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Wall of Worry Wednesday – Insurmountable or Time to Climb?

Isn't this fun?

On Monday we drew our 50% retracement lines for the Dow (13,000), S&P (1,395), Nasdaq (3,075) NYSE (8,050) and Russell (815) as well as the other global indices that we expected to be tested this week but I cautioned:

"How many times will the bulls be sucked in by the same empty promises?  How many times will they reach into their pockets and BUYBUYBUY the snake oil valuations sold by the Reverend James Cramer?

Now I don't mean to pick on Cramer but it is truly incredible how many times people begin a conversations with me by saying "Cramer says.."  Yesterday Cramer said to ignore the experts and their annoying FACTS and just BUYBUYBUY:  “No one from the Fed said anything today, yet the market roared, so I imagine these people are stumped beyond belief,” Cramer said. “It must be so troubling for them to rationalize this rally.”  

JEFF GUNDLACH'S EPIC PRESENTATION: 'To QE3 Or Not To QE3, That Is The Question'See, Cramer is just a great summary of everything that is wrong with investing these days.  What a ridiculous over-simplification to act as if the Fed has to say something every day to move the markets – the complete and utter ignorance/disregard of World events is truly stunning on Cramer's show, CNBC and pretty much all of the MSM who won't tell you anything that can't be reduced to a Twitable sound-byte.

On the right, we have the anti-Cramer – a thoughtful presentation by Morningstar's Fixed Asset Manager of the Decade, Jeff Gundlach, who is the only bond fund manager to win the Standard & Poor’s/BusinessWeek Excellence in Fund Management five years in a row.  I urge you to run through Jeff's presentation as it contains a fantastic series of charts that gives a well-balanced view of the global macros.   One very notable chart was this one, showing the divergence between stocks and commodities as Operation Twist has had no stimulative effect on demand:  


undefinedThat's not a healthy-looking divergence, is it?  While the bulls are betting that commodities will catch up to the hyper-inflated stock prices, we've been betting the hyper-inflated stock prices will eventually run into the demand reality that is already tanking the commodity markets.  

As we noted in Member Chat this morning, the Central Banks are pumping free money into the banks (that will eventually become a burden on the bottom 99% taxpayers and their children and their children's children…), who are not lending it to boost the economies but are turning around (or "twisting") to buy Sovereign Bonds that the top 1% have been stuck with.  

Aside from the feeding frenzy by our local Banksters at the expense of the Fed, Spanish and Italian banks have used LTRO and EFSF funds to load up on over $600Bn worth of Government debt – debt that may well be defaulted on in the same way Greece just did.  It's nothing more than a stealth bailout of the top 1%, who are cashing in their bonds at top dollar and moving back to cash ahead of the next market collapse.  

Even the bankers to Europe's Top 1% in Germany and France are CUTTING their holdings in the same bonds by 50% as the bad-debt burden is transferred to the debtor nations, who will later be blamed for making these bad investments as the situation that is clearly visible now will, in the future, be used to justify even harsher austerity measures for their poor neighbors.  

“The more banks stop cross-border lending, the more the ECB steps in to do the financing,” said Guntram Wolff, deputy director of Bruegel, a Brussels-based research institute. “So the exposure of the core countries to the periphery is shifting from the private to the public sector.”

Corruption DemotivatorWhat a scam!  A great example of the Dooh Nibor Economy, where the Global Kleptocracy continues to run policies in their puppet Governments that rob from the poor and give to the rich.  While French and German banks lost money on Greece’s restructuring last month, a delay of more than a year allowed a similar shift of risk to the public sector. When the exchange took place, the debt relief was capped at 59 Billion Euros because fewer bonds were held by the private sector, including banks outside the country. If Greece had defaulted in 2010, the reduction could have been as much as 232 Billion Euros.  

This amazing Global Ponzi scheme is bound to end badly – the only question is when?  The bull case (see Cramer) is that the Fed and other Central Baniksters are placing a floor under the market so you "can't lose" – no matter what idiotic valuation you pay for stocks (Gundlach believes 8-10 is the proper p/e for the S&P 500 – now 15).  Essentially, people buying the market under this premise are no different than people who invested with Bernie Madoff, knowing it was a scam but not caring as long as they got their 20% returns – it works until it doesn't.    

This is a discussion I have with our Conservative friends all the time – it DOES matter where you get your money from.  We (the top 1%) are currently extracting our wealth and income from the bottom 99% at a record pace.  

The gap between the rich and the poor in America has never been wider and AMERICA can't, CAN NOT, recover if our survival plan is to get what we can and put it into our 3M lifeboats while letting the other 297M people go down with the ship.  The austerity actions being taken now are essentially a justification of theft along the logical lines of "well, those 297M people are going to die anyway so robbing them isn't REALLY a crime, is it?"  

According to Romney and the rest of the GOP, it is MUCH more important that we preserve his comfort and his lifestyle than to waste our time helping those who are unable to help themselves.  This is the same attitude the Germans are developing regarding their poor European cousins – why should we save you from collapse if it might cause us discomfort?  

The more the Corporate Media manages to convince the top 10% (no one else matters) that the bottom 90% are unsaveable or "not worth" saving – the more they are able to justify greater and greater abuses heaped upon those down below.  Dehumanization of the enemy is an essential part of a propaganda war and make no mistake about it – class warfare is a war and it's not a war that the poor are waging against the rich (despite what their PR machine would have you believe) – it's a war that the rich have been waging against the poor for 40 years now.  

This is the way things work people – I apologize for the Micheal Moore clip, I know that he is considered to be the great Satan and most of you have been brain-washed to feel sick at the mere mention of his name or the sound of his voice because he….  er….  well, because he did whatever horrible things that you think you know have maybe been insinuated about him by the MSM, right?  That's good enough for us because WE'RE REAL AMERICANS, right?  

Government DemotivatorReal Americans don't put up with agitators, unless those agitators are from the Tea Party or unless they are anti-tax agitators or unless they want to reduce (not COMPLETELY destroy) our Government because, as we all know, Government is the problem and private enterprise is the solution!  

Of course, in this upcoming election we have 242 House Republicans that should be re-elected – it's the 190 Democratic bums that need to be thrown out and THEN you'll see some real action.  The Republicans have been hamstrung so far by their 32% advantage in Congressional seats and now we have an historic opportunity to extend the reign of a Congress that only managed to pass 80 Laws out of 945 votes taken (with 5,970 resolutions killed on the floor) in 2011 – a record that may only be broken by the same team in 2012 as they are 0 for 89 votes with 627 bills killed in Committee in the first quarter of this year – go team!!! 

These people are destroying our country folks.  Do you really believe the World's largest economy can afford to do NOTHING for 2 years?  Is this going to be the winning strategy we reward – hamstring a sitting President, let the country run straight downhill and then run for re-election on the premise that, as long as you approve of the guy the people elect to be in charge – you might be willing to play ball.  This is not politics – it's extortion!  

Let's contemplate that while we wait PATIENTLY for the markets to correct.  The point in going over these Global and Political macros is to get you to step back from the day to day BS that the MSM likes to keep you focused on and contemplate the bigger picture.  We discussed many of our recent short plays in yesterday's post and there was no change in yesterday's Member Chat as we took advantage of that very silly move up to add back some short positions after Monday's profit taking.  

Now that we've completed our 50% retrace of the month's drop, we'll be happy to take quick bear losses and go longer if we can accomplish 3 of 5 of our 50% lines (see above) but clearly we'll be exercising a HEALTHY degree of skepticism against any short-term market moves.  

Early this morning, we took advantage of the morning pop to short the oil Futures (/CL) at $104.50 and we're just testing $104 now at 9am – so the Egg McMuffins are paid for and we're ready to start our trading day!  

Kleptocracy by WilliamBanzi7.  

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  1. Oil Lines

    R3 – 108.15
    R2 – 106.61
    R1 – 105.74
    PP – 104.20
    S1 – 103.33
    S2 – 101.79
    S3 – 100.92

    Huge volatility!

  2. Why are taxes so complicated:


    Needless to say, taxpayers should have the right to dispute the veracity of the IRS’s calculations and submit their own form. And some classes of people are going to routinely have unusually complicated tax finances. Journalists, for example, often have miscellaneous travel expenses related to freelance assignments. People running substantial small businesses will still need accountants. But for the vast majority of the population, most of the pain of tax compliance could be eliminated by a few keystrokes at IRS headquarters. So why don’t we do it? Two reasons. One is lobbying by the tax preparation industry to discourage states and the feds from developing easier tax-paying systems, as California recently did. The second is lobbying by anti-tax conservatives. When the Golden State implemented its ReadyReturn system, it did so over the objections of Grover Norquist and his anti-tax pressure group Americans for Tax Reform, which fears that if taxes become less annoying voters might be less unhappy about paying them. After all, if the government did something to make your life easier it would be harder to tout the difficulty of tax compliance as a reason to abolish the progressive rate structure.

    From an ideologue’s perspective, it makes perfect sense. But for you, the next time you find yourself struggling with IRS forms, remember that it’s big business aligned with anti-tax conservatives, not the government, that are causing you the pain.

  3. Phil,

    You’re thoughts on the best portfolios/plans for growth in an IRA as well as growth in a margined account that can be overseen daily, preferably after hours or every few days.

  4. From ZH twitter
    zerohedge ‏ @zerohedge
    EURUSD sliding as French CDS passes 200 bps
    If FR is dragged into this then we are approaching endgame..

  5. Oil lines/stjeanluc – when you get time (can be after hours say) I had a question on your oil lines.  I see how the pivot points would be calculated, and I see the open/high/low in TOS for /CL but I don't see where you find the value at the close.  Do you just look at the value around 2.45 or 4pm?  Or is there somewhere I'm missing in TOS to see that?  Thanks, Scot.

