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Tuesday – Fox News says President Not to Blame for Oil Prices – America Must Conserve!

For once I have to agree with Fox (and thanks to D Virginia for the link):  

With gas at $3.87 and over $4 in California, New York and Illinois, Fox news says other journalists don't check "the substance of the accusations against the President," the media needs to "look at certain claims and promises to see what the facts are behind them."  And what are the facts that Fox News presents us with?  

  • Cal Thomas:  "No President has the power to increase or to lower gas prices – Those are market forces."  
  • Neil Cavuto:  "China and India are slopping up oil faster than we can these days and THAT is the not so sinister response to what's going on."
  • Cheryl Casone:  "At this point, it really is tough for this President, I have to be honest with you, because he really does not have any control over what's going to happen with the markets and with the economy and with oil prices and with supply and demand and gasoline – it really is out of this President's hands."  
  • Bill O'Reilly: "Yesterday oil hit a record high and politicians can't do anything about it."  
  • Joe D'Agostino (VP of NYMEX on O'Reilly): "The only thing we can do is start to use less energy."  
  • Bill O'Reilly: "If every American who owns an automobile or an air conditioner says "I'm going to use 10% less" – the prices then would fall… Politicians can't do this."  
  • News team:  "Get rid of gas guzzlers, buy decent insulation for your house and tell your local, elected officials to get on the stick and do some more mass transit/infrastructure spending because those kinds of fixes that can really help Americans."  
  • News team:  "Drilling an ANWR would reduce the price of oil by about 40 cents a barrel (1 penny per gallon) or maybe as much at $1.40 per barrel (3.3 cents per gallon)."  "If we drilled in ANWR we would get 4% of our daily consumption in oil."  "It would take 20 years for saving from ANWR drilling to be realized."
  • O'Reilly: "So the next time you hear a politician say he or she will bring down oil prices, UNDERSTANT IT'S COMPLETE BS!  If Americans want lower gas prices, cut back – that's what the candidates SHOULD be saying.  Sell those SUV's, ride a bike when you can.  If every one of us bought 10% less gas, prices would fall fast."  

I'm sure by now you've realized that sure, this was Fox – but it was Fox when George Bush was President and oil was $130 a barrel, on the way to $145.  If it sounds almost exactly the opposite of what Fox sounds like now that Barack Obama is President and oil is at $107 (17% LOWER than it was then) then you perhaps realize what a TOTAL PIECE OF CRAP, PROPOGANDA-SPOUTING, MANIPULATIVE HATE-FEST Fox news is and how you can't believe a single thing that is broadcast over their airwaves.  

This is a television station with no morals, no scruples, no concern for anything other than positioning their own candidates, right or wrong and painting a picture with words and images and "experts" who will back up whatever BS it is convenient for them to shove down your throat.  It's not journalism – it's an outrage!  

I especially love the part where O'Reilly essentially comments accurately on Newt's $2.50 per gallon gas promise – "COMPLETE BS!"  That sums Newt up nicely.  Oddly enough here's Bill O'Reilly – SAME GUY – on the SAME STATION – under a different President, discussing the SAME ISSUE:

To his credit, O'Reilly plays the part of the skeptic but Newt wins him over in the end and O'Reilly takes the opportunity, of course, to sell that Keystone Pipeline Fox is working so hard on.  Not one mention of conservation in the "drill baby drill" solution.  Is it still "complete BS"?  We report, you decide…

And why does Fox still call Newt "Mr. Speaker"?  The man was forced to resign in disgrace and was brought up on multiple ethics charges and paid a substantial fine.  Did we still call Agnew "Mr. Vice President"?  Do we call still call Rod Blagojevich "Governor"?  Do we still call Fox "News"?  

Clearly Fox thinks nothing of lying to their viewers.  Whether they were lying in 2008 or they are lying in 2012 – does it matter?  This is not news, this is a blatant propaganda network that is seeking to brainwash their viewers – and it works fantastically well.  I am constantly attacked by people who hit me with the SAME EXACT talking points over and over and over.  These are not original thoughts – this is just those little sound-bytes that are used by Fox and the Right in general over and over and over again until people simply believe them to be facts – no matter how ridiculous they are.  

The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over.  Make the lie big, make it simple, keep saying it, and eventually they will believe it.” – Joseph Goebbels

I could go on all day about the BS that goes on at Fox, the WSJ and every other media outlet Murdoch's slime trail passes over but really I was just killing a little time ahead of the 8:30 retail sales report.  In our Weekend Reading Post, I had said to Members in Chat at 1:42 am Monday Morning:  

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.

Unfortunately, we forgot to make that bullish bet and the Futures are indeed up half a point ahead of those numbers and ahead of the Fed as hope for QE3 springs eternal, no matter how many times the Fed tries to soft-peddle it.  We'll know in a few minutes what the headline number is and then I'll see if we can figure out what reality is but our knee-jerk reaction is going to be to flip short in the Futures if we get a nice spike up.  

8:30 Update:  Retail sales fell a bit short!  Up 1.1% vs 1.2% expected is no tragedy, unless you consider that last February had one less day than this one (3.3% more days this year) and that it says right in the first paragraph of the report that the data is not adjusted for price changes (ie. inflation).  So, unless you think inflation is lower than 1.1% – this report is really not very good.    

The key drivers were building material and garden equipment and supplies dealers sales were up 13.8 percent from February 2011 and gasoline stations were up 10.3 percent from last year.  We already knew HD and LOW and SHW were doing great as more people fix up their homes as they sure can't sell them while the banks are also fixing up the foreclosed homes they do hope to sell.  And, of course, I'm not entirely convinced that forcing consumers to spend $4Bn more Dollars on gasoline than they did last year is a "good thing."   

This is certainly not a bad report but that's not necessarily a good thing as it pushes the Fed back off the QE bandwagon as they have fewer and fewer reasons to "pump you up".   As you can see from our handy-dandy retail sales chart, a strong Retail Sales Report indicates a demand for Dollars and a demand for Dollars makes the Dollar go up.  Generally, that in itself is bearish for the markets, which is why we like to fade the initial positive reaction to a bullish Retail Sales Report as the Dollar tends to climb and wipe out the early gains.  

Also, let's note that the price of oil and gas is up 18% from $90 last February but the actual sales of gasoline are only up 10.3% so we are following Fox's advice (vintage 2008) and using less gas only the crooks at the NYMEX are just charging us more money per gallon to make up the difference.  How long can they keep this up before breaking down?  This morning at 4:52, my comment in Member Chat was

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 (/CL) 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.  

Fortunately, oil hung out near $107 right up until 8:35 so it wasn't only the early birds catching the worm this morning.  Already we are hitting $106 and that's a gain of $1,000 per contract on those (/CL) futures – not a bad way to get our day started but my target for the week remains at $102.50 but we are playing $105 for the bounce, which worked very well for us yesterday.  Gold is also doing well at $1,685 and we're also waiting patiently for the big drop there as the monkeys get tired of starting at their shiny bits of metal.  

Now we have the FOMC announcement at 2:15 to look forward to and Treasury has $21Bn worth of 10-year notes to peddle so TLT should be a nice pick-up this morning at $115.35 out of the box, probably with the weekly $114 calls at $1.45 for a quick run back to near $116 by 12:30.  So there's a nice trade to make this morning and we already knocked one out of the park in the Futures so no pressure on the rest of the day – we'll just see what happens…  

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  1. Holy Sh*t Phil

    Fox really gets your blood pressure up. 
    Mingya…..there's no doubt that your jugular vein had to be close to popping when you typed that line……damn…..all capital letters.  There must have been some serious steam vented when you hit the return key after that flurry. 
    Look…….we can't have you watching the fair and balanced network…..getting all worked up……having the big one….then leaving us behind to navigate this difficult market on our own.  You need to discontinue watching Fox or get one of these.

  2. LOL Exec – I thought that was going to be a link to a Real Doll, not a stress ball!  I'm fine thanks – just trying to get through to people in ny own subtle manner.  ;)  

  3. Dollar up = Futures up

    Hmmmmmm…….that's been happening more and more frequently.  Looks like they're setting up for a big push.

  4. Man, dollar reaching escape velocity…

    Oil lines

    R3 – 109.12
    R2 – 108.06
    R1 – 107.50
    PP – 106.44
    S1 – 105.88
    S2 – 104.82
    S3 – 104.26

    Dollar Lines

    R3 – 80.49
    R2 – 80.32
    R1 – 80.02
    PP – 79.85
    S1 – 79.55
    S2 – 79.38
    S3 – 79.08

  5. Does anyone know why the dollars moving?

  6. That dollar 3:00 AM trade worked like a charm today at 4:00 AM!

  7. I have updated my weekly volatility spreadsheet with yesterday's prices to show which stocks are moving outside of the predicted range. So far only YOKU has but they are part a deal.

  8. These budget deficits rules in Europe are just meant to be broken:

    Just around 1 month following the EZ’s agreement to a “fiscal compact”, the EZ has allowed Spain to increase its 2012 budget deficit to +5.3% (it had asked for 5.8%), from the original 4.4% target. The 2011 budget deficit was -8.5%, as opposed to the target of -6.0%. The 2013 budget deficit target has been retained at 3.0%, which Spain has as much chance of meeting, as I have of becoming the next rock super star. However, it is clear that Spain could never have met the original target this year and the deal (assuming that Spain agrees) is sensible (the current administration has inherited a real mess from the previous Government), though raises an awful precedent. I’m waiting for the other countries to come forward with their own “requests”;

    Just like the old ones were. Most people don't remember, but Germany and France were the first nations to break the 3% budget deficit rule that was part of the original Euro treaty. These rules are non-sensical to begin with as they don't allow the flexibility needed to deal with crisis like the one we have just faced.

  9. Phil,
    Good morning
    Trying to figure out a way to get out of those AAPL July 500 short calls, received $7 for, now $70 plus.
    Any combination of puts, roll you can come up with?
    Or continue waiting?
    I am afraid of it REALLY getting away from me, in case AAPL declares a dividend or some “dumb” thing like that and the stock takes off…

  10. Good article on China from the Economist:

    And an interesting prediction:

    Joerg Wuttke, a veteran industrialist with the EU Chamber of Commerce in China, predicts that the cost to manufacture in China could soar twofold or even threefold by 2020. AlixPartners, a consultancy, offers this intriguing extrapolation: if China’s currency and shipping costs were to rise by 5% annually and wages were to go up by 30% a year, by 2015 it would be just as cheap to make things in North America as to make them in China and ship them there (see chart). In reality, the convergence will probably be slower. But the trend is clear.


    At the same time, there is plenty of positive comments in the article as well. Nice read!

  11. Maya1
    AAPL 500c Have you got any long calls against your caller ???

  12. Austerity is hard work….

    SPIEGEL reports this week that the German government didn’t reach even half of its planned savings in the federal budget. Only 42 percent of the spending cuts named by Merkel’s coalition government, comprised of the conservative Christian Democrats and the business-friendly Free Democratic Party, were actually not implemented. Calculations made by the influential Cologne Institute for Economic Research indicate that only €4.7 billion ($6.16 billion) of the €11.2 billion in austerity measures stipulated by the savings package actually took shape in 2011. The government is also falling behind on its targets for this year. Of the originally planned €19.1 billion in savings, less than half has been implemented. For the coming year, the concrete measures that have been agreed on so far cover just one-third of the announced amount of savings. Merkel’s cabinet is hoping to agree to the basic foundations of the 2013 federal budget in March.

  13. Drill baby drill
    BP put an end to that one in a hurry. Now that it has been revealed what a total ignoramus Sarah Palin was  and is, the real story is that most US state governors, and probably presidents too, are just telegenic figureheads who have no capacity to govern or lead the nation whatsoever. Main qualifications to be Governor or President are 1) previous career as actor or in media and ability to deliver slogans, 2) use of hair dye, wigs, and plastic surgery to look youthful, (baldness is a disqualification) 3) looking good on camera from different angles, not obese. 4) related to previous office holder by blood or marriage, 5) willing to place hand on stack of bibles and state belief in God, monogamy, and Jesus Christ (whoever he might be), 6)  no knowledge of science, art, history, geography or literature so that candidate may start with a clean slate, 7) independently wealthy or willing to become so via sweetheart deals with puppet masters, 8) good reproductive skills, at one child will be accepted as proof of heterosexual ability, but multiple reproductive capacity desirable. Reproduction while in office not expected due to onerous nature of paid duties. 9) Team player, willing to take orders.

  14. China is already probably slowing down:

    Not a hard landing though. Yet!

  15. Good morning,


    IWM      80.17,  80.46,  81.04,  81.41,  81.61,  81.96,  82.12,  82.34  and  82.88

  16. NEWS all of the netwroks mirror the agenda of their masters….v sad i am back to reading the christian science monitor..for news print..what happened…once coporate bosses found a medium for their unactualized narcissism it was over..

  17. I would say that we are close to mission accomplished with the DMND trade. With the profits on the puts we now have $1350 out of a possible $1500 in the BCS!

  18. stjeanluc
    DMND very good decission to move on the exitement I bought the stock as well as sold the put

  19. You/AAPL
    I have the actual stock

  20. Good Morning All – The VIX is at 2007 lows? Wow!

  21. There are notes in the spreadsheet for the USO puts and TZA calls related to cost:

    USO – 1/2 off at $1.99
    TZA cost is $3.05

  22. Maya1
    AAPL are you not a lucky fellow!!! the delta on the 500 Jul call is only .75 as the stock is always 1 so you still have space to grow, so sit back and enyoy the ride.

  23. OK, where do we stand?  Dollar 80.25, oil $106.06, gold $1,690, silver $33.40, copper $3.87, Nat gas $2.23!, gasoline $3.33 so doesn't look like oil will give up $106 without a fight as gas is holding up at $3.33.  

    Pound $1.3065 (way down from $1.32 at 10:30 pm), Pound is "better" at $1.565 and Yen is very happy to be low at 82.71 and no point in mentioning EUR/CHF is there?  

