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Thursday, March 30, 2023


Tumblin’ Tuesday – Keep on Rolling

Got to roll debt baby, call it the tumblin' default

That's the theme for the week as Greece gets yet another final deadline extension to come up with more and more concessions so they can borrow even more money that they will never be able to pay back.  "Honey, got no money" is the line that should be obvious to EU Stones fans as the IMF's chief economist insisted that Greece must cut wages to boost competitiveness and pull the country out of its economic quagmire.  "Either you basically increase productivity growth a lot and quickly, and you keep wage growth moderate, or you decrease wages," said Olivier Blanchard

"It is a pretence that the measures are taken to forestall bankruptcy," Communist party leader Aleka Papariga told the gathering crowds at today's National Strike.  "On the contrary, they will lead the people to misery to benefit the plutocracy and capital," she said.

Sadly, only the Communists are telling the people the truth in Greece – the people are being sold into decades of wage slavery as a population that has already voluntarily accepted 25% wage cuts is now being forced to accept additional 30% wage cuts while the ECB and IMF shove another $192Bn worth of debt down their throats that is ONLY to be used to pay off bondholders who took advantage of them in their time of weakness to force them to roll over their debt at record high rates.  


Sacrifices MUST be made, says the former VP of the ECB – who is now the Prime Minister of Greece (unelected as Papandreou was forced out) – but he's not talking to the creditors, but the Greek people, who will still, even if they work for 1/2 wages for the rest of the decade, be 120% of their GDP in debt by 2020 (down from 160% today).  So the Greek people are being asked to sacrifice their own retirement and their children's future rather than telling the Banksters to take a hike.  

And people wonder why we can't get a deal passed?  As I said in yesterday's post, either Greece passes a debt deal and Athens will be in flames (strike began at midnight) or Greece will not pass a debt deal and Europe will be in flames (DAX down 1% at 8:05).  That simple logic allowed us to go short on the Futures in Member Chat this morning as the Dollar tested 79 and my 4am comment to Members was:  

Dollar bouncing off 79 is going to be bad for the indexes.  Looks like fake pumping to me and Greece not even fixed yet.  I am literally scared to short these days but 2,525 is a good line to watch on the Nas (NQ) and 825 on the RUT (/TF) and $1,725 on gold (/YG) should be good for a little ride down if the Dollar can get over 79.15 (now 79.12) so let's call that the bear line with 79.20 confirming Dollar strength although not meaningful until over 79.50. 

Already the Nasdaq is down to 2,517 and, at $20 per point, that's a quick $160 per contract.  The Russell is down to 822 but that one pays $100 per point so $300 per contract there and gold is our star, with a drop to $1,715 at $33.20 per contact, edging out the RUT shorts with gains of $332 per contract – not bad for a morning's work, just in time to pay for 200 Egg McMuffins.

Percentage-wise, we did better with our TLT trade, also detailed in the morning post as I said there (also in conjunction with my prediction of strife in Greece: "I am liking those TLT longs (we picked up the weekly $115 calls for $2)!

As you can see from our chart on the left, even those late to the party in the morning were able to get in on the fun as TLT dropped down to $1.85 and didn't get back over $2 until after 10 and continued on to our initial $2.50 target (up 25%) and made it all the way past $2.80, for a 40% gain in a day.  This was a great start for our new virtual $5,000 portfolio as we picked up an aggressive TLT spread in the morning on that one as well for our first trade.  

As long as we can keep making quick, little, hit and run trades like this – we really don't care which way the market goes, nor do we care if the VIX wants to pretend that this market isn't volatile.  In fact, in this trade, we took advantage of the low VIX to buy a relatively low-premium call (the $115 for $2) which gave us tremendous leverage on this 10% move in TLT.  Generally, we prefer to be sellers of premium but, when the premium is so cheap it's not attractive for us to sell – we know how to climb over to the other side of the table and make a few bets for ourselves.  

If all goes well, we're get a chance to reload on TLT this morning as we get the usual Dollar dump into the morning's open as they pump up the Futures to bring in the next round of suckers.  Of course, we are now those suckers as well as we're doing our best to be more bullish as long as the technicals hold up and this morning's little dip is NOT capitulation by the bulls.  

