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Just Another Manic Monday – $1.25Tn ESM Edition

Another week, another $1.25Tn.

That's the way the Global Markets function these days as RUMOR has it that Germany will now bow to International pressure and allow the "permanent" ESM Fund to be" temporarily" doubled from to $1.25Tn extending the due to expire EFSF and combining with the existing ESM.  That then, in theory, will prompt the IMF to put in $1Tn of their own (40% US money!) as Christine Lagarde has said she would not advocate increasing IMF resources to help reinforce the euro zone firewall unless EU countries act convincingly first.

This "great" news sent to the Euro and the Pound up half a point this morning and turned the EU markets from down 0.5% to up 0.5% as Europe, once again, is "fixed."  It also "fixed" oil prices, which were in danger of slipping back below $106 this morning but now back at $107 and that's still not enough because the S&P says if Russia can't get oil up to $120 a barrel, there is no way they can balance their budget this year and each $20 below that mark will cost Russia a notch of credit ratings.

On the other hand, according to the IEA's Chief Economist, if Russia gets their $120 oil – it's the rest of the World that will plunge into a Global recession.  The IEA estimates that the EU will spend a record $502Bn this year on net imports of oil, up from $472Bn in 2011.  That represents 2.8 per cent of the bloc’s gross domestic product, whereas between 2000 and 2010 it was spending on average 1.7 per cent of GDP on oil imports.  The US will spend $426Bn on imports (2.7%), Japan $198Bn (3.6%) and China $251Bn (4.1%) while India is spending 5.9% of their GDP just on imported oil.  The IEA notes that every recession in industrialized nations since WWII have been preceded by spiking oil prices.  

That has not stopped Bernanke, this morning, from giving a speech where he once again hints at additional Fed easing and that has rammed our futures up (8:30) to the day's highs but pretty much exactly where I predicted they would be when I set shorting targets in this morning's Member Chat at 7:10, when I said

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.  

Bernanke's "conclusion" in his speech has this rally fuel to help goose the markets into the end of the first Quarter on Friday: "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies. I also discussed long-term unemployment today, arguing that cyclical rather than structural factors are likely the primary source of its substantial increase during the recession. If this assessment is correct, then accommodative policies to support the economic recovery will help address this problem as well."  As Paul Simon says:

He’s a one trick pony
One trick is all that horse can do
He does one trick only
It’s the principal source of his revenue
 
He’s a one trick pony
He either fails or he succeeds
He gives his testimony
Then he relaxes in the weeds
He’s got one trick to last a lifetime 
But that’s all a pony needs     

Or, as 1020 pointed out in Member Chat this morning, Ben's "Gotta have more cowbell!"  Bernanke's comments did the trick and the Dollar plunged back to 79.25 for the first time since early March, when the Dow first rocketed to 13,250.  So we have cheap Dollars boosting US Industrial Exporters and cheap Yen boosting Japanese Industrial Exporters and that means we're all counting on the EU to buy all our stuff – what can possibly go wrong with this plan?

Actually, my bearish theory is the Dollar will hold 79.25 and bounce back as the unfolding crises in Spain, Italy and Portugal make it seem like $1.25Tn is going to be a drop in the European bucket and Chinese news continues to disappoint as well and THAT'S why we're bearish on my target lines!

Still, we have to expect $1.25Tn from the EU and another $1Tn from the IMF and another $1Tn from the Fed (all rumors, of course) to give us a nice run-up into Friday's end of quarter window dressing.  After that – who cares – it's 4 days from now and you know investors don't look that far into the future…  

Pundit scoresSpeaking of people who can't see the future, CXO Advisory's "Guru Grades Page" tracked the accuracy of many famous stock analysts and scored them based on the accuracy of their predictions and, not surprisingly, they are not, on the whole, any more accurate than flipping a coin.  As I commented to Members on the subject:  

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…

There's a reason our mission statement at Philstockworld.com is "High Finance for Real People – Fun and Profits" – if you don't learn to have fun with the markets, they can be endlessly frustrating and you certainly don't have to take the markets seriously to make a profit – no more so than you do a roulette wheel or the roll of dice on a craps table – there are no "secrets" other than the one that our friends Steve Wynn and Shelly Adelson know all too well:  

BE THE HOUSE!  


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  1. Yesterday Spain was broken and the next day it's fixed! Because Spain is bigger and more important than Greece? Turn on the presses!


  2. Oil Lines

    R3 – 107.44
    R2 – 107.24
    R1 – 106.95
    PP – 106.75
    S1 – 106.46
    S2 – 106.26
    S3 – 105.97



  3. Good Morning!
     
    I think Bernanke just said:  WE NEED MORE COWBELL!
     
    http://www.youtube.com/watch?v=_Mie9hhQTUM
     
    :)


  4. stjean / BATS
    (from Friday)
    I'm sure you've read the fresh news over the weekend that it was primarily a software problem, if I understand correctly. Probably aggravated by some HFT, but mostly the software change they made so they could add their own Symbol was totally fubared, and totally creamed them Friday. I think they claim they've fixed it, but the IPO is off for now.
     
    http://www.bloomberg.com/news/2012-03-26/bats-ceo-blaming-code-in-ipo-stirs-concern-on-market-complexity.html?cmpid=msnmoney
     
    See Phil, I'm learning……


  5. PHIL, if you were FORCED with a gun to your head  to buy TNA or TZA TODAY, if they were within .5% of Friday, shares only, no options, strictly buying long shares, and being willing to sell the shares any time in the next two weeks, which would you take?
     
    Serious question.


  6. BATS / Newbie – Indeed Newbie and the irony didn't get lost!


  7. What's another $400,000,000,000.
    In for a penny, in for a pound….er……Euro.


  8. stjean
    Yeah, a little levity and "man bites dog"  like that once in a while is kinda cool……


  9. Once again, kicking the can down the road…

    http://ftalphaville.ft.com/blog/2012/03/26/936741/whats-behind-door-2/

     

    In other words, a temporarily-combined EFSF and ESM means a total new net lending capacity of €740bn until June 30, 2013. After which point, the firewall reverts to being only the ESM, which only has a lending capacity of €500bn. Which is, many would say, not enough.

    The neat thing about this option is that it would — the European Commission figures, at least — be enough to lure the IMF and G20 to contribute.  And it will not require a parliamentary vote in eurozone member countries, because it will not be changing the ESM capital stock, as authorised under the ESM Treaty. [...]

    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.


  10. PP for today:


  11. TNA
    Just placed Limit Buy for TNA at $59.28
     
    off to bed now


  12. Pain in Spain
     
    Billionaire British financier Sir Michael Jagger today expressed frustration with the ongoing Euro debacle:
     
    Angie, Angie
    When will those clouds all disappear?

     
    Here we go, good trading everyone!
     


  13. FAS running up again….




  14. FU CMG PCLN!!!!


  15. 26k volume pumping cmg to all-time highs
     
    100k volume did it for PCLN


  16. FAS and VXX are causing all the damage again!



  17. Volume has dried up in less than 30 minutes


  18. Phil – i messed up. (surprise) I have been gradually moving $ from etrade to TOS. Entered & exited one spread and all went well then following a Pharm recommendation i thought i chose to buy a CLDX Aug 3 call and sell the 4. Then over the next few days watched CLDX from ETr. When one day i opened TOS to see how i was doing i found that i had sold the 3 and bought the 4! Hasn't been a disaster but i'm wondering what creative solutions there might be. My loss so far is $15 plus costs.
    Maybe btc the 3 and sto the 5?


  19. Good morning! 

    We've got to respect $3.5Tn and let's use our Futures lines as bullish jumping points.  They work out to roughly Dow 13,200, S&P 1,400, Nas 3,075, NYSE 8,250 and RUT 840.  No point in over-thinking it, it's MORE FREE MONEY and really, if all these guys (because none of this is set – just rumors) do what the MSM is trying to convince you they will do – That's over 6% of the ENTIRE PLANET'S GDP in additional stimulus and then we're on our way to Dow 1,600 and S&P 1,600.  

    So the DDM trade from last week, our last 10 bullish trade and a few more will be appropriate – IF we hold these levels but, IF we fail them – then what can possibly stop the market slide if $3.5Tn in new QE promises isn't going to do it?  

    That means that, this morning, despite the bullish turn of events (which we anticipated last week) we're more inclined to cash out our bullish trades into the excitement and press our bear bets and TOMORROW, if we're still over our levels – THEN we will scramble to add some aggressive bullish trades to our virtual portfolios.  

     Again, I cannot stress enough that CASH is my preferred position because this market is tough to call and you need to be very flexible and very nimble to trade it.  Since most people are not – my general recommendation is to stay in cash until a more obvious set-up presents itself.  This is more like an inflection point, where we could go up or down in either direction – very quickly and for no particular reason.  

    It's very hard to trade this way but if you want to buy low (bullish) and sell high (bearish) then you have to learn to take unpopular stands against the crowd.  You also have to learn when to quit, which is why we set these lines (generally our 7.5% lines on the Big Chart) where you take your loss and walk away – until we get to the next cross that we think may be rejected.  Keep in mind that, if true – there's no possible way to fight a $3.5Tn injection of capital.  If not true, all the gains we're seeing this morning and the rest of the week can be erased in a day.  

    Our DDM play last week was the May $70/75 bull call spread at $2.10 for the Dow over 13,200 and you can sell puts against anything you want to own for $2 to drop the next to .10 on the $5 spread with DDM now at 70.24.  This trade isn't going anywhere – there's no rush.  It's easy to get more bullish if the move isn't BS.  What's hard is getting these cheap entries on bearish positions when the market is jammed up in the morning and the VIX is below 15 – these are the opportunities to buy low, not chasing bullish positions.  

    Did you all catch StJ's AAPL vs Tech sector chart this weekend?  Don't forget those Tech earnings INCLUDE the AAPL partners who are also doing great.  They INCLUDE PCLN, NFLX, BIDU, LULU and all those other "great" momentum stocks who, as a group, are DOWN SIGNIFICANTLY in total earnings from last year.  

    chart

    This is every all theater and nothing more – as Shakespeare warned us 400 years ago:  

    Life's but a walking shadow, a poor player

    That struts and frets his hour upon the stage

    And then is heard no more: it is a tale

    Told by an idiot, full of sound and fury,

    Signifying nothing.

    At the open: Dow +0.69% to 13171. S&P +0.78% to 1408. Nasdaq +0.73% to 3090.

    Treasurys: 30-year -0.15%. 10-yr +0.03%. 5-yr +0.07%.

    Commodities: Crude +0.05% to $106.92. Gold +1.05% to $1682.35.

    Currencies: Euro +0.34% vs. dollar. Yen +0.34%. Pound -0.52%.

    Market preview: Dow and Nasdaq futures build on early gains on the merest whiff of more possible QE from Ben Bernanke, although the S&P Benchmark is -0.35% and the dollar takes a fall. Lions Gate (+3.6%) gives back some of its gains made following theroaring box office success of the "Hunger Games." Later: Pending Home Sales, Dallas Fed Manufacturing Outlook 

    Key to Bernanke's view of the economy is his belief cyclical rather than structural issues are behind the weakness in the labor market. "If this assessment is correct, then accommodative policies  to support the economic recovery will help address this problem." S&P 500 +0.6%, Gold +1%, Crude +0.2%, Copper +1.3%UUP-0.3% premarket.

    Long-term Treasury yields remain higher as Bernanke hints at additional Fed ease – saying faster growth will be necessary to lock in and add to recent labor market improvements. The long bond +4 bps to 3.35%, the 10-year +3 bps to 2.26%.

    Philadelphia Fed President Plosser tells a German conference central banks should not have unfettered ability to expand their balance sheets and the Fed's partaking of such could erode fiscal discipline. Plosser considers price stability the Fed's "core mandate," a view the Chairman doesn't seem to share. 

    The Fed is likely to hint at QE3 in its April meeting, tweeted Bill Gross over the weekend. The opinion is at odds with the Fed's last policy statement in which it upgraded its view of the economy. Pimco's Total Return Fund has boosted its holdings of MBS, likely to benefit from more QE as the paper would be a target of Fed purchases.

    "It looks like they have crossed the Rubicon," says former BOJ member Eiji Hirano of the bank's decision to expand QE and set a positive inflation target. Far from filling the output gap, Hirano envisions a "nightmare scenario" of a weaker yen, stocks, and JGBs as the central bank is viewed as financing government spending.

    Feb. Chicago Fed National Activity Index: -0.09 vs. +0.33 prior (revised from +0.22). The index's 3-month moving average increased to +0.30% – marking its highest level since May 2010.

    Feb. Pending Home Sales: -0.5% to 96.5 vs. +1% expected; +2.0% prior and +9.2% Y/Y. "The spring home buying season looks bright because of an elevated level of contract offers so far this year," NAR's Lawrence Yun says.

