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Monday Market Movement – Is Socialism Good for the Markets?

EWQ WEEKLYHollande won the French election.

In a sharp rebuke of the Merkozy austerity programs, the French went with the guy who promises to tax the rich and the CAC has rallied 2% off it's low open as of 8am – indicating that the "bad" news in the French election was more than baked into the underperformance of the French market recently.  This is a "sell on the rumor, buy on the news" event - kind of like the 100% rally the US markets had after we elected that notorious Socialist, Barack Obama

As you can see from Dave Fry's chart of last week's action in France, the EWQ dropped 3.5% in aniticapation of the Hollande victory so we're not going to be too impressed by a 0.7% bounce that retraces 20% of the drop or even a 1.75% bounce, that retraces half the drop – if that's all there is. 

None of the structural issues that affect the EU are going away so we'll just have to dig a little deeper this week and try to get to the bottom of what's really driving the International Markets so get ready for a lot of Global Macro talk as we watch our own Big Chart levels to see what sticks and what doesn't as we test those Much Hold levels to — well to see if they hold, of course! 

S&P 500 futures gapped down 1% at the open following Hollande's victory in France and a poor showing by Pasok and New Democracy in Greece (regional elections in Germany didn't go Merkel's way either). German Dax futures were  -1.3% (now -.5%) and France's CAC 40 -1.5% (now +0.5%). The euro gaps down 70 pips to $1.3009 vs. the greenback, and £0.8059 vs. sterling, the lowest level since late 2008.

Exit polls in Greece show the 2 pro-bailout parties garnering just 32% of the vote, maybe not enough to form a majority government. It's a shocking fall for Pasok and New Democracy, which together claimed nearly 80% of the vote in 2009. "The exit polls confirm … there's no political consensus for the kind of reforms Greece must implement if it wants to remain in the eurozone," says Nicholas Spiro.  This is not something that will be resolved quickly, as long as the future of the Euro is in quesiton - we are going to continue to see volatility in the markets

Riber Hansson - Sweden - Merkel get a new dancing partner - English - France, Sarkozy, Hollande, President election FranceAt Berkshire's annual meeting this weekend, Warren Buffett told the tens of thousands of shareholders packed into the CenturyLink Center in Omaha, Nebraska, that while America’s financial institutions were far healthier than during the financial crisis, he still feared for the health of Europe’s banksHong Kong (-2.3%), Japan (-2.5%), and Australia (-1.5%) fell sharply this morning, with about half the decline a catch-up to Friday's big drop in the West, and half a knee-jerk reaction to today's election results in Europe.  

Kick over the wall              cause governments to fall
How can you refuse it?
Let fury have the hour, anger can be power
D'you know that you can use it?The voices in your head are calling
Stop wasting your time, there's nothing coming
Only a fool would think someone could save you

This is not the end folks, this is only the beginning of a change that is sweeping across the World – these are stunning defeats of the status quo by people who are finally as mad as Hell – and they are not going to take this anymore.  Brushing off what's going on in Europe as isolated incidents is a big mistake - but it's one the Corporate Media in the US is already trying to shove down your throats as the focus on the minutia today, rather than on what's really going on in the World

DBC WEEKLYGeman Factory Orders, for instance, were up 2.2% - IN MARCH!  To hear it on CNBC, you would think they can't make stuff fast enough to keep up with demand but it's still DOWN 1.3% from last year.  That's the story you'll hear about today.  What you won't hear is that Spainsh Industrial Production FELL 7.5% in the same month, their biggest declines since October 2009. 

US Consumer borrowing rose by $9.65Bn in March as our own consumers struggle just to put gas in the tank.  Berkeley's Laura Tyson is worried that if the workforce doesn't keep up with technology, wage inequality will widen further, structural unemployment will increase, and America will be less competitive. More must be invested in training and education, she says – but projected cuts at all levels of government threaten the relevant programs.

These problems don't get fixed overnight.  We'll see how resiliant our markets are going to be this week in the face of adversity but we'll mostly be watching those technical levels and we're not going to be impressed until we see some real progress.

Meanwhile, be careful out there!

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  1. Good Morning!

  2. Oil Lines

    R3 – 101.32
    R2 – 99.78
    R1 – 98.42
    PP – 96.88
    S1 – 95.52
    S2 – 93.98
    S3 – 92.62

  3. Speaking of austerity, good charts in the NYT this weekend:

    So much for big government and stimulus…. The private sector is doing better under Obama and Clinton than under anyone named Bush. But government spending is holding back total growth!

  4. Holding back growth – All but Homeland Security…..

    Not a great place to grow government…..

  5. VRTX @ $60

  6. Let’s hope it hits S3 today!

  7. Nice austerity articl SJL – also great job keeping up to date on the trades and trade ideas.

  8. Holy Crap…..VRTX.  That was unexpected.

    PP for today:

  9. Alrighty Phil, expecting big things out of you today! Looks like I’ll be fighting a custody battle from over here in Kabul…. No pressure! Lol

  10. If u had to put 20k to work today what R the options

  11. Pharmboy
     What do you think of Physicians Formula Holdings Inc. FACE?

  12. Guess – there is nothing to see – move along folks – Euro is not going to fall apart. 

  13. Phil – I'd be happy to own AAPL at $400, so I'm selling a Jan $450 put for over $53…what say you?

  14. I am all for an end to austerity – the Europeans should print like mad – so we don't have to shoulder the whole thing ourselves – just does not seem positive for Euro 
    The entire region is in recession – its the double dip that everyone was so worried about last year. Its here folks

  15. Jan 2014, that is…

  16. FACE/qc – not really my area.  They appear to be a cosmetic company (LIZ type).  Revenues are growing, albeit slowly.  ROI is paltry for a company that is growing….not sure what market they are segmenting (like MAC, or Liz, etc).  Yikes, I have gone a few too many times with my wife to buy that stuff…. :)

  17. AAPL was down close to $4 in premarket and now trading up.

  18. AAPL – is this the start of the reversal?  Lflan – any thoughts.

  19. Average cost for the TNA calls – $1.75

  20. Phil – On the PCLN puts, you mentioned selling 3 of them at $16 and keeping 2 on Friday, but when you posted they were at $13.50 or so and topped at $15.30 at the end of the day. Too late to ask and do something then!

  21. Good morning!

    Dollar down to 79.73 as Euro kicks back to $1.3046 and Pound up to $1.6161.  Yen at 79.89 and EUR/CHF right back to 1.2012.. 

    Oil (/CL) fell right back off to $97 and is right back to bouncing again at $97.35 but not as strong a bounce as before.

    I would not want to draw any conclusions from this morning's action.  Could be Europeans running for relative saftey or Asians going bargain hunting or people getting optimistic due to lower oil prices but nothing major has changed at all and the Fed is not on the table just because Europe had elections – they have to show us a lot more than this.

    So, as is often the case on a Monday – it's a watch and wait kind of day. 

    At the open: Dow -0.4% to 12986. S&P -0.38% to 1364. Nasdaq -0.48% to 2942.
    Treasurys: 30-year +0.11%. 10-yr +0.06%. 5-yr +0.03%.
    Commodities: Crude -1.29% to $97.22. Gold -0.28% to $1640.65.
    Currencies: Euro -0.23% vs. dollar. Yen +0.04%. Pound -0.06%.

    Market Preview: U.S. stock futures make back earlier losses and large parts of Europe turn green after the anti-austerity election results in France and Greece initially sent markets lower. But the results weren't unexpected so may have been priced in anyway. S&P benchmark -0.3%. AIG -6.8% on the Treasury selling a stake in the insurer but Vertex is +51% following a positive Phase II trial. Later: Consumer Credit, Fed's Lacker

    Spanish industrial production dove 7.5% Y/Y in March vs a 5.3% decline the previous month, and a 4.4% contraction the month before that. A longer-term chart of the series.

    Spain may consider pumping government money into the banks, says PM Rajoy in an apparent change in policy. First on the list may be Bankia, which just wrote down a chunk of its real estate assets, and is considered one of the nation's weaker banks. Shares are off 4.8% as Madrid rallies, +0.7%.

    The final tally in Greece shows the establishment New Democracy and Pasok parties garnering just 32% of the vote and 149 seats in parliament – 2 less than necessary to form a coalition. The neo-Nazi Golden Dawn party won seats (21) for the 1st time, more than 50% of what Pasok took. New elections may be on the agenda for June.

