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Super Tuesday – America Wakes Up to Sophie’s Choice

GOP candidates caricatureRomney, Newt or Santorum?

In the movie "Sophie's Choice," Meryl Streep was forced to make a terrible decision over which of her children would be sent to the gas chamber and which to the labor camps.  Even after choosing, she was unable to live with the decision and she and her husband killed themselves, which manages to further screw the boy who was sent off to the labor camps, now an orphan too.  That pretty much sums up this Primary season for the Republicans as they have to choose between 3 TERRIBLE candidates – any one of which is a pretty clear path towards National suicide.

A recent Gallup poll indicated 55% of Republican voters say they wish someone else was running but, that leaves 45% happy with their choices (I guess if they were Sophie, they would have just flipped a coin and been done with it) and perhaps today we'll get a better indication of who the front-runner is as 410 delegates go up for grabs today, which is much less than last election, when John McCain alone scored 511 delegates on Feb 5th, 2008.  Interesting Republican trivia:  On that day in 2008, Mitt Romney came in 2nd with 176, Mike Huckabee had 147 and Dr. Ron Paul scored 10.  So Romney was only 1/3 as popular as McCain 4 years ago and I'm pretty sure McCain got his ass kicked in the General elections, didn't he?  

Something has to change in this country as 93% of all income gains in 2010 (most recent figures) went to the top 1%.  93%.  How does this work?  In 2010, average real income per family grew by 2.3%, but the gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99% incomes grew only by 0.2%.  Looking ahead to last year, National Accounts statistics show that corporate profits and dividends distributed have grown strongly in 2011 while wage and salary accruals have only grown only modestly. Unemployment and non-employment have remained high in 2011.

While it is very, VERY good to be in the top 1%, being in the bottom 99% – not so much.  What I try to get the top 1% to see though, is that getting 45% of the growth, like we did under Clinton, is pretty good – especially when it means that EVERYONE is participating in economic improvements and the overall growth is MUCH BIGGER.  There's no point in climbing to the top of a pyramid if the base is about to crumble but the top 1% have gone completely into plunder and pillage mode – throwing the bottom 99% under the bus so they can get what they can out before they escape the last days of the American Empire.  

Idiot Joe on CNBC was just saying this morning that he was at Universal Studios in Orlando and he had to wait 15 minutes in line to pay $11.50 for a Harry Potter Butter Beer (and even that was purposely misleading because it's not the beer that's $11.50, it's the souvenir mug that comes with it – but never let the facts get in the way of a Conservative making a point, right) and Joe's conclusion was that (and I kid you not) "the bottom 99% in this country have it better off than the top 1% in the rest of the World."

Wow, what a clueless moron!  Does he really believe that the people who pay $80 a day for park admission at Universal and stay in $300 a night hotels around the park (where you have to be to join Joe's early admission privileges and yes, I know because I go all the time) are the bottom 99%?  People in the bottom 80% have an average family income of $24,000 – it costs 5% of their ANNUAL post-tax income PER DAY to vacation at Universal Studios!  

So, is Joe as clueless and out of touch with the reality of American life as Mitt Romney (and, if so, why the hell is this man a key analyst on CNBC?) or is he just an amoral bastard who's lying to your face in order to win points for his Corporate string-pullers?  We report, you decide.  

Speaking of top 1% A-holes on CNBC, TBoone is on AGAIN this morning trying to stop oil prices from going off a cliff.  We're loving it as we got multiple opportunities to short oil at $107 yesterday and picked up several nice little gains and just this morning in Member Chat, we caught a nice ride down to $105.50 for a $1,500 per contract gain – Egg McMuffins for everyone!  

Meanwhile gold (also short) is down to $1,684 and copper is back to $3.76 and natural gas (also being pimped endlessly by TBoone) is bouncing off the $2.35 line with gasoline retreating to $3.24 so I don't think even the great Mr. Pickens can stop oil from hitting our $105 target today and, in very bad news for oil bulls, Iran says it will be willing to allow IAEA Inspectors to visit it's Parchin Military ComplexNO WAR FOR YOU!  

I was on TV at 3:05 yesterday and shorting oil at $107 was one of my picks and it stayed over $107 until 4 am so plenty of time to trade it and I'll bet that's the most profitable trade idea given out on television all week as I'm still one of the only bears out there.  My reasons for remaining bearish are outlined on BNN (and in the last month of articles I've written) and now the technicals are starting to agree with me and I wonder how ready the markets are for a sudden change in the narrative from the MSM as analysts begin to rethink their overly-optimistic predictions.  

Before leaving for New York yesterday afternoon, my own 12:54 prediction for Members was:  

Dollar only 79.35, will be catastrophic tomorrow if we finish low and spark a continued sell-off in Asia and then Europe wakes up and realizes they were too optimistic today.  I've got to go in 1/2 hour but doesn't look to me like we'll be bouncing. Oil was a nice re-short at $107 – gotta love our counterparties!  

This morning the Dollar is at 79.77 and (8:52) oil is $105.45 and the Hang Seng fell 459 points (2%) and the Shanghai fell 1.4%, the Nikkei fell 0.6% and India tumbled 1% while Europe opened low and has been heading lower all morning, now down 1.5% and our own futures are down about 0.75% so far.  Not bad for a 19-hour old prediction!  

Now Cramer is on CNBC pimping oil, saying Iran and war as many times as possible in a single sentence.  He says the market isn't pricing in war but I think war was priced into oil $20 ago and what's not priced into oil (or any commodities) are the slowdowns in China and India ON TOP OF the terrible economies of the EU, UK, US and Japan with even Australia and Canada now feeling the pinch as Global commodity demand grinds to a halt – a la 2008.  

Let's just go back a moment and think about this.  Jim Cramer is on CNBC at 8:55 am.  He has a show that airs at 6pm-7pm so there's no way they need him here now.  What is his motivation for coming on TV to implore you to buy oil?  Last night, Cramer told his sheeple not to worry about China slashing their growth forecasts to 8-year lows.  Judging from his "Buy the F'ing Dips" commentary this morning – I assume he's also not worried about today's news (from SA Market Currents):  

Goldman Sachs (GS-1.6% premarket on news the investment firm suffered a $103M net loss in Asia for 2011, its first loss in Asia since 2008. GS cited weak markets that took a toll on lending and investing, as well as a mark-to-market loss in its holdings of shares in Industrial & Commercial Bank of China.

Eurozone Q4 GDP second estimate -0.3% on the quarter, as expected. Yearly figure is +0.7%, as expected. (statement)

Eurozone Q4 exports -0.4% Q/Q, stripping 0.2 percentage point from GDP, imports -1.2%. Household spending, government expenditure and business investment also fall. The GDP breakdown is worrying "as it shows widespread weakness," says economist Howard Archer. The EC's Olli Rehn predicts "a turning of the tide."

U.K. retail sales fell 0.3% Y/Y in February (based on stores open at least one year), says the British Retail Consortium. This follows a 0.3% decline in January, the worst read for that month in 17 years. "The reality of weak sales shows that a convincing revival remains illusory," says BRC Director Stephen Robertson.

U.K. house prices drop 0.5% in February, according to Halifax, the 3rd consecutive decline. On a Y/Y basis, prices were 1.9% lower. Particularly troubling for the market, are rising mortgage rates despite the central bank's best efforts.

Russia's blue-chip Micex index -1.2%, nearly erasing yesterday's post-election gain, as riot police are called in to Moscow to break up protests by those contesting Putin's win. (previously)

With the the outcome of Greece's bond swap lookingdecidedly shaky, the country denies market chatter that it will put back the Thursday deadline to try to increase the participation rate. 

"The euro is not in the interests of the Dutch people," says Geert Wilders, leader of the populist, right-wing Dutch Freedom Party, calling for a return to the Guilder. With a sixth of the seats in the Dutch parliament, the DFP is the first political movement in the eurozone with a large popular base to opt for withdrawal from the single currency.

Brazil's 2011 GDP growth comes in at 2.7%, short of a recent government forecast of 3% and well off the 4.5% target put in place at the start of the year. The economy grew 0.3% in Q4 (1.4% Y/Y). The central bank is in rate-cutting mode and the finmin "currency war" mode as the country looks to return to speedier growth. 

As I said in yesterday's interview – it's not that I'm bearish per se, just that the markets are priced back at 2007 levels, which is ridiculous when Europe is clearly in a recession, Japan is dead in the water, India and China are slowing along with Brazil, Russia, Canada and Australia and the US "recovery" is creating no jobs and selling no homes, which means it can reverse very quickly.  

So that makes me cautious when everyone else is mindlessly bullish.  I guess that makes me a bear, but at least I won't be gnawing my own leg off when it's caught in a trap!

Be careful out there,  

- Phil

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  1. People in the bottom 80%  have an annual  average income of $24,000 per family.

    Can this be right for 80%? If so, it is a stunningly low figure, because $24, 000 is about $12 per hour which is what the Florida Dept. of Juvenile Justice was paying as a starting salary 10 years ago for high school graduates with no experience. However, I guess many single retired people living just on Social Security brings down the average, and of course the number of families with an employed member is declining as a proportion of the population. This doesn't bode well for recovery in the housing market where large down payments are now required.

  2. RSSOwl w/Basic Membership/Anyone
    Good Morning!  I have been playing with RSSOwl since Friday, and it seems to work during off-hours and over the weekend, but during the trading day, when I (try to) create the feed, it "pops" me back a level to the main PSW page…with no comments…the same page any non-member can see.  Am thinking it is related to the 15-minute delay on many posts due to my only having a Basic Membership.  Would appreciate any input on how to get around this…if possible.  Many thanks!

  3. I have a strange feeling that most of the comments today will be about whether the donkey is more awesome than the elephant.  Mmmm. Bestiality my favorite category!  

  4. And wheee on oil….

    R3 – 109.42
    R2 – 108.42
    R1 – 107.5
    PP – 106.5
    S1 – 105.58
    S2 – 104.58
    S3 – 103.66

    These 0.5 lines are popular again today!

  5. Laddoo,
    You may not be able to see this reply, may have to have one of the premium members to repeat, but when you create the new feed you have to add '/feed/;atom/' at the end.  Today's feed address would be:
    Works for me, and I am a Basic member.

  6. Laddoo,
    Not the ';' just /feed/atom/.

  7. What tablet, netbook do most people on the site use for mobile trading?
    I need to buy a device for mobile trading and would appreciate any input on a trading device to buy.

  8. Stuman/Scottmi: kudos for some great input yesterday.  And also Deano for link to Bruce ;)

  9. qcmike- any of the ipads work fine

  10. qcmike- I prefer a netbook although the small screen is annoying. I use an HP which has great battery life. In two years , I have not had to recharge during the day while on the move.

  11. 25$ / Phil – Just to confirm, you would be looking to cash the DIA puts and the TZA in the initial excitement right?  

  12. yodi – I reread your post from the other day, and I would be interested in hearing more. Not ready to commit $10k non-refundable yet, but it sounds like an interesting idea. I take it this is different from the Build-a-Berkshire project?

  13. For anyone trading the 25KP there might be opportunities to lock in some profits in some of the positions if we keep going in that down direction. Trades affected will be the SCO, USO, GLL, TZA and DIA in particular. The second set of DIA puts might open over $1.00 which would be over our 20% profit target. Setting stops to lock profits would be advisable. This is not a trade recommendation, just a heads-up!

  14. so CNBS has been saying buy, buy, buy and now they are asking 'oh – was that the top?'  how these people on still on the air is beyond me.

  15. GLTA:

  16. StJ – Thanks for post. I like the "stop lock" idea at 20%.  This way i will not miss out on the potential carnage

  17. Thanks lotter!  I am using the  "/feed/atom/"  suffix.  I'll experiment with the settings today and see how it goes…

  18. Good Morning!
    Phil, I guess Kernan's book has only been available since May '11 and already some new and used versions cost less than the Sunday paper – Hardcover at that.
    I hope this is not Joe's way to fund his little girls tuition, otherwise she may have to attend one of those "liberal" community colleges.
    I feel bad for that kid…..

