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Free Money Thursday – Quoth Bernanke “Forever More”

But where's my Trillion Dollars?

Federal Reserve officials said they expect to keep short-term interest rates near zero for almost three more years and signaled they could restart a controversial bond-buying program in yet another campaign to rev up the disappointing economic recovery.

The Central Bank's pronouncements came after a two-day policy meeting from which officials emerged still frustrated at the slow pace of growth and a bit more confident that inflation is settling down after climbing last year. The combination of persistent slow growth and low inflation, Fed Chairman Ben Bernanke signaled in a news conference after the meeting, could give the Fed leeway to take more action to support the economy, though he didn't commit to it.

A bond-buying program—also meant to push down long-term interest rates—could be the next step. Mr. Bernanke said there would be a "very strong case" for even more action by the Fed "if the recovery continues to be modest and progress on unemployment very slow and inflation appears to be likely to be below target for a number of years out."

Fed_jump

What amazes me is not one reporter at yesterday's news conference asked Dr. Bernanke what is COSTS to ARTIFICIALLY keep rates 3.75% below what his own board considers "normal" for another 3 – 4 years.  Maybe that's because we don't know what it cost already, do we?  We do know the Fed now has a $3Tn balance sheet.  Since I don't recall a bake sale at which the Fed sold $3Tn worth of cookies, I have to imagine that money was borrowed from somewhere and don't things that are borrowed eventually need to be paid back?  

I mean, I understand that, since Reagan, there has been a massive effort to destroy the American Education system and make the beautiful sheeple as dumb and compliant as possible (a less crazy article on the subject here) – but surely there must be some reporter who was accidentally exposed to some rudimentary economics who can come up with a better question than "when in 2014?"  

Apparently, it is beyond the grasp of the MSM that, when the Government borrows money at 3% and lends money at 0.25% – SOMEONE has to pay that 2.75% difference.  I don't know how to put this in the "new math" terms my kids are learning but, in old math, if I borrow $1Tn at 3%, I owe the person I borrowed it from $1,030Bn at the end of the year – are you with me so far? 

OK, so then I LEND that Trillion Dollars to my Bankster Buddies for 0.25% and, at the end of the year, they give me back $1,002.5Bn.  Here comes the really hard math part (hopefully someone from the NYTimes can keep up) – $1.030Bn minus $1.0025Bn is $27.5Bn and that's the amount we LOST lending money to the Banksters for 0.25%.  

What's $27.5Bn between friends, right?  Well, that's where this math stuff really kicks in because we lent that $1Tn over and over and over again for the last 3 years so that's 3 x $27.5Bn or $82.5Bn.  Still, sounds like chicken feed in the grand scheme of things so why should we care if the Fed extends these ultra-low rates to their Bankster Buddies for 3 more years – after all, if we were in trouble, the Bankers would certainly do the same for us, right?  

Unfortunately, we're going to need a calculator now because, funny story, the Fed didn't just lend $1Tn to their pals.  In fact, they didn't just lend the $3Tn on their balance sheet.  Nope.  It is estimated that the Fed lent an additional $7 TRILLION to their friends ON TOP OF the $3Tn they reported.  So $3Tn + $7Tn = $10Tn.  That means $82.5Bn (3 year loss) x 10 = $825Bn.  THAT is how much OF YOUR MONEY Bernanke just gave away yesterday (assuming they don't sneak in another bonus $7Tn) by extending 0.25% for 3 more years.   

Even this would not be so terrible if those banks were using all this free money to lend out to American Citizens at ultra-low rates to help them get back on their feet and help businesses refinance through rough economic times but that's not what's happening at all.  

In fact, the banks are simply turning around and lending the money back to – you guessed it – US, at 3%.  So it not only costs us $825Bn to GIVE the banks a $10Tn loan but they turn around and lend it back to us for another $825Bn.  Mommy, when I grow up – I wanna be a BANKER!  

I know it seems like the same money but it's not.  We borrow first, THEN we give the banks money, THEN they lend us more money and our Deficit grows and grows and grows until, like Greece, a bunch of Bankers decide we're a poor credit risk and decide to foreclose.  Don't worry though, they're not done lending us money yet.  Before we leave this point, I want to make sure it's clear enough for the Fox viewers – If I borrow $10 at 10%, at the end of the year I owe $11.  If I then lend you, my Bankster Buddy, $10 at 0% and then you lend me $10 back at 10%, then at the end of the year I owe $12 and you have $1.    

That's right, not only is the Fed screwing us with this scam but they are INEFFICIENTLY SCREWING US – we have to borrow $2 additional dollars in order to give the Banksters $1 – how stupid is that?  If we DIDN'T borrow the money to give to the Banksters, then we would not have additional debt and wouldn't need to borrow money from the Banksters.  That's why the key to this whole system is to have a society that has poor math skills and an even poorer understanding of economics because – ANYONE ELSE WOULD BE OUTRAGED!  

But why should we be upset?  After all – "only" 377,000 Americans were laid off last week and that's just 21,000 (5.5%) more than last week and continuing claims "only" went up 88,000, to 3.55M (up 2.4%) – thank goodness for that 99-week limit right!  Durable Goods were up 2.1% ex-Transports and up 3% on headlines in December and many, many analysts will tell you how bullish that is – but they will never show you this chart:  

That's funny isn't it because, usually, they LOVE showing charts and this one is free from the Government, so the graphics department doesn't have to do anything but put it on screen.  Yet, strangely, it's almost as if it didn't exist at all!   We love BA and do you know why we love BA?  Because BA is the ENTIRE difference between this complete and utter disaster and the lovely, lovely headline numbers you'll be hearing about all day.  

Nonetheless, these may be our last 48 hours of being bearish because, if we hold our breakout levels over the weekend – we have no choice but to switch off our brains and run with the bulls.  So let's enjoy it while it lasts and short oil at $101 again along with the Dow at 12,800 and the Russell at 800 and see if they can burn us one last time.

After that, we'll be happy to join in the fun.  

Once upon a Great Recession, while I pondered Global Depression,

Over what the New Year's markets may have yet in store,

While I nodded, nearly napping, suddenly there came a tapping,

As of some one gently rapping, rapping at my chamber door.

`'Tis some creditor,' I muttered, `tapping at my chamber door -

Only this, and nothing more.'

Back into the chamber turning, all my soul within me burning,

Soon again I heard a tapping somewhat louder than before.

`Surely,' said I, `surely that is something at my window lattice;

Let me see then, what thereat is, and this mystery explore -

Let my heart be still a moment and this mystery explore; -

'Tis a Mormon, nothing more!'

Open here I flung the shutter, when, with many a flirt and flutter,

In stepped Ben Bernanke right on through my chamber door.

Not the least of greeting gave he; not a minute stopped or stayed he;

But, to my charts he went directly and drew on each of them a floor -

TLT at 116, Dow 12,000, 20 VIX -

Twenty VIX and nothing more.

`Profits!' said I, `this is evil! – profitable still, but clearly evil! -

You tempt us yet, what of the risks your plans ignore,

What of Debt and high inflation, the lack of jobs throughout the nation -

Surely you don't want stagflation – tell me truly, I implore -

Is there an end to you manipulation? – tell me – tell me, I implore!'

Quoth Bernanke, `Nevermore.'


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  1. Oil Lines

    R3 – 103.97
    R2 – 102.18
    R1 – 101.10
    PP – 99.31
    S1 – 98.23
    S2 – 96.44
    S3 – 95.36

    Yesterday's high and low – 100.4 / 97.53

    Breakout lines – 105.04 / 90.01

    In response to your question yesterday Crussell, I calculate the standard floor pivot points using the continuous contract prices. The breakout lines are fib lines based on daily moves.


  2. @Felipe
    The answer to this question is.  NO. 
    Just ask those who earned $40,000 a year and were persuaded to buy $500,000 houses.  Who are now living in them for the past several years without having to pay it back on terms they originally signed for.  Just ask those I-Banksters like Dick Fuld and Stephen Friedman and John Thain who took out billions of dollars in bonuses from their companies and how they did not only not have to pay them back but had the Bernank and Hank Paulson write them off AND permits them even now to continue taking borrowed money.  Just ask a dozen people I have known in my life who declared millions of dollars of bankruptcy, after taking the money they borrowed and bought condos in St. Bart's, the Keys, the Caymans, as well as all the toys that go with them. 
    Surely your question is sarcastically rhetorical?
    "I have to imagine that money was borrowed from somewhere and don't things that are borrowed eventually need to be paid back?"


  3. "Is there an end to you manipulation? – tell me – tell me, I implore!'"
     
    Bravo!!!
     
    that timed and placed interview with Hilsenrath just prior to the FOMC was just a part of this Kabuki FED theatre.
     
    in the context of the FED policy shift as of yesterday's FOMC the Hilsenrath interview was obviously designed as part of the necessary political calculation to create the public impression that the FED is acting responsibly by NOT spending a Trillion today of taxpayer money for the banks to borrow for zero while the reality is that the interview was also intended as a way to disguise the real message to the market that Frankenstimulus is not at all dead,, but very much alive and well.
     
    and as for the message to the market; the market was given the message it told the FED to design long before it was released officially to the public yesterday.
     
    the scale of corruption is breath taking


  4. Thanks St. Jean


  5. StJeanLuc –  /CL just hit your 101.10 pivot already!


  6. Fed and Banker intrigues; Education industry conspiracies- Oh, what a fun day so far.
    Time for my hat!
    http://www.ebaumsworld.com/pictures/view/226456/


  7. StJ interestingly the  NYMO indicator doenst seem overbought


  8. What a great article.  Can you please make this available to the public so I can send it to my friends?  


  9. Phil,
    Who are the next AAPLs out there?


  10. /CL / Burrben – And as you can see, there is some hesitation at that 101.10 line. Could go either way from here!


  11. Pstas – since when do we have virus traps on PSW ?


  12. Dpas – On my chart, SPX just reached 70 on the RSI(14) so that overbought territory. Technically speaking, we can remain overbought for long periods. There is actually a method called "RSI is wrong" when you buy when the RSI goes through 75 and sell after 20 days of when the RSI goes below 25. Active Trader Magazine tested that in 2004 with good results. I have no personal experience in that!


  13. another all-time high for CMG and EDZ sinking again…
     
    FU ME!!!!


  14. Good morning,

     

    IWM    76.66,  76.82,  77.04,  77.20,  77.48,  77.96,  78.34,  78.78,  79.10,  79.52  and  79.82

     

    I also have ascending trend lines at  78.99 and 79.28; we should open at resistance (SPX 1327ish) so short there or wait for confirmation. 

    I will be traveling today;  good hunting !!



  15. Phil, do we stop out on the XRT 52 callers at 4.2 in the 25KP?


  16. I seriously wish for someone to invent an Anti bot which messes up all the trade bots who go crazy and carry out trades which screw their masters over so hard that these bots are out for a very long time……seriously over the last 2 years these bots have screwed the fundamentalists by climbing walls of worry and fu***d the TA crowd by crapping all over their levels…..
    The 150 day SMA level for gold which has held like a tight rope for the bulls over the last year/ year and half was bulldozed through and bears got their asses handed to them (me included)…..
    Very untradeable market indeed, maybe it may be time to trade the exact opposite trade you normally would trade on!
    The thought that really scares me though is what will happen when the bears get their time in the sun….10-15% down days in a row that make 2008-09 look like happy days? 


  17. Phil/
    Why didn't you send someone to the "Fed Speak" to ask those questions…… LOL    
    Flip/ Surely, you are not comparing this theft by the FED and the breach of fiduciary duties to citizens taking advantage of the bankruptcy code….. seems to me many differencesa and two different leagues…  



  18. JRW – thought you're traveling every day, on the high seas, that is…


  19. Phil – love the high literature that seems to be finding its way into your daily missive – today's was epic!



  20. PP…


  21. Next AAPL?
     
    That is a tough one! Nokia Corp. announced results today and cut the dividend from about 10% to about 5%, plus they announced at buy back of up to 10% of their stock. The float is 3.8 billion shares. They have been losing market share in  the cell phone/smart phone market, but under a dynamic new CEO, Canadian Stephen Elop, they are restructuring and pinning their future on a joint venture with Microsoft whose new Windows 8 operating system is due later this year and is expected to run on smart phones, and tablets, as well as laptops and desktops.
     
    IF,  and it is a big IF the Windows  8 venture is successful and Nokia sell a lot of phones, and branch out into tablet computer, they may not be the next AAPL, but the stock could make some  huge gains over the next few years. To me this is why it is of great interest to know whether AAPL's huge sales for the iPhone reflect a secular trend towards what I call "handheld minicomputers with calling" in place of regular phones, e-readers, netbooks,  laptops, and desktop computers. Since a single carrier, CHL has 600 million subscribers,  there is a big old market out there for a company that gets it right. If AAPL is  BMW, could NOK become Ford?
     
    The  advantage of the collaboration with MSFT (as I see it) is that developing and maintaining an operating system is a massive undertaking for a independent cell phone company, but if you have a pre-eminent software company doing the heavy lifting, then that is a huge saving.
     
    Anyway, with the dividend and the share buyback,  or even the potential for a buyout by MSFT, it doesn't look like there is a lot of downside right now.



  22. Pharmboy
    What do you think of
    AFFY‎ – Affymax, Inc. (NASDAQ)
    Any Trades  ?
    Thanks


  23. Pharrmboy,
    what do you think of CLSN and LCI?


  24. Banks / Phil – And Dick Bove was on Kudlow yesterdat complaining that this administration is strangling the banks and making it hard to make money! I guess just like this administration is horrible for the markets…

    Of course, that great market timer Kudlow told his listeners to get out when Clinton came into office, jump back in when Bush came in and probably told his friends to get out again when Obama came in. That has worked out very well so far… No wonder his guest are in the same wavelength!


  25. jmm1951,
    I didn't mean the next AAPL as a direct parallel. Don't know if you thought of only personal electronics pr other industries. Good analysis though. I agree someone like MSFT or GOOG in the market make it harder for AAPL. Question is organic growth going forward for AAPL. I am weak on understanding global growth for AAPL. Also, I guess domestically everyone will get continue upgrade paths for iphones/ipads. Hard to believe my iphone will be abe to do that much more…


  26. NOK / Jmm – I am a little bit cautious on them, but the results looked pretty good. I guess we need a couple of quarters to see if they can keep it up. They have only starting selling these Windows phone in the US for example. But encouraging I guess…


  27. Hi StJ, I think you're missing a MON April 72 put in the 25K. Maybe I'm wrong but it is in the upper part of the spreadsheet and doesn't seem to have been sold. And I know I still have it — but I could have missed the sale.
    Great work on all these sheet BTW. Quite mindblowing how you keep it all together.
     
    Thanks


  28. Why is ANYONE bothering with Dick Bove…he hasn't been right since the earth was cool. He should find a troupe looking for an Edmund Gwynn look alike and stick to acting.


  29. Speaking of Microsoft, good article about the impact of the Xbox on our TV habits:

    http://thenextweb.com/microsoft/2012/01/25/microsoft-not-apple-holds-the-key-to-smart-tv-success/

    I have said it before, this is a good success story for MSFT where they have actually beaten Apple to a market!


