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Free-Fall Friday – Are There Any Dips Left to Buy?


No one told us markets could go down?  This is an outrage, I demand an investigation – TURN THOSE MACHINES BACK ON!!!   

Has it already been a week since I said "Stop the Rally, We Want to Get Off"?  As I noted in that post, we began our list of 12 Long Put Plays for Members on Thursday of last week (near the end of what I called "A Weak Week of Denial") and some have already doubled while others, like PCLN, have gotten even cheaper, which only makes us love them more…

I concluded that this rally was fake, Fake, FAKE and gave my reasons on Friday so no point in going over them again – now we're just watching and waiting to see what sticks as we haven't actually done a lot of technical damage (see Dave Fry's chart) – Yet! 

Although we were TRYING to get bullish on Monday, we did so only after setting more aggressive targets in our Weekend Review of the 5% Rule (see post for details and levels) and by 10:09 on Monday, our first trade idea in chat was the very bearish TZA spread that I featured again in Tuesday's post, which was the April $17/18 bull call spread at .42, selling the April $17 puts for $1 for a .58 credit.  TZA finished at $18.39 yesterday and the spread is now .54 but the short puts are down to .65 for a net gain of .47, which is 81% in 3 days and a good way to offset the 2.3% drop in the Russell – isn't leverage fun?

What was not fun is what happened to people who trusted Credit Suisse to run an honest game with their TVIX instrument.  As noted by ETF Digest's David Gillie, an ETN is an unsecured, unsubordinated debt security with significant basis on the credit rating of the issuer. Although ETNs may be named to indicate tracking certain futures markets or indices, due to the fact that their holdings are credit notes rather than tangible assets, such as ETFs, their price becomes largely supply and demand based rather than based on underlying holdings.  As Kid Dynamite points out – it does say right in the TVIX prospectus:

The long term expected value of your ETNs is zero. If you hold your ETNs as a long term investment, it is likely that you will lose all or a substantial portion of your investment.

Oh Please!  Like we're going to read the prospectus before we buy a financial instrument?  We don't have time for that – we're savvy investors – now where are those Credit Default Swaps that will protect me from bond defaults?  

We did have a bullish play in Member Chat on Tuesday but it was TLT, as that ETF (not ETN!) touched $110 again and my 1:35 comment to Members was:  

TLT coming back to a defendable $110 line.  April $108/110 bull call spread is $1.15 and you can sell the $108 puts for $1.30 for net .15 credit on $2 spread with 900% potential profit in 31 days.

CAT WEEKLYTLT got back to $112 yesterday and the $108/110 bull call spread is already $1.50 and the $108 puts fell to .70 (thanks, in part to that collapsing VIX) and that's net .80 already, up from a .15 credit in 2 days and that's up 533% already – LEVERAGE!  We also had a longer-term EDZ hedge and I reiterated 9 of our Long Put Trade Ideas just ahead of the close as the market ship did seem to be taking on water – even if it wasn't sinking yet.  Ironically, on Tuesday, we were discussing VXX and how dangerous that was to play (we do) because of the way that ETN imperfectly tracks the VIX.  Frankly, it didn't even occur to me that people were long on TVIX – we were shorting it in October because it sucked

CAT was one of our Long Puts and it didn't take very long for the May $95 puts to jump from .95 to $1.90 – a nice double with LEVERAGE!  The point of "LEVERAGE" is to use it to your advantage because, if you are going to be able to make a 100% gain on a relatively small drop in the Dow (2% this week), then you have 50:1 LEVERAGE on the short side.  That means, if you have, for example $100,000 invested and you fear losing $10,000 on a 10% drop in the market, you only need to put about $2,000 into leveraged protection and you're going to be well covered.  Of course, if your $100,000 isn't going to MAKE at least $2,000 if the market doesn't fall – then you're just wasting money and should probably go to cash – hedging is tricky that way – you have to have an actual plan!  

Our plan on Wednesday was to watch and wait but, since our bullish hedges were on their way to big gains, it was prudent to hedge the hedges and we discussed an aggressive long on DDM, using the May $70/75 bull call spread at $2.10 IF (and only IF for you programmers) the Dow got back over 13,200.  Sadly it didn't but the DDM spread is still $1.75 – down just 12% – even if we had triggered it, it would be a small price to pay against the 81% gain on TZA, the 533% gain in TLT or the double on CAT.  It's very simple, when we make a good gain, we either take the money and run or we lock in the gain by taking a trade in the other direction – that helps set us up for the next turn (very good when we're trading in a channel – which we have not been lately).  

Wednesday was oil inventory day and we got the gift of $107.50 oil to short and we hit our $105 goal yesterday for another fun week of poking the speculators.  At 12:12, I thought the "rally" was looking a bit forced and I added 2 more disaster hedges for a slightly longer time-frame than our TZA play:  


  • SQQQ June $10 puts can be sold for .60 and the June $10/14 bull cal spread is $1.05 for net .45 on the $4 spread.  
  • DXD May $12 calls are $1.20 and those can be offset with one of this morning's bullish short puts.  

The SQQQ June $10 puts are still .55 and the $10/14 spread is $1.11 so up "just" .24 so far but what we like to call "on track" for the potential 788% gain with SQQQ at $11.  The DXD May $12s are only $1.25 and also still playable if the Dow remains below 13,100.  That's another key to hedging – you have to keep tightening those stops to protect the wins – once we have cash, we can always find more trade ideas to hedge with!

Yesterday, as we like to do when we're winning on the bear side, we looked at a speculative upside play on DIA, using LEVERAGE to potentially turn $8,700 into $400,000 if the Dow makes it to 20,000 (up 50%) by Jan 2014.  We're up 8% in 3 months and up over 25% since October so, if you think this rally will never end – it's a perfect trade!  Of course you can turn $870 into $40,000 or $87 into $4,000 – going for the big bucks was just an example and again, if you have $100,000 CONSERVATIVELY invested and you're worried you might miss something – then $870 tossed at that can goose your returns 40% – even if you do miss an epic rally. 

During the day, as I'm sure you can guess, we added bullish trade ideas to the mix.  Long-term, of course, as we are long-term bullish – we're just looking for a short-term correction as the market has certainly gotten ahead of itself.  Most likely we'll flatline into the weekend and next week marks the end of the Quarter so anything other than a move up will make us VERY bearish.  Cashy and cautious is still our overall stance – when we're flexible, we can make plays like the ones above on Monday, Tuesday and Wednesday and be back to cash on Friday and sleep very well over the weekend – looking forward to the next opportunity in either direction next week.  

We already made our Egg McMuffin money in the Futures this morning as my 4:49 am comment to Members in Chat related to taking advantage of a sharp Dollar drop that popped the Futures:

Meanwhile, Dollar all the way down to 79.57 with Euro at $1.327 and Pound at $1.587 so not likely they'll go up more than 0.024 and 0.013 respectively and that means 79.50 should hold and that means we can poke at Futures shorts again at Dow (YM) 13,030, S&P (/ES) 1,395, Nas (/NQ) 2,750 and RUT (/TF) 825.  

By 8am, the Dow had fallen to 12,962, 1,385 on the S&P, 2,730 on the Nasdaq and 816 on the Russell.  The RUT pays $100 per point per contract so $900 on that move alone so don't expect us do do much today other than sit back with our Egg McMuffins and watch the fun – there will be plenty of opportunities to jump back in next week for another round of fun!  

Have a great weekend, 

- Phil

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  1. WMT spread
    Interesting effects of volatility. Having bought the WMT 2013 $45/$57.50 bull call spread just  a couple weeks  ago, I was able to sell both legs  at a profit yesterday for a gain of more than 15% in less than a month.  As this was the largest  position in my portfolio,  a  huge win.

  2. Happy Friday….GLTA

  3. Nothing like a falling VIX to help kill premium Jmm….

  4. Phil,
    From the "buy puts" list from Mar 14, 2012, Looking at the price of the puts and comparing them to this morning, I gather from your early AM comments that if the put prices are cheaper than when recommended, you want us to get in and initiate positions. from my review AXP, GOOG, HD, KO, fit the bill.
    From the Momo stocks…PCLN,CMG, LVS fit the bill.
    I prefer the axp/hd/ko/goog list. Your recommendations, as always, very much appreciated. Thanks 

  5. Oil Lines

    R3 – 109.02
    R2 – 107.90
    R1 – 106.75
    PP – 105.62
    S1 – 104.48
    S2 – 103.35
    S3 – 102.21

    Yesterday's high and low – 106.77 / 104.5

  6. Heavy selling of IWM pre market

  7. All the 'beats' are due to this…..$239M worth of shares were repurchased.  Here is a list of such a repurchase program, which has helped EPS.  Biderman's take:

  8. Credit Suisse announced last night after the close they would start issuing new shares of TVIX- I guess people will get in line to buy- lol! For what it is worth- NAV is claimed to be $8.27 minus 6% premium- down from 83% yesterday morning.

  9. Phil – i should have waited a little longer but needed some upside protection so i followed this post on Wed:
    "Meanwhile, Dollar failed to hold 80 so not the best time to add shorts.  Watch that S&P 1,405 to confirm a bullish recovery as well as 835 on the RUT.  
    At the moment, the DDM play above is a better way to go as we had a nice sell-off on the Dow. "  I didn't sell a put thinking we still might have a pull back
    Any thoughts on how should react today if we continue dropping? Cash for the weekend, maybe?

  10. Good morning,


    IWM     79.10,  79.29,  79.56,  79.82,  80.17,  80.46,  81.04,  81.41,  81.65,  81.94,  82.12,  82.34,  82.67,  82.94,  83.18,  83.33,  83.55  and  83.74

  11. After reading a lot of the articles concerning TVIX and seeing the price action over the last 2 days, makes you wonder what is the purpose of this thing and how can it be so poorly structured.

    Of course, knowing that it was priced 80% over NAV, should give you pause, or a reason to short.

  12. AMZN making me proud! Again many thanks to Pharm for his call the other day. Now only if AAPL gets going..

  13. JRW: I do not understand at all what those bunch of numbers are. they do not mean anything to me.

  14. The Mar4 103 calls need to be rolled today.

  15. dpast….AMZN has been a beast.  I only did a few to goose my upside potential JIC.  Oh well, but I am glad it worked out.

  16. We rolled yesterday so nothing expiring today!

  17. Good improvement on this one. Got to protect the TLT profits!

  18. Good morning!  

    I was kind of taking it for granted we'd have a bad open (see title) but we're holding up pretty well.   Dollar at 79.72, Euro $1.323, Pound $1.583 with 82.4 Yen to the Dollar and that's knocking the poor Nikkei back to 9,900.  I don't see why we are opening flat – Europe is down half a point and heading lower.   

    So nothing to add, if we cross those Futures lows they are fine to jump back in on and, if not, then we're watching and waiting.  Volume is nothing at the open so we can't draw any conclusions for a while.  Next week is a big housing week again with Pending Home Sales on Monday, Case Shiller on Tuesday (along with Consumer Confidence), MBA Mortgages Wednesday (with Durable Goods) and then Friday is a huge day with Q4 GDP, Personal Income & Spending, PCE Prices, Chicago PMI and Michigan Consumer Sentiment.  All that to take us into the end of the Quarter so a lot of work ahead for the Window Dressers if this data isn't good.  

    TVIX opening at $8 – Ouch!  

    KBH had a crappy report – if this is a preview of homebuilders, then the Bullish premise is dead at the earnings gate:

    KB Home (KBH): FQ1 EPS of $-0.59 misses by $0.36. Revenue of $254.6M (+29.3% Y/Y) misses by $82M. Shares -11.9%premarket. (PR)

    It's too far too fast for KB Home (KBH), plummeting 15.5%premarket on an earnings miss after a 67% moonshot in the shares YTD. Q1 net orders of 1,197 were off 8% from 2011 Q1. Gross margin declined to 9.7% from 12.6% a year ago. Order backlogs represent $460M in sales against $353.6M this time last year.

    Friday's economic calendar:

    10:00 New Home Sales

    10:00 Mass Layoffs

    1:45 PM Fed conference on the financial crisis

    2:30 PM Fed's Lockhart: Monetary Policy

    At the open: Dow -0.08% to 13036. S&P -0.02% to 1393. Nasdaq flat at 3063.

    Treasurys: 30-year +0.42%. 10-yr +0.29%. 5-yr +0.15%.

    Commodities: Crude +0.12% to $105.47. Gold +0.72% to $1654.25.

    Currencies: Euro +0.23% vs. dollar. Yen -0.17%. Pound -0.08%.

    After opening higher, it's been a straight line down for European shares which now sit at session lows. Stoxx 50 -1.1%, led by Spain -1.5%. At this point, it's looking like the worst week of the year for shares across the pond, with the Stoxx 50 off about 4% from Monday morning

    Market preview: Stocks look to continue in their consolidation mode, with S&P futures hugging the flatline as weakness in overseas markets keeps sentiment under wraps ahead of data on new home sales. KB Home -14.4% after saying orders for new homes declined, and Micron -3.9% after reporting a wider-than-expected lossStill ahead: new home sales, Fed conference.

    The Fed will today host a shindig of the world's leading central bankers to dicuss the impact of their money printing. Those joining Ben Bernanke include the BOE's Mervyn King, the BOJ's Masaaki Shirakawa and former ECB Chief Jean-Claude Trichet, who was very public in his resistance to QE but nonetheless allowed the bank's balance sheet to balloon.

    Is this as good as it gets? Two economists contend that because of U.S. demographics and the makeup of the workforce, growth was already slowing and on a weaker course before the 2007 credit event came along – and now the current recovery is already in full bloom. "In other words, the good times are over, and they are not coming back."

    Credit Suisse will restart issuance of TVIX ETN units today. It was the suspension of such last month that led to the units massive premium to NAV, much, but not all of which melted away yesterday - no doubt because the market expected today's announcement. TVIX-16% premarket.

    Canada's February inflation prints at 2.6%, up from 2.5% previously and inline with expectations. Core inflation moves to 2.3% against expectations for 2.2%. The loonie -0.3% at $0.9972.

    U.K. February mortgage lending grows just £545M vs. £651M in January and £1.28B a year ago as housing approvals dip to a 9-month low. Other data show consumer net repayment of unsecured debt rising to £305M from £123M previously as families try to get a handle on their finances.

    U.K. banks still do not have enough capital to ensure their health during another crisis says the BoE's new Financial Policy Committee. Limiting dividends and holding back pay are not enough, says the group, which urges the lenders "to raise external capital as early as possible." 

    The new Greek bonds accepted by the country's private creditors are off to a rough start, with the longer dated paper trading at less than 20% of par after being priced around 25% at issuance. At the end of the day, the government will have reduced its €350B debt burden by about €58B. It was a lot of fuss for so little. This issue isn't done with.

    One reason for the poor performance of the new Greek bonds is the absence - due to a technicality – of a CDS market for them. "With no CDS technical to assist with unwanted positions, the market is struggling to find the marginal buyer." Notice to regulators: If investors can't protect their longs or sell short, they sell.

