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Monday Market Movement – Ship of Fools Sets Sail

$35Bn worth of 3-year notes to sell today

That will be followed by $21Bn worth of 10-year notes tomorrow and $13Bn worth of 30-year notes on Wednesday.  The 3-years are expected to fetch about 1.5%, 2% for the 10-year and 3.12% for the 30-years despite the fact that that represent negative returns to inflation.  So, either it's just a scam where the Fed, through its member banks, purchase whatever Treasury wants to sell to keep up the illusion that the US is able to borrow cheap OR the rest of the World is so horrifically scary that Global investors are willing to take a loss on $69Bn long-term, rather than risk leaving it in a bank or putting it into a stock or commodities or in the notes that are handed out by other countries.  

Like Greece, for example, who were just "fixed" yet today the NEW BONDS are trading as 18.1% for 11-year notes.  Hmm, 18.1% for Greece, which has just been declared "safe" by the EU or 2% for US notes?  Something is clearly wrong with this picture…  You KNOW something is wrong but, if you are buying equities, then you are choosing to pretend that, although there is a very obvious scam going on in the bond markets, that it somehow doesn't affect the equity markets.  Come on – admit that you are lying to yourself – you'll feel better!  

Buying equities in a Federally funded, Bot-propped rally is no different than participating in an obvious Ponzi scheme.  You KNOW it's fishy but EVERYONE is doing it so you just want a little taste and you tell yourself you're just going to help yourself to some of that free money and then you will get out (dumping your shares on some other sucker who will be closer to the eventual burning than you were).  That's called the greater fool theory and it works great as the World is bursting at the seams with fools but, eventually, the fools and their money are parted and SOMEONE is left holding the bag.  

Will it be you?  Of course not, you are no fool!  Someone else will buy your GMCR shares for $63, right?  Well, that was right on Thursday, but on Friday they dropped to $52.50 and that was after drifting gently down from $69 earlier in the month.  It was "just" a 10% loss and then, suddenly, it was a 30% loss.  Sometimes there just aren't enough fools around when you need them.  John Hussman was interviewed in Barron's this weekend and declared the current market "A Who's Who of Awful Times to Invest" describing the current market as "the basic 'overvalued, overbought, overbullish, rising-yields' syndrome."  My comment to Members in our Weekend Reading section was:  

Hussman – Sure I agree with him. That's why I pulled back in the Income Portfolio as we're in a very dangerous spot here. If we hold up this week and next (real end of quarter), I'll feel better but the Fed neglecting to ease on Tuesday could knock us back pretty hard and I'm simply not seeing the data to support the markets. As noted above (and by me for a while), take out BAC, AIG and AAPL and the ENTIRE S&P has negative earnings. That's including AAPL suppliers and including auto makers and their suppliers.

This is a rally based on ignorance and we have a lot of ignorant people but, eventually, even they run out of money. If the media starts pointing out some negatives, tone can change very, very quickly and why on Earth would we believe that there will suddenly be any kind of volume of buyers to come in to relive the people who want to cash in their 20% gains at the top? That goes back to my car lot model – we've marked up the entire market based on not even 10% of it being bought and sold and we KNOW 80% of the buying and selling is Robots gaming the system who don't even hold their shares for more than a few milliseconds so now we're down to basing a $10Tn move in now $40Tn market on 2% of the shares being actually transacted. That's some pretty dangerous leverage to base valuations on. 

Ignorance is what the MSM feed off of.  They program to ignorance while their Corporate Masters then use that ignorance to extract wealth from the masses. I do my best to pull back the curtain on these scams but THERE ARE SO DAMNED MANY OF THEM!  The biggest one, of course, is oil and, as you can see from the chart on the right (thanks Mish) from the EIA, the US is now using LESS Petroleum than we did in 2001, when oil was $20 per barrel.  

Petroleum by itself has sunk to mid-90s levels of usage when we had oil priced in the teens – back when Al Gore wanted to put a 0.04 tax per gallon on gasoline so we could research alternative energy solutions to prevent our nation from being at the mercy of foreign oil prices.  Gore was defeated by the Republicans, who said a 0.04 increase in the price of gasoline (then 0.97 per gallon) would wreck the US economy.  

We all know who won that debate – it was Al Gore, who won the popular vote but was defeated by the Supreme Court in the post-election so, instead, we now pay $4 per gallon for gas but at least we don't have that pesky 0.04 tax, which would have raised $132Bn to fund energy research since 2000 and instead we spend, in the US alone, $827Bn a year more than $1 per gallon for fuel and WE STILL DO NOT HAVE A BUDGET FOR PURSUING ENERGY INDEPENDENCE!  Would you even know if there were a 0.04 per gallon tax.  Hell, we wouldn't even notice .40 and then we'd have $100Bn PER YEAR to put towards the problem.  If only Al Gore had been allowed to serve:  

Gold is another major scam, also based on fear and misinformation.  Gold spiked to $850 an ounce in 1980 and that was up 466% from $150 in 1976 and then, between 1983 and 2003, gold drifted around between $250 and $400, bottoming out as the market was flying in 1999 as stocks were clearly a better investment than gold, as was housing at the time.  Stocks and housing have gone nowhere since 2000 but gold is now $1,700 per ounce, up 580% from $250 or let's call it up 466% from $300.  If gold is a hedge against inflation – what exactly is it besides gold that's up 466% since 2000?  Oh yes, oil!

Like oil, we are not using more gold than we did in 2000, we are just paying more for it as the Mainstream Media is now controlled by the very people who want you to buy oil and gold.  They pull black goo and shiny bits of metal out of the ground and you break your back all day working for currency that you exchange for less and less of what they produce and you never question it because every single channel on television gives you the same message:  Shortage, FEAR, new paradigms, incompetent Governments, nuclear war – whatever works to get you to live in the kind of fear that drives you to overpay for commodities and it's never going to stop until we get to the root of the problem.  That was the great accomplishment of the Bill Clinton Presidency, he made the fear go away and people who are not terrified don't pay $4 a gallon for gasoline or $1,700 an ounce for gold. 


Without a war, without a shortage, without significant increases of demand, we are paying "emergency" prices for commodities.  We pay this because, in 2001 the gutting of the Commodity Futures Trading Commission (CTFC) paved the way for commodity speculators to run wild and repeals of key sections of Glass-Steagall made commodity trading a primary source of income for investment banks.  Glass-Steagall limited banks' securities and derivatives trading to less than 2% of their assets, in case such trading might be necessary to help service customers' accounts. Then-Fed Chairman Alan Greenspan raised these limits first to 5%, then 10%, then 25%. When Glass-Steagall was repealed in 1999, all the limits went out the window, a process also furthered by Phil Gramm's so-called Commodities Futures Modernization Act of 2000, known as the "Enron Bill," which totally deregulated derivatives.  

We are still suffering the after-shocks of that madness and, just like in 2008, Global consumers are once again being pushed to the limit with inflation in India and Egypt back at near 10% levels that sparked riots that presaged the global collapse that year.  As John Hussman points out – this is a particularly dangerous time to invest and we have moved to cover our gains in our Income Portfolio (see weekend update) as we've had a really good run – it's time to give the bag to some other fools and give them a chance to get rich quick while we take a little break.  

We have goals in our Big Chart and, IF we can take those technicals, we'll be happy to play a technical rally bullish – but we're not there yet.  We're at the point where things could go either way and, if they are going up another 20%, we won't miss very much by sitting out the next 5%.  If they are going down 20%, then we will have lovely, lovely cash on the sidelines and, who knows, maybe we'll even want to buy some gold for $850.  

Be careful out there – it's going to be a crazy week.  

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  1. Oil lines

    R3 – 108.26
    R2 – 107.91
    R1 – 107.37
    PP – 107.02
    S1 – 106.48
    S2 – 106.13
    S3 – 105.59

  2. Jrom sure picked a great time to ship to Afghanistan! 

  3. These guys are trying to solve every problem…

    It was not enough to beat the Jeopardy champion!

  4. Temporary Blindness


    • Many jobs that were added this month were low-quality and/or largely a function of lower-wage temporary workers.

    Two things struck me in the jobs report when I parsed through the data.

    1. The average workweek was unchanged.
    2. More importantly, average hourly earnings rose by only 0.1% (month over month).

    The second point seems to me to be a statement that those jobs that were added this month were low-quality and/or largely a function of lower-wage temporary workers.
    Indeed, that is precisely the case.
    Of the 227,000 net jobs added in February:

    • 20% of the monthly increase was temporary jobs, which rose by 45,000 (up from 32,000 in January).
    • 18% was food service/bars, which added another 41,000 jobs.
    • Finally, education/health added 71,000, or another 31%, of February's total job gains (these are skilled workers but lower-paying).

    So, temporary workers, waiters/waitresses/bartenders and teachers were responsible for almost 70% of the job growth last month.
    Maybe I am negative data-mining (as I am net short!), but I simply don't see this sort of quality of job creation as a solid foundation for the domestic economy.

    Position: None


    Douglas A. Kass

  5. Speaking of IBM:
    IBM's Holey Optochip transmits 1Tbps of data
    …that's around 500 HD movies being transferred each second…
    And this is just crazy…
    The idea is to stack hundreds of silicon wafers and utilize dual fluidic networks between them to create 3D processors.

  6. IBM / Burrben – No knock on Apple, but IBM is by far the best tech company out there… But as we know, that doesn't mean the best stock to play! Although, a good long term hold. The threshold to compete with IBM on that level is much higher than the threshold to compete with Apple.

  7. Good morning,


    IWM     79.10,  79.29,  79.56,  79.82,  80.17,  80.46,  81.04,  81.41,  81.61,  81.96,  82.15  and  82.41

  8. rustle 123
    This story came out last week . It too questions the quality of the so called job recovery.

  9. Dr. John L. Faessel
    Commentary and Insights
    Quote of the Day
    “The only place success comes before work is in the dictionary.”
    ~ Vidal Sassoon ~
    The shake-out after the European Central [ECB] rescue of Greece continues with Greek sovereign debt bondholders taking it in the neck. Hundreds of billions went up in smoke and be assured; more of Euroland will fold. And can we here in the USA prevent the same? Stay tuned. Election Day is Tuesday, November 6.
    Favorite overbought / oversold indicator the McClellan Oscillator is in of Neutral at minus 2.
    Bullish investor sentiment* remains just ticks away from cycle highs, however it only recently rose to these heights after an over 7-month period of significant Bearishness suggests there is some “time” before alarm.
    Once again, it all hangs together until the Israelis go after the Iranian nuke sites… IMHO
    EuroLand Bond Yields remain well off highs as the ECB rescues Greece
    Greek 10-year yields 29.47%
    Italy 10-year (gross) bond yield – 4.86% – off from highs of 7.26% on 11-24.
    Spanish 10-year (generic) bond yield – 4.99% – off from highs of 6.7% on 11/24.
    The S&P 500 (SPX) closed Friday at 1370.87 just a tick away from cycle highs.
    Ascending tops resistance is S&P 500 (SPX) 1389
    Short term price resistance is at Fridays high of (SPX) 1374 / 75
    Key cycle highs Price resistance is (SPX) 1378 (2/29/2012)
    Short term price support in the (SPX) is at 1366
    Important trendline support off  Dec, Jan, and March’s lows is 1344
    Then at last Tuesday’s lows of 1340
    50-day moving average support is at 1327.
    After an 8-month downtrend the 200-day moving average support line moved up last week and is now at (SPX) 1259.
    Important pullback low price support is 1265 & 1258 (12/30) 
    Then at pullback lows of 1248 registered on (12/28).
    Last Friday’s key indicators and metrics:
    ·     McClellan Oscillator is in NEUTRAL @ minus 2
    ·     Natural Gas (Globex) 2.324
    ·     Japanese Yen 12115
    ·     Crude oil (NYMEX) $107.40
    ·     Silver (COMEX) 34.212
    ·     Brent Crude $125.98.
    ·     Copper – 3.8585
    ·     VIX – 17.11
    ·     Euro – 1.3107
    ·     US Dollar Index – 80.08
    ·     Swiss Franc – 1.0869
    ·     3-month $ LIBOR at 0.475
    ·     CBOE Put / Call Volume Ratio – 0.90
    ·     Gold (COMEX) $1711.5
    ·     The Treasury 10-year yield 1.99%
    ·     Aussie Dollar – 1.0563
    ·     Canadian Dollar – 1.0098
    * Bullish Investor Sentiment is mixed – but just off cycle highs

  10. Phil, would it make sense to roll the 51 puts higher to try to collect more premium this week? 

  11. Oil UNDER 106??? 
    I really want to short….

  12. PP

  13. FU CMG!!!
    FU PCLN!!!
    FU TZA!!!
    Have a great day ;-)

  14. Phil – The average cost are as follows:

    TZA – $3.05 as we paid $0.95 for the roll to the Apr 18
    USO – $1.99 as we paid $0.45 to roll to the 41 strike

  15. EDZ working for you Jabo! 

  16. That was strange, i didnt expect the market to open for another hour. Did you US guys move to summer time already? 

  17. Asset performance since the March 2009 lows:

    It has been one heck of a rally – except for Nat Gas and treasuries! Obama, the market killer!

  18. Yes we have Dpas..,

  19. Phil – I didn't roll the TLT 115 calls from friday thinking they would simply expire but they were exercised. Do you think i should sell the shares now for a small loss or hold with hope? (i closed the short end for a nickle on Fri so the net would not be a loss)

  20. Good morning!  

    CNBC doing a full court press on commodities this morning.  They even have gold bars surrounded by security guards as if people on the floor of the NYSE will grab them off the table.  

    As you can see from the Big Chart, we're looking pretty good if we can hold 813 on the RUT today and we'll be thrilled to take back 8,259 on the NYSE this week as we're OK having the RUT and NYSE below their 10% lines but not so much below the 5% lines.  

    The Dollar is right at 80 and the Euro is at $1.3124 and the Pound at $1.5637 so pretty simply if the Dollar is under 80 and the Euro is over $1.31 AND the Pound is over $1.57, then it's probably a good idea to be bullish intra-day.  

    As I mentioned above, it's auction week so we don't expect much of a market pop while the Fed is trying to steer people into TBills and I think we'll drift for the week into expirations with a move down, if anything back to 800 on the RUT and 1,350 on the S&P.  We are still all about that 1,360 line on the S&P, below there is where we begin to have serious concerns that we're breaking down. 

    I did an update on the Income Portfolio this weekend and, more importantly, I laid out a dozen portfolio moves that raise an extra $23,415 in cash and prepare us for a possible bearish flip if the markets turn sour on us.  So this is, officially, the most bearish I have been since we started the Income Portfolio last April, other than last July, when we pressed our hedges up significantly and generated a nice sum of cash on the way down.  

    My primary concerns is that oil will collapse and spark an overall commodity sell-off that begins to spook the broader markets.  My secondary concern is someone will realize what a mess the Global Finance system still is an how the EU still has Trillions of Euros to commit before the rest of the PIIGS are "fixed."  

    You all know my favorite hedges, this is the 3rd time I'm putting them in an Alert so don't say I didn't tell you so:  


    • SQQQ April $12/15 bull call spread at .55, still .55
    • DXD April $13/15 bull call spread at net .55, now .50

    You can be aggressive and sell short puts on the same ETFs or you can sell a stock you really do want to own if it does get cheaper or you can just say the SQQQ spread has a 445% upside as is and the DXDs has a 263% upside as is so you don't have to risk a lot to make a lot.  They are good protection – in case you have positions you don't want to cash out but would not be happy losing money on if you wake up one morning to a 10% drop in the markets.  

