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Federally Fueled Thursday – QE Maybe?

Bad news will be good news!

Yesterday Fed Chairman, Ben Bernanke, reassured the markets that the Fed will be "Keeping interest rates low is still appropriate for our economy" (see statement) saying the committee had "had no difficulty coming to a consensus" about keeping rates low.  Mr. Bernanke is "really laying the groundwork to show he's serious on holding the line on the federal-funds rate target until well into 2014," said Michael Dueker, chief economist at Russell Investments.  

While this is not QE3, the promise of endless supplies of ZIRP "Free Money" was enough to kick the markets up a notch and we finished the day at the highs (we followed through with our morning plan of going bearish into the run-up in Member Chat) – up about one percent overall as the Dollar dove to month lows.  In fact, the Dollar bottomed out at 78.9 this morning, the lowest level since early April, when the S&P was at 1,422 and the Dow was at 13,300.  

What does it mean then, that the Dollar is back to it's lows but the markets are not back to their highs?  Oil was $105, gold was $1,675, copper was $3.96 – all are lower now despite the Dollar being pressed back down to the lows.  Therefore, the buying power of our Dollars is actually increasing (we can buy more stocks and commodities for the same Dollars we had in March) – even though it's not apparent from the charts. 

Also not apparent then is the declining value of those stocks and commodities which seem, at this point, to only be supported by the Dollar's renewed weakness.  So our market premise needs to very much focus on whether or not we believe the Dollar is a weaker currency than the Euro or the Yen.  There is, of course, a tremendous difference between SAYING the Fed would ease under certain conditions – which is what Dr. Bernanke said yesterday – and ACTUALLY printing more money – something the Fed has not done since Operation Twist began way back on September 21st (when the Dollar was around 80.

Operation Twist does run until the Fed's next meeting in June but we have been given no certainty from the Fed that QE3 or OT2 will follow – just a lot of vague promises from Uncle Ben telling us that – if we should fall – the Fed will be there to catch us.  I believe that's what Jean-Claude Trichet said to Greece a couple of years ago – now both Trichet and Greece's dignity are long gone…

In fact, while we wait on our own housing and employment data, Ambrose Pritchard notes that the ECB says net demand for loans has fallen "to a significantly lower level than had been expected in the fourth quarter of 2011, with the decline driven in particular by a further sharp drop in financing needs for fixed investment." Demand fell 43% for household loans, and 30% for non-bank firms.  Demand for housing loans fell 70% in Portugal, 44% in Italy, and 42% in the Netherlands in the first quarter of 2012. Enterprise loans fell 38% in Italy. The survey took place in late March and early April, and therefore includes the second of Mario Draghi’s €1 trillion liquidity infusion (LTRO).

This slump in loan demand is more or less what happened during Japan’s Lost Decade as Mr and Mrs Watanabe shunned debt. Zero interest rates did nothing. The Bank of Japan was "pushing on a string" (though it never really launched bond purchases with any serious determination).  It is true that banks have slowed the pace of credit tightening, but they are nevertheless still tightening. "A banking crisis remains very much in play for much of the region," said David Owen from Jefferies Fixed Income.

The IMF said last week that Europe’s banks would slash their balance sheets by €2 trillion – or 7% – by next year. This amounts to an economic shock. The Fund said deleveraging on this scale at a time of sharp fiscal tightening risks a "bad equilibrium".  Indeed it does. It ensures hell for countries containing 200M people, or more. Judging by the rise of Sinn Fein, the Dutch Freedom Party, the Dutch Socialist Party (hard-Left), France’s Front National, and some true fire-breathers in Greece, they victims will not readily put up with this.

Julian Callow from Barclays Capital said there is no almost no historical precedent for the sort of deleveraging under way in the EMU periphery. Credit rose from 100pc of GDP to over 200pc in Ireland, Greece, Portugal, and Spain in the EMU boom. "This is far higher than in Japan during the 1980s. It is hard to find an historical parallel or any insight from economic theory for where we are going," he said.

Speaking of Japan, that country's ratio of debt to GDP is now 228% – almost double that of Greece and Italy and with a much bigger GDP (3rd in World).  Already, the combined costs of interest on that debt and social security are approximately equal to total government tax revenue.

Japan’s trade balance is about to go negative for the first time since 1980. Land values and Nikkei stock values have fallen to about 30 percent of 1989 levels. Now, educated young Japanese women are emigrating, Japanese companies are shifting production overseas (even to the U.S.), national politics are in gridlock (six prime ministers in the past five years), and last year Japan experienced its first mass street protests in decades. 

The Bank of Japan is expected to throw another Trillion Yen onto the fire this Friday so, like many Fund Managers (see chart) – I really can't see the logic in being long on the Yen and, obviously, Europe is on the verge of having a Revolution if the ECB can't learn a tune other than "more austerity please" to solve their problems so why, why oh why is the Dollar below 79?  As I said to Members early this morning when we decided to short the Futures – it does not make sense!  

We'll still go bullish on the markets if we have to.  As I mentioned yesterday, we'll be adding bullish positions this morning if we see 50% retraces of the monthly drops, which would be Dow 13,000, S&P 1,389 (adjusted up 5 points to eliminate AAPL effect), Nas 3,050, NYSE 8,050 and Russell 815. Usually we're good with 3 of 5 over but we didn't pull the trigger on more bull plays as the S&P and the NYSE are right on the line and the Nas has a long way to go – even with AAPL goosing it by 30 points yesterday.


We ARE willing to go technically bullish but I see death crosses – EVERYWHERE – as the 50 dmas fall below the 200 dmas and that, my friends, is NOT a bullish sign.  Since the last time we looked at our Multi-Chart on the 16th, when we warned that the "miraculous" move up was masking overall downward momentum, those 50 dmas have now fallen below our 50% lines – also not a good technical sign.

Yesterday we wondered how many fools would rush in and buy as Bernanke and Company play the same old song and dance – again – and the answer, so far, is not too many as the volume was crap and the movement was crap.  We'll see if the bulls can pull one out of their hats into the weekend but we'll be leaning bearish if we can't hold 3 of 5 of the US indexes  over that 50% mark.  

I can't imagine, this weekend, what's going to change that will make Euros and Yen more attractive. 

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  1. Gee, got busy last night and forgot to post the lines… Here they are! Sorry guys…

  2. The site is currently running very, very slow for me….

    Oil lines

    R3 – 106.18
    R2 – 105.37
    R1 – 104.72
    PP – 103.91
    S1 – 103.26
    S2 – 102.45
    S3 – 101.80

    PP has held all morning so far!

  3. Site is slow to load for me as well…..

  4. very slow today

  5. very slow today

  6. muy despasio

  7. Good Morning!
    Pharm – When's moving day?

  8. Refresh rate on this site like motor oil on a sub – zero day. Just me or anyone else?

  9. SKX- I have the BCS 11/15 October net debit= 1.94.  I sold a put to offset it but that is not shown in the ND I posted here. Strong earnings last night- stock is up.  Whats the best way to get the most off this transaction?

  10. Phil – thought you'd enjoy these:
    "TASER beats by $0.06, beats on revs (TASR) 4.15 : Reports Q1 (Mar) earnings of $0.07 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.01; revenues rose 10.8% year/year to $25.6 mln vs the $22.72 mln consensus. The increase in sales versus the prior year was driven by the continued adoption of the TASER? X2 Electronic Control Device (ECD), as well as a significant order to the United States Army for the X26 ECD… Gross margin in the first quarter of 2012 was 59.4%, compared to 52.8% in the same period last year."

  11. More TASR: "While we have been greatly encouraged by pre-orders from agencies for the AXON Flex ahead of the shipping date, expected in May, we anticipate meaningful sales bookings in the back half of the year. Along with the momentum for our newer products, the Company maintains a strong cash position and has zero debt, which leaves us well-positioned to drive profitable growth and drive value for all of our stakeholders. Additionally, the continued strong cash generation ability of the business positions us to be able to repurchase up to $20 million of company stock this year."

  12. Earning strangle – That CTXS 65/87.5 strangle is not working well so far as CTXS has jumped more than 11% overnight! It was sold for $1.00 but is now worth 2.00. But still in the money so I'll hold and see what happens. There are rolls open all the way to $100 while the stock is at $85 now above its most recent high around $84. And it's going down as we speak.

  13. Can someone explain what this means??  Apple states on its FQ2 earnings call (webcast, live blog) its conservative FQ3 guidance was partly due to a 2.6M Q/Q increase in iPhone channel inventory

  14. 1020 – still waiting for the 2nd loan……so, end of May….and the regulations are getting very tight, as the banks/loan originators want to see every deposit over $100 and why it was done.  Getting to be quite a pain, and I have more than once thought of walking.

  15. DECK – Phil a la company, what say you?  Further beatdown after earnings tonight?

  16. Sluggish for me too.  I did a traceroute that came back good, so it must be a link on the site that is slow.

  17. did we open or is this a dream where bots have left the building therefore like 8 trades have occurred?

  18. StJeanLuc / FAS Strangle  -  Hi, I'm back from the jungles of eastern nicaragua.  With lots of cuts, bumps, bites and bruises to prove it.  Anyway, I was thinking of starting out the FAS Strangle.  What do you suggest the best way to open the position would be?  Seems to be a okay time, as the current pos is -400
    Apologies for a newb question, but the current position looks confusing.  A BSC with different ex years in XLF, and a put on FAS in may combined with the strangle.

  19. Good morning.  

    The programmers are looking into why the refreshes are slow – hopefully they'll get it fixed soon. 

    Jackie (10) says there's a lot of movement but we should wait until there's a clear signal on "take your daughter to work day."  She will be here all day to answer questions and she's putting together a special report on natural gas in China, which she decided was the most important headline of the day.  

    Dollar's at 79.08 and if they can push us back below 79, that's going to be bullish.  Euro just held $1.32 but the Pound failed $1.62 so we'll try to get consensus over there.  

    Initial Jobless Claims: 388K vs . 375K consensus (prior week revised to 389K from 386K). Continuing claims +3K to 3.31M.

    March Chicago Fed National Activity Index: -0.29 vs. +0.07 prior (revised). The index's 3-month moving average decreased to +0.05%, from a level of +0.37% last month.

    8:41 AM S&P 500 futures give up a little more ground, -0.4% following weaker-than-expected reads on jobless claims and from the Chicago Fed

    That was then, now we're down less than 0.2% on some thin action.  At one point the S&P futures were at 1,392 and we picked a short (/ES) at 1,390 this morning (end of prev. post comments) and got a drop to 1,380 but now back at 1,385, which is 1,389 (our adjusted line) on the Index.  

    PCLN continues to go nuts and there is a lot of buying coming in now (9:39), mostly in the Nas.

    Not sure what it all means, news isn't even exciting – I guess Bernanke bounce will work until it doesn't.  

    At the open: Dow -0.11% to 13076. S&P -0.2% to 1388. Nasdaq -0.01% to 3029.

    Treasurys: 30-year +0.45%. 10-yr +0.27%. 5-yr +0.13%.

    Commodities: Crude +0.08% to $104.2. Gold +0.66% to $1653.15.

    Currencies: Euro 0.% vs. dollar. Yen -0.68%. Pound -0.12%.

    Market preview: Stock futures turned lower followingweekly jobless claims that showed the four-week moving average rose to its highest since January. European stocks soured after the EC’s sentiment gauge fell to its lowest level since December. Exxon Mobil -1.7% as earnings missed. Aetna -10.2% as profit fell 13%Still ahead: pending home sales.

    Credit conditions in the EU have tightened "appreciably" in the last quarter, writes Barclays, with demand for credit diving to levels close to those seen in 2009 at the same time bank lending standards are on the rise. The outlier, of course, is Germany.

    The loonie remains at its highest level since September, buying $1.0165 as the Bank of Canada continues to signal rate hikes in the not-to-distant future and the Fed remains on "permanent hold," says SocGen's Kit Juckes. FXC +3.6% YTD.

    The argument to extend QE is stronger after Q1's weak GDP data, says the BoE's Martin Weale. A trained economist, Weale surely knows GDP data is rear view window information (Q1 ended in March, it's almost May), and that GDP in one quarter is no predictor of GDP the next. Sterling moves along, +0.1% to $1.6171.

    The PBOC raises its fixing for the yuan to 6.2829 per dollar, the strongest level since it ended the peg in July 2005. Analysts caution against reading another bout of yuan appreciation into the action, instead noting Beijing often makes such moves ahead of high-level meetings with Washington.

    Hedgeye's chart of the day (complete with a snarky comment directed at the Fed Chair) points to the wide divergence between the performance of the stock market since the 2009 lows (way up) and consumer confidence (not so much). Which one has it right?

    The Troika delivers a passing grade to Ireland following its review mission to Dublin, setting the stage for disbursement of another €3.7B in rescue aid. "Nonetheless, considerable challenges remain. Economic growth is expected to remain moderate" – is that what 0 is called these days? (earlier on Ireland)

    Six weeks ahead of the vote, Irish support for the EU fiscal treaty comes into doubt as public reads the newspapers about Spain, Holland, Greece, and France. The referendum has 30% support against 23% against, with a whopping 39% (and rising) undecided. The Irish trade union movement announces it will not support the treaty.

    The Irish government insists it will not postpone a referendum on the EU fiscal treaty despite the possible election of Hollande in France who says his first order of business will be redoing the pact. (waning support at home too)

    Only 27% of the revenues of the companies in Spain's IBEX 35 index come from Spain, according to BNP Paribas (h/t James Mackintosh).  It might be something for bottom-fishers to contemplate with the market (EWPdown 15% YTD and within a few percentage points of taking out its 2009 low.