    Obviously, it ain't just Goldman:  JPMorgan Chase (JPM) is ordered to pay $384M to American Century after losing an arbitration. Over time, JPM “stacked the deck” against American Century by pushing in-house funds, encouraging customers to swap out of Century funds, and awarding bonuses for selling JPMorgan products, the arbitrators say.

    The SEC is investigating whether high-frequency trading firms and exchanges collude to limit competition or manipulate markets, the WSJ reports. The probe includes the BATS (BATS) exchange, which is due to start trading today after selling 6.3M shares at $16 each in an IPO, although it's not known if the NYSE or Nasdaq are involved. 

    BofA (BAC) is launching a small pilot program that will let homeowners at risk of foreclosure hand over the deeds to their houses and then sign leases for BofA to rent the houses back to them at market rates. It's a shift in strategy for BofA and could be less costly to the bank than a regular eviction-and-foreclosure process, while doing less damage to borrowers' credit scores.

    "For virtually the first time this cycle, buying gold is a contrarian trade," says Kamal Naqvi from Credit Suisse of the low sentiment in the market. Gold hit a 10-week low of $1,628/oz. yesterday as, quite frankly, it's a lot easier to buy Apple. The metal is recouping a bit this morning, +0.4% to $1,660. 

    IEA chief Maria van der Hoeven backs Saudi Arabia to fill the gap in oil supplies caused by international sanctions on Iran, saying "There is no fear of disruption." The Saudis said on Tuesday that they're ready to increase output by 2.5M bpd to 12.5M bpd, but some analysts are skeptical about the country's ability to do so.

    PulteGroup (PHM-4.4% premarket on reports of increased pressure from the Labor Department amid an investigation into housing industry pay practices. At issue is whether subcontractors hired by the big home builders are paid proper minimum wages, overtime and other benefits as required by U.S. labor law. LENKBH,DHI and NVR also are being investigated. 

  19. Darden Restaurants (DRI):
     FQ3 EPS of $1.25 beats by $0.02. Revenue of $2.16B (+9.3% Y/Y) beats by $20M. (PR)

    More on Darden Restaurants' (DRI) FQ3: Warm weather contributed to sales gains – Olive Garden +5.5% Y/Y, Red Lobster +7.4%, and Longhorn Steakhouse +16.2%. Declares quarterly dividend of $0.43 a share. Expects same-restaurant sales growth of 2.5%-3% and EPS growth between 4% and 7% for FY12. Plans to open 85-90 new restaurants. Shares +0.5% premarket. (PR)

    Told you so!  Best Buy (BBYsold an impressive 13% of all iPhones over a recent 3-month period – falling just two percentage points short of the mark of Apple itself, according to data from Consumer Intelligence Research Partners. Overall, retail stores – led by carriers such as AT&T, Sprint, and Verizon – accounted for 76% of sales and online stores 24%.

    After a slow start, Facebook (FB) has become big in Japan: Nielsen estimates the company had 13.5M registered Japanese users in February, compared with just 6M a year earlier. Celebrity endorsements and last March's earthquake/tsunami are seen as reasons for the growth. Facebook is also seeing rapid adoption in Brazil, which may soon become its second-biggest market. (previously)

    Google (GOOG) is reportedly talking with Hollywood about enabling movie purchases on Google Play; only rentals are currently supported. Studios are said to be pressing Google to support downloads in order to maintain access to rentals, though given the extent to which online movie watchers are opting for subscription services over downloads, they shouldn't count on their efforts netting huge sales.

    There could be a lot more devices with retina displaysarriving soon. Applied Materials (AMAT) has developed manufacturing gear that makes it easier and cheaper to make high-resolution displays in large volumes. AMAT, whose display equipment business has fallen on tough times, expects the tablet and TV markets to embrace displays leveraging its technology later this year. 

  20. Holy cow – oil flying straight up!  $107.50 again – those bastards!  Great opportunity for us to double back up on USO!  

  21. wow lookit oil!!

  22. Phil, looking at doing a bull call spread on IMAX for the June 26/31 while writing a 24 put for a cost of .20, would you do that or write a Sept 22 put on that which would give you net cost of 0 or possibly net .10?  Think the stock will continue to run up into Batman/Avengers/Spiderman movies

  23. Trendline support 81.20 ish.

  24. StJ – Wasn't there a DMND addition to the 5K yesterday?

  25. Phil / $5kp – for those of us that never uncovered the TLT spread, how should we be looking to adjust today?  I am not sure if i should do the roll early, wait for a pullback, or, if it really matters, as I am just looking to capture the next weeks premium.
    thanks in advance, scot.

  26. TVIX – If anyone looks at the volume, it appears that someone got wind and unloaded right before it dropped.  Now, anyone that was holding it should've know the inherent risks associated with the product.  We just can't deny that as has happened time and time again, someone probably got tipped off and got out before it tanked.   

  27. Correct Enni… I'll update the spreadsheet.

  28. Updated 5KP:

  29. What the f&cking just happened with oil? These pricks should be hung for treason… They are literally destroying America….

  30. Oil – just read some message about Israel possibly mobilizing

  31. WMT/JMM – Good job with the non-greedy exit.  When you are that far ahead of schedule, no reason not to take it.

    Speaking of which, our original "One Trade" on BAC hit $1.60 out of possible $1.80 profit and obviously no point in sitting on it until Jan to make 20 more cents!  

    Long Put List/Jasu – The idea is to take profits when we get good dips and then look for "fresh horses" – whichever ones YOU BELIEVE IN that are cheaper than they were originally and that you are willing to either stick with long-term or stop out with a 20% loss and wait PATIENTLY for a better opportunity.  I agree on CMG, PCLN and LVS (and WYNN), of course – Momos are my favorites to short while the other 4 are really just cheap ways to play a broad market collapse.  

    DDM/Morx – If it's an upside hedge protecting short plays, then no big deal but, if it's a bet – it wasn't really supposed to go on unless the Dow was over 13,200 and that's not looking good.  

    TVIX/Rpme – The "purpose" is to enrich CS and enbroke the suckers who chase returns.  

    AMZN/Dpast – I'd take that and run – look at the Nas!  

    Now things are turning ugly!  

  32. What a crock of sh!t! Israel mobilizing… How convenient to have this story released on a Friday morning…

  33. Oil – I didn't say it was true, just said that is what I read which was at about the same oil spiked up.

  34. so where was the oil event du jour?

  35. Inkarri- I know, I’m just fed up with rumors like this being put out to support oil prices which have no business being this high.

  36. FAS Money – Still a long way to go but at least heading the right way now.  

    IWM Money – Looking good

    $5KP – PROFIT!  

    $25KP – The USO April $41 puts hit $1.05, now back to $1.30 so I'll wait and see where we officially doubled down.  If we can get back to $1.60+, I'd say no point in holding 40 over the weekend and we can go back to 20.  Of course we take the money and run on the DIA next week $131 puts at $1.55 (topped out at $1.70) – that should be a reflex when we get a dip like this!  There's nothing else I'd change but why is the VIX only up 4% this morning?  That's annoying.   

  37. ganyant / #'s

    Please read this !!

  38. Fading dollar the only way Dow still only down 20ish?

  39. USO 25KP / Phil – If we DD at 10:00 AM when you posted, the USO puts closed at $1.30 so that should be the official position.

  40. Phil
    Freefall Friday or flatline Friday?

  41. oh those weeklies are so tempting….

  42. Shadow,
    BTFD – Buy The Friday Dip

  43. JRWi…thanks for the link on your notes, but I think it is broken?

  44. TOL – 5K of the 23 Apr Puts have moved…only 500 in OI.  Selling the 20 Puts……very conservative.

  45. FU PCLN!!!!
    even AAPL goes down every once in a blue moon!
    Is it up because Cramer said he likes it?
    Maybe that will have Phil change his mind about them ;-)

  46. EUR and AUD stronger than yest. the markets usually follow their strength. Although markets are lagging the mentioned currencies. The move seems extreme if the $ perks up we may continue to sell off later on. Unless the markets are rigged ;-)

  47. Stardawg…try this for JRW.

  48. Weasle
    The BOTS have been selling since premarket and money flow is out, not even the dips are buying!

  49. more annoying is the VXX…once I can extricaye myself from this POS I am done with this BS VXX is down…no worries we are about to embark on the bull run of the decade, right?

  50. NFLX bought @ 120 plus sell the May call/puts for 24

  51. IMAX/Rustle – The whole trade is more aggressive than I would be until we see if we don't fall off a cliff after EOQ.  I would want a look at summer season without getting killed by one film so I'd prefer selling the Jan $20s for $2.40 because who doesn't want IMAX for net $17.60 and then I'd go for the Sept $23/26 bull call spread at $2.10 for a net .30 credit on the $3 spread and, if you stop out the bull call spread at $1 or more if the trade fails, then you still have a $1.30 credit on the Jan $20s with a net entry at $18.80, which is still a very nice 26% discount to the current price.  So this trade makes $3.30 before your trade breaks even – are you THAT bullish on IMAX that you blow off the bird in the hand for what's MAYBE in the bush?  

    DMND/$5KP, Enni – Yes, it was 5 May $24 calls at $1.35, now $1.50.  

    TLT/$5KP, Scot – You still have the today $12 calls sold short?  Those are $1.35 at the moment but you can roll them straight across to the next week $112s at $1.75 and pocket .40 – nothing wrong with that, right?  

    Oil/Jrom – It's the weekend!  Gasoline popped too – we have to learn to go long gasoline on Thursdays!  

    Israel/Ink – Yep because – it's the weekend!   Israel is always about to do something crazy on the weekend, especially as it's the Sabbath there and no one is around to deny the nonsense.   

    Sectors/StJ – I'd say the most attractive play off that chart is OIH.  BHI crushed them but I think it's a good opportunity to have a bullish hedge against oil shorts.  2014 $30 puts are $3 with OIH at $41.50 and you can spend that on the Jan $35/40 bull call spread at $3.10 for a net .10 on the $5 spread that's $6.50 in the money to start.  

    Dollar 79.55 and 79.50 held the line in the Futures (after a spike down to 79.325).  

    $1.30/StJ – Well that sucks but we'll take it.  Still want to take $1.60 and run on that 20 although actually I nailed the low at 9:56 to the penny (and that was AFTER it took me the time to see it, write it up an post it!).  That minute topped out at $1.13 but the next minute it was back at $1.29 and then $1.30.  This is why people need to LEARN how to trade and not wait for someone to tell them what to do – 20% difference on the entry by not reacting on a move like that.  Could have been in and out and happy already..

    PCLN/Jabob – Maybe I should write a whole post on them.  They could become the short of the decade if they slip back to $350.   Maybe if people all contribute valuation studies etc to back up my point that the entire travel sector doesn't make enough money to justify $35Bn and I'm pretty sure the combined market cap of ALL the airlines doesn't equal $35Bn – that's gotta tell you something right there!  

    VXX/Sage – What position?  

  52. Sage…..agree with you….never again with the VXX…I've been burned repeatedly with the POS….Obviously I'm wasn't smart enough to leave it alone til now

  53. JR

    Are you still long?

  54. Sage- maybe since VXX has been going down with the market, it will go up with it too.  I'm also done with it, but can't decide to bail on April puts or not. It's waiting for me to buy them back to wake up and behave properly.

  55. What happened to Apple?

  56. AAPL P-Bar!  $542.80 volume 800 at 10.57.36.

  57. That's time:  10:57:36….

  58. VXX is indeed annoying! Going back 3/13 when we bottomed on the VIX:

    3/13 VIX closed at $14.80 and VXX closed at $21.34

    Today, the VIX is at $15.67 but VXX is now at $18.1.

    Obviously VXX is backed by VIX futures and not the VIX itself so the picture is distorted – I guess traders are betting on lower volatility going forward, but you would not expect a 15% plunge in VXX when the VIX is up close to 6%. Like I said yesterday, it seems to me that all these VIX instruments are good for daytrading but too unreliable for long term trading!

  59. Sage-shorting volitility in a dead market, that's a trade I wish I had thought of!

  60. Phil / $5kp – that's exactly what i thought so glad to see my instincts were correct :) .  I am learning.  I suspected that the 'goal' was to capture the next weeks premium.  Thanks again, and, take heart, most of the times us newbies only post when we screw up, but rarely mention all the things we do right :) .  I still screw up plenty, but, I am getting better.
    thanks again for the service you provide :)

  61. VIX – This and oil is literally killing me.  My only comfort is that there are still 4 weeks to Apr expiration, so plenty of time for shit to hit the proverbial fan

  62. Is anyone else getting a "high Risk Website is Blocked" message when refreshing PSW?

  63. VXX I have a APR 19/22 BCS that just keeps going down, because there are no worries right?

  64. Wow, now they halt AAPL if it drops $10 – are these markets rigged or what?  

  65. Phil/homebuilder pay practices
    This started when the builders began requesting their subs slash their pricing by 10-15 and even 20% (LEN) in early '06.
    For me, If that did not mark a top in housing, nothing would……

    This guy says that hedge funds are selling front month volatility and buying longer term contracts thus dropping vxx.

  67. Phil/Rigged

    Yes….of course they're rigged.  You'd have to believe the Bots are going to fight like hell today to prevent 4 red days in a row. 
    It be just like them to stage a fake run to squeeze the newly emboldened Bears.

  68. PHIL,
    BTW….it's interesting how their favorite trick of dropping the dollar into a sell off is hardly keeping the DOW in the green.
    Is this a case of it works until it stops working?

  69. Phil – PCLN doesn't buy gas like the airlines. The airlines always operate halfway in and out of bankruptcy so their stock prices reflect this risk, otherwise the industry's collective market cap would be much higher. There's 35,000 commercial flights per day in the US. At an average of 100 souls per flight and $200 per ticket, that's $255B in revenue per year, just in this country alone.

  70. VIX – It looks that after the initial big drop in TVIX, that it is not moving just like VIX.  

  71. I show AAPL LOD $542.80, if true that is 10%.

  72. IMAX/Phil
    I was thinking right before you wrote that and watching the market that I would wait and hopefully get a better entry.  I am a little uncertain about the June's, wish they had July's because it's late June and July 4th that the big movies come out so I'm also thinking of waiting till there are July's now.  I am bullish because they have triple the amount of theatres they had only a little more than a year ago and if you remember the last Batman movie and Avatar propelled the stock from 12 to 36 and their revenues so far for this year have been strong with very weak movies.

  73. stjeanluc – AMEN on the VXX comment.  That BS should be criminal.  From now on I'm not going within a mile, even for a daytrade.

  74. Joe M That is a very good article. As we saw in 2008 "smart" money can be so smart it becomes like the whoop bird. It flies at ever increasing speeds in ever diminishing circles until it flies up it's own ass. "whoop"

  75. VXX / Cat – Like I was saying 2 days ago, you could have shorted VXX about 36 months of the last 39! This thing decays even faster than the 3x ETF. But when it turns, watch out…. Not for me either. But for day trading, there are some good things – good volume and somewhat tight spreads.