    Irish house prices are steepening their decline, down 17.8% Y/Y in February, against a 17.4% drop in January, and 10.8% a year ago. The official data has prices off 49% from the peak, and Davy chief economist Conall Mac Coille believes the bottom won't come until they've declined 65-70%

    Angela Merkel confirms an earlier report that she favors boosting the eurozone's firewall by allowing the €200B left in the EFSF to "run parallel" to the €500B in the ESM "until it has been paid back by the program countries." Such a move would enable Merkel to avoid the need to seek domestic approval for increasing Germany's bailout exposure.

    The EU "core" gets reduced as Citi's Jorgen Michelsremoves the Netherlands from the group of rock-solid credits. While the government has just a 66% debt/GDP ratio (vs. 88% EU average), the nation's highly leveraged consumers are sucking wind from tight financial conditions and Dutch banks are increasingly reliant on ECB liquidity. EWN +10% YTD. 

    Last week's Dow and S&P slide should be viewed as a "reality check," Josh Brown writes, as China concerns mount and housing data turns negative, plus we're nearing the "sell in May" time of year. “If what we’ve just seen since last Monday represents the start of a new [broad] trend, it will be hard for the buyers to maintain their excitement,” Brown says.

    Here's the beginning of wage inflation:  As concerns about a Chinese slowdown mount, the country's rising wages also have foreign investors on edge. Double-digit annual wage growth is now a fact of life for many firms, and consulting firm InterChina believes China's wages will surpass Mexico's in 5 years. Making matters worse are very high turnover rates, as workers prove happy to jump ship upon seeing a slightly better offer. (also

    One of my old projects:  Technology to harness the power of the ocean to meet energy needs struggles to meet the high expectations of the EU. Funding constraints threaten progress toward commercial deployment, while analysts say meeting a goal of creating gigawatts of energy from wave and tidal sources by 2020 is unlikely. Still pushing forward is Siemens (SI), with its expectation to eventually meet 3%-4% of the world's global energy demand through the nascent technology.

    "TVIX only $6.50 above fair value," tweets a wise guy as shares in the leveraged ETN are hammered again this morning, -8.4%to $6.56, bringing the decline to 55% in less than 3 days. ETN pricescan vary widely from NAV, leading to excessively high premiums when shares become dear, and then the correction when the issuer prints up more.

    People began queuing for entrance on Friday, but no this isn't an Apple product launch, but Supreme Court hearings on the constitutionality of Pres. Obama's healthcare overhaul, which are due to start today. The case could have implications for dozens of companies, and could define the limits of Congress' power. A ruling is expected in June.


  20. Good Morning!      stj…..AAPL portfolio numbers don't compute……April 600 calls (50)  sold at 21.50, now 18.35 yields  profit of  3.15  times 50 times 100 = $15,750.    Did I get that right?  


  21. Correct lflan, I was using the wrong column for the number of contracts!


  22. stjeanluc…..Just in case you don't realize it, I continue to greatly appreciate your input here.  Not only your work with the portfolios, but I find many of your posts to be of exceptional value, and well worth my giving them some attention.    lflan


  23. That guy talking about carriers vs AAPL is saying what we have been saying for a while – carriers subsidies make up a large portion of AAPL margin. He is saying that phones like the iPhone cost them $400 per user on subsidies and that the subsidies are now more money than their CAPEX expenses! His point was that the carriers don't like it much when they don't hold the cards… We'll see what happens, but when you look at Sprint for example, they have sunk so much money into the iPhone that I can't see them getting that money back when customer loyalty in the wireless world is only as good as the next deal!


  24. Good Morning All – Okay, so the Dow moved up another 30 points on a housing miss spun into a "the spring buying season looks good" statement?  okay…


  25. holy crap… look at vxx!  What is going on with that????
    I bought a few December calls last week.  Should I double down on those already?


  26. Thanks lflan – I know that I don't post many trades here, but there are so many stories out there that have great impact on the markets!


  27. Fake…Fake…Fake
     
    It doesn't matter though.


  28. stjean – I concur with Iflan. Your posts and spreadsheet updates are truly appreciated.


  29. The threat of Iran seems to be the major driver behind the oil prices:

    http://condoroptions.com/2012/03/25/is-the-threat-of-airstrikes-against-iran-driving-oil-options-prices-higher/

    Think of this as an estimate of how richly or cheaply priced options on crude oil are, relative to the actual historical volatility of the asset. Any ratio above 1.00 indicates that option buyers were willing to pay a premium above the value of the volatility subsequently exhibited by crude oil futures. As you can see, the ratio is usually greater than one. When oil prices dropped precipitously in 2008 and oil volatility exploded higher, option buyers made out quite well (the ratio dipped towards 0.75); otherwise, it has generally paid to be a net seller. Notice that the 50-period moving average of this ratio has been above 1.50 since December, which means that oil option premiums have been very rich compared to the volatility of the underlying.


  30. FAS Money – Not going to be worried with our new longs protecting up but over $16 on XLF means we should probably kill the weeklies so let's say $9 is a stop out there.  

    IWM Money – Back at 840 is no longer on track but not dangerous under 850.  

    $5KP – Should have taken our TLT money and ran.  We'll see how we look tomorrow.  

    $25KP – Back in the dumps as the market rockets higher:  

    • DMND – Going the right way.  
    • XRT – $62.45 – are they freakin' kidding?  
    • BBY – Our hedge against XRT hitting $63
    • SCO – Oil the wrong way today but we love it. 
    • TZA – Painful dip and I do want to roll but let the rally run its course first 
    • SQQQ – June 
    • USO – Picked the wrong day to DD and not really interested in rolling until we get back to $108.50
    • FAS – How are those June $72 puts still $3?  That's 30% out of the money – a great way to raise cash if you need it.  Same problem as FAS Money, if we cross $16 on XLF, which is about $112.50 on FAS – we'll need to make an adjustment.  
    • TLT – Glad we covered (why didn't we cover the $5KP?).  
    • VXX – Now everyone thinks they are all broken so let's spend $1 to roll down to the May $17s ($1.65), with our $19s at .65 – that's a really good deal so we're not going to say no.  

    So glad we killed those DIA puts but now there's an opportunity to buy some more with the April $131 puts at $1.33 so lets add 10 of those in the $25KP.  


  31. stjean – as iflan said, thanks for all that you do…much appreciated


  32. Phil – You mention ocean power as an "old project" of yours.
     
    Do you have an opinion on OPTT?
     
    Thanks


  33. AAPL down?
    People selling AAPL to buy PCLN?


  34. Some interesting earnings this week:

    Tomorrow LEN should give us another picture of the housing market. MOS on Wednesday is part of the ag business. And Thursday, we get BBY (in the 25KP) and RIMM which is always entertaining!


  35. jabobesat/AAPL, Chinese people returned (a lot) iPads to Apple stores.


  36. Apparently the middle-man does win all the time – even better than the bank!

    http://abnormalreturns.com/retail-forex-follies/

     

    In our forthcoming book we talk about why foreign exchange trading is for most retail traders a losing proposition. In case you doubt this proposition you need only read this Heard on the Streetpiece by John Jannarone.  Case in point, FXCM Holdings ($FXCM). The article notes that on average 70% of the  company’s customers are losers each quarter.

    Why do so many FXCM clients, and clients of other retail forex brokers have such a hard time becoming profitable? The one-two punch of leverage and high trading costs. Jannarone writes:

    FXCM says it collected $98 in trading revenue per million dollars traded in 2011. Those fees could mount quickly. In the example of an account with $20,000, levered 50 to 1, each trade costs about half a percentage point of the customer’s equity. The average active account made 2.7 trades per day last year.

    If your account is getting hit 1.35% in trading costs per day (2.7 * 0.5%) you have to do some pretty nifty trading to make up for it. Apparently not many do. Take heed what Josh BrownThe Reformed Broker says about retail forex trading, “Just don’t do it.”


  37. AAPL: return line in New York Apple store, news link(don't read the words – it's in Chinese), just look the pic.
    http://www.worldjournal.com/view/full_news/18004184/article-%E6%96%B0iPad%E6%B0%B4%E8%B2%A8%E8%B7%8C%E5%83%B9-%E5%BC%95%E7%99%BC%E9%80%80%E8%B2%A8%E6%BD%AE?instance=instant


  38. bobhu,
     
    So the story is about bulk returns?  Tried to read it thru a translate program…  As you can see, hard to follow:
    Mr. Meng revealed that Hong Kong and the United States sold the same day, the Hong Kong Bank account for enough geographical advantage, the freight cost, a week earlier than the shipping from the U.S. arrive sellers hands, so that the new iPad parallel on sale in mainland China, prices have fallen fall further, and now the wifi 16G version of the lowest market price has fallen below 3800 yuan. However, the purchase price including tax will be 550 yuan, equivalent to nearly 3500 yuan, plus delivery costs, "did not have to make".


  39. Learning/Newbie – Yes, you are!  As to TNA or TZA – TODAY it would be TNA until Friday or until the Dollar gets back over 79.50, then back to TZA but now I'd watch that 840 line in the Futures, which is about $65 on TNA and that's what's got to hold.  Notice the FACT in the news item above on Merkel is a lot less than the RUMOR already – now we're seeing how far the RUMOR of $3.5Tn can take us but I think that this is already baked into the numbers in large part and what we're really finding out is the level below which investors will be disappointed.  

    26K/Jabob – So ridiculous out of 30M shares.  

    CLDX/Morx – Well, you're bullish so why not just take your Aug $4s ($1.50) and spent $1 to roll them to Nov $3s ($2.50) and, when the Aug $3s you sold burn off their premium (now about .30 at $2.30), you can roll them out to the Nov $4s ($1.75) or even the Nov $5s ($1.30) if you are feeling braver.  Alternatively, you could buy 1x the Nov $4s for $1.75 and roll the short Aug $3s ($2.30) to 2x the Aug $5s ($1.10) which is spending 1x $1.95 to roll yourself into 2x $1 spreads (less what you already collected).  

    Carriers/StJ – They may not like it but they still need it as they'd rather have a low-margin or small loss customer than no customer at all with a $1,000 acquisition cost per subscriber.  I'm sure the Telcos hope and pray that someone unseats AAPL soon but I think that's what the music companies were hoping about ITunes – after a while, they learn to live with it.  

    Housing/Ink – You caught that one too!  

    VXX/Peedle – It is an ETN and TVIX is chasing people out of VXX.  Maybe for good reason – it may be every bit as broken as TVIX but volume on VXX is 3x TVIX and it's been around a long time so I'm betting (see move above) that it's just panic selling by people who are reacting to TVIX news without differentiating the products.  All this money running out of Ultra-Shorts is causing the VIX to get bought up as these funds unwind their ultra-short positions so it's a self-feeding loop, which is why I wanted to roll for time, as well as positon. 

    Fake doesn't matter/Exec – Well isn't there a multi-Billion Dollar porn industry that proves that premise?  

    OPTT/1020 – Sure, I know those guys, they've been around for ages and still can't make money.  Their new Buoys show promise but miles away from profits.  I was really into using wave power for a while and worked with a couple of companies working on solutions.  I wanted to install platforms that would move up and down with the waves and power hydraulic pumps as well as using fluid pressure systems by using discarded tankers (200,000 tons) and letting the tide pick them up and then drop them down to compress fluid systems.  Unfortunately, big jobs like that require Government funding and, at the time we were working on it, our man Bush came to town and defunded everything that was aimed at long-term alt energy projects.  As to OPTT, they are working on a right-sized solution but their constant need for funding has led them into a lot of dilutive agreements with partners.  Their biggest issue is their cost/kWh is about .15 and with coal and nat gas cheap – they have no chance of getting momentum and, without momentum, they can't mass-produce and, without mass production, they can't get the cost/kWh down to a more realistic level.  And, of course, look how limited their sales targets are – it's not like they haven't already spoken to everyone who has oceans they can drop buoys into, right?  That means that, unless and until their price point makes significant improvement OR the price of alternatives goes significantly higher ($200 oil plus coal and nat gas keeping pace and no major improvements in solar) then there's not much chance of a significant uptick in sales and they will continue to lose money and dilute on a regular basis.  So, yes, I do have an opinion on them!  8)  

    Forex/StJ – Excellent point!  

    AAPL store – It's just speculators who were buying machines to sell in China running into lower than expected demand so they are giving up on their plans to make a double on each IPad.  I don't think it really speaks ill of AAPL.

    And what Peedle said! 


  40. Phil, GS said this was a generational time to buy stocks and they should know what the central banks around the world are going to do, print baby, print, maybe forever. Which means stocks will continue to go up until the magic inflation genie gets out, and then stocks will go up more.
    Look at whats happened since 2009. Printing has done wonders for the market and if this is true, the sky's the limit.


