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Thursday Fakery – India’s Industrial Output Revised Down 83%

EPI WEEKLYFirst the good news: 

India's industrial production grew at a slower-than-expected pace in February, weighed down by a contraction in consumer durables and consumer goods.  Production of consumer durable goods shrank 6.7 percent in February from a year earlier. Consumer goods contracted 0.2 percent on year.  Inflation is still running at 6.7% but at least it's down from 6.95% last month.  Now the bad news, January's Industrial Production Report has been revised down from a blistering 6.8% to an almost contracting 1.14% (and when it's that low, 0.04% really matters!).  

It turns out the massive 38% run in the EPI based on all these FANTASTIC numbers coming out of India may have been based on totally false information and it's funny how the selling begin along with the release of that spectacular 6.8% report – almost as if some Bankster was pumping out fake data in order to bring in the suckers so he could unload his shares before the real data came out.  

Not that that would happen in our fine Kleptocracy, right?  We had a similar run-up in our markets as analysts raised their earnings expectations for the S&P 500 from $90 to $100 to $110 and then raised the multiple they felt should be applied from 10 to 11 to 12 to 13 to 14 to 15 or even 16 – coming up with huge targets for the S&P – as well as our other indexes.  This caused our markets to rocket higher as it was all sunshine and lollipops from our Corporate Media – all the way back to October.  

Now that all the sheeple have been herded into the markets at those MASSIVE valuations, suddenly estimates are going the other way – $105, $102 and now Gary Shilling says $80 may be the right number.  

Shilling notes the S&P's dependence on foreign earnings, a stronger Dollar, higher oil prices, consumer retrenchment and a hard landing in China (and India!) and he recommends going long Treasuries and short stocks and commodities (see Gary's 2012 Investment Themes).

 

SPY WEEKLYGarry was right on the money in 2011, missing just 3 out of 19 investment themes he was tracking at the time so let's not dismiss him out of hand.  With S&P earnings dipping back to 80, Shilling says the p/e multiple is likely to contract back to 10 and that brings us all the way back down to S&P 800 – a whopping 43% drop from where we are not.  While that's a bit more doom and gloom than I'm willing to buy into – 10% down from here to about 1,250 is certainly not out of the question and, if the Fed doesn't step in and turn those machines back on – things could get much worse.  

As I noted yesterday, we don't go back to being bullish until we see 1,372 hold on the S&P and then 1,384 to confirm – otherwise we're just in a weak bounce off of the first week of the sell-off.  That, of course, didn't stop us from balancing our picks a bit with 8 bullish Trade Ideas on 6 Dow components going out to Members in yesterday's Morning Alert.  

Of course the real money to be made in this scam of a market comes in the Futures and our play from the early morning Member Chat was the big money for the day as my 6:15am trade ideas for Members were:  

Oil is $101.59, gold $1,657, silver $3.6545, copper (/HG) $3.666 and a good play higher off the $3.675 line if you want to play a recovery, nat gas is $2.04 and gasoline at $3.248 is also playable over the $3.25 line (/RB).

The RUT (/TF) is at 788.7 and would be playable (and confirm a move up) over 790 but very tight stops and only if the Dollar fails 79.75.  

Overall, I don't see the BOJ putting up with this (Yen 80.82) so I'd look for the Dollar to move back up but, if the Euro holds $1.31 and the Pound holds $1.59 – that's going to be bullish but, if they fail, then I'm not sure this early pop will last. 

As you can see from the chart, we took that money and ran ($420 per penny, per contract = $2,100 per contract) and we rode the Russell all the way up to 795 for another $500 per contract.  The early birds really do get the worms in the Futures and, if these jokers want to manipulate the markets higher in the mornings – we're more than happy to play along because, at PSW, we don't care IF the game is rigged – as long as we can figure out HOW the game is rigged and play along!

This morning they ran oil back up to $103 and the Russell hit 798 but we went short oil Futures (/CL) in this morning's chat off the $103 line as that was just utter nonsense – as is the move up in the indexes but we left ourselves bearish into the close so there was no need to pile on that side as we'll be perfectly happy just to get that reversal into the open.  

As you can see from this chart the disconnect between inventories (approaching a record) and price (and demand!) has never been more ridiculous and, as you can see from the NYMEX Futures Strip on WTIC – there are over 600M more barrels on order (1,000 barrels per contract) in what will become the front three months after next Friday's contract rollover – unless they manage to actually use the 172,378,000 barrels that are current scheduled for May delivery by next week.  

The good news for the oil bulls is Obama CAN'T release oil out of the SPR – THERE'S NOWHERE LEFT TO PUT IT.  Like natural gas pipelines, our domestic oil storage facilities are beginning to spill over and, if consumer demand doesn't pick up soon, we will have to turn ships back from the Gulf of Mexico as Cushing is full and Private Inventories are full and even the SPR only has room for about 30M more barrels before it too is full.  We can see the effect filling the pipelines had on natural gas – yesterday it slipped below the $2 mark – the lowest price ever recorded!

Keep in mind, we didn't go long on gasoline because there was demand or because of fundamentals – we went long on gasoline because energy prices in this country are nothing more than a manipulated Ponzi scheme that is VERY OBVIOUS to us at Philstockworld.  This allows us to play along at home while the big boys screw the American people.  We are not the wolves and we are certainly not the sheep but we do like a nice, juicy leg of lamb when it's served up for us like this – it sure beats being the sheep…

That's what this market is now – manipulation until the Fundamentals kick back in and then back to manipulation again.  The NY Times had a nice article last night showing that speculators are adding 40% to the price we pay for oil, even while US production is ramping up to record levels.  Our "Core PPI," it rose 0.3% in March, 50% more than Economorons had predicted while the 1% drop in March energy prices and a 2.5% dip in crude goods flattened the non-core PPI to 0% vs 0.2% predicted by clueless economists. 

The Core PPI is the one the Fed is supposed to be paying attention to and tomorrow we'll get the CPI index along with Consumer Sentiment but that won't be the end of it as Big Ben himself rounds out the week with a speech at the Russell Sage Foundation titled "Rethinking Finance."  Maybe Bernanke has finally rethought his own idiotic policies — nah….

We're watching the same levels as yesterday but the longer it takes to get to our weak bounce levels, the harder it will be to break them.  We have massive Fed speak today from Dudley (11:00), Plosser (12:30), Kocherlakota (1:00) and Raskin (3:00) along with a 30-year note auction at 1pm and then, after hours, we have earnings from Google and the Fed's Balance Sheet is released for our amusement

This is going to be fun!  


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  1. Oil Lines

    R3 – 105.70
    R2 – 104.41
    R1 – 103.54
    PP – 102.26
    S1 – 101.40
    S2 – 100.11
    S3 – 99.25


  2. Phil, I have to take my kid to the doctor in 30 minutes so I'll be offline when the market opens. I am posting the portfolio updates now but they won't reflect the prices at the open only prices at the close yesterday… I'll be back later this morning.


  3. JPM and WFC report before the open tomorrow and that might impact XLF and FAS! FAS looks to open a bit higher around $98.20 so no threat to the short calls yet.



  4. How is oil being held up!?!? I mean economy slowing, no demand, Iran situation cooling, stronger dollar yet oil is still over 100!?!?



  5. The PCLN puts are looking good and PCLN looks to open lower this morning! We are at 40% but with some help might get to a 50% win today!


  6. FCS is releasing earnings on 4/19 now! The big one tonight is GOOG and they are expected to beat…. Tomorrow morning we have JPM and WFC both expected to beat as well.


  7. Royal Dutch Shell – oil slick reported in the Gulf…YIKES!

    PP for today:



  8. OECD report published today without much following in the US media
    "How much consolidation is needed?
    Immediate rise in the underlying primary balance needed to bring debt to 50% of GDP in 2050
    "Bringing debt down to prudent levels will require sustained fiscal consolidations of more than 3% of GDP in many, though not all countries. Some countries must anticipate extremely large efforts: Japan faces fiscal tightening of up to 12% of GDP, while consolidation in the United States, the United Kingdom and New Zealand is projected at more than 8% of GDP"
    http://www.oecd.org/document/15/0,3746,en_2649_201185_50108431_1_1_1_1,00.html

    That is Austerity with a big A :)


  9. FU PCLN and CMG!!!


  10. $DX getting a little haircut.  FXE has a little spring in its step….


  11. Good morning! 

    We had a nice dip in oil down to $102.40 but now back to $102.95 for a possible re-load but they can probably play games until the nat gas inventories at 10:30.  It's a long cycle this month, usually they have to dump contracts on Tues or Wednesday but next week they have until Friday to square up positions, which means they can screw around for a couple of extra days so be very careful with oil.  

    The Dollar failed 79.75 so that's bullish for the moment as the Euro is at $1.316 and the Pound is at $1.595 so there's 3 good lines to watch.   80.86 Yen to the Dollar can't be making the BOJ happy nor can $1.2022 EUR/CHF.   Now we have to see if the Dollar holds 79.50 or gets back over 79.75 to risk more bearish positions. 

    We only need one more Must Hold to flip bullish again (3 of 5 rule) and the RUT is right at the 800 line.  That should be 80 on IWM (now 79.87) and the IWM weekly $78 calls are $1.95 so not even .10 in premium to play those calls over the $80 line (and, of course, the /TF RUT futures are always good when they clear a big level).  

    The VIX is still at 19.25 so not everyone is convinced all is well again.  1,372 is still the most critical level and then 1,384 confirms we're back on a bullish track but most of this is anticipation that Bernanke will hint at more QE on Friday.  

    Europe is flat.   They were up 1% and now flattish so we'll see how they do as well.   Still, on the whole, my gut says bearish but we must obey the technicals if we get them.  


  12. Chipotle's Q1 trending ahead of expectations, says Cleveland Research

    Cleveland believes Chipotle's Q1 comp momentum has accelerated and is tracking ahead of expectations with food costs moderating. The firm remains Buy rated on shares. :theflyonthewall.com


  13. FU Cleveland!!!!


  14. Looks like today is going to be the short squeeze


  15. No problem StJ, thanks for updates.  

    Oil/Jrom – Pure manipulated BS but what else is new?  As I noted above, no point in complaining – just go with it.  They hit their tagets, get a bunch of suckers to buy their contracts, and then they let it drift back down and do it again.  Hell, it's nice work if you can get it.  

    Gold is getting stretched (I hope) at $1,670.  Worth a flyer to short (/YG) there with very tight stops.  

    GOOG earnings have a lot of people excited tonight as well.  I think they've spent a lot of money recently and may disappoint slightly but wouldn't bet against them.  

    OECD/Lionel – Too depressing, no one wants to hear about it and it's never going to happen (not on purpose anyway).  

    CMG/Jabob – Hmm, that's odd.  I'm pretty sure expectations were that they'd have more than the one ShopHouse open by now.  They did get away with a price increase to $8.50 though and you don't need more sales if you can gouge your existing customers on each one.  The problem with that strategy is that you make more money but you also stop yourself from getting new customers from the more price-sensitive crowd and this is how a lot of retailers get into trouble as the switching costs for new customers becomes extreme.  

    No break below $103 on oil – maybe $103.50 will do better as that's our old line and should have strong resistance.  Dollar diving to 79.50 though so everything else flying up – gold zoomed right over $1,670 too.  