    The ratio of bulls drops again in the AAII Investor Sentiment Survey, off 3.5 points to 27.6%, well underneath the long-term average of 39%. The bearish camp increases 3.6 points to 37.4%. Bullish sentiment peaked out around 51% in early February, and has been declining since. 

    Included in Volvo's (VOLVY.PK) mostly upbeat earnings report, is an expected 15-25% drop in the market for construction equipment in China. The company had previously guided for a flat 2012 in China. Volvo becomes the 3rd heavy equipment maker in 2 days to warn on slowing in China.

    Still $18!  Last week"The suggestion of any conflicts of interest is unfounded." Today, Chesapeake (CHK) says it won't extend its Founder Well Participation Program, which indirectly facilitated up to $1.1B in loans taken out by CEO Aubrey McClendon. "The board did not review, approve or have knowledge of the specific transactions engaged in by Mr. McClendon or the terms of those transactions." CHK -1.8% premarket. 

    Sterne Agee makes a call that Las Vegas Sands (LVS) should be bought on any weakness after digesting the casino operator's Q1 report (III). Shares are -2.4% premarket in choppy trading following the earnings report.

    Apple has risen 8% or more the day after earnings on 9 occasions since 1997, notes Mike Bergen. The following day: The Nasdaq 100 was higher just 2 times, with an average loss of 1.1%.

    $1,650 was our shorting line on gold (/YG) so I like playing that cross.  Oil usually gives up ground after the nat gas report at 10:30 so we'll wait and see there.  

  20. Phil XLF on two vertical plays set up in Nov 11 11/15 Jan13 and 10/13 jan13 doing very well I hold the Jan 10p sold for 1.28 now .20 and the Jan 13 12p sold for 1.89 now .40 thinking of rolling these to Jan14 12p what you think

  21. Le site charge slo

  22. Le site charge lente

  23. Le site charge lente

  24. Le site charge lente

  25. Pharm / deposit — I must have missed the conversation but you piqued my interest. Are you saying that your applying for a mortgage and they are looking at every deposit you've made of $100 or more?  That sounds whacked.

  26. PCLN / StJ – Following the MoMo discussion from yesterday, i see PCLN breaking higher but i cant tell on the volume (my technical analysis platform doestn work when i am at work, firewall :-( )
    What do you think? Time to ride it up? 
    Just a caveat, AAPL seems weak…

  27. Jackie says maybe a couple of days before a big sell-off based on MACD and RSI on the major indexes.  That means that this may be a blow-off top.  We're at about the same place we were yesterday morning so no change yet – we'll see how it plays out into the KC Fed at 11 (and a big 7-year auction at 1) – the housing data is a good excuse to test highs.  

    Pending home sales way up in west and south, down in North and mid-west but, overall, a strong report:

    Mar. Pending Home Sales:+4.1% to 101.4 vs. +1% expected; -0.5% prior.

    Although it would be a good idea to keep it in context: 


  28. FAS Money / Burrben – I am guessing you mean the FAS Money with the XLF BCS and the short Calls and Puts in FAS. If I were to start it today, I might have a pure 2014 BCS like a Jan 14 13/15 BCS rather than the hybrid one we have right now. And since FAS has run up since we sold the calls and puts I might sell different strikes as well like the FAS May 105 calls and 90 puts instead of the 100 and 85. But you would be out of sync with us.

    Your other option is to wait for us to roll the puts and calls and sell the next round with us. You can then open a 2014 BCS at the same time. You won't be completely in sync with the XLF position, but the money is made with the short premium on FAS.

  29. stjean:
    I believe we DD on the USO puts in both accounts.

    April 25th, 2012 at 1:42 pm | PermalinkIgnore this user

    Good time to DD on USO May $39 at puts at .67 in $5KP and $25KP. 

  30. Why is WFR getting loved on today?

  31. Thanks for staying on top of things Dclark…

  32. Phil do you anticipate Japans 130B tomorrow could preovide lift to our markets? does not seem like much

  33. Whoops. There goes Mr. Bucky.

  34. $ getting crushed, why arent we in rally mode?

  35. Pharm – sorry to hear that.
    I miss the day when all you needed was 20% down, a 700+ FICO score and a smile :)
    Did you pickup the 2 story on the corner?

  36. stjean
    Its an awful lot to keep track of. You do a great job. Thank you.

  37. stjean
    Its an awful lot to keep track of. You do a great job. Thank you. Now can you get the dollar to stop falling!

  38. PCLN / Dpas – I had a entry signal at 1:20 PM yesterday but too late to get in now and the action is not convincing…  You would need to break above the gap up price to confirm at $733 or so. 

    Until I get a reversal, it's not for me… Just waiting for now.

  39. Morning Phil, If the RUT can get to 815, it looks like 817 is the 50 DMA.  Wouldn't that be a likely resistance?

  40. Nice work Jackie!  :)

  41. Forexlive..

    On the wires, ECB’s Constancio says that the developed economies are going through a period of slow growth that is not going to change any time soon.


  42. StJean / FAS Money  
    So basically the Idea is to have a long dated BCS that you sell monthly FAS prem against.  I'm assuming this is to reduce the margin cost of selling FAS options?  
    Sorry for the easy questions, but the site search is super slow, and my laptop died where all my Rssowl comments are archived, so I'm using a old beater laptop. 

  43. stjean— Ithink everyone should start shorting PCLN until it goes below 700!!!!
    FU PCLN!!!

  44. stjean— Ithink everyone should start shorting PCLN until it goes below 700!!!!
    no emotion Jabo
    FU PCLN!!!

  45. StJean/PCLN
    Great job you do keeping this "circus" organized.  Really appreciate all your contribution.
    I think Phil moved the PCLN July 560's to the 580's yesterday.  Not sure the 25KP shows this?
    April 25th, 2012 at 3:14 pm | 

    PCLN July $560 puts are $7.40 and can be rolled to the July $580 puts ($9.60) for $2.20 – that's a good roll for the $25KP as well as the Long Put list.  

  46. DIA $127 puts can be rolled up to the DIA #129 puts for $0.45
    Nice roll… and you pay $0.225 per Dollar. 
    Good time to do that in the 25K portfolio Phil, or hold the $127 line?

  47. FAS Money / Burrben – Your assumption is correct, we are long with the BCS (hoping that XLF stays above 15) and we sell premium against it (weekly or monthly). FAS is really margin intensive no matter what though, but we keep the positions reasonable. The premium makes good money and if we are right with the BCS, it's the cherry on top… If you look at the spreadsheet, you can see that we have already sold almost $7500 net of premium. The BCS will make only about 10% of that.

  48. Sad article 1020.  

    SKX/Newt – Very nice!  The spreads are really wide but you should be able to get $6.50 for the Oct $11s and, if you can get out of the $15s for $2.75 or less then you may as well take the money and run so if you can ask for net $3.75, that's a good thing to do but, if not, you can see the spread on the $15s is pretty tight around $2.90 so that means your goal is to first get $6.85 for the $11s if you want to wriggle out early.  If you intend to go long-term, you can wait for them to add Jans and roll then.  

    Fallon/Rperi – Thanks I forgot I Tivo'd that.  

    TASR/Deano – Moving along very nicely!  

    AAPL/Lolo – They shipped a lot of IPhones but they backed up in the retail channel so that inventory needs to be worked off before AAPL can expect a lot of new orders.  Of course, I would imagine that they only get paid on activation anyway so I'm not really sure that would matter.  Maybe Iflan knows.  

    DECK/Lolo – I'm not a fan but we shorted them over $100 and lost interest a while ago when they took their fall plunge.  Now just $68 is probably about the right price for them and expectations are very low (.25 vs. .49 last year) but, overall, they are facing long-term issues and I sure wouldn't want to own them but I don't have interest in shorting them either under $85.  

    Sluggish/CD – Thanks but it's definitely us.  Turns out it's being caused by overuse of the search box on the top left of the page by a person or persons (they are looking into it and drones will be dispatched to the offender's location).  So the box has been disabled but now they have to clean up the database.  

    SOX up 1.6%, Transports down 1.4% – interesting diversion.  

    FAS/Burr – Yes, it's a good set-up as is.  We're just there to sell lots of premium, when it's high we sell more calls, when it's low we sell more puts.  Having the 2014 $13s means we're long-term bullish and we have a reasonable expectation of the Jan $15s burning off that $1.40 and leaving you with a net $1.72 entry and THEN you can sell a 2014 call and have your almost free vertical.  

    XLF/Yodi – I like that idea.  Those puts are pretty dead and we're fairly confident XLF will hold $13.50 long-term but you may need to gut out a dip or two along the way.  

    Oil went the wrong way after nat gas – back to testing $105 and yes I think it's a good short (/CL) off that line.  Dollar shot down to 78.87, now back to 79.98.  Euro $1.3235, Pound $1.6193 – still not closing the deal on $1.62.  

    Copper took back $3.75, $3.85 is bullish for them and the Global Economy.  Nat gas $2.23, gasoline $3.12.  

  49. rain – I was being facetious, but yes, 'they' want documentation of all 'deposits.'  Unreal.

    1020 – yes, corner one that is a short sale.  Still on the MLS, but says sale is pending…..and we did not pay the going rate.  With over 400K in upgrades, and what houses are going for there, I am very happy.  I think, over time, the house should be just fine.  If the market collapses, at least there is a roof over our heads, and I can still walk to the beach with a margarita in hand….we are keeping the beach house.

  50. TLT is up….go figure.  Somthing has to give.

  51. Looked at the market this am and saw long bond zooming up (TLT) and market going up and I thought to myself "that is really odd" then I remembered that we went through the looking glass back in 08 and I had to stop thinking or I would get myself in trouble.

  52. PCLN / ccs – Thanks. Apparently slipping these last 2 days. I am actually working on an important business transaction now so a little distracted… I'll fix the portfolio.

  53. Hi, this is Jackie and I would like to talk about China and shale gas. China is the world's biggest energy user and the people of China are hoping that they can use their shale like we do to make their gas less expensive. Policy planners in Beijing belive shale gas could be part of the awnser to the growing need of imported gas in China.
    Apparently getting shale gas out of the ground has proved challenging so Chinses energy executives say it will take years before China's shale resorces are developed on a large scale. “The geology in China is very very complex,” said Chris Faulkner, chief executive of Breitling Oil and Gas, a US shale gas company that is exploring business opportunities in China. “There’s no procedure in the US that we can just lug over here and apply to this geology and expect to have the same results as the US.”
    China says they will get 60bn cubic meters yearly by 2020.  Thats actually a lot because a cubic meter is about 27 cubic feet, so 60bn cubic meters 1.6 trillion cubic feet. China has 25tn cubic meters, wich is 675tn cubic feet- enough to supply the countrys gas needs for nearly 200  years at current levels.
    SHI is exploring the most for shale gas. Their chart is low but they might be a good invesment for the future.

  54. Go Jackie!

  55. Pharm / deposits — I'm guessing the deposits are outside of paychecks and you are claiming them as an income source? Or are they questioning your downpayment?

  56. PCLN / Jabo – We all wish that PCLN would just turn over and die, but I am sure you would not mind making a couple of bucks riding the wave up either. Or are you that emotionally connected to the stock    :-)

  57. Phil, my son is on the Drone team in the Middle East, so if you need to borrow one….Homeland Security does not monitor this, do they?

  58. Watch AAPL they are trying to keep it from getting to 600 where more than likely it would break lower. Bad for the market.

  59. stjean….

  60. Great research Jackie! I like that investment idea.

  61. just what italy needs…getting sued by eu over energy performance of buildings…wow

  62. You should be happy now Jabo… going in the right direction at least!

  63. Jackie—great  piece—will take a look at SHI

  64. Jackie you rock.  Anyone know what is the difference between SHI and SNP? 

  65. Pharm – nice place, kind of a sleeper until you look inside. Great layout, nice casework.
    We almost bought the same one, with the spanish elevation, directly below the one we eventually purchased.
    200 bucks a square would have been a great price…..

  66. AMRN – look at that chart…more takeover chatter.  They may have a good fish oil, but krill oil is gaining traction as better….

  67.  broad market stronger than major averages today

  68. Phill/anyone—-heard of a co ticker symbol DMOK--has introduced a solacase an ever charging battery system accessory  for the Ipad?—looks real interesting!

  69. sorry DOMK-- pink sheet

  70. SHI / Jackie – Great report!  Do they use fracking to get the shale gas?  Do you know why it is so much more difficult to get the shale gas out of the ground? TIA :)

  71. 10% over that, 1020.  Not too bad.  One in Ur area went for 316.  Another in ours went for 220 as well, but the lot was smaller, and the owner ripped out a ton of landscaping and all the appliances.  Throw a few fists in the wall, and 100K in damage…again, I am pleased.


    Now, if PLX would go to 100, Oil would collapse and SPY go to 100, I would be very happy!


    Forget the bershire workshop, just become a bank and borrow at 0.  Buy the market…and done.

  72. Pharm – a talk on Science Friday said the omega 3 in fish comes from what they eat, not from the fish itself and that plankton was a very good way to go to the source.

  73. Jackie – good research. Got any more?

  74. Phil – my TNA may 56/61 is showing a bit of a profit! Glad i did nothing (at the moment)

  75. Phil,
    Any thgts on Muni CEFs (MUH, NZF, MMU,etc) now for income?  Presumption is that munis stay strong in weakening equity mkt with slowly growing economy sans  pick-up in  infl.

