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Friday Follies – Come and See the Show!


Welcome back my friends to the show that never ends We're so glad you could attend 

Come inside! Come inside!

There behind a glass is a real blade of grass

Be careful as you pass.  

Move along! Move along!

Come inside, the show's about to start

Guaranteed to blow your head apart

Rest assured you'll get your money's worth

The greatest show in Heaven, Hell or Earth. – ELP

What a long, strange week it's been in the markets.  

I know we've been having fun.  See that turn in the S&P at 2:35?  My 2:46 comment to Members in Chat was:  

$25KP/StJ – Keep in mind it's an aggressive portfolio BUT, in the $5KP, we're going to take $1.80 and run for the DIA $127 puts on the whole thing and 1/2 out in the $25KP.

That's two days in a row we nailed the turn almost to the minute (Wednesday it was USO) and those $127 puts cashed out with a 50% profit in 2 days (we picked them up on the 17th).  I put it to you – are we simply amazingly good at picking tops and bottoms or is the market, in fact, a total scam and we just happen to be good at identifying criminal patterns of behavior? 

Since our premise for making these calls is that the market is a scam and since I said just yesterday morning "Every morning we have a pump job to short into and every afternoon there is a BS stick-save to re-establish our shorts" – you have to at least consider the possibility that the markets are, in fact, fixed.  

So it should come as no surprise that our ultra low-volume Futures are back up this morning with oil once again giving us an entry at our $103.50 shorting spot (see yesterday's post).  We caught a $1,300 per contract ride down to $102.20 yesterday and then all we have to do is wait and let them pump it back up to $103.50 and we short it again and already we're back to $103.25 (7:30) for a quick $250 per contract gain and now we wait for the next run-up and see if we can short them again – maybe at $104 this time.  If people are going to manipulate the Futures – that's fine with us – we just need to learn their limitations and pick our spots to step in. 

VIX As you can see from our Big chart, we have blown 3 of our 5 Must Hold levels so, of course, we lean bearish but we've been leaning bearish all month and we're more concerned with a bounce here that forces us to take some profits off the table.  I doubt anything can happen today to make us bullish into the weekend.   The IMF is meeting and not much is coming from them but next week we get the Fed on Wednesday and, until 12:31, there will continue to be hope for more QE and, if not, we can expect a very, very large amount of selling in May.  

Do you see that MACD line on David Fry's VIX chart?  Do you really need 10,000 hours of TA training to figure out what's likely to happen in the near future?  Complacency is what's wrong with the markets – we are pricing companies to perfection and not discounting any kind of risk premium into our stock valuations.  Something is bound to happen – all we need to do is choose the form of the Destructor.  

Which of our myriad of concerns will finally grow large enough to put fear back into the markets?  Spain, France, China, Iran, India, Japan, Unemployment, Housing, Inflation, Deflation, our own Debts, Obamacare, lack of Obamacare?  So many potential hazards and some of them even contradict each other and NONE of them matter in the markets as we are back to partying like the care-free days of 1999, or 2007 – when we didn't know from terrorism and we thought real estate only goes in one direction (like AAPL stock, right?) and we were sure that tax breaks would fix everything.  

Thank goodness we're smarter than that now!  

So smart that, fresh off defeating the Buffett Rule, which would have raised at least $49Bn a year by simply making sure multi-millionaires paid a 30% tax rate like everyone else in America, House Republicans rammed through a measure yesterday to provide another $46Bn a year tax cut to businesses in a blatant appeal to their donor base ahead of the elections.  

This bill was so bad that 10 Republicans voted against it but, thanks to their overwhelming majority, they bill passed 235 to 173 anyway.  "This is not about mom and pop," said Rep. Sander Levin, D-Mich. "It's about popping the cork for wealthy taxpayers."  One estimate by the nonpartisan Tax Policy Center said 49 percent of its tax breaks would go to taxpayers with income exceeding $1 million.   

Democrats tried taking advantage of the bill's broad sweep, trying to embarrass Republicans by forcing a vote on language that would have forbidden the tax breaks from going to businesses including pornographers, prostitution, golf clubs that discriminate by race or sex, and companies that send U.S. jobs overseas. GOP lawmakers held together and defeated the proposal.  Democrats also tried unsuccessfully to replace the GOP tax cuts with breaks for companies that invest in their plants or equipment.  It's NOT that the Dems won't vote for tax cuts – just not a BS bill like this one

Democrats said the House GOP bill would do virtually nothing to spark the economy, citing an analysis by the Joint Committee on Taxation that said the bill's economic impact would be "so small as to be incalculable." They also complained that it was not paid for, meaning its $46 billion, one-year cost would make enormous budget deficits even bigger.  "They have run up deficits in this country recklessly, and in the name of a political campaign they're prepared to do it again," said Rep. Richard Neal, D-Mass.

Amazingly, having the Republicans vote to boost our deficit by $1Tn over the next 10 years seems to be a market-booster as the top 1% are licking their chops over the power they have to ram through legislation as well as the latest polls which show Bankster Romney with surprisingly strong numbers now that the Republicans are beginning to line up behind him.  More tax breaks for the rich, more bailouts for the Banks, more military spending, less pollution controls, less Social Security, less Medicare, no Health Care, no Financial Reform – it's gonna be a Bankster's Paradise!  

Of course, as top 1%'ers (or those aspiring to be) it's our job to invest in fiddles while Rome is burning and later we can sell lifeboat seats to those who can afford them when our ship of state finally takes on too much debt to stay afloat.  I mentioned some of our recent long acquisitions in yesterday's pre-market post and, during Member Chat, we took advantage of the morning pop to get back into PCLN puts at $732 as well as that CMG spread from the morning post that's looking very good today.   

We also added a long trade idea for FTR ($4.12) as well as CHK again ($18) FAS ($99.50) and TNA ($99) with the last 3 all at 1:15 as we called the turn a little early in Member Chat.  Those should all be up nicely this morning and now it's 8:55 and oil is, in fact, testing $104, which is great for a re-load on our short positions if it holds up into the bell.  The Dollar is at 79.40, keeping the Futures up 0.5% but the Euro is testing $1.32 and if you really think people would rather hold Euros than Dollars into the weekend – then you too have an exciting futures as one of the suckers we'll be selling premium to!  

Have a great weekend, 

- Phil

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  1. Oil Lines

    R3 – 105.36
    R2 – 104.51
    R1 – 103.83
    PP – 102.98
    S1 – 102.30
    S2 – 101.45
    S1 – 100.77

    Big push toward R2 now.

  2. Good Morning.

  3. Nice on oil…..blew through 104.  105, here it comes….

  4. Im sorry for all this oil shorting interest I am posting…..but I want to eat tasty sandwiches.
    June /cl is at 104.24 and I can’t get a read on where VLO is tracking this morning. Advice?
    Only closing orders are being accepted for May.

  5. Good morning! 

    Oil going nuts, now up to $104.35 on no news.  Certainly worth a poke to short at $104.50 but, obviously, prepare to lose .05 and get the hell out as we could hit $105 or more since it's the last day for the front month and whatever price they finish at is their delivery price and, with over 20Mb open – there's a lot of cash riding on this one.  Great chance to set up an SCO play for May but tricky with the Holidays so light betting this period.  

    Gold is not following oil up ($1,643) and the Dollar is at 79.415 but, as I said above, the Euro is testing $1.32 and I can't imagine any reason funds want to hold Euros over Dollars into the weekend so this should be the floor on the Dollar and the likely top to oil.  

    Gasoline (/RB) was a wise out earlier, now back to $3.14 where I do like them long off that line as that is what normally happens into the weekend.   That's a good pair trade – long gasoline and short oil (/CL now $104.55 so we wait for the cross back under or $105 to be tested).  

  6. Oil/Newt – Unless you have a TON of experience, shorting oil on expiration day is not a good idea.  You can't trade May, June is the active contract now and it's flying with the May jam session so all is well at the energy pits and maybe we'll see $5 gas for Memorial Day!   I think the long gasoline play is a lot safer than the short oil trade but both are super-risky.  

  7. It sure looks like they are going for 105 now….

  8. CMG / Jabo – Dont want to jinx it but have a look at premarket of shitpotle.  Believe in the miracle! 

  9. Or not…. Maybe the 104.5 lines holds a little more. Just a crazy morning….

  10. USO – if it breaks through 39.80, this baby is gonna pop up to the $40.40, then $40.90 area.  those are the 50% and 38% retraces from the most recent top to bottom.

  11. Either things get better quickly in the economy or we might correct to confirm the correlation:


    The pattern had been the S&P 500 up with the ECRI Leading Index lagging, but the Leading index is catching up: In 2010 and 2011, the S&P 500 tracked the Economic Cycle Research Institute (ECRI) Weekly Leading Index of US economic growth. Both the Weekly Leading Index and the S&P 500 declined from the April 2010 high and both improved off the summer 2010 lows. In 2011, the ECRI Weekly Leading Index fell from an early April high and the US equity market followed. Since early October, the S&P 500 has rallied sharply, but the ECRI Weekly Leading Index has not confirmed this rally, but in recent weeks, the Weekly Leading Index has shown signs of bottom and may be set up to catch up to the S&P 500. What negates this improvement is a break below the late 2011 and mid 2010 lows for the Leading Index.


  12. Oil/ Phil:
    Thx. I appreciate the insight.


  14. The FAS puts will obviously expire worthless today. The calls might need to be rolled although looking good now!

  15. At the open: Dow +0.51% to 13030. S&P +0.49% to 1384. Nasdaq +0.57% to 3024.

    Treasurys: 30-year -0.23%. 10-yr -0.12%. 5-yr -0.06%.

    Commodities: Crude +1.62% to $104.39. Gold -0.01% to $1641.25.

    Currencies: Euro +0.38% vs. dollar. Yen +0.12%. Pound -0.31%.

    Market preview: Stock futures point solidly higher, propelled by strong earnings reports from GEMicrosoftMcDonald's,Honeywell and Schlumberger; S&P futures +0.4%. European bourses are up thanks to a strong German investor confidence reading. Crude oil rises as the dollar declines. No major economic data on the calendar. 

    A look at PE ratios across 12 sectors shows significant multiple expansion across nearly all over the past months. Consumer Discretionary (XLY) – sporting the highest PE at 17.6 – raises a red flag to Bespoke as the sector is a defensive one.

    Canadian inflation slows to 1.9% Y/Y in March from 2.6% in February, and vs. expectations for 2%. The core rate was 1.9%, down from 2.3%, and inline with forecasts.