    Looking in my magic mirror I see the Dow at 13,008, S&P 1,378,  Nas 3,004!!! (when did they sneak that in?), NYSE 8,132 and RUT 820 so all looking very well on our indexes with AAPL $560 driving that Nas back to 2000 highs (cue Prince) – but we HAVE to short them there – this is getting silly as every $10 in AAPL is now $10Bn and only $8Bn worth of AAPL stock gets traded on a typical day but that's the WHOLE DAY.  So, when you see AAPL go up $10 in the morning on 2M shares trader ($1Bn) EVEN if EVERY SINGLE ONE of those transactions was a buyer with no seller – the leverage of AAPL moving up $10 on 2M shares is 10 to 1.  Since there are probably a roughly even amount of buyer and sellers, AAPL is probably moving up $10Bn in market cap on maybe $100M of inflows.  

    It doesn't matter how good a company is – it still needs to grow at a rational pace or it will not be sustainable.  Just be very careful if you are still in it!  

    More importantly for the bulls, XLF is at $15 so holding that is very bullish.  We did, however, expect Retail Sales to give us the week's high and now we will easily be wrong or right depending on if the markets go up or down from here.  So, these will be our last bearish adjustments before throwing our hands up and going more bullish.  I'll get back to them later in the review of Portfolios but, for this morning – we are assuming it's a head-fake up and, of course, we follow through with our DD on the DIA $129 puts (.35) into the morning excitement from yesterday.  

    At the open: Dow +0.4% to 13012. S&P +0.59% to 1379. Nasdaq +0.69% to 3004.

    Treasurys: 30-year -0.41%. 10-yr -0.19%. 5-yr -0.11%.

    Commodities: Crude -0.28% to $106.05. Gold -0.74% to $1687.15.

    Currencies: Euro -0.69% vs. dollar. Yen +0.6%. Pound +0.05%.

    Market preview: Stock futures point to a higher open afterU.S. retail sales recorded their biggest gains in five months. S&P+0.3%. European and Asian markets are broadly higher. Investors will be parsing today's FOMC statement for any unlikely shift in the Fed’s economic outlook and how it would impact future plans for QE3. Also still ahead: business inventories.

    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 IBD/TIPP Economic Optimism

    10:00 Business Inventories

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

    2:15 PM FOMC Announcement

    Redbook Chain Store Sales: +3.3% Y/Y vs. +3% last week

    ICSC Retail Store Sales: +0.7% W/W, vs.+1.3% last week.+2.3% Y/Y, vs. +1.7% last week. Warm weather and improving consumer health which is more than offsetting the drag from rising gasoline prices, gave a boost to sales.

    Feb. Retail Sales: +1.1% vs. +1.2% expected, +0.6% (revised) prior. Ex-auto +0.9% vs. +0.7% expected, +1.1% (revised) prior. 

    Ceridian-UCLA Pulse of Commerce Index: -0.2% Y/Y in February, vs. -2.2% in January. "The continuing weakness of the PCI is signaling that, perhaps, the recovery in home building has not yet taken hold," says UCLA's Ed Leamer says.

     NFIB Small Business Optimism Index: +0.4 to 94.3, from 93.9 prior. It's the sixth consecutive month of increase – the recovery continues, "albeit at a glacial pace."

    Initially falling against the yen after the BoJ didn't come through with additional easing measures last night, the dollar is back on the rise, hitting a new 11-month high of ¥82.68. Deutsche Bank notes the full effect of last year's earthquake – a "huge negative terms of trade shock" – is only now being felt, and likely to keep a firm bid under dollar/yen. 

    Loan demand continues to be weak in China with the big 4 banks reportedly making less than ¥20B in loans in March's 1st 2 weeks due to "weak demand from large corporates." Slowing money supply growth is likely to slow even further unless "the government forces someone to borrow money." 

    Nomura revises its 2012 GDP growth forecast for China to 8.2% from 7.9%, saying the economic prints for the year's first 2 months have been weak, but not as bad as the bank expected, and lower inflation leaves room for easier monetary policy. The revision is particularly noteworthy given Nomura's earlier prediction of a 33% chance of a hard landing.

    "The German economy shows signs of stabilization at the start of the year," says the country's economic ministry in an upbeat assessment of the situation in its monthly report. "Sentiment indicators have markedly improved. Businesses and consumers are thus expecting that the economy will gather steam over the coming months." 

    Germany's ZEW Economic Sentiment Indicator increases by 16.9 points to 22.3 for March, marking the highest reading since June 2010 and the 4th consecutive month the sentiment indicator has trended higher.

    The Troika bows to economic reality and revises Greece's fiscal targets, saying higher immediate deficits will require a primary surplus of 4.5% for 2014 and several years beyond. "A primary surplus of such magnitude is not disproportionate and is socially bearable." Easy words to write.

    "(Spain's) problems are significantly worse than Greece's," says Sony Kapoor, who believes the country could tip Europe back into a state of instability. 2012 will be the year to see if austerity works, with Spain being the key testing ground, he believes.

    84% of companies surveyed in February by ChangeWave Research said they plan to buy iPads (AAPL) in the next quarter, up from 77% in November. Whereas only 6% and 3%, respectively, say they plan to buy Amazon or Research In Motion tablets. Also, 59% of enterprise tablet buyers say they'll use service plans from AT&T (T) or Verizon (VZ) – this contrasts sharply with the buying habits of consumers, who have largely preferred Wi-Fi-only tablets. (previously)

  24. JMM for a moment i was thinking your criteria were exclusionary which would offend  our collective and delicate sensibilities!!….but after carefully perusing those evaluative criteria i am pretty sure it includes both parties with joe biden and rick santorum being their party's 'poster children' in the cover up capers..chris christie..ugh..william howard taft only seems to be true we are al serial discrmininators..which is why washington attracts such lightweights..too bad webb is retiring..too smart for that sandbox
    the world is buying dollars.."the cleanest shirt in the laundry'..

  25. ours is an ineptocracy

  26. PHIL/ who th eheck is running elizabeth warren's campaign..joe trippi?

  27. Before we get all hysterical about gas prices in the US, they have reached record prices in France this week at 1.62 euro/liter for regular or $8.00 per gallon at the current exchange rate!

  28. Bullish / Phil – You are not fooling anyone.  You are not going to turn bullish. Just buying time till market gets back to its senses :-)

  29. Little late, sorry.

  30. Good Morning!      At Maya1……….I can't resist commenting on your post from 9:20 this mornning.  And my comments have nothing to do with this being AAPL.  You sold calls on a stock for $7 and they are now worth $70, and you are wondering how to manage this "before the stock really takes off."   Huh?  This train left the station months ago.  Why are you still in this trade?   I don't care what Phil says, you need to buy back these calls NOW.  And if you want to recoup your losses, just get a bull call spread on AAPL about a year out and fuggidaboutit. 

  31. looks like TLT is changing the rules

  32. il va san dire oui?..:who cares about french gas prices st jean?…when i drive over the border to canada i pay vastly more for long as the oil cos can export a half billion barrels a year and send it to a spr in china we will pay alot for gas and the saudis will laugh and daven to the reliquary they have for the dead jd rockefeller

  33. Budgets/StJ – They already blinked on Greece.  That's  a good sign.  

    Oops, inventories up 0.7%, that's a lot and not really a good thing.  

    AAPL/Maya – I thought we talked about backstopping those?  You can pick up the 2014 $500/610 bull call spread for $50 and that saves you the next $60 of upside from here and, if AAPL breaks $600, you can buy the $550/660 spread for $50 and you've covered another $110 for $50.  Keep doing that and you'll end up ahead and, of course, each time you add a new hedge, you put a stop under the lower hedge so you don't get burned on a sell-off.  You can also sell the 2014 $380 puts for $30 to offset some of the damage and those July $500s, now $73.50 can be rolled to the Jan $540s (now $72) for $1.50 so still not too bad even without the offsets but you are pushing it by not covering at least a little bit.  If you simply sell the July $500 puts for $16.50, that pays for you to roll the caller to the Jan $570s ($56.70) – with all these possibilities, the key take-away should be not to panic but do make sure you do something if $560 breaks and holds.  

    China/StJ – Yep, it all evens out over time – it's the in-between parts that are hell to get through. 

    Governors/JMM – We had a good Governor in NJ but he turned out to be gay and, apparently, there was something wrong with that in NJ….

    China/StJ – Yet….

    Tide/Terra – Oh yeah, our economy is just fine and there is no inflation…

    News/Angel – This is what Government is SUPPOSED to do – keep the press free and independent.  Once they fail at that (long gone now), Democracy is out the window anyway.  

    DMND with a very nice move today.  

    VIX/Ink – Wow, crazy low now.  We had a play yesterday, even cheaper now.  

    Warren/Angel – Why is she doing badly?  I know Scott Brown's tactic is to keep repeating Kennedy's name and insinuate that he is somehow aligned with him to the point where the Kennedy family is now publicly asking him to knock it off.   As far as I know, Mindy Myers still runs the campaign and she's very good.  

    Bullish/Dpast – You have to play the cards you are dealt and I may not like it but we have to make more bullish plays until the madness stops.  

    TLT $114 calls at goal at $1.45 but looking ugly so you have to have faith…

  34. the germans who are the french with bad cooking pay more for gas than beer i bet..(not betting a lot)

  35. lflantheman
    Please AAPL enlighten  me Maya 1 He holds the stock and the Jul 500c still has 16$ of premium why buy the premium?

  36. Good Morning Phil – This goes back to you saying we are priced at 2007 levels when things were much better economically, but do you mind sharing how you would play the VIX being this low?  Thank you as always.

  37. Iflan, Maya, Phil – with all due respect (and it is a lot of respect), AAPL is bound to sell off between now and July when Maya's caller is due.  Right now it's near 80 RSI and other signs showing that it is near a short term top.  Wouldn't it make more sense to wait it out?  AAPL may not get down to $500 but it isn't likely to stay this stratospheric for much longer…tho of course it will go higher after a selloff…

  38. Pharm,
    Were you buying back March 17 PLX $5 puts yesterday?

  39. yodi/jerconn….Well, he can hold the July 500calls and wait for a pull back, but isn't that what he's been doing?  My point is, the position has moved against him to the tune of a ten bagger and it's just being watched.  AAPL will very likely be above 570 in July and there is a possibility (call it slim) that there may not be a significant pullback.  Then where is he?  He would then owe more than $70 for these calls.  My point is……you need to get out of losing trades early.  You can't wait for a ten bag loser to reverse your position. 

  40. Sparky – yes.  For a nickle. 

  41. Iflan – yeah that's a good point, to get out of losing trades early.  However, now it's late, as you pointed out earlier.  I would sweat it out a bit longer…btw, Maya we're assuming you're male, sorry if the wrong assumption…

  42. jerconn…."Now it's late. I would sweat it out  a bit longer."  That is precisely the thought process that leads to big losses.  Not necessarily in this case, because he owns the stock, but in general.  You MUST learn to exit losing positions and you must learn to STAY WITH winning positions in order to make killer money in the market.

  43. FU MARKET!!!

  44. lflantheman
    AAPL how can he be losing for ever 1$ AAPL goes up the 500 caller goes up only .75  .25 cent in my pocket every time

  45. Phil – In February I held an AAPL jan 13 400/450 bull call spread. I bought a jan 14 450/550 spread and. Sold the 400 calls. Am wondering the best next move for this play. A still have the Jan 450s short. Thinking about a Jan 13 or 14 560/660 spread, but not sure…..,

    Thx ….Hoss

  46. lflantheman
    AAPL now in Hoss18 we have a much more serious case he holds a nacked short let see what Phil has to say

  47. My cable is down. Guy is already working on it and thinks 20 mins so not worth relocating hopefully. I’m getting a sandwich and brb.

  48. lflantheman
    I know you are an apple man  I trade both gold bars and AAPL options You ask me with what do you sleep better at night .
    I say with a gold bar under my pillow any time.

  49. yodi….He's not losing money.  He's making 25 cents for every dollar up on AAPL.   So, I guess looking at it from that standpoint, it's OK.   A quarter is a quarter, eh?   And that's what it is……for every dollar rise in AAPL, he makes a quarter.   Why do we trade options?   For leverage.  Does his situation sound like he has any leverage at work here?  His position is reversed leverage.  If you think this stock is going to reverse then why not buy some puts, and make some real money, using leverage?   Or, just take the quarter.

  50. Phil cable down that is the advantage living in Mexico you always have an USB in your pocket as well as a generator in the garage.

  51. Phil / water supply
    I agree that water will be treated as a valuable commodity.   There already are water issues in China.  See
    The only water company I have found interesting in Hyflux (600:SG) in Singapore.  Hyflux builds large reverse osmosis desalination plants in Singapore, China and other Southeast Asian countries.
    Do you have a favorite water company?

  52. Phil,
    Isn't Ben supposed to be supporting TLT way down here? He may be napping – do you have his cell number?

  53. lflantheman
    OK .25 is .25 Buy put or calls are not my type of option I like to trade., only if I have to. Look at the 16$ premium still in the option you are buying this as well???

  54. I think the real discussion here is not about Maya1's trade, but rather about trading philosophy.   We do not all trade alike, nor should we.  What works for me will not work for Maya, or yodi, or others.   You have to stay in your own comfort zone with this stuff.  My comfort zone is leveraged trades, quickly cutting losers, and letting winners run until they drop.   When they fall  they become losers, and that's when I drop them like a hot potato. 

  55. Good article from Bruce Bartlett as usual:


    Only in some fantasy world would it be possible to balance the budget without higher revenues. In the real world, it is impossible to balance the budget with revenues at 16.4 percent of G.D.P. Therefore, taxes will have to rise. The only question is who will pay more?

    Everyone, I think, but the wealthy will have to pay a lot more, because they have a much greater capacity to do so than most Americans. If they don’t pay more, then the rest of us will have to bear a higher tax burden or suffer having programs like Medicare, which almost everyone will benefit from eventually, decimated. [...]

    If, as Professor Meltzer has shown, the rich get richer regardless of the tax rates, there is no economic reason not to raise the top rate. Perhaps unwittingly, his research confirms that of other economists who say that we could get substantial additional revenues even if the top rate doubled.

  56. Going off board for most of the afternoon.    Thanks for the lively discussion!  Back later.

  57. Ok, i am minutes away from margin call. Not a single green position.  Only Ben can save me now..

  58. lflantheman
    He do not go we are not finished yet What would you do with a Jul 375 /500 Bull call ?

  59. So much for the value of small government:

    I would love to go back to Reagan's time as the GOP always recommend – higher taxes, higher government spending. 

    I am waiting for Fox News to start picking up these figures any minute now.