    At the open: Dow +0.04% to 12927. S&P +0.03% to 1371. Nasdaq flat at 2988.

    Treasurys: 30-year +0.34%. 10-yr +0.18%. 5-yr +0.07%.

    Commodities: Crude -1.27% to $106.03. Gold -0.54% to $1702.25.

    Currencies: Euro +0.01% vs. dollar. Yen -0.4%. Pound +0.23%.

    Market preview: Stock futures are trading below the flatline, with S&P -0.2%, weighed by China's weaker-than-expected trade balance as imports surged. Investors will keep an eye out for themeeting of euro-area finmins. Commodities came under pressure from Chinese demand worries; Nymex crude -1%Still ahead: employment trends, Treasury budget. 

    The bit firmly between their teeth, Japanese officialscontinue to press for a weakening yen, PM Noda telling Parliament the currency remains "strong," and finmin Azumi also chipping in. The dollar's quick rise vs. the yen - up 8.1% in the last 6 weeks – has been one of the year's more interesting developments. Yen ETF: FXY -6.7%YTD. 

    The yuan falls by the most in nearly 2 months as PBOC Governor Zhou says the exchange rate is linked to the balance of payments, and, well, it's deteriorating. No longer a one-way bet higher, the yuan has declined 0.5% this year, after slow, steady rises for the last 3. (also)

    Nouriel Roubini counters BofA's take on the economy – saying economic data will be pressured by an increasing level of foreclosures, higher oil prices, and a mild weather effect on jobs that will fade out in the spring. 

    Eurozone finmins will sign off on Greece's 2nd bailout package today, and then turn their attention to Spain, whose budget plans are running off the rails. Amidst staggering unemployment, Spain thumbed its nose at Brussels, scrapping a 4.4% deficit/GDP goal for 2012. "They will have to be questioned. I think there are no real reasons for missing the target this year," says a EU official. Sounds like war.

    "Local authorities have slammed the door in our face," says the French Budget Minister after they refuse to sign a stability pact with Paris aimed at improving the country's finances. The collapse of Dexia – which dominated municipal lending – last fall has made it difficult for localities to raise cash. 

    Calling for "a full stop to inflation worries," an anonymous South Korean central banker says there is a "high chance" of a rate cut this year. If anything, most watchers had expected a hike to be the central bank's next move. "China is a concern … If and when China coughs, Korea aches all over." EWY +14.2% YTD. 

    A 1K foot collapsed section of high-speed rail track amidst heavy rains in China throws more concern onto the quality of the system's construction. At issue is the base material used in construction, not the first time this has been a concern. Rail stocks in Shangahai/Hong Kong: China Railway Group (CRWOY.PK-5.4%, China Railway Construction (CWYCF.PK-7.3%

    Exxon Mobil (XOM) and Iraq have reportedly worked out an agreement that allows the energy concern to be paid in oil for work done on a large oil field project. Global oil companies working on Iraq's oil infrastructure expansion prefer payments in crude due to the complexity of working out cash payouts in Iraq.

    Apple's (AAPLstrategy of aligning itself with just one mobile carrier in China appears to have backfired, where the iPhone has amassed only a 7.5% share vs. Samsung's (SSNLF.PK) 24.3%. Apple launched sales through China Telecom (CHAlast week, which should help boost its share. But CHA, though huge by western standards, is the smallest of China's top three carriers.

  21. Good Morning:   I have nothing new to add re AAPL this morning.  You know the drill……..    stjeanluc, some AAPL portfolio corrections and additions:  5 of the Mar 17 bear put spreads were sold last week for  12.15/2.20 and  I  sold the other 5 this morning for 9.90/1.39   Thanks…

  22. Phil
    How much are security guards paid and what is the gold worth?

  23. AAPL / lflan – Thanks. I actually booked to the sold put spreads in the closed positions but forgot to update the quantities in the open section. All corrected now.

  24. Hmmph, VIX down 10%.

  25. The Skeptical Eye

    We have a mysterious new Guest Contributor this week. Not a lot is known of his background, however, the entire  staff had a group meeting, and the consensus was that he is probably an escapee from a Mental Health Treatment Center. You might find him to be not only irreverent and interesting, but just a little “off”. During the staff meeting, words like “uncontrollable”, “mentally unstable”, “wild man”, “loose cannon”, “implacable” and several other words less fit for print were mentioned. We tried to put a leash on him at one point….. Later, at the emergency room, the doctor asked “so, what was it that put these huge teeth marks in your arm again?”. Our man had to admit “The Skeptical Eye”.  Doc says “big teeth”?  Our man:  “Like garden trowels”.

    He may return from time to time, we don’t really know. We did see several large men in white coats with butterfly nets running around the grounds outside the office here this week though, just after the Eye ran in through the lobby and jumped the elevator to the “secured” 44th floor, where we keep the cage.


    Let’s cut the crap. The time to buy a $540 stock is not when it is a $540 stock, but when it is a $380 stock. Such as Apple was in October. The time to buy a $380 stock is not when it is a $380 stock, but when it is a $140 stock, such as Apple was in mid 2009. An even BETTER time to buy a stock that REACHES $540, is when the stock is $12, AND before it has split 2 for 1 twice, such as was the case in 1995 on the day Apple Computer Incorporated announced that one “Steve Jobs” was going to return to manage the company on an “interim” basis.

    I remember the day distinctly. Nice and sunny, not too cold. I was in my “cubie”, designing a Machine Vision System for use in the automated manufacturing line of a medical device startup company. With the radio on, as usual, the news came across. Having, even at that point, been working at a deep systems level of Apple machines (on which said Machine Vision System was being programmed) for more than 7 years, I knew this was IT. This was the BIG THING. The know-nothing business press had been whipping the “Apple is gonna go bankrupt” hysteria for months.

    We had a Computer Systems Administrator, you know, one of those PeeCee dweebs who thinks Windoze is the greatest advancement of mankind. He was always asking me when I was "going to get a “real” computer”. He liked to make a big show of calling his “broker” three times a day to check up on his Compaq stock. Like he was "Mr. Big Cheese". By the way,,, how’d that work out for you, dick brain?

    I leaned over my cube wall and hollered “Better load up on Apple Stock, Job’s is COMIN’ BACK! He’s gonna take that thing to a Hundred Dollars!

    Oooooooh, how little I knew.

    Peter Lynch used to talk about “ten baggers” and  “15 baggers” in his books. Those were his kind of metrics of great success stories, in stocks he bought for Magellan, or wished he’d bought.

    So, how many “baggers” is Apple, now trading at $540, compared to the “relative low” in ’95 when the brilliant guardians of all things business in America had written Apple off as a basket case that would soon disappear? A reader who has “skimmed” this article quickly might do a quick mental calc and think; lemme’ see, 540 by 4 is about 135, by 10 is a shade over 13, so, ballpark, maybe  4 x 10, so in the area of 40. A 40 would have made Lynch so happy he’d pee his $4000 suit. BUT, a more CAREFUL reader of the story, would have noticed the whole “2 for 1, TWICE” part. Nice little detail there, eh? So, let’s do that math again, with some care. $540 is NOT $540, it is $2160. $2160 by $12 is a ONE HUNDRED AND EIGHTY BAGGER. 

    That’s right my friends, $1000 in 1995 would be $180,000 today. $5000 would be $900,000. To me, that’s some money.

    From a company written off as weeks from bankruptcy to the largest company in America by cap. I think maybe Steve earned his money.

    So, did I take my own advice and buy Apple after Steve came back?

    Of course not, what do you think, I had money at the time? Come to think of it, do you think I have money NOW?

    Everybody and their mother (and their mother’s mother) either owns Apple stock right now, or they want to own Apple stock right now. And yeah, I wrote that before watching the Doug Kass thing tonight.

    The Apple is eventually going to fall from the tree of hype. Newton told me that himself. But he didn’t tell me when. Don’t let it fall on you.

    If you've made big money off it, take the money and run screaming. Don't be holding the bag when your mother's mother's sister's husband's taxi driver no longer has any money left to buy it.

    -The Skeptical Eye


  26. IBM/StJ, Burr – That's a company I'm very confident retiring with.  They are the last of the great R&D companies and that's going to keep them going for many, many years.  

    Speaking of R&D – TSLA making new highs as their competitors can't get the batteries right.  

    Quality/Rustle – Good point by Kass.  

    Smith/DC – He's a smart guy, that's a good article. 

    Faessel/Rustle – Wasn't he all bullish last week?  

    Oil/Burr – Should be bouncy around $105 but good if they break below.  We need the Dollar to do better for oil to move down between now and inventory but I will be liking the shorts on inventories regardless.  

    And good day to you too Jabob! 

    Summer time/Dpast – Yes, we switched over the weekend.  Seemed early to me too, I thought April. 

    TLT/Morx – I'd hold out hope into the TBill sale around 12:30 but I see $116.44 now so you must be happy – now just don't be greedy!  

  27. Phil on the income port ECA  4% div how ever PE 115 Why did you chose this stock  because gas is cheap now thks

  28. My thoughts about this week………..

    I see the week ahead as leaning more negative than positive. If I had to take positions, they would be short positions, and in very short term time frames such as 2 to 5 to 8 sessions.

    This past week was very unsteady.

    The week before was fairly "flatish" all week. A little noise, but not a lot of movement or excitement, Friday of that week, the big three (indexes) did very little, except the Russell, which fell straight off the cliff, hard.

    The Russell is the Index which I watch the most closely. It has more Beta than the big three. It often serves very well as an early warning indicator that "something" is happening, although it doesn't always show "what".

    So Friday (March 2) it nose dived and Monday this past week it mirrored the others in wave shape. But on Tuesday this week, the Russell dived deeper and harder than the others. It was already comparatively much lower, and it had a much worse Tuesday than the others.

    It was a rather miraculous "save" for the Russell to slowly catch up during the remainder of the past week; through Wednesday, Thursday, and Friday, to end the week about even with the DOW; both of them sitting just about exactly where they were 10 market sessions earlier.

    The forecast for this next week can be based off many, many specs of data, like any week can. I prefer to look primarily at charts with overlays, at overall price and index levels, and then backgrounded with the current gestalt of the entire investing and news environment.

    Starting from point X of Monday, swooping down deep through mid-week, and then gliding back up to even and a little over point X by week's end, this past week has not been confidence inspiring.

    So be watchful this week, and I suggest generally avoiding any new longs.

    Green Mountain Coffee gets it beans crushed

    We saw a CLASSIC case of what can happen to a mega high flier when it gets ridiculous, with Green Mountain Coffee, Thursday night and Friday. The decline was mild starting last Friday, and curving down throughout this week.
    When the news hit the fan Thursday night after hours, the wreckage was brutal.  After hours activity was much worse than what the standard intra-day charts show. Down -24% in 5 days is called a VERY bad week.


    If you are even thinking about taking any kind of long position in Apple at this point, you should really take up skydiving or bungee jumping. They are much safer activities. A little psychotherapy wouldn't hurt either. This doe not mean there can't be another 50 bucks or more in Apple still, but they've gone well beyond the point of reason, and it's only a matter of time. Do you want to try for another 50 bucks at the risk of easily loosing a hundred or more when it blow's? Stay away.

    As Phil often says, let's be careful out there.

  29. Oil
    It is world wide fungible. Doesn't matter how much is produced where, it is going to "flow', no pun intended, in whatever direction, and to where, it will get the best price. Period.
    For years and years I have been hearing the cliche's about "American Energy Independence". If you talk about gas, coal, burning cornstalks, solar, bio-shale or whatever the hell it's called, harvesting "heat" from magma, windmills, watermills, etc—-that's all fine and good and I hope those are all viable long term options.
    And to tell the truth, I don't know ANYTHING about the world oil market, and I would like PHIL to comment on what I'm saying. But there is no way that congress could, even if they wanted to (and they absolutely don't) pass ANY kind of law that would keep oil drilled from U.S. land or the gulf of mexico IN THE U.S.
    If oil is $7 in Australia, and $3 in U.S., the oil is going to Australia, doesn't matter where's it's drilled or piped, if Big Oil can transport it there and still make more money than they would here.

    Phil, what say you?

  30. Equities Update

    Previous week> You’ll remember the Week of Feb 27 through March 2 was fairly flat, with the Dow varying within a narrow 50 point range between 12930 and 13020. There were very short spikes above that range at the open on Wednesday and Thursday.  Monday of that week had a very short lived dropout during the opening half hour, which was fully reversed by the start of the second hour. That week ended at almost the exact center point of the weeks range, AND also within 5 points of where the week started.

    The Nas and the S+P followed the Dow in movement, as has been the pattern for some time now (very little divergence). The magnitude of the daily movement for those indexes was larger, yet their ending point was only about +1% for the week.

    We DID see a rather significant breakdown of the Russell that Friday, with a major divergence from the other indexes. While the Dow, Nas, and S+P ended the week very close to where they started, by Friday’s Close the RUT was down about -2.5% for the week, and exhibiting a strong downward vector.

    This past week had more movement and excitement in comparison to the previous week.

    The Equities Market started out on Monday with a sharp drop of the indexes of -.5% to -.7% during the first hour, then spent the day with a mostly linear increase, with a small drop in the last half hour, to end a few tenths of a percent below where it started the day.

    Tuesday morning all hell broke loose, and the  indexes immediately gapped down big time, with the Dow opening a good 140 points below the Friday close.
    All four indexes were down a hair over 1 percent or so at the open. Excluding the Russell, they drifted gently lower during the day and ended down less than a half percent. The gap down on the Russell was larger than the others, and it was ALREADY way below the others, as it had seen more deterioration in the previous 3 days.

    Wednesday started a mild two and a half day slightly noisy up trend. Again, the S+P and NAS magnitude of movement was significantly larger than the Dow.

    All 4 indexes gapped up at Thursday’s open, but immediately started down, which lasted during the first 30 to 60 minutes, as has been so common lately. The rest of the day was mostly in a choppy up trend.

    Friday started almost flat with Thursday’s close, saw a spurt up fairly quickly, and then lazily floated around for the day, and dropped a bit at the end of the day.

    By Mid-day Friday the Dow was down a hair, and the other two (excluding the RUT, of course) were up for the week by 1.25% and 1.5%, respectively.

    The second half of Friday’s session saw the three indexes drift down slightly.

    For the week overall, the Dow ended down about a half percent, with the NAS and S+P up a little over 1%.

    The Russell deserves Special Mention, as it has been the rogue actor for a while now, and especially this week. The mid caps have behaved somewhat out of step for many months, as the Market tries to figure out if the economy and near term business world are getting better, staying flat, or going through a shallow short retrenchment.

    In contrast to Mid-day of the previous Tuesday, when the Russell was sitting at the 0% line exactly even with the Dow, by THIS Tuesday, the RUT hit the -4.5% point toward the end of the day, having driven a much deeper path down than the others, when they were only down in the -1% to -2% range.

    Wednesday, Thursday, and Friday the RUT caught up much faster than the others, ending the week at almost the exact point of 817 where it started the previous Friday morning, one week earlier.

    It was a long, lonely, and very deep trip for the Russell, but it was an good accomplishment to end up without any damage considering the -4.5% excursion in the nether regions.

  31. Faessel/Phil
    He was bullish after the 200 point drop day.  When McClellan was oversold, on a short term basis, he sticks to McClellan readings.

  32. Morning Phil: Perhaps I should have adjusted this last week. I have the March 22/28 BCS discussed in mid-Feb, for $2.98, with March 24 short puts for $1.08, so net $1.90. I was thinking of rolling to the April 22 put , and buying the April 20/25 BCS. I suspect you would do this differently and would and would appreciate feedback.

