. BOE very negative today..

    And France
    French jobless claims climbed to the highest in more than a decade as declining business confidence discouraged hiring.
    The number of people actively looking for work at the end of October rose by 34,400, or 1.2 percent, to 2.815 million, the Labor Ministry said today in an e-mailed statement. That’s the highest since January 2000. The number of jobless was up 4.9 percent from a year earlier.

  79. Phil – I own 10 EDZ Dec 19/24 bull call spread from Nov. 17th.  sitting on a decent gain on long call and short caller is at cost.  should I roll to Jan?  perhaps buy more of the April 25/45 spread?  I already own 5 of those.  Thx.  I took profit on QQQ, TNA and TLT.  thanks for those.  still holding SCO Dec. 40/46 bcs as a hedge. 

  80. JR/Squeeze
    I’d imagine you’ve got your finger on the dump button with that short.

  81. The Senate is set to vote on a bill today that would define the whole of the United States as a “battlefield” and allow the U.S. Military to arrest American citizens in their own back yard without charge or trial.

  82. UCO/David – I don’t see how people can afford $100 oil.  I don’t care what the reason is – people just can’t pay it anymore.  Why is it, I I said there was an IPad shortage and now they are going to be $1,500 so everyone should buy AAPL stock, I would clearly be an idiot but with oil – any fantasy number is accepted as if the consumer has an infinite oil budget and will keep buying at any price?  Demand is not that inelastic and prices are up on SPECULATION only, nothing fundamental support oil over $85 and even that’s a stretch of logic.  The only sure bet is shorting oil at $100 – not going long. 

    Frankensein/Exec – My gut tells me they are going to have a lot of trouble this year.   

    Speaking of food.  I hope everyone had a nice Holiday Weekend.  The President and his family were nice enough to volunteer at the DC Food Bank and New York State pitched in another $1M for our local Food Bank so I send a heartfelt thanks out to my party – who are the kind of people who actually do things for other people – even in tough times.  Between that and our $1M match, we went from "we’re screwed" to "I think we’re going to have enough for the year" in less than a week!   Thanks to all the people here who contributed as well, there are 66% more people on the program this year than there were in 2007 but Federal funding has been cut – if it wasn’t for private funding people spending their first year homeless would simply be turned away at the holidays and that’s just unacceptable.  We were also very lucky to have such warm weather so far – a benefit of Global Warming!  

    79.40 – We’re holding up pretty well considering.  

    Texas/JC – Haven’t had a chance to look it over but the energy sector is blazinly strong as everyone wants to buy WTIC instead of Brent – it’s an oil economy down there still so that could be carrying the whole thing but then it’s meaningless to the rest of the country anyway. 

    Nice turn call JRW.   Sell-off not very strong though – we could still get a good finish, so be careful. 

    Obama/DC – I haven’t heard anything.  There’s not much he can do except talk it up and express support for an iMF decision that the IMF is still denying.  

    France/Kustomz – Damn, just when I got that video out of my head!  

    EDZ/Terra – It depends what they are for.  If they are a trade, I would not risk losing the profits – if it’s a hedge, I still like EDZ as a hedge but they will almost certainly go down tomorrow as well.  I’d pull the $19s and add enough April spreads to cover the short $24s but those are VERY aggressive shorts as you have time decay to deal with by April as well.   On SCO, I would have taken out the $46s for .85 this morning as $100 is just not happening.  

    Battlefield America/Nicha – I like it, it’s catchy…  This is certainly not the country to hang out in if you are looking for rights to be protected – or liberty… or equality… or brotherhood….

  83.  Another brick taken out of the Posse Comitatus wall against tyranny.

  84. By the way, in case you want to know why Carter was a one-term President:  

  85. exec / TZA

    Just got out with 45 cents !!

  86. QQQ Weeklies – in a 0.46 out at 0.59 — happy with that especially in light of fridays close.
    TBT weekly – bought the weekly $18 call last wed at 0.55 (all premium)  and sold friday at 0.82 — in hindsight, just because I made money I’m not sure it was a wise trade, paying all premium with 9 days to expiry.

  87. Why even bother picking stocks… There is more money to be made elsewhere!

    In the decade since the stadium opened, the personal seat licenses or PSLs fans bought for the right to purchase season tickets have soared in value, offering a far better return on investment than the slumping stock market or even the price of a barrel of oil.

    Take, for instance, a fan who bought a license for a seat in an upper level of Heinz Field for $250 in 2001. It now is selling for an average of $4,306, an increase of 1,622.4 percent, based on 2011 sales at STR Marketplace, a website authorized by the Steelers to allow fans to buy and sell seat licenses.

    A seat license that went for $500 in an end zone now is selling for an average of $7,486, an increase of 1,397.2 percent. And one that sold in a lower midfield section for $2,700 when the stadium opened now is going for an average of $17,131, a jump of nearly 534.5 percent.

    Taken together, the 49,278 seat licenses sold by the Steelers for an average of $1,172 since Heinz Field opened now are selling for $9,802, on average, or an increase of 736.3 percent, based on the sales data. 

  88. Nicha – I thought that was a story from The Onion until I read the article. Wow.

  89. They can manufacture a rip your face off rally today if they can crush the $.. By the way the Euro at this moment needs to be jammed higher or it may be sold off.

  90.  Another day wherein the Dow follows the Euro up and down like a stray dog.  I’m flat and happy, bon chance, tutti!

  91. Pharmboy
    November 28th, 2011 at 10:15 am | PermalinkIgnore this user
    Pharm Hi SVNT 2.44 up .15 today is there still any hope for this stock ?