  19. ok…"/feed/atom" not "/feed/atom/".

  20. Pharm, your AAPL OHLC numbers are incorrect in the PP calculations – they should be 545.42/547.48/526/533.

  21. The AAPL lines should be:

    R3 – 566.67
    R2 – 557.02
    R1 – 545.09
    PP – 535.54
    S1 – 523.61
    S2 – 514.06
    S3 – 502.13

    Sorry Canuck I keep on forgetting to post them… Thanks to Pharm for remembering!

  22. Good morning,


    IWM    78.34,  78.68,  79.10,  79.29,  79.56,  79.82,  80.17,  80.46,  81.06,  81.41,  81.69,  82.00  and  82.41

  23. newbie / Bearish

    You are in good company !!  8-)

  24. JR

    Good morning.  Kinda early for you.
    What's you feel for today's action?  BTFD or meltdown?
    BTW.  What's your background?  How did you evolve to Megatrader?

  25. StJ – maybe GMCR as well, tho probably a bit later…

  26. Nice job Phil, big "wheee" today.  Those SQQQ and DXD trades from Friday are going to make my quarter, thanks! 

    Where do you stand on profit taking, is this it or are you confident in your 750 target for the Russell? 

  27. AAPL Portfolio / lflan – Can you give me the numbers you got when you went to cash yesterday at 2:09? Thanks.

  28. The short calls are showing a nice $850 profit!

  29. kurtww and
    Thanks for reading my proposal as well as your email pstas. You confused me a moment with Phil Davis.
    The project is some what in line with the  Build-a-Berkshire project and Phil's idea.
    The matter will have to be discussed with Phil first as well as approved , and you will understand I am not at all happy to publish my part of the contribusion and suggestion on a public web site. I have tried to explain as much as possible with out giving" the pass word to the box"

  30. Laddoo, 
    also settings to automatically update the feed are set by default to 30 minutes. You may want to change that. 

  31. That DMND spread is showing $1.25 of a possible $1.50.

    The TSL trade is not doing well!….

  32. Wheeew…   I was pissed at myself yesterday for losing on the AAPL apr 500 calls, but I took the 15% stop.  THANK GOD.  Those things are down to 34.50.  A full $10 from where I sold em yesterday…..   That would have been another car down the drain…

  33. Just closed my AAPL Jul 570 short C for a nice profit

  34. StJ – updated the spreadsheet.  Takes a while to get to this site.  Thx.

  35. Shame on anyone not locking the profits in the DIA and GMCR trades in the 25 KP portfolio!

  36. Flan, AAPL are you nibbling on the buy list or are you taking the rainy day attitude from Phil? Question is will it still be raining tomorrow?

  37. Phil
    Who do you think blinks first, the bond holders or Greece?  I am thinking bond holders but that is total guess and think Greece might actually default after Thursday.

  38. Most stocks in my screen are bouncing right off the 20d MAs.

  39. russellb73 Greece just using 1st grade tables they will default sooner or later

  40. These sudden moves, like the 50 point pop in the Dow in a split second, get annoying. 

  41. futures have accelerated their losses … metals are taking a bath as well… gap down moves out of high level consolidation patterns normally lead more weakness later in the trading day…. and btw just in case you hadn't noticed: there hasn't been anything normal about this market lately…so who can say i ve been short since 1326 and i began building my position(confidently hahaha) at 1307


    Good morning! 

    $105 broke on oil – Congrats to all the players!  

    Let's not get over-confident on the bear side, the bulls have been relentless and this is the best-looking dip opportunity in a while but we just need to keep an eye on key indicators like:

    • Dollar 79.85 – over 79 is DOOM for stocks and commodities, under 79.50 is back in business for the bulls.  
    • Oil $104.74 – over $105 shows they still have some control, if they lose $102.50, it will be panic time at the NYMEX and that will drop the markets like a rock BUT pave the way for a recovery if oil goes back to low $90s.  
    • Gold $1,669 – there's nothing good about high gold, under $1,650 is going to spook people and, with GLD and other gold ETFs holding a 6-month supply, if those inflows turn to outflows, things can get very ugly.  
    • Copper $3.75 – Below this line would be a bad break for "Doctor Copper."  Many, many people feel copper is a strong indication of global economic health and, of course, China has enough copper to rebuild Manhattan in storage – that's not good…  
    • S&P 1,350 – below 1,359 is bearish, below 1,297 will be disaster.  
    • Dow 12,816 – 12,750 is the 10% line, look for a 500-point drop if they can't hold that.  
    • Nas 2,918 – 2,863 is that 10% line and that's a long way to fall by itself.  Not likely unless AAPL fails $500 – very interesting with a lot of pressure on AAPL to produce at this event.  
    • NYSE 7,965 – 7,866 is the next bad break and that's the MUST HOLD line.  Not holding the MUST HOLD line = BAD. 
    • RUT 793 – 774 is their MUST HOLD line – can you believe we're suddenly worried about must hold lines and everyone stopped telling me how I need to get more bullish – funny how these things work out…

    So down and down we go and where we stop, no one knows so we'll just have to sit back and watch and we will want to buy this F'ing dip but only as a bounce cover to avoid stopping out of our short plays on a bounce.  Nas 2,900 should be bouncy and that's about $63.40 on the QQQ and the weekly $63 calls are now $1.63 so at about $1.50 – IF the Nas is holding 2,900, THEN they are a good upside momentum play.  

    Also, the S&P can be played over the 1,350 line with Futures (/ES) or SPY weekly $133 calls at $2.75 (now $2.55) 

    Oil, of course, should be bouncy off $105 (/CL) for a long play and USO has weekly $39 calls, now $1.35 with USO at $40.20 so very little premium to play a move over the line.

    Keep in mind the purpose of these trades is to lock in bearish profits without having to cash in the bearish plays as I expect a bounce, but then I expect us to head lower again, unless there is some sort of actually positive news.  



  43. Not going to say it but, its starts with a wubble u and ends in an E

  44. Oops, I meant Dollar over 80, of course, not 79, where it's been for a while.  

  45. Greece/
    The Hedge funds will block the full transfer and the CAC will be implemented b y Greece….thats when the party starts…

  46. SPX below the 10% line!

  47. DMND – can anyone tell what the option trade on the March 26 calls for DMND was as it was nearly was nearly 5,000 contracts today (was this a big block at the bid/ask?).  TIA.

  48. Stjeanluc/apple,
    no problem, for me it works better in Pharmsboys chart anyways — as long as it comes up somewhere.

  49. Phil – on the QQQ weeklies think you were looking at the quarterlies, the weeklies are not 1.63 but around .72 – also good, no (if Nas holds 2900)…

  50. Phil
    I have 5 MA April 300 P @ $4.00 (now .30) from an old hedge that I never sold in one of my accounts.
    Think any way MA pulls back to get a buck out of this or just dump it into sell off today?
    (I know should have sold way back but couldn't believe how fast the run up))

    SVU up +.16 this am — and EDZ up another $1.22 — glad I followed you on those two.
    Now if we can get WFR to move--

  51. Phil / compression — Still catching up… tiny url and compress links but only the URL form of the link. What I'm talking about is compression of the entire browser bandwitdh. The idea is quite simple. You setup a proxy on the web that services all requests from your browser (like anonymous browsing does) and you compress the communications channel between the browser and the proxy. Similar to the way we encrypt links for privacy using secure sockets. Instead, you build a compression socket rather than a secure socket (or both).

  52. france cds +7%
    bloomy eurozone financial services/bank index -3.7%

  53. Phil/Cramer
    He was also talking this morning about $5 gas not affecting anyone either.  We could live with that.  Guess he has seen retail numbers dropping steadily in the last few weeks.  And hasn't spoken with any companies who on average just got hiked 15% on freight delivered buy truck.  Not too mention airfare hikes and if oil stays here, can't wait to see how many layoffs there are in the service industry when there is a lot less traveling.  Even spoke to someone high up on RCL who said that the ships now make the bulk of their profits from all the a la carte items on the ships and drink and the casino.  And right now, even though boats are packed, people have cut back dramatically on that spending.  Which is why they cut their earnings forecast.

  54. 80%/JMM – Yep, incomes are drastically skewed by the top.  If you remove the top 20% from the figures, it's a very sad thing.  Don't forget, 50% of the people don't even earn enough money to pay taxes (other than FICA etc., which is 12% anyway) and those are just the filers, the bottom 20% earn effectively zero and that counterbalances the 30% above the 50%, where the cut-off is about $15K (which is roughly SS income for our nation's 60M seniors).  That's my point, without wages for the bottom 90%, the top 10% can only suck away all the money from the bottom 90% as there's no real growth to profit from.  That chart and study are the best illustration yet of how the economy can look "great" for the top 1%, who took in 93% of the income gains, while still terrible for the bottom 99% but the top 1% control the message (see McLuhan).  

    RSS/Laddoo – I don't deal with the RSS stuff but you're right, maybe a problem as you are describing delayed vs. non-delayed chat times. 

    Animal Spirits/Dpast – Hopefully we can refrain from political discussions until after hours.  I'm sure whoever the Republican electorate choose will be a wise man who will represent all the best attributes of the party.  

    Wow, that took a long time to write as I kept cracking myself up…

    Mobile trading/QC – I still don't trust the security of a tablet enough to trade on it.  I take a laptop for that (also not happy with TOS on the IPad anyway compared to PC version but it is fine-looking for trading – even futures, I just don't have the trust yet). 

    Selling into excitement/Dpast – If you are not confident in your ability to cover with long plays, like the ones I mentioned then yes, I think 1,350 should be a stop line on the S&P to get things off the table.  I'll go over those positions in my next comment.  

    Yodi Idea/Yodi – Please do remind me to get in touch with you over the weekend.  

    Kernan/1020 – I read a little of that book in BKS and I had to stop myself from calling child services on him!  I feel really bad for that poor girl, slapped on a book cover wrapped around her Dad's agenda.  I understand the need to reprogram your kids when they get home from school, I have to straighten mine out all the time, but I'm not going to USE them to further my political goals – that's pretty messed up.  Although Madeline did write an "article" about how money is no longer necessary in society that I did tell her she could publish on our site if she backs it up with research – but it's her idea, not mine.  

    Weaker and weaker we look. 79.85 (below 79.80 at this point would be a relief for the bulls) – that line seems to be firming up for the bears (Dollar bulls).  Euro testing $1.31, Pound testing $1.575 and Yen backed the wrong horse and fell to 80.93 despite the big move up in Dollar (that's what happens when you try to play both sides of the fence).  EUR/CHF still 1.205 – as I often say – why don't we just let the Swiss run the whole thing? 

    Thanks Dennis!  See above, I think we have a way's down to go but the key is to keep moving those stops up as you make money and then use those stops on a reverse.  You can always buy back in on the next move down…

    Blinks/Russell – I think there's enough bond holders in where the rest will capitulate.  That means Greece might be "fixed" again on Thursday and we're back to rally mode! 

    DMND/Kramer – Looks like a $25/26 bull call spread at about .35, not a bad trade, taking advantage of today's dip.  

    QQQ/Jerconn – Thanks, I may well have missed the date but, as you say, either is good – the point is just to not pay much premium on the momentum trade.  

    MA/Ban – For you to make money in the next 10 days, MA needs to drop about $18 per session so you'd not even on track with today's move.  I'd say you're lucky you got back to .30.  Thank goodness for EDZ (bet you thought we'd never say that again!).  

    Compression/Rain – And no one does this?  Seems like an obvious thing to pursue. 

  55. JR

    How are you positioned?

  56. Phil/DMND Are you not at all concerned about the forthcoming restatement of 2010/2011 results?
    It is highely likely that the changes will not be pretty.

