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Monday Market Miracle – Greece is Fixed Again!

Good news everyone – Greece is "fixed"!

Just look at the happy, happy people celebrating in the streets – looking towards a bright future of lower wages, gutted retirement plans, reduced government services and endless, endless debt payments against which their Government, who were put in place by the IMF and ECB, have mortgaged 136% of the entire value of their nation's assets to the IMF and ECB.  

Look hard because it's soon to be the future of Italy, Spain, Ireland, Portugal, France the UK and the US as well as austerity claims a major victory for the bondholders as they twisted the arms of the Greeks until they snapped and then they put the knife in to hold them in place and began twisting the legs until they snapped and then they shoved a "rescue package" down their throats.  And to think in the old days we used to have to have a war to destroy another country – how silly – now we can do it with contracts!  

greeceAs pointed out by the London Telegraph: In 1953, The US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Germany's Chancellor Konrad Adenauer a 50% haircut on all German debt, worth 70% in relief with stretched maturities. There was a five-year moratorium on interest payments.  The express purpose was to give Germany enough oxygen to rebuild its economy. The Wirtschaftswunder whittled down the burden of German debts to modest levels within a decade. Germany emerged as a vibrant democracy and a pillar of the western security system.

Greece, on the other hand, is being shown no such mercy and hasn't got a chance in hell of emerging from anything until 2025 – even according to the ridiculously optimistic IMF and ECB forcasts that seek only to kick this can as far down the road as possible so that people will stop asking awkward questions about the overall viability of the EU.  150,000 Government jobs now have to be cut and 50,000 businesses will close (many burned down early to avoid the rush last night) in a nation of 11M people (and leaving every day).  That's like the US agreeing to 4.5M Government job cuts and 15M businesses shutting down (5 people employed per business average) to "fix" our economy.  

Over 40 members of the Greek Parliament from the ruling party chose to be expelled, thrown out unemployed onto the burning streets of a nation with no future – rather than go along with this farce last night.  That was 1/4 of the New Democracy Party's Members and 20 of of 153 of PASOK's lawmakers.  We can expect those same people, along with the parties that were against this from the start, to call for new elections and run on a platform of overturning this agreement – making the whole thing meaningless – unless the IMF intends to march troops into Athens to enforce the treaty and begin hauling away landmarks.  

[budgetpr]We get a preview of US austerity this evening as President Obama rolls out his 2013 budget proposal (year starts in July) that calls for $350Bn in short-term spending that is unlikely to be approved and another $476Bn, six-year highway bill that is woefully inadequate while aiming to cut the PROJECTED deficit by $4Tn over the next decade, mainly by taxing the wealthy – good luck with all that!  

Our projected $1.33Tn deficit in 2013 has been cut, despite the stimulus, to $901Bn by the President – essentially using the tax increases and spending cuts he promised in September so no surprises there but, as of this morning, Congress has refused to even put his measures up for a vote.  Obama is pressing for a new 30 percent minimum tax on people earning more than $1 million annually (the "Buffett Rule") and he wants to let the Bush Tax cuts expire on people earning more than $250,000 a year with a cap on itemized deductions at 28%.  

This plus very small increases (too small) in Corporate taxes, increase revenues so much that we are able to add a $350Bn stimulus (to grow the economy and generate more revenues) AND knock $400Bn off the deficit WITH Obama's Health Care program kicking in as well as Obama has cut $2.50 in spending for every dollar in taxes raised – a feat NEVER accomplished before.  Will there be applause?  Will there be accolades?  More likely, there will be a crucifixion…


Without Obama's proposed changes (which should have been passed THIS year but have been shelved by Congress), by the next Presidential campaign in 2016, the US is projected to have $24Tn in debt (up 50%) against a $17Tn GDP for a Greece-beating debt to GDP ratio of 138.9%.  At that point, we can expect the Troika to be coming for us – looking to jam a restructuring down our throats.  That's the future the GOP will be running towards as they reject Obama's Budget out of hand.  

With all this fun and excitement, I'm very glad we took the bullish money and ran last Thursday and and we took the bearish money and ran last Friday, ending up much more cashy and flexible into the weekend.  As usual, the pre-market is up 1% on all the excitement over Greece being "fixed" – as it has been pretty much every Monday this year (I wonder what they will do next Monday, with no more Greece to fix?).   We already caught oil (/CL) for a ride down from $100 to $99.50 in Member Chat this morning and it just popped up to $101.62, which gave us another entry at the cross below $101.50 and hopefully they open up here so we can do another USO or SCO trade (see last week for those fun trade ideas).  

We'll be impressed if the market makes new highs but that's way up at 12,920 on the Dow, 1,355 on the S&P, 2,935 on the Nasdaq, 8,110 on the NYSE and 835 on the Russell and THEN we need to see the SOX and Transports turning around – all preferably WITHOUT the Dollar (now 78.895) crashing through the floor (see Stock World Weekly for chart of that ongoing relationship).  

Time for the bulls to put up or shut up – it's going to be an interesting week! 

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  1. The Troika will demand political guarantees from Samaras and others…….there is a much larger risk in the form of the trillion or more of LTRO being purportedly used to bring down the yield on sovereign bonds

  2. Morning all.  Long weekend of festivals here in Nica, so I didn't have any time to read.  Looking for a quick note as to current market perception?
    25K – short term bearish, long term bullish?
    Oil – Still shorting off $100?
    Long Term – Still waiting for a pullback, looking for good bullish opp's?
    Short Term – ??
    Thanks all.  Too much Tona's to make much sense…

  3. Oh goody! We'll get to short oil at $100 once more! Some USO puts to go please

  4. Thanks for the history lesson on Germany this morning Phil… It seems we never learn!

  5. Oil Lines

    R3 – 100.40
    R2 – 100
    R1 – 99.83
    PP – 99.46
    S1 – 99.27
    S2 – 98.90
    S3 – 98.71

    The Monday morning lines are usually unreliable due to the fact that they are based solely on thin Sunday night action!

  6. Happy Happy Joy Joy, PP for today:

  7. Good morning,


    IWM     78.34,  78.76,  79.10,  79.53,  79.80,  80.46,  81.12,  81.41,  81.92  and  82.42


  8. Oil seems to be happy about Greece (all these molotov cocktails to make), on the other hand gold is less enthusiastic this morning. Perhaps not enough violence yet! Or maybe investors are coming to the realization that gold will not protect their houses and stock up on guns and ammo instead!

  9. Good that last Friday was all a dream

  10. Some pretty sound advice from Barry's site:


    1) Accumulation and Distribution Days: When should traders go to cash? Follow the big boys! The big institutions control the market, so pay attention to their actions by tracking accumulation anddistribution days. When institutional selling builds up over a short period of time (2-4 weeks) AND leading stocks start to break down, that is a great sign to start raising cash. Why? Because 4 out of 5 stocks move in the general direction of the market. I don’t care how good the company is, when the market’s in a downtrend, you don’t want to fight it.

    2) Uptrends and Downtrends: Don’t get caught up with the terms Bull and Bear market. Just recognize if we are in an uptrend or a downtrend. For example, use the 50-day moving average on the NASDAQ Composite as a general indicator to be in or out of the market. Above the line usually means we’re in an uptrend and it’s a green light to be in stocks…below the line, downtrend and red light.

    3) Scale In: When conditions start to improve, SLOWLY scale back in. There’s no reason to rush. Take a few positions and test the waters. If the rally is for real, there will be PLENTY OF TIME to make money. If you are wrong, at least you can get out quick with minimal damage and protect your portfolio. Think Defense First!

    4) Buy the Strongest Earnings & Sales Growth: When markets are in a confirmed uptrend, what stocks should you buy? Be in the best! Don’t settle for low rate stocks. Look for companies that have strong earnings and sales growth. Why be in dead-money stocks with little growth potential? We’re in this to make money, right? So be in stocks that have a higher probability of moving up!

    5) Fundamentals AND Technicals: Why does it only have to be one or the other? Why not USE BOTH! We want as many factors as possible in our favor when trading the market. Therefore, start with strong fundamental companies AND combine the proper technical timing to identify ideal entry points to effect your best risk vs reward trades.

  11. @Felipe

    ALL that folderal about Greece, Obama's plight at the hands of republicans in CONgress, and projected deficits as if the R's have a 1 in a billion chance of capturing Air Force One in November, and not one single option trade.
    Short WOR 19

  12. Timing/stjean – Great post. Also, what do you make of oil blowing through R3, just briefly?

  13. JRW, are you planning to go long or short today? Probably off 81.92?

  14. How is everybody feeling this morning? I see yesterday/last night everyone was in good mood!

  15. Oil / Pakdog – I am actually surprised the R3 held so well (these lines are not precise to the penny). But like I said, Monday morning lines are the most unreliable because I use Sunday for reference and the trading is too thin to be really useful. On the other hands many algos use the same data so there is always a chance!

  16. Flip – Would you vote for Romney in Nov or choose the Sweet Meteor of Death instead?

  17. Stjean – Sorry to make you repeat yourself. Thanks for all you do here.

  18. Not a problem Pakdog! Thanks!

  19. FAS up $3.00 this morning…

    We have no premium sold against this IWM BCS as the TNA calls expired worthless on Friday.

  20. Oil has now been at an average of 100 for 3 months, we had 5 months last year at a slightly higher level before we crashed.  Let's not forget that oil at extended prices has been a direct or leading cause of the market correcting close to 20%, 100% of the time.

  21. Sweet Meteor of Death, 2012Sweet Meteor/Pak – I love it!  

    Guarantees/Roro – What kind of real guarantees can they get?  If you lend money to a Government and that government is dissolved and replaced – especially if they are replaced on the basis that the agreements they made were illegal in the first place – the only real recourse a lender has is to cut of trade, assistance, etc. (or boot them out of the EU, if they care) or – war.  War doesn't seem realistic and Greece has no economy anyway so hard to threaten them with trade sanctions and such and I'm pretty sure they WANT to leave the EU at this point (the people, not the flunkys). 

    Long-term/Burr – It's all about inflation.  If the Central Banks aren't going to turn off the taps, all that money will begin spilling over into the economy one day.  Short-term, today I think we go up but I'm looking for short opportunities now.  

    Speaking of which – AAPL $500!  That's $460Bn or 3% of the US GDP.  

    Oil still heading back down towards $100.  I think I need a function key for this trade idea:  SCO March $35/39 bull call spread at $2, selling $34 puts for $1.10 for net .95 on the $4 spread that's $2.35 in the money with oil at $100.20.  So we're going for $100 or less into March expirations.

    In the $25KP, 10 March $37.50 puts are .90 so let's give those a shot and we'll roll them and DD if we get to $102.50 but I doubt we get so lucky.  

  22. AAPL over $500 and I would say pretty good timing for lflan! Just wow….

  23. AAPL portfolio:   Sell to close the March 490s for 25.00 for a profit of $17, 395 for the porfolio.  Keep the April 490s.    Are you boys keeping up with this?          :)  

  24. PCLN???

  25. Phil those are This week Feb's at .90

  26. Sage they are the march puts 37.50

  27. or uso

  28. 25kp – SCO Puts? Ultrashort Oil, Betting oil going up?

  29. Phil, I dont see March 37.50…

  30. the march 37.50 are uso puts

  31. That is kind of my point Phil……..the next thing the Troika will ask for is the 1st child……….but, in reality where is the political leadership?
    No where……….and, under the most impossible of circumstances which makes the vote and scare mongering more pathetic by degrees while the banks are getting a pass off of printed money and everyone else is getting fucked one way or another.
    I just don't get it as to why someone/anyone hasn't stepped up with an alternative to the terms of the Troika? is it really that complicated?

  32. On Friday we closed the short DMND puts, the long TLT calls, the long USO puts and 1/2 the DIA puts. We also had a quick XLF trade that was basically a wash!

    This morning we added another 10 USO puts.

    Phil, I could not get confirmation from anyone, but we did unload 1/2 the DIA puts in the morning and I saw no further action later on Friday so I still have 10 DIA puts in the portfolio. Correct me if I am wrong there!

  33. mampcsA

    I would short a failed attempt at 82.42 !!

  34. @Pakdog
    I no longer vote in national elections.
    Gave that up when the Republicans took over in 1994 and promptly turned into everything the democrats were for 40 years, and worse, and since then confirming that there is only one party in this country: the party of Incumbency.  Felipe's been trying to force a categorization on me of being conservative when I am anything but. As proof I offer my voting record. Not Bush, Not Clinton, Not theBamster, Not Hillary, Not Romney… the list is endless. I'd write in someone but I'd rather use that time to make a couple really profitable options trades, which is why I pay $7,000 a year to be here, not hear lefty, extremely radical, hate-right- wing poltical rants every morning.
    Yes, to answer your question I would prefer the sweet meteor of Death over any democRAT or RepubliCON running for office, and only serve to keep some semblance of reality when things turn political on this board which they seem to do with increasing frequency as the non-election nears.
    TheBamster in a walk but he will be presiding over one of the worst economies since the
    Depression.  N0 one can govern this  country. It's too big and Size does matter as some wise sage wrote not too long ago:
    "And don't forget it's a relatively small country. It's not like these people have anonymous lives. That's why I was very dubious that, when push comes to shove, the majority of their leaders would vote to sell their people down the river. These are intelligent people for the most part (and Socialists for the most part) and they understand the ramifications of this agreement and, unlike our politicians, they aren't all millionaires and they will literally have to live with their decisions."
    Go long WOR at 17.50, Short at 18.75, Stop at 20.

  35. Phil,
    The VIX Puts/FAS Calls hedge worked pretty well for me. Do you think that is a reasonable hedge to be applied at end of day?

  36. anyone know why PCLN ran 20 points this morning?

  37. anyone know why PCLN ran 20 points this morning?

  38. Maybe now the world with see what a farce the IMF is – finally inflicting pain on a European country and its in the news for the entire world to read about.
    What a joke the whole thing is – except for the Greeks.
    What worries be is that the right wing party stood up to the BS -
    We will be really luck if we don't end up with a Fascist Regime – they were having problem with fascist youth attacking foreign looking people and that was six months ago. Think Phil had a post on it.

  39. stjeanluc, I had a double down as well on the $29 DMND puts for a total of 4. And I could be wrong but I thought we took DIA off the table on Friday.

  40. Also, I'm showing a low of $0.92 on USO in TOS. Did anyone actually fill at $0.90?

  41. Miners are selling off, possible prelude to a gold drop.  

    Learnings/StJ – I find it amazing but even when people studied history, they did the same dumb crap over and over again.

    JRW's up early so you know it's an exciting day to trade!  

    Good advice from Barry, thanks StJ! 

    No trades/Flips – Unlike you, I like to get some factual observations before decisions what I believe.  

    Briefly/Pak – To me, the briefly is key.  Especially with manipulated indicators like briefly it's exactly those points they are going for and when they are attacked and failed, I consider that to be very telling. 

    Feelings/Pharm – I feel great!  I'm excited and enthusiastic about this week as I'm really looking forward to buying opportunities if we get a good crash. 

    FAS Money/StJ – Still at $90.16 so $6.16 of intrinsic value and we need to look ahead (since no next week until Thurs am) to our March roll, which is 2x the $98s, now $3.40 and, if we have to do that, we'd certainly want to sell short puts but then the short puts will be cheaper and less attractive to sell so why not sell 1 March $79 put for $3 ($300) since the only way that goes in the money on a 12% drop (4% of XLF to $14.10) would be for us to gain $870 back on the two short calls – get it?  Since we are certainly long-term bullish on Financials – there's not much threat in us getting assigned a bullish ETF on them – especially one share.  