  30. low cost no cost money until late 2014! BTW zero interest rates does not apply to you and me…  the banks get…to promote the (very old) charade…where the banks borrow from the Fed at 0 and then lend back to treas.. by buying bonds at 2% for ten years – will continue through late 2014….. how messed up are the banks that they need another 2 -3 years of free money!!! on top of the 2 years they've already had, in order to clean up their books?..and ATTENTION K MART SHOPPERS savers will continue to get 0.10% on their accounts….I could go on and on… but…( lets take a flying fuck at a rolling breakfast donut instead!) nevermind….in summary … the Fed has reiterated its desire to monetize the mess….stocks are awash in giddyness.(.they found PAHRMS LAB!.)… bears have been properly trussed whipped…. ..bulls are everywhere…of course the heat index is rising..and along with it a growing panic to get in….this is usually just about the time things turn fugly….stocks are going to gap this morning…. I dont think we hold….too many technical indicators hitting extreme overbought conditions at the moment…..we are due for a healthy 5% smackdown….as you know i am short from 1307 i am adding on th eopen and i am shorting more nflx..i will be surprised if it doesnt start today or tomorrow…(wait i am already  suprised!!


  31. Phil,
    Is there a bond play here? 30 yr bond dropped below 89DMA, fib retracement from past highs right back up to it. Short from here by buying TBT?


  32. MON / Zipla – Sorry, I don't see it. What line in the spreadsheet.

    MampcsA – Do you have that MON put? Thanks.


  33. I suppose JRW's graph comparing 2006 to current is obsolete by now


  34. Bove / Angel – I agree, this guy has not been right in the long time… 


  35. AMLN / Pharm – Pharm any opinion on this one.  I'm contemplating a Feb 12 $9 put sale for about $1.00 with stock at $11.66.  Expected FDA response for BYDUREON on Jan 28th.  Already received European approval.  From what I've read it seems like it may have a tough time in a competitive market but approval seems more likley than not.  Not much else in the pipeline though. Stock up today by more than 2%.  


  36. AAII 48% BULLS 18% BEARS


  37. Stj, yes we are short 2 of the MON April 72.5 puts at 2.25


  38. MY mistake StJ. We must have exited as I see on line 3 of the top part of the sheet. I must have missed it as I still show 2 of those puts in my account. My apologies.


  39. Phil,
    i,m in the TZA APR 26/38 bull call spread for 1.65, do you suggest to roll down ?
    Thanks


  40. My 25KP is a sea of red today :-(


  41. Thanks MampcsA. I just thought I had missed something.


  42. MON / mampcsA – What day did we sell that MON put? Thanks.

    Any other trade missing?


  43. NFLX/ Angel
    There was a chart gap which Phil mentioned around at 120 ish if I remember correctly, maybe that gets filled today and then back down..


  44. Good morning! 

    Whatever you do, don't wonder why our indexes are up about half a point EXCEPT the NYSE which is stuck at – you guessed it 7,866!  If you think about it too long, you may develop bearish thoughts and we certainly can't have that, can we? 

    What you should contemplate is how we are nailing a 5% rule number on the nose 3 YEARS after we projected it.  I don't know too many other TA systems that do that well and this one is based on the assumption that the markets are manipulated by TradeBots – interesting.  

    Still, we are probably just resting at resistance on the NYSE as the RUT is up to the 800 line and the Dow is well over the 12,759 mark but I did kind of say yesterday that:

    NOW they need to do whatever they can to make their exits.  If I'm right, we'll see volume pick up into the close but down or flat moves in the indexes and then we'll see flat or up overnight and big volume in the morning, also not moving us up.  

    Well we did get 35% of the day's Dow volume in the last 20 minutes of trading and it was all down and we are getting big volume now (22M in 25minutes) but I'm wrong so far as we are, in fact, up 68 points.  Sure half of those points are coming from CAT (up 4%) and 12 Dow components are selling off so far this morning – which is kind of strange in a move up (DIS, HD, HPQ, IBM, INTC, KO, MCD, PFE, PG, T and WMT) but let's pretend it's real – appropriate attitude in this extend and pretend economy.  

    The bottom line is – we did the math (post above) and we did, in fact, get our $825Bn additional stimulus and it was done in such a way that no one (well, maybe Ron Paul) even understands that it's happening.  So the spin is "look how well the market is going and we STILL might get more stimulus" – we have no choice but to go bullish if this attitude has a chance to get ingrained over the weekend.  

    Lots of data and lots of earnings and I still like the bear plays, painful though they may be.  

    DIA Feb $127 puts at $1.48 were $2.50 yesterday so I like 10 of these int he $25K and we risk a stop at about $2. 

    Of course I like shorting oil at $101 (/CL) and I mentioned the RUT (/TF) below the 800 line.

    TZA is another fun trade below $21, with the March $18/23 bull call spread at $2, selling the $19 puts for $1.15 for net .85 on the $5 spread.  In the $25KP, let's just go with 5 of the bull call spreads to save margin and we'll stop at $1 and hopefully make $3.  This will likely be the last bearish trade for the $25KP if we keep going up.  

    Another way to offset TZA is with the SCO March $34 puts at $1.70 for net .30 as it's not likely oil is over $100 and the RUT is stronger.  T had a nice dip this morning and you can sell the 2013 $27.50 puts for $2 to totally cover it – I like that as T isn't going anywhere.  

    Upside, it's still the financials and we had a FAS trade Tuesday but I still like the March $82/86 bull call spread at $2, selling the $65 puts for $1.95 – if you don't like that trade – you are not bullish at all!  


  45. AFFY – March 27 approval date for peginesatide for anemia in kidney dialysis patients.  I need to look into the drug. 

    CLSN – for a flier sure.  We were in them last year, and got out for a nice profit, but since then, they, along with DCTH, BSDM, etc have gone no where. Not real excited about the small med cancer devices at the momonet but, they did raise capital last year, so should be fine for a 1/4 entry.

    LCI – generic manufacturer of opioids and cocaine….well, would love to have those happy pills for myself, but not interested as their YOY growth is small.  DEPO is a better choice here.

     

    Buying DXD….


  46. dpastas –  I wish there were chart police.  So that we can look back at least 3mo to show ALL of the chart that predicted crap that never came through..   No one ever talks about those!  


  47. DB / Phil – Phil, I sold DB Feb $42.50 calls for $2.15 now $3.30 – $3.50.  DB is up over $1 today to $44.65 so all premium sold is effectively gone.  Is this a good time to roll to March $45 for same range $3.30 – $3.50? I don't believe eurobank strength can last.    


  48. I believe durable goods orders were up 4 our of the last 5 months in 2011 to which I ask – How much of this was due to the IRS allowing companies to depreciate 100% of of "qualified" expenditures in 2011 and big businesses taking advantage of this before year end?  Just a thought(that apparently cost us $200B in lost tax revenue in 2011)  GL out there…


  49.  big drop in new home prices yet sales still sucked


  50. Angelcur – dude. you are sounding like a screaming bear!


  51. stjeanluc
    MON we traded 1/9/12
    FEB 12 sell 77.5c 3.34
    sell Feb12 80c 2.07
    I am not sure about the put but I sold Apr 12 65p  1.29


  52. said with a smile.. ) :-)


  53. Thanks Yodi. Looks like you had a different roll we did…


  54. If we are going to see a reversal on SPX anytime soon, odds favor the high this morning. Hit resistance SPX rising wedge. Hit support big Vix falling wedge. Testing declining resistance from 2007.

    The cash high today is also exactly double the 2009 low on SPX. If we break over here I have a trendline void above with nothing really below the retest of the 2011 highs. 

    Regardless of whether we see a short term reversal here I'm thinking a test of the 2011 highs looks more likely than not.


  55. Stj, we sold the puts on Jan 13th.


  56. OK, so AFFY is EPO (AMGN/JNJ drug) for extended release (PEGylated).  Thanks, no thanks.  They are trying to get into the generic space of EPO, and JNJ sued them, AMGN will most likely, and Takeda is not going after the Japanese market.  I did not dig very far, but the risks outweigh the rewards to me – although we do need more of these, biologics are going to be a lawyer's dream!.  For a positive play, I would try a few April 8/9 BCS and sell Feb $7s for a free trade (if the $7s stay above water).


  57. Thanks Mampc!


  58. Still holding the XRT 72 short calls in the 25KP for what it's worth.


  59. Next AAPL
     
    Very hard to know what may happen in the mobile device field. My understanding is that Asian countries with massive populations like China and India are developing e-commerce payment systems, so I imagine that effective implementation and marketing will be paramount.
    http://www.exchange4media.com/news/story.aspx?Section_id=4&News_id=45008
     
    NokiaShop is offering consumers various payment options such as cash on delivery, debit and credit cards, and three and six month EMIs on pre-paid transactions. Further, Indiatimes is developing a network of warehouses in multiple geographies, and is promising to deliver orders within three days in metros and mini-metros.
    Indiatimes is hopeful that this association will give a boost to sales of products in other categories as well. Sinha remarked, “If you are able to convince customers with your payment mechanism and trust in the brand to transact once, the rub-off happens in all other categories that you provide.” Apart from this association, Indiatimes has 7-8 more such relationships in the pipeline and aims to take the number up to around 50.
    Quoting Internet & Mobile Association of India (IAMAI) numbers, Sinha said that India’s e-commerce market stood at Rs 64,000 crore. He further said that a business of Rs 170 crore was being looked at in the first year at NokiaShop and thereafter a year-on-year growth of 70 per cent.
    With the touch and feel of the products missing online, consumers tend to take up the behaviour of buying offline. However, Sinha felt, “For a category like mobile phones, consumers might go offline, touch it there and buy it online. Thus, Nokia stores also play an important role in the promoting online sales.” This apart, the online content was being made rich and more interactive.
    When quizzed about the consumer behaviour of viewing online and buying offline, Oza said, “We believe that we can change this over a period of time. Our philosophy is to invest in the future.”


  60. Phil
    This is your kind of humor!  I ran across this reading comments!
    "This just in…. Despite the governments best efforts to pump $Trillions of dollars worth of air back into a bubble with a hole in it, the air has all leaked out. Now they have decided we STILL don't need to fix the hole, we just need more air."


  61. stjeanluc
    What is the official on MON thanks


  62. Good God, EXEL is finally moving.  I am a permabull (not).

    Phil, I swear I have my rosy glasses on, but I cannot SEE red!


  63. I would guess that JRW is short at the 79.8 line this morning (if he's trading today).


  64. Anyone get the TZA 18/23 spread at 2? I tried 2.05 and haven't filled yet. It's 2.15 now.


  65. Phil/
    ZH…GS recommends buying the Russell 2000 for an 8% + move…. Guess the top is coming SOON ?????


  66. Man, I missed that turn in FAS for the strangle. I was worried it was another head fake and look at it go down now….


  67. it's 10:30.  Is this the low?


  68. PHil – where do you like the USO puts here?  Yesterday I believe it was the March 138's…anything changed (oil's up a lot)


  69. Pharmboy 

    Thanks on AFFY


  70. LULU making new highs.  

    NFLX up 22% – can't wait to short them!  CMG, of course, up more.  

    No/Flips – Just because your friends got away with fraud doesn't mean it doesn't have to be paid back.  YOU are paying it back through the bank write-offs that the Fed is now back-filling with your money.  This is how the rich steal from the poor and if you are too "moral" to play that game – Mitt Romney says you are just a loser who can't compete in modern society because they "deserve" their gains that were legally obtained by clever people who simply knew how to move money around and they should be rewarded, both on Earth and in Heaven, which even now is raising it's cover charge to $2M liquid.  

    Mitt Romney

    Good charts StJ – reminds me why I can't find any good bullish plays – as does this: 

    NYMO

    Manipulation/Roro – It's funny how obvious it is once you start looking for it.  They are amazingly good at timing their statements around events that help them accomplish their goals.  

    Available/Dennis – Done. 

    Next AAPL/Kallen – Probably a solar company.  You have to realize (sorry Pstas, more tin hat info) that the oil, coal, natural gas, nuclear and utility companies ALL lobby against solar energy and lobbying includes not just getting Congress to withhold funding and conduct BS investigations into any misstep in a solar program, but funding PR people to do whatever it takes to make sure solar energy is kept on the back burner.  Why – because it's free.  Not only is the sunlight free but the damned cells last 20 years or more – where's the repeat sales?  I'll bet you have a 20-year old solar calculator that still works in a drawer somewhere.  That little strip in the front made it work in any room there was a light bulb on.  Don't you think we've made a little progress in the last couple of decades?  Every possible effort is made to defund and discredit solar energy because there are Trillions of Dollars at stake from the entrenched energy complex that will lose out once it take hold.  

    Speaking of which: 

     

    Energy-efficient windows are melting my Prius, woman says

    They talked about this on CNBC this morning and Joe said this is a great example of how "stupid" all this green energy stuff is.  The propaganda is deafening on that network…

    F'ing You/Jabob – Ah I love the smell of capitulation in the morning.  Smells like… opportunity.  Some day this rallys going to end. 


  71. Can't pull my hedges because that will trigger the top.  Rolling them is burning me out.  Crazytown…


  72. Man, that was an about face by RIG……wow.


  73. Jmm/Stj:  Nice comments on NOK, I could use a little creative thinking right now.  Euro looks toppy right now, coughing when it gets aboove 1.3160.


  74. Wow, the NYSE is down 1% according to my screen. Hardest index to manipulate.


  75. lows should be in right, can't have ANY type of correction and with the Spy down .05% must be time to buy!!


  76. PORTUGAL is going to get anther bail..CDS up another 5%..pass the Mateus


  77. Pharm – do you see this as a good day to add PLX? Are you using options to enter? Thanks


  78. Stj, 25KP looks up to date to me. Don't see any missing trades.


  79. i have thought about this inflation targetting that the fed is putting into place..explicit targetting that is..if the voting members get a little less sanguine you will see QE3…my FIRST prediction that its coming…i believe around APRIL


  80. morx – I have the Feb $7.5 Ps sold.  I like the action in here, but one thing I noticed (too late yesterday) was a huge block that must have gone through right at the open, as the stock dropped to 5.19 (and they did it in the AH as well).  You could see the Feb $5 puts for a starter, as I am not sure what is going on with the stock right now.  They are talking in San Diego at a conference, but it is nothing new.


  81. Yes I'm trading (still short) ($20.76)

     

    No, the roadmap is not obsolete yet !!

     

    See you tomorrow; good hunting


  82. Angel/QE3
     
    The next fed mtg is March, that was my timing and why I was not going to stay bearish out past that time frame instead the no announcement yesterday ended up biting me in the ass…BTW what is Mateus??


  83. Dollar bounced off 79.20, oil topped out at $101.39, gold $1,732.20.

    Don't forget, a little sell-off is timely with a 7-year auction coming up.  

    XRT/$25KP, Mampcs – I hope you didn't stop out.  Waiting for Monday to capitulate.  We try not to stop out on spikes, of course. 

    Anti-bot/Checho – It's not just the program, you need co-location and, of course, Billions to play with.  I agree it's untradeable, that's why I've been saying CASH all year but people trade anyway.  It's fine if it's gambling money you can afford to lose but people trying to INVEST need to learn when to sit on the sidelines.  

    Fed/Acobra –  I need a TV show, so I can get press passes and interns and such – THEN we could have some fun!

    Literature/Jerconn – Yeah, all that useless liberal arts training still oozes out from time to time.  8)  

    $25KP – Ouch!  I'm sure it's better already.  

    • MA Feb $305s now $1.05 and worth a DD to 10 at net $1.35. 
    • Otherwise, all looks holdable to me. 

  84. Sage:  Mateus was the Chateau Margaux of my college dorm in the '70s.  


  85. Looks like the NYSE print was wrong on IB. Shows down only .05% now.


  86. Flip/Phil/Bankruptcy
     
    I believe that if the bankruptcy trustee discovered that these filers had undeclared assets such as overseas condominiums, they would be in a Martha Stewart situation subject to possible perjury charges.