    U.K. retail sales jump 1.8% in March following a decline of 0.8% in February. For the quarter, sales were up 0.8% Y/Y. Economists point to mild weather an earlier Easter pushing April sales into March as skewing the figure

    Typically moving together, the IFO German Business Climate Index and the German ISM have diverged over the past months, with the ISM not confirming better confidence readings. IFOexpectations for the next 6 months hinge right on the line between booming and downswing. (full IFO report) (earlier)

    Hollande gains ground on President Sarkozy in final polling ahead of this weekend's French elections. If, as expected, no candidate wins 50% of the vote Sunday, a runoff is scheduled for May 6, and polls show Hollande – who has promised to revisit the EU's fiscal straightjacket agreement – with a 58-42 lead in a 2-man race.

    One reason for Spain's bear market this year is fear of a wave of forced sales by industrial firms looking to pay down debt (seeaction on Wed.). Andrew Peaple notes 25 of the IBEX's 35 firms have floats under 70%, with 15 less than 50%. Unwinding of this state of affairs may prove salutary for corporate governance and performance.

    Debt-addled EU states hoping to sell state-owned property need to slash prices and make the process more transparent if they want to close sales faster than a trickle, says CBRE. "They haven't got a cat in hell's chance of hitting that target," says a privatization expert of Greece's aim to raise €50B through 70K sales by 2015.

    So Egan-Jones gets charged by the SEC over a good-faith error, while the systemic corruption of Moody's and S&P gets a pass,writes Barry Ritholtz. Remember, Moody's and S&P are paid by the issuers whose paper they rate, while Egan-Jones is paid by those who want to hear what Egan-Jones has to say.

    The Consumer Financial Protection Bureau is investigating nine leading banks over their overdraft protection programs and their justifications for the size of their overdraft charges, Bloomberg reports. The probe, which is taking in the usual suspects, such as JPMorgan (JPM), Wells Fargo (WFC) and BofA (BAC), could be another threat to a major source of income.

    "To some extent what we saw in the 2007, 2008 crash was the result of the throwing off of Glass-Steagall." That's not from an Occupy Wall Street protestor but from Richard Parsons, who's just ended his term as Citigroup (C) Chairman and was on its board for 16 years. "Why didn’t he do something about it when he had a chance to?" asks an analyst. Quite. 

    Bank of America (BAC) is downgraded to Sell from Underperform by Credit Agricole's Mike Mayo, who maintains his $8 price target. The action – coming from "stopped-clock bank bear Mike Mayo" - earns a spot in Jeff Matthews' "Least Helpful Call Dept." Shares +0.3% premarket.

    Shares of E-Trade (ETFC) rip a 5.8% gain premarket after its Q1 report (III) impresses investors. The brokerage firm says it added $4B in new brokerages assets and 46K new accounts in the period, helping it realize a 12% Y/Y increase in trading activity.

    McDonald's (MCD): Q1 EPS of $1.23 in-line. Revenue of $6.55B (+7% Y/Y) in-line. Shares +1.5% premarket. (PR)

    A look at the trend in McDonald's (MCDsame-store sales offers another data point to Keith McCullough suggesting global growth is slowing – on the margin. (earnings earlier

    News Corp.'s (NWSA) U.K. newspaper unit is facing 46 more civil lawsuits that have been filed in British court alleging voice-mail interception by its now-closed News of the World tabloid. Yesterday, British police arrested three people, including an employee of the Sun, in an ongoing investigation of alleged bribery of public officials by journalists.

    Now this electric vehicle thing is really getting serious: The iconic 1980s DeLorean model comes back to the future with a refurbished electric version set for a limited run in 2013 – all set in motion by a former DeLorean mechanic. The cost for the new phase of the car will be $95K – and no it doesn't run off the flux capacitor. (video)

    Cisco (CSCO) CEO John Chambers tells Charlie Rose he expects international markets, which account for 55% of sales, to account for 70% of future growth. He also says the acquisition of set-top software firm NDS was motivated by the boom in online/cloud video, and suggests U.S. tax policy (which has kept Cisco from repatriating overseas cash) bears responsibility for a decline in IPO activity. (yesterday)

  16. The only Chinese company I really like:
      China Mobile (CHL+1.2% premarket after saying its Q1 unaudited net profit was up 3.5% Y/Y, boosted by a growing customer base despite increasing competition. CHL added 2.975M 3G users in March after adding 2.646M in February. 

    Nokia (NOKtrims another 2.9% in premarket action after a German court finds the firm infringed on a patent related to emergency services and negative sentiment over its Q1 report continues to swirl around.

    ACI Research's Edward Zabitsky, who has a Sell and $270 PT on Apple (AAPL), says he believes Samsung (SSNLF.PK), whichreports in a week, sold over 40M smartphones in Q1, well above the 30M-33M iPhone shipments many expect. He also thinks Samsung's massive internal sourcing of components makes it the smartphone market's cost leader. But given the iPhone's huge margins, Android vendors have more to worry about this than Apple. (also)

    Three Breakfast Reads:

    1) Will Apple Be Helped Or Hurt By Facebook? 

    2) SA Readers Appear To Favor Yielding Securities 

    3) You Need To Know About Digital Domain 

  17. Looks like we will need to roll the TNA short calls unless we get a good selloff… Right now we can roll each of them $1 up next week even.

  18. Phil:
    DIA May $127 puts at $1.15 for a reload?


  20. Weakest open on OPEX this year..

  21. Tweeter / StJ – I have put together my list in xl.  Whats your email?

  22. USO Today $39 puts for .02 are a fun gamble but $40 puts for .51 have just .03 premium – both can be huge winners if oil drops off.  

    Betting $105 oil does not hold we can pick up the SCO May $31/34 bull call spread at $1.80 and sell the $33 puts for $1.20 for net .60 so let's do 5 of those in the $25KP and, of course, we'll be finishing our other positions today.  

    In the $5KP, let's just pick up 5 May $38 puts for .55 and see how that goes – they were $1.30 last week and .85 yesterday!  


  23. Shame about SCO… We can hope for a good oil move by end of day!

    XRT and FAS calls might have to be rolled today.

  24. Dpas – Send it to stjeanluc at gmail dot com.

  25. FU PCLN!!!
    FU CMG!!!

  26. Wow, CMG actually heading lower.  Still a long way to reality. 

    DIA/DC – Certainly tempting also but oil is more ridiculous than the Dow so I like those puts better at the moment.  I'd like to see the Dollar over 79.50 before adding more short positions as the RUT and NYSE have now flipped us to 4/5 bullish on the big chart.  

    Euro still $1.3195, may not die until near the close (11:30).  Europe up only about .25% so we're way ahead of them at the moment – perhaps a bit too enthusiastic.  

  27. Fut the Wuck!  Just bumped into another form of manipulation. Trying to roll some MSFT contracts out and the target option is "closing trades only".  Evidently the market makers get to decide when there are closing trades on an option only!

  28. RVBD – sell off is way overdone – Selling June puts

  29. Don't forget, 1,384 is a big line to cross for the S&P – can't be bearish over that mark.  

    Dollar 79.37 – also good for the bulls.  

  30. CMG / Phil – I entered a CMG trade in paper money, just to track it, and wanted your take when you get a chance, please.  I bought Jun $360 puts for $4.40 (I believe the stock was around $435 at that time).  Now it's $2.33, so getting close to the 50% loss magic number.  Would it make sense to roll up to a different strike price?  Or just stay the course for now?  Thanks, Scot.

  31. Oil looks toppy, Bought USO may 39 puts again at .87…. lather rinse repeat

  32. Phil,
    What's causing the dollar to get whacked79.4 to 79.25

  33. Why is the dollar taking such a drubbing?

  34. FAS Money – $90 puts will obviously expire worthless.  I don't like the uncertainty at the moment so let's lighten up by cashing the XLF Jan $11 calls ($4.50 x 10 contracts = $4,500) and selling 2 FAS May $85 puts for $1.85 ($370) along with just one FAS May $105 call at $4.10 and we'll see how we look next week.   We'll check on the $100 calls later but let's call it a stop at $1.25 (now .95) and we're just going to let them expire worthless or buy them out into the close.  

    IWM Money – We'll roll all 3 calls ($750 total) to 4 next week $56 calls at $2.40 ($960). 

    $5KP – Fine with the new USOs.  


    • DMND – Fine 
    • XRT – $57 calls at $3.90 can be rolled to the May $57 calls at $4.25 for +.35 and we'll take that every month for a year while we wait…
    • BBY – June is a long time
    • SCO – Not looking as good as it was.  We're at $34.33 and the short $34 puts are .10 and I hate to pay $100 if I don't have to but we'd hate it a lot more if oil pops $105!  So let's call it a stop at .25 and hope it never triggers.  On the $31 longs – let's hope we recover into the close and put a stop on those at $3 (now $3.40).  
    • SQQQ – June
    • FAS – Seems to be working.  April $100 calls .50 in the money so seems silly to pay $1.10 for them.  Same with the $99 calls – remind me to deal with it later – I'd rather roll 'em than pay the premium. and we still have those short June puts with the ridiculous premium that owe us $3,500.  
    • GLL – Yawn
    • DIA – I think we'll get our best price into EU close.  Let's target $1 for a DD but I'd rather get .99 as that would give us 20 at net $1.10 instead of $1.105.  
    • CHK – I love that.
    • PCLN – F them!  

    Dollar 79.295!  Euro $1.3210, Pound $1.6132 – MADNESS!  

  35. If this turns it gets ugly, bulls having to fight hard to maintain this small gain and financials selling off.

  36. CMG might charge $8.50 for a burrito here (I don't know because I never go there) but my brother says in FL they are only $6.50 and he did make a good point.  He gets the salad with chicken and if he went to a competing restaurant for the same thing, he said it would be $8-$10.  I just wonder how far down they can fall with still a high growth rate and plenty of room for expansion of restaurants.

  37. german cds +6.5% now today
    DOLLAR GAFFING/  repatriation belief in chin soft landing and weaker US data propping it up…it will start accelerated downside move when spain starts getting in serious trouble..they are just in trouble right now, but many seem to think that doesn't matter that much….that attitude will change greatly if they get in serious trouble…

  38. Personally I think Amazon is the better stock to go after, much higher p/e, thin profit margins, disappointed last few quarters and lower growth rate.

  39. XLY/Phil – referred to as a red flag because is a defensive sector… what does that mean in lay terms?

  40. Morning All – Anyone know what volume on the Dow is at? 

  41. Phil,
    still thinking /CL a short at 104.5?

  42. ink/  TOS is showing 107mm which is huge compared to our regular days (non options expiration)

  43. Almost 108m ink

  44. Closing only/Rain – Are you with IB?  That's pretty unusual. 

    CMG/Scott – I see $2.50 at the moment and, since we see no reason CMG would go higher now (not that the usually need one), you can roll up to the $410 puts at $11.95 for $9.45 and sell the $390 puts for $6.50 for net $2.95 and that puts you in the $20 $410/390 bear put spread for net $7.35, which is not bad.  On this path, if CMG goes higher again, you will retain value in your $410 puts for a while and you can spend $5 more to roll them out to something like the Sept $385s, which are currently $17.50 so $6 and that buys you more time to be right and, of course, once your short putter expires you can get some of that $6 back by selling more puts.  So that's the path you are heading down if you are looking to commit more money – make sure you are willing to see it through before putting more money in now.  Otherwise, get out while it's cheap!  