  16. this looks like a good op to get into the EDZ may 13/16 you mentioned on the 10th. I am comparing it now to the 12/15, now 1.20 ask. Selling the 12s as an offset.
    or wait til we move higher (if we do)


  17. Morning All – So if I understand this correctly, the jobs miss doesn't matter because the BoJ said it will QE to infinity and everyone is hoping Ben will announce QE tomorrow?  Magical. 


  18. FU MARKET!!!? How the hell are we up today!?!!?!? Are they even PRETENDING to have a reason?!?


  19. Phil USO – are we DDing on the April $40's now 0.93?


  20. We (they) have been trained that FREE MONEY solves everything. As long as it works, by their definitions (being able to buy cheap clothing, I-pads, expensive burritos, and booking cheap flights), there is no need to worry about all that other stuff.


  21. At the open: Dow +0.16% to 12826. S&P +0.19% to 1371. Nasdaq +0.25% to 3023.

    Treasurys: 30-year +0.11%. 10-yr +0.04%. 5-yr +0.02%.

    Commodities: Crude +0.25% to $102.95. Gold -0.24% to $1656.35.

    Currencies: Euro +0.38% vs. dollar. Yen +0.04%. Pound -0.27%.

    10:00 AM On the hour: Dow +0.57%. 10-yr -0.02%. Euro +0.53%vs. dollar. Crude +0.66% to $103.38. Gold +0.65% to $1671.05.

    Market preview: Stock futures are little changed, with the S&P  +0.1%, as dovish talk from Fed officials Dudley and Yellen are offset by the biggest rise in weekly jobless claims in nearly a year. European stocks slip after an Italian bond auction pushed yields to three-month highs. Asian bourses closed mostly higher. Still ahead: EIA natural gas, lots more Fedspeak.

    This could be the 3rd time in 3 years the markets and economic consensus have over-reacted to economic news, says BAML, noting the divergence between its Economic Diffusion Index (down) and the S&P (up). In mid-late 2011, the Index shot higher as stocks tanked, presaging a nice bull run. Could the opposite be in store now? 

    Investors stampeded out of the bullish camp in the week ended April 11, the AAII Sentiment Survey showing the percentage of bulls dropping 10 points to 28.1%. The bear camp soared 13.8 points to 41.6%, garnering not just the exiting bulls, but a few neutrals as well.

    The weekly report on mortgage rates from Freddie Mac shows the 30-year fixed average fell 10 bps to land at 3.88%, while the 15-year shed the same amount to drop to 3.11%. 

    March Producer Price Index: flat vs. +0.3% expected and +0.4% prior. Core PPI +0.3% vs. +0.2% expected and +0.2% prior.

    International Trade: The U.S. international trade deficit in goods and services decreased to $46.0B in February from $52.5B (revised) in January, as exports increased and imports decreased.

    Today's trade deficit data is enough to make Goldman lift its 2012 U.S. GDP growth forecast to 2.5% from a prior 2.3%. The firm is particularly encouraged by the 3.9% M/M drop seen in real goods imports, though it grants some of the decline is due to seasonality stemming from the Chinese New Year.

    Initial Jobless Claims: 380K vs. 359K consensus (prior week revised to 367K from 357K). Continuing claims -98K to 3.34M.

    The poor jobless claims print (including the previous week being revised higher, yet again) and fast core PPI number take some of the steam out of U.S. stock index futures.  S&P 500 +0.2% after being up more than 0.5%. Futures had been given a charge on extremely dovish comments out of Fed Vice-Chair Yellen last night.

     "In effect there has been a significant shortfall in the overall amount of monetary policy stimulus since early 2009," said Fed Vice-Chair Yellen last night, suggesting even with all of its extraordinary measures, the central bank hasn't done enough. She believes ZIRP could stay in place well beyond the current target of late 2014. 

    "It is too soon to conclude that we are out of the woods," says NY Fed chief Bill Dudley, noting things looked rosy at this point in 2010 and 2011, only to fade later. The mild winter may have pulled forward some economic activity and hiring, he believes. It's a dovish speech that should eliminate any thought the key powers on the FOMC are considering exit strategies in 2012.

    Portugal's Banco Espirito Santo crumbles, off about 15% after it announces plans to raise €1B in capital through a rights issue. Shares are to be issued at €0.395 each, a 66% discount to yesterday's close. The PSI 20 Index -1.9%.

    Italy sells €2.89B of 3-year notes priced to yield 3.89% vs. 2.76% at last month's sale. Demand was roughly inline with expectations the country would move €3B of paper. In the secondary market, Italian 10-year BTPs -11 bps to 5.42%, 2-years -6 bps to 3.37%. Italian shares -0.8%.

    Some colorful comments from Polish central bank chief Marek Belka hit the wire. He says a EMU collapse would be like a volcano eruption at a neighbor's. He believes EMU will survive, but maybe in an altered form. 

    Chinese bank lending soared to ¥1T ($160B) in March, far higher than expectations for ¥800B. Sources say Beijing has set a target of ¥8T in lending this year (against ¥7-7.5T in 2011). Money supply growth in March was 13.4% Y/Y, up from 13% previously.

    Construction activity appears to have picked up a bit over the past months in China, according to a Standard Chartered Survey. Yet looking at a chart of sharply rising property inventory, one wonders if that's a good thing. As for 2012's big stimulus – social housing – survey respondents believe little if any of these projects are actually new. 

    "Some people have dubbed the party 'The Family,'" says Jim Chanos of the Chinese communists. He points to the scandal and murder charges surrounding key party chief Bo Xilai as a "peek behind the curtain."

    Jim Chanos brushes off chatter about the large Chinese banks being broken up, calling them "arms of state policy. They loan because the local party official … tells them we need a new stadium … I really doubt the party is going to give up a lever of power." (Chanos earlier on "the party.") 

    More from Jim Chanos: The contrarian fund manager also says he's short Coinstar (CSTR -2.4%) and Dell (DELL -0.2%) on account of technology trends. Chanos expects the adoption of streaming video to gradually eat into Coinstar's DVD rental sales, and he predicts tablet proliferation will do a number on Dell's PC business.  (video) - I don't agree on CSTR because you can't stream blue-ray.  

    OPEC adds it voice to the IEA's from earlier, stating the oil market is well-supplied, and only the perception of danger of a shortage due to Iran tensions is keeping the price high (no mention of Western central banks?). The group says its March output rose 136K bpd to 31.3M bpd, 1.3M bpd greater than the planet's need.

    Just what we need, more and much BIGGER speculators:  The SEC and CFTC are considering an $8B cutoff for determining which derivatives traders should be classified as swap dealers and required to set aside more capital. It's a far cry from the $100M threshold the CFTC proposed in 2010.

    Ford (F +0.2%) and Dow Chemical (DOW +1.5%announce a JV to explore better ways to use carbon fiber in car and truck components. The aim is to improve fuel efficiency by making vehicles lighter, with Ford aiming to cut between 250 and 750 pounds from the weight of its cars and trucks by 2020.


  22. 10 am HOD?


  23. Someone 'Tweet' that Iran has agreed to everything.  That should make oil drop very quickly…..



  24. A lithium-ion battery manufactured by A123 Systems (
    AONE-1.9%is behind the injury-causing explosion at a General Motors (GM+0.6%) battery lab, according to reports.

    Windows Phone (MSFT) is the Ford Puma of mobile platforms, says Dusan Belic: everyone admires it, but few actually want to buy it, not when iOS and Android boast much larger app libraries, and continue to make improvements. The commentary comes a day after Nokia (NOK) said it shipped 2M+ Windows Phones in Q1, and a week after ABI predicted Windows Phone would account for only 2% of the 36B app downloads it expects to see this year.

    Facebook's (FB) willingness to pony up for Instagram bodes well for other Silicon Valley tech hotshots, according to VCs. The company's decision to pay a pretty penny for a 12-person startup with no revenue and its ability to bid against Google could help other up-and-comers down the road including fast-growing Pinterest

    JPMorgan upgrades AT&T (T) to Overweight from Neutral on a valuation call and with more than a passing glance at T's cozy 5.78% yield. Shares +1.2% premarket.

    Societe Generale downgrades Nokia (NOK) to Hold, saying the Finnish mobile phone manufacturer's most serious issue is that it sold less handset devices in Q1 than forecast. Shares -5.4%premarket. (Earlier: Nokia shedding assets)

    The DOJ's price-fixing suit against Apple (AAPL) and 2 publishers remains a hot-button subject. CNET concludes the publishers may be in trouble, but Apple probably isn't, given it wasn't present at a key meeting. Tim Carmody thinks the terms of the settlement with 3 publishers should leave Jeff Bezos smiling. Matthew Ingram argues Amazon (AMZN) is the most sympathetic party in this dispute, since it's ultimately fighting to offer consumers lower e-book prices.


  25. EDZ/Morx – Yep, good time to short US stuff too.  

    Let's double down on USO April $40 puts, now .92 – in $25KP (10 more) and $5KP (5 more).

    Also, let's add 20 DIA May $124 puts at $1.25 in $25KP and 5 of them in $5KP.  


  26. What's promoting the rally today, the bad unemployment numbers?


  27. TZA May $16/20 bull call spread at $2, or SQQQ May $9/11 bull call spread at $1.20 – selling any of yesterday's short puts from the Alert to offset:  

     

    On the bullish bandwagon – we were looking at the following Dow components (with yesterday's close):  BA ($71.79), CSCO ($19.70), HPQ ($23.48), VZ ($36.87), WMT ($59.61) and XOM ($82.83)

    • BA Jan $50 puts can be sold for $1.20 and that's free money for PM players.  Selling the $60 puts for $2.65 is a very nice net $57.35 entry and raises some nice cash to offset some short plays.  
    • CSCO Jan $17.50 puts can be sold for $1.10.  
    • HPQ Jan $20 puts can be sold for $1.30 
    • VZ 2014 $35 puts can be sold for $4.25. 
    • WMT Jan $55 puts can be sold for $2.05 but an interesting spread is buying the June $55 puts for .34 and selling the Sept $55 puts for $1.10 on the assumption that the Sept puts (163 days) decay at more than 1/3 the rate of the June puts (65 days) and, of course, if the VIX drops – it should be in your favor as the longer puts lose premium.  If not – you are just short the Sept $55 puts at net .76 – which isn't terrible but this is a fun arb play as it stands.  
    • XOM 2014 $60 puts are $3.80 – also free money for PM players.  

     


  28. Just doesn't matter/Ink – Well Yellen was her doveish self yesterday and then we have bad jobs numbers and a flat non-core PPI (fear of deflation) and we have Ben on deck tomorrow AND the BOJ saying no matter how much we print – they will print more and we have China lending 25% more than we thought so, not only does bad news not matter – it's so bad it's GOOD!



  29. how bout GLL? May 17s.
    thank you


  30. Phil – long DX from the 79.5 line?


  31. FYI – I'm changing my handle to from "Burrben" to "DotheOppositeOfBurrben" tomorrow.  I sell puts…we crash.  I sell calls…we fly.  
    hehehehe.  


  32. Burrben
    You have family here!


  33. Today may be the biggest joke to date- the news continues to get worse and they keep running it higher- how can anyone have any belief in our markets anymore?