  87. bought one near GOOG call and one near AAPL put. See what happens there.


  88. Phil………i think your liberal arts training is a boon to the conversations here. difficult to find too.


  89. the only short i have right at the moment is short AUD/CAD……equal opportunity play regardless of FEDerventions


  90. Phil, in your post, the $12, isn't that supposed to be $22? I may be dumber than a Fox viewer here….


  91. AUD-CAD/Roro,
    The pair isat the top of the range.  Is that your logic for the short?  Have you factored in any implications if oil has a mini crash ie, will CAD suffer more?


  92. Do we not talk about the BDI being at 784, the lowest it's been pretty much ever, save a month in December, 2008?
     
    Those may promote anti-bullish thoughts so I better just forget about that completely!!


  93. AA / Phil – I am not sure you can use P/E with AA as a reference. It has been all over the place in the last 10 years. Here is a summary from MSN Money:

    In 2008 it went as high as 100 (average for the year)…. The other price ratios are also unreliable.

    Right now they might be benefiting from many factors including good airplane sales for example! Who knows…


  94. checho…………..selling it off of the top is part of it. if OIL sells off so will equities and the usual correlation with that pair is a nice range to the downside on a sell off.
     
    if equites get slammed, which looks doubtful with the implied QE forever and whenever then the 2 commodity currencies can fight it out, but i kind of think the interest rate differential is likely to move in favor of CAD whether the RBA cuts or not as I think the BOC is pretty much made it clear no more cuts coming.
     
    i have been playing it in and out for several weeks.


  95. Phil, two questions…how do we go short on USO ($138 March puts?)…second question: if you are bullish on financials, why buy MA puts?


  96. AA / Phil – What is more worrisome on second thoughts is the price/sales ration currently at 0.45. That's my favorite number as it cannot be fudge as much as the P/E. Currently it's really low and that's not good even historically for AA. Either sales rebound from here or the stock go lower!


  97. checho……AUD/CAD again…….i have a risk free trade at the current short price of 1.0650 since i have taken profits over the past several weeks on the in/out or hit/run trades that Phil mentions as a way to trade.
     
    and, because it is priced at the very top of a historic range and the fundamentals between Australia and Canada are more or less on the smae page then irt looks a lot more like a pure trade in this environment as opposed to having to guess when the and how much the next FEDervention comes and where this silly buying may suddenly stop.
     
    and, because i have accumulated a higher price from previous trades i ca also scale in if it moves higher………i really can't see AUD running away from CAD so low risk short to me.


  98. Phil,
    What is your thinking on GGLL/gold and our options?


  99. TNA rocket man.


  100. That chart seems to confirm what we think…. manipulation in the AH trading!

    http://www.bespokeinvest.com/thinkbig/2012/1/26/after-hours-vs-the-trading-day.html

    Below is a chart showing the rolling 50-day average gap (prior close to next morning's open) for SPY as well as its rolling 50-day average open to close change since the start of 2011.  From January through October of last year, the market was mostly moving in the same direction outside of regular trading hours as it was during regular trading hours.  Since then we've seen some big shifts in these performance numbers.  Over the last couple of months, the market has averaged gains in after hours trading and losses during the trading day.  Who knows how much we'd be up if the market was actually gaining when it was open for trading.


  101. Sorry, GLL.


  102. Jabob,
    I have a problem.  I wanted to FU EDZ.  But then I saw you "FU ME".  Then I said to myself.  If we keep FU everything, now even ME, pretty soon, we are left with nothing to FU.  And then what?
    :)


  103. MITI – WHOO HOO…


  104. AUD/ CAD/ Roro
    Sounds good, one last question, what do you think is the current out-performance of AUD vs CAD attributable to then if there is a possibility that RBA may ease in their next session?


  105. Hi Pharm any take on AMLN for a Feb 10 c sale thanks


  106. STD/Phil – any thoughts on Banco Santander down here? div over 10% at this price. may have found bottom at 7.. unless STD is on the short list for implosion?


  107. Speaking of the NYSE composite, can someone explain that 85 point gap up at 11:00? Is that some sort of adjustment?


  108. cwan,
     
    I guess then you could FUrself? jk
    ;-)


  109. Pharm — That's spelled "Mai Tia", but it's a bit early :)



  110. And here is a chart Romney can relate to…. also from Barry. I am quite certain that this trend cannot continue in the US without creating some big problems.

     


  111. owed/BDC: actually you loaned the bank $10 first at 0% and they loaned you back $10 at 10% so the $10 principal technically cancels out but the spread in the interest rate remains.   But yeah, I had to draw a flow chart on a notepad too… argh, no better than a Fox viewer :( ((


  112. More cold comfort – Options Express is calling for a bear spread in gold as short-term overbought.


  113. You are the Yoda of FU, jabo!


  114. And maybe, but maybe we have seen a top….

    http://www.bespokeinvest.com/thinkbig/2012/1/26/bearish-sentiment-drops-below-20.html

    The weekly sentiment survey from the American Association of Individual Investors (AAII) showed that bullish sentiment rose to 48.4% from 47.2%.  On the other end of the spectrum, bearish sentiment dropped to 18.9% from 23.6%.  While this week's drop in bearish sentiment looks like a large shift, we would note that it doesn't even erase the 6.4 percentage point rise we saw in the prior week.  That being said, there have only been four other weeks since the start of 2006 where bearish sentiment was lower than it is now.  Two of them were this month, and the other two were in December 2010 and January 2011.


  115. Gold/ Zeroxzero
    Gold is the truly unknown of everything in the mix.  Paulson the hedgie honcho apparently has the biggest position in GLD the ETF for gold and given his under-performance in other investments is heavily reliant on GLD to perform


  116. Pharm – I Know the review for PLX got delayed but when is the next big date for them?


  117. checho……….AUD/CAD is in an ascending channel back to late Nov 2011 from 101 which had come down from the 1.0650 where it is back too today
     
    what i like is that it is steady and i think that is because the ec metrics between Austarlia and Canada are close.
     
    AUD is the risk currency traders look first, i think. it tends to be more volatile against other counterparts with wider swings like against USD depending on the market psychology.
     
    maybe RBA will maintain its rate or not but i doubt the yield differential advantage that AUD enjoyed is coming back so it is kind of reverse psychology……….and, then there is China and questions over its hard or soft landing.
     
    i am playing very cautious for the time being as i cannot get a sense of order in the market with all of the intervention distortions drowning out fundamentals and low volume rallies
     
    technicals are into way O/B on it, and it is at the top of its range.
     
    NASDAQ ids just not cutting it here…….2460 down 20 points. just noticed. FTSE also seems to be having a real struggle to get over the 5800 mark and has been a real laggard compared to other indexes even Spain and Italy.
     
    this environment since the FOMC yesterday is starting to feel like QE2 and the subsequent POMOs which were free money buy the dips trading that just blew technicals and fundamentals out the window.
     
    the other thing that concerns me for shorting is the money flowing out of Europe looking for a place to hide. a friend whio is in real estate dev told me 2 weeks ago that Canadian banks have so much European money being deposited that rates would come down and that is exactly what happened.
     
    same for AUD i imagine.


  118. PLX – May.


  119. zz/mateus
     
    Thanks it was milwaukees best (the beast) for me in the dorms


  120. INHX – selling Feb $10 Puts.  BMY ain't gonna back out of that one.


  121. checho…………short answer……..AUD/CAD at the top of a historic range is a low risk hedge against an equity correction. a very good hedge, i think


  122. This is what, Mitch McConnell, said on Tuesday about, Obama's, State of the Union, that he has not delivered yet: "Based on what the president's aides have been telling reporters," McConnell said, "the goal isn't to conquer the nation's problems. It's to conquer Republicans."

    In the video below, is what he said after the GOP took the house in 2010.
    Got hypocrisy anyone??????????
     
    http://www.youtube.com/watch?v=W-A09a_gHJc


  123. UTHR/Pharm – "Spiking Lower on FDA Notice… "   do you know what's up here?  


  124. Thanks Roro, you make a good case and the logic fits,  If I remember correctly at some point, maybe a year or so back, Phil wrote an article on currencies and I think he picked the loonie over the AUD as his choice.   I'll try and find it on this site, it should be somewhere in the archives.
    Cheers


  125. Rustle123
    Great post on the 30 companies that spent more lobbying than the paid in income taxes! 
    I believe one of the solutions to our problems is to eliminate lobbying and implement public financing for All elections!


  126. Generic remodulin – their flagship – someone is filing a generic version.  Patent runs out in 2014 or so.


  127. McConnell / Rustle – What, the audacity of Obama…. trying to defend himself!


  128. l4 – companies are people….lobbiests are people…..therefore people hire people to talk to Congress people….They are creating jobs!


  129. AUD/CAD/roro – are you taking this as a position/swing trade over days or just during day. what size stop do you favor?


  130. Could this be a sign of a possible top?


  131. Bove/StJ – Yeah, I saw that – amazing that guy has any credibility left.  Kudlow is just another Conservative pill-popper that gets a pass as long as he agrees to be a clown for the Kochs.  

    "Hard to believe my IPhone will be able to do that much more"/Kallen – That's because you haven't seen the plans for the Igasmatron.  

    LOL Angel!

    Bonds/Kallen – I don't play with them too much but I think the Fed is very serious about keeping a floor on TLT at $116-117 and that means TBT goes nowhere except for the occasional blips.  My only interest in TLT is to short it when it's over $120 but I guess you could go long at $116 too but only a game for in and out trading. 

    MON/Zip, StJ, Mampcs – I can't imagine any reason we would have bought back short MON puts, not that far down.  

    TZA/Smala – Still $1 – good time to roll.  You have $1.88 left in the $26 calls and they are a bit out of the money so I'd spend .90 to roll them to the $22s ($2.80) and the short $38s are down to .85 and you can roll them to the Feb $25s (.55) for .30 so you are spending $1.20 more for $2.85 total to be in a much lower $3 spread but with a 2-month advantage on your caller.  You can set a stop on 1/2 the short calls at $1 and the other half at $1.50 and you can always re-cover, if you have to, with something you sell for $1.25 or more when the rally (in TZA) stops.  

    Sea of red/Mampcs – Red skies at night, sailor's delight, red shy at morning, sailors take warning…

    NFLX/Checho – $120 is the mid-point between the 50 and 200 dmas at $80 and $160 so it's going to be resistance, regardless.  If you want a fun play on NFLX, I like the June $75 puts for $4 that were $9 yesterday and $17 at Christmas. Just a gamble for now, something you wouldn't mind rolling and doubling down on maybe twice.  

    DB/Stu – Yes, it's like "Always sell into the excitement" because you short callers have no premium so not relevant from that perspective but the callers you want to roll TO have better premium because DB is heading up.  So, you get a better price on the March premium today than you got for selling it yesterday.  

    Durable goods/Ink – Well look at the chart, even with all that – it was only aircraft orders that were up.  I don't know why people can't figure this out from BBY and SHLD earnings – AMZN is not shipping and installing washing machines and refrigerators – that's why they call them "Big Box" stores.   That end of the business is way down because consumers are not buying the things they can put off and the money they don't spend on washers and dryers and refrigerators and stoves and couches and carpets is being spent on food, fuel and other crap that consumers HAVE to buy but it still leaves them enough extra to give the impression that other things are going up but, as Hayek says, the boom sows the seeds of it's own destruction and the bottom line is people simply CAN'T afford to buy durables or houses anymore and that market will not come back until people get jobs and the people with jobs get raises.  

    More air/L4 – I used to use the example that the Fed was like a guy who's pool has a leak so he gets a hose but the leak is faster than the hose can fill so he gets a bigger hose but all that water rushing out of the leak makes the hole bigger so the water keeps falling so he gets an even bigger hose – either the hole will magically fix itself or the pool will burst and all the water in the World won't fill it again until you build a new pool.  From the Fed's point of view – it's a self-fixing pool so they'll keep pumping.  

    Rosy/Pharm – You have to stop reading (and thinking) – it's the only way.  

    TZA/Mampcs – 5% is never a big deal when trying to fill a spread that pays 150% and, if the momentum is your way because we are calling a top, neither is 10% and you just have to move your stop/take action point up accordingly. 

    GS/Acobra – Yep, and Jamie Dimon said Greece default will have no affect on US banks.  I do agree with GS that RUT is the laggard if we are going up but, for the moment, I'm still thinking it won't.  

    USO/Jerconn – I like to be 21 to 60 days out with a .50 delta for shorts like that so Febs a little tight but the March $38 puts are expensive at $1.42 with a .42 delta so I will look at the Feb $39 puts at $1.25 with a .53 delta and the Feb $38 puts at .77 with a .39 delta and clearly we get great bang for the buck with the $38 puts so now it's a question of do we WANT great bang for the buck as it's also how you get banged in your head as it goes the other way.  So now I look for the day's lows (.66) and yesterday's high ($1.03) and that would lead me to offer .70 as oil holds $100.50 and, if oil breaks below, I'd buy 2x at .80 and sell half at $1 to get my .60 net entry anyway.  With the 2x, I'd stop 1/2 at .70 and buy 1x more at .60 for an average .75 entry – still not bad.  

    Triggering the top/MrM – If you have so many hedges that pulling them will trigger a top – you MIGHT be over-hedged!  ;) 

    NYSE – WTF was that.  It gapped up on my charts from 7,820 around 10:45 to 7,920 at 11.  These markets are just getting silly now. 

    Bankruptcy/JMM – Yes but how would he discover that?  That's the joke, the rich have money to pay lawyers and accounts to bury these guys in paper and unless you have a trustee with access to funds to chase people around the World, there are thousands of ways to put things off the radar.  I wouldn't even mention some of the tricks I've seen as they are terrible weapons in the wrong hands…

    Liberal arts/Roro – I flipped from pre-law to Business in college and took an extra semester because I just liked taking a variety of classes (plus I was having fun an my roomates were a year behind me).  I also used to go to Harvard a lot and audit classes my friends were in and they had some really amazing teachers there as well.  I doubt you can do it these days but I used to be able to just pop in and check out a class for a week or two and, as long as it wasn't crowded, no one seemed to mind.  

    $12/BDC – Sorry, you are, in fact, as dumb as a Fox viewer.  I borrow $10 at 10% so at the end of the year I owe $11, I then lend that $10 to someone for free and borrow another $10 at 10% to replace it but, ironically, it's from the guy I just gave $10 to.  When he pays me back, I have my borrowings down to $10 again but, on top of that, I now owe $1 to my original lender and the $1 I owe the guy I gave free money to who lent it back to me.  Try it at home with your kids – it's a great way to convince them to be bankers! 

    BDI/BDC – It's noisy now due to massive overcapacity of ships.  Of course that, by itself, indicates how far off track we are from where we thought we'd be in 2007, which is why having the market back at 2007/2008 highs is totally insane. 

    AA/StJ – Yes but that's why you don't want to pay high p/es for them.  It's the same reason that, historically, people never used to pay double-digit p/es for commodity stocks, builders, bankers or other cyclicals – because they ARE cycles and their earnings will swing up and down so there's always a risk to owning them – more so than regular growth stocks.  Somehow, that very sound logic has been washed out of investors and now, rather than paying less and riding out the cycles, traders stampede in when they are priced high at the top of a cycle and panic out when they are at the lows – MADNESS.  


  132. Pharm!
     
    Put down the pipe for a second!
    They should all be fired for failure to uphold and abide by the true meaning of Democracy and Captiallism!