  6. Good Morning All! Phil, any thoughts on GNW? Any recs on this pullbacks? TIA!

  7. Here they are….GLTA.

  8. Go DEPO…. DepoMed (DEPO) +6.7% premarket after saying it will prepare and file a new drug application with the FDA in H2 2012 for its Serada treatment for menopausal hot flashes. Results of three Phase 3 clinical trials were positive and statistically significant for three of the four pre-specified primary endpoints.

  9. Something else for my fellow stockaholics.  I think twitter the poor man's bloomberg.  Catch most of the news right on the spot.  Some very interesting people to follow in the list below
    The 101 Finance People You Have To Follow On Twitter

  10. Oil Lines / Scot – My lines are based on the continuous contract prices using the Floor pivot calculations. So I use the high, low and close prices on the previous 24 hours. I actually programmed it to display automatically in my charting software.

  11. Twitter / Dpas – For traders, the following list is also pretty good:

    I just saw that last night and was going to add a few people to my account. Cramer is on that list but that's probably an oversight!

  12. List / StJ – Thanks!! Just went through the list already have half of them :-)  Also a very good swing trader i follow is Traderflorida.  Lately he is really on the same camp with Phil (short anything that moves)
    Cramer is actually the most helpful of all to follow. Just need to remember to trade his advice costanza style ;-)

  13. List / Dpas – I might actually make sense to weed out people from both lists and create our own Twitter list for members. Let me know if you have any feedback on the value of some of the guys you follow…

  14. Good morning! 

    Europe down about a point.  Euro at $1.307, Pound at $1.597, 81.35 Yen and EUR/CHF is $1.202 with the Dollar just rejected at 80 and back to 79.95.  

    We hit $104 on the button on oil (/CL) so congrats to the early birds who caught that worm today and now hopefully we get a nice run back up into inventories (10:30) that we can short into again.  

    I have a lunch meeting and I'll be gone from about 11-1:30 so hopefully the markets aren't too crazy today – I imagine we'll be positioning today for a flatline into Friday's expiration although I did think the S&P would be more like 1,360 than 1,380 to end the period.  

    Other than Oil Inventories, there is NO data today outside of earnings.   We had a 6.9% increase in Mortgage Applications as the 30-year went back to 4.05% but don't let the talking heads on CNBC fool you, any real reporter would click on the link and see this:

     Released On 4/18/2012 7:00:00 AM For wk4/13, 2012

      Prior Actual
    Composite Index – W/W Change -2.4 % 6.9 %
    Purchase Index – W/W Change -0.5 % -11.2 %
    Refinance Index – W/W Change -3.1 % 13.5 %

    That's not too hard to figure out, is it?  It's ALL refinances.  ALL as in so many refinances that they completely mask an 11.2% DECLINE in actual purchases.  Isn't it amazing how happy the MSM is to lie right to your face.  Keep this in mind as analysts come on TV to tell you what a positive number 6.9% is.  The only reason these numbers were up in March was a change in FHA loan coverage for super-jumbos (more tax breaks for the rich!).  

    Tomorrow we have a datapalooza with Unemployment, Consumer Comfort, Existing Home Sales, Philly Fed, Nat Gas Inventories and Leading Economic Indicators, which have been trending down and are very unlikely to improve:  

    So nothing to get bullish about other than technically bullish if we somehow manage to pop 3 of our 5 50% retracement lines at Dow (13,000), S&P (1,395), Nasdaq(3,075) NYSE (8,050) and Russell (815).  At the moment, the Russell is our laggard so we'll keep an eye on those IWM calls if the RUT Futures (/TF) can make it over 805 (now 803), which should be 813 on the main index and we can play the $81 line on IWM bullish with the April $79 calls, which seem to have about .13 in premium at $1.95 so those can be played when they hit $2 with tight stops below $2 and don't forget – making .10 is good, .20 is great!  

    More likely we head lower – at least until the EU closes and, of course, if the Dollar goes over that 80 line – it's very bearish for stocks and commodities.  

    GS came up with a $750 price target on AAPL – if that doesn't goose the market, nothing will!  AAPL $615 at the open.  

    Also, while I'd like to see more volatility priced in, selling BRK.B Jan $72.50 puts for $3.10 is a very nice way to raise cash with a net $69.40 entry (stock is now $80).  

  15. ARNA – if you own stock, I hope you sold.  They continue their trip down the escalator…..

  16. Pharm, 
    Do you still like selling puts on PLX? TY!

  17. We're living in an Apple World.  I'm voting yea for giving Apple it's own exchange and taking it out of any Nasdaq components.

  18. BOJ buying Euro?

  19. Man I can't believe I got suckered by the AAPL drop.  Bought the 600/615 BCS for $11.  Sold it for $5.  The spread was all the way down to $2.30, thought I made an OK decision.  Now AAPL is 617 and the spread is worth $10.50.  
    I'm really bamboozled by this type of market.

  20. On the CNBC website but not mentioned at all on the network.  Funny how the market ignores this like it's nothing:

  21. PLX/enni – no, I do like the may $5/7.5 BCS.  It is a bit more now from when we started playing it, but it still works at 1.10.  I do like the stock in here as well, playing until May.

  22. FU PCLN!!!
    FU CMG!!!

  23. Best Portfolio/Kallen – Clearly that would be our Income Portfolio.  I'd suggest going to our Virtual Portfolio tab and reading all the posts back from where we started it last April.  This (May expiration) will be the last month on that one and we'll begin a new one after the Holiday at the beginning of June (or maybe that weekend if it's rainy).  That should give you a good idea of our style and philosophy for long-term investing.  

    Oh yes, Manual of Ideas is inverviewing me this evening at 6:30 and I'm pretty sure it's a pod-cast:

    Oil $104.28.   Dollar 79.89.  Euro $1.3082.  Pound at $1.5986 is NOT going over $1.60 so, essentially, that should put a floor on the Dollar (maybe 79.80) and a top on the markets very near here.   If we do pop those lines – then we could be off to the races again so keep an eye on those relationships. 

    Endgame/Dpast – Not yet.  As it said in the picture of Geithner with the giant rolls of paper – we can't be out of money, we still have paper!  Europe is in the same boat and they may not want to, but they will come up with another Trillion to buy another quarter in the very least.  It's election season over there and the leaders are all about to lose their heads if things get any worse.  

    GNW/Ink – I like them long-term but insurance companies are essentially CONSERVATIVE bond investors and bond returns suck unless you want to invest in the PIIGs.  They bottomed out at $1.75 in 2009 and I'd hang back and hope for another liquidity crunch (two words that don't seem right together) and then we can go hog wild on the sector.  If the markets recover, and they get back over $7.50 – I'll like them then too but not as much as I would LOVE them at $2 or less.  

    Top 100,25/Dpast, StJ – Good lists.  Sad that Cramer leads with most followers though.  Good idea on making our own Twitter list.  I thought we should do a top financial sites too – maybe give out awards at the end of each year like those other pretentious sites who think they have the right to judge – I would enjoy doing that with a humorous twist.  

    AAPL/Rustle – Yep, $618 and all is well.   Notice the manipulation from GS.  They are up yesterday on ITV rumors and now GS gives it a little top-spin with an upgrade.  IBM is down 2.5% and INTC is down 2.5% but who cares – AAPL!!!!!  Did I mention CHINA!!!!?  

  24. Some good names to watch tonight with AMEX, QCOM and YUM reporting!

    ABT beat this morning and raised guidance, but they are caught in the downdraft this morning. Maybe Pharm will have more insight.

    HAL beat nicely and are up over 4% this morning.

  25. CHK scandal, is it serious?

  26. Spanish and Italian banks loading  up on their Government debt –  beside transfering the burden on the tax payers: this also a scheme to decouple the countries belonging to the Euro zone. Now if one of those were to be cut of from the zone, there would be considerably less trouble for the other remaining countries and their banks.

  27. PCLN flying – looks like we'll get that re-entry for 5 July $560 puts at $7.50 in the $25KP!  

    FAS Money – Gotta love premium decay.  

    IWM Money – Up $102 from yesterday.  Can slow and steady win the race?  No likely with FAS money up more than 2x but certainly a lot less stress with IWM.  

    $5KP – Today better be the day on USO, we want to take $1.12 off on 1/2 and leave just the 5 at $1.26 if we get a nice break.  DIA I expect good things out of by next week.  


    • DMND – currently $21.85
    • XRT – $61.14 looks like we'll have to roll again.
    • BBY – Creeping back ($22.08) 
    • SCO – ($34.53) cutting it close to the bone on our target but, of course, it's a great net gain already.  
    • SQQQ – $11.04 is pretty much an AAPL put.  
    • FAS – $101.78.  One bad bank report could do it.  SLM, BRKL, IBKC,  BAC, BX, FHN, FNFG, MS, PBCT, COF, CYN, ETFC, MBFI, BPOP and GE still to report this week.  
    • GLL – Waiting but getting less patient.  
    • USO – I'll regret it but prudent to also take $1.12 and run on the half that cost us .92 – just in case we have to put money back into a roll up.  
    • DIA – Patience.  

  28. Pharm – ARNA – I didn't sell. I actually just increased my position. Is everyone just assuming with 90% probability this will not be recommended on May 10th? Also, in your experience, how much further do you think this stock can fall without a pop into the May 10th decision? I mean if it get's the recommendation it will be a 10-12$ stock (if it follows VVUS' move). I dont know how this stock is lower than 2$ pre-decision… Anyways, just looking for some commentary. Yes, it has been frustrating to see the stock crash when I had my sell (1/2) at $4…. And why has your opinion changed so much from 18 months ago when you really liked them. Their drug hasn't changed….