    Dow testing 13,000 in Futures, which is around 13,055 on the index.  S&P right on the 1,384 line.  

    Dollar/Jasu, DC – It's doing a great job of goosing the markets.  EUR/CHF at 1.2016 so they are buying like crazy and I think someone has figured out the best way to boost the Euro is to sell EUR/CHF to trigger the SNB to start buying.  That way, you can use a relatively small amount of money to manipulate the Franc and that, in turn, switches on the printing presses at the SNB, who will keep buying Euros until their ratio gets back closer to 1.205.  It's kind of brilliant….

    79.25 Dollar.  Imagine if the Dollar wasn't down 1% from yesterday…

    CMG/Rustle – That's interesting – I'll have to go check out the one by our mall and see what they're charging.  

    XLY/Scott – If you see a lot of money plowing into "defensive" stocks, it means investors have little faith in the others.  Not sure how well that holds up in this kind of market where the Bots buy everything in synch (see StJ's charts from yesterday). 

    Dow volume/Ink – Looks like 107M at 10:37 but it's normal to have a very strong open on expiration day (people doing what we did with our portfolios – rolling a lot of contracts, shifting a lot of positions).  

    Oil/Jasu – Only been good for scalping today, it's not that strong considering the Dollar is down 1% but into the weekend and with what I'm sure must be rumors of the Fed easing next week – it's just not a fun trade today, too much work. 

  45. DJIA volume: 107,879,932 average 3 mos. 137,579,651 (pretty heavy)

  46. rustle / CMG — And anywhere else, you'd likely be eating hormone and antibiotic laden meat.

  47. Rustle
    Amazon is a good pick. Customer ratings of retailers involved don't mean they like Amazon, customer service issues. Much worse than ebay that sellers and buyers have issues. Everything is fine until it isn't. When if ever they fall?

  48. Phil / closing — Fidelity for that trade, but I'd have to think that it doesn't matter since each firm doesn't have their own market maker. Aren't all the market makers at the CBOE? Or at least the last in a line of market makers?

  49. Volume – Thanks all. 

  50. FAS Money – The FAS 100 calls spiked to 1.60 or so without stopping at $1.25! They are back to 1.42 but obviously gone now if you had stops!

  51. AMZN is another overpriced but I wouldn't bet against Bezos.  He's been laughed at in the past.  And again, there is religion with Amazon.  It's the first place most people go to buy online, likely more so with gas prices where they are.  They are the ones eating BBY's lunch.  With shipping charges getting out of hand their free shipping is attractive as well.

  52. Phil,
    RVBD taking it on the chin…think it is worth a flyer selling a couple of puts perhaps the sep 20@ 2.70?

  53. Phil- what is the basis for the 1384 line on SPX?

  54. rustle/rainmain/CMG – and they actually have good food…

  55. AMZN/rainman
    I'm not saying to short them but think there's less risk than going against CMG and possibly more percentage upside.  One caviat on Amazon is if they finally pass a law which has been tossed around that now puts state tax on all internet purchases.  What is the downside of Amazon then?  They want to open a warehouse in NJ and are looking for an 18 month tax holiday after that because they would have a presence in the State of NJ, taxes on all orders for me and everyone else in NJ.  How much will that affect their business and what other states do they want warehouses in?

  56. The Republicants are now blaming the President for the Secret Service chasing tail while in Columbia…..
    Phil, No matter who is elected, you might as well be putting that deposit down on that home in Jersey or that island you've been eyeing.
    Time to go skip some stones…..

  57. rain
    interestingly I read AMZN is losing money on the premeire membership, that I recently joined and I think I made up my annual $79 fee in free 2 day shipping charges in my first month trial period. Are they perhaps floating too many loss leaders with this program and the kindle at a loss?

  58. Fidelity/Rain – IB does some strange internal routing so I thought that might be it.  If you try just picking up the new position by itself, do they give you the same message?

    FAS Money/StJ – This is why hard stops are bad things – that was just a spike out that should have been ignored – you could see all the indexes doing it at once and now we're selling off.  I sure hope people bought the DIA puts!  

  59. rustle / AMZN — I live near Vancouver, WA and get taxed on Amzn purchases. It doesn't stop me from using them and I can shop in Oregon where there is no sales tax. The gas alone to go shopping is more than the sales tax for most things but then again, I live in a rural environment so I'm fuel cost conscious with any outing.
    sage / loss leaders — Loss leading is a common way to get customers.  It got you!  Are you going to be shopping elsewhere now?  I doubt they are being stupid about it. Like I said, people have thought Bezos crazy in the past.

  60. Phil/DIA – Aren;t we at a level now where we should'nt really buy DIA puts?

  61. Phil / closing — Yes. I actually called fidelity about it and they said it's the MM's decision to change the option to close only. He had to call down to the floor to find that much out and had never seen that before. I said it smelled fishy and he agreed.

  62. FAS Money / Phil – Agreed on the hard stop, however the prices was over $1.40 for 20 minutes… It's a tough line to walk to close or keep open.

  63. SNDK got slammed and is sitting on a double bottom. They reduced Q2 guidance but think things will pick up Q3/4. Just sayin.

  64. DIA Puts/Phil – for a new entry and not a double down, would you prefer say 1/2 the number of DIA May 130 Puts at 1.85 as opposed to the DIA May 127 puts at .99? (i.e. approx same money going into the trade for fewer contracts) or are there  delta or other greek aspects to consider?

  65. So I guess some of this action is driven by these headlines I'm hearing of the IMF and their bazooka which wasn't needed since the EU was fixed…at least CMG is down for Jabob.

  66. thanks Ink ;-)

  67. Nice squeezy triangle thingy on CLF.

  68. I wonder if anyone here has a clue how many jobs have been lost to the internet over 15 years? How many smaller business closed down? Even Circut city fell to the internet. What has happened is all that has been taken over by huge middle men that take a toll on both sides. The one winner, computer manufacture, a new necessity like the telephone has come in, but even that is squeezed into low margin overseas production and although the upper class talks about the latest ipad iphone, go to 85% of the rest of homes and they have 10 year old XPS systems and they turned off the cell phones to pay for gas in their 15 year old gas hog SUVs.

  69. And these FAS calls spiked over $1.25 again before collapsing below $1.00… Nice game they are playing!

  70. RVBD/Sage – Not on the first day unless you KNOW the move down is BS.  They missed and guided down against high expectations.  Better wait until next week and see if they get attacked by the downgrade police.  

    Nice run in oil to $104 that time, now $104.16 so stopped out and now the reload is another test at $104.50 or a cross below $104.  That's how you play the futures – lose a nickel, lose a nickel, lose a nickel, win .50…

    1,384/Pstas – That's from some bounce lines we were following back from the 11th (see AM post).  It's been very reliable, along with 1,372 and then 1,360 would be back to the lows.  

    Jersey/1020 – Oh I am out of here by the end of the decade most likely.  Kids will both be in college so no major need to stay around.  

    AMZN/Sage – That membership is great.  You know you get free videos too?  It's a loss leader but, eventually, they have too many loss leaders.  If you sign up for prime and have them send you 100M kindles and don't download any books – you could bankrupt the company! ;)  

    DIA/Ink – What level is that?  The market is doing just what we thought – flying up into EU close on a weak Dollar.  If you're not going to short when the Dow is up, when will you?  

    Close only/Rain – Yep, very unusual. 

    FAS Money/StJ – That's when it's a good idea to ask.  Just because we pick a target at 9:30, doesn't mean we can't give it a fresh look at 11 if it didn't go as expected.  

    DIA/Scott – I like the $127 puts because we could be wrong by 200 and then our puts drop to .70 (down 30%) while the $130s would drop by .60, also down 30% but a lot more money.  Going 200 points our way, the $129 puts are $1.60 (up 60%) while the $132 puts are $2.95 (up 47%) so we commit less cash, lose less cash and have much cheaper rolls if we're wrong with the $127 puts.  The closer to the money you go – them more damned sure you'd better be!  

    IMF/Ink – That's a BS story since it's the same new money as it was a month ago except back then the rumor was it would be $1Tn and now LeGarde is scrambling to fill $400Bn. 

    CMG/Jabob – That's it, I'm putting you back on meds!  8)  

    Internet/Shadow – Well first it was computers that killed millions of jobs and then tying them together over the Web killed millions more and next we will have Watson filling in for a few hundred million admin and customer service people and then they will put Watson brains in robots and there won't really be any point to us at all – it's just progress baby…

  71. Check this out – how long before these things get mass produced and replace 75% of the service workers?

  72. FAS Money / Phil – I don't have hard stops in my portfolio so the positions are still open. But I have to post the prices if people want to get out…

  73. Out of Here / Phil – Check out Malta as well…200 days of sunshine!!  It is on our list…

  74. Correction – make that 300 days!

  75. Another random AMZN thought. I think people are too focused on the Kindle Fire being a loss leader. Seems no one believes they learned anything from the generation 1 kindles and have it wrong on the Fire. I simply don't think Amzn got to where it is doing stupid things and give them more credit. I find it astounding that they can charge nearly full price of the physical book in the electronic form (and with free shipping ;)

  76. Last night on the local news, Idaho Falls, Idaho, they interviewed employment councellors how said that people just need to see the good in minimum wage jobs. Somehow they even got a woman who has 2 kids on that said you just have to change how you look at things that she is making it on minimum wage. Wish I could have asked her some questions like who pays for medical care? Who pays the rent subsidy? Who pays for the food stamps? She qualifies for all of those subsidies.
    Now no rich man wants hear the answers to these questions! Who doesn't pay more, supply health insurance, and profits by all this? Who benifits by this shift? That same group, the 1%ers, politicians, and businesses of all sizes.
    I actually hope Amazon, Ebay, Apple, Microsoft, and the rest go BK along with the people that back them up, investors in the decay of America.
    This by any measure does not mean I will stop trying to take my share, but I don't own their stocks either.

  77. DIA/Phil – thank you!

  78. Phil, I have started to scale into ACI and I am currently short an Apr $11 put for $.45 which reduced my net to $11.95, so if 100 shares are put to me at $11 I will be in for 200 at net $11.48 for 1/2 my intended position.  My question is, with ACI at $9.65, which seems very cheap, and since I am most interested in collection of dividend, would it be a wise move to just purchase 100 shares at that price, so down to net $10.80 and roll the $11 puts out to July for $.58 credit?  Either way I would sell calls against the shares.  Scott, what are you doing with the ACI shares in the IRA portfolio?

  79. Ahh I love the smell of desperation in the morning. They've managed to dry up volume and now its on auto pilot as they trade along with the EUR. Just silly now as stronger EUR has nothing to do with confidence and all to do with a continent on the verge of a meltdown as they suck up EURs to shore up balance sheets. Central banks playing the role of pied piper.