  92. You are right stjeanluc…and Mike Tomlin would be a much better president than Obaaaama! ;-)

  93. Jabo, I remember when they started selling these PSL for the Eagles new stadium and it felt like a ripoff. I would have bought 10 of them if I had known…

    Don’t know about Mike Tomlin for pres…

  94. I’m short again off IWM 69.74, again, because:

    And on the Dow:

    And another view:

  95. IMF// here is an indication of any increase in us spending within the imf needing congressional approval
    3     Section 504 of the Federal Credit Reform Act of
    4 1990  is amended by adding at the end the following new
    5 subsection:
    7 COSTS.—Beginning with fiscal year 2005,  no appropria-
    8 tion may be made for an increase in the quota of the
    9  United States in the International Monetary Fund unless
    10 that  appropriation includes new budget authority suffi-
    11 cient to cover the  estimated costs to the United States
    12 of providing credit to  International Monetary Fund bor-
    13    rowing nations at  interest rates below the cost to the Gov-
    14 ernment after appropriate  adjustments for maturity and
    15    credit  risk.’’.

  96. angelcur / IMF — Thanks!

  97. JRW, very brave. Markets have not weakened with currencies (AUD EURO) when they sell off and move higher together. I would be careful but, agree with the charts. Looks like they are controlling the markets for a rip in the Euro. JMHO
    1.3334.. level im watching for a breakout or breakdown.

  98. kustomz / Rip in the Euro

    Well, if "they" can break North here, it probably means we will be saving the Euro this week !!

  99. Hindsight/Canuck – It’s OK to gamble once in a while using options to make a leveraged bet – as long as you’re realistic about what you’re doing and that time and position are working against you with an out of the money call so you should be thrilled (like with our AMZN today) to take a quick profit off the table.  

    Seats/StJ – I wanted to do that once but couldn’t get people to invest.  Ticket sales of all sorts only go up and up and up over time so  any time you can lock in a long-term price, you have a nice little investment but it’s kind of hard to put it into a VC portfolio so I gave up.  

    Speaking of investing – I’m back on that bandwagon to set up a Berkshire-like company that just invests in whatever looks good.  I’ll be putting up something to collect names of interested people by the weekend if someone reminds me.  

    IMF/Angel – First of all, they have 100M ounces of gold ($171Bn) that they can tap,   The IMF can also take a loan against cash-flow (their existing quota), which would be a total BS way of bending the rules but – tough.  Doing that, they can service a multi-Trillion Dollar loan.  As it stands now, they have plenty of firepower with about $600Bn already approved and special drawing rights (already approved) of over $300Bn more with less than$200Bn currently tapped.  Also, since they lend money, they could be considered to have hundreds of Billions more in loan assets to back additional borrowing.  Then they have "Stand-By Arrangements" which, If I understand them correctly, would work for Italy because they allow Italy to borrow 200% of their own IMF quote PLUS 600% of their outstanding credit net of SCHEDULED repurchases PLUS the IMF has special cases where they can increase these numbers.  So, on the whole, I would be very careful about making bets based on what the IMF can’t do.  


  100.  3 mutual fund managers just won $254m powerball jackpot

  101. hes on cnbc right now

  102. JRW that meeting is for Greece next tranche… 8b

    Looks like Euro cant get it together..

  103.  worst thanksgving week since depression..very oversold…poor quality rally giving backdrop..could build from here..just saying not impressive other than the actual point gains in averages so far

  104. SVNT/yodi – are they going to get it together, I hope so.  I still own them and their drug, while not a blockbuster, is ok.  Just need to sit and wait.  Otherwise, start reducing.  I am starting to do just that…..

  105. More wealth was lost last week since the depression – oh I see angel said it also….and where did it all go?  My accounts were held up somewhat, but I still believe in JRW’s and my chart that a small rally is in the making….then we go boom.  Retail sales up, how about  margins…we won’t know for a while, but I bet margins were squeezed….hard.

  106. Oh, and one other thing….those retail sales were gains for some, but I bet you real estate is gonna get another smack down b’c more people said ‘screw it’, I am going to spend big, ’cause I am not paying my mortgage. 

  107.  angel – no fair, they already win the lottery all the time.  Big question – will they invest in their own funds?  I think they should only be paid in shares of stuff they run.  ;-)

  108. Italian rates are rising….hum….

  109. Interesting thoughts on the role of a central bank:


    Ladies and Gentlemen, this is what a lender of last resort looks like….On September 16, 2008, Morgan Stanley owed $21.5 billion to the Fed. The next day, that number doubled, to $40.5 billion. And eight working days later, on the 29th, the bank’s total borrowings from the Fed reached $107 billion. The Fed didn’t blink: it kept on lending, as much as it could, to any bank which needed the money, because, in a crisis, that’s its job. 

    And the problem is that re ECB has decided that it’s not its job…

    The banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens….Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges. First, the European Central Bank must agree a backstop of some kind….

    I don’t know about other experiences, but my sister runs her own business in Spain (profitable and all) but tells me that getting credit from any bank is a real hassle now. I think that there is a real systemic problem looming and we have not seen the worse yet!

  110. Thanks Pharm

  111. I agree with Pharm, this would be a great point in the markets to remind everyone that Wall Street doesn’t get paid bonuses if the markets end the year in the red; seeing as though trading is an art as well as a science, keeping this big picture point in mind will help recognize that "Trading the Trader" is a big part of making money. The fact is that "they" have more than enough money on the sidelines to take us back North of 1300 with little effort before year end. I only trade what’s in front of me, but on the other hand denying points like this will leave you broke on the road to eventually being right !!

