Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Tuesday – To QE3 or Not to QE3 – That Sets Direction

Waiting for the Fed

We did our Hamlet post for the ECB last Thursday and, like the Prince of Denmark, the dithering by the former Deutsche Mark crowd on whether or not to support the union of Mother Merkel and Uncle Nick, who killed the Fatherland in order to take their place at a new EU table – goes back and forth endlessly, swinging from pledges of bold action, right back to more inner monologs – where much is pondered by nothing is actually fixed.

In Hamlet, the action is moved forward by haphazard events, with Germany's decision-making driven by fear of the hyper-inflationary ghost of the past while a castle full of knaves and fools twist and turn along the path which fate will, inescapably, lead them all to.  

Sadly, in Hamlet, pretty much everyone ends up dead (spoiler alert!), dropping off like flies, one by one as their little union falls apart and things spin out of control.  In the end, Norway has to come and take over the ruined kingdom – presumably because they have all that oil money and a balanced budget….

It was Polonius (Ophelia's Dad), who first said, "neither a borrower nor a lender be" (shame on your English teacher if you thought Ben Franklin didn't steal it) and the continuation of that couplet is "for loan oft loses both itself and friend."  

The European Governments certainly aren't making any friends with their drastic austerity measures and the program they came up with (see "The Rube Goldberg Solution") simply guarantees a recession while doing virtually nothing to solve the debt – just another game of kicking the can down the road

But what is the point of kicking the can down the road if you are doing nothing to improve your situation along the way?  Does the EU really not understand the game?  Businessmen punt all the time – when bill pile up and sales are down and times are tough – we restructure, we refinance – whatever it take to buy some time and improve our cash flow but THERE'S USUALLY A PLAN!  You don't just begin haphazardly shutting down operations while hoping your revenues randomly improve.  

Austerity NEVER works!  The UN's Economic Think Tank, UNCTAD, in their September report, entitled "Post-Crisis Policy Challenges in the World Economy," savaged U.S. and European economic policies and called for wage increases, stricter regulation of financial markets, including a return to a system of managed exchange rates, and a conscious break with market-led thinking.  "The message here is very pragmatic: we need to reverse our course quickly," said UNCTAD Secretary General Supachai Panitchpakdi.

Supachai, a former head of the World Trade Organization, said the policy response to the crisis, with an emphasis on fiscal tightening, was misconceived and inept.  The report's lead author Heiner Flassbeck said the global economic situation was extremely dangerous and, without more stimulus, a decade of stagnation was the best-case scenario.  The current policies were a disaster, said Flassbeck, head of the globalization and development strategies division at the U.N. Conference on Trade and Development, and a former deputy finance minister in Germany.

If interests rates everywhere are zero, and if governments stick to the policy of not only keeping fiscal deficits where they are but retrenching, cutting public expenditure, then we will end up in permanent recession.  Unemployment depends very much on demand. And if you have no demand then you need government to step in with a huge program for stimulating the economy. This was the U.S. scenario in the past. Now it's worse because wages are rising less than in the past so you're going to need a bigger stimulus program.

The recovery from the financial crisis was not only jobless, which was to be expected, but it was also "wageless," he said, with Americans, Japanese and Europeans — 70 percent of the world economy — expecting their incomes to stagnate.  In its last report a year ago, UNCTAD said a premature removal of stimulus policies might cause a deflationary spiral with attendant slumps in growth and employment around the world.

"Let's not fool ourselves. This is a realistic scenario for the whole developed world, if we do not understand the lessons now, and really quickly, because we do not have other instruments any more," Flassbeck told a news conference to launch this year's report.  "To revive the economy with a wageless recovery with diminished expectations by the private economy, by private households, what are the instruments at hand? There is nothing."

The report put much of the blame for the crisis on deregulation of financial markets, which it said invited destabilizing "herd behavior" by speculators, and allowed an over-concentration of banking activities.

"What we've seen in the past and we never learn is that countries seem to have excessive belief in the financial markets. And we've seen time and again that financial markets are not very sound in their judgment.  But still people keep thinking that they are doing these austerity measures because they want to please the markets so that the markets give them better ratings, including the rating agencies which do not always produce the best assessment.

Flassbeck said the herd mentality was evident whenever equity markets and commodity markets all lurch in tandem on the same day, an effect that could not conceivably be caused by real swings in demand. But the world was ignoring it, he said.  "If the G20 negotiations were not confidential I would tell you that it's ignored even there," he said.

You can feel the frustration in that statement, can't you?  Why is it that we've spent, internationally, over 20% of the global GDP handing money out to Investment Banks, regular Banks and Big Businesses but have done nothing for their customers?  Note the above statistics are from 2003 and have gotten much worse since then – this problem has been coming down the pike for many years and eliminating the losses that have been realized due to the problems of social imbalance do not prevent the same problems from upending the economy again, do they?


At the moment, all we can do is kick that can down the road again and the futures are climbing in anticipation of the Fed rolling out QE3 this afternoon (2pm). If they don't come up with AT LEAST $500Bn of new stimulus to get us through the next 6 months, I will get very bearish indeed and if they do come up with $500Bn or more, then we will ride that bullish wave until it's time to flip short again as nothing the Fed or the Administration does that doesn't take concrete steps towards creating jobs and rebuilding the infrastructure of this Nation, is ultimately doomed to failure. 

The rest of the World is dragging us down and it's not like we're strong swimmers in the first place.  

Take the ICSC Retail Store Sales Index, for example.  It's down 0.1% week over week after being down 2.3% the week after black Friday and is now up just 2.9% for the year after being reported up 3.8% just last week. Despite another fall after the steep post-Black Friday drop, the report believes "consumers are delaying their final gift buying more than ever, a trend that points to sales strength over the next two weeks"  Whuck?   Are there people who actually read this BS and just nod their heads and think "well, sounds like retail sales are doing great"?  

Speaking of Retail Sales, BBY missed by .04 (10%) with revenues missing by less than 0.1% so let's think about that for a moment.  Had they sold 0.1% more stuff, would they likely have made 10% more money?  No, probably not.  That means that the stuff they are selling is simply not making enough money.  How many retailers does this apply to with their "great" sales?  Unfortunately, we'll find out in January.  

Overall November Retail Sales (including food and gas), were up 0.2%, which is 60% less than the 0.5% expected by Economorons and down from 0.6% in the prior estimate.  People, these are not good numbers.  This is an economy that needs real stimulus and all we've done so far is bail out the top 1% (including top Corporations), who had their best year EVER – thanks the the bottom 99% taking on more debt obligations than ever through their Nation's borrowing and having their currency devalued more than ever through their Nation's money-printing.  

The Fed or not the Fed – this is not likely to end well so please – be careful out there!  


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Oil Lines

    R3 – 100.60
    R2 – 99.92
    R1 – 98.89
    PP – 98.21
    S1 – 97.18
    S2 – 96.50
    S3 – 95.47

    Yesterday’s high and low – 99.25 / 97.54

    Breakout lines – 102 / 93 

  2. PP for today:

  3. Anyone know how to get pre-open volume? Looks big today.

  4. Yeah for YMI (we will be holding on to them for a while, so selling the April 2.5 puts for 1.20 or better will be the way to go – let it come to the price target) – YM BioSciences Inc. (NYSE Amex: YMI, TSX: YM), today reported updated results from the ongoing Phase I/II study of its JAK1/JAK2 inhibitor, CYT387, for the treatment of myelofibrosis. The results are being presented this evening in a poster session at the 53rd Annual Meeting of the American Society of Hematology underway in San Diego, CA.

    "In this multicenter study, CYT387 continues to demonstrate a unique ability to render and maintain myelofibrosis patients transfusion independent for clinically-relevant periods, while also producing significant and durable improvements in their splenomegaly and constitutional symptoms," said Dr. Nick Glover, President and CEO of YM BioSciences. "In addition, MRI results obtained from a subset of subjects confirm the meaningful improvements in splenomegaly as measured by palpation. Moreover, CYT387 was well tolerated, with dosing up to and exceeding two years."

  5. Also, we were looking for this in the YMI data…..Monday night showed the ballyhooed (and controversial) anemia response maintained!  This one is going to be a good one folks….a very good one.

  6. Democracy, Russia style…

    Dan Wasserman 

  7. Pharm or Phil
    Do either of you follow HSP was thinking of working into a position. Change of management at 52 week lows any ideas? perhaps a buy/write or perhaps just selling some puts?? TIA

  8. FAS Strangle Experiment – My thoughts right now are to see how strong we open and maybe cash in the 55 Put sold yesterday depending on the profit picture. I will then wait until after 10:00 AM like every day to open another position. If we don’t get a strong enough open, I’ll keep the 55 Put and sell a call after 10:00 to complete the strangle.

    We have to be careful today with the Fed announcement later this afternoon. Might close the position early if needed. 

  9. Sage: Hospira (HSP) has their knickers in a twist with manufacturing issues.  I would start by selling a few Puts out in time instead of owning the stock. How about the May $22.5 for $1.40 or better.  Otherwise, ABT or EW are a better choice.

  10. I don’t understand why everyone is waiting for QE3…..not gonna happen….(yet).

  11. We talk a lot about government and government austerity; and, the banks that are not lending. Yet, there is a continuous dialog about whether (even now) our banks are capitalized enough. So, our banks will continue not to lend and will continue to delever their balance sheets until they have ridiculous tier 1 capital. We can institute stress tests (like we have) that will model an 8% further drop in GDP, 13% unemployment, and falling home prices. The banks will prepare for these tests by lessening risk, hoarding capital, and reducing lending. But, in the meantime, the lack of growth or contraction becomes a self fulfilling prophecy because private financing is the lifeblood of the economy.