  57. Phil   /Pstas
    Thank you for the comments on mobile trading devices.

  58. Check the time, b'c if they are in the same zone…low is in.

  59. Phil/Greece
    Accordingto ZH reporting there are blocking stakes in local and Greek Swiss bondholders and possible UK law bondholders…. so, it might be necessary to enforce the CAC language…. I report.. you decide… LOL 

  60. Phil/No need - Sounds like Madeline knows where Dad keeps the "black card"  ;)

  61. we should go lower but i 90%+ of the time on opening swoon we bottom for day around 10:30-11:30
    that is how you run $70B and can be up KNOW that is going to happen… volume is even worse than people realize, because its the biggest growth stocks that have been rising last few weeks…volume in small/mid-caps AWFUL..the volume thing is more important than many realize.

  62. So whats a good play for the bounce? DIA or IWM?

  63. Phil / BTU
    A while back we did a trade on BTU.  Sell the Jan14 30 put for 7.50 and buy the Jan13 30/45 BCS for $5.50, credit of $2 on the trade..  The put is now $7.38 , the BCS is now $4.40.  Would you add more here?  I have 30 contracts of each.

  64.  greek debt agency makes explicit threat not to honor bonds that dont participate in PSI…uhoh

  65. FAS Money – Yay!  May as well pick up $2.10 for 2 of the March $83 puts as we still make $4 more when the $87 calls expire worthless and we'll want a consolation prize for if they don't.  

    IWM Money – Wow, $54 puts now a concern?  Well, that's still 6% lower or 2% on the RUT, down to 766 so I'm not going to pay $1.28 just to not have to roll.  I think we're well-positioned here.  

    $5KP – Damn, I knew we should have stopped out TSL.  As it's April, now we wait.  TLT I'd like to get .90 for and be happy and DMND looking very good, let's ask for $1.35 and see if we get a bite.  When XLF stops falling, a bullish FAS spread will likely be our next trade.  


    • DMND – Already bouncing back, looking good with plenty of time.  
    • XRT – Nice improvement back to $59 but a long way to go before we are happy.  
    • GLL – Now $16.83 and back on track, no reason for us to pay premium to buy them back. 
    • SCO $6 is our max gain on the March $28s so lets take those off the table and add 10 April $31/39 bull call spreads at $3 to cover the remaining short calls.  
    • FAS – right on the money at $88 works out to $14.50 on XLF and I like that for a March pin next week.  
    • TZA – we're on track now with TZA up .85 today at $20.78 and our goal on these calls is $4 so that we take if it comes.  
    • SQQQ – They are June, will be super-fun if AAPL disappoints this week.  
    • USO – Topped out at $1.76, now back to $1.60 but we have until April and $95 oil would be sweet.  
    • FAS Spread – Also hoping for that $14.50 pin on XLF – winning both sides of this trade would be lovely. 
    • GMCR – Oh no, we doubled down and no one said take profits on a spike to $1.65 on MARCH (as in expires in 10 days) puts?  Come on folks, this is what you do when you DD, you set a stop on 1/2, AT LEAST, at whatever the new basis is ($1.34 in this case) and, when the stock shoots past that mark and it pulls back even a smidge (valid option term, look it up) – WE TAKE IT OFF THE TABLE!!!  The whole point to doubling down when you are behind is to reduce your basis BUT, if you don't cash out the 1/2 you doubled down with when you get back to your basis – then you aren't accomplishing anything!  
    • DIA – Also a DD situation, now $1.45 and pulling back from $1.54 so should have been off at $1.50 already, half off here and that drops basis to about $1.42 and then if we DD again at $1.10, we're down to about $1.25.  



  66. For whoever plays EDZ I ran a small test to estimate the decay of the 3x ETF as it relates to EEM and I found that there is about a 1.7 points of decay each month on average. It's not a perfect calculation as it can vary depending on the direction of EEM and its gyration. But for example, if EEM were to revisit it's lows of last October on a correction, my target for EDZ would be around $28. It was $37 in October. Something to keep in mind when placing long term trades. 

    Once again, this can't be a perfect calculation as violent moves like today can have a great impact, but I ran the same test last year with TBT and that proved pretty accurate!

  67. I'm bearish too, but watch the money supply. Stocks and bonds are priced in dollars, and the amount of those in circulation (dollars) are not magically fixed, and options follow the absolute price (in dollars), not some relative index of prices.

    anyone remember what caused the french revolultion?

  69. FAS Money – Selling 2 FAS Mar 83 puts (now 2.17)

  70. Phil: "the markets are priced back at 2007 levels, which is ridiculous…"  -   To what extent is that number adjusted for currency or inflation?  To what extent should we care, do you think?  Just trying to compare apples with apples, y'know.

  71. exec / Position

    In and out, but right now leaning Bullish

  72. Dollar to the rescue or head fake?

  73.  quite oversold on the hourlies…am not  expecting much more downside this session…until we  bounce a bit or consolidate for a few hours to work off the oversold condition… would now be interested in ading to the short side on the SP on a move back up to 1356 or so…so for me it's reasonable to trim and take profits on some short positions while holding on to some for further downside.


  74. Cramer/Rustle – $5 gas not affecting anyone?   Are rich people getting brain damage?  Maybe we should check for lead in the pipes – that's what did the Romans in…  Maybe part of the problem (and we discussed this with charity and tipping this morning) is that a lot of people in the top 1% and even the top 10% don't really do charity.  I don't mean the writing a check kind of charity but I mean hanging out with Jimmy Carter on the weekend and building a home or serving actual soup in a soup kitchen as opposed to attending a black-tie charity auction and thinking you know all about the plight of the homeless because there was a picture of one on the invitation.  

    Cramer lives in a town with a 6-figure average income and drives to work in the morning and hangs out with more 6-figure+ people and probably doesn't give a thought to the "little people" in the studio, even though he himself was once homeless (or so he claims).  Who in their right mind can believe that paying $100 for 20 gallons of gas to drive 400 miles (about par for a week's driving) doesn't affect people?  With 2 cars that's $800 a month or $9,600 a year spent on gas alone.  God help you if you have kids who drive!  $9,600 after tax on a $60,000 family paying 25% back to the government (if they have a good accountant) is 1/5th of their entire household budget – on gas!!!!  

    This is what I pointed out back in 2008 when I said the then-healthy Global economy couldn't possibly support $5 gas – the math makes it impossible.  We do not have Europe's public transportation alternatives, we don't have the kind of economy cars Europe has (35mpg fleet average vs less than 20 US) and our entire society is structured with the assumption that people will drive quite a lot each week.  We're not adding buses and trains to allow more people to use public transportation and we're not moving the stores closer to where people live in the suburbs and we can't possibly upgrade our fleet fast enough to offset the rising costs so, therefore, MATHEMATICALLY – we can't afford $5 gas.  Not for any sort of time-frame past the spike that will destroy all other consumer spending.  

    That was true in 2008, when 10% more people were working and everyone was able to dip into their home equity lines to pay for the gas spike so it's sure as Hell true today.  Cramer is not an idiot – he's a liar with an agenda.  Many other analysts who think we can support $5 gas are just idiots.  

  75. Another CNBS anchor, whose book (hardcover) costs less than bird cage liner…..
    These folks should just stick to reading the news…..

  76. Phil – do you see any option trading opportunity for GROUPON?

  77. yodi 
    March 6th, 2012 at 7:25 am | PermalinkIgnore this user
    Phil TZA setting a stop loss. Buying the Apr 17/20 bull c and selling the Jul 16p where would you set the stop loss
    looking at an analyses say TZA drops to 18.60 on the 19th Apr doing nothing you would  show a profit of 41.00 however 
    14th Mar -124.00 22nd -96.00 30th Mar -66.00 7th Apr -32.00 14th +4.00 17th +24.00 19th +41.00

  78. Bernie Sanders on CNBC sounding like Phil – hes my favorite senator anyway.

  79. Hi Phil.

    I have some very nice TZA hedges you discussed several weeks ago. TZA Mar 19/23 bull call ( cost 0.98), and short Mar 18 puts for $1.11 for small net credit. My question is, with 10 days remaining and only .09 of premium left in the puts, is it time to move the hedge out to April? And how would you do it? Thanks

  80. Phil: when to adjust spreads
    I know adjusting is dependent on many variables but not sure if now is time to adjust a LULU spread of mine, went to yoga yesterday so it's on my mind, Long April 67.5 puts short Mar 65's.  Thinking of adjusting to the Apr 67.5/62.5 or Apr 70/65.  Is it too early to adjust since the Mar 65 still is all premium?  Earnings are supposed to be the 16th if that should be a consideration.  I already have a full complement of short Apr calls so not trying to be too aggressive with the puts.  TIA

  81. Sanders saying on oil – we have oversupply nd lower demand and the price is just speculation by GS, JPM, etc.

  82. I love Bernie Sanders, he tells it like it is.

  83. the main driver has been headlines, bullish past few months. Thats changed to bearish today, I would just be a bit cautious going into the European close as we see some short covering. Maybe tip toe instead of stampede in as just about everyone expects some recovery.


  84. Lookie there…SVU up 3% today…..

  85. DMND/Alik – Yes, that's why I said if we can get $1.35, we should take it.  Overall though, it's expected and I think the restatement will lead to a rally as it's only moving profits from one bucket to another – they didn't lie about earnings, only the timing of them.  

    Great graphic StJ.  Fortunately, since I'm in the top 1%, I can forward this to Rufus Gifford (Obama's Finance Director) and exercise my 10,000x power differential!  

    Speaking of exercising my power, my man Bernie (I have a home in Vermont) is on CNBC banging the drums on oil speculation.  Who says writing your Congresspeople doesn't help?  Simon trying hard to spin him but Bernie is starting to get it.  Gotta pull this clip for tomorrow (if CNBC doesn't redact it).  

    Greece/Acobra – It will be a wild ride if they do default now.  All faith will be lost in the EU and they'll have zero credibility to fix the other PIIGS – hard to believe they would let that happen. 

    Black card/1020 – It's not Maddie I worry about.  Every time I'm ordering take-out, I notice Jackie using her concentrating face whenever I read off my CC #.  I won't be surprised at all when she's memorized it.  

    79.80, below this line and we can "recover."  Oil $105.43, Gold $1,674, Dow 12,817 (12,802 in futures so 12,800 is a good bull line), RUT 790 in futures (791 index), and Nas futures bounced right off 2,575 and that was 2,900 on the index so "everything is proceeding as I have foreseen…" 

  86. Phil, I am expecting a 10 % correction, perhaps this is the start. Being that the Dow has been holding this up more than the other indexes.
    Any thoughts to buying a 126/122 bear put spread for .64?

  87. RSSOwl/lotter/msf65/Phil
    Thanks all for your input. It's working now. Not 100% sure WHICH thing I did that made it work…probably will not be sure until tomorrow's post.  But for now, I'm out on the web collecting obnoxious sounds to trigger :)

  88. IWM / Phil – Thanks for the heads up. Lets see if i can make a couple of dimes in the afternoon. May visit the McDs for dinner

  89. On my charts, 79.82 is R2 for the dollar and it's been a fight to get it past (or below). R3 is at 80.01 and that would be very bearish I think. R1 is at 79.66 on the other side.

  90. AAPL bounced hard….almost even.

  91. Felix wonders if anyone will ever get paid on all the CDS out there (not just the sovereign debt ones)


    If you own protection on a credit, then, you’re very much in a world of caveat emptor. You can trade in and out of CDS and make a good living; these things are, first and foremost, trading vehicles. That’s why they’re more liquid than bonds. But if you have a strategy which involves actually getting paid out on your CDS in the event of default, then you should definitely worry that the payout might not happen, even if the event of default is clear and declared. What’s more, there’s really no good way to hedge that risk.

    So far, the CDS market has managed to muddle through, when it comes to restructurings and bond exchanges. But it’s sure to blow up sooner or later. And I’m far from convinced that ISDA and Allen & Overy are capable of reworking the standard documentation to make it more robust to these risks.