    My guess is the Christmas rally will begin with The Marshall Plan II  (QE III)

  112. Out of TZA with another 46 cents !!

  113. Bad timing, getting back into TZA on a break of IWM 69.30 support !!

  114. OK, so we gave back all the gains from today’s session and are left with the gap up from the pack of rumors from the IMF last night which boosted the futures! Back to reality? 

  115. DC – who’s (or who’re) my fellow DC person(s) in this joint? Just did our annual Christmas Carol at Ford’s. Decent friend/acquaintance plays Scrooge – great staging. But also just hit me again what a Dickensian state we’re in right now – if not always.

  116. Powerball/Angel – I’d be getting out of that fund right away.  I’m sure their attention will be elsewhere.


    1:00 PM On the hour: Dow +2.48%. 10-yr -0.14%. Euro +0.57% vs. dollar. Crude +0.65% to $97.39. Gold +1.52% to $1714.15. 

    2:00 PM On the hour: Dow +2.5%. 10-yr -0.12%. Euro +0.63% vs. dollar. Crude +1.07% to $97.81. Gold +1.53% to $1714.35.

    3:00 PM On the hour: Dow +2.39%. 10-yr +0.02%. Euro +0.55% vs. dollar. Crude +1.12% to $97.86. Gold +1.37% to $1711.55.

    Another inflation index: PNC Financial estimates (.pdf) the prices for the gifts in "The Twelve Days of Christmas" song gained 3.5% Y/Y to hit a record high of $24,263.18. Though tracking some rather unique items such as Maids-a-Milking and Turtle Doves – the tongue-in-cheek index tracked CPI rather closely for the time period.

    In its 2012 Securitized Products Outlook, JPMorgan suggests a wild card now on the table: QE3 in mortgages. The prediction is supported by a majority of bond dealers surveyed by Bloomberg, who expect the Fed to begin a new round of stimulus by buying up mortgage securities instead of Treasurys. (also

    Early Cyber Monday report: IBM Benchmark estimates that as of 12:00 PM EST, e-commerce sales are 20% higher than last year’s take for the same time period. The data shows that 8.5% of purchases are being made with a smartphone – a mark that is expected to increase later in the day.

    Morgan Stanley cuts its outlook and price targets on big U.S. banks, citing economic concerns in the U.S. and Europe. Most notably, it cuts Citigroup (C +5.8%) to Equal Weight from Overweight and trims its price target to $30 from $45. Cut to Underweight: STT +1.7%, BK +1.4%, NTRS +1.4%. But for today at least, bank stocks (XLF +3%) are rallying

    Soon to be merged Greek lenders Alpha Bank and Eurobank announce 9 month losses tied to their holdings of government debt. Eurobank reported a €575M loss, with €830M attributed to bond holdings, while Alpha recorded a €567M loss, €760M from Greek paper. The merger will close before year’s end and will include plans for a €3.9B capital increase for 2012.

    IMF chief Christine Lagarde heads to South America – not to try and impose Fund programs on that region’s economies – but, in "an historic about-turn," with her hand out to get assistance with EU bailouts. The SA countries will likely push for increasing their influence within the IMF, something Lagarde can chat about, but not guarantee.

    Today’s bounce in copper futures is helping to push copper mining stocks higher: Freeport-McMoRan Copper & Gold (FCX +6.6%), Augusta Resource (AZC +6.2%), Southern Copper (SCCO +6%), Cliffs Natural Resources (CLF +5.8%), HudBay Minerals Inc. (HBM +5.5%), Taseko Mines (TGB +4.3%) and Western Copper & Gold (WRN +3.8%). 

    Risk on: Direxion will up the leverage on 10 of its ETFs to triple-leverage from double-leveraged next week. Though tickers for the affected funds won’t be different – a change to the name for each fund will swap the 2X for 3X. Making the change: INDZ, INDL, BRIL, BRIS, NUGT, DUST, GASL, GASX, RETL, RETS.

    It looks as if Best Buy (BBY) is giving up on Research In Motion’s (RIMM +2.8%) PlayBook: many online buyers are reporting cancelled orders, and PlayBook listings on Best Buy’s web site have been pulled. The PlayBook has seen dismal sales this year, and the release of Amazon’s (AMZN) Kindle Fire (also a 7-inch tablet) may prove the nail in its coffin. (also

    Global server revenues grew 5.2% Y/Y in Q3, according to Gartner, well below Q2′s 19.5% clip. While lower top-line growth was expected, given the Q2 impact of IBM‘s mainframe upgrade cycle, a decline in x86 server revenue growth to 9.3% from 17.7% implies a broader softening of demand, and is arguably unwelcome news for Intel (INTC). Western European sales fell 4.9%, while Asia-Pac shipments rose 23.9%. 

    More on Gartner’s server data: IBM‘s revenue share fell 50 bps Y/Y to 29.7%, while H-P’s (HPQ), hurt by collapsing Itanium sales, fell 270 bps to 29.3%. Dell’s (DELL) share rose 20 bps to 14.7%. Oracle’s (ORCL) share fell 30 bps to 5.9%, though this is a much smaller drop than Q2′s 130 bps decline, and suggests the company’s position might finally be stabilizing. (ORCL FQ2

    A potential $4B accounting charge wold be tough to swallow if AT&T (T +1.7%) fails to complete its T-Mobile (DTEGY.PK) deal, but some analysts are looking on the bright side. Mizuho reiterates a Buy rating, writing that shares already reflect the expectation that the deal doesn’t receive FCC approval, and Wells Fargo says AT&T’s move to yank the application allows it to try again in the future. (also

    Corning (GLW +5.9%) is upped to Buy from Neutral at Davenport, writing that the company’s glass sales could rise on double-digit growth in global LCD TV units. While LCD TVs apparently were flying off U.S. shelves this past weekend, the big story is in China, where LCD sales may grow 15% this year, and in emerging Latin American and Asian countries who may collectively see a 42% Y/Y gain.