  12. Tuesday 12-13-2011
    Dr. John L. Faessel
    Commentary and Insights
    Quote of the day
    Jon Corzine always “the smartest guy in the room”
    ~ Joe Biden ~
    Corzine’s MF Global, has managed to misplace $1.2 billion*

    Euro at Cycle lows

    Ruling the MARKET – Again: “From a technical perspective the key declining Tops line resistance at (SPX) 1263ish that comes off last July’s top tick will be the overriding wall of resistance.”
    Correspondingly the lower trend line off “the” lows of 10/4 and 11/28 is at (SPX) 1189.
    The Markets Drivers > EuroLand Bond Yields
    Italy 10-year (gross) bond yield – 6.58% off from 7.26% on 11-24
    Spanish 10-year (generic) bond yield – 5.67% - off from 6.7% on 11/24
    Horrible Data points of note:
    "As caseloads for all the government programs have soared, so have costs. The federal price tag for Medicaid has jumped 36% in two years, to $273 billion, jobless benefits have soared from $43 billion to $160 billion. The food stamps program has risen 80% to $70 billion. Welfare is up 24% to $22 billion."
    The (SPX) closed on Monday at 1236.47
    Short term support in the S&P 500 (SPX) is at 1229 and 1227
    (SPX) support at the August 8th lows is at 1101.
    Support at the October 4th lows is at 1074.
    50-day moving average support is at 1222
    Short term price resistance is at S&P 500 (SPX) 1258
    Then at 1267
    The 200-day moving average resistance is at 1262.
    Price resistance at the top- tick of the near four month old consolidation is at 1292 then at 1277.
    Monday’s key indicators and metrics:
    ·     McClellan Oscillator is Neutral @ minus 47        
    ·     VIX – 25.67

  13. FAS Strangle – Was able to close the 55 Puts for 40% win… We’ll check after 10:00 AM for a new trade. 

  14. DIA – Unless you disapprove, PD, I’m selling half the DIA 121s w a 30% gain this morn. Setting a still profitable stop for remainder. Thanks for this.

  15. Took some quick profits on my TNA at 42.64 yesterday.  Right now I’d rather take potentially less profits and make sure they are profits and not losses.

  16. Meant bought my TNA at 42.64 yesterday.

  17. Phil
    Any update on this week’s XLF $13 calls? Now .16 down from .28. Are you planning on riding these out through FED announcement, or try to take them out close to even and play another day? Could have been even if I DD yesterday.  Thanks.

  18.  IFLANMAN: AAPL JAN 390/385 spread
    I’m curious how you think about scaling into such a spread? Is the idea to scale into the jan 390/385 spread as the price drops? Rises?  Or do you have an planned roll for the spread lower or higher depending on the stocks movement?  TIA


  20. Oil spiking up!

  21.  /cl wtf?  just the /dx down?

  22. Good morning!  

    OK, if we’re following the script, there should be something to take the markets lower into the 1pm 10-year auction ($21Bn), if that goes well, then there won’t be a need to worry about tomorrow’s 30-year ($13Bn) auction as yesterday’s $32Bn, 3-year auction went off at a nice 0.352% (courtesy of Operation Twist, of course) and that, my friends, is how you create $66Bn worth of new money in a week! 

    Don’t look at the DIA $121 calls – it will make you cry as we bailed at .80 yesterday in the WCP but the rest of our picks are bullish so we’re good for now but we’ll see about picking up a new short position as this morning rally tops out – perhaps the SQQQ spread from Friday, which is getting cheap again.  

    It’s not the Dollar today, that’s still at 80.20 with the Euro at $1.318, Pound $1.558 and they Yen was harshly rejected at 78 last night and is back to 77.8 to the Dollar.  Don’t forget that TM says if the Yen is under 90 – it’s not worth it for them to make cars in Japan.  The EUR/CHF trade is – that’s right, you guessed it – 1.235, we really need to just hand the reigns over to the Swiss and let them tell us what to do.

    Oil is very excited, at $98.87 but natural gas is flat at $3.24 and gasoline is just breaking over $2.60.  Gold is going nowhere so far at $1,669 but over the $1,670 line, I like it long (/YG) as a play on this rally.   Gold Futures are a very sill $33.20 per $1 so, of course, tight stops are prudent below that line!  

    As I noted last night on our Big Chart:  "Still healthy consolidation right where we want it.  S&P holding their line (barely), RUT on their line, Nas holding, Dow tried to break over and failed, NYSE tried to break over and failed –not dead yet."  When the Fundamentals make no sense, we switch off our brains and follow the technicals so let’s not worry about why we go up – we just need to take back those lines and hold them and we’re bullish.  

    All we are doing is consolidating the way we expected to consolidate into the Fed.  We are poised for a massive breakout, upside Santa Clause rally TODAY – IF the Fed is kind to us this afternoon.  If not – well, Hell hath no fury like a market disappointed.  

    Woops, oil just went ballistic so let’s add 10 GLD Dedc $164 calls to the WCP at .90.  GLD was $170 last week so good potential if Ben goes easy and $1,660 should put in a good floor, below which we’ll stop out if the Fed disappoints. 

  23. Rustle / Faessel - This Faessel guy is too much.  When he talks about "Horrible Data Points," the fact that we have people who need government assistance isn’t the horror.  It’s how much it’s costing us.  A guy who’s definitely speaking for the 1%.

  24.  Oil and gold going crazy

  25. Pharm – are we still expecting BPAX’s Phase III efficacy results this month, before options expiration? Still holding the bull call spread you suggested Dec 2.5/5. TIA

  26. DIA Bail – Well. Guess I missed the bail out update. Actually, I think I misread it. So I had them overnight. Better lucky than good.

  27. winning – BPAX – data are out and they did not get the pop.  Close it out.  I am looking for a new new play on them.

  28. Phil,
    Since the question of whether Q3 today is ‘ to be or not to be’ the ultimate binary event, would simultaneous Dec calls on TNA  AND TZA be appropriate?

  29. JCaesar/Faessel
    He’s not pointing out he doesn’t want those programs, he’s pointing out the cost of them which without increase in tax revenue will hit hard.

  30. Phil, thanks for your response on STEM. I read that info as well, it was reported on Nov 15. Just trying to figure out the drop yesterday and now up 30% today, as you quite often have data that I have not uncovered.

  31. Rustle – Right…and I have a bridge to sell you.  ;-)

  32. Love buying SCO in the morning after a big push down and watching it slowly go up for me to sell it in the early afternoon.

  33. as of 3:16 yesterday we were still in DXD calls. Do i still have that right?
    thank you,

  34. FAS Strangle Experiment – The strangle strikes for today are 57/69. Once again, today could be quite volatile because of the Fed. I’ll cash in early on the winning side if possible. 

  35.  ZH reporting that Iran has closed the Straits of Hormuz for military ‘training’.

  36. BPAX/Pharm – thanks. Just curious where do you see the data?

  37. link Kallen?

  38. @Felipe
    re:  the FAS  60/61 BCS of yesterday.  Are we doing anything with it or letting it ride?

  39. If what Kallen reported is true can’t help to think that that is a great reason to short oil.

  40. stjeanluc
    You Vertical FAS of today I take it you buy the 57 and sell the 69 thanks

  41.  Grenade attack on shoppers in  belgium

  42. Oil / dc – The $ spiked down at the same time as oil spiked up so that looks like the usual culprit moving the price around. I’m not seeing the connection with Iran right now.

  43. Market Watch – about attack on shoppers

  44. Fyi IB Commish
    I just took a look at IB vs TD commish, and it seems to me like IB is way cheaper.  There are no ticket charges with IB, so the 10 GLD’s just cost me 7.22 with IB, .70/contract.   Looks like TD would have added a $9.99 ticket charge.
    Anyway, my 2c

  45. FAS / Yodi – It’s a strangle – sell the 57 Put and 69 Call. Once again, margin intensive! 

  46. stjeanluc
    Sorry I see it is a strangle sell the 69c and sell the 57p right

  47.  I believe IB crushes TD on margin rates – trading platform not as good – IB does charge for data feeds per month - 

  48. Damn, oil kissed $101 and pulled back to $100.40.  A scary, dangerous short this week but they are probably jacking it up to help them get out of the 160,000 remaining January contracts, which terminate on the 20th (next Tuesday).  

    Click for
    Current Session Prior Day Opt’s
    Open High Low Last Time Set Chg Vol Set Op Int
    Jan’12 97.85 98.72 97.64 98.89 09:37
    Dec 13
    1.12 47238 97.77 160820 Call Put
    Feb’12 98.06 98.93 97.86 99.08 09:37
    Dec 13
    1.09 14667 97.99 185322 Call Put
    Mar’12 98.21 99.05 98.03 99.27 09:37
    Dec 13
    1.09 5899 98.18 127729 Call Put
    Apr’12 98.56 99.43 98.29 99.43 09:37
    Dec 13
    1.06 3529 98.37 61200 Call Put

    Notice that Feb is already heavy but the front 3 months are only good for 472M barrels and that is a FAR CRY from the 600-650M barrel counts that gave us "sure thing" plays during the summer months as they came up for rollovers so (waving my hands in the best possible Jedi fashion) these aren’t the shorts you are looking for – move along

    Maybe tomorrow, after inventories but the Futures (/CL) are fine to play below any .50 line as the Fundamentals still suck for oil and this run-up is nonsense outside of QE3 speculation.  

    Financials/StJ – That’s a buy list if the Fed comes through later.  

    Volume/Rain – I can see it on TOS charts but it doesn’t give me a number.  There was a huge buy spike at the open but only 18M traded on the Dow at 10 is not too exciting (but not lame either). 

    1,250 on the S&P should be an important line to cross (up 1%).  

    QE3/Pharm – If not, I don’t care how good those Pharma stocks are, they’ll tank with the rest of the markets.  

    Self-fulfilling/Hannah – That’s true but banks don’t make any money if they don’t find a way to lend it out.  Once the holes are filled, the money should go to work.  

    Data points/Rustle – Send John that cartoon with Obama and the cow.  

    VIX down 8% this morning to 23.41, that’s why it’s a good day to buy calls (or puts) if you are looking.  Calls are better because, if we sell off, the VIX goes up and the premium goes up so you hold value better than you think.  If we go up, the VIX goes lower but you move into the money so you don’t care.  On puts, you get totally screwed if we head higher as the VIX goes down and kills your premium as you fall more out of the money but, on the other hand, getting a put right as the VIX expands does very, very well – that was the logic behind our very successful long put list in October and we’ll do that again if we get a good run up but the VIX is already lower now than it was then (despite the fact that the markets are clearly more volatile).  

    DIA/NF – We dumped at the close in WCP but yes, Rule #2 kicks in here if you still have them.  

    Good discipline Rustle – If this is a real rally, we have a few months to add more bullish positions (starting with those bottom 5 banks!).  

    XLF/DC – I believe we decided to wait on the Fed – unless, of course, we get .35 or better ahead of it.  Were those for the WCP?  I don’t have them in there…

    Money, Money, Money/StJ – All looking good to me.  Even AA is dead center at the moment. 

    Faessel/JC – Depends on how you take it.  They are horrible in that we can’t afford it but, of course, we must afford it.  