    IWM Money/StJ – Nice pop to sell 2 TNA Feb $63s for $1.  TNA topped out at $63.60 very briefly last Weds.  

    USO/Sage – MARCH!!!  Logically, the Febs are a very dangerous play and, although we do dangerous plays like that, I wouldn't have said "and we'll DD on a move $2.50 against us" on a put that expired on Friday.  The correct move if we were day-trading (and you are day-trading if you are buying options that expire the same week) would be to set a stop and consider a re-entry but no way would you want to ride it down without a very firm idea of where the ceiling is (or, as with TLT last week, the floor – and even then we bought a week because it was getting too close for comfort).  

    SCO/Kallen – When you SELL puts on a short ETF, you are bullish on the ETF and therefore bearish on the underlying stock/commodity.  

    Troika/Roro – But it's Troika puppets running the Government so who's there to speak for the people.  People don't burn down buildings and attack Parliament because they feel they are being fairly represented – they know it's all crap and that's all they are able to do about it.  This is just history again – Governments often mistakenly believe they can push the people much farther than they actually can but #greekrevolution is very popular on twitter and #spanishrevolution is catching up already: 

    "SOLIDARITY WITH GREECE" #greekrevolution, Valladolid (Spain). Twitpic photo by Christopher Gonzalez.

    No one thought the Arabs would actually overthrow long-standing dictatorships until they were finally pushed just a little too far.  Soon hundreds of thousands of Greeks will not have food or fuel or jobs to distract them (20% already out of work) and it won't be long before they have rolling blackouts and, when you scrape together $100 to fill your fridge and the power goes out and spoils the food – how many more straws would it take you before you join the mob?  It's possible the Troika is smart and will now allow all sorts of soft money aid to flow through the Greek budget (further running up the deficit against the stated plans) in order to calm the population and show that things are indeed improving under austerity but, sadly, I don't think they are that clever.  

    $25KP:  Still too bearish, I guess.  

    • DMND – $23.55 – Waiting and seeing. 
    • XRT $57.62 – I am dumbfounded. 
    • GLL $16.05 – If Greece is fixed, why is gold high?  
    • SCO $37.60 – on track
    • FAS $90.79 – only $2.79 of $7.90 is intrinsic – so silly.
    • TZA $18.83 – We had 5 at $3.65 ($1,825) and we doubled down with 5 more at $1.86 ($930) which is clearly more than a full position and our average was $2.75 and we got back to $2.60 on Friday and then fell back to $2.35 and then back to $2.60 again over the FULL DAY and we didn't lighten up to make ourselves more flexible – that's BAD TRADING!!! 
    • SQQQ $13.66 – only $1.34 of that is intrinsic and we like the target (unless AAPL is going to $600 in March).  
    • DIA $128.29.  So the fact that I say at 9:54 on Friday  "DIA $128 puts should be 1/2 out at $1.35 and a stop at $1.25 on the rest for a nice win. " and then at 10:18: "This is a good spot to do those 1/2 outs on the $25KP and set the stops on the other halves a bit higher!" and then at 11 saying : "Nas back over 2,900, RUT 814.90, XLF $14.54, NYSE 7,983 so close to stop outs on the rest of those short $25KP positions discussed earlier if you haven't already.  I'd say if RUT OR NYSE pop, then kill them."  all leads to us STILL having the DIA puts???  If we're not going to execute trades properly then there's really no point in this, is there?  

    $5KP/StJ – Seems all on track.

  42. 25Kp / Jrod – Thanks but I didn't see anything on the DMND DD. Can you tell me when? As for the DIA puts, I know we closed 1/2 at the open and put a $1.25 stop on the rest. That was triggered at the close on Friday but I was wondering if Phil got out before because I saw no post on that.

  43. DMND $29 calls DD trade from last Thursday…
    $25KP Moves:

    • Buying back 2 DMND June $45 calls for .30.  Rolling 2 June $37 calls (.70) down to $29 calls for $1.10 and DD at $1.80.  Selling 3 June $22.50 puts for $4. 

  44. AAPL portfolio:   Sold to open 10 April 540 calls for 10.35, thus converting the long April 490s to a spread. 

  45. Stj, yes we did get out of the DIA puts at 1.25 on Friday.
    I also thought Phil wanted to close all DMND positions ang got out of the DMND 29 calls at 1.85 this morning. Guess i was mistaken (though it turned out to be a good decision in the end).

  46. 25KP / Phil – On the DIA puts, I have 1/2 of them out as of Friday morning and ask for confirmation on when and what price we got out of the rest and no one got back to me on that. They topped at $1.68 so I have to assume that most got out with a nice profit. But as I said before, I am only the scribe here… I can't guess on the exit prices that the majority got. 

  47. Briefly / Phil – Makes sense because it just shot straight up suddenly from 99.70 and has drifted steadily down since then. Like you say, doesn't matter if it's rigged if you know it is.

  48. Thanks Jrod and mampcsA on the 25Kp trades! Thursday and Friday were a bit hectic tracking all the moves!

    Jrod, the DMND Jun 29 calls went over $1.80 on Thursday. Is that when you DD on them? Thanks.

  49. Hedge/Kallen – What, back to that combo?  I won't know until the day's end.   At the moment, volume 29M at 10:30 is better but still light but we are holding up well considering the Dollar is back at 79 so we have to see which way things break (and, as you can tell, I still believe down).  

    PCLN/Jabob – Firms that run Superbowl ads tend to get pops that month but I don't see anything special.  Perhaps AAPL is just pushing money into the Nas. 

    Fascism/Samz – I don't see the Greeks going that way.  Communist maybe.  Liberal Socialists for sure – depends who has the best speech about kicking the bankers out of the country.  

    0.92/Jrod – That's where to 5% rule comes in.   If it's a .90 trade and you have .92 then your stop the other way is .95 to either fill the trade or let it go.  If you do fill at .95 instead of .90, your expectations should be still for 20% of .90 on the move ($1.08) and you should be thrilled to make .13.  Once you get into that habit, you'll be able to make better decisions about whether to chase or let things go.  

    DMND/Mampcs – I think I didn't mind holding the  2 longs I saw but the gist of it was I had lost faith in the position and was no longer willing to risk an assignment.  

    Scribing/StJ – I understand that but it's silly if we call an exit at $1.60 and it gets booked at $1.25 because no one makes the trade – even though there is ample opportunity.  Hard enough making money day trading without blowing profit opportunities right and left.

  50. Time to go long off the 10:30 LOD?

  51. DMND, it's 4 longs actually. We did DD at 1.80.

  52. JRW, did you go short and if so, when? Failure at 82.38? Thanks.

  53. FAS Money – Selling 1 Mar 79 Put (still $3.00)

  54. Lflan/Following – Yes, thanks!!

  55. Have you lost confidence in Diamond Foods altogether or just that trade? is now a time to enter for someone who hasn't? thanks

  56. IWM Money – Selling 2 TNA Feb 63 (now 0.60). They wer $1.00 at the open but have come down to $0.60 right at the time Phil was posting.

  57. CMG - looking at the chart, if you bought CMG at 10:30 am and sold at the close you would have had 100% winners over the last ten days (sorry Jabo).  Not a recommendation, just sayin…

  58. mampcsA

    I was short but now 2/3 long

  59. I DD at the same time we made the DMND adjustments. When we rolled the 2 37s to 29s I added 2 more 29s at $1.80.

  60. Greece – driving to work, the head of European credit at RBS was on Bloomberg and was quite dour.  His proposition was that Greece simply doesn't have the productivity to meet their prescribed debt to GDP goals and very likely may still default, even as soon as the March deadline.  After that, Portugal will replay the same drama when their debt comes due later this year.  With a nice, tidy European accent, he ended with "There is no free lunch."

  61. DIA Puts / Phil – I booked them as sold at $1.40 which is where it was at 11:00 AM when you made the second calls. They dropped to 1.35 before getting to 1.60 so that might have stopped some people there. That shows a 100% profit on the second set of puts. That's part of a nice $3400 day on Friday!

  62. Inflantheman/AAPL
    When were the Apr 490 calls purchased? I missed this but just bought the Apr 490/-540 spread

  63. Any doctors on the board or Pharm/Phil  familiar with MAKO? A friend that is pretty astute says they could be another ISRG – looks like they are losing $ though.

  64. Phil/Stop loss orders
    You have said that it is best not to set mechanical stops on day trades as options tend to be thinly traded and bots will seek out stops and move the stock up and down to blow them out. Does this apply equally to contingency orders? For example if I am long  Feb 18th MSFT $30 calls at 51cents and I place an order to sell 20 calls if MSFT ducks below $30.50 would bots actually push MSFT down from present $30.56 to below $30.50 to blow off that stop, or is it more a case of many traders setting stops at $30.50 being a  nice round number with some supportive qualities, and therefore triggering a dip?

  65. Peter D, chaps,
    I didn't get a chance to play SPX strangles, as I was out most of the day in meetings.  By the time I came back, it was 10 minutes before close, and I didn't want to trade anything in a rush.
    It's tempting to play some.  What do you think?  Or it's better if I sit on my hands?

  66. rnmarple….The March 490s were purchased Friday, with recommendation to hold over weekend…..both posts are on Friday's board. 

  67. DMND/Morx – I Am willing to lose a defined $180 on a call (and would expect not to lose all) but not willing to have the stock put to me at $20 on some revelation that things are even worse than they seem.  There's a lot of smoke so 4x $180 (1/3 position) is plenty to bet on no fire without risking getting assigned blocks of shares at $2,000 each.  

    Wow, CNBC just will not broadcast the President when he speaks – it's amazing!  I had to sit through every last syllable Bush uttered (remember every Wednesday, Bush would be on ahead of the oil inventories ratcheting up the fear factor?) as their network not only carried every second of his talks but then would somehow piece together a semi-coherent sound-byte and play that over and over and over again.  With Obama – they ignore or talk over practically everything he does.  

    No free lunch/MrM – Amazing how you still have to tell people that.  

    DIA/StJ – That's the way I used to look at them.  I'd look to just see what transactions triggered after I posted a change.  I like doing it with whoever is actually trading and logging their results BUT it falls apart quickly if no one does the trades as outlined.  

    MAKO/Jomp – I'm sure we have guys who know it.  I don't follow them, I only got interested in ISRG because doctors on this site said it was the greatest thing since sliced bread back when no one had heard of them.  This is a different area and could be just as valid but many of these guys come and go as it's a very tricky business to get right.  At least, so far, none of the robots have gone nuts and gone on a killing spree – yet!  

    MSFT/JMM – If they were about to move the stock up and wanted to find call sellers first, then yes – it's those "head fake" moves that get you when you set hard stops but, on the other hand, there's nothing wrong with calling a top or bottom that you really want to get in or out of on something – especially if you're not going to be around to watch it but, if you are around – nothing beats your best judgement of when to make a trade (well, hopefully not!) as opposed to some arbitrary number you picked before you knew more (see "Microwave Oven Theory").  Contingent orders are better because there's nothing visible as a pending order until your conditional is hit (because you're not trading the conditional, just watching it).  On the down side, they do have a lag and pricing can get out of your comfort zone.  

    Oil (/CL) back over $100 as Dollar gets rejected at $80.   

  68. IT Help:
    Does anyone know of a calender that will allow individuals from different states to update it regularly and allow everyone in a group to view the changes in real-time (or as close to real-time as possible)? I need this to schedule family members to be with my mother as she begins her brain cancer treatments. Any help would be greatly appreciated.TIA

  69. rnmarple….For the record, I did NOT recommend purchasing  April 490/540 AAPL bull call spreads today.  What I did was COVER some April 490s that are already 20% profitable.  There is a big difference.  Having said that, the spread will probably come in O.K., so I have no problem with it.  I just want to avoid confusion.  Covering an already profitable long is different than buying a new spread outright.  Overall earnings are different, break-even points are different, and so on. 

  70. dclark41….I use Google calendars for this.  Works nicely. 

  71. I am actually quite surprised that the oil lines have hold up so far today… falling from R3 to PP and then bouncing back to R2. Small $1 trading range so far!

  72. no doctors have an opinion on MAKO?

  73. Expiring ITM BCS with IB / Anyone
    I have the Feb 80/90 BCS on OXY that's 100% ITM.  Oxy is trading at 103.  Has anyone let this expire with IB?  If so, do you know what fees they possibly charge, and is it cash settled, or do you end up with stock somehow?
    The price of the spread right now is 9.75×10.20

  74. I just saw 44.84M volume for the DOW.  Is that quite a low volume?

  75. jomptien
    MAKO, I am holding the stock with options plays since last year Jun.
    People with hip or knee problems will tell you more about their operation. Target for MAKO is set at 45.00.
    I have followed their operation procedure very closely and it is very inpressive. They are using computer operated cutting equipment operating  to a fraction of a millimeter. In comparison to the conventional Operation To me something like day and night.

  76. Iflan:
    Thanks for the response. I assume I just have to set up a separate "family" Google account to make that work?

  77. DMND – so by implication i think i hear you saying that purchasing the stock (covered) in the unofficial IRA portfolio is pretty risky. Would you go so far as to recommend we exit?

  78. SCO $25K / Phil – For extra boost int the $25K, would you recommend to buy back the short caller today with the oil at $100 and leave the long call work its magic till friday? Thanks for your perspective

  79. dclark….yes, once you set up the calendar you can decide who can view the calendar as well as who is allowed to view and change the calendar.   I use it for a camp rental where several families can see immediately who is occupying the camp on whatever dates.  It's very nice. 

  80. At the open: Dow +0.62% to 12880. S&P +0.72% to 1352. Nasdaq +0.72% to 2566.

    Treasurys: 30-year -0.03%. 10-yr -0.05%. 5-yr -0.02%.

    Commodities: Crude +1.69% to $100.7. Gold -0.1% to $1723.65.

    Currencies: Euro +0.36% vs. dollar. Yen flat. Pound -0.31%.

    10:00 AM On the hour: Dow +0.42%. 10-yr +0.05%. Euro +0.26%vs. dollar. Crude +1.31% to $100.33. Gold -0.24% to $1721.15

    11:00 AM On the hour: Dow +0.34%. 10-yr +0.12%. Euro +0.13%vs. dollar. Crude +1.37% to $100.39. Gold +0.17% to $1728.15.

    11:40 AM European shares close, holding onto moderate gains. Greece will get the headlines, but little has been solved there. The ECB liquidity hose, however, remains on full blast. Stoxx 50 +0.4%, Germany +0.7%, France +0.3%, Italy +0.3%, Spain -0.1%, U.K.+0.9%. The euro gives back all of its overnight gain, flat at $1.3201.

    12:00 PM On the hour: Dow +0.49%. 10-yr +0.02%. Euro +0.13%vs. dollar. Crude +1.45% to $100.47. Gold -0.11% to $1723.45.

    "An insincere acceptance of impossible conditions," said Keynes, describing Germany post-WWI, but equally apt to Greece last night. "The policy cannot command democratic consent over time," writes Ambrose Evans-Pritchard, who says the next parliament will be packed with "'anti-memorandum' fire-breathers." The dominant party in Greece months ago, Pasok commands 8% in the polls. 

    The terms of Greece's deal with its private creditors will be published after eurozone finmins meet on Wednesday, Reuters reports. Bondholders will take a net loss of 70% and the average interest on new bonds will be 3.5%. Creditors will also receive an additional warrant linked to Greek growth, thereby giving them upside potential. 

