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Thursday Follies – Europe “Fixed” Again

EZU WEEKLYSpain is up 2.3% this morning (7:30).

They are bouncing Europe with them despite a pretty poor round of trading in Asia (flat).  Why?  Because Spain's 3 & 5-year note sales "only" went for 100 more basis points than last time with the 3-years coming in at 4.04%, up 54% from last year's auction at 2.62% and the 5-year notes fetched 4.75%, up only 28% from the last 5-year note sale so YAY – Spain is fixed!!!

A whole $3.3Bn worth of bonds were sold or about 1/3 of 1% of what has been allocated through bailout programs to buy this junk but this autction is moving $80Tn worth of global equities up 1% ($800B) – talk about getting bang for your bailout buck!

I'm not going to get into how silly this is getting – we went through this all in '07 and '08 and the markets can be amazingly silly when they are in denial so we'll just go with the flow and pick up some nice upside momentum plays – as long as we can stay over 3 of 5 of our Big Chart's 2.5% lines and, if the pre-market move up holds – they should have no problem taking back 3,075 on the Nasdaq, 820 on the Russell and 8,200 on the NYSE.  We're already over 1,400 on the S&P on yesterday's stick-save close and the poor Dow has 800 whole points to go before they catch up at 14,000 so it looks like the Dow will be the logical bullish bet if the other 3 indexes join the S&P over the line.

So IF the Dow is over 13,300 AND the other indexes are over our mark – how much money can we make playing for the Dow to catch up and make it to 14,000.  700 points is a lot, so there should be many ways to play this to our advantage.  DIA $133 calls are $1 and have a delta of .44 so you capture 44% of a move up, which means a 100-point rise in the Dow will get you a 44% gain – it's a good trade to enter with tight stops below 13,300 as the Dow has 2 weeks and two days left to make those 800 points and that should be a cake-walk as they're already up 400 points in the last 7 sessions and, as we know from our friends at CNBC – what goes up, must go up forever

DIA WEEKLYWe can also use spreads to lever our Dow plays – here's a couple of ideas but keep in mind that no battle strategy survives engagement with the enemy so we'll have to make adjustments in Member Chat depending on how we actually open but that 13,300 line is a great on/off, along with our other 2.5% lines to confirm the move: 

DDM is an ultra-long on the Dow, moving at twice the percent of the Dow's moves.  Currently at $71.12, the 5% move the Dow needs to catch up should take DDM to about $78.50 and we can take the May $73 calls all by themselves for .60  and those could be worth $5 of more if we hit our target – not a bad return for a hedge!

If we offset that with a stock we REALLY want to own at a lower price (or GMCR should be fun to sell puts against this morning – we'll have to see in Chat), like BA for $65.  Wouldn't you like to buy BA (now $77.26) for $65?  If so, you can sell the Jan $65 puts for $2.50 and that will pay for almost 4 different attempts at catching a Dow rally.  Other puts we like to sell were noted in yesterday's post – some were still available. 

Of course, if you are REALLY bullish on the Dow, then you can just sell the DDM June $61 puts for .65 and you have a nickel credit and don't have to deal with owning DDM unless the Dow goes 5% the other way (12,635).  Another way we can be bullish on DDM is a bull call spread, like the June $67/71 bull call spread at $2.60 and that's already 100% in the money for a near double if the Dow simply holds that 13,300 line through expiration.  Using an offset like selling FCX June $37 puts for $1.30 drops the net cash entry to $1.30 with a 207% upside in just 43 days and all the Dow has to do is hold 13,300 (assuming FCX, now $38.12, holds $37 as well). 

We'll look for more of these in Member Chat this morning – IF WE NEED TO – to initally cover our bearish bets and, if we're forced to stop out the bear side (by the same 3 of 5 rule), then these hedges become our new bullish plays.   Overall, I'm still waiting for the other shoe to drop, probably a French shoe this weekend as France flips Socialist, followed closely by the German boot as they refuse to start paying for France to be kind to their citizens when Greece and Italy and Spain and Portugal still aren't making their citizens suffer enough in German eyes.

Mario Draghi said the ECB will NOT be lowering rates or providing more QE or doing anything for the moment and that is already knocking the EU markets back to Earth.  Meanwhle, 365,000 Americans lost their jobs last week and the prior week was revised up from 388,000 to 392,000 job losses.  Same-store sales numbers in the US are also weak, with expectations now down to 1.4% growth, WAY down from March's 3.9% number that was caused, as we warned at the time, by pulling Easter forward this year.   Now we pay on the other side.

As the data was mixed so far, I guess the ISM Service number at 10:00 wiill be a big deal but Plosser speaks at 11 and I doubt he'll say anything to inspire the bulls as he hangs a bit hawkish overall.  Tomorrow is the Big Kahuna – the Non-Farm Payroll report and we will have to wait and see if the level of job creation in this country is bad enough to be good news because – let's face it – no one on Wall Street gives a damn if anyone on Main Street has a job – they just want MORE FREE MONEY from Uncle Ben – more free money that is ultimately billed to Main Street – the victims of the biggest, longest. most expensive con ever played. 

Have fun with that!

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  1. Oil Lines

    R3 – 106.93
    R2 – 106.49
    R1 – 105.79
    PP – 105.35
    S1 – 104.65
    S2 – 104.21
    S3 – 103.51

  2. Phil / Vegas — We're going have a crowded one there this weekend. Fight at the MGM, the Kentucky Derby and the WSOP.  Probably going to be standing room only. Keep some extra cash on hand for the maitre d's and cab stands…

  3. Stats

    Blain says during election year data shows June, July, and August best performing months.

  4. Phil/Reminder

    Ok Phil here's the scenario…..Own Ford and sold Jan 13 12.50 covered calls.  Currently up 67% on the calls.  I was contemplating buying back the calls, or selling either the Jan 14 $10 puts for 1.42 or the $12's for $2.49.  What would you do?

  5. China PMI Non-Mf'g – 56.1
    UK Housing prices – -0.9% (YoY) (-0.3% predicted)
    UK PMI Services – 53.3 (54.1 predicted)
    Euro-Zone PPI – 3.3% (3.4% predicted)
    ECB Rate Decision – 1.00% (1.00% predicted)
    US Jobless Claims – 365K (380K predicted)
    Continuing Claims – 3276K (3311K predicted)
    Non-Farm Productivity – -0.5% (-0.6% predicted)
    Unit Labor Costs - 2.0% (2.7% predicted)

    Mixed numbers this morning with better than expected jobless claims in the US but deeper contraction in the UK (austerity still not working apparently). Futures jumped a bit on the job numbers.

    Non-Mf'g ISM still to be published in the US at 10:00 EST with a prediction of 55.3. Then the Nat gas announcement at 10:30 AM and 3 Fed speeches today.


  6. Tomorrow looks data heavy with PMI numbers from Germany and the Euro-Zone and the USA NFP… 

  7. Safest investment as rated by the average American:

    The power of advertisement!

  8. There was the only big debate in France yesterday between Sarkozy and Hollande for the presidential election and from what I read, no real winner! Polls still have Sarkozy looking for new job next week (or more probably a good team of lawyers). I'll post my predictions tomorrow AH!

  9. International exposure was a drawback in April:

    It was well documented that the stocks with heavy international exposure outperformed by quite a wide margin in the first quarter of this year.  April was a different story, however.  With Europe running into serious trouble early in the month, US companies that generate a large portion of their revenues outside of the country took a hit.

  10. Gas prices took a tumble over the last week or so:

    That ought to be good for something… 

  11. NIHD – any new thoughts on this. In the wiki your last comment was wait for the down grade police. Their low in 2009 was 10.65. Could it be one i really want to own? Not sure Nokia is the place to invest these days.

  12. PP for today:



    From SHJ – Trans need to make a higher high. 

  13. Diamond/LQMT
    I really can’t see where they might use it. The weight and thermal issue is big. It’s strength and high strain failure (good durability) is really attractive though. ( Must be why the journalist says perfect for the iTV. We like them nice and heavy and we drop them allot!! Geez )

    Like the inventor said. $100M’s and years to make this production ready and to make something of substance.

    Some 2020 LEAPS would be fun. Oh well !!

  14. SQQQ- I have several BCS's on this: May 11/12, June 10/14 and June 11/15 and sold puts May 11, June 10.  I'm not sure how to handle these.  Advice???

  15. /CL
    Dropping! Need to watch those May putters.

  16. And wheeeeee on oil…. Approaching S2!

  17. Oil smackdown…. nice! 104.40

  18. Interesting that oil gets hammered at the same time as the $USD

  19. SQQQ/newt – today is the 3rd.  Give them until next week and then exit.  I have several of the same. 

  20. RIG calendar should come in nice…..stock is up AH to almost 52.

  21. anyone know what caused drop in oil

  22. Dollar, Euro, Oil= Heavy Manipulation

  23. Metals not responding to Dollar drop at all.

  24. Lflan/AAPL – up close to $4 in premarket.  Are we looking at purchasing here or can we still get it for cheaper?

  25. OIL/StJ: Oil is at 104.19 is it heading down to S3— If you recall we talked about the trend the other morning when I was caught in a fight with it.  Missed its move yesterday as I was licking my wounds… I'd like to make up the few hundred in learning losses. Thanks.

  26. Gmart / oil just the opposite of what happened on Tuesday dollar up oil way up

  27. Good morning,
    today is national holiday in Poland that celebrates the declaration of the Constitution of May 3, 1791,
    the second oldest constitution (after American) and "the first constitution of its type in Europe".,_1791

  28. Oil / Newt – Short, medium and long term trend are now bearish… I believe it is safe to to short when crossing lines and with proper stops!

  29. Oil – And S3 is at 103.51 so short positions should be watched as we approach!

  30. GMCR – well that was nice.  My $4k worth of puts brought in $20k.  Oh i love that momo. 

  31. NIHD – not nokia but nextel

  32. Oil/StJ: Thanks.

  33. lolobear – nice!!

  34. Oil/ StJ: As Oil is tracking between 103.75 and 103.61 +/-  wait for it to hit a .50 line before I short? And what happens if it hits S3?

  35. ccsincsd – Thanks!

  36. Phil,
    When time permits could you elaborate on how you arrived at how the $2.50 will pay for 4 future failed hedging plays (below) -  $.60+ each? What is the basis for each loss – 20% / 50% loss on each position?
    " Wouldn't you like to buy BA (now $77.26) for $65?  If so, you can sell the Jan $65 puts for $2.50 and that *****will pay for almost 4 different attempts at catching a Dow rally"**** from chat
    Thanks as always

  37. We had a $0.50 stop on the USO May putters. That got taken out at the open this morning!

  38. Out of USO May 40 puts at 1.13 , nice gain, watching for possible re-entry

  39. SPY 5 MINUTEI love it when I'm working and someone knocks on my door with a nice breakfast! 

    So much for trying to get more bullish, Europe turning down and our markets selling right off that BS pump-job pre market (not to mention the one we had yesterday). 

    CNBC is trying to spint the hell out of the retail numbers and notice it's always Pisani with the bull case – whose pocket is that guy in? 

    Dollar was already slammed down to 79.20 to give us that pop off the jobs number, which made no sense and now you know why.  Now reality is setting in and the Dollar is creeping back up as no one has the juice to sustain a push like that when people are worried about the EU. 

    Oil just failed $104 and still going lower so congrats to our short players on that one with $104 the obvious stop line now.  Gold finally taking a dive at $1,635 and wait till you see what happens if the Dollar pops back to 80!

    We'll see how ISM Services look but who the hell knows what the market wants at the moment?   Do we want them to be awful and call for The Bernank to rescue us or do we hope they are good so we can say "see – we're not as bad as Europe (yet)"?  Cash is definitely king in this kind of environment.  I'd say, if you have been too short – its a good time to look at that DDM bull spread and, if you're not sure, hold off on selling the offset.  13,200 on the Futures is just being tested with the Dow proper at 13,260 so that's a great entry/exit line for a bullish momentum play (the straight DIA calls) or starting the DDM spread.