  41. DOW
    How low is it? 20 milliom shares in 15 minutes, 20 more in 1 hr 45 min = 11 million per hour!


  42. peedlew99/AAPL, Before this new iPad lunch, Hong Kong always few weeks late to sale Apple's new products(Iphone 4, 4s, ipad 1 and 2).  Based on past experience, the “middle man” knew there were always huge ChineseI(in China) demand on the new Apple products, the "middle man" had ordered their group(in US) to buy as many as iPads they can get(online and store).  But this time US and Hong Kong set the same day to sell iPad and Honk Kong get enough inventory to satisfy their customers.  So, the price in for New iPad was drop a lot in grey market at China(to 3800 yuan), the basic iPad after tax is about 3500 yuan in US.  There is NO profit after shipped to China(if custom find it, they will charge you another 1000 yuan).  So, all the Chinese bought online and in stores are returned their inventory. 
     
    Hope this clear the air.


  43. 11:00 AM On the hour: Dow +1.02%. 10-yr -0.19%. Euro +0.41%vs. dollar. Crude +0.28% to $107.17. Gold +1.41% to $1688.45.

    March Texas Fed Manufacturing Outlook: Business Activity Index 10.8 vs. 17.8 prior. Manufacturing production 11.1 vs. 11.2 prior. New orders -0.3 vs. 5.8. Capacity utilization 12.3 vs. 10.0. Shipments 8.6 vs. 4.2. Employment 21.7 vs. 25.2.

     

    Capital in search of returns is pouring into frontier market currencies, sending a host of them up more than double digits against the greenback this year. Many of these countries have not just high interest rates, but also hard commodities which get more dear as the balance sheets of Western central banks power upward. 

    Valuations never got anywhere near low enough in 2009 for it to be the start of a secular bull market, argues John Hussman. Valuations now are even worse than 1965 – which happened to be the start of a secular bear market, he says. Bullish earnings expectations rely on a continuation of all-time high profit margins, a metric that is notoriously cyclical.

    Quadruple Dip: Housing Relapses As "March Is Turning Out To Be The Weakest Month Since Last October Re: Buyer interest"

    The Dallas Fed Manufacturing Outlook just came with its largest miss of expectations in 9 months – and biggest drop in 7 months.. A 10.8 print vs expectations of 17.0 dropped the index back to its lowest since December and keeps the 'good is good but bad is better' dream alive we assume and markets are entirely unfazed. The 'hope' sub-index printed higher which accounts for some of the reaction but we note that New Orders went negative,Average Workweek plummeted to its lowest in at least six months (and the number of employees also fell), and Prices Paid jumped but Prices Received dropped for the first time in three months (more margin pressure). This makes 14 of the last 16 macro data prints in the US a miss – but Ben is here to save us from considering the harsh reality of our quagmire.

    Secular Bear Market? (Comstock Funds)

    How Debt Bankrupts the Middle Class (Stanford University Press)

    National Bank upgrades Potash (POT +2%) to Sector Perform. The firm is encouraged by a 14% increase in its grain price index over the last 3 months, as well as belief China will import more corn this year than was previously forecast. It expects U.S. corn plantings to hit record post-WW2 levels this year, and that this will lead to a pickup in fertilizer purchases. BMO seems to agree.

    Water wars between countries could be just around the corner (Guardian)

    Chip maker Micron (MU -2%) slips after Oppenheimer cuts the stock to Perform. The stock has jumped 30%-plus YTD, and the firm says “it was easy to set a price target of at least book value, but once that has been crossed, it becomes difficult to justify a higher valuation unless Micron becomes profitable… Investors should take profits as Micron strives for profitability."

    Canaccord reiterates its bearish view on the LED equipment sector, chopping its rating on Aixtron (AIXG +1.7%) to Sell from Hold and repeating a Sell on Veeco (VECO +0.1%). The firm says recent strength in the sector reflects “restocking and double ordering,” and that “expectations are not aligned with fundamentals – again," differing from recent upbeat outlooks (III). 

    Benchmark reiterates a Hold on Google (GOOG -0.1%) following its Q1 checks. The firm believes North America (47% of revenue) had a decent quarter after a slow start, but Europe (35% of revenue) remains weak, with flat Y/Y revenue growth. Nonetheless, Benchmark thinks sales picked up globally in March, and is encouraged by Google's display share gains and improvements in its search click-through rate.

    Tim Cook's weekend trek to China reportedly yielded “great meetings” with Chinese officials, and Apple (AAPL +0.2%) plans "greater investment" in the country which may include owning manufacturing or R&D facilities. Despite a just six retail stores so far, one China-based consultant says AAPL “has done a great job” in China replicating its U.S. retail success. 


  44. From ZHedge:  

     

    While it appears to us that Bernanke's message was loud and clear, there are those who need validation and peer-confirmation. Such as that from the firm whose alumni run the Fed, namely Goldman Sachs. Below is Jan Hatzius' take on the "surprising" Chairman speech which essentially said QE can and will come at any time there is a downtick in the market, masked by the unemployment rate rising to its fair value, as estimated by Gallup, somewhere around 9%.

    From Goldman Sachs:

    BOTTOM LINE: Fed Chairman Bernanke argued that the outperformance of labor market indicators recently may reflect a “catch-up” from unusual weakness in jobs during the recession. By implication, continued declines in unemployment will require faster GDP growth in the future. He also continued to argue that most of the increase in long-term unemployment is cyclical rather than structural in nature. Chairman Bernanke’s read on the state of the labor market was consistent with an accommodative stance for monetary policy—though he did not directly call for additional easing.

    MAIN POINTS:

    1.    Federal Reserve Chairman Ben Bernanke spoke on recent labor market developments before the annual meeting of the National Association for Business Economics (NABE) today. His comments focused on two aspects of the current debate on the labor market: (1) the outperformance of labor market data relative to GDP growth; and (2) how much of the increase in long-term unemployment reflects cyclical rather than structural factors.

    2.    Chairman Bernanke discussed three alternative explanations for the better performance of labor market indicators recently. First, the surprisingly large drop in the unemployment rate may reflect statistical noise, and that GDP could be revised higher in the future. However, he said that there is no specific evidence to support this conclusion at this point, and in fact Gross Domestic Income (GDI)—an alternative measure of aggregate activity—was weaker than GDP over the last year. Second, the decline in the unemployment rate could be overstating the improvement in the labor market, as the drop partly reflects potential workers exiting the labor force. However, Chairman Bernanke argues that the decline in broader measures of labor underutilization (he cites the BLS’s U-5 measure) casts doubt on this explanation. Third, the large decline in the unemployment might reflect “a catch-up from outsized job losses during and just after the recession”. Chairman Bernanke ultimately finds this argument most compelling, and presents some simple supporting evidence.

    3.    The chairman’s comments on the recent decline in the unemployment thus cut two ways. On the one hand, the drop in the unemployment rate is likely a real and encouraging development. On the other hand, because the outperformance compared to GDP likely reflects a catch-up from past weakness then, in Chairman Bernanke’s words, “further improvements in unemployment will likely require faster economic growth than we experienced during the past year”.

    4.    The second portion of the Chairman’s speech focused on whether the increase in long-term unemployment reflected cyclical or structural factors. Consistent with his existing views, Chairman Bernanke argued that elevated structural unemployment is mostly a cyclical phenomenon, and that structural factors can explain only a small (and possibly temporary) part of the increase.

    5.    On monetary policy, the Chairman said that faster growth—perhaps needed to see further declines in unemployment—“can be supported by continued accommodative policies”. He also argued that because the increase in long-term unemployment was primarily cyclical, “then accommodative policies to support the economic recovery will help address this problem as well”. These statements were not necessarily calls for additional easing, but they clearly supported the Fed’s current accommodative stance.


  45. Income Increase/Phil
     
    And that yearly $80 increase is gone from the difference of filling your tank up for a month today than a year ago.


  46. Done for the day!  Later……


  47. Here's the joke – divide the $4.2M average of the top 0.1% by 999 (everyone else).   $4,200 PER PERSON for the bottom 99%!  What's better for America – that 140,000 people get $4.2M each or if 138,600,000 people get $4,200 each?  


  48. Top 0.1% / Phil – Actually, what they don't realize is that another $4200 to the bottom 99% would actually be leveraged to much more to the top 0.1% given time. It's just insane…


  49. Long-term unemployment is cyclical?  I recall reading an article from Mish a while back detailing how approxiamtely 500k US mfg. jobs a year are lost to Asian countries.  Furthermore, I guess his statement means that all the construction jobs are also going to be coming back?  This is not a surprising statement from him as last week he also said that "most evidence" points to the Fed not being responsible for the housing bubble. 


  50. GS/Rpme – Of course they are going to tell you that – who do you think have been buying stocks since 2009?  Now they need to sell them.  Why didn't they tell you it was a generational opportunity 3 years ago when stocks were 50% cheaper?  If we're getting the kind of hyperinflation that will make Dow 13,000 a better bargain than Dow 7,000 was – then we aren't missing much bu making sure GS isn't full of crap, right?  

    Dow volume 45M at noon – About normal for this slow year.  

    Thanks Bob, good explanation. 

    Cyclical/Ink – Very scary when the Fed chair is this clueless (or simply lying).  


  51. Oh, PLX…thank you.  And SGEN….And TSRX…and CLDX….now get UR arse in gear YMI!


  52. Is that gap in IWM right?  On JRW's 2d, 3min, it goes from 83.74 to 84.06…??


  53. ARIA ARNA IMGN and PLX are making me look like a financial genius today.


  54. Just want to point out when it comes to the oil factor in movement of the stock market, in 2008 we averaged over $100 oil for six months, then the market crashed, in 2011 we averaged over $100 oil for 6 months and we crashed or you can say a minor pullback of 2000 points in a little over a month, right now we're at 5 months of avg $100 oil, and back in 2000 oil went from 17 to the 50's for about 6 months, then we crashed.


  55. oops, meant we're at 4 months now.


  56. Watching the Tebow press conference, he looks like a young Jesus who juiced up.


  57. Pharm – Did you "Wave the Wheat"?
     
    http://www.youtube.com/watch?v=LwH03TVo7pQ&feature=player_embedded
     
    :)


  58. I'm A Jayhawk:
     
    By George "Dumpy" Bowles
    (Revised in Fall 2010 due to changes in the Big XII;
    new lyrics by Matt Schoenfeld)

    Talk about the Sooners, Cowboys and the Bears,
    Aggies and the Tiger and his tail.
    Talk about the Wildcats, and the Cyclone boys,
    But I’m the bird to make ‘em weep and wail
    CHORUS:
    'Cause I'm a Jay, Jay, Jay, Jay, Jayhawk,
    Up at Lawrence on the Kaw–
    'Cause I'm a Jay, Jay, Jay, Jay, Jayhawk,
    With a sis-boom, hip hoorah,
    Got a bill that's big enough
    To twist a Tiger's tail,
    Rope some 'Horns and listen
    To the Red Raiders wail–
    'Cause I'm a Jay, Jay, Jay, Jay, Jayhawk,
    Riding on a Kansas gale.
     
    I like this "Bird" tune a bit more…. ;)
     
    http://www.youtube.com/watch?v=2WNrx2jq184


  59. rustle
    I checked Oil prices and thought when are they going to notice that there is only necessary travel. Commute roads don't show it but check the rest, empty, not enough to justify a patrol car, and that is another point less gas for for law inforcement. The allocation is in dollars not gallons and they go down as prices go up. I have also noticed that police stations are crowded when they used to be empty, why pay for personel that is stuck where crime isn't? 


  60. Tidal & wave power – My brother in law is an engineer implementing tidal power in Nova Scotia.  There are 100 billion tons of water that flow into the Bay of Fundy everyday, which has the highest tides in the world.  The Nova Scotia government is doing a 4 player "bake-off" to see which is the best technology.  A 10 metre turbine what was installed to generate 1 MW of power had its blades chewed up in 3 weeks.  Cost of turbines is in excess of $10M so pretty much a big player game.  Lockheed Martin is one of the players here as is Alstom from France.   I checked out some of the smaller partners with tech patents but they are private at the moment.  It will be cool clean technology though once deployed.  Some turbines can also be deployed in rivers.  
    http://www.cbc.ca/news/canada/nova-scotia/story/2011/02/10/ns-atlantis-tidal-power.html


  61. Phil, admit it, you are in the running to publish Greg Smith's book on GS, aren't you.


  62. Phil—did you ever put more thought toward the PCLN idea that you had on Friday?


  63. We are sitting on the top of the break out at 140.8X on SPY.  Needs to retest the highs soon, or it should start to circle the drain.