    Google’s (GOOG +4.4%) oft-criticized music service (I, II) shows its serious side with Cyber Monday deals meant to sharply undercut pricing from rivals Amazon (AMZN +6.5%) and Apple (AAPL +3.5%). Albums priced at $1.99 are now available via the Android Market. A key unanswered question: Can Google strategically embed the service on the Android platform and leverage its search dominance to boost sales and market share?

    Three lunchtime reads:
    1) The eurozone really has only days to avoid collapse
    2) Don’t read too much into holiday shopping
    3) Buybacks vs. dividends: focusing on the long term

  117. Remember, failing to hold 2% gains = BAD!  

    Scrooge/NF – Sadly, it never gets old, does it?  

  118. Phil,
    SCO Jan 37/40 BCS at $1.20 – still a go?  Good place to enter?

  119. Scrooge – Sadly for sure. Presented well, it’s still a scorching piece of work. To see it under the box where Lincoln was shot, across the street from the house where he died and all that – just kinda hammers ya. They always send the cast out – after a nice speech by Scrooge (Ed Gero) – to take food bank donations too.

  120. Exciting Selling – Taking into account the earlier ask about selling calls in general, what about selling against some of my laggards (eg EBIX, DDD) that I expect to own longer term – perhaps accumulate – that got an undeserved call premium boost on a day like today? (This on,y where I own u delaying shares – maybe slightly red – but u likely to get called away with conservative monthly call).

  121. SPY calendars….SPY put side is 117 for 1.80.  Call side is 121s for 1.32ish.

    Sell the weekly, buy the monthly.

  122. SCO/Canuck – Sure, it’s a bet oil is $97.50 or lower at Jan expiration.   Not a bad bet, I think with a 250% payoff potential.  

    Scrooge/NF – Sounds like fun! 

    "It is a fair, even-handed, noble adjustment of things, that while there is infection in disease and sorrow, there is nothing in the world so irresistibly contagious as laughter and good-humour." – Dickens

    102M on the Dow at 3:45 is not at all impressive.  

    79.42 – Dollar finally calming down.  Oil around $97.50, where we expect it to be ahead of inventories as there is a lot of hope of good holiday driving but, after that – they don’t have a good catalyst through the Jan contract expiration around Dec 20th.  It’s been warm so no heating but then a storm that shuts Transportation dents demand too and where’s the Hurricanes?  

    Despite a big green day in equities worldwide, price action in Treasuries reminds that risk remains and the economy is still slow. A Pavlovian move higher early reverses with the 10 year yield now lower by a basis point to 1.96%, after hitting 2.08% this morning. TLT flat for the day, +28% YTD. [

    BofA’s Mary Ann Bartels is the latest to see echoes of 2008 in recent market action: "The rally in the S&P 500 off the Oct. and Aug. 2011 lows is similar to the rally off the Jan. and Mar. 2008 lows… Last Monday’s break below the 50-day moving average, near 1207, points to a repeat of the 2008 pattern and targets a move down to 1150-1100, with the risk of the Oct. low of 1074 being tested."

    In Peter Morici’s view, markets have been freezing up because investors have come to realize the euro "makes little sense," even if Merkel and Sarkozy don’t. The enormous differences in labor policies, taxes, and social programs between different member states, not to mention wages and GDP growth, make it an economic anchor around export-driven Germany and debt-ridden Greece alike.

    Has apocalyptic been used yet? Polish foreign minister Sikorski, standing at the Brandenburg Gate, lays claim to that adjective to describe the future should Germany not act (i.e. allow the ECB to print away) to save the eurozone; the collapse of which, he says, is a greater security threat to his nation than Russian missiles or terrorism.

    Shares of Nike (NKE +4.5%) follow basketball-related companies Foot Locker (FL +8.6%) and Madison Square Garden (MSG +9.5%) (I, II) higher following a tentative resolution to the NBA work stoppage. Despite predictions from analysts that the lockout wouldn’t dent shoe sales, the return of games could signal that sales of broader NBA-licensed merchandising – tallied at $3B last year – will beat recent estimates. 

    The bloodletting in Groupon (GRPN -10.1%) and LinkedIn (LNKD -9.3%), occurring in the absence of major news, and on a day when most high-beta names are surging, has accelerated in the final hour of trading. Groupon has been a favorite of short-sellers all month, and many expected LinkedIn to see ongoing selling pressure following the recent end of its IPO lockup. 

  123. FAS Strangle Experiment Update – Today (49/59 weekly strangle) didn’t work out that great. The call side gained about 8% of margin, but the put side lost that much as well so even at the end of the day. The problem comes I think from the fact that I sold at the morning spike – would have been better to wait until after 10:00 AM. For experimentation, I closed the call side and am keeping the put side open to see what happens the rest of the week. 

  124. Out of TZA with 24 cents; 3% on the day.

    What a joke !!