    Lucky/NF – Yep, we don’t throw back the fish that jump in the boat on their own.  

    Straddles/8800 – Not for me because you are so screwed if we flatline after paying that premium.  Better to short them both and gain from the decay but, on the whole, I’d rather play the Fundamentals AFTER we have the facts rather than commit cash to a wheel spin ahead of time.  

    Iran military "exercises" closing the Strait of Hormuz today, during an OPEC meeting – more of a threat to OPEC than to us.  I’ve never seen a country try so hard to get themselves blown up.  Oh wait, Simon questions Sharon’s report as it seems unlikely the entire Straight can be closed and suddenly her entire report is unwound so everything she was reporting was nothing but BS speculation to the point where she was called out by one of the other anchors – what a travesty!  


  49. Fair enough pak, but you know how they love to overreact to the upside in the oil sector! Beside the dollar is back where it started and oil is still up.

  50. stjeanluc
    margin intensive! indeed 4256 for 2 contracts !!

  51. Commissions / Burrben – If their trading platform was comparable to TOS I’d be more interested in IB but I heard it’s not. Any thoughts on that?

  52. 2 Charts to follow up on the causation/correlation theme from yesterday – from Felix:



    Pretty telling if you ask me! So much for correlation GOP style though!

  53. Phil
    I really don’t remember if the XLF’s were part of WCP. Thank you.

  54. F! NFLX – I know you’re right, PD: Verizon big enough to do what they want. Please pass the remainder of this post to stjean if you feel like you need to injure me.

    Tho Verizon can get their own content deals – they will have a hard time – essentially bargaining against themselves and terms set by other cable bigs. So they announce they’ll run their streaming service in areas where there is no FIOs – basically no Verizon customers? While I agree Verizon won’t buy NFLX outright – if at all – and take on their content and DVD costs – its been suggested they pay a quarter of that “price” and piggy-back (partner) on NFLX’s subscriber base. That being people that don’t have Verizon or cable anyway.

    BTW, their COO says they “expect” subscriber numbers to turn positive in December? What the heck? I would assume they know and are signaling, or they know and are lying or they are clueless.

    Oh well. Who cares? I care only that NF**X end the week under 77.78.

  55.  pakdog / ib
    Works fine for me.  I’m able to enter and manage all of the trades we have on PSW.  But I don’t want to turn this into a holy war of platforms.  Just sharing that I saved $10 today at IB.
    If you are curious they have a ton of videos on how to use TWS, so just view the option trader module one. 

  56. Margin / Yodi - That would be 20K for 10 contracts which is not bad when you think that the strategy has a P&L of $5300 over 3 weeks! That’s 25% on your margin requirements! Or about 400% per year at this rate.

    On the other hand, like I said over the weekend, I am not sure we can stay lucky that long. I expect the first shoe to drop sometimes soon! 

  57. BPAX – So, Nov/Dec was when things were on the calendar, but it seems that they moved to Feb 14 for the male version of Libogel….that’s the event I was focused on. Interum data were due out at the end of November for Bio-gel, but seems sources were mixed up on the dates…..good video here.

  58. Verizon / NF – The last I heard is that they were trying to set a deal with Redbox for streaming as Redbox is having trouble competing with Netflix on streaming. For all I care, this is just rumors until we get the official word.

    Keep in mind that FiOS is really limited in its reach right now so that must enter in the equation. I am lucky to have it at my house, but that’s not the case for a lot of the US. 

  59. dc – Yeah, I know the $ has a big roll in what goes on with oil but it’s not all of it. Oil speculators overreactt? I’m shocked at the thought of it.

  60. I would say that is a nice reversal.  Crooks…and Wheeeeeeeeeeee

  61. Phil:

    December 8th, 2011 at 2:48 pm | PermalinkIgnore this user

    WCP:  10 TNA Dec $41/43 bull call spread at $1.10, selling 5 JPM $32 puts for .90 for net .65 on the spreads.
    WCP:  20 XLF next week (Dec) $13 calls for .28

  62. Burrben – No holy war intended just seeking information. Would love to keep more of the money I’m currently contributing to the TDA executive bonus plan. I’ll check those vids, thks.

  63. Pak

  64.  FAS/StJ — Those FAS strangles are hard to fill!  What price did you get?

  65. VIX is down over 9% today.  Is that a "Crash"?

  66. Pharm-
    Pharm- From the trades you have posted (the SPY put spread from last week plus the TLT spread from today) I am surmising your disdain for the Santa rally scenario- or at least for it to be short lived? Your calls on long bonds have been on this year so I am listening. Could you elaborate?

  67. FAS / Escohen – You sometimes need to leg in the strangles to get you price. I noticed that on TOS I have trouble getting multi leg trades to fill. At 10:00 I got .78 and .58 for the P/C. 

  68.  Phil – any revised thoughts on RIMM? Would you suggest bailing out of a current position ahead of earnings later this week, or you think it’s over-done? Price action looks to be a little concerning today, but not sure if I am over-thinking this.

  69. yes, I know Phil, Pharma is not worth betting the Pharm on, but at least they will continue to pay dividends…and those ‘retail’ chemists and Pharmers on Palomar Mountain will still have a business!  1020 knows what I am talkin’ ’bout….!!! 

  70. stj/NFLX – From The Street yesterday:
    "But Janney Capital Markets analyst Tony Wible finds a buyout unlikely. "Any buyer has to not only pay $4 billion for Netflix equity, but also has to pay another $4.5 billion for the content obligations that are likely debt. It is far cheaper to buy rights on your own than to buy Netflix. It is also far cheaper to buy Netflix’s subscribers for $100 than to buy the company for almost $400 per subscriber." 

  71.  Phil: futures
    /cl crossing lines? does this mean a tick below, a minute below, a drop below and and reject from below?

  72. That would definitely be a progressive plan:


    I don’t know how you can sell that to the electorate… But we have been fooled before!

  73. NFLX / NF – But nothing like rumors to drive up the price of NFLX 2 days in a row…  

  74. Abnormal divergence between European and US markets today. To me it looks like someone "knows" something today. Would be interesting to know who is right…

  75. STEM/Rpme – You have to be careful between reading something when you follow a company and when it finally gets to the retail investors – the lag can be very surprising.  As I said yesterday, you could take that report many ways and it seems we have now taken it both ways in 24-hours.  That’s why I leave the CRAZY biotech investing to Pharm!  

    DXD/Morx – In the WCP, yes because we are bullish otherwise and that’s our protection against a Fed failure.  Had we had a big down morning, I would have been happy to take the money and run but now they have become a hedge.  

    ZH/Kallen – Just as bad as CNBC with the rumor-mongering.  It’s scary how little getting a story right matters compared to getting it out fast.  

    FAS/Flips – On track.  Don’t forget, when we don’t like FAS action on a spread like that, as long as we can pull the bottom for what we paid for it and leave the naked caller to expire – it’s a good play.  

    Grenades/Samz – Now THAT’s a big concern.  It amazes me that no one has blown up a mall or a movie theater in America – that would tank the economy pronto!  

    A group of unidentified men reportedly opened fire and lobbed grenades at shoppers in the city center of Liege, Belgium, the BBC reported early Tuesday. The attack was centered at a bus stop in Place Saint Lambert, a particularly busy city square. The BBC said at least two people are believed dead and approximately 25 injured.

    Video from scene.  

    This may be what we need to get used to.   

    80.24 again after a very brief dip to 80 to pump up the open.  It’s all about selling those TBills at 1pm because -think of what a catastrophe it would be if we begin having bad auctions and rates jump up here to anywhere close to what EU countries pay in interest.  I just can’t be allowed to happen.  

    IB/Burr – No ticket charge?  That’s much better.  I think that’s an option in TOS and works if you are doing 10 or less but still more than .70. 

    Oil crossing $100, SELLSELLSELL! 

    Let’s get out of GLD in WCP at .70 – maybe back in later but not worth risking big loss.  

    Woops – 80.50!  

  76. phil--  i have a FCX bcs dec 40/41 purchased at 0.45.they r down to u suggest i wait till fed decision or exit.i still have the FAS 66/67 dec bcs.what do u suggest on them

  77. Merkel rejects raising upper limit of ESM funding! 

  78.  WTF is going on? What tanked Market and Euro

  79.  Phil,
    Related to your VIX post earlier, will we have a strategy if QE3 is announced to buy longer term calls to be able to sell (and hopefully roll) shorter term calls to reduce cost basis?

  80. What timing on Merkel…  imagine that..

  81. pstas – yes and yes.  I follow the bonds pretty closely, and I have long thought (and read) that we are living in a fair tale land of free money, but we were Japan with a twist – we have very little manufacturing, so growing out of the life we live is going to be very hard.  As for the SPY play, I wanted to give it time and with the decay of the 121 monthly puts this week, I thought I was a good risk reward.  As for TLT, I saw a play on the options and tried to figure out why they did that….TLT is in a channel, and it needs to break up or down.  With the T-bill auction, earnings being compressed, and the EU having solved nothing, my conclusion was that TLT would go up, and thus the play was also a good risk reward into the new year.  Similarly, the GE puts from last week, which I am down on, or may break even…..GE is dependent upon the EU for a lot of revenue, and DD just guided down (30% of revenue is from the EU), well, GE is in the same boat.  CAT is as well….hence my very bearish bias, but you already knew that.  :)

  82. VIX kissed the lower BB… boyz….let’s play.

  83. 80.60! 

    Euro hitting $1.31, $1.30 should stop it.  Pound at $1.555 and same at $1.55.  If not – BIG TROUBLE!  

    $118.50 is goal on TLT – we’ll see what other bad news we suddenly get to take us there.  

  84. Oil back over $100.

  85. STEM/rpme – investors, esp. those with deep pockets can move things beyond our scope.  There are black pools out there that we don’t even know about on these tiny companies, and if there is betting going on, we will not be privy to those bets.  Big blocks of sell orders can move the stock down, so that the boyz can get in at a better price, which hurts the average investor and causes them to panic out.  IF the technology/drug is sound scientifically, then the stock should recover or better yet, we should DD on the stock.  I play what I know/read about, and stem cells are not my thing,  soI will not invest in them until the successes start to outweigh the risks.  Just my take.

  86. Well, hello and good bye again GMCR…..

  87. stj/NFLX – it’s absurd.  Which I guess matches the company (u read two weeks ago their primary UK competitor bought up all relevant Google ad terms before NFLX even entered the market?  it’s the little things that reflect deeper problems…)

  88. TRGT – yes, back to them.  May $10/17.5 BCS for 95c or better.  The few, the small, the proud (that means no more than 5 for round 1).