  133. Pharm!
     
    Put down the pipe for a second!
    They should all be fired for failure to uphold and abide by the true meaning of Democracy and Captialism!
    (spell check)


  134. Pharm / People – Following your train of thought, I guess computers are people because they're built and programmed by people?  We should just call them Cylons already.  ;-)


  135. scottmi………..i am not using stops on this pair. if you look over a day chart you see the average daily range is around 50 or 60 pips.(a lot of times i use mental stops if it is an index or oil or a currency pair or if i hold overnight trades i may put exrtreme stops in case Iran commits suicide kind of thing)
     
    i usually hold a position for several days, but it depends on the changing circumstances, but over the past several weeks it has been usually several days.
     
    if it moves higher from here i will likely scale in with more shorts. i just don't think there is a legit reason for AUD to run away from CAD


  136. [From Spain] --The mood in Europe:   "An Italian, a Greek, a Portuguese and a German go to a whorehouse.  Who pays?"
     
    "The German."


  137. At least I'm reducing my loses by the hour, too bad i am all out of option buying power, those DIA puts should be really sweet by now


  138. Do you guys think we are going to get a lift tom. with the GPD number or is it already baked in?


  139. zero,
    I think that would be even funnier if you leave the German out of the setup.


  140. trannie v over extended bullish % for bptran hit 90% on tuesday..i am liking iyt for a short


  141. Phil……….that is so funny! so, i guess we crossed paths. i used to sit across the street from Harvard at the Au Bon Pain and look in.


  142. angel – "trannie"?  Oh, you mean "transportation"!


  143. Pharm / INVE – u still like this one?  i'm in the 2.5/5 april bull call spread.  any news event coming soon?


  144. 0×0 — Doesn't matter who pays, they're all f*cked.


  145. roro – thanks..!


  146. Phil,
    Regarding TLT and Fed keeping above 115/116, it was at 95ish in July and then climbed and stayed around 115 in October due to Euro crisis. What is the Fed pressure to maintain at 115 now?


  147. ZeroZero
    That's funny!


  148. USO/Jerconn – See above on those puts.  As to MA, thanks for reminding me.

    MA/$25KP – back to $1.35 now so we stop 5 back out and we're back to 5 with a lower basis.  


  149. Did anyone fill on the MA DD? My order is still active and TOS shows a low of $1.09.


  150. MA / Phil – hey Phil time for today's question :-) .  I am still stuck with the MA 290 puts.  What do you think will recover faster in a downturn: if i DD now the 290s or if i roll them to the 305?  Looking at the delta of both contracts, MA 290 is half of the 305, so by DD i could simulate it no? And it's also cheaper.  Looking forward to your POV


  151. Phil would you dare play upside based on the fed auction at 1pm?


  152. Phil
    Did you answer this question  ?
    Thanks, may have missed the answer
    scottmi
    January 26th, 2012 at 11:38 am       | PermalinkIgnore this user
    STD/Phil – any thoughts on Banco Santander down here? div over 10% at this price. may have found bottom at 7.. unless STD is on the short list for implosion?


  153. Rain:  Absolutely!


  154. Phil, Should we look at adjusting our B of A trade?


  155. SNDK seems to have been taken down a bit hard. Probably expectations of a larger beat based on AAPL's earnings.


  156. MSFT//another reason that msft doesn't have big legs….new xbox has anti-used game technology…..that will REALLY piss off college kids….bad for gme too


  157. Phil – sorry to trouble you, but I get the impression you don't have conviction behind those USO puts.  They were my idea, I thought oil above $100, let's short, but if you don't think it's a great idea, I don't want to put money on it…asking your advice…


  158. are we worried about the auction?


  159. Phil
    Would you suggest selling puts on NLY right now? If so, what strike?


  160. roro- i'll be watching that AUD/CAD. nice play today for retraction off 1.068! i'll look for another test there or further weakening.


  161. FTR getting hammered.  again.  don't see any news. 


  162. Hey Pharm! You know I was kidding you right?


  163. Find it hard to believe so many columnists come out with this "Hey AAPL won't last" kind of stuff.  They just blew the pants off everyone and their own estimates, there is every reason why they'll continue to do so, but you got these naysayers trying to make their reputations by saying it won't last.   The weight of reason is against these guys, I believe…but it's good that they spout off, keeps it low enough to buy the dips, I suppose…


  164. FTR – getting a year to two years worth of dividends on each $5 strike put sold .. i'll take FTR at 5 anytime this year at anything netting under current price (and have sold a couple puts today). 


  165. MA/Jerconn – I can be long on financials and still think MA is ovepriced.  They're not a bank, they depend on consumer spending and I'm pretty sure post-Xmas will not be so sexy but we're not even playing for earnings, just a nice drop with the market at some point.  

    AA/StJ – I think they are up because of aircraft and autos at the moment but it's not enough due to the new heavier use of composites.  Didn't they just shut down plants due to low demand?  How is that bullish?  

    GLL/Kallen – I think if something goes wrong in Europe and people run back to the Dollar, gold drops $50 overnight and another $50 after that.  

    50-day/StJ – That's a great chart.  Kind of says it all for this rally. 

    FU/Cwan – Perhaps this tutorial will prove useful to you

    STD/Scott – I often wonder if their symbol makes them somewhat less desirable?  I think with the Portugal and Spain issue, it's like one of those old hand grenades you find in a surplus store – do you really want to take it home and pull the pin because the burned out vet behind the register told you it was "safe"?

    1% trend/StJ – Oh come on, there's still 82% being wasted on the bottom 99%, I'm sure they can create some sort of market event to yank the money out of people's pension funds and come up with some scheme to get the Government to borrow Trillions of Dollars and transfer more of the people's wealth to the top 1% – maybe they can simply drive down the wages and prices they pay for goods and services from the bottom 99% by wrecking the economy and, if they are really clever – they can crash the housing market and destroy Trillions of Middle Class Dollars in assets which will allow the top 1% to swoop in and buy those homes for 10 cents on the Dollar – perhaps even backed with more Government aid (that is paid for by the taxes of the same people they confiscate the land from) to make sure they get maximum leverage and assurances on their investments.   Oh wait, that chart is from 2008 – never mind…

    I really do not want to hear any crap from people who are too bearish if they are not willing to take that FAS spread!  


  166. Phil et al,
     
    here are a few arguments for the sell off;
     
    - F Funds rate was already expected to remain low for extended period
     
    - no QE measures have been officially announced (although policy shift to much more clearly inferred)
     
    - inflation may hinder the FED from delivering QEs (once real inflation #s are admitted)
     
    so, any thoughts on the life span of the latest FED psycho faux intervention.


  167. scottmi……….you are right. right off the top of the ascending channel too. i got in this one early. took it yesterday post FED as a hedge, but still think it is a very low risk hedge for possible equity selloff and/or scapling 40, 50 pips.
     
    i think i will hold this position and add if it moves higher. 1.0650 is not a bad place to be short. imho


  168. INVE/Terr – not my recommendation….although I think they would be good for the Dept. of Homeland Security, no?  I think that is what the past episodes of NCIS is all about!

    l4 – kidding….I did not find that funny!


  169. FTR:  Implied dividend yield now over 16%. I am also tempted to add to my position and sell more puts. Given their asset base and high cash flow, I do not think bankruptcy is any risk, despite obviously very high debt levels. If they face cash flow pressure, they can easily cut the dividend. In fact, the stock would probably go up if they announced a dividend cut that would improve their dividend coverage.  I know it is scary to see 9 straight days of collapse in this stock, but they control their own destiny with the ability to cut the dividend to survive.


  170. l4 – back at'cha… LOL!


  171. USU must be getting a few bids….finally.  If you cannot remove it surgically, nuke it!


  172. wow CMG another ATH over 370. Craziness!


  173. FAS play – how about suggesting some other PUT offsets – the margin on the 65 puts is intense
    thanks


  174. FAS/Phil – hey i'm game for the BCS (though FAS burns me almost every time i play it seems!) but the margin req for the naked put is oh so onerous, as in totally unreasonable (even moving it down a few strikes)!  Any other plump puts you like to cover, with same March expiration?


  175. If no one is buying homes with 'record' low rates…where do we go from here?  Oh, I see Phil had a long winded comment on that one!


  176. Time to short (per David's chart)


  177. Pharm, that's funny! After your first reply I was just in the process of dispatching a "Waaaambulance" to your crib! Ha!


  178. That March FAS spread can now be had for $2.


  179. scottmi………just looked at AUD/USD.
     
    it hit and pulled right back off of 1.0680/90 the 76.4 fib from july/27/11 high of 1.1057 to the oct/04/11 low at 0.9397.
     
    200 MA at just below 1.05


  180. Demand for the 7-year auction wasn't nearly as strong as yesterday's 5-year or Tuesday's 2-year auctions. Coverage of 2.73 is strong for the 7-year issue but the high yield of 1.359 percent is more than one basis point over expectations which is a sign of weakness. The 57 percent of the $29 billion offering is a high share for dealers which points to weak participation from long term investors. Demand for Treasuries is easing following today's results.Demand for the 7-year auction wasn't nearly as strong as yesterday's 5-year or Tuesday's 2-year auctions. Coverage of 2.73 is strong for the 7-year issue but the high yield of 1.359 percent is more than one basis point over expectations which is a sign of weakness. The 57 percent of the $29 billion offering is a high share for dealers which points to weak participation from long term investors. Demand for Treasuries is easing following today's results.Demand for the 7-year auction wasn't nearly as strong as yesterday's 5-year or Tuesday's 2-year auctions. Coverage of 2.73 is strong for the 7-year issue but the high yield of 1.359 percent is more than one basis point over expectations which is a sign of weakness. The 57 percent of the $29 billion offering is a high share for dealers which points to weak participation from long term investors. Demand for Treasuries is easing following today's results. 


  181. sorry about the triple post up for some reason i was not seeing the pasted material in the box so i re did it


  182. Go ahead, make my day SPY….


  183. Ok, everyone at once…. Wheeee!


  184. Pharm, what's the deal with MNKD?  Up 7% today…


  185. Rain – I need about 18 more of these and then I will give you a wheee…


  186. Lobbying/Rustle – Isn't that sick?

    I like those charts RP – too bad they are so big – all should check out!  

    McConnell/Rustle – So sad that people can get away with that kind of two-faced BS and it doesn't affect their standing (probably improves it among the faithful) or create any kind of backlash in the media – nothing.  You can pretty much say anything you want to and then say the opposite with no consequences these days.  It's just sad…  My Father used to tell me that truth was slipping away from society and I was young and used to argue with him that of course there were truths and facts were facts but, now that I'm older, I see what he means – the change in my lifetime alone is just stunning.  

    Loonie/Checho – Yes but the year before it was AUD that I liked best.  I switched to Canada over uncertainty in Asia affecting Australia and last year I started liking the Buck better at 73 – now I'd say I'm back to Canada.  

    TZA/L4 – That's our trade.  

    Oh and WHEEEEEEEEEEEE!!!! 

    And this is only Dollar 79.50!  


  187. I've been looking far afield to explain market bullishness in the face of all reason, and concluded that it really is manipulation — and I'm pretty sure I've figured out where it's coming from: http://beforeitsnews.com/story/1670/675/NL/NASA_Evidence:_Alien_Spaceships_Patrol_The_Planets.html


  188. GLW not bad for some Jan 13 $12.5 calls/puts.


  189. LOL ZZ! 

    GDP/Danny – I don't see how we can hit the 3.2% expected.  Maybe I'm just dumb but I can't see where it's coming from.  Maybe inventories as builds in inventories are a plus and retail sales were disappointing so a lot of stuff piled up (there's the assumption that they wouldn't be in inventory if there wasn't a demand for them).  Also, it's a preliminary estimate and those have been shockingly inaccurate before.  

     

    • Economic activity rebounded in the third quarter after the weakest two-quarter period since the recession ended in 2009.

     

    Category Q3 Q2 Q1 2010 Q4 2010 Q3
    GDP 1.8% 1.3% 0.4% 2.3% 2.5%
    Inventories (change) -$2.0B $39.1B $49.1B $38.3B $92.3B
    Final Sales 3.2% 1.6% 0.0% 4.2% 1.7%
    PCE 1.7% 0.7% 2.1% 3.6% 2.6%
    Nonresidential Inv. 15.7% 10.33% 2.1% 8.7% 11.3%
    Structures 14.4% 22.6% -14.3% 10.5% 4.2%
    Equipment & Software 16.2% 6.3% 8.7% 8.1% 14.1%
    Residential Inv. 1.2% 4.2% -2.4% 2.5% -27.7%
    Net Exports -$402.8B -$416.4B -$424.4B -$414.2B -$458.7B
    Export 4.7% 3.6% 7.9% 7.8% 10.0%
    Imports 1.2% 1.4% 8.3% -2.3% 12.3%
    Government -0.1% -0.9% -5.9% -2.8% 1.0%
    GDP Price Index 2.6% 2.5% 2.5% 1.9% 1.4%



     


  190. This little girl was asked to count the Obama's terms in office…
    http://www.youtube.com/watch?v=666SkQlRIt8&feature=related


  191. FTR I can't find any news either. Maybe its because T is down??? However once it broke $5 many funds cannot buy at that level. Am considering watching for DD as I did a B/W at  $7 and bought the $5 calls back when they were cheap so I'm uncovered now but absorbing the rundown. 


  192. PHIL whats up with PRU?


  193. scottmi / GLW — The 10/12.50 bull call spread looks better for $1.65 financed with the $10 puts at $0.80 gets you in the $2.50 spread for $0.85 with a cost basis of $10.85 if put to rather than $10.75 just selling the puts.


  194. No clue.  Would not touch them.  Well, if they were $10, I would short….


  195. WEF Risks Chart/Phil – well i am happy to see that global governance failure, species exploitation, and water and food crises are all expected before any major systemic financial failure. GO FAS! 


  196. Its quite funny, in CNBC they have gold, oil and netflix on the revolving on the ticker, all the majors :-p


  197. WEF Risks – p.s. anyone know what 'global governance' is anyway? and what a "failure" of that would be? Our alien overlords pack it up and leave?


  198. If we can't break through the support trend line now at IWM 78.96, I would consider taking profit !!

     

    Or, if we break North of 79.20ish, same !!


  199. scottmi — Pack it up and leave? No. They'll land and address congress. :)


  200. Oil is closing on the PP for the day…. better be careful around here.


  201. FTR/Neverworkagain,
     
    Jan 2013 buy/write, $4.60, sell Jan $3c for $1.60 and $5p for $1.30, net $1.70/3.35 and if you are called, you make $1.30 on a $1.70 acb…  the numbers look nice but I am not familiar with the company.  What is the yield on the acb of $1.70??  assuming I haven't made any math errors here.


  202. Time Traveler From The Year 1998 Warns Nation Not To Elect Newt Gingrich
     
    http://www.theonion.com/articles/time-traveler-from-the-year-1998-warns-nation-not,27178/


  203. Didn't play my FAS strangle today (I was pissed I missed the downturn early on) but I am glad I didn't. Down $4 from the highs, that would have been hard on the put side…. Tomorrow is another (weekly OpEx) day!


  204. LOL Rustle….


  205. Rainman – i LOVE that movie! :-)


  206. FTR / Neverwork – Man, you have some courage swimming upstream here. They were at $10 a year ago! Momentum is not your friend here.


  207. stjeanluc / FTR — My thoughts exactly. Nasty, nasty chart. One up month in the last 8.  I'd wait until they turn and with only 7.5% short interest, I doubt it'll be very V shaped or fast (unless they get bought).