  64. TSLA on the way to giving us that free car we were playing for.  We hit March on the nose and now everyone is over that battery issue already:  

    Anyway, it seems to me that you shouldn't look at it as trying to get a free car but to make a car payment monthly and that is much easier as you can buy 50 2014 $30/40 bull call spreads for $4 and sell 25 $20 puts for $4 for net $2 ($10,000) on the 50 spreads and then you can sell 50 $1 calls like the March $35s every month and you have $500 towards your car payment.  Of course, you have to not pout about possibly owning 2,500 shares of TSLA for net $22 ($55,000) but you were going to spend that on the car anyway!  TOS says net $3 in margin ($7,500) and you have $40,000 of upside on the bull call spread if all goes well.  

    Oil/Rustle – Good point on delayed reaction.  

    12:00 PM On the hour: Dow +0.93%. 10-yr -0.21%. Euro +0.42%vs. dollar. Crude 0% to $106.88. Gold +1.34% to $1687.15.

    1:00 PM On the hour: Dow +0.88%. 10-yr -0.05%. Euro +0.42% vs. dollar. Crude -0.03% to $106.83. Gold +1.29% to $1686.35.

    The average price at the pump creeps higher, rounding up to $3.90/gallon for regular, according to AAA. UGA +20.5% YTD. Beleaguered drivers can take tiny comfort from oil today, not participating in the Bernanke-led stock and commodity rally. WTI crude flat at $106.84.

    European shares close mostly higher, given a boost midday by Bernanke's dovish speech. Spain was the exception after weekend elections dealt a blow to the country's ruling party and its austerity plans. Stoxx 50 +0.7%, Germany +1.2%, France +0.7%, Italy+0.8%, Spain -0.8%, U.K. +0.8%. Euro +0.4% to $1.3324.

    The new narrative:  A bit of capitulation is evident in the hedge fund universe as a gauge of bullishness climbs to 48.6 from 42 last quarter – the biggest jump since April 2010. With shares up 27% since early October, lagging managers are now more concerned with career risk rather than market risk. 

    Bernanke's dovish remarks provide the catalyst for a day maybe like none other yet in 2012 – a surging stock market leaving Apple (AAPL) behind. With the S&P 500 +1% and the Nasdaq+1.2%, the mighty tech giant is up a mere 0.15%.

    While stocks might be rising on hopes of more QE, BTIG's Dan Greenhaus points out that Ben Bernanke said that "continued accommodative policies" would help bring down unemployment, not additional stimulus, meaning that the Fed chief possibly favors extending Operation Twist "rather than any new purchase program."

    6 Things Bernanke is Clueless About (Mish

    "Everything that Richard Nixon did to me, for which he faced impeachment and prosecution, which led to his resignation, is now legal under the Patriot Act, the Foreign Intelligence Surveillance Act, and the National Defense Authorization Act (NDAA)." Daniel Ellsberg. Can Congress legalize tyranny by passing a law that says it can? Can Congress shred the Bill of Rights by passing a law that says it can? 

    Schlumberger's (SLB -0.9%) earnings will be hurt in this and coming quarters by downward pricing pressure for its fracking services, CEO Paal Kibsgaard says. In addition, the shift of equipment to liquids-rich basins is increasing costs and leading to lower utilization. Schlumberger's warning follows one from Baker Hughes last week. 

    EU Gas Now Over $10: Charting The Global Gas Pump Price Shock

    Bearish commentary leads KB Home (KBH -5.2%) to add to the losses seen following its FQ1 miss, which was marked by declining gross margin and rising cancellations from buyers unable to get financingGoldman thinks a lot of KB's problems are company-specific, noting peers have struck a more bullish tone. Wells Fargo expects bottoming residential construction to give KB a lift, but remains concerned about its weak margins.

    Being the house:  Stifel Nicolaus hikes its price target for Las Vegas Sands (LVS +2.4%) to $69 from $63 and raises 2012-13 EPS estimates, believing the Cotai Central opening could be a "game changer."  The firm says the new hotel plus LVS’ existing Macau assets will account for ~52% of total Macau mass gaming capacity, "which should put LVS in a unique position relative to its peers." (also)

    Results from a Phase II trial of a cholestoral drug from Regeneron (REGN +0.7%) were good but were upstaged at a heart conference by the outcome of a Phase I trial of a rival treatment from Amgen (AMGN +1.5%), which was better. Still, both drugs have a long way to go before they'll be able to enter a market that could be worth $20B/year.

    How often do you see this – M&A activity LOWERS the price:  Comverge (COMV -8%agrees to be acquired by PE firm HIG Capital for ~$49M, or $1.75/share, below its $1.88 Friday closing price and analyst estimates of its worth. COMV felt it had no choice, believing it "would be unable to raise the necessary capital to fund continuing operations, which would place existing stockholder investment in the company at significant risk."

    Setting up for a great short:  Buffalo Wild Wings (BWLD +6.1%) powers up to an alltime high in intraday trading on momentum buying that traders are tying to the exposure that the restaurant chain receives during NCAA basketball's March Madness period and positive comments from Stephens on the sector.

    Intel (INTC) accounted for 15.6% of all chip sales in 2011,estimates iSuppli, up 250 bps Y/Y. Rising selling prices for Intel's PC CPUs (fueled by its Sandy Bridge launch), strong Xeon server CPU sales, and the acquisiton of Infineon's mobile baseband unit drove the share gains. Samsung (SSNLF.PK) remained the world's #2 chipmaker, while baseband giant Qualcomm (QCOM) rose 3 spots to #6.

    Nokia has a patent on vibrating tattoos. Yes, you read that right. Nokia has created a type of ink that when applied onto the skin as a tattoo will be capable of vibrating or pulsing when your phone receives a notification.

    Baird's survey of potential iPad (AAPL) customers – admittedly focused on a "younger, tech-savvier group on average" – found 42% of respondents planning to buy the new iPad to be first-time tablet buyers. In addition, 48% of existing iPad owners say they're in the market for the new iPad, and 15% of all respondents say they plan to buy the discounted iPad 2. 60% of non-buyers say they're turned off by the iPad's price. (previously)


  65. Major Euro Zone Developments that Most have Overlooked

     

    There are several developments that warn of future problems in the euro zone and these make us suspicious about the euro's ability to sustain the upside break.

    First, we are surprised by the lack of commentary and focus on an important ECB decision last week. It decided to give member central banks the option of not accepting bonds as collateral under written (guaranteed) by countries receiving international assistance. The ECB was explicit, national central banks are not obliged to accept bank bonds guaranteed by such sovereigns. Recall that in early January the ECB allowed 7 of the 17 national central banks to accept a broader range of collateral. This may not seem to be significant at the moment, but if there is a new flare up of tensions, this could compound the challenge of the distressed countries' banks.

    Second, and not totally unrelated, borrowings from the ECB require collateral and there is increasing concern that the banks may be asked to pony up more collateral. The line item on the ECB's balance sheet where this can be monitored is "credits related to margin calls". This exploded in December 2011, but has moderated each month here in the first quarter. The risk is on the upside here. 

    At the same time, there is some concern that a rising share of European bank asset are already spoken for (encumbered in the jargon). The more assets are encumbered (used as collateral) the fewer assets are available in a recovery situation for unsecured creditors. This becomes another form of subordination. This may keep the cost of unsecuredfunding high even though the risk of default, judging from the indicative pricing in the CDS market, has eased. 

    Third, when trying to assess a member's budget position, often ignored are the unpaid bills. The data is not easily available and when it is available, there are often long lags. Looking at Spain, for example, unpaid bills amounted 72.9 bln euros in Q3 '11 and 87.5 bln euros when trade credits are included. This compares with 50 bln in unpaid bills in 2005 (including trade credits) and 68.5 bln euros on the eve of the crisis (2007). 

    Fourth, bank deposits, excluding government and financial institutions (essentially individual and non-financial corp deposits) are falling in some countries. The January data showed Greece suffering the largest fall (17.6% year-over-year), followed by Ireland (-6.1%) and Spain (-2.8%) and then Italy (-1.9%).

    Leaving aside tiny Malta, France has seen the largest increase in such deposits (10%) followed by Finland (8.3%). Of note Finland's deposit growth peaked last September and has been slowing every month since then. France's deposit growth accelerated in January to its fastest pace since May 2008, fully recovering from the slowing seen late last year. 

    Fifth, while Portugal's deposits in January 2012 were 3.2% higher than in January 2011, there has been significant fiscal deterioration. Tax revenues fell 5.3% in the Jan-Feb period, while the social security expenses, which include unemployment benefits rose 8.1%. This resulted in a core public deficit of almost 800 mln euros vs 274 mln for the same year ago period. Part of the deterioration reflects the repayment of debt by the state broadcaster RTP. 

    The euro has broken above the $1.33 area for the first time since it broke beneath there at the start of the month. The upper end of the wider range is seen near $1.35. The euro has not traded above $1.35 since early last December. While some observers attribute the euro's advance to Bernanke's comments which they interpret as dovish, we note that the debt market thinks differently as US 5-10 year yields are rising 4-7 bp today. The euro dollar futures strip from May through next March imply a 1 bp lower in yield. 

    While the dollar is heavy, the euro's gains against the greenback also seem to reflect cross rate demand against the yen, with euro re-taking the JPY110 area. That said, on other crosses, like the Australian and Canadian dollars, and Scandi's, the euro is losing ground.



  66. Monday Mar 26

     

    Charles Plosser Speaks
    7:30 AM ET

    Ben Bernanke Speaks
    8:00 AM ET

    Eric Rosengren Speaks
     

    Redbook
    [Bullet
    8:55 AM ET

    Ben Bernanke Speaks
    12:45 PM ET

    James Bullard Speaks
    9:00 PM ET
     

    Weekly Bill Settlement

    GDP
    [Report][Star]
    8:30 AM ET

    Jobless Claims
    [Report][Star]
    8:30 AM ET

    Ben Bernanke Speaks
    12:45 PM ET

    Charles Plosser Speaks
    1:00 PM ET

    Farm Prices
    [Bullet
    3:00 PM ET

    Money Supply
    [Bullet
    4:30 PM ET

    Jeffrey Lacker Speaks
    6:45 PM ET
     

    Chicago PMI
    [Report][djStar]
    9:45 AM ET


  67. We might need to stay a bit bearish…

    http://soberlook.com/2012/03/economic-surprise-index-is-now-trending.html

    Notice how the US economic data coming out lately has been quite mediocre relative to expectations? For example, today's pending home sales came in -0.5% vs. +1% expected. Dallas Fed manufacturing activity came in at 10.8 with 16 expected. Citi has an index that tracks economic data surprises. Here is the definition: 

     

    The Citigroup Economic Surprise Indices are objective and quantitative measures of economic news. They are defined as weighted historical standard deviations of data surprises (actual releases vs Bloomberg survey median). A positive reading of the Economic Surprise Index suggests that economic releases have on balance beating consensus. The indices are calculated daily in a rolling three-month window. The weights of economic indicators are derived from relative high-frequency spot FX impacts of 1 standard deviation data surprises. The indices also employ a time decay function to replicate the limited memory of markets.

    The index is now trending lower as the negative surprises are starting to weigh it down. The US economic forecasters have gotten a bit ahead of themselves, which may indicate a need for caution.


  68. Rustle - since I learned about the TVIX from your post back in Feb, I'm wondering if you are still following it looking for revenge or have looked away?  I don't have time to follow but at this point I think it's below it's NAV (which was $7.34 last week) and so I am wondering if at some point it'll be a wild bounce candidate, since everything else seems to bounce in this market…  If you do any further research, please post, I'd love to get back what that sucker took from me. Thx.


  69. Anyone else got double/triple trade confirmation from TOS? 


  70. Last July 22
    IWM was right here, August 9 was 63.87, October 4 60.15! Is this time different?


  71. Phil—are these MoFos (CMG and PCLN) ever going to stop going higher?
    Didn't you think they were overvalued when they were ~~ 75% lower?
    Has anything really changed or are they worth more just not close to these values in your opinion?


  72. Waves/Stu – Until they can improve the materials, I'm not a big fan of turbines due to the breakage.  LMT is also a partner of OPTT as the military is a target group that would love to have deployable ocean energy solutions.  I know 100M tons of water sounds like a lot but Niagra Falls drops about 50Bn gallons a day about 150 feet – imagine the power!  They generate 2.4Gw over there – I think China has the right idea and just build some artificial dam projects – if you do it right, you can get centuries of use out of them.  Look at the Grand Canyon, we could dam that up somewhere else I'm sure.  

    Smith/Rustle – I couldn't afford the advance he should be getting.  

    PCLN/Jabob – Yes, I am formulating an article.  