  89. All I can say is today’s market ain’t for sissies!

  90. Wow $80.76 dollar!

  91. RIMM failed $16.  

    GMCR down 7.5%!  CMG down 2.6% after yesterday’s silliness.  NFLX up 1.5% as that rumor still going.  

    12,000 in Dow futures (12,075 on the Dow) hanging very tough.  735 on RUT being tested again and now it’s 1,240 on S&P, which is 1,234 on Futures.  

    Correlation/StJ – Good ones. 

    Volume only up to 40M on Dow at 11 so 75% slowdown from first half hour and back to LAME.  

    NFLX/NF- I think you’ll get your wish unless we get QE3, then you’d better have an exit strategy.  

    80.75!  I’m very surprised we are not in free-fall (yet).  This is so exactly what we thought would happen into the bond auction, it’s scary – isn’t it? 

  92. AMZN – NF**X up on nothing, AMZN hammered DOWN on sales pop (only 1.5%, ahem) – hahahahahaha.  By happenstance, I’m wearing a t-shirt my daughters gave me:  "I laugh because they’ve already driven me crazy!"  Perfect.

  93. ….and oil holds $100.

  94. Pharm/Palomar
    O.K. – maybe I did a little "pharming" in the 70′s….. :)

  95.  Market seems to be doing really well in face of euro falling off a cliff 

  96. It looks like the only thing holding up oil for now is these Iran rumors because gold is back to it’s pre-market prices! And the dollar is flying!

    I wonder if we could ask Jrom when he is in Kabul to start a Rent-a-Drone program for us. We could setup fake attacks on Iran Sunday night, collect our long oil plays on Monday and restart again the week after! It would just be a variant of Phil’s Rent-a-Rebel… 

  97. NFLX Exit Strategy – Aimee Mann long ago penned my exit strategy:  "…so do me a favor, if I should waver, be my savior and get out the gun…"

  98. Pharm-thx. I’m in . We shall see.

  99. Scary? in any sane scenario it would be criminal!  If you really want to see confidence in your markets and currency, then we need to start seeing people in nice suits hanging from lamp posts.

  100. Some clarification from ZH:
    And for those curious about more, RanSquawk speculates that the source of the data is a report in the Tehran Times saying that Iran will hold War Games in which it would close the Straits. Unclear if this is what Ran referenced when they said the Straits were already closed.

    TEHRAN – MP Parviz Sorouri of the Majlis National Security and Foreign Policy Committee has said that Iran plans to practice its ability to close the Strait of Hormuz, one of the world’s most strategically important chokepoints, which accounts for about 30% of the world’s seaborne oil shipments.
    “Currently, the Middle East region supplies 70 percent of the world’s energy needs, (most of) which are transported through the Strait of Hormuz. We will hold an exercise to close the Strait of Hormuz in the near future. If the world wants to make the region insecure, we will make the world insecure,” ISNA quoted Sorouri as saying on Tuesday.

  101. Phil / Vol — strange that we didn’t have a huge volume at the open. I was seeing quite a few issues on my watches that had > 1M shares and at least one was over 5M and I didn’t see significant news on any of them. I don’t recall seeing that kind of premarket action before.
    Scary — you bet this move is scary but until /DX rolls over, I’m holding my IWM puts! Thanks! :)

  102.  Euro dropping like a stone, the levee has broken, it seems, don’t see how the market holds up but what do I know.  I know Phil’s SCO call is looking good, for one thing.

  103. ….see now …..that’s a real threat to oil! You never know when Iran will make another stupid unsustainable threat!

  104. FAS 60/61 – Phil/All – sorry, my ability to follow in real-time getting stretched – I’ll address that as a sep matter.   But it’s already feeling unfair of me to ask about trades or trade fixes I may have missed – so this’ll be my last based on not keeping pace or simply "waiting" rather than acting:  this week’s FAS 60/61 bull call spread?

  105. It kind of blows my mind that in the middle of this mess that Merkel and the rest of them keep opening their mouths and saying this stuff. They seem to live in another reality.

  106. Phil:
    Where does Deutsche get its facts? 
    ."…demand continues to outpace supply"
    10:44 AM Deutsche is taking a bullish stance on the oil sector over the next year as demand continues to outpace supply. The firm upgrades the following drillers to Buy, citing their leverage to higher oil prices: Murphy Oil (MUR +2.9%), Hess (HES +2.5%) and Marathon Oil (MRO +3.2%). [Energy, On the Move] Comment!

  107. Thanks DC!  

    LOL – Rick Santelli just made some comment about "Here’s to you Mrs. Robinson as Simon and Garfinkle used to say."  What kind of tool doesn’t know who Simon and GarfUncle are?  

  108.  Seeing the Bid / Ask on Euro expand to a PIP or more. 

  109.  NF**X/FAS  See Phil’s 10:42 post.

  110. Phil/Santelli
    Could’ve been worse, could’ve referred to them as Semen and Garfinkle.  I remember when Serena Williams was at the Academy Awards one year and talked about how much she loved Philip Semen Hoffmore.

  111. acd54/FAS – thanks. 

  112. Rick Santelli/Art Garfunkel
    Santelli is just a kid. Almost too young to be a Graduate.

  113. Someone please tell merkel and company that they are fighting a publicity war, and they should start acting like it. They just need to convince the markets that they are actually serious about doing what it takes; then they can sit back and spend the next 2 years quietly cleaning up this mess.

  114. hanna / publicity — But then the banks couldn’t clean up along the way!

  115. Remember the Fed doves were making their rounds for the past 2 months talking up QE.. that more needs to be done..Janet from another planet Yellen wants it….really bad and they can always use the excuse of..we need to build off the recent momentum and build on that 8.6 UE number…just saying…its very possible that it happens.

  116. Phil,
    Following up on trader2255′s comment on Rimm to you, I am going to be put the Rim stock at 19 and am thinking of turning around and selling 16 calls for mar and collecting $2.30. I made $2.00 on the Rim puts already, making my average buy price $17.  Do you think this is a good strategy or should I just sell the stock once putted to me.

  117. RIMM/Trader – I’m at the point where I can’t take it anymore but I can’t find any logical reason to sell them other than price.  In the last month, they are no worse than AMZN or VLO, for example

    Pharma/Pharm – That’s when I do get very interested, when they are pinning the low end of the scale and the VIX is sky high – then I love to gamble on those companies with a good buffer. 

    80.64 – Euro bottomed out at $1.3056 with a very sharp bounce back to $1.309 but no $1.31 yet.  Pound bottomed at $1.5509 so I was .0009 off on that one.  Silver fell to $31, gold $1,660 as expected.  Copper touched $3.44, nat gas $3.24, gasoline $2.615 and oil a bit disappointing, not going lower than $99.50 so far.  

    Europe is closing at lows with FTSE stil up 0.85%, DAX down 0.65% and CAC down 0.75% with whatever delay the WSJ has on their data. 

    NFLX/NF – Nobody is buying them and, if somebody does buy them, they will make excellent shorts on that basis alone.  I’ve been saying that since – forever – NFLX overpaid for content, they overpaid for subscribers and they are an easily duplicated model with no special technology and no barrier to entry and a first-mover advantage that is dwindling day by day.  They are on their way to $10 – it’s just a matter of time.

    Speaking of which, NFLX is always a fun short and the March 85/75 bear put spread is $5.80 and you can sell the Jan $87.50 calls for $3.35 to someone who thinks there’s a greater fool out there to buy them at 15% over the current price.  Once those puts expire, another $2.50 sale and the bear spread is free.  

    Futures/Lincoln – I like to catch an actual cross below the line, that breakdown is generally most reliable.  Generally, I’ll trade blocks of 10 so I’ll buy one or 2 shorts if I THINK we’re breaking down and then set a DD point on a bounce over consolidation above my line (obviously, only doing this if the DD point is like .10 higher or less) and then, I’ll add another couple right under the line and then play it by ear if it crosses back over but generally, the second it crosses the line – I’ll get back to 2 or less so I’m ready to either dump for a small loss or buy 2 more and start the cycle again.  The trick to this is also taking the quick .10 profit on the other side on a couple so you pay for your mistakes above the line.  Mostly it’s practice, practice, practice and, at around 10,000 hours – you’ll begin to get a feel for it.  

  118. Thanks for the HSP advice Pharm, I see what you mean, already own ABT but like the generic injectibles

  119. John Corzine…just make sure you’ve got an empty stomach if your going to watch

  120. Phil,

    I still have the 2013 RIMM 22.5 short puts. I like your value calculation on them and want to roll down and add. What do you think? I know you recently endorsed them in the Income portfolio but just wanted to check your sentiment before making a move. Thanks

  121. NFLX – Gotcha.  Just bein’ chatty.  Thanks for the trade play.  Is the first-mover advantage the primary reason almost every new piece of content-running hardware (mobile, dvd players, etc.) touts the fact it has NFLX (and Pandora, etc) as "pre-installed"?  Who’s the audience?  Current NFLX subscribers?

  122.  Areva getting hosed, E 1.5 billion mining operations writedown, with core nuclear division E800 adding another E800 million associated with Finland’s new generation pressurized reactor.  If my speculation about a nuclear renaissance in a few years turns out to be correct, it appears to be starting from a lower and lower base.  Cameco [CCJ] at 17.18, with a 2.18% dividend.

  123.  Phil, on futures trading, would be great if we could have a live session broadcast like the Vegas one sometime in the near future. I guess things slow down close to Christmas, so that would be a good time to setup a session.

  124. Sen Bernie Sanders just made an irrefutable case for subsidizing wind and solar power companies.  He basically said we’re subsidizing oil companies who’s processes are mature and companies are making trillions and wind and solar power are struggling and they have made great progress over the last 30 years (wind power has come down in cost by 90%) and these are energies that will keep us independent of oil.  Texas uses enough wind power to equate to 10 nuclear plants.  It is so absurd but in a kleptocracy what do you expect?

  125.  Phil: futures
    Thanks, one detailed answer like that a month is worth the price of admission :)  I’m hoping to have learned enough about selling premium that 2012 becomes so boring I’ll start working on 10,000 hrs of futures.  This last month has been, boring that is, as I await Jan premiums to decay.