  125. JR/3%
    Don’t Fret……I know a lot of people that don’t earn 1% in a year.

  126.  STJ:
    I had the same results on FAS strangle.  About 10:10  would have been a good time to sell it today. I think the huge gap up had a greater influence on the early option action.

  127.  Late stick

  128. Here sticky, sticky! 

    Still no volume but will be impressive numbers for Asia to key off at the open.  

    That was a very good way to start the week.  Anything less than follow-through to 5% gains will be a huge disappointment tomorrow.  

  129. IWM 69.75, what a shock !!

  130. Nice stick on top of the pre market stick. Looks like they are trying to price in the ECB taking action. The longer they take the deeper the cut.

  131.  You did okay JRW! There seemed to be a lot of "Bot" action today!  I only netted about 1%, so I have a little ways to go on the learning curve to equal your 3% under these conditions!

  132.  Pretty funny Phil!  Here "Sticky Sticky"?

  133. JR,

    You called it.  Look at the last 5 minutes…..they have plenty of reserves to blow us into the green by year end. 

  134. One more big day would be an incredible end to what was a good month already.

  135.  the daytraders thought gap up was too much…they bought ultrashort financial skf all day….then covered in last 15 minutes…with volume so light it spiked us into close i think  fitch lowers US outlook to negative..FRANCE IS AAA WITH AN UPGRADE LIKELY BABY (KIDDING!!)..WHAT BS

  136.  Judge Rakoff, what a mensch, slapping down Citi and the corrupt and weak-kneed SEC.  I had the privilege of working for him on a case as a young lawyer, also involving corruption, in which some poor Long Island bag man was being hung out to dry for passing on bribes to a LI machine politician.  I came up with a constructive receipt argument, and Rakoff got him off, pointing the finger where it belonged.  The defendant was a big Irish guy, who took me to a bar afterwards and started weeping and hugging me.  That put me off criminal law forever – I don’t mind helping money change pockets, but playing with real bullets — lives in the balances kind of stuff — was not for me.  
    Jed Rakoff – a brilliant, courageous guy; unfortunately, our political system is incapable of electing those kind of people to Congress or the Presidency. 

  137. Hi, Phil, What are your favorite hedges to the coming hyperinflation as you projected? Good? Silver? Agri/Food ETF? Industrial metal/Materials? Do you expect the Gold price will rally strongly from here, just like at the end of 2008?

  138. Now this should be fun:
    6:30 PM Be careful what you wish for, banks: After Barney Frank leaves Congress, his place as top Democrat on the House Financial Services Committee likely will be taken by Maxine Waters, whose bizarre ramblings and conspiracy theories have befuddled bank CEOs and Tim Geithner. She has advocated banning all credit default swaps and taxing "gangsta banks" out of business.

  139. TLT is going to get CRUSHED if there is a year end rally. Why was it going up today with the market up? Puts made sense right at the close but I missed this one. Could be an interesting play tomorrow though.

  140. Smart, there’s a sense that TBT will rise like the Great Pumpkin and shower money on all of us hyperinflationists, but man do you have to have some patience in this game.
    For now, I have a front month 120 put on TLT, just for a little insurance. I’m watching the horizon for the great big currency kablooie, but it’s nowhere to be seen as of yet….

  141. pstas
    Soros on CDS
    "some bondholders owned CDS and they stood to gain more by bankruptcy than by reorganisation"
    "It’s like buying life insurance on someone else’s life and owning a license to kill," he concluded."

  142.  Hello PSW members,
    I have 2 Dec Quarter SPY 125 calls, (currently $1.39, with net current loss about $750), acquired in May for about $1050.  This position will only break even if SPY hits the target of 130 by Dec, which is a long shot but still possible, I guess. I am looking to play for this target, (as it’s hopelessly underwater otherwise), while considering to sell Dec 125 calls for about $1.25. What would you recommend?  Thanks in advance.

    Pendulum swings on American oil independence
    “The notion that the US was a superpower in the 20th century but won’t be in the 21st doesn’t hold up so well now,” Mr Morse says. “Compare it to a country such as China, which is going to be overwhelmingly dependent on energy imports. The US is in a much stronger position.”

  144. does anyone on the site use a net book  for trading when traveling --I am looking for something smaller and lighter  than a lap top— but can  run TOS platform and Fidelity platforms easily—any ideas —TOS app for the  Ipad is not great

  145. Savi
    I’ve used an HP net book with windows 7 and it worked OK with command center, but I never tried TOS. The speed was OK, even with a Verizon hot spot, it’s just that the screen is so small I’m having a hard time imagining TOS on it, but it might work.If you’re going to use Wi Fi you definitely want to look into a VPN service as well. Hope that helps.

  146. Net books- I have used an HP Mini net book for about year. I have to drive around a lot for business purposes and this unit works fine.  I run the same TOS desktop platform- when you open it up, you may have to adjust the font size so it fits on the smaller screen. The HP is light and has a very good battery life. I use a Verizon MiFi modem for connection which is slow but fills the need of not having to rely on wifi. I find the TOS app for my Iphone to be almost unworkable for anything other than checking prices/quotes, so the net book is the way to go , IMO. The biggest drawback is the small screen. I miss not having dual monitors as I have on my desktop. I use charts a lot and the net book is inconvenient on that score but I have multiple charts set up in TOS using the flexible grid option which is good enough.

  147. pstas ,sparky—thanks very much for the info—trying to decide especially for international travel

  148. International travel- in case you are not aware of it – you have to jump through some hoops to get economical connections via Verizon/MiFi; etc., if that is in your arsenal. I forget the details but recall that unless you purchase a specific package you can rack up some outrageous charges.