    Hows this for a headline..Markets in Europe register weekly gain for the first time in nearly a month. Bullish!!!!

    /ES sitting a measly 5 points above the must hold line of 1376

  80. This looks promising:


    Back in 2009, tech giant IBM missed out when the Department of Energy distributed a record $2.9 billion in research grants to develop low cost, high range batteries for electric vehicles. Now the company seems determined to leapfrog over DOE with its own pet project, called the Battery 500 Project.

    Battery 500 is just what the name says: a vehicle battery that can take you 500 miles between charges, equal to or better than a typical tank of gas.

    Best tech company in the world, period!

  81. Phil ink
    I went short 45 minutes ago 1/2 position, the price hasn't moved. So I wonder when do you short also. Sorry I type up 2 cents!

  82. Phil, I've been very, very patient, but I think it's getting to be time to short LULU (I know Lincoln's ahead of the curve on that one).  Any suggestions?  Earnings aren't until June 8.

  83. So I just did a HARP refi through the mail, no closing costs, charged to me anyway…WFR tried to say they were paying the closing costs until I said you mean Uncle Sam is paying you for those costs and the operator said um yeah. They lowered my rate by 5/8 without any info, in fact they said they appraised it but no one came out in the 10 days that it took to make the transaction…seems this would eventually hurt the NLY's of the world right?

  84. That robot better have an outrun a human function cause I would take a bat to its head unit if it came anywhere near me.

  85. Sage – You must've done a streamline FHA refi where they only do "desk appraisals" but even then, it's a joke I think.  A friend did one and they used the value from when he originally bought his house in December 2008(when it was worth $50k more) with no problem. 

  86. Yeah I have a strong LTV about 60%, even after the 150k fall. They did not require any income proof or really anything other than my home insurance proof?? Seems risky as the verify process was none and done from GA and Im in OR…just seems like more of the same but Ill take the savings.

  87. Asimo/Phil
    Sure that's not a little Asian guy in there.  It's creepy the way he walks so gingerly.  Not like a robot.

  88. This is kind of freaky – humaniod robot saying goodbye to his friends.  

    Europe closed up about half a point overall.  

    Dollar still hanging at 79.30, Euro $1.32.12, Pound $1.6125.

    We might be flatlining here but I'm pretty sure at least one fund will cash out into the close for at least a little dip.   

    Malta/Aussie – A little too close to the crazy people to the south.  I'm more of a Northern Europe kind of guy, more likely to go for 300 days of fresh powder than sunshine. 

    You're welcome Scott!  

    ACI/Rperi – Rather than buy 100 shares of stock for $9.69 ($969) to make .44 ($440) for the year, why not buy the 10 Jan $7/9 bull call spreads at $1.20, which makes $80 if ACI simply holds $9.  That's more than your dividend pays, uses up just $120 of your cash and, if you roll the Apr $11 puts ($1.30) to the Jan $9 puts ($1.55) then you drop your basis to $11.70 with your next 100 at $9 for a $10.35 average but, because of the $7 calls, you still pick up more cash on anything over $8.30 as well.  

    Short/Shadow – I think this is a good spot to go short but they do seem to be in full-blown pump mode so not sure if it will subside by the close.  In other words – risky! 

    LULU/Rdn – They are so dangerous.  I'd just go for the June $65 puts at $1.80 and see how they go next week for a light, initial entry. 

    Refis/Sage – How did you initiate that?  I know in Florida, my Mom and her friends can't get it done.  Banks all delaying everything.  

    Robots/Kustomz – You'll get used to them eventually.  Kind of like pod people.  

  89. Refis/They have to be FHA loans.  The only ones I'm seeing that get denied are the the FHA loans that have PMI with certain companies.  I had a friend who was turned down because the banks did not want to deal with her current PMI arrier who was accused of some kind of fraud years ago.

  90. Phil / SKX – breaking out thru 200mda.  your plays from early Feb have done well.  Thx.

  91. This tiger didn't know what to make of a robot:

  92. Fresh Powder / Phil – In that case, check out the Swiss side of Lake Geneva.  Fantastic micro climate on the Lake, and skiing is a school sport!  
    Another one on our outta here list :)  
    "The canton of Vaud also has a special expenditure-based tax package available for foreign residents who are not in paid employment in Switzerland. Provided certain additional conditions are met, the tax payable is calculated on the basis of the taxpayer's estimated lifestyle, and hence on total outgoings rather than income or assets."

  93. Phil,
    I just got on. Time to DD on DIA May $1.27 puts or did you already pull the trigger on this? Thanks

  94. Malta / Aussie – I loved it there… Would not mind moving there! Nice people, good weather. As Phil notes, there are some geopolitical risks, but they have a lot to go for them.

  95. More money more problems

    “I am confident that we will have a convincing decision form the
    G20 concerning the global financial firewall today. It is very important
    for the sake of financial stability and the world economy,” Rehn told
    MNI on the sidelines of the G20 finance ministers meeting.
    “Our aim has been to reach a financial firewall or around E400
    billion, I trust that this objective will be reached,” he added.
    The debate over increasing IMF lending resources to deal with the
    spillover from the European sovereign debt crisis will be the key issue
    at the Spring meetings of the IMF Saturday.
    The IMF initially sought $500 billion but has since dialed that
    back to $400 billion, and total new pledges collected this year come to
    about $320 billion, including $60 billion from Japan and $200 billion
    from the Eurozone announced previously.

    The United States and Canada have already said they have no
    plans to contribute additional resources to the IMF.

  96. Ok, this robot is freaky real.  I think he would be a Republican if we give robots the right to vote:

  97. stjeanluc / Malta – Did some work there a few years back.  We also had a good look at it before moving to the US, liked it a lot…but the schools were not yet up to scratch for our 3 younger kids.  Once the kids are off to college…maybe!  

  98. Power Ski
    I moved here to ski the deep til I died. Average 500 inches per year and locally developed for the 1%, extra good for .001%. A brand new runway long enough for any plane, hanger space, and enough wana be rich to kiss their a//??s Real estate less than 50% to the dollar. Come on in and take over today! I bet George Gillet would sell the ski area for about $10 million, cheaper than a few planes that come in and out. Even Microsoft and Apple billionairs come here to play. For the times you may want to come back!

  99. VPHM – let's start a small postion in them.  Selling a few 22.50 May puts.  Risky, but they have been holding that area well, and one could do a buy write there in addtion, but I want to see where they go.

  100. Malta / Aussie – Schools do play an important part in location selection when you have kids! Mine are in college so that makes it easier. I am amazed at how some people move and then realize that they have to pay for private schools because the local school systems are not good. But that's another topic!

    You mentioned Switzerland, but it's really expensive there though… You need to be in the top 1% to really enjoy it unless you have a job there.

  101. Phil/HARP
    …they called me?  I was not even looking to go through all the hoops but then I get a call and its done, that's why I thought it was kind of crazy and riskyish on the banks side. What I could not figure is if this somehow shifts my mortgage to a better pool for balance sheet purposes or what WFR has had the loan for a couple of years and I am a good payer with excellent credit…I have heard nightmare stories of people unable to get a refi…In fact I had 2 different calls from WFR in the country for this HARP in a weeks time?
    I thought it might be due to the fines against BAC that they wanted to show they were in fact lending money?? 

  102. CMG - sorry Jabo, I had some 420/400 put spreads for earnings so it was probably me who put a 420 base on their fall 8) .

  103. Jabo, have no fear, I have been short since December and have run out of patience and rolling money, so today's expirations mark my exit from the short side, which means we likely go down and down and down from here just to tweak me…

  104. im going to play golf. If we head lower expect a story to surface this afternoon that turns the markets around (EUR trading like it knows something). Dont know what else to say, this market sucks butt and I'm done watching the paint dry. Good luck people!

  105. Switzerland / stjeanluc –
    Yes, it is expensive.  But coming off the back of living in Tokyo, Hong Kong and Sydney, it is all relative!  Less expensive as a retired couple than trying to live there with 3 kids in international schools…hence not for us right now.  The kids wanted to experience living in the US, having visited Cali relatives here every summer.   One of us holds an EU passport (Dutch born, Aussie raised), so makes it easier to move there.  Tax rate is based on notional rent and is negotiable with the Canton.  
    Still a dream (option?) down the road….we spent a week there again last summer.   Absolutely fabulous.  We have good friends (expats) who live in corporate housing right on Lake Geneva…now they are living the dream!  

  106. HARP – sounds like yet another scam to feed more of our tax $$ to the banksters.  Sage you are welcome for that no-fee (to you) reduction in your rate!

  107. Pretty quiet out there for OpEx.

  108. Oil/Phil -sooo…  what's your spidey sense saying at this hour of the day?

  109. phil holding may $39 USO puts at 0.87.  should i cover over the weekend leave open and roll next week if needed?

  110. Scott, right?? If you can't beat em join em:)

  111. If you can't beat 'em, join 'em/Sage – all i need is a session or two with O'Conner.

  112. Asimo/Rustle – That thing can run 6.5mph!  Stairs and everything.  Japan is going to kick our asses on next generation workers. 

    SKX/Terra – That was a nice little value pick up. 

    Tax on lifestyle/Aussie – That's a good one for me, I'm a man of simple needs…

    DIA/Crussell – Yes, we did the DD at $1.03 as we weren't getting our target.  

    More money/Kustomz – I'll be surprised if they do more than say they will discuss doing more.  

    Republican robot/Rustle – Don't they already have one of those running for President?  The one in the video is more realistic though. 

    HARP/Sage – Must be some kind of regional targeting or something to do with BAC's settlement.  I'm going to check into it though as I know so many people who could benefit. 

    Good move Kustomz – very annoying market to stare at. 

    Spider-sense/Scott – Still waiting for one of the funds to pull the trigger and give us a dip, then we'll have to determine the size and quality of the rescue under fire.  Momos are weakening and were done pushing higher so I think one or tow sellers are already testing the resolve of the Buy Bots.  Dow volume 133M at 1:20 .  

    USO/JJ – I wouldn't cover at $104 – if they go to $105 then I'd be happy to roll or DD.  

  113. Howdy barf, nicha, robert, cwan and short stranglers,
    Saw your post, barf, on getting back to the short strangle index plays.  Those are my favorite!  April was tougher to play than March, but I survived this week and bagged all those short puts on SPX and RUT.  Most of the gain came this week and they are playing games with us again.  Yesterday, when we still had the short puts, they dropped the market, increased the VIX, trying to squeeze the margin from the retailers, and today when we are ready to sell next month puts, they jacked up the market, dropping VIX, luring us into a trap again, all in overnight action.  Shouldn't after hours market be banned?  Well, we'll get into the trap with smaller numbers of contract any way.  That's our game.

  114. Hello Peter!

  115. what was the amount y'all paid to roll DIA from 124 to127? I got out of sync. It's abt 50c now.