  76. AAPL – apparently there was one trade of 100 at 542.80, coming from BATS.  Can robots have 'fat fingers'?

  77. St J  The article Joe M posted had a good explaination of what is going on with VXX. Hedge funds have been selling front month vix and buying farther out, because they know that nothing bad can possibly happen between now and April.

  78. AAPL/Laddoo – $542?  I only saw $590.  Still was that even 10%?  Don't we have rules for a reason?  

    TLT/Scott – Good job and thanks!   In a small, conservative portfolio, picking up $400 on a roll when you have 3 more rolls ahead on a net $1 spread is a FANTASTIC way to make a living.  No need to add risk when you can get those kinds of returns by working the $1 spread.  

    VIX/Dpast – Next week, you have to consider selling a front week and rolling back in time – kind of like what we did with TLT in the $5KP.  Oil, don't forget, can totally burn you if Iran does something crazy (over and above their usual crazy) – ALWAYS keep that in mind – it's never something you want to bet big on.  

    Risk/Exec – If you could copy that to Greg I'd appreciate it (admin@….) 

    VXX/Sage – The April $19s are still .95, but that's 50% off yesterday so I am worried VXX is going the way of TVIX at this point.  It only costs $1.05 to roll out to the May $18s and, when the Apr $22s wear out, you can just sell the May whatevers for $1 to pay for it.  If every month you nudge your spread down $1 in strike, you have a pretty good chance of hitting it one day.  

    Builders/1020 – Yes and the crap quality of new housing sure didn't help push those sales through.  I couldn't believe the corners TOL was cutting on new homes.  Maybe I'm old but when you buy a house for $1M, you expect nice stuff to be included – not on the list of "upgrades".  

    Speaking of housing – I had a meeting in NYC yesterday and I caught up with some friends who were eating out and of course they eat out almost every night because no one in NYC has a real kitchen except for the people who are so rich that they can afford to eat out anyway.   It occurs to me that the rising cost of food and the still-ridiculous cost of apartments may end up damaging NYC as it finally becomes too expensive to live in.  Certainly something worth watching.  These people don't have cars either, they are a captive market…  

    VXX/Joe – As good a theory as any.

    Squeeze/Exec – You mean like this?   Yes, they will keep doing it until it stops working just like they'll scream WAR! every Friday to goose oil.  

    79.47 on the Dollar.  Right back to $1.3277 and $1.5877, which is where we shorted early morning but indexes not back as high as they were then (see above post for Futures levels) yet.  

    PCLN/BDC – The point is that PCLN collects $4.5Bn for booking air (and hotel) travel while UAL, for example, actually goes to the trouble of PERFORMING THE SERVICE and takes in $9Bn and loses $138M and makes $600M in a great year.  HOT does $1.5Bn in sales and makes $160M…  When the middle-man makes more money than the services he's selling – those middle-men eventually get squeezed.  The airlines tried to toss these guys once and failed but I'm almost ready to pitch them on a solution myself as it's not just PCLN, the booking agents make 10x what the providers make and for what – a website that consolidates the information from various provider sites?    I think for a chance at an extra $20Bn in annual revenues, I can get the airlines interested in letting me have a crack at it for them.  Just one of my BBBW ideas…

  79. catspring2
    IWM got a big P-bar on 100 shares today!

  80. VXX decay – this is why I bought Jan13-10 puts at 0.30 and forgot about them. Plus with ETN's there is always default risk. Long term puts should always be considered a good bet on this garbage. Let's just find some ETN's originating from Ireland and then lace our hands behind our heads….

  81. Phil
    etrade and swab both show the $542.80 trade and you are right it was not although very close to 10% of HOD.

  82. biochris that makes perfect sense.

  83. Phil--please do it soon ;-)
    pretty please

  84. Should have taken a $541.62 trade, but still 100 shares?

  85. TSRX….dd on my shares.  4.86.

  86. So what's everyone's best guess on a Friday close today?  Last three days had selling into the close, think it continues?

  87. Phil,
    I guess you could say I am a newbie, though I have been a Voyeur Member for the past year and was a long-time follower on Seeking Alpha before that.  You've been a tremendous help getting my house in order so much so that I went from being deep in debt to a six figure net worth in just over five years.  Anyway, now a Basic Member as of 10 days ago and I thank you for it.
    Trying to figure out what to do with my my 5 TZA Apr $22/25 hedges I bought for $1.25 to protect $53k in long positions.  I offset with CHL short puts I closed for a $138 profit, so it's a free hedge and then some.  I expected to lose money on the protection, so I'm in a fine position, but would there be any sense in rolling down to continue protection?

  88. Obama fast tracks pipeline. Isn't the southern pipeline the part they're going to use to suck Cushing dry by pumping the oil to the gulf and exporting it— ensuring higher prices? So nice of him to take credit for a move to LOWER  oil prices. Wait and see, wait and see…. 

  89. VXX / Sparky – Yeah, I read that. But with that in mind who would want to even bother with VXX?

  90. Hello All – I know Phil has been writing about things being priced to perfection but with the action on the VIX lately, does anyone also get the feeling that if in fact, the VIX and the bears are being beat to a bloody pulp, that this manipulation will seriously backfire?  I have been coming across more and more comments lately that people are just getting fed up with the markets and choosing to not be involved.  How do they stop Apple after a "bad" trade but turn a blind eye to everything else?  Just getting ridiculous in my opinion.  

  91. Prob not me ever again.

  92. Phil, I agree on PCLN, and have some time now so let me know your thoughts on that idea and I'm working on another one to do with peer-to-peer advertising, if that sounds interesting. BDC

  93. rustle123
    Most times it takes at least 5 days to change direction, based on that we should close red today and Monday.

  94. Markets caught up and are outperforming EUR and AUD. They are going to have to step heavily on the $ to sustain the move.

  95. Nice bounce in DCM above the falling trendline resistance: Japan’s biggest carrier hits 2 million LTE subscribers
    "NTT Docomo, Japan’s biggest carrier, announced yesterday that it had reached two million subscribers on its LTE service Xi.

    Xi launched in December 2010, and within its first year it had already achieved approximately one million subscribers.

    In the past three months, however, that figure has doubled.

    After NTT Docomo released its first Xi compatible smartphones last November it saw a massive increase in activations. This new figure accounts for smartphones, tablets and other devices using the LTE service.

    It apparently hit the milestone on March 18th, meaning that between its first and second million the company’s growth rate quadrupled."

  96. Airlines/Phil – excellent point about middlemen – my favorite local busline, Southwest Airlines (not so local anymore – but still my favorite way to get around California), has stayed away from all those, maybe for the reason you cite? And of course they recently acquired ATA. So perhaps at least one outfit is wised up to the scam, unless there's some way the providers are making money off the middlemen.

  97. AAPL decay: It looks to me AAPL calls decay quite a bit. For example: when AAPL was $597 last week, April 575 call was around $37.00; today when AAPL is $597 again, the April 575 call is down to about $34. So, if AAPL stagnate around here for two more weeks, the April 575 call may decay to less than $30, or do I misunderstand it?

  98. IMAX/Rustle – Keep in mind you are betting on their schedule, more than anything.  I think Wrath of the Titans (next weekend) and Titanic 3D (4/4) should do well but then they have nothing until the Avengers on 5/4 but that should be a blockbuster and then Men in Black (6/25) should be good and then it's Spider Man (7/3) and Batman (7/20) and then I'd sell.  So I'm hoping for a dip ahead of the Avengers but there is no way I want to miss this stock coming into the summer.  

    PCLN/Jabob – Well if people remind me on the weekend and I get a little material that's interesting, then I will probably have time. 

    Thanks Rperi and officially welcome!  The trick to those bull spreads is you MUST take action before they go below 50%.  A bit late now but the reason is, as the spread is currently net .20, had you bought it for net .40, the $22s are STILL .40 so you didn't really lose anything yet (you did, you got killed because you waited) and you could just spend $1.20 to roll out to the May $19s ($1.60) and then sell something for about $1.60 after the April caller expires.  As it stands now, you could sell the May $16 puts for .80 and the $23 calls for .85 and then you are in a wider, deeper spread than you started with.  You can do the same thing with your position but the waiting cost you an extra .85. 

    Pipeline/Sparky – The Dems in Congress are not going to pass the pipeline unless there are restrictions on exporting.  

    Dollar coming off our target lows again.  DIA next week $128 puts at .22 are a fun trade, looking for and risking .10.  

    Fed up/Ink – People got fed up a long time ago.  The volume is about 1/3 of what it was and 85% of that is just HFT bots trading with each other so, in effect, no one is trading.  It's a total joke and why I keep saying PCLN is NOT worth $35Bn, CMG is NOT worth $13Bn and GMCR is NOT worth $8Bn – you can PRICE things at anything you want but it's when you actually try to SELL them that you find out what they're really worth (as we learned in 2008 but forgot less than 2 years later).  

    PCLN/BDC – I'm going to update the BBBW post this weekend and talk about some ideas there, we can go over it in that chat.  

    Middlemen/Snow – You can look for yourself, look up a dozen travel providers and compare them to a Just PCLN and EXPE and don't forget, the airlines have all those reservation people and it's the top-line revenues of those travel cos that come right off the top of the providers – it's a broken model and, of course, the consumer suffers for it.  

  99. Speaking of AAPL – All the way to $542 without finding a standing buy order to stop it?  Not good…

  100. IMAX/Phil
    I know I'm betting on the schedule, that's why I wish there were July options.  I'm wondering how many other people have bought the stock already in anticipation of that summer schedule though.  If it does dip, this stock is a layup.

  101. VXX/Phil – i have uncovered April 19 calls. considering an adjustment – perhaps  rolling to May 17s for $1.38 and selling April 18s for $1.15 to cover/defray roll cost.  and i see these prices are decaying as i type..  Not too many so not a big concern, other than to play it as best can.  Your thoughts?

  102.  "….All the way to $542 without finding a standing buy order to stop it?"
    This must have been a fraction of a fraction of a second dip since the buy back of the 600 call I sold never closed. 
    Meaningless. These flash crashes happen infrequently but I'm sure they scare the daylights out of tape watchers. 

  103. Phil / NYC — As of nearly a year ago, 1/3 of people under 30 want to leave the state: Young New Yorkers Plan To Leave State: Poll

  104. Phil, Nowhere in that article or the tedious little film did it mention anyone trying to restrict exports of oil.
    It probably doesn't matter what happens with the Keystone southern portion however, because the powers that be, and especially the Democrats and some of their major supporters want oil prices higer,  They want brent and wti to trade closer together in price. The way to do that is to unlock Cushing, and I believe one of the gas pipeline companies is reversing the flow of an existing major pipline to that end as we speak.

  105. Phil – I entered an Apr VLO BCS 27/28. Paid .46, but VLO is now below the bottom of the spread. There's still time, but I wonder what my adjustment plan should be if VLO fails to regain at least 27.

  106. Phil / PCLN -- I'll bet a lot of retailers make less than MA or V but there is no way they'll be able to get rid of them.

  107. AAPL Phil it is like a one way street this market is only allowed to go up so of course we circuit break as some crazy wack driving on the wrong side of the street "you're going the wrong way!"

  108. Exec / Long

    I was long, then short then long, now in cash waiting to go long off IWM 81.77 or 81.94 !!

  109. sparky / pipeline -- Seems it would be more prudent to for the oil traders start buying/renting cheap tankers to manipulate the reserves. Actually exporting it would just toss 1/2 the profit potential. Just bring it back into port when you need a little dump rent the tankers when you need a spike.

  110. Phil
    LNKD is bumping up against $100. Does this look toppy to you and worthy of a possible bear put spread with PE at 840? Earnings report in May. Thank you Phil.

  111. rain,  There are more powerful interests besides oil traders who would like to see oil higher.

  112. Phil/ P Bar spikes?
    Can you or anyone else on the site answer this?  What happens to all physical stops on the event of P Bar spikes like the Apple spike to 542.8 this morning?  I would think if spikes trigger stops on the way down and then execute at the bottom, that trading accounts could get wiped out in seconds.  If so, the responsible parties should be under investigation or in jail.  Also what happened to the four P Bars  to 833 on IWM ( Russell) yesterday that even JRW commented on?  At the end of trading all four showed on my charts.  After the later daily data update on my Trade Navigator charts they were all gone (expunged).  Where in the world are trading authorities on this one?  Until I get an answer from someone that knows, I don't think I can trade with any kind of physical stops.  As always, your vast knowledge and opinion would be very much appreciated.

  113. VIX / Phil – Why should i roll so early? I hold Apr VIX BCS and short a put.  Do they expire earlier? I though expiration is April 21st.  Cheers

  114. sparky  — Agreed.

  115. Airlines/Phil – so continuing the thought which was sort of implicit in my comment, why don't the rest of the airlines go the way of Southwest, and divorce themselves from the online pack? There's something in there about actual travel agents as well, but I'm not sure what, as those folks are a nearly extinct species in the US (although not in the rest of the world – and we do have a fair number in the Los Angeles Korean community).

  116. rvnelson  — That's why they put the trading halts in place. To give people time to edit their stops and stop the free fall. Of course it only helps those that can sense the drop, were lucky enough not to have been executed and edit during the 15 minute halt (or whatever it is). If your stop was in that 10% range and was executed, oh well! If you have fat fingers and are in the right circles on the other hand…

  117. rain
    The oil issue is a perfect example of what is wrong with politics in this country.
    The difference between Republicans and Democrats is that Republicans want oil prices higher now to tank the economy before the election and because their power base demands it, and the Democrats want oil prices higher after the election so that it doesn't tank the economy before the election, and because their power base demands it. Nowhere, do either of them truly care what is best for anyone beyond what will get them in power and keep them in power.

  118. but ultimately both parties want higher oil prices for different reasons.

  119. sparky — I disagree that the democrats want them higher after the election. Just play both sides of the fence and tout alternative energy as well. Oil lobbyists fill one pocket, the the alternate energy lobbyists fill the other. What's not to like?

  120. sparky — bingo!

  121. Phil or anyone,
    Does anyone know how to get historical Implied Volatility Data on Stock options?  I am trying to candlestick pot the IV of an option over time.  This would be great help is anyone knows how.  TIA.

  122. flip
    I believe the $542 trade was a test and the system actually failed, it should not have stopped trading. I am an IWM tape watcher and the smallest trades make changes every day. They don't scare me, I look for them and large blocks. I assure you others do the same. The bots do lots of trickes to close stop, limit, and technical level orders. A$6,000 split second loss was the cost to do something, wish I knew what and why? I don't follow AAPL because it trades like a triple ETF without diversification. All companies like people make mistakes, Apple is overdue or maybe it happend and that trade is a hint.

  123. Here is the FT take on that AAPL trade:


    Apple’s circuit-breaker was triggered after the stock price suddenly dropped 9.7 per cent, to $542 a share, at three minutes before 11am, New York Time. At seven minutes past 11, BYX, one of BATS’ two trading exchanges, declared “self-help” against the other, BZX — in effect meaning that it wouldn’t be taking quotes routed from the other exchange. Something to do with Rule 611, aka the “Order Protection Rule” of Reg NMS.