  126. JRW…Wakey wakey eggs and bakey

    Some thoughts from Forexlive author JC..these guys are great..He does not believe the Fed will do QE but..
    There has been talk of a discount rate cut in the wake of the Fed’s move to lower the rates on Fed currency swaps with foreign central banks.
    The discount rate is no longer the Fed’s policy rate, but it is a penalty rate set well above the market for emergency funding. It stands at 0.75% today. That’s quite a penalty with the Fed funds rate near zero.
    The Fed could lower that rate, but it would merely be symbolic. If the dollar is sold on the announcement, feel free to take advantage and buy the dip. It won’t last long.

  127. Taxes/StJ – Just tell the bottom 99% they get $300 and you can give $300M to Billionaires.  

    TLT almost $118 again, those beautiful sheeple!  

    FCX/Sri – I think it can hardly hurt to wait at this point.  You will either be lucky or not.  On FAS, you’d have to be REALLY lucky.  We pulled the $66′s ages ago and dumped the $67s yesterday because it was too risky to leave a naked FAS call ahead of the Fed.  You can still pull the $66s for .95 but super-risky to leave the others open so I guess you are stuck ahead of the Fed on that too.

    QE3/Kallen – I hope so but we’ll have to see how much is announced and what form and then gauge the market reaction first.  

    Dollar back to 80.80 as the auction draws nigh.  If we have a "good" auction – that should be as good an excuse as any for the markets to rally and head back up – we’ll see how in the bag the Fed is then.  

  128. QE3 – Doesn’t the financial elite already have free money from the Fed?  How could interest rates get any lower? What "new" things are we expecting? 

  129. jcaesar: Hey SOMEBODY’S gotta buy Soros cheap Italian bonds right? ;)

  130. Kinki – Buying massive amounts of foreign sovereign debt – now that would be novel (I think).

  131. Very funny National Lampoon take on the Rick Perry "Strong" ad.

  132. jcaesar: JRW’s been predicting this for a few months now.  A new Marshall Plan.

  133. looked like a good auction, No?

  134. The Treasury sells $21B in reopened 10-year notes at 2.02% (.pdf). Bid-to-cover ratio of 3.53, vs. a recent average of 3.07; indirect bidders take 61.9%, vs. a recent 44%. Direct bidders take 8.4%, vs. a recent 9.9%.

  135. kinki / JRW – I know he’s been predicting that (the new Marshall Plan), but I didn’t realize that was supposed to our QE3.  I should be taking better notes from him I guess!

  136. Very good auction yes

  137. Rent-a-Drone/StJ – Great idea!  

    Iran/DC – That release doesn’t even say they WILL close the Straight, it says they plan to practice their ability to do so.  This is such nonsense.   If Iran closes the straight, I imagine it would play out very much like the way it worked for Somali Pirates on South Park.  

    FAS/NF – It’s at $61.  If you didn’t intend to hold it through expiration, what’s the point of buying it because you know you won’t get any money out of it until the premiums expire.  IF FAS drops hard and we don’t see it coming back, the nice thing about holding a $2.80 call you paid net .55 for is that all you have to do is pull it before it goes below .55 and then set a stop on the higher call and that’s that.  We just did that with the $66/67 spread and made $2.70 on a $1 spread so this one is all gravy for us.  

    DB/DC – Reality is what you make it in the Financial World.  No one ever questions these guys so they get to just say demand is outpacing supply even though we have built up record inventories Globally and they say it so often that it becomes a "well-known fact" that no one bothers to check or challenge.  When I try to explain what BS it is, I get hate mail for weeks from peak oil people who say my "insane" theories on oil will doom us all.  Meanwhile, they’ve been saying that since I said $200 oil was BS back in 2007.  With inflation, they’ll be right eventually.  

    Williams/Rustle – Ah those Freudian slips…

    Publicity/Hanna – EU politicians and CEOs are miles more straightforward than ours.  Unlike our Government, they believe their people CAN handle the truth.  

    10-year auction went off at 2.02% – MISSION ACCOMPLISHED!  2nd lowest price of the year.  A+ Auction says Rick – he’s kvelling!!!  62% indirect bid is highest since Feb 2009 – and we all know how good things were then…

    So that should be enough holding up the Dollar BS.  Poor TBT flying back down to $19 with TLT right at goal at $118.50 and that should be the top of the week for them so I like selling the $119 calls (Friday) for .85 and buying the $120 puts for $1.95 for net $1.10 and you make every penny below $118.90.  Risky, of course.  

  138. Good morning, nothing new……………….but still an interesting market for the day trader !!


    IWM  70.96,  71.59,  71.89,  72.15,  72.56,  72.98,  73.24,  73.51,  73.82,  74.12,  and 74.62

  139. Those 10 yrs will be 1.5% here pretty darn soon……buy bye by…….

  140. TLT / Phil – You wrote last Tuesday about selling calls on TLT – the post where you compared us to bookies! Are you saying that 118 will make another good mark to sell premium against. viz, the Dec 120 calls? I know you wrote about it as a weekly trade we could make so you may be repeating yourself here.

  141. JRW – Interesting market?  Is that the same as a profitable market?  I’d prefer a trending one, but you can’t always get what you want.

  142. Phil – Nevermind!

  143. EU CEOs and Politicians / Phil – I don’t know about that… Demagoguery is alive and well in a lot of countries. How else would politicians get elected. Telling the truth doesn’t work in that context. I mentioned before that very few people in Europe are aware about the social programs funding issues – it’s a big problem (bigger than here in the short/medium term) but yet, that rarely gets addressed and for good reasons – people don’t like bad news. Germany has been the most forward of them all so far.

  144. FOMC Release is at 2:15 PM if I recall – we go up or down from there! 

  145. It’s been a roller coaster year for Amazon as well…


  146. JC
    JRW is correct this is a day trader’s market and today has been a good one. I have not participated because health issues, so many issues and max pain that I can’t think. Waiting for a call from Utah Univerversity Hospital.

  147. Ladies and gentlemen, if you learn just one thing from hanging out here, you MUST learn Phil’s maxim "Always sell into the initial excitement."  I went long overnight and was up big this morning, and it all evaporated on a quick drive to work.  In this market, take the money and run every chance you get!

  148. Europe is a mess, we’ve seen a slow down across the globe and most CB have been dovish and cutting…Bens a feel good kind a guy, he wants the markets to have confidence and the $ is far too strong for his taste. I say some form of QE will be announced. Europe wont get fixed in the next 6 months so really no reason not to help boost our economy. Fingers crossed.


  149. FAS Strangle Experiment – I closed my 69 Calls with a 38% profit. I will ride the Put into the FOMC statement hoping for a pop in the market. If not, I’ll hold overnight and see what happens tomorrow! 

  150. RIMM/Ging – You own RIMM at net $17 then so I’d sell the stock for $15.60 and buy the 2013 $10/17.50 bull call spread for $3.70 and sell the March $14 puts for $1.40 so you are effectively in RIMM for net $16.30 worst case (if they are below $10) but, once the puts expire, then you are in RIMM for net $12.30 with the $10 calls and no margin worries (unless you decide to sell another round of puts).  Meanwhile, you pull $13.30 off the table less whatever margin requirement on the short puts.  

    Dollar heading back down now and markets set to rise into the Fed who’d better come through or this morning’s drop will look like a timid practice run and, frankly, since they "practiced" 3 mornings in a row now – I’m kind of VERY concerned that we are heading lower (but I’m playing the technicals, not my gut).  

    RIMM/Japar – They are tricky this low as now they might get bought so it’s hard to cover with calls but I suppose, from 2013 $22.50 puts (now $8.65), I’d roll down to 3x the 2014 $13 puts ($3.30) and sell 2x June $17 calls for $2.40 and buy 2x the 2014 $20/25 bull call spread at $1.30 so, if RIMM is over $17 in June, you can roll, of course and you have $5 of coverage to the upside plus $4.50 per long covered by the money you would not owe the short puts so RIMM would have to be over $30 before you are in trouble and all you have to do is add more long spreads if RIMM breaks over $17.50 and $20 and $22.50 and $25 (with stops on your bottom spread, of course) and you will be able to follow them higher so almost anything but a sudden BK or them suddenly getting bought for 100% more than they are trading from now should be good for you.  

    NFLX/NF – Sure, they have 20M subscribers so that’s 10% of your target population in the US (we don’t count little kids and old farts as target) and, of course, I’m sure NFLX points out it’s 20M ACCOUNTS so maybe 50M users can be extrapolated so it’s now about 25% of all the people you could possibly expect to sell something to.  It’s the same reason you can get PSW articles on the Kindle – we just don’t want to be left out but it’s not like it makes sales for us.  

    Flatlining into the Fed now.  

    CCJ/ZZ – Very undervalued for the patient.  

    Futures/Mampcs – I’ll try anything once.  Someone has to make it so all I do is click on something and it works though. 

    Subsidies/Rustle – Of course it’s absurd.  The whole concept of subsidies is to develop industries that are not privately financable because they are many years away from profitability.  The function of Government is SUPPOSED to be to tax the earnings of industries that are not desirable or positive for the nation’s future (ie job creation) and to subsidize the ones that are.  That’s how nations are built!  This one has gone completely backwards as we subsidize the people who ship jobs out of the country (and oil companies that ship Dollars, ie WEALTH, out of the country) while any attempt to ALSO subsidize something like Solar is met with Whitewater-like witch hunts led by Conservatives attempting to undermine the programs.  It’s very sick…

    solar, environment, energy, clean energy, subsidies, government, oil, fossil fuels,

    Nice Lincoln, boring is good.  

    TLT poking higher, panic continues.  

    QE3/JC – It doesn’t matter how much they have – they want MORE.  If the Fed promises to buy assets, then the banks can jam up the foreclosures because they know they have a buyer and that’s BIG MONEY!  If the Fed promises to buy their paper (and it includes foreign paper) then all of a sudden those 3-year Greek notes at 20% will become very popular.  

    TLT/Pak – 2% on 10-years should be the bottom.  Despite Pharm’s prediction, it’s just unrealistic to expect ANYONE, including Central Banks, to hand us $20Bn to hold for 10 years at less than 2% when even the inflation we admit to is 1.9%. ONLY fear drives money into TBills – fear that something worse than losing money to inflation can happen to your cash if you park it in Euros or Yen.  Fear is not a long-term investing premise – people get used to being afraid and move on at some point.  