  34. I think we gain it all back today, crazy


  35.  I pray someday these pricks meet the same fate as the white collar crooks in China….


  36. Sage
     
    Yep….unbelievable.  They have the shorts so paranoid that they bail at the drop of a hat.


  37. Now that the Bots got their attention they'll start the slow crawl upward.


  38. jromeha- I am all in favor of us reopening Alcatraz to send them where they belong!!!


  39. Burrben, dclark41        George Costanza does the opposite
     
     
    http://www.youtube.com/watch?v=RerJWv5vwxc  


  40. Jthoma – I think the belief is disappearing as money continues to flow out of equity funds.  Phil is right, the fact is that Yellen did say ZIRP until 2015 or 2016 I believe, BoJ QE to the moon, etc.  I even read messages about Lee Adler calling this a manipulated joke of a market. 


  41. one of my favorite quotes…Captain Renault: I'm shocked, shocked to find that gambling is going on in here.

     
    I suppose we could insert manipulation for gambling and that's how the CBs henchmen could answer the questions from congress on Cspan


  42. Stock:
    VERY FUNNY!


  43. MCD might be good to sell puts today. if you really want to own it.


  44. Pharm, do you know why CLDX is down today?


  45. Glad I played bullish a couple days ago but incredibly shocked we are up today after the Italian bond yields, unemployment claims miss and India industrial output.  Going back buy back my bearish positions much lower by EOD.  McClellan should be even or slightly up now if we hold today.


  46. I find it amusing that three years amd trillions of dollars later, that they[the Fed] are still trying to figure things out by continuing with their easy money policies.  I also find it interesting that I have yet to hear any of them say "we've spent trillions so far and all we've gotten is this "modest" recovery".  It's all a big joke if you ask me but unfortunately, the butt of the joke will be on all of us.      


  47. Good call on USO Yshen!  

    Dollar bouncing right off 79.50 so we'll see what happens.  Oil all the way to $104 now on lower than expected build in nat gas but no reason it should last:  

    EIA Natural Gas Inventory: +8bcf vs. consensus of +42 bcf. Futures +0.93% to $2.00


  48. Phil/USO Puts – Well I went for the $40 Puts, but what's going on w/ Valero??


  49. GLL/Morx – We have the May $16s, now $1.10 and I still like those as a new entry.  Not ready to dd just yet on our portfolios.  

    Dollar/Jrom – Sure, that's a good line to play for a bounce but only as a momentum play. 

    Opposite/Burr, DC – That may be because, at this volume level, you're the only ones playing.  

    IWM $78s at $2.66 already (up 35%), now we can watch that 807.50 line on the RUT for a stop (probably $2.50 on the calls).  

    Next big line is Dow 12,950 and the April $127 calls at $2.70 have .35 premium, which isn't bad for a week over that line with very tight stops.  

     


  50. SCO/Phil – as an alternate play on oil for next week, how do you like SCO April 32/34 BCS @ 1.40 – gives a 40% return in one week if oil fails to hold higher than 104.20 end of next week…


  51. Phil, I'm not holding most of the naked positions in the 25KP so given my positions are not quite as bearish, ie FAS, would you still hold the DDM calls. I'm debating whether I should use this spike to get out.


  52. CSTR / Phil – You can't stream Blu-Ray per se, but on Netflix you can stream in HD (1080p – the same as Blu-Ray in line resolution) and while the picture does suffer a bit from compression (especially in dynamic scenes which you generally don't get with Blu-Ray except with bad transfers), it is generally good enough for most people! I am guessing that in the long run, with bigger pipes and better compression algos that we will approach Blu-Ray quality in streaming. 

    I think that the bigger support for CSTR is that not everything is available for streaming yet and as long as it's the case there will be a business for DVD rentals. Also, not everybody has fiber coming to their homes either! I am guessing that we have another 10 years of potential business, but I would not want to bet on long time growth!


  53. VLO/Cats – Well gasoline flew up, now $3.33 and that's all profit for VLO.  

    SCO/Scott – I like it but make sure you have a reasonable stop.  We're not going to stay in April over the weekend.  If no sell-off today, we'll move to May. 

    DDM/$25KP, Jrod – For the $25KP, they're a hedge that we need and they are May so no reason to get out at $1.25.  If you are not as bearish as our other positions and regretted having them, then it is a good idea to at least lighten up.  Keep in mind things don't have to be all or nothing.  

    CSTR/StJ – Sure, long-term it's a dead model (that part of their business) but it's not a reason to panic now.  They are overpriced at $62 anyway so it's not like I would buy them up here – I just don't think the company is dead yet.  CSTR also has a partnership with VZ so maybe NFLX needs to worry about them and not vs. vs. 

    And now we're testing 1,384 – that was quick!  This is actually bullish if we hold it as we had a weak bounce yesterday and now a strong bounce today so a move over the strong bounce is certainly a bullish one but, of course, there's been a huge amount of pumping to get us here so some healthy skepticism is required. 


  54. Stockbern – Yep, that's where I got it from.  Watching Seinfeld was one of the best things ever I did with my time!



  55. The market is a great bore right now, so I went looking for entertainment.  Selected remarks from a Spanish portfolio manager's report, roughly translated: "As mentioned in The Economist, the U.S. needs a budget deficit of 7.8%  to grow at 2.1%, Japan needs an 8% deficit to grow at 1.7%, the U.S. is waiting until after the elections to attack their problems [over there no one pays taxes, but neither do they cut spending], they continue to adulterate their unemployment figures by dropping out any worker who hasn't found a job in 99 weeks, the U.S. savings rate continues to fall and they are back to using borrowed money for consumption as in the bad old days of 2007…"  
     
    The report concludes: "One way to resolve the Spanish deficit problem is to make rich single people pay very high taxes.  It is not fair that some men should be happier than others.[ una forma de solucionar el déficit.... Los solterones ricos son los que deberían pagar fuertes impuestos. No es justo que algunos hombres sean más felices que los demás."]


  56. CLDX – bouncing b'w areas now.  Buying back April $5 calls for 5c, selling May $5s for 35c.  That makes the play from a few weeks ago profitable with the sale of the puts – we bought them back (for now).


  57. alik – in a post recently Pharm said it would be a bumpy ride for CLDX. I doub dwn on my aug 4 calls and sold a couple aug 4 puts today. but i claim to know nothing and can prove i don't have good sense. FWIW.
    in the news this morning someone initiated them as a buy. doesn't seem like that should cause them to drop but like i said…


  58. oops. hi pharm.


  59. Not Fair/Zero – indeed. perhaps your spanish fund manager will enjoy this.


  60. Scott:  English chick, bluegrass backing track, very funny.


  61. Nomura's New York offices, located at the World Financial Center, have been evacuated. The reason is unclear, reports Dow Jones, which says there's no fire. 

    11:00 AM On the hour: Dow +0.9%. 10-yr -0.08%. Euro +0.52% vs. dollar. Crude +1.14% to $103.88. Gold +0.85% to $1674.35.

    11:48 AM European shares close mostly higher after a volatile session, with Spain the only index in the red. Stoxx 50 +0.4%, Germany +1%, France +1%, Italy +1.1%, Spain -0.7%, U.K. +1.3%. Euro +0.5% at $1.3172.

    Yesterday's stock market rise didn't create much optimism that the recent pullback is over. Trading volume during the one-day uptick came in below the 2012 average and was 19% lower than Tuesday’s thrashing. Net new 52-week highs peaked at 280 companies on Feb. 3, but yesterday only 33 companies hit new highs and 27 hit new lows, for a net of only six.

    Add Dan Fuss to the list of bond fund giants liking equities more than fixed income. "We're in the foothills of a gradual rise in interest rates," he says, adding the move will be secular in nature. When the Fed stops sitting on the long end, "you need to get out of the market risk that's in fixed income and into company-specific risk you can find in stocks.

    Fed May Extend Support Past 2014, Official Says (NYT)

    5 Big Fears Hanging Over the Stock Market (Fiscal Times)

    Greece's central bank – Bank of Greece – is set to distributenearly €100M to its shareholders and the government after generating that much profit in 2011, a sweet deal given the state of the country and its banks, to which the BoG has plenty of exposure. The BoG is a private corporation and its shares trade on the stock exchange (-62% Y/Y).

    The RBI is expected to launch the first rate-cutting cycle in India in 3 years at its April 17 meeting, but a 25 basis point move would be little more than symbolic, argues Jeff Glekin. With the central government in "policy meltdown," it's up to the central bank to go for bold stimulus with aggressive rate cuts. EPI +23% YTD, but -21% Y/Y.

    "Profumo, Berlusconi, and Vince Foster all rolled into one," is how Patrick Chovanec describes the Bo Xilai affair in China. While he agrees Bo's ouster is not likely to threaten the Communist Party's hold on power, it is sure to "shake things up." 

    Wells Fargo (WFCfaces a U.S. government probe over claims it neglects bank-owned homes in minority communities, Bloomberg reports. The HUD agency is examining allegations that the no. 1 U.S. mortgage lender violated fair-lending laws; if it finds violations and can’t reach an agreement to have the bank remedy them, the matter may be transferred to the Justice Department.

    Wow, we are so going straight to Hell!!!  IntercontinentalExchange (ICE -0.4%plans to introduce futures in corn, wheat, soybeans, soybean oil and soybean meal on May 14 pending regulatory approval. ICE COO Ben Jackson says the move is being initiated to meet customer demand. 

    Could an Internet upstart upend the longtime dominance of razor-selling giants Proctor & Gamble (PG -0.5%) and Energizer Holdings (ENR +0.7%)? A few years ago the answer would have been an almost resoundingly no, but the advent of social networking sites gives Dollar Shave Club a better chance of going viral to spread the word about its low-cost razors without spending hundreds of millions in advertising.

    Shares of Crocs (CROX +1.7%) trade higher after Longbow Research lines up the company with a Buy rating and $26 price target on the strength of the shoe seller's vision in Asia.

    Merck's (MRK -0.6%) baldness drug Propecia and enlarged prostate therapy Proscar will carry labels linking them to sexual dysfunction after the drugs are no longer used, the FDA says. Propecia’s packaging will include warnings about various disorders that occur after patients stop using the medicines; Proscar’s similar warning is limited to decreased libido.

    Heavily-shorted Fusion-io (FIO +10.9%) soars after Pipersays it believes the flash memory module vendor is working on an OEM deal with Cisco related to its popular UCS server line. Piper adds Cisco could become a 10% customer in the next 3-4 quarters, and that top customer Facebook could generate $201M in 2012 revenue. In addition, Fusion-io, which primarily relies on the server market, is announcing Fusion ioFX, a solution meant for workstations handling content creation apps.

    Though Nomura isn't thrilled with Gartner's Q1 PC data (I,II), it, along with similar data from IDC, is stoking a major rally in H-P (HPQ +6.2%). Gartner estimates H-P's share rose 30 bps Y/Y and 120 bps Q/Q, reversing the declines seen due to last year's drama. Dell (DELL +0.1%), which is believed to have lost share, and just received bearish comments from Jim Chanos, is undeperforming.