  149. pstas – You should ask Verizon about upgrading to their Verizon Wireless 4G LTE Mobile Hotspot MiFi 4510L. 
    They upgraded mine for free. The 4510L works on both 3G (when 4G is unavailable) as well as 4G (FAST!!!).
    Link to a MiFi 4510L review.

  150.  This wouldn’t work for international travel, but I’ve been using this Ipad app for day use called "LogMeIn", which is $15 right now.  You just leave your computer on at home, and when you log into this app it lets you see and control your computer remotely with the 3g or a wifi connection.  It’s a little bit slow to respond because of the delay, but it sure beats trying to use that TOS Ipad app.  It’s really pretty nifty.

  151. Diamond- sound great. I will check it out. Thanks for the info.

  152. Phil, this is the trade you said to ask about after hours: ECA.
    November 27th, 2011 at 3:30 pm | PermalinkIgnore this user
    Phil/ECA, In July 2010 I bought 200 ECA at 31.20 and sold 2 each  2013 30 P+C, Rolled to 2013 25 P+C, and rolled the calls to Jan 2012 20′s. I have collected some on the call rolls but am down on the stock and puts. Stock now 17.80 and I know I am screwed but what is the best way to save some of it with little margin left. I know I should have never let it get away from me like this. Thanks – now at 18.57
    This is the only real trade I am having troube with even my FTR I got at 7.60 is OK. Also thanks alot for your lessons as I am much better than 2+ years ago when I joined even though not "there" yet as some of the board.

  153. Randian thought of the day – Would Ayn Rand support financial regulations?

    Apparenlty, yes!

    Rand’s philosophy is only anti-regulation because it is ultra-supportive of the capitalist ideal: The people who create the most societal wealth should receive the benefits of this contribution. From this perspective, Rand’s philosophy points out that real capitalism is no longer enforced in America; not because of welfare programs, taxes, the social safety net, or government regulations, but for a very different reason: The highest paid people in America today create no real wealth for the society.

    From - 

  154. FAS / Joemayo – Thanks for the information. Lesson learned.

    Having kept the put side open, my plan for tomorrow is to wait until after 10:00 AM and sell a call vertical about 10% from the last trade and complete the strangle that way. We’ll see what happens. 

  155. According to the WSJ, Facebook is targeting a $100B+ IPO for sometime between April and June.

  156. Warren Buffett visits Japan for the first time last week in his 80 or so years of life and the first place he goes is… Fukushima.  Yes THAT Fukushima.  He went to visit a new plant opened by the Tungaloy subsidiary of his Iscar holding.
    Nice Photos of the Trip Here.
    He also mentioned he is "on the lookout for a "big investment" here" , which probably means he already has a few in mind.
    My appreciation for Warren has grown 2-fold because a super-wealthy, super-successful American CEO like him actually had the balls to head to the center of what is one of the worst nuclear disasters in history, and he is again lending his name in order to provide an endorsement to provide investor confidence.  A true American capitalist hero.
    Also to add to the "Buy Japan" bandwagon, not-as-heroic super-investor Jim Rogers was also coincidentally in Tokyo and said that "he likes Japanese stocks and they are ‘very cheap’" .   He himself is holding Sanrio (maker of Hello Kitty) and Tomy.

  157.  Kinki – thanks for highlighting Buffett’s trip.  I have read three places in the last week that Japanese stocks are valued at below book value and could do very well.  On the other hand, Bloomberg ran this article over the weekend about mob ties to Japanese companies:

    Olympus is the latest reminder of the extent to which the yakuza is intertwined with the corporate culture, and it’s hardly the only household name to get ensnared. In 2009, Fujitsu Ltd. (6702) ousted its president for alleged ties to “antisocial forces,” a euphemism in Japan for organized crime. The question is this: If Olympus was mixed up with such sinister forces, which other Nikkei 225 Stock Average companies are?

    I’m interested in diversifying into Japan, but also mindful that Buffett and Paulson both took it on the chin in China do to corrupt bookkeeping (not that this hasn’t happened in USA, from Green Mountain Coffee to the whole financial system with poor ratings protocol from Fitch, Moody etc.)  I’m considering going the ETF route, since I don’t have the luxury of traveling to Japan and meeting with corporate leaders personally as Buffett does with all his investments.  I am interested to hear what others think of Japanese investment as some of the heavy weights start looking there.

  158.  Savi 
    I have a Acer TimelineX with a Intel i7 proc that is very light for travel, 13in screen, and 7hr of battery.  I use it everyday to trade with.  I also bring a HDMI cable with me on longer trips, and when there is a flat screen TV in the room, I connect the HDMI out on the laptop to the TV and I have a huge monitor.  It also has bluetooth, so I bring a bluetooth mouse with me and I’m not restricted to the tiny pad on the laptop.  My 2c.

  159. Burrben—thanks for the info—will look into the Acer

  160. Good morning!

    I am very, very sick this morning.  My girls both had the flu yesterday and I thought I escaped but no.  

    I’ll put up a short post and hopefully I’ll be able to check in but hard to focus.  

    AMR bankruptcy took us down in futures but Dollar also off the floor from 78.70 and that’s not because AMR is BK.  Started rising at 6 and now at 79.10 but it didn’t kill the rally yesterday, topping out at 79.50 so we’ll see.