    Data from the Bureau of Economic Analysis illustrates a key difference between Reagan’s first term and Obama’s: the pliancy of the Congresses they had to work with. Despite the fact that it was controlled by Democrats, Reagan’s Congress was ultimately accommodative, and the result was significant fiscal expansion, which likely helped bring down the unemployment rate.

    Despite presiding over a Democratic Congress, Obama enjoyed no such co-operation. Serial GOP filibusters limited the extent to which he could use deficit spending and temporary tax cuts to hasten economic recovery. Republicans bucked historically bipartisan policies to thwart the president. And when they took over the House in 2011, Republicans pursued an austerity agenda, and, separately, spooked credit markets by taking the government to the brink of default. All of these factors, combined with contraction at the state and local levels, offset the stimulative policies Obama secured at the beginning of his term. And that prefigured a significantly slower labor market recovery than Reagan enjoyed.

  60. FAS Money – Time to sell 2 April $95 calls for $6.75 and put a stop on 1 of the short March $87s at $10 and the other at $11.50.  

  61. Maya1
    Now you have enough opinions to go home to let us see, once Phil has tied up his cables again and let him be the final judge

  62. $TRIN…in the tank.  <1 is buying.  >1 is selling (ARMs indicator for those that may have missed my link yesterday.  Investopedia has info about it.


    Life is good I guess.  Not sure for who, but it is good.

  63. Pharmboy
    I can see you sitting in an armchair drinking your coffee

  64. Maresk Lines sees second half recovery in international shipping.  Or not.   I can confirm still about 8% down (total import/export) YOY and the end of the first quarter is fast approaching.

  65. Phil--do you hink there is any hope this market gives up the gains later or is it just up up and away?

  66. IWM Money – This is different than FAS Money as we don't have 10 longs backing us up but our spread is a little better so we can sell 2 April $60s for $4.70  and put a stop on one of them (NOT the March $60) at $5.50 in case we're premature.  

    $5KP – We're going to spend .40 to roll the 20 DIA March $129 puts to the 20 of the 3/31 $128 puts (.65).  That makes our basis on 20 at $1.03 if my math is right and, of course, 1/2 out at $1.03 is our goal.  TSL actually up today for a change.  Tempting to buy back the TLT $15 caller but too risky.  If the portfolio had more cash, I'd take the opportunity to spend $1.05 to roll to the April $114 calls ($2.39) because, once the premium from the March caller is gone, we should have no trouble getting our $1.05 back from the next caller, maybe a higher one.  

    $25KP – Same deal on the DIA puts, let's roll out to the 3/31 $128 puts.  XRT not moving much, gold not moving much (making me think this rally won't stick).  In this Portfolio we can afford to roll our TLT calls so let's do that while it's cheap.  Nothing to be done with VXX after just a day.  On the whole, we're looking for something bullish to buy to get more balance but not until this move up sticks through the Fed. 

  67. Status Report – If TLT is this low then the 10-year note sale will go badly and that can tank the market.  

    If the market is this high into the Fed then this could be just a blow-off top (often preceded by a low VIX) as the lack of QE3 could be the excuse for a very sharp correction (Banksters love to blame anything other than overbought conditions for a correction).  

    But, the large reality here is that the Nas is over 3,000 and that's a very powerful signal and even the transports are picking up so no bearish whining – if this holds up today we have to hold our noses and buy until Nas fails that 3,000 mark.  


  68. FAS Money – Selling 2 FAS Apr 95 Calls (now $6.90). Putting a stop on the 87 calls at $10.00 for one and $11.50 on the other.

  69. Phil / WMT 200K trade
    I entered a 25% allocation of the trade you detailed out on WMT.

    • 25 x Jan WMT 45/55 BCS bought for 8.66.  Now 8.90, on track
    • 25 x Apr WMT 57.5 Calls sold for 1.85.  Now 3.40 or *down* 81%

    WMT is trading at 60.70.  Trying to understand the next step.  Should I add another 25% to the trade, and roll the call's up and out?  Or just DD on the call's, lowering my cost basis.
    Trade from you:
    100 Jan $45/55 bull call spread at $8.50 ($85,000) and sell 100 April $57.50 calls for $1.70 ($17,000) and that puts you in the $10 spread for net $6.80 and you are .80 below your caller with 8 months to roll. WMT got knocked back harshly on earnings but that was $4 down and their 200 dma is another $4 down so not likely to fall that far and the 50 dma is at $60.33 so not likely the stock flies up. If you manage to pick up just $4K in premium each month, that's a 20% return on your $200,000 plus, if WMT is over $60, that's a bonus $15,000.  

  70. Oh, they so want retail in it is sickening.  Low volume, everyone cheerleading that things are better.  Gimme ur money, I will invest it for you.

  71. IWM Money – Selling 2 TNA Apr 60 Calls (now $4.80) with a stop at $5.50 on one of them.

  72. Biotechs are not participating in the irrational exuberance…..

  73. phil/TLT
    Why would be buying back the TLT 115 C risky? since this will keep us long with 114 C, is the risk of TLT going further down is what you are talking about? The advantage of keeping the spread is that if TLT keeps going down then the fast decrease in value of 115 C will cover up the loss on the 114 C, if TLT keeps going down.
    Can you please explain your move if our premise is that TLT will head up for the auctions?

  74. Obama is totally the anti-Bush.  Every time Bush used to speak, the market would tank Obama usually gives us a winner, even when he's "anit-corporate".   Right now he's being anti-China!  

    AAPL/Maya and chorus – I do think AAPL is likely to pull back but Maya is down about $50 and doesn't want to be down $100 so it's prudent to cover.  If AAPL falls, then the calls go worthless and, assuming they don't stop out sooner, maybe the bull call spread falls to $25 (probably not that bad) but that's still a $25 improvement and then, if AAPL comes back, it's a nice, bullish long-term spread.  

    Ineptocracy/Angel – I like that.  

    AA still very cheap at $10.17.  You can sell the 2014 $10 puts for $2.05 and buy the Jan $7.50/10 bull call spread for $1.70 for a net .35 credit on the $2.50 spread that's 100% in the money to start and the worst case is you own AA at net $9.65.  

  75. FAS Money – The first FAS Mar 87 calls is now gone at $10.02…. Stop for the next one is $11.50

  76. Oil hit $107 again but you have to be extra brave this time.  

    France/StJ – Lots of public transportation and cars that get almost twice the mileage of ours makes it not as horrible as it sounds but still, a lot of money…

    TLT $114s down to $1.37, I still like them.  If we have a bad auction the markets should go down on that news and spook people back to Treasuries – I think…

  77. Gas prices / Phil – True, gas mileage are better there, but when I check with my parents who live with 2500 euros per month and it cost 100 euros to fill up, it hurts… And heating oil prices are also way up – my folks only filled up 1/2 their tank because it was too expensive. They use a wood burning furnace 90% of the time and wood is sill cheaper as long as you don't mind the extra work!

  78. Burrben WMT running simular trades additional sold Jan55puts and Jan 13 52.5 p all showing profit as well as the Jan 14 bull call spread.
    The Apr 12 I was not so good only received 1.72 in my pocket. How ever the call still has .20 of premium. So I will wait, should you how ever decide to roll today I would have to pay for a Jun 60c 1.46 extra from my 1.72 still .26 cents in the green plus the other .20 premium makes it an other profit of .46 cents In the meantime the other option plays are doing the job!

  79. Well it's official.

  80. JR

    How are you positioned?

  81. exec / Position

    Cash, waiting; the breakout should have had more follow through, so maybe bad news at 1:00 or 2:15 !!

  82. My position….

  83. Apple Just $14 Billion Away From Eclipsing Entire US Retail Sector

    Check out that chart.  This company was at death's door not 14 years ago.  Simply incredible.

  84. Pharmboy
    Is this a crystal ball or a time bomb

  85. yodi – both.

  86. So, what rent a rebel agency is at work now?  Oil is up after being down over $1.

  87. Phil if you wanted to buy a calendar put spread on tlt - 
    What would you look to buy in Dec or Jan and what would you sell front month. thanks

  88. VIX/Ink – See the $25KP play.  I like that spread on VXX on the assumption the VIX does not stay below 20 for a month.  

    Dollar smacked down all the way from 80.345 to 79.975 and that's where all these bonus points came from since the open.  Someone made a good call on that earlier – Dollar taken up pre-market so they could put on a show of smacking it down later.  Pound flew off $1.56 again to $1.574 and Euro off $1.3051 to $1.3114 – these currency swings are insane with $5Tn per day running through FOREX.  

    Gold back to $1,700, oil did not stop at $107 so we have to wait for a good cross now ($107.16).  

    AAPL/Hoss – Talk about letting the calls go too far in the money!  Yes, I'd layer on another spread but you might want to consider rolling the $400 calls ($173) to 2x the 2014 $450/600 bull call spreads at $75.30.  That gives you $21 cash and, for $150.60 you are buying 2 bull spreads that are $220 in the money (+$70) with another $80 to gain up to $600 so + $127 vs where you are now with your $400 calls at $173 in case you have to pay off the caller.  Meanwhile, the net delta on the 2014 spreads is just .22 x 2 or .44 vs .81 on the $450 caller so you do well on a sell-off compared to sticking with the spread so no reason not to do it other than possible margin issues.  As to the short $400 calls, I assume those are March?  If so, very nasty and you may want to consider a similar roll of your Jan $450s to a 2x (and I'd spend money to go to the same 2014s or it's just messy) and then rolling the short March $400s ($162) up to 2x the Jan $530s at $80.50 but you still need to set a stop on 1/2 at $100 if AAPL keeps going higher and you really should consider selling a put.  Also worth considering is taking short-term momentum trades when AAPL goes over a line (like $560) and picking up a few dollars here and there while it's moving higher.  If you did that for just 20 of the days you watched AAPL go up over $150 since you began the trade and averaged just $2 – you'd be $40 better off.  

    Cable/Yodi – Well I consider it an advantage that I have 30Mbs cable running my 5 computers 99.9% of the time that it's up.  Otherwise, I do have my 3G IPad, which is what I used earlier.  

    Water/Ron – I hate everything about turning water into a profit-making business.  Desalination is one thing but, in the US, they are looking to privatize water services and that's going to lead to some nasty crap down the road.  I don't have any "favorites" in the space but, if you remind me on the weekend, I'll take a look.   That's one of the sad things about the markets – sure WMT is an evil corporation destroying small-town America and enslaving millions of people in subsistence jobs while wrecking millions of other jobs by outsourcing $400Bn of merchandise to China (WMT is 70% of the entire US trade deficit) but, hey, what a great stock, their dividend pays the mortgage on my ski house…  

    TLT/8800 – This is very interesting.  We're coming down to the wire and TLT is still $115.15.  

    Good comfort zone Iflan. 

    Bartlett/StJ – we will have to ban that sort of negativity soon.  Makes it hard to trade in the bubble.  

    Margin/Dpast – Best to identify your biggest problem and perhaps get ahead of it and get partial out, roll what you can (if you are going to stick with it).  

    Great chart StJ – I love the way the Reps are hammering on "not enough jobs created" when net 1M government jobs have been cut instead of the 2-3M that should have been created by a rational Congress.

    Hope/Jabob – I will be shocked if the Fed announces more QE and, without more QE, I will again be shocked if we stay bullish but maybe they say such great things about the strength of the economy that it softens the blow?   I just don't see it but, if no sell-off after the Fed, how can we stay bearish?  

    WMT/Burr – You have a net $6.80 entry and the $57.50 caller can be rolled to the Sept $60 caller ($2.75) for .65 so as long as that roll is under $1, you may as well keep the protection.  If you do that roll, then you are in the bull call spread for net $7.80 and have a $2.20 advantage over your caller so $62.50 becomes the point at which you get in trouble.  The 2013 $60/70 bull call spread is $3.50 and buys you another year of rolling with another $6.50 of upside and, for good measure, I'd say it's prudent to sell the 2014 $50 puts for $3.20 but, if you do that, you should probably stop them out if $60 doesn't hold (at least half) or you'll be over-hedged.  Again though, I'd wait and see if you actually have to make that roll (at $1) first.  

    Volume/Pharm – Yep, only 45M on the Dow at 12:30.  Maybe heading into the 2nd slowest day of the year (after yesterday).  

    TLT/Pat – Because they are all premium and we're wasting our money and our own premium will burn off and we're leaving ourselves naked and exposed to a further downturn.  My PREMISE is they may head up by my premise may be wrong and I don't think it's worth the risk when the market is clearly not doing what we expect it to.  

    FAS Money – See the stop on the First March $87 roll effectively became a 2x roll to the April $95s.  Hopefully we won't have to pull the trigger on the other one but, if so, we're only rolling the loss.  

    Gas/StJ – Oh no doubt people are hurting but those options aren't even available to people in most of the US who don't have fireplaces or gas-sippers or public transport alternatives.  On the whole, it's a massive, friggin' Global mess and the top 10% are having a market party and fiddling away while the bottom 90% burn – it's amazing how disconnected most of us are from what's really going on in the World but it all goes back to the same thing – it's not even covered in the news here, is it?  The Government used to mandate Network news, including Global news as part of a broadcast license – boy did that go out the window!

  89. Create jobs, er, help Enron….I swear to the holy heavens above this country is going to hell in hand basket.

  90. There goes 115 on TLT

  91. Debt/Pharm – Hey, we're trying to get bullish here…

    Useful chart Exec:


    Doubters of the equity market rally also ignore the three-year +135% advance in the NASDAQ (see also Ugly Stepchild) in part because the 11-year highs being registered still lag the peak levels reached in March 2000. Even though the NASDAQ increased 9-fold in the 1990s, if you bought the NASDAQ index in the first half of 1999, you would have still outperformed the S&P 500 index through the 2012 year-to-date period. Irrespective of how anyone looks at the performance of the NASDAQ index, it still has outperformed the S&P 500 index by more than +200% over the last 25 years, even if you include the bursting of the 2000 technology bubble.


    AAPL/Kinki – LOL.  I guess they should just shut down all the Malls and just keep the Apple stores.  Waste of space on the rest…

    Dollar totally flatlining just under 80 – so artificial looking…  

    Oil/Pharm – They want $107 to hold really badly.  Should be able to pull it off into tomorrow's inventory if they can keep the Dollar below 80.  