  208. FTR / Rainman – Of course, there is always the chance of being the early bird, but that 5.9% dive today reminds me more of AIG than AAPL!


  209. FTR/stj – sure as heck right has been relentless erosion.  do i think FTR will still be around in a year with vast regions of people using them as their phone/internet provider? yep. in two years? yep.  and so does Blackrock who bot 5% in december, and FTR directors who have just acquired (been granted?) phantom stock units at $4.53 and $5.15..


  210. JRW, have you been short all the way from IWM 79.80 or did you get out at 79.10 (11:00 am) and then get back short again?


  211. Does anyone like TVIX at its current level of $17.68?


  212. FTR / Scott – I really hope it works out for you. 


  213. The level of complaceny in this market is just stunning.  The tomorrow QQQ 60 puts are only .17, as if the bots will under no circumstances let this market drop; just a few months ago I could buy those on a Thursday (for a much higher premium) and still make 500% the following day.


  214. Speaking of the VIX, looking at the Feb options and volume, we can see that the 27 puts and calls have the highest volume. OI is highest at 35 right now. Of course there could be a lot of call selling. But that's 10 points above today's level.


  215. FTR/stj – yeah, me too! not, of course, going "all in"..! just set up more CB lowering puts as previous ones expire. can't bring myself to sell calls at this level.


  216. stjeanluc
    Are we still holding the FAS jan4 81 until tomorrow or do we close I actually hold the 82c sold for 1.11 now .37 ???


  217. nasty reversal in oil


  218. FTR:  Sure, the chart looks terrible. But this is a broadband / fixed line telco with $650mn of cash flow a year now, due to a big investment cycle which ends next year. Their dividend costs around $750mn a year to pay out, but when their capex drops next year, the numbers will look much better. I looked at their debt repayment profile which looks quite manageable. I am accelerating my usual scale-in here, and will back into more at $3.50 via puts if we get there.  So, if I'm taking a stand that the company is not going to go bankrupt, then I'm less worried about having to wait for price momentum before I scale in.


  219. Mike Luckovich cartoon: Romney’s tax return


  220. FAS / Yodi – That's FAS Money, Phil drives this one. It's showing a 50% win now. I would take the money, but there is a chance that this continues tomorrow. I'll let Phil roll the dice on this one. The FAZ put is also looking good for over 40% now!


  221. angelcur / ener1 — Oh, that's classic!


  222. Ener1/angel -  i may have to actually listen next time obummer speaks and buy puts on whatever he touts next!


  223. FTR – Still, they are not cheap at with a P/E of over 20 (and forward over 19). VZ and T trade at forward P/E around 13. Growth is much faster at FTR so that could justify it. But how long can they grow at the level. Also, VZ and T have better price/sales ratio which is my favorite ratio as I explained above. 

    But like I said, I hope you guys are the early birds and prove us wrong! 


  224. Phil:  Below is my question regarding my EDZ ,TZA  and VXX hedges from yesterday and your answer.
    Just to be clear, are you suggesting that I sell the long half of the February BCS and leave the short calls naked until expiration, using  the proceeds to roll down the April long calls (leaving the April short calls alone)? Or are you suggesting that I completely close the February call positions, long and short, and use the remainder to roll down the April calls?  Given how cautious you've been about this move up in the market, I wonder how risky it is to leave the February short calls naked?  Your point about letting the short puts expire worthless or rolling them is clear. 
    Generally, if the market is moving up, how much should I let these sorts of hedges deteriorate, percentage-wise, before rolling them forward a month?
    Thank you again for your input on this.
    January 25th, 2012 at 3:46 pm | PermalinkIgnore this user
    Phil:  My hedges are below.  I'd appreciate any suggestions regarding adjustments after the market closes when you have more time.  Thank you.
    EDZ Feb 16 /20 BCS @ 1.35, now .30 offset by short Feb 15 puts @1.18 now 1.85
    EDZ Feb 18/23 BCS @ 1.28, now  .15 offset by short Feb 16 puts @ 1.03 now 2.65
    EDZ April 14/19 BCS @ 1.4, now .95, offset by short April 13 puts @ 1.21 now 1.50
    EDZ April 15/20 BCS @ 1.65 now .70, offset by short April 14 puts @ 1.25 now 2.10
    TZA Feb 24/28 BCS @ 1.09 now .37, offset by short Feb 21 puts @ .93 now 1.33
    TZA April 26/38 BCS @ 2.17 now .98, offset by short VLO Jan 15 VLO puts @1.45 now .75
    VXX Feb 29/33 BCS @ 1.19 now .61, offset by short VXX Feb 27 puts @ 1.18 now 1.86
    Hedges/John – Not a lot you can do when you slip that far down.  You can pull the calls out of the EDZs to get a little extra (and leave the naked puts to hopefully expire worthless) and then use that cash to roll your April calls lower and just hope that pays off.  TZA is the same deal, you can still get .62 for the Feb $16 calls and that money pays to roll the April $26 calls ($1.81) down to the April $23s ($2.42) and there you go.  You're only down about $1.50 that way with TZA at $21 so not much of a move up and you're in good shape again.  All your offsets are aggressive so you'll have to roll them but next time, try just having one position and working that one by rolling, etc, rather than 7 with 21 different things to adjust that all actually are the same bet (market down) anyway.   Look in the Income Portfolio – we have 2 hedges against the whole portfolio – when we want to get more bullish – we sell against one of them and we're done in 2 seconds.
     


  225. I will dance if that POS CMG will ever be RED!!!
     
    FU CMG!!!


  226. TLT/Kalllen – Higher TLT is lower borrowing costs.  

    MA/Jrod – The very act of me mentioning something creates a demand for it, right?  You can't expect to get every fill at the price we want but you have to understand the point of what we're doing.  We were doubling down on MA to lower the basis on what we thought was a spike up.  If you paid $1.10 instead of $1.05, you would have a $1.375 average entry (down from $1.65) rather than a $1.35 entry so it's a 2.5 cents difference, maybe less than the trading fee.  If something is not trading heavily, I can only call out the mid-point between the bid and the ask when I see it, if it's actively traded, I point to the last sale but if someone before you jumps on the trade with a market order, they fill at $1.10 and if someone else does the same soon the bid/ask is $1.10/1.15 or maybe $1.10/1.20.  The main point of the virtual portfolios is to learn how, when and WHY we make these trades and adjustments so you DON'T have to follow someone else's picks and you will learn how to create your own bargains.  

    MA/Dpast – You can't do that.  Those are out of the money and now they are way out of the money with a .05 delta so a $10 drop in MA will give you .50 – is that going to be enough?  $10 is the bottom of MA's recent range – if you can't see a clear path to getting your money back – what's the point?   The $295 puts are .75 and if you want to put more money in, you are better off with the March $350/345 bear put spread at $2.10 as you add $1.40 to maybe get $2.90 back and you can just stop out at $1.50 if it moves against you and you're no worse off than if you DD'd on the long-shot and MA shot up.  

    Upside/Sage – Well my answer would have been no anyway as I have said many, many times – who in their right mind would lend us money for 7-years at 1.3% (or 10 years at 2% or 30 years at 3%)?

    STD/QC – I did above. 

    BAC/Rip – Which trade?  The One Trade?  Wasn't the point not to touch it for a year?  

    USO/Jerconn – Nothing of the sort.  I love shorting oil!  Down to $98.50 at the moment, anyway.  I think I said last week, we short at $100 and then $101 and $102 and at $103.50 we back up the truck for shorts.  That's the range – $103.50 to $98.50 at the moment so the closer to $103.50, the more we like the shorts.  

    NLY/L4 – Prices are terrible at  the moment so not really.

    FTR/Terra – Not liking T's earnings.  

    AAPL/Jerconn – After a while, they do become a large-cap like GOOG or MSFT or IBM or XOM – sure they can do well and come up with new stuff but it gets harder and harder to move the needle.  If MSFT had started XBox as a separate company – it would be as ridiculously valued as NFLX or Facebook right now but, inside MSFT, it's just another contributor to earnings that are multiplied 11x for valuation.  

    Lifespan/Roro – I was figuring through the weekend and then, without more stimulus from Europe or Asia and letting the pundits have at the QE program, the bloom would be off the rose by next week.  

    FTR/Never – I agree but look at S – never say they can't go lower. 

    FAS/Edro, Scott  - Didn't we have some on Tuesday?    JPM is my usual favorite in that sector, April $35 puts can be sold for $1.30.  GOOG puts are fun but margin intensive too.  EDZ March $14 puts can be sold for $1.65 but that's bearish too – I just think they are crazy cheap.  CHK still reasonable at $22 and you can sell 2013 $17.50 puts for $1.80, margin on those is just $1.75.  Keep in mind the crappy VIX make it hard to sell good puts and, as I said above, if you buy it for $2 and put a stop at $1 to try to make $3 – the offset is just greedy anyway. 


  227. HSP/Pharm – familiar with these guys at all?   


  228. Greenspan in FT today [yeah, boo, boo]:  "Anti-capitalist virulence appears strongest from those who confuse “crony capitalism” with free markets. Crony capitalism abounds when government leaders, usually in exchange for political support, routinely bestow favours on private-sector individuals or businesses. That is not capitalism. It is called corruption."


  229. MA / Past – Thanks Phil, clear. Now i just have to decide whether i want to throw in more money.


  230. the president is so teflon now gingrich is losing to romney who will go down like a butter augur…this is like Portugal..where if the people are lucky they won't have a goverment to implement austerity..and Finland who if THEY are lucky won't have a government to ratify it..we are in the same position no goverment just might be wonderful..


  231. HSP – yes.  At these prices, I would start by selling a few puts OTM.  Man, P/C ratio is 3.8:1….yikes. 


  232. Can the home builders plz implode.  Thx.


  233. JR/Short

     
    What's the target if we break through .96……78.57?


  234. HSP reminds me of Genzyme (X2).  Just start small, and be ready to roll/DD.  The manufacturing issues are going to hit them for a while, so P/E is 22 now, may rise some.  If the stock starts to rally, then it will be fast and furious to the UP side due to short covering.  I would start with the May $30s.  The Feb buy write looks very attractive at $35…..


  235. SPY – phantom bar up.   132 target or phat phinger?


  236. JRW
    Looks like Mr Market busted through IWM 78.96!


  237. Phil--do you have an opinion on CJES?


  238. exec
    The spreads are close, we bounced off the 78.78 line, get out if your short.


  239. My cousin afarmer in Iowa has been running his pickup truck on "natural gas" for at least 30 years….. some tractorstoo…


  240. Angel:  There's no way Republicans are going to win with anyone.  The "silent but impoverished majority" have gotten the message that someone not them have gotten rich while they've become poorer.  Obama, perhaps quite cleverly, disappeared from view from three years, then showed up when the economy appears to have bottomed, declaring "it's time to tax and take down the 1% who profited from your misery."
     
     It doesn't matter whether it's true — particularly with the odd collection of dog and cats the Republicans are offering up.  My respect for Obama as a master of political timing has risen from near-zero to near-100% after that speech — it's timing, more than anything.  The disappearing act was a stroke of genius — not a single awkward sound bite for a Republican to quote during the long U.S. economic slide. Now he's back and flogging the plutocrats in the classic populist demagogue manner.  Newt Romney is toast.


  241. Aliens/ZZ – Do they have any money? 

    PRU/Angel – Low Fed rate is murder on Insurance companies, who must invest very conservatively.  PRU also had some management shake-ups so maybe some internal strife as well and they have some lawsuit – I don't follow them too closely. 

    WEF/Scott – Well you can't print food and water, that's the difference.  I'm pretty sure Global Governance has already failed but I believe they mean that each individual Nation sees their Government as failing them.  

    LOL Dpast – Good observation. 

    I wonder if Bespoke would make a chart of oil during market hours vs after hours – I'll bet that chart makes the SPY chart look like it's well-correlated.  

    Newt/Rustle – I think they stole that from one of my comments:  

     "In the late 20th century, Newt Gingrich is a complete disgrace!" said the time-traveling man, warning Americans that 14 years in the not-so-distant past, Gingrich becomes the only speaker in the history of the House of Representatives to be found guilty on ethics charges, and is later forced to resign. "In my time, he shuts down the federal government for 28 days because his feelings get hurt over having to sit at the back of Air Force One. Gingrich gets our president impeached for lying about marital infidelities when, at the same time, Gingrich himself is engaged in his own extramarital affairs. And for God's sake, he divorced his first wife after she was diagnosed with cancer. Won't anyone listen to me?!?"

    Qs/Mr.M – That's just the kind of thing you should be looking for – mispricings like that are great opportunities.  

    Thanks for that great example of how the PR machine jumps on negatives around solar energy Angel.  

    FAS/StJ – I'm a target guy, on track so far.  


  242. FAS/StJ – I'm a target guy, on track so far.
    Phil Do I not hear you not to be greeedy?


  243. FYI, three of the last four Fridays were down days.  One can only hope…


  244. Stick.
    Who could imagine?


  245. DJI volume 93M with 20 mintues to go. Is today a holiday?


  246. Phil
    Just watching IWM your call was perfect, who or why some large purchases now!


  247. Jabo / CMG - this turkey, which I have been short forever, has broken through a resistance line that it has bounced off of four times, check the chart.  We are doomed…


  248. 3% !!  Boring, but X 240 trading days…………………………..

     

    See you all tomorrow !!


  249. FAZ took the money off the table


  250. Shadow

     
    What do you mean by the "spreads are close"?


  251. Whachu talkin' about Willis (mrm)?  Up days on SPY!  And I think SHJ said tomorrow leans up as well.  But, "help me OB1 Kenobi, you're my only hope!", no?


  252. HSP/pharm – a lot of feb 35 puts written today!


  253. What a boring day. Even the stick isn't exciting.


  254. exec
    That turn was so perfect, I hope you noticed what happened and got out. Clasic JRW and then some!


  255. I did….but back in now.


  256. Obama / Zero – Andrew Sullivan makes the argument of Obama's long game in Newsweek and maybe he is right. Remember, this guy had no chance against Hillary Clinton. And John McCain self destructed nicely. Patience, persistence and some charisma can go a long way I guess.


  257. Scott – yes there were, but I am not sure why…so that is why I said out and down.  You can start small there, but not worth the risk as the Mays are the same price, and if things go south in the market (most likely not), then to me the risk is too much.  I will do a  few of those as well.


  258. Aflac Posts ‘Biggest and Best Year’ in Japan, Chief Amos Says

     
    Aflac is scheduled to report fourth-quarter results on Jan. 31. The company, which uses a talking duck mascot to promote policies supplementing work and government health coverage, posted a 14 percent gain in Japanese sales for the nine months ended Sept. 30. Amos declined to give targets for 2012.
    “The stronger the numbers are for this year, the harder it makes next year” for growth, Amos said.


  259. well no volume as usual so that means that the magical sloppy buyer gets his way and enforces the MSB's first commandment "that the markett shall never close on its lows!"


  260. Let's see tomorrow how many happy bulls are willing to hold over the weekend.


  261. Hedges/John – Yes, I was saying generally to save what you can from your Feb calls and use them to improve the April calls – not as profitable a move now as it was yesterday afternoon or this morning but still the logical way to go.  If you have the margin (and you'd better with all those positions) then you can leave the callers open with reasonable stops.  It is risky, but you were worried about it going up on you yesterday, now down???  The rule of thumb is make a move before you lose 50% on the spread.  At that point, most of your original cash is still in the call you own and you can move that (as it's now out of position) to a longer-term spread with a better strike while you wait out the result of the short call.  If you have to stop out the short call – it would only be because your new spread is more in the money. 