  92. cnbc just made a key point..which is rare…"we don't know what the motives are for the parties involved in the Greece debt negotiations….they may want disorderly default"

  93. Pharm – Funny, that AAPL bounce not helping the NASDAQ much! We must be really weal everywhere else.

  94. bernie sanders is our senatro in vt..bernie was a great mayor of burlington..he owuld be a great senator from a major state..vermoney is just a silly place

  95.  DIA bear put spread 126/122 was April

  96. Volume/Angel – Good point.  As I said all along, you can't build a base for a rally on low volume – it just creates a huge air pocket beneath the prices.  Even now, just 53M on the Dow at 11:30, not exciting at all.  

    Europe closing with nasty losses, double ours!  

    Bounce/Dpast – Nas should be fastest recovery (see above) assuming an AAPL bounce.  Still, I don't believe in a real bounce at all, just a technical bounce that fails.  

    BTU/Burr – Well, I don't know if 30 contracts is a lot or a little to you but 3,000 shares of BTU is $84,000 at your $28 net entry so how much do you love BTU?  At this stage, I look at BTU's crash low, around $19 and figure we have a ways more to fall if we don't hold $30.   If we do hold $30, you make at least $6K plus whatever the spread works out to.  If you kill the spread at $4.40, you drop your net entry on BTU to $23.60 so I would be more comfortable just rolling the Jan $30s to the Jan $25s for $2.10 to pick up $3 of intrinsic for $2.10.  That then puts you in at net $30 if BTU goes lower, with a break-even at $27.50 due to the $25 calls, so about where you are now but with the chance of getting worse if below $27.50.  The new spread is $5.30 and you can now set a stop on that at $2.50 and then you're back to a 1x entry at net $27.50 as your worst downside case and that can be rolled to 2015 $25s or whatever and then, long-term, owning BTU in the low $20s is an excellent start.  So, to summarize, you can first take advantage of the sell-off to improve your possible upside by $3 (and later you can roll down the caller to pick up another $2-3 by giving up some upside) and then, if we keep going down, you probably want to get more defensive.  Again, this is because, to me $84K is a pretty big commitment so I want to make that initial entry as low as possible and not to right away commit to over $150K at the very early stage of what could be a huge sell-off.  

    Greece/Angel – To some extent, it's the last chance for posturing by bondholders – hoping to get some final concessions.  After this, they have nothing to threaten Greece with anymore.  

    EDZ/StJ – Sounds about right.  

    Money supply/BDC – Money supply can be infinity but if velocity is zero, no inflation.  It's the velocity of money that is killing the Global economy at the moment.  Doesn't matter how much money the CBs print if no one is willing to spend them.   That's why top-down stimulus is a disastrous policy.  China has it right, push wages higher and the economy will follow.  This country entered an age of prosperity thanks to unions pushing up wages (and women entering the work-force from WWII on), now we're in year 30 of reversing those benefits and we're reaping what we've sewn.  

    Protesting/Angel - Qu'ils mangent de la brioche!   

    HR437, "the Federal Restricted Buildings and Grounds Improvement Act of 2011" makes it illegal to protest in the vicinity of anyone who rates a Secret Service detail (even if you aren't aware of the person's presence), thus sparing politicians and VIPs the ugly and unseemly spectacle of having to confront voters who disagree with their policies. Only three Congressmen voted against it. 

  97. scaling in on AGNC @30.00

  98. Is there a bigger word than crooks… Unreal:

    When the deal was announced, buried at the end of the news release was a list of Wall Street banks that had advised on the deal, including Goldman Sachs. Goldman received a $20 million fee for playing matchmaker for El Paso. The fee, of course, was not disclosed, nor was the Kinder Morgan stake owned by Goldman Sachs’s private equity arm, worth some $4 billion. Nor did the release disclose that the Goldman banker who advised El Paso to accept Kinder Morgan’s bid owned $340,000 worth of Kinder Morgan stock.

  99.   greece paid bills with bonds that could be worthless, has outlawed dr. use of brand name drugs and still owes $20 billion to drug companies..big pharma ouzo drip needed

  100. Thats Bernies Sanders CNBC

  101. PLX holding up….that is a good thing.  Stoopid trade still stupid.

  102. JR

    Are you working with 78.57 trend line?

  103. STJ/EDZ – 1.7% or $1.7 each month? 

  104. Oil – S2 at 104.58 has been a strong support line for oil this morning. Making another run at it now…

  105. EDZ / Palotay – $1.7 a month! 

    Once again, not valid on short term calculations (for example – one month) – it's too volatile either way, but it's to take into consideration when entering trades over 6 months with targets on EEM.

  106. exec / 78.57 trend line

    No, how did you arrive at that?

  107. Hi, lflan and All AAPL traders,
    I am not sure if lflan is in today, so I am going to ask everybody.  I sold AAPL $500 puts expiring this Friday.  Slightly profitable right now.  What do you guys think?  Should I buy back?  Or hold?

  108. 15 min 15 day

  109. The DIA Mar 128 puts are $1.55 if you have not yet gotten out of the one we got at $0.80! Almost a double now!

    The GMCR puts are now over our 20% profit target with the first set. The second set is over 50% so another chance to get out of that second set.

  110. cwan – um, should you ask?

  111. cwan120
    AAPL you are very close to knife's edge If you have a profit cut my 2 cents as I am buying longs at 520

  112. STJ/EDZ – Wow.  That is huge! 

  113. cwan120
    However the DOW is falling faster thanAAPL -203

  114. cwan120
    AAPL it might be a good time to sell much further out puts but not weeklies

  115. cwan120
    clarification Long calls not puts

  116. Phil,
    Your thgts on the relative underperformance of XRT on the downside compared to the indices. Does this argue for latent strength in  XRT, esp in spite of neg funda numbers on retail sales?

  117. GLD buying more 150 JAN 14 c and selling 150 Jan 14 p waiting to sell the short bull leg for an other day

  118. AMZN up today 181.46

  119. FAS Money/StJ – Those were $83 puts, not calls.  

    Adjustments/ZZ – We have not, in fact, had much inflation since 2007 and earnings are not higher than they were in 2007, inflation or not.  We are back to paying the kind of multiples that are expected in a healthy economy in an economy that is less than healthy and that's simple mis-pricing of risk.   Also, we discussed last week 

    79.91, not looking good for da bulls.  $104.67 oil!  

    GRPN/Soccer – Only to short them one day.  Not worth playing with at the moment. 

    TZA/Yodi – For one thing, NEVER sell a short put in a position you won't be HAPPY to own at the net strike.  Once you accomplish that, the rule of thumb is to stop out or adjust a bull call spread with a 50% loss, usually while it's still possible to salvage the call.  

    TZA/Jbur – Don't you just love it when a plan comes together?  Back to Yodi's thing above, as long as you REALLY want to own TZA, the short puts are a non-issue.  As you can currently get $2.27 off the table on the March $19s, you could cash those and roll to the April $16/21 bull call spread at $3 so you spend .75 to move to a $5 spread that's $3 more in the money.  That's the adjustment I'd make and you just have to not let the naked March caller get away from you and, when the March puts expire, you can sell April puts to make up that .75 you spent on the roll.  

    LULU/Lincoln – Well the short March $65s are only .90 in the money at $2.70 so no way you want to pay that premium.  I'm all for selling the April $65s for $5 and rolling your $3.75 $67.50s to the 2014 $50/65 bull call spread at $8.25 so you have almost 100% more upside on the longs and the naked March $65s with 21 months to roll and you can turn it into a monthly income producer like our money trades.  That gives you a nice buffer into earnings and, if you are willing to buy another bull call spread at a higher strike if things go well – there's little chance the short callers will  hurt you.  

    DIA?/Sage – It's a fine spread but, with the market so manipulated, it's hard to count on anything lasting very long.  Still, nice risk/reward as long as you go in with your eyes open.  

    Speaking of DIA – let's kill the rest of our $128 puts, now $1.60, in the $25KP – we can always flip to April but why risk the March puts turning back on us?  

  120. VIX $20.74. 

    I do think we've bottomed now.  For the day, anyway.  

  121. FAS Money / Phil – I listed the puts in the comments but pasted the calls in the spreadsheet – price listed is correct. Thanks for the catch, corrected now.

  122. Phil – do you still think we'll see a bounce in oil as well as in QQQ?  I'm holding weekly calls in each, debating whether to bail now (more or less even) or be prepared to hold overnight.  QQQ weekly $63 calls @ .75 and USO weekly $39 calls @ 1.30 were my buy-in prices….

  123. stjeanluc
    Still looking out for you FAS 100 weekly call was forced to pay .35c premium to buy my 94c weekly back sold for 2.35.
    2.00 off the table! Tomorrow will be an other day

  124. Stj:  History repeats itself.  CDS?  You're probably too young to remember it's Grandpa: [ Excerpt] – "  Portfolio insurance was a risk management weapon forged in the raging furnace of market decline, but when tested in battle it quickly revealed a critical flaw. " 

  125. Phil   /   It's time to either double down or bail on my TSL Apr 7 calls.  Bought for 1.79, and now .72.  TSL is at 6.96 and is near the bottom of a 6 month channel , and seems to have good support at 6.10.  The TA picture looks good for a DD, but I don't have a good feel for solar in general.  I live off grid, and 10 years ago I paid $8 a watt for panels.  Now I just bought some new panels for $1.50 a watt.   Obviously I wish I hadn't bought the calls in the first place, and had I had my brain in gear I would have thought about the drop in the price of panels and passed on the trade, but I didn't.  I also don't know the company well enough to have made the trade.  Still learning the hard way : )   Any thoughts on TSL?
    By the way, wasn't yesterday a great day to trade oil?  How sweet it is!

  126. And more: " [B]y 1987 approximately $60 billion in equity assets were covered by different varieties of portfolio insurance, the majority of which was on behalf of conservative pension funds."  There's a chance Phil could have made it work — it was option-based — but he would probably have no problem explaining why it couldn't possibly work.

  127. Phil: miscommunication
    My earlier spread question was a put spread,"long april 67.5 puts short the Mar 65 puts" the last thing I would be doing is going long LULU, I, like most people seem little concerned with fancy clothes to do yoga.  I think the fad is to wear them in the grocery store and mall.  In any case would still love your take on adjusting the put spread to Apr 70/65 or 67.5/62.5 or better to wait for premium on the Mar 65 put to wear off? ,.. namaste

  128. Phil I am about break even in USO after fairly heavy losses. I now own MAR 40.5 puts and thinking of rolling to APR 39's for .21 do you think this makes sense as I expect oil to further drop but not sure if it will happen before 10 days any thoughts?

  129. Phil,
      When you find time, I would value your opinion on using an Income Portfolio strategy to partially fund post graduate studies. My younger daughter is intent on a career as a veterinarian. I'm on track executing the plan to fund her and her older sister's college, but Vet school ups the ante considerably. She's a high school junior (her sister is a college freshman) so I have some time. I'm thinking along the lines of using the techniques you teach to assemble a portfolio that can follow the Income Portfolio strategy when she gets to her DVM studies.
      I would also welcome any information on a veterinarian career from other PSW members.

  130. EDZ / StJ – Many thanks for sharing the study on EDZ.  I have an Apr 21 Call since Dec.  Its a very tall order to see 28$ again.  At least now i know not to play EDZ more than 2-3months out

  131. FAS / Yodi – That weekly FAS 100 Call was $0.66 last week, $0.05 today. Not bad either… But well played on your part!

  132. hey phil,

    i have yet to make any adjustments in the PCLN put spread from before earnings.  on its face i still like it, but it does have a loss.  t this point is there an adjustment you'd recommended ?

  133. Obama on TV now home mortgage program…reporters asking Q's on Syria and Iran, long oil perhaps?

  134. FCX crapping and gapping below the support trendline and the big $40 level on large volume.  I guess people aren't buying China's Ghost City growth story?