    Which suggests a bad or out of date quote had, somehow, been sent over. Bloomberg notes that a single trade for 100 shares was made before Apple’s plunge. Ten minutes before Apple shares fell, BATS had warned of system issues in some ticker symbols. Apple restarted trading five minutes after its halt, and according to CNBC the erroneous trades were canceled.

  124. Even Cortez on CNBC likes PCLN…
    FU CORTEZ!!!!

  125. I don't know much about that part of industrial history, but for car buffs here is an interesting what-if. Sounds like it could have made a difference. And probably another lesson in political corruption!


    With Tucker in the picture, though, everything is different. America would have had a very innovative company pushing the technical limits of what was possible with cars, and a very outspoken and visible head of that company to keep the public interested. If there were Tuckers in 1957, with pop-out safety glass, lightweight aluminum boxer engines, disc brakes, steerable headlights, padded dashboards, and all the other Tucker innovations, there's no way Ford or GM or Chrysler could have just sat back and cranked out the same old barges with bigger and bigger tailfins. Tucker would have brought the whole industry's state-of-the-art up.

    That also means by the time the Japanese cars started to arrive in the US in the late 60s, they would not have found a stagnating US car industry, so ripe for attack. They would have found four major companies in heated competition, with real innovations. When the oil crisis of the mid-late 70s hit, US firms would be ready for it, adapting the Tucker-style lightweight opposed engines to four-cylinder models with less displacement, in aerodynamic bodies. The Japanese (or Germans, or whomever) would have found much more formidable home-team adversaries.

  126. speaking of p-bars, there was on on /cl at 9:54 to 108.25 with a matching on on USO to 41.21…

  127. To Phil's point of things not necessarily being better, the US has borrowed approximately $784B in the current FY while only $618B was borrowed in the same time period in FY2011 which translates to $166B more.  Methinks we are going to need a bigger printer.  

  128. This TVIX debacle is starting to smell funny!


    There’s been a lot of talk about the carnage in the TVIX on Thursday. The VelocityShares 2x short-term ETN, whose creations were suspended by Credit Suisse on February 21 due to “internal limits”, fell 29 per cent. Curiously, the slide came just before an announcement from the provider that some level of creation would be reinstated.

    Understandably, the idea that the re-opening was leaked ahead of time is now doing the rounds. After all, why would the ETN, which had been trading at an 80 per cent premium to NAV, suddenly converge with its indicative value for any other reason?


    In fact, the whole thing has turned into a big mess.

    Some say those Muppet enough to have gone long the TVIX after its creations were suspended probably deserved to be wiped out. It was, after all, the equivalent of  playing with fire. More to the point, it was obvious that eventually the TVIX would have to reconverge with the NAV:

    We can’t help but agree.

    What’s more, it’s clearly obvious that people were positioning for exactly such a move if you look at the short interest in the units.

    But all this is really about two issues.

    The first is about the soundness of the structure, and its suitability for a listing on a public exchange. How can a product that has the ability to flip willy-nilly from open-ended to closed-ended status at the total discretion of the issuer ever be considered an acceptable public investment vehicle?


  129. long TZA 18.08--hope full for 2 pm sell off…

  130. VXX/25kp – Phil, more generally any action to take with the 25KP VXX position going into the weekend? thx

  131. Phil-- do you think there is something shady going on with the PCLN pumping? The quarter is ending next week and not only do we get a bunch of pumpers saying $750, $800, and $1000 price targets.. but you also have the CNBC clowns (Cramer and Cortez) saying it is a buy and not to worry about the price? WTF???
    Also, I think I heard the $1000 PCLN call close to 10 times yesterday on CNBC as well as hearing it a few times again today?
    Of course, I am bias because it is chinese water torture for me. But it does seem strange to me (at least the timing since their earnings came out almost 1 month ago)?
    What are your thoughts? TIA. 

  132. AAPL/Ganyant – Combination of them losing upward momentum and people losing blind faith that AAPL goes up and up.  This is why we ALWAYS sell into the initial excitement – when you get offered premiums like that, the odds strongly favor selling them.  

    IMAX/Rustle – Look at them historically, most years they peak in the summer – doesn't matter what the base is but dont' give them a chance to disappoint you – you just want to catch  a nice run and get out.   I do like them as a long-term hold, but that's a different trade.  

    VXX/Scott – See above, I favor buying time over position but the position can be funded by your next cover sale too.  

    NYC/Rain – Oh if you are just randomly born there and aren't an over-achiever by the time your parents get tired of you (and, in those tiny apartments, it's around when you turn 11!) the of course you want to get out.  I don't even understand how people doing regular jobs live in NYC and I work with poor people all the time!  I understand how people can live on the street and get shelters and hit the soup kitchens but it's the in-between crowd I can't figure out – how do they make ends meet when they make minimium wage and apartments are $1,000/ft?  

    Article/Sparky – Wrong link.  

    There will also be a vote later Thursday on an alternative pipeline measure offered by Senate Democrats. It would dictate that none of the oil or natural gas that travels along the pipeline could be exported from the U.S. and that 100% of the building materials used in its construction be sourced from American companies. That amendment is essentially a poison pill designed to ensure the defeat of the Republican amendment.

    That was from the last vote, no change in Dem's stance – it's all political theater.  Yes, you are right, the Dems WANT oil prices higher.  It's all part of their secret plot to put Rick Santorum in office (not even the Dems want Romney).  

    VLO/Barf – Rising oil prices and refiners do not mix.  The spread is .38 now so down .08, I'd be happy you didn't lose .46 and just wait for a time when VLO is actually low to go long on it, rather than up 40% since October.  

    MA/Rain – But the CC companies PROVIDE a service, they front money to the consumers and PAY the retailers money the consumers otherwise would be less likely to have and assume the ENTIRE risk of non-payment in exchange for a very small percentage of the sales vs travel agents that take 10% and provide nothing but a web page – surely you see the difference?  

    Tankers/Rain – That is the point.  They only need to get the oil to the Gulf where EMPTY oil tankers are constantly heading back over the Atlantic so ANY TIME they want to, this pipline will let them dump a couple of million barrels out of Cushing and onto a tanker or two and as long as they get it out of Cushing in time for the count – PRESTO! – we have a huge drawdown.  That's what this is all about.  

    LNKD/Crussell – Yes but these pure web guys are so dangerous to short.  With GMCR and NFLX – there's a story there that tangibly limits their growth so we know there are facts that will EVENTUALLY come to light that will knock down the price.  With LNKD, all they have to say is CHINA! and they can add $50.  OPEN I like for a short as the math is against them but they are already beaten down (we caught them at the top last year) – like GMCR, there is nothing I would like to see more than a nice 50% run so we can short them again.  NFLX is almost at our shorting goal of $150 (50% off the ridiculous highs).  

    Spikes/Rvn – Yes, the whole thing is a giant joke of a scam.  Surely you know that.  I always say never use hard stops unless absolutely necessary as they routinely flush a stock before a big move to blow out the stops.  I suppose they can jam a low number on one exchange and your order to buy on another exchange may not trigger but you have to ask your broker why something you had an order for didn't get filled.  They should all be in jail but then we wouldn't be able to trade so we all put up with it and pretend "flash crash" and "fat finger" and "expunging trades" is all normal and routine even though you don't see anyone reversing our trades when they go badly…  

    VXX/Dpast – I didn't say you should roll it so early.  Why are you asking so early?    I really love this as last week it was TLT and it was going to zero and why were we in it and so on and so on and this week it made doubles across the board so now everyone is whining about the VXX – these are highly volatile trades, they go up and down.  We roll before we're down 50% generally and it doesn't really matter how much time there is, it's about not losing so much that there's no point to the current position and too much loss to reasonably expect a recovery in the new position but, if you don't have conviction and the cash to stick with a position and add money to it – then 20% down is where you get out.  

    Travel/Snow – The main problem (and now I am revealing my presentation to the airlines) is that the airlines are unwilling to send people to their competition – something we should have all learned was a good idea from watching Miracle on 34th Street years ago.  What if United simply adds the other airlines and hotels to their site – then it becomes much more useful to their customers – even more so if they provide an incentive for booking through them.  Even better, if United can get paid 10% of what they book on other airlines and hotels, they may end up making more money as a travel agent than they do as an airline.  So let's say United discounts airfare booked directly on United by 10% and offers 5% (half their commissions) credit towards airfare against all other services booked through them.  Who are you going to use – United or Priceline?  

    Oil/Sparky – On what planet do you think there is some Democratic "power base" that wants higher oil prices.  Because in 2008 Steven Chu (who was not the Secretary of Energy at the time) was asked, IN THE CONTEXT OF PROMOTING ALTERNATE ENERGY, whether $4 a gallon gas would be good for the US Economy (to develop an alt energy infrastructure) and he said that "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe" which were $4 at the time.   This is a prime example of how propaganda can distort an issue and, through constant repetition, can brainwash others into repeating it as if its true.   It's a really amazing thing to hear this stuff come out of your mouth, over and over, as if it actually is true.  And then you base some whole, convoluted chain of logic around a premise that is completely nonsense – amazing!  

    Historic IV/Robert – Try – it gives an average.  

    AAPL/Shadow – Like the Flash Crash that cost people hundreds of Billions in losses – I'm sure we'll never know the truth.  

    Tucker/StJ – There was a good movie about him. 

    VXX/Scott – See above.  No.  

    PCLN/Jabob – AAPL is a tired horse and they need a fresh one to jack up the Nasdaq into EOQ.  It's that simple.  

  133. St J 
    I'm feeling very muppet about VXX.

  134. PCLN/Travel- I had a close relative in the retail travel business. It was a cash cow for decades. He was a passive part owner and took out a modest 5 figure annual dividend  and would only have to show up a half dozen times per year to sign the lease, etc. Plus, there were the travel perks. Free or deeply discounted fares and accommodation all over the world. He could go off to Africa or Asia for a month and hardly spend a dime other than personal expenses. All that changed with airline deregulation. The bulk of the income came from airline ticket commissions. As the carriers got squeezed, they squeezed the retailers. Then came the internet and put more pressure on everyone. More squeezing.
    But, it was always a love/hate relationship even in the best of times. The major carriers all ran, and continue to run I believe inexplicably their business based on the holy grail of market share. Seemingly they would do anything to protect share. Thus, they coddled to retailers to protect share while at the same time cutting commissions. Southwest, on the other hand had a different model. Their routes/schedule choices were driven by cash flow- like a real business. Still a tough racket considering the huge capital required to run an airline but they are able to make it work. Southwest had a proprietary res system which was not accessible at the retail level. The agents could book but would have to make a phone call. Southwest did not care about the retail agent segment at all.
    I don't pretend to know the PCLN business but it appears to be nothing more than an online retail travel agency. I am assuming the carriers continue to coddle them for the same reason- market share. There is no moat and the business is very vulnerable but can remain quite lucrative until something happens to change the equation.

  135. star, I was considering doing the same but, it looks to me like they have upside targets today. Unless you see the $ get bid I would be very cautious. When you see the bots punch the markets higher without much resistance its tough to get bearish.

  136. Hello Pharm, what is your opinion about SGMO?

  137. kustomz….thanks and noted……testing my patience that is for sure. 18ish is pretty much exactly the same distance from the open to the daily high.  Playing kind of a distorted intraday T BAR trade. 

  138. Anyone thinking of going long oil here? I have tons of USO puts but I have a feeling these @$$holes will do the usual run up into close…. Phil – long off the 106.5 line?

  139. Good, balanced article on Chu, Obama and their statements on energy

    12:00 PM On the hour: Dow +0.23%. 10-yr +0.31%. Euro +0.54%vs. dollar. Crude +1.63% to $107.06. Gold +1.28% to $1663.55.

    12:43 PM European shares close mixed, but well of the day's worst levels, ending one of their worst weeks of the year as the whiff of sovereign debt issues creeps back into the conversation. Stoxx 50-0.3%, Germany +0.2%, France +0.2%, Italy +0.2%, Spain -1%, U.K+0.2%. For the week, the Stoxx 50 lost 3.3%.

    1:00 PM On the hour: Dow +0.32%. 10-yr +0.29%. Euro +0.52% vs. dollar. Crude +1.71% to $107.16. Gold +1.23% to $1662.65.

    2:00 PM On the hour: Dow +0.3%. 10-yr +0.35%. Euro +0.47% vs. dollar. Crude +1.44% to $106.86. Gold +1.29% to $1663.65.

    Feb. New Home Sales: -1.6% to 313K vs. 330K expected, 318K (revised) prior. Months' supply 5.8 vs. 5.6 last month. Median price $233,700.

    Treasury yields fall some more from mid-week levels that were the highest since late October. Just a bit of the bid seems to have come out of equities and the positive economic surprises have dried up for the moment. The long bond -4.5 bps to 3.32%. The 10-year down 4 bps to 2.24% (2.38% on Wednesday). TLT +0.7%

    Bond yields have been rising in recent weeks, but deflationista Gary Shilling is unmoved: The economy still stinks, analysts are far too optimistic about earnings for this year, and the recent hiring resurgence is only because productivity gains are declining. Shilling also thinks house prices have another 20% to fall, in contrast to those predicting a bottom in house prices.

    High yield defaults through mid-March has 10 issuers going for $4.1B vs. just 4 firms for $800M this time last yearreports Fitch. In the meantime, bullish sentiment is high, with 90% projecting a default rate of 3% or less, 80% expecting looser lending standards, and 68% believing spreads will tighten. Flows into high yield funds have been positive for 15 straight weeks. 

    The USDA is maintaining its forecast for 2.5%-3.5% food inflation in 2012, following a 3.7% increase last year on account of growing emerging-markets demand and bad harvests. The 2012 forecast is in-line with the 2.8% increase averaged since 1990. (also)

    Macroeconomic Advisers estimates the mild winter weather helped boost the Feb. employment report by 72,000 jobs, nearly one-third of the reported 227K. The firm’s models also calculate the March report, to be released in a few weeks, will need to be reduced by 58,000 to account for the gains associated with the warmer weather.

    Stocks add to losses following disappointing new home sales (January revised lower as well). Builders certainly can't blame the weather or mortgage rates. Scott Barber points out NAHB optimism isn't yet being confirmed by better data on sales. S&P 500-0.4%, Nasdaq -0.6%

    Ireland is optimistic it will ink a deal with the ECB over the weekend to skip a €3.1B cash payment to one of its failed banks. The country instead hopes to print up a bond to give to the bank. The bank will then present said bond to the ECB as collateral to borrow €3.1B (or thereabouts). We remain dizzy. (earlier)

    The risks to China's banks from local government loans are greater than thought as the country's banking regulator finds about 20% of loans have been misclassified as fully covered by cash flows. Properly accounting for them will mean lenders have to set aside greater reserves as well as demand more collateral from strapped governments.

    "The downside risk is a period of declining growth not for a few quarters, but for a few years," says the Peterson Institute's Nicholas Lardy. Of the opinion many in China are in denial about a significant property correction, Lardy says stock market reforms could hasten the real estate slide as folks see another outlet for their investment dollars.