  33. newbe
    The russel is putting huge weight on the buy BOTS, money flow out.

  34. The 4th sell signal!

  35. Reading that Mauldin article really turns my eyes red…oh, so is my screen…why oh why?

  36. FAS Money – at $92.30 is not looking good for the short calls and of course we should take out the $83 puts for .31 and wait for a chance to make a good sale.  If that chance doesn't come, we'll keep an eye on selling April $84 puts (now $4) ahead of the roll we'll have to make on the short $87s and that doesn't suck at all.  

    IWM Money – TNA still in range at $58.77 but let's kill the $51 puts for .15 and leave ourselves an open, just in case (same strategy as above except we're not even in danger on the calls).  

    $5KP – There should be a note re. wanting to get 1/2 out of TSL at $2.09+.  Yes I want to DD the DIA $129 puts at .75 now (would have been better into the pump) and then 1/2 back out at .90.  

    $25KP – Nice improvement.  We gained $10,000 off net $10,000 in the last couple of weeks.  The trick is to double off the $25,000 you start with though.  Oh well, it's a good mix and we can wait on DMND, roll XRT when we need to, GLL is actually looking good, SCO we'll roll if we have to, FAS at $92 would make us roll the short March calls and we're well hedged with the April spread, TZA is April so no worries, SQQQ is June, not even close to worried there, USO at $1.99 we want to get 1/2 off the table (I certainly hope you know the drill by now), TLT is our little money machine and DIA is the same as the $5KP – we want to DD at .75 and 1/2 back out at .90.

  37. Pharm – Do you have a link to that article?  TIA

  38. VIX is at 15.50.  That is impressive.

  39. Euro $1.3106, Pound $1.5606 – going the wrong way!  Dollar 80.09 but looks like a horse at the gate, ready to run higher.  

    Security guards/Shadow – Probably better than minimum wage and about $1.2M of gold but it's all about the psychology of that image of gold being SO VALUABLE that you can't leave it out in public without armed guards.  Your question gets to the heart of the matter of what's wrong with gold as currency.  YOU NEED GUARDS!  

    I can walk around with $1.2M in my bank account and I can write a check or use my credit card anywhere, any time and I don't need to lug around 50 pounds of gold and pay people, let's say 2 guys getting $150 a day each is $300 a day and lets say I go out 200 days a year and I have a really good safe at home and don't feel the need for guards there – that still means it costs me $60,000 to protect $1.2M worth of gold or 5% a year just to be able to have the gold.  

    Also, there are convenience issues and the fact that you can get ripped off by fixed scales and you have to test the purity of all gold you are given and, if there is any sort of spread on the gold, you pay a pretty steep transaction cost every time you accept or spend gold to buy things.    There's a reason gold and silver were ABANDONED by EVERYBODY over 100 years ago – it's a silly, old-fashioned way to conduct business and it absolutely does not make sense in a modern economy.  CNBC proves that point – while attempting to prove the opposite.  

    VIX $15.50 is as good as TLT $15.50 to me!  VXX April $19/23 bull call spread is $2 and you can sell the $21 puts for $1.42 with VXX at $22.71 and VXX is not an ultra so you are betting net .58 to make up to $4 against the downside of a 10% drop in the VIX to about 14.  Let's do 10 of these in the $25KP.  

  40. Phil Where would you roll XRT to I am 0 premium today thks

  41. lnk – Mauldin.

  42. FAS Money – Killing the short puts

  43. IWM Money – Killing the short puts as well

  44. Ship of Fools…

  45. RIG not playing along.  XOM/CVX though, are moving.

  46. Phil
    Have not tuned in to CNBC for a couple months, today I will turn them on. I took the gold as a prop to sell gold like you and the fear thing!

  47. Apparently fasting helps beat jet lag:


    According to the Harvard team, the fast works because our bodies have, in addition to our circadian clock, a second clock that might be thought of as a food clock or, perhaps better, a master clock. When food is scarce, this master clock suspends the circadian clock and commands the body to sleep much less than normally. Only after the body starts eating again does the master clock switch the circadian clock back on.

    The master clock probably evolved because when our prehistoric forebears were starving, they would have been tempted in their weakness to sleep rather than forage for the food they needed to survive. Today, when a traveler suspends his circadian clock before flying from Los Angeles to London, and then reactivates it upon breaking the fast, the clock doesn’t know that it should still be on Pacific Time. It knows only that the breakfast and the daylight declare morning in Mayfair, and it resets the body’s rhythms accordingly.

    Just a theory for now but I usually don't eat much in planes anyway so easy to test.

  48. stjeanluc, I think we DD on TZA at the end of Friday as well.

  49. Hello Vix, forgot to set your clock forward?

  50. Double bottom perhaps?  Come on…do something!

  51. JRW
    I have trend line and other indicators at 80.66. What's your target today?

  52. Oh, back to gold for a second – Of course what really breaks down is that if you only pay guys $30,000 each to guard $1.2M worth of gold, in the course of hiring hundreds of different guys over the course of decades – the chances that one of those guys doesn't decide to take that 25-pound gold bar and bash your skull in eventually diminishes to zero.  

    AAPL/Newbie – I was going back and forth with Option Sage (Market Tamer) about that this weekend and he put up that AAPL article on the main page.  While they may be short-term overbought, I don't think they are in the long run unless they begin to "Ballmerize" – then it's back to $85 at some point.  

    ECA/Yodi – Yes, it's a roundabout way of betting on nat gas long-term.  In the Income Portfolio, we sold 10 2014 $20 puts for $4.60 for a net $15.40 entry and ECA is currently $19.50 so that would bring the p/e, at the present price of nat gas, down to 86 and, of course, we would then either roll them to 2x the 2015 $10 puts or (p/e 58) or set up a buy/write that accomplishes roughly the same and then it's 2015 or 2016 and if nat gas is still $2 and ECA is still making $128M a year instead of their usual $1.2Bn we might not want to DD again but probably we will and then we'll be around $7.50 a share in a company that is currently spending $4.5Bn a year on capital expenditures and would drop about $4Bn to the bottom line if they ever decide to stop building and just sell cheap gas.  

    Oil/Newbie – Most of the additional cost in other countries are taxes as well as the transportation costs you seem to believe are zero but that's exactly why Australia pays the most – it's far from the oil.  WE are the world's second or third largest PRODUCER of oil and, with our neighbors in Canada and Mexico, we are second only to OPEC with 11Mbd here, 3.5Mbd in Canada and 3Mbd in Mexico for $17.5Mbd vs about 30Mbd in Opec and then Russia at about 11Mbd.  China PRODUCES 4Mbd so they are 50% energy independent but people tend not to mention that because it blows the "China demand" myth.  Even India produces about 1Mbd but they are most screwed as that's about 20% of what they use.  What we do not have in this country is an extraction cost, that would have the oil companies pay for what is pulled out of the ground – almost every other country charges for the removal of their natural resources but not the US – we just give it away…  

    Thanks Rustle.  

    Mystery/JBur – I'm going to go with TZA and say the March $22s are dead as a doornail so what the hell are you talking about rolling?  I guess there's a dime there but don't kid yourself, you let it fall below net 50% when you could have had a nice recovery and now you are just rebetting.   Before I look at it, let me know what actual thing it is.  Hopefully I'm wrong and it's a stock but it sounds like TZA to me. 

    Mauldin/Pharm – It's very painful to take a realistic look at things.  

    XRT/Yodi – No premium but with the VIX this low it's no fun to roll so I'd wait and hope there's a sell-off.  From the March $55 short calls, for example, now $5.55, you only pick up .15 rolling them to the April $55 calls ($5.70) but the June $56s are $5.55 too so better to pick up $1 and sacrifice some time if we have to but maybe we sell a put, like the June $54 puts for $1.05 and roll the caller to the June $58s ($4.10) for net .65.  Either way, the point is there are many ways to play it, including flipping to a specific overbought retailer rather than play the whole ETF bearish.  

    Oil back to $106.50, hopefully they don't get back over and a good short line (/CL) with tight stops.  Dollar 79.975 with Europe closing, might move higher now. 

    Jet lag/StJ – So I guess they are doing us a favor on planes by giving us crap food these days?  

  53. Thanks Jrod… Corrected!

  54. Phil: Didn't mean for you to have to guess…not enough caffeine! It was on VXX (March 22/28 BCS for $2.98, with March 24 short puts for $1.08, so net $1.90).

  55. GTHP….here we go! Get through $1, and we have a gap fill…..

  56. Adding to PLX May 5/7.5 BCS.  90c. 

  57. SQQQ/Phil:  The disaster hedge you posted again this morning as "SQQQ April $12/15 bull call spread at .55, still .55"
    Did you mean SQQQ $13/17 BCS at .55?

  58. Phil: GMCR 
    my short play on GMCR was short 20 Mar calls which obviously are done but I also had a a 70/62.50 put spread in the ratio of 2 longs to 3 short.  Overall the trade was profitable but do you have a suggestion to work out the lone short Mar 62.50 put?  Better to just eat it? scale back into some more Apr short calls to offset that loss?  I'm not crazy about rolling the naked put since I really don't want to own GMCR, although I don't think they go BK and I suppose there is a price they make sense.  i'm not trying to be greedy just thought this might be a good exercise should I have a similar situation in the future. TIA

  59. The good old days of NASDAQ:

  60. shadow / Target

    Possible 80.58 or 80.92 on the downside

  61. PLX / Pharm – Did you read anything encouraging about the May FDA? 

  62. No DIPS buying, only BOTS buying the dips. CNBC has reached a new low in reality reporting. Check out Yahoo breakout for a different view.

  63. PLX/Pharm – why adding today? any changein prospects or deadline…or have extra cash in your account?

  64. CNBC
    Just turned it on, though I don't normally watch. It reminds me of Alex Trebek of Jeopardy! fame. I met him about 25 years ago, when he had been presenting the quiz show already for several years, and it struck me that while he was a very nice man, and very competent, he had an incredibly boring job just presenting the same old schtick and recording five shows a day back-to-back and then going home. I saw a member of the production team standing in for him in a rehearsal reproducing every mannerism and intonation perfectly, so it was obvious that other people could easily do the job just as well.
    Now 25 YEARS LATER he is STILL doing the same boring job.  It is the same with the CNBC presenters. When the station started out,  they were journalists who stumbled into jobs that probably no one else much wanted, and now they are established and making excellent money so no point moving to new fields, but they are bored stiff with the job and just going through the motions. The formats have never changed and the lots of really interesting programs that  COULD be made to educate and entertain the public about finance and  investing have never been made because the whole process is completely fossilized. Most likely Maria Bartiromo and Joe Kernan will still be there 25 years from now, only they will look like Kris and Bruce Jenner. Come to think of it, they already do.

  65. 10:00 AM On the hour: Dow +0.23%. 10-yr +0.13%. Euro -0.02%vs. dollar. Crude -1.71% to $105.56. Gold -0.76% to $1698.45.

    11:00 AM On the hour: Dow +0.18%. 10-yr +0.13%. Euro +0.03%vs. dollar. Crude -1.25% to $106.06. Gold -0.86% to $1696.85.

    12:00 PM On the hour: Dow +0.18%. 10-yr +0.15%. Euro +0.19%vs. dollar. Crude -1.07% to $106.25. Gold -0.6% to $1701.15.

    After a quick move higher on Tuesday's sell off, the VIX (VXX -2.6%) dives to its lowest level in a year, as calm (complacency?) reigns. John Spence notes investors cancelling insurance policies for market pullbacks by pulling cash from volatility-linked ETFs 

    Feb. Employment Trends Index+6.1% Y/Y to 107.46, vs. 105.99 in Jan. (revised). The acceleration in the ETI suggests that rapid job growth is likely to continue in the next several months, despite modest improvements in Demand and Production.

    Is the Gang of 12 changing their tune?  The S&P 500 has easily exceeded the forecast of Goldman's David Kostin for 1250 by year's end, but he's sticking with it. At sub-2%, income growth is weak, and earnings and revenue forecasts have been cut across all sectors in the last 30, 60 and 90 days. He also blames rising oil prices and the lack of money flow into the market. (video)

    Is the end near for 3-year-old bull market? (USA Today)

    Great Expectations: Is this recovery for real? (New Yorker)

    Carmen Reinhart warns that "financial repression" will be with us for a long time with a public debt overhang that will be impossible for policy makers to ignore. The latest buzz-phrase being bandied around by economists essentially refers to the negative real interest rates that bondholders and savers will see on their investments emanating from policy decisions. 

    More on that ticking time bomb called student loan debt: Breaking the numbers down a bit shows that while student loan debt continues to soar to new highs with a delinquency rate of close to 14%, taking into account the borrowers who fall under the grace period for not paying down debt pushes the percentage of accounts past due to as high as 27%. Where it hurts? The housing market where debt-pressured college grads may feel too strapped to buy.

    The results of Fed stress tests on U.S. banks should trigger a flurry of dividend hikes and share repurchases later this week, and Keefe Bruyette offers some predictions. Fifth Third (FITB), Huntington (HBAN), JPMorgan Chase (JPM) and M&T Bank (MTB) are “likely to have dividend yields above 3%," and Keycorp (KEY) likely will see a below-expected 65% payout ratio approved.

    Beware of Banks’ Flawed Focus on Return on Equity (DealBook)

    The ECB settles €27M in bond purchases last week through its SMP. It's the first time in a month the bank has reported the purchase of any sovereign debt, but €27M is little more than a rounding error on the size of the program, currently at €218B. 

    Brazilian President Rousseff blasts QE, saying the country "will defend itself from these openly protectionist policies … This artificial currency depreciation is not regulated by the WTO … we will do whatever is possible and impossible to defend Brazilian industry." The real (BZF-1.6%. The Brazil ETF: EWZ -2.4%

    While gasoline prices are percolating in the States, they haven't approached the $4.11 peak of July 2008 (granted, we haven't hit high summer demand yet). The same can't be said for Europe, where prices at the pump have taken out the record levels from that summer.

    Prices at the pump continue to move higher, the national average for regular touching $3.80, according to AAA, a sharp 8.6% rise in just a month. What does the rate of increase have to be for it to be considered an oil shock? 

     "We are presently owned by …  investors who don't think gas prices will ever go above $4," laments Chesapeake (CHK) CEO Aubrey McClendon. "I want to be owned by investors … (who) believe gas prices will never go below $10," he says, courting Asians to take a stake in his company.

    Investors should look for winners among S&P 500 IT and consumer discretionary stocks with high “idiosyncratic risk," since it's a better predictor of stock performance vs. correlation or dispersion analysis, Goldman Sachs says. These nine stocks have high IR and could outperform: BACCCLCFGOOGLOROKSUNTHC,WFM.

    Pfizer (PFE +0.4%) says that it's more likely it will spin offits animal-health unit than sell it to one of the host companies (IIIIII) rumored to be in the hunt to buy it. CEO Ian Read notes that it's the largest animal health business and would benefit PFE investors as a stand alone company. 

    Green Mountain Coffee (GMCR -1.5%) adds to Friday's Starbucks-induced losses after Dougherty slashes its PT to $65, albeit while maintaining a Buy. The firm isn't sold on claims that Starbucks' Verismo brewer will be fully complementary to Green Mountain's Keurig and Vue. It also notes the Verisma will directly compete with a brewer Green Mountain plans to introduce this holiday season in partnership with Lavazza.

  66. Baidu (
    BIDU -1.5%) sells off a bit following's (YOKU +13.7%) and Tudou's (TUDO +147%merger announcement. There could be fears the combined company, which will have a YouTube-like dominance of the Chinese online video market, will thwart Baidu's own online video ambitions.