    Barclays survey of 100 CIOs found 76 of them saying they've already deployed tablets, or are trialing/testing them. Troubling for the PC industry is the fact 40% said the tablets they purchased would replace laptops. In-line with existing data, the iPad (AAPL) is by far the most popular enterprise tablet, with over 80% of CIOs saying they'll support it. Interest in Android (GOOG) tablets is above 40%, but down from August. 

    Credit Suisse forecasts smartphone shipments will rise 46% in 2012 to 688M (in-line with UBS' estimate), and reach 1.05B in 2014. Apple (AAPL) is seen accounting for 23% of this year's smartphone sales (a figure that translates into 158M iPhones), and troubled Nokia (NOK) a mere 11%. CS also expects smartphone demand to result in Qualcomm's (QCOM) licensing business, whose royalty revenue benefits from higher phone prices, growing 17% in 2012.


  62. LinkedIn (LNKD +7.2%) jumps after SunTrust starts coverage with a Buy, and Morgan Stanley (Overweight) lifts its PT to $115 from $105. MS says its analysis of LinkedIn's sales efficiency found the company's recent aggressive hiring had a minimal impact on productivity, and that leads the firm to hike its margin forecasts. SunTrust is also starting Google (GOOG +1.3%), Web.com (WWWW+5%) and Netflix (NFLX +3.2%) at Buy.

    Barnes & Noble (BKS -4.0%) drops again as the e-book settlement (III) appears likely to prompt rival Amazon to cut prices to grab market share and further pressure profit margins for BKS if it gets into an e-book pricing war.

    Amazon (AMZN) makes it easier to get rid of dust-collecting CDs, offering to buy them back in exchange for AMZN gift cards. AMZN hopes the service eventually will translate to more purchases and more loyal customers; studies show that when consumers redeem gift cards or credit, they tend to spend 40% more than the value of that credit. 

    BIASES THAT CRIPPLE SMART DECISION-MAKING (Emotion Machine)

    How My Job as a Business Journalist Has Changed: Greenberg (CNBC)


  63. EXEL/Pharm – seem to be lifting a tiny bit off their low this week.. anything good?


  64. 12950 is a tough nut to crack so far and straddling that 1382 line.  Very tempted to buy some DIA puts with a tight stop.


  65. Scott – again, just noise. Keep selling premium.  SGEN no different.  Limits upside, protects against the downside.

     

    From Lee A. @ WSE:

    The greater problem as I see it, is that people  reading the mainstream media and listening to the conomic establishment, are unknowingly being engaged in fiction, and that makes it completely impossible to get at the facts.  When you look at what’s real, instead of the seasonally adjusted nonsense and the conomists ridiculous interpretations of it, it’s absolutely clear that there’s no sign, no hint, not  a scintilla of evidence, in this data, that the economy is weakening.

    Again, no more QE…..let's see how we do on our own…..


  66. Down oil!  Wheeeeee


  67. Great economic summary, ZZ – sums it up nicely!

    Noon volume is 44M on the Dow and it does look like we've run out of bull gas but Dollar laying around at 79.50 just waiting for the Fed to kick it below the line. 

    How's this for a stick save?

     


  68. Pharm/WSE – How do we account for the quality of jobs being added and the fact that it seems logical that most of the firing would happen at the onset of the financial turmoil and slowly start winding down as less and less people are able to be fired?  Unless we are now exporting accounting services, bartending services, etc., I would think that L.A.'s chart tells part of the story but certainly not all of it.  Furthermore, I believe our exports amount to about $1.5T which to me says that most of the GDP is just money going in a circle within the US and counted over and over again year after year as new GDP.  The rest is just credit creation, money printing, etc.  I could be totally wrong but these are just my thoughts.


  69. Anyone playing Google earnings?


  70. As always, I have followed faithfully advice from a bear about two years ago.
    B T M F D


  71. OPEN up 5% today, 1st Q earnings May 1.


  72. Good Afternoon .  Very interesting.  Markets up,  AAPL down.  Staying in 'AAPL cash'     


  73. aapl red?? i thought they only came in green now?


  74. FAS Money – No changes but now we'll have to roll those weekly $100s tomorrow, now a ridiculous $2.80 with a day to go (.80 premium).  Figure they should be $2.20 or less and the April $105s are $2.35 so that's where we're looking but let's see tomorrow.  

    IWM Money – TNA back at $57.50 so I'm very glad we only sold one short call.  

    $5KP – DMND not up today, getting sad on that one.  GLL May $16s finally at  a point to DD at $1 if we get it.  UUS just did the DD at .92, which dropped our basis to $1.06 and we do want to get 1/2 back out there.  

    $25KP:

    • DMND – Spread now but we'll keep an eye on it. 
    • XRT – Back at $60.60 but feeling better about it. 
    • BBY – Hopefully found a floor
    • SCO – Still OK
    • SQQQ – Wrong way again but June
    • FAS – Well-balanced
    • GLL – Same DD at $1 
    • PCLN – I would have taken $9.80 and ran if I caught it, now $8.50 and I think we can do better.  
    • DDM – As above, it's an upside hedge
    • USO – Just did the DD at .92, which dropped our basis to $1.06 and we do want to get 1/2 back out there.  

  75. Gold – "it" wants to be back above 1680. prediction, keeps over 1670 today, shoots for 1680 tomorrow. if can't hold that, then short it.


  76. Zero/OPEN – I think this one is setting up for a spectacular decline after they miss on May 1st.  The article below lays out the case for how the earnings estimates are way too high. It sounds like there is a good chance that they have negative YOY growth in earnings.  I'm long puts and short calls.
     
    http://seekingalpha.com/article/348821-looking-beneath-opentable-s-q4-upside-surprise


  77. @Phil "I don't agree on CSTR because you can't stream blue-ray"
    As an expert in this field I can say you are not completely correct.
    With new MPEG4 encoders you can stream HD.
    It may take another 2-3 years until the whole infrastructure in place though


  78. Phil Holding the following GOOG position long 2x Jan13 bought for 35.70c now 101.40 Sold after rolling already various times 2x Jun12 575c for 84.12 now 76.70 Does it pay to roll the caller to say Jan 610 thanks


  79. Phil-- I think you mentioned yesterday all the upgrades of pcln,cmg, and all of the other momo drek… why do you think it would come all of a sudden weeks/month before earnings and after such an already huge run in the price? Did you say because of AAPL? If so, what do you mean? Swapping? 


  80. $25KP – The May 16 GLL calls have just hit $1.00.


  81. Do we still like BKS?  Getting crushed today.


  82. It's amazing what a couple of down days can do to the psyche of investors:

    http://pragcap.com/bullish-sentiment-plunges-to-a-7-month-low

    This almost a contrarian indicator now… I am going to start using the extreme bearishness and extreme bulishness as oversold and overbought lines!


  83. May 16 GLL calls did not fill at 1.00…


  84. Gold/Scott – If the Dollar hadn't dropped 0.8% today, I'd be more impressed with gold's 1% gain (same goes for the rest of the markets, oil, etc.).  

    OPEN/Palotay – I use them all the time for reservations now.  Still don't like the stock but great for getting a table in NYC.  

    CSTR/Lol – I stand corrected and I will amend my statement to "because you can't stream blue-ray in the near future."  Better?  If you want to keep looking ahead, FDX is in trouble when they come up with teleporters or, in the very least, 3D printers that will print whatever you buy right at home.  

    GOOG/Yodi – I'd roll them to more premium but why still in $101.40 calls?  You can be in 4x the 2014 $600/700 bull call spreads at $46 and sell 3 June $610 calls at $50 and then your callers have $48 of premium (about 1/3) and you are very well covered to $700+.  If GOOG shoots higher, you can just buy more long spreads but if GOOG falls, your long spreads will barely budge while the short callers are wiped out. 

    Upgrades/Jabob -I think the Nas is being pumped up to cover the exit of AAPL while they can.  The Momos are used because you have all the trained sheep who buy the dips and are scared to short them so the way is clear for pumpers to jack them up and it's a lot easier to pop CMG up $15 (2.5%) to cause some excitement than it is to move MSFT or CSCO, which have huge market caps.  

    GLL/StJ – Thanks.  I'm happy with that entry and let's keep an eye on USO except I forgot we can't lighten up in the $5KP as it makes a day trade!  

    BKS/ZZ – We liked them a month ago when they were $13 and they went to $14.70 but now at $11, looking lame so I'd rather wait for the selling to stop – tempting though it may be.  


  85. Daily show was great yesterday – all 3 segments.  The open on Santorum dropping out was great.  


  86. GLL / Phil / StJ – Just FYI, i got a fill on the GLL 16 calls @ 1.00 even (12:22:57 today).


  87. FTR – looks like it hit a ceiling today.


  88. Phil, if we push at 13000 but can't break it , would you suggest buying some puts for tomorrow with a .20 cent stop?


  89. 12:00 PM On the hour: Dow +1.07%. 10-yr -0.14%. Euro +0.45%vs. dollar. Crude +1.2% to $103.94. Gold +0.91% to $1675.35.

    1:00 PM On the hour: Dow +1.26%. 10-yr -0.18%. Euro +0.51% vs. dollar. Crude +0.88% to $103.61. Gold +0.95% to $1676.05.

    1:04 PM The Treasury sells $13B in reopened 30-year bonds at 3.23%. Bid-to-cover ratio of 2.76, vs. a recent average of 2.82; indirect bidders take 30.7%, vs. a recent 30.5%. Direct bidders take 13.4%, vs. a recent 18.2%.

    2:00 PM On the hour: Dow +1.26%. 10-yr -0.06%. Euro +0.67% vs. dollar. Crude +0.41% to $103.13. Gold +1.06% to $1677.85.

    The Fed should take even more steps towards transparency, argues Philadelphia Fed President Plosser, saying a better-informed public would improve the effectiveness of policy. He calls for adopting a "reaction function," at which point it would be understood the Fed would take action.

    "The spirit, excitement, and vigor of Wall Street is gone," Mike Steinhardt tells Bloomberg TV, adding he has little reason to be wildly bullish. "We don't hear (the Fed) talking about widows and orphans. Who has benefited from low rates? It's been the banks." In an era of perpetual ZIRP, he's a fan of high dividend stocks. 

    Does "sell in May and go away" really work? It sure does, Eddy Elfenbein writes after crunching numbers back to 1896. Historically, the Dow hits a peak on May 6 and pulls back an average of 1.33% by May 25; by Oct. 27, the Dow has advanced just 0.34% from May 6. It means the market is nearly flat for a third of the year; for the rest of the year, the market gains an average 7.5%.

    Canadian consumers pushed their non-mortgage debt up 3.4% Y/Y in Q1, with a 9.7% increase in auto loans leading the way. Credit card debt fell for the 5th consecutive quarter, but its drop has been mirrored by an increase in borrowing on lines of credit.

    IMF chief Christine Lagarde suggests the fund may need less than the $500B it has been pumping its members for as a kitty for crisis intervention. "The needs now may not be quite as large as we had estimated earlier this year," thanks to actions by European institutions, she says. 

    Argentina's appears to be making an already difficult environment worse for attracting investors to develop its Vaca Muerta shale fields, after revoking licenses from YPF SA (YPF +8.3%) and Petroleo Brasileiro SA (PBR +2.5%) over an investment dispute. The deposit holds over 23B boe in an area roughly the size of Connecticuit. Unfortunately, says RBC's Peter Hutton, “None of the majors would want to step into a field that’s been expropriated from a fellow major.”