    What a coincidence!  Another reason oil prices are so high: Global supply outages robbed the market of 1.2M barrels of crude a day in March, Reuters estimates, for reasons ranging from civil unrest to technical problems. “While disruptions of supply to the world oil market are commonplace, it is rare and perhaps unprecedented that such a large volume of oil is offline at any one time outside a single major disruption.” 

    Iranian crude oil exports have fallen by 300,000 barrels/dayin March, Reuters reports, a drop of 14% in Iran’s exports attributed to growing compliance to U.S.-led sanctions. Nymex crude spiked to $108.25, pulled back, and have steadily climbed back to $107, up 1.6%. Pres. Obama weighs in on the issue, saying Middle East tensions could add $20-$30 to oil prices.

    compromise looks to have been reached that will result in more moderate than expected solar energy subsidy cuts in Germany, reports pv magazine. Solar socks are bouncing. FSLR -1.7%TSL+5.7%YGE +4.5%. ETF: TAN +2.2%

    Peabody Energy (BTU -1.3%) says that due to recent storms and flooding in Australia, the company's Q1 financial results are now expected to be near the low end of the original targeted range. It now sees its EPS to come in between $0.50 – $0.75 on revenue of around $500M to $600M.

    CHINA!!!  Textron (TXT +3%) rises after its Cessna unit signs two somewhat-vague strategic agreements with China's AVIC. One involves the creation of JVs that will "pursue various activities" related to developing aviation businesses, including an aircraft service network, and the other involves a JV to produce mid-size Cessna business jets, as well as "a potential new product for the business jet market." 

  140. Nike (
    NKE -4%) trades lower following its FQ3 report, as gross margin and inventory worries take precedence over healthy top-line trends. During its earnings call, the shoe giant said it expects gross margin to rise Q/Q in FQ4, but still be down 100 bps Y/Y. In addition, though maintaining a Buy, Citi is removing Nike from its Top Picks Live list, citing the stock's 2012 gains and a lack of a catalyst until May.

    Nike's worrisome FQ3 report spills over to taint shares of other companies that sell shoes for a buck. Decliners: Crocs (CROX-2.3%), K-Swiss (KSWS -4.4%), Under Armour (UA -1.9%) and Deckers Outdoor (DECK -1.8%).

    Piper Jaffray says that "Hunger Games" may be highest grossing March release ever. Midnight sales are roughly translating into a $325M domestic box office performance, well above the firm's current $225M estimate. The firm recommends buying: Lions Gate (LGF -1.2%), IMAX (IMAX -0.9%), Cinemark (CNK +1.5%), Regal Entertainment (RGC +1.2%) and Carmike Cinemas (CKEC +2.6%).

    Barclays' lines up with earlier comments by Citigroup on Research in Motion (RIMM +0.4%), saying its channel checks indicate BB7 demand is poor and with weak enthusiasm. The firm expects Q4 unit volume to be at the low end of guidance and overall results to be weak. The firm remains below the Street consensus on estimates.

    There will be 67M 4G LTE phones shipped in 2012, forecasts Strategy Analytics, up over 10x from 2011. The higher costof 4G radio and baseband chips benefits the likes of QCOMSWKS,RFMDTQNT, and AVGO. It could also benefit 4G baseband vendorSQNS, if it can add some needed customers. Verizon has said it will only sell LTE smartphones from now on, and the next iPhone is widely expected to support LTE. 

    Three lunchtime reads:

    1) Chinese capitalism is just another knockoff

    2) Exchange-traded notes are worse products than you think

    3) Bernanke decries gold, defends Fed's make-it-up system

  141. FU tza,,,,stop loss already :-(

  142. AAPL …..No obvious play on AAPL today.    Will go into the weekend with the 50 April  575/600 bull call spreads in the AAPL portfolio.  And no, I'm not skiing this weekend.  Melted.    :(

  143. BTW, long PCLN .   Like the pony express, I'm jumping on the other horse for awhile.

  144. PHIL
    I thought I was the only one who thought the pipeline was about the empty tankers, the second act is the US doesn't want to refine the Canada tar, and China doesn't care about air.

  145. AAPL is running again!! May pass the $600 mark and stay above this time of the run after wondering for several days. 

  146. SPY 140 looks like its in the bag..

    JRW confidant in that 83.74 target?

  147. FU Iflan!!!!

  148. JRW 82.94, thinking too far ahead

  149. PCLN/Pstas – That's right, they have no moat.  When you have no moat and you are making $1Bn a year – someone who will be happy making $200M can come and kick your ass.  I don't see the big upside in going after PCLN as another web site – I see the value in running an operation for the airlines that cuts PCLN, EXPE et al out of the loop all together and puts those revenues back into the mix.   As you note, LUV doesn't even play with the travel agents and, because they don't pay a commission, the on-line agents pretend they don't exist yet, miraculously, people seem to find them.  The on-line agencies are nothing but leeches to the service providers and it's time to rip them off – painful though it may be.  

    Oil/Jrom – I would go long off $105 (with very tight stops) but not $107 or $106.50 because I simply don't believe anything up that high is real so why bet it?  If you believe in it – then you can play it but don't go making bets in random direction you have no faith in – that's how you end up selling low and buying high.  

    Wow, look at that RUT recover – 11 points off the low (1.3%) in 4 hours!

    Skiing/Lflan – Screw that, we're opening our pool this week.  May as well enjoy the warming.  Actually we also live on a mountain so I look forward to having ocean-front property one day as well… 

    Pipeline/Shadow – Cushing is full – without expanding the facility there's nothing a pipeline can do over there BUT take oil out.  I don't understand why people in the Democratic party are unable to articulate these things to the American people.  Fox obviously has no problem hammering home the "Obama and Shu want $8 gas" talking point.  Here's another interesting thing going on:  

  150. Dow volume 63M at 2:30.  NYMEX closed at $107 – that should be it for the oil run.  Dollar 79.58.  RUT (/TF) back where we shorted this morning at 825 look the most attractive to bet down now.  Next week $80 puts are .22, were .56 at 10 so I like those for a weekend hold.  

  151. kustomz / IWM 83.74

    Upside target is 83.01; downside is 82.11

  152. Hunger Games – i love it when dystopian flicks push a BUY for a whole sector! LOL!

  153. alik – gonna have to look into the drugs.  Zinc finger inhibitors have been looked at in the past, so I am not sure how theirs differentiates itself.  I also still have HEB on my list for mrm.  Will do this weekend.

  154. CNBC breaking out the cheerleaders big time.  The "see trucks on the highway" – WOW!  When the statistics fail you – go anecdotal…

  155. JRW – I am leaning up, as this is consolidation here, and unlike yesterday, going into Q end, I see them holding their gains….Time will tell I guess.

  156. The powers!
    Before the open lots of selling, started again 15 minutes ago, then the 105,000 share buy, and selling goes on. I'm waiting for the ticker to show kitchen sink at ask!

  157. Now the 100 share low ball, then up again. Total BOT market for the Friday night evening news!

  158. Phil--the FAS march 103's have to be rolled no?

  159. FAS Money/Savi – Yes, sorry, I missed those.  The $103 today calls are now $4.80 so that was a dumb thing to skip.  The next week $104s are $5.40 so we get paid .60 to roll the caller up $1.  Do that 52 weeks in a row and we collect $31.20 to end up in the $155s so I guess we can stick with this one…  

  160. 400,000 shares at bid this early, beware of holding longs over the weekend!

  161. Phil
    Did you mention this before??…..Very cool, all enclosed iphone using gorilla glass 2.  WOW.

  162. VXX / Phil – You got me all wrong.  This is what i said initially: bleeding from the position but at least plenty of time for volatility to come back.  Any bullish trade for next week  ? :-)

  163. russellb73….that is soooo cool!   I would have to have one of those immediately, along with several million others.

  164. VXX/Dpast – Bullish on VXX?  I'd rather (and this goes for most things) see what happens Monday.  We could be up 1%, we could be down 2% – either way, I'd rather adjust based on what actually happens than put more money now into what is essentially a coin-flip over the weekend.  

    Look – what can possibly go wrong?  

    Bullish Sentiment Among Active Traders Jumps to Highest Level in Four Years, Says New Schwab Survey (Charles Schwab)

    The rich versus the seething masses (Reuters  

    The hypocrisy of Wall Street “capitalism” (Salon)

    Are We About to Eclipse Mideast Oil Output? (Barron’s)

    U.S. Inches Toward Goal of Energy Independence (NYT)

    Heatgate or Hype? Thermal imaging of new iPad vs. iPad 2 (photo) (BoingBoing)

  165. Anyone
    Action today has over and over and over again we are on the eve of distruction! Who wrote that song?

  166. From ZHedge:  

    In part driven by the 'regime uncertainty' of "authorities having dispensed with the rulebook in trying to shore up the tottering edifice of Western finance" and in part "a defensive response" to the crushing liquidity suck out of the credit crisis, as Sean Corrigan notes this week, money is distinct by virtue of the fact that 'it flows' and this transmission mechanism is clearly broken.

    US non-financial corporates hoarding of a $630bn mountain of money in 2.5 years (or 85% of retained earnings) have retarded the most incendiary effects of the Fed's extraordinary actions. The key issues will be whether these same corporates will begin to spend this cash, or whether they will simply rediscover an appetite for alternative, non-money assets (and the Fed should certainly take the opportunity to trim its swollen security portfolio by helping satisfy this reawakened urge, should it arise) and then, if they do, what those to whom they redirect the funds will do with them in their place.

    If the upshot is that there is a sizable remobilization of this money, things could quickly get very hot on the inflationary front if the transition is not managed well.

  167. Eve of Destruction/Shadow – Barry McGuire, classic:  

  168. Come on PLX….make my year.  or should I say make UP my year.

  169. Pharm – ARNA!!!!!!!!!!!!!!!!!!!!

  170. jro – SeekingAlpha strikes again…..someone just tweet that PFE is looking at buying PLX…then you will see movement

  171. Thanks Phil!
    I really needed to revisit that song.


    System eats itself: Trading halted in IPO of high-frequency trader BATS as it falls to 4 cents. 

  173. Bloomberg..  hackers may have caused the erroneous trades in BATS today.

  174. FAS Money Update – Rolling this week FAS 103 calls (last at $4.85) to next week 104 Calls (last at 5.25)

    Phil – On Friday I list the positions to be rolled under the positions in the morning.

  175. About That $20 Trillion in Public Debt….   (March 23, 2012) 

    Massive Federal deficits require higher taxes; ever-expanding public debt and higher debt service sets up a death spiral once new investment is crowded out by Federal borrowing.


    In only three more years you're talking $20 trillion in public debt for the USA and a GDP going nowhere fast. And what does that look like in terms of the S&P 500?Courtesy of frequent contributor Chartist Friend from Pittsburgh, here is the SPX charted against total public debt. You'll notice it's crashing:

    What this chart reflects is another aspect of the death spiral I described yesterday in The One Chart That Says It All: when depreciation outstrips new investment, then productivity, income and profit all decline. As interest on skyrocketing debt rises, then more income must be diverted to service debt, leaving less for new investment. That sets up a positive feedback loop, i.e. death spiral…

    Worth reading all.

  176. HAHAHAA trust me I know how elmo feels, Lloyd sticks it up my butt almost everyday..

  177. Sorry corrected position!

  178. AAPL – today's p bar only now goes down to 590.  On my 3 min day chart, it has always been there.  On my 1 yr daily, it went down to 542.  SEC is worthless in any of this.

  179. BATS withdrawing IPO now.

  180. Charles H. Smith….I read him every day.

  181. Good for TA though Pharm, AAPL is going to close 10% over it LOD! Pretty good signal!

  182. That's one giant hammer….

  183. Not really, b'c I show the LOD of 594.401 in TOS numbers,  on the chart the P bar goes to 590 on the 3 min, and earlier on the 1 day it went to 542…..that is total crap. 


    Also, I have noted with TOS that they are front running some of my trades, as they do not show up on the buy/sell of my option trades in the Last X trade.  Next time I will take a picture of it and send it to them for free trades.  Anyone else notice this?

  184. It's funny because that 542 low shows up in the TOS charts. And it's in all my RT charts as well in my charting software.

  185. At least in the intraday charts in TOS! 

  186. Bats cancels their IPO – timing is everything!  

    AAPL/StJ – LOL, that's one way to look at it.  

    78M on the Dow with 10 mins to go.  BAC, by comparison, traded 253M shares today.  

    Dollar laying around at 79.57, Euro ($1.326) and Pound ($1.586) went dead flat since their close and it's 82.45 Yen to the Dollar and you know where EUR/CHF is.  

    Looks like we're putting in a green day except the poor VIX, down another 3.5% since nothing is actually happening, apparently.  

    That AAPL chart looks like a fantastic short, I hate to tell you.  I think the May $470 puts at $2.15 are worth a poke on the premise that they have rumors of a margin squeeze into earnings and drop $30, which should push them to a double, but, of course, if you luck out and get a quick buck – at least 1/2 should come off.  

    TOS/Pharm – I just figure it's a reporting delay.  

  187. JRW
    Maybe this will get your motor running this weekend. I have been tweeking my car all winter, yesterday it was 60 degrees with a friend to moitor, a sloppy 0 to 60 in 3.9 and 20 to 100 in 8.0. This at only 18 psi boost, leaned out and had to let off. Computer still not right and launch control = out of control. I remember you saying you made some ECU changes last year for more performance. I have a cobb access port to monitor and reflash it should do a 1/4 in the 11s if I can dial all in.

  188. Not in mine.

  189. Well that was a fun week!

    Have a great weekend, 

    - Phil

  190. Phil – it is not a reporting delay at all.  They are sometimes holding my trades on their books.

  191. Not a green day for VXX though… down another 7%.

    On that positive note, have a good weekend all!

  192. Cartoon of the day:

    Mike Thompson

  193. Big selling after close!

  194. Barry's succinct summation of week’s events:


    1) Initial Jobless Claims fall to 348k, the lowest since Mar ’08
    2) Multi family housing starts jump again in Feb and permits rise to the most since Oct ’08
    3) Greek CDS payments clear smoothly
    4) Portuguese 10 yr bond yield falls 108 bps in spite of concerns with it post Greece, 5)French business confidence rises 3 pts to a 4 month high


    1) China slowdown concerns grow. HSBC preliminary mfr’g falls to 48.1 from 49.6, 5th month below 50. More cities report home price decreases and fewer report home price increases. BHP and Rio express reservations over pace of Chinese growth. Official at China Assoc of Auto Mfr’s says auto sales likely to miss their estimates in 2012. China raises gasoline and diesel prices
    2) Spanish and Italian 10 yr yields rise almost 20 bps on the week
    3) German and French mfr’g PMI fall back below 50 and Euro zone mfr’g and services composite index unexpectedly falls to 48.7 from 49.3
    4) UK retail sales below estimates and consumer confidence falls
    5) Feb US New Home Sales unexpectedly drop to 313k, a still anemic level and months supply up a touch to 5.8 from 5.7
    6) Existing Home Sales months supply rises to 6.4 from 6.0. Feb sales light but Jan revised up
    7) NAHB home builder survey unchanged at 28 vs estimate of 30
    8) Single family housing starts flat, seeing no weather induced improvement
    9) Due to uptick in mortgage rates, refi apps fall 9.3% to a 10 week low
    10) AAA said average gasoline prices rose another .05 on the week and is up .15 for the month.