    The euro's New Year rally may be about to come to a close, writes Simone Foxman, noting the currency's behavior in 2012 is closely tracking its fall 2011 performance (also surrounding a "crucial" vote in Athens). If the pattern continues, the euro is set for a steep decline.

    "Which market is leading? And where to," asks a market observer, charting the S&P 500 against the Shanghai Composite. An unscientific view might point to divergences in market direction being resolved in China's favor, but there's room for other interpretations.

    Signs of caution are building in the Dow Jones Transports, which dropped 1.04% Friday and shed 2.14% last week. In February the transports are down 1.2%, while the Dow industrials are still up 1.3%, which is starting to raise some eyebrows among followers of the Dow Theory that both the industrials and transports must move in tandem to confirm a market trend

    As well flagged, President Obama sends Congress a $3.8T budget request for FY 2013, but given the tax rises that are included, it's unlikely to pass intact and certainly not before the election. The request forecasts that the deficit will rise to $1.33T this FY before falling to $901B in FY 2013. You can watch Obama's budget remarks live here.

    Chinese inflation, which surprised forecasters by jumping to 4.5% in January, could print as low at 3% this month, according to Zhou Wangjun of the NDRC. As his title is senior official in charge of pricing, he may be worth paying attention to. 

    German January wholesale prices +1.2% vs. flat in December, and expectations for +0.5%. Prices +3% Y/Y vs. expectations for 1.8%.

    The OECD's leading indicator, which attempts to flag turning points, rose 0.2 point in Dec. to 100.4 vs. a long-term average of 100, with the global economic outlook showing tentative signs of improvement led by the U.S. and Japan. The timing's a tad unfortunate given that Japan today reported a worse-than-expected Q4 GDP contraction.

    Certainly something to watch:  Declaring victory and retreating, France's AMF does not renew its expiring ban on shorting of financial stocks. Belgium moves similarly. Bans in Italy and Spain remain until at least February 24. (PR, .pdf)

    Paul Volcker is set to fire back at critics of his proposed ban on prop trading by banks, arguing in a comment letter that the rule would make the U.S. financial system safer. Many big financial firms are submitting their own comment letters countering Volcker's view that too much liquidity in the market can cause investors to bid up asset prices with the expectation that there will always be a buyer.

    Oil prices move higher as they ride the momentum of a Greek austerity deal that could boost economic activity and a weaker U.S. dollar. March crude futures traded as high as $100.62 a barrel before slipping back. Brent crude +0.4% to 117.72, WTI crude +0.9%to 99.52.

    Extending the EU oil embargo on Iran to ship insurance, so that firms can no longer cover vessels trading with the country, hasemerged as key to enforcing the sanctions. As a result, major operators such as OSG and Frontline (FRO), as well as owners controlling over 100 supertankers, will stop loading cargoes from the country. 

    Chesapeake Energy (CHK+2.6% premarket afterannouncing plans to make $10B-$12B of transactions to fund its 2012 capital expenditures, including seeking JV transactions in its Mississippi Lime field, considering a 100% sale of its Permian Basin assets, selling ~$2B in pipeline and infrastructure assets, and issuing debt.

    Arch Coal (ACI -3.7%) dips after Brean Murray cut the shares to Hold, expressing concerns over the company's weak pricing power, and that it may not be able to sell its non-contracted planned 2012 output.

    Thanks Revtodd with the heads up on this!  Trina Solar (TSL +3.5%) gets a big upgrade from Bank of America, which raises shares to Buy from Underperform with a target price raised to $17 from $2. Investors are betting so far today that the upgrade is the right move despite TSL's 44% gain in the past three months.

    First Solar (FSLR -5.5%) is the S&P's leading loser after Brigantine reduces its rating to Hold from Buy. Among the reasons cited, the pace of installations in Germany “has slowed dramatically,” with proposals to impose further reductions on feed-in tariffs; andfunding delays for the Antelope Valley facility puts its sale at risk, potentially requiring FSLR to buy it back. 

  81. MGM (
    MGM -0.7%) edges lower after announcing itsCityCenter Holdings JV will be offering $240M in notes through a privately placement, which CityCenter will use to help pay down $300M in borrowings from a credit facility. Together with the bond offering, MGM is preannouncing CityCenter posted Q4 revenue of $269M, and an operating loss of $45M.

    Benefiting from Diamond Foods' (DMND -2.2%) [[difficulties]] is John B. Sanfillippo (JBSS +4.4%), which should pick up market share from walnut growers no longer wanting to sell their crop to Diamond. Growers had already been chafing under the low prices offered by Diamond and now have an excuse to look elsewhere.

    Spirit Airlines (SAVE +4.3%) rides an upgrade from Morgan Stanley to a long Research Tactical Idea higher. The carrier has been showing its mettle recently as it has unabashedly raised fees on a myriad of services. CEO Ben Baldanza says the firm wears its reputation for charging fees as a "badge of honor" on the theory that consumers actually only pay for what they use – instead of sharing costs in ticket prices.

    Monster Worldwide (MWW -3.5%) shares are downgradedto Sell from Neutral with its price target cut to $6 from $8 at Citigroup: “As an online recruitment play, MWW faces obvious cyclical risk,” but noting MWW's first Y/Y bookings decline in more than a year, "recent reports by CareerBuilder and LinkedIn suggest to us that MWW’s challenges are likely as much competitive as macro."

    Tireless public servants and stewards of the tax dollar, ECB researchers release a 37-page study concluding trading activity declines during World Cup football matches, with a scored goal causing an additional drop in action. "Little excuse for the England fans then," quips Katie Martin. (full study)

    Benchmark takes a dim view of the semiconductor industry, writing that “an upward inflection in a semiconductor mini cycle is already priced into the sector” and cuts its rating on Broadcom (BRCM -1.7%) and Marvell (MRVL -1.7%), arguing their shares have priced in that recovery. 

    Bernstein boosts AMD (AMD +2.5%) to Outperform from Market Perform with a new $10 target price up from $6.50, seeing a demand boost later this year from a pending recovery in the hard-disk drive market. Combined with management changes, likely low expectations and more, the firm believes "the risk/reward around the stock is now (again) skewed positively."

    Proxy advisory firm ISS issues a harsh critique of Facebook's (FB) corporate governance in a report, calling the rights of shareholders limited under the current dual-class structure and with a board weak on power. "This is a governance profile with a defense against everything expect hubris."

    More bad PR for Research In Motion (RIMM -1.7%): Responding to widespread criticism of the appointment of Thorsten Heins as CEO, director Roger Martin suggests Heins was the best option since the only alternatives were to "hand [RIM] over to children, or morons from the outside who will destroy the company." Wall Street begs to differ

    Public backlash against AT&T (T +0.5%) starts to stir up after the company slows down data speeds for its heaviest cellular users in order to better manage its network. Though the issue follows up on a previous warning from AT&T last year to its 17M unlimited data plan subscribers, it poses a threat to sales if consumers start tagging the carrier as the "slow" network.

    GE (GE +0.3%) and Microsoft (MSFT +0.5%) launch Caradigm, a 50-50 JV focusing on healthcare IT that will begin independent operations in H1. The new company will develop an "open, interoperable technology platform and collaborative clinical applications," the companies said. (PR)

    Google (GOOG) is working on $120M worth of new construction projects at its headquarters, reports the San Jose Mercury News after reviewing public records. Among the projects are a lab to test an anticipated home music streaming device; a "Google Experience Center" to show off new innovations; and a lab for an initiative called "Project X," which is believed to involve high-precision optics. 

    Apple (AAPL), long used to leading customer satisfaction surveys, has finished atop a Harris Interactive survey of corporate reputations. In spite of recent criticism of its contract manufacturers' labor practices, Apple's score 85.62/100 puts it soundly ahead of fellow top-5 finishers Google (GOOG), Coca-Cola (KO), (AMZN), and Kraft (KFT). (earlier

    Apple (AAPL) says the Fair Labor Association will conduct special voluntary audits of Apple’s final assembly suppliers, including Foxconn factories in Shenzhen and Chengdu, China, at Apple's request. The FLA is an independent group of companies and universities focused on improving labor practices.

    Retailers in some Chinese cities have been ordered to halt sales of iPads (AAPL), according to media reports. The move follows a lawsuit in which Proview claims it's owned the name for over a decade. Another report has iPads being confiscated from retailers in Shijiazhuang. Apple quivers, +1.8% and over $500/share.

    Apple (AAPL) shares pass $500 for the first time in its history, rising 1.5% to $500.55. The company's now worth $466.28B, well above Exxon's $398.03B.

  82. Iflan:
    Excellent! Thank you.
    And by the way, congratulations on the AAPL trades. This looks very similar to the run AAPL had Sept'10-Feb.'11 The pullbacks during that period were between 5-10% during that run. More recently, the pullbacks were between 10-15%. Of course, the Steve Jobs saga was playing out during that time. What do you see down the road before next earnings?

  83. Some quick notes from the FT on the Obama budget:

  84. Barry has update his rally chart that Phil posted yesterday… We are further along than he first indicated as he picked the wrong start date.

    That's a better rally than the average so far

  85. JRW.. are u still long or did u turn short?

  86. FU PCLN!!!!

  87. MAKO/jomp – not my area.  Balance sheet looks like they will need to raise more capital soon FWIW.  Cash is dwindling.

  88. Phil
    Good morning!
    Just for the exercise, and to maximize profits on some play money (2 calls),
    How would you play this?
    Bought April AAPL 425/450 BCS a number of weeks ago at $25/$11 (net debit $11), which is now at $77/57….
    Two months to go and do you see a trade here?

  89. dclark……I hope I see an AAPL pullback!!!

  90. AAPL/general comment:  It's going to be a lot easier to make more money on AAPL if it pulls back than if it continues the push upward.    That''s always true with a good company.  And with a bad company?…..the converse… want it to push up so you can short it. 

  91. OXY/Burr – Did you call IB and ask?  Also, maybe if you have the ability to offer to accept $10 for the spread you can solve your problem early.  

    Volume/Cwan – 47M at 12:15 is low.  Typically (and typically is low anyway), we do about 20M an hour on average (with a pop at the end) so about 60M at 12:30 is expected. A year ago, less than 100M by 1pm was very slow, more like 25-30M per hour.  Part of that is the removal of C, which was a very hot stock and even 100M was way off our pre-crash volumes.  

    DMND/Morx – It's a gamble so, by definition, not really appropriate for an IRA portfolio.  The bottom line is they did misstate financials so HOW they fix them will be a very big deal.  That could lead to a huge sell-off (at which point, seeing the facts, we may then want to buy into), or it may lead to a relief rally.  On the whole, I can see aggressively riding them out and taking a stab at a long-term hold but not in a portfolio that was in any way looking for safety (so not IRA, not Income Portfolio) and not in any way looking for a relatively near-term exit (not $25KP).  

    SCO/Dpast – If you buy back the $37 caller you net your $35s at $2.08 with SCO at $37.43 BUT the initial net is .90 and your WERE up $1.10 if they expired at $37 so you are taking $1.10 in the hand, and turning it into .35 in the hand (unhedged) and you need $38.18 just to get to $1.10 in the bush.  Does that sound like a good idea?  

    AAPL/Maya – For $77, the April $425s aren't doing you any good and $77 is a hell of a lot more than you get on the spread.  I would cash them ($15,400) and buy 4 2014 $500/600 bull call spreads at $35 ($14,000) and roll the 2 Apr $450 callers ($11,400) to 3 May $490 callers at $34.75 ($10,425) so a couple of thousand in your pocket and you don't owe your callers $30,000 at $590 until you are $36,000 in the money and if AAPL goes over $520, you can stop out one caller (as you are $8,000 in the money on the longs and can always sell 2 calls back later if you are wrong) or just add a long call or stop out one of your 2014 $600s, which won't move as quickly and would uncap your upside there.  

    CMG Feb $370 puts (Friday) at $1.50 are a fun trade for the week.  

  92. MAKO, thanks Yodi, Pharm, Phil. Bounced nice of 200 SMA.

  93. etradingsignals / Position

    Long; Target 82.42


  94. CMG vs SP500 vs JACK
    Holy crap!  I always see the FU's on CMG and just ignored them.   Now I understand WHY you don't short CMG.;NASDAQ:JACK&cmptdms=0;0&q=NYSE:CMG&&fct=big

  95. cwan/short strangles,
    My short strangle portfolios are showing good profit numbers today, so it's not a great time to start new spreads.  On the other hand, if the shorts are way OTM, the decay is more than the risk of loss due to the increase in Delta.  We are less than 5 weeks to March expiration, so it's about time to sell the March's.  Just manage your margin and you should be OK for a 10-12% correction.

  96. i have the NASDAQ100 riding the bottom of a rising channel which if it breaks into decisively to the upside can put a target at around 2750.(something to talk about while the Dow flutters around 10 or 15 points – a lot of that during the US sessions lately)
    i hate this market. if you wanted to sell the Dow last week you had to make the call at just after the close thursday and then be out by 3 PM friday afternoon OR reverse a short and put in a buy with the expectation of a 100 point gap up on the open sunday
    maybe if the markets were open 24/7 then i might think differently.

  97. The CMG add yesterday during the Grammy Awards made a statement as well….

  98. Finally, the 0.001% are getting burned….
    Italians Are Selling Their Ferraris To Avoid Tax Scrutiny

  99. Burrben
    As far as I understand if it keeps this way until Friday – your longs will get exercised and your shorts will get assigned – so in practical terms it will cash settled. (If I'm not mistaken, IB exercises and assigns with no commissions. – so that's additional bonus.)
    The only risk if by Friday it drops and shorts will be ATM

  100. Phil – *IF* china is slowing down and *IF* we head for some sort of a loooooooooong overdue correction what kind of a short Copper (CU) play do you like? I would like to go short the futures but I just dont have the funds to absorb a big swing against me…  

  101. When in doubt, advertise!

    In southern California 44 per cent of homeowners are "underwater," owing more on their mortgages than their homes are worth.

  102. Spirit Airlines
    "CEO Ben Baldanza says the firm wears its reputation for charging fees as a "badge of honor" on the theory that consumers actually only pay for what they use – instead of sharing costs in ticket prices."
    Oh, come on man, it is just a gimmick.
    I have flown them a couple of times recently and quite liked them. The beef is that they advertise very low prices, but once you get into the booking process, you find it is deceptive. For example $10 one way from Florida to the Dominican Republic sounds like a fair price to pay, but then you discover that you still have to pay $70 each way in taxes, $20 each way for a carry-on bag and another $30 for a suitcase, and that the cheapest return fare is $120, and you pay another $15 for an aisle seat, and suddenly your ticket price is $400 for the round trip, and the flight is in  the middle of the night, which is not so great when it costs $100 to get a taxi to the airport at that hour.
    But then again, you see that American Airlines has a daytime flight for double the price and it doesn't look so bad. In any case, once you are used to the ticketing system you ignore the advertised special price and decide whether to take a carry on or travel bareback, according to your taste,and if the plane is half empty you may still get an emergency exit row seat for no extra payment if you look like someone who can operate the emergency door, and maybe you can get a ride to the airport for less money.

    Airlines stocks tend to crash and burn, but Spirit MAYBE has a chance to survive. The business model seems similar to RyanAir, and it can work out well for families who share baggage and want to fly cheap.
    The stock ticker is SAVE (not SAFE!) and there are September options. You could recoup 20% with a $20 call sale and a $17.50 put sale if the stock ($19.58) holds $20 in September. There is no dividend, so a bull call spread might be better.