  135. EDZ / Dpas – The problem with these 3x ETF is that it's difficult to predict where we could be 6-12 months from now based on the volatility changes. My estimation of $28 would be if we would retrace on EEM quickly, but next month you are looking $26.5 and by June at EDZ at $24 if EEM retraces to its lows of last October (which remains to be seen). 

    EDZ seems to decay even faster than TBT (at this moment as TLT is in a channel) because of the volatility of the underlying instrument (EEM has a beta of 1.12 so more volatile than the S&P – great if choose the right direction, but burns you badly if you miss). That makes it even harder to predict. 

  136. Phil – I know it isn't Apr but wondering if i can do better on my EDZ. I have 2 Apr $15 puts sold for $3.62, now 2.70. If i rolled them to Apr 14s, now 1.90 and EDZ expired above 14 i would then about break even since i lost .80c on the roll from Mar. If not i would roll to Jul 13s.
    Really not much better off but wondering if i am missing something.
    thank you

  137. AUD looking perky across the board looks like Obama is helping to ease some tension

  138. Hey Phil,
    I know I owe you a call.  How does your after the market closes today look?  Sorry for being slow but still recovering my schedule from 10 days in NYC.  I owe Sam a call too.
    Rockwell Collins is a short I would look at for members.  This company has used just about every reserve ever created to hit earnings the last 8 quarters and the core business just doesn't have any growth.
    JCOM is another as the EFax business is deteriorating and they have used M&A to prop and make comparisons fuzzy.  Once you get down to apples to apples it looks like a dog to dog :) .

  139. Phil, I have set up an EDZ hedge March 15/20 BCS and 13 P for a total credit of 0.15. Now the total is about even. Do you think I should stay put for the next 10 day protection or roll to April option for another month's protection. Thanks

  140. StJ,
    How do you calculate the decay on EDZ?

  141.   gs just said "much of oil price rise NOT driven by iran"…hahahaha

  142. 1987/Zero:  Hey thats funny, because the 10 year anniversary of "portfolio insurance" was basically LTCM, and 10 years after that was AIG.
    The same black swan keeps coming to eat Wall St.'s lunch. :D

  143. Hi Phil – Do you have any new EDZ idea for today?  TIA

  144. yodi, pharmboy,
    Thanks for the warnings on AAPL short $500 weekly puts.  I bought back with $0.07 profits, barely enough to pay for the commissions round-trip.  Will follow you folks later.

  145. who comes up wiht that crap?

  146. cwan120
    AAPL you welcome It is always good to get out in a even situation I felt the Market is to unstable at present even that AAPL is holding 528 very well but you have another 3 days to go and a 25 pt drop is very well possible for AAPL On the other hand if you are a gambler you could have stuck around. As one says better save than sorry. You never can sell or buy at the lowest or highest price. It was just to hot for me even only 1 option.

  147. scaling further AGNC at 29.90

  148. they should have a pic od mitt dressed up like pharoahs foreman on the job in the valley of the kings…like that edward g robinson character in the ten commandments..with john houseman voice over as mitt gestures over his shoulder with a jerking thumb toward th etoiling slaves  'we make money the old fashioned way: THEY EARN IT!!)

  149. Volume is horrid.  Starting to scale out of some shorts.

  150. You're welcome Dpast.  

    CDS/StJ – I can't believe the whole thing isn't collapsing on the Greek fiasco.  What idiots would buy these things now?  

    Disorderly default/Angel – That was my theory from a month ago.   Some of these guys will clearly make more money by forcing a CDS trigger than accepting the restructuring.  Some of them may have 10x coverage and vastly prefer a default.  The way to do that is to pretend you are going along until the last minute and then blow it up – so the Greeks and the EU don't have time to fix it before default officially triggers.  It's like selling $1M of fire insurance to a guy with a $100,000 home and then asking him to accept $20,000 for the home and he says "sure, but first I've got to go to the store and pick up some gasoline and some matches."  

    AAPL/StJ – Good call, now AAPL move up masking additional, broad Nasdaq weakness.  

    Waiting for AA to come back down is finally paying off.  

    Bernie/Angel – A vote's a vote in the Senate.  

    DIA/Sage – Yep, that's what I figured.  

    AGNC Jan $25 puts can be sold for $1.30, not a bad way to enter the stock (now $30).  Interesting combo if you buy the June $25 puts, just .20 so net $1.10 and the trade is simply the assumption that the Jan puts will decay more than .20 by June.  

    Thanks Sage, I want to use that tomorrow.   

    AAPL/Cwan – If you REALLY like AAPL enough to own it at $500, then no harm in holding.  If you don't mind rolling – no harm in holding.  If you are going to freak out and capitulate if they drop another $25 tomorrow morning – better off getting out now.  Very important aspect of trading is getting to know yourself and what you will do under various conditions.   

    Good DIA call StJ.  GMCR we should be keeping 1/2 as I am hopeful they fill that gap back to $54 at some point. 

    Wow, S&P futures tested 1,340!  

    XRT/8800 – Yes, the positive spin on retail will not go down easy as it's fueled by inflation spending and few retailers have copped to margin compression yet.  I will just roll them until they realize I'm right…  ;)  

    Bounce/Jerconn – That was really for Dollar under 79.80, which hasn't happened yet but yes, you can also just play the lines there.  The point is to play it with very hard stops below your line and don't wait to get out if you see our other watch lines failing.  With momentum plays like that, you have to get used to taking .10 off the table and being thrilled about it.  All you are trying to do is NOT stop out your short bets on the bounce.  

    Portfolio insurance/ 

    TSL/2can – I think they'll come back but whether they do so by April is another matter.  Their pattern is to sell off and then rocket back up and then sell off again.  If they are not back at $7.50 before $6.50, I'll be very concerned but, for the purposes of the $5KP, I'm watching and waiting at the moment.  If I had to do something with the calls today, I'd sell the April $7s for .75 and sell the June $6 calls for $1.65 and spend $3.20 on the June $4s which puts you in the June $4/6 bull call spread at net $2.59 and then if you DD at net $1.55, you have 2x at just about net $2 and if TSL goes below $6, you can sell the Jan $5 puts (now $1.14) for about $2 and then you have a free June spread and worst case is you own them at net $5 (28% off current).  If you don't like them enough to want them at $5, then why would you not just walk away at $7?  

    Portfolio Insurance/ZZ – Mainly because they PAID premium to insure instead of selling it.  Whole thing would have worked if they went the other way.  As it was, all they did was chew up Billions in premium.  

    LULU/Lincoln – I don't know, you said you went to yoga class so I figured you were a fan.  Why would you adjust then, you are on track at $65.91 – spreads don't work unless you give them time to do so.  Don't they teach you patience in that Yoga class?  Not very swashtha of you.    

    USO/Sage – Why start chasing now?  How about get out now, hope we have a silly run up into inventories tomorrow that makes the puts cheaper and THEN get back in.  You should be THRILLED to be even.  We mis-timed our entry and lucked out by getting even before the expiration – that's the proverbial gift horse you should not be looking in the mouth.  If you MUST play something, see yesterday's SCO trade, which had the very mellow premise of oil not staying over $107 through April's expiration.

    Income Portfolio/Kevin – It's a good strategy for saving money long-term but, like any stock investment, if you put yourself in a situation where you MUST withdraw the money on some certain time-frame, it can end in disaster.  If you intend to gamble with your daughter's education funds, I think she should have a say in it as well, don't you?  You are risking her college, after all.  I think you need to first have a plan to pay for college with loans and or jobs where you have enough money (and her!) to get to where you need to go and THEN perhaps, take a portion of that money you can risk and make that your stop loss on whatever amount you decide to invest.  If all goes well, then you and your daughter only need to sacrifice for a year working extra hard or whatever and then you can say "we had a good year in the markets so we can cut back a bit" but to COUNT solely on the stock market to pay for something so critical when it can also lose as much as it gains – that's a very dangerous plan.  Even if it's only a 1 in 10 chance of losing – is that a risk you are willing to take with your daughter's education and future?  

    PCLN/Peedle – I know we liked the July $370 puts at $2 yesterday, now $2.80 (up 40%).  Do you mean the April $650/600 bear put spread at $33, selling the 2014 $330 puts for $26?  The spread is down $10 and the long puts are  $20 so down about $4 overall.  I don't know what you can adjust, it's an earnings play that assumed they would miss, but not so horrifically that they trigger the short puts.  If PCLN goes up, then the max loss (assuming they hold $330 long term) is the net $7 and that's the risk against the potential $43 reward.  The time to adjust would have been when they tested $650, not now that they're coming back down.   

    Obama/Sage – Not saying all too much.  Markets just tired, I think. 

    FCX/Kinki – Copper not dead yet at $3.745.  

    EDZ/Morx – Yes, you are missing something —- PATIENCE!!!  What is it with you guys?  They are up $1.30 today, our markets look like crap, the EU was crap and Asia has some catching up to do on the downside.  The April $15 puts are $2.65 with EDZ at $13.50 so $1.15 (43%) of the price you want to pay is PREMIUM.  Do we buy premium here?  Well, I don't.  We try to SELL premium.  In 45 days, for a fact, the EDZ April $15 puts will have NO premium.  That means, every day, you gain 0.03 by NOT doing anything.  0.03/$3.62 is 1%.  You make 1% PER DAY by not doing anything.  Why does this cause you pain?  Why do you need it to end?  It's not the April $15 puts' fault that you lost .80 in March – why do you want them to suffer for it when they are working so hard to make you $1.15 or more in 45 days?  

    Call/Scott – Looking forward to speaking with you later.   I like the shorts but maybe shooting fish in a barrel in this market.  We made 40% on PCLN puts in 24 hours so far – much more fun because you can watch the ticker crawl lower on CNBC!  My SCO trade from yesterday's TV spot is already up 50% – also fun to watch.  I missed one too – WFR is down a penny.  8(  

    EDZ/Jophil – See above comment to Morx on EDZ.  

    Volt/Angel – Your superpac money at work.  Someone already made a post ripping that ad apart for it's factual inaccuracies.  That video has already become a talking point on Conservative web sites – Google it and look how fast it spread.   This one comes from, which is a "Less Government Project"  which is run by Seton Motley and this particular site is owned by Ben Howe of Smith Media, who produces ads for the FreedomWorks for America SuperPac and Red State.  Nothing like seeing the Reps attacking the US Auto industry through their proxies..  The GOP has gotten very good at recruiting young punks like Seton, who are willing to say or do anything regardless of the truth – this way, the GOP can have a "hands off" relationship with the hate mongers and lots of plausible deniability when they ultimately go too far (they always do, even Rush).  Meanwhile, they post anything the guy puts up on 10,000 sites while Pac money funds the whole thing.  

    Mitt/Angel – Like this?  

  151. Decay / Cwan – I look at an EEM chart (or the underlying instrument if you are looking at other 3x ETF) and find levels that are replicated in the past. Then I look at the corresponding dates on EDZ. Depending on which dates you use and how far back you go, the ratio might vary and I am guessing between 1 and 2 (which is wide) to be safe. But on the dates I used, it was around 1.7. 

    Once again, not an exact science….

  152. NAS / Phil – Actually, AAPL is now up $6 since the open and the NAS is making new lows. The rest must be really, really weak! MSFT, down 0.8%, GOOG over 2%, ORCL over 1.7%. That's some weakness there!

  153. JR


  154. watch the $ if they test 79.92 again then you'll probably see 79.34 IWM..

  155. Anytime you can enjoy CNBC without the sound on is a good day in my book :)

  156. *78.43

  157. VIX if up – time to sell some short strangles. Sold Apr SPX 1450/1150.
    Also dipping back in on RUT iron condor- May 900/890-640/630.