  195. Shadow, your going to run a bit lean in colder weather. Here's a clip of my SL55 running 11's at Palm Beach raceway..My car is quiet, the noise you hear is from the BMW..

    Enjoy the weekend folks..

  196. Shadow / JRW – What kind of car are you two talking about?  Cars happen to be one of my passions (very jealous every time JRW posts that he earned a vette in a day, took me over 40 years, doh :D ).  I am still trying to figure out how I can use my software development career to somehow exploit my interest in cars and make some money while having fun with something i am passionate about.
    Anyway, I would be interested in hearing about either of your rides over the weekend (or anyone else that has a cool car or is simply interested in them for that matter).

  197. sorry for the odd formatting, used word for my spell checker and it put all that junk around the word i cut after correcting the spelling.

  198. JRW 82.94 AH. They couldnt leave for the weekend without hitting the target.

  199. kustomz
    That was nice, I have a max 98 db exhaust to tone it down when I drive it lower than that takes too much power away. I wouldn't like that BMW anymore than subwoofered overload. Stelth is cool. The only video I have is the wideband guage at WOT for tuning. BTW I ran it with Icebear snow tires that are worn too much for ice next winter.

  200. shadowfax / db's — Been a long time since I tinkered with cars and maybe this is obvious but I once had a '68 cougar XR7 that I put mufflers on that were 3 baffles when not under load but went to a straight pipe/single baffle when getting on it. I don't remember the db rating but it turned the car into a sleeper with a built 302 in it. That was 25+ years ago. I'm sure the technology has come a long way since. Sure was fun though. Fond memories.

  201. Klingon Kool-Aid
    It's money Jim, but not as we know it.
    Not so long ago, Phil posted a trade idea on PCLN; Jan 14 BCS 700/800, partially financed by the sale of the Jan 14 410 Put for a net debit of roughly $12 on the $100 spread. PCLN was in the mid $690s at the time. The opportunity to buy 50 cent dollars which is often Phil's wont. Well, 10 contracts would see you sitting on a $10k profit already. Whether PCLN goes up or down, one can sell the April 770 calls for a credit of $5.30. I can imagine that anyone in that spread that finds PCLN at $770 at April op/ex could both laugh and cry at the same time. I would be happy to roll it all the way to hell and back. And the drinks are on me (Klingons welcome).

  202. scotbraze
    My car is a low dollar ride, 2004 Subaru WRX STI, Blanch turbo, big injectors, fuel pump and the rest is mostly ECU. You can do something check out For $2,500 you can get started plus an access port. I have the port and the free race tuning download, one car and unlocked secrets for all to copy. These guys get 2 to $300 for a download tune that doesn't take long and block acess to the map. Once you get a combo dialed in its $$$$ for minutes. Even a stock Hemi truck has 50 HP and 75 Lb torque in that ECU. At 23PSI my car shoud produce 550 hp crank and 475 rear wheel out of 4 cylenders. Torque is much higher. 2nd gear is total smoke full throtle at 18 PSI, that is why I said sloppy. Check cobb out.

  203. Thanks Shadow, Im ok with a loud exhaust as long as its a quality sound and not just obnoxious. You should install an electronic dump for the exhaust. Just keep your eye on the boost as it will creep higher due to the free flowing exhaust. Only in a 4 wheel drive Suby can you run under 4 sec 0 to 60 on snow tires!! I have larger injectors/ supercharger pulley and an ice tank going in next week. My goal is to run high 10's. The correct tune makes or breaks ya.


  204. kustomz
    My exhaust is 3 inch no baffels, resonator, and like a big glass pack in back. Also a huge intercooler. Turbo creep was an issue until I got a manual boost controller now it leans out in the 4,000 to 5,500 rpm, perfect to 7,200. That front drive kicks in too much at the lowest setting, would like to break your arms. If you have any interest, knowledge, or ideas I could send a spreadsheet from yesterday's run to 100 mph. Thanks

  205. Phil,
    On this planet the alternative energy lobby still wants US gas prices to be the same as in Europe, which are no longer $4 per gallon. The goal is still to get WTI and Brent to the same price, and one way of aiding that aim is to empty Cushing. You are absolutely right that then the oil can be put on empty tankers, exported, and sold at higher global prices. Democrats only came up with the anti export amendment as a poision pill to stop the Republican pipeline bill, but they are not stopping the part of it that will empty Cushing.   If you can point me to where the Democrats are opposing this I would like to see it, because bottom line I personally think they want WTI to trade at global prices, too. This is based on fairly extensive reading, and observation of actions, or lack of them on the part of the Democratic party. The existing Seaway pipline to the gulf  is currently in the process of being reversed. You and I both know that oil is going out of the country, so where are the Democrats opposing that? There is not a Democratic "no export" policy, it's just a ruse to stop a Republican bill.
     PS Phil I haven't watched TV in years. "Stick to the facts, Mam, just the facts." 

  206. Phil, if you look at a comparison chart of VLO vs USO, you see they more or less move in the same direction, with the exception of late last fall, when USO fell and VLO held steady. I see nothing in that chart that suggests that high oil prices are bad for refiners. Doesn't it have more to do with the crack spread?
    Can I change my question? What are the good adjustments to make with ANY BCS that has a few weeks remaining, and has fallen below the long call?

  207. Shadow on your data logger can you see if its pulling timing when it goes lean and do AFR's drop as you run through the RPM to redline? What gear(s) are you seeing the lean condition? The Suby is probably making peak torque right around 4000/5000, right where your seeing it. Remember, lean makes HP and Im sure your knock sensor would pull timing if it was way out….Spreadsheeet, send it over

  208. Wow, nice cars, guys!!  Since I dislike being in jail, although the company's not bad, I took a Suzuki 1300 Hayabusa [motorcycle], threw a ti muffler on it, some light wheels, revalved and rebuilt forks, and found a smooth stretch past El Cajon in San Diego where it could hit 190+ mph, and accelerate 0-60 in 2.3 seconds [from a slightly rolling start, no way I would pin in standing still without lowering it and hanking on a wheelie bar].  Cheap thrills.  But you do have to worry a bit about centerpunching a coyote.

  209. The part of not wanting to go to jail is the fact that you can make 190 mph Zero? I guess them Chevy Caprice can't keep up…

  210. I rarely "speed" on my 'Busa – It's just nice to know you can with just a "twist"….. :)

  211. McClellan looks at the money supply and the markets and sees….inflation! Good article:

  212. 1020 – note the bug who greets the windshield about :39. Nice video – how did you take it?

  213. deano – Sadly, I can no longer summon enough testosterone to ride 200 mph….
    In other words, my wife keeps the family jewels in a safe place until the twins turn 18. :)

  214. 1020 – in the same circumstances with the 18 thing, but our agreement is an annual bike trip with the boys is OK – tame it is though – we rent BMWs and do a three-four day tour in the US or Canada.

  215. Re: Taxes  -    I am evaluating  tax software. Has anyone had good experience with Trade Log?

  216. silent/tax sw – just got done with trade log. This is my second year with them. Has worked well so far. Their turnaround time when I needed email help was very short. I got an answer on a Sunday!

  217. silentstorm44 – TradeLog is probably one of the best at what it does and has saved me a lot of money with my accountant!

  218. Tradelog/Diamond , Nicha – Are you using the MTM or standard version?

  219. standard version

  220. aussie – standard version

  221. everyone,
    what is trade log and where can i find it….TOS?

  222. Some more information on the VIX ETF:

    There are just so many of them now.

    And here is a list of the ETF and ETN:

  223. jasu1TradeLog Software

  224. Maybe there are some lessons to be learned…


    What you’re seeing here is the price of shares in BATS, at 11:14 this morning. The white spots are trades: there are 176 of them altogether. They start just below the IPO price of $16, and then just fall lower and lower and lower until the stock is trading for mere pennies. But the key number you want to look at here is not on the y-axis. Instead, it’s the chart report at the very top:

    Elapsed Time: 900 Milliseconds

    This is what happens when stocks are traded by algorithms rather than humans. The parabolic trajectory of the share price is downright elegant; indeed, if you’re going to crash from $16 to 4 cents within 900 milliseconds, you could hardly do so in a lower-volatility manner. The scary thing here is the sheer speed involved, and the fact that no human intelligence was stopping to think whether these prices made any sense at all.

  225. Phantom Bars/Anyone
    I would like to hear anyone's take on p-bars. What do they mean? Do they really only become "phantom" bars when they only live in our memories? Are they stinker bids meeting at-market orders? If these trades can be undone, why can't I undo trades I've made that I don't like :) ? Why is this legal? Thanks much…really enjoy the community here.

  226. diamond

  227. HEB/mrm – I am sorry, but the company just does not excite me.  Their lead drug is on the market, doesn't make any thing, and they are trying to get it in orally.  I just don't see it.  I could be completely wrong, but I am not a buyer…..


    SGMO/alik – well, their lead candidate is a Zinc fingered protein modifier that is trying to alter the CCR5 protein.  Basically, what the inhibitor is trying to do is not allow the protein (CCR5) to fold right when it is made by the cell.  Now, CCR5 is involved in HIV entrance into T-cells, so if there is no CCR5, HIV infections will 'slow.'  There are drugs that are in clinical development that inhibit CCR5 (PFE, MRK, Ono, etc), and there are also a few individuals carry a mutation known as CCR5 delta 32 in the CCR5 gene, protecting them against some strains of HIV.   I have not seen any drugs make it to market (I don't know of any past Phase 2…and this target has been around for over 13 years.  Again, my opinion, but I am not interested at this time.

  228. zeroxzero
    I have a fast bike also and I would never try to run it, first I fear just holding it up because my right leg is worthless and I tried a hole shot once, scaced the crap out of me, and I have offer it to 2 others to run it for me. They want wheely bars also! I did't like launch control from 0 in my car, then did 20 start in 2nd gear.

  229. kustomz
    Just got your post and will send the sheet. I can't find it right now but will later or tomorrow. Spent today trying to log wideband with the rest, never got out of the garage, stupid me or stupid software. I had to give it up before I lost it!

  230. Phil--
    just wanted to remind you about your PCLN idea.
    I really can't stand that stock ;-)

  231. Link to annual report:

    …We experienced exceptionally strong year-over-year growth during 2011. However, given the sheer size of our hotel reservation business, we believe it is highly likely that our year-over-year growth rates will generally decelerate on a quarterly sequential basis in the future. Thus far during the first quarter of 2012, we experienced deceleration in year-over-year hotel room night reservation growth as compared to the year-over-year growth rate in the fourth quarter of 2011. We expect to experience further deceleration in growth rates throughout 2012 and beyond.

  232. Here is what the company said in the annual report of 2/27/12: (link included)

    in the fourth quarter of 2011. We expect to experience further deceleration in growth rates throughout 2012 and beyond.

    Large, established Internet search engines with substantial resources and expertise in developing online commerce and facilitating Internet traffic are creating – and intend to further create – inroads into online travel, both in the U.S. and internationally. For example, following its acquisition of ITA Software, Inc., a major flight information software company, Google recently launched a new flight search tool that enables users to find fares, schedules and availability directly on Google and excludes online travel agent ("OTA") participation within the search results. Google has also invested in HomeAway, a publicly traded vacation home rental service, and launched "Hotel Finder," a utility that allows users to search and compare hotel accommodations based on parameters set by the user. In addition, Microsoft has launched Bing Travel, which searches for airfare and hotel reservations online and predicts the best time to purchase them. "Meta-search" sites leverage their search technology to aggregate travel search results for the searcher's specific itinerary across supplier, travel agent and other websites and, in many instances, compete directly with us for customers. Furthermore, certain suppliers limit OTA participation within the meta-search results. Some meta-search sites, such as, which offers its users the ability to make hotel reservations directly on its website, may evolve into more traditional online travel sites. These initiatives, among others, illustrate a clear intention to more directly appeal to travel consumers by showing consumers more detailed travel search results, including specific information for travelers' own itineraries, which could lead to suppliers or others gaining a larger share of search traffic or may ultimately lead to search engines maintaining transactions within their own websites. If Google, as the single largest search engine in the world, or Bing, or other leading search engines refer significant traffic to these or other travel services that they develop in the future, it could result in, among other things, more competition from supplier websites and higher customer acquisition costs for third-party sites such as ours and could have a material adverse effect on our business, results of operations and financial condition.

    Several major hotel companies, including Choice Hotels International, Hilton Worldwide, Hyatt, InterContinental Hotels Group, Wyndham Hotel Group and Marriott, have launched Room Key, a hotel search engine that competes directly with our hotel room night reservations services around the world. The hotel companies that own Room Key have a stated goal of driving demand directly to their brand web sites, thus reducing the share received by online travel agencies. They may also attempt to improve their competitive position by offering lower room rates, better room availability or additional features or amenities through Room Key than are available through services like ours. If Room Key is successful, our share of the online hotel room night reservation market could be negatively affected in the United States and around the world and our business could suffer.

  233. Global Hotel Exchange (GHX) is a new worldwide trading platform has massive signups and demand    1 minute ago
    Global Hotel Exchange CEO Thomas Magnuson has already noted that “The massive number of hotels we are signing daily from dozens of countries clearly indicates a desire to combat a global triple threat of falling demand, lower room rates, and increased OTA fees.”

  234. Good morning!  

    Not a lot of big news so far this weekend:  

    The stock market's long-awaited correction is at hand, Mark Hulbert writes, as sentiment indices point toward excessive bullishness and complacency. But that doesn't mean stocks won't finish the year higher than they are today, as "contrarian analysis has its greatest explanatory power over the very short term of the next month or two at most."

    Adam Parker, Morgan Stanley (year-end target 1167): “While the consensus view is that US economic data are an unbridled positive, we think the data are more mixed … Despite the mixed news, the world remains risky … Policy and politics create a wide range of outcomes … The warm winter may have pulled through demand for certain products from April and May, causing a potential rollover in the data as weather normalizes.”

    Barron's Alan Abelson says China's showing unmistakable signs of economic fatigue. He joins JPMorgan's chief Asian strategist, Adrian Mowat, who is very concerned about the Chinese property market, and finds no evidence of policy moves that might reaccelerate the economy.

    The Strange Case of the Disappearing Productive Capacity (Mainly Macro

    In a twist of irony, Wall Street firms are gearing up for their own little secular bear market just as the rest of the economy regains its footing. As a regulatory tidal wave bears down, the big firms have begun slashing bonuses, laying off workers and getting out of markets they had no business being in the first place. Inevitably, this will mean a squeeze in profits – and a vengeful shareholder.

    The banks claim they’ve repaid the Tarp bailout funds … but nearly half of the banks “repaid” such bailout funds by borrowing from other government bailout funds (and the rest could only repay money by fudging their accounting and using stealth bailouts which are are a little harder to detect).  Indeed, the government has decided on perpetual bailouts for the too big to fail banks.