  103. Oil is at R3 again where it stopped last time. 

  104. New chart we put out…that I thought you all may find interesting. Lot more downgrades than upgrades. Interesting also to see how it is for each sector. Hope you enjoy. If Phil wants, we can post more of these as we now have a writer who does these type of charts specifically.

  105. Burrben: CMG
    one mans ceiling is another mans floor.  I look at that chart and think it "is" reason to short.  Of course scaling in short calls and having the patience to know it won't payoff the first month or two gives very good return on margin.

  106. Pharm – love the billboard on the house idea.  Just waiting for a church to rent out the steeple.  I was thinking maybe True Religion jeans would put up an ad on ours.  Maybe Guess jeans on the other side, just to make it interesting.

  107. Maybe some old news for some here, but new to me. TDA charges me $15/covered call contract commission to automatically execute the trade on expiration date. But today I closed out a AA Feb $9 covered call for $8.99/contract. Commissions were the $9.99 for stock trade, but just $1.5 for the option trade(PSW rate). So instead of receiving $885/100 shares, I was able to receive $887.50/100 shares. $2.5/100 shares is not much, but definitely things to remember if you are executing thousands of shares of a stock.  Anyone else done this?

  108. BIDU earnings coming up on the 16th… Any thoughts?

  109. This baby is gonna pop up…..There is no volume and why not, just squeezes more juice out of the shorts.

  110. come on oil, trip on something and fall

  111. What happened to /CL on IB? Stuck at  100.39 with same bid/ask for the last 5 minutes.

  112. Peter,
    Thanks for the suggestions.
    I am thinking about covering the strangles with long calls/puts in IB.  As chaps suggested, in an IB account, it's a good idea to cover on both call and put sides, so as to reduce margin requirement.  I am thinking buying more puts on the put side, such as 10:11, but buying fewer calls on the call side, such as 9:10.

  113. 2can…I have tried many a time for that kind of manipulation of the market…does not seem to work for me:(

  114. oil  /CL has stopped trading

  115. Very strange 2can…

  116. sagemm1  never works for me either, but who knows, someday it might : )

  117. TOS / One_T: I think the $15 fee for stock assignment is a fixed fee regardless of number of shares.  So, if you have more shares, it may be cheaper if you let the shares be called away.

  118. /CL – no kidding. someone fat finger a BIG order?

  119. Anyone,  When a commodity's trading is halted by the exchange, what happens?.  Do they close all the positions at the halt price , or does trading start again like nothing happened from where it left off?  I've never experienced this before.

  120. Due to technical issues at the CME, the Globex Crude Complex markets have been halted.

  121. When I traded at the CBOT they just halted…nothing changed hands no matter the price.

  122. /CL  scottmi  I don't know.  For the last three minutes before the halt, it was a fight to the finish between the bulls and bears, with no one winning

  123. Is anyone else's screen showing the Vix dropping over $1 in a few minutes only to regain all of it a few minutes after that?

  124. lnk – we call that a p-bar…..'phantom bar'. 

    USO off to the races though….

  125. alos in my experience it only halted whe we were LU or LD, which is not a true halt, as it relates to grains

  126. Copper/Jrom – I think most of the miners are pretty much spooked already.  For the most part, you have to be willing to short gold too but FCX at $45 may be toppy, it's certainly run up th most of any of the copper plays but, not that expensive as they were $59 so, on the whole, I'd say there are no good ways to play it at the moment.  

    I love that advertising idea, Pharm.  Looks like Cali is neck and neck with Florida in distressed homes but – hey, look at the Dow!!!  

    Spirit/JMM – I fly them to Florida sometimes because they don't penalize you for last-minute booking and you can often ugrade to a first class seat ($40 each way) and yes, I just ignore the "advertised" price, which is complete nonsense – although it does make you realize why airlines make no money when so much of it is chewed up as taxes and fees.   On the other hand, if I have the opportunity to fly Southwest or JetBlue for about the same price – no way do I pick Spirit so they are only strong as long as their competition refuses to match them – the typical road for many discount airlines that have come and gone over the years.

    Charts/David – I  like that one for sure, would love to see more, thanks!  

    TRLG/Rev – Yes, I'm sure this would look great on the side of the Church:  

    I think these would be a better match anyway:  8-)  

    TDA/One – They have a thing if you close out contracts close to expiry but I thought they had to be a nickel.  Also, you should contact scott (at thinkorswim dot com) as I think, if you are doing small lots, you can get a better per contract rate.  

    BIDU/Lolo – They are one of those that I just hope they have a really silly run-up to short into but too crazy to bet against when they're not at the top of a channel.  

    CL/Mampcs – Someone was working hard to get it over $100.50 and other people believed the Saudi Prince last week when he said they will keep oil at $100 or less, no problem.  It does look stopped now so we'll have to see but probably something at CME.  Probably big sell order came in and they decided to close.  

    Halt/2Can – I never got hit by it (or never noticed) but I assume, like a stock, they simply resume trading and it's your job to scramble.  

    VIX had a huge down spike as well.  Strange.  Dow volume 67M at 2:30.

  127. They trades 11,000 /CL contracts at 2:00 PM (3 or 4 times normal volume at that time) and crapped out! But it's not unusually high volume (they traded 12,000 at 9:00 AM) so it can't be techical, just at that time it is… Wonder if manipulation was too blatant!

  128. lol730 / IB Exercise
    From my chat with them today, exercise fees were "USD 0.0000192 * Value of Aggregate Sales (proceeds)"  They wouldn't help me further, or help me to figure out what's the most cost effective method.  
    Since I'm too hungover right now to do much math, I just have a order a GTC order to close it out.

  129. Phil/MSFT options and stops
    Interesting what you said about "them" dropping a stock before a move up. Stock not moving much today, and then at 1:30 it suddenly dropped from $30.56 to $30.50 in one minute, the longest candle of the day, and has been moving up ever since (now $30.65)

  130. Well, USO does not seem to care about the halt. Off to the races at 38.75 now.

  131. Not sure what happened from NYMEX:

    CME Globex Update
    Feb 13, 2012 13:23 CST

    The following actions will be taken on CME Globex Crude Complex Futures and Options markets prior to the market opening: All day and session orders, including GTDs with today's date will be cancelled. All GTCs that have been acknowledged will remain working.

  132. All CME trades today will be cancelled -

  133. Large spike in USO volume right around the time CL went ark.  Any connection? 

  134. Well, bought 20 x MSFT Feb 18th $30 call for 51 cents (49 cents ITM) and sold them for 67 cents on the day trade. Not sure what the real risk reward in this type of trade is, but will continue to experiment.

  135. looks like the usual melt up

  136. sagemm1    "All GTCs that have been acknowledged will remain working"  Not sure I understand.  the word "acknowledged GTC's" in this context.  What happens to open positions?  Did you get that from the CME site?

  137. Phil – Jeans
    Well, some religious leaders endorse Rick Santorum, so I  can't see why something as American as ads for bluejeans can be offensive.  I mean, where is the line of decency here…
    Here is a great campaign photo of Santorum in a black church.  Scroll down about three or four pictures…

  138. Well I just bought 10,000 pairs of Jesus jeans, my day is done.

  139. TOS just canceled my two open sell orders, but didn't close my open positions, so I guess it's just back to the races when it reopens sometime in the future. 

  140. JRW   Nice job on the target!

  141. yes from CME…good until cancelled are good but good to a date is not…yes seems odd perhaps a massive Fup??

  142. FU CMG!!!

  143. Trying to get some info from TOS re CME trades being cancelled. Has to mean just open trades, right? Why would they wipe out the ones already closed?

  144. I had a taxi driver the other day whose name was Jesus Beard, though he spoiled the effect by being clean shaven.


  145. Charles Hughes Smith

    Greece is the epicenter of a drama that threatens to unwind with all the intrigue and subterfuge of ancient Greek myths and tragedies. As with the legend of Icarus, big, and now bigger, transnational banks provoked the gods with their wax-and-feather financial fabrications to create the appearance of soaring wealth. Now that they have flown too close to the sun and their wings have melted, these banks are being brought to earth by the obligations and consequences imposed by their fabrications.
    Rather than take responsibility, these banks seek to appease the gods by sacrificing taxpayers. In fact, if one looks closely, these banks aspire to be gods themselves. They clothe themselves in their indispensability and shield themselves from accountability with tales about how many innocent citizens will be hurt if they don’t get their next bailout. It is as if they say, “We are above the law… We are the law.” Mathematics, legal enforcement, restraint, humility all must fall under the sword of their hubris.

  146. more…

    CME Group Market Open Update
    Feb 13, 2012 13:55 CST

    CME Globex Crude Complex Futures and Options markets will open at 14:15 Central Time with a 15 minute pre-open. All day and session orders, including GTDs with today's date will be cancelled. All GTCs that have been acknowledged will remain working.

  147. On my IQFeed real time chart, the last trade I have for /CL is at $101 which is strange because it doesn't show up in TOS. However, that would explain the jump in USo after 2:00 PM. I don't know where IQFeed gets its data from.

  148. NEW YORK, Feb 13 (Reuters) – CME Group said on Monday
    all day orders for crude oil futures with Monday's trade date
    would be cancelled after trade on its Globex electronic trading
    platform was shut due to technical problems.
    "All day and session orders, including GTDs (good til date)
    with today's date will be cancelled. All GTCs (good til
    cancelled) that have been acknowledged will remain working," the
    CME said on its website.
    Trading on the Globex was halted just after 2 p.m. (1900

  149. Phil – The server is marking as spam every single comment that mentions CME. Are we now part of the conspiracy?

  150. jmm / beard — Kind of like Frank Beard of ZZ Top not having a beard :)

  151. Say it ain't so CMG… no no

  152. anyone,  This from the CME site re:  /CL which halted 37 nminutes ago   "CME Globex Crude Complex Futures and Options markets will open at 14:15 Central Time with a 15 minute pre-open."  Anyone know what they mean by a 15 minute pre-open?   sorry to be so ignorant

  153. dollar seems to be flying no market effect what gives?

  154. pakdog
    let us know what TOS says –

  155. Should be interesting when NYMEX trading resumes.

  156. Oil ends 2.3% higher at $100.91 a barrel.. oh boy :-(  
    And the USD is getting stronger. Very strange day

  157. Phil,
    after tax payers  bailed out Bank of America, it started to squeezed small business by forcing L-C matured and resetting double interest rate with 3% resetting fee. My firm have L-C with prime rate plus 1.5% been forced to reset for Prime plus 5.5%. Since I and my lawyer argue too much , it rise my rate to prime plus 7.25%. Is that nice?

  158. While we are on the subject of Jeans and the Church…I cannot help myself to a little music during this very boring day….

  159. Just finished with TOS. Nothing really to add to what's been posted. If you have open positions they stay open and you have to deal with whatever happens. That was my big question as I'm short /QM right now. Loving the $$ going straight up here, though. Could bail me out.

  160. Pre-open    never mind, I see what's happening.  bid at 100.56 now

  161. dpast…….i got that price too $100.90
    Willem Buiter says the Greek deal "cannot be imposed from abroad and requires the support of a broad coalition of the willing in Greece".
    Buiter also says the LTRO is merely buying time for Europe….

  162. tick tick tick ….

  163. FT has a half dozen articles on Greece and LTRO collateral, not an optimistic word in any of them. Brief excerpts
    On Greece:"“…scepticism remained intense in Germany and the Netherlands and a Tuesday meeting of the “euro working group” – finance ministry officials from all 17 eurozone members – would be key to decide whether lenders would approve the deal.
    One eurozone official said the group had come up with a list of at least a half-dozen items that Greece must accept before the deal will be moved to finance ministers for final approval on Wednesday.”
    And on LTRO: JP Morgan: "Some estimates of borrowing in the February LTRO have been as high as €1tr. Quite apart from whether banks would want to borrow that much (we pencil in €350-400bn, with upside risks), it’s unlikely that there would be enough free collateral to support a €1tr repo, given the approximately €200bn rise in borrowing capacity from credit claims."
     And, therefore, RBC Capital's conclusion: "We have significantly revised down our estimate of the collateral and liquidity increase in the European banking system, from a former EUR 1,033bn, to EUR 409bn, firstly due to the decision of 10 of the Euro-area’s National Central Banks (NCBs) not to avail themselves of the ECB-given opportunity to further ease collateral thresholds, and secondly due to the fact that the enlarged credit pot is to be based on a relaxation of corporate loan asset quality thresholds, rather than a new credit bucket as we had anticipated."
    FT comments: "… [the] expansion of eligible ECB collateral [is not] a free lunch – nor a source of easy carry – given the haircuts these assets (bank loans, from French real estate to Spanish public sector to Italian lease finance to Austrian SME, etc) will bear."

  164. Head fake/JMM – That's exactly what happens, they want to flush all the stops down to $30.50 (force sales to trigger) before they begin buying.  Sometimes they get lucky and set off a selling frenzy and get a good entry.  

    Well USO move makes it seems some upside event is coming but I see no news. 

    Santorum/Rev – He looks like he is literally a toxic substance there.  Some of those children look like they need assistance!

    CME/Pak – I very much doubt they are going to reverse trades  - that's a really big deal.  

    Jesus Beard/JMM – One of my favorite song lyrics:

    Levon wears his war wound like a crown

    He calls his child Jesus

    `Cause he likes the name

    And he sends him to the finest school in town

    Levon, Levon likes his money

    He makes a lot they say

    Spends his days counting

    In a garage by the motorway

    And Jesus, he wants to go to Venus

    Leaving Levon far behind

    Take a balloon and go sailing

    While Levon, Levon slowly dies

    Spam/StJ – Really?  That's funny.  

    Oil's back on – $101.75 – wouldn't touch it as we have no idea what happened.  

  165. Phil, shouldn't we be shorting oil over here?  Or is this one of the things we don't have to ask?  (Like selling into the initial rally…)

  166. Pharmboy,
    Are you shorting CMG as well???  I really admire you brave boys.

  167. Zero – this is a bull site, not a bear… plz stop posting nonsense!  Up up and away….

  168. very clean break of the descending channel at 99.45……….i01.25/35 next?

  169. Oh, I see my timing was superb…okay not touching it…

  170. Phil – The mad capitalist with the soul of a poet.

  171. cwan – I have shorted that beast off and on for a year…few wins, lots of cuts.  Yes, I like pain….hell, I have been shorting this market for over a year now, so what's new there.

  172. down oil down

  173. Pre-Open/2Can – I have no idea what they are talking about, seemed to open right up but maybe they left time to square off remaining open orders.  

    Dollar/Sage – Lots of strange stuff going on but, with 77M shares traded at 3:20, anything could happen.  

    7.25%/Neet – That's not nice at all!  Did you ever get it worked out?  

    Oil (/CL) $100.87 was top and now $100.64, not a bad move for the brave.  $100.50 is still a line we're happy to short on a cross below, of course. 

  174. Screw oil (although I am short there as well)…..Down market down….

  175. Pre-open,  Looked to me like they just let people bid against each other without any buys or sells until the bid reached 100.65 where it opened after the 15 minute bid/ask war.     down oil down : )

  176. JRW III
    Your IWM top call was on the money. Pretty amazing.

  177. Pharm…….you may about to become more scarce than Pandas……….everytime i short this bullshit i get burned.
    that sell off on the Dow starting last Thursday at 4PM was a horrid experience…… was a manufactured sell in the form of drip drip drip drip right into 3 PM friday and then bang.
    i looked at that setup on the charts and technically it looked good but how many times have i been wrong especially in the after hrs mkt so stayed away from it……moral of that story; the technicals cannot be trusted in this environment.
    i amn wondering about the NAS100………2750…..the top of an ascending channel on a day chart

  178. roro – if they inflate, then the money will be worth nothing, if the market tanks, I will be worth something…..biotechs are my thing, and reading finance is not (although I do have an MBA and thought I understood 'demand').  I guess this market is inelastic, until it snaps….