  116. CNBC asking people to sell some AAPL. Are they chasing people out before earnings?

  117. AAPL/Nicha – That does often happen before earnings but I wouldn't risk them long into earnings this close to $600.  At $550 I'd take a poke though.  

    Getting a nice little move down now – still can't get oil below $104 but money moving into TLT so maybe Dollar goes up next (now 70.305).

  118. morx – pull the trigger on the roll. I went to the 128s just b'c.


    Give me an F'in whee….this baby is gonna roll.  Now, I need FXE to behave.  PLX recovered nicely.  Selling 1/5 position of stock.

  119. Shorting is only for the patient today. First target 80.30

  120. Shadow…..I have been patient for 2 years….now I am getting a bit antsy, to put it nicely.

  121. FAS below $100….

  122. thank you pharm. sometimes it's nice to have a hand to hold.

  123. Peter: Right as always. I never stopped the SPX strangles. It's the other plays that don't work and cancel out the rewards of the plays that work properly. My streak remains intact: I have never had a spread OF ANY KIND on ANY STOCK that has finished cleanly in the money. Most of them have needed serious adjustment, and the others have simply crapped out at a loss.
    I did sell the way out, far future AAPL puts and after about two weeks, their value is 50% higher against me, which is waaaay beyond the movement in the underlying. I simply do not need this crap.

  124. SOX down 1.75%:

    Weak results and/or guidance (IIIIIIIV) from SanDisk (SNDK -13.4%), Freescale (FSL -7.9%), Lattice Semi (LSCC -9.4%), and Altera (ALTR -6.5%) is producing a selloff in chip stocks (SOXX-1.2%), which had been rallying on evidence of rebounding demand. Among the hardest hit (aside from the guilty parties): OVTI -3.9%.SWKS -3.9%MU -3.7%CRUS -3.1%

    11:56 AM Europe ends the week nicely higher amidst and ahead of lots of emanations from D.C., where the IMF and G-20 are holding meetings through the weekend. Stoxx 50 +1.2%, Germany +1.2%, France +0.5%, Italy +0.8%, Spain +2.1%, U.K. +0.5%. For the week, Stoxx 50 +1%, Spain -2.8% (off 8% over 2 weeks), France flat, Germany +2.6%.

    1:00 PM On the hour: Dow +0.84%. 10-yr -0.03%. Euro +0.56% vs. dollar. Crude +1.48% to $104.25. Gold +0.15% to $1643.85.

    Thirty states recorded unemployment rate decreases in March, eight posted rate increases, and 12 had no change, the BLS reports. Rates in 49 states and D.C. have decreased Y/Y, while only New York has suffered an increase. Nevada's unemployment rate is 12%, followed by Rhode Island (11.1%) and California (11%); North Dakota's rate is lowest at 3%.

    Headline writers tap into growing concerns that the economic recovery is heading for a springtime stall for the third year in a row after recent depressing data (IIIIII). The slowdown “in part reflects an unusually warm winter, which pulled forward economic activity, making January and February seem artificially good." It seems there's light at the end of the tunnel, but it’s a really long tunnel.

    Slow economy or not, America's CEOs are doing just fine. According to the AFL-CIO's paywatch databse, CEO pay among S&P 500 firms grew 22.8% on average in 2010 and then another 13.9% in 2011. Little wonder so many companies are hoarding cash and not taking risks, Matt Yglesias writes: "People who are seeing double-digit pay increases have very good reason to be risk averse."

    Economic Reports Fan Fears (WSJ

    Fears Rise That Recovery May Falter in the Spring (NYT)

    Interesting question of the day: Don Bilson asks on Twitter if people aren't buying beds (Earlier: Tempur-Pedic) or furniture (Earlier: Ethan Allen) – how are we supposed to believe they are buying homes?

    Bill Gross shakes his head over the inflation figures across the pond … 2.5% on the continent and 3.5% in the U.K. "Whither inflation if (the) world ever normalizes?"

    With the BOJ under criticism for worrying more about the state of its balance sheet than the economy, ZH goes to the tape. Turns out, the BOJ's assets foot to nearly 30% of the Japanese economy (compared to the Fed's 19%), suggesting years of modest easing have bloated the balance sheet, but done nothing to reverse deflation. Expect the next easing to be a big one. 

    It's looking more like status quo in Greece where the PASOK and New Democracy parties – the 2 supporters of the bailout regime – are rallying and look poised to win enough votes in the May 6 election to renew their coalition. The faces will change, the policies will remain.

    How crappy would we be doing without this?  Microsoft (MSFT +5.6%) jumps towards new 52-week highs following its FQ2 beat, which was fueled by strong enterprise Windows sales, and growing subscription license revenue for Office and server solutions. BofA (Buy) expects a still-low valuation and a giant upcoming product refresh to drive shares higher. Goldman(Neutral) is more guarded, expecting shares to be range-bound until Windows 8's fall arrival. (transcript

    Schlumberger (SLB +4.2%) shares shoot higher after reporting Q1 earnings jumped 38% as the number of U.S. rigs drilling for oil reached a record. International, deepwater and seismic businesses all showed strength, with international margins flat to up for the first time since Q1 2009 despite bad weather in Northern Europe and Eurasia, Simmons & Co. says.

    The only commodity I do like:  Uranium developer Cameco (CCJ +5.8%) is praised in two analyst reports. Seeing potential ~50% share upside, Gabelli finds CCJ "particularly compelling given its attractive asset base and project development pipeline." TD believes "the improved tone in the uranium market should translate into higher prices for the commodity later this year."

  125. DIA/ Thanks Phil!  Appreciate the guidance.

  126. Interesting pair of lists from Wonkblog of the fastest growing and dying industries in the United States.

    I like to parse lists like this to find what is consistent amongst the members.

    The top 10 fastest-growing US industries
    1. Generic pharmaceuticals
    2. Solar panel manufacturing
    3. For-profit universities
    4. Pilates and yoga studios
    5. Self-tanning product manufacturing
    6. 3-D printer manufacturing
    7. Social network game development
    8. Hot sauce production
    9. Green and sustainable building construction
    10. Online eyeglasses sales


    What might these all have in common:

    The top 10 dying US industries
    1. Photofinishing
    2. Newspaper publishing
    3. Appliance repair
    4. DVD, game, and video rental
    5. Money market and other banking
    6. Recordable media manufacturing
    7. Hardware manufacturing
    8. Shoe and footwear manufacturing
    9. Costume and team uniform manufacturing
    10. Women’s and girls’ apparel manufacturing

  127. Thanks for this, by the way, Stardawg – I love reports like this (was posted end of yesterday's chat):  

    morning PSW

    just returned from a trade show in Guangzhou, China.  Everything seemed busier than last time, more starbucks, more KFC, plenty of Iphones, plenty of IPADS, plenty of building cranes busy working (ie 30+ just on the way to the show from the hotel), wifi everywhere, malls busy, traffic crazy, politics the same, great service, efficient transport, dramatic wage inflation in SKILLED labour (10x in some fields), factories not complaining at all about commodity inflation this year although very firm on pricing, politics the same but the '10' year change is coming in power causing more power struggles than usual i guess……

    Seemed business as usual to me…….I think western media is over playing their 'soft landing' and concerns they might have a hard landing.  Especially if you take out 2004-2007 and compare it to median activity…..oh wait, thats just like most countries…..if we take out the bubble years and simply compare today with 2003 ish…things to me, seem not so bad on a regular joe type basis (unless of course you are tied to the real estate/finance segment).





  128. pharmboy
    Not much chance of seeing red today but the DOW and the RUT look gust a tad too green!

  129. Look FAS, $99 is coming.

  130. StJ – Please let me know what we have left to deal with.  Thanks!  

    No problem Ink.  

    Wheeee – finally getting a little selling action.  See, you just need to be patient.   

    PCLN $709!  CMG $422.  AAPL $576.  Oil $103.88 ($104 is now a stop for USO today's).

    Dollar just 79.31 so don't blame it.  

  131. CMG / Jabo – You ok dude? Some day today eh? 

  132. Speaking of Mofos….look at my precious SGEN.

  133. Phil, I think the FAS $99 short calls need to close or roll on 25K portfolio.

  134. Jabo is happy :-) .

  135. Portfolios / Phil – Here is where we stand:

    FAS Money – I have not closed the $100 calls yet (no hard stops) so I still have them and they are now $0.21. The puts are toast.

    IWM Money – All good as we rolled this morning.

    $25KP – We still have the FAS 99 and 100 short calls. FAS at 99.26 so both looking OK at  $0.65 and $0.22 now.

    We rolled the XRT.

    That leaves the SCO 31 calls long (now $4.00) and the 34 puts short pretty much toast as well.

  136. Next IWM target 80. From there some of the greedy thrive but I will get out with a 100% cash weekend. With luck Monday and Tuesday will help pay for Wednesday at the hospital.

  137. USO $40 puts at .88 – don't be too greedy!  If you ask for .90 on 1/2 and stop the other half at .75 that's a huge win.  

  138. Didn't like that bottom, out at 80.18.

  139. FAS/$25KP, Bob – I thought we were closing them?  They are still a rip-off at .70 but now we should have a stop at $1 though I doubt we get back to $100. 

    FAS Money/StJ – I really think we're good on both but let's put a stop at $1 on the $99 calls and .50 on the $100 calls – just in case.  If FAS flies up, we have room to sell something else for $2 to pay ourselves back.  

    $25KP – As above.  I guess we only have the short $100s in FAS Money and both in $25KP.  

    SCO is interesting but we accomplished a lot already by gaining .60 on the day.   I guess I'd call the stop $3.70 and hopefully oil tanks hard into the NYMEX close (15 mins).  

  140. OK, Phil. I have alerts on all these levels. No stops… We'll see what happens.

  141. So much for that – USO all done at .75 on failure to go lower.  SCO out too but should be $3.80 here.  

  142. please keep mr stick AWAY!!!

  143. Looks like we might get a stick now.  That was the sound of one fund selling in the woods.  

  144. Oil – looks like they want $104 real bad for the weekend. or to harvest all the stops out there.

  145. Yup, out of SCO at $3.70… That was quick!

  146. Actually, you the bid/ask for SCO is 3.70/3.90 so might be able to 3.80. Last was $3.70 though as some got out there.

  147. CMG- I’m tracking the spread from yesterday- long June 375 put and short May 475 call. Pull the plug and collect $ or let it cook?

  148. Pharm - I have PLX APR 2.50 calls in my IRA that are up nicely, option 1 is to let them exercise and own some stock on Monday, option 2 is to take the profit and roll it into call spreads and try to double or nothing, and option 3 is to take the money and run.  You seem pretty confident about the May 1 approval so I would like your vote (and I promise not to hold it against you!).

  149. Phil selling in the woods
    Now I know what it looks like when 1 fund stops selling and what to call it. Glad I got out! Thanks for warning of a fund bailing and be careful. Sometimes a plan works out.