    In the $25KP, let's add 20 DIA $133 calls at $1.04 with a stop at .90 as we'd rather lose $280 than dump out puts on a spike up, right?



    Speaking of offsets,

  40. Oil / Newt – I would not initiate a position between lines unless I got a new signal – for example if you get a pause and then the downtrend resumes! That is not the case now just yet. Right now you can see a small bottom forming as we approach S3 so no move… The trend if still down so if we cross S3, it could be fun… 

  41. Oops!  Speaking of offsets, GMCR Jan $25 puts can be sold for $4.10 and you can put a stop at $5 to risk .90 to make $4.10.  They are probably priced about right now but that's $30, not net $20.90! 

  42. StJ: Thanks.  I need a good charting service. Advice?

  43. From National Public Radio 3 minutes ago:
    Herbalife CEO is highest paid CEO in the U.S for 2011 at $89 Million.

  44. ISM not good at 53.5

  45. csincsd & burrben,
    Thanks for your feedback on commissions, much appreciated!

  46. The Jun USO puts are up 50% now!

  47. Charting / Newt – A lot of people use I use it for the Big Charts on this site but I also use Amibroker for my custom charts. However, real time data is really expensive so Stockcharts looks like a better deal.

  48. Vegas/Rain – I'm a walker anyway and I think we have reservations but now I'm gonna check.  Wish I had time for the WSOP but not on this trip – lots of good guys to practice with, though. 

    Electiion Year/Exec – Yes, isn't that silly though.  Like the May/June Bush stimulus that kept us going just long enough to have a horrific crash right into the election. 

    F/Exec – I would ditch the stock at $11 and, rather than spend .50 to buy out the 2013 callers that are 15% out of the money (and being the sucker paying premium), I'd sell the 2014 $12 puts for $2.50 and buy the 2014 $8/10 bull call spread for $2.30 so you have a net .20 credit and your break-even on the long end is net $9.90 (because of the $8 calls) and, at just $12, you pocket $4.20 more, which you wouldn't make on F unless it hits $15.20 from here.

    ISM Services are a miss!  Not a big enough miss to cry Uncle Ben either so a worst-case for the bulls.

     Apr. ISM Non-Manufacturing Index: 53.5 vs. 56.0 expected and 56.0 prior (>50 denotes expansion). Prices index fell to 53.6 from 63.9. Employment fell to 54.2 from 56.7. New orders fell to 53.5 from 58.8.

  49. DIA- Bid/Ask is below .90 – I haven't put stop in yet.

  50. Phil/Worst case ISM
    And with a worst case, we're barely down.  Scary market.

  51. Oil – thsi is more like it.. falling through s1, s2, s3 like they are nothing. good. maybe we will see some under 100 oil today since obama scolded the speculators yesterday. ;-)

  52. newbie
    Herbalive The man could not even buy the "Cry" for this money 104 mil I would not have you given 5$ for the picture. Money is in the eye of the beholder

  53. LNKD and FSLR reporting earnings tonight.
    Stj – can you give me the average earnings move?  Where do you find it anyways?

  54. Also – lflan, stj, phil and company – thanks again for all your insight.

  55. AAPL, GOOG, and PCLN
    No movement with the ES and YM moving lower.

  56. Calendar/StJ – That's very different Fed Speak than SA is reporting.  I wonder which is right, is that Econoday?   Euro-Zone Retail Sales tomorrow should be catastrophic and NFP between 175K and 250K would suck for the bulls as it's slow growth but not slow enough for the Fed to act and not fast enough to make a dent in unemployment.

    That -0.5% dip in productivity was being spun as good on CNBC because that means manufacturers will hire in the future (as they've maxed out productivity).  There's some logic to that if you see a trend of more than one month.  Meanwhile, they are also happy Unit Labor Costs are "contained", which means they don't have to pay people as much to do work.

    Safest investment/StJ – And not one person says cash?  I guess that's Savings Accounts but boy are we trained to BUYBUYBUY!

    Gasoline/StJ – They failed to hold $3.10 – very bad sign for gasoline. 

    NIHD/Morx – Wow, that was good advice.  I would keep waiting as we're kind of sitting on the verge of a potential Global Market collapes so maybe at least see how the weekend goes?

    LQMT/CCS – Well, if the tech is there long-term, then beginning to accumulate at .40 could be a fun flyer but this company dilutes  itself monthly so it's more the kind of thing I'd want to buy at .40, sell at .60, wait for the next dip and do it again – wash, rinse repeat. 

    SQQQ/Newt – I'd roll the May $11 calls to the June $11s and leave the May $12 caller to expire.  I stil think we sell off – I'm just not sure it will happen in 12 sessions or less. 

    $103.50 is the new stop on oil.  Wheeeeeeeeeeeeeeee!   That goes for our puts in the $25KP as well – can't be too greedy and we still have our SCOs to collect. 

    Oil and Dollar/Gmarts – Good point – these sell-offs would be much worse if people were running to the Dollar (still 79.29) but I think they are coming. 

  57. We talk about PCLN and CMG and a couple other MOMO's, how is LNKD not on the top of the list.   They are trading at 200x p/e on 2013 EARNINGS.  I still think that's a useless site altogether IMO.

  58. Earnings / Lolo – Here are the stats for today's earnings:

    FSLR moves on average 8.23%. LNKD is not listed but the history is too short to be meaningful.

  59. Calendar / Phil – This is what I use as it's more comprehensive:

  60. We sold 10 May 39 Puts for .35 in the 25KP on Tuesday but I don't see them in the spreadsheet. Did I miss the close on those?
    USO – May $39 puts (.35) can be rolled to June $39 puts (.85) for .50 and we can sell 1/2 the May $39 puts for .35 with a stop at .50

  61. Nevermind, duh, guess I should have paid attention to the stop at $.50.

  62. USO Puts / Jrod – I put a note under the $5KP portfolio. These puts hit $0.52 at the open this morning and we had a stop at $0.50.

  63. Pharm – what's your take on the SA article putting PLX value at $4.29?  Here's the link (thanks to pstas from yesterday)     I"m still holding some May $5 calls but they're hurting a bit.  Selling puts and calls seems like chump change…

  64.  big drop in bloomy weekly consumer comfort index for second week in a row…last year same thing happened before that feb/march mini-swoon

  65. GMCR gonna be at $5 before the coffee break.

  66. are we closed out June 39 puts today?

  67. Charting/StJ: Thanks
    SQQQ/Phil: Thank you

  68. Nevermind — stop on oil is 103.5 if over then closed june 39 put I think

  69. Hi Phil -PCLN — has been sideway for the last 5 days — should we continue to hold July 600 put through wed or closed before earning. thx

  70. Oh son of a bitch I hate this laptop!!!!  

    Just did it again.  Some combination of keys I hit seems to trigger a back button or somthing and I lose my comment.

  71. Consumer comfort, looks like they didn't try and stretch their tax returns….n…its gone.

    In and out of V, 2 winners and 1 loss…which brings me to just above even ;-)

  72. Phil – Laptop: Try this one! ;-)

  73. Phil if you hit return and the cursor is not inside the box your posting in, its sends the page back.

  74. Happy constitution day MSF!

    Quintuple congratulations to Lolo on GMCR!

    Paying for it/8800 – If you are really, Really, REALLY wanting to buy BA for net $65, then the $2.50 you get paid for promising to do it is free money.  In my example, I said you can lose .60 4 times ($2.40) attempting to play the Dow bullish (same 1x as you sold of BA) but, if you are sensible and stop out with a .25 loss (or .14 like we just did with the DIA $133 calls this morning), then you can make 10 attempts.  If the bulk of your money is on sensible, long-term positions like our Income Portfolio – then you should have margin coming out your ass for these kind of things.

    Yay, there goes $103 so that's out new stop on USO puts (call it $1.25) in $5KP and $25KP. 

  75. kustomz/post
    Ah !!  That has been my problem.  Have lost many posts.  Too mad to redo.  Thanks.

  76. Laptops
    OT, but Samsung just came out with a great 17.3 trading laptop.  IvyBridge I7, Nvidia and Optimus, and the review on the screen is that it's better and brighter than a MBPro 17.  Up to 12GB of mem and only 6.5lbs.  The Squaretrade 3yr accidental warrenty is only 180.  It's a great deal.  Just a FYI…

  77. Just catching up
    We did bounce off the lower assending trend line again this morning, BOT strategy. The plan is runnig perfect if your made of silicone. Now is time for the fake recovery matching yesterday. Support @ 80.70 resistance @ 82.90

  78. stick getting an early start today

  79. AGNC hits yearl high 31.75

  80. Sorry correction The painting is cold the scream not the cry and it was sold for 119.9 mil not for 104 mil but what the hell it is just pocket change for trader like us!!!

  81. spx 1400 is like a magnet — this market is unbelievable — are investors still think all stop still very cheap at this point, everytime small sell off, more demand come in and soak up all supplies end of day — does anyone else see the samething or I am wrong — very frustrated

  82. gucci, unfortunately I have been as flummoxed as you and I am sure others here…I went wayyyyy to short to start this year off, it would be a miracle if I could break even.

  83. Berkshire Annual Meeting:
    I will be attending this event on Fri/Sat. If any members are also going to be there and want to meet/greet- email me at

  84. Oil is pausing 102.87ish- still down trend????

  85. XRT is such a resilient piece of SH%T!
    It seems the threat of QE is more powerful than QE itself. What a racket.

  86. newt
    38.56 is where I would bail on USO (if it gets there). I have been selling June $39 puts in increments (1.20), (1.30) and the last at (1.50). Using stops as Phil suggested pretty much locks in your gain.

  87. VIX – such a docile thing… like a little gremlin.

  88. Oil/Dclark: Thank you.

  89.   i dont think people really grasp how important the commodity bubble is to the brics….so everything they do…and thus we do(ge, etc.)…is to keep that bubble alive at the expense of everything else….its very short-sighted and will end in catastrophe for them.
    MS trading like there is a problem

  90. Phil,
    What are your thoughts on ACI? I have an old b/w (bought at $15.45, selling JAN $12.50 P/C for net $7.85/11.42). Given ACI's woes lately, what, if anything,  would you do about the $12.50 puts? Wait? Roll to the 2014 $10s or 8s?

  91. Dollar rejected at 79.30, now 79.26 and the bulls don't need any more of a red flag than that to charge right in. 

    HLF/Newbie – Sure but he's at the top of the pyramid, right?  That's how much they say you will make if you have that many people working under you…

    Scary/Rustle – Yep, it's just silly to be bearish.  Of course that's what they want.  They sure don't want people like Lolo making 5x on his money when things crash so they have to get every possible bear to capitulate before they finally let it die.  This is getting so much like 2008 it's downright scary. 

    You're very welcome Lolo!

    LNKD/Rustle – We did them last year  and you're right, back at $110 they make a good short again but there is a fear that a rising FB lifts all ships.  Still, worth adding to Long Put List with the June $90 puts at $3.30 and let's do 5 of those in the $25KP too. 

    Thanks StJ!

    Comfort/Angel – Thanks, not good at all

    The Bloomberg Consumer Comfort Index fell to minus 37.6 in the week ended April 29 from minus 35.8, surrendering gains that had lifted it to a four-year high last month. Views on finances sank to the lowest point since January and more households said it was a bad time to buy needed items.

    A downshift in hiring and economic growth may be casting doubt on Americans’ ability to sustain spending after purchases grew last quarter at the fastest pace in more than a year. The drop in confidence indicates the run-up in gasoline prices since the start of the year may be starting to pinch even as the cost of fuel has retreated from a 10-month high.

    “The reversal of gains in confidence has been particularly pronounced in middle-income groups that are likely caught between sluggish wage increases and rising inflation that has eroded their real purchasing power,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. The deterioration“does not bode well for household consumption.”