    Dollar right at 79.23, Euro $1.333, Pound $1.5945, 82.81 Yen and you know where EUR/CHF is. 

    Nat gas failing at $2.244.  

    TOS/Bob – Not yet.  I did get some ugly color changes on my charts though. 

    Mofos/Jabob – I keep telling you, this is like 1998/99.  Yahoo was ridiculous at $100, absurd at $200, incredulous at $300 and, at $400, it would have taken them 6,000 years to pay investors back the share value through earnings.  Were the people who shorted at $100 right?  Of course they were, they made 95% if they hung on until Sept 2001 off their Oct  1998 entry – well worth waiting for if they were able to ignore the 300% move against them in between.  PCLN started this run back on Oct 2008 and, 3 years later, still hasn't had their pullback.  Will they go another 3?  Maybe – and I doubt they'll drop like YHOO did but they sure as hell could pull back 25-50% very easily – the trick is to catch that move when they do but for that you need PATIENCE and a very good rolling strategy. 


  73. And there goes AAPL….


  74. AMZN is now over $200… 


  75. BIDU $150, Qs naking new highs.  SQQQ at $10.66 – MADNESS!  

    Even WFR coming back to $4 so you know it's a rally.  

    TLT holding up this week at $112.63, which is strange as we have a lower Dollar now and more QE talk than we had when they hit $109.69 last week.  


  76. Last Monday and today, double top?


  77. Phil/ZH – I need to stop going out of the house if I want to get more bullish.


  78. Phil
    You have to not read me either!


  79. VXX/Phil – i'm considering a new entry here, a few April 16/17 BCS at .32.  What would make a good offset to the VXX staying weak/going down?


  80. Phil i hold SQQQ april bullcs 13/15 @.45 now .10 and SDS bcs 116/18@..50 now .13
    what could  i do with them since i'm still bearish(i cant get bullish these days) ? thanks


  81. Phil: 1999?
    I hope it is not going to take 3 years for the momo's to correct like YHOO did.  In '99 the biggest cloud on the horizon was could computers handle the Y2K "disaster".  The economic backdrop today looks way less benign. imo


  82. As Pharm says we need to break out now!


  83. AAPL portfolio:   Stay on  the  AAPL horse.   I'm not going to tell you how to play PCLN 'cause  jabobay was mean to me last week.   :)   


  84. VXX/Phil still trying to get my head around the underlying drivers of VXX and how they interact with actual equities in general…


  85. PCLN 770 calls are doing nicely. Who would've thought you could buy PCLN 770 calls and make money?
     
    Money that will be well spent  for the eventual short.


  86. Phil
    Thinking of double down on TEO.  Can't find a reason for it to drop 5-6% today, am I missing some new information??  One analyst, morgan stanley, downgraded but why the huge drop??


  87. lflan – Any new AAPL plays?  Getting tired of staying on the sidelines. 


  88. Could that be a plan…

    http://www.slate.com/articles/business/moneybox/2012/03/chicago_fed_president_charles_evans_has_an_ingenious_plan_to_save_the_american_economy_listen_to_it_ben_bernanke_.html

     

    Evans says that the Fed can guide these long-term expectations in two ways. First, what he calls “Delphic” guidance is a Fed observation that the future economy is likely to be weak and therefore future rates are likely to be low. What he calls “Odyssean” guidance, by contrast, is a Fed promiseto keep rates low, giving investors and potential durables goods customers confidence that come what may, the low rate climate will continue into the future. The Fed’s current language is somewhat ambiguous between the two, with formally Delphic statements often receiving Odyssean interpretations in the press and Fed watchers in the media and the business community receiving clear informal guidance that the statements are meant to stimulate the economy.

     

    Much of Evans’ paper is dedicated to attempting to mathematically disentangle the market reaction to recent Fed language shifts in order to demonstrate that Odyssean signals are being heard. The real meat of the argument, however, is that the Fed should clear the confusion up with a much simpler and clearer statement. Specifically, Evans wants the Fed to promise that it won’t raise rates until unemployment falls below 7 percent, unless inflation rises above 3 percent.

    That’s solid Odyssean guidance. It tells you that if you were at all considering investment in business equipment, structures, automobiles or the like, today would be a good day to take the plunge. Either nominal rates will stay low for a long time, or else the economy will recover unexpectedly quickly (turning your investment into a good value), or else the inflation rate will be unexpectedly high (reducing the real interest rate you pay). Either way, you want to invest today, and that should boost the economy.


  89. Or PCLN plays? Pretty please!


  90. 1999/Phil
     
    I don't know if we can ever compare this to 1999 since in my guess over 75% of the dot com companies had absolutely no earnings at all and were trading at market caps of over a hundred million, in fact many of these companies barely had any revenue at all.  And the few companies that did have earnings were trading in excess of 300 times p/e.  PCLN is only a 24x p/e on 2012 est year and 19.7 on est 2013 earnings.  That's not crazy if they can make earnings and they are growing at 20% on earnings to justify it.
     
    CMG is trading at 48.5x est 2012 p/e and 39x est 2013 p/e which is high, should be closer to half that which is a $200 difference in the stock but still not insane levels like 1999.
     
    The company that is most inflated that we don't talk about as much as the other momo's is Amazon which is trading at 148.5x p/e est 2012 and 74x p/e est 2014.  Again their growth rate in earnings should justify a high p/e but not that high and also note that they frequently miss on earnings.


  91. Phil/840 line in the Futures
     
    Are you referring to the RUT mini futures?  Do you have an link?


  92. Phantom Bars/Phil & Kinkistyle & others
    Thanks for the info…fascinating (and frightening!)


  93. FU CMG!!!


  94. The level chart is going to be quite bullish tonight… The RUT is nicely over the 5% line. Everywhere else, the intermediary 2.5% lines have been breached. Quite a day so far!


  95. exec
    Aside from what Phil said is we are having problems breaking out of the 82.27 line there is resistance at 840 and support at 815 today and where is the middle? Above or below from here. Next line is somewhere in the 870-880 area, below 896 is a short.


  96. exec 84.27!


  97. exec
    Dam me that 840 screwed me up 84.40 84.15 84.70-.80 and 83.96! Sorry!


  98. VXX at the LOD… under $16 now. 


  99. Cable/Phil – why are cable co's like CMCSA and TWC doing so well?


  100. NOK/Vibrating tattoos
     
    That could be the Apple pips squeaking killer app that changes everything. I can just imagine where some women will be placing their tattoos, though delicacy prevents me from elaborating. Anyway, it will give a new meaning to the phrases: Call me later and Busy signal. And the TV commercials will be great. Forget Windows 8, this is it.
    When the world seems to shine like you've had too
    much wine,
    That's a – more.
    Bells will ring ting-a-ling-a-ling, ting-a-ling-a-ling
     
    [as sung by Francis Albert Sinatra]


  101. SGEN – Buying June 20/25 BCS….$1.35.  Selling May $20 Ps.


  102. UNC lost so my brackets are screwed… I guess I'll just have to say GO ARNA!!!!!!!!!!!


  103. Blizzard conditions in the Tetons again! 66 degrees yesterday.


  104. AMZN – don't really see resistance till 208 and then 220.  What do the chartists see on this board?  Any feedback is appreciated. 
    Pharmboy – you had an amazing play on this.  Does it keep continuing up from here?


  105. lolo – no idea, I was just watching the tape and liked the risk reward since I have a small account. 


  106. jmm1951
    Vibrate tone choices available:Coming soon
    Vibrate me to the moon. Sinatra
    Can't get no satisfaction. Rolling Stones
    Satisfaction. Hot Rocks
    Great Balls of Fire. Jerry Lee Lewis
    Whole Lot of Shakin. Elvis
    Dream Lover. Glenn Shorrock
    Vibrate. Rufus Wainright
    Eight Miles High/. Byrds
    Tattoo Song. Jordan Sparks


  107. LNKD:  (Surely one of our fundamentalist favorites)  Last week, I pointed out that it had a beautiful C&H with confirmed BO.  Measured move about 130.  Moving slowly but nicely today.  


  108. ripcar – how about:

    Shake Me/Cinderella

    Thunder Island/Jay Ferguson

    Bang Go the Bells/Tesla


  109. lflan/PCLN – what's your play?


  110. ZLCS just came back into 1.04…..FYI.


  111. Phil,
     
    It's evident you love the movie "Ariplane", did you know it was a direct parody of  a movie from 1957 called "Zero Hour"?  I watched it and it's funny just seeing where all the lines came from.


  112. Only 78mm shares on the Dow…you would think the strongest day this year would have more volume.


  113. Reducing AAPL positions by 1/2


  114. RIGL….buying stock.


  115. AMZN / Lolo – Indeed, some "dead air" between 200 and 210. 208 is a 50% line, but not a strong one. Here is the volume by price chart:


  116. FU PCLN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


  117.  AAPL    And here's what I've done.     I've closed all positions then reopened 20   April 575/625 bull call spreads.  Prices later stj……..


  118. lolo      short 625 May puts PCLN.   (STO)    


  119. PCLN – you sold puts??  You think this thing is gonna keep going up?


  120. vxx down nearly 10%


  121. EOD in the middle. As jabobeast would say, "FU Market!"


  122. VXX/Scott – How about those short FAS Jan $45 puts at $3.25?  I still like DMND short June $21 puts at $2.  CHK May $23 puts can be sold for .83 – also not bad…

    SQQQ/TraderM – The $13s are .10 so it's a dead trade, when the net was .20, those $13s were still .30 or .35 and very rollable, now you're essentially just doing a new trade and happy to get .10 off the table.  Same with SDS, once you go past 50% loss on a BCS, they're not very salvagable.  

    As new trades (for both of the above) – I still like VXX May $15/19 bull call spread at $1.15 and you can sell the VIX (not VXX) May $15 puts for .70 since they don't die the way an ETN might.  That makes net .45 on the $4 spread that's .80 in the money to start.  

    TZA at $16.85 can jump 30% if the RUT falls 10% to $21.90 and the May $17/23 bull call spread is $1 and you don't really need an offset with a 500% upside potential but, if you want, you can still sell BAC Jan $10 puts for $1.54.  

    VXX/Scott – It's a derivative play on VIX futures across several months – very complex and you are betting on the skill of the ETN provider (IPath) to maintain the correct balance to replicate a move in the VIX by 2x.  We had a lot of notes on ETNs last Friday if you want more links.  

    TEO/Russell – Yes, you are missing the fact that it's in Argentina, which is what I told you last week when you asked – how can you keep up with what's really happening with a company down there?  If a major analyst says they suck – then the impression will be they suck until some other analyst makes a case going the other way.  If you're in it for the long haul – what do you care – but I sure wouldn't rush to DD on a minor pullback – save it for a major one.  

    Fed/StJ – More like the Sirens calling the sailors to dash their ships upon the rocks! 

    PCLN/Rustle – Not as bad as a 1999 dot com but we are supposed to have learned our lesson there.  I'm not sure where your numbers are from though – they earned $1Bn last year and are expected to earn $1.3Bn this year and $1.6Bn in 2013, which is still 23x the CURRENT valuation so – if EVERYTHING GOES PERFECTLY – they are only very expensive in 2013 and now you've projected they have 60% more market share so how exactly do they grow into this valuation?  AMZN at least has multiple revenue streams and tremendous top-line numbers in a segment that is doubling every year (on-line shopping) – at least you can argue they are not in a mature space but travel?  Travel?  ???

    Futures/Exec – Yes it's (/TF) on TOS and you can open a Paper Money account and see it for free.   I like their Futures screens a lot, you can set up 9 on a normal screen to watch at once. 

    Cable/Scott – I don't know, probably simply because they haven't been doing well and are catching up.  CMCSA got a boost from the Linsanity thing and the way MSG popped with the Knicks and maybe that's driving comps up.  TWC, as I mentioned when I said AAPL should buy them, was simply a bargain.  

    Wow, was that the bell already?  What a day! 


  123. Zero Hour/Rustle – I thought it was just from Airport, which was a popular disaster movie.  

    120M on the Dow at the close, another 20M at the bell for good measure.  

    Good job Jabob – that last FU dropped them $10 on the close!  


  124. PCLN/Phil
     
    Just took the earnings estimates from analysts.


  125. Well if "they" really are manipulating this market… "they" are bad-asses!  I was all over buying at the bottom, and did very well… but I don't like buying high and it has really cost me.  I'm super impressed, and I don't see them giving up these gains.  Not for a while anyway.  


  126. Zero Hour/Phil
     
    No, it's from that movie and it's exactly Airplane only serious.  They have all the same lines like "He's very sick, we have to get him to a hospital", Stewardess "What is it?"  in Airplane he tells the joke, here the Doctor says I can't go into it now.  Even has the lines like "I chose the wrong week to give up coffee".  You have to see it, it's hilarious.  They even slap the hysterical passenger and then the doctor says that's enough and he starts shaking her.