    Buttonwood takes a dour view on corporate buybacks, noting companies like Apple tend to buy shares at highs and leverage themselves up in the process. On the cynical side, companies may be using buybacks to boost earnings per share, which in many cases is a key determinant of executive compensation.

    A team appointed by Michigan Governor Rick Snyder has until tomorrow to make recommendations for solving Detroit's dire financial problems. If Detroit and the team can agree on proposals, Snyder has 10 days to act, but if no deal is reached, the state could cut off revenue-sharing funds or hire an external emergency manager to run the city.

    With the GOP and the Democrats looking to end various tax breaks to finance tax cuts, a new Congressional report shows thatexemptions amount to over $1T/year – around the same amount as the budget. The biggest breaks are those for employer-provided health insurance and pensions, which are forecast to reach $164.2B and $162.7B respectively in 2014.

    Barry claims is being gamed to make articles like "S&P Gets 9% Cheaper" stay on top of their Most Popular Stories list (this one has been up 32 days and is still #3) to manipulate Retail Investors.  One of the commenters notes:  I peeked at Alexa’s stats for Bloomberg and found something VERY interesting, you can compare total pageviews vs unique pageviews per user, last Summer is where that gets interesting – total pageviews exploded while pageviews per unique user were relatively flat….a quick interpretation is that someone or something simply sat on pages and auto-refreshed.  

    Oil Prices Spike Exacerbated By Wall Street Speculation, Federal Reserve Study Finds (Huff Post)

    The new user interface accompanying the latest Apple TV (AAPL) set-top box was actually "tossed out 5 years ago" by Steve Jobs, claims former Apple engineer Mike Margolis. "Now there is nobody to say 'no' to bad design."

    Bad Apple (Technology Review) 

  235. PCLN/Winston – Good example of how easy it is to get nice returns betting on inflation.  The bull call spread is already $43 and those $410 puts are down to $24 for net $19 – still not a terrible entry for PCLN bulls, especially as you can sell the May $750 calls for $24.50.  

    Keystone/Sparky – They DID block it.  ALL of it.  So what kind of question is "if you can point me to where the Democrats are opposing this"?  The last time they took an actual vote, the Democrats (not the Republicans) ACTUALLY voted in sufficient numbers to block the ENTIRE pipeline.  Actions speak louder than rhetoric.  It would have been VERY easy to let it go through but they didn't so you can think all you want that there is some secret Democratic agenda to raise gas prices and you can even believe that just because you don't watch TV, you aren't getting propaganda shoved down your throat but if you don't even believe the FACT of the way people vote because it violates the OPINIONS you have formed in your propaganda-free reading – then why even waste time looking for facts you will only reject if they don't conform to what you already want to hear?  


    The Keystone XL tar sands pipeline simply is not designed to move significant volumes of domestic crude. The 900,000 barrel per day (bpd) pipeline only has two comparatively small on-ramps in the United States. The first, in Montana, includes an on-ramp for a maximum of 100,000 bpd of crude. The second in Cushing, Oklahoma, allows a maximum of 150,000 bpd – and oil going into the southern segment from Cushing could easily be tar sands as well as domestic crude. That means that at most, little more than a quarter of the oil on Keystone XL would be from domestic producers.

    While the southern route of Keystone XL is being touted as a means to move domestic crude to market, it is also designed to move primarily Canadian tar sands. From Cushing, the southern route of Keystone XL is connected to two pipelines – the 150,000 bpd on ramp in Cushing (that can carry tar sands and domestic crude) and TransCanada’s 590,000 bpd Keystone I tar sands pipeline (which has no on-ramps for domestic oil). Keystone XL’s design prevents it from being used as a pipeline primarily for domestic production.

    Refiners/Barf – Not HIGH oil prices, RISING oil prices squeeze refiner margins as it's difficult to pass costs on to the consumer so the crack spread narrows as oil prices rise, squeezing refiner profits.  Just look at VLO in 2008 compared to USO or anytime for that matter.  As to bull call spreads – I may have mentioned taking action before you lose 50% once or one thousand times – no matter how much time is remaining, you can't afford to let it go further than that (nor should you on any trade). 

    Guns/Scott – Well if RGR physically can't make any more guns, I'd have to think SWHC is a good buy, despite rocketing up already.  Maybe even TASR will get more orders if we're running out of guns.  

    McClellan/Deano – I agree when the velocity of money starts moving, the S&P should fly.  But it's not at the moment.  That's like saying you have a car with an empty gas tank so how far can it go?  Then I come by with 4 5-gallon drums of gas and put it down in a bank vault.  Now how far can your car go?  You can place all the bets you want on that car going 200 miles but until you MOVE the gas from the bank vault into the actual gas tank – you will lose those bets.  That's what the S&P rise is all about – inflation is coming but so was Godot….

  236. Phantom Trades/Laddoo – There was a Bloomberg special on phantom shares, failure to deliver, etc. that's worth looking at for the basics.

    PCLN/Jabob – You'll be happy to know Sam (Antar) is looking into their revenue recognition for me.  Thanks for all the info – I will write something if I can. 

  237. Phantom Bars/Laddoo:

    Heres an analysis of what happened to AAPL during that big phantom bar/flash crash on Friday, along with the crash that occurred to BATS itself which caused it to pull its IPO.  It looks like a "stub quote" at 544 executed on the BATS exchange. :
    Nanex ~ The BATS IPO and halt in AAPL

    Here's an article explaining how stub quotes contributed to the May 2010 "Flash Crash".  Note that the practice of way OTM stub quotes was BANNED by the SEC. :
    'But market participants say stub quotes play an important role in preserving liquidity and keeping markets running smoothly. If a market maker doesn't have enough liquidity available to trade a stock near its recent price range, then a stub quote is entered so that the market maker complies with its requirements without extending its quotes beyond its available liquidity. Such bids would typically be priced at or near a penny, while such offers would be priced well above a stock's recent trading range, usually at least doubling it. They are essentially place-holders, never intended to be the prices of actual trades.

    "They never expect them to be executed there," said Mark Enriquez, managing partner at Pulse Trading, a brokerage firm. "Nobody expects to buy a $40 stock at a penny. But that's why you saw these crazy prices."
    The stub quotes were traded because liquidity was quickly sapped up across the equities market to the extent that the only bids left in some stocks were the stub quotes priced at a penny. Market sell orders work in such a way that they will keep going down the line of orders until they find bids to be filled at, and when the stub orders were the only ones left to be found, they got executed.'
    So it seems like what happens is liquidity dries up and a sell order will move down the line of orders until it hits a bid order and executes it.  Since BATS was having a helluva time trying to keep its own stock from dying, there might have been some sort of network or system latency issue that was jamming up order flow an a sell order ran down the line and hit at the next available bid — the stub quote at 544.
    I assume something similar to this happens whenever these "phantom bars" shows up.   HFT's will often "quote stuff: or send out blasts of orders and cancel them immediately in order to manipulate the price.  No doubt when you have hundreds of HFT's quote stuffing at the same time on the same stocks, there is going to be some latency issues on the exchange.

  238. Interestingly enough, on a 5 year chart, crack spread is still very elevated! Looks like the consumers is getting hit from both sides – high oil prices and high gas margins!

  239. ETF Performance:

    Look at financials and technology…. No wonder FAS is hurting us, financials were up 6.5% this month!

  240. Market timing is hard – just look at the track record of many so-called gurus…



    Wouldn't it be nice to know whether famous pundits had a good track record? One of my missions at "A Dash" is to find the best experts. Beware of those who pretend expertise that they really lack.

    A great source for track records is CXO Advisory. This source is objective and strong on research methods. The guru grades page shows the public record of many of the people we follow. You can check out the individual analysis to see exact public statements and the interpretation. I strongly recommend frequent visits to this site. But let us check out the quiz list. I made it easy by listing them in order of success.

    Pundit scores

  241. And from the Dept. of  NYT Scathing Editorials You Will Likely Never See:

  242. PCLN- Jabo- you citations reinforce just how juicy this will be as a short ala NFLX/GMCR. It will be spectacular when, not if, it happens.

  243. What? Phil did not make the Famous Pundit list? I demand a recount.

  244. Thank you Phil!
    Pstas-I would bet Phil's score would top anyone on that list.

  245. PCLN touted its most revenue is from Europe, but according to Europe Online Travel Report 2012, Expedia had the highest number of unique visitors in Europe, followed by Priceline (… ), so PCLN is still number 2 in Europe. and PCLN is just a middleman company, not even a company producing goods. With search engines, Google, Yahoo, Bing join the business, and hoteliers ganged up to form their retail search engines such as RoomKey, and free of charge platform such as Global Hotel Exchange.

    Also Expedia has better tie with China, it is ridiculous that Expeida's market value is around 1/7 of PCLN. Sometimes, I wonder how PCLN does its accounting to make a online travel agent to be so profitable.

  246. Shadow – nice ride man :) that's pretty insane.  My vette is 'only' 400 hp/ft-lbs (LS2) and that's scary fast.  I can only imagine what 500+ is like in a light, all wheel drive car, but I suspect it would be fun to find out :D .
    I have always been into the american muscle, and have wanted a vette since I was old enough to know what one was.  It was a real dream come true when I got my 2005 convertible in  08.  It was my daily driver (z51 suspension option and all) until the end of the year when my fiance and I purchased a 2011 camaro they were trying to get rid of to make room for the new ones.
    Back in my youth I drove a 72 monte carlo in high school (graduated 84), a 57 bel air hard top (no post) in my late teens / early 20's, and a 66 chevy II ss that i traded for the 57.  The 57 I did a lot of wrenching on, pretty much the entire drive train was replaced by me and a friend (383 sbc, turbo 400 trans and 12 bolt 4.11 posi rear, ran mid 11's with 150 shot nos the one and only time it was at the track if i remember correctly).  
    It's only been the last 5 years or so that my interest in cars has rekindled.  I am trying to find a classic car to enjoy, but i have not found what I am looking for at a price that I can justify.  Unfortunately, I don't have any place to work on a car, so a 'fixer upper' isn't really an option at this time.
    Anyway, nice chatting with you about cars :D  Have a nice rest of the weekend, scot.

  247. I have updated my volatility charts (weekly and monthly):

    I have added a new weekly chart based on Friday's prices and updated last week's chart also with Friday's prices to see who was outside the bands for the week:

    Losers last week were:

    SHLD – Coming back to reality!
    APA – I guess weak Nat Gas prices!
    VXX – Doh!
    CAT – China…
    JOY – China…
    NKE – Bad guidance!
    FSLR – Bad month for solar!


    PCLN – Sorry Jabo!
    AMZN – Good pick by Pharm!

    I have also updated the monthly volatility chart using Friday's prices and outside of the VIX ETF, everything is behaving as predicted.

  248. Corzine, professional liar?
    Interesting comment from an anonymous commenter in the Daily Telegraph as follows:
    When one of my friends at Goldman got divorced his very clever and wealthy wife hired a private detective to look into certain practices at Goldman. It was uncovered that all of the partners had been given a rather extensive course in exactly how to lie and be convincing.

    Of course I have no idea whether this is true, but it would be interesting if someone investigated further. I still think Corzine should be arrested and charged under the RICO laws.
    From Wikipedia:
    When the U.S. Attorney decides to indict someone under RICO, he or she has the option of seeking a pre-trial restraining order or injunction to temporarily seize a defendant's assets and prevent the transfer of potentially forfeitable property, as well as require the defendant to put up a performance bond. This provision was placed in the law because the owners of Mafia-related shell corporations often absconded with the assets. An injunction and/or performance bond ensures that there is something to seize in the event of a guilty verdict.
    In many cases, the threat of a RICO indictment can force defendants to plead guilty to lesser charges, in part because the seizure of assets would make it difficult to pay a defense attorney

  249. Ipad/dpas:  It kind of jibes with this apparent rumour and picture of a large number Chinese returning bagfuls of the iPad 3 at the 5th Ave. store because of lack of dutch tulip like "enthusiasm". 
    Translated from Chinese on Google:
    The next quarterly earnings going to be interesting anyway.

  250. Market alert …
    April 6th: Good Friday, market closed.

  251. Phil
    I couldn't stop watching Waiting for Godot. I was impressed that you would pick such an appropriate show in relation to market participants. I find myself waiting to live as I want and in the meantime ammusing myself with anything. The Bloomberg show doesn't really explain AAPL on Friday. Your right about the need for more liberal arts, more BA and you get less BS!

  252. PCLN/Phil – I like your idea of selling the May 750 C for $24.50 even better! In case PCLN misbehaves, they roll to the July 790 @ $23.50. then to the Oct 850 C @ $23.40 (by which time it is GOAAAAL!!!!!! on the Jan 14 700/800 BCS), and for good measure they roll to the Jan 13 900 C @ $24.40 and by then the PCLN 2015 options will be available so a whole new range of possibilities. By that time, the sold Jan 14 410 Puts will be down big. And of course, along the way, adding a new $100 BCS would round off what would be a very nice story. If the unthinkable happens over the short term and PCLN should actually go down, collecting the money on the shorter term sold Calls, buying back the Jan 14 410 Puts and heading back to Dodge would probably be the best course of action.
    This highlights one of the most profitable lessons I have learnt here – Leveraging a successful long dated artificial buy write. I tend to have a stable of these at any one time. For the most successful that have moved nicely into the money, I start selling short calls and short puts, generally being guided by the movement within the stock's channel. Calls are sold in the range of the upper channel, conversely Puts are sold in the range of the lower channel. I don't use this technique on the MOMOs (usual suspects, now including AAPL), but for the likes of JPM, SLB, CHK, MON, it has tended to work well.
    Finally, while I am generally agnostic to the Bull/Bear case, something in my bones tells me that circumstances are converging to make one adage on Wall Street true this year – 'Sell in May, and Go Away'. I noted Barry Ritholtz's position as being a 'miserable long'. Others have either left tons of money on the table, or lined up to short the maximum out of the market. If the adage SiM becomes a reality, then many people's reputations will be salvaged. Everyone who has profited out of this run up since Q4 2011, can then buy their favourite stocks at lower prices.
    Phil, I think many members would appreciate your wisdom and foresight on protecting (harvesting?) a portfolio of gains during this period. I know there are the standard hedges (DIA, SDS, DXD, SQQQ) but I would be very interested in a more expansive perspective. Would it embrace selling everything? Moving into a single vehicle (e.g. SPY) just to allow complete focus in a downward spiral? Planning for such an eventuality now, or as one wag put it – the time to plan for winter is in summer, you don't plan for winter in winter, could be a smart move.

  253. Best performing stocks of 2012:

    6 of the top 10 are in health care!