  179. 15 Spanish banks are down graded and the EURO does not budge off of 1.32

  180. rnmarple, willsons

    Thank you !! 

  181. Oil/Jerconn – If you are aggressive, sure it's an opportunity but I had to give the benefit of the doubt based on USO move up that SOMEONE knew SOMETHING and, in futures, you don't want to be on the wrong side of something – just in case.  As it is, turns out is was nothing. 

    Looks like another one of those Mondays where we gap up in the open and then nothing really happens all day.

    And I told you JRW up early is always a good sign!   

    China's imports of copper – far in excess of anticipated need – suggests to Gordon Chang that Beijing is attempting to dress up its trade numbers. Even as exports fall off, China's trade surplus is growing as imports dive even faster, giving the U.S. the nod to pressure on trade issues. Later this year, look for China to stop buying copper and the price to dive.

    Lending (more or less state-directed) is the Chinese equivalent of U.S. deficit spending, says Warren Mosler, who believes a 28% Y/Y decline in bank lending in January is less about the New Year holiday and more to do with Beijing remaining in "inflation fighting" mode. 

    IMAX, which had 9.8% of its float shorted as of Jan. 31,gains 4.3% after announcing deals with Broadway Theater Company to install 4 new digital theater systems in China and Hong Kong, with the first systems set to go live in 2013. IMAX has lofty ambitions for the Chinese market.

    Microsoft (MSFT +0.3%shuts down its retail website for India after a group of hackers dramatically post online screenshots of usernames and passwords – claiming to find the unencrypted information easily. The website now has a short note posted on it from Microsoft saying that it's working to restore access as quickly as possible.

    Fitch downgrades a number of Spanish banks, includingBBVA (from A+ to A), a move made necessary by the downgrade of Spain last month. "Fitch believes there is a close link between bank and sovereign credit risk … and it is unusual for banks to be rated above their domestic sovereigns."

    While some attempt to draw the EU into ever-tighter fiscal union, the ECB – by allowing each state's central bank to draft its owncollateral rules - may be taking a step back from monetary union. "It's a mess," says a banking analyst, "There's now 8 different monetary policies depending on what suits your banking system best."

    The poorest households received just 32% of benefits in 2010, a study from the left-leaning Center on Budget & Policy Priorities finds. The middle classes received almost 60% and top earners 10%. The safety net has also become "much more work-based" via cuts in traditional welfare and greater benefits for working families.

    Three lunchtime reads:

    1) Manufacturing rebounds, but is it a renaissance?

    2) Options: Why stock investors need to play "Moneyball"

    3) Why banks will continue to lose online payment market share to tech

  182. I fear we are too bearish in the $25KP but those IWM Feb $83 puts for $1.18 are .78 in the money with just .40 of premium – how can I not love that?  5 of those in the $25KP.  

  183. Pharm……….long or short, by the time this gets done i may only be worthwhile for the asylum……..i understand nothing.
    i have a preference to short but have been through this kind of nonsense market before so am more careful.

  184. Still cant trade /cl on IB

  185. saudi tanks move near jordanian border

  186. Thanks  / RSSOwl – Just want to say major thanks to a fellow user (dont remember his name) who recommended to download RSSOwl.  It allows you to create news filters so every time Phil posts anything or particular to $25K i get a notification in system tray.  Really useful if you are working on something else in parallel. 

  187. Roro – sometimes I think the asylum would be more relaxing/fun…especially talking (first hand) with those that are dissociated from reality.  Not a care in the world….

  188. JRW, What's your take of tomorrow's market?  Up or down?  Thanks.

  189. IRA Portfolio adjustment:

    Given Phil's disposition on DMND, I think we should close out our position tomorrow.  I will see what kind of prices I can get for closing out the position tomorrow. 

  190. hey look at the time of the low of the day!

  191. Phil,
     Bank of America did that  arbitrarily to all small business not only to my firm . I heard a lot of complain from SB. they all suggest to switch to other bank.  The end  I move all my A/Cs to  local bank.

  192. Saudi Tanks/Angel – I don't see it yet, is that confirmed news?  I see oil going up ($100.78). 

    93M at 3:58 – now a pretty good close for the Bulls with some late strength.

  193. Phil,
    When do you get concerned about assignment on the GLL short Feb 17 Puts?

  194. right at the close, someone went big in SGEN….earnings are today….

  195. For after hours entertainment, this is a great interview of Bruce Bartlett by Bill Moyers where Bartlett makes some great points related to Phil's post yesterday and today. It's about 20 minutes, but well worth the time. I posted it in the weekend post yesterday but that might not have been seen by everybody.

    The points that he makes about the mindset of people (faith, beliefs and lack of interest) and how they relate to their politics are so thoughtful! I am quite sure everybody would enjoy that…

  196. Dollar up, markets up, oil up…my account, down 1%. WTF?

  197. RSSOwl/Phil, would be great if you could also create a link that always points to your most recent daily post. Otherwise, we have to keep updating the link in RSSOwl every morning. Not sure if someone else has figured out a way around this.

  198. Pharm…… of all people must know of that medication, and where i can buy it and the stock…….the one that allows me to be disassociated without a care and NEVER wanting to read the news again, you know.

  199. Hello All,
    Northstar Realty Finance Corp (NRF) is a commercial mortgage REIT, but it also seeks to acquire property on the cheap by foreclosing on junior debt.   Wresting the Hancock Tower in Chicago from Goldman suggests that NFR might know what it is doing.  Its yield is high (9.3%) but its leverage is 4:1.   Does anyone happen to follow NRF?
    Thank you.

  200. Very weal 111M finish – that's the kind of volume we expect by lunch!  

    I do not regret the IWM shorts. 

    GLL/Kallen – If they assign them, they forego their premium and we sell them again – if it happens, it simply saves money on the roll. 

    WTF/Scott – Probably the VIX falling 8% is the culprit.  Always good to take advantage of a day with few variables to see which of your positions are most vulnerable to an isolated market move up of about 0.7%.  

    RSS/Mampcs – I don't think possible as link changes every day and is password protected, of course.  

    At the close: Dow +0.52% to 12868. S&P +0.68% to 1352. Nasdaq +0.87% to 2569.

    Treasurys: 30-year +0.15%. 10-yr 0%. 5-yr -0.07%.

    Commodities: Crude +1.9% to $100.91. Gold -0.01% to $1725.05.

    Currencies: Euro -0.03% vs. dollar. Yen -0.05%. Pound -0.1%.

     China’s First Trade Contraction in Two Years Adds Growth Concern (Bloomberg)

    ???  Copper Traders Turn Bullish as Inventories Drop to 2009 Low:  (Bloomberg)

    Repeating its actions from the first bailout, Finland willrequire collateral from Greece for its portion of rescue number 2. Finland's parliament will not approve the rescue until a collateral agreement is signed, says finance minister Jutta Urpilainen.

    ECB Cash Doesn’t Wean Investors Off German Debt (Bloomberg)

    Is the $25 Billion Foreclosure Settlement a Stealth Bank Bailout? (Time)

    Rich to Invest More in Commodities, Reduce Cash (Bloomberg)

    Why the Wealthy Really Are Moving Cash to the Caymans (Smart Money)


  201. Spreadsheet is up to date!

  202. I guess some areas have been hit harder in real estate:

  203. We have gone from importer to exporter of refined petroleum products:

    Now, remember, this is just an increase in refined products. The U.S. is still a colossal net importer of crude oil, in part because overall U.S. oil production has sharply plunged from its peak back in the 1960s, even after the recent (and comparatively small) surge in shale oil production in North Dakota and elsewhere. But our refineries are now doing big business abroad, and it’s one reason why overall exports have been ticking upward lately. And this hasn’t happened in decades: The last time the U.S. was a net exporter of finished gasoline was way back in 1959.

  204. I wonder why Pakdog… must be because it was popular to be against it!

  205. Taxes / pakdog – And this is from their news release:

    Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix.’  If Democrats continue to refuse to negotiate in good faith, Republicans may schedule this measure for House consideration later this week pending a conversation with our members.  Democrats’ refusal to agree to any spending cuts in the conference committee has made it necessary for us to prepare this fallback option to protect small business job creators and ensure taxes don’t go up on middle class workers. 

    Basically, they are now defender of the tax cut after fighting against it for so long. It's just so transparent….

  206. Stjean – Did you read where they wanted to drug test unemployment applicants and force those without a HS diploma to get one before agreeing to extend the cut? What is with these guys? Well, this move shows that at least some of them are smart enough to know when they've stepped in a pile of crap and want to get out of it quickly.

  207. Roro

  208. HERO- a good close above the $5 threshold. For those who followed this stock previously, the last two times where this happened, it was good for run up to mid-$6's. The company fundamentals have improved a bit since then also so maybe more this time. I closed my short puts positions after achieving my goal of 50%. Long the stock and added some on Friday. This is a volatile stock so not for the meek.

  209. @flipspiceland. Re: your comment to me from 9 am on the other page. I know, and agree completely.

    As for the other partisan zealots here – dont expect me to respond to your ad hominem nonsense.

    The facts about public servant fraud and corruption are reported every day, as are many cases of public employee abuses. You want to pretend it doesnt exist or is not prevalent, be my guest.

    You want links and evidence, I post them when its easy and convenient for me to do so, however, I believe you all know how to use search engines, so go look it up yourself if it interests you. And dont look it up if you dont care, as some of you apparently dont .

    But dont bother flaming me about it, I wont take the bait.

    Facts are facts, and the fact is that more revenue for government = more waste and corruption, period. Not better government. And notbetterservices. We can and must rein in this insidious behemoth. My views on this are not meant to disparage all government workers, particularly those that are effective honest and diligent. However, there is too muchabuse built into the system, and little incentive or motivation for politicians to engage in serious reform, as they are dependent on these same workers/unions for their political careers in many cases.

    We have a broken system, and more tax dollars are not going to fix it.


    I must have posted this in thewrong place.

    FOR Phil.

    Alan Rosenfeld.

    Google: “NY Post rubber room”

    Ve fun …

  211. U.S. Supreme Court Justice Stephen Breyer was robbed while vacationing on the West Indies Island of Nevis by a man wielding a machete, said Kathy Arberg, a court spokeswoman. [Bloomberg]

    Tourism can be a cutthroat business.

  212. SGEN – down AH….I will be adding to my position tomorrow by selling puts…lots of them.

  213. SGEN- Pharm- If I recall, this is also one of your favorites. How would you rank this against DEPO &  PLX? I don't want to get overloaded on biotechs.
    What month/strike are you considering?

  214. Obama is Coming for Your Portfolio, Homey

    Joshua M Brown February 13th, 2012
    Regular readers know I’m post-political, I find both parties to be equally useless and distasteful and Obama in particular to be well-meaning but misguided.

    So don’t take this as a partisan shot, just take it as frustration with something that I think could be a mess for the equity markets.

    The President released his fiscal year 2013 budget this morning, he’s looking to raise tax revenue as a percentage of GDP to 20.1%.  And among the various ways he seeks to do that, a serious hammering of the investor class is on the menu…

    From Americans for Tax Reform:

    The capital gains rate will rise from 15% today to 23.8% next year.  That’s because the Obama budget assumes the pre-2001 capital gains rate of 20% for investors earning more than $250,000 per year.  On top of this, the Obamcare surtax on investment will raise this rate to 23.8%.  Separately, capital gains earned as “carried interest” will be taxed at ordinary income tax rates.
    The dividends rate will raise from 15% today to 43.4% next year.  The Obama budget proposes taxing dividends for investors making more than $250,000 per year at ordinary income tax rates, which will rise to a top rate of 39.6% under the budget.  In addition, the Obamacare surtax on investors will combine to nearly triple the tax rate on dividends in just one year.
    The real tax rate on capital gains and dividends is actually even higher than this.  Since taxes on dividends and capital gains are a cascaded double taxation on savings, the rate is actually far higher than this.  Before being taxed to investors as capital gains and dividends, the money first faced taxation as corporate profits.  The U.S. has the highest corporate income tax rate in the developed world at 35%.  When factoring this in, the Obama budget is actually proposing a capital gains tax rate of 50.5% and a dividends rate of 63.2%.  That would leave U.S. employers and savers at a severe competitive disadvantage.
    What impact would this have on the stock market – especially in light of the fact that cash-rich corporations are finally paying out dividends and people are in need of that equity income more than ever?


    Obama Budget Raises Taxes on Small Employers, Savers, Families (AFTR)


  215. Pharm………….MAR ticker symbol?

  216. SGEN/pstas – well, they make money (sort of) and are one of the few independent mAb companies left (BIIB).  All others companies are either partnered (IMGN) or bought (MITI, Mederex).  So, they are becoming a large part of my portfolio.  The option premiums are nice, so I will most likely sell the Feb 17.5s tomorrow, as well as June $15s, and also sell a few calls against my position.  The P/C ratio was VERY high, as someone bought a crap load of $20 puts (Feb) – telegraphed move, or were they betting on something else?

  217. Cap/won't take the bait
    you just did….. :)

  218. NYPost/Cap
    I'm not flaming you with this post but read the story closely:
    "sources said yesterday," .."said a source familiar with the case" …"the source said," …"sources said". 
    You mean they couldn't get one person to go on the record? No one from the city? From the mayor's office that apparently bungled the case — "failed to produce documentation for several of the witnesses against him." [Even the National Enquirer will give named sources] Then again, perhaps it was a case of a few pissed off pupils not liking him and making up the "leering" charge — which actually doesn't sound like much of an accusation anyway.
    Just reading between the lines here. But, gotta say, those Post guys can do a sweet hatchet job — starting with that nifty lede, "The city’s “rubber room” king has been knocked off his throne." And what a flattering photo! LOL! That picture of him proves it all doesn't it?

  219. CHTP – tomorrow, I am buying the March $3/4 BCS, selling the $2 puts for a $0 trade.  I think they get approval. VERY RISKY, but I will play a few for a good upside move.

  220. Cap:  Perhaps I am your only sympathizer — but I doubt it.  I do have the view that halting, and even reversing,  the increasing income or, more to the point, wealth equality in the U.S., is one of long term importance to the country, since all kinds of bad politics will ensue if the issue is never redressed – fascism, revolution, all the stuff that can happened when well-armed, free but impoverished population becomes terminally convinced that their political system needs immediate change.
    But simply raising taxes and sending more money to the U.S. government, without more, is not a path which imbues me with confidence.  For all the honest and hard-working government employees that undoubtedly do exist in our country, both federal and state governments are virtual paradises of laziness and incompetence for quite decent paychecks.  When there is no meaningful metric of performance — like money — public service becomes an instant old-boy network, a system of "I'm OK so you're OK, Jack."  
    The ravings of a doctrinaire conservative?  Hardly. Here's an example — out of nearly 80,000 teachers in the NYC public school system, only three — 3 — were fired for incompetence in 2011.  That's because the NYC public school system is run for the benefit of the Teacher's Union, not for the benefit of the students. As anyone who sends their child there can attest.
     How about the federal government?  Well, I dunno, how did Iraq work out?  Let's see, the DOD ruthlessly excluded the State Dept. from any participation in nation-building, and we ended up killing thousands of our own and Iraqis, costing the US:-- "The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies. (".  So, more money for the DOD, perhaps?  Maybe then we can "win" the next one.
    I have no doubt that PSW can bat this issue around endlessly, but it is absolutely wrong to think that only venal, filthy rich oligarchs would have the temerity to suggest that federal and state governments have proven themselves to be relatively wasteful and ineffective when anything remotely like private sector standards of efficiency, and that therefore sending these governments more of our money with the confidence that it will be effectively used to benefit the country.must be viewed with great suspicion. I've been dealing directly with a federal agency for over a year now on a serious but fairly routine issue, and I am just dumbfounded by their stupidity, incompetence and impunity.  They are clearly people who are not held to any reasonable standard of performance other than no making their bosses look bad and suffering a budget reduction.  
    I worked for the U.S. Environmental Protection Agency.  The Deputy Administrator stood up at an autumn meeting IN 1977 – it was then a new, modern agency with no entrenched bureaucracy — and announced "We are not on pace to spend our travel allowance this year, so we've got to spend, spend spend or they will cut it for next year."  True story, I swear — and the next day, they sent half a dozen managers to San Francisco [from D.C.] on some kind of "inspection tour" they invented. Imagine what the Department of Labor, Education and Veteran's Affairs must be like.  