    June elections in Greece are already being talked about if a governing coalition can't be formed following yesterday's voting. Citigroup raises the odds of a Greek eurozone exit, saying no matter what happens, putting required budget savings into place by June's end is unlikely, leaving the Troika no choice but – at a minimum – to delay any further funds.

    With Intel (INTC) expecting another record year in 2012, the company will increase its quarterly dividend by 7% to 22.5 cents a share, starting with the payout that will be declared for Q3. CEO Paul Otellini says the company is experiencing "strong demand in our core business and significant progress in smartphones and other new growth areas." (PR)

    India has reportedly joined the U.S., the E.U., and South Korea in launching an antitrust probe of Google (GOOG). The probe is said to focus on AdWords, Google's bread-and-butter search advertising platform, though other services could be added in time. Google has a dominant share of the Indian search market, and some estimate it might account for 50% of all online ad spending in the country.

    Told you so!  CNNMoney's David Goldman talked with 10 Verizon sales reps, and found all of them recommending he buy a 4G LTE Android model instead of an iPhone. Others report similar experiences. Verizon probably isn't motivated by hostility towards Apple (AAPL), but by an interest in offloading its surging mobile data traffic onto its high-capacity LTE network. It recently mentioned all of its future smartphone releases will support LTE.

  22. Coulda, shoulda, woulda:
    Two mistakes this weekend:  1) Not betting on, "I'll have another", 15 to 1,  in spite of a strong liking for the pony, and 2) setting a buy of the /NQ at 5.00 lower than when the reversal began to continue with the PHILosophy to B T F D.

  23. Oil spot on your PP St Jean!

  24. Today's numbers:

    Switzerland Unemployment / 3.1% (3.1% expected) – We should all be so lucky!
    Switzerland CPI / 0.1% (0.2% expected)
    Euro-Zone Sentix Investor Confidence / -24.5 (-15.3 expected)
    Germany Factory Order (YoY) / -1.3% (-2.8% expected)
    Canada Building Permits (MoM) / 4.7% (-1.5% expected)

    Mixed numbers this morning. A slow week for data in the US, but lots of numbers coming our way by Thursday from the rest of the world.

  25. Did I miss something or was there no Stock World Weekly this week?  Derby and Oaks weekend is always a lost one for me but I was looking for it last night without success.

  26. Oil / Lionel – But with a bearish bias now…

  27. rperi /SWW – Subject of the email was: PSW Report: Stock World Weekly: Any Way the Wind Blows sent around 0830 Sunday.

  28. rperi/SWW
    There WAS a SWW, which I was able to get to through the email sent me, but I cannot seem to find it anywhere on the site (since I deleted the email).  It seems that it was not posted on the main page as it usually is…it was a good one too (read every word) but now I can't refer back to it…maybe Phil or someone can fix it for us?

  29. rperi/SWW, I didn't get the email either.

  30. By the way congrats on the French election prediction.
    Here are my predictions for the French elections this weekend:
    Hollande 52%
    Sarkozy 48%

  31. If anyone looked at my Kentucky Derby predictions last week:
    My prediction for the Kentucky Derby:  I'll Have Another, Bodemeister and Dullahan.  Think it might even come out like that straight.

  32. Buying substantial positions in Banco Santander and BBVA.      They both have very extensive international operations, and seem [to me] likely to be principal beneficiaries in Spain for any loosening of monetary policy/recapitalization of Bankia/other central government efforts to backstop the Spanish real estate disaster — all of which appear to be in the works.  Hollande's election should make it easier to face down the Germans in undertaking these measures, since Berlin is making accomodative noises all of a sudden.

  33. wow seems like the world is holding its breath, including this board!  :-)

  34. FTR near 3.50….
    Phil – time to buy?

  35. French Elections / Lionel – I had the feeling that it would be closer that polls indicated. Final numbers with 54.6 and 48.4 so close enough I guess… Next test for my predictions will be for the US presidential elections!

  36. Now silver drops hard.  I knew that was strange.

    Well, we certainly don't have a rally here – just not as much as a sell-off as we thought.  Oil failed to hold $97 that time – will be fun to see where the bottom is there.   Gold $1,633 and falling.

    Expectations/Jrom – Good luck with custody.  Not much I can do about that but I think watching and waiting is still my best stock advice of the day.

    $20K/Spiyer – I would keep it in my pocket and wait to see something more obvious develop.

    PCLN/Jabob – That got them to $755 for about 2 seconds and now back to $736 - a good sign that people are sick of them possibly. 

    AAPL/Jerconn – You know I love that trade – especially when the VIX is near $20 and you know you are getting a good price for the short puts.

    Here/Samz – I agree.  I have no idea what people are buying into at the moment.

    $5KP/TNA – Let's buy back the $63 TNA caller (.15) to be flexible in case there is a bounce to exit into (doubt it).

    PCLN/StJ – I'lll have to get back to those next.

    Coulda/Flips – Maybe you will get a chance to buy oil for a bounce off $95 today.

    SWW/Rperi – They have a problem with the system and we're going to revamp the whole thing at this point.  New format was not working anyway.

    FTR/1020 – Just had earnings, which were not taken well but, of course, I still like them.  I think it's a good time to sell 2014 $4 puts for $1.25 for a net $2.75 entry ($1 off) as a first stab at them. 

  37. 52.6 France is socialist
    54.6 and France is communist – Putin election style!

  38. LLY – everything down EXCEPT my new short. grumble.

  39. Holding 13000 and 1368 very well.

  40. Morning Phil, is VLO becoming interesting again at $22 ? the options seem yummy.

  41. APPL / FYI
    Sold another Jan14 390 put for 33.50.  I'd love to buy AAPL for 360 (my avg cost)

  42. lolo…No, doesnt seem like AAPL reversing to go back up.   I have no interest in playing it long right now.  

  43. LLY/Pharm – no stake in VRTX i'm finding yet, but here is their portfolio of JVs.  something kick them up or just the bots messing with us?

  44. Lflan – one AAPL play could be interesting (from Andy Zaky) is the 2014 $700/800 bull call spread for $20…

  45. Pharm-- sold some vrtx puts on your suggestion—bought some back today—-thx

  46. Phil – any other plays you like on FTR? I remember in the past you mentioned you worried about them getting bought out, do you still feel that is the case? Thx… I doubled down on my 2014 $5 calls for .15… Risking a few hundred on the hopes they do get bought out for 6-8$ a share…

  47. jerconn
    Re: AAPL – I like the 2014 $50-$550 Bull Call Spread with a $380 Short Putter – Also net $20.00 and 100% in the money!

  48. Pharm  -
    Just wondering if you there there are any good trades in your area that might be good to get into today?  I'd like to start adding some of your names to my portfolio.  The last article you posted referenced stratgies on: BMY, PFE and MRK in the SWW.  But for some reason I can't get access to it.

  49. jerconn
    Sorry meant to say $450 – $550 Bull Call Spread

  50. Anyone heard from JRW lately?

  51. cs – nice AAPL play…actually I want to sell the $450 puts and buy a spread for a little less than $20…

  52. Euro Stoxx 50 +1.5%
    German DAX +0.1%
    French CAC +1.7%
    Spain IBEX  +2.7%
    Italy MIB +2.6%

  53. FAS Money – Let's lock in our gains by selling 2 May $91 puts for $1.80.  That insures us of collecting $400 no matter which way it goes and our XLF range is roughly $14.50 – $15.50, which is about right.

    IWM Money – As we only took the July short calls to take advantage of that dumb spike up, let's put a stop on them at $6.  Like FAS Money above, let's lock in our $2 gains by selling 2 May $51 puts for $1.70.

    $5KP – We spent a lot of money (in the form of taking losses) by rolling to June.  Now we have a lot of waiting to do:

    • DMND – Time is running out on that one but up today means we can give them another.
    • GLL – We took some off the table and will wait on the rest.
    • EDZ – Looks fine
    • SQQQ – We'll need AAPL to stay weak to get paid on this one.
    • TNA – Can't be fancy like $25KP so we'll just have to wait and see.

    $25KP – Doing just what it should do.  Well-balanced and all we have to do is pick the fruit when it's ripe.