  254. Cars – you guys will be amused by a vehicle I spotted on Colorado Blvd in Eagle Rock (part of LA) a week or so ago. It was some sort of customized Model T, very shiny and pretty, – not so much the Model T coffee grinder exhaust but more of a rumble. There was no hood over the very shiny, chromed engine, so at a stop I looked over at it. There was the brand label, all shiny – "Offenhauser". Pointed that out to my son, who has some interest in cars and power, and he didn't know what that was. ~sigh~

  255. And to make it worse, he said, "huh! Only four cylinders?"

  256. Offenhsuser- used to be makers of racing engines, I believe. Compact and very powerful as I recall.

  257. BTW, it looks like Europe is on DST now. So back to the 6 hours difference with Western Europe and 5 hours with the UK. The 3:00 AM trade is again at 3:00 AM!

  258. Offenhsuer
    The product that put them on the map was called a ram manifold for huge V8s of the 60s, could feed huge quantities of fuel and air. Lots of power and very short engine life.

  259. deano
    Thank Spain, now we have someone else to fix, and first we must fear the end of everything!

  260. can't open that FT article? What does it say?

  261. jabo – here you go – from FT:
    Europe’s bailout bazooka is proving to be a toy gun - By Wolfgang Münchau

    Welcome back to the crisis. And it’s set to get worse once the markets discover that the eurozone is about to fudge the increase in the European rescue umbrella. The argument I am hearing is a wonderful example of circular logic: we don’t need a bigger umbrella because market pressure has eased.

    Well, the market pressure has gone up again recently. Investors are concerned about Spain. Over the weekend, Angela Merkel was preparing for one of her celebrated U-turns, by letting out a trial balloon in the German press that she would, after all, be ready to accept an increase in the rescue operation.

    But the arithmetic is tedious and most statements you get obfuscate the issue through double-counting. The US and other members of the Group of 20 leading economies want the size of the eurozone’s contribution of the total umbrella to be doubled from the current €500bn to €1tn. In that case, the International Monetary Fund would put up a further €500bn. To get there, the eurozone would have to do two things. First, it would need to merge the €440bn European Financial Stability Facility, the temporary umbrella, and its permanent successor, the European Stability Mechanism. Second, it will have to make the EFSF’s share permanent because the EFSF is due to expire next year. Both of these measures would be necessary to reach a total of close to €1tn. But Ms Merkel is not going to offer that. Not even close.

    As I understand it, she is ready to offer only a partial merger and only for a transitional period. Specifically, the Germans are proposing to tack on the existing commitments of the EFSF – the programmes for Greece, Ireland and Portugal – to the ESM. That would get us to a ballpark of €700bn. The trouble is that you cannot just add these numbers. Once the old programmes expire, they are gone. Any new money will have to come from the ESM. Over time, the ceiling will revert to €500bn. This deal would, at most, give a small, temporary increase in the ceiling.

    Still, it would raise Germany’s maximum risk temporarily from €211bn to about €280bn. This presents a huge political problem for the chancellor because it would require a vote by the Bundestag, which had previously agreed that the total liability of €211bn must not be broken. The €211bn figure has taken on symbolism in the German debate. Ms Merkel and other politicians have pledged many times not to break it. It is not clear she would get the support for such an increase. The CSU, the Bavarian wing of her party, is opposed. After Sunday’s election in the Saarland, her coalition is facing an even bigger test in North-Rhine-Westphalia, which holds early elections in May. Remember, elections there messed up the first Greek programme.

    A total merger of the EFSF and the ESM would raise Germany’s risk temporarily to about €400bn. I find it hard to see how the German parliament would simply accept a near-doubling of the risk, after having been told time and again that this would not be necessary. And even this would not satisfy the rest of the world, since this is only a temporary increase.

    The usual European response to such a stand-off is the use of creative accounting. I have heard the suggestion that one could “stretch” the callable capital of the ESM. That would leave the magic number of €211bn untouched. But it would also mean that the total rescue capacity can be no higher than €500bn at any time. The outcome would still look more like a toy pistol than a “big bazooka”. It took the markets several weeks to understand the significance of the recent political and economic developments in Spain. It may take some more until Germany’s stance on the ESM is understood.

    But it is only if you consider the two together that the real significance becomes clear.

    The current ESM is big enough to handle small countries, but not Spain. I expect Madrid eventually to apply for a programme, specifically to deal with the debt overhang of the Spanish financial sector. But even a minimally enlarged version of the ESM will not be big enough.

    What this stand-off tells us is that we are approaching the political limits of multilateral programmes. If you want to claim funds of such size, you need joint and several liability – ie all eurozone countries need to be jointly liable – not individual liability among member states. Call it a eurobond, call it what you like. If you do not want that either, then you have to accept that there is simply no backstop for Spain. As I said, welcome back to the crisis.

  262. Yup, Spain is next on the block but it looks to me more likely we run up in to the end of the week/quarter/window dressing. Then???

  263. Phil/TZA,
    Would you go for the May 18/22 BCS now .87 ,  or: 17/21 BCS @ 1.12

  264. Good morning! 

    What a nightmare.  Came home last night with no web access, woke up 2am with no web access.  After 2 hours finally discovered it was router and not cable and finally got all running again.  

    Now I'm way behind…

  265. Asia was flat with India down 1.5% but Hang Seng had a really strange finish, jumping up 125 and then back down 125 (to flat) all within the last hour.

    Europe is back to opening at 3am and they are down a bit but our futures are flat.

    Dollar 79.666 (mark of the Blankfein), Euro $1.325, Pound $1.586 and 82.59 Yen to the Dollar.  Just for laughs, EUR/CHF $1.2051 -off by .001 today, those Swiss are slipping!  

    You can almost directly plot the Nikkei to the Yen, the Yen fell to 82 and the Nikkei fell to 9,900 but then the Nikkei recovered to 82.6 into Japan's close and the Nikkei ran back to 10,000…

    Oil $106.44, gold $1.658, silver $32.12, copper $3.80, nat gas $2.29 and gasoline $3.3665 – almost there.  

    Nothing exciting so far this morning so I'm going back to sleep for a while to pass the time!   Hopefully there will be news when I wake up.  

  266. Very strange goings on while I slept!  

    Dollar rallied back to 80 and now is back to 79.67.  The rally didn't drop the indexes but the drop back from 80 to here shot us up like a rocket in the past 90 mins.  There's stimulus news from Europe but it's the same thing repackaged again – I can't see this move up lasting if that's all they have.  S&P (/ES) 1,400 makes a good shorting line as does Dow (/YM) 13,100, Nas (/NQ) 2,750 and RUT (/TF) 835 BUT - above those lines – we're going to have to be bullish.  

    FTSE and DAX up almost half a point, CAC is flat.  

    Monday's economic calendar:

    8:30 Chicago Fed National Activity Index

    10:00 Pending Home Sales

    10:30 Dallas Fed Manufacturing Outlook 

    6:00 AM Overseas: Japan +0.1%. Hong Kong flat. China +0.1%. India -1.8%. London +0.4%. Paris -0.1%. Frankfurt +0.3%.

    7:00 AM On the hour: S&P +0.33%. 10-yr -0.28%. Euro -0.23% vs. dollar. Crude -0.22% to $106.64. Gold -0.09% to $1663.45.

    The March IFO Business Climate Index inches higher to 109.8 from an upwardly revised 109.7 previously, and against expectations for 109.6. "The German economy is losing some of its momentum," says IFO chief Hans-Warner Sinn. Frankfurt +0.6%.

    Hedge Funds Capitulating Buy Most Stocks Since 2010 Amid Rally. Hedge funds trailing the S&P 500 Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years. A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. Companies with the most shares borrowed and sold by short sellers have led this quarter's rally as gains forced bearish traders to repurchase them.

    Here's the "bullish" market booster:  Angela Merkel looks set to bow to intense international pressure and allow the eurozone's "firewall" to temporarily increase to €940B ($1.25T) in order to calm markets. The firewall would combine the €440B in the EFSF rescue fund with the €500B in the permanent ESM, and would fall back to €500B once the EFSF expires in 2013.

    "It doesn’t take much to recreate risks of contagion," says Italian PM Mario Monti, calling out Spain as a country that could reignite the eurozone debt crisis. Spanish shares are also under pressure following a weekend regional election in which the ruling People's Party failed to obtain an absolute majority. Spain's IBEX 35 -0.9%

    Spain PP Misses Majority in Andalusia, Undermining Budget FightSpain’s ruling People’s Party failed to dislodge the Socialists in Andalusian elections, undermining Prime Minister Mariano Rajoy as he seeks to cut the deficit and tackle a new surge in borrowing costs.

    Italy Union Says May Step Up Job Reform Strikes. 

    Hungarian Market Collapses After Forex Loans Debacle: Mortgages.

    Jean-Claude Trichet yesterday said he's worried that central banks' bond-buying and other extraordinary actions they have taken to fight the financial crisis will become part of a new "permanent regime." Trichet, who oversaw a huge expansion of the ECB's balance sheet, was speaking at a Fed-hosted conference of central bankers.

    The cost of a Greek exit from the euro would be €500B-€1T, writes The Daily Telegraph in a review of how it might occur and its impact. The main issues include whether to denominate Greece's debts in its new currency, which would probably sharply devalue once floated. Another major concern is contagion to banks in the periphery.

    Fed Purchases of More Bonds Opposed by Two Regional PresidentsThe remarks from Lockhart and Bullard, who have never dissented from a decision by the Federal Open Market Committee, reflect broadening sentiment on the panel against further steps to spur growth. The Fed has held interest rates near zero since 2008 and purchased $2.3 trillion in bonds.

    Fresh Warnings on Money PoliciesThree global central-bank leaders warned that decision makers needed to be on alert for an array of risks associated with their easy-money policies. Most notably, the three—Bank of Japan governor Masaaki Shirakawa, former European Central Bank president Jean-Claude Trichet and Jaime Caruana, who runs the Bank for International Settlements—all cautioned in different ways against banks and governments taking advantage of low interest rates to avoid taking hard steps to repair their own finances after years of aggressive borrowing.

    While banks have significantly cut their balance sheets over the past year or so, increased costs and regulatory requirements to boost capital could force them to make another $1T in reductions within the next two years, a joint report from Morgan Stanley and consultants Oliver Wyman forecasts.

    More Than 25% of Student Loans are Already Delinquent...

    "We are finding that homebuyers are no longer expecting home prices to decline further, which is creating some sense of urgency to buy now," says KB Home (KBH) CEO Jeff Mezger. A key reason for the Q1 miss is a "spike" in cancellation rates from customers unable to get mortgages, even those already with full loan approval letters. (h/t Joe Weisenthal)

    Airlines Struggle to Secure Jet FinancingAlmost one in four airlines fear they will not secure financing to buy aircraft this year, and many are having to look beyond their established lenders for funding, according to a new survey.

    Forcing Frannie to write down principal on troubled mortgages they own is just another bank bailout, writes Gretchen Morgenson. Many of these mortgages have 2nd liens held by banks. Lowered principal on the first note all of a sudden gives value to essentially worthless 2nd lien paper, and all at the expense of taxpayers.

    More on principal writedowns: Just 2.5% of mortgages held by Frannie are seriously delinquent vs. 7.2% for bank-owned, and Frannie has already led the way with loan modifications that actually seem to be working. For this, and for his resistance to forced writedowns, FHFA chief DeMarco is a marked man among the crowd that helped bring us the Frannie mess in the first place. 

    Oil Price May Spark Global Recession, FT Says. High oil prices are the biggest risk to the global economy and may cause a recession, the Financial Times quoted International Energy Agency chief economist Fatih Birol as saying. Current price levels are on average higher than in 2008 when the oil price hit a record of $147 a barrel, Birol said yesterday in a speech in London, according to the newspaper. The European Union will spend $502 billion on net imports of oil this year, the U.S. $426 billion and China $251 billion, according to the newspaper.

    Vehicle Miles Driven Says Its All About The Ongoing Economic Contraction.

    China Soft Landing May Be Hard for Commodity Exporters. “China’s still going to be growing reasonably strongly,” said Nicholas Lardy, senior fellow at the Peterson Institute for International Economics in Washington and author of the 2012 book “Sustaining China’s Economic Growth after the Global Financial Crisis.” Even so, “the super commodity cycle that was driven by China is moderating, and exporters that have ridden the property boom over the last four or five years face a much tougher time.” “The idea that commodities are just a one-way bet as an asset class is over,” said Condon, ING’s Singapore-based head of Asia research, who previously worked at the World Bank.

    Businesses See Risks to Growth in ChinaU.S. businesses see slowing sales growth in China this year, according to an annual survey by the American Chamber of Commerce in China, while nearly half rate the nation's economic slowdown as a top risk factor. Worries of moderating growth in China are rippling across the global economy. Economists generally say Beijing would ramp up spending or take other measures if growth slowed alarmingly, significantly limiting the chances of what they call a hard landing.

    China's BYD 2011 Earnings Plunge on Weak Car SalesBYD, a Chinese carmaker backed by U.S. billionaire Warren Buffett, reported a jump in fourth quarter net income due to an asset sale, but full year earnings plunged on weak car sales, according to its annual report.

    Indicator Update: Should We Worry About China?

    Auditors On Alert Over Chinese ResultsA new wave of scandals involving Chinese companies listed overseas could hit New York and Hong Kong in the coming weeks as the annual results season get under way with auditors on high alert for fraud.

    Thanks for the bailout and adios!  GM(GM) to Shift More Production to Low-Cost Countries. General Motors(GM) is planning to shift more of its production to low-cost countries including Poland, Russia, China, India, Mexico and Brazil, citing a company strategy paper. As the automaker's output is increasing, GM Plans to build 80% of the additional units in low-cost countries, the paper said.

    Although the government and auto industry have thrown their weight behind electric cars, and gasoline prices are high, the state of EVs is dismal, prompting the NYT to ask whether this "latest experiment" in the vehicles is nearing its end. It's simple really: when people can drive as far in EVs as they can in gas cars for the same cost or less, they'll buy them.

    20 Biotech Stocks Being Bought Up By Hedge Funds.

    10 Charts That Show How Apple(AAPL) Is Different Than The Rest Of The Tech Industry.

  267. Love the AAPL vs Tech chart, StJ.  

    Gurus – About what you'd expect, no better than just guessing.  This is why the only sure bet in the markets is to BE THE HOUSE – Sell premium to suckers who think they are going to be smarter than the markets.  These guys are the best of the best and only 4 are better than 50% (and not much better).  Some, like Abby Cohen are so bad they make great contrary indicators and she's the SENIOR US INVESTMENT STRATEGIST AT GOLDMAN SACHS!!!  It's a total joke folks – the only danger is if you take these people seriously…

    NYTimes/Pstas – Yes, you are right because the NYTimes is a NEWSpaper, where they CHECK FACTS before printing something.  I know you like to lynch first and find evidence later (or not – what's the difference as long as you "get 'em") but, when you read something in the NYTimes, you can be reasonably assured that they have first investigated the facts and have consulted with legal experts and are reasonably sure there's a case to be made and, in the case of this new "evidence", there is not – as detailed very clearly in the NYTimes and again today.  

    Godot/Shadow – It's a shame they don't make kids watch the classics anymore.  It's good to have common cultural references in the very least.

    Oops, gotta work now – feel free to re-ask anything I missed in the new post.  

  268. Good morning every one. Some one knows when we are closing today???