  221. Freudian slip:  that would be "INequality."

  222. hello phil, i have a billing issue--i sent email to the admin.  is there a more direct email or contact? thanks.

  223. Moody's pulls a bullshit routine after hours as per usual.

  224. Pharmboy  /  I just realized how perfect your post of the polar bear with the dog was.  Exactly how I felt today when oil opened back up with a big gap up.  Like a dog trying to pull down a polar bear.

  225. Zerox/government
    The Deputy Administrator stood up at an autumn meeting IN 1977 – it was then a new, modern agency with no entrenched bureaucracy — and announced "We are not on pace to spend our travel allowance this year, so we've got to spend, spend spend or they will cut it for next year."  True story, I swear…
    I have no trouble believing you, because this is how government agencies budget.  A certain amount of money is appropriated and then it is carved up into sub-budgets like salaries, light and water, maintenance, capital spending, replacing broken chairs, pencils, travel, and so on. Often when one area runs short funds are transferred from unused budget. For example a flu epidemic might cause excessive overtime due to a lack of expenditure on flu vaccines in the employee health budget, so money would be taken from the maintenance budget and the yellow lines in the parking lot have to wait another year to be repainted, or whatever.
    I agree that there are many people working in government who don't work their asses off, but then again government often hires people, particularly the disabled or the obese, or the uneducated whom private industry really would not want anyway and often government agencies are doing difficult work that private companies don't want to do anyway. The problem is that the US used to be a relatively affluent country and could afford a large well-paid civil service operating under rules that sprang from reforms after the assassination of President Garfield,  but its place in the world is going downhill, and now it is having to tighten its belt a few notches.
    Bottom line is that US workers of all types are overpaid compared to their counterparts in many other countries purely because they are beneficiaries of historical circumstances, so now in the race to the bottom it has become dog-eat-dog with the public sector set against the private sector while the bankers laugh at every one and make off with all the choice cuts of meat.

  226. "Separately, capital gains earned as “carried interest” will be taxed at ordinary income tax rates."
    Wow! I only suggested that here a couple of days ago, and Obama has already incorporated it into his budget proposal.

  227. ZERO, go back to last night posting by stjeanluc, video interview Bruce Bartlett. Interesting take on taxes and politics

  228. @Cap
    Wait for it……it will be some excuse like, "You read that rag by disgraced media maven, Rupert Murdoch"??
    It's the shift the subject ploy, so effective in rhetorical circles.

  229. Phil,
    i am confused!…….Moody's down grades…….was that the signal to get long again?
    i am definitely confused about up or down, and one bet i'll make is that i am not alone.

  230. cwan120 / Tomorrow
    Open even, we go lower; gap up, we see if they can hold it.  Assuming no news, of course !!


  231. Jmm:  I think you're right.  U.S. citizens have enjoyed an outsized standard of living for the last few generations, mostly as a consequence of having conquered a  resource-rich continent and killed most of the original inhabitants [through imported diseases, primarily, not that it matters]. And it has indeed become dog-eat-dog, although more in the spirit of a scrabbling to stay on top, devil-take-the-hindmost free-for-all — I never quite understood the "race to the bottom" metaphor.
    That's the bad news.  The good news, as I never fail to point out on a rhythmic weekly basis, is that the U.S. is located on the half of the planet with only 13% of the people, and a good deal more than that in  percentage of natural resources, which, with natural gas, now includes.   So U.S. average incomes and standards of living will decline over the next ten years — but not over the next 20. Barring, it must be said, a nuclear exchange somewhere that poisons the atmosphere, in which case all quality-of-life bets are off.
     Our hemisphere is relatively peaceful and prosperous, has three of the five [geographically] largest countries, with 23 countries in all, while Eurasia and  Africa  have over 120 populated by 6 Billion people.  I don't repeat this on PSW because I like trivia; I repeat it because I think it is the cornerstone of any rational long-term investment plan. World savings and investment will tend to flow toward more productive regions — particularly if they tend to be more peaceful but not less well-defended.  I am continuing my Latam studies, as aforementioned. 

  232. Lflantheman / AAPL Split Rumors
    I read a few articles thinking that the current push above $500 is due to a pending split or div.  What do you think?  If so, any opinions on how to play?

  233. Xerox/Race to bottom
     I think the original meaning of the expression referred the the kind of  self defeating competition between the different states of the US to lure businesses from other states by offering lower taxes, bigger write-offs, cheaper labor, etc., but now you can really apply it to other countries as well  and to other forms of competition, like privatizing prisons or government hospitals, or the military, or the police. While ostensibly providing a cheaper and more efficient service for taxpayers, the savings are achieved largely by reducing the pay and benefits of employees,  thus they do not benefit the community as a whole since they affect the quality of life of large numbers of people detrimentally and really only amount to shuffling the deckchairs on the Titanic. I think you could say the same of the the quality of food in the US. While it may be incredibly efficient and profitable to set up a Subway franchise that is designed to be run by one person who makes the sandwiches and acts as cashier, it can only be achieved with preprepared unfresh ingredients, various machines, lousy bread, and horrible drinks imported from somewhere else, so while profitable it does nothing to improve the actual quality of food available to the population served. Certainly when I visit the US, as I must do for a couple of days this week, I can't wait to get back here and get food that tastes like food again.
    Ultimately these questions hinge on philosophical and even religious issues about the purpose of human life, which is beyond the scope of this board, but from an investment point of view it benefits us to think about what are the deepest and most profound of human needs and which companies stand to grow and profit from evolving technologies and what social conditions provide the optimum climate for the expansion of markets.

  234. I grew up on the "sout" side of Chicago. My parents were from the Bridgeport neighborhood on south Lowe Ave. – within spitting distance of the old Comisky Park (original home of the White Sox) and the old Union Stockyards.  The same neighborhood which encompassed the infamous 11th Ward and the Daley machine. My family was involved politically for many years- as volunteers, elections judges, precinct workers. Hell, my old man once managed (albeit unsuccessfully) the Congressional campaign for a local businessman who had the temerity to challenge the status quo. I had many friends and acquaintances who earned their living as city and county and state and federal employees. Good people , hard working and diligent. But they knew the lay of the land. To get along, you went along.
    I have seen the ugly bare skeleton of politically entrenched government first hand and can vigorously attest to the validity of the old as dirt adage that power corrupts and absolute power corrupts absolutely.
    Pension double dipping ; public sector union cronyism are just symptoms of the culture of corruption which ensues when the institutions of government are allowed to accumulate power. On the local level we have the bag men and coat holders on the public payroll; moving up the ladder we have aspiring back-bencher state legislators and their personal real estate fairies; up further we have executive level appointments up for bid; and up higher still there is the revolving door with investment banks and defense contractors.
    Did I miss anything?
    Given this bleak reality I am continuously aghast at the naive, almost childlike faith in government as our saviour. Like lawyers, government is a necessary evil, so to speak. (Sorry Zero-present company excepted).  The Founders in their wisdom recognized this and established the limited principal. We have strayed so far that it now is considered acceptable to have as the rule of law, ultimately enforced at the point a gun, an IRS code which is over 7400 pages long; a health care "reform" bill 900 pages long plus 1100 pages of implementation regs and still growing. to cite just two glaring examples. That ain't limited.
    Our progressive friends, for a number years now have taught us well. Namely, that all which is good comes from DC. However, it would do us all good to recall the alleged words of infamous bank robber Willie Sutton when asked why he robbed banks – "that's where the money is".

  235. Flip – lol – of course !

    Zeroxzero – thanks, I know.

    Zipla – whatever …

  236. Public versus private--quality of employees.
    Several years ago I was working at a state run mental hospital in North Florida that had an acute shortage of nurses. The hospital paid decent career service salaries with excellent benefits, paid vacation, sick leave, job security, a guarantee of a minimum of 40 hours a week, but still had as many as one third of its nursing positions vacant. Why? Private hospitals in the area were offering higher hourly rates and $10,000 sign-on bonuses for new hires and  nurses preferred to take these jobs, even though the benefits were less. A few years went by and the economy declined and now the private hospitals were not hiring any more, and they were sending employees home due to low patient census and telling them to use vacation days if they wanted to be paid. Now the state hospital  was besieged with prospective employees and refugees from the private hospitals, with sometimes as many as 30 people applying for 4 openings.
    Suddenly it was discovered that the state employees received excessive benefits and pensions and that the competition was not fair. Go figure.

  237. Cwan, Chaps, Peter D – Covering short SPX strangles with longs.  Guys, this is an idea i have been experimenting with for a couple of months.  How far out of the money are you guys using on the longs?  Are you looking at them as just a tool to reduce the margin requirements or do you set up the longs to limit losses?  I have been seeing that you can sell about the same amount of premium that you have as potential loss (  IE, if you sell 2k in premium, you would have a max loss up or down of 2k). 
    Even though this position is an "iron condor" i have been working the short strangle portion like Peter had outlined.  I kind of look at the longs / shorts as 2 different, although related, trades.  My concern has been the errosion of the longs.  It seems like the longs loose more value on a move than the delta would predict.  I tyically set up the longs so they end up delta neutral.  Any insight you guys could give would be great.  TIA

  238. ...a health care "reform" bill 900 pages long plus 1100 pages of implementation regs and still growing…
    If the number of pages is an issue, the Canada Health Act is only 23 pages long. Can't we adopt it?

  239. Pharm – just to round out your talents, here's how to make a miracle cure from our friends in Canada: Hemp oil.

  240. Josh Brown/Cap – Hey man, that's just cherry picking, and that is "No Fair!" Usually Phil is posting articles from Josh, and.. oh.. he didn't post that one though… Josh, that self-styled post-political-but-obviously-conservative rube must have it wrong. There is no way the US is a high tax state. I am told that on this very site almost every week!

  241. Hero/Pstas – Good stock, congrats.  

    Teacher/Cap – Yep it looks like you did find one.  A guy who is collecting the max pension of $85,400 (not $100,000 and how can the headline of the article not even agree with the facts in the same article?) despite being assigned administrative duties (not no work in a "rubber room") because the staff school did, in fact, not want him working with students anymore, despite the fact that charges against him failed to get him convicted.  Now I know that whether or not someone is actually found guilty with "evidence" is never going to be a concern of yours as to whether to attack them or not so I won't even ask.  Clearly it sounds like this guy is guilty and that his supervisors felt he was guilty but they couldn't prove it (for whatever reason) so they assigned him not to be around students because they couldn't fire him without due cause.  

    Meanwhile, the guy, in the course of 70 years, had done the proper Capitalist thing and invested in real estate but you Righties are now so confused that you attack him for making money???  Is it because he's a teacher AND he made money?  His "huge collection of real estate holdings" in the post seem to be 14 1-3 family homes in Queens that he rents out according to the Times, who actually bothered to check.  I'm not defending the guy, he seems like a sleeze but, really – this is your case?  I'm not even sure what it proves except that you can't fire a guy without proving he did something wrong.  I guess if he was fired and got a $10M golden parachute as many disgraced CEO's do – that would have been better – or only if he just paid cap gains on the bonus?  

    Tourism/JMM – When we were in Jamaica, just coming out of the airport, the bus stopped and two guys jumped on and we were worried but it turned out they were only trying to sell us pot.  

    Dividends/Cap – If that's true, these REITs and Trusts are in big trouble.  Chance of this passing Congress is pretty much zero.  


    Facing higher dividend taxes, businesses may accelerate 2013 dividend payments into 2012 to dodge tax hikes, he said.  "I wouldn't be surprised if we see moving all their 2013 dividends into 2012," Kies said. "A lot of U.S. companies are sitting on cash."

    Why Apple will pay a dividend (Fortune)


    Suggestion/JMM – Just shows you who's reading this stuff.  ;)  

    Moody's/Roro – Not a surprise but more fuel to the fire that will eventually wake the bears.

    Moody's downgrades the sovereign debt of Spain by two notches, and the debt of Italy, Portugal, Slovakia, Slovenia, and Malta by one notch. In addition, Moody's outlooks for France, the U.K., and Austria is being revised to negative, though each country is maintaining its A3 rating for now. 

    More on Moody's downgrade: Except for Portugal, which saw its rating lowered to Ba3, the downgraded countries all had A3 ratings going into today. Spain's rating is lowered to A1, while Italy, Malta, Slovakia, and Slovenia are lowered to A2. U.S. equity futures appear largely unaffected by the news, but the euro has ticked lower against the dollar to $1.3154.

    8:01 PM Japanese stocks tick lower today as exporters get hit on a strengthening yen in reaction to a Moody's downgrade of some European sovereign debt. The Nikkei Average is currently down 0.1% to 8,986: Sony (SNE -1.3%), Sharp (SCPAY.PK -1.3%), and Kirin (KNBWY.PK -2%).

    Government/Pstas – Perhaps if we paid them like professionals and treated them like professionals, then the best and the brightest would run our government instead of going into Finance or doing something REALLY important, like figuring out how to sell us that 100th type of cereal on the grocery shelf….

    Taxes/Scott – We're not a high tax state.  If Obama's plan passes, we will normalize with Europe and finally move towards slowing down this runaway debt load.  It's exactly what we do need to do – the same thing Fox screams that Greece needs to do – tighten our belts and pay down our debt.  Not a complicated concept, really but watch how the Reps muck it all up over the next few weeks and months..

    The Norway Model (Social Science Research Network)

  242. chasw:  Thanks, Barlett interview was great.  Among other things, it points up the curious political paradox of the Tea Party, whose scorched earth approach to raising taxes reflects so clearly the economic and political illiteracy of the American heartland.  It is extraordinary for the Tea Party "movement" to utterly reject any increase in capital gains taxes when the average member is unlikely to earn more than a four-figure capital gain in his entire life.  It is an amazing trick of the light when millions of solid citizens with declining real incomes turn out to defend with great vigor the tax privileges of an elite class of capital owners to which they have a zero chance of aspiring.  

    • "Don't you see that the whole aim of Newspeak is to narrow the range of thought?… Has it ever occurred to your, Winston, that by the year 2050, at the very latest, not a single human being will be alive who could understand such a conversation as we are having now?… The whole climate of thought will be different. In fact, there will be no thought, as we understand it now. Orthodoxy means not thinking-not needing to think. Orthodoxy is unconsciousness."
    • - George Orwell, 1984, Book 1, Chapter 5

  243. People like Cap, Scott, flip, cause me to reminisce.  It was the time of Reagan – my mother, 2 sisters and I having a pleasant lunch in Baltimore harbor.  Mind you, we grew up modestly poor in Minnesota with a good Scandanavian attitude toward helping your fellow man.  Then, they started to complain about the "welfare" people and how the government was spending "our" money on "these people".  I pointed out that my mother (like the recent Minnesota story) had benefitted greatly from the safety net.  The argument continued — I finally said, why don't you line them up against the wall and machine-gun them – they would probably appreciate it.  My mother and I eventually made up.  I don't talk to my sisters.  I despise right-wingers.  But the point – it started with the despicable "greed is good" Ronald Reagan.