    TLT/Samz – As the Jan $110s are $8 ($3 premium) and you can sell April $116s for $1.50 for net $6.50 on the $6 spread with time to roll.  I think that's the way I would go on a calendar spread.  You could also sell the Jan $120 calls for $3.55 and knock your long net down to $3.05 – you risk a sharp move up in TLT but if you use stops you should be able to stay out of trouble.  

    LOL Pharm: “This would be better known as the bucket-shop and penny-stock fraud reauthorization act of 2012.”  Oh we are so doomed!   This passed the House 390-23, almost as big a majority as rammed through the end of Sarb-Ox.  Amazing how bills like this get done with bi-partisan support….  

  92. INSANE!!!
    SPY: 4 unfilled gaps in 5 days.

  93. Please draw your own conclusions !!


  94. nibbling at cheap Jan13 calls during this period of low volatility (DIA 160, XLF 18)

  95. Ugly 2-year chart on TLT if you're bullish
    Still think bonds will eventually tank hard, but man has that taken a toll being wrong so far …

  96. AAPL/Phil:  insightful comment on that ZH post:

    "It's pretty sad when we only have one growth story in this country and that is based off of high margins from slave labor."
    Yes. My Chateau Lafite gets all salty from the tears.

  97. Bonds are in a channel.  I don't see them falling at all.  I still see the 10 yr at 1.5%.  Have faith.  I have considered going long in here on the 10 yr April futures. 


    FFIV rocketing to highs.

  98. There are some similarity between November 2010 and this year when looking at the OBV picture on a weekly chart. And we are reaching levels where we stalled last time as well.

  99. diamond4 unfilled gaps in 5 days.
    any backtest on this?  How has it played out in the past?

  100. Indeed Pharm, FFIV is outside the volatility range for the week! And the only news is:


    F5 Networks, Inc. (NASDAQ: FFIV), the global leader in Application Delivery Networking, today announced its 2011 Channel Partners of the Year awards for the Americas region.

    Bullish indeed…..

  101. 10yrs go for 2.076%.  Now, watch them move up in price. 

  102. 12:52 PM European shares close sharply higher, getting an extra pop midday from a better-than-expected read on German confidence. Stoxx 50 +1.7% , Germany +1.4% , France +1.7% , Italy +2.1% , Spain +2.5% , U.K. +1.1% . Euro -0.3% at $1.3119.

    1:00 PM On the hour: Dow +0.9%. 10-yr -0.29%. Euro -0.33% vs. dollar. Crude +0.77% to $107.16. Gold -0.24% to $1695.75.

    Barclays Capital increases its projection for Q1 GDP to 2.1% from its previous call for 1.5% growth in the U.S. economy. - And who owns the largest percentage of all US Equities?  That's right, Barclays!

    Zero Hedge can't help but note that BofA's 29-year-old senior economist espousing wisdom on CNBC was still in high school when the dot-com bubble blew up.

    Another down day for the VIX (VXX -2.9%) brings volatility (or fear) to its lowest level since the summer of 2007. The term structure – short-term risk relative to medium-term risk - plunges to its lowest level in at least a decade.

    The IBD/TIPP Economic Optimism Index fell by by 1.9 points, or 3.8%, to 47.5 in March, vs. 49.4 in February. "After six consecutive months of improvement, consumer confidence retreated due to concerns about gasoline prices and persisting high unemployment," IBD's Raghavan Mayur says. 

    Decent auction:  The Treasury sells $21B in reopened 10-year notes at 2.076%. Bid-to-cover ratio of 3.24, vs. a recent average of 3.18; indirect bidders take 38.6%, vs. a recent 45.9%. Direct bidders take 19.4%, vs. a recent 10.8%

    Long-term Treasury yields march to new 2012 highs as retail sales (ex-auto) beat expectations and money continues to flow into equities. The 10-year and 30-year are both 5 bps higher to 2.08% and 3.22% respectively. The popular ultra-short Treasury ETF (TBT) – known in past years for its relentless slide lower – is +8.5% YTD.

    The jobs growth demonstrated by the latest NFP report is nothing to get excited about, says stimulus proponent Joseph Stiglitz, not when there are still 23M American looking for full-time work. The U.S. needs GDP growth above 4% for unemployment to fall significantly, he argues, and that's very unlikely when government budgets are being cut, and the vast majority of consumers have little in the way of savings. (more) - Obviously he doesn't know about AAPL…

    Investors should consider rotating out of hot emerging-markets dividend funds (DGSDEM) and into defensive-minded domestic dividend plays like DVY, writes WisdomTree's Neil Leeson. "We may be ready for the pullback," he says, wishing "someone had put a dimmer switch on the doorway warning that the party is nearly full."

    The EFSF is considering issuing debt across three maturities – a short-term bill, a 5-year, and a 25-30 year bond – next week, according to sources. Up to now the longest maturity has been 10 years. A €3B bond issue in January priced at 40 bps over mid-swaps has since tightened to just 9 bps as the LTRO washes over the continent.

    Fitch upgrades Greece from "restricted default"  to "B- with stable outlook." The rating applies to the newly issued paper from the bond swap as ratings on the old debt have been withdrawn. "Losses imposed on bondholders have significantly improved Greece's debt service profile," says the agency.

    "(Spain's) problems are significantly worse than Greece's," says Sony Kapoor, who believes the country could tip Europe back into a state of instability. 2012 will be the year to see if austerity works, with Spain being the key testing ground, he believes. 

    Himax Technologies (HIMX) and other LCD driver chip developers are seeing order visibility improve, thanks to rising demand ahead of new mobile device launches. Consider this another positive datapoint (previously) for LCD industry players such as AU Optronics (AUO), LG Display (LPL), and Corning (GLW), following adismal 2011. Separately, AU says it will hire 2,500 engineers for its LCD and solar operations.

    Thanks in large part to rising iPad sales, iSuppli expects the tablet market's consumption of NAND flash memory to surge to 16.3B GB in 2015 from a mere 1.6B GB in 2011. NAND flash giant SanDisk (SNDK), which tumbled in January due to soft guidance andconcerns about oversupply, has rallied in recent weeks partly due to hopes that the new iPad will give the NAND market a lift. 

    Neat trick:  P-E firm Carlyle – set to debut on the Nasdaq under the trading symbol CG – drops a bit of a startling revelation on shareholders with its disclosure that owners took a $398.5M tax-deferred dividend before the IPO was announced last year. The catch is that the firm borrowed money to make the payout, a liability that could serve as a drag on future shareholders for years to come.

    Diamond Foods (DMND +3.1%) trades higher afterproviding a business update. Diamond, which has been crushedthanks to its accounting scandal, says its Emerald and Pop Secret brands gained share in the 12-week period ending Feb. 18, on the back of 29% and 6% Y/Y growth. The company also says it has retained a financial adviser to evaluate ways to strengthen its balance sheet.

    InterOil (IOC +2.6%) shares spike up and then pull back on conjecture regarding a well discovery in Papua New Guinea. A local publication report suggests IOC's Triceratops-2 well hit "elevated gas readings" upon approaching the reef top and could result in the company’s biggest discovery. 

    "That trade is coming," remarks Dominick Chirichella of going long natural gas and short crude oil. "Just have to wait for it to turn," he says of the ratio of the crude to gas price hitting a whopping 47.5 this morning. WTI crude (USO) is off a hair, but natural gas (UNG-1.5%) is seeing significant declines again.

    CSX (CSX -0.5%) slips after Bernstein downgraded the shares to Underperform from Market Perform, saying it expects the company's coal revenue to drop 13% in 2012.

  103. Yodi:  If you're sleeping with a gold bar under your pillow, you might consider if your neighbor is sleeping with one of these under his!

  104. VC Fred Wilson 
    trashes Yahoo's (YHOO) suit (III) against Facebook (FB), arguing Facebook can defend itself by claiming prior art, and declaring Yahoo to have "broken ranks and crossed the unspoken line" about refraining from lawsuits against fellow Internet companies. Meanwhile, analyst Erin-Michael Gill, who predicted the Yahoo suit, thinks Facebook can fire off an effective counter-suit. (previously)

    Thanks in large part to rising iPad sales, iSuppli expects the tablet market's consumption of NAND flash memory to surge to 16.3B GB in 2015 from a mere 1.6B GB in 2011. NAND flash giant SanDisk (SNDK), which tumbled in January due to soft guidance andconcerns about oversupply, has rallied in recent weeks partly due to hopes that the new iPad will give the NAND market a lift.

    As Apple (AAPL +0.9%) shares continue their inexorable march higher, Jefferies' Peter Misek raises his price target to $699 from $599 and his estimate for 2012 iPhone sales to 155M from 145M. Misek also writes that after a trip to Asia he “got early production evidence of iTV,” and thinks the Apple TV will be in full-scale production by May or June.

    Three lunchtime reads:
    1) How far have home prices really fallen?
    2) The worst of times to buy stocks?
    3) A bearish leveraged ETF best left to short-term traders

  105. Wow, I'm Phil now, cool!!

  106. Oh, it went away.  I was "in the Phil box" for a minute there.  Tricky software.

  107. Phil you misread my post – I think - 
    I want to buy a put calendar spread – not call spread.
    My portfolio is very bearish and this is a good bullish offset – if things get better – treasuries are going down. – thanks
    Here was my question -
    Phil if you wanted to buy a calendar put spread on tlt - 
    What would you look to buy in Dec or Jan and what would you sell front month. thanks

  108. peedlew99 – The chart is from Cobra's Intraday Watering blog at

  109. Phil – sorry, maybe I wasn't so clear.  Originally, I had a 400/450 Jan13 BCS.  I sold the 400 calls, pocketing $70, and bought a Jan14 450/550 spread, per a post I put up in February.  So my position is this:
    Short Jan 13 450 Call
    Long Jan 14 450 Call with Short Jan 14 550 call.
    That's what I was looking at adding a spread against to further backstop the short 450, and selling another put for a little more cash. (I had originally sold the Jan 13 $275 put, but bought that back a long time ago.)

  110. Wow, I hate this market. Getting destroyed today…Phil – if you had to short /YM, /NQ, S&P, or /TF futures  going into the Fed which one would you take?

  111. Hey anybody,
    What the hell happened to the Nikkei at the end of the session?  Bloomberg is showing it closed nearly flat after being up 1%… is that correct?

  112. Well, schooling in the EU is forever about to change.  Greece is round 1. 

  113. peed, Pissani just pointed it out…no new QE in Japan market had a bit of a hissy.

  114. LOL – Seeking Alpha would not publish this morning's post because it's "too controversial."  Now, they pay their authors and what is the end result – the authors learn that they'd better not talk about the abuses of the media if they want to get paid.  This is why you don't need a direct conspiracy to achieve the ends of the top 1%, you just need to intimidate/pay off a few of the right people and everyone else falls right in line.  Pathetic!  

    This is how it works, you don't even know it's happening but stories that don't fit the Corporate Message are killed before you ever get a chance to read them.  This is the kind of stuff that made us want to go to war with Russia about just 40 years ago!  What the Hell happened to this country?

    Gaps/Diamond – How can you fill a gap with 52M shares on the Dow at 1:40 – there's nothing to fill the gap with!  What a joke…

    Come on JRW – I am trying to get bullish here…

    LOL Kinki!  Maybe we should come up with a portfolio of companies that utilize slave labor.  It's a real winning strategy.  Just need to check Foxcon's top 10 customers for starters, then on to Vietnam…

    TLT/BDC – Fighting the Fed is hard work.  

    Stall/StJ – Based on that chart, I think we could be good to 1,450 – then a cliff.  

    Double barrel/ZZ – That is bad-ass.  On the other, when my news runs too long it bleeds over but then I go and fix it (with my vast HTML knowledge) a minute later usually.  

    TLT/Samz – Oh, bearish – that's different.  Interestingly, there is no put lower than $110 in 2014, which shows you how alone you are in your desire to fight the Fed.  However, if you do a 2014 $119/110 bear put spread for $5 and sell April $114 puts for $1.75, you're in for net $3.25 on the $9 spread and that's a fun way to play.  Otherwise, the premiums are too high to buy naked long puts comfortably.  

    And here comes the VIX!  

    AAPL/Hoss – Oh, I get it.  So you have naked Jan $450 caller backed up by $70 cash less whatever you paid for the 2014 $450/550 bull call spread.  Well it's the same thing, sort of – I'd yank the 2014 $450 calls at $164 and buy 3 2014 $500/650 bull call spreads for $64 ($192) so you spend the $28 you probably had left in your pocket and now you have $450 worth of long spreads with a delta of .23 (.69) covered with the short Jan $450 ($135, delta .81) and the short 2014 $550 ($110, delta .61) so the short calls have WAY more downside delta than you and also gain 2:1 to the upside but you have $450 coming at $650 and the Jan $450s make $200 and the 2014 $550s make $100, which leaves you up $150 so, essentially, you are covered up to $700 and very well covered to the downside.  I don't know what you are in for but you can still sell puts and still add another bull call spread if AAPL breaks higher as the only reason you'd be adding another spread is because your 3 long spreads are about $100 in the money each and then you can always stop one out if they begin to pull back to change the ratio.  

    Shorting/Jrom – Wow, that's now, isn't it?  I'd go for the Nas, too high at 3,015 without a pullback but once the premise is blown you need to get out.  On the whole, super-risky into the Fed – what if they do announce QE3?  

    Nikkei/Peedle – Looks normal(ish) to me.  9,960 in the futures is up nearly 1% for the day.  

    Greece/Pharm – So sad. 

  115. Wow, look at that move in the VIX

  116. FOMC Jan 25th statement:  


    Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.  In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

    The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.  Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

    Now we get to play "spot the differences".   

  117. lots of people who were shorting bonds constantly th elast three years are now buying them…gulp

  118. People selling ahead of the Fed and Bill Gross setting us up for disappointment.  It will come in April, he now says….  

  119. angel…if you were here the last three years, you would have been buying them……or at least I would have told you to buy them….

  120. FU ???

  121. Nothing! 

  122. did anyone get the roll on the DIAs for 40c.  Mine are sitting at 45c now.

  123. Phil— nothing but market is still strong like bull?
    What now?

  124. o TLT in the 25k?
    Close it out at even or hold?