  76. Jackie any ideas on why the $ is getting beat up over the last few sessions SNB or BOJ?

  77. Hi Jackie: 
    I'm Lincolns son and always shy away from China investments until my mandarin improves.  My 7th grade class has many friends on twitter who keep us up to date on things over there though.  Does your dad ever say bad words at his computer screen? 

  78. Pharm – that price should hold up….
    Btw, I've done that walk with a glass of wine – based on my experience, you may want to consider the bota bag…. ;)

  79. i was reading in Trains Mag that the trains that service the fracking areas are having to gear up big time to keep up with all that is being produced.

  80. Lincoln's son/bad words  
    LoL!  :)

  81. Incognito for my drinks…on my stroll to the beach

  82. Kansas Fed bad should be seeing new highs in a few minutes:)

  83. Great, I can see this board becoming a dating chatroom for the teen set…  ;-)

  84. AKAM beats on earnings, is upgraded to Buy at Jeffries, but profit warnings of $.01 – $.03 below analyst expectations of $0.39 for the next quarter and the stock is down 11%.  Crazy.

  85. jackie….I have a 10 year old son who tells me he wants to learn to do investment stuff.  How would you suggest I get him started on this?  You might know the answer better than me since you are his age and I , of course, am not.  Thanks. 

  86. oh nooooooo—kudlow

  87. Are we doing anything with the DIA 126 puts, now $0.51?

  88. Low volume, nervous shorts, weak $, crappy data. Rally juice.

  89. AAPL showing a bit of post-earnings weakness; that's what we expect and what we want.   PCLN weak today.

  90. Im not trying to be rude, I was just curious who Jackie is?

  91. AKAM / Rperi – At least they don't disappoint in the post-earning move department… They move 12% or so usually so right on track! The trick seems to be guessing which direction… There is congestion line around $30 so maybe worth looking at then…

  92. Larry Krudlow bagging on Geithner for being political – is he not part of Obama's cabinet? Did he not help to save many of Larry's friends on Wall Street?
    What a goober…..

  93. Jackie, i heard is the latest investment wiz-kid who turned 1000 into a mil in 6 mos.

  94. jromeha – Watch it!  She's got the juice to get you banned!   ;)

  95. Iflan,
    Give him 10$ pocket money a week and make him save 3$ off

  96. Iflan, get him the iTrade app…my 7 year old loves trading on it!!

  97. As a bear, seemingly perpetually this year…with today's action I am feeling like I am entering the scope of a sharp shooter just before being put to pasture…seriously considering taking everything flat and just waiting for a month or 2

  98. They certainly don't disappoint on earnings.  AKAM is probably the reason I found PSW in the first place.  Pre-PSW I made a poor decision and bought the stock at $47.50, and after they tumbled to their 52 week low of $18.25 after consecutive poor reports, and without having made a move to get out, I decided to learn about options to offset some of my losses.  After a few trips to SA I found Phil and looked forward to reading his posts each posts.  When they had their fallout I came over and signed up.  Anyway, back then I learned that I could sell a Jan 13 call and 2 puts at $30 strike for $15.24 and with any luck get out about even.  So $30 would do me just fine.  Either way I'm here and that's what counts.

  99. PCLN/Dpast – I see PCLN topping out in a descending channel from the 10th and the failure to take $730 is a big sign of weakness (not that there's any good reason for them to take it anyway).  

    Wow – Jackie has just informed me that she already needs time off to go to the orthodontist (new braces) and then LUNCH with her mother!  Can you believe this BS?  Just goes to show you how hard it is to get good help these days…  She says she will be back in the afternoon to help us into the close.  

    WFR/Rain – Major SOX buying lifting all ships.  

    Japan/Sage – Quite the opposite.  If they ease and we don't then the Yen SHOULD (maybe briefly) go down against the Dollar and a rising Dollar is not good for stocks and commodities (in the short-term).  

    817/Peedle – Well sure, it's the 50 dma – those do matter.  815 is just the 50% bounce zone from the high to the low and, of course 50% is a FIB line and then 820 is the 2.5% line above 800 so there's a lot of heavy resistance for the RUT going up – much easier for them to go down. 

    Slow growth/Kustomz – Yeah, about 30 years judging by the demographics…

    Italy/StJ – I had the most surreal conversation yesterday with some real estate investors who are buying rental units.  They are buying homes and condos and my advice to them was to not buy anything they couldn't ride out a 20% correction on and they simply didn't believe that housing could possibly go down another 20%.  I said, but the reason the rental market is hot is because people can't afford homes, therefore houses are still too expensive.  They simply could not wrap their heads around this concept.  

    Loading speed should be fixed now.  Drones report a clean kill with limited collateral damage.  

    PCLN/CC – Thanks for reminding us, I was just going to call for it again and was getting deja vu.  

    DIA/Itrade – We're over our levels so not a good time to throw cash at the problem – tempting though it may be.  

    Drones/RP – Thanks but any PD can get them now thanks to the Supreme Court.  

    I wonder how long we can ignore AAPL going down.  

    SNP/Grant – Jackie said she liked SHI better because there was a map showing who was exploring where and SHI seemed to have the most active sites.  

    Fracking/Aussie – Jackie says yes, they do.  The issues are that they don't have readily available high-pressure water and there are generally higher levels of clay in China's soil, which makes fracking less productive.  Jackie also wants to note that "fracking" is a very funny word and she can't wait to report on it to her class tomorrow.  

    DOMK: Hot Solapad AAPL iPad Accessory Preorders Outstripping Production ScheduleDMOK/Savi – I'm not finding it on Yahoo but sounds interesting.  My question would be whether or not a trickle charge is good for an IPad battery or if it might deplete the life-cycle.  Oh, DOMK I do see.  

    Domark International Inc.’s (OTCBB:DOMK.OB - News) wholly-owned subsidiary Solawerks disclosed today that preorders for its hot new “Solapad” product are exceeding their first production schedule. The revolutionary new Solapad product is an ever-charging solar and battery system that fits all versions of theApple (NASDAQAAPL - News) iPad. Once an iPad is placed into a Solapad sleeve, there is theoretically no reason to ever plug the iPad into any wall-mounted charger again.


    Solawerks has also previously announced two other ever-charging products, the “Solafire” for the Amazon (NASDAQ:AMZN - News) Kindle Fire and the “Solacase” for all versions of the Apple iPhone. Similar to the Solapad, both the Solafire and Solacase contain a large, high-efficiency solar panel on their back, plus an additional internal battery to keep the associated unit charged at all times.

    The Solacase fits all iPhone versions, including the new iPhone 4 and iPhone 4S. The Solacase can already be purchased directly on the Company’s eCommerce website at

    Sounds very interesting but my red flags are they have no money and $1.2M in debt  All of their news comes from Businesswire (do it yourself PR) and no tech mags have reviewed the product yet.  Given the trending buzz they are generating – I think you can buy a few shares and catch a nice pop and get out but it's very possible this stock really is a penny stock so I'd set a stop at $1.25 and not delude yourself into thinking this is some kind of investment.  

    More from Jackie/Nicha – Took her 2 hours to write that (15 mins to figure out how much a cubic meter was).  Not bad though….  We'll see what she can put together after lunch.  

    TNA/Morx – Yes, we're not getting any reason to cut our bullish plays yet.  

    Dollar languishing at the 79 line. 

    CEF's/8800 – Those things dropped 50% in the crash so I don't love them.  It's the kind of thing I'd love to buy if they crash again but I think people are a bit too complacent on munis and there will be a correction, maybe not a huge one but I'd wait.  

    Dollar/Sage – I'm glad you asked Jackie and not me as I sure don't get it.  She's at lunch though….  8)  

    LOL Lincoln! 

    Trains/Morx – Yep, lots of infrastructure required.  Too bad our Government doesn't believe in investing in it.  

    Great call on KC Fed reaction Sage – you are really starting to get that "bad news is good news" thing.    

    April Kansas Fed Manufacturing Survey: Falls to 3 from 9 in March, 13 in February. New Orders -8 vs. 17 previous, the first negative read since December. Production 0 vs. 13 previous. Backlogs -5 vs. 3 previous. Employment unchanged. 

    DIA/$5KP, Yshen – Yes, now we should be spending .57 to roll up to the $129 puts ($1.08).  In the $25KP, we're down to .66 on the $127 puts and those we can roll too to the $129 puts for .42.

  100. CTXS / StJeanLuc – What do you think of selling the $75 may put for .20 to help gather some money for a possible roll? $10 away, on support and CTXS seems to at least consolidate before making an inverse move after a big one.

  101.  some sort of large chemical accident in moscow..dozens of ambulances seen rushing to scene

  102. morxlntway: off topic
    I think I recall you are a general contractor and if so would you mind me asking a building question off line?  I'm in Charlotte also.  TIA

  103. StJeanLuc / FAS Money – please humor me; I am having trouble seeing the relationship between the XLF BCS and the sale of FAS puts and calls.  Could you explain in more detail the purpose of the XLF BCS?  Why not just sell the FAS puts and calls without it?  

  104. LOL, sorry! NOW I know who the Infamous Jackie is! Tell her Im still waiting on the scarf business plan!lol. They are now selling Indian Silk ones which are VERY nice. Ill send a sample.

  105. CTXS / Project – I don't think that there is much risk selling that put. On the other hand price action today doesn't inspire much confidence that they will go much higher soon. And large moves in the past faded quickly.

  106. TRIN is above 1 (meaning there is pressure to move up.  TLT staying elevated, and mrm is buying calls on SPY and DIA. :)   Good to go short.

  107. FAS Money / Boltdude – In the previous iteration of FAS Money, we had a FAS strangle that we sold against – it did reduce margin requirement. Phil thought it would be more interesting (and a lot less stressful – we had wild swings in the strangle) to play with an XLF BCS instead as an upside hedge on XLF. But like I told Burrben earlier, the BCS is really the cherry on top of the FAS sales. You could certainly just sell the FAS options without the XLF BCS and have done well.

  108. Wow, nice clubbing on the VIX

  109. Housing- Phil, you are on the money re: potential for further declines. Although, with a 10 yr horizon, the prospects look very good. I ran some numbers on buying/rentals in my local market on the low end and it is very attractive. Just does not fit my current horizon. Not prudent to tie up much capital for that long. Would be nice to find a passive angel to provide the bucks and put together some deals

  110. morxlntway – I Subscribe to Trains too.  Also Model Railroader.  Will you be in Grand Rapids for National Model RR Convention?

  111. SKX/Phil- Thank you.

  112. Hi Phil
    I bought May 159 GLD PUTS at cost of 1.72 now 1.37
    Should I roll to higher strike?

  113. Pharm - just closed ARRY for a double – I know youve been out of them for awhile, just wanted to give you props for another great pick.

  114. Jackie/Jrom – It's take your daughter to work day so Jackie is staying home and working with me (other than an extended lunch break with Mom).  So I threw the Financial Times at her this morning at 7:30 and she read it and found the most significant article (her opinion) to tell people about and then I had her do a write-up on it.   We did a few revisions but about 75% of that was just what she wrote – pretty good.  

    Wiz kid/Morx – Don't tell her that, she'll drop right out of school! 

    Big EU stick save took them off the floor in last hour and a half.  DAX and FTSE up half a point, CAC down .13% at the close but all were down half a point at about 2:30.  

    Credit pullback/Kustomz – Good chart:  

    Capitulation/Sage – That's a good sign!  Come on – this is what we have the day after the Fed makes nice noises and the bulls get all excited and Cramer foams at the mouth and screams BUYBUYBUY – and this is it?  

    AKAM/Rperi – Wow, bad timing but scaling in and rolling is the key.  Even with a stock, if you always initiate a 1/4 position with a DD at 20% off then you end up with 1x at $47.50 then 1x more at $38 and then 20% below that is $31 so even if you went 2x there it would be 4x at $36.87, less what you sold calls for along the way and, of course, you would have been half out even by now and not at all worried about earnings – perhaps even hoping they dive so you can DD again at a lower strike.  That's just a straight stock buy with a basic scale and no option selling – keep that in mind!  

    "green cloud" over Moscow that caused a bit of angst and unconfirmed reports of evacuations turns out to be pollen, and not the result of an accident at a chemical plant, reports Interfax

    XLF/Bolt – It's a buffer in case you get burned.  If XLF shoots up and we're stuck with the callers after several rolls, at least we have a $2,000 buffer.  Keep in mind those prices don't reflect our original positions, we had a regular BCS that we cashed out and we re-worked into this one but, if you look at the XLF spread from scratch now – it's net $1.88 and pays $2 plus most likely another $1 on a roll so about $1,200 of buffer if XLF goes much higher and you are stuck rolling those $100 callers.  If not, then the spread is very slow to decay and you'll make much more money on the short calls than you'll lose on the spread. 

    10 years/Pstas – Oh I wasn't against the idea at all, I just wanted to make sure their loan covenants and cash flows let them ride out the dip.  You may be willing to ride out a crash but your bank may not be when you have a commercial loan.  I do want to be holding leveraged real estate when inflation finally kicks in but the Fed is kicking that can down the road too.  Definitely something I'll be looking into on the BBBW project and I know you're already on the list for that.  

    SKX/Star – You have 3 weeks to be right on gold, I'd be more inclined to see what the weekend brings and, if no sell-off, then I would rather roll for time than position.  The June $159 puts are just $2.55 (+$1.20) and you can pick up .80 of that by selling the May $157 puts – once you decide to give up on May.  