  29. CHL / Lol – We'll have to see what happens about these supposedly loans from the CEO. They are making new lows as we speak, matching the 2009 lows. 

  30. Cashin saying that the PBOC is putting a floor under the euro at 1.30 because Europe is China biggest trading partner, trying to keep a strong euro!

  31. Bad loans/Rustle – Wow, that got worse since last night's news!  I thought it was 7.6%.  Oh well, what's 143.8Bn Euros in bad loans?  Those banks must make at least $5Bn a year total so only 30-40 years and they'll be fine….

    House prices also fell another 7.2 percent in the first quarter from a year earlier, according to the Spanish Public Works Ministry.

    I know if our house prices were dropping 7.2% per quarter that we sure wouldn't worry.  After all, once you get below 50% of the original value, 7.2% lower is only a 3.6% drop from the original price so it's almost like things are improving, right?  

    CHK down 6.66%!


    Chesapeake Energy (CHK) fell about 6% in early trading afterReuters published a story indicating that CEO Aubrey McClendon has been taking out loans to finance stakes in Chesapeake’s wells and then using those same stakes as collateral for more loans.

    The arrangement hasn’t been reported to Chesapeake shareholders, although the company and the CEO argue that they don’t need to be because they are personal investments. McClendon has the right to take stakes up to 2.5% in Chesapeake’s wells.

    That said, experts interviewed by Reuters say that the deals could raise conflicts of interest that compromise McClendon’s duty to shareholders.

    Nothing I'd bail over.  Reminds me of Lampbert crashing SHLD ahead of his buy-back.  It's shades of potential impropriety that can be "cleared up" and allow McClendon to come out smelling like a rose once he's upped his stake in the company by a sufficient percentage.  

    So, I do like selling the CHK May $18 puts for $1.30 and buying the May $15/18 bull call spread for $2 for net .70 on the $3 spread that's $2.65 in the money.  Let's do 3 of those in the $25KP. 

    And there goes oil again!  

  32. And you wonder why we can't keep healthcare costs low in this country:


    In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1. Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.

    Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldn’t penetrate the market.

    Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.

    I swear I’m not making this up. Wash, rinse repeat.

    ABT reported this morning and they beat. Maybe their legal department is more useful than their R&D department!

  33. Spanish bonds falling – from Zero Hedge

  34. why is PCLN and CMG flying with AAPL giving up their early gains???

  35. Jabo don't tell me you've gone to the dark side (long) CMG :)

  36. Good stuff from Jon Stewart as usual…


    Republicans predictably filibustered, claiming that the estimated $47 billion it will raise in the next decade is a drop in the bucket. “That wouldn’t pay for half a day’s work on the secret reanimate Ronald Reagan project,” Stewart mocked.

    But point taken, he added. Then again, didn’t Republicans say $300 million was an awful lot to spend on Planned Parenthood? “Let me get this straight,” Stewart said. “$47 billion in millionaires’ money is less than $300 million in mammograms and birth control.”

  37. Jabob was alive and well at 9:54am! :)

    April 18th, 2012 at 9:54 am | PermalinkIgnore this user
    FU PCLN!!!
    FU CMG!!!

  38. Oil inventories not doing much so far.  

     Released On 4/18/2012 10:30:00 AM For wk4/13, 2012

      Prior Actual
    Crude oil inventories (weekly change) 2.8 M barrels 3.9 M barrels
    Gasoline (weekly change) -4.3 M barrels -3.7 M barrels
    Distillates (weekly change) -4.0 M barrels -2.9 M barrels

    It's actually more of a net draw than expected so we're not likely to fail $104 on this news.  We'll have to wait until the full release at 1pm to see what happened but last week these numbers bottomed USO out at $38.50 and it's now $39.55 so we'll see if this initial excitement wears off and gives us another shot to short.  

    Clearly there's a demand story to sell as well so possible market lifter in absence of other news today but, as I said, FOREX physics make it unlikely the Pound holds $1.60 but currently they are over at $1.6015 and the Euro is $1.3112 and the Dollar is 79.74, which is interesting in light of the strong demand for Dollars to convert to oil.  

  39. Shouldn't oil be going the other way with a bigger build?

  40. maybe I am reading that wrong

  41. I think we all learned by now that oil prices have nothing to do with supply and demand.  Republicans were spinning the hell out of Obama's proposal telling people that prices in oil would be much higher if we had regulation.

  42. Pharmboy     DEPO    What are your thoughts?  Seems to be showing signs of life…

  43. EUR strength BS…this could go the other way very quickly

  44. how so kustomz?

  45. It's just unreal now…

    But as our GOP reps will tell us, speculation has nothing to do with it. We need to drill, drill, drill. No place to store it, but what the heck! Insane…

  46. So we have Hulbert talking up the market, Cashin talking down the Dollar, Goldman goosing the AAPLdaq — and all we can do is hold just under even???

    Generics/StJ – Well there does have to be a reason for companies to pour all that money into R&D but this is where I think Government control would be a benefit.  Based on the cost of treating a disease, the Government should incentify research in certain areas in exchange for reasonable pricing on long-term cures.  If they award these contracts to companies based on low bid – then ABT, for example, would own Tricor or perhaps have a general cholesterol contract from the government and then, rather than 20 firms running similar R&D projects – we could consolidate cholesterol research at ABT and then MRK would get arthritis, etc.  Surely that would be more efficient than the mess we have now?  

    PCLN/Jabob – Same reason they always do.  

    79.67!   Gasoline down at $3.17, I'd like (/RB) for another bounce (bullish) off the $3.15 line if we get it.  Usually it's a good play into the weekend and gasoline demand/draw was much stronger than expected.    79.60 held (mostly) on the Dollar yesterday so let's watch that line carefully.  Nas just on that green line at 3,043.  

    At the open: Dow -0.51% to 13048. S&P -0.42% to 1385. Nasdaq -0.36% to 3031.

    Treasurys: 30-year +0.23%. 10-yr +0.08%. 5-yr +0.02%.

    Commodities: Crude -0.33% to $104.29. Gold -0.46% to $1643.55.

    Currencies: Euro -0.42% vs. dollar. Yen +0.6%. Pound -0.33%.

    Market preview: U.S. stock futures are lower premarket, weighed down by falls in Intel (-2.7%) and IBM (-2.2%) following earnings and matching the direction in Europe as the debt crises inSpainPortugal and Italy rumble on. S&P benchmark futures -0.4%. SXC Health +9.4% and Catalyst +33% after the two agree to merge. Later: eBay, American Express earnings 

    10:00 AM On the hour: Dow -0.36%. 10-yr +0.06%. Euro -0.24% vs. dollar. Crude -0.22% to $104.41. Gold -0.41% to $1644.35.

    New Labor Department figures show the gap between America's highest- and lowest-paid workers is widening. Between mid-2009 and Q1 2012, earnings of Americans at the top – those who earned more than 90% of all workers – rose 7%, while wages of those at the bottom – those earning less than 90% of all workers – rose 2.5%.

    EIA Petroleum Inventories: Crude +3.9M barrels vs. consensus of +1M. Gasoline -3.7M vs. consensus of -0.6M. Distillates-2.9M vs. consensus of -0.2M

    First it was the Bank of Canada talking about a "modest withdrawal" of monetary stimulus. Then Sweden's Riksbank snapped a run of rate cuts, followed by BoE superdove Adam Posen voting against more stimulus. "Is the tide finally turning for global central bank policy," asks William Kemble-Diaz. 

    "Our monetary policy is very expansionary," says the ECB's Jens Weidmann, "fill(ed) with concern" over calls to give the bank a Fed-like dual mandate. The best way to ensure growth in the EU is to deliver stable prices, he says. The ink is barely dry on LTRO 2 and already there are "calls for a 3rd or 4th round," he says (shaking his head, one might imagine).

    Defense of the minimum rate (for euro/Swiss franc) is anabsolute priority, says the SNB's Thomas Jordan, after his move from interim Chairman to Chairman. He says the franc remains overvalued, but refuses comment on a further lifting of the CHF 1.20 floor. EURCHF promptly sheds a few pips back to 1.2026.

    Something fun to ignore:  The IMF warns of a EU credit crunch, expecting the region's banks to shed €2.6T in assets by 2013's end. This could reduce the area's credit supply by 4.4% and cause a hit to GDP of 1.4%. (Global Financial Stability Report) A press conference discussing the release here.

    Charts of Spanish banks' bad loans over time show today's reported increase still hasn't brought the level as high as in the mid-90s. Given the recent property bubble was far bigger and today's economic situation in the country is worse (and continuing to deteriorate), even the 8.2% bad loan figure seems optimistic

    Madrid leads the way lower in Europe, -3.1%. Given that, what would you think is happening to Spanish bond yields? Correlation fans will be disappointed, as the 10-year is off 8 bps to 5.80%. The utility sector is the big loser, led by Ibderdola (IBDRY.PK),-7.3% after a struggling construction firm is forced to unload a big stake in the company.

    Germany sells €4.2B of 2-year schatz (Treasury notes) priced to yield 0.14%, a record-low borrowing cost for the country, and down from 0.31% at last month's auction. Yields for the paper in the secondary market traded down to 0.09% last week, lower even than Japan

    Home prices fell in 46 out of 70 tracked Chinese cities in March, up from declines in 45 in February, reports the NBS. On a Y/Y basis, home prices declined in 38 cities vs. just 27 in February. Home sales were 17% lower during Q1, says Credit Agicole's Dariusz Kowalczyk, citing separate data. Shangahi +2% last night, led by property developers. Go figure.