  158. Geez I cant type and chew gum…78.34

  159. Phil
    What do you think of the April TZA 21/25 BCS @ $1.14, selling the April TZA 18 Put @ .68 for net $.46 on the spread in the event we see another 6% to 8% down from the current levels? 

  160. mr burns and mmitt bwhahaahahahahaha

  161. Pstas.  I agree on the short strangles.  One question though, i understand the 1150 part of the trade, but not the 1450.  The 1450 April calls are going for .85.  It seems like there is not enough premium for this call side to "make a difference."  Something that i do when the call side is worth so little is just sell the put side and if / when the market goes up then cover the put with the short call.  For me, i don't feel like i am missing out on .85 as, to me, .85 doesn't compensate me for the risk of being short a call.
    I was just curious of your rationale.  Thanks.

  162. Good afternoon AAPL traders!     Sorry to be out of the trading arena today, but with the markets as they are , perhaps just as well.  So, another down day in the markets, and for AAPL.   NAS so far about – 1.6% with AAPL about -1%.  AAPL went below  520 today but really doesn't like it there, quickly recovering to the high 520s.   News out there on iPad is generally favorable.   May be a bit of leakage on what they will be presenting tomorrow at 10 a.m. Pacific, to wit…..   But nobody really knows.  At least one more upgrade today,  Barcllays with a .$700 target.   So what to do around tomorrow's event.   Safest, as always, is to be in cash.   Next would be long-term bull call spreads, perhaps July or later, as yodi suggested yesterday.  Better than 50% chance we see at least a temporary drop in AAPL's price within a week of the event.   Right now the portfolio contains 40 April 500 calls purchased at 43.50 and at this moment worth 41.10.   I've not decided yet whether to just hold these, cover, or cash out for the event.  I think at this moment I'm  most likely to hold them, but I may cover.  I have also considered cashing them out and moving to straight-up July calls.   I'll decide in the morning. I do think AAPL will be >550 by expiration in April, so I'm not fearful of holding them.  But you have to do what feels right to you, as Phil notes above.  You have to get into your own comfort zone with any and all trades.  And stjeanluc, the numbers are correct.  

  163. Robert- strangles- I rarely sell only one side. I prefer to stay balanced. Besides, the .85 isn't much but I can likely roll down a couple of times for more credit. I maintain a lot of spare margin so I can roll up 2-4 or 6x if needed. It all adds up. 

  164. Nas/StJ – A lot of profits to be taken.  

    LOL Scott – Worst part of my job is I have to watch CNBC all day! 

    TZA/L4 – My favorite kind of hedge but a little bit chasey today, don't you think?  If you feel you need the hedge, I'd just buy the April $21/25 for $1.14 and IF we bounce back, then TZA will drop hard and THEN you will get a good price for selling the puts and, if we just keep falling and TZA keeps going up, it's a 250% gain anyway and by the time TZA is in the money, you'll probably have a bullish put you want to sell on some stock. 

    AAPL/Lflan – I think the best way to play AAPL bullish tomorrow is the QQQ weekly $63/64 bull call spread at .55 which is pretty much like having the QQQ $63s with no premium and an 82% upside potential if AAPL bounces the Nas.  You can offset 5 of those ($2.70) with the sale of an AAPL March $500 put at $2.90 and then you have $5 upside potential and worst case is you get to own AAPL at net $499.80 

    Volume at 3:30 is 95M, very stickable but Mr Market doesn't seem motivated at all.  

  165. Phil/Stickable
    Feels like the Bots are holding it back today.

  166. StJ,
    Thanks for the explanation on EDZ.  $1.7 per month!  Very scary.

  167. pstas,
    Welcome back to SPX strangling!  I felt lonely in the past few months.  Nobody seemed to want to play with me.
    Okay, I am going with ya!  One toe in to feel the water…

  168. AAPL portfolio:     I've made my first move into the 'event'…….Sold 40  April 550 calls at 15.00, thus converting the April 500s into   40  April 500/550 bull call spreads.  Now I'm looking at Phil's trade above.

  169. EDZ / Cwan – Remember, it's $1.7 off the potential move up…. And actually if the trend is up decay slows down! But on the downside, watch out. That's why EDZ was down 50% this year up to Monday.

  170. So was the ERY on the decay side.  That one eroded like wet sand on a lay beach.

  171.  a "gap and run" pattern (stocks gap lower then continue down without a meaningful bounce along the way)…my best guess is a bounce at open tomorrow you may sell

  172. Short call expiration party!:
    When all my short calls finally expire, hopefully no later than April, I'm hosting a party for all; make travel plans through PCLN, dress in your best Lululemon outfits and come enjoy a meal catered by Chipotle Mexican Grill, beverages offered by Sodastream and Green Mountain Coffee Roasters  and afterwards you can ride my HOG ;)

  173. 25KP – The DIA 128 puts are (first set) are now up 50%! Do we want to be greedy on those?

  174. Treasuries have not moved much, so, with the low volume dump…..just more noise. 

  175. im not sure any bounce will hold tomorrow…but should bounce at some point…had been hoping aapl had  been down more  into tomorrow…i think it makes selling more likely on news.

  176. Stjean/DIA – all of the DIA 128 puts were out at $1.65

  177. 11:39 AM European shares close sharply lower, the first true washout of 2012 as equities choose today to pay attention to all the negativesout there. Stoxx 50 -3.4%, Germany -3.4%, France -2.5%, Italy -3.6%, Spain -3.4%, U.K. -1.9%. Euro -0.7% to $1.3123.

    3:00 PM On the hour: Dow -1.61%. 10-yr +0.34%. Euro -0.79% vs. dollar. Crude -1.75% to $104.86. Gold -1.89% to $1671.75.

    The ECB balance sheet gives Apple's chart a run for the money, passing €3T for the first time and bringing that bank's assets as a percent of GDP to 1st place in the race with the Fed, BOJ, and BOE to see which can create the most currency. The euro (FXE) somehow remains higher (1.3%) YTD vs. the dollar.

    Foreclosure sales are on the rise, up 29% M/M, LPS Mortgage Monitor reports, with the most notable jump coming in the 24 states where banks must get a judge's permission before selling a home. Though it's too early to say whether it's the start of a trend, the increase is notable, LPS' Herb Blecher says, but "it's what has to happen for the pipeline to start clearing."

    FU EDZ!  Almost $9 out of every $10 put into equity ETFs worldwide in 2012 has gone into emerging market funds, according to BlackRock. It's the best performance ever for the sector in the initial 2 months of a year as investors chase strong performance in places like Egypt (EGPT), Brazil (EWZ), and China (FXI). Two broader EM funds:VWO +12.2%EEM +12% YTD.

    Nymex crude oil futures drop 1.9% to end at $104.70/barrel, lowest since mid February, rattled by concerns about the ripple effect of a potential disorderly default by Greece as well as China's lower growth outlook. Shares of the big oilfield services firms - SLB -3.1%,HAL -3.2%BHI -2.4%WFT -4.1%NOV -3.5% - are pushed well below their target prices.

    Phase 2 begins:  Business groups urge Congress to allow employers to put less money into their pension funds, saying that exceptionally low interest rates are forcing them to set aside too much cash. A provision attached to a Senate highway bill holds some appeal in Congress because it would increase the government's near-term revenues.

    The new EU fiscal rules border on sillywrites Martin Wolf. Consider 2007: Both Spain and Ireland looked better than Germany; Portugal better than France. Spain's current struggles are a consequence of the crisis, not a cause. Imposing more austerity now assures the numbers will get worse, not better. 

    France throws its support behind Luxembourg's Yves Mersch for a seat on the ECB's executive board, say sources, switching from backing Spain's Antonio Sainz de Vicuna. The move could tilt the balance towards the hawks at a time when they look with growing concern upon the wave of money unleashed over Europe.

    Is German economic outperformance simply a real estate bubble?  The Bundesbank looks on in worry as the ECB's easy money policies have spurred not just inflation (2.7%), but a real estate boom in perennially sluggish Germany. "The housing market is being swept clean," says Pimco's Andrew Bosomworth, as low real rates and easy loans put Germany where Spain and Ireland were 10 years ago. 

    Yields on Spanish 10-year bonds pass 5%, rising 10.5 bps to 5.077% as investors fret about the country's revised budget target and its relationship with the EU, not to mention Greece and weak growth. Yields also pass those of Italy (+8.5 bps to 5.115%) for the first time since August.

    It's this deal or nothing, reiterates Athens (PR): "Greece's economic program does not contemplate the availability of funds to make payments to private sector creditors that decline to participate in the PSI … if the PSI is not successfully completed … Greece will need to restructure its debt on different terms." (earlier)

    So much for the myth that the Japanese people buy Japanese bonds:  The BOJ's new QE program will have it purchasing an amount of Japanese debt equal to all government bond issuance in 2012. Is there a difference between a central bank buying government paper to stimulate the economy and buying government paper for which there otherwise is a lack of demand?

    If India's ban on cotton remains in place, a number of companies with exposure to the cotton sector could mimic gains seen during the last ban between April 21, 2010 and October 29, 2010. Outperformers during that period included BKICNHDEADM, andFMC.

    The Obama Administration says it's cutting the mortgage fees charged by the FHA’s refinancing program as part of its attempt to boost the ailing housing market. The move, which doesn't need Congressional approval, will help an estimated 2M-3M borrowers each save around $1,000 a year on average. (PR)

    The Obama administration plans to invest $180M in wind energy projects over the next 6 years. The DOE will select 4 projects to back that demonstrate some potential for large cost reductions over existing wind technologies. The First Trust ISE Global Wind Energy ETF (FAN) is down 3.3% on the day and is flat YTD. - What???  $30M a year???  Why bother???

    Consumer staples companies face a squeeze as both consumers and major customer Wal-Mart (WMT) have had enough of higher prices. Trading at 16X earnings vs. the S&P 500 at 12.8X, "(Staples) companies are going to have to get back to basics and not raise prices much," says Jones' Jack Russo.

    Danger Will Robinson, warning, Warning!!!  China Life Insurance (LFC -8.3%) tumbles after it says 2011 net income may have shrank 40-50% from a year earlier due to declines in investment yields and increases in investment impairment losses from gyrating capital markets.  - This happened in 2008 when we found out insurance companies were actually gambling their reserves.  

  178. Though outperforming its solar peers (
    TAN -4.5%), First Solar (FSLR -1.4%) has sold off to a level last seen in January 2007; shares are now down 24% since the company posted a dismal Q4 report. A note from Canaccord goes over some of the challengesfacing the company: falling margins, industry oversupply, China'sgrowth slowdown, an an eroding cost advantage for First Solar's thin-film technology.

    Oh the ironies: GM (GM) may be about to stop production of the Chevy Volt for 5 weeks but that doesn't stop the sedan from adding the "European Car of the Year" award to the North American equivalent. While the Volt missed its 2011 U.S. sales target, GM Vice Chairman Steve Girsky hopes higher fuel costs in Europe will bring success. 

    Investment in cloud computing could create 14M jobs globally by 2015, including 1.2M in the U.S., IDC predicts in a report commissioned by Microsoft (MSFT). The research also forecasts IT innovation created by cloud computing could produce $1.1T a year in new business revenues. (PR

    IBM's Jeopardy-winning computer, Watson, will soon be answering questions on Wall Street, as the room-size computer, which can read 200M pages in three seconds, will help Citigroup identify risks and analyze customer needs. Shares of the company once run by Tom Watson Sr. yesterday hit $200 for the first time.

    Though Steve Jobs once vowed to "destroy Android," Apple (AAPL) has offered to license some of its patents to Samsung and Motorola Mobility (MMIGOOG) for royalties of $5-$15/phone, sources tell the WSJ. However, the devil may be in the details: IP expert Florian Mueller previously noted Apple is only interested in licensing "lower level patents" to rivals. Motorola, meanwhile, is asking for a2.25% royalty on iPhone sales. 