    Europe/StJ – Don’t forget they have proper multi-party systems there so they don’t have to pander to the middle like our politicians do.  In fact, that’s how you lose over there.  When the Socialist Party picks a candidate – he’d better damned well be a good Socialist, not some US-style wanna-be Socialist.  They don’t need to win a majority – just appeal to a certain voting block.  Your up or down call is right on the money I think -unless we go sideways.  

    BRCM getting trashed today.  ZIP making new lows. 

    Feel better Shadow! 

    Good point Mr. M – I know the word "Always" seems to confuse people but, once they learn what that word means, it works wonders!  8)  

  151. Thanks Shadow.

  152.  With the dollar up .40 cent to 79.939, this is a dangerous daytrading market!
    This correlation usually results in the market selling off as a result of repricing. That hasn’t happened.
    I agree with Phil – Be careful out there!

  153. jcaesar / profitable

    Yes, although I’ve been in cash since noon. I’m planing to go long @ 2:18 !! (or whenever the chart tells me)

  154. l4 – I have the dollar at 80.65, up .43 pips……

    Now they are going to lure them in… kitty kitty…..

  155.  something get released early?

  156.  Funny, i see the dollar (DX Dec Futures) as 79.975 as well on IB. I see Phil keep printing 80.5+ for the dollar, so it must be IB got it wrong?

  157. Dollar/Mampcs – /DX on TOS may not be the same contract as you are looking at.  

    Dollar testing 80.60 but the indexes aren’t waiting and up we go.  Gold’s still laying around so I don’t feel bad about giving upon that and it looks like expectations are high ahead of the Fed.  Meanwhile we are WAITING – for the Fed!  

  158.  Good point Pharm! Meow!

  159. DX/mampcs — the March contract…../DXH2

  160. I’ve purchased 10 TZA Dec 17  28  calls at  .94 for the AAPL 50k portfolio.   This is short-term DSP designed to mitigate some but not all losses should the market tank after Bernie speaks.   I’ve placed a trigger to sell the calls if they drop below .6 in value.  This way I get some protection from a market tanking, but it shouldn’t cost me more than $400.   I hope to lose the $400. 

  161. DIA 12/31 $117 puts at .90 are my go-to put if the Fed disappoints.  If 12,100 fails then 10 of those in WCP with stops at .60.  

  162. Yep, dollar (/DX) is 80.65 on TOS.

  163. Fed Statement has no new program – Make it 20 of those puts in WCP!  

  164. There goes the 10 yr, under 2%.  GO GO GO

  165. So do they release transcripts of the FOMC meeting?  I guess these aren’t minutes.  What’s publicized?

  166. Fed upbeat on the economy…really! 

  167. TOL still a good short……Mar 19 Ps at 1.25. 


    OMG come to papa!

  168. Statement:  

    Literally nothing new.  Other than a word or two, they pretty much cut and pasted their last statement.  I can’t believe this!  How could they think this is OK?  

    Maybe I’m wrong but it smells like the a disaster to me.  


    Release Date: December 13, 2011

    For immediate release

    Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

    The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

    The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.

  169. No way is this good for an Xmas rally..Europe will remain the concern and markets will be ripped up and down for the coming months..

  170. EUR/USD goes below 1.30…its coming

  171. grenowoods – Thanks!

  172. Phil – come on, Dr. Ben said in 2007 that everything was going to be ‘contained’.   Now, things are slow….but he did say that he needs help from Congress….and I think he is sending a shot across the bow to get them to move…which, of course, they will not.  So I stand firmly entrenched in my premise that the 10 yrs, do, in fact, go to 1.5%.  SPX and SPY 1200/1000 or 120/100 put spread in June is $5. 

  173. Bought TZA….

  174. Would be incredible to see oil go flat now on the day.

  175. Phil—this is sort of close to what you thought might play out, right? Didn’t you say that they would hit the mkt and then save it possibly tomorrow?

  176. I think at the 0% lower bound the Fed has only so many arrows left in it’s quiver.  And that ain’t many!

  177. Ben, Fed and Tim G much just think ECB etc are a bunch of total jerkoffs – Thanks for the help guys – wait wasn’t Trichet raising rates not too long ago?

  178. A subdued reaction to the Fed is never good..

  179. And wheeeeeeeeee…….. 

  180. where is the santa rally now? maybe after the 30year bond auction tomorrow

  181. Sold the Dow at an average price of 12, 080
    Also short the AUD/USD at 1.0045
    Bon voyage!

  182. yet oil stays up…hmmm

  183. Finally we get a nice drop in oil!   Gotta take that money and run on a .25 move that bounces though – just wait for the next good cross to catch it again.  

    Wow, so nice of them to give us easy fills before dropping!  

    Transcripts/JC – They only release the above statement after the meeting.  Minutes in 2 weeks. 

    NYMEX closing and they will be DAMNED if they let oil close under $100 at 2:35 but let’s see what happens after.  

    Christmas/Kustomz – The Fed just canceled it.   Unless Bernanke calls an audible after the fact, there is no Santa Clause this year.  

    Oh, TLT spread is now BAD – premise is blown and not worth sticking with in case panic gets worse.  

  184. deja vuuuuuuuuuuuuuuuuuu..

  185. Banks taken out back and beaten…..bu bye!  I Saw Red….

  186. Seems as the word on the fed was out at 12:21 based on XLF action. MFG was proof, this is confirmation of the real problem!

  187. I’m guessing JRW is in TZA right now! ;-)

  188. Weak support all the waaaaay down to 1206 in /ES….  is there one person on this board thats going long here??? Who TF is buying this dip? They must be handing out free cocaine at the exchanges.

  189. 10-year/Pharm – Well it’s on the table now as they just removed hope from the equation.  I can’t even imagine what these people were thinking t this point…

    Playing out/Jabob – Well, it’s possible they are purposely tanking us to have a good 30-year auction tomorrow.  I think the risk of causing a massive panic isn’t worth getting an A+ instead of a B at the auction but the Fed may feel that they simply can’t afford to show anything less than MASSIVE interest in long-term note buying now that they are no longer back-stopping it.  

    $1.20 is plenty for the DIA puts in the WCP (+30% in 20 minutes).  Let’s dump them and then see if we’re going to bounce off 12,000 or not.  

  190. Never seen it more negative here. Just an observation.

  191. DIA –  Where are those "12/31" DIA puts stashed?  Do I have a broker problem?  I still see only monthlies.

  192. @NF**X
    They’re actually 12/30′s, look under that.

  193. Oh wow.. dollar hit 81

  194. dc – me, negative … I am one happy clam! 

  195. Sorry, Dow volume just 86M at 2:45 is just 45M since 11 so LAME!!!   Not proper panic selling at all – just retailers freaking out so far.  

    Dollar just kissed 81 and, if it goes over, THEN we get more bearish but that’s a huge move for a day, up 1% intra-day on real volume is a big move.  

    Next DIA puts on deck are the 12/31 $116 puts at $1 and we’ll grab 10 for the WCP if the Dow fails to hold 12,000 but oil is holding $99.86 at the moment and the RUT is holding 725 and the S&P is holding 1,230 and the Nas is right on 2,600 so we’re either pausing for the next leg down and we pick up down volume into the close or maybe this isn’t much of a surprise and we just have a little more consolidation at our lows.  

  196. I wonder how Europe will take this news tomorrow.

  197. Im short some FAS Dec 60 puts. Is it worth holding them and hope for better by Fri? Roll to Jan or bail completely?

  198. Now They whip us around and stop us out of our TZA before they take it down again.  Seen this movie before…

  199.  Phil: Solar 
    As an Independent I don’t really have anyone in congress that represents me but I’ll send that note along anyway.  I do a have a son who studied and is working as a solar technician, he is with a smaller company that is doing maintenance for DUK and is gaining some valuable insights if the industry does really take off.

  200. Staying in today’s theme: "To stop out or not to stop out, that is the question…"

  201.  Negative/DC – You are right, that’s another thing I wasn’t liking about the drop.  Like yesterday – it’s a whole lot of negatives and not all that much selling.  

    Now TLT Dec $119 calls can be sold for $1.15 and the $120 puts can be bought for $1.45 for net .30 on the spread and that’s worth risking 5 in the WCP.  

  202. Phil,
    For the US dollar index, I’m following the real-time us dollar index which shows 80.21 at 2:57. You just posted that the dollar hit $81.00. Am I following the wrong thing? This is the site I use:

  203. Stops placed on the DOW shorts just above entry price at 12, 090

  204. AAPL 50k     Sell the TZA calls.   I got 1.50 for +60% or  $560.    AAPL not reacting much  and this is all I cared about in this portfolio.   So we’ll keep the $560 and move on.    

  205. Well still have about 500-600 points on the downside before McClellan is oversold.  Still just below neutral right now.

  206. DIA/NF – I have DIA111230P117 in TOS – Maybe it’s because I said 12/31 and it’s officially 12/30.  

    And what Rustle said!  

    FAS/Barf – Never buy into the initial excitement!  Surely at $2.90 with FAS at $59.24 you can see why I think it would be a TERRIBLE idea to pay $2.14 in premium for a put that expires in 72 hours…

    Whip it/MrM – Whip it good!  

    Solar/Lincoln – Big oil is just trying to postpone the end for themselves.  That’s why they are second only to Bankers in lobbying Congress to screw over the American people.  

    Dollar Gingbaum – See above, I’m following /DX on TOS, there are about 12 different Dollar contracts – I only care about the one that’s in my face 24/7. 

  207. Negative, nope, I bought a bunch of stocks yesterday at the lows of the day because I STILL believe in SANTA.

  208. Come on – that wasn’t even yesterday’s lows – WIMPS!  

  209. McClellan/Rustle – You are thinking about it the wrong way – we never got oversold.  All we have here is a correction on the way up at the moment – just like we did coming off the August drop and we didn’t get QE3 then either.  


  210. Phil
    BRCM — Would like to take a shot at selling
     Jan12 28 P @ $1.35
    You have to go back to 11/09 to get to the $26.65 net entry.
    you think to early to get into semi space?