    • DMND – On track
    • XRT – I will be pissed if we have to roll it again.
    • BBY – Waiting on earnings.
    • SCO – At $39.50, no point in wasting $50 bucks to buy these back early.
    • SQQQ – We're giving up on these tomorrow either way as we don't want to own them post-split.
    • FAS – Let's buy back the Oct $115s ($8.75) as they are up $6,000 and, if FAS keeps going lower, we should have time to re-cover at a reasonable price.  If FAS goes up on more Fed excitement, then we're much more bullish with no effort other than taking our profits – get it?
    • GLL – Waiting game
    • CHK – $17 is disappointing but we're in the $15s at net $1.72 on the bull spread and we're comfortable rolling the short puts if we have to.
    • PCLN – F these guys – we're going for earnings!
    • EDZ – Looking better.
    • SQQQ – Let's take .90 and run on the bull call spread and buy back the $11 puts for .10 (last sale) as it's plenty and who needs the hassle?
    • TNA – As with SCO, no need to waste $130 buying those back early.
    • LNKD – Pulling back below $114 – we may get this one yet! 

  54. LLY – June 40 puts are only down 7c…what's the big deal with that?  That investment arm is something that many big pharmas are starting, esp. those with lots of cash, but no pipeline.  Those companies are start ups, not usually established, publically traded ones (ie VRTX)….that tells me that they are desperate b'c they cannot do the internal innovation themselves.  Now, this is the new paradigm in the industry, where biotechs will fill the pipelines of the engines, so the premiums for big companies to pay to 'have' something that appears to work in early clinical stage trials are going to be taken out….or licensed for big money.  Think about it…..GILD paid 11B for VVUS….BMY paid $2.5B for INHX….that is crazy money for all the competition in the HepC field.  Thus, SGEN, VRTX, EXEL, CRIS, YMI, INFI, PLX, etc are all companies we want to hold for longer term.  There are more, so this list is not exhaustive.

    VRTX – I am out of all sold puts…that was a very nice gain.  The study was successful in a few patients…now comes the bigger, harder trial. 

  55. Iflan  JRW good question made money by the mil

  56. Phil  hope you enjoyed (or are enjoying) Vegas!
    and as usual..
    FU PCLN!!!!

  57. yodi….He may just have gotten bored with posting, or even with trading.   Anyway, he certainly is master of the TNA/TZA day trade. 

  58. none of us know how jrw did trading..not to take anything away from him at all but making 3-10% a day on a modest portfolio means you own the world quickly..those returns did not seem plausible..but still he could have bot an island somewhere and is laying low to escape the tax man!…
    euro the most manipulated of all the manipulated…'anti euro candidates make gains in local italian elections…" BUY THE EURO!!

  59. FAS Money – The May 91 Puts tooks a dive in the last 10 minutes… Ask is now $1.70. Here is the new positions for both Money portfolios.

  60. So, two weeks ago, I posted a follow up on some of the Pharm companies, including MRK.  Their flagship in the clinic is anacetrapib, a CETP inhibitor (for cholesterol)…and now there are two – MRK and LLY (see below).

    Roche abandons efforts to move the heart drug dalcetrapib to market, following poor results from a late stage study. The move follows a similar failure last week by Pfizer in the category, and analysts predict negative sentiment towards other such drugs in trials, such as Merck’s anacetrapib and Eli Lilly’s evacetrapib. MRK -0.8%, LLY -0.7% premarket.

  61. Iflan my question did he really trade?

  62. I hope everyone got their CNK when Jackie picked it last week at $22.75 – now $23.64 and up 2.4% today.  DIS was another pick up hers, up 1.25% this morning but not much of an overall move off her $42.75 entry as they had a big drop Friday. 

    VLO/Micro – I know it's painful to wait but we usually buy them around $17 and get out around $22.  I'm not sure that this time is different.

    FTR/Jrom – Only regulations stand in the way.  FTR is a good size and it's hard for someone to buy them as it then blocks another purchase they may want down the road although, as it gets cheaper and cheaper – at $3.6Bn, they are down to about $1,000 per subscriber but they reach 3x that many in land lines so it's like buying them at normal cost and getting the potential for 6M more customers to market to for free.  Cash flow in Q1 was $253M – so $1Bn a year for a $3.6Bn company is just silly, isn't it?  They are about done converting their acquisition and, hopefully, now they will turn to marketing as they can make very attractive offers to their incrimental customers. 

    Excluding $35.1 million for integration costs and $6.5 million for severance and early retirement costs, operating income and operating income margin for the three months ended March 31, 2012 would have been $250.1 million and 19.7 percent, respectively. Excluding $42.2 million for integration costs and $1.1 million for severance and early retirement costs, operating income and operating income margin for the three months ended December 31, 2011 would have been $273.8 million and 21.3 percent, respectively.

    Free cash flow, as defined by the Company in the attached Schedule A, was $253.2 million for the first quarter of 2012. The Company's dividend represents a payout of 39 percent of free cash flow for the first quarter of 2012.

    So I sure like these guys long-term.   I think they are simply executing their plan following a major acquisition and people are impatient waiting, which is what makes them such a great opportunity for a patient investor. 

    Rather than speculate out of the money, I like the 2014 $3 calls at .75, selling the $3 puts for .60 and that's net .15 on the $3 calls with the stock at $3.66 and worst case is you own them for net $3.15.  This way, you capture 100% of any move up over $3.15 (so you are up .52 on day one!). 

    Vegas/Jabob – Yes, I can get very used to this schedule!  Too bad I have to head back tomorrow.  A 24-hour town suits me very well.

  63. Good Op-Ed from Cullen Roche on MMT.

  64. yodi that is a great question…i went back and forth with SOMEONE about this when i first came onto the board..and then realized that if there are one or two walter mittys on the board who gain some better sense of belonging or self because they can through their faceless musings claim to be a wonderous maven..good on them..for those of us who trade for a living..we know if you lie about your results you can never make money…its a v raw game we play

  65. Phil – sorry I missed a few posts. I have the SQQQ June $10/13 BCS. Do you recommend selling this today? Thanks

  66. Hey all concerning JRW. First he did buy a villa in Monaco. Second he likes to float around being served private meals with a loved one, sometimes there is no e connections out in the ocean. Third making his claimed 500% per year is doable. I miss the mark because I am not able to not do anything for the full hours needed. I have tried to get a partner to take the watch when I have to take care of myself but so far everybody sees my set up and gives up without a try. Seems when I leave the watch things go against me and when I close out first I miss the big move of the day and that's why I want a helper. JRW has also said he has a student that helps him while learning and that makes it even more doable. Opinions are like a  h    , everyone has one but I have proved to myself that you can do it.

  67. 11:07 EDT

    PCLN data points suggest upside in Q1, says Piper Jaffray

  68. angelcur,
    Very true the only one who actually still tries to follow his miracle trades is shadowfax and he is for real but I think he is not taking bags of money home. Daytrading you do like going to the casino put only 20$ in your pocket

  69. 07:46 EDT

    PCLN price target raised to $810 from $730 at JPMorgan

    JPMorgan expects to report strong Q1 results on Wednesday, May 9, and raised its estimates and price target for the company ahead of the report. The firm keeps an Overweight rating on the stock. :theflyonthewall

  70. Well, now you know that JPM wants out of PCLN.  If EXPE and TZOO did well, we can only expect that PCLN did as well…how much is priced in though?

  71. It is pretty amazing that PCLN isn't higher with the pumping as well as the market recovering, right?

  72. shadowfax/ JRW
    I'll be a student for his style. I trade it, but not nearly with the results of JRW! Learning by watching him enter on a setup and most important, how he stays in the trade until the "Decisive" break up or down on the 8 EMA on the 3 min chart is what I need to get good at!

  73. SQQQ/ Phil- WOW! Great rtns. Thank you!!

  74. FAS Money – Would you recommend getting started with FAS Money right now with the current position, or should I wait?

  75. Pharm,
    can you elaborate on your USO long position that you entered in on Friday? Do you plan to DD or roll now?

  76. I thing angel, yodi are the same person

  77. Phil / SQQQ – As with Newt…  Thanks!  That was almost a double.

  78. morx no but i will take that as a compliment..also i believe phil has met both of us tho not at the same time!

  79. Morx How can you misstake a German?

  80. Shadowfax,
    I'd be willing to work with you remote. I have the time and have a lot to learn.

  81. Phil and to all in the group if you had a simple and good idea on the production improvement of the Ipad how would you go about it?