    AMR Corp. (AMR) files for Ch. 11 bankruptcy protection, "in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability." (PR)

    Italy’s bond auction was near 7% but people bought them so relief there

    Tuesday’s economic calendar:
    7:45 ICSC Retail Store Sales
    8:55 Redbook Chain Store Sales
    9:00 S&P Case-Shiller Home Price Index
    10:00 Consumer Confidence
    10:00 FHFA Housing Price Index
    10:00 State Street Investor Confidence Index
    11:30 Fed’s Yellen: ‘The Global Economic Recovery’
    12:30 PM Fed’s Lockhart: Economic Outlook
    8:00 PM Fed’s Kocherlakota: ‘Making Monetary Policy’

    2:55 AM Asian stocks advance for a second day, with China’s benchmark index rising the most in two weeks on speculation the government will take action to bolster growth. Japan +2.3% to 8478. Hong Kong +1.4% to 18294. China +1.2% to 2412. India -0.2% to 16131.

    3:01 AM European markets look set to open flat ahead of today’s meeting of European finmins, where officials are expected to agree on details to leverage the EFSF and approve Greece’s next bailout payment. Investors will likely be disappointed if that’s all the meeting produces, as reports have circulated about plans for heightened fiscal integration.

    Overseas: Japan +2.3%. Hong Kong +1.2%. China +1.2%. India -1.0%. London +0.3%. Paris +0.8%. Frankfurt +0.9%.  

    The latest Italian bond auction results in yields on 3-year paper rising to a euro-era record of 7.89% from 4.93% only a month ago. The yield on a 10-year bond increased to a fresh high of 7.56% vs. 6.06%. Still, at least Italy was able to raise €7.5B ($10.06B), near the top end of its goal of €5-8B. 

    Italian debt – which rallied sharply after a bond auction in which yields were high but the paper got sold – falters again as yields move higher over the past minutes. Ten year BTPs are 12 bps north on the day at 7.35%, still well below the 7.56% yield produced at the auction. 

    Coincidence?  The ECB purchased €8.B in sovereign paper in the week ended Nov. 25 as part of its SMP buys, slightly higher than €8B the previous week. The total amount thus far sums to €203.5B.

    Coming on the same day as Italy’s bond auction (3 year paper at 7.89%), U.K. retailing giant Tesco issues debt as well (3 year paper at 2%). "Time to replace the euro with Tesco Club Card points?" asks the FT‘s Isabella Kaminska.

    Facing skittish bond investors, some European nations are turning to banks to act as lenders of last resort. Sources say Italy and Portugal, among others, are pushing their banks to keep buying government bonds, while the number of bank loans to local and national governments is rising sharply. (The already-stressed banks, meanwhile, are themselves facing a shortfall of bond buyers.) 

    Stagflation officially makes its way across the Channel from the U.K. as Belgian inflation pops to 3.85% Y/Y in November, the highest level in more than 3 years, and against an economy that produced zero growth in Q3. 

    France may be in line for a downgrade, according to a report in French newspaper La Tribune. Several unnamed sources say S&P could downgrade the outlook on France’s AAA rating in the next 7-10 days, ahead of lowering the credit rating itself.

    Moody’s places the subordinated debt of 87 EU banks across 15 countries on review with the view that the average downgrade will be 2 notches. The agency cites the removal of government guarantees as making systemic support for the paper more uncertain. S&P futures drop a couple of points, now -0.3%. The euro gives up about 25 pips to $1.3290.

    Fitch revises its outlook on the U.S. to Negative while affirming a AAA-rating – citing its "declining confidence" Congress will agree on timely measures to bring about fiscal policies aimed at reducing indebtedness. The change in outlook represents a slightly greater than 50% chance of a downgrade from the ratings agency within a two-year timeframe.

    Bets against the euro are at a 17-month high, according to data from the CFTC; as of Nov. 22, bets that the euro will weaken against the dollar outstripped bullish positions by $14.4B, an 11% increase from the week before.

    The U.K. is expected to announce later today an increase in its bank levy, to just under 0.1% of a bank’s liabilities from 0.078%, because liabilities were smaller than expected and the country still wants to hit its goal of raising £2.5B ($3.9B) from the levy.

    Japan’s unemployment rate rose to 4.5% in October, outpacing September’s 4.1% and the 4.2% economists had expected. The unfavorable data will put additional pressure on Japan to expand stimulus efforts in the face of a rising yen and a troubled eurozone. 

    Nomura has sharply cut its exposure to eurozone debt over the last two months, bringing down its PIIGS exposure to $884M from $3.55B, and Nomura’s not the only one cutting its potential losses… 

    Early estimates show Cyber Monday sales rose 18% Y/Y, with the question now being whether retailers can maintain the momentum from the whole Thanksgiving weekend. "It’s too early to see whether the entire consumer wallet will be spent this early in the year," says IBM’s John Squire, as "there are always procrastinators." 

    You get the Government you pay for:  Bloomberg reports former Treasury Secretary Henry Paulson told several hedge fund managers in late July 2008 that a government takeover of Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) was a possibility. This was despite testifying in the Senate a few days earlier that government intervention was nearly impossible.

    "The most affluent luxury customer is spending with confidence," Neiman Marcus tells analysts after it almost doubled net income from a year prior. CEO Karen Katz said well-heeled shoppers are loading up on pricey jewelry, and noted many of the swanky retailer’s "fantasy gifts" – which include a $250K speedboat and a $395K Ferrari – sold quickly.

    Toyota (TM) unveils a futuristic car reminiscent of a scene from Blade Runner with its all-black three-seat Fun-Vii model replete with auto pilot, onboard 3D holograms, and an outer skin that is a video screen capable of displaying anything from stock quotes to advertising. The carmaker didn’t miss out on including a smart grid with the model – featuring always-on connectivity to help drivers avoid road problems or connect with friends. 