    The Chinese government will wait 2-3 years to issue licenses for 4G networks based on the TD-LTE standard, says a government official. Such a holdup could be problematic for China Mobile (CHL), which has been conducting TD-LTE trials. It could also be a negative for Apple (AAPL) and 4G chipmaker Sequans (SQNS); the former has reportedly promised China Mobile a TD-LTE iPhone, while the latter has taken part in trials.

    Apple (AAPL) design chief Jony Ive expounds on his company's product philosophy in a rare interview … and takes a shot at the spec sheet obsession of many of Apple's rivals along the way. "Most of our competitors are interested in doing something different, or want to appear new — I think those are completely the wrong goals. A product has to be genuinely better. This requires real discipline…"

    Apple (AAPL +0.7%) outperforms as evidence appears of strong early demand for the new iPad. Gene Munster expects 1M+ units to be sold on Friday, the device's first day of retail ability, and thinks Street estimates for 10.1M FQ2 iPad sales could be conservative. Helping matters is the buzz surrounding the new iPad's high-res display: Ryan Block considers it a game-changer for tablets, while Jason Perlow sees it opening up many new applications

    The iPad Is Unbeatable (Slate)

    Adam Smith versus Business (Freeman Online)

  67. PLX – extra cash, yes, been selling premium against other positions.  PLX stock 'trend' is holding or up.  Look at the chart.  SA had an article on Friday that noted it, so I am trying to get ahead of the curve.  I am buying back puts sold in Mar ($5s).


    Lookie there, up, run baby run, faster than my bullet…. There are no sellers. 

  68. Thanks JRW!

  69. SODA up 5% on Chicago event, methinks a short in order here, anyone agree?

  70. Phil,

    Just when I was thinking that I must be the only idiot left that has gone heavy in cash, I read your morning post and was reminded why I'm mostly cash.
    Was the market always this senseless?

  71. IRA portfolio update,  Rolling our CHK MAR 22 CALL's to APR 22's to collect $0.35 per contract.

  72. VXX/Jbur – Not as bad!   March $22 calls are $1.20 and you can spend $1.90 to roll them to the April $21s at $3.10, the short calls should expire worthless and then you can sell whatever for $1.50 ($26s are now $1.50) and all you did is spend .50 to buy a month and $1 lower in strike.  The $24 puts, of course are currently $1.66 and can be rolled to the April $22 puts at $1.94 and that takes another .28 off your net while still dropping your strike by $2.  That's the difference between taking action BEFORE you lose it all and not!  It doesn't mean you won't lose, but it does mean that you can stretch 1 month's worth of insurance to 3 months for very little additional cost and, if the reason your insurance is losing is because your longs are WINNING! – then it's all good.  

    SQQQ/Aussie – April $12s are .90 and April $15s are .30 at the moment so  net .60.  I'd pay the nickel to be $1 lower in strike. 

    GMCR/Lincoln – The short put is $11 and you can roll it to 2x the April $52.50 puts at $4.60 ($9.20) or, 3x the short puts ($13.80) and spend $4.50 to buy 3 April $45 puts so your risk at most 3x $7.50 ($22.50) vs the $11 you currently owe if you do nothing so really risking $11 to make net $9.30 on the premise that GMCR holds $52.50 for 40 days.  I don't think I'd bother, you have a winning trade and it's over, why not move on to something that you believe in?  

    41M on the Dow coming up on 12:30.  I'd say it's slow but it's the new normal for March.  

    CNBC/JMM – Sounds good except look at Dylan Rattigan – There's a guy who said screw this crap and went off to be a real reporter.  In some cases, it's not the people, it's the company – Corporate news doesn't want real reporting and they don't want the public getting excited about anything – they want you to sit on your sofa and consume mass quantities – that's it.  So "real" reporting is not rewarded and hasn't been for many years so they attract lazy reporters to these jobs while cable provides outlets for the radicals like Dylan and Jon Stewart and half the guys on MSNBC, who actually believe it's a reporter's job to report the news and not just read it.  

  73. Also, I participated in a Hackathon at the Google offices in DC and managed to produce something useful.

    It used to be that every time I wanted get a different option quote to show up in the spreadsheet I would have to do the following, 

    1.  Go to yahoo's page and look up the exact symbol for the option I wanted. Something like CHK120317C00023000

    2.  Then I would have to paste that into a formula in a couple different places.  


    Now, I wrote a function using the Google Apps Script and made it available to my spreadsheet so that all you have to do is call CraigFinance("chk MAR 23 CALL")  and it will generate "CHK120317C00023000".

    This way all I have to do is change the txt in the cell from "CHK MAR 22 CALL" to "CHK APR 22 CALL" and it handles fetching the appropriate data from yahoo web page.  No more cutting and pasting! (which was getting quite annoying because I kept making mistakes)

  74.  you see that china import data? so much hoarding oil..just like copper….imagine if they stopped hoarding…those would crash and all the "smart money" would be talking imminent recession….hoard on…im sure that will end well..ha!

  75. The Oxen Group likes the Starbucks (SBUX) Apr20 48/47 bull put spread. Starbucks looks primed for a breakout on their latest news of the Verismo, and 48 is below the 50-day MA. That has not been penetrated since September 2010. Position has 15% potential!

  76. SODA/Jerconn – Word is they really impressed analysts with their presentation.  I'd give them a bit of room.  

    Senseless/Exec – Actually I was noticing on the Rattigan clip that that was a day the Dow went up 430 points and the S&P went up 50 points and the nas was up 124 points – in one day!  That was last summer on Aug 9th and we erased all those gains and more the next day but then we got them back again the day after that and went higher before falling all the way back again so pretty friggin' senseless then as they are from time to time.  Of course, that's what happens when you put too much liquidity or have too little.  Like if your car needs 5 quarts of oil to run and you have 3, it makes a noise and smoke comes out and maybe it stops working and you would say "are cars always this crappy?"  Then if you somehow put 7 quarts of oil into the car, maybe it won't make noise but oil will spill everywhere and there will be a lot of smoke and you probably can't drive and you would say "are cars always this senseless" – there is a "correct" amount of liquidity that leads to the smooth functioning of the markets as a forward-looking price discovery mechanism but we haven't been there since Bush's 2008 stimulus first shot oil up to $140 and then the housing bubble burst along with the Financials (soaking up money and draining liquidity) and then we had massive bailouts (adding liquidity) and then a sovereign debt crisis (draining liquidity) and now massive stimulus again (adding liquidity) and, eventually, they'll get it right – just not today. 

    Nice fix Craig. 

    Hoarding oil/Angel – Wow, I forgot all about that.  China has been filling a brand new 169Mb SPR (they have several) and THAT is why Chinese oil demand is up.  And we already know they are swimming in copper and they are even hoarding cotton, which is what's pissing India off.  

    i think it shows their true motives that the only hoarding is going on in high profile oil/copper…and not other commodities….its just about painting perceptions…and it will blow people's minds when it ends

  78. IRA Portfolio update #2

    Rolling our MT MAR 20 CALL's to APR 20 CALL's for a $0.67 credit per contract.

  79. RES/Phil – this oilfield services just split 3-2 and raised dividend… any familiarity or opinion on these guys?

  80. Shorting AMZN.   Anyone have any ideas for a long I can balance that with?     :)  

  81. AMZN / Iflan – Did this article influence you?
    Whats your short Play? Put spread? Thanks

  82. Apparently the WTO just ruled that Airbus received 3 to 4x more subsidies than Boeing. Not certain what that will mean going forward for Boeing but they said that these subsidies have cost them over 200 orders total. 

  83. aapl

  84. How about MSFT lflan?    :-)

  85. Jbur – sorry but I was on the other side of your March tza 22 call trade – I will be selling you those aprils 22s as well if you want them – sorry could not resist bc I have lost so much money on that ultra.
    If you are going to buy TZA – buy something with less premium –  buy the april 17s for 2.80  and sell the 22s against it for less .95 – for $2 buck debit  - you burn off the premium – and those 17s are then all ITM.

  86. Well that finally explains where the excess oil has gone. Once China is full the fun begins, anyone got an estimate when that is?

  87. dpastramas/yes    and stj/  I like MSFT, and I like CSCO.   I own niether. 

  88. dpastramas / put spreads on AAPL.   April.    If that works I may push more into longer term spreads.  I didn't get much to start, just scaling and watching. 

  89. dpastramas….Serious typo above.   should say PUT SPREADS ON AMZN !!!

  90. Sorry lflan, I was just joking… Actually, I like MSFT long term but not for a short trade!

  91. stj……I'm watching you.  Next thing I know you'll be talking me into DSP on AAPL!  

  92. RES/Scott – They are a small service provider, not one I follow.  They have been in a very steady decline for a year so I'd want to learn more before deciding they were "cheap" at $10 when they have already fallen to $9.35 in October and $9.31 last month.  Something must be wrong for there to be multiple 10% panics on a stock that's already down 50%.  I see very little cash, rising receivables and rising payables (bad combo) but it's tempered by a doubling of sales and not too much debt.  They pay 3% in dividends and that's $47M but doesn't that seem kind of stupid when they owe $200M.  Unless they are paying less than 3% on that debt, they are wasting YOUR money by giving it to YOU.  Also, they bought back 2% of their stock last year so I assume they are the buyer at $9.50 (at least I hope they aren't the idiots buying at $14) so, on the whole, they are iffy at best.  

    AMZN/Iflan – How about BBY?  They are getting no respect at $24.64 ($8.6Bn cap) despite a forward p/e of 6.5 (8.6 current) and $50Bn in sales and $1.2Bn in profits in what has clearly been a poor retail environment.  They bought back $1Bn (11%) worth of their stock last year which means they should have good comps this year with earnings coming on 3/29 that have light expectations of $2.16 vs $1.98 last year for Dec/Jan/Feb.  You can sell Jan $23 puts for $2.55 for a net $20.45 entry (17% off) and, if you want to be aggressive, the Jan $23/30 bull call spread is $2.75 for net .20 on the $7 spread that's $1.67 in the money to start (up 700%).  

    Hey look – a bullish trade I like!  

    BA/StJ – It means BA is dirt cheap at $73.89.  I always like them but you can sell the 2014 $60 puts for $6.25, which is A LOT at net $53.75 (27% off) and I would think people would be happy with just that but you can also pick up the 2014 $55/75 bull call spread for $12.30 and that puts you in at net $6.05 on the $20 spread that's almost entirely in the money to start.  

    China SPR/Shadow: 


    In 2007 China announced an expansion of their crude reserves into a two part system. Chinese reserves would consist of a government-controlled strategic reserve complemented by mandated commercial reserves.[11] The government-controlled reserves are being completed in three phases. Phase one consisted of a 101,900,000 barrels (16,200,000 m3) reserve, mostly completed by the end of 2008. The second phase of the government-controlled reserves with an additional 170,000,000 barrels (27,000,000 m3) will be completed by 2011.[12]Recently, Zhang Guobao the head of the National Energy Administration also stated that there will be a third phase that will expand reserves by 204,000,000 barrels (32,400,000 m3) with the goal of increasing China's SPR to 90 days of supply by 2020.[13]

    The planned state reserves of 475,900,000 barrels (75,660,000 m3) plus the planned enterprise reserves of 209,440,000 barrels (33,298,000 m3) will provide around 90 days of consumption or a total of 684,340,000 barrels (108,801,000 m3).[14]

    Figure they just finished in the fall and began filling at 1mbd so roughly June/July before they are done with this round. 

  93. Shadowfax/ Chinese speculators will stop hoarding commodities when real saving rates will turn positive. Which is about to happen if inflation readings stay below 3.5%.

  94. mr stick today?

  95. Hey, can anyone tell me when the low was today?  Oh, same as last Friday, same as Thursday, yadda yadda….ya.  I always think 'this time is different'…..don't know why.

  96. Phil/BBY/   I like BBY.  I'm out there on and off to buy electronics.  Always people shopping.  Very good customer service.  Good numbers, as you note above.  And we know people are buying electronics almost before they're feeding their kids. I think it's a buy.  Incidentally, I was there this weekend with one of my preteens.  He wants a MacBook bad, but I'm holding back trying to teach him to work and earn it, rather than just watch his dad (me)  pull out the dough. 

  97. What a joke – our 1pm auction went well and suddenly everyone is back in the water on the indexes:  

    The Treasury sells $32B in three-year notes at 0.456%. Bid-to-cover ratio of 3.44, vs, a recent average of 3.52; indirect bidders take 34.6%, vs. a recent 36%. Direct bidders take 8.9%, vs. a recent 10.2%.

    Doug Kass takes another stab at shorting long-dated Treasurys, noting (among other reasons) fund flows – which have seen an unprecedented wave of money coming out of stocks and into bonds – have reached a tipping point. The bleeding of stock funds looks to have stopped, meaning an "inevitable" reallocation from fixed income to equities is coming.

  98. VXX/Phil: Thanks for the excellent reasoning on making the adjustment. Accomplished.

  99. Hello All – Don't know about the rest of you but I wasn't too pleased paying $4.50/gallon of gasoline here in Los Angeles. 

  100. RES/Phil – thank you. Your answer really helps teach points to consider when evaluating any company.

  101. Not that it matters, but articles came out that the hedgehog inhibitor pathway are involved in Fibrosis…one of the hottest areas to play.  CRIS and INFI are in the game with hedgehog inhibitors.  Long term, I like both companies.

  102. lflantheman,
    " He wants a MacBook bad, but I'm holding back trying to teach him to work and earn it, rather than just watch his dad (me)  pull out the dough. "
    good lesson, however, buy the mac and see the delight on his face, while you can still see the expression…priceless!!

  103. GTHP…above 1…..hold steady young padawan….

  104. The oil lines are working surprisingly well for a Monday. Shorting off 106.5 (S1 is 106.48) and stopping at 106.13 (S2) has been good at least 4 times now. 

  105. jasu1…..Yes, it's hard not to break down and just buy it for him.  I may go back to BBY this evening.  Maybe I'll include an options investing starter disc with the Mac.      

  106. lflan, take the $1500 of the MacBook and buy 6 of the Jan 14 AAPL 310 Calls. If things go right, your son will be able to buy 1 MacBook and have some money in his pocket by then!

  107. Lows/Pharm – Run the same program until it doesn't work anymore.  

    MacBook/Lflan – My kids get hand me downs, whatever Tina and I are done with when we get new computers.  I looked at the MacBooks but can't justify the price so the last laptop I bought was a 17" Sony, which I like just fine.  Overall, I find the IPad much more useful for 90% of what I do and I just use the laptop to travel when I need a real keyboard and more screen space than just the IPad (and I have my Toshiba portable LCD too so 2 laptop screens and the IPad when I travel is not too shabby).   If the new talk to type feature works as well as Dragon does on my current IPad, I think that will push the IPad up to about 95% of what I need, other than running TOS really and the deficiency of screen space when I need to work on the road.  But, at home, I don't think I have ever touched the Sony since I bought it.  

    You're welcome JBur.  That was an interesting push down this morning. 

    $4.50/Ink – Are gas stations less crowded there than usual?  I get that impression by me in NJ.  I can't remember the last time I had to wait for gas at the station by my house, used to be often there were 4 cars taking up the pumps so it seems to me there's a bit less gas being used.  

    You're welcome Scott.  

  108. Not sure I would use BBY at the moment. Heard from former coworkers there, that major changes are coming soon. Usually timed for early April.

  109. VXX … another leg down.

  110. lflan – what's the AMZN play? 
    AAPL – does it continue from here on it.  I'm all cash and feeling lonely on the sidelines. 