  82. USO long – well, I did not get filled on my USO long, or any position for that matter.  I had orders in for the 36 calendar put (may/june) and the may 37/38 bull call spread for a bounce up.  I still like the bull call spread for 40c, b'c of the hammer forming on the candlestick chart, as well as the 200d MA.  This is a swing trade only.

  83. PCLN value
    I have an opinion on this moon rocket that can be dismissed but worth a thought. They may keep this up for a while longer but in particular concerning airlines as soon as the airlines discover how much they are paying them to use their computers as they should, that gravy train will end. This I know because I set up and installed a bunch of them. Next I also did car rental systems and they have figured out how to make it work for them, they even made big business of offing the old cars. I have no idea about hotels and the rest but it seems they are not interconnedcted like cars and planes. If they figure out that is a mistake that could help all, then I question why PCLN when travel agents are going broke. I have not looked into the books like Apple but soon may as I want to be in on their crash if it happens.

  84. Pharm – what play do you like on AVEO right now?

  85. yodi however greeks and germans are being viewed in a similar circumstance right now!

  86. Yodi – grandparents on PaPa's side were both from Germany. Came in the late 1800s. Maybe were cousins! Can i come visit for a while?

  87. Pharm – sorry, forgot to ask about ARNA. Do you know when they release their information before the review on the 10th? Is it tomorrow? I just remember last time before the review they released the report and ARNA went from $7ish to $4 a couple days before the review. Is this same event happening tomorrow? Thanks.

  88. Morx any time but you need to hurry will be in Germany in June to support the Greeks

  89. Doing a bit of daytrading in the AAPL 570 calls long.

  90. Using the July calls

  91. France – following argentina and bolivia's actions, i wonder if Spain is a little anxious about any assets they have in France with the election of Hollande.

  92. Morx: I took a DNA test [Genbase], my paternal grandparents having been born in Italy, and found out they were actually Austrian.  Since they came from an extremely castellated mountain pass area [Vall d'Aosta] and major trans-Alp route, I can only assume great-granddaddy was a homesteading soldier.  What I found out about my wife was even more interesting.

  93. SQQQ/Crussell – Well they are reverse-splitting on Weds so it is best to get out and we can re-enter once they have new shares. 

    PCLN/Jabob – Will suck for us if they have good earning but I think it's so expected of them that it will be hard for them to beat. 

    You're welcome Newt and Jafaw! 

    FAS Money/Palotay – I always like the current position — otherwise it wouldn't be the current position!  Keep in mind that we are aggressive there, not balanced but, at this particular moment, there's good balance in the position.  I love FAS Money as it's main goal is simply to sell premium as much as possible and THAT, people, is how you make 500% a year – letting other suckers who think they can make 500% a year take all the risks and all you have to do is wait for it not to work out for them.

    Angel and Yodi – I haven't seen them in the same place at the same time!  8)

    Ipad/Yodi (or Angel?) – I would install solar cells around the front black space to boost battery life by 10% or so (maybe more).  I would make the case less slippery, have it do a fingerprint/palm ID or facial recognition with the camera for ID (just cool) when it turns on.  Voice would be good too but you can't use it all the time.  I'd add a 2nd speaker for stereo and consult with Bose to see if the quality could be improved.  More memory would be nice too.

    Dow Futures are up over 200 points from their open last night.

    USO/Pharm – I don't think that's resolved either.  I think we're very bouncy under $98.50 but I do think we'll see $95 before $100 again.

    PCLN/Shadow – It is my understanding that they do not get a commission, they buy an allocation of rooms at steep discounts and then sell them off to the highest bidders so they make a lot more than you'd think per booking BUT, as the industry gets busier, I imagine their supply of cheap rooms and flights to sell dries up as well and so I expect their margins to shrink and that, even if they are rockin' sales, can really freak out investors.  If you can't find an empty seat on a plane – where would PCLN be getting discount seats?   If you can't get a hotel room because they are full – what is PCLN able to negotiate.  Notice their massive and expensive TV campain very suddenly disappeared – not just Shatner but all their ads – sounds like a money pinch to me, not what a Momo company does when it's in growth mode. 

    VIX down below 18.50 already – all must be well.  TLT holding $118 so far so a little bit of nerves still there.  Dollar shoved down to 79.67 but this is about where we finished on Friday (as are the indexes).

  94. ARNA – Don't know, but PDUFA is June 27th, and I think they release a few day ahead of that. 

    AVEO – July 12.5 calls and puts sold.  That's what I am in.

  95. Phil you should not mix up your members I am sure they pay membership fees at different times. So no one would pay you twice! 
    Ipad all good but not as good as mine!!!! So how would one go about it?

  96. 14real chasw
    If you have been paying attention you will notice that although you can miss false starts using the 3 min confirm it will also catch you just as it turns south on you. Phil advised me to only play the major support and resistance lines. It works great if you know when the move will be large but I am no good at telling the difference and the computers put out fake moves and will get you way too often. Why I want help is the indicators keep changing, like sometime the dollar, oil, SMA, XMA, order desk, or tick. It's you or me against a bunch of programers and their better programed computers. The computers are programed to find all the systems out there. I do everything living by myself and have over used too many just because hospitals will not let you go home. If they were at least on time instead of expecting everyone to have people with nothing to do but wast time waiting for nothing, it gets old really quick when these people don't actually like or want to help you as there has to be someone else, but sometimes there isn't! Yesterday I was complaining that I was going to miss big profits today at the open because I went cash Friday but it only went down a little and now it's green. My opinion is although the media was preaching doom because of liberal socialism in Europe the money people know that that actually works where austerity fails by volume and velocity. Giving money to the little people always get spent, hording by the rich and especially them refusing to give the underdogs a chance assures that the system will fail.

  97. GLW
    Just wondering if anyone got into this trade?  Or if there are any comments.  I'm hunting cause it's a slow day :)
    "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. "

  98. Interesting article by Jeff Saut over at Minyanville, tried to post but no joy. I did not know that the Wizard of Oz was written as an allegory on social and economic conditions…

  99.  11:00 AM On the hour: Dow -0.34%. 10-yr +0.08%. Euro -0.28% vs. dollar. Crude -1.9% to $96.61. Gold -0.67% to $1634.25.

    Most European markets close sharply higher, reversing post-election, knee-jerk dives at the open. Truth is, there was little surprise in the results – maybe the bigger news is Spain's first move towards a bank bailout. Stoxx 50 +1.6%, Germany +0.1%, France +1.6%, Italy +2.3%, Spain +2.8%, U.K. closed. Euro -0.2% at $1.3055.

    12:00 PM On the hour: Dow -0.27%. 10-yr +0.03%. Euro -0.24% vs. dollar. Crude -1.09% to $97.42. Gold -0.4% to $1638.65.

    1:00 PM On the hour: Dow -0.1%. 10-yr +0.02%. Euro -0.18% vs. dollar. Crude -1.19% to $97.31. Gold -0.29% to $1640.35.

    2:00 PM On the hour: Dow +0.02%. 10-yr flat. Euro -0.21% vs. dollar. Crude -0.74% to $97.77. Gold -0.41% to $1638.45.

    BofA hikes its year-end target for the S&P 500 to 1450, citing two key stock indicators – too many sell-side strategists turning bearish, and a rising number of upward earnings revisions – turning much more bullish since March. Concerned that risk premiums could stay high in the short term, Savita Subramanian advises: "Be an investor, not a speculator."

    Unbalanced towards the risk side," is how John Hussman continues to describe the market's current risk/reward tradeoff. His indicators – among them institutional crowding into "risk on" trades, "near panic" levels of insider selling, and a burst of new stock issuance – are at about the most extreme negative levels he's ever observed.

    Rents are surging from New York to L.A., as the average monthly U.S. rent for apartments hit an all-time high $1,008 in Q1. It makes sense: Demographics are favorable for rentals as a large cohort moves into the 25-to-35 age group, people who have lost their homes to foreclosure or short sales turn to renting, and some people have probably stopped doubling up.

    Yep, everything is just fine….  Angela Merkel leads a chorus of German voices in rejecting any thought of softening austerity in the eurozone despite the election results in France and Greece. Instead, Germany reckons Francois Hollande will soon have to backtrack on his pledges and kowtow to the status quo. "Germany is not here to finance French election promises," growls one Merkel ally.