    Home prices fell in 62 out of 70 tracked Chinese cities in March, according to a private survey (official survey here). The figure was slightly worse than February, but an improvement from November's level. The China Real Estate ETF: TAO +21.9% YTD.

    Big daily swings in the stock market have become commonplace again. The Dow has moved by 100 points or more on an intraday basis in 10 of the 11 trading days this month, after only nine such days in each of the previous two months. Markets that whip around tend to be more susceptible to sharp moves lower, as was the case in H2 2011

    The strong performance of the financial sector makes itunlikely the market is near a top, writes Mark Hulbert. Sectors that outperform in the quarter prior to a top are typically consumer discretionary and consumer staples, while financials typically lag before the peak. "Recent returns do not fit the mold … prior to past market tops."

    BlackRock shares -2.9% despite Q1 EPS easily beating expectations and net profit edging up 1% to $572M, helped by strong inflows into its popular iShares ETF ops. Total assets under management rose to $3.68T from $3.51T in Q4.

    BNY Mellon (BK-1.5% after reporting Q1 earnings that were in line, with net profit slipping 1% to $619M as forex revenue plunged 21% Y/Y. BNY declares divdend of $0.13 a share. 

    Berkshire Hathaway (BRK.A -1%, (BRK.B -0.9%) shares open lower on the revelation that Warren Buffett has been diagnosed with Stage 1 prostate cancer. Buffett tells CNBC nothing has changedin the company's succession plans.

    Genworth Financial (GNWdelays the planned minority IPO of up to 40% of its Australian mortgage insurance business. Shares-11.1% premarket.

    Shares of Wynn Resorts (WYNN +5.5%) power higher on a report the Macau government may sign the land grant contract for the gaming operator’s projected Cotai property

  47. Shares of Wynn Resorts (WYNN +5.5%) power higher on a report the Macau government may sign the land grant contract for the gaming operator’s projected Cotai property within this month. Wynn is expected to report a strong Q1 after Thursday's close, with consensus EPS estimated at $1.41.

    definite buzz over a buyout bid for Best Buy (BBY) is in the air, according analysts following the comings-and goings at the company. While investors start the process of exploring a run at the retailer, one big hurdle they see that would need to be cleared is the 20% stake owned by Richard Schulze that could be a bit tricky to free up. Shares of BBY +0.4% premarket. 

    Intuitive Surgical (ISRG +8.8%) is the S&P 500's top gainerafter its Q1 earnings beat yesterday and guidance that topped Street forecasts, prompting analysts to increase their price targets.

    Merrill joins Cantor Fitzgerald in upgrading First Solar (FSLR -3%). Though it still expects First Solar's earnings to decline over the next several years (!), and sees ongoing price pressure from Chinese rivals, it's pleased the company is getting rid of excess capacity, and likes its low valuation. However, Wunderlich is downgrading shares to Sell, predicting continued share loss due to the inadequacy of First Solar's panels for space-constrained deployments.

    WTF?  Videogame maker THQ (THQI+40% premarket after raising its FQ4 outlook due to strong sales of its Saints Row: The Third game. Expected EPS loss is now $0.10-$0.20 vs. consensus loss of $0.40, on revenue of $160M-$170M vs. $142.3M consensus. THQ expects to report cash and cash equivalents of ~$76M, three times higher than its previous estimate. - What are we, China?  How can an established company move like that on earnings?   

    RBC (Outperform) isn't bothered by the ho-hum guidance attached to Intel's (INTC -2.4%Q1 report: the firm argues ultrabookdemand, emerging markets sales, and server CPU strength will translate into 2013 EPS of $3, well above a consensus of $2.63.Wedbush (Neutral), however, thinks good news is fully priced in, and expects shares to be range-bound until there's better visibility on ultrabook adoption. (transcript)

    Sony (SNE) and AU Optronics (AUO) are reportedly in talks to create a JV that would produce OLED TVs. The JV would represent competition for Samsung (SSNLF.PK) and LG, and would be music to the ears of OLED technology developer Universal Display (PANL), which surged yesterday on positive Goldman comments.Sony recently exited the OLED TV market, which remains a niche for now due to high panel costs.

    Nomura reiterates a Buy on Vodafone (VOD), expecting shares to get a lift from a solid FQ4 report (due next month) and Verizon Wireless' (VZcontinued strength. The firm also sees Euro service revenue growth picking up due to less pressure from mobile termination rate cuts, though it's slightly lowering its estimates on account of roaming fee cuts and a weak euro.

    Apple (AAPL +0.7%) edges higher following a bullish notefrom Goldman's Bill Shope, who thinks concerns about carrier subsidy cuts, a soft June quarter, and slow Mac sales are overblown. Shope argues competition and an interest in getting feature phone users to upgrade will keep carriers from slashing subsidies; the iPad refresh and new iPhone distribution deals will produce a strong FQ3; and the Mac's international share gains will offset soft U.S. growth.

  48. Phil

    Wall of worry……what wall of worry???
    I bumped into a broker yesterday who couldn't have been more positive on everything from the market to the economy to Europe to just about everything we talked about.  I was thinking, damn, everything is fixed…..BUY BUY BUY.
    What a freakin joke.  These are the same guys that are convincing everyone from Johnny lunchbox to Grandma Jones into taking their life savings and dumping it in the market.
    On a different note, I heard a interesting comment on the radio yesterday.  Not sure if it's true but I'll repeat it because it's probably true……..the guy said something to the effect of………"regardless of how much you pay in taxes this year……….it was spent 13 years ago"…….if you think about that long enough……it will give you one of those ice cream brain freezes.

  49. I have to go but that news gives me nothing to feel bullish about.  Oil collapsing down to $103 so that $38.50 target for USO is very realistic but let's watch the $103, $102.50 and $102 lines as probably being very bouncy so be careful!  

    Later all!  

  50. USO 1.10 and it turns!

  51. wheeeeeeeeeeee on oil!

  52. 1/2 out of USO – Wheeeeeeee!

  53. That talk about who is going to get to $1000 first – AAPL or GOOG might be missing one candidate. ISRG is just a juggernaut right now. They are up 600% in less than 3 years with no sigh of slowing down… And the threshold for competition seems higher to me than for PCLN, CMG or even AAPL. We are not talking about cell phones and burritos here. 

  54. Didn't the IMF just raise the EU's GDP?  Unreal!

    ARNA/j – I am down on the whole weight loss sector from 18 mo ago b'c I believe the sentiment in Gov't is….lose weight by exercise and diet, not pill popping.  Plain vanilla now, as the cards have been shown, and insurance can give a big FU to the makers of pills that they deem a lifestyle rather than a necessity.  If things were really good in the area, why is VVUS still around?  OREX?  Why hasn't the Japanese picked up ARNA for a song and a dance?  My company was bought for a higher multiple than ARNA, and our drug is unproven.  Sure, it could go to 12 on the approval, but it could go to 50c on rejection.  At $3, you should have sold 1/2 at least.  I have been burned too many times on these little companies by going all in and not taking some off the table, one of our golden rules here at PSW.


    ABT/stj – that is DEPO's premise, and pharma loves to do it for big drugs.  The technologies are changing for drugs that once had horrible absorption in human, and we are seeing the fruits of that labor.  But biotechs are leading the charge to new and more exciting drugs for hard to treat diseases. 


    DEPO is a well run company, that needs some backing of a TEVA or other generic maker.  That is why I was betting on them, and getting taken out for their technology more so than their 'wash, rince, repeat' methodology…


    Oh, and bye bye oil. 

  55. exec – I was also talking with a parent of my son's friend who manages money for wealthy clients.  They are going into much more conservative things….e.g., bonds….big difference on one who is active in their money managing and just a sales pitch for the brokers….

  56. Wow, Andrew Keene asks who goes out of business first – BBY, CHK or FSLR. Where is the love?

  57. DMND not feeling the love today – down 2.5%

  58. I vote BBY.  Hated them and RIMM for over a year.

  59. And oil seems to have found a footing at $103. I have S1 at 103.3 so that might be a resistance line if they try pushing it up again.

  60. RIMM / Rustle – RIMM is good example of what happens to complacent companies…

  61. From Technical Indicator (McHugh's):

    Stocks rose sharply Tuesday, April 17th. The powerful down thrust last week followed by a powerful up thrust this week is typical price behavior for a sideways triangle pattern. These patterns are typically wave fours or b's. In this case, we believe it is large degree wave 4. The only question we have at this time is whether this pattern will be large or tight (small). If it is going to be large, then the rally this week is completing the middle wave b-up of a three wave a-down, b-up, c-down move for the first leg of this triangle, wave a down. If this triangle is going to be tight, or small, then its first of five waves, a-down, finished last week, and its wave b-up is close to finishing today.


    Our key trend-finder indicators work very well for all scenarios except sideways triangles that are fairly small. That appears to be the case at this time. We got new buy signals tonight in our short-term and intermediate term indicators, including the Secondary Trend Indicator, however, just as they got whipsawed from last week's sell signals, the new buy signals could/should get whipsawed again as this sideways triangle wave 4 works through completion.


    If a small sideways triangle is occurring, the upside target for the Industrials is 13,200ish and for the S&P 500 is 1,405ish over the next few days. Then prices should fall hard to bottom boundaries of this triangle, 12,825 in the Industrials and 1,375 in the S&P 500. If the larger sideways triangle if occurring for large degree wave 4, then prices could top at any time and anywhere from 13,121 to 13,200 in the Industrials and anywhere in the range from 1,390 to 1,405 in the S&P 500. Once topping, the Industrials should decline to a downside target of 12,500 to 12,650ish and the S&P 500 should decline to 1,340 to 1,360ish levels.