    —This just in from
    Broadcom (BRCM:Nasdaq) shares are off again Tuesday, ahead of its analyst day Wednesday. There are no new issues today vs. last week.
    The company’s 4Q is conservative at -8% to -13% q/q and this compares to its five-year sequential average of up 2.4%. We hear that Apple data points are better than expected (stronger iPhone and not-as-bad iPad), which should offset the sluggish HTC/macro. We doubt the company will give 1Q guide, but down 3% could be moved down slightly (down 5% q/q) depending on the supply constraint issues and typical seasonal slowness. But we also expect 2012 to be stronger than the 5% consensus y/y forecast, based on continued momentum in smartphones (and expansion into its customer base like Apple (iPad 3), Nokia/Samsung (big ramps in 3G base stations vs. 2G/EDGE) and new wins in Amazon’s next version of Fire), overall wireless growth and the exit of the inventory downturn.Shares trade at trough valuations 10x vs. the 17x average over the last three years, it has $6 a share in cash and an exciting product cycle for 2012. We are restricted, but can buy on weakness tomorrow if we get it.


  211. OK, Phil, good to hear you aren’t under the bed biting your nails… I’m rolling half and holding half. Adjusting for the slightly lower chance of a Santa rally.

  212. FAS Dec 60/61 really got punched.

  213. "correction on the way up" – There’s Phil the contrarian!  And probably right too.

  214.  I’ve been wrong-footed at every turn today.  When you’re out of phase, it’s just brutal.  Not even losing much, just feeling like a loser.

  215. Come on Bulls  - if you want it, you gotta sing!  

  216. UUP/phil – good time to buy puts on this? or how does that work with your comments earlier about puts and low VIX..

  217. Damn, 81.02 – now back in DIA puts until the Dollar calms down.  12/31 $116 puts still a dollar so 10 in WCP and we’ll buy 10 $115 puts if they get to $1 (now .80) and then put tight stops on the $116s.  

  218. JC
    You must have forgotten this is a manipulated market. Europe is a paid responce, they could be selling through the US right now. Not free markets or actual capitalism!

  219. AAPL 50k    I’m still trying to get fill on the Jan 390/385 bull put spreads for 2.30, and I’ve increase the order from 5 to 10.    And Lincoln, the only reason I was scaling in is to try to get the best price possible.  

  220. Phil/Members:
    From Barclays cash equities trading desk (who has been bullish forever).
     We have turned bearish. Although many of our bullish tenants still exist, like low risk levels and attractive
    valuations, they are being overwhelmed by bearish indicators that are showing up. We will go through why
    we have turned bearish in this presentation.
    ? SPX diverging sharply from copper, Euro, China equities, EEM which should all be coincident or leading
    ? Semiconductor companies are starting to pre announce negatively. They are very early cycle and
    typically first ones to see issues.
    ? VIX sell off suggests investors getting complacent and skew has flattened.
    ? Europe indicators are weakening include Sovereign spreads and funding spreads.
    ? China equities are weakening considerably and the China data points are bearish.
    ? U.S. economic data has been incredibly strong. How much longer can this last considering the rest of
    world data points. We may have seen an inflection point with the retail sales number today.
    ? SPX 500 earnings estimates continue to move lower.
    ? From a technical perspective, SPX 500 continues to fail at 200 day moving average, and the 200 day
    continues it’s downward slope.

  221.  3-Month EUR/USD Cross-Currency Basis Swap -140.55 -12.75 bps..complacency just like 07

  222. AAPL Jan 390/385 bull put spreads – I’ve had an order in since yesterday as well, no hits.

  223. Come on bears…..hear me roar!

  224. Shadow -  If Europe is "selling" right now, we’ll see it tomorrow morning for sure.  But as you say, things are totally manipulated, so who knows what we’ll wake up to.

  225. BRCM/Ban – I do like them long-term but right now there’s a lot of shuffling as people start to bet on what components are in and out of the new IPhones and IPads since, on the whole, that’s the only thing that matters in the Universe.  

    FAS/WCP, Scott – But the $60 calls are still $1.98 and our goal is to get $1 for them.  As soon as we’re confident the $61s aren’t coming back, we can pull the calls and leave the $61s short naked.  That’s why I love these spreads.  

    Down goes 12,000!!!  81.02 – now we have 2 stop lines on the DIA puts!  

  226. AAPL, GOOG, MSFT all green today, and SQQQ very green today.  Odd day…

  227.  Barclays – you would think they would use better grammar!

  228.  SCO hasn’t budged all day, very odd, really, given the currency gyrations.

  229. I’ve got trend line support right here (IWM 72.37)

  230. The internationals must be loveing this but the last laugh is a foot! No demand = shutdown or oversupply, neither boosts the bottom line. Plan B screw the investor I need a raise!

  231. AAPL 50k      I sold 5 Dec 17 390 calls for 4.05.  

  232. Biotechs & Pharma are holding well too.  Flight to safety and hedges were put in place on the big guns that actually make money and are somewhat recession proof…well, maybe…Here we go!!!!!


    WFR… with lot’s of fleas…..

  233. We just need AAPL to let go of 390…must kill the bull

    Carry will be next to unwind..

  234. This trade represents a form of DSP for me.    If AAPL stays under 390 within the next 4 days I keep the 2k.   If it moves upward I still profit, because I’ve only covered 1/3 of the 15 long January options. 

  235. And now I’ve sold another 5 of the above for 3.20

  236. Yesterday’s low (SPY) is now….gone….

  237. Wrong-footed/ZZ – When you’re not seeing something, best thing to do is get to cash/neutral, take a deep breath and step away for a bit.  

    UUP/Scott – May as well be a Forex trader (ie. crazy Japanese housewife) the way it’s trading right now.   You can’t apply normal anything to an ETF tracking the Dollar. 

    OK, now our goal is yesterday’s Dow low of 11,950 – still not really bearish if we hold it but not impressive if we lay there either.

    Barclays/SNS – Thanks, good to know!


    103M on Dow at 3:30 and now downside volume is picking up.  We either hold that line at 11,950 and S&P 1,225 or things turn UGLY!  

  238.  Iflan 
    did you get any of the AAPL 385/380 Bull put spreads

  239. He winds up, here’s the pitch…….just a bit outside…OK, now I am done.

  240. Pharm / WFR — 1:46 PM MEMC Electronic (WFR -2.2%) dips after Standard & Poor’s puts its junk-grade credit status on watch for a possible downgrade, citing a number of risks posed by the company’s exposure to the oversupplied solar-energy sector. [Tech, On the Move] Comment!

  241. pharm
    Bio is big bucks for the 1%ers who can afford them. So far the 1%ers have not saved anyone but themselves at the expense of the 99%ers!

  242. DXD Jan $15s back to $1.50, which was yesterday’s high – another sign if we go higher.  

    I don’t want to be alarmist but below 11,950 is a gap fill to 11,550 from the end of November!  

  243. DIA wk 4 puts – F-ing ETrade doesn;t show them at all – all good in the OpEx port tho.  thx.

  244. Im sticking to my weak support till 1205 /ES

  245. So now it’s 10 DIA 12/31 $116 puts AND 10 DIA 12/31 $115 puts, both at $1 in the WCP.  The $116 puts are $1.30 and a stop on those at $1.20 and a stop on the $115 puts, still $1.02 at .90 but we’re willing to hold both overnight to balance out the WCP.  

  246. Phil,
    I have the DIA 12/30 117s, 116s, and 115s now. What would you recommend re WCP at end of day and possible change in direction for tomorrow (after last auction I believe?)

  247. got into TNA under 41, hoping for stick and the fact the RUT can spike up quickly in last few minutes.

  248. Phil
    IWM volume picked up on this sell off also, I report you decide!

  249. Sold it way too much money to let slip out of my hands

  250. Phil,
    Never mind. You answered in your post.

  251. Rustle… 30 in TZA looks like a wall you may get some relief…Good Luck..

  252. AAPL Trade / Iflan – Can’t keep up with the spreadsheet update….  Busy day overall! 

  253. I’ve repurchased the 10 Dec 17 390 calls for 2.75 for +24% or + $ 875.  

  254. Shadow – biotechs are usually for retail, who then get the shaft by the 1%ers b’c they manipulate the b’geezers out of them.


    WFR – yeah, I saw that earlier….I remember long, long time ago, when they were $91…..

  255. The dollar is up 10%. Why isn’t oil down 10%?

  256. rehat      the bull put spreads filled.

  257. FAS Strangle Experiment – It didn’t go as planned (my bad), but still OK. If you didn’t cover the 69 Calls yet, they are now at 0.16 or so and I would close that leg now for a 70% profit. No need to be greedy. The 57 Put are obviously problematic now, but still all premium and have only 3 days to run. 

    The plan would be to hold the puts overnight and see how we look tomorrow. If we move higher in the morning, decay will kill the puts quickly (see what happened to the calls this afternoon). If not, we sell some more calls at a lower strike than today and keep on collecting premium. On Thursday or Friday, we can see if we need to roll the puts to next week’s options. 

  258. Iflan -What prices did you get (both sides) for the bull spread so that I can update the spreadsheet? Thanks 

  259. The VIX index hit its lowest level since 10/28/2011 which coincided with the 1285 peak in the S&P 500.
    VIX ETFs/ETNs performance suggests that investors are preparing for more volatility down the road.

  260.  Shadow:  Somebody must still believe the Straits of Hormuz story, or else something more interesting is going on, but I don’t see it.

  261. stj………..Sold  10 Dec 17 calls for average 3.625 and bought them back for 2.75         Sold bull put spread Jan 390/385 for 2.30, ten of them.   The only other trade today was TZA Dec 17  28 calls, in at  .94, out at 1.50…Thanks.

  262. JRW gap down tomorrow? Thoughts..

  263.  Dollar falling, we have a stick!

  264.  Whew! Not for the faint at heart! Must be very nimble! Good day for me on both TNA and TZA!

  265. pharm
    Your right the stocks are for retail but what about those crazy high priced drugs? Who can actually afford to buy them?

  266. Last support:

    Time to cash out anyway !!

  267. Builds character!

  268. And this was supposed to be an up day.  Sigh.

  269. Zero
    Its for the I believe in miracles type, Phil’s sheeple!

  270. Wow, we just closed over the 11950 line.  What a coincidence.  Bet that doesn’t happen too often.

  271. Shadow / drugs – Insurance companies (some of them) are supposed to afford the drugs.  Regular people of course can’t.

  272. kustomz / Tomorrow gap

    Likely will if we have the Euro downgrade today !!

    Don’t know for sure as Lloyd has not returned my call !!  8-)

  273.  Shadow:  If I can get a daily stick to bail out my idiocies, then I’m a believer.

  274. Phil – So if the Euro was so cheap a few days ago, is it really cheap now? ;-)   Just kiddin ya.

  275.  Any vix traders -
    What’s the relationship between the Vix futures – let’s say the Febs and the Vix Futures Options bc the Vix futures have a contract multiplier of 1,000 – Vix at 30 = $30,000 contract but the VIX futures options have a multiplier of 100.
    Sorry hear is my question -
    Is that VIX futures option really written on the Feb. futures contract? 