  115. Hello Phil is it a good time to sell puts on HRB  jan13  $15 for $2.10 ? any risk seems tempting with the 10% drop they just had. or any other play with them 

  116. what is going on with chk – oh – a Fed probe – never had one but does not sound fun

  117. Seems to me that you would want to hold leveraged RE right now at the low rates.  As long as the prices hold in the area, the RE assets may not appreciate as much due to inflation (which is not coming any time soon), but then you can raise the rent, no?  Less people will be able to afford the RE, but the low premium on the loan should more than offset anything else. 


    I see that EU stick is not making its way across the pond.

  118. Hi phil – AMZN  still have 190/210 july bcs do you have any suggestion before earning post market today --keep ithis spread or closed it before EOD --thx

  119. I guess AAPL earnings were better for PCLN than AAPL ????  WTF???
    FU PCLN!!!
    FU CMG!!!

  120. Phil—Thanks on DOMK—took a small position at 1.14 this morning  and out at 1.46

  121. grant – no, i will not be there. My Dad had a "garden" in our garage. He would back the car out and lower it with pullies. And he grew up next to the harbor and freight yards in Baltimore. So train fever was bread into me but i am not the kind of person who can sit in the same place and concentrate for more than about 15 min.
    My brother in law and i went to the Seaboard festival in Hamlet,  NC recently. I don't recommend it except for the collard sandwiches.
    there isn't anything much better than the sound of a freight train in the middle of the night to put me to sleep.
    Do you have your own set-up or work with a club?

  122. Anyone here but me think AMZN is a short into earnings?  

  123. SGEN briefly popped above $20.  Look at the chart closely….I see $22 coming, and soon (barring a market collapse).


    Here is the Krill Oil Company.  Can't remember if it was from someone here or I picked it up on the wires, but it is in my list and has popped with AMRN….NEPT.  No options, so VERY risky. 


    TRIN making higher highs and higher lows FWIW.  Will see how long it lasts.

  124. ARRy/jro – good.  Data are coming up, and I am not in the mood to play them.  I would think they would be taken out if it were good….so a waiting game now.

  125. Big spike in the futures.

  126. any idea why kustomz???

  127. Phil,
    What do you think about the drop in nihd? Is it time to sell some puts?

  128. Housing.
    Seems like a great time to buy houses. In our area, they are trading well below the price of construction. If and when inflation hits they are a real asset. New construction is running at 300,000 units versus 1m plus pre the recession.
    We have our house plus 20% of our assets in real estate. We're doing buy to flip and buy to rent.
    Locally, the housing market has been hotter for 2 or 3 months. It is the bottom.

  129. Low volume jabo probably triggered a buy program..something over the wires possibly, doesn't take much buying to trigger all the bots since it looks like they are all on the same page when volume is this low.

  130. Phil, isn’t VXX too low for what is reality? Time to buy the calls?

  131. PCLN moving up with AAPL!

  132. @Fellipe
    Have finally broken even on 150 puts I have on TASR which has risen nearly 8% today on better earnings.  Do you think it is worth the risk of having the stock put to me (if I am a penny or two away on the expiry in June),  and then selling further out calls on it?

  133. @Felipe
    That wasn't clear: they are short puts

  134. Phil,
    So bad its good…I understand that but if data comes out that is good it goes up if the data is ok it goes up and if data is bad it is good…so am I the fool here to think that once just maybe once (and I do not mean one day) could we have any sense cause at this rate I'll be out of cents.
    I know only play what you can pay but as a former pit trader in Chicago, it is extremely difficult, even more than futures were, to remain with conviction when you KNOW you are right (and I am LT bullish) and yes I know the market can remain irrational longer than I can stay solvent boy oh boy it is true now more than ever!
    I think the Bernanke gives his thoughts to the TBTF banks before he ignores conditions and says well I have a bazooka here and I am willing to use it!

  135. Phil,
    One more question. What is your opinion on trading UGA instead of USO?

  136. Phil,
    EDZ approaching 13.00,
    Any trade you recommend? I know there is a May14/16BCS….
    Thanks as always.

  137. Normal

    morxlntway – I have a garden rr running twice around my yard and koi pond.  It is a freelance narrow gauge line based on the Colorado and Southern.  I hope you can sit for more than 15 minutes drinking a beer while watching the trains.  It's a great way to relax in the evening or on a free afternoon.  My June issues just arrived!

  138. AUD either fails here or breaks out and the markets will follow

  139. PCLN / Iflan – I noticed that ealier.  just draw a chart of AAPL and PCLN, the correlation is staggering  (all the way back to Nov 11).  i am really interested to understand why

  140. dpastrama….you are absolutely correct.  Hey, we know AAPL is going up over the next few months ( at least I do).   Does that mean we should go long PCLN?     Seriously! 

  141. HRB/Micro – They are cutting back operations and I think they'll settle lower than this.  I'd be more interested in getting under $12.50 as an entry. 

    CHK/Samz – I doubt it will amount to anything.  They've been beating this horse for a week now an no new "evidence" that anything really bad was going on.  Of course I also couldn't believe OJ was guilty at first….

    RE/Pharm – Same thing as a stock, as long as you scale in, you'll be fine.  Worst case is we end up like Japan and prices just grind down and more and more kids live with their parents until they are 30 and you have a 10-year housing glut or more.  Keep in mind the banks have huge inventories of foreclosures and other things they are stuck with that haven't hit the market yet and won't as long as they are allowed to mark to fantasy.  All that does is stretch out the length of the crisis – at some point you have to find a price that causes people to buy – with transactions down from 14M in 2003-2007 to less than 7M now – they certainly haven't hit it.  7M on 110M homes is just a 6.3% turnover rate – unrealistically low and it's been 3 years like this so there SHOULD be a lot of pent-up demand but without adding jobs and raising salaries – how are people (real people) going to come up deposits to buy homes – even if they had the credit?    Until home prices rebound – people can't even afford to sell because they end up owing the bank money – the whole basis of there being 110M homes for 300M people in this country (not counting apartments!) is that, for the last 100 years, people have always been able to roll over cash from their last home to their next home – that's a dead issue right now.  

    Wow, what is going on?  Good Treasury auction?  

    Amid some surging interest in the 10-year part of the curve today, the Treasury sells $29B in seven-year notes at a record low yield of 1.347%. Bid-to-cover ratio of 2.83, vs. a recent average of 2.81; indirect bidders take 38.2%, vs. a recent 39.6%. Direct bidders take 17.6%, vs. a recent 14.3%

  142. I've looked at the bid/ask spreads on PCLN and they are AWFUL!   Now I remember why I use AAPL. 

  143. Phil,
    How do you generally decide which strikes to sell? Take for example the current 25K psotion of the short FAS 100 calls, which were sold at the money. Why not, just as a matter of practice, always sell out of the money strikes?  While you may not make as much, you'll certainly have that extra cushion.

  144. PCLN / Iflan – and the vol today is just pathetic. Probably only algos having fun (maybe this how the correlation is so strong)

  145. Pharm - "mrm is buying calls on SPY and DIA"  Not even close, read my momo post from last night to stj, I've still got EDZ and VXX, plus PCLN puts, and CMG puts, and AAPL puts, and BWLD puts, and lions and tiger and BEARS – oh my!  That's why this crazy market will not go down…
    Re. your Schlitz hat, I wear a Guinness baseball cap, much more fashionable (and as a chemist you likely know that stouts are the most healthy of beers)…

  146. WTF is with this market!?!!?!? 100 pts bc WHY!?!?!?!

  147. mrm – :) ….I am so short, my shorts are becoming short shorts….

  148. Is that all the retracement we get on AAPL? 

  149. Pharm - after some weekend reading I put in orders yesterday for AMRN and AVEO yesterday that didn't fill, and look at them today – clearly today is 'brought to you by the letter 'A'.  Does that mean we should buy some bios today that begin with "B" in case this is the beginning of a trend?

  150. lolo….could be.  I've not played the AAPL portfolio yet but in other accounts I've established some Jan 13  550/650  bull call spreads.

  151. Phil/USO – When should we start thinking about rolling the May $39's to a later month?

  152. lolo…those would be a double if AAPL is 650 in January…it's pretty likely they will be.

  153. lflan/AAPL – i'm buying the June 650's as a fun play.  I know you like the close in-th-money calls but if its going up the next few months, wouldn't that be a good play?  I have a feeling it'll smash through the 644 high rather fast. 

  154. mrm – bought AVEO last week on that dip, and repurchased the calls. I have now covered with the July 12.50 calls and sold more of the same puts we initially moved into.  AMRN moves like lightening and I only like them if they fall below 9, other wise, they could go up or down $2 in a jiffy, and IF their patent does not hold up, they will go to $3.

  155. NFLX - is there a technical term for what it just painted, perhaps a "pinnacle" formation?  It's a p-bar only really wide 8) .

  156. PCLN / lflan – I told you about the bid/ask spreads…. Like I said, easy to lose 20% just in that spread if the move goes against you!

  157. VXX / Phil – I hold a May 18/21 BCS on VXX. Currently the short 21 are worth only 0.24$ (from 1.30).  I guess its a no brainer to buy back the calls. However i am more puzzled on the long 18.  Should i double or roll down (worth 0.61$ from 2.33$). Cheers

  158. lolo…if I would be buying June I'd just make it July as that is earnings month and it might ramp up even more.   If you've already bought the June 650 s then consider converting that to a spread if you see a pop upward, by selling some higher calls.    That would make the play more profitable and safer for you.  

  159. This just filled:

    SQQQ May $11/12 bull call spread at .30 – 10 in the $5KP, 30 in $25KP.  In $25KP, add sale of 10 $11 puts at .45 to offset.  

  160. stj….yes, makes it hard to even get in at a decent level.  methinks the market makers are the only ones making the money here.  

  161. TOT as a P bar down to 47.68.  And Vol was huge.

  162. Hi nicha! other stocks i like are AAPL, DIS. ASNA who owns Justice my favorite clothing store. WOLF is great but they already went up a lot. Just recently I heard about Facebook buying Instagram for $1 billion dollars and Facebook is starting a stock soon. MCD went down a little but i belive they will start going to the highs again. CNK is a very good stock with the new Marvel Advengers Movie Marathon a one day thing leading up to the premire of the Advengers. That's all I  have to say for now I hope you enjoyed!
    Hi Lincon's son! I'm not sure he's always in his "man cave" while I'm at school. Usually I'm out and about but I'm in fourth grade and I hope you enjoy the rest of you'r day.
    Hi Iflantheman, well today It's take you'r child to work day and if I wanted to stay home I had to help my dad with work. I would start off by just showing him stock charts and he can also read financial news and things like that. Show him how stocks an go from their highs to their lows. It depends what he's intrested in. I hope my advice helped you.
    HI Morx give me 1,000 dollars and i'll be more than happy to try.
    Hi sage I think it's SNB because they told their plan to keep buying euros and that hurts the $.

  163. Grab your ankles shorts cause here we go

  164. O.K.  strictly for fun, I have purchase one (1) May 4 PCLN  725 call for  18.60.   I hope to sell a 730 against it later in the day to convert to a spread.  Again, just messing around a bit in order to get a feel for this puppy. 

  165. 4 of 5 over the 50% retracement lines and AAPLdaq knocking at the door.

  166. PCLN / lflan – On the other hand, if you look at my daily volatility spreadsheet, you can see that PCLN has moved an average of $8 every day over the last 50 days! Up or down. If you can pick the right direction, the spread won't matter as much. But in a trendless day, you can get killed.

  167. stjeanluc….How do you like my position sizing?   :)

  168. just a ignorant question for anyone who can help – what does BCS mean ( I keep seeing this term here). Is that Bear Call Spread or Bull Call Spread.
    Thanks for the help!

  169. Phil,
    Is it time to go bullish? More than 3/5 R higher.
    What is the best play?

  170. FYI:  I use a brokerage account aggregation application called Wikinvest,  I find this free application to be fantastic if you have multiple stock brokerage accounts.  Wikinvest has a sign-in window for every major stock brokerage firm.  You provide your log-in information to Wikinvest once for each brokerage account you have.  Then Wikinvest pulls all of your shareholdings and cost basis information from each brokerage account and aggregates it into one flexible portfolio viewing system.  Any trade you make in any account is reflected in Wikinvest the next day.
    Does anyone else use Wikinvest?