    Greenspan/ZZ – He's strange.  Sometimes he still says great stuff like that but other times, it's complete nonsense.  Age, I guess – or just sleazing for a paycheck…

    CJES/Jabob – Yes, I think it's an ugly combination of letters in a symbol.  Other than that, I have no idea what they particularly do.  It's a good sector but the juniors are always a crap shoot.  These guys don't have financials on Yahoo and a lot of their "news" comes from PR Newswire – so I don't touch them – that's a nice, simple rule.  

    Silent majority/ZZ – I agree.  Even the oldsters in Florida have finally figured out the Reps are bad for their health and pensions.  

    Greedy/Yodi – We can discuss later but when you are selling premium as a business model, then your JOB is to squeeze out as much of that premium as you can every week.  Over time, the targets take care of themselves but your JOB is to collect the premiums.  You are acting like you have a bar but you never sell a guy two beers because you're lucky you sold him one.  It's a bar, you sell beers – keep selling beer if they want to drink!  

    Less volume than yesterday so far.  

    And what Rain said!  

    IWM/Shadow – They have to try to paint the tape.  Europe will not like this at all tomorrow morning and China was already a disappointment today so who knows what tomorrow.  

    AFL/Kinki – Now there's an insurance company I do like.  

    All this with the Dollar at 79.54 – what a catastrophe if the Euro fails again.  


  262. That's for AH trades angel…come on!


  263. FTR/Never – I like your analysis on this one.  Bought @ 1.49 and sold Jan 14 3P for .60, so net 3.89/19.5% dividend yield. Not willing to sell calls because this play is attractive enough and don't want to limit the upside if the company is sold.  Clearly CapEx and payout ratio is key here, as well as the market value of their assets if acquired.  Hopefully management will know how to manage cash flow….clearly they haven't managed the stock price!


  264. Damn typo's….Bought FTR at 4.49!


  265. Annnnnnnnnnnnd – we're back to Monday's open.  


  266. Phil OK got you on the beer!!!!


  267. I cannot believe that ANYONE would take a Gingrich candidacy seriously.
    The media have made this guy newsworthy and like sheep those of you who do, y'all follow their lead.
    You CAN ignore the guy.  You can NOT give him one second of your time.  You CAN do this, people.


  268. Apparently it's not just Zero who is short the euro…

    http://ftalphaville.ft.com/blog/2012/01/26/853631/socgen-hedgies-short-euro-against-dollar-like-never-before/

    And getting longer treasuries…


  269. 130M on the Dow at the close was another big surge and that didn't give us much of a move but now that the markets are closed, the Nas and RUT jump up.  Would be funny if they weren't ruining people's lives with this BS.  

    Beer/Yodi – I thought you'd be able to relate.  8)  


  270. FTR:  One other thing I noticed is that their vast array of bonds trade very healthily, particularly in the last 2 months. Bond prices are up, and yields down. If there were operational problems coming down the pipe, the bond market would sniff them out, and that isn't happening. But I was thinking about it, and maybe what the bond market has been sniffing out is a dividend cut, which would be GOOD for bonds and the financial health of the company, and less exciting for equity holders. But I think a dividend cut (say from $0.75 to $0.40) would actually rally the stock. The equity yield would fall to 9%, but the company's ratios would normalise dramatically.  I'm comfortable with the company's long term business, and with the dividend and buy-writes, you can lower your cost basis to zero within 3 years.


  271. Gingrich / Flip – For me this guy never expected to do this well. It was always an extended book tour trying to make as much money as he could and raising his "network" value. Now his ego will never let him admit that, but it's quite obvious.


  272. Phil
    The 3:30 stick turn was very exciting for me. I have learned a new trick in the last 3 months of only 2 loosing trades and I mean only 2 trades. I feel ready to start back next week if they just get the meds right. Today was clasic, got up late, at 11 had to sleep for almost 2 hours, now everything is fine. The world needs to know when pain is too much you become non-funtional. I am promised next week the change will do the trick. I like not controling dosage, can't blame me!


  273. Election- please, people, get a grip. The campaign has not even started yet. You all may be correct that Obama will survive and we will endure a second term. I said from the day of his coronation he will be a one term President and I stand by that based on fundamentals. No need to rehash that all now but be mindful that the nonsense which takes place in the primaries are directed at the base. The candidates are NOT appealing to the middle which is always the swing group which makes the decision. Imagine the baloney we would be hearing from the Democrats if there was primary opposition? A few months from now all of this will be forgotten.
    President Obama has mucho baggage to carry and the strategy is clear- deflect from the record. Unemployment bumping 9% and $3.50 or maybe even $4 gasoline are very big hurdles.
    This is far from over.
     


  274. Gingrich
     
    His success so far in the TV debates has probably had the effect of elevating his testosterone levels (High T), so expect an outbreak of Spitzer's Folly any time now.


  275. Phil/Aliens:  To destroy what remains of my always-limited credibility after my giant Euro short [which just grows like topsy -- "often wrong, but never in doubt"], I've actually seen Aliens.  Not the actual creatures – but their space ship.  At close range — 30 yards.  December, 1971, Caribbean coast of Colombia, 1AM.  I wish it had been a sphere, or a cigar, or some other non-traditional shape, but it was saucer shaped [without the little bubble].  A story for some weekend when y'all are really bored and feeling credulous.  I have a witness, the president and CEO of a large bank [today, not then], but he wouldn't want me revealing his identity, I'm quite sure.   


  276. http://DownloadA great view from space!


  277. pstas:  Certainly a major misstep can sink any candidate.  But we know incumbents have some percentage advantage to begin with.  I'm not expressing an ideological position, merely a political one.  I've mostly voted Republican, FWIW.  But if you want to "stand on fundamentals" I'll put my bottle of bubbly on the line against yours on this any time — scout's honor.  Hey, how can you lose — I'm the guy who thinks there are really flying saucers buzzing the earth!!


  278. I will try again.http://Download if this doesn't work?


  279. Pstas and Zero – Would you guys bet $10,000?


  280. The shift from manufacturing to service graphically…

    http://www.nytimes.com/interactive/2012/01/20/business/the-iphone-economy.html

    In 1960 only 3 of the top 15 employers were in the service industry (Bell Systems – now ATT, Sears and A&P supermarkets), now only 3 are in manufacturing (Pepsico, GE and HP). And GE is 1/2 manufacturing anyway….


  281. ZZ/Aliens
    I have a friend who swears the same episode…. in very vivid detail….. 


  282. Newt, Flips – You just gave him more time than I do most days.  The whole thing is a circus and he's the clown in the center ring at the moment.  Mostly it's just amusing – it would be tragic if I thought he had a chance in hell of winning.  Money can always buy you some polls but it can't always get you elected.  Just ask Meg Whitman ($161M) or Carly Fiorina ($23M)… 

    At the close: Dow -0.19% to 12735. S&P -0.57% to 1318. Nasdaq -0.46% to 2805.
    Treasurys: 30-year +0.75%. 10-yr +0.47%. 5-yr +0.17%.
    Commodities: Crude +0.49% to $99.89. Gold +1.2% to $1720.45.
    Currencies: Euro -0.02% vs. dollar. Yen -0.43%. Pound -0.17%.

    1:04 PM The Treasury sells $29B in seven-year notes at 1.359%(.pdf). Bid-to-cover ratio of 2.73, vs. a recent average of 2.87; indirect bidders take 31.8%, vs. a recent 39.4%. Direct bidders take 11.6%, vs. a recent 14.3%.

    1:09 PM Treasurys trim a bit of their post-Fed rally after the seven-year note auction comes in a little light. The 30-year yield -0.04 to 3.115%; 10-year -0.05 to 1.95%; five-year -0.02 to 0.77%; two-year -0.02 to 0.21%.

    Market recap: Stocks drifted lower in thin trading following a weak new home sales report and as yesterday's enthusiasm faded over the Fed's decision to hold rates near zero until at least 2014. As much as anything, investors are "a little bit tired right now" after this month's run. Commodities rose, with oil topping $101 intraday. NYSE decliners led advancers seven to six.

    Is it the start of a consumer confidence boom? German consumer confidence reached a 10-month high this month, and a newWSJ/NBC poll shows U.S. consumers are more sanguine than in a year. The new-found optimism, to the extent it has returned, may be based as much on an adjustment of expectations as anything else: It's not 2005-06 any more, but it's also not 2008-09.

    Where are the jobs? Taking a longer view of U.S. employment, National Journal finds the the Truman-era America where 1 of 3 jobs was in manufacturing or farming is long gone. Finance, insurance, and real estate now account for 21.4% of employment, while manufacturing fell from 25.6% to 11% and farming declined from 8.2% to 1% during the period from 1947-2009.

    The Fed's Robin Hood Effect: With an extension of its interest rate lock through 2014, the Fed has backed a transfer of wealth from old people to young people, argues William Baldwin. Savers unwilling to gamble on stocks or bonds are stuck with cash rates below that of inflation, while young borrowers gain another windfall with low interest rates on their accumulating debt. 

    While the prospect of a longer liquidity rush from the Fed is helping to push risk assests higher, one man getting out is Hedgeye’s Keith McCullough, who's just sold all his U.S. equities. McCullough reckons the Fed's policy "to inflate" will inhibit growth, while the low interest rate amounts to a tax on the consumer.

    Students at George Washington University School of Business will get a noteworthy guest lecturer when the Fed's Ben Bernanke delivers talks on March 20, 22, 27, and 29. The Fed says it will stream the lectures for online viewing, but there's no word on if any Q&A session will be allowed that gives college kids the chance to quiz the Chairman. 

    The ECB is split on whether it should take losses on its €40B ($52B) of Greek bonds or agree to an alternative such as accepting back what it paid for the debt rather than its full value. Given the 50%+ haircut that private creditors are set to take, the ECB is under pressure to take writedowns.

    As Angela Merkel says debt restructuring talks remain on track, performance of Greek stocks appears to anticipate a positive announcement out of Europe. National Bank of Greece (NBG +15.2%) continues to perform well, adding to this month's monster gains. Money is betting that a default won't happen, and that's likely a good thing for the risk-on environment. (submitted by Michael Gayed)

    While buybacks are becoming ever more popular, companies have been pretty bad at timing them, a report shows. Out of 380 S&P 500 firms that repurchased shares, 84 bought stock when the price was high and only 60 bought when it was low, while 72 saw poor returns within a year vs. 57 that saw good results. 

    Shares of home builders (XHB -1.7%) slide after the weak report on new home sales, which "continue to bounce around at low levels - the 307,000 reading for December is little different than the 309,000 average for the fourth quarter and the 303,000 average for 2011 as a whole," RDQ Economics says. LEN -3.2%DHI -3%NVR-3.6%KBH -3.4%RYL -4.8%[

    Nintendo's (NTDOY.PK) weak sales report (III) just highlights the point that the traditional video game industry is getting crushed by cheaper smartphone and tablet choices as well as Facebook's social games, according to Michael Comeau. He argues that although traditional hard-core gamers will always pay up for the latest cutting-edge hardware and software, the average consumer is losing interest. In the line of fire: THQ, GMEATVISNE.

    A federal appeals court throws out an injunction that blocks the enforcement of an $18B judgement made against Chevron (CVX) in Ecuador for the spilling of chemicals into the Amazon basin. Attorneys say they will try to collect the money from Chevron in countries around the world. (previous)

    AutoNation (AN +1.4%) CEO Michael Jackson says in anearnings CC that he sees 3 drivers pacing a recovery in the auto market – as he backs up his call for 2012 sales of 14M vehicles in the U.S. Factors that could push CARZ and VROM higher: (1) A fleet of U.S. cars showing their age; (2) the accelerated pace of new products being launched by manufacturers; (3) the availability of credit financing to customers.

    Juniper Networks (JNPR): Q4 EPS of $0.28 in-line. Revenue of $1.12B (-6% Y/Y) misses by $10M. Expects Q1 revenue of $960M-$990M, below $1.1B consensus. Expects Q1 EPS of $0.11-$0.14, below $0.26 consensus. Shares -5.7% AH. (PR)

    More on Juniper's Q4: The soft Q1 forecast, together with Ericsson's (ERICweak results, indicate the 2012 telecom capex environment is looking bleak. Juniper's service provider sales fell 14% Y/Y in Q4, more than offsetting a 9% increase in enterprise sales. Asia-Pac was particularly weak, with overall sales falling 20%. One unanswered question is the extent to which competition from Cisco is taking a toll. JNPR -6.6% AH. (PR)


  283.  

    Chesapeake Energy (CHK -6.6%) is lowered to Underweight from Neutral at J.P. Morgan amid continued concerns about its 2012 funding gap. "We now think there are few 2012 catalysts to help the stock outperform," the firm says as CHK shares slide after a four-session, 13% jump after news of the natural gas producer's planned retrenchment

    North Dakota's natural gas production, rising in step with its booming oil output, may require more pipeline capacity to carry the fuel to markets - good news for pipeline producers such as MDUResources, which expects nat gas pipeline capacity to double in 2012 as it did in 2011. Given increased capital programs for oil producers in the state, it's a trend that should continue. (submitted by Michael Filloon)

    EV battery maker Ener1 (HEVfiles for bankruptcy in a bid to restructure debt and raise more equity funding. The firm was a recipitient of a $118.5M federal grant back in 2009 as part of a broad EV battery technology program. Shares now trade on the pink sheets under the symbol HEVV for less than three pennies. 

    Just in case anyone is interested in the truth – this deal has been going on for 6 months, HEV began the filing in July and the "bankruptcy" is a pre-packaged restructuring with lenders.  "None of the Company's foreign or domestic subsidiaries has initiated reorganization cases, and they are not expected to be adversely impacted by the legal proceedings."  The pre-packaged restructuring plan, which has been unanimously accepted by all of Ener1's impaired creditors, provides for a restructuring of the Company's long-term debt and the infusion of up to $81 million of equity funding, which will support the continued operation of Ener1's subsidiaries and help ensure that the restructuring will not adversely impact their employees, customers and suppliers.  - Wow, it's a good thing no one investigated thingswhen Bush bankrupted his oil companies after getting Government aid or I guess we wouldn't have an oil industry anymore!  

    More solar hell:  Cypress Semiconductor (CY -4.8%) shares sink after the company's conference call lowers guidance on Q1 EPS to $0.15-$0.18 vs. $0.25 consensus, and revenue to $200M-$210M vs. $228M consensus. CY warns revenue will decrease at a rate greater than normal, and bookings and revenue "will bottom out" during the period. (earlier: Q4 earnings)

    Gee, who could have seen this coming?  More on Green Mountain Coffee's (GMCR -3.7%decline: The specific cause is a Detwiler Fenton report claming Wal-Mart (WMT) will launch a single-server brewer in partnership with Esio Beverage, and its coffee cup prices will undercut those for Green Mountain's K-Cups. The firm adds Green Mountain's next-gen V-Cup brewer, which it hopes will limit the impact of patent expirations, will see limited traction in 2012.

    Whitney Tilson, who reversed his bearish stance on Netflix (NFLX +21.7%last fall after missing the stock’s huge drop, takes a victory lap after the stock’s spike following stronger-than-expected Q4 results. In a letter to his followers, he praises the "complete turnaround" in NFLX’s streaming video subscribers while ridiculing bears. J.C. Penney (JCP +17.2%) is lookin' good too.