  150. DJ just quoted the G-20 saying that "IMF resources will not be earmarked for any particular region".  There I was thinking the jokes couldn't get any better.   

  151. Hi, Peter D,
    Good to hear from you again!
    Hi, Barfinger,
    I have the same problem!  I really wonder how I can stop the itch to play any stocks.  The SPX strangles work so well.

  152. CMG  / Down day on heavy volume, this has to be a trend reversal.  Lets milk those puts…

  153. 10 UUP May $22 calls at .17 in the $5KP.  

    Funds/Shadow – You have to think about all the players and their motivations and the timings and constraints of the day – it helps you picture the way various scenarios will play out.  

    Listen to Cramer – "I only go to the supermarket once a month."  I guess they don't eat fruits or vegetables in the Cramer house.  Or milk, or cheese.  And all their produce is frozen….  The man just lies to people's faces to make up a premise – sickening!  

    Dow volume at 151M at 2:52. 

  154. Phil looking at option play on Jul 12 SCO b/s 31c @5.50 / 36c @2.95 sell 31p @ 1.65 Your thoughts pls thks

  155. CMG/ Dpast:

  156. CMG / Newt – Just to add, i will be cashing the short calls as they are already 75% up, big win! I also need the margin.  But the puts are here to stay

  157. Cramer / Phil – He didn't mention anyone else in his house, just him. Maybe he doesn't do the shopping!

  158. Nas looks a bit shakey with AAPL having trouble getting back over $575 and SOX down 1.9%.  If they go, we probably lose the rest.  

    SCO/Yodi – You're putting yourself behind Memorial Day and July 4th weekends.  I do think the economy will collapse before SCO goes to $31 but then there is some decay over time as they are an ultra.  I'd rather do the above May spread we're doing in the $25KP (with the short puts) and then, if that doesn't work, roll to a June spread and then a 2x July spread but if you make the 1x in May and again in June and again in July, then you'll make more money than your 2x July play with a lot more flexibility.  

    Oh and down goes the Nas!  Watch that 3,000 line now – if they blow that it's going to be  a tragic close.  

    DIA puts looking good.  

  159. Geneva / Phil – I live in Geneva CH. In case you are interested i can give you some info. As aussie said the tax regime is very very favorable and the nature and environment simply spectacular. Big advantage that you are in the heart of Europe with international airport (direct flights to NYC and Washington in case you get home sick)

  160. Cramer/Phil
    Does it looks like he eats any vegetables or fruits?  And he's probably lactose intolerant.  He actually might be telling the truth for once.

  161. PLX/mrm – how about taking delivery and then selling 1/2 on Monday or early next week.  I think it continues to run.  I have no doubt that they get approval.  Oh, did I just say that.  I am 99% sure, leaving a smidge of wiggle room.

  162. Cramer/StJ – That would be a nice cover for him but the point he was making was that people only need to go to COST once a month and supermarkets are dead (but not WFM when he's talking about them) and he used his homey little anecdote to prove that ordinary guys like him are a great example of the new American consumer.  

    CMG short calls/DPast – Very good idea cashing those in.  Up 75% means there's no reason to risk the rest.  

    Geneva/Dpast – I'm doing a lot of travel next year.  I'd love to stop by and check it out.  

    LOL Rustle!  

    CNBC says MSFT adding back the 12 Nas points AAPL is losing.  

    3:00 PM On the hour: Dow +0.61%. 10-yr flat. Euro +0.59% vs. dollar. Crude +1.08% to $103.83. Gold +0.12% to $1643.35.

    It's increasingly up to domestic Spanish and Italian banks to buy their respective countries' sovereign debt as IMF data shows foreigners exiting both markets. Owning nearly 50%, foreign holders now account for just 36% of Spanish bond holdings. In Italy, it's dropped to 40% from 47%.

    The IMF has secured its $400B firewall, with new pledges of $41B today taking firm commitments to $360B and the final $40B "easily achievable," say officials. The U.S. (election season) and Canada (wants non-EU nations to have veto power over bailouts) are not expected to contribute.

    Technician chessNwine takes a long-term look at prospects for Berkshire Hathaway (BRK.ABRK.B) after Warren Buffett's cancer revelation, and he expects a real breakout in the shares – "up and out" – after four years worth of consolidation that will lead to an "explosion, which should be a powerful one."

    Apple (AAPL) has entered settlement talks with China's Proview over the latter's ownership of the iPad trademark within China. Proview sued Apple in February over the matter, though the company largely hasn't been able to halt local iPad sales. With Chinese iPad interest surging, Apple has plenty of motivation to quickly put this issue in its rear-view mirror.

  163. IMF – How did they get to $400B without the US, Canada, Brazil, China?  If I am wrong, please feel free to let me know.

  164. Phil:  "It's increasingly up to domestic Spanish and Italian banks to buy their respective countries' sovereign debt as IMF data shows foreigners exiting both markets…"
    So how would the Spanish or Italian central banks do a QE without being able to print Euros?  Do they have control of giant government pension funds they could shift out into their own Treasuries? Do they sell off state assets to foreigners — I dunno, a national park here, a stretch of lovely coast over there?  Whatever can be done in Spain and Italy, will probably be done now, which I define as this year and if I can think of it you bet they already have.  Any ideas?

  165. I did miss a nickle geting out an hour ago, but seriously I think we have just seen the bottom. Of course maybe anti-stick!

  166. zero – can't the Italian and Spanish banks borrow at 1% from the EU and buy their own debt at 5/6% and play the spread?  I do believe that is the game being played. 

  167. CMG/Dpast-
    Thanks again. 74%. Nice!

  168. Woohooo, FAS below 99 now!

  169. pharm
    Spanish and Italian could if they put Big Bad Ben in charge!

  170. Cramer would be the last person I listen to in order to get the pulse of the average American!

  171. Wher is my Bonus?
    I just solved the world financial problem and didn't even notice what I said. The World Bernankster!!!!

  172. LOL Shadow….World Bernankster can KMLFA…..drugs are more fun.  Especially when you are looking at pretty colors on the screen.

  173. Phil
    I have been a Premium member since November. Thank you for your wisdom, insight and profitable plays. I struggled for a time in the market until I found your site and methodology. Your sense and pulse on the market is truly amazing. Now, if I can only get off the mattress earlier (I am on Mountain time) so I can get a few egg mcmuffins pre-market!   

  174. Phil—Thanks for the /RB plays—-out of it with nice gains—just did not feel like holding any futures positions over the weekend

  175. even though /RB I guess is a weekend hold

  176. lol, Pharm, where do you come up with these cartoons?

  177. CMG / Phil – Yesterday's pair trade is developing interestingly. As said the short calls are already 75% up, but the long puts are only 5% up today and shitpotle is getting punished on heavy vol. Wouldnt you expect that the puts would be flying as well?

  178. dpast – VIX is in check, so no, I think those puts need more time.

  179. $25KP – It's coming down to the wire on the FAS 99 calls now… Want to roll them Phil? The May 100 are $5.50 now. Tempting…

  180. rdn4evr: LULU 
    I see Phil gave you milquetoast way to trade LULU.  Hope it works because that will mean I finally won also.  Phil likes to make money the smart low risk way.  My approach always seems to involve considerable pain and patience, kind of like yoga :

  181. SVM – very tempting to buy/write here.. or just buy.

  182. crussell
    I alos suffer mountain time sickness. I spend last summer in the eastern zone and though awake I was not worth anything by the time the market opened. Just remember last winter when it was dark for the first few hours, thats when it sucks! And don't go to California or god help further west.

  183. Of course, FAS could help us and close below 99…

  184. Cali / Shadow – Yes, hard to get up for the market open out here in Cali…and in a week's time, I will be attempting to trade from Sydney for 10 days :(

  185. CMG / StJ – Ok VIX might be relatively low but the implied volatility of CMG should have exploded, it is dropping on 3x to 4x the average vol of the last 2 months.

  186. Have a great weekend PSW!!!
    Phil--as always, I would like to thank you for your great advice!

  187. jabo—-avez-vous eu un bonjour? ;-)

  188. Phil/st.jean
    Great calls on FAS! Congrats!

  189. What strange days.. thanks Phil!

  190. On a positive note – it is 78 degrees with sunny blue skies at 1pm PST market close…still time left to go out and enjoy the day :)
    Have a good weekend!

  191. Spanish banks/ZZ – No different than our Fed (who also have no money).  They just write checks and declare whatever they bu a liquid asset to offset the debt they run up.  That's why it's so dangerous – they are letting counties inflate their debts off the balance sheets in addition to the trouble they are already in.  

    Congrats to all the FAS players – that worked out perfectly!  

    Thanks Crussell – Congrats too!  

    Gasoline/Savi – Oh the idea is to get out, nicely played.  Too risky to carry Futures through the weekend.

    CMG/Dpast – No, it's right where it should be.  Big premium was paid on the puts and CMG did not move big and the net of the trade is up huge – that's what's important.  Net cost of the puts is about .50 now.  

    FAS/StJ – Nope, they were just to expire.  We'll see what happens next week. 

    Yoga/Lincoln – LOL! 

    Well that all went just perfectly today. 

    Congrats to all and have a great weekend.   I'll be around.

    - Phil

  192. Good to hear Jabo end the week on a upbeat note!

  193. dpastramas: CMG puts
    I think there was so much implied volatility due to earnings yesterday even big move down today doesn't offset the collapse of that impl vol.  IMO 

  194. Mission accomplished on FAS….

  195. aussie
    If I ever get to Sidney I hope I'm not trading stocks. The rest of the country will hate you.

  196. Cali/Aussie – That's why I'm more likely to go to Europe and out west.  What's the point of me waking up at 4am if I'm already in a rush to get my post out?   Nice that the market is closed at 1pm though…

    You're welcome Jabob and congrats on finally catching one!    Come on Jabob – one time – THANK YOU CMG!  

    Thanks DC! 

  197. Lincoln / LULU
    Unfortunately, my puts never filled at $1.80.  Oh well, maybe next week.  There's always a gap up somewhere…

  198. whoops and what Phil said,   please lord give me a few more days like this, I don't care what the averages do as long as my demon stocks keep moving this way.  

  199. Question for Peter D , Phil, etc on Strangles;  
    I noticed that with the iv dropping on the puts, they were down way more today than calls were up.  It seems like Peter D is right, and this is getting gamed for the short strangle sellers.  Opening up strangles yesterday on the next weekly options would have been profitable today without having to deal with today's opex shenanigans.  I wonder if that would be consistently profitable.

  200. ROFL!  Just got this EMail from our friends at PiMco:

     Our company name is “PIMCO” not “PIMPCO”

    Thank you,

    Mark Porterfield

    PIMCO – Media Relations

    The funny thing is it wasn't even me saying it, it was John Nyardi's interview with Sara Eisen but it shows how closely we're watched now.  