    After skyrocketing in Q4, U.S. iPhone sales may have cooled a bit in January, if comScore is right. The firm estimates the iPhone's share of U.S. smartphone subs (on a trailing 3-month basis) totaled 29.5% in January, roughly unchanged from December. Android's share rose 130 bps to 48.6%, while the BlackBerry's fell 80 bps to 15.2%. Yesterday, Canaccord said its checks indicated the iPhone continues to gain U.S. share. 

    In another example of the power of Apple (AAPL -0.8%), the company reportedly has booked such massive amounts of air freight space over the next few weeks in gearing up for the iPad 3 launch that it has single-handedly raised shipping rates out of China by as much as 20%

    The next iPad, which will reportedly be called the iPad HD, will go on sale on March 16, an Apple Store source tells 9to5 Mac. Such a release date would give Apple (AAPL) 2 weeks to rack up sales before the close of FQ2. Full launch details should be made available at tomorrow's event.

    Three lunchtime reads:

    1) Increasing correlation between gold and stocks: What are investors to do?

    2) March right out of stock market

    3) Tech bubble? No way

  179. Cramer predicting more pain tomorrow

    "We are in one of those moments when the investment policy committees at some of these big firms are just now realizing that something must be fundamentally wrong. They are flummoxed, because nothing in the world is much worse than it was yesterday, but they do not want their double-digit gains to devolve into low-single-digit profits, so the desire to lock in is upon them.
    The problem with these surprise declines is that these firms weren't prepared for what to sell — and believe me, they are selling, not buying. So they are sorting through today and will take action tomorrow, not today, and that means you could have another day of pain.
    They are scrambling to put the tail on the donkey. Reasons:

    1. Greece and a Greek default?
    2. War with Iran?
    3. Transports rolling over?
    4. Numbers are too high because of oil and currency?

    They are going through their portfolios to see what can be hurt the most, and tomorrow they are going to take swift action. They can't be as swift as today.
    Because you can't expect Europe to be up tomorrow — it's a whites-of-their-eyes buy situation — they don't feel too late, especially given that we just hit a top last week.
    So be aware that the sellers are just now grouping, and they are frantic to figure out what's causing the real weakness, but in the end they will just sell first and ask questions later, because the charts are broken and the money's not flowing in.

  180. DIA puts/StJ – I wanted to be all out on those at $1.60 (12:49 comment) 

    And what Winning said!  (nicely done sir) 

  181. Cramer/Ban – Damn, that makes me want to start buying…  

  182. Cwan- have been here and in the short strangles but mostly busy rolling up calls. Started judiciously selling some puts about two weeks ago and it is working out OK for now. Seems a bit safer to go forward now with a bit of a pullback and the VIX up.

  183. ban2……..If Cramer said the above are we to assume an UP day tomorrow?    :)

  184. For a small income trade, we sold the 42/43 bear call spread on USO for Mar17. I agree with Phil that oil is headed lower. Iran fluff can only last sooo long. Fundamentals are negative, and inventories tomorrow should bring us to 102.50 by Thursday open.

  185. pstas,
    Same here.  Been selling a very small number of strangles, like 1 or 2.  Quite boring.  Hope that we get more actions in the coming days/weeks.

  186. well – you only need someone to be predictably right or wrong to get a play in.
    As with all the media shysters their usually right but just get the timing wrong
    I like to try to play his calls 3-4 days after his sheeples get in –

  187.  remember adp in morning…market reacts more to it than friday report…so should be good bounce early…then maybe fade by afternoon

  188. if bulls exist you would think they would want to buy the russell right here.  otherwise this has just been robots trading shares

  189. WFR – up 1.9% today, and bottomed right around when Phil was on BNN yesterday… hmmnnnn.

  190. My bad on the DIA puts… was distracted by the Arsenal game!

  191. Volume 25% higher than yesterday on the Dow…

  192. At the close: Dow -1.57% to 12759. S&P -1.54% to 1343. Nasdaq -1.32% to 2912.

    Treasurys: 30-year +0.67%. 10-yr +0.32%. 5-yr +0.18%.

    Commodities: Crude -1.67% to $104.94. Gold -1.7% to $1674.95.

    Currencies: Euro -0.79% vs. dollar. Yen -0.86%. Pound +0.93%.

    Market recap: Stocks closed sharply lower, with the Dow posting its first triple-digit loss in 45 trading sessions, fueled by fears of a Greek default and weak economic growth. The new reality: A lot of good news has been priced in, and what's left is a sluggish global picture. Crude oil fell below $105; Treasurys and the dollar jumped the most in three weeks. NYSE losers led winners five to one.

    One country ETF green today? Greece (GREK +3%), courtesy of a big move higher in Athens as the rest of Europe dove. The ETF remains a stalwart for 2012, +20% YTD.

    Hot global real estate: 416 land-grab deals (MarketWatch)

    Alan Greenspan Fans the Flames of Class Warfare (Economix)

    A tale of two depressions redux (Vox)

    Boeing (BAforms a partnership with Chinese jet manufacturer Comac to research ways to make planes more fuel-efficient and cut greenhouse gas emissions. "From a financial perspective, this probably doesn't mean much, but Boeing is very keen to maintain good relations with the Chinese government because it controls the airlines," an RBC analyst says. (PCLN) says it plans to sell $875M worth of convertible debt, while adding some of the proceeds will be used to fund a $200M stock buyback program. The remainder of the proceeds will be use for "general corporate purposes," which could include additional buybacks. (PR) - Going into debt to buy their own stock at record highs – DANGER!!!  

    Pandora Media (P): FQ4 EPS of -$0.03 misses by $0.01. Revenue of $81.4M (+71% Y/Y) misses by $1.8M. Company expects FQ1 revenue of $72M-$75M and EPS of -$0.18 to -$0.21, below consensus of $86.6M and -$0.02. Expects FY13 revenue of $410M-$420M and EPS of -$0.11 to -$0.16, largely below consensus of $418.3M and $0.01. Shares -12.5% AH. (PR

    More on Pandora's (PFQ4: Listener hours totaled 2.7B, +29% Q/Q and +99% Y/Y. However, ad revenue growth was slower (+9% Q/Q and +73% Y/Y), which suggests Pandora may be facing monetization challenges. Meanwhile, content acquisition costs (royalties) rose 101% Y/Y, and equaled 59% of revenue.  Pandora says it now has a 69.8% share among the top 20 U.S. Internet radio services, up 1150 bps Y/Y. P -13.5% AH. (PR)

    1 Big Number That Will Burn Facebook Investors (Motley Fool)

    If the ‘ridiculous’ Dow had chosen Apple instead of Cisco (Network World)


  193. Good column by Bruce Bartlett again (in Phil's new above)


    Last week, Bloomberg News reported that declining bonuses are creating severe hardship for many in the top 1 percent of income distribution. One of them, Andrew Schiff, complained that his $350,000 salary barely covers his expenses. Others lamented that they could no longer go to Aspen to ski and must buy discount salmon.

    As I said, everyone’s suffering is subjective. But there does seem to be a widespread view that the poor don’t suffer as much from economic downturns because they are used to being at the bottom. As Bob Dylan put it, “When you got nothing, you got nothing to lose.”

    Those with expectations of staying on top, who have grown used to living the good life, no doubt do suffer meaningfully when those expectations are shattered and they must learn to get by on incomes only five or 10 times the poverty-level income rather than 20 or 30 times.

    But they should have the good grace not to ask for sympathy from those who are unemployed, barely have enough to eat or have had their homes repossessed. In particular, the wealthy ought to stop demanding more tax cuts and cuts in spending for programs aiding the poor, as every Republican presidential candidate promises. That’s just repulsive. [...]

    I’m still waiting for the growth Republicans promised under George W. Bush after they cut the top federal income tax rate to 35 percent from 39.6 percent, the top rate on qualified dividends to 15 percent from 35 percent and the top rate on capital gains to 15 percent from 20 percent. All of these actions significantly lowered taxes for the rich without raising economic growth at all. Why will more tax cuts for these same people do any good now?


  194. From Gann360…..

  195. pstas, cwan, robert & others,
    Thanks pstas for posting.  Of course, I'm playing short strangles all the time.  I've been selling the "crazy play" (short puts, and long put verticals) in the past few weeks, especially when the March and April put verticals have been very cheap.  I think AAPL & IBM are the guardian angels for SPX.  Without the angels in the index, RUT has been suffering a bit more.  Do you know that buying iphones and ipads has kept the SPX up, limiting gain in VIX and helping us, the seller of SPX puts?  Also when lflan goes long on AAPL, it also help us gain on SPX short puts.  See, they are all connected.  What a theory!  Anyway, a 5% to 10% drop in the indices would hit the profitable spot in the crazy plays.  The key is to keep the plenty of margin available for adjustments, either rolling and/or flipping.
    In fact, my March RUT put verticals are in the money, and I'm selling them off gradually to lock in profit. We don't want to wake up in the morning with a 2% gain in RUT, and see the value of the put verticals evaporated.

  196. Stjeanluc/Tax cuts
    Ah, but think how few jobs there would be now if not for those tax cuts that saved millions of jobs for undocumented domestic help and Mexican gardners.

  197. "I'm sure whoever the Republican electorate choose will be a wise man who will represent all the best attributes of the party.  "
    And of course, the Dem candidate will likewise represent the party's attributes.
    The Economist on Rod Blagojevich, who begins his jail term this month, and Illinois's amazing record of political corruption.

    Perhaps useful to recall the point of political origin of the Current Occupant- the State of Illinois – where the unofficial motto is "Where's mine?" The Land of Lincoln, after 40 plus years of de facto Democrat party control, is now the Land of Ludicrous where personal real estate fairies peddle influence; Plum private sector jobs are filled with well connected spouses; State bills go unpaid; Pensions underfunded to a degree they are in serious threat of collapse; Armies of patronage workers called to march to secure crony elections; and ad nauseum.
    All of this business as usual is possible after a 66% and 45% personal/corporate income tax pop.
    The model for a second term.

  198. Ah but Illinois is only the 3rd most corrupt of our states.   They were beaten out by NY and CA.   Chicago did take the title for most corrupt city, though.  

    I guess you'd rather be in Missouri, where they cancel firemen's pension plans, allow rich people to pull their tax money out of school districts to send their kids to private schools, take food stamps away from people with drug convictions and, of course, use public funds to put a bust of Rush Limbaugh in the State Capital building.  

    You know, come to think of it, I'd rather see Rod skim a little something off the top in exchange for not destroying the middle and lower classes and worshiping assholes.  

    Has it ever occurred to you that some states have "more corruption" because they actually look for and prosecute it while the kind of corruption in which Corporations funnel campaign money to politicians in order to have laws tailored to their needs is simply business as usual in the Red states?  

  199. 7:30 PM Japanese shares dip in early trading, on the back of heavy losses in the U.S. and Europe overnight. The Nikkei Average is currently down 1.1% at 9,527, with industrial shares and exporters leading declines: Komatsu ({[KMTUY.PK]] -4.1%), Hitachi Construction Machinery (HTCMY.PK -3.1%), Sony (SNE -3.40%) and Nikon (NINOY.PK -2.2%).

    Corporate insiders remain bearish this month, continuing to sell shares of their companies at a well-above-average pace. As of last Friday, the current insider sell-to-buy ratio stood at 6.56-to-1. A month ago, in contrast, it was 5.77-to-1. There hasn't been such consistent selling by insiders since May 2011. The last time this happened, a correction was right around the corner

    We need to stop worrying about every little correction in the stock market and more about jobs, says Ken Langone. He says unemployment is higher than the official rate of 8.3% because of the many people who have given up looking. If included, the unemployment rate could be as high as 13%. We have hardcore unemployment in America, Langone says, "What do you do about that?"

    Politicians' talk of $2.50/gallon gasoline isn't realistic, and the U.S. already enjoys the "cheapest energy in the world,” T. Boone Pickens says. He's “frustrated” that legislation which would put more natural gas into commercial trucks has gone nowhere: "You put natural gas… into heavy-duty trucks, you can bring down the price of diesel gasoline. I don’t understand why they [Congress] don’t understand."