  125. Nothing!  


    Release Date: March 13, 2012

    For immediate release

    Information received since the Federal Open Market Committee met in January suggests that the economy has been expanding moderately. Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated. Household spending and business fixed investment have continued to advance. The housing sector remains depressed. Inflation has been subdued in recent months, although prices of crude oil and gasoline have increased lately. Longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects moderate economic growth over coming quarters and consequently anticipates that the unemployment rate will decline gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook. The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

    The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.

    No change at all from last meeting.  We did sell off from Jan 25th through the end of that month but Jan 25th itself finished at a high and the next day we spiked higher before giving up the week's run-up into the Fed.  This is a tough call but I think we have to see how this digests tomorrow before giving up on the bear case.  

    Dollar still under 80 but, as I said, Gross is spinning the Hell out of this thing and promising QE at the next meeting – despite no indication whatsoever in the statement.  

    We'll see if RUT can get over 820 – if not, then not much to this rally, not that there could be with 59M on the Dow at 2:23! 


  126. What now/Jabob – Same statement as 1/25 – look at the chart from 1/25 – no reason to think this will be different. 

    TLT/Willie – We just rolled the $114s out a month so we let the $115s expire worthless and then we'll see.  

    Gold selling off, no free money supporting shiny metals.  Oil coming back after another nice, slow cross below $107! 

  127. Phil/aapl short calls
    So, are you saying that I should leave the July short $500 calls as they are and simply cover with the jan2014 $500/610 BCS?
    And partly pay for the BCS as I see fit?

  128. Stall / Phil – On the other hand, a monthly chart shows much more room to run…

    On Balance Volume (OBV) measures buying and selling pressure as a cumulative indicator that adds volume on up days and subtracts volume on down days. OBV was developed by Joe Granville and introduced in his 1963 book, Granville's New Key to Stock Market Profits. It was one of the first indicators to measure positive and negative volume flow. Chartists can look for divergences between OBV and price to predict price movements or use OBV to confirm price trends.

  129. OK, so VIX is back at the low….presto….

  130. VIX — and now near the high! Broken POS.

  131. Is this a YTD low for TLT?

  132. Phil/aapl
    Are u saying I shoul leave the short July $500 calls alone and buy the Jan 2014 $500/610 BCS asl cover?

  133. Phil/Seeking Alpha, I am so surprised to hear about it and so sick of it, as you wrote "What the Hell happened to this country?".  This is NOT the USA I came 27 years ago.

  134. 10yr Treasury futures are selling off hard. 

  135. Close your eyes and dry hump the closest soft textured surface, its the same as enjoying time with a gorgeous woman trust me..Im Ben Bernanke and there's no inflation! The burst of this newly formed bubble will be epic.

    Let me add…
     I have a closing on the 16th, the lady lived in the home for 2 years for free. She began renting on the first of March and complained for an hour about how she has to pay rent now…. waking up to the fact the party is over.


  136. OK, now I want to buy back the TLT $115 calls for .45 in both the $5KP and the $25KP.  

  137. Is it time to cue the TBT chatter?

  138. Tlt – did a butterfly put spread bought April 116 – sold 2 x 112 bought 108
     Phil – tlt has started to roll over and I am sure you remember when it was in the 80s -

  139. Getting rich quick with MSFT
    With such a low VIX MSFT calls have very little premium. You can buy the January '13 $20 call and sell the April $32 call for approx net 11.50 with the stock at $32.40 a few minutes ago. Hence if you are called away in April you make a nice 50 cents on your outlay of $11.50 in just one month (almost 4%) , and if you are not called away, you collect more than the MSFT annual dividend in just one month.

  140. Just lost 50.00 from Vix drop on 10 diamond puts

  141. Phil Controversal
    Never give in. Last weekend I had a 10 hour talk with a conservative, LDS, and last term Iraq medic. He attended a Idaho caucus on Tuesday that went for Romney. What he wanted to know was what kind of businessman Romney was. He is getting out of the army and thinks civil war is coming and soon. What I got out of him was America's fighting people have had enough of control and fight the world with both hands tied behind their backs. They fear what will happen to them whatever they do. Lots of people USED TO GO to seeking alpha like me. Yahoo search goes to you at the first S. Your oppinion matters to many, even search engines know it!

  142. AAPL/Maya – Well, let's look at the alternatives:  You can buy back the July $500s (worth $63) for $75 or you can spend $50 on a bull call spread that covers that $75 plus another $50 at no additional cost.  Since you already have $50 of downside protection (.77 delta) against your long spread (.27) you can pick up a short put with a Delta as high as .50 and it won't hurt you to the downside (worse than your current loss).  Any put you buy with less than a .50 Delta, will give you an overall improvement on a move down (as long as it's not too drastic) and further mitigate the damage caused by a move up.  

    Run/StJ – Yes but that's the same technical fallacy that we had any business being as high as we were in 2008 in the first place.  But PLEASE – I am trying to get bullish here!!!  8-)  

    Closing/Kustomz – Very interesting.  

    TLT/Samz – I find it very hard to believe they are willing to let it go.  If our payments on debt creeps up just 1%, that's $160Bn a year the Government needs to come up with to cover. 

    MSFT/JMM – I like that! 

    VIX/Bert – They are spiking you out I think.   There are so few traders now that it is literally you lining up against a bot on a thinly traded play like that.  

    Dollar 80.265 – at least that's doing what you'd think it would do.  Gold $1,682, oil $106.57 baby!  

    Thanks Shadow.  Alpha asked if they could just run the bottom half of the article and my response was less than polite…  

  143. Why would the 2:15 release spike the dollar up? I see only BOT buying. Is this EOD the power's show?

  144. wtf is going on?  is this panic buying?

  145. The mother of all sticks

  146. FU Mr Stick!!!

  147. wow.  haven't watched cnbc in ages.  that bartaroma woman looks like she was beaten with a bag of oranges.

  148. sh*t.
    and the $ is nice and ready to trash over the next few days to pop us over the next resistance .  that's the sound of my hat in the bull ring

  149. FAS flying…………… and VXX tanking :-(

  150. Phil — are we going to the moon??  S$P 1400 by tomorrow

  151. That last spike up, not a stick was total fluff!

  152. pharm pretty sure lots of gnashing of teeth about tbt in 2011…but look at gs and jpm today whats up there!

  153. Huge pop in nat gas to $2.32 (.11).  

    Don't forget, on 1/25 we closed at the highs and the next day we spiked higher still and this volume (68M on Dow at 3:05) allows them to do whatever they want with these indexes.  

    XLF flying at $15.15.  AAPL $564.  

    JPM raising dividends, kicking the Financials into high gear and boosting the Dow, S&P, etc.  Note the timing!  

    OCC Probing JPMorgan Chase Credit Card Collections (American Banker)

    2:00 PM On the hour: Dow +0.84%. 10-yr -0.25%. Euro -0.35% vs. dollar. Crude +0.47% to $106.83. Gold -0.34% to $1694.05.

    Would a Higher Top Tax Rate Raise Revenues? (Economix)

    Fed Open Market Committee: As expected, puts any real action off to April's two-day meeting, but regarding closely watched economic outlook: The panel acknowledges improvement in jobless rate (still "elevated"), but also "significant downside risks" and gas prices pushing up inflation "temporarily.

    More from FOMC: Staying the course still means near-zero rates at least through late 2014 and reinvesting principal from agency debt and agency MBS into further agency MBS. Lacker the sole no-vote. Household spending and business fixed investment continue to advance; housing still "depressed."

    "I have no choice but to own stock," says Nassim Taleb. "I don't trust Treasury bonds. I'd rather have a dividend than a coupon," he continues, succinctly making the case for big cap stocks. He's also not afraid of the euro, saying "they know the problems in Europe," but the U.S. does not. 

    Easiest Credit Worldwide Shows No Signs of Abating as Fear Index Plummets (Bloomberg)

    The Bundesbank reports its profits falling to just €643M in 2011 as it increased risk provisions by €4.1B following the ECB's bond purchases and acceptance of questionable collateral as backing for loans. President Jens Weidmann calls on the ECB to being thinking about an "exit strategy" from its extraordinary measures.

    Greek Swap Seen Provoking Aftershocks on Borrowing (Bloomberg)

    Molycorp (MCP +3.8%) shares are moving up on heavy volume after Pres. Obama, the EU and Japan ask the WTO to help increase China's exports of rare earths. But Dahlman Rose notes that given the massive drop in rare earth prices YTD, a negative WTO ruling may have no meaningful impact on prices. AVL +3.6%REE+10.7%.

    The Pentagon is a gas guzzler (CS Monitor)

    With ~$100B in cash on the books, CEO Tim Cook has said Apple's (AAPL +2.2%) board is studying what to do with the money. and Bernstein's Toni Sacconaghi offers a counter-intuitive idea: AAPL ought to bolster its potential payout by tapping the credit markets for $50B-$100B, with its low debt-to-capital ratio and premium bond rating, and given today's ultra-low rates.

    Speculation an "iPad Mini" will be introduced this year (III,III) intensifies after an unnamed Samsung (SSNLF.PK) official says"Apple is planning to release a smaller iPad, probably with a 7.85-inch screen." It's added Apple (AAPL) could buy $11B worth of displays and chips from Samsung this year (up from 2011's $7.8B), in spite of the intense competition and dozens of legal battles that exist between the companies.

    More on Apple/Samsung: The Samsung official also claimsApple "has the intent to use" Samsung's OLED displays, though it doubts Samsung's ability to supply  enough of them. This remark could be providing a lift to OLED technology/materials supplier Universal Display (PANL +4.3%). (previously

    Nice post from Barry:  


    The Federal Reserve Bank of St. Louis Review has a fascinating research piece titled Many Moving Parts: The Latest Look Inside the U.S. Labor Market.

    You can see the full piece in the Think Tank, but I pulled the more interesting charts and posted them below.

    I especially like the first chart, which shows “Worker Flow” in and out of the labor pool, and various states of employment.


    Click to enlarge:


    More charts after the jump

    Read the rest of this entry »

  154. shadow $ rising because of yields..wonder if the jig is up and this is a sign that Bernanke may lose control of the bond market.

  155. Now even the financials are joining the party. Phil its time to flip bull…

  156. divy raise and  and buy back

  157. "Flippin the bull" – Pharm should have a good emoticon for this somewhere!

  158. How is the VIX still positive? I've got to believe there is no conviction in this run.  

  159. What's going on with JPM? Are there any news?

  160. The mother of all price moves…. My caution has screwed me.

  161. FAS at 101!

    FAS Money – The second FAS 87 Call is gone at $11.50.

    IWM Money – One of the TNA 60 calls triggered at $5.50.

  162. Phil Now I am getting confused on the AAPL deal. Why does Maya1 Has to buy more Bull calls to cover his Jul 500 short call as he is covering it already with his stock?/ Ok Buy more Bulls But this is more upside if AAPL goes up but for the 500 call with 16$ premium. I do not get it

  163. I guess everything is great. All that crap that was being thrown around last week is forgotten!
    Is there any volume to this move?

  164. JPM buyback and div hike

  165. Phil / WMT trade questions –  Sorry for the delay, the power was down half the day here.  Anyway, you think I should
    1) Hold the calls and wait until the roll becomes $1.  When/If it's $1 then roll to the Sept $60.  If it doesn't become $1, should I sell more calls?
    2) Look into selling the 2014 $50puts and buying the 2013 60/70 BCS for net 0.30.  Stop out half if WMT doesn't hold $60.  Allocate another 25%?
    Trade Comments:
    You have a net $6.80 entry and the $57.50 caller can be rolled to the Sept $60 caller ($2.75) for .65 so as long as that roll is under $1, you may as well keep the protection. If you do that roll, then you are in the bull call spread for net $7.80 and have a $2.20 advantage over your caller so $62.50 becomes the point at which you get in trouble. The 2013 $60/70 bull call spread is $3.50 and buys you another year of rolling with another $6.50 of upside and, for good measure, I'd say it's prudent to sell the 2014 $50 puts for $3.20 but, if you do that, you should probably stop them out if $60 doesn't hold (at least half) or you'll be over-hedged.

  166. New highs from MSFT, IBM, CL, DISCA, UA, COH, WFC, SIVB,  WFM, BLX, FFIV, CALM, GWW, USB…  

    C is up 5%, BAC up 3.5%, GS up 5.5%, JPM up 5.5%, SKX up 4%, WFR up 4%, X up 6%, AA up 4%,  DMND up 5%

    No stopping this train at the moment but this still strikes me as very funny when the Fed just clearly said they are not moving on QE3 and the Euro has barely been holding onto $1.30.  Bernanke speaks at 9am so hope springs eternal I guess.  

    Volume now 83M so busy since the Fed and not the kind of move up you'd expect from a big volume spike so a lot of selling mixed in but up on stronger volume still a good bull case in the end.  

    1,400/Gucci – Sure, why put it off?  

    Thanks for updates StJ – Good thing we did have stops.  

    Bull call/Yodi – Because he wants to do better?  I'd rather see him stop out of the stock on a pullback and leave the spread to cover.  

  167. get bullish just in time to hold the bag?  not me.  but i will trim my shorts here.

  168. rainman
    This run is total BS BOT CRAP! All to suck in the sheeple. I don't think we will see a blow out top tomorrow, this is the top!

  169. So wasn't the fed keeping banks from raising dividends? If so, the JPM hike would be recognized as a signal by the fed taht the banks are now recapitalized and will start lending again (== bullish)?

  170. That XLF stick is something to be seen… I can't recall a move on the upside like this one in a long time. They really waited patiently to release the bazooka!

  171. XLF is up 3.5% today when the average weekly volatility over the last 50 weeks is 2.69%….

  172. Phil/Censorship
    Well Phil… how's it feel to be "censored"…. You Need to do "Crowd Funding" whereby a group of people will fund your views via magazine, books or films, when the "evil doers prohibit you from exercising your unpopular views.  You need to follow investigative journalist, Teri Buhl who is attempting to write a story about a banned New Canan, Connecticut trader with a very exotic sex life (sex, drugs and rock & roll – swinging) funded by profits selling FX trading to "mom and pops"….. also, the story relates to a recently (on leave) managing director at Morgan Stanley accused of an assault and hate crime on a cab driver…….high powered Connecticut lawyers are attempting to stop her publication of these stories (she has written for Fortune, Forbes, New Yorker the Atlantic). So, her story has so much interest, people are funding her to  publish and she has been given a top attorney through the Harvard Digital Media Center (Pro Bono) to represent her from the onslaught of law suits.  LOL        

  173. Gold just hit $1.660!  

    Volume/DC – Yes, picking up.  Now 91M on the Dow at 3:29 so good volume since the Fed, will be very bullish sign if we hold it but very bad sign if we dump out into the close on big volume. 