    We stand corrected, of course.  Research does indicate that there is not, in fact a P in the middle – we must have been thinking about someone else…

  201. CMG/Phil – Just wanted to say thanks for the excellent advice.  I was able to sell the June $360 puts for $3 (so a $1.4 loss) then buy the $410/$390 spread you suggested for $5.60, and now it's worth $6.25 already, so well on the way to making up for the loss with excellent potential.  Have a great weekend and thanks again.

  202. Thanks, Phil:  That's what I rather strongly suspected, although I didn't realize that the ECB alchemy of turning valueless dross into sound collateral was available to national banks as well.  Then why is there any crisis in Europe at all?  Wouldn't the national banks of the Peripherals just have revved up their own helicopters and thrown bales of badly-collateralized money out onto the Piazza del Popolo and the Paseo de la Castellana?  Of course, the Euro would have sold off, as the dollar did in response to QE, since the banks wouldn't be repaid much of the interest on bad collateral, but then having the Euro sell off would be the whole point of the exercise. Do Germans not care, as long as it is "off balance sheet?"  What is it I don't understand here?  I apologize in advance for being confused.

  203. And feel free to answer next week — or not at all.  Thanks for a fun week, have a good weekend!

  204. rdn4evr,
    It can be consistently profitable.  As with any short selling, there will be a black swan events that set you up for a big one time loss.  It can be up or down, more likely down as VIX goes up.  We did a non-scientific Expectancy calculation a couple of years back for the short strangle trade, and the outcome was positive, i.e. it is profitable over the long run.  As we learn together on this board, there will be days that we'll pull our hairs out being short in the puts and/or calls.  Other than that it's profitable 95% of the time.  Risk management is paramount when we sell short.
    barf seems to know more about the weeklies than me.  I found that the weeklies don't have the volume needed for my trades, so I do mostly monthly.

  205. Banks/ZZ – The local (National) banks can do exactly what the Fed does as long as the ECB, in turn, accepts the debt as collateral.  That's why the decision to expand their collateral acceptance was such a big deal last month – it allowed all the local banks to buy up all the debt (we talked about that the other day) and "fix" the problem.  

    Really good info-graphic from the NY Times that gives you a great picture of how incomes break down in America.  

  206. Barry's succinct summation of the week’s events:



    1) German IFO business confidence and ZEW investor economic confidence both point to a teflon economy right now in light of debt drama with their neighbors
    2) Spain sold 12 mo, 18 mo, 2 yr and 10 yr debt successfully, yields hold steady near highest since Dec
    3) UK retail sales and jobs data both better than expected
    4) US Retail Sales in March broad based and above estimates but core figure ex auto’s, gasoline and building materials (thanks weather) were touch light
    5) Housing construction permits rise to most since Sept ’08 led by multi family
    6) Refi apps rise to 5 week high as mortgage rates drop near lows again
    7) Brazil and India both cut rates as focus more on growth than inflation
    8) Shanghai index closes at 5 week high on growing speculation of another RRR cut
    9) Positive for Japanese exporters as yen weakens after BoJ deputy Gov says they will print all the yen it takes to get to 1% inflation.


    1) While Spanish yields flat on week, CDS rises to record high, IBEX trades near lowest since Mar ’09, Italian 10 yr rises to just shy of highest since Feb, Italian and French CDS at most expensive since Jan
    2) Initial Jobless Claims again surprises to upside, 4 week avg rises to most since Jan
    3) Existing Home Sales, Starts and NAHB builder survey all below expectations
    4) Purchase apps fall to 6 week low
    5) NY and Philly mfr’g surveys fall but components mixed
    6) Industrial Production flat m/o/m
    7) China says home prices fall in 37 cities in March, up from 27 in Feb
    8) Japan says print as much yen as it takes to get more inflation, a step closer to the day of reckoning for the JGB market!?

  207. Ah. jawohl, Phil.  Jetzt ist das klar.   Curious that the Euro didn't drop more as a consequence.  

  208. Hey Peter, good to see you. 

  209. Here are my predictions for the French elections on Sunday – 1st round:

    Hollande – 29%
    Sarkozy – 27.5%

    And that will be the 2 candidates for the second round May 6.

  210. Thanks Peter

  211. Lots of data next week:

  212. Is AAPL going lower?

    One thing that doesn't lie is volume. Plotting OBV on the chart above, you can see that during the runup, OBV kept on making higher highs and higher lows. However, for the last 10 days, volume has been going the other way, making lower highs and lower lows. At the same time, we are hitting the 50 DMA so that might prove support and of course earnings are next week. But momentum seems to be lost for now!

  213. We have a similar pattern developing with SPY. We have been riding the 50 DMA for a while now, but OBV is clearly in a downtrend channel now. Not a good sign!

  214. What is On Balance Volume? Not familiar with that metric.

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

  216. OBV- I don't see it as an available study in TOS?

  217. Rail Traffic continues to soften (from PragCap).


  218. pstas – right click a daily or weekly chart.  Not a intraday study really.  Go to studies, all studies, under M-O, OnBalanceVol.

  219. A bit of weekend reading. Zerohedge at their best (pounding the Fed :-) )

  220. And to couple the above with a very very very interesting research paper on Volatility during hyperinflation (tip: we want to be long the VIX contrary to what we have seen so far)

  221. Found it-= thx

  222. And a chart on CMG.  Encouraging

  223. Apologise for spamming the forum, but this can be huge (if true)

    Loyal3,which seemed to have come up from nowhere, has an SEC approved model, and an agreement with NASDAQ to allow any user to buy any shares of listed companies through Facebook with 3 click. Users basically buy the stock directly from the company (no brokers, no fees), and you pay the average daily price (no trading).

  224. OBV / pstas – Stockcharts has some real good information on all the indicators that we use. For example, you can find some good stuff on OBV at:

    Good sample charts.

  225. Average daily price??? That’s something that could be abused to our benefit!

  226. These people are so detached from reality:

    When performed by married women in their own homes, domestic labor is work—difficult, sacred, noble work. Ann says Mitt called it more important work than his own, which does make you wonder why he didn’t stay home with the boys himself. When performed for pay, however, this supremely important, difficult job becomes low-wage labor that almost anyone can do—teenagers, elderly women, even despised illegal immigrants. But here’s the real magic: when performed by low-income single mothers in their own homes, those same exact tasks—changing diapers, going to the playground and the store, making dinner, washing the dishes, giving a bath—are not only not work; they are idleness itself. 

    And Mitt himself…

    Even if you have a child 2 years of age, you need to go to work [...] And people said, "Well that's heartless." And I said, "No, no, I'm willing to spend more giving day care to allow those parents to go back to work. It'll cost the state more providing that day care, but I want the individuals to have the dignity of work."

    The hypocrisy is just frustrating!

  227. StJ – saw that clip on Daily Show……unreal.


    I also like it when his wife said that, “we need to respect choices that women make.”  If I was the Democratic Party, I would play that one to the hilt!

  228. FRIDAY
    Gasoline price in Minneapolis today =$3.69

  229. Ann Romney/ video:
    Are the lights on? “give a shout out” and “awesome”?????

  230. So Im halfway back to Kabul from the Helmand province on a nice C-130 and we have to return b/c 10 poor congressman got left behind and wouldnt DARE to spend another night on Camp Leatherneck. Anyways Phil, I was sitting back to back on the cargo net with your girl Michelle Bachmann… Ugh.,… I *ALMOST* caved and asked for a picture but since I consider her Satan I decided against it. We were all pissed that those guys caused us to get into Kabul 3 hours after the scheduled arrival. The pilots were too b/c they pulled more Gs than I thought the C-130 was capable of… It was fun seeing the congressman get quesy…One of them even got up and grabbed a barfbag :) . Anyways, that was my excitement and enjoyment this weekend. Looks like I missed another BS day on Friday… Cheers..

  231. Good Morning!
    I know just enough about Mitt Romney and his Mormon faith and I feel that once he gets the republican nomination, you will begin to see a moderation in his views. He and his family knew it would be difficult to get the republican nomination and more than likely discussed the fact that Mitt would have to be guided by the political winds, not ideology.
    I am begining to wonder if the ideal scenario would be Mitt as President with the Democrats controlling the House and the Senate.
    I think this may be the only way we'll finally get some work done…..

  232. I love Phil's Casino Owner metaphor and find it very powerful in guiding option strategies. As I look at my portfolio of option positions, the plans going forward are based on reducing roulette down to a game of black/red. My portfolio consists of a number of (currently) losing positions. Rather than predict what each position will be come May expiration I plan to take the other side of the current trade. Some examples:

    • CHK sell May 19 strike calls for 0.51 – offset against sold Jul 22 puts (5.05)
    • EDZ sell May 14 strike calls for 0.65 – offset against sold Jul 14 puts (2.65)
    • GS May 120 strike calls for 0.97 – offset against sold May 120 puts (8.50)
    • QQQ May 63 strike PUTs for 0.56 – offset against sold June 66 calls (1.73)
    • SLB May 75 strike calls for 0.80 – offset against sold May 70 puts (1.70)
    • SPY May 133 strike PUTs for 0.96 – offset against sold Sept 140 calls (5.00)
    • TLT May 115 strike PUTs for 1.05 – offset against sold May 115 calls (2.80)

    I am trying to balance selling a reasonable amount of premium to contribute to my monthly target of premium to sell, whilst recognizing that I will need to be ready to roll positions if they go against me. But only one side can be a losing side, and for those positions that are already deep ITM, the roll positions are already planned.

    I also need to replace hedges which expired last Friday (FAZ, TZA) – both of them for a nice profit as I had sold the long calls some time ago when it looked like the hedges would not be needed – the hedges had been placed 3 months ago.

    • TZA Jul 18/28 BCS is at 2.01 and with TZA currently at 19.18 is 1.18 ITM
    • FAZ Jul 22/30 BCS is at 1.72 with FAZ at 22.27

    I now need to find some offsetting trades to pay for those hedges.


  233. Hi Winston,
    Selling call / put offsets to loosing position seems to be a good idea, until it does not work, due to whipsaw action.  Rolling to lower strikes or DD seems like a better idea (where directionality of trade is maintained) but requires more analysis to figure out break even and come up with new price targets.  Would appreciate your reasons for picking one vs the other.
    I think one of the most difficult things to do as a trader is to figure out how to handle loosing trades.  Phil's portfolios are a great example of how to handle that (I am not able to execute most trades in my portfolio, but consider directional implication of securities seriously).  I will read answer to your post from experts, with interest.  Thanks for sharing.

  234. Winston – in the biotech Pharma field, how about offsets by selling:

    • VRTX – July $34s are $2.40 (looks like someone is betting that line with a 3K lot moving) (my favorite – as I think these guys are in play)
    • BMY – Sept 33s are $1.15 (not quite as attractive in a sell off, but going out to January would be fine).
    • GILD Aug 45 or lower strikes are all > $1 (That gap may be filled, so possibly wait on this when you buy the hedge)
    • MRX – Oct $34s for 1.50 or better
    • HSP – August $30s for 1.20 or better.