    Little time is wasted in France, where Francois Hollande will be inaugurated as President next Tuesday and plans to head to Berlin shortly after to meet with Merkel. After that, it's off to the States, where he will meet President Obama before a G-8 summit, and then Chicago where he will detail his plans to withdraw French troops from Afghanistan.

    New Democracy leader Samaras has 3 days to form a governing coalition in Greece – unlikely given the election result - or a new polls could be called as soon as June. The finance ministry says the government will run of cash by June's end if no government acceptable to Brussels is in place. Here we go again.

    After just a few hours, New Democracy chief Samaras says he is unable to form a government in Greece. Next in line to try is the 2nd place vote-getter – the Radical Coalition of the Left (Syriza) – and its leader Alexis Tsipras who has promised to freeze payments to creditors and redo the bailout package.

    A blow to PE firms investing in China, Beijing rules any funds will be ruled as foreign unless all of their money comes from Mainland investors. The ruling specifically mentions a Blackstone ((BX) fund, of which it was hoped would be granted "local status." "If you're still treated as a foreign investor, then you're playing 2nd-fiddle," remarks a lawyer.

    Being decided in D.C. over the coming weeks is the Qualified Mortgage rule, promising to profoundly affect mortgage finance. Without a so-called "safe harbor," any future foreclosure could mean a litigation nightmare for lenders, meaning they're going to stop lending. Lew Ranieri says two "well-respected" mortgage companies are looking to sell, citing "regulatory uncertainty."

    FT's John Dizard sees parallels between the housing bubble and the shale gas boom, where the biggest producers are more land/lease speculators than energy companies, in how they seek to make money – and they’ve been speculating in a highly leveraged manner. Yves Smith finds it "sad" that finance is now based on "flawed incentives and risk sharing that encourage the manufacture of bad loans."

    Shares of United Airlines (UAL) move up 5.9%, helped in part by comments in Barron's over the weekend suggesting that the carrier could be the biggest beneficiary from industry consolidation that could transform the industry from a hyper-competitive industry full of eager players to an oligopoly.

    Benchmark crude oil prices could drop by another $7-$10/bbl in the next few weeks as "economic data out over the last week has further confirmed we likely have not seen the worst of the situation in Europe and the recovery in the U.S. is tepid at best," according to one commodities pro. But expectations that the weaker economic outlook may build the case for more stimulus could limit any move lower.

     "You have stretched the rubber band … as much as you can," says an analyst, not expecting utilities to switch from coal to natural gas much more after coal accounted for just 37% of electricity production in February (46% a year ago). Cheap gas can actually hurt some power producers as it drives down wholesale prices faster than costs.

    Abu Dhabi airline Etihad deals a new blow to Airbus (EADSY.PK) by further reducing an order by seven planes, or $2.3B, for the A350-1000, a competitor to the Boeing (BA) 777. Etihad had originally booked 25 jets but now only wants 12. Meanwhile, Boeing has been racking up the orders for the 777.

    IMAX (IMAX +1.3%), Dolby Laboratories (DLB +2.3%), and RealD (RLD +0.7%) all trade higher on enthusiasm stirred up by strong movie ticket sales for blockbuster The Avengers. One of the reasons Disney's movie is blowing past the impressive numbers rung up by The Hunger Games is that close to half of the tickets sold are for the higher-priced 3D editions – helping shine a spotlight back on 3D-related companies.

    Nomura analyst Robert Fishman says Buy-rated Cinemark (CNK +1.9%) is "uniquely positioned" to record a smashing 2012 U.S. box office haul, while the company's Latin American theaters provide a shield against long-term domestic trends. (Earlier: earnings)

    Crunching The Avengers numbers: Bernstein Research's Todd Juenger forecasts that Disney (DIS +1.5%) will add a penny per share to earnings for each additional $60M above forecasts its multi-superhero movie generates in ticket sales. Though it's a conservative estimate that doesn't factor in the full effect of the company's ability to wring out merchandising and distribution sales or the value of future sequels, it adds credibility that Disney's strategy of making fewer films loaded with characters than can be highly marketed could work.

    Shares of Green Mountain (GMCR) slip another 2.2% to fall to a lowly $24.56 as the Monday morning quarterbacking continues on how sell-side analysts could miss the boat so badly on GMCR with seemingly alarming questions on the firm's accounting and sales growth hanging in the wind. While Josh Brown already cut analysts to sheds with his take last week, Jeff Reeves can't help making hay out of Dougherty's less-than-impressive PT cut to $80 in advance of GMCR's earnings bombshell.

    Shares of PetMed Express (PETS -18.9%) fall apart despite the company beating the estimates of analysts with both lines of its FQ4 report. Investors appear to be tripping up on the pet pharmacy's negative earnings growth and shrinking margins.

    Cree (CREE +4.1%) rallies after announcing an LED lighting control system in partnership with Lutron Electronics. The solution, evidence of Cree's ongoing efforts to target business customers willing to pay the higher prices attached to LED lighting products, will be available this summer. (PR) (previous)

    IBM bolsters its commitment to Linux, which has been rapidly growing its server share, by introducing a line of servers based on its Power CPUs that will exclusively run the open-source OS. Big Blue is hoping the performance of the systems will convince enterprises to accept their higher cost relative to Linux servers running on Intel (INTC) and AMD CPUs. IBM partner Red Hat (RHT) has to be pleased with the development.

    Expect Cisco (CSCO) to deliver a solid FQ3 report on Wednesday, says Sterne Agee's Shaw Wu after conducting supply chain checks. Wu, long bullish on Cisco, only expects in-line guidance, but continues to view Cisco as a major turnaround story, and thinks it trades at less than 7x 2012 EPS after backing out $6/share in net cash.

    More on Facebook: Though JPMorgan considers Mark Zuckerberg a "risk factor," his unique leadership style is an asset to his company, argues Henry Blodget. Some of the hallmarks of Zuck's style: a laser-like focus on optimizing Facebook's products; a willingness to "break" existing products in order to roll out new ones; and an ability to both acquire top talent and let go of old hires.

    Rural telco Frontier Communications (FTR -6.2%) makes new 52-week lows after its Q1 report revealed the decline in its wireline voice revenue base to be accelerating. Local & long distance service revenue fell 10% Y/Y to $572.1M, and switched access & subsidy revenue fell 11% to $148.3M. In addition, data & Internet services revenue fell 2% to $450.7M, and broadband subs grew only 11K Q/Q to 1.78M. (PR)

    AT&T (T) is expanding its Windows Phone (MSFT) lineup by adding Samsung's (SSNLF.PK) Focus 2, a mid-range 4G device featuring a 4" display, 1.4 GHz. CPU, and 5-megapixel camera. The Focus' specs aren't as impressive as those of Nokia's (NOK) Lumia 900, the subject of a massive marketing campaign, but it's also cheaper at $50 with a 2-year contract.

    Apple (AAPL) is planning to release a $799 MacBook Air in Q3, claim Digitimes' sometimes-reliable sources – the cheapest Air currently goes for $999. MacBook Air sales have been taking off, though overall Mac sales have been hurt by iPad cannibalization. Digitimes adds Intel (INTC) is trying to bring prices for its MacBook Air-like ultrabooks down to $699. (previous)

    Apple's (AAPL) much-rumored TV set will resemble a much larger Cinema Display, a "well-placed" source tells Cult of Mac. In-line with earlier rumors, the source also claims the product will feature Siri, and an iSight camera to enable FaceTime video calls.

    Three lunchtime reads:
    1) The only solution to the eurozone crisis
    2) The 'hierarchy of needs' – and grocery-anchored REITs
    3) Buy stocks slowly as prices fall

  100. Phil PCLN
    I do believe and by your comment on advertising that they are unneeded middle men and like everywhere else can be replaced by computers and in at least a few industries they already have them but have no clue how to use them. Just like my always preaching max Ram memory is cheap and stops lots of problems. The computer industry doesn't like that idea when their business model requires new sales evry 6 months if they can get away with it. So they say I don't know what I'm talking about but processors aren't significantly faster and the programs are 10 zillion patches and a system that never starts with a clean piece of paper. All you really need is more ram to run the expanding progam or patches without shuffeling in and out of a hard drive. Solid state memory could help but they don't really want that to happen do they.

  101. PBR:  PBR has moved down substantially.  The yield is 5.6% and its deep-sea reserves are immense.  That said, the deep-sea reserves are expensive and difficult to access and dependent on high oil prices to be economic. Another negative is the fact that the company is partly state-owned and subject to a good deal of political interference.  Do you think that the stock is of interest at these levels?  If so, how would you play it?