    Coal companies Alpha Natural Resources (ANR +8.9%) and Peabody Energy (BTU +7.3%) rank among the day's top gainers amid signs the Fed may pump up growth after all (III) and sentiment that the worst could be over for coal shares – they're "a great buying opportunity now," BlackRock's Dan Rice says, expecting U.S. coal output to decline 11% this year and help shore up coal prices.

    CHINA! A rumor China's Q1 GDP is going to print 9% tonight is being give some credit for today's rally in risk assets. Putting aside suspicions about Chinese data, we forget – is it bullish or bearish for the number to come in fast? Wouldn't strong Q1 GDP lessen the need for monetary ease - rumors of which are also getting credit for today's rally. 

    CHINA!! China may cut bank reserve ratio requirements as soon as early next week, according to SGH Macro Advisors, which cites "well-informed Chinese sources." Those hoping for an ease will have an eye on tonight's Q1 GDP report to see if it confirms a slowing economy. (more on China stimulus)

    CHINA!!! China's monetary stimulus is starting to take effect, writes Sober Look, pointing to March's jump in new lending. A look at a chart of new loans over a 4-year period shows what an outlier March's figure is. The market is looking for stimulus "no matter where it comes from … China seems to be just as good (as the Fed)." 

    CHINA!!!! The China Internet Syndrome: A variety of websites experienced outages in China leading to widespread speculation that the nation's network infrastructure could be teetering on the brink or that government filters ran amok. Though services have been largely restored, the episode highlights the tightrope China Internet stocks such as SINARENNDANG, YOUKU, and SOHU must walk.

    Shell (RDS.A) says an inspection of the company's assets in the area of the Gulf where an oil sheen was spotted reveals all operations as normal with no sign of leaks. Shares +0.5% after falling nearly 5% premarket. (PR)

    Boeing (BA +2.4%) updates its order and delivery totals for 2012 after adjusting for recent buys and cancellations. The manufacturer now shows 415 net orders for the year, led by a whopping order for 230 737s from Lion Air placed in February.

    Chipotle (CMG +1.6%) trades higher after Argus initiates the shares with a Buy rating. The firm says same-store sales and unit growth are likely to remain among the highest in the sector, and that recent price increases have been absorbed by customers.

    Barclays thinks the recent pullback in chip stocks represents puts the risk/reward in the sector's favor heading into earnings season, and believes inventory replenishment will help drive shares higher into 2H. The firm likes BRCMQCOMSWKS, and AVGO on account of their Apple/Samsung exposure (III), and is also a fan of telecom chipmakers ALTR and CAVM. (Needham



  90. Pandora (
    P +3%) is rallying in spite of being started at Neutral by SunTrust. The company has become a source of lively debate on SA: Helix Investment praises Pandora's strong mobile growth and local ad sales efforts, and Rocco Pendola follows up by discussing its forward-looking, tech-oriented management. Spencer Osborne, commenting on a digital media study, voices concerns about Pandora's high content costs and competition.

    Three months after Google (GOOG +1.3%) tumbled on a soft Q4 report marked by an 8% cost-per-click decline, the Street badly wants to see a rebound in today's Q1 report, one that would validate Google's assertion the decline was mostly due to forex issues and algorithm changes. Skeptics fear the decline has much to do with competition (III) from the likes of Facebook and Amazon, weak Euro ad spending, and the lower prices generated by mobile search ads. (earlier)

    Three lunchtime reads:

    1) Five money moves a cautious capitalist is making now

    2) Handicapping the obesity race

    3) Bonds: BlackRock's Street shortcut


  91. APPLE – Is anyone taking a stab at some out of the money puts on Apple?  Phil? Iflan?


  92. GLL/Scott – Nice, thanks.  Never hurts to ask for your price, right?   I hope that's not it for FTR but they are a very long-term position – nothing good expected this Q or next from them.  My only concern is someone buys them.  

    13,000/Rustle – We're not getting there today, that's 2.2% up from the 12,720 bottom.  We fell from 13,290 so down 570 (4.2%) so we look for 114 (12,834) and 228 (12,948), which we're over but not likely we make a 50% move retrace today to 13,005.  So, do we like DIA puts?  Our May $124 puts from earlier already got smacked down to $1.05 and I still like those but not enough to DD yet (more likely we'll roll as it's just .40 to go to the $126 puts, now $1.47).  That's why I took those this morning – if the Dow fails – they will pay well but if GOOG rallies us – they will be cheap to roll and DD.  

    AAPL/Palotay – We took puts when they were at $640, not as much fun now but, if you want new ones I'd go with the July $480 puts at $6 as the $450 puts (up $30 on AAPL) are still $4 and the $510 puts (down $30) are $10 so a 2:1 risk/reward is a good spot to enter a speculative put.  


  93. phil, any adjustments on june cmg 345 puts? now $2.45 (down from $3.30, last adjustment).  TIA


  94. CMG/Lunar – Not sure where it's going to stop (if ever) so better to wait at the moment.  Some I wanted to chase but you can't chase them all – too expensive.  

    Dollar 79.44

    GS having a hell of a good day.  

    XLF testing $15.50 so clearly people think we have good earnings coming up and QE3.

    NFLX up 4.3%, BIDU up 3.7%, CHK up 3.3% with nat gas at $1.99, HPQ up 7% (finally), FCX up 6% (our bullish offset), OIH up 3.5%, VLO up 5%, X up 7% – Transports up 2.5%….  Best day on the S&P since March 13th they say.  CNBC acting like getting 1/2 of the loss back is a reason to break out the party hats.  


  95. MMM – heckuva pop there too today. hmm. dow stocks getting juiced? i suppose the plunge protection team actons aren't called QE..


  96. USA the land of the tax breaks for corporations:

    http://ftalphaville.ft.com/blog/2012/04/12/958861/all-the-best-tax-breaks-are-made-in-america/

    All of these companies are in the Fortune 500 and there they are not paying US federal taxes over a four year period. The back of the report has notes on some of the main sources of the tax breaks in use, on a company-by-company basis. Trying to disentangle US federal taxes from tax disclosures in 10-Ks is like pulling teeth, so it’s quite an admirable effort.

    So much for a 35% tax rate!


  97. Phil, what do you want to do about the April USO 40 puts, I know I never got filled to sell half so still have a full load?


  98. XLF / Phil – With JPM and WFC tomorrow and C on Monday morning, we are going to get a good early look at bank earnings and I guess we can plan accordingly!


  99. 70mm shares at 3:17 seems light.


  100. today's action seems silly: rumors of better china gdp than expected tonight…which is laughable that people running big money pay attention to that fabricated report…and all-knowing euro bouncing…so everything must be fixed in europe…and fed doves out in force today…so buy buy buy!!!


  101. Phil…getting killed on CMG 4/21 435 calls,have 10 @ 2.40.Whats my best roll out of this mess?Last few days have been insane.THX


  102. I'm bearish again.  Hope Google stinks up the joint like last quarter.


  103.  Rustle: On Goog, me too.  I think Google has jumped the shark.  It's management is twisting and turning, they seem lost in the woods as to how to monetize their products.  The "shark" episode itself was it's giant client data faux pas, which it shoved through in a very unfriendly way, but it has been losing strategic steam for awhile.


  104. 3:00 PM On the hour: Dow +1.36%. 10-yr -0.11%. Euro +0.66% vs. dollar. Crude +0.91% to $103.63. Gold +1.14% to $1679.25.

    Minneapolis Fed chief Kocherlakota repeats his call for the Fed to begin hiking rates as early as this year, saying the employment picture has improved and inflation is set to rise above the central bank's target. Kocherlakota's comments are in stark contrast to the dovish sentiments of Yellen and Dudley earlier. They have votes on the FOMC, he doesn't (this year). 

    Thirty-six of 51 economists surveyed by the WSJ don't expect further QE from the Fed. That's up from 30 in the January survey as "an entrenched upturn, albeit anemic … is entering a sweet spot." An emerging consensus also grows doubting the Fed's commitment to keep ZIRP through 2014's end.

    Home Depot's (HD +1.7%) revenue took a $13B hit at its worst point in 2006, and it will need a stronger upturn in housing to speed the recovery of that lost revenue, CEO Frank Blake tells CNBC. "We grew in 2010, we grew in 2011, so we're kind of clawing our way back," but it could take "several years" unless there's a stronger housing recovery. - That's funny because, in 2006, their stock topped out at $45 and was between $33 and $45 since 2004 but now, with less revenues and less profits, they are at $50.60

    It's a good day to own commodity stocks. Alcoa's (AA+2.5%strong Q1 and China optimism is not only lifting aluminum names, but also makers of steel (SLX +4.7%), copper (CU +4.1%), silver (SLVP +2.7%), and gold (PSAU +3.8%), among other things.

    Kinder Morgan Partners (KMP +1%will begin a $5B expansion of its Trans Mountain pipeline, more than doubling the capacity of crude oil it can ship to Canada's west coast. The expansion would increase the volume shipped from Alberta to Vancouver to 850K bpd from 300K, allowing Asian buyers to load Canadian crude in significant volumes.

    BJ's Restaurants (BJRI +2.9%) trades higher after Barclayschimes in with a Buy rating and $57 price target. Analyst Jeff Bernstein justifies the company's high-flying earning multiple by comparing the restaurant chain to fast-growing peers and factoring in its unit growth potential. 

    Some solar stocks (TAN +0.4%) give back yesterday's gains after Chardan analyst Jay Srivatsa says more bankruptcies in the sector are coming in the next two or three quarters. The sector outlook is "dismal," the firm says, as even large firms such as First Solar (FSLR -1.9%) idle production lines and others suspend commercial production.

    A day after rallying, Arena Pharmaceuticals (ARNA -6.2%) is giving back its gains, and has managed to trigger the SEC's Rule 201. Earlier this week, the drgumaker filed to sell 8.6M shares owned by Deerfield Management, which invested in the company in 2010.

    In spite of today's outages, Chinese Internet names are rallying strongly thanks to hopes for a strong GDP report.  RENN+8.6%SINA +5.9%BIDU +3.4%SOHU +3.9%YOKU +5.4%.

    Microsoft (MSFT) says it will begin charging for third-party access to Bing's API; rival Google is already charging high-volume developers for API access. The decision could threaten the recent, modest share gains produced by Bing/Yahoo, but could also be another sign Microsoft is getting serious about reducing losses at its Online Services division. The division lost $458M in calendar Q4, but that was much better than the $728M loss posted in calendar Q2.

    From Barry:  

     

    Back in February, we looked at the Skyscraper Index Building Bubble. This is the money shot from that report:

    Note I posted a small low res shot so as to not overload the servers; if you want to see the full report, click here — otherwise, to see the larger version of the graphic above, click here.


  105. Just had a look on the CMG chart is like a ladder to heaven Oct 10 83 now 432 must be the chilli !!!


  106. From Springheel Jack: Updated SPX 15min chart showing possible IHS forming and negative 15min RSI divergence: http://screencast.com/t/3ViuI05hOVsy 


  107. Taxes/StJ – All this BS about personal tax is just a distraction from the real crime in this country.  Corporations payed $198Bn out of $2.4Tn collected last year in taxes – it used to be 50/50.  