  111. stjeanluc,

    So what stocks came up on your screen :
    High RS, Price to sales ratio<1.
    Thanks in advance   Were you ever able to run this screen

  112. Screen / Jasu – I didn't forget but got caught up in other things this weekend. It's still on my list!

  113. lolobear…..AMZN   April 185/180 puts, just a few, testing the waters.   bid/ask  2.20/2.45     Could probably get them for 2.25    or less.  

  114. stjeanluc
    Patience Jasu…Patience!!

  115. 1:00 PM European shares close about unchanged in quiet trade. Stoxx 50 flat, Germany +0.3%, France +0.1%, Italy flat, U.K. +0.1%. The outlier is Spain, -1.3%, and quickly becoming a focus for eurocrats concerned over missed budget targets. The euro +0.2% at $1.3148.

    1:00 PM On the hour: Dow +0.2%. 10-yr +0.11%. Euro +0.2% vs. dollar. Crude -1% to $106.33. Gold -0.73% to $1698.95.

    2:00 PM On the hour: Dow +0.31%. 10-yr +0.02%. Euro +0.21% vs. dollar. Crude -0.91% to $106.42. Gold -0.63% to $1700.75.

    Though Laszlo Birinyi and other market forecasters are drawing parallels between 2012 and 1995's bull run, Barclays' Barry Knapp isn't buying it. Rising energy prices, slowing central bank activity and earnings growth, geopolitical risks, and "overzealous financial regulatory policy" all lead him to think history isn't repeating. Knapp also points out small caps and cyclicals are underperforming, typically a bearish sign.

    Surging energy costs will impact stocks soon, Morgan Stanley's Adam Parker says. The impact of gas price shocks occurs at a one-month lag and is asymmetric, he says; for a $0.10 price shock, the subsequent monthly S&P return is -1.2%. But "investors may want to see evidence of a change in consumer behavior due to price shocks before altering their equity market views." 

    The U.S. government ran a $231.7B budget deficit in February, the Treasury Department reports, up substantially from the $222.5B deficit in the same month last year. Receipts were $103.4B, and outlays were $335.1B. Fiscal YTD, the deficit is $580.8B, $60.4B less than at the same period last year.

    Four former members of the TARP watchdog panel are urging the Treasury Department to end tax breaks for bailed-out insurer AIG (AIG -0.4%), writing that the tax exemptions have allowed AIG to escape billions of dollars in tax payments since receiving $182B government aid in a taxpayer-financed bailout.

    The German government achieved less than half of its planned budget savings in 2011, implementing just €4.7B of €11.2B in austerity measures, according to the Cologne Institute. 2012 is getting off to a slow start as well. No word yet on whether an EU/IMF team is headed to Berlin to pore over the nation's accounts.

    Already here are the consequences of the ECB assuming senior status to other sovereign bondholders, writes Richard Woolnough, who says the bank's explanation for not taking losses doesn't hold water. It's unsurprising that corporate credit is becoming more desired than the debt of sovereigns and banks where it's possible the ECB could get involved.

    Lawyers representing smallish-sized Greek bondholdersintend to file suit - likely in D.C. – against banks and Greece over the bond swap. They will argue the country reneged on a Greek-German investment treaty intended to protect investors and that banks failed to properly advise against the risk of loss. 

    Oil stocks take a hit after China reported a trade deficit over the weekend, raising concerns about economic growth in the world's second-largest oil consuming nation: Cabot Oil & Gas (COG -3.3%), Murphy Oil (MUR -3.2%) and Baker Hughes (BHI -2.5%).

    The WTO rules that Boeing (BA +0.8%) received $3B-$4B in illegal subsidies in the form of federal research grants and local tax breaks, but U.S. Trade Rep Ron Kirk calls the decision "a tremendous victory" for the U.S. because European subsidies to Airbus (EADSY.PK) "are far larger… and far more distortive than anything" the U.S. does for Boeing.

    Alpha Natural Resources (ANR -3.4%) takes a hit after reporting that an employee of its Kingston Mining unit suffered fatal injuries Saturday evening while working in a West Virginia coal mine. The coal producer has been under intense scrutiny in the wake of its purchase of Massey Energy, which owned the ill-fated Upper Big Branch mine where an explosion killed 29 miners two years ago.

    After meeting with Crocs' (CROX +1%) CFO, Stifel Nicolaus says it's more confident in the company's H2 growth prospects. The firm expects the company to report higher than expected Q3 EPS partly due to its uptake of new products, and maintains its current Buy rating on the stock. 

    Three lunchtime reads:

    1) Krugman: What Greece means

    2) New cars, housing, and economic recovery: Great expectations?

    3) As Fed meeting nears, it awaits clearer economic signals

  116. $4.50/Phil – Yes, I have noticed a slight slowdown in traffic.  I was only one of two people at a gas station today in a very busy intersection.  Having lived in LA for over 25 years, I have noticed for the first time, a slight decrease in overall traffic in the last few months.     

  117. lolo…….Cash but no AAPL?    You aren't the only one wondering what to do with AAPL right now.   Let me think about a play for anyone who has cash but no AAPL.   I'll get back with you.   Meantime, Phil may give us a good answer. 

  118. lnk – same for San Diego.  Traffic has been a bit lite.  Costco gas lines though are unreal here.

  119. AMZN / Iflan – The article makes a very compelling case for betting against AMZN.  My only concern is that AMZN is sitting currently on the 50MA and since this is a bot market they might jack the price up again.  So, just worried a bit on the timing of the trade; hopefully the fundamentalists will wake up from their snooze, hopefully…

  120.  Citigroup Inc. (C), the second-worst performer in the KBW Bank Index (BKX) last year, is grappling with a revenue slump. Chief Executive Officer Vikram Pandit is not.

    Pandit’s $15 million pay package for 2011 and a multi-year retention package announced in May could total $53 million, based on regulatory filings and an analyst’s estimate. The CEO also received $80 million last year from the New York-based firm’s purchase of his Old Lane Partners LP hedge fund in 2007.

  121. Greetings from the zoo – Phil, you still shooting for oil to hit 102.5 this week? And what about TLT, do you think it goes higher? Im keeping my short /QM, USO, and long TLT plays (unless you say otherwise)… Alrighty back to work….  Allah Akbar!

  122. lflantheman/AMZN short, do you think it's a good idea to sell AMZN weekly(this week) $185 calls for $1.25 if one has margin? TIA,

  123. Where’s the volume. Super low today.

  124. bobhu…I'm thinking that play would have a high likelihood of success.  Got to be willing and able to roll if necessary. 

  125. Pandit / Angel – I read that yesterday and had to refrain from throwing up! The excuse is always that if they didn't pay these guys that kind of money they could not find the talent to manage such a complex business.

    It's funny though as the US Army doesn't seem to have trouble finding 4 stars general that manage organization as complicated as Citi for less than 1% of the salary! I guess it's just a question of motivation.

  126. If the Fed's announce QE3, markets take off (not likely).  If Fed's announce the recovery is underway, market takes off.  If Fed's raise rates, market tanks (very unlikely).  VIX is in the crapper, and TRIN is holding high though….

  127. pharm
    CNBC just said low volume = bull market. Have not tuned in in months today was all I need for the next few. There are those who belive in anything!

  128. Gas Lines – I'd love to hear from all who notice conditions.  

    Cash, no AAPL/Lflan – I don't think anything is simpler than deciding you are willing to own AAPL at $350 and therefore selling the 2014 $380 puts for $30.75.  TOS says I can sell 10 (obligating you to buy $380,000 worth of AAPL) for a net $38,725 in margin and it drops $30,050 into your account.  That right there is a nice ROI to me.   You can then take $10,600 of that money and buy 2 $450/550 bull call spread at $53 and now you make $19,450 over $350 and up to $39,450 if AAPL holds $550 through Jan 2014.  Seems like a nice ROI to me and, if the bull call spread drops to $25, you can pull $5K out and use it to roll the short puts lower.  

    AMZN/Dpast – If we pop Nas 3,000, a lot of things may start to go nuts, including AMZN.  I'd be careful on the short side.  

    Pandit/Angel – Yep, we definitely have the wrong gig.  When we were young, who'd have thought being a  bank manager would be so rewarding?  

    Oil/Jrom – Yes, I think we were high enough last week for a few tankers to decide to come in and that should push inventories up this week.  Also, hard to see how refiners can make any LESS product than they've been making.  We had more production after Katrina and Rita shut down half the Gulf.    TLT may hit it's highs on Wed at 12:30 so be careful with them.  Oil I simply don't see as sustainable.  

    AMZN/Bob – Option expiration week – anything can happen.  

    Dow volume 61N at 3:13.  

    Good point on Army, StJ – or the President or the heads of various US departments with thousands of offices and tens of thousands of people under them or hundreds of foreign countries that have the same or people who run other large companies for 1/10th the amount that are just as complex (and they probably didn't lose Billions either).  It's a joke.  

  129. Speaking of the military…I went to see Act of Valor this weekend.  About the Navy Seals doing their Rambo stuff.  Pretty impressive, even though fictional.  Most impressive was the tribute at the end listing all the Seals that have died since 9/11 in the line of duty .    Looked like 40 or 50.   I know one thing for sure.  If these guys decide you need to be taken out, they are going to get you.  You can run from them, but you can't hide.    Bin Laden found that out, as have a few Somali pirates and others. 

  130. Pharm, what's TRIN and how does it work?

  131. AAPL/iflan – For whatever it's worth, in my "cash-only-at-the-end-of-the-week" port, my AAPL play for the week (and it's hard for me to see much past a week re where I think something won't go) – opened today – is 40 this week 435/440 bull call spreads for $4.10.

  132. aug – TRIN here.

  133. Phil and members:   I don't want to harp too much on AAPL, but I do want to remind you of something I posted probably over a year ago.   Someone inquired as to what to do with cash while figuring out how to invest the money.  I suggested using AAPL stock as your bank account.  I still do that to a great extent.   I d on't  have a lot of cash laying around, but I do have a lot of AAPL stock laying around.  And , I still think it's not a bad idea to just use the AAPL stock as your "bank account". 

  134. Phil, Re: Your observations about Gas lines.
    We shop at Safeway and  when we spend $100  we get $.30 off of our next tank of gas. Their price is not bad to start with.
    Last Wednesday I pulled off the freeway and found the line at Safeway to get gas was clear around the parking lot. Having to  go see a client I was desperate for time and pulled into a very  large Chevron. There was only other sucker there paying $4.40 for regular.
    So we are eating faster, bought  Safeway Stock and saving the .$.30 per gallon to buy a Prius?

  135. Phil – way past time to DD on the DIA March 129 puts…now at .55…or perhaps roll to the March 130's?

  136. Phil,
    You make such a great bear case, but seem to be looking for a higher market.  Are you giving in to Big Brother?  

  137. volume should pick up later in week on fed and triple witch

  138. EUR/JPY – looks toppy in a downward channel, weekly, daily, hourly and 15 min charts..

     So no three card monte or craps with my daughters college money; but blackjack should be OK, since it’s a skill, not gambling, right?  LOL
      Actually, I find it gratifying to find myself on the same wavelength in a very – dare I say it in connection with you – CONSERVATIVE  approach, so you’re preaching to the choir. I do recall you referring to the 5K the other day as a conservative one, on the other hand.
      I don’t think I presented the situation clearly to you in the post last week. The 529s I have for both are in the fixed option, and the other accounts I have for them are in cash or cash equivalents, for just the reason you stated regarding the propensity for Murphy’s Law to tank the market just when you HAVE to have the money for school. I need to cover 8 years at the undergraduate level (4X2); I have 5 &frac12; covered now and just continuing the savings plan I’ve been executing for the last 3 years should take care of the rest.
      It’s post grad where I had the question regarding the efficacy of the Income Portfolio strategy. My older daughter, currently a freshman in college, will likely participate in a 5 year to Master’s program. I don’t think that additional funding will be a big problem. My younger daughter, currently a High school junior, on the other hand, is into Veterinary Medicine and a post grad DVM program at Cornell, the only NY State DVM program of which I am aware, runs $28,000/year  tuition, for example.
      As the savings program I implemented for paying for their college is about the extent of what resources permit me to do, what I was thinking of is to use money from another portfolio, completely separate from the kids college money and from my retirement portfolio (although I always expected to get some contribution in retirement from it, but not be dependent on it to any degree) and in the 5 years leading up to Vet school, assuming she makes it that far, use the Income Portfolio strategy to conservatively build up to a point where it can make a reasonable contribution to fund Vet school. I would always have the wherewithal to use loans and other means to fill in partly or completely, if necessary.
       I’m certainly open to any other advice you might offer as to an alternate plan. The Income Portfolio just appeals as it seems to me to fill the bill well and has been flexible and effective from what I have seen. I would think if it built the portfolio up nicely in the run up to Vet school, I could just go more conservative or just stop at or near the time and go to cash. I suppose if I regulated it according to the directions of your last post regarding the subject it might prove serviceable to some point.
      Sorry if I’m belaboring the point, I’m just thinking the old adage, “Well begun is half done.” As always, many thanks for taking the time to make such comprehensive replies.

  140. time to tell th eoil cos you want to export to do it after domestic needs are met..nothing from any candidate for the gop or the president…shhhh..keep this on the down low..i mean would a half billion barrels make that much dif if it were going onto american gas tnks instead of chinese spr?

  141. Who is going to blow more QE out the door faster this week,  the ECB or BOJ?

  142. Gas
    Only one store in Jackson gives gas discount $.10 for $100 or $10,000 doesn't matter, but only 1 tank a day limited to 30 gals.

  143. Gas
    We used to get $.10a gallon  but Safeway raised it to $.30 a few months ago.

  144. scottmi…
    Agree.  Took that trade.
    Worried about the BOJ though.  Phil offered a nice explanation of the mechanics of the BOJ yen selling last night.
    worth a read.

  145. Hey jromeha. My son is back safely from your vacation land and is actually sitting in the same room as me right now. He was "only" there for 4 1/2 months and it was a training mission. But the stories he tells are disturbing, like when he first got there and some Afghan tried to "buy" him for what is apparently the males "Thursday night fun." The whole experience has clearly affected him and he said that 4 1/2 months was about all he could take of fake smiles and handshakes and various other things. He said the smart Afghans just want to get out of the country. One Afghan interpreter, who my son liked, asked for a letter of reference but he's not allowed to do that. Crazy stuff.

  146. Jobo – this one is for you…  My thoughts of today's action.

  147. BTW no lines for that because it has the corn based – 10% MPG blended in, worth $.40 less per gallon in miles.

  148. NF**X   That should come in just fine. 

  149. pharm???

  150. grenowwods- Just finished reading " The American Sniper" about the Navy seal with the most all time kills- get it for your son- he would enjoy- very easy read but makes one realize we have no clue what goes on in that part of the world!

  151. now I see… ;-)

  152. FU PCLN!!!

  153. Pharm,
    What finger is that?

  154. Anyone knows if TLT paid dividend monthly or quarterly?  Thanks.

  155. SQQQ-$12.26,
    selling the Apr 12p for $0.60 and buying the Apr 12c for $0.90, net $0.30 with unlimited upside – looks interesting

  156. PCLN is back at 650…. DAMN YOU PCLN!

  157. lflan – any AAPL calls in order?  I got lots of money sitting on the sidelines. 

  158. peedle – The same one my 4 yr old uses when he points at people…..or picks his nose….

  159. No sellers = no red.

  160. lolo…I would do that trade Phil outlined above.  It's a very high-probability trade. 