  102. ARNA
    On the morning of May 8th, the Food & Drug Administration (FDA) will release the briefing documents for the May 10th Advisory Committee (AdCom) meeting to discuss the risk and benefit profile of Arena Pharmacueticals' (ARNA) new drug, Lorqess (lorcaserin hydrochloride). There are good arguments that can be made for both a bear and bull case on the approvability of Lorqess and these will take center stage on Thursday.

  103. Off topic, and can be answered AH, but since I am researching it…..what do you techies think of DLP pictures for a 70" screen vs. LCD/LED?  DLP is SO much cheaper…..thx.

  104. Thx edro….I just found that as well.  I put my play forward a while ago…..and I am not interested in playing beyond that.


    YIKES on PETS……I need to get me some of that…and at 200M, I can come up with a whole host of things for them to sell branded to increase margins!!!!

  105. Burrben GLW we are in this play since Dec11 and still watching the flowers grow, rolling rolling and rolling!

  106. StJeanLuc / FAS
    On FAS Money:
    In your opinion, would you buy the XLF 2014 BCS to start up the FAS Money position, or stick with the current FAS Money position, long the 14 xlf, short the 13?
    On FAS Strangle:
    Ready to dive back in yet?

  107. Shadowfax,
    I'm having similar issues with entry, exit points. However, I am determined and am slowly feeling more comfortable with some modest success rates. I gree with you that it can be done.

  108. "..Dow Futures are up over 200 points from their open last night".
    Go ahead, rub it in..

  109. flips….yeah, just give it a few more days.  I think today was another minor turn date……

  110. AAPL/jerconn – I wanted to subscribe to that forum but it says that membership is locked due to the abundance of members.  Any inside connections jerconn?  Would love to subscribe. 

  111. zxz – i would probably find out i'm polish.

  112. MRX – May $36 Ps….selling a few for 80c.

  113. MRX earnings are tomorrow FWIW.  Options are pricing in a move….StJ….what say you on the comith volatility?

  114. lflan, holding AAPL calls overnight? or strictly daytrade?

  115. Yodi / GLW
    Cool, I'm going to enter it tomorrow.  When you say rolling, do you mean just "rolling along"  Or you are rolling the options?  From what I can tell, the only options to roll around would be the long calls?  

  116. Did anyone else lose TOS Paper Money?  Mine stopped working – the live account is fine. 

    France/Scott – I very much doubt they would go that far. 

    Paying twice/Yodi – Ah, but that's what makes it so brilliant!  I would never have suspected otherwise…  8) 

    IPad/Yodi – What do you mean go about it?   Are you looking to compete with AAPL or improve what they have?  AAPL can do whatever they want – who's not going to partner with them?   They already have external solar IPod chargers and I think it's very easy to modify the concept if your goal is not to fully power an IPad but simply to augment what's already there.  The other stuff you can practically do with apps now and the Bose idea would be the most work but I've worked with them before and I believe they can modify their AWMS design for use in the IPad, which would give them great bass and good separation.  Oh, one more thing I would do it make a car adaptor that allows you to better use the IPad as a mobile GPS – the IPhones are a bit small and the IPads a bit big but hopefully the new Ipad will be an in-between size that would be perfect for a dash mount.

    GLW/Burr – That's a long-term trade, better entry now.

    Oz/Rpme – I wrote an article on that ages ago – "Are We Headed for an Economic Tornado?", back in March of 2007 where I attempted to warn people that skyrocketing oil prices would doom our economy but no one listened…

    Has oil become the new gold standard, falsely propped up in price and controlled by a global cartel that uses it to bleed the economic wealth of the people? When the government repealed the Sherman Silver Purchase Act in 1893 they effectively threw the farmers to the wolves of Wall Street who were able to set whatever value they wished for essential grains, produce and cotton while increasing the "value" of manufactured goods that farmers required. Only when the corporations took over the production of these commodities did they become "scarce" and "valuable." Modern global economics has created a way for those same wolves to play that game with something that no modern man can live without – oil!

    The same market manipulations that were polarizing the working farmers back in 1890 may coalesce into a storm of change in 2008. Like Standard oil of 1907, the oil cartel of 2007 has simply pushed too far and taken too much, outraging the people.

    Much like Oz, our own government initially ignores the plight of the people outsside the Emerald City but that is secretly because the "benevolent" power of the governement is a no real match compared to the ruthless, immoral, selfish machinations of the powerful witch (oil interests). Oz says to Dorothy, go out and slay the Witch of the West and THEN I shall grant all your wishes.

    PBR/John – We discussed them last week, they have a lot of issues.  If you remind me on the weekend, when I'm back at the command center, I'd be happy to dig back into them because they may have hit a point at which they make sense again. 

    DLP/Pharm – We have the 84-inch Mitsubishi 3D DLP TV that I think Tina paid $2,100 for WITH the stand and we love it.  It's like having a movie screen in the living room.  They make a 92-inch model but it's much more money and I can't see wanting 8 more inches (that's what she said!) when 84 is pretty friggin' huge. 

    Forget that we are up from some beaten-down futures – this is a very poor performance coming off Friday's drop.  I'm sure that will be obvious from the Big Chart. 

  117. FAS Money / Burrben – On a personal basis, I would go with the 2014 BCS, but Phil indicated this morning to someone else that he liked the current position as well. I don't think that there is much difference in the long run as long as you keep on selling premium!

    As far as the FAS Strangles are concerned, that was fun for a while but I am not sure I am ready for that format again. I would play it very differently now, timing the entries and exit more carefully. I would like to get the MoMo portfolio started though, but that's another subject.

  118. Phil,
    TOS PaperMoney – I'm having problems when I change screens, but mine is working

  119. Hi Phil,
    NFLX – sold x1 June 75P for $2.2, now $6.4 (-200%) to buy back.  NFLX is around $73.7, so intrinsic value is still around $1.3 and roll to June 70P is available for $4.  I am comfortable with waiting until June to roll, but wondering if that is the right thing to do? I do not want to DD, but would consider if you think it is a good price to sell at current levels for our members.. NFLX bottomed around 70 last december and could bounce back by June, I hope, but would like to plan out next move.  Appreciate your advice. 

  120. pharmboy
    You have only 2 different systems mentioned. LED is the same as floresent with the former very dificult to control color known as temperature but last forever at a much higher initial cost vs floresent easy to control color temperature, cheaper, and lasts 10 tp 20,000 hours. Both are LCD the difference is the backlight as both go through a matrix of color covers in fixed displays and small projectors. Larger use high intensity discharge lights. DLP is actually thousands of movable mirrows that deflect or project light and timed to a spinning color wheel. Want green prject when blue is aligned, same idea rot all the basic colors red, green, and Blue. Some even use a forth, I think yellow, because the mix doesn't work out so good. Their are 2 main issues with them, light bulbs are expensive and don't last very long, some only 2,000 hours max and some people like me see a Rainbow effect. Much more expensive has 3 mirror chips for different collars at the exact same time that mitigates the rainbow effect and creates truer colors by the combo at the exact same time.. LCDs have problems with black or unable to product real black, DLP doesn't but has the other pronblems. I don't like either and I have a old CRT that are now replaced, sort of with Plasma that can't prject onto a screen. They have good life, good blacks, least motion artifacts, and last a very long time. They only suffer from what is call burn in and should never be used with something like gaming with a fixed score line that will slowly burn in and not go away, no problem if only used to watch movies where everything is always changing everywhere. I would only consider Plasma and limit it to what you can get, they also use the most electricity. A bit long but know you know most of the story. I will try to answer any questions on these.

  121. DLP/Pharm  We poor folk only have the Mitsu 73". It's in a family room that has large north and west windows.
    With that, you have a good amount of glare for which the DLP is better suited than the LCD/LED, especially in the afternoon. I believe you would have similar issues with your family room of the new house.
    I would keep the LCD/LED with the better picture, for rooms with less light, like say, the master bedroom….. :)

  122. Burrben,
    GLW rolling in both ways I have now the May 14c possible expiring worthless So I let the May caller just sleep in the Hamock 
    and sell an other caller further out. With other words you double up on your covered calls for the moment official being naked on the next callers you sold for an other 11 days TOS does not charge me any margin on these type of moves. If you would do it correctly you close the May caller and than sell the next caller. But this cost you $ if they like the May 14c is still .10 plus your trading costs. In my case I cut out both costs obviously if the caller goes worthless. Just my type of gambling

  123. VIX creeping back up into the close.  TLT fixed at $118.13.

    Not too impressive overall.