    USO/Jr – I like them enough to hold overnight and, if they move against us, my plan is to roll out to May as we wouldn't want to risk the weekend but if we resolve with Iran (we're having a summit), oil can drop hard on Monday.  

    Banks/StJ – Yep.  JPM is the best of the bunch and C one of the worst so a good overview.  

    That about sums it up Angel but don't forget the upgrades – have you ever seen so many upgrades?  

    CMG/490 – Damn, you had them down to $3 last week and at no point between $3 and $10 do you stop out?  CMG is only at $432 so the money is all premium so I wouldn't do anything until 1/2 of that money goes intrinsic at least.  The tomorrow $435s are $1.40 so, with 7 days left, those callers will lose at least $1 per day unless CMG pops $435 and then you can still roll them to the May $450s (now $8.70) and, if you really don't believe CMG can possibly go lower, why not sell the May $380 puts for $3 to balance it out a bit and help pay for the roll?  

    Jack's Chart/Diamond – Thanks:  


  108. Stick! – back to the ol' "No Stock Left Behind" policy.


  109. Did CNBC just flat-out lie to us when, 10 minutes ago, they said that there were bullish trade imbalances into the close?  


  110. No GOOG play and no AAPL play from here today.    But, let's see…..GOOG closes tomorrow at 675 to 700.  


  111. Yep, they lied!  

    Nas had a big dip at the close.  

    And now it's Google time.


  112. $10.08 vs $9.64 expected.  Nice head fake down to $630 and now up to $670 but it depends what the other metrics are and then it very much depends on the CC so, overall, I don't see a big move out of GOOG on this (less than 5%).  


  113. Does "sell in May and go away" really work?
    All the big money traders have to recharge their batteries and use their Hamptons, St.Bart's, European, South Seas, and Lake Winipisaukee Mansions in the Summer, don't they?


  114. GOOG – Everybody is getting in the dividend action….

    Google announced today that its Board of Directors unanimously approved a stock dividend proposal designed to preserve the corporate structure that has allowed Google to remain focused on the long term. More information is available on our Investor Relations site, including a letter from our founders Larry Page and Sergey Brin explaining the proposal, and in our forthcoming proxy statement.     


  115. Phil / Corporations & Tax:  I have often emphasized in our discussions regarding the 1%, the 0.1% American wealth brackets that "U.S." corporations that the real crims  -- arithmetically if not morally – as I think the numbers you put up today demonstrate.
     
    All the sturm ung drang about the bad Kochs and evil Sheldon Adelson reflects the public's need to put a face on a what has been presented as a moral issue.  But it's not a moral issue.  Corporations may be "people" from a legal standpoint, but they are neither moral or immoral — they are amoral, profit-maximizing entities, bound to follow laws as they find them. Morality is quite besides the point.
    "Tax avoidance" is perfectly legal, and therefore acceptable, behavior.  As a corporate lawyer who, in my misspent youth, worked with Wall Street firms to come up with structures to accomplish it, I assure you that confiscating every mansion in East Hampton, Bel Air, Aspen, Darien and Nantucket will do far less for U.S. fiscal health than simply forcing U.S.-based corporations to repatriate their massive untaxed  and offshored profits.
     
     But I wouldn't hold my breath — they have the American public focused on "raising taxes on the rich folk," which will be the key to Obama's inevitable victory.   As as a consequence, nothing of importance will change for a number of years, until people finally catch on.


  116. In a letter to shareholders, founders Sergey Brin and Larry Page, CEO, said they have accomplished what is “effectively a stock split,” by creating a “new class of non-voting capital stock,” to be listed on Nasdaq.
     
    These shares will be distributed via a stock dividend to all existing stockholders: the owner of each existing share will receive one new share of the non-voting stock, giving investors twice the number of shares they had before. It’s effectively a two-for-one stock split—something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure.


  117. And revenues seemed to have beat by $2.5 Bn! Once again, small estimate mistake by the analysts. How do these guys keep on getting paid!


  118. Speaking of "raising taxes on the rich" Zero, how about that little statistic – from 1979 to 2011:

    Top 1% – Average income increased by $700,000
    Bottom 90% – Average income decreased by $900

    So much for trickle down economics…. More like trickle up (to the tune of $22,000 per year – I guess no trickle)

    There is a case to be made that the top 1% needs to share the pain a little bit!


  119. Stj – Didn't they miss on revenue by a hair?  $8.14B vs $8.15B…


  120. Indeed Ink, they have updated the numbers now. They first reported $10.65 Bn… I guess we'll need to wade through the numbers now.


  121. Stj:  "Average income" increased by $700k? True, but consider that threshold for household being a member of this 1% you speak of is  a total income of $516,633 in 2010 — a figure that includes wages, government transfers and money from capital gains, dividends and other investment income.  That's right, probably half of this "1%" doesn't earn $700k in total, much less as an "increase."
     
     But I can get into the populist swing of things, too — "Six Waltons have more collective wealth [@USD 93 Billion] than the bottom 30% of Americans."  Makes you want to show up at their mansions with flaming torches, right?   Of course, that doesn't tell you how many of the people you are counting towards "average incomes" are pensioners or disabled and don't do any work at all. Probably even the Waltons show up at the office from time to time. Is is worth pointing out that near half of American workers pay zero federal income taxes?  
     
    Stj, Disraeli said there were lies, damned lies, and statistics.  I still say that if we properly taxed the corporations that do business in the U.S. and sell stuff to U.S. citizens, the country would be far better off from both a financial standpoint and one of social harmony.


  122. Gimme a break Zero… Sure, these are averages, but my point was that the top 1% have done much, much better in the last 30 years than the bottom 90% and that cannot really be in question. And yet, what we hear from the GOP guys is that we need to cut their taxes more because they are the "job creators". The average tax for the top 40,000 taxpayers is 18%. Doesn't that strike you as too little compared to what we pay on average – although I can't speak for you, but I am not in the top 1% and I pay much more than 18%!

    I don't want to put the Walton's mansion to the torch, but I feel that they should pay their fair share of taxes – most likely they are in the Romney 13% bracket and that they actually pay taxes on the obscene amount of money they earned the old fashioned way – by inheritance! Don't you feel that if we could split even 50% of that $93 billion with the bottom 99% of this country that it could have a more positive impact on the economy. And the poor Waltons would be left with "only" $8 billion each!

    And I do agree about corporations also paying their fair share obviously… 


  123. At the close: Dow +1.4% to 12985. S&P +1.38% to 1388. Nasdaq +1.32% to 3056.

    Treasurys: 30-year -0.22%. 10-yr -0.14%. 5-yr -0.04%.

    Commodities: Crude +1.01% to $103.74. Gold +1.03% to $1677.45.

    Currencies: Euro +0.62% vs. dollar. Yen +0.03%. Pound -0.36%.

    Notable earnings before Friday's open: INFYJPMSJR,WFC

    Market recap: Prospects for more QE plus growth in China pushed stocks sharply higher for a second session after dovish comments from the Fed's Yellen and Dudley and a rumor about better-than-expected GDP numbers from China. Coal stocks helped lead the way for energy and commodity shares. But the bond market was little changed. NYSE gainers led losers three to one. 

    Broadest Bull Market Rally Since 1990 Masked by Apple (Bloomberg)

    The national economic recovery "clearly has a long way to go" as the weak housing market weighs on an unusually slow recovery, Fed Gov. Sarah Bloom Raskin says. Defending Fed actions so far, she adds vaguely that “monetary policy alone may be insufficient to promote a more robust and sustainable improvement in household net worth."

    Unemployment Falls Fast in U.S. If Men Get College Degree (Bloomberg)

    Assisting Spain in being about the only major world index in the red today were falling prices for its banks following Banesto reporting an 88% decline in Q1 profits to €20M. The lender – part owned by Banco Santander (STD) – was forced to set aside €475M as provisions for bad property loans. 

    "This is turning into a disaster for the EU periphery," says RBS' Andrew Roberts, who notes Spanish and Italian banks are "deeply underwater" on their LTRO-enabled purchases of sovereign debt. "What the LTRO has done is concentrate systemic risk even further," argues Guy Mandy from Nomura. "If everything goes wrong, it could go wrong in a hurry."

    Big Banks Needed 485.6 Billion Euros for Basel Capital Rule (Bloomberg)

    State Government Tax Collections Increase $62 Billion in 2011 (Census)

    JPMorgan Chase (JPM +2.1%) kicks off quarterly earnings reports for the big banks tomorrow, and S&P Capital IQ raises its rating on the shares to Buy from Hold with a $49 target price from $42 on expectations of a mostly positive report and an attractive valuation.The Street expects EPS of $1.12 on revenue of $24.37B, both lower than in the same period last year.

    A judge blocks an attempt to halt the deposition of BofA (BAC) CEO Brian Moynihan in a legal clash with bond insurer MBIA (MBI) in a development that could speed settlement talks between the companies. "This is a game changer," a source tellsWSJ. "It creates enormous pressure for Bank of America to settle this case." (also

    How the Banks Endangered Medicare (Economix)

    New finding offers neurological support for Adam Smith’s ‘theories of morality’ (EurekAlert)

    How Physics and Neuroscience Dictate Your “Free” Will (Scientific American)

    CalSTRS – the country's largest teacher's pension fund ($152B) – confirms its underfunding increased by 15% to $64.5B, leaving it covering just 69% of projected liabilities. Contributing to the shortfall were the recognition of 2008-09 losses as well as a reduction in the assumed rate of return to 7.5% from 7.75%, still greater than the 7.25% proposed by an actuary for CalPERS. (PR)

    More on J.B. Hunt (JBHT): Q1 EPS beats estimates on a 16% Y/Y jump in revenue. Overall earnings rose 35%, led by higher rates, better load volumes and solid growth in the truckers intermodal-transportation division, which accounts for roughly 60% of top line performance.

    Adobe (ADBE+1.3% AH after announcing a $2B stock buyback plan, good for acquiring 12% of outstanding shares based on today's close. Adobe, which had $2.8B in cash and investments on itsbalance sheet as of March 2, also says an existing $1.6B authorization due to expire in FY12 has been used up. 

    Well that settles that discussion quickly!  Coinstar (CSTR) has resumed trading following its Q1 preannouncement. Shares are currently moving at $71.19, a new all-time high and up 16.3% from today's close. Jim Chanos can't be pleased.

    Coinstar (CSTR) preannounces a blowout Q1. Citing strong demand for a number of hit titles, as well as lower-than-expected expenses, the company expects revenue for the quarter to be $567M-$569.2M and EPS of $1.36-$1.40, well above a consensus of $537.7M and $0.90. Coinstar is also guiding for 2012 revenue of $2.155B-$2.28B and EPS of $4.40-$4.80, compared with a consensus of $2.22B and $4.09. Shares are halted.

    Netflix (NFLX+0.7% AH after Coinstar's (CSTRbig upward guidance, which partly reflected "better than anticipated consumer acceptance of the price increase" for Redbox DVD rentals. If CSTR is enjoying higher sales on a static basis, it could mean more customer defections for NFLX – or if it's passing on higher costs without complaint, maybe Reed Hastings won’t get bashed so much. Stay tuned.