  161. Greno – been here 2 1/2 (only another 9 1/2 more), this country is beyond f#cked up… I am a liberal hippie (I know, doesnt completely fit with the mil stereotype and I get called a commie all the time) who is usually accepting of everyone…But this culture is one I dont think I will ever understand. Im not a religion fan in general, but this one… I mean the people who seen those Korans burning rushed in and were burned a decent bit just to stop some books from being burned! I mean even the most devote Christian would probably just say something like, "Ill pray for you." I dont know…  I cant say Im against our mission here, but I can say that below the 0-6 level there is almost a universal pessimistic attitude toward the people and this country in general… 

  162. AAPL – looking for something simple i can nibble on.  What about April $575 calls?

  163. Haven't seen volume this low since 12/30/2011…yikes.

  164. WTF is the mission?  11 years later in a backwater… 
    oh!  Growing opium, maybe.

  165. Well that was 5 1/2 hours of my life I'm never getting back.

  166. So funny how many times CNBC is mentioning gold today with their gold special tonight.  I guess they have a lot of promises out to people that they could push gold higher into this week's expirations and they are getting nervous since the Fed looks like a bust so it's an all-out push to get what they can out of it before people head for the exits.  

    Seals/Lfan – I had a friend in college who washed out of Seals, he was a scary guy!  Physically, the guy was perfect, huge, strong, fast but his problem solving and leadership weren't good enough and this guy wasn't a dunce.  I've always had great respect for the program knowing how high their standards are.  As to the AAPL bank theory – any company can crash.  Look at the time MSFT fell off a cliff when they declared a dividend or PFE has their tylenol thing.  SNE had laptops catching on fire and fell 20% in a week.  Money in the bank is insured, no matter how much you love a stock, if you can't afford to lose 20% of your investment then it's a foolish risk.  Since you only collect 2% in a bank and you can buy AAPL for $550 and sell the Jan  $530s for $73.50, I am in favor of taking 20% of your bank money and making 10% on that to boost your returns on the rest as you're in AAPL for net $456.50 and, if they drop to $350, then you can deploy 20% more of your cash and own AAPL for net $400ish, which doesn't seem like a terrible commitment (and then you sell another $50 worth of calls and drop basis to $400) so you only need 13.5% more to DD.  That way, your upside is 10% on 20% (2%) and the other 80% makes 2% (1.6%) and now you net 3.6% on your entire account and only if AAPL gets REALLY cheap, are you committing to putting a lot of your cash holdings into it.  Of course, that's just an example, I'd prefer to do the back end with a bull call spread and a short put and commit much less cash to the trade.  

    Safeway/Rip – That's interesting as neither Tina or I go looking for discount gas.  I will have to ask around and see if there is some place that's taking all the business.  I know back in 2008, COST was being a little too generous with their gas discounts that it dug into their overall earnings but it was a smart play in the long run as it pulled a lot of business their way.  

    DIA/Jerconn – No, we did a DD already and if the Dow isn't going lower, we're just screwed although there could be stupid spike up tomorrow worth a DD but, either way, now would not be the time to do it.  

    Higher/Peedle – I'm looking for a short-term correction but, long-term, they can't put the hyperinflation genie back in the bottle.  Eventually, anything you buy is likely to double by the end of the decade at worst.  I'd just prefer a better entry.  It's not about Big Brother, it's about twice as many Dollars, Euro, Yen and Pounds in circulation than there were 5 years ago.  Only because the economy is dead has the velocity of money dropped to the point where 2x Volume x Velocity = Same GDP.  The volume is not going to go away so any uptick in velocity is going to push prices much higher very quickly and it will take another Volker to stop it, not the spineless, clueless paper-pushers of the current Fed.  

    Big save and pin in the Euro at $1.315, Pound back to $1.563 but that's lame.  82.24 Yen to the Dollar and no movement from the Swiss.  Nat gas disturbing at $2.26, making new decade lows every day.  

    Income portfolio/Kevin – Well trades like BBY or BA above are a good way to start but make sure you are realistic about your losses (if any) and what impact they would have on your future.   You can always talk yourself into gambling but that doesn't mean it's the right answer.  Timing is everything and, although the market took a big hit, we were not fully invested at the time and we took the opportunity in the summer to get more aggressive – that could just as easily have been a mistake if we had another 2008 and rather than making $100,000+ on $500,000, we could have lost $100,000 just as quickly.  To me, starting now is not a good idea.  Too many things are too expensive and the macros are too shaky.  If your investing premise puts time pressure on you – it makes it even trickier as you can't ride out a 40% dip so you need to be comfortable pulling the plug with a 20% loss or it's not even a good idea to start.  You really need to sit down with a financial adviser and look at the various alternatives before making a decision like that.  It's important to realistically assess the downside scenarios and where they would leave you and make sure you are comfortable with those as well as making sure your goal to the upside is realistic.  The more you try to make, the more you will risk – that's a fact and these markets are nothing like the +/- 8% a year of history, they are more like a casino and that means it's not really appropriate for everyone.  

    Oil/Angel – Our army was burning 1Mbd at the height of the war.  I was never sure if that counted towards domestic consumption or not but probably not.  Somewhere in the middle east, there must be about 300Mbd more floating around than there used to be. 

    QE/Scott – If they do, it'll pop the Dollar way up if we don't follow suit. 

    Speaking of the Dollar, slammed down to 79.87 into the close.  Volume finished at 71M on the Dow – amazingly low.  

  167. correction….PFE has their tylenol thing….JNJ t'was.

  168. At the close: Dow +0.32% to 12963. S&P +0.06% to 1372. Nasdaq -0.2% to 2982.

    Treasurys: 30-year +0.07%. 10-yr -0.04%. 5-yr -0.06%.

    Commodities: Crude -0.96% to $106.37. Gold -0.68% to $1699.85.

    Currencies: Euro +0.2% vs. dollar. Yen -0.3%. Pound +0.26%.

    Market recap: Trading with little conviction and in a tight range, stocks closed mixed as the latest data from China added to growing concerns that its economy is cooling. Banks topped losers as Greece’s new bonds reportedly were trading at distressed levels. Crude oil dropped below $107/barrel; gold prices slipped below $1,700/oz. NYSE decliners led advancers nearly three to two. 

    Ray Dalio: Man and machine (Economist)

    Why Job Growth Is Likely to Slow (WSJ)

    Why Job Growth Is Likely to Slow (Economix)

    "Last year you only had to get 2 things right," says Jeff Saut, "You had to raise cash in March/April and put it back to work during the bottoming sequence of August-October." He believes a similar strategy will work this year, with his preferred sector being the cyclicals, as either the economy moves forward of the Fed unleashes QE3 if it slows.

    China Inflation May Provide Room for Stimulus: Economy (Bloomberg)

    "The pattern is set," says Kyle Bass, making the case for gold. Put any acronym you want on it, but central banks are going to continue to monetize debt by expanding their balance sheets. Bass also decries gold being taxed as a collectible, giving it a disadvantage to other assets. "It should be taxed as any other asset you own."

    Inequality by County (NYT)

    Investors can catch great deals with the stocks of a number of largely-overlooked global companies that strike close to the heart of value investors with their "extremely cheap" valuations and provide income-oriented investors a generous yield to latch onto, according to Morningstar. ADRs Making the grade: [MTFTEDCMSUWBK,RDS.AAMX, and TEVA.

    "Forget about $5 natural gas. When can we get back to $3," asks Raymond James after hosting a conference in which the consensus sees only weak prices for the next 12 to 24 months. Prices are off again today, touching a multi-year low as forecasts for unseasonably warm temperatures continue. UNG -2.1%.

    Solar stocks take a beating after Conergy (CEYHF.PK) CEO Philip Comberg warns the solar industry could be headed for a price war as demand sags and firms try to maintain market share. The interview in Germany's Handelsblatt effectively says pricing is falling below production costs. FSLR -6%SPWR -5.8%STP -4.6%YGE-4.4%TSL -3.4%.

    American Capital (AGNC +1%) gains after JMP Securitiesupgraded the stock to Outperform on valuation following last week's $2B follow-on equity offering.

    Amazon’s brilliant plan to pay you crazy money for your iPad 2 (Pando Daily)
    • The Case(s) Against Law School (NY Mag)

    Apple Wins Patent for iWallet: The one that will rule the World (Patently Apple)

    Warren Buffett on how to con the media (Market Watch)

    The Koch Brothers, The Cato Institute, And Why Nations Fail (The Baseline Scenario)

  169. jthoma – I'll pick that up and give it to him, after I've read it of course.

  170. Phil,
    You make a nuanced point about inflation that we should all be thinking about.  But doesn't hyperinflation require money being broadly available throughout the economy?  And not simply hoarded by our overlords?
    Also, if our economy is indeed dead, don't we need to get thru a systemic reset before things really get better?  This is the "prepper" case, right?  Something that resembles a collapse.  I have nearly an impossible time picturing this actually happening, but I was born in 1971 and have only ever been comfortable.  I'm not sure I trust my perception of what is possible.
    I think 6 months ago they overstated the bear case to scare everyone out and buy stocks cheap.  Now they're running the same scam the other way.   But that's me.  
    I guess my question is do you think there is any real chance of fixing any of what's wrong, or is the best we can do just to stay ahead of the curve for ourselves and our families…

  171. Jthoma:  More than Carlos Hathcock?  Wow, I hope he writes a bio, too.  Some Seal Team One buddies in SDO taught me to shoot over quite a few years, picking up where my WWII dad [Pac. theatre] left off.  Once it's a reflex, you never lose it, but I never did the long range stuff.  One of them was a close combat specialist, big Maryland farmboy; I asked him what his preferred cc technique was, and he laughed and said "a .50 at 1,000 yards."  He won the Navy Gold one year.

  172. Peedlew – Eur/Jpy the sqeeze is on, either pop or drop… or, to most annoy, a flatline…

  173. Phil
    I liked your inflation formula. I try to explain that every day and noone gets it, or that money to the bottom in any form is good for the economy.

  174. By the way greno- it’s called man love Not that there’s anything wrong with that! You know which workers did partook in it bc they come to base and their fingers have purple dye on them…

  175. LOL jromeha – yeah, that's what he said. It was an ANA guy who tried to "buy" him – apparently an amount equivalent to a months pay. My son was revolted.

  176. Have a grandson who works at a Sams Club gas station.  He's noticed that most people are only buying 5-10 dollars worth of gas at a time.  He's the early AM guy so his observation are those with jobs that are hanging on by the skin of their teeth.

  177. Local grocery store has 5 cents off on Sunday  of the stations in town the only one with people buying gas
    Also I was in a mall last Tuesday and there were more sales clerks in the mall than customers it was like a ghost town

  178. GDP Forecast / Phil – Interesting, all these European countries implemented austerity measure and now they have bought themselves 2 more years of sub-1% growth after 2 bad years already. And their debt levels are not much better than ours! And I would not be surprised if these forecast were wrong by a factor of 2! To think that Spain is going back to zero growth in 2013 would surprise me especially if Europe insists on them sticking to the 4.4% budget deficits when they project 5.8%. Cutting 1.4% GDP would be painful.

  179. Navy Seals / Anybody
    You all might remember that a few years ago the Interstate Highway 35 Bridge collapsed here in Minneapolis. As an aside, not my main point, the causes were determined to be primarily that the gusset plates that hold all the beams together were only one half inch thick, although the blueprints called for them to be one inch thick. So when the thing was built (I think in the '60's, not sure), it was "built" incorrectly, the people doing the building did not follow the blueprints. The other major factor was that the bridge was grossly overloaded at the time it collapsed, with construction equipment (they were putting another layer of "blacktop" or something on it), plus huge amounts of sand and gravel. So the construction company doing the re-surfacing were at fault for putting so much equipment on the bridge.
    But, back to main point. 13 people died. Dozens others injured. Biggest mass casualty event I remember in my lifetime in Minnesota. Somebody said to me "this was like our version of 9/11). Many dozens of cars in the water. If you never saw the pictures, I strongly recommend finding some photo galleries on line to look at the pictures. I went over a couple weeks later, and it was the most unreal experience I've ever had. Three foot girders twisted like cooked spaghetti. Also, three foot girders (about an inch thick steel) with cracks nearly all the way through….broken like twigs……imagine the physics…..
    After the first week or so (roughly), The United States Navy Dive Team arrived, to help with salvage and looking for bodies. The river water is like dark brown coffee, you can't see your hand in front of your face, and very strong current.
    A Minneapolis Police Office of some significant rank (Like Captain or something) was quoted on TV as saying "These Navy Dive Team guys make our SWAT Team look like a bunch of pussies". And he said that publicly!
    In Police culture, SWAT guys are always considered the Big Swinging D**ks.  So that says something.
    Wouldn't want to mess with any of those guys, ever.
    By the way, we had a female firefighter on the Mpls Fire Dept who was a true hero. She got there before hearly anybody else, and there is video of her, in nothing more than her blue Fire dept T-shirt and a pair of pants, tying a yellow safety rope around her waist and junping into the water to try to find anybody alive in the cars. She didn't (there were "air pockets" in some of the cars I think). But I remember thinking "man, that takes some real guts, to tie a rope around your waist and jump in to the rolling river". I hope she got a promotion.
    I'm kind of a pussy myself, so I've always admired people like cops, firefighters, advanced military guys, all those people who literally "put their lives on the line" to take care of the rest of us.

  180. augrusot / TRIN has a VERY complete educational section that covers nearly every techncial indicator known to man, although they can get very complicated in explaining some of it.

  181. AAPL
    rustle / kass / etc
    Just need to clarify something (sometimes, often actually, my brain misfires)…..
    In my post today about getting out of Apple, I mentioned "seeing the Doug Kass thing tonight". What I was referring to was his appearance / CNBC / I think it was Wed, when he talked about Apple as being in "mania" stage (great word, by the way, rustle). I originally wrote my post a day or two after that (but did not post it until today-long story), but what I was trying to say was that I wrote my note BEFORE I saw Doug on TV. Hope that makes it clear as mud. :)

  182. @Felipe
    It's unlikely that you can enter, personally, every trade idea you develop but do you ever execute one like this?
    "Cash, no AAPL/Lflan – I don't think anything is simpler than deciding you are willing to own AAPL at $350 and therefore selling the 2014 $380 puts for $30.75.  TOS says I can sell 10 (obligating you to buy $380,000 worth of AAPL) for a net $38,725 in margin and it drops $30,050 into your account.  That right there is a nice ROI to me.   You can then take $10,600 of that money and buy 2 $450/550 bull call spread at $53 and now you make $19,450 over $350 and up to $39,450 if AAPL holds $550 through Jan 2014.  Seems like a nice ROI to me and, if the bull call spread drops to $25, you can pull $5K out and use it to roll the short puts lower".