    Consumer Credit up HUGE in March, miles over expectations.  Car loans and student loans drove it.

    March Consumer Credit: +$21.3B vs. +$9.8B expected and $8.7B prior. Non-revolving debt (student loans, car and personal loans) up $16.20B, while revolving debt (credit cards) increased $5.10B. Credit card debt +$5.1B.

    3:00 PM On the hour: Dow -0.01%. 10-yr +0.02%. Euro -0.24% vs. dollar. Crude -0.58% to $97.92. Gold -0.45% to $1637.75.

    "The best offense is a good defense," writes David Rosenberg, adding "dirt-cheap" gold mining stocks to his long-held bullish stance on high-quality bonds. In isolation, Greece – and a "probable" exit from the eurozone – may mean little, but a domino effect could trigger bank runs in Portugal, Spain, and maybe even Italy and France.

    Seems minor home improvements may be popular but not the major ones:  Decking and railing products maker Trex (TREX -8.9%) takes a hit despite beating Q1 estimates this morning, after the company issued Q2 revenue projections slightly below analyst expectations. It now sees Q2 revenue of $90M, below consensus estimates of $94M.

    Radian Group (RDN -2.02%) dips after saying delinquencies on loans carrying Radian Guaranty Inc. mortgage insurance fell for the fourth straight month in April, but the number of new delinquencies increased.

    Japan has no operating nuclear reactors in the wake of last year's Fukushima disaster, but Raymond James notes Chevron’s (CVX) multi-billion dollar Gorgon liquid natural gas project off western Australia will be “directly connected” to the Japanese market when it opens in two years. With capacity of 15M tons of LNG per year, Gorgon could generate ~$4.9B annual revenue for CVX.

    Chesapeake's (CHK -0.4%) largest shareholder urges the company to remain open to potential acquisition offers in the wake of Aubrey McClendon's troubles. Southeast Asset Management advises CHK not to use the current price-to-value gap "as an excuse to refuse discussions with any potential acquirers who would be willing to pay a price today that recognizes the longer term value of the company."

    Cheniere Energy (LNG +2.3%) says Asian investment company Temasek and PE firm RRJ Capital agree to invest $468M toward the financing of LNG's Sabine Pass liquefaction project. The three also are in discussions on a strategic partnership focused on developing LNG sales, marketing and trading relationships and opportunities in Asian markets

    I told you my visit would boost their value this weekend!  Shares of Caesars Entertainment (CZR +1.4%) spike higher after a report tips off that Penn National (PENN -0.7%) may pay as much as $600M to buy one the casino operator's properties.

    A mixed verdict is delivered in Oracle's (ORCL) patent suit against Google (GOOG). The jury finds Google guilty of violating Oracle copyrights by using Java APIs in Android, but has found it not guilty on other counts. Google is asking for a mistrial on account of the jury's inability to answer a question regarding fair use of Oracle's APIs. (previous)

  124. Phil not even competing with AAPL just want to improve some things in their production. Positively none of your ideas

  125. HDTV's/Pharmboy
    DLP will not be as pixelated on a larger screen as LCD/LED but it is a much bigger size tv.  LCD/LED have many more colors which give you a sharper and more accurate picture and you could hang it on a wall if you want.  A DLP is a very heavy tv at that size.

  126. Phil -  "I told you my visit would boost their value this weekend!"
    I guess that means you're going home a little lighter?  ;)

  127. Pharm sorry too long could not proof read green project when green is lined up, produce instewad of product black, and plasma limited to the sizes that are sold. A little smaller is a lot better to at least me.

  128. 1020 – No, I think Phil is leaving with a few more chips than when he arrived.  Their value is rising on the expectation that he will return and lose money next time and thus boost their revenues.

  129. lunar…I'm going to hold these overnight, at least.

  130. Phil Bose Yodi
     Not even good sound! Speakers need to be BIG!! to sound good. Small is limited to low volume, want good sound small? Get some goo cans or headphones, low HZ or soundwaves are large and need large to be reproduced with any volume. That will never change, the nature of things.

  131. Thx all on DLP/LCD/LED……ROFL 1020…..

  132. NFLX/DrM – Well I assume you know I don't like NFLX at all, right?  I imagine they'll have support around this price but I wouldn't want to roll them to July because then you are risking another earnings report that can tank them again.  I don't see why you should pay $4 to roll the putter to the $70s, that really makes no sense as then you will have PAID net $1.80 for the short put so your best outcome would be losing $1.80.   Right now, you need the Nas to hold up, of course but I think give them a chance to find support here – it's around where they bottomed in the fall at least. 

    Lighter/1020 – I spent all my cash game winnings entering tournaments.  None in the money so far.  I need the practice and a lot of good players are here this weekend so worth it but I will be down a little overall as I haven't been in the money once this weekend but I have gotten about 30 more hours towards my 10,000 hours of practice that will pave the way for my retirement career.

    Oh no – it's the ANTI-STICK!!!

    Nature/Shadow – It doesn't need to rock the house, just be pleasant for a small room.  I think it can be done but, sadly, no time to run a multi-year R&D project to find out.

    Speaking of tournaments – I'm off for my 2nd to last one so have a good day everyone!

  133. Have any of you used IFTTT service ( ) to track the updates in this site? If so, I would very much appreciate some insight on how u did it.

  134. CAT / To all the technical experts, have a look at the daily chart of CAT.  i believe i have identified a declining chanel between Feb and now that CAT has been following bouncing up and down.  I project a lower boundary around 96$.  Opportunity to go long if it doenst break though to the downside.  Can anyone validate my suggestion?

  135. Sound/ Yodi/Shadpowfax
    Definitive Technologies Pro-Cinema 600 is a outstanding 5.1 small speaker system. I use it in the upstairs Home theater/den and it has great sound with serious bass! It puts the Bose systems to shame IMO. You can find it online between $650 – $799.

  136. Pharmboy
    I assumed in DLP only in a projecctor LCD the same. As in a home theater not just a TV. Plasma can not prject onto a large screen, but I think tey get as big as 72" and I know they have shown at CES 100". Different from Rustle A good DLP is way sharper than LCD which is brighter. This that I refer to is not at Best Buy or Walmart good projectors start at $10,000 great at $50,000, and only sold and installed by professionals.

  137. LOL – sorry, I was away.  I have no connections there (Bullish Cross), I don't even comment on that board like I do on this board…Zaky has AAPL totally theorized and is always "researching" it and looking for different angles, and makes good (I think) long term suggestions which I'm happy to share to see what others think of them.   Lflan fills in the gap on short term trading and I"m still developing my own approach to AAPL.  Zaky thinks AAPL "will make many people wealthy" in the next few years.  Interesting to note that Morninstar gives AAPL a "fair valuation" of $670, which is $100 beyond where they are now…

  138. 14real and Phil
    I agree with 14 real idea of sounds good. Phil if you do as you do in finance, the math, it will be clear that small needs more motion to equal larger. Not looking up the numbers a 6" and a 12" speaker can produce 30 cycles, but 6" pushes 28 sq in of air, 12" pushes 113" of air so the small needs about 4 times the linear movement or 1/2" to 2" which can be done, but a 3" would need 16" of travel and so on. My speakers have a 1.1 inch tweeter, can produce 105db, but only from 2,000 cycles up most less expensive tweeters start at 5,000 cycles and that is way higher than a female voice's basic sound. Full range speakers have been built with 3" drivers but you need 24 of them, Maybe for a million dollars you can prduce a driver with 16" travel but it still takes a lot of space. In a practical sense it can not be done small. Get the good cans or head phones and not ear buds!

  139. PCLN/25k – maybe buy some weekly Puts and sell May Puts (675 or so) against our PCLN? If PCLN holds or rallies after earnings, this spread will be close to worthless and so at least hedge some loss on the July 620s.  If PCLN sells off a little or a lot, spread will still be close to worthless – only lose a lot if PCLN hits close to the strike right after earnings – and then we'll still have nice gain on the 620s.

  140. CAT- dpast- I was looking at the chart today and agree on that channel. Also, more importantly, it is near support/200dma; I am watching it for it to break either way- will consider play also either way depending on the move.