    Groupon (GRPN +3.8%), still contending with the fallout from its Q4 restatement, is appointing Dell exec Veit Dengler the head of its international ops. Dengler will replace the Samwer brothers, who are best known for creating European clones of popular Internet services, and have been running Groupon's international business since the company bought CityDeal in 2010. 



  124. Facebook's (FBpurchase of Instagram was "a Mark Zuckerberg production," according to DealBook. Less than 24 hours after Instagram obtained funding at a $500M valuation , Zuckerberg called CEO Kevin Systrom, and worked out a deal over the next 48 hours. The fact Zuckerberg kept Facebook's underwriters in the dark about the deal, and didn't wait until after the IPO, has many bankersseething. Chances are they also won't be happy if he decides to skipFacebook's road show.

    Instagram’s Buyout: How Does It Measure Up? (Waxy)

    Barnes & Noble (BKS -6.4%), off sharply for the second day following the DOJ's e-book settlement with 3 publishers, is up 1.6%AH after announcing a version of its Nook Simple Touch e-reader with built-in lighting. The product is said to be "optimized for low-light conditions," and will sell for $139. Amazon (AMZN), whose Kindle Touch goes for $99, is reportedly working on a front-lit Kindle.

    More on Google's Q1: The new share structure is defended via another letter praising Google's long-term focus (previous). Ad click rates fell another 6% Q/Q and 12% Y/Y, backing up recent fears. Paid clicks rose 7% Q/Q and 39% Y/Y, up from Q4's 34% and likely fueled by mobile. International sales were 54% of revenue. Capex relatively mild at $607M, down from Q4's $951M. Headcount growth was a modest 610 (helps explain the earnings beat). GOOG +1.2%AH. (PR)

    During its Q1 earnings call (webcastlive blog), Google (GOOG) admits lower rates for mobile ads are contributing to its cost-per-click weakness, as are new search ad formats and revenue-sharing agreements with OEMs and carriers. However, the company expresses optimism mobile ad rates will improve, given mobile advertising is in its early stages, and has the ability to drive local commerce.  GOOG +0.4% AH. (more)

    This is such BS!  More on Google's (GOOGnew share structure: Legal chief David Drummond says the new Class C shares will trade under a different ticker, and be identical to Class A/B shares save for the lack of voting rights. Larry Page, Sergey Brin, and Eric Schmidt "will maintain the same link between their voting and economic interests that exists today, even if they sell some of their non-voting Class C shares." Expect ISS and others to register their dismay.


  125. Recharge/Flips – I know I need my trips.  

    Corporate Taxes/ZZ – Not this again.  I don't give a crap how innocent the poor little Corporations are – as Jessica Rabbit said, "I'm not bad, I'm just drawn that way."  So, since they aren't people and they can't be harmed, let's bend them over a table and tax the hell out of them – end of story.   It's all a game that they play so we need to change the rules and if they find a way to cheat that – then we'll change 'em again.  

    GOOG Split/Diamond – So Sergey and Larry can now sell 1/2 their stock without diluting their voting position – BRILLIANT!  

    Probably/ZZ – That's a pretty major misreading of the situation.  The THRESHOLD for being in the top 1% is an income of $650,000 to be in the bottom of the group.  The average INCREASE for the group was $700,000 and yes, it does make me want to show up at the Waltons with torches because they didn't even earn the money, they got it from their Dad and there's $150Bn sitting around doing nothing in the economy except sucking more money towards it like a black hole of wealth that just keeps increasing in mass at the expense of everything else in the universe.  It does need to be stopped.  

    We need to have a concept of TOO MUCH – why does anyone need more than $1Bn?  This is what progressive tax systems address – you can keep making money over $1Bn but the government will redistribute 70% of it.  If that makes you say "I refuse to work" then GOOD!!!!  That gives other people a chance to work and earn money.  

    If the World had no more oxygen and I had a patent on the only machine that made it – I could lease them for whatever I wanted.  If what I wanted is all the money in the World – then that's my right as a Capitalist, isn't it?  In fact, as you argue – it's my RESPONSIBILITY as a Corporate Citizen to demand all the money in the World if I can get my hands on it.  Then I would have all the money and you would have none  and I would make sure I gave plenty of my Trillions to all the World leaders who matter and make sure every law in the land protects me, my money and my oxygen monopoly.   

    What's wrong with that?  Isn't that the way things should be?  At some point, you do have to draw a moral line but the way things are going now – it is possible for someone to eventually corner the market on energy or water or food or clean air down the road and the idiotic stances taken today will only pave the way for the subjugation of the human race in the future.  After all, that's how they did it in the old days – the Monarch controlled the food or the water or ran the protection racket (Army, castle walls) and you either lived by his rules and paid your tribute or you were out in the cold.   Power was briefly (in Human History) given back to the people and now the ruling class is very much lined up to swing the pendulum back the other way.  


  126. Great article on Gawker – they have an insider at Fox News spilling the beans:  

     

    The Nation aggregates news stories, gives them provocative headlines, and invites commenters to weigh in. The comments are fascinating actually, if you can detach yourself enough to view them as sort of the id of the conservative movement. Of course, if you can't detach yourself, then you're going to come away with a diminished view of human decency, because HOLY MOLY THESE PEOPLE DO NOT LIKE THE BLACK PRESIDENT. I'm not saying they dislike him BECAUSE he's black, but a lot of the comments, unprompted, mention the fact that he is black, so what would you say, Dr. Freud?

    The Fox Nation moderators, realizing that they had a problem on their hands, did the absolute bare minimum, hiring one or two college kids to comb the comments for the most egregiously racist postings, and putting in automatic text filters that blocked various key words. Of course the intrepid commenters quickly found ways around these filters using letter substitutions and spacings, which is why many comments complain about our "n@gger president" and the "M u s l i m in the White House."

     

    The post that broke the camel's back might be familiar to some of you, because it garnered a lot of attention and (well-deserved) ridicule when it hit last August. The item was aggregating several news sources that were reporting innocuously on President Obama's 50th birthday party, which was attended by the usual mix of White House staffers, DC politicos and Dem-friendly celebs. The Fox Nation, naturally, chose to illustrate the story with a photo montage of Obama, Charles Barkley, Chris Rock, and Jay Z, and the headline "Obama's Hip Hop BBQ Didn't Create Jobs."

    Announcing Our Newest Hire: A Current Fox News Channel Employee

    The post neatly summed up everything that had been troubling me about my employer: Non sequitur, ad hominem attacks on the president; gleeful race baiting; a willful disregard for facts; and so on. It came close on the heels of the Common controversy, which exhibited a lot of the same ugly traits. (See also: terrorist fist jabs; Fox & Friends madrassa accusations; etc.)

    The worst thing about the Hip Hop BBQ incident is that we didn't back away from it. Bill Shine, who is a rather important guy—sort of Roger Ailes' main hatchet man, and the go-between for Ailes and most of the top talent—bafflingly doubled down and defended it. The story still exists on the Fox Nation site, headline and photo montage intact, to this very day.


  127. Phil,
      So I guess this means we're officially bullish (S&P 1388)?  It's hard to find something to buy though…..everything seems so overvalued


  128. Also from the Fox Mole:  

     

    Here’s a Picture of Bill O’Reilly With a Topless Woman Along With the Fox News Legal Threat Meant to Quash It

    The Fox Mole

     

    How Sean Hannity Learned to Stop Worrying and Love Teleprompters

    Oh no!  They already nailed the Fox Mole – just when he was getting started...  

     

    Hi. My name is Joe Muto. I was the Fox Mole.

    Two hours ago I was called into a meeting with Dianne Brandi, the Fox News Executive Vice President of Legal and Business Affairs and suspended indefinitely… with pay, oddly enough.

    They nailed me.

    In the end, it was the digital trail that gave me away. They knew that someone, using my computer login, had accessed the sources for two videos that ended up on Gawker over the past few weeks. They couldn't prove it entirely, but I was pretty much the only suspect.

    I denied it, which is why they didn't fire me outright. But two nice gentlemen from security escorted me to my desk to pack up my stuff, and it was pretty obvious at that point that I would not be setting foot back into 1211 Avenue of the Americas again.

     

    I am a weasel, a traitor, a sell-out and every bad word you can throw at me… but as of today, I am free, and I am ready to tell my story, which I wasn't able to fully do for the previous 36 hours.

    Stay tuned for much, much more tomorrow.


  129. Bullish/Japar – Well I want to see us hold up through Monday but yes, we have no choice.  We have lots of coal and nat gas stocks that are cheap and HOV and WFR are still on sale (SVU taking off, HPQ too) – there's always something to buy in a bull market.  


  130. Of course that also should be: "explained" :-)


  131. TrimTabs on flawed BLS numbers and the economy

     

    For months now we have been harping on the fact that the U.S. economy is growing slower than either the BLS or the BEA are reporting. So Friday’s disappointing result of only 120,000 new jobs when the street was expecting 200,000 was not surprise to us.

    In fact, our assessment of the economy has not changed. U.S. economic growth is likely sluggish, in the 2.0% to 2.5% range. The good news is that GDP growth is positive. The bad news, it isnít fast enough to bring down the high level of unemployment anytime soon.

    What about wages and salaries. We use real-time income tax withholdings as a more accurate measure of wages and salaries. According to the tax data, wage and salary growth in Q1 2012 was an anemic 3.4% y-o-y, nearly unchanged from the 3.5% y-o-y growth rate in Q4 2011. Since inflation is running at 2.9% y-o-y, wage growth is only slightly higher than the rate of inflation, not enough to propel the U.S. economy anywhere close to robust economic growth.

    There is nothing in our economic crystal ball that says conditions are going to change anytime soon. We see sluggish economic growth for as far as the eye can see because of lackluster consumption due to weak wage and salary growth barely above inflation, high unemployment, elevated fuel and energy prices, a lackluster housing market, and a European debt crisis that wonít go away.


  132. I thought you were doing your Ricky Riccardo impression Diamond.  ;)


  133. St Jean – where'd you get your #s for your 428 post? Im debating a repub friend on fb and would like to quote it from somewhere.Thx



  134. Numbers / Jrom – I just saw these numbers watching MSNBC this afternoon. I was watching while working so I didn't take all the information. I am sure we could dig that up somewhere!


  135. Tomorrow is Friday the 13th…. be careful, be very careful!


  136. Numbers / Jrom – This page has some numbers you can use: http://www.cbpp.org/cms/?fa=view&id=3220

    Note what I saw, but pretty dramatic as well! It's always a matter of what they use for inflation and what year…



  137. A few items from FT: spain, Spain, SPAIN! 

    "US and European equities finished higher today with the glaring exception of Spain, where domestic bank Banesto set aside €475m against bad property loans and the prior day’s rally for Spanish sovereign bonds fizzed out."

    "Investors’ faith in the profit outlook for Spain’s banks took another knock following poor quarterly results from Banesto – the Spanish bank part-owned by the country’s biggest lender, Santander. Net profits slumped 88 per cent to €20m in the first quarter of the year, as the lender implemented tough new provisioning requirements imposed by the government to better reflect deteriorating real estate prices."