  171. Intresting news from Jackie:
    2:00 PM On the hour: Dow +0.42%. 10-yr +0.27%. Euro +0.16% vs. dollar. Crude +0.30% to $104.44. Gold +1.11% to $1660.45.
    Wedbush's Michael Pachter isn't buying rumors Asian online gaming giant Nexon will buy Electronic Arts (EA +6.9%). With a current market cap of $5.3B, EA would be very tough for Nexon ($8B market cap) to swallow. In addition, employee defections would be huge, Nexon's CEO (owns over 50% of shares) doesn't want to relinquish control, and Nexon has no experience in many of EA's core markets. Also rallying on the rumor: ATVI +2.5%. ZNGA +3.6%. GLUU +3.7%.
    Online poker continue to sit on the radar of gaming firms as talks of a settlement between the DoJ and closed-down poker sites progress. The roller coaster ride that has been online poker – traversing from phenomenal growth to criminal indictments in the blink of an eye – now appears heading to a next phase of partnerships and consolidations. While firms such as MGM, BYD, CZR, and WYNN are lined up ready to go if legislation pushes forward, Sandy Adelson's Las Vegas Sands (LVS) doesn't have a stake in the game
     New Disney (DIS +1.1%) flick The Avengers opened to international audiences at a record-setting pace, according to early box office reports. Though the film doesn't hit stateside until May 4, pre-sales in the U.S. are also exceptionally brisk. The movie is the first offering from Marvel Comics to be marketed and distributed by Disney, with hopes running high it will make up for the John Carter debacle.
     Apple (AAPL) followers are all over Cirrus Logic's (CRUS +14.1%) FQ4 report, in which the audio chip supplier beat estimates and suggested sales would rise sharply after a soft June quarter. Capstone believes Apple accounted for 63% of FQ4 revenue, down from 70% in FQ3, and thinks this indicates June quarter iPhone sales will fall to 28M-30M from 35.1M, though iPad sales will rise to 16M from 11.8M. Oppenheimer believes Apple could become an 80% customer by year's end.
    Nomura maintains a Buy rating on Wynn Resorts (WYNN +3.1%) as the more reports (previous) swirl around pointing to the casino operator closing in on obtaining Cotai approval for its project in the region. Analyst Harry Curtis says after Cotai is in the rear-view mirror, the next catalyst for Wynn will be a resolution of the disputed Kazuo Okada shares.
    Jeff Gundlach stirs things up at the New York Yacht Club, the bond man telling a luncheon if he were master of the universe (isn't he?), he would be short Apple and long natural gas with 100X leverage (prev. on NG). On the Fed: There's no inflation only if you look at house prices and wages, and yesterday "added another dose of confusion" to the mix.
    Samsung (SSNLF.PK) discloses its anticipated Galaxy S III phone will feature a 1.4 GHz. quad-core Exynos CPU. Samsung's growing use of its own processors within its Android phones, together with its surging market share, present a problem for QCOM, NVDA, and TXN, each of whom dream of dominating the Android app processor space. BGR notes Verizon (VZ, VOD) plans to to carry the S III, as well as an HTC phone with a 5" display and quad-core Qualcomm CPU.
    Three lunchtime reads:
    1) Has Obama stacked the Fed? Not really
    2) Reich: How Europe's double dip could become America's
    3) Cyclical DJIA bull in a secular bear
    Zynga (ZNGA +1.5%) is rallying a bit heading into today's Q1 report. However, shares have fallen hard in recent weeks on concerns about the performance of its Facebook games. Baird is worried about the implications of Facebook's Q1 data, though Lazard expects Zynga to hike its 2012 guidance, and thinks Hidden Chronicles, Slingo, and CastleVille have been performing well.
    Goldman Sachs maintains its Conviction Buy rating for Starbucks (SBUX -0.1%), powered by data showing that K-cup sales are percolating right along. The positive spin appears to be helping out shares of strategic partner Green Mountain Coffee (GMCR) more than SBUX, with shares up 3.3% on the day and adding to their 9.5% run over the last 5 trading sessions

  172. Dipping your tippy toes lflan… Good stuff! BTW, the spread on the monthly options seem to be more manageable percentage wise. Something to keep in mind!

  173. WTF, my only bullish plays are down and all my bearish plays are getting destroyed…This has been the worst 10 for my portfolio I have ever had.

  174. gandhjo…..BCS……I've been guilty of using this myself.  It usually means bull call spread but could also mean bear call spread.  It really shouldn't be abbreviated like this because it is confusing.  I checked a couple of options glossaries and it is not even listed as an acceptable abbreviation for either. 

  175. BCS / Gandhjo – Bull Call Spread in 99% of the cases…

  176. I have to go for a while but if anybody needs me i'll be back later.

  177. stjeanluc….I chose the May 4 because that lets me get out of the trade before earnings on May 9th. 


  179. hemas03 – how did that just fill? mine filled yesterday (wish it hadn't) Down to about 15c now. But i see it wasn't in StJ's report this morning. i'm confused.

  180. Thank you jackie for the posts, particularly the one on AAPL.   It's my favorite stock!

  181. Hi Jackie, if the market was going the other way today, i might entertain that venture.
    i saw a little film last night where the church youth leader gave everyone in his group $100 and told them to give it away. some of the kids got so excited about giving they used the opportunity to raise more money and other donations and did some amazing stuff. One even raised enough to pay for a well do be drilled in Africa.
    Hope you had a good day even if you did have to spend it with your dad. :)

  182. 64m shares @ 2:40…

  183. BBBW / Pharm – How about BBBW buys a Bank? :)  

  184. Portfolio / Morx – It's probably my bad… I probably missed that one as well. 

  185. st j – wish i had missed it. but tomorrow's another day. You do an amazing job at keeping up. I wasn't complaining at all!

  186. somebody farted market goes up another 100 points on…flatulence, now I am getting mad, as hell and I am not going to take it anymore!

  187. Trying to catch up and make my mind work again. How many people charge their I-phone/pad during the day? How many people are going to leave their phone/pad outside upsidedown in the sun? How many use their Iphone/pad while lying on their back in the sun? In the wiinter?

  188. AMZN/Gucci – Well it's very risky into earnings, of course.   I think AMZN should do OK and the market is on fire so the trick is to be comfortable with your plan if they drop to $180 on earnings.  

    DOMK/Savi – Nice!  

    AMZN/Iflan – You can take advantage of other people's greed by selling 5 May $210 calls for $2.15 ($1,075) and buying 3 July $220s for $4 ($1,200) to cover for net $125 out of pocket and you keep whatever is left on the long calls if they head down or don't go up $15.  If they do pop to $225 (15%), figure you owe $7,500 and the 3 longs should be worth about what the $180s are ($22.50) so $6,750 which means the risk isn't too extreme (and you can still roll) against the potential win.  

    NIHD/Harip – Lower revs per client and lower profits not a good combo – best to let the downgrade police have at them first. 

    Housing/Aussie – I hope so.  As long as you can ride out a possible dip, it's certainly close enough to a bottom that you don't want to miss it.  

    Dow volume 62M at 2:30 – About normal for a slow day.  

    S&P 1,400 – That's friggin' unreal.  Nas 3,050 makes it an official party.  

    VXX/Cjji – It can go much lower if we're back into one of those things were we just go up every day again.   The S&P is now up 3% since Monday – that's going to crush the hell out of the VIX and now we're into a short squeeze (I know we're feeling it now!) and Asia still needs to catch up in the Morning, which might get Europe to keep going up and then we'll open high again tomorrow with an even lower VIX and THEN I'll be interested in going long at 15.  

    Sense/Sage – You have to have bets on both sides or the market will chew you up.  The trick is to use the profits from the side you are "wrong" on to fund the rolls of the side you are waiting to be right on.  I still think this move is a blow-off top but the whole point of a blow-off top is to force capitulation and we're starting to hear a little of that from the board but I cannot emphasize enough how important it is to have bullish plays as well to balance out.  

    UGA/Harip – Not really the same but if you can't play the futures and want to play gasoline – it works.  Keep in mind the fees and decay make it just as bad as USO for a long-term position.  

    EDZ/Jasu – I'd wait until tomorrow because, if we close strong, Asia should have a big pop tomorrow and send EDZ back to $12ish.  

    Strikes/Wave – Mostly it's based on where I think the stock will finish the period and then I sell as much premium as I am comfortable with.  I really did not expect us to move up like this after the Fed and, since we got no new QE, I still don't see what the hell people are buying.  As it stands now, with FAS at $104.80 – the $100 calls are worth $4.80 and we sold them for about that much so what's the problem?  We make money on our long spread and we make money on the short puts – this is not a problem and won't be until XLF goes up another .25, then we might want to make an adjustment.   You just have to play these out over time and get used to rolling but it's ALL about selling premium.  If I sell $5 a month in premium then FAS can climb $60 a year and I'll break even (but make money on the long spread).  

    BAC Jan $7.50/10 bull call spread at $1.08, selling $7.50 puts for .82 for net .26 on the $2.50 spread that's .80 in the money to start.  

  189. Thanks Morx, I didn't take it as a complaint. I need all the help I can keeping up…

  190. Anybody going to strangle AMZN into earnings??

  191. Phil,
    Any idea's on what you think tom. GPD will be

  192. SQQQ is going to have a reverse split May 10  also DXD and some others

  193. Jackie – You sound like a little Warren Buffet, "Buy what you know."  I bought MCD earlier today.  I feel real good now with your endorsement. 
    Phil – Maybe she needs her own color box!

  194. USO/Palotay – I think if we don't get a drop by Monday, we'll have to punt to June.  

    PCLN/StJ, Iflan – You really can't get out of it when it's moving against you, you have to sell into the excitement when it's going your way or they ream you. 

    VXX/Dpast – So you had net $1.03 now net .37 – violating the rule of not letting a vertical fall more than 50%.   Rather than throw .24 into buying back the caller, who's possibly dead anyway, why not just spend .94 to roll out to the June $17s ($1.57) and then you improve your position by $1 AND gain a month of time for just .70 more than you were going to spend for nothing.  Once the caller expires, THEN you can sell something else for .94 and you're back to net $1.03 but net $1.97 on the $4 spread with a one-month advantage over your caller isn't terrible.  

    40% of the S&P companies that reported today (18) missed!  How ridiculous is this?  

    SQQQ/Hemas – Thanks, I knew we could get it at .30!  

    ROFL on Jackie's picks!    I told her to just go with things she knew about that were good companies.  Morx, you'd better be forking over the cash now….  8)  

    Bullish/Spiyer – Yes, much as it pains me we do need some more bullish picks.  At the moment, the RUT is the laggard (5% behind the leading Nas in the last month) so the bullish way to go would be a TNA May $57/62 bull call spread for $2.70, selling the CHK June $17 puts for $1.25 for net $1.45 on the $5 spread.  

    TNA can also be played bullish with the May $60/63 bull call spread at $1.30, which is just out of the money but it's not a big move for TNA to go up 5% (1.7% on the RUT).  Let's get 10 of these in the $25KP and 5 in the $5KP. 

  195. AMZN history is pretty good moves post report.      Last 3 quarters….. – 7.7      -12.7      + 3.9    down 5 of the last 8 quarters the day after and sometimes down even more within the next month.    Kindle sales is the new deal, but they don't usually report individual product sales, though they might here.  Nevertheless, I don't think they are making a lot on these.   They may miss, or not satisfy, and they may fall.  They are down in late afternoon….?insiders?      I'm still considering just an old fashioned short a month or so out, with small position sizing. 

  196. Now CTXS is taking off…. Might have to deal with that strangle eventually, but 22 days to go.

  197. What does reverse split mean for SQQQ?
    I have SQQQ June $10/$14 BCS bought at $1.11 (now $0.90)  with  $10 P sold at $0.80  (now $0.40).  Should I sell it or keep it?

  198. mrmocha
    April 25th, 2012 at 11:25 pm | PermalinkIgnore this user stjeanluc – Regarding momos, I have been playing them to fail since December; admittedly not the best timing, but I have crafted the right strategy.  I buy an OTM monthly put a month or two out, then each morning if it is trending up, I sell a weekly put to cover, with a fairly tight stop.  If I still own the cover just before market close, I buy it back (never cover overnight) and use the profits to roll my long put.

    I really like this trade idea from yesterday. I had tried to do something similar, but had failed to execute quite the way I wanted with mixed results. Now I see that the key to the play is to sell the weekly put and use the profits to roll the further out put, and to use fairly tight stops on the short put. Modeling with a simulator shows that with the right match of deltas and thetas the upswings can be very profitable and I am planning to give this strategy a more extended run.

  199. SGEN and Biotechs not participating.  Rotation?  no way.  They are selling this rally.

  200. VXX / Phil – I was still hoping for any reversal in may but i see you are already giving up. In any case your suggested trade makes whole lot of sense, i can benefit from an additional short call to cap the long 17.  
    My personal "handicap" is that i am very short term focused, i try to save the trade in the course of the month. Need to take advantage of the long term as well. Cheers

  201. Strange, AAPL meeting real resistance at 610 even tho the markets have broken out…

  202. Stjean, no apologies necessary re SQQQ in 25 KP, on the contrary, many thanks for all you do!

  203. Well, that post on AMZN didn't work but it basically said that they are capturing more and more of the android tablet market.  An argument for post-earnings upside. 

  204. AMZN / lflan – Average post-earning move is 5.89%. A weekly 175/215 strangle gives you 10% on each side and pays over $1.50 and expires tomorrow so massive vol crush expected. So an average move would be a huge winner. A 12.5% move on the other hand would be painful….

  205. Should be a good play……I would say 90% chance it works, but I might push up to 220 just to be safe.  

  206. PCLN / Momentary loss of common sense
    Current position: short 2 X July 780 calls and 1 X long 2014 750/800 BCS, financed by short 1 X Jan 14 410 puts; so far so good.
    Threw my hat into the ring of reckless abandon and did the following:
    Bought 1 X July 740/790 BCS ($20) partiaally financed by sold 1 X May 670 put ($10) for a net cost of $10 on the $50 spread and will sell another put in June for whatever strike is at $10 premium.
    I'm a hopeless case, I know.

  207. Wikinvest/Ron – I used them for the data but I've never tried the link.  I have a very hard time trusting my passwords to any web system.  