    In response to the soft forecast attached to Corning's (GLW)Q4 report, Goldman (Neutral) is lowering its PT to a mere $11. Of particular importance to Goldman is management's earnings calladmission that the problems in its display glass business are "structural," with price declines offsetting any long-term volume growth. DisplaySearch recently noted that even Corning's Gorilla Glass growth is slowing.

    eMarketer estimates U.S. mobile ad spending rose 89% in 2011 to $1.45B, trouncing a prior forecast. Sales are expected to reach $2.6B in 2012. Google (GOOG) has a dominant share of the mobile search ad market (45% of spending), and is believed to have a leading 25% share of the U.S. mobile display ad market (31% of spending). Millenial Media, which just filed for an IPO, is believed to have 18% of the display ad space.

    Chatter about Apple (AAPL -0.6%paying out a dividend with part of its $97.6B in cash picks up again as analysts question what's the most productive use of a piggy bank that is greater than the GDP of a majority of the nations on the planet. Count Ticonderoga's Brian White in the camp of people who believe that a dividend payout would increase AAPL's value by attracting dividend-only funds and investors. "It’s going to be a gusher when they tap into that thing…It’s like tapping into an oil field out in Texas." 

    Apple (AAPL -0.2%) receives some negative PR from theNYT, which documents the poor working conditions at its contract manufacturers' Chinese facilities in a lengthy exposé. While such reporting is nothing new, the Times takes its efforts a step further by airing quotes from former Apple execs accusing the company of deliberately turning a blind eye to labor abuses. (previously)

    Three lunchtime reads:

    1) Notes on the Fed meeting

    2) Kass: Pressing pause

    3) Soros: How to pull Italy and Spain back from the edge


  284. 11.11EnglishAstronomie21.pps (5.1 MB) View online Third may be a charm!


  285. So ZZ, it was you, Jamie Dimon, hallucinogenics, and Aliens…do I have it right?


  286. Sorry it just won't let me copy the link IRL not sure why.


  287. pstas – care to make your bet against Obama… interesting?? I'll put $500 on Obama to win. Is it a bet? 


  288. ZXZ- flying saucers, eh? Maybe you need to borrow one of my hats?
    http://media.photobucket.com/image/tinfoil%20hat/kidthatsirish/tinfoil-hat.jpg?o=12
    Seriously though, I also am not making a ideological point either but rather a fundamental political one. While all of the likely Republican nominees have major weaknesses the President does also. Incumbency is a formidable weapon for sure but that is also his weakness. He has a record which can be judged. The opponent can make of it what he wants. The electorate can only guess as to what the "new guy" may do while the current occupant is on defense. Thus, we have the apparent strategy- deflection.


  289. Glad you're on the mend Shadow (or at least balancing meds!).  Nice to get into the rhythm of the markets but just make sure you know these things work until they don't.  

    Aliens/ZZ – I've never seen one but have little doubt they are out there.  Most people don't understand the word infinite.  Space is pretty much infinite and there are infinite stars with infinity times X number of planets that have been around for Billions and Billions of year and it only took 5M years for these monkeys to come down from the trees and fly to the stars – only arrogance makes us think we're alone in the Universe – most probable reasons we aren't a tourist trap for aliens is we have a young and backwater solar system way out in the outer spiral arms of the milky way and, of course, the speed of light – which we don't know can be broken (but, then again, we're just monkeys).  Assuming aliens can and are allowed to observe us, why would they not follow the same rules our own scientists follow when observing primitive tribes and go very far out of their way to avoid contaminating us through contact?  So plenty of logic to UFOs and we're lucky we get any visitors at all as we may as well be in the Ozarks of the Milky Way – do you think the hillbillies get a lot of limo traffic?  


  290. EUR/CAD/roro, zero – here's an outfit liking to short the EUR/CAD pair.


  291. Anyone
    Where can I find the original BAC trade by Phil about 2-3 weeks ago?
    Thanks


  292. Found following for FTR.  I have a small, un-covered position that's done nothing but gone down.
     
     S&P Lowers Frontier Communications Outlook To Negative
    Font size: A | A | A
     
    3:56 PM ET 1/26/12 | Dow Jones
    DOW JONES NEWSWIRES

    Standard & Poor's Ratings Services lowered its outlook on Frontier Communications Corp. (FTR) to negative from stable, noting the regional telecommunications provider's declining revenue due to competition from wireless substitution and cable companies that offer telephone and data services.

    The ratings firm, which affirmed its corporate credit ratings two notches below investment grade at double-B, said it expects Frontier will be challenged to meaningfully improve its operating trends in the near term.

    Though its acquisition of about 4 million access lines from Verizon Communications Inc. (VZ) in July 2010 helped the company's scale and market diversity, the company has faced challenges in reducing access-line losses and adding new data subscribers in these markets because of the long transition period and system switchovers.

    The negative outlook reflects declines in revenue and earnings before interest, taxes, depreciation and amortization from access-line erosion, particularly in the legacy Verizon markets, due to competitive pressures. S&P also said the company's sizable dividend limits prospects for debt reduction.

    Frontier reported in November that its third-quarter earnings fell 30% as subscriber numbers dropped. The company roughly tripled its size after its acquisition of the landlines from Verizon. The acquisition also reversed a two-year trend of declining revenue, though revenue slipped in the third quarter.

    Shares slipped 5.4% to $4.50 in recent trading, outpacing the broader market. The stock is down 35% in the past three months. 


  293. LOL Pstas – Stop it, you're giving me Bob Dole flashbacks!  


  294. MA / Past
    Just wondering what you decided to do with your long 290s. I have 5 too as I missed the hint to roll up and did not seem to be worth it later. But I'm interested in the salvage move.
    Thanks


  295. Stj:  My dad insisted that money is not a gentlemen's bet.  A good bottle of something would be my preference.
     
    Acobra / It's one thing to think "they're out there" — billions of stars, lots of evidence of planets orbiting stars at the right thermal/radiation distance, everything in the universe made out of the same 110 elements — not hard to posit.  Watching them fly by your nose is a whole different deal.  It was traveling only 5 miles per hour at first, 30 meters away — then whooosh.  I was sure it was some secret military deal — until I realized it made zero sound.  No way we could, or can, do that.
     
    rpme:  I had actually smoked an after-dinner joint. I was, after all, a teenager — in Colombia. But it wasn't that good a joint.
     
    Phil:  It's been posited that, if aliens ever did locate us, the result wouldn't be pretty.  Not true, apparently.  They are obviously staying out of sight — there was nothing but a handful of houses within 40 miles in both directions of me.  Why?Your guess is as good as mine.  And I doubt you need to exceed the speed of light to get here – our galaxy is only 100,000 light years across.  We monkeys are good for 75 years — 900 months.  A fruit fly lives for one month,  900 X 75 years = 67,500 years. There are 51 stellar systems within 5 parsecs of us — 16.03 light years.  So they are probably close neighbors --and likely have a good handle on regenerating their DNA to eliminate it's built in life span.  Just saying.


  296. Phil: Solar
    Good point earlier re vested interests who sell consumable energy sources.  Think how many more batteries would have been sold, used up and disposed of if solar calculators not been invented decades ago.  I guess the battery manufacturers didn't have very good lobbyists.


  297. scottmi,
     
    EUR/CAD……..i traded that a lot last spring and summer when it was running at the top of the range on a day chart from the 1.42s short. i think i did it first time in May then again in June when it came back up to range top and then a 3rd time in Aug……..i know one trade i caught it at 1.43 and something.
     
    after that i went and shorted the Euro. i think it was early Sept but it was off of a Tricket press conference and the EUR/USD was at 1.40ish. i remember Tricket sending the message that the rate increases were done so there was no reason to be long the Euro at that point because its only edge over USD was the rate differential. i think i rode it 500 pips and then cashed out…didn't get short again for the second run down to 1.27 though….staying away from Euro for the time being.
     
    i think trading EUR/CADis pretty much like trading EUR/USD but the reason i picked it over EUR/USD back then was the range tops and the potential for deeper drops.
     
    after that i started to get aggressive with shorting Spain's ESP35………a real pig and had nice day ranges and an easy short target as the SHTF over sovereign debt. i was also shorting the DAX and the UK100 (FTSE) then too.
     
    got burned on some short Dows in between though, especially on the screaming reversals……ouch!
     
    i looked at a 4H for the S&P close to 4 today and it is trading in an ascending channel so i am not seeing a top forming, at least not yet……….i do not trust the central planners, at all. i knew there was a twist coming in the last FOMC so was very cautious into it………luck and some experience i guess. intuitively i kind of knew the FED had to bring some different trick to f%#k shorts……..
     
    the channel looks identical to the channels formed during QE2……….the rally looks artificial but who knows how far it can run.
     
    i have tried to develop 2 trading styles for different market conditions……..one like EUR/CAD or ESP35 and pick trades off of big tops/bottoms (clear tops and bottoms) with larger position sizes or the trades Phil calls hit and runs in for 30 or 40 points sometimes a bit more but then back to cash and very modest position sizes involved………hit and runs add up too.
     
    i was buying USD/JPY around 76.75 with other entry orders placed at the Oct lows with stops at 75.45
     
    right now i like the Italy's ITA40 for hit and runs (it moves around 200 to 300 points in a session and 1.31 per) although i got burned on it last week…….stopped out just above the stop and then next day the bitch came back down into the money, but it has to be traded at the European open or usually around 0430 to 0530 AM
     
    sorry did i say, bitch….yes, i like to especially about politicians
     
    i like trading OIL too……….volatility is opportunity.


  298. CP – did anyone here see JCP coming? wow!


  299. Flashbacks or moonbeams? Different time, different economy. Different fundamentals.
    Unemployment; gas prices; deficits; debts; protesters in the streets? I think that even you, coming from the far left end of the spectrum could make a contest with that material.
    I guess we will just have to hold the election after all.


  300. Lifespan/ZZ – Yeah but if you could live for 500 years, I'm still not sure if you'd want to spend 32 of them in a spaceship!  As the Emperor said in that Star Wars cartoon — you must smell like feet wrapped in leathery burnt bacon.  I think without wormholes or FTL, the whole idea of exploring deep space would be about as appealing to an advanced culture as the idea of getting on a horse at home and going to check out Alaska would be to you.  


  301. rpme – Notice zeroxzero admits to smoking an "after-dinner joint," but that he does NOT deny that Jamie Dimon was with him? ;-)


  302. Unemployment = Bush.  Gas Prices = Bush.  Deficits = Both.  Debts = Both.  Protesters = Obama is a protester!  Not a winning strategy so far, Pstas and I'm being kind about the debt/deficit as that train left the station long before Obama was given the job of driving it.  How about creating jobs, ending the war, making homes affordable – I could spin on….


  303. scottmi
     
    looking at GBP/USD as a possible short….nice range top on 8H chart and techs into O/B at/near 1.5700 so maybe a sell and stop over range high at 1.5800.
     
    no entry yet, but looking at it.


  304. GBP/roro – what! the pound can go even LOWER!?  actually, that worthless fraud of a stand-alone currency does like like it's topping in a channel..


  305. That's the spirit, I knew you could do it. Right out of the play book. Isolate, ridicule and crucify them on their own cross of standards.
    By the way, Bush isn't running this time and you may want to rethink that "Obama is a protestor" thing unless getting riled over the greens fees on Martha's Vineyard qualifies. :)
    Also,  thanks to all for the wagering offers but I don't gamble unless I can be the house. Hmmm, does anyone know how to sell a put on an election?


  306. scottmi……….kicking the tires. it is up off of 1.53, 1.54 so 300 or 400 pips and a stagflating economy, declining industrial/mfg production, negative growth, high unemployment ………BOE in for more QE? Posen thinks so..


  307. GBP/roro – fun to watch this fight for 1.568. someone oh so wants to push it up there…but it's not really wanting to…


  308. scottmi…………1.0680 for AUD/USD is a big Resistance too……..76.4 fib retrace from the jul/28/11 1.1075 high to oct/o4/11 low at 0.9397
     
    it pulled right back off the touch today………some of this depends on the shelf life for the most recent FOMC's QE to eternity when and  if the market calls the FED on it.


  309. scottmi……another one maybe USD/CAD at parity……..looking O/S on a daily so maybe back to 1.02ish
     
    0.9750 next big level down which would mean a LOT higher OIL and DOW or vice versa.


  310. Phil – You need to start a "Phil's Political World" to make some money off all the people who care so much about politics.  Then Phil's STOCK world could just be focused on trading and how govt decisions affect the market….


  311. i'll sign on for that capital idea, Burrben.


  312. Bet / Zero – Sorry, that was my attempt at a poke at Romney… 


  313. Stj:  I'm a little slow after the week's market drubbing, apologies mine.  
     
    Spaceship/Phil:  It would depend on the spaceship.  If they were advanced enough to re-engineer their DNA, their spaceships would more likely look like the Mandarin Oriental with it's own beach and golf courses than the Friendship-7 Spam-in-a-can.  
     
    Pstas:  LOL Vineyard.  I actually was stuck on the Vineyard by virtue of accepting a dinner invitation while Clinton showed up one summer, with F-18s flying top cover over the golf course, radar blackouts, no-drive zones and, of course, about the only place I've ever been with privately-owned beaches!! My proletarian credentials consist having been jailed in West Tisbury for having a stun gun in my checked luggage, legal in 42 states, as I did my best to flee the place. My only sympathizers were members of the Brazilian Vineyard underclass locked up for out-of-date car registrations.  A real worker's paradise, as you say.
     
    Burben: If you can separate politics from economics in the current environment, you're cleverer than I by half.  But, sticking to economics [ ;) ];  The Times of London, January 27 2012 12:01AM
     

    "David Cameron and Boris Johnson were caught up in a new round of cross-Channel tensions yesterday after the favourite to replace Nicolas Sarkozy as President of France threatened to scupper the EU’s economic rescue plan and undermine the City. François Hollande, the socialist tipped to win power in May, set out a manifesto that declared war on financial services and promised to rip up the EU’s fiscal treaty, due to be approved on Monday. The Prime Minister, the Mayor of London and British business chiefs were taken aback by Mr Hollande’s plans, claiming that they would damage financial centres. Mr Johnson accused him of “political vindictiveness”. Opinion polls show Mr Hollande ahead of President Sarkozy by up to 20 points before the two-round election in April and May."


  314. zero/ i was on the vineyard at that time my place was in oak bluffs..v small world!


  315. Angel:  My oldest friend and law school buddy has lived in Gay Head [sorry, "Aquinnah"] most of his life, but even he calls the place "La Maldita Isla."   Of course, it's a bit more downscale from Nantucket, where the local saw is that "the billionaires are ruining it for the millionaires."  I prefer mountains, remote beaches, deserts, and the people that inhabit them, even if I have to pack in my own capuccino maker.  


  316. checking for the European open……….try to make the day pay


  317. MA / Zipla – I am still pondering.  Phil's suggestion makes perfect sense for a way to save the trade.  Unfortunately most of my trades are in the red and i am almost out of option buying power, don't want to lock my precious remaining margin for the two 3 months. I will probably let this play out, unless I get a lucky break with gold and oil ;-)
    Aliens/ zeroxzero - Come on tells us the story! 


  318. Phil – gimme a 3 am trade por favor! lol. Do you ever sleep!?!?!?!


  319. Portugal's debt unsustainable – Kiel Institute
     
    5 year bonds surge on Thursday to record 18.9%……….3 year yields 21% …….fears of a second rescue from the EU-ECB-IMF
     
    no worries, the EU Summit for Monday will look after that nonsense


  320. jromeha……took a short ESP35 at at 8685 off that story about Portugal's debt and soaring bond yields……..Spain follows.