    • UK FTSE -0.4%
    • German DAX -1.0%
    • French CAC -1.6%
    • Spain IBEX -4.0%
    • Portugal PSI -1.0%
    • Italy MIB -2.4%

  62. It's looking increasingly like the biggest impediment to recovery in Europe is the ECB with an assist from the Bundesbank:


    If you're persuaded by my opening analogy, you can see why lenders are so concerned about growth. It's why they don't actually like austerity. But just today, the Bundesbank — Germany's national central bank, and the real power behind the ECB — came out and told countries not to worry about growth. Telling a country in a debt crisis like Spain not to worry about growth is like telling man in debt to not worry about finding a job. The most polite way to characterize this advice is "delusional."
    To crib from Keynes, Europe's policymakers have blundered in the control of a delicate machine, the workings of which they do not understand. They're not evil. But they're almost certainly wrong. Rather than consider the possibility that the economy might work differently than they think, they have settled on a simple message: The beatings will continue. Unfortunately, morale will continue to not improve. Eventually, you have to think leaders in Europe's beat-up countries will begin to wonder if life might be better outside the euro zone. Hopefully, the ECB will come to its senses first.

  63. With friends like the ECB, Spain, Portugal, Italy and Greece don't need enemies…

  64. So, ARNA May 2.5/3.5 BCS went for 19c.  Tell me that they are not baking in failure  Stock is on the lower BB.  That is my play for the FDA.

  65. Who needs Cheney in the White House – Halliburton is up over 100% since that pinko commie Obama was elected. To think of all these CEOs that are going to vote against their economic interest in November!

  66. ARNA / Pharm – Would you sell any puts with this BCS? Or too dangerous in case of negative FDA outcome?

  67. Pharmboy – What is your opinion of Adam Feuerstein?

  68. jabo — after buying overpriced electronics, apple users need cheap travel. 8)

  69. DMND — diamond fails to deliver data is coming back down to earth ( so there is a chance it can bottom now. I suspect $20 as a nice round number without new developments.

  70. dpast – maybe on somethink like VRTX where the whole thing can be done with one put – July 32s.


    Diamond – I read him b'c of his following.  I think he is no better than anyone else, although I personally think he has too much influence.  I have no idea what background he has, but I like Hammer and Gekko better.  All have cut back on their writing, as have I, b'c there is not as much out there right now for reporting.  Many of the good companies are in mid-stage trials, so the run ups have been done.  YMI still has lots'o'room though.  Buying more in there for that matter.


    WFR – what they givith, they take awayith…..back to where it began.

  71. @stjeanluc
    Taxes prepared by IRS.
    Unfortunately there is ideal world of journalist articles and reality of evolution of governmental organizations.
    In Israel they've adopted this approach many years ago. And it was fine. But as time passed it evolved. And now if you don't agree with IRS calculations, you have real burden to prove your case. And you have to fight. THEY (IRS) assume that if you dispute – you are trying to cheat. They often reject your tax forms and it's almost impossible to resolve it without personal visit to IRS office.
    Any organization given power to initiate filled form, starts assuming that they are correct by default.
    We often dream about ideal solutions and get unintended side-effects way too often

  72. Somebody giving FCX some love.

  73. CRIS is making a nice run at $5.  Now, over it and hold it.  Then we can get to $7.

  74. Taxes / Lol – It's true that in some cases, it might be a problem. But for the people who file with the -EZ form and only report regular income, it would be easy for the IRS to access all the relevant information without any problems given the fact that it's already file by the employers.

    Small business owners (like me) would be hard pressed to do the same though… But helping 30% of the population could be step forward. Going to a simpler tax code would obviously be a better solution, but I would be willing to bet that the tax code would not stay simple very long as armies of lobbyist would be itching to add pages to the code… 

  75. rainman
    People who buy Apple products have to travel to every bean barn to find others to listen about expensive products while eating overpriced tacos. And the momos go to the moon!

  76. AVEO has fallen since our entry.  My allocation is down about 25%.  I am DD on the stock and selling the 12.5 July puts, which is where our puts are sold as well.  I am not DD on the puts, yet.

  77. Oh, and I read on the bioboards that AVEO is HIRING!

  78. Volume off a cliff, very easy to trigger the buy bots..

  79. Kustomz
    How low is the volume, the question is also is oil and AAPL are down and the dollar is in no signal land?

  80. It's amazing that people are looking towards tomorrow's auction for Spain.  Realization is even if it goes well, it doesn't change anything.  They are in a financial mess right now and if the yields on this one particular auction are .3% better, it changes nothing and probably means the EU found a secretive way to buy them to keep panic from spreading.

  81. Shadow, I pay close attention to the futures, you can see them trying to trigger or testing to gauge interest. From what I see it looks like they are playing possum. They want to send the markets higher, my gut is telling me we should be lower. Difficult to choose direction here..sitting in cash waiting for the signal. They may be looking to pump into 2:30 since its been sideways since 12…

  82. Phil Please set my thinking straight on AGNC holding stock and sold the Jan13c for .86 trading today at .90 Stock trading at 30.50 so we still have .40 of extr value. The div to be paid is 1.25 obviously .35 more than the premium of .90.
    However ex div day was 3/5/12 so why is the stock still going up and way would some one call the Jan 30 caller if he would not participate on the div in the first place??? thanks

  83. Phil,  we currently have some CHK in the IRA Portfolio.  What do you think about this current scandal.  Are they conveniently leaking this story to drive the stock price lower before Natural Gas spikes back up?  Or, is this a sign of Corrupt CEO and we are in for another ENRON moment?

  84. Newspapers must really be hurting.  I pay $1 a week for the NY Daily News and just locked in another year for the same rate.  Six papers plus the Sunday for $1, how can you beat that price?

  85. CMG reports earnings today (I think) and I was wondering what we are doing with our 370 put we rolled into?

  86. And magazine subscriptions I get completely free, Newsweek, Forbes, Business Week, Maxim, Car And Driver, Details, GQ and Men's Health.  How long before all publications stop printing and everything is Android or IPAD based?

  87. cmg is tomorrow after the close, I believe

  88. cmg
    Q1 earnings are expected to be announced after market hours on April 19, 2012Estimates: 2.08 | 1.932 | 1.74 (High | Mean | Low)

  89. kustomz
    Without opening a futures trading account I can't get anything but delayed action Please keep us up on them the best I get is when Phil says numbers that are off and I assume he has quoted futures.
    Have an in to watching futures real time for free?

  90. Frankfurter Allgemeine Zeitung:

        Germany's leading economic institutes said the European Central Bank's response to the region's debt crisis jeopardizes its independence, citing a yet unpublished report. "The independence and credibility of the ECB is at stake," the institutes will say in their biannual report to be published tomorrow. "There's a danger that monetary policy won't be able to free itself from the predicament it has entered," the institutes said.

  91. lol – Great comment on taxes/Israel.  It is, as you say, in the nature of bureaucracies to assume their default position to be correct, and to put the burden of proof on the taxpayer, who must fight the very bureaucracy his taxes fund from a vastly inferior financial base.  It doesn't take much imagination to see where that would have to end.

  92. stjeanluc – What is your take on the 2012 French Presidential Election?
    Douglas Kass: "One big short term headwind is if Hollande defeats Sarkozy – it could upset the EU debt program."

  93. Lol, Jabobeast, I definitely think you'd know better than I!

  94. Hola people!  Just closed a very nice deal so I'm in a very good mood – oil helping too, coming right to our goal at $102.50/38.50 so let's not be greedy and look to take $1.20 off the table on those 1/2 USO positions in the $25KP and $5KP as it's better to get out while the gettin's good.  

  95. France / Diamond – Looking at the latest polls, I don't see Sarkozy winning anymore. 3 months ago I could have been sold on a comeback, but now he is still more than 10 points behind in all the polls in the second round. Either we are going to see the biggest polling mistake ever or Sarkozy is a goner.

    Now Hollande has said that he wants to review the European agreements negotiated over the last year or so and possibly renegotiate them. As with every world leader, he will be held hostage by the markets and will quickly realize that his power is limited. Looks at France's CDS today for example – a subtle message of things to come. A couple of meetings with Merkel and the ECB gang might also help convince him. You would hope that another pair of eyes could help soften the current ECB/Bundesbank austerity program though and that might still be a possibility. There might be a period of wavering when there is still no official position and Hollande looks to gain his footing and markets might show some weakness – there will be a couple of weeks between the presidential and congressional elections and Sarkozy's party still has a majority in the most important chamber which I am guessing they will fight to retain although I don't see that. 

    Overall, it will be tricky between now and June… I would not bet one way or the others on market reaction!

  96. Someone is betting big on IMGN.  800 options moved:  April 13 Ps July 13 C/P.  Looks like they will take delivery of the stock this week, and then have a nice position hedged……

  97. "Just closed a very nice deal so I'm in a very good mood"
    Congrats Phil, may it lead you to many more!

  98. We're pretty much on script as the Pound flatlined at $1.60 and the Euro is back at $1.313 with the Dollar at 79.73, 81 Yen to the dollar and EUR/CHF at 1.2019.  

    Gasoline (/RB) with a great pop off $3.15, just rejected at $3.20 and back to $3.194 so another gift from the energy pits on our Futures plays.   Nat gas going nowhere, back t $1.955.  All commodities looking lame….

    On the whole, the markets aren't too weak but still not making our bullish goals either.  

    Volume is pathetic 60M on Dow at 2:15.