    WMT/Burr – Yes, I'd wait until I HAD to do the roll.  At .65, it's just not that urgent.  If it doesn't go to $1 by expiration, then we have to see what the options are.  The other spread is AFTER you have to execute the positive roll (because you wouldn't be doing the roll if WMT wasn't showing continued strength and momentum) again, at this point, it's like looking 3 moves ahead in chess, there are too many possibilities to say what to do if you execute the spread and they don't hold $60 so let's see where we get to first.  

    Banks/Rain – Yes, JPM must have passed their stress test and the early release of that result was meant to offset the disappointment of no QE – kind of like "Hey, your mom died but I got you a puppy."  

    Note last Fed meeting on 1/25:  

  174. Phil Bull calls got you. However you talking to a buy writer and a stock can go up and down but a bull gets killed if things go down as they are limited in time

  175. Phil – On February 24, 2012 you stated:
    "We are not just priced for perfection, we are priced for perfection plus a return to full employment a forgiveness of all debts without write-downs and inflation without rising interest – we are priced for Nirvana!"
    Question: How are we priced now? ;-)

  176. Phil
    What is you take on oil for tom. into inventories?

  177. GLL -    i covered to make a 16/17 BCS last friday.. now how low will gold go? thinking to flip the long 16 to 18 and make it a credit spread..  i have more faith in QE printing than i do in people deciding gold costs too much…

  178. Actually, reality check – REALLY this is going to make you all bullish and forget the crash of 7 sessions ago?   That one had a nice capitulation spike on Tuesday as well:

  179. There goes the VIX again..down like 8% in a split second.

  180. Too good to be true?

  181. wow, AAPL will be at $600 this Fri.

  182. SLV dropping very quickly!

  183. Now Fed releasing stress tests at 4:30.  Wow, they just keep changing the rules.  

    Gotta go for FAZ March (Friday) $22s at .69, selling April $20 puts for .62 as a fun spread.  

  184. Gold – april gold futures testing support at 50% fib from the Dec 1525 low – Feb 1794 high.  I just can't say what's next but goldbugs probably like buying a 50% dip.

  185. This is in part about asset allocation as people sell bonds and move to stocks – my guess. look at tlt getting taken to the woodshed. 

  186. FU MARKET! This is ridiculous! I guess it could be worse, oil could be up a bunch.. What a crock of sh!t…

  187. We did have a 3 day pullback recently, like your chart shows. It took us 4 days to blow past the old high. Screaming rally here. Phil, still no capitulation?

  188. Don't forget while the market goes up, does the dollar? when? Why?

  189. GLL – when in doubt sell half. ok, i'm flipping half the longs up to make a credit spread. i really don't like shorting gold. !!

  190. And we have not had the facebook ipo yet, what a day thats going to be ;-) .  Market will be up like 10% on that day alone.

  191. Going for 66.6 on the Q's.

  192. in the ancient  bull market times us dx and spu all travelled the same road

  193. A timely call on XLF there phil

  194. Phil/CASH: Been sitting on cash a long time. u ready to go bullish yet?

  195. AAPL portfolio:   I have CLOSED OUT the April 500/550 bull call spreads.  All of them.  In CASH now!

  196. Was Greece fixed again today along with Spain, Italy, Portugal, and Ireland?  Just trying to justify the market spike, or maybe unemployment is under 5%, might've missed that too.  Oh I know, gas prices are about $1 a gallon again.  Now it's making sense.

  197. stj…prices were  70.50/ 30.50

  198. Vix tanking for the 4th time today only to bounce back in a few minutes.

  199. interesting EOD

  200. Lemme know when we get to 1550. 

  201. Maybe Jamie and the boys will "mark-to-market" all of their crap now that they are doing so good. 

  202.  how is the market this inefficient???? are people really surprised by bank div hikes/buybacks? wow

  203. Phil, any adjust for VXX trade(Apr. $19/21 BCS, sold Apr. $21 Put)?  TIA.

  204. Phil….I'm selling into the excitement.  No, really, as you said the other day, I just need to give this horse a rest!  

  205. any news on apple?

  206. phil- is now time to buy TBT?

  207. When the fed says Friday and the banks shock the market an hour after the fed and before the markets close is a dirty trick to mash the least whats left of them. Criminal is what it is.

  208. Crowd funding/Acobra – Too much work.  All my stuff gets picked up on the wires once it's released (48 hours) so I don't care much if SA misses it for myself but for America, it's a sad, sad thing.   Did you know Forbes actually redacted my articles because their readers were offended by my remarks that Capitalism wasn't working?   People think they are informed because they read and watch the news but that's already filtered for you to make sure nothing in there is off-message.  I don't just mean Fox viewers either – there's almost no media outlet that doesn't have some kind of censorship.  Blogs with ads get pressure from their advertisers – you've seen people threaten to cancel their memberships over what I say.  I'm a little unique because I don't live off this money but, for people who do – that stuff matters and it's just another way people who have money can control people who don't and the less money the bottom 99% have – the easier they are to control.  That's the way things work in the country now – work until you drop with no time to think and, should you accidentally have some free time – there's 500 channels of Corporate Media to tell you how you feel about things and books cost $20 a piece now and libraries are defunded too so TV is the easy choice.  That's why the Conservatives freaked out about the Clint Eastwood ad in the superbowl – it wasn't an approved message and a lot of people saw it – can't have that in America…

    Bull calls/Yodi – Not if you stop them out intelligently.  

    Priced/Diamond – We are priced for fantasy today.  Still, this is now officially just like 1999 and we could go up another 20% from here.  Who cares why – it's a rally, so everyone buys until it blows up in their face.  As I said, I'd rather miss a few % out of 20 than jump in at the top but now we have Nas 3,000 below us and soon S&P 1,400 and then we HAVE to buy – like it or not.  

    Oil/Danny – We usually head up into 10:30 inventory and I expect we sell off after but who knows after this performance?  As I said last week – cash is lovely.  We miss a little rally but we don't have wrong bets – just cash…

    Gold/Scott – Why would you want gold when AAPL goes up 3% a day?  Gold is simply another asset class and it's one that has run away, ouperforming the S&P by about 200% since the 2008 crash.  There's not enough inflation to justify that, the Dollar was at about 90 then, now 80 so currency devaluation also doesn't work.  It's fear and bubble mania and that's it.  The VIX shows you fear is gone by the wayside so why should gold be up at this level?  Sure you can give them a little something for a hedge against future inflation but 200%?  A bit much. 

    Capitulation/Barf – No, we MUST capitulate (if bearish) and we hold up tomorrow.  You can't pretend this kind of move isn't happening but still loads of time to pick up stragglers like AA, BA, FCX, HPQ, WFR, X, YRCW…  A few stocks worth a look if the others are going to move even higher.  One nice thing about a mega-rally is it leaves very few stocks behind in the end.  

    Qs/Rain – Oh, so close, $66.29. 

    Bullish/Dflam – See above.  Going to have to it looks like.  

    VXX/Bob – Not yet but if we get down to $13 on VIX I think it's worth a roll.

    Good idea Lflan.  

    TBT/Sns – I don't play that anymore.  See TLT bear spread above. 

  209. Seeking Alpha censorship
    Seeking Alpha is ridiculous. How can they object to objective statement of fact like:
    …you perhaps realize what a TOTAL PIECE OF CRAP, PROPAGANDA-SPOUTING, MANIPULATIVE HATE-FEST Fox news is and how you can't believe a single thing that is broadcast over their airwaves.
    But I think perhaps you should have added this, which is standard for Seeking Alpha. 

    "News Corporation (NWS) operates as a diversified media company worldwide. Its Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, and movie programming for distribution through cable television systems and direct broadcast satellite operators primarily in the United States, Latin America, Europe, and Asia." [Source: Yahoo Finance]

  210. all news outlets suck some more than others

  211. if there was a guy like cronk around today people woudl flock to viewership..libs converatives those hitting both sides of the buffet table..we all thirst for objectivity but eat swill that is innured within the narrow confines of corporate agendas..was it ee cummings who wrote 'there is just some shit i will not eat'?

  212. I actually need to draw a 15% line on the NASDAQ chart as we are above by over 40 points now! The Dow is within 150 points of the 15% lines as well. 

    Also, volume on the Dow today was 30% higher than yesterday.

  213. With the VIX collapsing short calls where I was in negative territory are falling in value and it looks like a good time to buy some back at a profit as a way of adding bullish positions without doing much. And with the VIX in free fall, what better time to start thinking about buying some OTM  VXX calls on the cheap?

  214. Good AH hours article:

    Re-elected with 61 percent of the vote in 1936, President Franklin D. Roosevelt told his supporters, "Now I'm going back to do what they call balance the budget." True to his word, he cut spending and promptly sent the nation into a recession — a sharper decline than in 1929. [...]

    The growth logic took time to penetrate the rest of the business community. Even after the great spending surge of World War II wiped out unemployment, the National Association of Manufacturers and the Chamber of Commerce continued to argue that government deficits were "job destroying." This "strange thinking," Hoffman told the NAM, would "fasten upon us an economy of scarcity."[...]

    Growth now took precedence over the conventional thinking on balanced budgets and the ideology of market self-regulation. After World War II, the U.S. embraced a Keynesian anti-depression economics that united business, government and labor. That coalition would endure for the next 40 years of prosperity.

    Why do we keep repeating the same mistakes… At least some of us!

  215. 15%/StJ – We don't do 15%, once we firm up 8,259 on the NYSE, we'll have to redraw with 10% lines becoming must hold lines.  As you can see from the Dow – it's already doing the job there.  That's what I keep saying – once we break out, we have new must hold lines where we can begin making bullish bets with clear, strong resistance lines to watch for breakdowns.  Usually, we don't want to move the lines until everyone is over the new Must Holds but that's just not going to happen and I'll have to spend this weekend figuring out if we need to recalibrate our lines for some reason.  Clearly the NYSE is respecting it's Must Hold line, which indicates that it's still valid but why the huge lag?  

    At the close: Dow +1.64% to 13172. S&P +1.79% to 1396. Nasdaq +1.67% to 3034.

    Treasurys: 30-year -1.17%. 10-yr -0.6%. 5-yr -0.33%.

    Commodities: Crude +0.33% to $106.69. Gold -1.7% to $1670.85.

    Currencies: Euro -0.64% vs. dollar. Yen +0.93%. Pound -0.34%.

    Market recap: Stocks exploded higher after JPMorgan announced a dividend hike and buyback, likely the start of a chain reaction among banks as the Fed serves up stress test results. It was a nice day to own financials: JPM +7.3%C +6.3%BAC +6.3%,WFC +5.8%. Treasurys extended losses, pushing long-term yields to their highest since October. NYSE gainers led losers more than three to one.

    The Fed releases its stress test results: "Despite large hypothetical declines, the post-stress test capital level … of 15 of the 19 bank holding companies were estimated … above all 4 of the regulatory minimum levels … even after considering the proposed capital actions, such as dividend increases or share buybacks."

    Not so bad:  Citigroup (C), SunTrust (STI), and Ally Financial have failedthe Fed's stress tests, which mandates a minimum tier 1 capital ratio of 5%. Citi had a projected 4.9% ratio under the tests, SunTrust a 4.8% ratio, and Ally a mere 2.5% ratio. C -3.7% AH. STI -4%.

    Other bank stocks react to JPMorgan (JPM) receiving Fed permission to return capital to shareholders: C +6.4%BAC +4.6%,WFC +4.9%MS +4.5%GS +6.2%. Financials ETF: XLF +3.6%.

    Foreclosure Pact Alleges a Pattern of Malfeasance (WSJ)

    Bank of America (BAC +4.6%) has passed the Fed's stress test as well, say sources, but has not requested to do a buyback or increase its dividend, reports the WSJ. (earlier)

    Glaeser: Why Some Housing Markets Do Better Than Others (Bloomberg)

    Apparently gold has failed the Fed's stress test as the price dives over the past 30 minutes to $1,667/oz. GLD -1.8%.

    "There will be no light sweet crude imports into the U.S. Gulf Coast," by 2015, says Valero (VLO) CEO Bill Klesse, who expects domestic shale output to take its place. This will narrow the discount of heavy crude so much, the company is nixing plans for a Port Arthur refinery. Shale oil "(affects) the competitiveness of the refining business on the world scale." 

    Apple (AAPLcould be subpoenaed by the FTC over its deal to make archrival Google (GOOG) the default search provider for iOS devices (and thereby contribute to Google's mobile search dominance), sources tell Bloomberg. The move is part of the FTC's growing antitrust investigation into Google's business practices – one that covers searchGoogle+, recent privacy policy changes

    Who are the Super PACs’ Biggest Donors? (ProPublica)

    How the Depression Made Keynesians of Capitalists (Echoes)

  216. Is low volume a problem?


    It seems like a day doesn't go by where someone isn't pooh poohing the rally in equities and writing it off as a rally on low volume.  This isn't just a recent trend either.  It has been going on the entire bull market, which coincidentally has been one of the ten longest in history.  If we could give one piece of advice regarding these naysayers, it is to listen to them at your own risk.

    In the chart below we calculated the performance of the S&P 500 since March 2009.  We also calculated how the index would have performed if we backed out the performance of the index on days when the S&P 500 was up on weaker than average volume.  We consider weaker than average volume to be any day where the volume in S&P 500 Spyder ETF (SPY) was below its 50-day moving average.  

    As shown in the chart, the S&P 500 is currently trading at around 1,384, which works out to a gain of 103% from its bear market low on March 9, 2009.  Now, if we back out all days where the S&P 500 traded higher on weaker volume, the performance of the S&P 500 since March 9, 2009 would look considerably different.  Without these days, the S&P 500 would currently be trading at a level of 128, which would be a decline of 81%!  Say what you want about a rally on low volume, but gains are gains no matter how they happen.

  217. 15% / Phil – Sorry I was just being a bit ironic in my comments! 

  218. Country default risk:

    Apparently, no problem in the USA… Greece on the other hand!