Both of our other trade ideas were bullish ones yesterday, one on CSTR and one on AMX.  The CSTR trade was at 9:27, just ahead of the bell and made for an easy entry as the stock traded to lows of $48.66 at 10:20.  My trade idea was just to sell the Jan $42.50 puts for $6 and we also discussed adding the Jan $45/60 bull call spread for $6 as well as a riskier way to go for a $15 profit, rather than $6 but we felt the numbers justified $60 ahead of earnings.  It seems the markets already agree with our assessment as CSTR is already at $60 this morning.

We're trying to ignore the news but: "You could sell your home, owe nothing more on your mortgage and get $30K," goes a letter from JPMorgan to a delinquent homeowner. With the foreclosure process gummed up, banks are finding it less expensive to allow short sales, forgo their right to pursue unpaid debt, and even offer cash.  This should really piss you off if you're paying your mortgage like a good little drone but the same bank (Chase) won't refinance you at 4% because – for whatever ridiculous excuse – "you don't qualify." 

What we need in this country is for some Communists to come over and teach the people how to organize themselves to stand up to these Corporate Monsters but, oh yeah – just the mention of the word Communist puts most of you into a Pavlovian frenzy as you've been conditioned your whole life to think anything Communist (ie. anti-Capitalist) is somehow evil.  I guess bending over and taking it IS our only option – Yay Capitalism!

If the people in this country had any balls (or actual leaders of their own and not just the Corporate puppets we're allowed to vote for), we'd have a mortgage strike and simply not pay this month.  That would choke off about $200Bn in monthly mortgage revenue from the Banks and I'm pretty sure it would only take one month before the banks capitulate and come back to the table with a reasonable way to share the 0.25% borrowing rate they get from the Government with those of us they are currently squeezing for 5% and higher loan payments.  

Ireland is currently trying to organize a Mortgage Strike: "The nuclear weapon is for borrowers acting in concert and to say that unless proper and sustainable solutions are put in place which are fair and reasonable, then we should not continue to pay under these current conditions," says Ross Maguire, of the New Beginning Trade Union. "It is radical but it is where we are going if things don't change. It's the last option but it is better that people like us have control over it because the danger is that if that kind of people power was misdirected it could wreck the financial system. New Beginning doesn't want to smash the financial system; we merely want to reform it and re-balance power between banks and borrowers."

This is the tightrope being walked in Europe and this is the fire that may fan the flames of Global revolution.  What's going on in Greece is a practice run by the power elite to see how far they can push the masses into servitude before they show a little backbone and rise up.  So far, the Greek people have been surprisingly docile as their retirement programs, health care, current wages and Government Services have been slashed, even as their tax rates have risen by over 30%.  In the US, the middle class sheeple are also dying the death of 1,000 cuts with thousand more yet to come.

Should this make us bearish?  Of course, not – it's a huge victory for Capitalism as getting back to free labor has been our goal ever since Lincoln screwed it up in 1863.  This time, there won't be a war to defend the Capitalist's right to own slaves – this time we will get the people of nation after nation to "volunteer" to spend the rest of their lives living in squalor and servitude as our children and our grandchildren will pay for our excesses.  

Because, after all, it was our own fault for buying that couch on layaway, right?  


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Oil lines

R3 – 98.89
R2 – 98.28
R1 – 97.59
PP – 97
S1 – 96.29
S2 – 95.68
S3 – 95

Yesterday's high and low – 97.68 / 96.38

Breakout lines – 99.78 / 92.97

That dollar smack down just pushed oil over the S1 line!

A few weeks ago I opened a very small starter position in WHR in my IRA account as follows:
Buy 100 shares @ $48.34
Sell 1 2013 $45 call
Sell 1 2014 $40 put.

I didn't pay much attention to this position as I was not intending to trade it, but I note today that the stock closed yesterday at $70.74.  I am up $2240 on the stock, $184 on the put, and down $1696 on the call. So overall  I am up $700 (plus dividend) on a cash outlay of about $3000 in a few weeks, which is a perfectly good outcome.
However I am wondering how best to tweak this, as I would rather keep the stock long term than sell it now for a small profit. Clearly there is no really adequate way to roll the call and the calls have very little premium in them anyway, and the negative premium in the short call does provide some nice protection if the stock does a wheeeeee back in the other direction. But I was thinking maybe it would make sense to roll both the call and the put to an intermediate position, something like the 2014 $55s and snare a bit more premium. On the other hand the stock may well have peaked at $70.74 and maybe I should just wait for a pullback before rolling the put up?