  99. futures : i have that link in my notes – but i didn't use it in a long time

  100. Hi Phil,
    FSLR – initiated a spread, selling 6 Jun 25C for $2.36, buying 3 Jun 20C for about $5.02, for about $0.37 net (total $115) debit. Question, how to manage this trade?  It could get in trouble when FSLR jumps higher and I would like to buy additional calls or move to higher strikes if / when this happens.  Would like to know when to put on full cover, for such a trade?
    I have sold some puts (2 x Jun 25P (sold for $3.8, currently $5.3) and 2 x Jun 35P (sold for 3.5, currently $12.9) so I am already down on puts sold.  I will need to roll the puts, but for now, it seems that the call spread may provide some balance, while I wait for FSLR to calm down around $25 (bottom-ish) ?  
    I want to build a position on alt-energy stocks (have a position in WFR that you recommended) and would not mind bottom fishing in FSLR to create a long(er) term position.   
    Thanks in advance. 

  101. shadowfax — Open a TOS paper account. They say it's delayed but the carts aren't. The actual price at the top of the chart appears to be delayed but the bars on the charts are a live feed.

  102. Stj / Hollande — I would think Hollande would have to be on the side of the Peripherals, given it's 9.7 unemployment rate in Feb. 2012, higher than Italy's [officially, in any case].  He may eventually side with Germany out of fear for French bond spreads, but since, longer-term, Germany's policy benefits Germany, largely at the expense of the Peripherals, I would think "austerity" a tough sell for a Socialist — particularly because there is no deficiency of economists willing to suggest that austerity is exactly what the EU doesn't need right now.
    Soros said last week: "You can grow your way out of debt; you cannot shrink your way out of debt."    Indeed.

  103. Hollande / Zero – That was my point exactly! He will only side with Germany under duress and you can be sure that enough pressure will be applied to make sure he does.

    Speaking of austerity, did you read my post - What is being imposed to Europe now is pure insanity!

    And here is more – look at the Italian situation:


    The plan, which must be ratified by Parliament and sent to the European Commission in Brussels by the end of the month, forecasts that Italy's gross domestic product will contract by 1.2% this year, almost three times the forecast in December.

    ….Yet, Italy's fiscal policy is tightening, Deputy Economy Minister Vittorio Grilli said. Rome will post a budget surplus of 0.6% of GDP next year in structural, cyclically adjusted terms….The International Monetary Fund reached a similar conclusion, saying Tuesday that Italy won't balance its budget until 2017, but that next year it will achieve a structural balance—suggesting Italy wouldn't have a fiscal shortfall if the economy were performing at its full potential.

    I suspect that many countries would not have budget deficits if their economies ran at full potential…

  104. AHHH crap.  Phil,  I don't know how this happened but I can no longer see your comments!!  How can I fix this?  Also, How can I see your response, since I can't see your comments!

  105. Phil – Congrats!
    StJ – on a structural, cyclically adjusted terms?  So that means no real surplus, as in money in the bank…funny. 

  106. Brokers/Exec – You're right.  Declining volumes, declining investment account mean your average broker is more desperate than ever to get people to give them money and they will say anything to get it.  Good point about the money being spent already – no point really then, is there?  

    ISRG/StJ – That was one I pounded the table on years ago, when people used to say "What's a da Vinci?"  They are like AAPL for me – still a great company but, having been in at $100 and out at $300 – $600 just seems like a lot…

    WFR/Pharm – That is sad. 

    AGNC/Yodi – I assume those are Jan $30s. On or just ahead of expiration day, the person may want to call the stock to pick up the net .35 but not now so I'm not sure what you are asking.  Is it worth selling that premium?  Sure it is – what if the stock goes down – then you get .86 more.  What if it goes up and he calls you?  Then you get his .86 + $30 for the stock.  These are not problems.  

    CHK/Craig – I think it will pass but it may take some time.  I do suspect it's a game to chase all the retailers out of the stock so the company can buy back or maybe do some sweetheart sell-out at a price shareholders would never have agreed to otherwise.  Of course the CEO is corrupt, he's a friend of Cramer's….

    $1/Rustle – Yes but then you have to read the daily news….

    CMG/Jrom – I believe we left off in the June $370 outs at net $5.50, right?   They are now $4.10 but into earnings, I don't see the point of putting in more money – we just have to hope they prove themselves overpriced.  

    Futures/Shadow – In TOS Paper Money, can't you see the Futures live?  

    Hey Jrom – I finally got the other box – way cool, thanks!  

    Thanks Kustomz – makes me very psyched to do Berkshire project – I miss getting deals done.  

    FSLR/DrM – You do realize it's not that clever to first enter a trade and then wonder what to do with it, yes?  You ask how to manage it but my answer would be – don't do trades like that.  If you are bullish on FSLR, then the $20/25 bull call spread is/was $2.76 and nets 84% in two month if you hit your goal.   If you are actually bearish on FSLR, then why not JUST sell the 3 naked $25 calls and be thrilled if they expire worthless and pay you $15.06?  What is it you want to happen with your 3 $20 / 6 $25 spread?  You want FSLR to be very close to $25 without going over and to stay within that $5 trading band for two months even though it's NEVER, EVER, EVER done anything of the sort – EVER!  Is that about right?  You pick a stock that routinely moves 20% in a month and bet it won't move 25% in two months.  The same goes for the short puts and that's even stranger because now you WANT FSLR to be over $25 but you don't want it over $25 on the long side and you also sold $35 puts but $35 would be devastating on your short calls if FSLR comes back.  As you may know – I think FSLR is the worst of the sector so it's not something I'd hold long-term or put more money into but you need to at least pick a direction and try to cut it down to maybe 3 legs per stock if possible. 

    LOL Craig – Someone please tell Craig that he probably has me blocked and that the unblock is a check box under the comments somewhere.  

  107. craigzooka – Under the dialog box un-check box to ignore Phil. :-)

  108. thanks Diamond, I have no Idea how that got checked.

  109. Phil
    Was afraid the answer was tos, I have 3 acounts now that want my money, this second 100% cash, will they let me open a paper account and not bug me?

  110. Well I missed 30% of the move in TNA, I think the EUR may be bout done not sure on the markets but you know what they say about the bird in the hand.

  111. SGEN options are very wide right now out in time.  I am selling the 17.5 May Puts.70 or better.

  112. shadowfax – The TOS paper account will only be valid for 60 days if you do not open a $$$ account with them. However, if you have multiple e-mail addresses, then every 60 days you can open a new paper account! ;-)

  113. The IMF is saying that EU banks will have to sell $2-$3T in assets?  Didn't they already pledge most[all] money-good assets to the ECB for the LTRO funds?  I assume that much like we will probably have to mortgage out the Grand Canyon, they'll have to start mortgaging out the Eiffel Tower, London Bridge, etc…

  114. Oil question Phil – so the May $39s are 1/2 out I assume…..would rolling down be wise to protect the profits, or just get out due to the summer driving (Memorial Day bump)?  Thanks.

  115. TOS/Shadow – One can only try. 

    11:42 AM European shares close sharply lower, led by another meltdown in Spain (-3.9%), the IBEX giving back far more than it gained on Tuesday. Stoxx 50 -1.7%, Germany -1%, France -1.6%, Italy -2.3%, U.K. -0.3%. The YTD divergence between Spain and other European bourses (and the S&P) widens even further.

    3:00 PM On the hour: Dow -0.44%. 10-yr +0.07%. Euro -0.01% vs. dollar. Crude -1.42% to $103.16. Gold -0.55% to $1641.95.

    The March Architecture Billings Index creeps down to 50.4 from 51 previously. The new projects inquiry index dives to 56.6 from last month's 4 1/2 year high of 63.4. "Progress is likely to be measured in inches rather than miles," in coming months, says AIA Chief Economist Kermit Baker

    "When I see Goldman Sachs (GSpull back risk that muchthat quickly, I get a little anxious about what could be around the corner," says Nomura's Glenn Schorr. Goldman's "value at risk" (VAR) fell to its lowest level since before the financial crisis, it reported yesterday – this despite Q1's rally in risk assets.

    The 20 day moving average of the Put/Call ratio has fallen near levels indicating perhaps too much bullishness, notes Tommy Thornton. Bears need to be patient though – a shorter-term view shows the ratio has been this low for the past couple of months, during which the SPY has inched higher. 

    "Sentiment is bearish, which is bullish for stocks," Ed Yardeni writes, pointing to drops last week in two surveys of bulls vs. bears to multiweek lows.

    VC funding fell 22% Q/Q in Q1 to $5.9B, reports CB Insights, but the number of deals increased by 30 to 785. A lack of "mega-deals" (Yammer's $85M round was Q1's largest deal) kept a lid on funding levels, but seed funding (sub-$1.5M deals) hit a new record. Going forward, Facebook/Instagram is expected to produce a pickup in funding for mobile startups, which totaled $435M in Q1. (previous)

    The Fed and BOE may have turned off the money printing presses for the time being, but the BOJ is ready to keep them running, with Deputy Governor Kiyohiko Nishimura saying "the bank is committed to implementing additional easing measures if deemed necessary." The BOJ's policy board is due to meet next week. 

    "There is significant evidence (QE) has caused collateral damage to pensioners, savers, and pension funds," writes Saga Group Director-General Ros Altmann, applauding the U.K.'s Treasury Select Committee demand that the BoE justify its "massive monetary experiment … Forcing gilt yields lower is not a remedy for economic recovery." 

    Italy's non-performing loans rose 16.5% in February,bringing the ratio of bad/performing loans to 6.3%. Good news on bank deposits – locals added 1.6% to their accounts in March – may be outweighed by foreigners cutting 16% for the month. Net funding from abroad is off 32.5% Y/Y.