  127. so Phil,  I think you're "right"… but I think I'm gunna throw my hat over into Goldman's ring… 



  128. Wow, look at that Big Chart – you really can't fight the Fed! 


  129. AAPL portfolio:   stjeanluc…….here are today's numbers…….Bought to Close  50 April 600 calls for 20.50.   Sold to Close 30  April 575 calls for 37.00    then  Sold to Open  20   April 625 calls for 9.77.      Trade logic:   Portfolio up about 10% for the day, so following my rule to reduce position size.     Repositioning for higher yield for $ invested, but less overall invested.     I expect AAPL to be under accumulation this week as hedgies and others 'dress up' their portfolios, and I expect AAPL to be above 625 at April expiration.   And lolo, the PCLN play doesn't imply that it will keep going up, but rather that it will be above 625 by May expiration.   


  130. By the way, keep in mind that what you see is 600M Dow shares of down volume all erased by 120M shares of up volume – that's my problem with the market – these prices aren't really supported by anything – even half the move was a gap up on no volume Futures – just like it was the fist time we popped these line in early Feb.  BUT 13,200 is where we said we'd go back to bullish and we're there so Mooooooooooooooo!  

    At the close: Dow +1.22% to 13240. S&P +1.46% to 1417. Nasdaq +1.64% to 3118.

    Treasurys: 30-year -0.23%. 10-yr +0.01%. 5-yr +0.06%.

    Commodities: Crude +0.22% to $107.1. Gold +1.83% to $1695.35.

    Currencies: Euro +0.7% vs. dollar. Yen +0.53%. Pound -0.64%.

    Market recap: Stocks powered higher after Bernanke said “continued accommodative policies” were needed to confront persistent problems in the jobs market, differing from the growing view that the Fed was preparing to back away from low rates. The comments sank the dollar while providing a lift to export-sensitive stocks like industrials. NYSE gainers led losers more than three to one.

    Mostly pleased with the Fed's first two rounds of QE, 81% of the economists polled by the NABE think enough is enough, and a barely visible amount agree with the Fed's pledge to hold rates at exceptionally low rate until 2014's end.

    The S&P Value Index (IVE) is outperforming the S&P Growth Index (IVW) thus far in 2012, notes Bespoke – not by a lot, but of particular interest as growth is expected to outperform value during bull markets. The outperformance holds even going back to the start of the big bull run in October. 

    "You can get cautious, but never bearish," says Jeff Saut, holding plenty of cash as he awaits a chance to buy the dip. Recognizing the investor need to do something when there isn't much to do, his advice is to recognize a lot of easy money has already been made and "do nothing and wait for a fatter pitch."

    While it's "dangerous to base assumptions" about the economy on anecdotal evidence, it "trumps government statistics any day of the week," writes Joe Queenan in the WSJWith its shuttered stores, Queenan's town is "reeling;" then there's the mostly empty office building he works in. "This is one spooky building. This is one spooky economy."

    The Swiss franc's sharp rise last year wasn't the result of scared EU citizens pouring money into the country, says HSBC, but instead from the Swiss hoarding money at home. Similarly, the success of the SNB keeping a ceiling on franc strength has more to do with bouncing equity markets drawing money from Switzerland. When that cash returns home, the SNB will truly be put to the test.

    The FHA is no longer insuring mortgages for anyone with a credit dispute of more than $1K. One attorney estimates the action could result in a 33-50% decrease in FHA originations this year. The FHA is under pressure – with the word bailout being tossed around – as its capital has slipped well beneath mandated levels.

    Richard Mayo is the latest in a long line of managers who see dividends as the place to be, believing a portfolio of growth stocks will be a loser's bet in a slow-growth economic environment. A surprising source for dividends is big retailers, such as CVS, which Mayo sees as a “mature” retailing company but one churning out free cash flow of $5B-$6B/year. He also likes WMTHDLOWTGT.

    American Express (AXP +2.2%confirms a new repurchase program of 150M shares worth of its common stock and says it will raise its dividend payout by 11% to $0.20 per share. AXP now trades with a 1.23% yield. 

    Baidu (BIDU +4.5%) surges following a report from Sina Tech that Apple (AAPLplans to add Baidu as a search option for Chinese users in a pending iOS update, though Google (GOOG) will remain the default choice. Given Baidu's dominant share of Chinese search, such a move seems like a no-brainer. The report comes shortly after a much-discussed Tim Cook visit to China. (more on Baidu: III)

    China video sites could turn to a pay-per-view model as advertising sales continue to slump, according to media execs. After Apple set the tone by enticing consumers to pay premium prices for content, tech companies such as Tudou Holdings (TUDO -1.7%), Youku (YOKU -1.6%), Sohu.com (SOHU +3.3%), and Baidu (BIDU+4.1%) see PPV as a way to recoup the higher costs of acquiring content.

     

    Talk about rats leaving a sinking ship!  Green Mountain Coffee (GMCR -1.7%) founder and chairman Robert Stiller sold $66.3M of his stock before it plunged on news that Starbucks had developed a single-cup coffee machine to rivals its K-Cup brewer. Stiller’s combined sales on Feb. 15 and 24 were his largest in a single month since at least 2003: Good timing or trading on inside information?

    OLED lighting, still in its infancy, is expected to emerge as a rival to LED lighting by 2015 as a slew of Japanese companies commercialize the technology, which boasts advantages in thickness, energy efficiency, and temperature. However, at this point, the technology still suffers from high production costs and low brightness. Universal Display (PANL) has licensed its OLED lighting technology to Panasonic, Pioneer, and others.

    Research In Motion's (RIMM) North American smartphone share, long in freefall, may now be below 5%, says BlueFin's Paul Peterson, who believes RIM's much-criticized marketing efforts have been a dud. Peterson expects RIM's FQ4 unit shipments to come in at the low end of its guidance range when it reports on Thursday, and says his checks indicate RIM has significantly reduced build orders for the next 6 months.


  131. PHIL
    TZA / Merkel / Dollar/ commodity price of bunny fur
     
    AFTER HOURS POST
    PART SERIOUS-PART JOKING
     
    So lemme' see if I got this right……..I've been studying everything I can learn about the Russell for the last Two and a Half Years. Same with TNA/TZA. Have read every single thing I can find to read about them. Learned all about their strengths and advantages, AND their weaknesses and dangers.  I ACTUALLY HAVE read the Prospectus'es (Prospecti?), word for word, cover to cover.  I studied the financial strength of Direxion. I studied the daily volume, and I knew that 25M shares a day and spreads of a penny would make for a stable product.  I've done maybe 40 trades,  about 70% profitable, 10% breakeven, and 20% loosers.  I've spent, conservatively……say 400 hours or more learning just about those two symbols. And I'm nowhere near JRW.
     
    I've developed my own "system", based mostly on very elemenatary TA and the charts. I would call myself a "chartist" more than anything else. I make trade decisions based almost exclusively on my own prop Mov Avg lines and Envelopes. That decision is 80% "mechanical". The other 20% is "gut", combined with the news environment and the general market position and trend. That "system" took about a YEAR to develop. I'm still trying to "fine tune" it with Standard Deviations of the ATR. I see possible room for very granular "tuning" there.
     
    I am completely 100% self taught. Never had a day of training in this (apart from reading on the web and reading MANY books about Trading, Investing, etc.
     
    I print charts out on paper, several charts per day (often, but not every day). When I do, I annotate them literally by hand, with a ruller and different color ink pens.  When I have a position on, I look at it every single day. I calculate the percentage of ATR, percentage above or below my Entry, etc.  When I annotate a chart, I draw maybe 8 separate lines on one page, and do maybe 4 or 5 math calculations, just for that chart.
    ___
     
    So NOW, I have to start reading the news about what Angela Merkel says? AND I have to start looking at what the international Central Banks are doing in terms of "stimulating" their economies, with dumping money into them?
     
    AND, to be most effective, I have to start reading about, learning about, and get fluent with Dollar Forex?
     
    Hell, the only thing you left out was Oil, and the market for used video games.
     
    Even before starting the "job" I've been working on for almost a month, I was ALREADY spending maybe 2 to 4 hours a day (most days) cruising the web looking at interesting things, both Market news AND General news. One of the benefits of reading your articles the last two years has been that I have started to "think" about the Macro, not just U.S., but International as well, and taking THAT GENERAL news into account about whether I buy one standard lot of TZA or TNA (as I've said, they are the only things I trade).
     
    PLEASE tell me that to continue sucessfully trade TNA-TZA into the future I don't REALLY need to learn about what the Euro CB's are doing, what Angela Merkel says from day to day (it seems to vary by the week), and how the Dollar is varying (against what, by the way?  the Euro?)
    Say it ain't so Joe, Say it ain't so…………….   (:


  132. scottmi / VXX / Phil
    AFTER HOURS POST
     
    Dude, if you get that totally figured out, you're probably going to go into the Trader's Hall of Fame. Voodoo Squared, from what I've been seeing here on the subject.  Or "The Random Walk" raised to the N'th power.
     
    I made ONE trade with VXX, and lost a LOT of money, largely becuase there  WAS VERY LITTLE CORRELATION between the actual Vix and the VXX Product.
     
    As I posted maybe a  couple weeks ago or so, (before being sent temporarily to the "Time OUT" Chair), I found that when the Vix went down, the VXX went WAY down. When the Vix went up, the VXX went up a little, but not NEARLY  in the ratio you would think it would, and not nearly in the ration than when it went down. I called it "heads you win, tails I loose".
     
    I suggest  very, very carefully reading everything that has been posted here over the last week or so, and then go to other outside sources to get more observations about the Product. You could also search SA on the topic, there is probably a lot there.
     
    I have not read all the Vix/VXX stuff here the last week, so Phil may or may not have already commented on it, or explained it.
     
    BUT the most important thing I learned from him about VXX, after my big loss (like more than a year ago, I think), he explained in detail that it is NOT an Index Tracking Instrument the way TZA + TNA + IWM are. He talked about it as being "paramutual betting", which I don't really understand. (I've never made a "horse" bet or been to a "track").
    If I understood ANY of what he explained to me, it sounded like the VXX is almost like Futures, where you are betting against the cumulative expectations or opinions of gazillions of other traders. Don't rely on that comment, I'm not positive if it's right.
    So if he hasn't already written a Tutorial in the last few weeks explaining Vix/VXX bizarro-ness, in detail, it would probably be a good subject for one of his detailed "explanatory" articles.
     
    I know this………I'll never touch VXX again, or any other instrument that allegedly mirrors the Vix.
     
    Best Wishes


  133. rustle123
    CMG / restaurants / "trendiness"
     
    Just a quick point. Sure you already know this.  Not sure how much you follow the "restaurants" sector, but I've always thought of the group as pretty scary, in terms of long term investing.
    You and I are in roughly the same age group.   In my adult lifetime, having lived my entire life here in and around Minneapolis, I could come up with AT LEAST a dozen "chains" of restaurants that started out of nowhere, went through rapid, then ridiculous, growth. This could take 2 or 3 or 4 years. Many of them were "trendy" or "the fad of the time".  Kind of the way I look at Yoga centers right now. I'd bet an arm there are going to be a lot less Yoga centers ten years from now then there are now. I just think that is a "fad", and that it has peaked, or will soon.
    But I can think of all these fairly large rest's that were once VERY popular, then they weren't, then people got totally bored and tired with them, business volume fell off, and eventually they closed.
     
    Do you remember the "Rainforest Cafe"?   Or Sbarro?  Perkins went bankrupt a few months ago (maybe thats mostly a MN chain, not sure).  What was that "Boston Home Cooked Food" chain that went bankrupt back around 10 years ago or so?  (I forget the exact name at the moment).
     
    Phil has referred to CMG as "a place that sells $15 burrito's".  How long can that really last?
     
    stock=$57 to $424 in 3 years?
     
    I don't know anythings about how to study "fundamentals", but I would bet that CMG see's $250 before it see's $650.
     
    my 2 pence


  134. Newbie – I believe you may be right about the yoga centers disappearing in 10 years as I read something about 75% of Americans being obese by 2020. 


  135. Phil, 
    I have a tza april 17/18 BCS for .45.  What is the best course of action for this.
    Thanks


  136. Damn… I want to be a bull, but the stock market is correlated to this economy, isn't it?
     I better stop reading.  
     
    Maybe I'll watch FOX NEWS.