Speaking of the dollar, here are a few lines:

R1 – 79.61
PP – 79.35
S1 – 79.06 and this is where are now

That should help us read the next Fed reports – an academia translation guide from Barry:


This is the new plan for Greece:


Essentially, the EMU is taking 130 billion out of their wallet, putting 110 billion (or whatever) right back in their wallet and calling it 130 billion in "new funding".

The only thing that can be construed of as "new funding" is the additional amount that actually goes to Greece. 

Why the Mathematical Farce?

I suspect the answer is to make it appear as if Greece is paying back debts, when it isn't. 

This is what it has come down to – smoke and mirrors. Not sure that helps Greece much…

Guess Zero Hedge did not like the Barry Rieholtz "smackdown" … so they did some simple math….. According to established data and Treasury, there were 1,953,000 jobs created between 1/31/11 and 1/31/2012 and tax witholding per person decreased from $4,545 to $4,476 per person a decrease of 1.5%.  Therefore, with the current percentage of labor force participation dropping (to 63.1% – Goldman Estimate) with lower taxes being collected…. this is not a good trend… .  After all this analysis by the experts this past week, Isn't this the bottomline…???

oh oh commy's talk again 🙂
Phil/ FTR
what is your thoughts about 500% dividends payout ratio? do you think it is safe and sustanable?

PP 4 2day

5k portfolio:   For all interested, we are ready to embark on growing 5k into 25 (or more!) within a year.  Here are some guidelines.  We will run the portfolio together.  Feel free to post your ideas about trades and methodology.  We cannot and will not daytrade.  We have no margin (yet) in this account.  We will have to concentrate on straight-up calls and puts, and spreads.  We are looking for high-probability trades only.  We must not lose money!   I would suggest we divide our 5k into 5 portions of a grand each, and allot no more than a grand to any one trade in the beginning.   If you make a trade suggestion, provide some supportive evidence for doing the trade and outline your analysis of the methodology for the trade.  Do this as succinctly as possible.  No rush.  Patience and thoughtfulness will be paramount for this portfolio.  Thanks!

Portfolio / lflan – Can you suggest another name for the portfolio as Phil is also starting a 5k portfolio. Maybe the "Community" portfolio if we all get involved!

Good morning.
Sad reality on Greece in your commentary.
Everyone has been waiting for AAPL to drop post earnings ” as it always does”.
Before earnings, everyone was convinced it ‘could not go up, given the run up from $363 to $420’
I have my own opinion, but would value yours!
Assuming it DOES go down 10%, any play now?
BTW, tried to buy you a cup of tea, but the powers said no.

Dollar taking another turn for the worse… Next lines are:

S2 – 78.81
S3 – 78.52

LF – I would suggest that either you or Phil are the only ones that can "officially" add trades to the 5K though.  Too many head chefs never work well…

And gold is up about $10 in the last 90 minutes or so on that dollar weakness. Apparently that interview on CNBC last evening about that fact that Saudi Arabia would not let oil prices go over $100 has put a damper on oil today….

Good morning, still nothing new,


IWM     79.10,  79.53,  79.80,  80.46,  81.12,  81.41,  81.92,  82.42,  82.84,  83.07  and 83.75

If only we were engaged in Capitalism… instead of high tech wealth transfer to the banks.

Another proposed rule – there should be minimum time frame when proposed entry was possible. Timing shouldn't be TOO important.
(If position was proposed at 9:45am and by 9:51am it already got away and never looked back … That's too much emphasis on timing to be really educational)

stj/Buurben……Comminity 5k is OK with me, unless someone has a better name for it.     Phil can decide who runs it.  Doesn't matter to me. 

lflantheman/Community portfolio
Great idea, I am with you on this.

lol…timing will not generally refer to time of day but rather to entry and exit prices. 

lol…I see what you mean.   I think most trades will not be subject to such narrow entry/exit.

This is the new $5KP portfolio started yesterday. It looks like yesterday entry point is valid again this morning.

Phil, the MON calls were bought back yesterday for $0.35 (if was there most afternoon) and we sold 1/2 the TLT position at $2.50. It's back at $2.00 this morning on the gap down (I guess that's the problem with stops overnight). The SLM position is now showing a $410 profit so based on your comments yesterday we could unwind it.