    The Netherlands – with nosebleed levels of household debt, government finances in breach of EU rules, and its formerly bubbly property market "in a coma" – could be facing a ratings cut. The government is trying to put together an austerity package as the economy wheezes, but needs votes from Geert Wilders' Freedom Party, which has called for a return to the guilder. 

    Athens looks likely to wait until after May 6 elections to move ahead with plans to recapitalize the nation's banks, according to senior officials. The country's lenders are facing about €40B in losses (20% of GDP) from the country's debt restructuring. "The trick with the plan is to incentivize private investors," says an official.

    Might Genworth's (GNW -21%delay of its Australian mortgage insurance business IPO be ringing a bell for the Oz property market? The company cites deteriorating market conditions in the Aussie mortgage market "as lenders accelerated the processing of late-stage delinquencies … at a higher rate and severity than expected." Westpac WBK -1%.

    Deutsche Bank makes a couple of changes in its oil portfolio today, upgrading Exxon Mobil (XOM +0.3%) to Buy whiledowngrading shares of ConocoPhillips (COP -1.2%) to Hold. The firm says investors are focusing on cash return to shareholders, and believes XOM could ramp up its dividend by 33% over the next year. On other the flipside, COP is likely to cut its share buyback forecast post-split.

    Halliburton (HAL +4.4%) CEO Dave Lesar shed some light on the firm's rig count in an earnings CC. He says that the 1% decline understates the dramatic shift toward oil plays (+10%) away from natural gas rigs (-19%) due to lower natural gas prices. "While these moves are beneficial to us in the long run, they do not come without a short-term impact on our margins." (transcript)

    Argentina's billionaire Eskenazi family risks default on more than $2B of debt after the government seized control of YPF and said dividends probably would be reinvested. The family's Petersen Group, which owns 25% of YPF, owes Repsol (REPYY.PK) $1.9B; it counted on YPF dividend payments of as much as 90% of profit to repay Repsol and ~$680M of loans with banks including Citigroup (C).

    Another round of losses for Arena Pharma (ARNA -15.2%), as Adam Feuerstein responds to critics of his view that its weight-loss drug "isn't much more than a placebo" and causes tumors in rats. Lorcaserin is "a weight loss drug that doesn't really help obese people lose weight, but which may exacerbate heart valve problems or fuel the growth of tumors. Not exactly the best risk-benefit equation."

    Oppenheimer thinks datapoints provided by IBM and Intel (INTC) related to the latter's Romley server CPU launch bode well for Cisco (CSCO). Intel mentioned on its earnings call Romley shipments are twice those of the prior-gen Nehalem architecture at a similar point in time, and the decline seen in IBM's Q1 server sales indicates to Oppenheimer there's a lot of pent-up Romley demand, which it expects will boost sales of Cisco's 10G Ethernet switches. 

  116. With shares up 23% YTD and flirting with 
    multi-year highs, expectations have risen for Qualcomm's (QCOM -0.3%) FQ2 report, due after the close. Bulls expect factors such as strong smartphone sales, increasing orders from Apple, growing Snapdragon processor sales, and the higher chip content of 4G phones to result in a solid quarter and healthy chip shipment and royalty guidance.

    Don't expect Research In Motion (RIMM) or any other struggling phone vendor (III) to find a buyer, says Tero Kuittinen, for the simple reason that every major M&A deal in this space over the last decade has been disastrous. Sony/Ericsson, H-P/Palm, and BenQ/Siemens all proved to be fiascos. Moreover, "people are starting to suspect there is no money in smartphone manufacturing outside of Apple and Samsung."

    With the BlackBerry's North American position in tatters, Research In Motion (RIMM -1.6%) is increasingly looking to emerging markets to stabilize sales. A week after announcing plans to openMiddle Eastern stores, RIM is launching the BlackBerry Curve 9220for the Indian market. RIM is bundling ~$50 worth of free apps to stoke demand in a cost-sensitive market where the iPhone (AAPL) has limited share, but Android (GOOG) has been surging

    The buzz from a digital conference hosted by Ad Age in NY is over Loyal3 - a startup that aims to be a major disrupter to brokerage firms with its platform that allows customers to buy stock directly from publicly-traded companies without fees via their Facebook (FB) page. The company is currently fine tuning its system for SEC compliance and plans to launch in Q2 of this year.

    Facebook (FB) is now the most popular site in Brazil, according to Experian Hitwise (translation). Facebook accounted for 10.98% of the country's Web visits on Sunday, putting it above the 10.55% claimed by Google Brazil (GOOG). Facebook passed Google's Orkut to become Brazil's most popular social networking site in January, and claims in its S-1 Brazilian monthly active users rose 267% in 2011 to 37M. (previous

    Three lunchtime reads:

    1) The top 100 financial advisers, and what they're recommending

    2) How to assess strategy ETFs

    3) Not if, but when for Spanish bailout, experts believe

  117. Oil/Pharm – I'm looking to get them all off and wait and see into the holiday weekend.  After that should be a great time to short again. 

    Flatlining already – this might end up being a very boring last two days into expirations.  

  118. xilai's wife magically has bone cancer now

  119. Probably driven by the options market, but looking at an AAPL intraday chart, the 10's lines are really acting like magnet almost every day. You could draw S/R lines every $10 and probably do well playing of these!

  120.  hahahaha..his is great!….right when the bottom felt like it was about to fall out….big aapl block buying…and entire market stops on a dime and starts lifting…the manipulators must be in awe at how easy their job is.

  121. AAPL flat and PCLN up 20… CMG up 6+

  122. There seems to be a new rule Jabo – if the market is open, PCLN and CMG will be up. When the market is closed, there is a change they will be down. It has not been observed yet though…

  123. Is there a trade buried somewhere in the YPF fiasco?  I'm always willing to bet on political outcomes.  Which this will have, not that I've sorted it out yet.  It's a bit early to tell.

  124. Verry bad indicator!
    NY broker called yesterday with a screaming loosing deal for only me and a select few. I have had 100% cash in that account since Feb 11 when he changed clearing houses. My last try a month ago was buy stock sell puts and calls. Answer, no naked !

  125. Xilai/Angel – Quite the soap opera over there. 

    80M with 5 mins to go – same old story, volume is all down.  

    So close to that PCLN fill – I'll be pissed if we don't get it now. 

    YPF/ZZ – Not on that company, that's some crazy stuff.  I'm surprised England isn't sending ships – they love to do that…

    Bad indicator/Shadow – Those guys are getting desperate.   They have to eat too….

    Short story – All day long stocks were sold off into any interest, media tried to make it seem like something was going on.  

  126. My 20 day osscilator says tomorrow will be flat to down. FWIW

  127. Different close today, no IWM sell at close orders??????????

  128. Phil
    Bet they don't ave an appointment at the hospital on the 25th!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11

  129. qcom lowered guidance getting railed

  130. Doesn't AAPL use QCOM chips?

  131. 2 things… 
    1. Anyone else seeing a bear flag in the NYSE and the RUT?
    2.  FCX is having a nice day… any reason?  That seems bullish to me.  So, I'm nowhere.

  132. Phil – Avert your eyes (Pink Sheet stock) …
    Liquidmetal Technologies (LQMT)
    The iPhone 5 is rumored to be shifting from Glass to Liquidmetal – Patently Apple

  133. StJ and Lflan – what ever happened to the 10K Momo portfolio?  Nixed by the boss or still happening?

  134. Portfolio / Jerconn – lflan is off this week…. Not rushing into it!

  135. That was one heck of a gap up at the open in Spain… Definitely a fade though! I would had starting shorting the gap around 10,000 and taken a profit at 7500.

  136. Would have been good for $125K per contract!

  137. On the earning side, bad guidance from QCOM is hitting the stock… They are down over $2 in AH trading. Maybe a good entry point as the problem seems to be shortage of supplies, not demand!

    FFIV beat and they are up almost 5% AH. These guys are really volatile!

    AXP beat as well, but no real reaction AH. They say that the extra day in February helped a little bit – LOL!

    EBAY is looking good and making good money on PayPal – they are also up about 5% AH.

    YUM beat but they are down AH. They did mention margin pressure in China due to commodities and wage inflation. Ya think!

    VMW beat on earnings and revenues and are up over 2% AH.

    That's it from earning central!

  138. ICI showing that investors pulled another $1.5B from domestic equity mutual funds for the week ending 4/11/12 as reported by ZH.  Looks like money is flowing into bonds.

  139. PCLN puts never got close to $7.50. I had an order in to buy at $7.90 for several hours, and nothing.
    I was in GNW for a couple of one month plays, and glad they are done. I am short CHK puts, and boy has that hurt the paper value of the port. Play individual stocks, and you can get blindsided, like I was with CCJ last March, when a FREAKING TSUNAMI cost me 50% of my position.
    I am done listening to stock picks on this board. I have made quite a bit on the good ones, and lost it all back on the bad ones. I'm returning to my SPX strangles and a handful of other things.
    I value the commentary, but I am not listening to individual stocks any more.

  140. And, higher taxes are not the answer to anything. You heard it here first (or again, maybe)

  141. Just finished my interview with John Mihaljevic but it's for a podcast for later release, wasn't a live broadcast.  Very similar to my last interview, people all want to learn our system all of a sudden.  

    I've been thinking about YPF (ZZ's idea) and they might be worth a shot.  I base this on the fact that people buy national companies like CEO and it doesn't seem to bother them.  YPF makes $11Bn a year and drops $1.5Bn to the bottom line.  They have about $7Bn in debt and payables against $3Bn in cash and receivables cash flow is good and they're paying over $1Bn in dividends, which might stop or maybe the Government WANTS to collect $500M a year in dividends as the half owner.   At this crazy low price ($13) that's a 17% dividend and, if they stop paying it, then the company will be bursting with cash and still valuable. 