  137. Speaking of correlation:  http://view.ed4.net/v/LVA6WW/QN70ET/8ZB56HZ/F46QW/  — Not that this is likely to surprise anyone on PSW.  From FT:
     
    Excerpt: "
     

    The Commodity market's algorithmic challenge

    By Javier Blas, Commodities Editor

    The growing trend of increased correlation between the price of oil and commodities markets and other assets class, including currencies, equities and bonds, is well documented. 

    But now two economists have found evidence of a rise in cases of heightened correlation over very brief periods – even as short as one second – pointing to the increased impact of algorithmic trading strategies on commodities.

    David Bicchetti and Nicolas Maystre, at the United Nations Conference on Trade and Development (Unctad), say they have found “striking” correlations between commodities such as oil, corn, soyabeans and the US equity market over very short periods, including 5-minute, 10-second, and 1-second frequencies.

    “This is consistent with the idea that recent financial innovations on commodity futures exchanges, in particular the high-frequency trading activities and algorithm strategies have an impact on these correlations,” they said.

    The paper by Mr Bicchetti and Mr Maystre – ‘The synchronised and long-lasting structural change on commodity markets: evidence from high frequency data’ – provides evidence of a marked change in the presence of HFT in commodities.

    “Before 2008, high-frequency co-movements between commodity and equity markets did not usually differ from zero over a long lasting period at such high frequencies,” they said. But “in the course of 2008, these correlations departed from zero and became strongly positive after the collapse of Lehman Brothers.”

    “We believe a conjunction of factors made that change possible. First, financial technical innovation spurred HFT through the gradual introduction of full electronic trading on exchange platforms since 2005. Second, investors moved away from passive strategies and opted for active ones,” the authors said.

    The role of HFT in commodities is controversial, with some market participants criticising them for distorting prices. Last year, the chairman of the World Sugar Committee, the industry body that represents the big traders, said in a letter to the ICE Futures US exchange, that high frequency traders “only serve to enrich themselves at the expense of the traditional market users”.

    Sean Diffley, chairman of the WSC and a hedge fund manager, wrote: “It would appear that the computer-based traders are parasitic, contributing little.”



  138. Does anyone know what the ISEE number is? 
     
    Of possible significance is the extreme that the ISEE numbers posted today. The Equities ISEE number was an all-time high 410 at today's close. The last time this number was over 300 (302) was April 6th, 2011. The SPX began a multi-day pullback the following session. When the equities ISEE number has closed above 300 it has often marked a significant market top within a period of just a few days. Of course, the liquidity here and the expectation for QE3 could well make this time different.


  139. Are there any bears left?  You got to admire the degree of bulls in such a nothing economy.  


  140. peedlew99ISEE Index



  141. Looking out five years, I would like to make a longer-term investment in The Vanguard Select Global Growth Sniffer Equity Fund, since it seems that real GDP growth is going to be a scarce global commodity going forward.  Unfortunately, it doesn't exist, so I am trying to synthesize it.  If anyone has any fund suggestions along these lines, what I have in mind is select Central & South American companies, Canada, and a few SE Asian prospects, primarily Indonesia, Thailand, Burma and Malaysia.


  142. zero,
     
    please post what you find
     
    diamond,
     
    Thanks… opening long call positions… All time high today.  Amazing.


  143. TZA/Newbie – Technical is a great way to trade if you are trading short-term and there's really no point to learning to pay attention to the news when it doesn't matter anyway. 

    CMG/Newbie – I wouldn't bet against anything going up 100% if we're breaking higher from here.  Once we get past earnings, if there is still this kind of technical enthusiastm, what's going to stop us between now and July?  Of course, that's when they usually do pull the plug so it is going to be interesting….

    Good point on Yoga, Ink! 

    TZA/Joe – The April $17s are still .95, which is more than the .45 you paid for the spread, right?  So, assuming you want to keep TZA as a hedge, there's no harm in rolling them to the May $16s ($1.85) for .90 as it puts you in the $2 spread for net $1.35 with a month of time between you and the caller and you move from being .25 out of the money to .75 in the money – all for just .90!  When the premium is gone on the April caller, you can roll to a May caller and get all or part of your .90 back (the $19 calls are currently $1).  See how much fun it is to make an adjustment if you don't wait until the position is a big loser!

    Reading/Peedle – That's the hardest part about participating in these rallies, you really have to just pretend nothing matters. 

    Oh look, STD is closing 58 UK branches.  See, doesn't matter…

    Algos/ZZ – Good article. 

    AAPL/Diamond – It's funny because BIDU went up on AAPL news too so now CHINA! goes up when someone mentions AAPL and AAPL goes up when someone mentions CHINA! – it's one of those Escher staircases or those hands that draw each other…

    ISEE/Peedle – It's Long Calls Purchased/Long Puts Purchased over the short run, I think.  So 300 is just 3:1 and 410 is 4.1 to 1 – indicating extremely bullish sentiment by options investors.  The reason this can be misleading (and, as your not suggests, it preceded a pullback last time it was this high) is because the Fundies that are paining the EOQ windows lock in their gains by selling calls ahead of dumping their stocks and that creates a much higher than usual ratio as many new call contracts are written.  Think about it, for every call bought, there is a call sold and the people selling naked calls are generally the larger investors with margin accounts and, if not those people selling naked, then it's people who own the stock covering – which indicated that they too believe their stocks are toppy…

    71/Diamond – Wow! 

    Growth sniffer/ZZ – I'd say just buy AAPL. ;)


  144. phil, have written vxx april puts @ 22/21 strikes now way under water,suggestions?


  145. Tuesday's economic calendar:
    7:45 ICSC Retail Store Sales
    8:55 Redbook Chain Store Sales
    9:00 S&P Case-Shiller Home Price Index
    10:00 Consumer Confidence
    10:00 State Street Investor Confidence Index
    10:00 Richmond Fed Mfg.

    Not a promise of another bout of QE, Bernanke's speech today may have been in response to the emerging market view (encouraged by hawkish FOMC members) that the Fed could raise rates as early as next year, writes Jon Hilsenrath. The Chairman isn't intending to tighten policy soon and certainly doesn't want the markets doing it for him.

    Third Round of Bond Buying Not Needed: Fed's Bullard. A third round of Treasurys purchase is not necessary unless the U.S. economy deteriorates further, according to James Bullard, president of St Louis Federal Reserve Bank. "I think QE3 would require the economy to deteriorate somewhat from where it is right now," Bullard said. "The basic story on the U.S. economy is that we've had good news over the last six months or so, especially compared to the recession scenario that was being painted in the August-September time period of last year." Injecting too much liquidity into the system will also have the effect of driving commodity prices higher and reducing real spending power, Bullard said. "I think one of the biggest mistakes is continue to throw us much more in the way of monetary injections into the economy and with that, you get a much higher increase in commodity prices and potentially produce less global consumption across the world, which slows economic activity down," Bullard said. "I'm afraid that's the real danger just now – that we've maintained too loose of a policy right across the global economy and what results is inflation and reduction in real spending power."

    Mostly pleased with the Fed's first two rounds of QE, 81% of the economists polled by the NABE think enough is enough, and a barely visible amount agree with the Fed's pledge to hold rates at exceptionally low rate until 2014's end.

    The S&P 500 is on track for only its second-ever back-to-back Q4-to-Q1 gains of more than 10%, but Sam Stovall says it may not mean a correction is coming. Noting the index's 5% Q2 gain in the previous instance, Stovall says investors may find that when a correction finally comes, "it will likely occur from such a high level that the S&P 500 does not dip below its prior-year close."

    LAKSHMAN ACHUTHAN: Developed Economies Are Going To Experience Frequent Recessions In The 'Yo-Yo' Years.

    Housing Hype: Recovery Turns to Relapse? Housing was charging back. Spring sprung early. Sentiment among home builders doubled in six months. Any talk that the fundamentals might not be supporting the sentiment was met with harsh criticism. And then suddenly it wasn’t.

    Pain at Gasoline Pump Cutting Into Consumer Spending. Drivers are feeling the pinch. Gasoline prices added another 11 cents over the past two weeks, putting the national average price at $3.93 a gallon, according to the Lundberg Survey.

    EU Gas Now Over $10: Charting The Global Gas Pump Price Shock.

    German Coalition Strikes Compromise on Solar Cuts – Sources. Leaders of the lower house of parliament in German Chancellor Angela Merkel's centre-right coalition have reached a compromise agreement on cuts in solar power incentives with the upper house after weeks of negotiations, sources told Reuters on Monday.

    EPA Said to Be Close to Tightening U.S. Greenhouse-Gas Limits. The Environmental Protection Agency is close to issuing the first limits to cut U.S. greenhouse gases from power plants, with an announcement possible as soon as tomorrow, according to people familiar with the matter. The rules from President Barack Obama’s administration would set emissions for all power plants at the level established for a natural-gas plant, or about half what is released from a coal-burning facility. Any new coal plants would need expensive carbon-capture equipment, according to the people, who declined to be identified before an announcement. “It will make it nearly impossible to build a new coal plant,” Michael Brune, executive director of the Sierra Club, said in an interview. Environmental groups such as the Sierra Club are pressing the Obama administration to issue tight standards to head off an increase in global warming that they warn could be catastrophic. “If old King Coal isn’t dead already, he’s certainly teetering toward life support,” said Frank O’Donnell, president of Clean Air Watch in Washington.

    Planned Pipelines to Rival Keystone XL. Two major energy companies are planning to build new pipelines that will move as much as 850,000 barrels of crude oil a day from Canada to refineries along the Gulf Coast by mid-2014, in the latest effort to cope with a surge of oil production in North America. The separate projects, planned by Houston-based Enterprise Products Partners LP and Enbridge Inc. of Calgary, will compete with TransCanada Corp.'s proposed Keystone XL pipeline, a massive project to move crude from the oil sands of Alberta to U.S. refineries.

    Steel Finds Sweet Spot In The Shale. Natural-Gas Boom Begets Low Prices for Fuel, Strong Demand for Piping—a Double Boon for Mills.

    It's another ugly day for the VIX (VXX -9.4%) which is back to levels similar to those seen in April 2010 and April 2011, i.e. good times to lighten up on stocks. The dive in the VIX just adds to troubles for the TVIX, which has seen both its premium to NAV and its NAV itself disappear. TVIX -17.6% today, down nearly 60% in 3 sessions.

    Make No Mistake… Institutional Investors Are All In. (graphs)

    Bipartisan Support in Washington for 401k Skimming (Forbes)

    How the JOBS Act triumphed over its critics (Business Journals)

    The New Blue Collar: Temporary Work, Lasting Poverty And The American Warehouse (Huff Post)

    Corporate Bond Risk Falls in Europe, Credit-Default Swaps Show. The cost of insuring against default on European corporate debt fell, according to BNP Paribas SA. The Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings dropped 6.5 basis points to 591.5 basis points. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 1.5 basis points to 116.75. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers fell two basis points to 208 and the subordinated index declined 3.5 to 324.5.

    BOE Says European Debt Concerns Persist as Yields Stay Elevated. The Bank of England said investors remain concerned about the euro-area outlook even after measures by policy makers helped reduced some tensions in markets. “Concerns about the indebtedness and competitiveness of some euro-area countries persisted and remained a key influence on financial markets,” Chief Economist Spencer Dale wrote in the bank’s Quarterly Bulletin, published in London today.

    Libor Flatlines as Europe-Wary See Stress Signs: Credit Markets. Stresses in the global financial system have stopped easing as a European Central Bank official signals they're unlikely to extend a third round of unlimited loans to the region's banks and as bond yields in Spain and Portugal begin to rise again. The 3-month libor has held at about .47 percent every day in March, after sliding from this year's high of .58 on Jan. 3. Measures from interest-rate swap spreads to the relative yields on short-term bonds sold by the world's biggest banks also show the health of the financial system isn't improving.

    Spanish PM Mariano Rajoy's Election Defeat Fuels Bail-Out Fears. The Spanish ruling party’s failure to win control in a key state election is a “serious setback” that casts doubts over the government’s ability to stick to its financial reforms, economists have warned.

    Spanish Banks' Bond Buying Can't Cap Funding Costs: Euro Credit. Spanish banks are using loans from the European Central Bank to buy domestic government debt in a recycling exercise that hasn't stopped 10-year yields from climbing back above 5% in recent weeks. Investments in government debt by Spanish banks climbed to a record 230 billion euros in January from 178 billion euros in November, a jump of 29%, central bank figures show. "The increase in debt purchases by the Spanish banks has been massive and it's clear it's coming from the LTRO," said Tobias Blattner, an economist at Daiwa Capital Markets in London, referring to the ECB's loans program. "The key point is that Spanish banks can't keep up the pace because the situation is still so volatile and prone to changes of sentiment."