  321. Good morning!

    Not much excitement so far.  Asia pretty flat (Shanghai opens Monday), Europe down about 0.4% and our futures flat ahead of GDP later.  Next Tuesday we get Auto Sales – now with very high expectations and it's jobs week and Bernanke speaks 12:30 on Thursday along with Retail Sales, ISM, Productivity and Factory Orders so that's our big day next week.  

    And here's this morning's wake up call to people on the wrong side of the political spectrum: 

    [PollResultsV3]

    ROFL!!!  And that's AFTER he said he's going to pass a Millionaire tax!  Certainly the boyz did not help themselves in last night's debate, what a sickening spectacle.  Santorum's brilliant strategy was to attack Romney on Health Care – IN FLORIDA!  Way to remind the oldsters that you're the ones who made a donut-hole in their prescription programs.  I don't know if Republicans understand this issue but you can only score points talking about not fixing health care with people who don't actually need it yet – once someone begins to understand just how expensive health care is in this country – they tend to become strong advocates for reform.   

    Very funny exchange between Romney and Gingrich where Romney says "I can't believe you worked for Freddie and Fannie" and Gingrich comes back with "Well I can't believe you owned stock in Freddie and Fannie" – It's like the arguments my girls have – I was waiting for Romney to say "Oh yeah, well I'm rubber and you're glue…"  which he kind of did as he came back at Newt by explaining they were owned through blind trusts and I though he scored points underscoring Newt's baseless, improperly researched attack – especially when Newt is supposed to be "the smart one."  

    Friday's economic calendar:

    8:30 GDP Q4

    9:55 Reuters/UofM Consumer Sentiment 

    Notable earnings before Friday's open: AEPARLPCVX,DDHIFHONLMMONEEPGTROW

    Notable earnings after Friday's close: SCCO

    Asian markets are range-bound heading into the weekend: Japan -0.1%. Hong Kong flat. India +0.3%. China closed. 

    3:28 AM EU stocks open down following mixed U.S. data yesterday, with banks and mining stocks leading the way. Credit Agricole (CRARY.PK) is -3.3% and BNP Paribas (BNOBF.PK-2.4% following downgrades by JP Morgan Cazenove. Euro STOXX 50 -0.4%, London -0.5%, Paris -0.4%, Frankfurt -0.2%. - I think I saw a plus 22% unemployment number in Spain!

    Loans to the private sector in the eurozone +1% Y/Y in December vs. +1.7% in November and forecast of +2.1%. M3 money supply +1.6% in December vs. +2% in November. The three-month average of annual M3 +2.1% vs. +2.5% in September-to-November.

    Japan’s retail sales grew at the fastest pace in more than a year, rising 2.5% in December vs. forecasts of +2.1%. A resurgence in household demand could be temporary, as recent declines in exports and production may weaken employment and incomes.

    Japan's core consumer price index fell 0.1% in December from a year earlier, in line with expectations. The drop was the third straight Y/Y fall for core CPI, bringing to mind a return to sustained deflation in Japan. 

    South Korean Manufacturers' Confidence Index Is Near Lowest Since July '09. South Korean manufacturers’ confidence is near a 30-month low as Europe’s debt crisis dims the outlook for exports. An index measuring expectations for February was at 81 from January’s 79, the lowest level since July 2009, a statement from the Bank of Korea showed in Seoul today. A measure of expectations at non-manufacturing companies was unchanged at 79.

    Soros Doubts China Growth Momentum. Billionaire hedge fund manager George Soros – who opted out of the game some time ago – is doubtful China's economy will chug along at a resilient pace again this year. "China's central government has released signals to help the public prepare for slow growth this year," Soros said at the World Economic Forum in Davos, Switzerland, yesterday. "Weak exports make it difficult to reach 8 percent GDP growth."

    Yet another RE bubble about to burst:  Mumbai's Home Sales Decline to Three-Year Low as Record Prices Dent Demand. Mumbai’s residential home sales dropped to a three-year low in the quarter ended December as record home prices and higher interest rates crimped demand, according to Liases Foras Real Estate Rating & Research Pvt.

    Explaining his dissent in the FOMC decision to stretch the near-zero rate policy through late 2014, Jeffrey Lacker says rates may need to increase before then to stop inflation rising. Lacker also thinks giving a time for the first increase in the FOMC’s statement would be better left to the bank's Summary of Economic Projections.

    Fed Easing May Harm Long-Term Economic Growth, Warsh Says. Former Federal Reserve Governor Kevin Warsh said the central bank’s record monetary easing may set back the U.S. economic expansion and that he’s concerned policy makers are pushing investors into riskier assets. “Recent policy activism — measures that go beyond a central bank’s capacity or traditional remit — threatens to forestall recovery and harms long-term growth,” Warsh said.

    We essentially have two Europes, muses Art Cashin, Greece and Portugal et al., and then all the rest. Eventually, they're going to need to find a way to separate, Cashin says, and Greece may wind up being the first "gangrenous finger" to be cut off. (video)

    Schaeuble Says Greek Government Must Act, Stuttgarter Reports. The Greek government must fulfill promises attached to earlier aid packages before expecting more money, the Stuttgarter Zeitung reported, citing an interview with German Finance Minister Wolfgang Schaeuble.

    Ackermann Says Greece Solution Still ‘Open Question’ as Debt Talks ResumeResolving the Greek sovereign-debt crisis is crucial to avoiding contagion in Europe, said Deutsche Bank AG (DBK) Chief Executive Officer Josef Ackermann, as private bondholders met Prime Minister Lucas Papademos to seek an accord to cut the nation’s borrowings. “I’m confident that we can get our act together in Greece and avoid a major contagion, but that is still a very open question.” 

    Euro Falls as Greece, Creditors Wrangle Over Debt-Swap AgreementThe euro fell, snapping a four-day gain against the dollar amid concern Greece is struggling to reach agreement with its creditors on a debt-swap arrangement.

    For Greece, the Outlook Is Still GrimEven as Greece tries to convince creditors that its debt-reduction efforts are on track, gloomy new International Monetary Fund forecasts about its long-term economy are threatening to derail talks meant to secure the nation’s next big installment of bailout funds.

    NEXT!  Investors Fear Mounting Losses in Portugal as Second Rescue LoomsPortugal is fighting a losing battle to contain its public debt and may be forced to impose haircuts of up to 50pc on private creditors, according to a top German institute

    EU Red-Flags 'Volcker'. Planned U.S. Rule on Banks' Bets Is Seen as Threat to Worsen Debt Crisis. The European Commission will complain to Treasury Secretary Timothy Geithner that proposed U.S. regulations could discourage banks from trading European sovereign bonds, potentially increasing funding costs for the continent's governments.  - LOL, it "discourages" banks from trading them BECAUSE THEY ARE DANGEROUS – that's kind of the whole point of the Rule…

    Contrarian trader Steve Cortes says it's time to get defensive, despite consensus reaction to the Fed's move to keep rates at historic lows into 2014: “So far, at least, the response has been very underwhelming, and the reason is because monetary policy is like a narcotic. The more you take it, the less it works." He likes the classic defensive plays: bonds, utilities, tobacco stocks. 

    Washington's political gridlock has at least one advantage: It allowed businesses and interest groups to cut lobbying spending last year for the first time since 1999. Overall lobbying expenditures totaled $3.27B in 2011, down from a record-breaking $3.51B in 2010 as Congress finished work on the massive bills overhauling healthcare and financial regulations. - Gee, only $6M per Congressperson?

    Our trip to becoming a 3rd World Country continues:  Here's an ironic twist: Aided by a favorable exchange rate and affordable labor, the U.S. is once again becoming a competitive manufacturer of cars and trucks. Hobbled by a stronger yen, Toyota (TM), Honda (HMC) and Nissan (NSANY.PK) are ramping up capacity in their U.S. plants with plans to ship U.S.-made models to Europe, Korea, the Middle East and other parts of the world.

    GM(GM) Seen Accelerating Opel Restructuring as Sales Plunge: Cars. The financial crisis in Europe is adding new urgency to General Motors Co.'s attempt to turn around its money-burning Opel unit. 

    Transocean (RIGjumps 5.2% AH after a judge says the company is indemnified against most of the claims made against it related to the Deepwater Horizon disaster. However, Transocean is still considered exposed to punitive damage claims and Clean Water Act penalties. (previously)

    More problems for Chevron (CVX) in South America, as a Brazilian prosecutor says he plans to file criminal charges against the oil giant and some of its local managers within weeks, adding the threat of prison sentences to an $11B civil lawsuit as punishment for a November offshore oil spill. CVX also is contesting an $18B judgment in Ecuador

    Cliffs Natural Resources (CLF) provides an update on its 2011 expected results, saying revenue per ton will be below estimates across virtually all regions due to higher mining costs and lower-than-anticipated sales volume. Shares -0.2% AH.

    Gold Bulls Ascendant Amid Best Start to Year in Three Decades: Commodities. Gold traders are bullish for a fourth consecutive week, betting that the Federal Reserve’s pledge to keep interest rates low until late 2014 will extend the metal’s best start to a year in more than three decades. Nine of 15 surveyed by Bloomberg expect prices to gain next week

    Investors Abandoning Copper, Cotton, Crude. The commodities market is shrinking. Amid plunging prices and soaring volatility, investors and traders reduced bets on 13 key commodity contracts by 19% in 2011, according to a Wall Street Journal/Dow Jones Newswires analysis of U.S. Commodity Futures Trading Commission data. The data show so-called open interest, or the number of futures and options contracts outstanding in each commodity. The exodus was the biggest in at least 12 years, outpacing the flight seen in 2008 during the financial crisis, the data show. And it came from a range of commodities—from crude oil to copper to cotton. Investors of all stripes bolted for the exits, including hedge funds and producers and consumers of raw materials. Index funds and other investment products often used by retail investors also showed outflows in the last months of the year, according to Barclays Capital.


  322.  

    Seagate (STX+3% AH after announcing an increase in its quarterly dividend and a buyback of $1B of its common stock in addition to the $900M remaining on a previous $2B authorization. The data-storage maker expects to fund the dividend and share repurchases through cash on hand, future cash flow from operations and potential alternative sources of financing.

    Taco Bell (YUM) is fixin' breakfast, rolling out a morning menu at nearly 800 of its 5,600 U.S. restaurants. The move adds to the scramble among fast-food heavyweights competing for the morning allegiance of on-the-go consumers. Breakfast has become the most important meal of the day for restaurants, accounting for virtually all industry growth in the past five years. (also

    Much like falling voice revenues, DSL's market share losses at the hands of cable are taking a toll on the wireline operations of U.S. telcos. AT&T (T) lost 636K DSL lines in Q4, a figure that can't be offset by U-verse subscriber gains. By contrast, Time Warner Cable's (TWCQ4 report boasted of a 130K broadband subscriber gain. Verizon's (VZ) reseller agreements with cable companies couldworsen matters.

    Are Analysts Missing The Big Picture On Google(GOOG)?


  323. Phil……….downward sloping channel from 103.65 puts current resistance for OIL around 101.15…..support 96.65


  324. Dollar being smacked down and markets heading higher – seems to be the usual playbook.  79.34 and 79.19 was yesterday's low.  

    Dow (/YM) can be played bullish off the 12,700 line with very tight stops and oil (/CL) over $100 with very tight stops – I don't have faith in either.  

    79.35 can be the stop indicator from the Dollar too – this may be a quick and desperate move, a head fake before the Euro weakens again (now $1.313 with $1.571 on the Pound).  

    Yen back to 76.96


  325. $100.15/Roro – They're testing that now, I'll be quite pleased with $96.65 though.  

    I still like oil down, I think Iran's about to fold from what I'm reading in local papers.  


  326. i meant Res at 101.15 and have sell entries at that price……….top of the downward sloping channel from 103.65. bottom of same channel comes at 96.65


  327. Playbook/Pstas – That's a bit juvenile, you don't like what I say so you have to reduce it to some imagined trickery?  Say something of substance and you may get a substantive answer but your Dittohead commentary is tiresome and adds nothing to the conversation.  Good move not taking bets, I think the above poll would be a good time to opt for a "surrender" and give up half in advance.  

    Politics/Burr. Roro – I'm not even good at having a conversation on another post once I start a new one, you want me to start another site and talk there – no thanks!  Feel free to cut and paste my political commentary and you and Roro can be the editors on that one.  Maybe Cap will give us a section on his site

    3am/Jrom – I was up but reading. As you can see, when I do see a set-up, I'll jump in (Dollar now 79.26, oil $100.46, Dow 12,713).  I don't sleep much but I also never force myself to wake up unless it's urgent – like a plane.  Just depends on if I went out or not and what time I finally get to bed but, most days, I'm up after 4-6 hours.  About once a week I sleep 8 hours to catch up and I'm an excellent napper – tell me I have to wait an hour for something and I can go right to sleep!  

    Portugal/Roro – I don't understand why people need analysts to tell them that borrowing money at 18.9% is unsustainable.  I lose faith in Europe for even allowing this to happen.  What is the point of the EFSF if they are going to allow one country after another to get into a bond crisis before they step in.   Wouldn't it have  been more clever to buy EVERYONE'S notes at less than 6% so there would be a general air of confidence for at least a month or two?   

    Oil/Roro – If I were looking at the downside play (and I always am) at your line, I would not be thrown by a breach of that line on an unusual move down by the Dollar.  We just topped out at $100.50 (my line, of course) and the Dollar bottomed out at 79.26 and now back over 79.30 so a quick flip flop off our bullish trade is in order (ditching the Dow) and now we watch 79.30 to hold in the Dollar and stop at $100.30, then lock in the first nickel with the lower stop and then follow normal Futures trading from there.  


  328. As the Egg McMuffins are already paid for, I'm not super interested in this so I'll be heading off for breakfast soon.  

    Spanish unemployment passes 5M in Q4, rising to 5.3M from 4.9M in Q3. The rate increases to 22.8% from 21.5%, the highest in nearly 17 years. Over half of 16-24 year-olds are out of work. Economy Minister Luis de Guindos calls unemployment Spain's mainsource of vulnerability.  (PR in Spanish .pdf)


  329. Zero/spaceship

    Boy do I have a story for you.

    3 of my friends saw a similar craft when they were leaving my house when we were kids. It was really close probably 100 yards, but I missed it. It was a big deal at the time. Sometime around 1978.

    A lot of people saw it that night and some UFO experts came and interviewed the 3 of them. If I can dig up the newspaper article I’ll post it for you.


  330. PG Missed!! ;-)  Lets see if i can get any buck out of my puts. 


  331. bailed on the short ESP35 at b/e


  332. A few select stocks 11/25 close vs yesterdays close, and of course percentage gain – run-up?:
    AAPL  363.57  444.63  22%
    CCJ  16.66  23.61  42%
    FCX  33.82  46.5  37%
    HPQ  25.39  27.99  10%
    QQQ  52.88  60.22  14%
    XOM  74.51  86.77  16%


  333. Shoot…..F missed.  New I should have sold all the calls yesterday.  Dumb


  334. Anyone know if the GDP report is this morning at 8:30?


  335. Exec / Zero  -  Did you guys see "The Fourth Kind"?  My favorite alien movie.


  336. Pstas – Yes at 08:30. But doesnt matter, whatever the number the zombies will buy
    US Advanced Q4 GDP Annualized+3.0%exp v +1.8% Prior Q3 final reading


  337. Burrben,
     
    Never did.