    You're welcome Newt

    PCLN/Gucci – It was always an earnings play but do keep in mind it's almost 100% risk if it goes against you so defintely gambling money only. Ideally, we roll to the $620 puts for $2 but it seems that opportunity never came as I don't see the adjustment but the last sale on the $600s was $8.79 and the last sale on the $620s was $10.70 so it sure wasn't difficult to work into the roll. 

    Laptop/Diamond – This is a very nice Sony but the first day I flip keyboards is always bad for me.

    Thanks Kustomz – That's very likely it as it has one of those pads right where I rest my wrist and I bet I do that once in a while without realizing it.

    $102.87 – this is getting very interesting with oil!

    Scream/Yodi – Worst part is it's one of 4!  Guy's got a lot of auctions to attend if he wants to complete the set.  I always laugh at my art friends – they walk into my house and say "Is that an original?" and mostly it's not as I'll stack a good reproduction up against most originals for 1/100th of the price or less!   That Scream, for example, is done to death and you can get an excellent copy with a great frame for $3,000 and they would have to walk right up to it and stare hard before they can tell the difference so WHAT IS THE POINT?  I don't see why people feel the need to own these things – it's just a way to flash bling – same a a rapper running around with a pound of gold on his neck or putting $10,000 rims on his car…  You can argue it's an investment but for $100M – you'd better be able to live in it when times are tough! 

    Berkshire/Pstas – Have a great time and thanks so much for tickets.  I would have loved to have come but it just so happened to be this weekend, when I had Vegas booked.  Give Warren my best and tell him thanks for not naming me yet – I can wait a few more years before I take over…  8)

    Threat of QE/DC – Good point.  The actual QE, like the actual EU bailout – is more likely to disappoint by being too small so the fantasy of QE is doing a great job at the moment.  

    Europe totally crashed and burned and gave up 1%+ gains, now closing at lows of day.  Friggin Spain gave up 2.2% out of 2.5% and we are going to rally now?  UN FRIGGIN' BELIEVABLE! 

  92. Oil is looking like the leading indicator, followed by lack of volume, and money outflow.
    Local indicator is Diesel fuel dropped to $4.01 from $4.42 2 weeks ago. Oil didn't drop 10%!
    IWM is being held by SMAs on the 1 min chart.

  93. the painting above your mantle should equal to the value of you house.

  94. france about to find out the bottom of the barrel has a root cellar

  95. PLX valuation – as I noted yesterday, and there was a post I also put up that valued them in the $5 range….well, I am playing not only for future earnings, but for the technology – which is transferable across biosimilar drugs…Epogen rakes in money for AMGN and JNJ…..PLX can make it.  Nupogen for AMGN – PLX can make it….and on and on.   The May play was only for the pop (or drop).  I was out right after the open for a gain, and I also sold those 7.5 calls against my stock.   My real flier was the 7.5/9 bull call spread…and those are most likely dead.


    So in summary, I am paying for the technology and future revenue.  I am cautiously optimistic that PFE anti's up and buys them for a cool $1B (~10/share).  I would sell the June $6 puts….I did for 30c, they are better priced now.

  96. Einhorn guest author at HuffPo… Simple and interesting:

  97. Phil 2008
    That is why I have been flapping so much. I am a tech guy that refuses to use other peoples view, they all seem to lead you to the grave. I do my own programs, charts, and constantly change according to what is different. Lately everything is different, JRW would say up or down from here. I am now in the when not if camp!

  98. Speaking of PLX.  IF they close on a hammer today (red but at the top of the range), I would buy stock and sell the June 7 calls for 60c or better.  Again, this is a leg in trade, coupled with the put sale, that would be a 1/2 position.  Otherwise call away price is a nice 22% from here.  These plays are perfect for a small portfolio.

  99. This downturn has some volume!

  100. Some bot-y pushed sell!

  101. I'm with Morx.  "Value" is an elusive animal, but it tends to hide within things in limited supply and a high recognition factor.  Few "investment" categories have held up as well as fine art in the Great Recession.  The guys who own the other three "Screams" [at least one is in the Oslo Museum of Art] will be smiling about now.  Or laughing at the Philistines who are worried about their CMG profits.

  102. CNBC still trying to keep people out of CHK, there was a buy on the stock and they have a whole segment picking it apart – how often do they do something like that? 

    Hmm, we're not getting our usual Euro closing pop.  TLT back over $117 but Dolar still 79.295 – under no circumstances do they want to let it hit 79.30 apparently.  I wonder how long they can hold it?

    VIX/Scott – What volatlity?   I don't see any volatility, do you?

    Commodites/Angel – Good point.  Also same as 2008, this bubble pops and emerging markets collapse like house of cards and we're back to riots in the Middle East and suddenly Northen Europe oil producers not looking so clever anymore and the US/Canada jobs boom that's been driven by oil, gas and mining jobs goes south very fast, etc.  So $105 oil is killing us but maybe not as much as $85 oil will kill us. 

    ACI/Kevin  – How many times have you seen me answer an ACI question by pointing out that BTU is better?  Now you see why.  I would not be inclined to change it now as the coal sector is really knocked down overall and should bounce eventually.  You worst case is what you wanted when ACI was at $15.45, you get to own 2x at $11.42!  The Jan $12.50 calls are done at .45 and you can roll them to the 2014 $10 calls at $1.80 to pick up $1.35 and you can roll the $12.50 putter ($4.70) to the 2014 $10 putter ($3.50) for $1.20 and you collect net .15 overall and drop your basis to net $7.70/8.85 if you want but there's no hurry as long as you see a clear path to that relationship.  If ACI stays in business and you can do a free roll that lowers your basis by $2 or $3 a year – you're only a few more years away from a free 2x position anyway! 

    94%/Angel – I'd have to bet just a little bit against with those odds. 

    Double/Morx – Is that so you can be at least twice as pissed if you have a fire?

    Einhorn/Enni – Great guy! 









    When, not if/Shadow – Sounds about right to me.

    Wow, led up on weak volume and then slammed back down hard to new lows on Nas and RUT.  S&P tied low and Dow working on it.  What a ride!   So much for me going swimming…

    Oil $107.79 – every once in a while it is truly kind to us.

  103. Oil ???

  104. From Springheel Jack this morning:
    Looking overall at the MSWORLD chart, which covers all equities outside the US, we have yet another potential H&S forming there, backed up by a declining channel with broken declining resistance from the 2007 high as current declining channel support. This one's well worth a look in detail as it is a simply lovely technical chart. The H&S target would be slightly below the 2009 low: See Chart.

  105. Oil- what time to the bots take over trading- I think it was Phil who told me?

  106. Vol is a joke @35.8m 12pm

  107. Hi Phil,
    Whats your thoughts on gold stocks such as Goldcorp and Barrack, seems to me they have way passed any reasonable support level.  Thoughts for going long?


  108. Pharm – thanks, good explanation and good advice on PLX!

  109. Hello All – Maybe I am late in seeing this but I didn't see any headline of Brazil's mfg PMI coming in at 49.3. 

  110. Thanks diamond and Jack
    That's what I have been flapping about. I have a few more about the same. Wish I could post them but everytime I try my system crashes. Somehow somebody got a protection flag in there, maybe good old Microsoft.

  111. Canadian banks?  ""An yll wynde that blowth no man to good, men say."

  112. SLW – not a bad day to write some SLW Puts..

  113. Phil,  you asked me to repost this from yesterday:

    Nok ($3.60) buy/write,

    Jan 13 $3.50 p&c for $1.30, 2.30/2.90 and dividend yield of 11% and 50% gain if called,
    Jan 14 $3.50 p & c for 2.10, 1.40/2.55 and a yield of 18.5% and 150% gain if called --

    the numbers are compelling, but with Apple and Samsung dominating the sector, do I really want to be owning 2x NOK?
    What kind of value do they have at this level?

  114. AAPL/   I think we get back in cheaper.  Holding mostly cash for now.
    lolobear….got any good earnings plays for tonight? …..and congratulations on that GMCR play!

  115. LNKD - has a P/E of 910.. holy S*&%… Wow… I'm leaning negative for the earnings. 

  116. lflan – on these momos i just play with fun money. 
    But i'm looking at several reports just to study.  Give me your email and i'll forward you the one i'm looking at right now.

  117.  Enni/Einhorn: Great read, thanks! Here's hoping that using the Simpsons means more people will get it…:)

  118. FTR – parked at 4. out of favor maybe, but not out of business or customers.

  119. Scott, I play SLW a lot but have been steering clear for awhile because of so much sentiment that gold and silver are still going lower, what's your rationale for getting in here?

  120. lflan – Report sent

  121. holy cow- look at the price of the LNKD 105 weeklies that expire tomorrow!!!!!!!

  122. SGEN holding like a champ……ARNA up (YIKES).  VVUS….I am starting to like the July $18/15 bull put spread (for $1 or less --> currently 1.15). I want to see if they sell their ED drug first…although I think they will have a hard time…who wants a 4th entry to market? 

  123. Nice refresher article on YMI….

  124. I guess everyone is taking Phil's advice- only sell puts on stocks you really want to own-LOL!

  125. i dont think people really grasp how important the commodity bubble is to the brics….so everything they do…and thus we do(ge, etc.)…is to keep that bubble alive at the expense of everything else….its very short-sighted and will end in catastrophe for them.

  126. GMCR seemed to turn just below 25. maybe just a bounce but hope not. Would you still recommend selling puts, Phil?

  127. Toes hanging over the cliff edge or trendline resistance 80.80!

  128. SLW/mrmocha – silver is down against gold. gold is down (but holding over so far) a trendline support. Gold has shown a lot of support at 1630ish recently.  For SLW puts i think the $20 strike is quite safe and i would be happy to buy into it (again) at that price.

  129. BOTS skinny lifeline!
    This could get ugly.

  130. SLW/mrm – correction.. i am holding 25 strike puts. quite happy with it there too.

  131. I believe GMCR is on the road to selling their company to either a coffee or retail competitor.  Their business model is not looking so good even one year out.

  132. Pharm
    I still an holding a small amount of SVNT. sold puts (Yikes!) I don't know whether or not there is any merit to the lawsuit by Tang Hedge, but regardless their management doesn't inspire much confidence.  Seems there is some value with Krystexxa, but they are inept trying to exploit it and now this lawsuit.  I am going to take it on the chin with this dog, but I would like to just take a few jabs rather than a jab, right cross, and a punch to the gut. Is there any hope for this thing getting back to where it was before the suit was exposed ($2.50) or is this stock simply going down the drain? Any help appreciated. TIA

  133. There must be a way to play LNKD around earnings.  I'm studying it.  This is a MoMo if I've ever seen one.  Here's a link to get us started:

  134. It's tragic what's happening with oil today…. The next line I have is a daily Fib line at 101.91!

    Still holding the USO puts in the portfolios as I don't see a reversal yet. I am using an ATR line to track the stops on USO. It's at 38.95 now!

  135. SQQQ/Pharm- I just saw your advice- thank you.

  136. Beat Rate/StJ – Wow, that's pretty drastic.  Smaller caps still getting killed I guess. 

    Value/ZZ – I don't consider things very valuable if they don't produce an income.  Steve Wynn uses art to make money – that's smart!  Art goes up and down but mostly up due to the scarcity factor and I have a very nice Dali over my mantle but I got it at a screaming good price or I never would have bought it.  If you are buying art as an investment, then you should be selling the art when the market is high and buying it when it's low, not staring at it on your walls – JMHO. 

    GS still sneaking down.  GG can't catch a break.  RIMM in Hell.  GMCR maybe stabilizing at 50% off?  Jan $25 puts jumped up to $6 but now you can sell 2014 $25 puts for $8.  A more speculative play on GMCR is the 2014 $25/35 bull call spread at $2.70 and you can do this spread and not even sell the puts unless they go below $20, at which point you should be able to get $2.70 for the $15 puts.  They are still going to make a couple of bucks a share – that's not a $15 stock – it's simply not a growth stock. 