    Ackermann Says Spanish Contagion 'Not Off Table,' N-TV Reports. Deutsche Bank AG (DBK) Chief Executive Officer Josef Ackermann said that while the solution to Greece’s crisis reduced the risk of contagion to Spain and Portugal, such a scenario is “not completely off the table,” N-TV reported.

    The Yen's Looming Day Of Reckoning. Japan is on an unsustainable path of a strong yen and deflation. The unprofitability of Japan’s major exporters and emerging trade deficits suggest that the end of this path is in sight. The transition from a strong to weak yen will likely be abrupt, involving a sudden and big devaluation of 30% to 40%. It will be a big shock to Japan’s neighbors and its distant competitors like Germany. The yen’s devaluation in 1996 was a main factor in triggering the Asian Financial Crisis. Japan’s neighbors must have a strong banking system to withstand a bigger devaluation of the yen.

    4 Years Of Japanese Central Planning Failure Charted.

    Australia Shows Signs of Coming Downturn: Dow(DOW) CEO. Dow Chemical Co.'s chief executive said Tuesday that he sees signs of a coming downturn in the Australian economy, arguing that jobs growth and overall competitiveness are in decline. Andrew Liveris was unveiling a plan to resurrect Australia's manufacturing sector at a conference held at the University of Technology in Sydney. "We are seeing troubling signs for our economy at large--maybe even signs of a coming downturn," he said. Liveris said Australia's current growth trajectory is "unsustainable" and that the country had grown far too reliant on China for its prosperity.

    China's Industrial Company Profits Fall 5.2% on Exports. Chinese industrial companies had their first January-February profit decline since 2009 as slowing exports and a government campaign to cool property prices damped earnings. Net income dropped 5.2 percent from a year earlier to 606 billion yuan ($96 billion), the National Bureau of Statistics said on its website today. That compared with a 34.3 percent gain in the first two months of 2011. The bureau didn’t release a figure for January because of a weeklong Chinese New Year holiday that disrupted production. “Earnings growth will continue to slow as companies are squeezed from both ends: slowing investment demand and elevated costs,” Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., said before today’s release. “The government’s property curbs are having a chain effect by slowing housing investment and demand for all related goods such as steel, cement, construction machinery and electric appliances.”

    China Life 2011 Profit Falls 45% On Stock Losses. China Life Insurance Co., the nation's biggest life insurer by premiums, said Monday its 2011 net profit plunged 45% because China's stock market losses battered the company's investment performance. The stock market rout, coupled with slower premium growth, made last year particularly tough for Chinese insurers.

    China to Ban Public Purchases of 'High-End' Alcohol, Cigarettes. Chinese Premier Wen Jiabao pledged to ban the use of public funds to buy cigarettes and “high- end” alcohol, warning that corruption may endanger the ruling Communist Party’s survival. Wen spoke at a State Council meeting yesterday, according to a statement on the government’s Website. He also said state- owned enterprises and agencies must “strictly control” funds used to renovate “luxury” office buildings or buy artwork. “Corruption is the biggest danger facing the ruling party,” Wen said, according to the statement. “If not dealt with properly, the problem may change the nature of, or terminate, the political regime.”

    Former China Banking Regulatory Commission Chairman Liu Mingkang said yesterday the nation's bank lending may continue its weak trend during the first half.

    Others are coming out of the woodwork to flog Goldman's (GS) wayward drift from its customer values. Copper River, once a successful $1.5 billion hedge fund in 2008, says that Goldman's handling of short trades for the firm did irreparable damage and contributed significantly to the demise of the fund.

    Bank Lobby’s Onslaught Shifts Debate on Volcker Rule (Bloomberg)

    TBTF Get TBTFer: Top 5 Banks Hold 95.7%, Or $221 Trillion, Of Outstanding Derivatives.

    FHA Bailout Risk Looming Larger After Guarantee Binge: Mortgages. The Federal Housing Administration won’t be able to earn its way to financial health this year, increasing the chance it will need a taxpayer bailout, based on an updated forecast from Moody’s Analytics, which provides the agency’s housing-market analysis. The U.S. government mortgage-insurer, which guarantees $1.1 trillion in home loans, had been counting on “robust growth” in home prices to help rebuild its insurance fund after paying out $37 billion to cover defaults the past three years, according to its annual report to Congress, filed in November. It won’t get that growth until 2014, according to the latest outlook from Moody’s Analytics. Prices will fall 3 percent in fiscal 2012 before growing 1.4 percent in 2013 and 6.5 percent in 2014, said Celia Chen, a Moody’s Analytics housing economist who updated her estimate after providing the housing-market forecast for the FHA’s annual actuarial report. “The FHA’s economic projections are surreal,” said Andrew Caplin, a New York University economics professor who has testified to Congress on the agency’s finances. “They must believe there will be very few readers in Congress able to critically review such a complex report.”

    Gold Takes Shine to Bernanke. Gold futures gained as Federal Resrve chief Ben Bernanke signalled support for the central bank's easy-money policies, sending investors looking for alternatives to the U.S. dollar.

    VC David Henderson has one word for you: water. Though not historically seen as a growth area, Henderson expects the strains of population growth, climate change, and emerging-markets industrialization to lead to heavy interest in both water infrastructure projects, and new technologies that can boost the availability of clean water. A few water ETFs: FIW, CGW, PHO, PIO.

    Supreme Court justices signal they're ready to confront Obamacare, but a decision still isn't expected until June. Bernstein suggests investors move in ahead of a ruling, naming UnitedHealth (UNH) as "likely to rally the most post closure," with Humana (HUM) the least exposed given its concentration in Medicare; WLP, CVH and AET also are seen as well-positioned.

    SCOTUS on HealthCare: It’s Not About the Law, Stupid (Slate)

    Everyday Stress Can Shut Down the Brain’s Chief Command Center (Scientific American)

    IMAX (IMAX) and Lionsgate (LGF) says the limited release of The Hunger Games: The IMAX Experience grossed $10.6M in IMAX theatres worldwide during its three-day opening weekend, marking a box office record for a digital-only release and for a non-sequel 2D release. IMAX +0.8% AH.

    Skechers (SKX) receives an Underperform and $11 PT from Wedbush, which expects shares will move lower due to the the weaker-than-expected performance of the shoemaker's GOrun line, which stands to impact Fall orders from wholesalers. Forex headwinds, operating expense deleveraging, inventory issues, and a lack of upcoming catalysts are also seen as reasons to be bearish.

    Though China has many successful tech firms, don't expect it to produce the next Steve Jobs or Bill Gates anytime soon, says local investor Xu Xiaoping in remarks that could stir some controversy. Xu's arguments: the Chinese education system doesn't encourage students to follow their passions; many Chinese tech products lack the "soul" needed to evoke strong user loyalty; and incumbents generally try to crush upstarts than buy them, thereby discouraging innovators.

    CBS (CBS +1.8%) CEO Les Moonves tells CNBC several major industries are increasing their ad spending as signs emerge of an improving U.S. economy, and that the 2012 presidential campaign should also give CBS a boost. Moonves also backs up prior remarks about CBS' inability to reach an acceptable Apple TV content deal, and suggests his company could hike its dividend.

    Support in U.S. for Afghan War Drops Sharply, Poll Finds. After a series of violent episodes and setbacks, support for the war in Afghanistan has dropped sharply among both Republicans and Democrats, according to the latest New York Times/CBS News poll. The survey found that more than two-thirds of those polled — 69 percent — thought that the United States should not be at war in Afghanistan. Just four months ago, 53 percent said that Americans should no longer be fighting in the conflict, more than a decade old. The increased disillusionment was even more pronounced when respondents were asked their impressions of how the war was going. The poll found that 68 percent thought the fighting was going “somewhat badly” or “very badly,” compared with 42 percent who had those impressions in November.

    The Science of Why We Don’t Believe Science (MoJo)

    The Science of Truthiness (HuffPost)
     


  146. VXX/Jash – Those puts are about $5.50 and we are concerned that VXX will implode like TVIX so you may not want to roll back but rolling back is the obvious thing as the June $20 puts are $5.50 but you can switch to the VIX and sell the May $22 puts there for $5.10 instead as the VIX won't "break" and you just have to roll every month until you luck out and the VIX pops.  Of course, with any short position you are behind on, one thing you should consider is just rolling your loss – not trying to "win" the whole position now that you are behind.  If, for example, you sold those puts for $2.50, then the loss is $3 and you can sell the VIX May $19 puts for $3, instead of the $22 puts for $5.10.  Also, doing nothing this week is a fine option as we have a very artificial pump into window dressing to end the Quarter and, next week, we'll see what's real and what's not. 


  147. thanks phil,sounds good advice.


  148. 3:39 AM Asian stocks follow their U.S. counterparts higher following Bernanke's remarks on the need for "continued accommodative policies.” Japan +2.4% to 10255. Hong Kong +1.6% to 20990. China -0.1% to 2347. India +0.2% to 17089.

    6:00 AM Overseas: Japan +2.4%. Hong Kong +1.8%. China -0.1%. India +1.2%. London +0.2%. Paris +0.2%. Frankfurt +0.6%.

    6:33 AM U.S. stock futures point higher in advance of releases on economic data that include March consumer confidence and Case-Shiller's report on home prices. S&P +0.1%, Dow +0.2%.

    The “Dumb Money” indi­ca­tor (see fig­ure 1) looks for extremes in the data from 4 dif­fer­ent groups of investors who his­tor­i­cally have been wrong on the   mar­ket: 1) Investors Intel­li­gence; 2) Mar­ket­Vane; 3) Amer­i­can Asso­ci­a­tion of Indi­vid­ual Investors; and 4) the put call ratio. This indi­ca­tor shows extreme bull­ish­ness. As stated last week: “If we look at the “dumb money” indi­ca­tor in fig­ure 1, we know that as long as the indi­ca­tor stays above the upper band (see green arrow on chart), prices should con­tinue to go higher – albeit in a grind­ing fash­ion at this stage of the rally.

    Investors are "obsessed" with problems in Western economies, but the U.S. is recovering already as are some parts of Europe, says Goldman's Jim O'Neill. "There's a broad anti-equity culture out there" as nervous investors stick with cash, but the outlook for stocks is good.

    We believe Mr. Bernanke is more wrong now than he was about the housing bubble, by the way, and using cyclical policies to address structural problems will end in tears. This isn’t the issue here, however, as we’re just trying to divine the market direction to put bread on the table.  Nevertheless, we have noticed an interesting characteristic about this market since volatility collapsed after the ECB LTRO2 operation. The S&P500′s ability to close above its open on a consistent basis has been impressive and is sign, at least to us, of a market that it technically short/under owned.

    The eurozone needs to boost its firewall to at least €1T ($1.3T) in order to restore market confidence, according to OECD chief Angel Gurria. At the moment, a German compromise would only bring the total funds up to €700B. (OECD statement)

    German Bunds Gain on Bailout Concern as Italy, Spain Sell Debt

    German consumer confidence is set to fall slightly in April, market research company GfK says, an unexpected dip after six months of improvements. Income expectations fell because of higher oil prices but consumers' overall outlook for the economy approved after Greece's debt restructuring.

    "We are seeing troubling signs for [the Australian] economy at large, maybe even signs of a coming downturn," says Dow Chemical (DOW) CEO Andrew Liveris while unveiling a plan to resurrect Australia's manufacturing sector. An over-reliance on China and a high Aussie dollar are pushing the country to a "tipping point."

    RBS (RBS) +4.9% in London on a BBC report the British government is in talks to sell up to a third of its 82% stake in the bank to Abu Dhabi, though sources caution a deal isn't imminent.

    The EPA will propose as soon as today the first ever standards to cut CO2 emissions from new power plants, sources say. The rules are likely to be politically divisive, and could hurt companies that generate most of their power from coal, such as Southern Co (SO) and American Electric Power (AEP).

    The taxpayer will end up making a profit of $5B-$10B once AIG (AIG) repays the estimated $45B it still owes the government for its bailout, CEO Bob Benmosche told Jim Cramer yesterday. In March alone, the Treasury has gained back over $14.6B of its investment in AIG, including $6B from the sale of shares.

    The GOP last night pulled a House vote on a 90-day extension of funding for U.S. highways and transit projects, which expires on Saturday, after it became clear it wouldn't pass. Democrats want the House to vote a 2-year, $109B Senate measure that was approved this month. Failure to extend the funding could affect up to 1.87M jobs.

    Australia's consumer watchdog says Apple (AAPL) made misleading claims about 4G capability when promoting its new iPad in Australia, and regulators plan to apply to the Federal Court in Melbourne tomorrow on the allegation that Apple breached consumer law.

    Finally, an Espresso Machine for the Car

    ATC: Why Youth Has An Advantage In Innovation & Why You Want To Be A Learn-It-All

    Great site that combines coupon/deal   sites into one easy view (Dealupa).