Having  a hard time drinking the Kool-Aid.
I can understand investors not wanting to sell, but who the hell is buying anything?
Market is very overbought and Europe is clearly not fixed and any fund manager knows it. 
a little WEEEEE on that last drop.

Let's see if this is like yesterday, market goes down roughly the same amount and in last hour we're flat and possibly close down 10 points.  This market needs a black swan to burst this bubble.

iflan/Community portfolio
Seems difficult to find $1000 trades without risk that could pay off well. This is just for discussion purposes.
MSFT $27 April calls are $3.20/$3.25 and the stock is $30.14, so there is only 11 cents of premium. If stock goes over $31 at any time we might see a 30% gain and could attach a trailing stop. Selling the $32s for 30 cents would tweak entry to net $2.95 for options that are $3.14 ITM. A stop loss order if the stock dips below $29.50 would prevent serious loss.
Is this the kind  of thing you are looking for? Would welcome any critiques or suggestions to improve this trade.

if the facts don't match your ideology, just change the facts…



In other words, it is an issue of credibility. Republicans don’t really care about accurate revenue estimates; they just want them to show that tax cuts pay for themselves, so they can pass more of them without constraint. As my fellow Economix contributor Simon Johnson has noted, the corruption of the agencies that produce budget data is a crucial cause of Europe’s debt crisis.

Confirmation of this fear is the fact that the House-passed legislation would not require a dynamic estimate for appropriations bills, no matter how large. Republicans want the world to know that tax cuts expand real G.D.P., the capital stock and labor supply, but if spending has any such effect they don’t want anyone to know. Implicitly, Republicans want everyone to think that spending never raises growth because it’s their dogma.

But in the real world, everyone knows that government investments in the national highway system, medical and other scientific research, and other programs unquestionably add to growth. And there are times when government spending can provide macroeconomic stimulus, which the C.B.O. has repeatedly documented, to the consternation of Republicans.

I am not sure it's helpful in the conversation about priorities!

And gold is on a nice ramp up this morning, now up almost $20 since 7:30 AM! Unreal…

Phil/RIMM to  AAPL
One also has to consider what terms AAPL is offering Halliburton. I'm sure they are not paying full retail. This is like the advertisement about Tylenol being the medication hospitals prefer most. It is kind of true, but hospitals used generic brands of acetaminophen (the drug in Tylenol) or if they do use Tylenol brand, they do not pay anything close to the retail prices the public pays, which are a significant premium  over generic brands.

Phil/ RIMM to AAPL
It would be more interesting if Halliburton published their rationale for making the change.

@Felipe/  anyone
What is it in our CONgress that permits the attachments to a bill— originally written with no mention of the attachment?
Why is this even legal?? 

And oil is finally waking up to the weak dollar, zooming up all the way past PP (small stop there) and R1…

Any guess what this US$ selling is?

Cus I actually think we're at fairly good support around here.  "greece fixed" maybe going to break it thru lower?

Phil / jmm / RIMM — I think the most important part of that release is the movement from RIMM to AAPL in a business setting. Slap in the face for RIMM and feather in the cap for AAPL.

Phil Do you have any take on YPF for a buy write ? thanks

Or is Uncle Ben going to use some dovish verbiage?

Community 5k,
That's a big challenge to get to 25k within a year.  For the first "conservative" $1,000, we can sell 1 RUT March 690/680 bull put spread for $0.35, getting 3.5% without commission for the 5.5 weeks.  The adventurous can sell 740/730 bull put spread for $0.85 (8.5%).  This one is only 10% OTM versus the first spread that is 16% OTM.  There is a chance that we'll get better pricing on a 5% drop, but we might not get one.

Speaking of portfolio, the AA Money virtual portfolio has been closed so anyone still holding any position should unwind them. We are about even now so it was a good time to bail out of a boring trading setup!

TLT weekly $115 Call holders, warning…. TLT is getting another leg down.

why did the market erase its losses? Bernank QEternity?

Oil has now breached R2… Quite a run this morning!

WHO DOESN'T KNOW ABOUT QEternity?!!!!!!!!!!!!!  When will this bullshit finally not be a surprise!!!!!!

Phil / FTR
500% dividends payout ratio means they pay 5 times more than they make (net income), and i am in doubt they can continue to do that for long term…..
just think your math is too good to be true…….:)

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