    Gold stocks/Ging – I'm still bearish on gold and, like BTU, the only gold stock I really like is ABX because they are the biggest and the best.  That doesn't stop them from going down in the short run or in a crassh,  but you can set up a 1x entry by selling the 2014 $30 puts for $3.40 and buying the $30/45 bull call spread at $6.60 which is net $3.20 on the $15 spread so a great hedge against inflation and the worst case is you own 1x at net $33.20, which is $4.70 LESS (15%ish) than it's trading at now AND your spread is starting out $7.90 in the money with a possiible 5x return.  Why tie up $37,000 in 1,000 ABX when you can do 10 of these spreads for $3,200 + another $6K in margin with a potential $11,800 upside?

    NOK/Canuck – They don't make any money and they won't make any money for a long time or maybe ever (see MOT, RIMM, PALM) – it's a tough business and NOK made a huge strategy decision going after the low-end phone market on the assumption people in Africa wanted a $29 phone but anyone who can afford a PLAN can probably justify a smart phone – especially since an IPhone or a Samsung is like buying a web-based computer for people who don't have one in poorer countries.  So they sell the goat and get another job and buy a smart phone. NOK is miles behind and they do have a nice pile of cash but that doesn't mean they'll spend it wisely (see RIM, MOT and PALM again).  So – do I like the spread?  Sure but to me NOK is a very speculative play that could go back up or could go to $1 so I think I'd just sell the 2014 $3 puts for .80 and buy the $3 calls for $1.20 for net .40 and sell the Jan $4 calls for .45 so your worst case is owning 1x NOK at net $2.95 even if you don't stop out the 2014 $3 calls at $1 but, if you do stop them at $1, you drop the net entry to $1.95 and now we're getting reasonable. 

    LNKD/Lolo – I remember once we shorted AMZN with a p/e of 800 and they went over 1,000 on us (up 25%) before finally stopping – was a nightmare! 

    GMCR/Morx – Yes, see above.  Even if they cost you a buck earlier, you can now sell even better puts than you could then so no big deal. This is why we scale – hard to call a dead bottom….

    Dollar just nudged back below 79.30 – could give the Bulls another flag to run at so keep an eye but could also be just a quick test of the line, which may become support. 

  137. $102.60!!!  Gotta love shorting oil.  June $39 puts only $1.40 but let's raise stop to $1.35 as I worry about a bounce off $102.50 and, if we get below that, that will be the new stop, probably at $1.50.

  138. LNKD / lflan – The options seem to predict about a 10% move! As I told Lolo, there is not much history to go by to predict what's going to happen. Sell an 85/125 weekly strangle for $1.50? That gives you close to 20% on the downside and over 15% on the upside. I would not play them though… They could beat by $0.01 and rise 20% as MoMo do.

  139. lolo……How about I come back on line in about an hour and we try to figure out how to nail LNKD for a few bucks!!

  140. stjeanluc…..LNKD …gotcha!   I have to do something else but I'll be back in an hour and we'll discuss again.  There must be a way to suck some of the premium out of this puppy.  

  141. I went from being too bearish to being too bullish.  I have a running EDZ hedge which seems to make me money each month no matter what the market decides to do, but I need an additional bearish hedge.  What would be your suggestions at this point?  TIA

  142. Lflan – Also to keep in mind, lots of data tomorrow morning. No matter what LNKD reports, they could get caught in a up or down draft that carries them much further than on a regular day! One more reason to tread carefully!

  143. look at the inverse correlation between itb and equilibrium now..meaning itb over bot and gld oversold

  144. Can anybody provide info on the Oil decline? Do you see a support here or more decline is expected? What about the run up during NYMEX close?

  145. EDZ/rperi – what is your EDZ hedge? mine net costs me money each month..

  146. stjeanluc/LNKD,
    I'm in with a 90/125 strangle, thinking that it is worth a gamble.  A  20% blowout to the upside should get you to about breakeven and you'll be able to roll; as far as the downside is concerned, there has been tremendous resistance at 95 in the last month and I doubt the stock will go below that even on a miss – too many folks still believe the story.
    Having said that, it is a gamble, so not a good idea to bet the farm!

  147. 11:42 AM European shares close mostly lower, giving up big early gains when Mario Draghi gave no indication of imminent further ease at his press conference. Stoxx 50 -0.2%, Germany -0.3%, France -0.1%, Italy -0.7%, Spain +0.3%, U.K. +0.2%. Down sharply early, the euro returns to flat.

    12:00 PM On the hour: Dow -0.3%. 10-yr +0.06%. Euro -0.08% vs. dollar. Crude -2.11% to $103. Gold -1.12% to $1635.45.

    1:00 PM On the hour: Dow -0.32%. 10-yr +0.05%. Euro -0.10% vs. dollar. Crude -2.5% to $102.58. Gold -1.16% to $1634.85.

    The euro's tight trading range (vs. the dollar) has tightened even further, writes Robert Sinn, the sort of thing often proceeding a big breakout. With sentient towards the common currency firmly on the bearish side, might the big move many are expecting be to the upside?

    Nouriel Roubini's latest reason he thinks the global economy will come close to collapse next year: a likely military confrontation involving Israel, the U.S. and Iran. The pressure from oil sanctions against Iran and concern about its weapons will trigger the action, which will drive oil prices to extraordinary levels, which the fragile global economy can't handle.

    While the jobless rate is expected to stay steady at 8.2% when April figures are released tomorrow, the rate would be over 11% if the 6M who say they want to work but haven't looked for the last four weeks were to start applying again. And of the 86M adults who weren't in the labor force last year, 36M were between the main working ages of 24 and 65.

    Mortgage rates dropped to record lows in the week ending May 2, Freddie Mac reports, as the 30-year fixed-rate averaged 3.84% vs. 3.88% in the prior week, and the 15-year fixed rate slipped to 3.07% vs. 3.12% last week. The corresponding rates a year ago: 4.71% and 3.89%.

    The Trulia Price Monitor – which claims to be a leading index by tracking home asking prices – rises 0.5% in April, the 3rd consecutive increase. Prices rose 0.2% Y/Y. Beaten-down towns like Miami (+16.1%) and Phoenix (+15.8%) led the way. Rents nationally in April are up 5.6% Y/Y.

    The Greek election result this weekend could surprise as no new polls have been allowed to be published for the last 2 weeks. The most recent data has the 2 status quo parties barely scrapping together enough votes to keep the bailout/austerity ball rolling, but if people truly vote their pocketbooks, another outcome may ensue.

    Duh of the day:  A report from the Commonwealth fund confirms what may be widely suspected: that the U.S. doesn't get the bang for its healthcare buck. Per capita spending is $8K, sharply higher than many in the OECD, but that hasn't necessarily translated into better quality. The reasons for the high costs include the use of technology and the outsized rate of obesity.

    Canadian lenders dominate Bloomberg's list of the world strongest banks, placing 6 in the top 22. There may have been more, except the country ran out of banks of large enough scope. Counter-cyclical regulatory policy helps, as banks are usually told to tighten up when times are good, not after the crash.

    We know who to short in another housing sell-off!  Wells Fargo (WFC) adds to its dominant position in the home lending market, originating 33.9% (up from 30.1%) of mortgages in Q1, exceeding the combined total of the next 7 largest lenders. "The government is concerned about (its) dominant position," says Paul Miller, who doesn't expect big additions to market share from here.

    "HSBC (HBC) is to Riggs as a nuclear waste dump is to a municipal land fill," wrote one U.S. attorney, comparing money-laundering at HSBC's U.S. unit to the scandal-plagued D.C. bank. Vowing to crack down on abuses a decade ago, HSBC has failed to satisfy regulators. The operation was a "sham" designed give the appearance of compliance, complains the same attorney

    General Motors' (GM -2.1%) Q1 report struck a familiar chord to shareholders of Ford (F -1.3%) – profit gains but a dissppointing outlook. Both automakers are seeing improvement in their bottom lines as they can ease off of consumer incentives, but are getting tripped up by an economy recovery that's only improving in "fit and starts."

    We did well on these guys selling puts last time they sold off:  Shares of Thor Industries (THO -13.3%) get whacked by preliminary numbers for the company's FQ3. While sales figures topped the estimates of analysts, margins are getting squeezed mercilessly by what the RV seller calls an "elevated promotional environment driven by aggressive competition."

    Exxon (XOM) is hard to beat for safety-conscious investors but Halliburton (HAL) is the better value, TheStreet's Richard Saintvilus writes. XOM's portfolio of E&P projects should mitigate concerns through lean times, and should be considered for any portfolio "with realistic investment horizons and, more importantly, patience," but HAL should be the pick of investors looking for 30% gains.

    Transocean (RIG +2.5%) bucks the downdraft in energy issues in today's trading, rising after reporting Q1 results buoyed by an improvement in utilization levels and rising rig rates. Analysts at Dahlman Rose say the quarter “will have positive implications" for the stock, and Guggenheim raises shares to Buy with a $65 price target, up from $46.

    It's not for the faint of heart, but Chesapeake (CHK +2%) is upgraded by BMO and Bernstein with respective target prices of $25 and $21, nodding to the risk while excited at the potential investor reward if the stock price is at a bottom. “The company is being watched,” BMO says, but "what remains is a company with a deep and wide asset base, and one that has fundamental value."

    DreamWorks Animation (DWA -7.2%) can't seem to get a break, as the stock takes another hit despite its Q1 beating estimates late yesterday. Net earnings rose 3.2%, driven by strong demand for Puss In Boots, but the stock is selling off due to concerns over the timing of its future release of Madagascar 3. Analysts say the planned international release for the movie is staggered to the timing of the Olympics in the U.K, which increases the risk of piracy, among other things.

    Josh Brown excoriates the analysts for their bullishness on Green Mountain (GMCR -48%), especially the 69% who had a Buy rating despite David Einhorn's short thesis and the insider selling. A "punk analyst sitting in his office" doesn't know the pain of having "suffered through a hundred disasters just like Green Mountain." Those who manage real money do.

    Getting psyched for PCLN! Up initially after delivering mixed Q1 results and issuing above-consensus revenue guidance, Yelp (YELP -9.5%) is now selling off hard, possibly a sign its steep valuation led it to be priced for perfection. SA's Paul Zimbardo notes Yelp's opex growth exceeded its strong revenue growth, as the company increases its sales force in order to generate more local ad sales.

    Though Q1 PC sales were better than expected and positive supply-chain data has emerged in recent weeks, Digitimes reports retailers have become conservative about their Q2 outlooks, out of concern consumers will hold off on purchases until Windows 8 (MSFT) arrives. Nonetheless, they expect demand to eventually pick up thanks to Windows 8 and the release of cheaper Intel (INTC) Ivy Bridge CPUs.

    Though it believes global smartphone shipments rose 45% Y/Y in Q1, Canalys thinks U.S. shipments rose only 5%, evidence the market is cooling down after years of torrid growth. By contrast, Chinese sales doubled, and now account for 22% of global shipments. Samsung (SSNLF.PK) controlled 22% of the Chinese market, and Apple (AAPL) 19% – soaring Chinese sales had much to do with Apple's FQ2 beat. Still, Android (GOOG) accounted for 2/3 of Chinese shipments. (IDC) [

    The Kindle Fire (AMZN) accounted for just 4% of global tablet shipments in Q1, estimates IDC, down sharply from Q4's 16.8%. If there were any doubts TXN's wireless chip weakness had to do with Amazon as well as Nokia, that should put them to rest. Partly due to seasonality, IDC believes global tablet shipments fell 38% Q/Q, but still rose 120% Y/Y. The iPad (AAPL) is believed to have grown its share to 68% from 54.7% in spite of a 23% Q/Q drop. (previous)

    Three lunchtime reads:
    1) The fallacy of oil ‘speculation’
    2) How to minimize fixed income portfolio risks
    3) Is gold today's safest investment?