  244. What do you think the results are when you google "gossip newspaper"?
    1. The National Enquirer
    2. The Hollywood Gossip
    3. Star Magazine
    4. NY POST…..

  245. ZZ   Just because Tea Party members are not necessarily "voting their pocketbooks" does not make them pollitically illiterate. There are principled independents who believe in smaller government and despise earmarks and other very parochial ways that our Congress operates. If our problems are to be fixed, it will be by people who are willing to put their self interests aside and make good decisions for the entire nation. I don't find that a trait to warrent belittlement.

  246. A quiet evening at home with the Cap's…..

  247. PCLN – who the hell knows ?

    Because they could ?

    Hopefully, its a sign of a top.

    In the market and the stock.

  248. Sorry Cap, you'll need to hit the link….hangs head in shame….

  249. So what are you right-wingers going to do with all this righteous anger? I for one don't believe that "all good comes from DC," and I certainly have no childlike faith in government. A few things I do believe though > As of today, with the Republican cave-in on the payroll tax cut, conservative power in Washington has taken a major step back. Everyone but the Republican candidates knows the White House is a pipe dream now which means there will be no coattails to ride in November which also means House and Senate incumbents will have to stand and fight on their records. Too bad for them they haven't done diddly. And increasingly it looks like Obama is kicking their butts, so much so that they even realized what was happening, hence the humiliating public cave-in (stupidity is a tough hurdle to get over so it took time to sink in what has befallen them). Besides they're easily distracted, and they've decided to move on from opposing tax cuts for low and middle income folks to opposing contraception for the same low and middle income folks. Brilliant! And another thing, Obama has decided to run against the do-nothing Congress which will be great fun to watch. Lord knows he'll need something to run against. What will be the challenge in taking down Romney, Santorum or Gingrich (I can't help laughing whenever I even think of that one)?
    I'm easily distracted, too. Why just the other day I was reading that the oil rich Soviet Union was bankrupted by the crash in oil prices in the 1980's. Amazing. All these years of hearing it was an arms race instigated by Saint Ronald of Santa Barbara that brought the Bolsheviks down only to find out it was Saudi Aramco. SMH. Got to be tough to swallow since he's the only Republican president other than Lincoln a "true" conservative can admire (leaving out W, of course, because he's kinda like the crazy uncle living in the basement you all don't like to talk about). Take away his greatest claim to fame and what have you got? Tax cuts? But he then raised them again later, and the government and deficits he went to Washington to shrink got massively larger while he was there. I don't know, I'll let you work on that. Cutting taxes and raising them again doesn't get you a place on Mt Rushmore (although apparently it can get your name on an airport).
    @Flip and Cap. Please tell me you guys don't believe everything they tell you on Fox. You seem a lot smarter than that.

  250. Phil – Is this what Yentervention looks like? USD/JPY up suddenly 0.32 to 77.90 and EUR/JPY up 0.44 to 102.49.

  251. roberthjrfl,
    I am not sure what you mean by setting up the longs to be neutral.  Can you give us an example?  Also, how do you limit your losses to be about the same as profit potential?  Much appreciated.
    I just began to explore this strategy.  I've been using Peter D old strategy of selling strangles and buying put verticals for protection.

  252. You're right about at least one thing, Pak:  The prospect of a Republican victory is melting like like a snowball's chance in hell. Sparky, I don't belittle the common sense of regular folk, only their self-appointed leaders like Palin and Bachmann.  I'm pretty sure  that Obama's a good enough politician to convincingly point out that the Republican party is not on their side over the course of the general election campaign.   I'm certainly going to start selling everything I can and buying it back to recognize whatever losses I have lying around, cuz the future value of those loss carryforwards is going up, I reckon.

  253. Kongen – oh dear, please don't mistake me for a machine-gunning sister!  i'm more with the crowd who have had it with politics full stop and that MORE money to government is not a solution. Starve the beast is not a republican movement, it is more libertarian or even anarchist (where i will self-identify).  Pstas summed it up rather brutally: the system is broken.  To take that further, there is going to be a lot of pain before it gets better, if it gets better. I'm not one of those with cayman offshort accounts --hell, i find D.C. too expensive to visit. I fear such a period. …. but maybe (and I hope!) I am wrong (though I don't think that means hoping Phil is right either--he's planning to escape to Jersey!), and Greece will be saved, and Obama will be reelected and the Change that was Hoped for will come and it will be all sunshine and lollipops…   Well, we can all have our dreams, eh?   I just have a hard time seeing it play out that way, from banksters to local government, to state to federal: Broken. Immoral. Unfixable. Ergo, collapse and rebirth. And there are no guarantees what rises from the flames will be any improvement. And I'm an optimist at heart!  Go GOOD GUYS!

  254. PSTAS/Chicago/Govt: I agree wholeheartedly with your view of Chicago politics (longtime 1st Ward resident), I have witnessed it many times first hand. However, we are slowly creeping forward, no longer are wads of hundred dollar bills the way to gain an approval from inspectors – Silver Shovel has driven this practice underground (and now we wait weeks for inspections). I would guess, however, that most here (PSW), liberal or inclined otherwise,  do not have 'naive, almost childlike faith in government', quite the contrary, it seems that government (like, perhaps Corporate Boards), are inextricably, well, human, and filled with all of the evils (and good) that we humans do. At least we have the option to vote out the bums (so sorry to see Daley go -not)  whereas, on corporate matters, that vote seems to be, at least for a  common shareholder, a proxy for more of the same. Although, on reflection, our right to vote seems to have roughly the same effect.

  255. btw - I love the discussion here.. including no holds barred plolitics after hours. There is dissatisfaction from all quarters, and I learn a lot.

  256. Good morning!  

    Europe bouncing off bad open but not down too far.  Europ bottomed out at $1.3127 (now $1.3168), Pound $1.565 ($1.573) and Yen doing very well at 78.07 as Japan seems to have flipped back to Dollars, which topped out at 79.465 (79.295).  

    Of course we have the Moody's downgrades to blame on everything but who cares, oil just gave us a $101 entry (/CL) to short again!  Gold hit $1,715, now $1,717.  I think the Dollar looks bouncy so let's watch 79.25 for a stop on the oil shorts and, of course, the $101 line! 

  257. Well, a quick trip to $100.85 before turning not so bad but then the Dollar failed 70.30 and that's what triggered the stop out on oil.  Hopefully Dollar holds 79.25 and gives us a reload opportunity – Yen getting stronger at 78.13 and oil back at $101 so we have to wait for a cross back below as it's very dangerous nickel and dime trading right now. 

  258. Not the pound testing $1.575 and each time we get a chance to add an indicator to our mix, we take it so now we know $1.575 is another stop line.  And oil back below so – game on

  259. Good quote ZZ, I wish I understood it.  ;)  

    Reagan/Kongen – It really started with the Reagan campaign and the "Welfare Queens" and other such "examples" that have been a staple of Right-wing propaganda ever since.  Your Mom and sister probably spent more time watching TV than you did and were bombarded with what was, at the time, the most expensive PR campaign ever waged to convince Americans exactly what they were saying – that our Government was taking your money and "wasting" it on undeserving leeches who were scamming the system.   

    $100.85 again – just as good hitting that twice as getting one 0.25 run, right?  

    Tea party/Sparky – Interesting poll by the NYTimes on them from before the movement was completely co-opted:

    Reading about the NYT poll on the makeup of the Tea Party, the most interesting data (beyond the anti-poor, anti-black sentiment) was that Tea Party members are wealthier and better educated than the general public. (The poll pegged their numbers at eighteen percent of the American public — primarily Republican, white, male, married and over forty-five.)

    I don't like how fast oil snaps back up – makes for dangerous shorting – be careful.  $100.99 again already…

  260. Topped out at $101.09 ($101.05 now) and $101.18 was recent high and 79.20 seems to be holding for the Dollar so brave entry here with a scale in up to $101.20 but a stop if the dollar fails or the Pound pops, of course.  

  261. Morning Phil,
    selpt in……..time to sell the US dollar again?
    about Moodys; you know i trade the european sessions and the european equity indexes and yesterday the price action was telling a different story for spain and italy than germany and the UK. i didn't clue in to it until late when Moodys made the announcement after US close, but that made me wonder about how Moody's or any other rating agency for that matter handles the release.
    in other words it is information that has value and from what i read yesterday i didn't see any mention of a possible Moodys announcement as anything else but  a surprise.
    my point is that someone knew, and it was not only Moodys. maybe i am a cynic but Moodys has lied before (MBS ratings and the real estate debacle) but there is a LOT of money involved (short the Euro, Pound, AUD, CAD etc., equtiy indexes)
    and, why let a good opportunity go to waste.
    US dollar looking toppy here

  262. Damn, stopped out by better than expected ZEW Index in Europe!  Dollar fell to 79.12 (79.14) and oil went over $101.20 to $101.29, now $101.25 so now $101.30 and 79.15 are our watch levels and the Pound is right at $1.575 (need to be below that to short oil) and Euro has very nicely popped to $1.32 so another good stop line to watch but 

  263. Moody's/Roro – Well, even if they play it straight as they can – there's still hedge funds with tons of money for "favors" for people inside these companies who can give them a clue in advance.  Moody's has thousands of employees and hundreds must have been involved in this project plus they have to interview hundreds of Government officials so lots and lots of room for leaks – it's just going to happen.  

    As to the Dollar, I don't think so:  

    The Bank of Japan unexpectedly added ¥10T ($128B) to its asset-purchase program. Bowing to political pressure, it also set an explicit price stability "goal" (as opposed to an "understanding" of price stability). The target is 2% or lower in the CPI in the medium-to-long-term and 1% for now. Greenback +0.5% to ¥77.98. Nikkei+0.6%. (BOJ statements)

    Still not breaking $1.32 on Euro or $1.575 on the Pound – that's interesting.  Oil at $101.35 at the moment, Dollar 79.155.  Obviously $101.50 is a good spot to get back short (with tight stops) but scary otherwise. 

  264. that 79.25/50 looks like an important resistance level for the dollar index.
    the european equity indexes do not look soft, especially post downgrades
    i'll go out on a limb here, but i am not touching OIL as a short until i see 102.15, next sig resistance level. besides, it did have a clean break to the upside out of that descending channel and tested R at 100 then 99.75 and finally 99.50 when the break higher came.

  265. Oil/DC – It's what I've been saying for years.  

    Yentervention/Pak – Good call – see above news.  Now they are up around $1Tn of firepower.  

    Well, we're getting to $101.50 but now the indexes are flying up and the Euro and Pound broke over so it's game off for oil shorts, unfortunately.  Dollar 79.075, gold $1,722 may be a good long over $1,720 (/YG).  

  266. Thanks for answering that Moody's question Phil………..just out of curiosity, did you know it was coming?……..i read around and no one i read mentioned it other than several who expressed surprise and one who just happened to step out in between US close and Asian open.
    nothing like picking the spot/time to drop it either…… between market sessions.
    why not give the markets advance notice as in the way other economic relevant announcements are made like the ZEW as a recent example?…………i know, that would be too simple and wipe out a perfectly legitimately corrupt business practice. think of all the entertainment expenses and birthday presents lost.

  267. for what this is worth i really do not know how anyone can trade these markets without being up for european sessions. just look at the price swings in OIL, currencies and all of the equity indexes including the DOW and S&P since the Europe open.
    i think trading is getting more and more complex………at least that is my impression comparing to when i started in 2005.

  268. Now we're well over $101.50 so we can use it for a shorting line again but very careful with Dollar at 79.50 and Euro over $1.32 and Pound over $1.575 (a no play if they they are over).  Yen now testing 78 and if they can't hold that, that's Dollar weak (lower Yen number is stronger for them, which they don't want) and, again, bad for oil.  


    OECD Data Suggest U.S., Japan Rebound

    Developed economies may be set to emerge from slowdown, led by the U.S. and Japan, the OECD said.


    Europe Struggles Over Greek Details

    European Union negotiators have yet to settle key elements of a complex bailout and debt-restructuring package for Greece ahead of a pivotal meeting this week.


  269. Moody's/Roro – We knew they would get downgraded – hence little reaction to the news but we didn't know when.  I think we got plenty of advance notice as all the ratings agencies have been saying for ages taxes must be raised and spending reigned in.  Despite what they are forcing Greece to do – the other EU Nations have done very little to improve their positions.  

    Trading futures is getting more complex in this market but trading stocks is very simple, just buy them!  Seems to be working so far…

    Tuesday's economic calendar:

    7:30 NFIB Small Business Optimism Index

    7:45 ICSC Retail Store Sales

    8:30 Retail Sales

    8:30 Import/Export Prices

    8:55 Redbook Chain Store Sales

    9:00 Ceridian-UCLA Pulse of Commerce Index

    10:00 Business Inventories


    Notable earnings after Tuesday's close: ACASACC,ACGLFTIMETSKTSTRWSHWTWZNGA 

    2:10 AM Asian markets are mixed, with Japan posting gains after some surprise moves from the BoJ. Japan +0.6% to 9052. Hong Kong +0.1% to 20910. China -0.4% to 2342. India +0.2% to 17810.

    6:00 AM Overseas: Japan +0.6%. Hong Kong +0.1%. China -0.3%. India +0.4%. London +0.2%. Paris +0.4%. Frankfurt +0.6%.

    Not actually good, just better than expected.   Good short on oil ($101.50) as early rumors of strong report (from CNBC) were BS:  Eurozone industrial output -1.1% M/M in December vs. -1.2% expected, -2% Y/Y vs. -1% estimate. Germany production -2.7%. (PR .pdf)

    Greece Must Meet All Terms To Stay In EuroFailure by Greece to meet all the conditions laid down by Europe and the International Monetary Fund for new bailout funds would lead to its exit from the euro zone, Luxembourg's finance minister said on Monday. Markets have adjusted and sufficient firewalls have been erected in Europe to limit the financial damage should Greece decide to default and leave the monetary union, Luc Frieden said. "I still think that we should do our best to keep the euro zone with all its members. But again, the key lies with Greece today," Frieden told the Atlantic Council after meeting with the U.S. Treasury. "And therefore if the Greek people or the Greek political elite do not apply all of these conditions — and I do know that is very difficult for the Greek people and I do not underestimate the problems that it creates for Greece -- if they don't do this, I think they exclude themselves from the euro zone and the impact on other countries now will be less important than a year ago."

    Greece Faces Death By A Thousand Cuts Unless It Leaves The EuroLucas Papademos was suitably apocalyptic. If the terms of the second Greek bailout were not approved, the Greek prime minister warned over the weekend, there would be a "disorderly bankruptcy that would create conditions of economic chaos and social explosion.

    France To Push On With Trading Tax. France is determined to press ahead with a financial transaction tax inspired by the UK’s stamp duty and supported by at least eight other eurozonecountries, the country’s finance minister has said.

    Chinese companies more than doubled their investments in European firms last year, according to a new study by P-E firm A Capital. Chinese investment in Europe rose to $10.4B from $4.1B the year before, even as China's total overseas direct investment declined and its investment in the U.S. fell sharply.