  276. Zero
    The stick is so yesterday!

  277. Call me old-fashioned, the cash showed up today.

  278. Thanks JRW and thanks for making me a better trader in TZA TNA!!! Thank you!! Sold virtually at the top of TZA off IWM 71.59

    IWM  71.59,  71.87,  72.15,  72.56,  72.98,  73.24,  73.51,  73.82,  74.12,  74.62,  74.80  and  75.06

    Rustle, hope it you went your way in TNA  ;-)

  279. who is saying the euo is cheap?

  280.  Funny JRW! Lloyd didn’t give you the VIP number to his cell! It’s (666) 666-6666!  

  281. JC
    Not just the drugs, Actually getting surgery to save your life, once again I have not found a place where medicare pays enough and yesterday my doctor agreed I was suffering but when I asked for pain relief, no way! Send records, MRI to another hospital not yet, the good faithful of Utah have not turned me down the 3rd time. If I were a pet what would they do?

  282. shadow – Sorry about your pain.  Amazing  they won’t pay for the drugs. 

  283. All the portfolios are now up to date!

    Iflan - Sorry to be a pain, but can you tell the prices you paid/sold each leg of the Jan 385/390 BPS? Thanks.

  284. there were rumors of ratings agency downgrades after close…if they dont do it we could open up in morning…but i have a feeling it wont stick, unless something positive comes out overseas.

  285. Phil………Thanks for the VERY concise, and timely FED analysis.
    My short DOWs are risk free and up nice money from entries at an average of 12,080.

  286. Phil and all portfolio followers - I am flying to France tomorrow to spend some time with my folks there. I will be there for about 4 weeks. I guess for a change it will be nice to have the 3:00 AM trade after breakfast! The time difference will make it a bit more trying to track the portfolio during market hours as it’s usually family time then, but I will do my best to update them every morning after the market opens like I do now and after the market closes.

    Everybody involved will want to make sure to look for Phil’s adjustments on all the portfolios during the day as I might not be able to post them with 100% regularity. But I should be around most of the time with my folks leaning over my shoulder wondering what I am doing!

    I’ll be reporting from ground zero in Europe and that should be interesting. I tried arranging a meeting with Sarkozy but he has not gotten back to me – an oversight I am sure as they can use all the help they can!

  287. JC
    Drug D will pay for them until the donut hole, but only if you can get a prescription. How great it was when they called pain a vital sign but now it is suffer stupid! What would they do to a cat, dog, or horse? I must suffer because I am kind of human!

  288. @Kustomz
    TNA was a very good trade today.  Sold it at 45.70, bought it back at 40.79 and holding into open tomorrow.  Hoping for pop in morning and I will dump again.

  289. rustle
    I wish you the best in the AM. If it is up premarket consider getting out ASAP.

  290. That’s the plan every day.

  291. @Stjean
    We should just eliminate money altogether and go back to trading goods for services.  I will trade two chickens for a Sony Bravia.

  292. Stiglitz is always fun to read:

    There is, interestingly, a common thread running through all of these cases, as well as the 2008 crisis: Financial sectors behaved badly and failed to assess creditworthiness and manage risk as they were supposed to do.

    These problems will occur with or without the euro. But the euro has made it more difficult for governments to respond. And the problem is not just that the euro took away two key tools for adjustment—the interest rate and the exchange rate—and put nothing in their place, or that the European Central Bank’s mandate is to focus on inflation, whereas today’s challenges are unemployment, growth, and financial stability. Without a common fiscal authority, the single market opened the way to tax competition—a race to the bottom to attract investment and boost output that could be freely sold throughout the European Union. [...]


    Public-sector cutbacks today do not solve the problem of yesterday’s profligacy; they simply push economies into deeper recessions. Europe’s leaders know this. They know that growth is needed. But, rather than deal with today’s problems and find a formula for growth, they prefer to deliver homilies about what some previous government should have done. This may be satisfying for the sermonizer, but it won’t solve Europe’s problems—and it won’t save the euro.

  293. Sorry, had emergency phone call!  

    DIA puts in WCP all  stopped out – I hope for good reason!  Dow closed back at 11,954.94 – very cute!  

    DIA/Kallen – Isn’t that a great coincidence?  

    10%/Shadow – Time to replace that calculator battery!  Unless you mean over the past 3 months and then you’re right.   Oil has gone straight up since October for no good reason.  

    Dollar $90.99 at the moment. 

    Euro/JC – Yes, it is.  Euro down because lack of Fed easing makes the Dollar strong and knocks Euro down by comparison but this is no reflection of the Euro actually getting weaker.  The Dollar was at 75 on 11/1 and now 80 (up 6.6%) while the Euro was $1.40 and now $1.30 (down 7.1%).  

    VIX/Samz – No idea, other than trading VXX once in a while, I never touch them.  

    Your welcome Roro!  

    Time shift/StJ – I just need to know where we stand in the mornings and I’ll comment adjustments – no big deal if we don’t get an update until the next day. 

    Oil back over $100 at $100.23 – more fun tomorrow!  

  294. Phil
    No batteries needed I did it over 3 month as you checked, I did round off and gestamate off charts also. Hey what about the demand for gas? Diesel is locked in, shipping and heating demand so $4.30 a gallon here.

  295. stj…, you are not being a pain, but in fact very helpful with keeping the portfolios uptodate.    The Jan 385s were bought for 14.18 and the 390s sold for 16.48    thx.

  296. Great Rustle, I wasn’t too worried for you. This market is in total control of the big boys and it just isn’t the right time to let the trap door swing wide open. I’m sure the BOJ is going apeship over the rise in the $, we may see some support in AUD and EUR overnight from Asia…

  297. STJ,
    amusez-vous en France!

  298. Phil,
    I missed your request last night for me to add the ETFs/ETNs that trade options until 4:15PM EST to the Wiki. Just saw it. Checked the wiki. Someone (maybe you?) already added.
    I’ll keep an eye out next time for a request like that.

  299. This turned out an ugly day – however the VIX was still down 1%.
    I guess there is no volatility in the market…

  300. Absolute classic (hilarious, even) regarding the UK’s position in Europe –

    It’s a tirade by a UK Independence Party MEP, as well as a response by a Scot.

  301. By Ronald D. Orol

    WASHINGTON (MarketWatch) – An auditor with the CME Group Inc. was informed that former MF Global Chief Executive Jon Corzine may have known about a loan to one of the firm’s European affiliates made using customer funds, according to the CME Group executive chairman Terrence Duffy. Duffy said he learned about the disclosure over the weekend and that the loan was for roughly $175 million. The CME Group has provided this information to the Justice Department, added Duffy, who declined to name the MF Global executive who said Corzine was aware of the breach.

  302. Bailed on the DOW shorts at 11,970.
    Took the money, back to cash. Don’t like the stall or the bounce off of 11,900.

  303.  l4real – Thanks!

  304. Thanks Iflan! All up to date now!

    This morning I was actually wondering why you didn’t sell any weekly calls against the long since you 15 of them in the portfolio, but it worked out OK this afternoon. 

  305. We have to have at least one Trump cartoon today… it’s so much fun:


  306. Phi JC
    Got the call, going to SLC for a surgical consultation Thursday. 340 miles each way and they will not do it over the phone. I hope they can do it Friday. Also see that all in car phones may go, April 2010 I got slammed again by a texter, probably why I  need surgery, but then there is the BS preexisting condition so taxpayers pony up while ins cos make more money! I’m sure the GOP has a fix for this!

  307. stj……Your post 7:50 pm.    Curiously, your post is right on target.  I had planned to sell 395s if they popped, but I got tied up away from the computer from 9 am until about 11 am.   By then AAPL had popped and dropped.  But you may be seeing how I play AAPL sometimes.  By purchasing calls a month or more out, then selling and buying back covers for profit UNTIL at some point AAPL decides to bounce, then taking profits on the calls themselves.  So we made 2 profitable trades today as AAPL pulled back, but I do believe we could have done better selling the 395s, which at one point today were over 3 bucks, then pulled back under $1.    So we keep working.  I believe there is pressure on AAPL to pop sometime during the next month.  In the meantime we try to make a few bucks onying the covers.   Thanks stj

  308. Tough sledding continues, eh ?

    Hope everyone is doing ok.

    Here are a couple of cycle calls I picked up today fwiw, not making any recommendations on them.

    1. Down to 1210 area then up to 1330 area (sounds crazy to me) then down big.

    2. We break the 1075 lows by or on Jan. 24.

    These are from different prognosticators and not Tom DeMark who called for 1330 by Dec 20.

    Me, I guess we finish the year at 1250, maybe 1270, maybe 1200.

    But what do I know ?

    Lots of unknowns – MF Global, Europe, Congress, the golfer in chief, Iran, frogs, locusts, and assorted plagues.

  309. Good morning!

    There’s an OPEC meeting today and that’s keeping oil up but they’re not going to cut production and oil (/CL) is still a good short off that $100 line.

    Dollar calmed down to 80.85 after topping out at 81.10 yesterday.  The Euro tested $1.30 and bounced sharply back to $1.304 and the Pound is at $1.5509 with the Yen just under the 78 line.

    Shanghai lost another 0.9% this morning, now 2,228.  The Hang Seng dropped half a point and the Nikkie 0.4% with India down 0.7%.  

    Europe is down about a point and near the lows.  The spin on the Fed is the next meeting is a 2-day meeting on Jan 24-25 so maybe they need 2 days to hammer out QE3.  After that meeting, there can be no excuse as the next one isn’t until March 13th but even Jan 25th is a long way away.  

    By the way, interesting note on Bernanke, who called the bottom on interest rates in September, when he refinanced his own home!  

    Our futures seem happy enough so far, up about 0.25%ish but nothing exciting going on yet.   Maybe it will stay that way for a change. 

  310. Already much more confident with my trades after only several days of being here, Phil……….also have to start working on the options trading soon.

  311. Shopping malls and stores are using cameras and cell-phone tracking programs to gather data on shoppers and market more effectively.

  312. So much for happy futures – Dollar popped to 81.15 and now we’re down half a point.  At least oil is dropping nicely, now $98.70.   

  313. Phil,  quick question.  When the entire market sells off, how do TPTB keep oil prices so high?