  148. SVNT/dclark – I swallowed hard on that one…and almost choked. Horrible pick on my part, and with RDEA being gobbled up for a similar treatment, I think SVNT is not as good.

  149. Longs, take the money and run time! This market is braking down as I type. Cash is king of the safety positions.

  150. BMRN….oooooo…look at 'er go.

  151. You are brave Wappler! Good luck…

  152. USO / Phil – If we don't get stopped out on the puts before EOD I still think that it might make sense to close the position today and not risk the NFP tomorrow. We can always reload later but it would be a shame to leave that much money on the table.

  153. Looking for Mr. Stick to not show up this afternoon- hopefully!

  154. Financials smell something…

  155. @Felipe
    "You can argue it's an investment but for $100M – you'd better be able to live in it when times are tough!"
    re: good investment advice
    Remember: "You can live in your car; but you can't drive your house".

  156.  Stocks Falling on Unusual Volume:


  157. I had a bull call spread as an early year hedge which was originally offset by selling puts in CHL, then I paid to buy back the caller and the puts expired worthless.  I rolled out and down on the long call and have been selling calls and puts against the position each month, with the worst case scenario being that I would own EDZ for less than $10 which in and of itself is a good long term hedge.  The original spread and offset was for a $.10 credit, and the roll cost me $.80.  I sold $1.74 against it in April, $1.46 in May, and I have two more month to sell before deciding what to do with the long call.

  158. Small spike on USO!

  159. LNKD/Pharm – I'd sell 5 May $110 calls for $6.20 ($3,100) and buy 4 July $120 calls for $6.30 ($2,520) for a net $580 credit.  If you want to be more aggressive, you can sprend the credit on the June $110/100 bear put spread at $5.60, which is a nice double if they fail to hold $100.   The July $120/95 bear put spread is also very reasonable at $12.50. 

    Keep in mind that, if LNKD pops, most likely adjustment is to cash the long calls into the excitement and wait for it to pull back before closing out or rolling the May calls. 

    Oil holding $102.50 but not bouncing off it..  Good sign for possible breakdown but seems unlikely with weekend looming at the same time.

    Bearish/Rperi – I still like SQQQ this low ($11).  The June $10/11 bull call spread is .50 and you can more than offset that by selling the $11 puts for .80 for a .30 credit on the $1 spread.  

    Oil/Pat – No easing, no jobs, no sales, no manufacturing, lower demand, looming austerity in Europe and US, no stimulus from China, record natural gas lows with coal racing to same, no noise from Iran this week….  Other than that, no reason for them to go lower.  8)

    USO/StJ – I agree but we just stopped out anyway.  Probably a head-fake before breaking down but better safe than sorry – we have plenty of other bear bets.

    Car/House/Flips – Choosing between the two, when the economy collapses, I'll take my homestead on the mountain next to a freshwater lake where we have fishing competitions and across the street is my county's resevior.  There's 100 acres of state parkland behind my house with thousands of deer and wild turkey and even a 7-11 on the other side of the park.  A car I can always get…  We don't need to build a survival bunker, we live on one – and it's very pretty!

  160. Oh, and wheeeee!

  161. APP…..ah, I love to see red…

  162. USO / Phil – Not stopped out yet. The puts stayed over $1.35 on the small spike!

  163. Phil LNKD I think you mean sell May 100p now 5.70 ??

  164. That 80.33 line is the strongest for a while, if it breaks down it could be a beautiful waterfall!

  165. But it might make sense to get $1.41 now and forget about it!

  166. using Opts rules on oil, I stopped 1/2 out.  On any bump up, I will buy the June 38s to reduce delta and still ride the wave. 

  167. CMG down $7, PCLN down $20… popping champagne at Jabo's house! 

  168. Good idea Pharm. I'll close 1/2 the USO puts in the portfolio and ride the rest with that $1.35 stop!

  169. please closed market now for Jabo and me :)

  170. Nice job on EDZ/Rperi!

    $102.50 is right on the 2.5% line for oil on the day – no wonder it was bouncy.  Gold down at their 1.25% line at $1,634 so it's a controlled Bot sell-off, that's when the 5% rule hits marks like that.  We aren't seeing any human panic yet, just a slow burn. 

    Nas and RUT down 1.3%, Dow and S&P down half as much.  I wonder who is right? 

    Stops/StJ – That's good but I'll be surprised if we fail the 2.5% line. 

    LNKD/Yodi – Oh no, it was selling the $110 CALLS, not puts!!!   I'll fix it.

  171. $25KP update:

    SCO Jun 30 Calls – Up 45%
    SCO May 33 Puts – Up 70%
    SQQQ Jun 11 Calls – Up 48%
    TNA May 63 Calls (short) – Up 65%
    DIA Jul 122 Puts – Up 25%

    USO Jun 39 Puts – Sold 1/2, the other on a 1.35 stop.

  172. Pharm/Oil,
    What if Oil keeps dropping? Will you wait to reenter back again? What if you are 10% down on your initial trade? Do you still suggest to sell half and wait to enter into 38 P.

  173. $25KP / Phil – The BBY position is making a hole in our pocket. Once the NFP is out of the way, I think that it would make sense to adjust that. June expiration is still 43 days away, but Q1 is not BBY strongest quarter! Would it make sense to strangle the position? There would be no margin cost!

  174. pat – YES sell 1/2.  Down only 10% is better than 30%.  Don't enter the 38 puts unelss there is a bounce.  Otherwise use stops like StJ did.  Oh….there she goes!

  175. Forgetting it/StJ – My attitude there is, if you have the time to watch it, may as well keep the stop because you're essentially risking .06 against a much bigger potential gain.  If you have better things to do than stare at .01 moves in USO options – then by all means take money and run to somenthing more worthwhile. 

    PCLN/StJ – I damned well hope we're in the $620s now. 

    1:00 PM On the hour: Dow -0.32%. 10-yr +0.05%. Euro -0.10% vs. dollar. Crude -2.5% to $102.58. Gold -1.16% to $1634.85

    2:00 PM On the hour: Dow -0.61%. 10-yr +0.06%. Euro -0.09% vs. dollar. Crude -2.44% to $102.66. Gold -1.19% to $1634.25.

    Bullish sentiment jumps 7.8 points to 35.4% in the latest AAII Sentiment Survey, the highest level in a month, but below the long term average of 39%. Likewise, bearish sentiment hit a 1-month low, diving 8.9 points to 28.5% – below the historical average of 30%.

    Secular Bull and Bear Markets (Advisor Perspectives)

    Edward Luce: America is A Nation of Spoiled Brats (Foreign Policy)

    The CEOs from 6 major banks (mostly the usual crew) sat down with Fed Governor Tarullo yesterday to voice their concerns over new regulations and the recent stress tests. Of particular concern were rules limiting exposure to other firms and governments (and by definition forcing banks into Treasurys), a view shared by Mexico's central bank chief.

    SEC Keeps Ratings Game Rigged (Pro Publica)

    Progress Is Seen in Advancing a Final Volcker Rule (DealBook)

    Can Occupy Wall Street Replace the Labor Movement? (Bloomberg)

    A discouraging forecast from Corinthian Colleges cuts a wide swath of losses through the education sector as a host of names continue to battle a double-whammy of concerns on federal funding and the quality of the education offered for the high tuition charged. Decliners: APOL -2.2%, ESI -6.6%, EDMC -7.6%, STRA -4.4%, DV -1.9%.

    Research In Motion (RIMM -5.8%) is making 8-year lows on the final day of its panned BlackBerry World conference; shares are now down 16% since the conference began. Network World reports attending enterprise customers had mixed feelings about RIM, expressing concerns about the cost of deploying its Mobile Fusion device management solution, and about strong employee interest in using rival devices.

    The next iPhone (AAPL) will feature a 4" display, and be longer and thinner (but not wider) than the 4S, claims iLounge. In addition, the device, due this fall, is expected to feature Corning's (GLW) Gorilla Glass 2, and sport a smaller dock connector. (previous)

  176. The new Samsung Galaxy phones are out and it's insane what they do with screen resolution now. 720 x 1280 in a 4.8" screen. I recall when I had a 20" monitor with a lower resolution! That goes for the new iPad as well by the way!

    Comparison between the different "flagship"

  177. Brazil industrial production contracted by 0.5% in March on an expected increase of 1.4%.  Production decreased by 3% in Q1 compared to Q1 2011.  I would say that is noteworthy. 

  178. To protect the longer PCLN puts, if you are not taking the money here….is selling the May 600s and also the May 625/615 put spread for 50c.  That protects over 3/4 of the gain, and if it continues to go down…welll, YES for us.

  179. PCLN / Phil – If someone was able to roll to the 620 for $2.00 I'll adjust our position. The spread was over $2.00 when trades were made yesterday and that was really thin trading (12 contracts all day of the 620 in 3 trades, 13 today).

  180. PCLN, I had the roll in every day since posted and no luck, admittedly I did not work it.

  181. LNKD….I've placed a complex spread on LNKD for earnings.   Buy to Open 1 May 19  115 call, Buy to Open 1 May 19  95 put, Sell to Open 1  May 4 115 call and Sell to Open 1  May 4 95 put.   I got this spread for 3.45.     It is profitable if LNKD stays between 85 and 130 by close tomorrow, has a potential upside of 197% profit, and can be adjusted in several ways.   Adjust the above purchase upward as to number of spreads in accordance with your own portfolio size, etc. 

  182. Oil not getting a pop into NYMEX close so far (2:35) – that is not going to be very encouraging for them.

    BBY/StJ – They earn May 22 and AAPL sales must have gone through them to some extent so I have just patiently been waiting for earnings to fix them.  If not, then I'll want to roll, of course.

    Brazil/Ink – And no one seems worried about them at all on TV or in the MSM but look at their chart – about to massively break down: 


    PCLN/StJ – OK but, at this point, I'd pay $3 to get $20 better position as the next $20 move adds $4 back.  We're almost at the point where a 10% drop puts us in the money!

    LNKD/LFlan – Nice but I think I'd take more risk they don't go up.

  183. Bargains/Phil – in a corporate account which currently does not allow any options (but can buy stocks and funds), currently has a few LT holds. Any dividend bargains today that you see as good stocks to buy for LT hold with no option play?  Mulling SVU and FTR, but more happy with those when i have puts and calls against them…

  184. PCLN / Phil – OK, adjusting our position now then! 

    And OK with BBY….

  185. Phil and all
    Can't say we didn't warn the team that it was dangerous out there as we fall below 80.33!

  186. GNW/phil – was looking at Sept 5/8 BCS with selling Sept 5 put.. but was not very compelling. Any GNW play jumping out at you?

  187. iflan/LNKD
    Thanks for the strategy.  I don't see that TOS will give me access to May 4 options.  I only see May 1, May 2, and May 3.  Is it because of who you use?

  188. could be an interesting last hour

  189. ccsincsd……the May4 options are this weekly options that expire tomorrow.

  190. In TOS, the May 4 options are the May1 expiration and the May 19 options are the May expiration.

  191. would be nice to have no Mr. Stick today:)

  192.  plosser, lockhart "conditions warranting qe3 not in forecast" – bloomy

  193. BBY doesn't get better until they find the right CEO.

  194. Scottmi /EDZ I took a diffrent path to my EDZ hedge sold 15 puts for 1.50 let them get assigned then sell 13 puts and calls against for last 3 months my cost basis on 300 shares is below 11 right now

  195. A really big guy is getting out 200,000 share orders below bid! Pump it up, DUMP!!

  196. Bargains/Scott – I'm in Vegas so I don't have all my screens at the moment.  Happy to look next week, when things will likely be cheaper anyway.  Certainly FTR and SVU are two of my favorites.  GNW not bad but I thought you can't sell options?  Different portfolio, I guess. 