    Check out M1!  

  200. does I.J. (in the morning article) refer to Kernen?

  201. Looking out for the little guy? Ok to skim a bit off the top? Get real.
    Corruption is not funny and it is not free. It costs the taxpayers of Illinois more than $500 million per year. Governor Blagojevich’s well-publicized corruption antics led to a lowering of the state’s bond rating, which cost the state more than $20 million during its last bond issue. Corruption also takes time and resources away from police and prosecutors. Blagojevich’s first trial cost tens of millions of dollars to investigate and prosecute, and after a hung jury resulted in a retrial, the taxpayers footed the bill for Blagojevich’s new attorneys. And so it goes – in a time of deep budget deficits, we are wasting taxpayer money and raising taxes and fees on citizens who can ill afford to pay for corruption any longer.

    Just off the top of MY  head- 1/2 $B would build 50 schools? Pay good wages and benefits to 5000 people? Could pay Cadillac health insurance for 10'sof thousands?
    Each year.
    For the over 40 years.
    I guess you are OK with that.

  202. Newt on TV saying that he'll get gas at $2.50/gallon… How?

    And bringing up the fact that when Obama took office, gas was $1.89 a gallon and high prices are Obama's fault and the entire rise has happened in the last 3 years. Of course, he is betting that no one is going to look at historic charts and see that gas prices were higher in 2008. But hey, let's not get facts in the way of a good lie because we know that facts and evidence have a liberal bias!

  203. Not sure if that's a positive or negative…

    After CEO Reed Hastings recently hinted at the possibility of Netflix's Watch Instantly service coming bundled with cable services, Reuters is reporting the company has met with "some of the largest US cable companies" to discuss partnerships. The report goes on to mention it could stream through cable set-top boxes and appear as another line item on customer's bills, however for that, Netflix would have to rework content licensing agreements that bar its service from cable boxes, which has kept it off of TiVo Premieres offered by companies like Suddenlink and RCN. We've also spoken to the infamous people with knowledge of the discussions and are hearing that while deals are being discussed, what's initiated the talks is the increasing bandwidth load that Watch Instantly is placing on networks — see theComcast vs. Level 3 dustup from 2010.

  204. Look, Watson just found a job at Citi:

    Watson's been a busy supercomputer since it took a couple of humans to school on Jeopardy last year — what with its stint at Columbia and a recent foray into hunting patent trolls -- and now it's taking on the financial industry. IBM and Citigroup recently announced plans to explore how America's favorite supercomputer fits into the realm of digital banking. Under the agreement, Citi will examine Watson's ability to "help analyze customer needs and process vast amounts of up-to-the-minute financial, economic, product and client data," in the hopes of providing rapid, personalized banking solutions. According to Bloomberg, Watson's financial assistance will be provided as a "cloud-based service" and will earn IBM a portion of the revenue and savings it helps generate. 

    I wonder if they will use it to optimize the fees they make you pay on all the bank transactions. And maybe IBM could get some of the action and improve the bottom line!

  205. Cramer/Phil – every now and then he throws an honest comment. i remember him saying buy FCX in Dec'08 at $16 9pre-split) back when it was.. i did. Sadly, i sold out WAY to early at only a 50% gain! ;-)   Then again, this is i believe the only trade i ever took via Cramer..

  206. stjean: The Arsenal almost pulled it off – what a season, so many highs and lows, plenty of volatility, wouldn't you say? Just the team to follow for a market participant. No away goal was the killer. Next year, and please God, with Van Persie!!

  207. ScottMI/ FCX: And I remember the Italian guy (Lovino?) on Fast Money was always on about FCX back in that period, about the time I picked up on Phil on SA and thought, hmm, here's a guy who speaks the truth and isn't just pimping his book.

  208. Watson/Stjean:
    "Vikram, shall we play a game?"

  209. IJ/Newbie – Yes, Joe Kernen. 

    Corruption/Pstas – Yes but in the same article your statement is from, the same guy goes on to say the real problem is the corrupting influence of money in politics – that's kind of my whole general point.  I am very glad you now think the government should be building more schools and paying for "Cadillac health insurance" but I'll just be happy if they pay for the regular kind…

    Gas/StJ – That one is really annoying and it's amazing how many people are now parroting this nonsense.  Now it's almost as if they purposely tanked gas into Obama's inauguration just so they could claim, 4 years later, that he caused the prices to go back up.  Now it's backfiring on them because Obama and the rest of the Dems are finally going after speculators – hopefully this time it will be something with teeth.  

    NFLX/StJ – They are going to blow up the bandwidth very soon and it will be a major issue.  Watson will fix everything in the Financial sector, at least.  That thing will put millions of people out of work in the next decade.  

    Cramer/Scott – Been a long time..

    Spain/Dmor – Good for them, it needs to be done.  EU demands of austerity are ridiculous and only damage the countries long-term.  

    Meanwhile, Hang Seng and Nikkei down 0.75% and BSE down 0.6% but the Shanghai bounced at 2,400 and is flat at the moment. 

    Dollar 79.77, Euro $1.3136, Pound $1.5725, 80.68 Yen to the Dollar, no point in even mentioning the Swiss as it never changes.  

    Our Futures are:  Dow 12,766, S&P 1,344, Nas 2,594 and RUT 788 with oil at $104.98, gold $1,676, silver $32.90, copper $3.76, nat gas $2.33 and gasoline $3.24.  

    Split decisions on Super Tuesday – including a big delegate split in the fragile-employment key state of Ohio (still some 500K nonfarm jobs below its year-2000 peak) – mean a longer haul for the GOP primaries, with 67% of delegates still at stake after today. A Romney-Obama matchup is still likely, though tonight's results may have less impact on the presidential race than this Friday's jobs report might.

  210. oknoman & stjean: Ref Arsenal. Every time Wenger gives a player the captaincy, he leaves. Say goodbye to RVP, and of course to any kind of silverware next season.

  211. Phil
    #8 He makes some assertions about Bank of America. In your opinion, Is there any validity to what he says?
    #15 Any guesses where an asteroid will hit in 2013? Don't answer that. :)

  212. Phil:
    It looks like if you wait long enough your short trades on XRT will pay great dividends. A combination of demographics and enormous debt may spell doom for retail sales. The question remains: How long?
    I was just skimming news sources when I ran across this story. Very interesting read.
    see:  Guest Post: Cause, Effects & The Fallacy Of A Return To Normalcy

  213. Good morning!  

    Futures up a bit but I'm not ready to call it a bottom just yet but we may have a Greece is Fixed (again) rally tomorrow, which is why I liked that QQQ spread as we had two ways to win for the week. 

    Nasdaq (/NQ) can be played below the 2,600 line, RUT (/TF) below 790, Dow (/YM) below 12,800, oil below $105.50 (/CL) and gold (/YG) below 1,690 so that's 5 to watch and 3 of 5 below is a green light to short the other two and 3 of 5 above would be a signal to get out.  Dollar 79.775 at the moment so we're looking to take back 79.80 to confirm bullishness.

    Euro at $1.3133 and below that $1.31 line is a critical breakdown that can lead to panic.  $1.57 on the Pound it the same (now $1.5724) and the Yen is at 80.71, indicating they have too many Euros and not enough Dollars – it would be very bad timing for the bulls if they chose today to rectify that.  

    6:00 AM Overseas: Japan -0.6%. Hong Kong -0.9%. China -0.7%. India -0.2%. London +0.3%. Paris +0.6%. Frankfurt +0.5%

    European shares are mostly up in midday trading following yesterday's sharp sell-off as some investors bet that the game of chicken between Greece, the troika and bondholders will ultimately end well. Euro STOXX 50 +0.4%, London +0.3%, Paris +0.7%, Frankfurt +0.4%, and Milan +0.9%, although Madrid is -0.6%

    German factory orders come in far worse than expected, -4.9% Y/Y in January vs. -1.7% consensus. Orders are -2.7% M/M vs. +0.5% consensus.

    Combined sales at China's 77 largest steelmakers fell 8.5% in January from a year earlier to 260b yuan, citing an official at the China Iron and Steel Association. Profitability in February and after aren't optimistic, the official said.

    Morgan Stanley(MS): There's Something Weird Going On With The Economic Data.

    Sarkozy Proposes Minimum Corporate Tax. French President Nicolas Sarkozy said he’ll create a new tax that would force large French companies to pay a minimum amount of tax.

    Australia's GDP climbed 0.4% in Q4, just half the 0.8% gain economists had expected, while Q3 was revised down to +0.8% from +1%. Year-on-year, the economy grew 2.3%. A housing slump deterred consumer spending and the report covers a period when the eurozone's crisis weighed on Asian demand for commodities

    Congress Poll Rout in India Risks Economy as Gandhi Flops AgainIndia's ruling Congress party was routed in regional elections, a defeat that shattered claims by its chief campaigner Rahul Gandhi to have rebuilt support and endangers the government's agenda to boost a flagging economy. Gandhi, 41, touted to replace his mother as Congress chief this year, took responsibility for the party's performance in India's most populous state of Uttar Pradesh where it was set to win 7 percent of seats. An unexpected loss in Punjab underscored how Congress is struggling to escape blame for rising prices and alleged corruption two years before a national ballot.

    Prices Pressure Asia Central Banks to PauseAsia-Pacific central banks will probably hold off on adding monetary stimulus this week as higher oil prices combine with diminishing concern of a euro- region meltdown to make the case for preserving firepower

    Why Bad Money in China Drives Out The Good. China to suffer as long as politics placed above market.

    Gold Set for Worst Run This Year as Commodities Slump on European ConcernsGold may drop for a fourth day in the worst run this year as concern resurfaced that Europe’s debt crisis will slow growth, strengthening the dollar and eroding demand for alternative investments.

    Despite the cost of generic drugs falling sharply, the prices of treatments used mostly by older Americans rose nearly 26% from 2005-2009, a new study (.pdf) by AARP shows. The pharmaceutical industry slammed the "misleading" report for ignoring "key facts about the marketplace."

    With Greece's debt-swap deadline a mere day away, posturing continues from both bondholders and Greek officials, but some of the largest private holders are falling in line. SocGen, Assicurazioni Generali and UniCredit all say they'll participate in the swap, as will Greece's six largest banks. 

    Carefully Orchestrated Moves Set Stage for Greek Debt DealGreece is unlikely to get all of its bondholders to agree willingly to a debt-restructuring plan before a Thursday deadline, but it repeated Tuesday that it is ready to force the deal through by other means. Greece stepped up pressure on its creditors Tuesday, saying it won't have money available to pay bondholders who resist. Creditors have until Thursday evening to decide whether they will accept the deal, which replaces existing bonds with a package of new securities with less than half of the face value.

    European Banks Now Face Huge Margin Calls As ECB Collateral Crumbles.

    Split decisions on Super Tuesday – including a big delegate split in the fragile-employment key state of Ohio (still some 500K nonfarm jobs below its year-2000 peak) – mean a longer haul for the GOP primaries, with 67% of delegates still at stake after today. A Romney-Obama matchup is still likely, though tonight's results may have less impact on the presidential race than this Friday's jobs report might

    Young Adults See Their Pay DeclineYoung people entering the job market are taking the brunt of the downward pressure on wages caused by high unemployment, according to a new analysis of pay trends. In data compiled for a coming report, the Economic Policy Institute, a center-left think tank in Washington, found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.

    Colts Will Release Peyton Manning on Wednesday.

  214. BAC/DC – Drawing down reserves to boost earnings was my complaint about the entire banking sector last week (and their boost to S&P earnings makes the whole thing a joke).  BAC is no more guilty than the rest and the asteroid will land in the ocean, so don't worry (unless you live on the beach).  

    XRT/DC – Well it's not a demographics play, more like a consumers are exhausted play.  That's a great article!