    China's outstanding loans to local government financing vehicles were 9.1t yuean as of Sept. 30, citing data. Of that total, almost 3t yuan is being managed as ordinary corporate loans. About 65% of the outstanding loan was backed by collateral.

    Canada Examine How Benchmark Rates Get SetCanada's top antitrust watchdog said it is investigating allegations of collusion in the setting of key benchmark interest rates, joining law-enforcement authorities across the globe in a probe of how the rates are set.

    Black Gold Swan – Presenting The Reason Why The CME's(CME) Crude Market Was Halted For Over One Hour.

    Market Volume Hits Fresh Non-Holiday Decade Lows. (graphs)

    The EU's controversial carbon emissions tax could erode more than 30% of the airline industry's profits, warns IATA chief Tony Tyler. The first year of implementation could cost $1.2B, with worldwide profit pegged at $3.5B this year, and there's the possibility that costs could "balloon" in future years.

    Chesapeake Energy (CHK) had its ratings outlook loweredby Moody's yesterday to Stable from Positive, reflecting "the adverse effect of weak natural gas prices on Chesapeake Energy’s operating cash flows." Chesapeake's capex plans "far exceed its cash flows, necessitating the execution of continued asset sales and capital raising transactions in 2012." 

    Zinc Glut Rising to Two-Decade HighThe largest glut of zinc in almost two decades is threatening to curtail a rally in prices as record production expands inventories to the highest since at least 1984. Supply will outpace demand by 539,000 metric tons, the most since 1993, according to Standard Bank Plc. Stockpiles of the metal used in brass and steel will reach 2.2 million tons, Barclays Capital estimates. 

    Sprint (Swon't count the impact of the iPhone on the company's profits while calculating employee bonuses, according to a regulatory filing yesterday. The result is that CEO Dan Hesse's bonus will come in at $1.77M for 2011 instead of $1.53M, with Sprint justifying the move by saying it didn't have the iPhone on its radar when it set performance metrics last year.

    In one fell swoop, the Department of Justice ended investigations into several smartphone patent purchases, most notably Google’s (GOOG) purchase of Motorola Mobility (MMI), whose U.S. approval directly follows EU approval earlier in the day. “The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics," DOJ says.

    Big Brother on the March:  Pentagon Working With FAA To Open U.S. Airspace To Combat DronesThe military says the nearly 7,500 robotic aircraft it has accrued for use overseas need to come home at some point. But the FAA doesn't allow drones in U.S. airspace without a special certificate. - So they can only come home by flying here?  REALLY???  Like they are even capable of flying all the way over the ocean to get here!   It's amazing what kind of BS people are willing to swallow…

  270. As to that last item – do you guys really wonder why I'm checking out other countries?  

    $101.35!  Makes up for popping us out at $101.20 before so now we play like we're back to scratch.  

  271. @Pakdog
    I am not a Conservative, as I have told you before. I am an atheist. So much for the Religious Right.  I didn't vote for Reagan, before my time, and from what I've read he was nice guy with decent personality and the front man for whoever was pulling his strings. I have no opinion on the history of the Cold War being won by him or some oil cabal done in by the price of crude.
    Please don't tell me that because I know  that D.C. is a snake pit, inhabited by demcorat and republican reptiles  that I get my get my information from Limbaugh, Fox, or other Right wing organization. Stop categorizing me because Felipe tells you so.
    While I don't share your opinion that the decmocrat reptiles have done a great deal of good, neither do I think that the republicans have done any better or worse. I've made this clear any number of times but somehow your and Felipe's take on those who do not agree with you, why they ust be members of the right wing. Well, I hate to break it you both but there are a great many  of us out here who are not captured by the ideology of either the left or the right. 
    I don't vote as I have said before, but you don't seem to get that. I long ago came to the conclusion that no one can govern the United States, least of all the type of men and women who make their life's work a self-dealing, personal wealth building jihad against the American people, who are too clueless to realize what is happening OR have invested in one of the party's demagoguery for their own personal gain, or a traditional hatred of the OTHER built on nothing more than despisement of race, color, nationality, or country of origin.
    So at least stop labeling me to suit somel device you need to create a boogey man you can point at as one of 'them'.
    As I have also said before but Felipe ignores: I don't come here for left wing or rabid political talk, but to make money. But Phil and his disciples are using this platform for a political podium to and Phil, to preach, to make sure that democrats retain or secure more power.  With the election in the bag for the Bamster, I don't see the point of reiterating day after day several times a day, the mantra: "Republicans Suck! Democrats UBER ALLES"!
    It reaks of a rabid partisanship that hasn't convinced one single soul of anything they didn't already believe. It is Phil's attempt to be a Ruch Limbaugh of the Left and equally ineffective, distracting, and nauseating.  I wish there were a way to tune it all out by hitting the ignore button as I have done with the membership, to screen out his diatribes.
    Short WOR at 18.75, close at 17.50.

  272. Here's the "good" ZEW numbers:

    The ZEW guage of German investor sentiment unexpectedly turns positive in Feb., rising to +5.4 from -21.6 in January and coming in well above forecasts of -11.6. "From the perspective of the financial market experts, there is a good chance that the German economy will experience a slight uplift in the second half of 2012," says ZEW. - Keep in mind this is an opinion poll during a massive bull rally

    EU shares, which had been negative, turn positive, helped by the far better-than-expected ZEW guage of German investor sentiment. Euro STOXX 50 +0.3%, London +0.1%, Paris +0.2%, Frankfurt +0.6%, Milan +0.65%, Madrid +0.3%.

    Rush of the left/Flips – Interesting how you don't like to be labeled but you hand them out right and left.  When your views are in alignment with the right, you are a righty – whether you want to be or not.  Trust me, I know plenty of Liberals and you are NOT getting into that club and I'm pretty sure it wouldn't take long for a room full of moderates to suggest you may be at the wrong meeting as well!  I myself do not love the Democrats – I just hate the Republicans.  I see the Dems as the lesser of two evils but not by some narrow margin where I throw up my hands and say "whatever" but more like choosing to bathe in uncomfortably hot water vs a vat of acid.  The same market instincts you trust me to convey have led me to conclude (after many, many years of study) that the stated goals of the Republican party will, if left unopposed, lead to the destruction of the United States of America.  

    You won't see it in our lives so you will always think I am wrong but we are losing everything that was great about this nation and replacing it with a Corporate Kleptocracy that is every bit as corrupt and ruinous as the Roman Empire was under Caligula – only the Republicans have less orgys (so far).   You expect me to sit here while my country is sold out to Corporate interests?  To sit back and watch our environment destroyed, our natural resources depleted our children left to the wolves in some perverse devolution to a society where might makes right and only the fittest deserve to survive?  No thanks.  

    The momentum to undo all the positive gains our forefathers fought for – the Constitution, the Bill of Rights, the Emancipation Proclamation, the ERA, Worker's Rights, Social Security, Civil Rights, the EPA, Welfare… is already in motion and being pushed from the Right every day. In 1941, Roosevelt laid out the "Four Freedoms" essential for all people: Freedom of speech and religion, freedom from want and fear.  That's a set of principles I can get behind.  

    Clearly the GOP is against freedom from want – I don't even think you can deny that.  Fear is, of course, their stock and trade so also not high on their list of things to eliminate.  Religion is something you are free to do as long as it's a "good one" and speech – well, isn't that what you're trying to stop right here, Flips?  "I wish there were a way to tune it all out by hitting the ignore button."   

    No thanks, I'll stick with the Dems and anyone else who is willing to stand up to the Republicans because I want my country back!  

    $101.50 again – still good if it crosses back under – $101.35 was the floor.  

  273. Good article on Greek life:

  274. $101.50 holding up at the moment and 79.15 is proving tough for the Dollar to get over.   Both Euro and Pound are under their lines so still hopeful for an oil short but I have to go to work now so just have to wait and see how we open.  

  275. "…the destruction of the United States of America..". has already been accomplished thru the K Street gang and politicians on both side who have sold out the country for personal power, many who has disgraced themselves in the process including Lyndon Johnson, Bill Clinton, Tricky Dick Nixon, and Abraham Lincoln( who had to kill and maim 2.5 milion men and their families, who trashed the same constitution he ostensibly was using to "save the union") George Bush, and now theBamster.
    You need to spend more time with George Carlin instead of the propaganda sites you visit to confirm your extreme bias that democrats are somehow angels compared to republicans.
    "I just hate the Republicans".
    @And there you have it..  There is no debate with hate. Only 'ignorance'.
    No I don't expect you stand by  ut I do expect you to realize that many here are spending $7,000. a year for your financial acumen, and not your political rants against the hateful right. Yes, I am free to leave as I have been invited to do or predicted I would do. As long as I can glean some decent trades I will not exercise that option.
    Now if you could just bottle that hate, put it in red-- so we could all see it-- put an Ignore Buttton on the bottle, life would be grand. Because in all of your rants you have convinced no one that isn't already encamped in yout tent.
    Stick with your dems, I don't care.  And I'll stick with Geroge Carlin who understood more than you ever will (or what I'm beginning to believe you do really already know) that Politicians belong to a specail club and you and I are not in it, they don't give a f…k about you.  

  276. Just because Tea Party members are not necessarily "voting their pocketbooks" does not make them pollitically illiterate. There are principled independents who believe in smaller government and despise earmarks and other very parochial ways that our Congress operates.
    Yes,but smaller government means bigger business. If you hand the running of government services like prisons, schools, police, the Veterans Administration, Border Patrol, the military, food stamps over to private contractors, then you lose public scrutiny and accountability.
    When I was a civil servant every single e-mail I ever wrote on the state e-mail system was deemed to be a public record and could be requested by the press, as could my personnel file, and pay stub records. Do you think that companies that want to take over government services are willing to be so open with the public?
    I am not so in  favor of big government that I would like to see government taking over private sector businesses that are already serving the public effectively, nor do I wish to abolish private health care or schools. I just think there should be a choice. In the UK, which, as everyone knows, there is a universal health care service where no one has to pay at point of service or is sent a bill later, people are still perfectly free to have private health insurance, and in fact about 8% of the population do have private insurance. However this private insurance has certain exclusions including pregnancy, childbirth, HIV/AIDS, contraception, allergies, and some other conditions so most people also use the government health services.
    Even if it is a valid point that the structures of government services in the US are too bloated and could be trimmed without affecting the level of service provided to the population, why on earth would the Tea Party people support this stupidity over the inclusion of contraception in health care plans? Although it is true that the Pope's official position is that sex is only for reproduction, 98% of US catholics do use contraception even if Rick Santorum does not. Surely they should be given the choice in their health care plans. If they choose not to use the contraceptive coverage in their insurance plans, then that is their private decision and they can always change their mind when they have enough children.

  277. $101.10!  That was nice.  Seems to be holding so watch for reload.  Euro $1.318, Pound $1.5722, 77.15 Yen seems to be hard to get over.  79.25 is where the Dollar stopped.  

  278. Health care
    Question I would like to ask the Republican candidates at their next debate: Have you ever used contraception or had sex with a partner who was using it? Do you regret your decision?

  279. Oops. Only 10% of Americans thought Congress was doing an acceptable job, according to the most recent Gallup poll. The worst ever! Disapproval etched up to 86%, matching the December record.
    Even the leadership of Greece got a better score—though people are rioting in the streets of Athens, throwing Molotov cocktails, and burning down buildings to express their discontent. A stunning 18% of Greeks approved of the job their leadership was doing, while only 76% disapproved. These astronomical numbers must bring wistful smiles to the lips of our storied lawmakers.
    It has been a horrendous dive from the lofty 84% job approval rating of October 2001, when the country erroneously looked up to Congress as a source of hope and guidance. Republican voters are the least dissatisfied with Congress, awarding it an approval rating of 12%, same as the previous low. Democrats are getting more frustrated, dropping from 14% to 11%. And independents continue their push towards zero, though sampling error, apparently, nudged their approval rating up from 7% to 8%.
    (That's me in that "independent" group, you know ,  the powerful minority that swings elections)

  280. George Carlin (RIP) was a Catholic Democrat who got tired of both…..

  281. Flip – You still care or you wouldn't say a thing – that would be apathy, which you clearly don't have about all this. Elie Weisel put it well when he said the opposite of love is not hate but apathy. For me giving up is unacceptable. I have to care since the opposite is nihilism and joining the club of the living dead. In our politics I would prefer a viable third party but in the end I'm usually choosing between a Republican and Democrat and holding my nose when I vote. In spite of all the mess, corruption, waste and stupidity I still must choose rather than opt out and carp from the sidelines. From this point of view, when you attack well reasoned positions, I assume you ARE taking a side. But you say you're not. I'll try to remember that and add that you should try to stop weighing in against the hope that things can change for the better which begins with naming the problem and then choosing to take sides. Sometimes it's like I'm trying to choose which is driving toward destruction more slowly than the other, other times it's more obvious which is right. So this is what it boils down to for me, not any kind of blind enthusiasm. Defend the hope that things can get better and choose what seems the better way to go. This clip sums it up pretty well.

  282. Well said pakdog.
    Flip just enjoys being a hater…… :)

  283. @Pakdog
    You're approach is far more balanced than mine could ever be. 
    WADR to Elie Weisel and your agreement with him, I don't accept apathy as the opposite of hate; to me that simply sounds good but is not the fact of the matter, or the truth.  Apathy in my world falls outside a comparison between love and hate.  It is being forced into the wrong context.
    Hate is in my view, the opposite of love. Not any rhetorical flourish or languistic tampering can convince me otherwise.  It's like the the republicans saying that a reduction in the rate of an increase is a decrease. Don't buy it, never have never will. It's STILL an increase.    I could cite a million examples of how hate has obliterated a billion people on this planet thus far, and apathy hasn't killed anyone, directly.
    I am taking the 'third way' invented by Bill clinton. 
    There's a story about a judge holding a bench trial who heard both sides of the argument from the lawyers for the prosecution and the defense. I'll paraphrase:
    After the DA made his solid case against the defendant, the judge said to him, "You are totally wrong!",  about his charges against the defendant. 
    Then the Defense attorney got up and made his argument and the judge told him "you're wrong, too". 
    Then the bailff went to the judge at a sidebar and said quietly to him, "Judge, they can't both be wrong!", and the judge said, "Bailiff, You're wrong, too"!
    That's pretty much where I come down.
    You still think the U.S. is in fact governable FOR  THE MASSES and apparently think its working or have hopes that you will see a day when it becomes so.
    I reached the conclusion that FOR THE MASSES, this country is too vast, too spread out, too diversified, and the people totaly 'unorganizable' into a cohesive influential force.  In that chaos, the top 1% have hired 40,000 lobbyists to govern the country FOR THEMSELVES and not a single one of them got a single vote in any election, ever.
    I don't wish the country ill will.  I too would be proud to see it come to its senses, but the complete lack of self-disciplne in the people and its so-called leaders, the 50 year slide of jobs being exported out of the country, the investment bankers—particularly Goldman Sachs takling over, hijacking our Treasury Department and every single financial nexus in the world, bar none— and a TreaServe awash in Goldman sycophants, the behavior of Hank Paulson, and the power he abused doesn't bode well for our people….I could go on for hours about what influences I have come to learn about, many here on this site, that have destroyed my hopes for the country and its citizens.
    I have a hope that I am once again proven wrong (I said Justin Bieber would last about 6 months) and that would be a very good thing as I am not "Invested" in being right and desire therefore a disastrous outcome (Only insofar as my shorts are concerned, though).
    Wish you much luck in your hopes and dreams and can avoid the abyss I foresee. You will certainly be much happier in your hope than I am in my realism