    I would just sell the GNW 2014 $5 puts for $1.25 for a net $3.75 entry and be happy to make 33% even in an IRA with full margin.  I don't know why people make things so complicated – just take the 35% discount off the current price, pay the net $515 margin and collect $1,250 and make 142% on margin in 20 months – is that such a terrible thing that you have to contort yourself into a more complicated spread to avoid it? 

    Speaking of stocks with Gs and Ws in their ticker, GLW is back under $14 and loveable again.  I think owning them at $12 long-term is a no-brainer so eselling the 2014 $12 puts for $1.65 is free money and then we can buy the Jan $12.50s for $2.20 for net .55 on the naked calls as we wait for the retail crowd to find out GLW is the glass in the new IPhones. 

    Warnings/Shadow – Unfortunately, when you get the timing wrong, you sound like Chicken Little – sure the sky falls, but when?

    BBY/Doro – I know how to fix them so I'm sure someone else will figure it out at some point. 

  197. I just sold my PCLN 620 puts for a 20%(in at 10.50 out at 12.70) gain also bought back my july TNA calls for 20% in case the massage the employment numbers tomm. Can always get back in at a diffrent strick price

  198. Phil
    Are you backing out of your warning? I personally don't care if I'm wrong, safe vs sorry. This time the market is hitting my marks and doing as expected perfectly and to me the only thing that could no go wrong is they write a new program. That takes a lot of work and if they do this is a perfect time to kill a couple nothings like me. Its time for a little stick.

  199. PCLN 620 filled at $3.00

  200.  avg stock -1.6% today, much worse than spx

  201. support is now over 81.00, looking more like resistance

  202. Good move Bert – even now they are sticking it to us really good.

    Warning/Shadow – Not sure which one you mean now.  I'm looking at the global macros and they say the market is overpriced to risk – plain and simple.  Unfortunately, since the Corporate Media is telling you to ignore all risk and the only people left trading the market are risk-takers and robots – it will take an actually catastrophic event before we have any proper price discovery.  We don't know when that will happen but, since Spain, Italy, Japan, China, France, the US, Australia and half the Middle East are all sitting at the edge of a cliff – we only have to wait long enough for one of them to get tired and lean back a little….

    Gasoline just failed $3.05 and having trouble getting it back!

    PCLN/Newt – Thanks and GL!

    I can't see the volume but it looks like this stick is getting sold into. 

  203. Phil:
    In the 5k do you see any merit rolling the TNA long calls to July $66 for $1.45 or even further out ??????

  204. USO/ 25K- close or keep stop in place?

  205. STJ
    Has the volatility study been updated?

  206. TNA/DC – Yes, that's a good idea but let's see what happens tomorrow. 

    USO/Newt – No, we're done with that in both portfolios.  Gotta cash in some profits. 

  207. Thanks Phil. How's the weather in Vegas?

  208. newt – IMO I would hold out and sell a 1/2 position at the May 38s for 45c.  Stop at 55c. 

  209. Or do what Phil says….I am holding out though. I see more drop ahead, but a bounce first – hence the sale of some covers.

  210. Phil,
    what do you think about the following play on CHK:
    buy Jan 15-20 BCS for $2.34 and sell Jan  16 puts for $2.67 so $0.33 credit on $5 spread.

  211. USO/ Phil- great returns!  Thank you.

  212. SCO – The SCO trades are still being held correct?

  213. Please remember I only day trade and my oppinion is only today. It will be modified between closing and opening the next day and then changes during the day. This week I am batting 1000 and it does not look good to me right now!

  214. lflan – LNKD not bad. 

  215. I'm still thinking it tanks.  Analysts want too much.

  216. Stj-PCLN – the roll is now to July 620 is 2.90 — are we still roll it or wait . thx

  217. WHR – might be time to look at this again..

  218. Gotta hold 13,200 at all costs apparently. 1,391 on S&P not too impressive. Nas 3,024, NYSE 8,048, RUT 806 – these are all failures if we close here – what's the poiint of painting a line if you can't get over it? Perhaps aggressive sellers have moved their lines down and are taking advantage of Mr Stick but who knows – I just can't see how EU data tomorrow: PMI and Retail Sales – are going to be good lead-ins to our NFP which, if in-line, will make no one happy at all.

    Then you have the weekend with French elections and whatever nonsense in Greece and the Fed is clearly sitting on their hands and the ECB just said no QE – so what is the motivation to be long into this weekend? Facebook is two weeks away and is already about $85Bn, so down 15% from expectations already.

    Sorry, I can't even get motivated to do the DDM spread – we're not at target – it's just not bullish.

  219. What will baffel me is closing anywhere between 81 and 80.33 because that tells me nothing that really matters in my calculations so tomorrow could go anywhere. Buyers and sellers beware!

  220. LNKD – maybe the writing's on the wall as it gets a spike up. 

  221. $25KP and $5KP – Closing the last of the USO Jun Puts at $1.42.

  222. PCLN / Gucci – Phil says OK to pay to roll!

  223. Volatility / Joemayo – I didn't update last weekend. I'll post new spreadsheet this weekend. 

  224. Come on IWM close @ 80.67 and show no cards at all for all you Vegas goers!

  225. Weather/DC – Looks nice but I haven't had a chance to go out yet.  I do like the fact that it's only 1pm and I have my whole day ahead of me here.  Maybe I will go back to Veer and look at apartments. 

    CHK/Msf – I like that but why sell Jan $16 puts for $2.67 when you can sell 2014 $18 puts for $5.35?  It's net $12.65 vs net $13.33 on the short Jan puts and you may never get another opportunity to sell puts for this price.  If your Jan positiion is going to pay off, then you'll be really glad you sold the more expensive puts, right?  If it doesn't work out, you'll be glad you still have net $3 in the short $18s for a $15 worst-case net entry on 1x. 

    You're welcome Newt.  It's so much easier to play oil in the Futures unfortunately because you can take a quick .25 drop and run over and over again.  USO is a different animal, you have to poke it and prod it until it finally does what you want. 

    SCO/Ink – Sure, they are just on-track. 

    PCLN/Gucci – We're taking that roll as we just can't get $2 but then it's silly not to take $20 in position because we're too cheap to spend $1.

    WHR/Scott – Not until housing or jobs comes back.

  226. GLL back to the top of it's downard channel?

  227. OK, that was fun and now I get to go swimming and have lunch at the pool – I could get used to this. 

    Later all!

  228. WHR – near a 50% fib line.. if breaks below that… more to fall..

  229. Nice close Thank you, and for jabo FU market!

  230. Oil/ Phil- yeah on Futures.  I find myself sitting here taking nickles and dimes then giving them back.  I need more tutelage around it. Setting limits and stops etc.

  231. FSLR – i bought the May $17 puts and FSLR just crapped its pants.  Boy am i getting lucky with these momos.

  232. I really hope it didn't reverse on me.

  233. LNKD flying on making 4c……That is another to start a short position in…..

  234. Looks like that LNKD trade from lflan will work out!

  235. Phil,
    CHK — sure it's much better. I forgot to look at 2014. Ooops!

  236. Oil / Newt,  Phil has posted many times in the last 6 months on oil futures strategy.  If you just pull up his posts only and look thru them for charts with dark backgrounds, you will find them.  The charts have entries and exits, with notes on the chart. 
    The only sure advice I can give you is to set your stop as soon as you enter a position.  the price can jump 20 cents in a second,  with up to 10,000 contracts exchanged in a minute.  When you're behind 500 or a grand on 1 or 2 contracts within  seconds of entering your sell order because it beat you to the punch on setting a stop, it's hard to push the buy button,but if you don't do it, it can get worse real fast.
    So set your stop ASAP.  sometimes I set the stop before the order entry.  The other thing I can say for sure, is that it's a much surer thing to play it short than long.  Be careful, and good luck.

  237. Newt,  another thing is to start early.  Between 6 and 7:30 central time is the easiest action of the day, and the most likely oil will behave around the .50 cent lines.  Avoid the last hour before the Nymex close.  Too crazy then by far.

  238. Some interesting thoughts about setting stops in this HFT/algo environment:


    But they are not supposed to be able to see your stops right?  And if they can’t see them, then how can they go after them?

    More on that in a minute.

    First let me take a moment to clarify who “they” are.  To tell the truth, I don’t know who “they” are, but I watch “their” actions every day.  They could be market makers, specialists, bots, HFT’s, Algo auto-traders, a combination of all of them, or just the market mojo driven as a whole by the spirit of the late Paul Lynde.

    It doesn’t really matter what the mechanics of it are, it’s just the results of those mechanics that matter.

    The bottom line is that many entities in the market benefit by volume, and they do anything they can to create that volume, like triggering your stops with only a quote instead of an actual trade which I have written about before.

    This type of market action has changed the rules of trading, and let’s face it, the rules of trading have always been pretty dicey to start with.

  239. stjeanluc…..Great post (s) on setting stops.  This comes under the heading of 'trading methodology', which I feel is extremely important to making $ in the markets, as you know.  I've made my own share of mistakes in days past buying and selling options and setting stops.  If done improperly it can cost you reams of money.  Topics worth continued discussion on the board.  

  240. Stops / lflan – I am now up to setting alerts in TOS and my charting software rather than stops. Dangerous, but less visible I guess… It's coming down to being limited on how many open positions you can actively manage anymore! 

  241. The next big bubble – Australia:

    Our own more Minskyan interpretation of events is that the lack of volatility in the Australian economic cycle and the absence of any recession since 1991 has led Australians to have an excessive appetite for debt in the belief the future will reflect the past. But for us, suppressed volatility is merely storing up an even bigger crash further down the road.

  242. Power generation
    With coal and gas prices rather low, rail traffic down, and electricity generators reporting low demand because of a mild winter, I wonder if the real n****** in the woodpile (is there are more polite phrase with the same meaning?) is not the advent of the curly light bulb that uses so much less power?

    The reason I say this is that I just got my second monthly electricity bill for my spacious 2-bedroom apartment in the Dominican Republic. The lighting is electric, there is a very large fridge, hot water tank on 24/7, washing machine,  (no dryer as drying clothes uses both solar and wind technology), TV and cable box running all day, fans running most of the time and occasional use of air conditioners at night in the bedrooms.

    The monthly electricity bill was a bit less than $9. Since there are several lights on most of the time and I have a three-year-old who is very skilled at switching on, but never at switching off, I would think they would use a lot of power, but with most of the bulbs now only using about 7 watts, that is a huge savings, and now with LED bulbs, I even have one that runs all night in the hallway on 1.7 watts. The cumulative effects of this saving worldwide must be VAST  and cause a considerable reduction in energy consumption. I have an account that is metered to me, so it must be right and I have seen other people's bills which are similar or just a bit more.

    The generator at the power company runs on oil, about half of which comes from Venezuela.
    The Dominican Republic has no native oil other than coconut.

  243. Hi Phil
     I bought 1200 shares of ACI at $13.21 and sold 2013 $10 P& C at $ 4.92 for net $$8.48/$9.24. Stock now at $8.22. It looks like ACI will take a few years to come back. Any suggestions? 

  244. Oil/2Can: Thanks.  It gets crazy- fast.  Regarding the charts you referenced by Phil- how do you pull up Only his posts and charts?

  245. Holy cow!  Just had Rao's served to me poolside for lunch and, walking back to my room I spy a Nobu being built across from Rao's and, in between, is a place that serves crepes with gellato, all sorts of coffee drinks, pastries and smoothies – this is all in the same spot!  If I had to design a place in food heaven it would be just like that! 

    I'm definitely moving here.  Not to Vegas, to Caesar's – I'll take the penthouse like Howard Hughes did at the Hilton except hopefully I'll remember to cut my nails…..  Really I totally love this place as it's also my favorite pool except the topless area doesn't have blackjack tables in the water – they definitely lose a quarter star for that!

    So,how's everyone else?