  235. VRTX- funny you should mention this one as I have been watching it for a potential swing trade long. Earnings report coming up on the 26th so I am hesitant- will see what Monday brings. Comment?

  236. drmtv10 / selling calls/puts; I roll to lower or higher strikes when there is only 1/3 of premium left in the position (one of Phil's guidance notes) and try not to get to far out of position by going as far out in time as necessary. I have only recently started DD, and have already seen that requires a lot of firepower in terms of margin if the position goes against you after too many rolls. So rolling and DD are part of the same armour for me.

    Pharmboy / Biotech offsets; I just do not seem to be able to get the feel of biotechs. I tried TRGT (but got ambushed by a failed drug trial), so I am a bit wary of managing the volatility of those names – although I will look into BMY. Thanks.


  237. NY Sunday Times – Walmart and Disney on front page
    The Times has a massive four page article on Walmart's bribery campaign in Mexico that is worth a read.  Without corruption, Walmart's overseas growth is nowhere near its achievement.  This story gets under my skin not just because I dislike corruption on massive scales.  I had a client who spent six months in jail because, as a Walmart cashier, she let another employee walk out with $2000 worth of merchandise.  As a single mom, she lost custody of her child and spent months putting her life back together.  That is the price to pay for retail crime.  But who is going to jail for wholesale crime like Walmart does as their standard business practice.  As consumers we should be treating Walmart like North Korea, because it is the corporate equivalent of a rogue nation.  If corporations are people, arrest somebody for God's sake (and strip search them!)
    Interesting that the Times put Disney's consulting wing on the front page as well, noting that hospitals, airlines and hair salons have used Disney principles to enhance their work.  Let's hope Walmart doesn't get into the same business!

  238. The latest from France:

    Hollande – 27.95%
    Sarkozy – 26.86%

    I was slightly off in my predictions but still had the correct order. Marine Le Pen (from the far right although slightly to the left of Santorum, Palin and Co.) got more than 19% but has not called for a vote to Sarkozy in the next round – she actually will abstain helself. It's going to hard for Sarkozy as he faces a problem – tack to the right hoping to collect the far right votes, but lose the centrist or tack to the center and face massive abstention from the far right. The far left candidates have already called to vote against Sarkozy in the second round. I could be wrong, but I don't see a winning path for Sarkozy 2 weeks for now unless there is a scandal somewhere! And speaking of, Sarkozy must be hoping for re-election because it seems that the French legal system will be looking for some answers from him on some "affairs". As a president, he had immunity and could not be questioned so far (so much for "Equality").

  239. This looks pretty darn cool:

    Altaeros Energies, a company from Massachusetts (with MIT and Harvard blood in its veins) has created one such curiosity. The prototype is a wind-turbine that doesn't just languish on a hill-top, cutting a line in the horizon. No, this one has a helium-filled outer-section which allows it to deploy itself to 1,000 feet, where it can benefit from stronger, more consistent winds and gives nearly twice the power yields of its land bound brethren. 

  240. Lots of earning beats so far:

    Still early though…

    Next week will be interesting with many blue chips reporting. 

  241. But aren't the earning beats on lowered giudance from the begining of the quarter?

  242. Hola people!  

    Had a super-busy weekend but got a lot of reading done.  

    France news knocking futures down a bit but we won't know until Europe opens.  

    Stock index futures and the euro reflexively open lower following the French elections. One school of thought on Europe says the EU periphery isn't being punished because markets don't believe the austerity promises, but because they do believe the austerity promises. To the extent Hollande may lean against such policies, perhaps the situation will improve. S&P -0.2%, CAC 40 -0.3%, euro-0.2%.

    I'm just sitting down to dinner so I might not get back to things until morning. 

  243. Earnings / Bertll – The game is played every quarter so comparisons are meaningful I guess… Lowered guidance to beat earnings has been going on for as long as I remember. 

  244. Revtodd / Walmart:   I have no axe to grind with WMT in particular.  Walmart is doing what all of its species does — outsources production overseas to low wage countries under working conditions that are no legally available in the U.S., minimizing taxes through transfer pricing mechanisms, while waiting for the Congress to grant it's periodic  "ally-ally-in-free" tax holiday in an attempt to effect some modest tax collection.
    Of course, these Walmart-type cost, tax and scale advantages are applied to destroying local competition with textbook predatory pricing, and yet somehow the American public is so grateful to pick up cheap merchandise as a palliative to their falling incomes that they're numb to the fact that the mass exportation of U.S. jobs to lower-tax, cheaper labor regimes is exactly why they're broke.  So their next move is to vote for a presidential candidate who pledges to lower taxes.  The principal effect of this will be to allow these very job exporting and largely tax exempt multinationals to pass through dividends to their wealthy U.S. shareholders at a lower marginal tax rate.  [It doesn't matter if they raise taxes on dividends:  the money will be transferred through increased share values, which is not taxed at all until realized].
    It's quite a political dilemma – how a democracy can recover it's economic and political balance when the majority of the governed do not understand the economic and political forces that afflict them.  I suppose that's how a Hitler comes to  power — just finished The Garden of Beasts, by Eric Larson [author of The Devil and the White City], a account of American ambassador to Berlin Thomas Dodd's diplomacy, 1934-37, and it was interesting to note that the German economy continued to deteriorate throughout the '30s, right up until Germany's invasion of Poland in Sept. 1939.

  245. Zero – I enjoyed Garden of Beasts as well.  It was especially interesting to read an inside account of how many people misjudged Hitler and the Nazis and did not take the movement seriously until it was too late to stop it in Germany.  Its a good case study of sociopaths taking over a country.  The Walton Gang in Bentonville are not Nazis, but there is a sociopathic quality to their practices to accumulate extreme wealth.  I got this on Facebook last week:

    If a man has an apartment stacked to the ceiling with newspapers we call him crazy.  If a woman has a trailer full of cats we call her nuts.  But when people pathologically hoard so much cash that they impoverish a nation, we put them on the cover of Fortune Magazine and call them role models.

  246. Good morning!  

    Asia down a bit less than a point and finishing at day's lows.  

    Europe Futures are pointing down with Euro falling back to $1.316, Pound $1.609, 81.17 Yen to the Dollar (down 1% – stronger), and the Dollar at 79.47.  Over 79.50 is going to be bad for our indexes and Europes.  

    Whoops – France and Germany opening down 1.4%!  

    Oil (/CL) failing $103.50 and I don't see anything to justify it holding that so a good short off that line – especially if the Dollar moves over 79.50.  

    Gold is $1,640, silver $31.37, copper $3.6385, Nat gas $1.94 and gasoline fell to $3.106!  

  247. Pretty close with that prediction StJ – Does Hollande take the main election now?   I don't see why not as I'm sure most voters are almost in an "anyone but Sarkozy" mode.  

    OBV/StJ – Pretty much ends up charting what we observe when we see those low-volume pump jobs followed by high-volume sell-offs.  Nice that it's able to cut through the BS and give you a more realistic picture of what's going on over time.  

    Rails/Pharm – That simply does not look healthy, does it?

    Great Fed summary Dpast!  

    Getting back to Loyal3 – I'm not clear on how you would sell your shares.  There's the rub…

    Romney/StJ – What an idiot.  They had Obama's spokesman dead to rights on here slip-up and then they had to ruin it by continuing to talk.  Now Romney and his wife have made fools of themselves and his insane stance that the Government should pay more for day care so women can go to work can't make either side happy.  Keep in mind that this constant push to put more people into the work-force when we already have 10% unemployment (16% real unemployment) is simply another way Big Business (Romney) is working to drive US labor costs down to third-World levels. What a brilliant friggin plan to force 30M women into the work-force by raising state taxes (that are flat and penalize the poor) to pay for day care to force them to go get low-paying jobs that will probably make them ineligible for aid they are currently getting and drive another 20% of our existing workforce to the unemployment lines.  BRILLIANT!  

    Wow $103.23 already!  Indexes down about 0.75% so far and looking bad.  Dollar $79.54.  

  248. Mishy/Jrom – Oh man, she's my favorite!  I would have gone for the picture.  

    Mitt/1020 – Well I'm not going to vote for him on the hopes that he's only lying to everyone and is actually a nice guy.  

    Spreads/Winston – While it's certainly a good idea to sell premium on the other side, just be careful you don't box yourself into positions where you can't win.  It's good to set partial stops so things don't get away from you – especially when significant lines are blown – this happens to us pretty often in FAS Money as we play it aggressively and it moves quickly.   Also, rather than add even more positions to hedge the hedges – why not look at which of your longs you feel good about owning more of at a lower price?   

    WMT/Rev – I can't wait for someone to go to the Supreme Court and argue that WMT should be cuffed and taken into custody.  They are certainly old enough to be tried as an adult.   As to Disney – it's AAPL who should be consulting retailers – not DIS.  Disney's own stores were such a failure, they sold out to PLCE.  

    Turbine/StJ – I saw that this weekend, very cool.   Great for deploying off ships. 

    Beats/Bert – Yes, expectations were lowered over and over again since last Q.  In fact, I had DIS up from the earlier topic and check out the EPS trends in Yahoo – this is the kind of thing that's happening to many companies – 90 days ago .62 expected, 30 days ago it was .58 and now .56 so down 10% in 3 months – no wonder companies are beating estimates!  


    Great summary ZZ!  Of course nothing the Nazis did turned around the economy other than war, which becomes a command economy with debts being ignored, paid imports down and captured assets up along with unlimited Government spending on paper nobody dares question and let's not forget that military job-creation!   THAT'S how you boost an economy!  

    Good one Rev!  

  249. Oil bounced off $103.05 so done back at $103.15 and waiting for reload on break below $103 or rejection at $103.50 (if it bounces that high – not likely).  

    Euro $1.314, Pound $1.608, 81 Yen to the Dollar is bouncing and that's 79.60 on the Dollar.  

  250. hoarders/revtodd:  Warren Buffett pretty much admits that the money itself is pretty much meaningless to him and he thinks of it more like a way for keep score like in a game. 
    He fashions himself a company "collector" and the Berkshire Hathaway portfolio is his collection — like an adolescent's hobby — which is why he is able to remove himself from his money and advocate for higher taxes and policies which supposedly "hurt" the rich and "help" the 99%.  He's just giving away some of his points and he knows he can rack up more points in a jiffy because he is just so good at it and it is just so easy for him to make is back.

  251. Phil/Romney   I would not say that Obama has been all that either. I will wait for the debates and decide then.
    I want what's best for this country.
    Fool me once…….

  252. Fool me once/1020 – Yes, I don't know about you but it will take a long time before I am fooled again:  

  253. I'll do my best as well – I just don't feel like moving…. :)