    Argentina is not dilluting the stock, they have taken it from a family that owns(ed) 25% of the company and from REPYY (Repsol/Spain), who owned 57.4% of the company.  There is bound to be a big legal battle and all sorts of nonsense but, like BP, it may not hurt to take a chance that they one day recover from this disaster.  

    Unfortunately, they don't have long-term options but the Oct $15 puts can be sold for $4 for a net $11 entry and the $15 calls can be bought for $2.70 and that raises the potential net to $13.70 but only if you don't put a $2 stop on the calls, in which case your net entry is $11.70 – so let's keep an eye on them, might be worth a small gamble…

    Bear Flag/Peedle – It's got to be confirmed by the S&P at least.  As to FCX – they were just getting silly cheap, that's why we sold the puts yesterday.  At a certain point, you just have to draw the line. 

    LQMT/Diamond – Ah, you know me well!   AAPL paid $20M for the exclusive rights to use Liquid Metal in "electronic products" back in late 2010 – that took the company from 0.11 to $1.76 at the time.  Now they are back to .25 after visiting .12.   So far, AAPL has only used liquid metal to make a "Sim Card Ejector Tool" that you have in your IPhone 3 box (not in the 4s) – I think we are a long way from making IPhones out of this stuff.  

    Spain/StJ – ROFL!  If only…

    Big Chart – The longer they are under those 50 dmas, the more they bend those lines down and suddenly it's a bear trend.  RUT already curving over so I'd take a failure on the must hold very seriously there.  Overall, lines still behaving well and it's usual for the Dow to be a mess as it's so drastically affected by just a few stocks.

    Nice earnings recap StJ! 

    PCLN/Barf – No, we were off by $1 but the market wasn't weak enough looking to chase 'em.  I'd like to get a win on CMG first and then I'd be more motivated to attack PCLN again.  This thing about stocks is you have to stop them out more so than index plays (or be very willing to roll and DD).  It's all a matter of playing things you are comfortable with – one of the things you learn about yourself with practice.  

    Taxes/Barf – If we limited individual wealth at $1Bn, the Forbes 400 alone would have to redistribute $1Tn.  That is more than the entire net worth of the bottom 50%.  Do you think that wouldn't make a difference?  Who is more likely to put that money into the economy?  Corporations are sitting on another $3.5Tn in cash – that's $25,000 for every single working person in America – no difference?  By taking that money out of circulation the top 1% reduce the amount of money that is available to everybody else and that raises the cost of money when you need it.  If they released that money – voluntarily or through taxation – it would not increase the supply of money by one penny – it would simply put that money to work in the economy where it would allow people to buy homes and build factories and plant crops and oops – all of those things potentially compete with the top 1%, don't they?  No wonder they'd rather sit on the cash….

  142. Phil, I would approve a system that caps wealth at $1B. And I agree it would make a difference, and not materially change incentives for future activity. We have no possible mechanism for doing this, of course, so the next best thing is to tax anyone who has extra money, which is where the taxers go wrong. I do not defend the wealth of the top 1%, for they do not fear the taxman since their accountants and lawyers stand in the way. Redistribution, once it gains the upper hand, has a way of attacking those that are not there yet, but upwardly mobile. And that makes a difference too.
    Job creators are not already rich, and the leftist tax plans discourage them.

  143. Speaking of taxes, that jokester Kudlow was at it again, blaming Obama for his war on business. They are hurting so badly right now… Look at the stock market, only up 100% in 3 years. That doesn't  even compare to the Bush boom years – Kudlow did write the book on that! Spoiler alert – it didn't end well!

    And here he is again, mentioning the deficit when his pals in congress insist on keeping revenues at 15% of GDP when it was 19% under Bush on average. Over 3 years, that's another $1.8T in taxes that were not collected. And 2 wars, the biggest recession since 1929 and an overall mess! Why mention facts when fiction is so much more entertaining? Drill, drill, drill so that we can store more oil… It's unwatchable anymore. Him and Kernen have turned CNBC into the rich man's Fox News.

  144. If Apple does switch to LiquiMetal Corning should take a hit… Apple usually announces new iPhones during the summer months right?

  145. Kwan – GLW makes the Gorilla Glass displays for the iPhones. They will most likely be unaffected by changes in material (including LQMT) that may or may not be used in the body of new iPhones.

  146. That liquid metal is cool!  But could that little company possibly make enough volume for the iphone?  seems a stretch.  They made around 1 million dollars last year.

  147. peedlew/AppleWork
    My company was/is doing some carbon fiber work for Apple.  We are strong, fast, nimble, $10M business.  We have ZERO^3 chance of getting ANY of the production.  License/royalty revenue our only potential source of income.  But, they do pay fair for the R&D work.  Can't say the same for the golf industry.  Same game, they just steal it when you are not looking.

  148. peedlew99 – I own a nice position (net $0.00) of LQMT since I have been scaling in and out of the stock starting in August 2010. However, I would actually be surprised if AAPL were ready to make such a drastic change, at this time, on what is arguably their most important product. It would truly be a gamble, since if ANYTHING were to go wrong it would be a nightmare for them that would not be easy or inexpensive to ameliorate.
    That being said, (secretive) AAPL could pull it off since all they would need to do is contract out the work to a foundry specializing in non ferrous alloy custom castings and LQMT would only need to oversee the production/process.
    I remain skeptical, but if AAPL were to pull off such a game changing surprise, I think it would then be "game over" for everyone else and AAPL $1,000.00 would again be the topic du jour.

  149. Last post (I need some sleep) …
    Parrots are really cute when they repeat words they've heard, but the owners of the parrot in this video probably didn't think that their bird would imitate perfectly an intimate moment of passion. :-)

  150. that can't possibly be real, can it?

  151. Phil – you're welcome! Im glad you like it. Now all you need is some rambo-like face paint! lol. Anyways, Im off to the south part of the country – praying for a CMG miss, an ARNA acceptance, and oil to fall down to $80 while Im gone…Is that too much to ask!?!?!! lol.

  152. Phil,
    A question about entering into medium term spreads.  Lets say I enter into a Jan 2013 CMG 420-370 put spread.for 18.  Sometime in Sept 12 CMG dips to 350 and the spreads moves to 32.  Since there is 18 still to earned what would be the safer mitigating strategies to lock in some of the gain in Sept? 

  153. Good morning!  

    Futures up on Spain's auction going "well".  Most earnings looking good too.  

    Dollar held 79.60 again and bounced back to 79.75 as the trill of the bond auction fades.  

    Yields again rise as Spain sells €2.54B ($3.33B) in 2- and 10-year bonds, although the Treasury did beat its goal of tendering up to €2.5B. The two-year paper was sold with a rate of 3.46% vs. 2.069% at an auction in March and the 10-year at 5.74% vs. 5.403% in January. A sale of short-term bills on Tuesday also saw yields surge

    EU shares pare some of their gains after Spain's borrowing costs rose at a key auction, with Madrid now trading flat. Spanish 10-year bond yields in the secondary market are also flat, at 5.82%, in choppy trading. EU Stoxx 50 +0.6%, London +0.5%, Paris +0.8%, Frankfurt +0.4%, Milan +0.4%

    Japan swung to a trade deficit of ¥82.6B ($1.02B) in March from surpluses of ¥170.9B a year earlier and ¥29.3B in February. The forecast was for a ¥223.1B deficit. Exports +5.9% Y/Y to ¥6.20T vs. consensus of -2.4%, boosted by the weaker yen, and increased demand from the U.S. for automobiles and parts. Imports +10.5%. 

    More stimulus talk boosts markets:  The People's Bank of China might cut banks' required reserve ratios, among other easing measures, in order to boost liquidity and bank lending, Xinhua reports. The speculation follows a Standard Chartered note this week that highlighted a slowdown in the M2 money supply.

    Really nothing at all to get excited about but we're back to the usual pre-market pump highs at the moment.

    Oil testing $103.50 (/CL) and you know that's a short.  Gold $1,641, silver $31.50, copper $3.62, nat gas $1.947, gasoline $3.21.  Euro $1.311, Pound $1.602, 81.69 Yen is up 1% since Monday, EUR/CHF at $1.2017 – they cannot keep themselves down (in value, higher number). 

  154. Face paint/Jrom – Don't worry, we have plenty.  Enjoy the sunny South.  Actually, you're in a good position to affect oil.  Just have all the guys over there put their money into USO puts and then go out and win the war over the weekend and prices will plunge on Monday and you all get a nice bonus!  8-)  

    Mid-terms/Checho – That's a lot of ifs.  Sept 4 months from Jan and $350 is $70 in the money so let's look at the Sept $510 ($83)/460 ($49) put spread at $34 to get an idea of how things would look (there is no Aug).  Since you are below the short puts and have $16 to gain – it's really a new bet.  Now you are betting $34 to make $16 that CMG won't go up $20+ between now and Sept expiration.  If you think that's not safe, there is always taking the money and running or, if you really don't think CMG can go any lower, then you can take the $83 from the $510 puts and buy a Jan $480 ($75)/410 ($39) bear put spread for $36 so you put $47 in your pocket ($3 less than max gain on spread) and you have an additional $50 of downside coverage to your short puts with a spread that's $20 deeper in the money than they are.  If CMG goes further down, you may have to adjust but it's a pretty good margin of safety considering you also have $47 cash on the side. 

  155. And wheee already!  

  156. Hi-
    So short oil at103.50 and get out at what price? This is one of the reasons I joined and I want to get a good understanding.

  157. Phil,
    Your  thgts on using TLT as a hedge, selling puts with a stop below the near term channel btm of 114.82?