  219. AAPL traders:  I want to let you know what I'm thinking.  I cashed AAPL out today.  But perhaps not for the reasons you may be thinking.  I do NOT think AAPL is going to significantly retrace.   Here are the reasons I cashed out.  
    1.  To follow one of my rules, that whenever a portfolio goes up by 10% or more in a day I consider cashing out, at least overnight, to allow thinking and contemplation.  I want to know why this occurred.  So tonight I'll be perusing the news of the day surrounding AAPL and the markets in general.  Phil would call it selling into the excitement.  After that I want to seek and answer to the question: "Why the excitement?"
    2.   Time to get out of the 500/550 BCS. When both arms of a spread are in-the-money the profitability decreases.   I'll be looking for a different re-entry level. 
    3.  The B talks tomorrow, I do believe.  This is an 'event' of sorts, so maybe better to see what happens afterwards.
    4.  And finally, hey, AAPL did go up quite a bit today, and perhaps a little pullback might be in order.
    Markets up on pretty good volume today.  I still contend that we are in a true bull market and that's the way I'm playing it until I see otherwise. 

  220. lflan/aapl – If i could pay pennies for your thoughts, you would be a gazillionaire.  Thanks for the update and the post.  I follow your comments a lot and as a result have made a lot of money.  So thanks again!

  221. Iflan – nice thinking, I like your trading and esp the 10% rule and selling in order to think about and contemplate the next move.  I doubt if you'll find anything specific for today's AAPL rally – in a bull market everything goes up.  It could be more institutional buying of AAPL as well.  But  what you would consider a "significant" retracement?   Not long ago AAPL dipped from 535 to 516, I think – was that significant?  Would you consider a $30 to $40 retracement at this point to be significant?  

  222. lolobear……I'm pleased that you are making $.   That's why we are here, to learn how to make money trading.  And, of course, we learn a lot of other stuff along the way.
    jerconn….A significant retracement.   Well, for me, I would love to see AAPL pull back to under 550 again.  540 or 530 would be significant, as I see it.   But I think a lot of people have been waiting for this stock to retrace for a lot of weeks, and it just hasn't happened.  And look at the P/E on AAPL  16.   That's right   16  .   I calculated today that if AAPL had the same relative value as AMZN, which has a P/E of about 130, that AAPL would be selling for $4,500 per share.  So in my opinion the stock is still undervalued and AMZN is terribly overvalued.  AMZN is certainly not a better company than AAPL.  So we have to remain long AAPL in some way.  So even if there is not a pullback, don't expect me to remain cash in this AAPL account for very long.   I believe this puppy is going to the moon, and I plan to be on for the ride. 

  223. Phil, 
    I have a TZA July 30/40 BCS at $1.58, now $0.63. What adjustments would you recommend I do?
    Many thanks in advance.

  224. Iflan – thanks, a $30 to $40 retracement is what I was also thinking is significant.  Do you use any indicators such as RSI or Chi oscillator to help determine when the stock may retrace? Or as you have said before, just your gut instinct?

  225. I am going to reposition myself tomorrow. My long positions are doing very well (as are everybody's) but my hedges are causing havoc. I long ago decided to hedge with short calls on stuff like TNA and TQQQ. Needless to say, this has been expensive in terms of portfolio value on a daily basis. I have tried to maintain short calls front month, but these have been blown out to April, and they are in trouble already. I can't continue to maintain short-term hedges like this.
    If I move my short calls from April to June, I can move 10% out in strike (or so) but then, in a short term drop, they do not release their protection very quickly. I consider this kind of hedge as storage of protection. The entire value of the position will be released in a downturn, and as long as I can roll, nothing is permanently lost. I was playing for a short, and perhaps hard, correction, but that has proven incorrect. We may eventually get this correction, and then, this sort of hedge is not the most effective.
    With the VIX at 14.9 or something ridiculous like that, I bought some Dec14  750 puts on SPX (thanks, robertFL). If the VIX ever gets back into the 20s, (could such a thing be possible???) this will pay off.
    I welcome comments.

  226. jerconn…the latter

  227. Phil
    Thank you and others for their input on AAPL.
    So, here is what I did:
    Rolled the July $500 short calls to the Jan $550′s for net $6 debit
    I also bought the 2104 $500/610 BCS as you suggested for $52- financing it partially with the sale of July $500 puts for $15 as well as the Jan 2013 $460 puts for $25, in effect spending $12 for the BCS.
    I have placed stops on the long calls and the short puts.
    Hope to pick up some more short puts at better prices if AAPL retraces (haha??!!)
    IF you think this was a good save ( for now, at least), then I would consider it a good exercise.

  228. VIX
    I was wondering what the minimum value for the VIX might be and found this interesting article:

    Here's a bit of it:
    The Weekly, Monthly VIX might be important for swing traders and investors.

    For active traders, the three most important application of the VIX might be the following:

    Potentially at Minimum VIX extremes, we can be more confident about future direction and might increase our position size accordingly.For example when we have a 5 Days Maximum in the VIX intraday, than we increase the Long position (If playing long), and if we have a 5 Days Minimum in the VIX, than we increase the size of our short position (If playing short)

    The VIX value itself could be used as an excellent tool to calculate our basic position size. Our position size depends on market status / setups, the WIN probability of the predictions that we are playing and as a default it depends on the expected volatility.As a general rule the Daily range of the S&P500 index is about VIX / 16 [%] This means, that for example having a VIX value of 16, we can expect the average Daily market range as 1%.Having a VIX value for the previous market Day as 80, than we can expect the coming daily range to be about 5% (80 / 16)

    Few VIX – related settings work so consistently as the following setups:According to some research the deviation from the SMA gives us a better edge than the VIX level itself.If we have the Daily closing level of the VIX more than 5 – 7% above the SMA10, than the win probability of a Long position is considerable better than 50%.If we have the closing level of the VIX more than 5 – 7% below the SMA10 of the VIX, than the WIN probability of the short position is considerable better than 50%Some traders even use these or similar setups for regular trading.According to Connors this edge works in a number of different time-frames.
    He says the minimum level for the VIX is usually 10-16, so we are pretty close to that. I agree with barfinger's strategy of starting to buy some long puts. It seems to me that if one buys deep out of the money puts in, say, AAPL, one might profit double if there is a correction and AAPL pulls back, or one could later use the long puts as the lower leg of a vertical spread to win back the lost premium.

  229. VIX
    The 10-day SMA for the VIX is 17.65 and it closed at 14.80 indicating a very favorable situation for a short position has arisen. If we gap up tomorrow at the open, I imagine selling into the initial excitement would not hurt.

  230. Good lesson in accounting tricks:

    This report also presents estimates through fiscal year 2022, because the baseline projection period now extends through that additional year. The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012–2022 period (see Table 2, following the text); that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources). The addition of 2022 to the projection period has the effect of increasing the costs of the coverage provisions of the ACA relative to those projected in March 2011 for the 2012–2021 period because that change adds a year in which the expansion of eligibility for Medicaid and subsidies for health insurance purchased through the exchanges will be in effect. CBO and JCT have not estimated the budgetary effects in 2022 of the other provisions of the ACA; over the 2012–2021 period, those other provisions were previously estimated to reduce budget deficits.

  231. Forgot the other side:
    "Now, add it all up, and the plan I'm proposing will cost around $900 billion over 10 years"

  232. Having been short for quite awhile, it's not a particularly cheerful evening for me — professionally, not personally speaking.  But here's some slight consolation:  Phil's "Taser paradigm" bearing fruit: [Times of London] "The Metropolitan Police is considering using a range of new tactics, inlcuding water cannon and Tasers, to cope with any future riots."

  233. Then again, the technology of of humane crowd control walks hand in hand with less attractive technologies of social control: [NY Times]: Jaywalkers beware!
    "New York State Set to Store DNA of All Criminals
    By JOHN ELIGON and THOMAS KAPLAN 43 minutes ago
    The deal would expand the DNA database to include people convicted of misdemeanors, not just felons."

  234. Censorship- For what it is worth Phil, I am also disappointed that SA would not publish your screed and in Forbes' editorial excess.
    You should be encouraged to disseminate your political views sans abatement. Especially in this election year. Your positions on important issues represent , I gather, general Democrat Party standards. Elucidating on some of your notable themes (nationalizing the oil industry; nationalizing the health care system; "punitive" corporate taxation;) to name a few, would enhance the national debate and surely  enlighten the masses.
    The more we the people hear from folks like  you, the better.

  235. Social / crowd control [cont.] — But may be taking a long position in "human control" isn't that bullish a play after all, since "human beings" appear to in a serious bear market themselves:  If the 20th century was the century of the population explosion, the 21st century, as Eberstadt notes, is looking like the century of the fertility implosion.  Already, nearly half the world’s population lives in countries with birthrates below the replacement level. According to the Census Bureau, the total increase in global manpower between 2010 and 2030 will be just half the increase we experienced in the two decades that just ended. "  [Disclosure -- I'm long PG, makers of Pampers]

  236. Robust retail sales.
    "In fact, February was the first time that this index exceeded the record high for the same months, set in 2007. It has taken 5 years for unit sales excluding gasoline to recover to where they were then, and there are about 5% more people in the US today. It’s an indication that more people are falling behind, and fewer people are doing better in the US. Trend growth has been anything but robust, but the past 12 months have shown some acceleration."
    "There has been some correlation between the rate of change in retail sales ex gas and stock prices. It appears that changes in the momentum of real retail sales ex gasoline lead significant moves in stocks. The growth rate trended down from February to July of 2011, foreshadowing the summer break in stocks. But from 2004 to 2007, stocks kept rising even in the face of steadily weakening growth in this indicator. So the period of negative divergence can be very long before stock prices break. The current annual growth rate of 6.7% is consistent with a strongly bullish stock market."

  237. Good morning!

    Dollar way up at 80.82 but not doing too much damage to the Futures so far.  

    Asia up about a point except the Nikkei flat and the Shanghai was down half a point but had a mofo of a stick to flip it up 1% – I don't know what's going on over there yet.  

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    8:30 Import/Export Prices

    8:30 International Trade

    10:30 EIA Petroleum Inventories

    1:00 PM Results of $13B, 30-Year Bond Auction

    14.8% of S&P 500 companies made new 52-week highs during today's rally, says Bespoke. That's both the first time the number of new highs crossed 10% this year, and the highest reading posted for the figure since May 2, 2011. The firm sees the improved breadth accompanying the market's latest move higher as a bullish indicator.


    The VIX (VXX -4.7%) at multi-year lows may suggest investor complacency … or maybe not, posits Conor Sen. The term structure of the VIX shows expectations for a sharp rise in volatility in coming months, as opposed to this time last year when continued smooth sailing was baked in. "(It's) why I'm still bullish," he says.

    Apple(AAPL) Drives Record $1.24 Trillion of Company Cash, Moody's Says. Apple Inc. (AAPL), the world’s most valuable business, led U.S. corporations in amassing a record $1.24 trillion of cash last year as memories of the 2008 credit crisis linger, according to Moody’s Investors Service. Excluding Apple, with $97.6 billion of cash and no outstanding debt, the figure was relatively unchanged at $1.15 trillion, even as revenue and cash flow from operations rose to a record, Moody’s analysts led by Richard Lane said in a report yesterday. Investment-grade companies graded A3 or higher by Moody’s hold $594.3 billion, or 54 percent, Moody’s said in the report, which tracked cash and liquid investments for non- financials.

    State unemployment rates were mostly lower in January, as 45 states and D.C. recorded M/M decreases, New York posted an increase, and four states were unchanged, the Bureau of Labor Statistics reports. Nevada maintained the highest rate at 12.7%; California and Rhode Island each posted 10.9%. North Dakota had the lowest jobless rate, 3.2%. 

    China's Wage Hikes Rip9ple Across AsiaMore Asian governments are pressing businesses to hike wages as a way to prevent outbreaks of labor unrest, raising the specter of higher manufacturing costs for global companies—and the products they sell world-wide. In the latest move, Malaysia's cabinet has approved the country's first-ever minimum wage to be imposed soon, according to people familiar with the matter. The decision follows similar moves elsewhere in the region, as officials from Thailand to Indonesia follow efforts by China over the past two years to boost pay after years of widening gaps between rich and poor. - This is a good thing, we won't get a proper recovery until we begin to see wage inflation.  

    Developed economies are still experiencing a hard landing after the credit crunch, despite data showing small increases in GDP, says FX analyst Stephen Gallo. As a result, investors should worry more about the West than about China, which is managing its slowdown. What we're experiencing is "the result of the bursting of the credit bubble," Gallo says. “This is what a hard landing looks like."


    CBO: Deficit Estimate for 2012 Hiked to $1.2 Trillion After Payroll Tax Cut, Jobless BenefitsA new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year ending just a few weeks before Election Day. It would be the fourth straight year of trillion dollar-plus deficits. The almost $100 billion spike from earlier projections for the fiscal 2012 deficit comes almost exclusively because Congress passed legislation recommended by President Barack Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people languishing on unemployment rolls for more than six months.

    Japan's Shocking Keynesian Slip: "We Are Worse Than Greece".


    Japan Q1 Business Mood Worsens But Seen Improving. Big Japanese manufacturers turned slightly more pessimistic about business conditions in January-March, but sentiment is expected to improve in the next quarter with the yen off record highs and due to spending for post-quake reconstruction. Wednesday's data suggests the Bank of Japan's closely-watched tankan sentiment survey, due next month, is unlikely to show a sharp worsening in sentiment.

    4 Big 'Troubles' in Little China. (graphs)

    Troika Finds Greece Already Likely To Miss Bailout Budget Targets.

    Canada's Housing Market Flirts With Bubble. After a brief dip, home prices have shot up; incomes haven’t kept up.

    Merkel Says Europe Is 'Good Way' Up Mountain, Not Over ItGerman Chancellor Angela Merkel said that European efforts to resolve the debt crisis are making progress, even as “imbalances” in euro-area economies show that the task is far from complete. 

    Bundesbank Steps Up Pressure On Draghi. Germany’s Bundesbank has stepped up pressure on Mario Draghi, European Central Bank president, to plan the withdrawal of exceptional help for eurozone banks, warning of potentially dangerous side-effects for the region’s financial system.