    Goldman’s Adrianne Shapira pours cold water on the "encouraging start" to this holiday’s shopping season (I, II), noting the cost of getting the customer’s attention – free shipping, longer store hours, more marketing, etc. – is rising, which may not bode well for margins. Wal-Mart (WMT), in particular, reclaimed lost market share but at considerable cost, Shapira says. 

    Good advice:  Reacting to news headlines – like today’s morsel of good news out of Europe – is a trap to steer clear of, says Southwest Securities Mark Grant. It’s just another whipsaw, the type that that has dominated Wall Street for months. "The equity markets’ rallies upon some headline," Grant notes, are always followed by a downdraft "as the slow-witted finally figure out that the grand pronouncement is little more that hot air being belched up to mislead the masses." 

    Be careful what you wish for, banks: After Barney Frank leaves Congress, his place as top Democrat on the House Financial Services Committee likely will be taken by Maxine Waters, whose bizarre ramblings and conspiracy theories have befuddled bank CEOs and Tim Geithner. She has advocated banning all credit default swaps and taxing "gangsta banks" out of business.

    Bullish Cross, which says it has never missed a price target on Apple (AAPL), now hails it as "the most undervalued and underappreciated large-cap growth company in America… Apple is reaching a floor in this age of P/E compression, and is about to undergo one of the biggest rallies in [its] history." Shares now trade at a trailing 13.1 P/E, lowest in nearly a decade. (also: I, II)  

  161. Ahhhhhhhhh—sold my 92 AMR  1.00  puts yesterday—so so sad  

  162. Phil—hope you get better soon—did you get your flu shot?

  163. Savi, have considered the smallest MacBook pro? Or the air? My girlfriend has the pro and it fits very nicely inside her purse.

  164. Boy, do I want one:

    Maxine Waters just moved from, IMO,  Most Obnoxious Dumbkopf in CONgress to my favorite Democrat, and should place herself in contention for the POTUSy. 
    While she’e at it, she could also begin the push for Single-payer Medicare For All health program. Health Insurance has now become an oxymoron.  Health Insurance companies have bought of the Insurance Commissions in the States who have given free reign to every increase the companies have ever asked for, all the while racking up record profits in the  Non-profit niche they hold.  This status must change and these companies forced out of business in single payer system.  Obsolete their redundant CEOs and boards who will have to find employment burger flipping.  They are a scourge and a mockery of the not-for-profit model that at one time had great merit. But they ruined it.
     I withdraw all former opposition due to size and diversity in the United States.  This epiphany has occurred because of the unconscionable closing of hospitals, hospitals merging with or buying health insurance companies, or  insurance companies buying hospitals and generally moving from their charters as health insurance companies, like Highmark. 
    The Non-profit to profit oriented models that these companies have adopted, at the expense of patients, doctors and Nurses must be discarded.  The CEOs of Hospital systems replaced with those actually interested in health care and not just money for themselves.  There’s more, but ’nuff said.

  165. craig-- thanks—-if I had kept my AMR puts i could have afforded the MAC   :-(

  166.  Savi
    And the Acer 1830T is only $570 from Amazon.  For me a travel computer needs to be cheap since it’s more likely to get broken or stolen.  I would love the MB Air but I couldn’t justify the price.

  167. Iranian students storm British embassy? Not sure if that’s real but USO calls or playing oil futures up off 98.50 is a good hedge if true.

  168. I’m ipadding on couch but hard to type or read

    That car is the coolest thing ever but I will not be an early adopter of self drive.

    Flips, are you seriously seeing the light? I’m too sick to tell if you are joking.

  169. @Felipe
    Not in the least. 
    The Tipping point has been reached. The final straw is now extant in the goings on here in Western Pennsylvania between UPMC and Highmark Insurance over the last several months and are enough to convert anyone who believes (or used to) that the current system of delivering health care is working well.
    Those days are over for good.  Not only is the health care system broken but is consistently being subject to rape and brutalized by the same kind of mentality— in the CEOs, Boards and Executives—- that killed the Financial system for the masses only to accrue all the money in it for themselves, and to hell with the patients, doctors and nurses, let them be damned.
    Rampant irrational greed, with multibillions of consumers’ money the only god these people will bow to. Enough. 
    I don’t think even government could be as callous about its ‘customers’  as these London suited, custom-made initialed Egyptian cotton shirted , Mercedes 600 chauffer-driven megalomainiacs, psychotics, and socipaths are.  They are matched only by their brothers in politics, education, and investment banking. ALL of them should be set for extermination. Literally and figuratively.  As I once was a staunch member of the republican party before Gingrich and company proved to be a worse cure for what ails this country than the democrat disease of 40 years running, so to have the Health Insurance companies and mega-hospital systems are proving to be the bane and catastrophe of good health care.  
    Before if gets much worse,—--and it will if these mergers, acquisitions and the general contamination, which has now reached epidemic fail,   must be stopped cold in its tracks. 
    If it takes a national medicare for all  health care system, and NOT A NATIONAL HEALTH CARE INSURANCE SYSTEM to stop these bloodsucking scumbags, then so be it.  They, like the unions killed labor, the teachers, education, and the politicians the democratic republic have overreached with their lobbying and now the 99% must vigorously object and throw out any poltician who does pursue National Health Care with passion, common sense, and with all due haste.  If it takes even Hillary care, heaven help me, then so be it.