    Futures/Newt - Then you are doing great!  The first thing you need to learn when you do the trapeeze is how not to to fall – the impressive tricks come long after you get the basics down. 

    FSLR/Lolo – Nice streak!  Hopefully it will come in 3s.

    LNKD had a nice pop I see.  As long as they stay under $120 I'm not worried as we WANT to cash out big on the long calls and then wait for them to come back to Earth.

    GDX/StJ – Part of that is those nationalization moves but certainly doesn't account for such a drastic drop.

    2014/Msf – Yep, I usually start there and have to be convinced to go shorter.  Especially when a stock is down you want to sell a lot of put premium. 

    Good futures advice 2Can. 

    Big Chart – NYSE and RUT are our broad indexes (hardest to manipulate) and they are hitting the Must Hold lines and the 50 dmas did NOT do them any good so why would we think the Nas or the S&P will benefit from their 50 dma support?  Although – notice there was consolidation at 50 dma by RUT and NYSE before giving up and not, just when the Nas and S&P are testing their 50s, the RUT and NYSE will be testing the Must Hold lines – also a place we expect support.  So it does not seem too likely that all 4 will fly lower without a day or two pause now.  Once they do, ignoring the fact that the Dow is way below them at the -2.5% line already, the Dow can drop back to 12,800 pretty fast.  So I think either we get a snap down and a bounce tomorrow, followed by consolidation or we get consolidation for a couple of days, followed by a snap down,   Anything up breaks the pattern and we'll be back where we were this morning – slapping on longs to protect ourselves except now well look for the NYSE and RUT to get back over their 50s as a bullish sign along with, of course, S&P 1,400.

    More polite phrase/JMM – In the future, please make sure you find one. 

    ACI/Dflam – We just discussed them this morning. see 11:52 comment. 

    My posts/Newt – There's a tab at the top that says "Phil" and that sorts my posts only but no really good way to search within like that.  That's why, I hope when people find something useful – they put it in the Wiki so we can build a backlog of useful stuff.

  246. On the other hand – Larry Kudlow at 4pm – how could they?  There might be impressionable children watching!

    4:00 PM At the close: Dow -0.47% to 13206. S&P -0.76% to 1392. Nasdaq -1.16% to 3024.
    Treasurys: 30-year +0.09%. 10-yr +0.05%. 5-yr +0.05%.
    Commodities: Crude -2.49% to $102.6. Gold -0.99% to $1637.65.
    Currencies: Euro -0.05% vs. dollar. Yen +0.04%. Pound +0.12%.

    Market recap: Stocks deflated after a weak reading in ISM services, on top of a similarly soft manufacturing report earlier this week, raises anxiety ahead of tomorrow's payrolls report. Energy stocks lagged again after crude oil slid 2.6%, but natural gas spiked on lower than expected inventory. NYSE decliners topped advancers three to one.

    A recession is coming, says Street Advisors Lance Roberts, but it's not necessarily a bad thing. Whether it be from falling off the impending "fiscal cliff," or getting caught up in the debt trap where budget reductions, taxes increases or interest rate hikes can't be accomplished because the economy is simply too weak to offset the negative impacts, the downturn is coming. It's part of the overall economic cycle, Roberts says, and despite wishes, hopes and prayers, recessions occur with a surprising level of regularity.

    No single economic report generates as much action and angst each month as BLS payrolls; the current consensus is for an addition of ~168K jobs, but given the data this week (I, II, III), nobody will be surprised if it comes in lower. Calculated Risk takes the under on tomorrow's number, while AP's taking the over (over time, at least).

    {Whistling sound of a massive bomb falling just moments before it explodes…} - With LME copper stocks at their lowest level since 2008 and China bursting with the stuff amidst lower domestic demand, the country is set to export large amounts of the metal over the coming months. Analysts believe there are 500-600K tons of the copper in Shanghai warehouses being used as loan collateral (total 2012 mine supply will be 240K tons).

    Wishful thinking?  Today's natural gas inventory report comes as major companies show signs of scaling back their U.S. production. Announcements in recent days from XOM, ECA and COP highlighting reduced Q1 production and pledges of continued reductions – coinciding with a spike in demand from users – could be the start of a trend that would help alleviate the oversupply of natural gas.

    Global semiconductor sales rose 1.5% M/M in March (an extra 2 days helped), the SIA reports, but fell 8% Y/Y, proof the chip industry's recovery from a tough inventory correction has a ways to go. European sales sported both the largest M/M increase (3.8%) and Y/Y decline (15.4%). For the whole of Q1, global sales fell 2.2% Q/Q and 8% Y/Y. - Here's a good example of how BS numbers are.  March had two extra working days and we're all out partying the markets over the great March numbers (and Feb had an extra day this year too)

    Jackie called it (and she's got her stock too!):  Disney (DIS +0.3%) appears set to have a huge hit on its hands when The Avengers opens in the U.S. this weekend as it catches applause for pushing all the right marketing buttons for the release. While Fandango reports over 1K showtimes are already sold out domestically, the superhero action flick grossed $260M globally in about a week as Disney adroitly opened it overseas to take advantage of local holidays. Reviews: CNN, New York Times, Ebert

    Janney slices up the players at a large influential food conference in Dallas to find that Kraft (KFT -0.3%) emerged as the standout company. The food company is planning over a dozen new products – geared toward consumers ready to experiment with fancier versions of mac and cheese, hot dogs, and Jell-O – in a move Janney thinks can resonate with consumers. - Do you know why KFT is doing well?  $2 for a single box of Mac and Cheese!  Those were 5/$1 when I was in college when they were on sale

    More on First Solar's Q1: In spite of the massive Q1 miss, the company is lifting its 2012 EPS guidance to $4-$4.50 from $3.75-$4.25 ($4.07 consensus) thanks to its cost-cutting efforts. Operating cash flow guidance range is raised by $50M. No revenue guidance is provided. Q1 gross margin was just 15.4%, down from 45.8% a year ago. FSLR still halted. (PR)

    SunPower (SPWR): Q1 EPS of -$0.12 beats by $0.03. Revenue of $494M (+11.7% Y/Y) misses by $31M. (PR)

    Netflix (NFLX -7.6%) closed at levels last seen in early January after Viacom (VIA, VIAB) stated on its FQ2 earnings call Epix's movies will be available on Netflix "under any circumstance," but other streaming partners might also be added. Last week, it was reported Apple (AAPL) is talking to Epix, which Viacom co-owns with LGF and MGM, about a streaming deal. Netflix's exclusivity ends in September.

    LinkedIn (LNKD): Q1 EPS of $0.15 beats by $0.06. Revenue of $188.5M (+101% Y/Y) beats by $9.9M. Expects Q2 revenue of $210M-$215M and 2012 revenue of $880M-$900M, above a consensus of $207.9M and $876.8M. Company is also announcing the acquisition of presentation-sharing site SlideShare for $118.8M (45% cash, 55% stock). LNKD +7.6% AH. (PR)

    More on LinkedIn's Q1: Hiring Solutions revenue +121% Y/Y, now makes up 54% of sales. Marketing Solutions (ads) +73%, Premium Subscriptions +91%. International revenue 36% of total (up from 33% in Q4). Registered users grew by 11M Q/Q to 161M. Sales & marketing expenses +124% Y/Y, exceeding revenue growth. R&D expenses +91%. LNKD +10.2% AH. (PR)

    Facebook (FB) officially sets its IPO price range at $28-$35 in a new S-1. The company plans to sell 337.4M shares (180M in new shares, 157.4M from insiders) for a total offering size of $9.45B-$11.8B, higher than many expected. Mark Zuckerberg will sell 30.2M shares. The over-allotment option is 50.6M shares. Facebook's expected valuation range is just $59.9B-$74.8B. IPO plays are following the tech sector lower: GSVC -3%. SVVC -3.1%.

    The Facebook (FB) roadshow presentation. The company earlier set its IPO valuation at $60B-$75B. - WOW!!! Zuckerberg just set a record for the fastest loss of $30Bn EVER!!! That's going to really put my poker bets into perspective..

    Though Facebook's (FB) roadshow presentation is heavy on PR, the company does provide an informative chart highlighting its revenue/user for different regions. While Facebook derived $9.51/user in 2011 from the U.S. and Canada, and $4.86 from Europe, it only generated $1.76 from Asia, and $1.42 from the rest of the world. This gap is a big reason why Facebook's ad revenue growth is slowing, given much of its user growth now comes from emerging markets. (earlier) - GREAT point on how adding Asian consumers cannot make up for losing Western ones

    Samsung (SSNLF.PK) introduces its hyped Galaxy S III at a London event (live blog). As expected, the S III features a 4.8" display, as well as home media sharing and voice recognition features. The device, due in Europe in May and the U.S. this summer, suggests Samsung is trying harder to differentiate itself via software. A quad-core Samsung processor will power the international models, though a QCOM Snapdragon chip might be used in the U.S. models. (previous)

  247. Hello All – I was looking around and noticed that there are 62,112 contracts outstanding for the January 2013 $75 DIA puts at a cost of $0.35-$0.40.  The average number of contracts for any given strink that month can't be more than 1.000 so I imagine someone is making a very big bet that the Dow drops drastically.  Just thought it was interesting to see that. 

  248. DIA Puts – Or I suppose someone is making a hefty bet the other way and thinking it won't drop that far. 

  249. Does anyone know if there is a way to tell if people are short or long on option positions? 

  250. Jmm:  What Phil said.  Your writing is thoughtful and interesting, your comment a disappointment. I am no prig, but I have a stake in the subject.

  251. Phil: thanks.
    DIA from this morning- I didn't get stops in at .90- it went through them so figuring I'd ride it —but now I am feeling like an escape route is good.
    "In the $25KP, let's add 20 DIA $133 calls at $1.04 with a stop at .90 as we'd rather lose $280 than dump out puts on a spike up, right?"

  252. JMM  Disapointed as well. I have been disapointed with Phil for attacking people personally instead of directing his arguement at their positions, the same goes for your prior post. If you can't make a comment about a technology that saves electricity without making a racial slur, perhaps you should not comment at all,

  253. sparky/ zero: You are pompous twits to take that as " a racial slur".  

  254. I took it as a racial slur.  There is no reason to use metaphorical phrases that had a certain meaning at a different point in time, especially when one is capable of many other useful metaphors or allegories.   If we aren't in a post-racial era now, it is exactly these "oversights" that keep us locked in the past.   Kongen:  pompous twits…..really?!!!  Kind of the same slur in response….see what these type of comments create?

  255. $96 Billion for the equity of Facebook?   So that means $1 Trillion in sales revenue would generate the 9.6% ROS.  And FB will monetize the great unwashed masses to spend money they don't have?   Maybe in the far, distant future which in that case, a reasonable discount rate would reduce to the future cash flow to something in present value that doesn't justify a PV of $96B.   Not to mention the unknown unknowns which present risks that can't be quantified.   And what is the real switching hurdle here…even 30 year olds should be able to remember MySpace.    I just don't get how people buy into these valuations.   With that all being said,  FB should just acquire Yahoo and broaden their content base…a no-brainer!

  256. Good morning!

    Asia mostly down with Shangai up half a point and Nikkei up 0.3% (but down in futures), Hang Seng lost 0.8% and India fell 1.9% – good thing we ignore them! 

    Europe at lows of morning, which is down about 0.75% across the board and our Futures are generally flat – ignorning it all so far. 

    At this very moment, 6:30, we're getting our futures jammed up sharply.  So far I see no reason for it but the S&P is up 3 points suddenly to 1,389, which was the same place they jammed us up to pre-market yesterday.   

    The Dollar is at 79.37, Euro $1.3127, Pound $1.618, 80.23 Yen to the Dollar and EUR/CHF 1.2013 – nothing going on there at all.  