    Getting to Grips With the EU's New Fiscal PactA picture paints a thousands words. Over the course of countless summits, European leaders have strained to produce the right narrative for photographers: extravagant triple-kiss greetings, toothy grins, and wistful stares between Angela Merkel and Nicolas Sarkozy. But tonight in Brussels the choreography went horribly wrong: Jean Claude Juncker, head of the group of 17 euro zone finance ministers, was snapped strangling his Spanish counterpart.

    Here's What Really Happened Today When JPMorgan(JPM) Announced Its New Dividend.


    IDC is hiking its 2012 tablet shipment forecast to 106.1M units from a prior 87.7M – a level that translates into 54% Y/Y growth. Gartner, it should be noted, is estimating 368M PCs will be shipped this year, which suggests the ratio of  PC shipments to tablet shipments may be only a little over 3:1 in 2012. IDC also estimates Amazon (AMZN) sold 4.7M Kindle Fires in Q4, good for 16.8% of the tablet market. 

    My favorite Chinese stock:  HSBC is upgrading China Mobile (CHL) on a belief the world's largest carrier will soon offer the iPhone. HSBC expects a new Qualcomm (QCOM) chip supporting China Mobile's upcoming TD-LTE 4G network to be included in the next version of the device, thereby allowing Apple (AAPL) to make good on a reported promise. Of course, all of this assumes the Chinese government is willing to play ball.

    Go Ricky!  Santorum Wins Alabama, MississippiFormer Pennsylvania Sen. Rick Santorum won the Alabama and Mississippi primaries Tuesday, pulling off another pair of surprise victories and boosting his claim to be the conservative alternative to Republican front-runner Mitt Romney.

  238. Have the Futures gotten so dull that no one is up at 3am anymore?  

    My stupid computer decided to do a windows update in the middle of me writing comments and I lost over an hour's worth of writing – all brilliant stuff, I assure you.  8)  

    Shanghai went back to big negative, now down 2.6% in a really crazy day and I think closed now. 

    China's home prices are still far from reasonable levels, said Premier Wen Jiabao in a speech today, reiterating the country's commitment to cooling the national housing market. His comments sent China's benchmark index down the most in three months; Shanghai Composite Index -2.1%, erasing a 0.8% gain.

    China will expand 8.3% this year, forecasts S&P, exceeding China's own estimate of 7.5% growth. Potential negative developments in the eurozone and Middle East provide downside risk, but China should benefit from "local governments' penchant for growth and policymakers' increasing support to small and midsize enterprises."

  239. Note the volume on the move down.   This is what I'm talking about, when volume selling comes into a BS market like this – you get moves like that – down 3% in 2 hours!  

  240. I'm up, just got home from Open Mic night and since there is a 2hr time difference now, it's easy to be up for the 3am trade.  All I want is to make $10K before the 20th where I fly home to FL.  If I make that 10K, I can have a really nice trip for 3 weeks!
    Let's trade!

  241. Phil, you have to stop writing in the Comments box.  If you write in the WordPress editor, it will Autosave your comments.  There is a Autosave plugin for the Comments box, but the Admin here hasn't installed it.

  242. Good Morning
    Phil could I also have a $10,000 trade please :-)

  243. PHil, when you figure out how to turn off Microsoft automatic update, let me know…I have never been so annoyed as by their unannounced and unsolicited upgrades that take over the computer just as you're working on something…but I haven't figured out how to turn off the auto update…there should be enough computer savvy ppl on this board to tell us how to do that I would think… 

  244. It is hard to say what is most damning in this resignation letter from Goldman Sachs, published in the NY Times today, but here is the gist of it:
    How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

    What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

    Sorry I won't be around to discuss today, since I am heading to Albany to lobby for funding for low-income housing and homeless programs.  I don't expect much since our individual legislators don't matter much due to NY State's top-dominated budget process, but I'm always interested to see what happens at these events.  
    I've been low key trading for the past month, busy with more homeless, plus several job interviews, so I may have big changes soon.  Like many of you, it is hard to wrap my mind around a bull market, retail rising, and my worst year ever helping people who are homeless and searching for low-income housing.  We are dealing with a new heroin epidemic and severe austerity from state and local budgets for many programs that serve the mentally ill.  Its hard to be a bull in a world where I'm walking through so much bear shit.

  245. TLT continues its massive sell off in pre-market down another .95 – we have had a huge move in tlt.
    Would be very interested in hearing member opinion about what is happening. – only slightly higher volume of 900K vs average of 780K 
    Seems like it must be money that has been parked in bonds moving to stocks - 
    Is this the retail investor finally moving to stocks – sign of blow of top – can only hope -

  246. For those interested – yen is starting to drop like a stone

  247. Phil – I have to sell some bullish puts to off set bearish positions.
    Should I just look at the income portfolio – thanks 

  248. Phil,
      I had an Apr EDZ and TZA bull call spread on which I bought to cover the short call leaving naked the long call. So, I have 40 Apr EDZ 12 calls at $1.65 (now $0.9) and 40 Apr TZA 18 calls at $2.12 (now $1.15). Question for you is should I roll, DD or just wait? Don't see a great roll option at the moment. Thanks.

  249. Disbabling Windows update
    In Windows 7:
    Go to Start Menu
    Go to Control Panel
    Select Windows Update (If your Control Panel  is listed alphabetically, this will be at the lower right).
    Select Turn Off Automatic Updates, or Notify Before Automatic Updates.
    Alternatively, prepare text in a text editor that provides automatic saving and then paste it into ultimate destination as required.

  250. Good morning again!  Had I known people were here, I would have stayed up but I was so annoyed at losing my comments I went back to bed so I'm super-awake now!  

    Futures ticked up on Dollar pullback to 80.70 but looks bouncy and mean here so be careful.  Gold is properly scared at $1,656 but oil still brave at $106.59 (and we expect it to keep up through inventory at 10:30).   

    Hang Seng went red into the close and -2.63% was final on the Shanghai and the Nikkei was closed when China crashed but Nikkei futures are still strong at 10,085.  Europe is up a point and looking strong and the Euro bounced off $1.30 to $1.307 and the Pound bounced off $1.565 to $1.5712 and it's 83.5 Yen to the Dollar so of course the Nikkei is thrilled at the moment.  

    6:00 AM Overseas: Japan +1.5%. Hong Kong -0.1%. China -2.6%. India +0.6%. London +0.4%. Paris +0.8%. Frankfurt +1.1%.

    7:00 AM On the hour: S&P +0.16%. 10-yr -0.42%. Euro -0.05% vs. dollar. Crude -0.13% to $106.58. Gold -2.22% to $1656.55.

    Magnitude 6.8 earthquake strikes off northeastern Japan coast, tsunami advisory issued. (Japan Meteorological Agency)

    U.K. unemployment at 8.4%, up 0.1% on the quarter. (PR)

    U.K. Chancellor George Osborne aims to launch a 100-year debt issue to "lock in" the benefits of Britain’s low borrowing costs. Also being considered is a perpetual gilt that never matures. Investor reaction has been mixed, with investors attracted by the idea of a long-term, fixed-interest, safe security but reluctant to get into bed with such low yields.

    MBA Mortgage Applications: -2.4% vs. -1.2% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) unchanged at 4.06%. 

    The German cabinet approves the country's share of financing for the €500B European Stabilisation Mechanism. Germany will contribute €21.7B of paid-in capital and €168.3B of callable capital. 

    India's headline inflation edged up to +6.95% in February from a year earlier, ticking up for the first time in 5 months on higher food prices. Economists had expected +6.79%. India's central bank meets tomorrow and is widely expected to hold rates steady 

    South Korea's jobless rate hit an 11-month high in February, jumping to a seasonally adjusted 3.7% from 3.2% in January, mainly due to a flood of new job seekers as graduates entered the market. The data will likely do little to dampen optimism over the resilience of Asia's fourth-largest economy, and the jobs market is expected to pick up again in March. 

    World oil markets face a "bumpy ride" in the months ahead, warns the IEA, as OPEC spare capacity is dwindling to the lowest level since 2008, leaving little buffer as countries like Saudi Arabia ramp up production.

  251. @Felipe
    "…….. This is what I'm talking about, when volume selling comes into a BS market like this – you get moves like that – down 3% in 2 hours……. 
    Futures ticked up on Dollar pullback to 80.70 but looks bouncy and mean here so be careful".
    I miss those days when the market was much lower and you admonished 3/4 of the world for not recognizing what the other savvy quarter of the world apparerntly knew:  that there was huge value in the prices on offer back in 2010.  WE were the ones who were nuts for being so bearish, you told us. 
    And sure enough the market kept on going with only one setback in the late summer of 2011.  Since then we are up 30%, AAPL has tripled, as well as others—- MOMOs, large caps, small caps, no caps.
    The only single and simply remarkable advice that has been given for nearly two years now has been the Bear cartoon advising the dimwit to just BUY THE F'ING DIP.  All the other words, books, crash warnings, hyperinflation, deflation, stagflation, bloviation have been for nought.
    But I just know that if I close my shorts,  within hours the Paul Farrells of this world will finally prove right, your own remarks to "BE CAREFUL" out there, and other similar bearish sentiments will at last emerge triumphant.
    But a prehensile niggling in my brain says to bet it all, close the shorts, take what's left and put it all on AAPL calls and go away.


  252. Quick recap of comments so please excuse very short answers and please re-ask in new post if I miss or am unclear.

    I hope someone is putting Lflan's excellent trading rules in the Wiki.  

    TZA IZega – It's $1 to roll down to the $21 calls and I wouldn't sell puts yet as 5% up or down in the RUT is $3 on TZA and if it's up, you will be able to sell $13 puts for $2 (and then you have another $1 to roll down again) and if the RUT falls 5%, you're in the money.  And sure I look at the indicators but I am more concerned with Global fundamentals but now that we're in a technical rally, fundamentals are out the window (and have been since the S&P went over 1,360 and Dow 13,000) so there's not much to do but watch the charts as bad news clearly does not matter.  

    Good adjustments Barf but I would consider adding an aggressive FAS trade like the one in our $25KP, which was far out the money when we put net $1,000 into it and is now looking good to pay $4,000, which will give us much-needed cash to reposition our losers.  

    AAPL/Maya – I'd put a stop on the stock at $560.  You can always buy the stock back over the line but it would be a shame to blow those gains and you have very good upside coverage on the short calls without it.  

    VIX/JMM – I agree, 12 is super low and historically doesn't last too long but that's in "normal" markets that don't have PIIGS that could go bust every day and California about to fall into the fiscal ocean etc.  Ignore and soar can only take you so far for so long before you run into some "unexpected" hazard.  

    Health care/Pstas – How about the fact that it's 3 years later now and Health Care costs have continued to skyrocket out of control, driving the estimates higher.  If we wait 3 more years it will cost $1.6Tn and 3 more years it will cost $2Tn – this is very typical of Conservative thinking – keep putting off a problem because it's "too big to fix" and then justify the inaction because the problem gets bigger and worse to fix by the constant inaction until things are so screwed up that really are unfixable and then they have the gall to say "see, we were right – it's even worse than we thought."  That's everything that's wrong with Republicans in a nutshell…

    And again, spending $125Bn a year on Universal Health Care or spending $600Bn a year on Iraq/Afghan wars??? Yes, I can see how a choice like that is so difficult to make.  

    TASR/ZZ – Still just $4.12!  

    Censorship/Pstas – Thanks but I find that I just have to keep putting up the investing stuff and, every once in a while, I get to sneak a little of that counterprogramming.  Sometimes I get away with it, sometimes I don't.  With Forbes – I said it wouldn't last before they published my first article and on day two they gave me notes which, of course, caused me to push the boundaries every day for the next couple of weeks until they actually had a board meeting and decided to remove everything I had written and try to pretend the whole thing never happened.  I thought about suing them just to make a racket, but what's the point?  

    XRX/Pstas – Not for years.  Worth a look on weekend.  

    LOL ZZ!  Adult diapers in Japan outsell baby diapers….  

    Good point DC.  

    $10K/Burr – How about the AAPL March $575/565 bear put spread at $5.60, selling the $570 calls for $4.70 for net $1 to make $9?  10 of those is $9K profit if it hits and an interesting way to put your foot down on AAPL – as long as you don't mind ending up short 1,000 shares at net $566, of course!  

    Comments/Burr – It's not my post, it's the comments.  Not going to write those in WP each time.  The problem is MSFT doesn't even give a warning, just starts shutting everything down.  

    GS/Rev – There's a good topic for the morning post!  

    TLT/Samz – Just money rushing out of TBills after very fakely rushing into it.  Some are suggesting the Banksters had a deal with the Fed to buy up the TBills in exchange for easy stress-test and now they are past it they are dumping out.  

    Bullish puts/Samz – Remind me during the markets and we'll see what's cheap but HPQ is on top of my list.  

    EDZ/Japar – At this point it's better to put the money in to going longer (in time) and lower in strike, not to DD as we don't know when, or if, this thing will stop going up.  With the VIX this low, you can roll EDZ April $12s (.85) to July $11s at $2.10 for $1.25 and you can turn it into a BCS by selling the $15s for $1.15 and then it only cost you net .10 to roll out 3 months and drop $1, which isn't bad.  TZA Apr $18s are right on the money at $1.44 (if you are being quoted $1.15, get another broker!) and those are at the money so very easy to come back still so I'd spend .95 to roll to the $16s ($2.40) and the escape plan would be to spend another $1.30 to roll to the July $16s (now $3.70) and then cover with something like the July $24s (now $2) to pay for most of the adjustments. 

    Thanks JMM!    Also should go in the Wiki – good computer tricks are worth saving.

    I agree Flips, it's like a no-win scenario.  That's why I liked cashing out last week.  I'd rather just sit this out for a while and see what happens from the sidelines at this point but there are so many tempting shorts I can't stay away (more on that in the morning post).  

  253. AAPL/Phil
    Morning.  Another student caught in a AAPL Bear Trap.  Have read your direction to Hoss & Maya.  Think I'm getting it.  But, still want to ask.  I'm stuck in this:
    +10 Jan 13 300 Call (paid ~$100 when aapl ~$400)
    -10 Apr 485 Calls  (have been rolling up and out as fast as possible, but the aapl train got away from me)
    Can add more capital if I can use it to re-start writing weekly/monthly calls for income.  I do believe in a pull back, thus staying somewhat high delta on the short is my continued risk, but still a big time bull long term.  Thanks.