  183. Lowest volume day of the year.  This is the zombie market.  Undead.  

  184. Apple / Phil / anybody else
    you wrote:
    AAPL/Newbie – I was going back and forth with Option Sage (Market Tamer) about that this weekend and he put up that AAPL article on the main page.  While they may be short-term overbought, I don't think they are in the long run unless they begin to "Ballmerize" – then it's back to $85 at some point.
    LOL   – no chance that Apple ever "Ballmerizes", I don't think. I doubt they have anybody , anyplace in the company, who is that stupid.  I don't think we'll ever see $85 again (geez, I hope not).  Funny-I remember when it WAS $85, and thinking, "My God, that is a massive price for Apple".  I haven't read the book Walt Isaacson did about Steve (yet, I will), but I've heard Steve left a 5 year "vision plan".  Just one point about Steve and Apple….. Yes, Steve was  a brilliant mind, and we probably won't see another like him in consumer tech for a long time. BUT, he specifically ran the entire company with an iron fist, as we all know, and he also made sure he was always "the public face" of Apple. That wasn't just ego, he did all those Macworlds and WWDC's himself because HE knew how he wanted it done, and nobody else would do it as well, or in the way he wanted it done.
    I haven't watched the video of this last product introduction yet, but I think they will do well for a long time.  My point is that although Steve was the genius who saw things nobody else could see, the Company has thousands of brilliant engineers and product designers. Jon Ive  will probably be around for a long time doing the "Industrial (Consumer?) Design". so as long as the engineers and product visionaries can give him a decent product, he'll find a way to wrap plastic and metal around it and give it a mega cool interface.
    My commentary here and elsewhere about Apple is hardly meant to be long term negative. Not at all. Their products are by far the best in the universe, and I'm convinced they will continue to be for a long, long time. If I had unlimited money, there are at LEAST $20,000 worth of products that I would LOVE to walk into an Apple Store and buy right now.
    partial list:
    new iPod (all mine are broken)
    MacBook Pro
    Mac Pro
    Time Capsule
    27 inch Display
    Fully pimped out, that must come to well over $20k
    I've been a very, very hard core Apple Technology Systems guy for 20 years, and have worked with their stuff at a deep technical level, and I totally love the technology and the products.
    My only thinking/feeling the last few weeks is that the share price curve has been ridiculous. But, maybe the fundamentals of the company support it. I don't know, I'm not a fundamentals guy. It just feels like a stock that "everybody owns or wants to own", to quote Mr. Kass.   I'm not saying they won't go up a hundred bucks, I'm just saying in the very short term -one week to six months, it "feels" awfully expensive.

  185. jmm1951 / CNBC
    It is really sad that  CNBC couldn't do something better than what they do. There is an opportunity with a show like that to do a LOT better, obviously.
    Like you said >

    "The formats have never changed and the lots of really interesting programs that  COULD be made to educate and entertain the public about finance and  investing have never been made because the whole process is completely fossilized.".
    So true.
    But I guess it really all is about trying to keep as much market share as possible, which I guess comes down to "the lowest common denominator".
    I don't watch CNBC anymore, haven't for a long time. Trying to keep my mind "clean".
    Like Phil said recently, he watches the Bloomberg wire all day long and it never moves the market. But Bartiromo says one word about a stock and "to the moon" it goes.  Sad.

  186. Gasoline Price -Minneapolis
    current price is $3.69 today

  187. Newbie:  As you suggest, CNBC is not about investing, it's about entertainment and "eyeball count,", with Kramer the clown prince.  Didn't Bozo also honk  his horn every few seconds? 

  188. KORS- my 2 cents- MOMO's are always a challenge to short and this one qualifies. Stock finished strong today and the news likely was known already. Strictly from a technical standpoint, I would watch for it to break below 44 which is recent support. Possible big gap fill down to 35.

  189. Discount diesel in DR
    My taxi driver has discovered a source for discount diesel. You take a right turn off the main road and go a short way down a dirt road and there is a place with an above ground tank and a 1950's era pump that is enclosed in a concrete blockhouse with a cast iron door and huge padlocks. You pull up there and they sell diesel for 20% off the price at the Shell station down the road. (160 pesos for 1 gallon, which is about $4.25, instead of 200 pesos).
    I have a feeling it is probably diverted boat fuel, but diesel is diesel. Most of the taxis here run on propane.

  190. newbie/CNBC
    To really understand what any TV station is about, you have to look at the advertising, not the programs as the commercials are the real raison d'etre. Supposing you want to sell advertising for brokerages, stock tipsters,  and gold coins, then you design shows that would appeal to the target audience. If you want to sell Viagra and Cialis, then you invent the Golf Channel, and show Tiger Woods, holes in one, and a lot of fist pumping.

  191. Phil / Oil / anybody else
    When I said oil $7 and $3, obviously I meant gasoline. Sorry.
    Also, when I picked "Australia" as an example, I was just randomly picking a country, I did not know that gasoline was necessarily expensive there. I could have picked any other country.
    But here's what I really wanted your comment on Phil:   The whole "fungible" nature of oil.  Do you agree or not agree that oil flows around the world to whatever destinations and in whatever ways it will get the most money for the "producer"?  -Meaning both the country, such as the Middle East countries where the government gets a lot of the money for the oil, but also the Companies that drill / pump /transport the oil.
    Is there a lot of "smoke filled rooms" and behind the scenes skullduggery that determines how and where all this oil moves around the world, with a  /political / oil industry / US Government / friendly mideast countries /   "Oil/Industrial/Complex" invisible "power structure" that grossly distorts what some people would try to otherwise describe as a "free market"?
    I read two books about the Bush Dynasty, one by Kevin Phillips and one by, I believe her name was Kitty Kelly (something like that), and the relationship between the Bush//Herbert/Walker clan and the Saudi's goes back DECADES. I mean this is real dark CIA type stuff.
    There was a movie, many years ago, maybe like in the late 1970's. I don't remember what it was called (it was a "drama", and was in the theatres, I assume), but I think I saw it on TV.  There was a scene in which gasoline prices or oil prices were mentioned by one of the American Big Oil company GEO's guys, while they were sitting in the CEO's office, and the guy said "we'll just blame it on the arabs". And the CEO (who I *almost* can think might have been Marlon Brando, otherwise somebody very like him) said "we ARE the arabs.  (meaning the U.S. oil companies).
    My point is, and I could be 100% wrong (probably am) but it seems to me that it would be difficult, at any point in time, in the next 10-20 years, to somehow "control" the oil that is drilled and refined in the U.S., into KEEPING that product completely inside the country, if the demand and sale price were higher someplace else. Could it be feasible to do that, if legislation were passed? I think I read somebody above in today's thread or within the last day or two mention a politician could or should say they would "pass a law" that no oil could be taken from U.S. soil and sold outside our country, or something to that effect (sorry to the poster if I'm butchering what they were saying).
    What I mean is, if Exxon pumps a huge amount of oil each day inside U.S. borders, (AND Alaska and the Gulf of Mexico), if they could transport it to some other country (any country) and sell it for a lot more than they can sell it here (including transportation costs), wouldn't they do that? Or could the government stop them from doing that, if they wanted?
    Extreme example:   Say a barrel that is pumped in Texas can be sold for $100 in the U.S., but the same barrel could be sold at dockside, in some relatively democratic "U.S. friendly" country --Denmark-New Zealand-Japan, wherever, for $400, and lets eliminate all consideration of "taxes" of any kind,  and let's just pretend the transport cost would be $50, (400-100+50=they sell it for $250 more than they get selling it here) would Exxon send some of it's Texas oil to those places, and sell it at the $250, even if it meant "we" "came up short"?
    I hope I'm not over-complicating this. It's just a question and issue that has bugged me for years and years, because when I hear the politicians talk about someday being "energy idependent", it doesn't ring true to me. If they are saying it, and if it's not true, then they know it's not true. However, if it really IS potentially feasible at some point, then maybe they are speaking the potential truth, and if they are, then they know that also.
    So do you see a day when, let's say the U.S. consumes "X" amount of oil everyday, that the U.S. drilling/pumping/refining infrastructure could ever get to the point where we Produce that much every day, to roughly match "X", thus theoretically being able to say to the middle east or venezuela or wherever oil comes from, "we don't need much more from ya all, we got it covered"?
    You know all about oil, and I know nothing about it, so I'm sorry to sound so grossly ignorant.
      In fact, and again, I'm probably wrong, but I thought I heard on the radio a few weeks ago that we were a NET EXPORTER at the current time (like within the last month or so). Could that possibly be right?
     Do you see a time in the next 10-30 years when the U.S. could really and truly be almost completely "energy independent", where we are able to get all of our "energy sources" (of all kinds) from within our own country?
    Thanks Phil, and anybody else who knows about this sort of thing.
    I guess what I should really do is find a few really well written authoritative books on the subject and really study it. Anybody have any suggestions?
    I always like to have a real accurate intellectual understanding of a lot of the important issues of the day, and I've just never understood oil and energy, and it bug's me.  Seems like a lot of voodoo involved, also seems like everybody tries to keep it as complicated as possible.
    We have a huge Koch oil refinery here, outside the extreme edges Minneapolis area (stinks like hell), and my brother tells me that most of the oil/gasoline we use in Minnesota comes from Canada.

    Thanks everyone.

  192. jmm1951 / cnbc / target audience advertising
    Yeah, I know that's true. I guess I'm nieve, it just seems that GE would or *should* have a little more "public responsibility", since they are essentially a monopoly for that knid of daily television. But I guess that kind of thinking is immature/unrealistic.
    The longer I live the more amazed I get about the stupidity / ignorance level of the average / median american. This counrty is full of unbelieveably stupid and uninformed people.
    I've heard, don't know if it is true, that in Europe, the populace is generally MUCH more aware of reality, current events, poilitics, etc  and that the people understand things a lot better than Americans do.
    It is kind of funny though, and I kind of laugh at it every day, that nearly every web site I visit (related to finance/investing, etc) has big ads (and of course CNBC too) from online brokers, and they are ALL TRYING TO STEAL CUSTOMERS FROM EACH OTHER, all day, every day.  Not that there's anything wrong with that. I just find it humorous. You go to a website and across the top of the page are four Graphics- Advertsing boxes, one each for Ameritrade, Scottrade, eTrade (are they still in business?), Fidelity, etc.

  193. Navy Seals
    I wrote a post of several paragraphs a little while ago, and then tried to post it, and something went kablooey and it disappeared, and I'm not up to writing it again.
    I'l just mention this quote, which was the prime point…
    When the Minneapolis Interstate 35W bridge fell down, about a week later the United States Navy Dive Team showed up to help.
    One of the higher ranking people in the Mpls Police dept was quoted live on TV saying "these Navy Divers make our SWAT Team look like a bunch of pussies".

  194. Asia up nicely.
    CNBC says it's because of the BOJ.  Bloomberg says they're rallying because of, yes, you guessed it… GREECE!
    How do these people stay in business?  Phil, you may need to make PSW a TV channel if just to have a touch of sanity on the idiot box… Orwell's telescreens.

  195. Phil,
    I rolled last Fri to the this week 115 TLT Calls.  I was looking to cover those around 117, but that never happened today.  Do you have any suggestions on how and / or when to cover the 115's?  I was expecting more strength today and passed up the chance to cover at 116.5 or so.  Any thoughts would be much appreciated.
    thanks scot.

  196. Jmm1950
    During the little bit I was I’m the DR I was told that diesel fuel was smuggled in from Haiti.

  197. newbie/dumb people
    The longer I live the more amazed I get about the stupidity / ignorance level of the average / median american. This counrty is full of unbelieveably stupid and uninformed people.
    I've heard, don't know if it is true, that in Europe, the populace is generally MUCH more aware of reality, current events, poilitics, etc  and that the people understand things a lot better than Americans do.

    There are a lot of uninformed people in every country on the planet. I'm not sure about Europe, but for example in the UK they have the BBC which is a huge source of reasonably accurate information via several TV channels, many radio stations, and the Internet. However, this just means that most people tend to parrot what they heard on the BBC. Most European countries also have national newspapers which means that people who want to be informed are likely to read the leading sources. The US does not have national newspapers, and most people don't read Time or Newsweek. In his book about a walking tour of England in about 1984 (Island by the Sea) Paul Theroux commented on how everyone in the UK talked about the same news stories, for example an escaped convict. I think people in leadership positions in the US are usually very well informed (this may not extend to Congress), but that most people in the hinterland just live in their communities without much awareness of the outside world. If I can just give one final example, in the UK there has been a lot of media coverage and political discussion over the years of the issue of mentally ill people who are released from hospitals and then kill people and how this danger should be managed. In the US many similar dreadful events happen, but they rarely get attention beyond the local newspaper and don't become political issues on a statewide, let alone national level. How they are managed will often be decided by the Supreme Court with little or no grassroots input. Also things happen mysteriously, like Florida had a referendum item that banned factory farming of pigs on the grounds of cruelty to animals. I never heard any discussion of this issue before I saw the ballot paper and although the item passed, I have never heard of the residents of Florida protesting about the sale of pork imported from other less humane states that don't respect pigs in the same way!

  198. Nuance/Peedle – Yes, we won't get hyperinflation until we get wage inflation, which is what keeps me from being more bullish.  We don't need a reset (we sort of had one in housing and CRE), what we need is money to flow through the economy again but to drive up wages we need higher employment levels and that's not coming any time soon unless we're going to add 1M jobs a month for the rest of the year.  I don't subscribe to the prepper case, see "The Worst-Case Scenario:  Getting Real With Global GDP," which I wrote in June of 2010, when we had another 10% drop in the markets and people were very disheartened but I was calling it a buyable bottom at S&P 1,050.  I think, on the whole, that hyperinflation is the fix.  We can never pay back our debts – it's just never going to happen so we either default (unthinkable) or we print money to pay off our debts.  Default leads to the guillotine for our leaders and the top 1% so I'm pretty sure they're going to choose to print money…

    GDP/StJ – I think that all forecasts underestimate the domino effect of austerity.  China already feels Europe's pain, even Germany and Australia are slowing down – how do people in France, the US and the UK think they won't be affected?  That's just not how the World works anymore.  

    Big Chart – RUT right on the line, they are going to be key.  Futures up half a point at the moment with Dollar at 79.73 and oil touching $107 again.  

    AAPL/Flips – It's a bit long-term conservative for my taste but it's a good trade for a more hands-off style portfolio.  I prefer to wait for stocks to fall and then get aggressive on them but sometimes, you do get bored waiting…  

    KORS/ZZ – I'm not sure if insiders cashing in on an IPO is a smoking gun.  Sometimes there are tax issues and people NEED to cash shares in.  I certainly don't think they are a buy but I'd need more reasons to short them or we might have to listen to Jabob saying "FU KORS" as well every day.

    And what Pstas said!  

    Fungible/Newbie – Frankly, by the time I got to the end of your comment I had not idea what the question was anymore so I read it all again and now I need to go to sleep.  If oil were truly "fungible" then Canadian oil wouldn't be trapped in the low $80s and gasoline in Saudi Arabia wouldn't be $1 a gallon (or many other OPEC nations) etc. etc.  Again, I think you miss the point that there is NOT a shortage of oil so it's not about keeping it in this country or that country.  There is an adequate supply to meet the demand and, therefore, the price of oil should be a reasonable mark-up over its extraction cost.  What you have though, is a monopolized (or oligopalized) supply that is not extracted in a free market, which prevents price mechanisms from working properly and ON TOP OF THAT, you have speculators controlling the flow of oil and you also have local refining and distribution cartels doing what they can to jack up margins along the way.  

    What's really terrifying, is these same people are already moving to take control of our water supply and, when they do – you can expect the same sudden shortages and supply shocks and price spikes we get with oil.  When they are done with water, I won't be surprised if they figure out a way to go after air – the real criminals are the ones who insert themselves into the human necessities, usually where their participation is not even necessary, in order to put themselves in a position to profit from every basic human function – the kind of things you can't choose to cut back on.  

    As to whether XOM would send a $100 barrel of oil somewhere else if they could make another $300?  Duh, wouldn't you?  The nature of the markets mean that won't happen but what speculators do is try to push the price of all oil to the high end of the curve.  We are a net exporter now because it's more profitable for our refiners to ship oil out than sell it here.  Plus, we're not using it anyway (see today's demand chart).  Perhaps this cartoon will help you: 


    Also Newbie, your 2nd attempt at your paragraph on Navy Seals made your point infinitely better than your first attempt BECAUSE it used 1/10th as many words.  Think about that.  