    Nat gas is down at $2.12 from $2.30 this morning.  Gasoline $3.13, getting stronger into the weekend, as usual.  Oil is $104.50 and copper has been going up and up ($3.79), which is great for the FCX longs we got a while ago.  So, on the whole, we have mixed indications of economic health and tomorrow we get our first look at Q1 GDP, which is estimated at 2.9% but now I wonder if 2.5% will rally us as it puts the Fed back on the table?  Last reading was 3% but if we go down like Europe did – 2.5% is about right.  

    BCS/Iflan – That's why I don't use it.  

    Solar IPad/Shadow – I think it's like a solar calculator battery, works fine in any kind of lite.  You just have to get used to leaving your phone/pad with the back up and it's always charged – I can think of many times that would be useful.   AAPL should embed it into the device under the glass – that would be fantastic!  

    GDP/Danny – See above.  I think a miss between 2.5 and 2.9% and now I'm worried that the news will be bad enough to be good in this ridiculous market.  

    SQQQ/Joe – Oh that's sad, I like it when it's super-low.  

    Color box for Jackie/Grant – Don't give her any ideas, the girl needs to pay her dues first!  Still, I'm a proud parent as that's not a bad job for a 10-year old.  The girls aren't allowed to watch their TV shows in the morning and I always have CNBC or Bloomberg on in the living room so they watch every morning while eating breakfast – I'm sneaking that 10,000 hours in one meal at a time.  

    SQQQ/Msf – Probably best to get out before the split – too annoying otherwise but no hurry until a few days before.  

    VXX/Dpast – Not so much giving up as making a strategic retreat in the face of an overwhelming enemy.  In the strategy section there's an article on rolling and scaling where we discuss Sun Tzu and his tactics as they relate to adjusting positions.  

  208. Rolling my FXE up to the June 130s for 52c.  Will sell the May 129s for 36c to pay for some of it.

  209. VXX / Phil – My bad, I should have used retreat instead of giving up (give up would be just close the f$%king spread  :-) )
    Will take your advise from earlier and roll tomorrow morning in case VIX drops to 14 after the GDP miss euphoria (damn schizo market)

  210. Ronresnick – it sounds good but esp after Wiki leaks I'd agree with Phil that's a bit dangerous to entrust your confidential details with Wiki…

  211. 10 minutes to go and 80mm on the dow …pathetic

  212. TNA might need a little goose to fill

  213. Selling GS short, small position, on bet that "rogue trader" will turn State's evidence and point out systemic GS problems.  As they are the Great Satan, it's a logical vote-getter for politicians, and might move further than hanging one rogue out to dry.

  214. I'm thinking we're back to having big down volume into the close – all the people who pumped us up with 80M shares to 3:50 will be gone by 4:01. 

  215. what do you folks think which index benefits the most if GDP comes in good tomorrow? TIA  (RUT, my guess)

  216. Heading straight for 606 where AAPL would have most likely failed…what a save!

  217. XRT….piece of poop, it is.

  218. DOW / In my platform i see very big volume buying into the close, almost 2.5MM shares. That must be a hint for tomorow's open

  219. jmm1951 / stjeanluc - My strategy worked fairly well today. I sold the CMG wkly 415 P covers this morning at 3.50 and bought them back at 2, so made a profit of 1.50 each, not enough to roll the long puts.  I sold the PCLN wkly 720 P covers this morning at 4 and bought them back at .87, so a profit of 3.13 each which I spent to roll my long puts JUN 600 P up to JUN 620 P with some profit left over. So I'm back to totally short overnight with minimal pain on a big up day…

  220. Is that volume right 107mm at 4:05…how can that be?

  221. Ratigan and Ritholtz on MSNBC  -  Good stuff!

  222. expe knocking pcln up

  223. rpme / 107 — Yup, that's right. Bot pump day.

  224. Phil – I'm Sure you could spend a segment or two with Dylan….. :)

  225. EXPE now down?
    PCLN still up…
    Gooble Gobble..???

  226. Phil
    If the new ipad gets hot it will not get it calculators can run years on a button cell. Even cell phones get warm when in use but may cover standby most cell phones will standby for a couple weeks on a charge. A 4 sq ft solar panel is about 60 watts in full noon sun, cheaper way less. It's a penny stock that best chance is infomertials.

  227. Sounds good MrM… You should post some of the results once in a while for case study.

  228. oh damn it… i knew i should've shorted DECK… Down close to 18% AH

  229. Another from yesterday, Misquitos have no problem with 8,000 ft up, the trick is temps drop quick, 60 degrees there gone!
    Flea eggs like pet pests explode around 3,000 feet. Take the flea infested mut to the mountains for a couple weeks, gone!

  230. WTF??
    WHY IS PCLN UP 15 AH??
    Does it go up whenever any company beats earnings??

  231. Did you see AMZN some shorts got the word before they released.

  232. kustomz--if they did then they got the WRONG word!!

  233. Wow, AMZN up almost 10% AH…. Glad I didn't strangle them! Lflan suggestion of 220 would have been good.

  234. The correlation between whoever beats and PCLN is incredible….

  235. WTF--EXPE, AMZN, and AAPL make PCLN jump $65 in 2 days???
    Phil-- is there any explanation for this?

  236. GS/ZZ – Good theory. 

    AMZN with a nice pop!  

    Dow volume finished at 107M so 27M in last 10 mins and the Dow did go down until final pop.  Certainly a bullish day overall. 

    Dylan/1020 – Yeah, I love his show.  

    Informercials/Shadow – I agree.  Sounds great in theory but probably not so much in practice.  Always worry when people sell out pre-orders before any reviewer is given one.  

    DECK – Ow!  

    PCLN/Jabob – PCLN goes up on ANYTHING that happens.  Doesn't matter what or to who – it's all a reason for PCLN to go higher.  

    LOL StJ!  

  237. Interesting….AMZN made 38c last time, and they took a beating.  7c this time, and they are higher on a 1.4B spread in earnings (11.9-13.3B).  What is rationale about that?  Oye ve…..

  238. From Bloomberg:  Investment banks, faced with a weak industry outlook, probably will reduce the amount of revenue set aside for pay and should cut 20 percent to 30 percent of managers, according to Boston Consulting Group Inc.

  239. What the…?!  I'm not complaining because I sold AMZN puts but wow is all I have to say. 

  240. Don't give them 10,000 hours of CNBC!  They won't be able to think.  Bloomberg is better.
    Personally, I am totally off TV journalism for over a year.  Read everything or watch taped interviews.

  241. mrMocha – Congratulations!!!  However, I will miss the days where you change momentum of the stock with a single trade.

  242. AMZN going to fill the gap back to 226!

  243. CSTR down on the other hand… Apparently they didn't beat enough. 

    That doesn't seem to impact PCLN though. Strange… Maybe something with the rental of Star Trek movies.

  244. $ taking off..EUR getting sold off

  245. Well, I made no play on AMZN.  Oh, wait, I guess I did.  I bought that PCLN call!   

  246. Looking at EXPE and what they note, MAR had an earnings beat, but their revenue was lower (way lower) than this time last year?  They also guided lower. Now, I ask, where is this coming from?  MAR hit a 52 wk high on 4/19 (almost there today). P/E is 67.  I gotta smoke more of my ditch weed…..I am not getting it at all.

  247. Testing the 2.5% lines everywhere…

  248. LOL lflan… Although Jabo probably doesn't appreciate the humor!

  249. I guess this is now a MoMo market Pharmboy… leave your analysis and your feelings at the door and ride the wave!

    As long as the CBs are printing Monopoly money (and they all are, look at the Chinese CB balance sheet – they put the Fed to shame), there is no risk in this market. The morning hangover will be tough though, but in the meantime lets party through the night.

  250. ZH/
    Adding insult to Bayern Munich injury, we just got S&P which did the impossible and cut Spain to BBB+ from A (outlook negative) not on Friday after hours. Kneejerk reaction is a 30 pip drop in EURUSD.

  251. Pharmboy,
    Don't Bogart that joint, my friend – I am getting smoked on the PCLN calls that I've sold!

  252. Jabo,
    Mind if I join you?  FU PCLN!!!

  253. ZH says – FU Amazon: 

    "Only problem is that the EPS, which was $130 million equivalent, was based on $41 million in actual net income from continuing operations, or $0.09. Hardly the stuff sending stocks up 10% in after hours. What accounting for the balance? An after tax adjustment amounting to $89 million coming from Equity-method investment activity, or the oldest accounting trick in the book, which alone added $0.19 cents to the EPS number, or about 95% of the entire EPS beat. What is surely not driving the AH spurt is that company's guidance for Q2: "Net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011. Operating income (loss) is expected to be between $(260) million and $40 million, or between 229% decline and 80% decline compared with second quarter 2011." So… actual profit before after tax accounting gimmicks may be negative, but at least they will make up for it in volume, right? Or inverse cash: in Q1 the company burned $3 billion in cash, bringing its cash load down from $5.3 billion to $2.3 billion. One final thing that is not causing the10% spike after hours is the operating margin: the company made $192 million in income from operations on $13.2 billion in revenue, or 1.5% profit margin, compared to what was considered abysmal 3.2% last year."

  254. Spare your verbal abuse guys, i think S&P (the rating agency)probably delivered the coup de grace to these schizo markets downgrading Spain
    i read somewhere that an analyst was describing the US EU and CN markets as mountaineers, US is leading but Europe and China are tethered to the US.  If EU fails then will bring down the rest.  S&P downgrade is another catalyst…

  255. PCLN is up because expedia beat AH and is up about 18%.

  256. 11:45 AM Europe closes mixed, recovering in the last couple of hours of trade from large losses. Stoxx 50 flat, Germany +0.5%, France-0.1%, Italy -0.5%, Spain -1.2%, U.K. +0.5%. Movement in the euro remains mostly neutered, the common currency +0.1% to $1.3230.

    At the close: Dow +0.94% to 13214. S&P +0.72% to 1401. Nasdaq +0.69% to 3051.

    Treasurys: 30-year +0.39%. 10-yr +0.25%. 5-yr +0.12%.

    Commodities: Crude +0.31% to $104.44. Gold +0.98% to $1658.35.

    Currencies: Euro +0.16% vs. dollar. Yen -0.47%. Pound -0.17%.

    Market recap: Stocks jumped as better than expected housing data outweighed weak readings on the U.S. job market and eurozone economic confidence, helping lift the S&P 500 above 1,400 for the first time in three weeks. But Exxon and UPS, considered barometers of global trade, retreated after missing their numbers. NYSE advancers topped decliners three to two.

    Reality comes knocking down the Futures already:  S&P downgrades Spain two notches, to BBB+ from A, with a negative outlook. The ratings agency says it expects "Spain's budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections."

    Bill Gross backs away from his recent calls the Fed was ready to launch another round of QE. Having listened to yesterday's press conference, Gross says the "big three" – the Chairman, Yellen, Dudley – have moved "closer to the middle."

    Ben Bernanke is increasingly a "lonesome dove" on the FOMC, writes Greg Ip, with big consequences for monetary policy, and the markets. While the FOMC statement says inflation is expected to fall, the projections showed members increasing their CPI projections with fewer believing the Fed should delay rate hikes beyond 2014. The Chairman's term ends January 2014.

    A failure by the BOJ to expand its asset-purchase program at tomorrow's policy meeting "would be a disaster for communication," says former board member Atsushi Mizuno. He argues Japanese banks – heavily exposed to firms struggling with the strong yen – are a bigger threat to the nation than a sell-off in JGBs. The yen is surging today, the greenback -0.7% to ¥80.78.

    Jeff Gundlach stirs things up at the New York Yacht Club, the bond man telling a luncheon if he were master of the universe (isn't he?), he would be short Apple and long natural gas with 100X leverage (prev. on NG). On the Fed: There's no inflation only if you look at house prices and wages, and yesterday "added another dose of confusion" to the mix. 

    Brad DeLong has a contrarian take on the recoveries in the Group of Seven countries: "Bearing in mind that the U.S. has – or ought to have – a growing population, its trend growth rate ought to be about 1%/year faster than Europe… Correcting for and relative to (what ought to be) the long-term trend, the U.S. cyclical performance is down with the U.K. and Italy.”

    Rally fuel?  Global Macro Monitor examines the jobs recovery by industry. The mining and leisure/hospitality sectors have recovered all jobs lost in the downturn, and then some. But construction has recovered a scant 1.1% of 1.95M jobs lost since the housing bust; financial services has recovered only 11% of lost jobs, manufacturing 21%, retail and wholesale trade 25%.

    French unemployment rises 16.6K in March to 2.88M, +7.2% Y/Y, and the highest level since 1999. Separately, the latest poll has Hollande with a 55% to 45% advantage over Sarkozy. Among Le Pen voters, 51% say they will vote for Sarkozy, 16% for Hollande, and 33% to abstain.

    If you're not bribing, you're not trying. A misquote of retired baseball player Mark Grace suddenly seems appropriate with a bevy of U.S. companies now under suspicion of engaging in systemic bribing in order to land new business. A whopping 81 public companies are reportedly under investigation for violating the Foreign Corrupt Practices Act. Headliners: WMTAVPQCOMDELVS.

    The SEC has opened an informal inquiry into Chesapeake's (CHK -1.6%program that granted Aubrey McClendon a share in each of the natural gas producer's wells, Reuters reports. Major shareholder David Dreman questions whether CHK's new statementsthat its directors had never reviewed or approved McClendon's actions were prompted by the SEC probe.

    Health insurers will rebate more than $1B to customers this year under a provision of the U.S. health-care overhaul that forces them to offer refunds on the premium dollars they don't spend. They have until June to finalize exactly how much the rebates will be, and are expected to go out by August. Critics say the provision does nothing to address the actual drivers of high health-care costs – particularly the cost of care.