    Oil is $101.39 and that's a good bullish cover this morning  over $101.50 (/CL) along with gasoline at $3.04 if it gets over that line (/RB now $3.0386) 

    Gold is $1,631 and can also be played long over $1,630 (/YG), copper still sad at $3.74, silver $29.89 will be a nice bullish play if they get over $30 (/SI), nat gas is still $2.34 and I mentioned gasoline. 

    Open contracts/Ink – As there as to be a counterparty for each contract, there is no real long and short but if you look at where there are clusters of bids as well as the price of the sales, you can get an idea of demand and which way it's flowing.   I occasionally point out discrepencies where puts are more than calls or vs. vs., even when they are the same distance out of the money.  DIA, for example, is at $131.81 and the $132 calls are $1.20 but the $131 puts are $1.30 despite being .60 more out of the money – so the sentiment is pushing the prices bearish (or was at the close).  

    DIA/Newt – Well, you might get lucky as they are jamming up the futures but the only purpose to that position was to let us ride out the move up without getting out of our other short positions as we thought it would be fake.  So we EXPECTED to lose the money but it was cheaper than paying speeads and commissions to change other positions.  Today, if we get a big move up on jobs – it might be more real than yesterday and, if we crash – I doubt there will be a recovery for a while. 

    FB/LV – At $9 per user in revenues, they should acquire everyone they can in the West but their market share is already so huge that there are not many new eyeballs to get in the US and Europe will be the same problem soon.  Kind of like KO buying Dr. Pepper to access their client base – it's not like they never heard of Coke so there's no driver there. 

  257. FB/Phil –  My thought was the content and advertising value of Yahoo, not the expansion of user base would bring more value/user to FB.  They seem so complimentary.  
    I think Yahoo should have been the Facebook play, if they had good management in their earlier years.   I consulted to them when I was at Accenture, and their management was incredibly unfocused with completely dysfunctional decision-making processes.  Everyone basically did whatever they wanted, with no accountablity or guidance from above – until it was too late and then they would purge leadership and teams/projects.  Kind of the opposite of the Facebook culture, at least what I say of it from the outside.  

  258. Samsung
    Wow.  I figured after seeing the new laptops and phones they release maybe I should look at buying in.  They were 450 in Jan11 and are now 1250 and rising.  I'm looking at SSNLF (I think that's their ticker).  Anyway, probably doesn't make any sense to go long now, eh?

  259. Europe made a big move up too.  Spain up 1.8% (was up 2.5% yesterday before giving back 2.2% of it), FTSE still down 0.5% but DAX down just 0.25% and CAC down 0.2%. 

    Only news I see is Sarkozy catching up in the polls but still down by a few %.  Europe seems to be freaking out about Hollande so why oh why would people be long into the weekend?   Also this but since when does this matter?:

    6:44 AM Apr Monster Employment Index: +3 to 146, up 1% Y/Y. All metro markets tracked by the index continue to show positive annual growth.

    This just looks like another BS futures spike to me, commoodities not going along for the ride is a good clue that the index moves up are fake.  Dollar 79.33.

    6:00 AM Overseas: Japan Closed. Hong Kong -0.8%. China +0.5%. India -1.8%. London -0.9%. Paris -0.9%. Frankfurt -0.8%

    Company Startup Rates In The US Have Fallen To A Record Low.

    One Of The Best Economic Indicators There Is Flashing A Warning Sign

    The Unabridged And Illustrated Federal Budget For Dummies – Part 1: Spending. (graphs)

    The Unabridged And Illustrated Federal Budget For Dummies – Part 3: Debt & Deficits. (graphs)

    Eurozone April final services PMI 46.9, down from flash 47.9. - Keep in mind that below 50 is contracting so -2.1 is now -3.1 a month later – contraction is accelerating

    German PMI services falls to a final 52.2 in April from a flash estimate of 52.6, but manages to remain above March's 52.1

    U.K. Commercial Real Estate Falls for Second Straight Quarter. U.K. commercial property values declined by 0.7 percent in the first three months of 2012, the second consecutive quarter of decline, Investment Property Databank said. Values are 31 percent below 2007 levels, making it difficult to refinance five-year loans that are in negative equity and are maturing, London-based IPD said today in a statement. The last time prices fell for two straight quarters was in the first half of 2009.

    France Faces 40% House Price Slump. France faces a property slump of Anglo-Saxon proportions as the frothiest boom in French history finally tips over, threatening the country with an economic shock just as austerity hits. "It is a gigantic bubble, all the more dangerous as it is spread across France," said Pierre Sabatier, from the consultancy PrimeView. "It reached a paroxysm in the summer of 2011. There is a mix of incredulity and denial as it starts to burst but there can be little doubt that all levers propelling the market are disappearing." PrimeView said prices across France have jumped 160pc since 1998, though houshold incomes are up just 35pc. Paris has overtaken New York to become the world's third costliest city at €18,000 (£14,600) per square metre. The boom seemed to defy global gravity last year as southern Europe and the US battled property slumps. The mood has since darkened. "A number of clients tell me they think the market has topped and want to get out," said one French hedge fund manager. Standard & Poor's has told investors to brace for a 15pc correction. Credit Agricole says prices may fall 12pc by the end of next year, expecting a "gradual slide" that could last until 2016.

    Euro Risks Highlighted as Votes Show Swing in Political Pendulum. Four elections this weekend have the potential to reshape the European political map and show how the response to the financial crisis remains hostage to the whims of voters on both sides of the region’s economic divide. Recession-weary Greeks will pick a new government and polls show the French will probably install a Socialist president for the first time since 1981. Local elections will test Italy’s political pulse, and voters in a northern German state may deal a symbolic blow to Chancellor Angela Merkel’s coalition. The May 6 elections capture the popular agitation in debtor and donor countries alike, after emergency loan packages worth 386 billion euros ($508 billion) and a focus on deficit reduction failed to halt the debt crisis. Instead, Europe has been sundered in two economically, with Greece’s unemployment rate of 21.7 percent contrasting with Germany’s 6.8 percent. “We have to look out for political risk still in Europe,” Julian Callow, chief European economist at Barclays Capital in London, said on Bloomberg Television. “We’ve been in a situation frankly in the last year where the politics has really been quite favorable to push through structural economic reforms, to push through fiscal tightening. My concern is the political pendulum is starting to swing back.” The vote in Greece, the epicenter of the euro crisis, may amplify the mutiny against the wage and spending cuts and tax increases that are conditions for drawing on financial aid and staying in the currency.

    Euro Set For Biggest Weekly Decline In A Month. The euro was set for the biggest weekly decline in a month amid concern leadership changes at elections in France and Greece this weekend could derail the region’s austerity efforts. The 17-nation currency was 0.2 percent from an almost two- year low versus the British pound before a private report that may confirm the region’s output of services and manufacturing shrank for a third month. The Dollar Index was poised for a weekly gain before a U.S. data forecast to show employment increased last month in the world’s biggest economy.

    Hollande ‘Pragmatic’ on Fiscal Pact, Sueddeutsche Zeitung Says. French Socialist presidential candidate Francois Hollande would be ready for a “pragmatic solution” to a disagreement with German Chancellor Angela Merkel over the so-called fiscal pact that would limit government spending in European Union countries, Sueddeutsche Zeitung said. Hollande’s team has “concrete proposals” on how the fiscal pact can be complemented by measures to stimulate economic growth, the newspaper said, citing notes documenting talks between German diplomats and Hollande aides. Merkel would agree to such an amendment, which may be decided at an EU leaders’ summit in Brussels at the end of June, the newspaper said without citing anyone. Hollande is aware that he would have to speak “tough truths” at the beginning of his term and that there’s no way around pushing France’s budget deficit below 3 percent of gross domestic product next year, the newspaper said, citing notes on the talks.

    China's real unemployment rate is "relatively high" with a "relatively serious" hidden unemployment problem, according to an article by researchers at the Chinese Academy of Social Sciences including Yang Shengming, Feng Lei and Xia Xianliang published in today's People's Daily. China's yuan exchange rate is "almost at equilibrium," the researchers wrote. Maintaining stable currency rates and financing will be important to stabilizing the job market and alleviating unemployment, they wrote.

    Chinese Shipyards Face Bankruptcy on Falling Orders. Almost 500 Chinese shipyards out of a total of more than 1,600 may close because of falling orders and decreasing loans, citing industry data. About 80% of shipyards in the eastern Chinese province of Zhejiang either stopped production or ran at half of production capacity. New orders fell about 40% in the first two months of the year and by 52% in 2011, according to the report.

    Michael Pettis Revisits 12 Predictions On China.

    The Reserve Bank of Australia cuts its growth and inflation forecasts, as "labor market conditions have continued to be on the soft side" and "recovery in housing construction is unlikely in the near term." Growth is now expected to be 3% this year (vs. 3.5% Feb. estimate) with consumer prices up 2.5% (vs. 3%).

    Hugh Hendry Predicts Crisis Will Spread to Asia. Hugh Hendry, one of the hedge fund industry's most outspoken managers, has warned that the economic crisis is headed for Asia, with the region's largest economy, China, struggling under a bursting property bubble and tumbling demand for its exports

    Fed supervisors are pressuring banks, including BNY Mellon (BK) and JPMorgan (JPM), to reduce their exposure to the $1.7T market for triparty repos. The obscure credit market is where many large firms get funding for their trading businesses, and there has been informal discussion about labeling it systemically important and bolstering oversight. - Oh good, maybe they'll get it down to $1.2Tn – then everything will be fine… {end sarcasm font}

    NY AG Eric Schneiderman and Delaware AG Beau Biden are reportedly investigating banks for failing to package mortgages into bonds as advertised to investors, with sources adding that failure may have led to improper foreclosures.

    RBS (RBS): Q1 pretax loss of £1.4B, widening from a £116M loss in Q1 2011. Much of the loss came from changes in the valuation of RBS' debt. Operating profit of £1.2B vs. £800M consensus. Sets aside an extra £125M for PPI claims. Will repay next week the last of its state emergency loans and resume dividend payments on preferential shares. Shares +2.9% in London.

    BofA (BAC) is reportedly in early stage talks with lawyers representing more than 1,000 former Merrill Lynch brokers over a settlement that could cost the bank hundreds of millions of dollars. The brokers, who left the firm after BofA's 2009 takeover, claim they're owed deferred compensation.

    A California pension fund sues Wal-Mart's (WMT) board for mishandling allegations that officials knew about a bribery scandal in Mexico and covered it up. The lawsuit claims "gross misconduct by Wal-Mart's executive officers and director."

    United Airlines (UAL) is said to be putting the finishing touches on an order for at least 100 Boeing (BA) 737 planes worth as much as $10B at list prices. The order could potentially increase to 200 planes.

    GOPers flock to Roger Ailes’s Fox News office (Politico

  260. PHil, oil still going WEEEE so those greedy bastards like me who held on to their USO puts yesterday have something to cheer this morn, but do you see a bottom to this?  I want to sell and go long, what would you recommend?  Thanks!

  261. Son of a bitch!  I just lost my whole post on this friggin' laptop.  Something to do with tapping the pad and I can't get it to turn off so that doesn't happen. 

    New post will be late.

    Oil/Jerconn- The $100 line SHOULD be very solid and bullishly playable but it all depends on jobs in 15 mins. 

  262. Oil—- OHHHHHHHHHH- ha ha ha haaaa

  263. PHil, thanks on the USO advice!  Get Jabo to "cheer" your laptop maybe that will help…

  264. And they missed… welcome back mrs volatility

  265. So guys here is the dilemma: i have a May 31/39 SCO bought for 4.23$ currently at 5.90$… What do i do? Do i cash it in? or wait two more weeks? i am inclined to sell it, they will push oil up later this month, any opinions?

  266. CHK / Phil – Just a question on the new BCS. I see CHK is coming back up and we short a 18 May Call.  Should we close it while still green? 

  267. Oh LORD!  Won't you BUY ME—-- THE M FNG DiPPPP!!!
    Down 160 last night to 47 now.