    PSW TV/Peedle – I met with Sirius about doing a Sirius Stocks channel but it never went anywhere.  I did kind of like the idea of doing something similar to what we do here but on the radio live during market hours.  I used to do a radio spot with ZMan, those were lots of fun…  

    TLT/Scott – So greedy. You violated the Microwave Oven Theory – you let some arbitrary target you set in the past bind you to poor actions in the present in spite of new information (ie. my 10:18 comment on TLT or the general concept of ALWAYS selling into the initial excitement).  And with this week calls, you should be totally ashamed of yourself for not taking the money and running when you had the opportunity.  So those are my thoughts, not much help.  Now you'll have to get lucky into tomorrow's auction or it will be time to roll out to a reasonable spread in April.  

    Uninformed/JMM – I think the British are far better schooled in history than we are and most have a passable knowledge of philosophy, geography and economics.  They all know their multiplication tables and, of course, they are generally good at English (and most have a 2nd language) so they are simply more prepared to process news than the average American.  Also interesting in British schools is that they teach sex ed and religion but they teach religion as if you have a choice to believe what you want – they just want you to know about them all, which I think is great.  Imagine US kids coming home with the Qur'an as required reading?  

  199. EUR/JPY – look slike the BOJ is edging ahead in the QE race…

  200. TOS iPad app – updated the iOs5 on my iPad 2, and now the TOS iPad mobile app won’t open.

    Anybody else have this issue? TIA

  201. aussie_opt. I am in the same boat.. it sucks

  202. Good morning! 

    Thanks for the heads up, won't be upgrading the IPad for a while.  

    It was TOS that let me look at the futures in bed earlier and decide it wasn't worth getting up for other than the usual oil short at $107 but if I still have to get up to tell you guys that one – I'm giving up!  

    Dow (/YM) just now slipping below 12,450 so that line can be used and RUT 817 doesn't sound like a line but they consolidated there all night long so we may as well use it and Mr. Dollar is heading back to test 80 from 79.74 so I'm expecting a good dip from oil.  Oh yes, and gold (/YG) is very playable below that $1,700 line these days.  

  203. So, what have we learned lately?  

    We've learned that the Dollar gets stronger when the EU opens.  That's our classic 3am trade although Europe doesn't open until 4 this week so kind of messed up.  The Euro was $1.3078 at 1:40 on Monday, topped out at $1.32 when Asia opened and the EU had been closed for 10 hours and has since fallen back to $1.3132 so the people who LIVE in Europe seem to be the ones who want out of the Euro.  

    The Yen made a huge move from 82 to 82.70 and that saved the Nikkei off that 9,850 line.  That means the BOJ is back to buying Dollars today (since the Euro dropped and the Dollar popped) so we can expect to go over 80 and that gives us confidence in our shorts.  

    Oil is already $106.80, gold $1,698, silver $33.50 (good short line on /SI), copper $3.87, nat gas pathetic at $2.25 and gasoline $3.33 (1/2 of $6.66 – Lloyd must be pleased!).  

  204. For those who don't know, the basis of the 3am trade began long before the whole World went manipulation crazy.  The BOJ have been propping up the Dollar for years to make the Yen weaker so during the Nikkei sessions, like clockwork, they would buy Dollars to knock the Yen down and make their exporters happy.  The nature of BOJ buying was that it would come in waves so the 3am trade was streaky and would work for weeks, then not work, then work for weeks again.  I think generally they would approve some Billions of Yen and spend them and then they'd need to go print more before the next round.

    What that meant is that, at 3am, when the Nikkei closed, we could count on the Dollar being at the Day's low and that meant the Futures would often be at the day's highs – or at least the pre-market highs and there were very easy shorting opportunities.  Since our premise was that the Dollar would go up – just like today, we could pick a line like 80 and only stick with our short plays if the Dollar was over – otherwise our premise is shot and we just walk away and try again tomorrow.  

    This thing was such a regular joke for years that, for a while, I went about 6 months detailing the trade in the public post – just to see if more people participating would break the cycle but it is amazing how strong it is – even the Forex traders couldn't stop the Yen from rising (and why would you when you can play the Yen up from midnight and win 3 out of 4 times?).  So we learned that the BOJ will do ANYTHING to defend the Yen at certain levels.  

    The big difference is that, lately, they have changed strategies to prop up the Euro as well as the Dollar and that makes it much trickier for us to play.  Oh yes, and the 3am is not literal – it's AROUND 3am and this week, with the daylight savings time, I couldn't possibly tell you how it all lines up.

    I can tell you I'm a dumb-ass though as I said right in the Weekend Reading comments at 1:42 am yesterday:  

    Retail sales is 8:30 on Tuesday and, as I've noted, we had an extra day this Feb so 3.3% improvement is beat in plus inflation (unmeasured by the Fed but bumping up prices), plus very high gas costs plus huge improvements in auto sales should equal a very good sales report pre-market Tuesday so, if we do fall off today, it might be good to make an overnight bounce trade.  

    We forgot to make a bullish bet into the close and we are, in fact, up ahead of retail sales and may spike higher still on that good news.  So let's not expect to make a lot shorting the Futures this morning but, at 8:30, if we spike up, that might be a good shorting opportunity again.  

  205. Tuesday's economic calendar:

    7:30 NFIB Small Business Optimism Index

    7:45 ICSC Retail Store Sales

    8:30 Retail Sales

    8:55 Redbook Chain Store Sales

    9:00 Ceridian-UCLA Pulse of Commerce Index

    10:00 Business Inventories

    1:00 PM Results of $21B, 10-Year Note Auction

    2:15 PM FOMC Announcement

    6:00 AM Overseas: Japan +0.1%. Hong Kong +1.0%. China -0.2%. India +1.3%. London +0.7%. Paris +1.1%. Frankfurt +1.0%.

    Obama's Stimulus Helped Grow Debt, Not Economy: Ramesh Ponnuru.

    As US Rakes Largest Monthly Deficit In History, 2012 Tax Revenues Net Of Refunds Trail 2011

    84% of Actively Managed Mutual Funds Did Worse Than Their Benchmarks In 2011.

    French inflation declined unexpectedly in February, with consumer prices up 2.5% from a year earlier vs. +2.6% in January and +2.7% in November. Economists had expected inflation to hold steady at 2.6%, but apparently a slowing economy is outweighing the impact of higher oil prices

    The Bank of Japan holds off further easing (following last month's ¥10T boost), leaving its overnight call rate unchanged and sticking with its inflation target. As expected, though, it will extend a cheap loan line for growth industries. The yen rises 0.22% against the dollar, which buys ¥82.115.

    Russia's central bank leaves its rates unchanged for the second month running, saying the current rates are likely to strike the right balance between checking inflation and spurring growth in the medium-term. The decision was widely expected. Russia's blue-chip Micex index +0.3%.

    Soaring Target2 Imbalances Stoke German Risk Angst: Euro Credit. German angst is growing as an entry on the Bundesbank's balance sheet swells to a sum worth about 20% of economic output, a sign of the extent to which Europe's largest economy is funding the region's laggards. The ECB's Target2 system, which calculates debts between the euro region's central banks, shows the Bundesbank is owed $656 billion, up almost 65% from a year earlier. German central bank President Jens Weidmann wrote to ECB President Mario Draghi last month to warn about growing systemic risks. "The Germans are very much justified in their concern," said John Whittaker, an economist at Lancaster University Management School. "The Target2 liabilities are just as risky and just as real as holding the government bonds of Greece and other peripherals."

    Spain's self-declared deficit target of 5.8% of GDP "is dead," says Eurogroup chief Juncker, as European finance ministers reach an accord with Spain to cut an additional 0.5% of GDP out of the 2012 budget. Spain still says it will hit the eurozone's 3% limit in 2013. 

    EU booster today – Greece is fixed!  Eurozone finmins sign off on Greece's second bailout, clearing the way for the first payment from the €130B package to be made later this month.

    Greece should exit the euro, according to Andrew Tyrie, chairman of the U.K.'s Treasury Select Committee. In a well-received speech last night, Tyrie said the current lull in the eurozone crisis should be used to craft a permanent exit for Greece. He also called for the IMF to bolster its war chest while "getting tough" with the eurozone.

    After Greece, Here Are The Four Things That Keep Bank Of America(BAC) Up At Night.

    EU ministers may freeze €495M ($651M) in development aid to Hungary after the country failed to narrow its budget deficit in a "sustainable" manner. The move, up for vote today, would affect 29% of Hungary’s share of so-called EU cohesion funds.

    Ore-Shipping Cost Seen Falling to Decade Low as China Cuts Target: FreightRates to ship iron ore, the second- biggest cargo after oil, are poised to drop to the lowest level in a decade after China cut its growth target, signaling weaker demand from the world’s biggest buyer of the commodity

    High rents and relatively low supply are feeding a potential bubble in the home rental market. In certain markets rents are up almost as much as home values are down: In Chicago, for example, rents are up just over 9% annually while home values were down just over 10%. Now, with home affordability hitting record highs and investors starting to buy again, investors are starting to worry about a tipping point lurking in the shadows.

    ???  Short interest on iShares Home Construction ETF (ITBhit an all-time high, but it's not necessarily a cause for concern over the fund’s prospects. Contrarians sometimes view a jump in short interest as bullish, and for ITB, there’s precedent: a sharp rise through late Oct. 2009 helped start a six-month rally. ITB's top five holdings: DHILEN,TOLPHMNVR- I'm pretty sure that you can't possibly compare the two periods and that this IS actually a bad sign.  We'll see…

    Sentiment in Homebuilders 'Gone Wild', Pros Say Steer Clear.

    U.S. Subprime Mortgage Performance Weakens on Soft Home PricesDeclining home prices weakened the performance of U.S. subprime residential mortgage-backed securities collateral over the past three years, Fitch Ratings said. Fitch said changes in the remaining collateral backing the securities and an environment of falling home prices are weighing on the loans' overall performance.

    Meredith Whitney was right. No, there weren't "50 to 100 sizable defaults" in muni bond markets, but as Duff MacDonald writes, her general point that municipal finances were a mess and would get worse was spot on. "Laugh at her all you want, but then try this: Go find one person who says their local taxes are falling or their municipal services have improved… I wish you luck." 

    California's Greek TragedyNo one should write off the Golden State. But it will take massive reforms to reverse its economic decline.

    The Fed is fighting a civil lawsuit subpoena that would put Bernanke on the witness stand, requiring the Fed chief to testify on conversations he had with BofA execs before the lender completed its Merrill purchase. It's rare for an acting top regulator to be deposed in a private case, and the Fed believes Bernanke's conversations aren't central to the lawsuit. 

    Fed To Take Propaganda To The Schoolroom: Will Teach Grade 8-12 Students About Constitutionality Of… The Fed.

    The Fed unveils its doomsday scenario for the upcoming bank stress tests: how the 19 biggest U.S. banks would survive a world with 13% unemployment, a 50% drop in stocks, and a 21% tumble in housing prices. The Fed plans to release full results Thursday at 4:30 p.m. ET. (earlier: III

    Pandit earning his bonus?  Citigroup (C) may emerge the surprise winner when the Federal Reserve reveals the results of its bank stress tests on Thursday, which could include a dividend boost to its shareholders. Although analysts generally expect banks to pass the tests, investors will be closely watching how generous the Fed is in allowing banks to increase dividends and repurchase shares.

    The U.S. will file a complaint today with the WTO over China's quota for rare earth exports, with Pres. Obama expected to personally announce the action.

    Evergreen Solar to Abandon Massachusetts FactoryEvergreen Solar Inc. said it has failed to find a buyer for its Devens, Mass., plant and plans to walk away from the facility, which was launched with some $50 million in state aid. The company asked a bankruptcy judge for permission to abandon the property before a $543,000 property tax bill comes due.

    Yahoo (YHOOsues Facebook (FB) in federal court, alleging a number of FB's products infringe on its patents. "These technologies are the foundation of our business … and represent the spirit of innovation upon which Yahoo is built … We are confident that we will prevail."

    Facebook (FBresponds to the Yahoo (YHOOlawsuit: "We're disappointed that Yahoo's effort to engage with us was limited to a few short phone calls … We will defend ourselves vigorously against these puzzling actions."

  206. With iOS devices accounting for 60% of all mobile search traffic as of December (according to comScore), and Google (
    GOOG) predicting mobile devices will eventually account for 20% of all paid search clicks, Apple's (AAPL) Siri is a threat to Google's mobile search revenue, says Barclays. Though Google is working on a Siri rival for Android, that won't help its iOS position. (previously)

    Wal-Mart's (WMTefforts to partner with studios to promote their UltraViolet platform for streaming DVD content could go nowhere fast, if a report that Wal-Mart will charge $2-$4/disc to make a DVD UltraViolet-capable is accurate. Says Dan Rayburn: "The studios are doing exactly what consumers don't want, which is forcing them to pay multiple times for the same piece of content." Apple (AAPLmust be pleased.

    In a major departure from its historical focus, Intel (INTC) isdeveloping an Internet-based TV service to sell to consumers, and has been talking with media companies about creating a "virtual cable operator" that would offer channels in a bundle. The TV service would rely on Intel-built set-top boxes that feature the company's own processors.

    Quick take on Intel's TV efforts: Building a new TV service would be a costly gambit for Intel, and shows how desperate the chip giant is to establish a strong presence in the TV processor market, after abandoning it last year to ARM (ARMH) and MIPS-based solutions. However, Intel's willingness to offer channels in a bundle, rather than on an a la carte basis, could make media execs more receptive to its efforts than to Apple's (AAPLovertures.

    Pakistan Tells White House to Stop Drone Missions After Disputes Fray TiesPakistan has told the White House it no longer will permit U.S. drones to use its airspace to attack militants and collect intelligence on al-Qaeda and other groups, according to officials involved in the talks

  207. your not kidding about Chicago rental market--my daughter was just hired by the Obama campaign headquarters in Chicago and is paying double the rent she paid for an apt in DC—did not get double the salary though

  208. Question Every one is crying about gas prices why don't they switch to nat gas much cheaper ?????

  209. Phil,
    I did the April 19/33 BCS and is up now. Would you keep holding this or get out with a 25% profit now? Thanks

  210. Phil/religious education UK
    Ah, yes, as part of the deal by which government took over elementary schools formerly owned and run by the Church of England, it was agreed that religious education would be part of the curriculum in all schools and that there would be an act of worship at the start of each school day. (This was called Assembly). This created the interesting anomaly by which the only mandatory subject on the curriculum in English schools is religious education, while in the US religious education is the only subject that is banned. As a result English people are heavily indoctrinated God-fearing people, while Americans are all happy agnostics? No! Actually the reverse is true, because the last thing on earth that churches in the US would want to see would be a rational attempt to educate people about religion or any classroom discussion about the truth of religious doctrines.

  211. yodi/switch to gas
    In a free market, they probably would. As I have mentioned before, many taxi drivers and others here in the Dominican Republic run their cars on propane. It is very cheap to do the conversion and install a tank in the trunk. It seems to be impossible to do this in the US for regulatory reasons, insurance coverage etc., and because of safety concerns. However these issues don't seem to be much of a problem in the DR. Sugar cane alcohol is more of a danger when drivers use it as a fuel, because it affects acceleration, braking, and steering,  especially after dark. Every aspect of life in the US is controlled by the stifling and parasitic legal system, and I think a lot of people who vote for "less government" think they are voting to get out from under this, but they aren't.

  212. jmm1951 
    Thanks and sad to read you explanation. Are they not using much more dangerous fuel for rockets? I can only shake my head. They must have picked up that stupidity from the Germans