    Deckers Outdoor (DECK): Q1 EPS of $0.20 misses by $0.05. Revenue of $246.3M (+20.2% Y/Y) in-line. Shares -18.6% AH. (PR)

    12:37 PM Goldman Sachs maintains its Conviction Buy rating for Starbucks (SBUX -0.1%), powered by data showing that K-cup sales are percolating right along. The positive spin appears to be helping out shares of strategic partner Green Mountain Coffee (GMCR) more than SBUX, with shares up 3.3% on the day and adding to their 9.5% run over the last 5 trading sessions. 

    Starbucks (SBUX): FQ2 EPS of $0.40 beats by $0.01. Revenue of $3.20B (+15% Y/Y) beats by $20M. Comparable-store sales up 7%; traffic up 6%, average ticket up 1%. Targets revenue growth in the low teens, led by mid-single-digit comparable store sales growth. Shares -4.4% AH. (PR)

    Jefferies is upgrading Akamai (AKAM -10.2%) to Buy following its post-Q1 plunge, the result of soft Q2 EPS and marginguidance the company blamed on new investments to support traffic growth. The firm likes Akamai's top-line performance, and sees Internet traffic trends boosting demand. Cancccord, however, is displeased Akamai's high-margin cloud infrastructure sales rose only 14% Y/Y. (transcript

  257. Leap Wireless (
    LEAP -20.2%) and MetroPCS (PCS-9.5%) tumble after delivering Q1 reports (III) featuring major Y/Y drops in net adds. The results also suggest the discount carriers' efforts to compete against nationwide giants are taking a toll on their profits. Leap's cost per gross addition (CPGA) rose 18.8% Y/Y to $228, while MetroPCS' soared to $235 from $78. Leap's Q1 free cash flow was -$111M, while MetroPCS' was -$8M. (AMZN): Q1 EPS of $0.28 beats by $0.21. Revenue of $13.18B (+34% Y/Y) beats by $228M. Expects Q2 revenue of $11.9B-$13.3B vs. $12.8B consensus. Shares +9.7% AH. (PR)

    Coinstar (CSTR): Q1 EPS of $1.39 may not be comparable to consensus of $1.42. Revenue of $568M (+34% Y/Y)beats by $30M. Shares -3.7% AH. (PR

    Homebuilders get a boost from solid earnings reports out of Ryland Group (RYL +8.5%) and PulteGroup (PHM +5.7%) earlier, plus today's better than expected March Pending Home Salesnumber: SPDR Homebuilder ETF (XHB +0.8%), Beazer Homes (BZH+7.2%), Lennar (LEN +3.3%), Hovnanian (HOV +2.1%) and Toll Brothers (TOL +1.8%). 

     More on Expedia's Q1: Strong results fueled by 24% Y/Y increase in room nights (37% for, up from 19% in Q4. Hotel revenue (70% of total) +17%, offsetting a 17% drop in plane ticket revenue (11% of total) due to lower prices. All other revenue sources (car rentals, ads, etc. ) +15%. $291M worth of shares repurchased. EXPE +16.5% AH. PCLN +0.8%TZOO +1.7%TRIP+2.2%. (PR - PDF)

    Annaly (NLY) CEO Mike Farrell exercises options to purchase 100K shares of company stock at $13.25 each (today's close $16.27). His stake in the company is upped 4% to 2.6M shares. Earlier in the week, the CIO did the same thing.

    Is Microsoft (MSFT) thinking of unloading Bing? A recentNYT report claims execs "sent out feelers" to Facebook (FB) last year to see if they'd be interested in buying the search engine. Mark Zuckerberg turned them down, stating Facebook was preoccupied with other matters. Microsoft's Online Services division, dominated by Bing, lost $479M in FQ3, as modest ad revenue growth and share gains failed to stop its bleeding. (also)

    A report emerges that Spotify plans to directly compete with Pandora (P -1.1%), Microsoft (MSFT) is said to be working on a music service that would compete with Spotify's existing offerings. The service, code-named Woodstock, would be a replacement for Zune, which Microsoft is phasing out, and would feature Xbox and mobile app support. About a dozen other companies also want in (IIIIII) on this market.

    Zynga (ZNGA): Q1 EPS of $0.06 beats by $0.01. Revenue of $321M (+32% Y/Y) beats by $3.5M. Bookings of $329M (+8% Q/Q, +15% Y/Y), 182M monthly unique users (+19% Q/Q, +25% Y/Y). Company raises 2012 bookings guidance to $1.425B-$1.5B ($1.35B-$1.45B prior), boosted by acquisitions. Broadens 2012 EPS guidance to $0.23-$0.29 ($0.24-$0.28 prior). ZNGA -2.9% AH. (PR)

    Groupon (GRPN -2.4%) heads south following CEO Andrew Mason's all-hands meeting. Possibly hurting shares is Amazon's (AMZNintroduction of new personalization features for itsAmazonLocal daily deals product. Amazon's effort will rely on user preferences and the company's extensive experience in offering product recommendations.

    Facebook (FB) is worth $90B, not the $100B it's reportedlyshooting for, says Captone Investments' Rory Maher. His reasons: revenue growth is slowing, the company's aggressive spending (I, II) is hurting near-term profits, and premium ad sales are weaker than expected. Separately, Jeff Bercovici notes Facebook's pre-IPO revenue growth is far less impressive than Google's. 

  258. Netflix's (
    NFLX -1.1%) streaming service cut into ratings for kids shows from Disney (DIS +1.1%) and Viacom (VIA -0.1%) in Q1, according to analysis from Sanford Bernstein. The two companies now face a bit of a conundrum – do they pull their premium kids programming off of Netflix and make the service less compelling or ring in the extra ~$75M in annual revenue the NFLX arrangement delivers?

    Research In Motion's (RIMM +3.8%) first BlackBerry 10 phone will be announced in August and released in October, claims Like RIM's Torch line, the device is said to lack a physical keyboard, and rely solely on a touchscreen. A BB10 phone with a keyboard is due for Q1 2013. (previous)

    Apple (AAPL) followers are all over Cirrus Logic's (CRUS+14.1%FQ4 report, in which the audio chip supplier beat estimates and suggested sales would rise sharply after a soft June quarter.Capstone believes Apple accounted for 63% of FQ4 revenue, down from 70% in FQ3, and thinks this indicates June quarter iPhone sales will fall to 28M-30M from 35.1M, though iPad sales will rise to 16M from 11.8M. Oppenheimer believes Apple could become an 80% customer by year's end. 

    Apple's (AAPL -0.2%Chinese sales, now 20% of its total and heavily responsible for its FQ2 beat, have gone from amounting to less than $1B/year prior to China Unicom's (CHU) 2009 iPhone launch to currently being on a $25B+/year annual rate. This staggering growth comes even though over half of iOS sales come from a handful of wealthy urban provinces, and top carrier China Mobile (CHL) isn't yet selling the iPhone.

  259. Yes jromeha, I think it's a wonderful idea to get in buisness. There is someone in my town ive heard of who will buy them for $10 each so we can make a big profit! I hope our buisness will succeed greatfully and thank you so much for the scarfs you already sent and i can't wait to see the Indian silk one! I love to wear a tank top and then wrap them around my arms like a sweater. I hope you are staying safe and god bless America.

  260. Thank you everybody for the fun day now I see my dad's job it quite difficult so I will not be taking over anytime soon. God luck on finding a partner pops! I hope everyone does well in the stock market. And I just want to say FRACKING!!!!!!!!! one more time.

  261. Koch-funded Americans For Prosperity's new ad blasting Obama for stimulus spending? Mostly made up. 

    Fun resumes next week when Moodys will downgrade Spain and Italy

    Cher tries to sell “The Key to the town of Adelaide” on ebay – the town is pissed. 

    Student Loan Debt Slaves In Perpetuity – A True Story Of "Bankruptcy Hell" 

    UK Economy Double Dips For First Time Since 1970s

    The Radical Implications Of America's Dirt-Cheap Natural Gas by 

    TOP BANK ECONOMIST: 'The Financial System Is Increasingly Being Rigged' 

    53% of New Graduates are Jobless or Underemployed; Rude Awakening for Class of 2012; Useless… 


  262. Peedle/Oil Manipulation:  Big thanks for the link last night on oil manipulation, it is really must reading. Talk about right from the horses mouth!
    As a follow up to my question about oil price manipulation… I found a remarkable article that must be read by anyone who cares to understand the forces behind the price of oil.
    Written by Chris Cook's formerly a Director of the International Petroleum Exchange.  Amazing.  

  263. LOL Jackie, Phil, your a lucky dad!

  264. Hi,
    To all (myself included) wondering why the market is going 'UP':
    I heard a marketplace (public radio) that discussed presidential election stats and state of economy.  
    They said that with no other major issues in mind, usually with economy is doing well,  22/25 last elections saw ruling party president get re-elected.  Current perception qualifies for economy NOT doing well, so it looks really "bleak" for Obama.  (I wish I could get exact details from their website
    Looks like President and Fed (and executive branch of government) need to do the most it can to make economy look as good as possible by Oct.  This means that markets cannot be allowed to go down too much?  Obama is already having a hard time explaining on job performance, but at least, he seems serious about wanting to be re-elected. 

  265. Phil, your wife must be an angel, because your daughter is positively adorable. She probably wouldn't like that word (she's much too mature and intelligent for it), but it's meant in the best way!

  266. The American Trucking Associations’ (ATA) trucking index rose 0.2% month-over-month in March 2012 following a 0.5% rise in February. Compared with March 2011, seasonally adjusted tonnage was up 2.7%.

    From the press release:


    “March tonnage, and the first quarter overall, was reflective of an economy that is growing, but growing moderately,” ATA Chief Economist Bob Costello said. “The pace of freight definitely slowed from the torrid pace in late 2011.”

    Follow up:

    “Most economic indicators still look good, which will continue to support tonnage going forward,” he said. Costello also noted that the industry should not expect the rate of growth seen over the last couple of years, when tonnage grew 5.8% in both 2010 and 2011. “Expect tonnage overall this year to be up at a more moderate rate, perhaps less than 3%, which is more in-line with normal growth.”

  267. Jackie – Fantastic job today…glad I was able to contribute a new word to your vocabulary! 

  268. mrmocha/PCLN
    Yes, I did a little trial run today as follows.
    Bought the June 16th $710 put for 34.40 (bid at close was $30.90).
    Sold the April 27th $$725 put for $5.90
    Bought back April 27th $725 put for $1.90

    So pretty much break even so far with transaction costs.
    So the big risk is a huge gap up at the open, but a big gap down at the open is a big winner.

  269. Japan coming in with some pretty bad data NAS should go to 4000 tomorrow:)

  270. Joemayo/reverse splits:
    thanks for the heads up on the reverse splits – this would impact one  of my positions and I will exit prior to may 10.

  271. BCS/acronym,
    St Jean, while you are correct that 99% of the time it is a bull call spread, we should also note that the numbers should also tell us — tza 15/20 (ascending numbers) = bull ca;  tza 20/15 (descending) = bear cs.

  272. Gandhjo/BCS

    usually bull call spread, but a BCS covered call or buy-write is a trade involving Barclays Bank ADRs!

  273. Phil / GS theory:  It's a long shot, but it may hit home:  WSJ  Updated April 26, 2012, 9:40 p.m. ET 
    "Goldman Insider Probe Grows: 
    Investigations are deepening into the potential involvement of Goldman Sachs Group Inc.GS +0.51% employees in the high-profile Galleon Group insider-trading ring.   U.S. prosecutors and securities regulators are investigating whether a senior Goldman investment banker gave Galleon hedge-fund traders advance word of pending health-care deals, according to people familiar with the matter. The banker, whom the people identified as Matthew Korenberg, is a San Francisco-based managing director for Goldman, a senior post."

  274. Footnote:  Judge Jed Rakoff is handling the Galleon / GS case against former GS director Gupta.  I actually worked for Rakoff as an associate at Mudge Rose in the late '70s, where he was then a partner.  Brilliant guy, good luck to him.

  275. MDRX got hammered after hours they were down over 55 percent at one time tonight they finished at 9.26 Feb, 21 there stock was at 21.22. Also Chairman fired and 3 board members resigned, also had bad earning miss Allscripts  reported that first-quarter net income declined to $5.8 million, or 3 cents a share, from $12.6 million, or 7 cents, a year earlier. THere into digital hosp. records will be one to sell puts against in a week or so after the downgrade police hit.

  276. the relationship between gold and USD and rest of world currencies… a really great free learning site.


  277. Market Movement / RUT / TZA / TNA
    Free money for all PSW members……….
    Everybody get market short!
    OK, here's some free money for everybody, I'll expect a cut of the profits. Just send the checks to phil and he can forward them to me.  Friday or Monday (or Tuesday or Wednesday or Thursday or Friday or whenever)  I am going to TRY to sell half my TZA and buy TNA. I figure that way I'll at least STOP LOOSING money.  I'm throwing in the towel on my now 3 month old TZA, which is a major sin that I have now repeated twice (holding TZA that long). It goes aginst all my own Self Developed Rules but I fell into the Hold and Hope mode. Major blunder! ( it's only down 2%, it'll come back in a day or two). Extrapolate that long enough and it becomes a problem!!
    The first time I held TZA for months (more than a year ago), I sold for a 50% loss. Of course, a few months later it came back so that I would have gained back 80% of the loss if I had continued to hold it for that rebound-would have had only a 20% loss which would have been a little easier to swallow.
    So, I'll announce when I make the TNA purchase, and the entire market should start going down a few minutes after, and should keep going down for the next three months. Be sure I get the credit.
    I'm tired of trying to fight the irrational rocket ship, so if you can't beat 'em, join 'em.
    You heard it here first.