    "Pressure also mounted on eurozone sovereigns, with 10-year Spanish government debt now yielding 5.82 per cent, close to the psychologically key 6 per cent level. Bankers concede that ongoing uncertainty over banks’ ability to raise capital independently of government support remains a powerful drag both on bank share prices and government debt."


  138. stjeanluc, re market summary charts
    As a beginner here, can you explain or point to an explanation of the summaries you post, that have the major averages and a matrix of the "Must Hold" level, as well as the 5% up/down and 10% up/down levels?
    What is the beginning point for these levels?  How is the "Must Hold" level calculated, and how is it used in assessing the current markets?
    Thanks!




  139. China GDP 8.1%


  140. GOOG Play.
    End of the day today I picked up the folioing Google trade with a goal of the Implied Volatility Crush after earnings was announced. 
    Sold Weekly April $650 Call
    Bought April $650 Call
    &
    Sold Weekly April $650 Put
    Bought April $650 Put
    - Total cost was $3/contract for this trade.
    - Main payout is if Google pinned $650… so far I'm lucky!
    The Volatility Crush for the $20 premium in both $650 weekly puts/calls is about $20 each. I'm banking that the weeklies decay a ton overnight and the longer term Aprils hold value better.
    I'm thinking of exiting 1st thing in the morning, but wanted to see how anyone else would plan the trade exit tonight.
    Thinkorswim is suggesting that at the open the trade should be worth $9/contract at the open if Google holds $651.
    The volatility will continue to fall throughout the day, which is great if we hold $650, I have $30+/- window before most of the profit from this trade would disappear.


  141. [CECON]Good morning!  

    China GDP up "just" 8.1%, which is the worst performance since Q1 '09 to put it in perspective.  That's with a "surprise" 25% pickup in bank lending/stimulus.  Again we were lied to yesterday with the BS 9% whisper numbers – China is not, in fact, roaring – just whimpering into a soft landing, if you can believe the number in the first place.  Pre-hype expectations were for 8.3% growth so this is a miss, no matter how CNBC et al spin it.

    Stimulus from China seems unlikely as they are ahead of their 7.5% prediction, housing is still out of control (prices, not volume) and their CPI came in at 3.6%, which is 10% higher than last month's 3.2%, which is what caused them to clamp down on runaway inflation in the first place.  

    If you use the above link and look at PPI, notice that the annual rate is high at 6% and that this is not being passed on to the Consumers (3.6% monthly, 5.4% annual) so margins are squeezed somewhere, right?  Also notice is you switch PPI to monthly view, the rate is actually now -0.3% and the last time the PPI in China crossed negative was the Fall of 2008 and that did not turn out to be a good economic indicator, did it?  

    All the charts are fun to play with – feel free to draw your own conclusions…

    Singapore Q1 GDP rises 9.9% annualized vs. expectations of 6.8% and Q4's 2.5% decline. On a Y/Y basis, GDP was 1.6% higher vs. expectations of 1.1%. The central bank – which conducts monetary policy by managing the exchange rate – signaled it will allow a slightly faster pace of appreciation of the island's dollar. EWS+17.9% YTD.

    North Korea's much ballyhooed long-range rocket launch ended in apparent failure today, dealing a blow to the prestige of the reclusive and impoverished state that's continually defied international pressure to push ahead with the plan. The Unha-3 rocket broke up and crashed into the South China Sea just moments after it launched.

    Overall, Asia stocks are up with the Hang Seng leading, up 1.65% but the Shanghai is up just 0.4% and that's not what you want to see against this drop.  The Nikkei is up just 1.14% after the BOJ promised Thermo-Nuclear Easing less than 24 hours ago and it only got the Yen as far as 81.2 (weaker) but it's already back down (up) to 81.  India is flatlining into the weekend at 0.2% and also not what you want to see after a 10% drop since Feb.  We're not closed yet, maybe a little stick into the close as Europe gets their own pre-market pump job – also working off their, so far, weak bounces.  

    Our Futures are already down 0.25% after having been up about the same earlier so a little chasey to short now.  Dollar 79.60, oil $103.18, gold $1,676, silver $32.29, copper $3.68 is a big negative (closed at $3.72), nat gas back to $1.982 and gasoline had gone all the way up to $3.38, now $3.343, which is a big drop (we caught an unusually massive move the other day).  

    The Euro seems safe enough over their danger zone at $1.3168 and the Pound also at $1.5938.  Even as I write this the Yen is slipping (rising) to 80.95 and EUR/CHF is $1.20175 so the BOJ is motivated to boost the Dollar and the SNB is motivated to boost the Euro into the weekend.  

    We have our own CPI (0.3% expected. 0/2% core) and Michigan Sentiment at 10 (76 expected) and Dudley Speaks for the third time in 2 days at 8am but he already popped the market yesterday morning and even I can't believe the sheeple are that dumb to respond to the same noise two days in a row.  

    Next week is light on data and heavy on earnings into expiration day on Friday:

     

    Tuesday Apr 17

    Retail Sales
    [Star]
    8:30 AM ET

    Housing Starts
    [Star]
    8:30 AM ET

    Redbook
    [Bullet
    8:55 AM ET

    Weekly Bill Settlement

    Jobless Claims
    [Star]
    8:30 AM ET

    Money Supply
    [Bullet
    4:30 PM ET
     

     

    I would love to go back to being bullish – being bullish is much easier than being bearish in this Central Bank driven market but then I read these annoying facts and I have my doubts.  Here's why I'm still going to be cashy and cautious into the weekend but I do have an idea to hedge some upside trades with our Long Put List – so we'll see how things look later and I'll give it some more thought.  Meanwhile – check this out from Econoday:  

     

    Germany

    February manufacturing orders were up 0.3 percent after dropping 1.8 percent in January. On the year, orders dropped 6.1 percent after declining 6.0 percent in January. The modest February advance in total orders was built upon a 1.3 percent monthly gain in capital goods which proved more than enough to offset declines in both basics (down 0.3 percent) and consumer & durable goods (down 3.8 percent). However, a 1.7 percent increase in orders from overseas contrasted with a 1.4 percent decline in the domestic market where basics were down 4.6 percent. Orders from other Eurozone countries dropped 3.2 percent from January leaving their 2-month moving average growth rate at a depressing 4.6 percent lower. Outside of the EMU bloc, orders were up 5.0 percent on the month after a 7.6 percent slump last time.

     

     

    February industrial production was down 1.3 percent and was down 1.0 percent on the year. Excluding construction, output was down 0.2 percent and inched up 0.1 percent on the year. February's decline was largely attributable to a 2.1 percent monthly decline in the consumer goods sector although intermediates were down 0.3 percent. Capital goods output was up a modest 0.3 percent while energy grew 1.6 percent. However, construction eclipsed January's 4.7 percent gain, slumping fully 17.1 percent. For the sector as a whole, average January/February production was 1.2 percent below the fourth quarter mean when it dropped 1.8 percent.

     

     

    United Kingdom

    February industrial production was up 0.4 percent and was 2.3 percent lower on the year. Manufacturing dropped 1.0 percent and was down 1.4 percent on the year. Output was lower on the month in nine of the thirteen reporting sub sectors. Transport equipment (down 2.0 percent) and rubber & plastics (down 2.7 percent) were especially weak while the most significant increase was posted by electrical equipment industries (4.6 percent). Among the more erratic industries, mining & quarrying output jumped 3.8 percent (oil & gas 4.6 percent) and energy supply was up 6.1 percent following cooler weather. Water & waste management saw a 1.3 percent increase from January.

     

     

    Asia/Pacific

    Japan

    First quarter Tankan results were weaker than expected. Sentiment among large manufacturers was unchanged at minus 4. Analysts expected it to improve to a reading of minus 1 because of the easing fears about Europe and the continuing U.S. recovery. They also pointed to the yen’s decline against the dollar along with the equity rallies worldwide. The diffusion index is calculated by subtracting the percentage of companies reporting deteriorating business conditions from the percentage of those reporting an improvement. A positive figure indicates the majority of firms see better business conditions. The diffusion index for small manufacturers slipped to minus 10 from minus 8 the quarter before. It was expected to remain unchanged. Large nonmanufacturers reading improved slightly to plus 5 from plus 4 in the fourth quarter. Small nonmanufacturers remained unchanged for a second quarter. Capital investment plans in fiscal 2012 for large firms were unchanged. However, small firms said they expect CAPEX to decline 12.9 percent in the new fiscal year.

     

     

    Australia

    February retail sales crept up 0.2 percent about as expected and were up 2.0 percent from a year ago. The largest contributor to the monthly increase was other retailing (1.8 percent), followed by food retailing (0.3 percent) and department stores (0.7 percent). However, clothing, footwear & personal accessory retailing slid 1.4 percent, cafes, restaurants & takeaway food services declined 0.7 percent and household goods retailing was 0.5 percent lower. Predictably, the states with the largest increases were those that are growth the fastest including Queensland, Western Australia and South Australia.

     

     

    February trade deficitnarrowed to A$480 million from A$971 million in January. Analysts expected a surplus of A$1.1 billion. Exports slid 2.1 percent on the month but were up 5.8 percent on the year while imports dropped 3.9 percent on the month and were up 6.0 percent from a year ago. Exports were down across the board. Non-rural goods exports dropped 3.0 percent while rural goods exports declined 9.0 percent. Non-monetary gold was 43 percent higher. Services were down 3 percent. Imports of consumption goods were down 7 percent while intermediate and other merchandise goods slid 3 percent and capital goods were down 5 percent.  Non-monetary gold was 2 percent higher. Services slipped 1 percent.


  142. Big Chart – As I linked above to the multi-chart, we're in the strong bounce zone but, so far, no one else is.  As we got to the strong bounce zone on a 1% drop in the Dollar – that's kind of cheating so I'm dubious and need a little more convincing before I can run with the bulls again.  

    I like this on StJ – they could title it: "The Death of the Middle Class"   

    GOOG/Itrade – That should work out well.  

    Europe already failed to stay green, down almost half a point so nap time for me as I'm already bearish enough.  Oil (/CL) below the $103 line (now $103.19) and RUT (/TF) below 805 (now 804.5) are the bearish plays I'd go for as long as the Dollar (/DX) is over 79.60 (now 79.61).  Dow (/YM) 12,900 (now 12,904) will be a good confirmation that we're heading down. 


  143. And from Bloomberg – more Spain!
    Spanish banks’ borrowings from the European Central Bank jumped by almost 50 percent in March, reaching the most on record, as lenders tap emergency loans and channel some of it into sovereign debt purchases.

    Average net borrowings by Spanish banks climbed to 227.6 billion euros ($300 billion) last month from 152.4 billion euros in February, the Bank of Spain said on its website today. Spanish lenders took 29 percent of the total long-term loans offered to euro-region banks, the data showed. That includes the three-year long-term refinancing operation loans known as LTRO.


    Spanish bonds fell, pushing the 10-year yield to 5.93 percent at 11 a.m. in Madrid from 5.82 percent yesterday, and widening the gap between Spanish and German borrowing costs to 416 basis points.



  144. Spain/Deano – That's a keeper! 


  145. Funny, we're back up now on JPM earnings but we knew those would be good.

    Dollar back to 79.60 so good retest here.