  278. Phil,
    Is Jackie available for doing sub-contracting work on the SWW?

  279. Jackie, you're welcome, Im glad you and your sister enjoyed them.

  280. WikiInvest
    I looked at this a while back. There is NO WAY that I would EVER give my brokerage info to ANYBODY.

  281. EWU WEEKLYGood morning!

    Dow is almost 100 points above it's lows already – they are just not going to let this market die…

    Dollar topped out at 79.32 and back to 78.97, Euro bouncing of $1.315 back to $1.323 and, of course, $1.32 is bullish again for stocks and commodities.  Pound still back over the bullish $1.62 line at $1.6226 – I guess having a Recession is the key to economic success – maybe we'll get lucky and have a negative GDP too so our market can make new highs?  

    The real joke of the morning is the BOJ announcing an additional 10,000,000,000,000 Yen QE program and the Yen is UP 1% against the Dollar at 80.54.   On the news, the Nikkei Futures fell 200 points in one hour.  


    Bank of Japan to Boost Bond Purchases

    The Bank of Japan stepped up its fight to curb deflation and weaken the strong yen, announcing plans to boost its purchases of Japanese government bonds.

    The Bank of Japan leaves its rates unchanged and expands asset purchases by ¥10T to ¥40T. USD -0.36% to ¥80.74. (BOJ statement - .pdf)

    That makes this now the stupidest market I've ever seen.  The US doesn't ease and the Dollar drops to new lows, the BOJ eases what would amount to about $500Bn in the US relative to it's GDP and they Yen moves back near it's all-time high.   This is the kind of thing that happens when every CB in the World is engaged in some kind of manipulation at the same time – it's like playing Monopoly where everyone is the banker and they are all cheating and taking money out of the bank whenever they want AND the bank has an endless supply of money BUT there's no inflation (since we don't count asset bubbles as inflation) – that's the story they're selling us.  

    Europe opened down about a point but is already flat after an hour because not only was Spain downgraded by the S&P (with Moody's to follow next week) but they also have RECORD UNEMPLOYMENT at 24% – about where the US was in the Great Depression – isn't that FANTASTIC?   

    Spain's downgrade, its second this year, highlights the fact that austerity alone is not enough to solve the eurozone debt problem. Experts say it's time for "European leaders [to] break out of this pure austerity mode and try and do something different in terms of pro-growth policies."

    Spain's unemployment rate rose to 24.4% in Q1 from 22.9% the previous quarter, marking the highest unemployment in 18 years.

    I like playing /NKD bullish off the 9,500 line as it's just a good resistance point and, if all the other markets are going to head up today – why shouldn't they? 

    Japanese manufacturing PMI fell to 50.7 in April, down from 51.1 in March, leaving the index in expansionary territory for the fifth consecutive month. Output and export orders both decreased in April, though an increase in domestic orders for manufacturing equipment points to rising internal demand.

    Japanese industrial production rose 1.0% in March from the previous month, as output of transportation and information technology machinery increased. The reading was weaker than the 2.4% gain forecasters had predicted.

    Japanese household spending rose another 3.4% Y/Y in March on a price adjusted basis, following the 2.3% Y/Y increase in February. Household spending had declined on a annual basis for much of 2011, though the introduction of government subsidies for the purchase of fuel-efficient cars likely provided a temporary boost to consumption. The unemployment rate was 4.5% in March, matching that of February.

    Holland's caretaker government yesterday reached a deal with the opposition parties on the 2013 budget, which will reduce the deficit to the EU ceiling of 3% via social service cuts, pay freezes and higher taxes, including "sin taxes" on alcohol and tobacco. The deal should increase Holland's chance of keeping its AAA rating.

    The People's Bank of China allows the yuan to hit a record against the dollar for the second day in a row, setting the exchange at 6.2787. The move follows more calls yesterday from Timothy Geithner to allow the renmimbi to appreciate further, but despite a slowdown in China's economy.

    China's industrial profits rose 4.5% in March, recovering from a January-February decline, and were down 1.3% Y/Y for the quarter.


    China's copper-hoarding tendencies might be funny if they didn't threaten to "destroy the world as we know it," FT's Izabella Kaminska writes. Visitors are said to be "astounded" by how much copper is stored in warehouses; Standard Chartered estimates "total copper inventory in China, which includes inventory outside of the bonded areas, has reached about 1M tonnes (mt)."

    Honda (HMC) FQ4: Net profit +60% to ¥71.59B ($887M), operating profit +142% to ¥111.98B vs. consensus of ¥123.2B. Guidance: FY 2012/2013 op profit ¥620B vs. ¥231.36B and consensus of ¥645B; global car sales +38% to 4.3M units, motorbikes +10% to 16.6M. (PR)

    Sharp (SHCAY.PK) booked an extraordinary loss of ¥117.1B ($1.5B) for the fiscal year that ended in March due to restructuring costs and inventory losses. Sharp forecases an 18.7% fall in TV sales to 10M units in the current fiscal year.

    Samsung (SSNLF.PK): Q1 net income +81% Y/Y to 5.05T won vs. 4.24T won consensus. Surging sales of Galaxy smartphones helped mask slumping earnings at the chip business. Operating profit at the mobile business was 4.27T won vs. 4.01T won consensus.

    IHS has lifted its 2012 growth forecast for the semiconductor industry to 4.3% from a prior 3.3%, due to the impact of smartphone and tablet demand. Revenue is expected to reach $324.6B this year, and grow to $412.8B by 2016. Still, the firm is worried inventories remain relatively high, even after the correction that has occurred over the last 6 months. Chip stocks rallied today on a round of solid Q1 reports headlined by TSMC (TSM +6.1%). (Gartner

    Finally, a legitimate challenger to AAPL!  Samsung (SSNLF.PK) overtakes Nokia (NOK) as theworld's biggest provider of cellphones, ending the Finnish company's 14-year reign. Samsung's shipments rose 36% to 93.5M phones, well above Nokia's 82.7M. With shipments of 44.5M smartphones, Samsung also regained the lead from Apple (AAPL) in that segment.

    If you're looking for reasons to talk down the economy and the markets, look no further than the price of milk. The creamy goodness has declined nearly 25% in recent days at the distributor level, and falling milk prices — particularly over the past decade — have generally been a warning signal for an economic slowdown as well as a general decline in commodities.

    Wall Street may have to carve off another 10%-12%  of its staff if it hopes to achieve higher profitability targets this year, according to a recent report by the Boston Consulting Group. The cuts may include pay reductions as well, particularly for those in the upper ranks, as financial institutions struggle to wring profit from ROEs still languishing in the single digits.

    Bidding wars for homes are back thanks to a sharp decline in the amount of homes listed for sale. "We very much believe we've hit bottom," says Ivy Zelman, best known for her early warnings of the real estate crash. What happens when all the inventory held back by banks comes to market? "Release it," says a real estate executive, "It will sell."

    I still just want to short everything.  My only reaction on Monday if we open down 500 points will be to kick myself for not shorting the crap out of this rally but it's just too crazy to make uni-directional bets.  It's the last week in April next week and if the "sell in May" crowd want to exit at good prices – this is exactly what they need to do – spark a BS rally, have Cramer scream BUYBUYBUY until the retailers think they are missing out and then, when the sheeple move in – the funds move out, right on schedule in May.  

    Or maybe I'm just getting old and cynical and the Global Economy is in fantastic shape and the people who don't have jobs ARE just lazy and we're better off without them.  

  282. CNBC/Peedle – I love being able to show them the things that aren't true on CNBC.  It took me years to learn not to trust the media.  We got a hint from Trudeau when I was a kid but it really wasn't until college when I took a course in Critical Analysis of Mass Media which was taught by the hottest teacher I ever had that I really got a look under the hood.  At the time, we would have to dig and dig for just a few examples of incorrect information in the papers or on TV news.  Now Jon Stewart has a daily show pointing out the BS that goes on every day.  When I was in school, we actually thought that it would go the other way – that by holding the media to be accountable, we would be able to make sure that facts were always presented accurately and without bias so the public could make informed decisions. Then Reagan deregulated the media and we've been on a slippery slope to hell ever since.  

    A lot of this stuff is detailed in 1988's "Manufacturing Consent:  The Political Economy of the Mass Media" by Chomsky and Herman – it's a very good read on the subject.  The simple act of removing Government oversight and creating a media economy in which profits are the only motivation (very Capitalistic, right?) CAUSES the death spiral we're currently in:  

    Using the propaganda modelManufacturing Consent posits that corporate-owned news mass communication media — print, radio, television — are businesses subject to commercial competition for advertising revenue and profit. As such, their distortion (editorial bias) of news reportage — i.e. what types of news, which items, and how they are reported — is a consequence of the profit motive that requires establishing a stable, profitable business; therefore, news businesses favoring profit over the public interest succeed, while those favoring reportorial accuracy over profits fail, and are relegated to the margins of their markets (low sales and ratings).

    Editorial distortion is aggravated by the news media’s dependence upon private and governmental news sources. If a given newspaper, television station, magazine, etc., incurs governmental disfavor, it is subtly excluded from access to information. Consequently, it loses readers or viewers, and ultimately, advertisers. To minimize such financial danger, news media businesses editorially distort their reporting to favor government and corporate policies in order to stay in business.

    It doesn't have to be a conspiracy when it's systemic!  

    Another good read is "Rich Media, Poor Democracy" by McChesney.  The funny thing is that a lot of these books were published back in the 80s and 90s but by 2000, the Corporations had taken full control of media and publishing and now no one talks about it anymore (or at least no one who gets published)….

    My poor kids, I think I might be dooming them to be like that crew in the Matrix – the few that are left who see the World for what it really is…  Sometimes it's more fun to just take the blue pill.  

  283. Here's Carlin with a great summary of the subject: 

  284. Phil
    Boy, now they have rigged this market where they win with good news or bad news! Utterly amazing! I took your TNA suggestion yesterday to try to re-balance to neutral (once again!). I ask again, if the market is supposed to be forward-looking, what do they see? The only thing any of this is based on is the hope of another round of government intervention (some form of). Perhaps HOPE is a strategy!

  285. Oh look, Italy had a bond auction and it really sucked. YAY! That should be worth 100 points on the DOW!

  286. Well, now we're green in the Futures.   CAC is up half a point and, get this – Spain is up 1%!  

    Go ask Alice
    I think she'll know

    When logic and proportion
    Have fallen sloppy dead
    And the White Knight is talking backwards
    And the Red Queen's "off with her head!"
    Remember what the doormouse said.

    Euro $1.324!  Pound $1.6225!  EUR/CHF $1.2012!!!  Feed your head!!!  

    EXPE/Pharm – Wrong pills, that's your problem. 

    Big Chart – Look at the Dow fly up and down 2.5% – maybe this time it's different or maybe we'll be back at 12,800 in a couple of weeks or less.  Certainly some kind of problem if Dow and S&P are back to April highs while the other indexes struggle at the 2.5% lines so let's keep an eye on that.  

    Drone/Scott – I love Russia.  Tons of smart, ruthless capitalists with lots of surplus military hardware and no rules!   That guy has real balls, he let's that thing swing right past him with a loaded gun, not to mention he's standing next to a primed bomb at the end.  

    AMZN/Deano – Good points by ZH.  Maybe a good long put once the excitement dies down.  

    Coup de Gras/Dpast – Is that French for rally fuel?

    Thanks Kustomz!  She's a total pleasure to hang out with.  

    Adorable/2Nifty – Yeah, I won't show her that comment but she sure is (Jackie is the one on left).  

    Japan/Sage – Wasn't that bad but 10Tn Yen didn't do the trick for them.  

    Sub-contracting/Newbie – She wants to know how much she'll get paid.  

    Hope/DC – That's what it's all about.  On the one hand, the market is going up because the economy is getting better and on the other hand, the economy is so terrible that the Fed has to ease more and the market is going up based on that.  They "can't lose"!  Of course, we know how these can't lose bubbles generally end. 

    Italy/DC – Wow, Ilene's up early!  On the bright side, it wasn't 6% for the 10 and it wasn't 5% for the 5 so the can is kicked another month because 6.01% is panic but 5.84% is "safe".  

    If the US paid 5% on it's debts, that would be $800Bn a year in interest payments alone.  

  287. Coup de Grace / Phil – Apparently the worst case scenario has already been priced in.  Any kind of news from now on are good. I cant find any other reasonable explanation.

  288. Check this out – here's Jackie's spy movie (she's in the green shirt):

  289. Is this your backyard Phil? Love the industrial size bbq

  290. she is truly adorable

  291. Trader Vic/ Booms and Busts: Who Holds the Pump and Who Holds the Needle:
    The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression (recession), is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding one final collapse of a boom expansion brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved

         - Ludwig von Mises

  292. That's not my backyard, that's her best friend in that video – another too smart little girl and her older brother.  My BBQ (Viking) can eat that BBQ and still have room for few racks of ribs! 

  293. Phil / SWW / pay / Jackie
    Tell her I'd have to ask my boss on that one.
    Thanks for the Carlin clip, one of his best. We lost a real hero in him.