  141. Market wise after hours 4:45 the ask side of the order desk is almost gone and the bid side not much better with 1 trade in 3 minutes.

  142. Berkshire – Phil, to address your questions from this morning on the earlier post- yes, it was a good time. The mood seemed to be as is reflected generally, to use the cliche, cautiously optimistic. Buffet is surely positive but it pays to remember his time frame reference is "forever". Clearly, he expressed a positive outlook for the US and is putting his/our/shareholder's money on the line accordingly.
    My objective in attending the meeting was primarily to get a look under the hood, so to speak as I have a lot of money invested with Warren. Many of the shareholders seemed to have the same near term concerns re: the lagging stock price; Buffet's health; succession. I left with the impression that all is well. In fact , I bought some leaps on Friday while traveling (ain't technology grand) betting on earnings good news and a positive meeting impact. So far, the market agrees. We shall see. As I indicated in my meeting summary post over the weekend, barring a general market sell off, I think $100 for the B shares is in the cards. The value is there.
    For what it is worth re: the BBW project- Warren made his responsibilities crystal clear which I also see as the guiding operating principles:
    1. Risk management- avoiding the big mistake
    2. Capital allocation
    3. Maintaining the Berkshire culture.

  143. France / elections
    The TRULY scary part is that the "neo"-nazi's took 6.8% of the vote.
    Voter turnout was officially reported as 65%.   Two thirds of voters. 
    Extrapolate the 6.8% to the third who did not vote, and the theoretical total could be 10.2% of the population.  Probably not representative of real sentiment. Even if the extra 3.4% extrapolation were cut in half, that STILL would total 8.5%.
    THAT is scary.

  144. shadowfax:

    "Just like my always preaching max memory is cheap and stops lots of problems"…


    "…… the programs are 10 zillion patches and a system that never starts with a clean piece of paper"

    Uh, that would be Windows.   Mac OS X is quite a bit better than that…. It's Unix, after all, and the number of patches per year that OS X needs is about a tenth of what Windows needs. 
    "All you really need is more ram……… without shuffling in and out of a hard drive. Solid state memory could help but they don't really want that to happen do they?"
    Actually, there are a LOT of computers out there that DO use only solid state ram without any hard drives. MacBook Air, for example.

    Also, memory is a source of MASSIVE profits, at least for Apple, if you buy it from them rather than third party. They are not afraid that if you get plenty of ram in your computer it will perform so well that you won't still want a different Mac in three or four years.

    Flash ram in portable computers will grow, but it is still too expensive for most people, and the capacity is too small compared to the cost—-even thought it's a hundred times better than 10 years ago.  A 160 Gig iPod with a hard drive is $250, but a 64 Gig iPod Touch (ram only, no HD) is $400. Not totally fair comparison, Touch does way more, but still…
    But yeah, you can never go wrong by putting  massive amounts of ram into any personal computer. Makes a huge difference.

  145. Rail is one of the first reporters of April 2012 data. So far other major transport indicators are mixed but the transport data overall is showing weak growth:

    Truck Transport (March 2012): Up 2.7% year-over-year
    Rail (March 2012): Down 1.8% year-over-year
    Rail (April 2012): Down 1.5% year-over-year
    Container Counts (March 2012): exports increased 12.9%, while imports increased 2.5% year-over-year.

    Only import container counts are economically intuitive.  For sure, the economy is not in a strong growth cycle so far in 2012 as the transport numbers are anemic – but not recessionary.

    The full report here:

    Contains potential canary in the coal mine:
    Iron & Steel Scrap --  April 2012 was down 5.3%
    from April 2011 and down
    12.5% from April 2010

  146. ARCO- McDonalds on the cheap?
    What do you think, Phil
    Nov. 12 BCS 15/17.50 for $.70 ; sell Nov 12 12.50 puts for $1.05
    Recent earnings report down due to higher mandatory minimum wages; currency conversions; Same store sales and overall volume up.

  147. ARCO- sorry, I meant the 12-Nov 12.5/15 spread for 1.35 coupled with the puts is net $.30 on the $2.50 spread.

  148. Phil,

    I have the July PCLN July 600 put for 8.5 (now 11). Should I sell before earnings? Or should I add another PCLN short play. Really tempted to sell some call premium

  149. PCLN
    Tried to buy a flight today by bidding what I thought was a fair price on an AA flight that definitely has seats available. (Taxes plus more than Spirit charges). I thought it was OK as Shatner came up on the screen saying it was being finalized, but then they stood me up and said no can do and offered me a deal that was the same as on the American Airlines Web site. Another flight was available, apparently in a non jet aircraft to a minor airport, but I could not take it as I could not take delivery of offered paper tickets by Fed Ex.

    It may work better in Europe where there are a lot of charter flights to vacation destinations with spare seats next to the toilet.
    I think their interface is very tricky and you may end up buying something you don't want if you are not very careful.

  150. newbe
    Ther is a problem with Apple pies. They don't understan why AAPL is going back to $550 after beating the 25% earnings estimate reduction. I will agree that Apple doesn't need many updates. The reason is made for the mases with a small amout of constant blow money. The actual situation is Apple computers are not used in the cridical situations and that is the same reason they are attacked less than PCs and need less protection. I did try to set up a day trading system with an Imac first and it could not do it. The security is in it doesn't really matter, the big fish don't swim there. Just try running 6 monitors on any Apple product and I ran 4 PC computers and 4 or 6 Apples would have the same problem as 4 or 6 PCs you can't intergrate them without a communication bottelneck. You have to try it to totally understand the outer limits. You have to remove the bias and pay attention, AAPL was supposed to make $15 and change before it was reduced.

  151. Hey the problem everywhere is too much control in some places and that is an excuse for too little in another. My opinions AAPL and PCLN have money making business models that work perfect as long as the money is going to the mass spenders. The problem starts with cutting the money to the mass spenders and they actually support the top not the other way around. Then the fools have money, you can separate it from them and they don't care because they are having fun. Through all of this the super rich only support super computers and the private jet industry. What is extremely funny to me is watching the rich's money machines failing because they got too greedy and robbed their own bank. AAPL and PCLN's profits eventually suffer because those investment people take that money and feed it to industries that the middle have no access to and that takes the velocity out of money. The ultra rich money either goes to investment savings or dead end industries. Either way the money doesn't generate any more money and that means it is deadended and economies fail. In the 1930s the suisides were the rich jumping from their penthouse windows that they could no longer pay for. History just keeps repeating itself, all you have to do is wait a while!

  152. Speakers – thought i'd throw this in.. installed inwall speakers throughout my house during build, and controlling whole house audio system with Sonos. LOVE IT. It is THE solution, imho.   To add depth in my main living area, went with a local firm that does behind drywall subwoofers Stealth Accoustics and their amp that drives them. I could not be happier with this solution. Deep full sound without another piece of furniture (a sub box) in the way somewhere.
    Stealth's mids and tweeters didn't work so well for me though, so for those i went with Speakerlab inwalls.  Listen to the range on these because it really improves (to a point) with each step up in their line. Basically i went up until i could not tell anymore with a range of my listening, including some magnificant orchestral recordings. The subs are fantastic becuase, with Sonos, i can adjust EQ for each speaker, reducing range to the speakerlabs to let them focus on what they can do best, and let the sub do it's thing.
    p.s. nice thing about Sonos is also an excellent wireless system for great system without having to build in. If you rent, take it with you when you move.
    p.p.s  Stevie sings Superstition on Sesame Street. Sound is just so-so but had to share!

  153. scottmi
    I sold some of those products, sonos and speakerlabs. They kept my high end stuff going. My main thing is now records are the best. Got some very rare moving coil step up transformers from Isreal, hope to try then this weekend, the wireing is Japanese so I'm figuring it out the hard testing way. The package was opened a few times, they are looking for wires from places like that. It took a half hour to get them, never been checked in so many ways over a package. No FBI yet so I think it's OK now.

  154. CAT / Pstas -Thanks, as a favour, can you please let me know the position you will initiate, should you choose to jump in? Cheers

  155. Food for thought:
    Q: You still don't own Apple (AAPL). Any regrets?
    A: Apple has to spend incredible amounts of money on research and development to see the next mousetrap down the road, or settle for smaller market share. If another phone is close enough, for $100, and an iPhone is hundreds more, which will people buy? Look at what happened to Xerox (XRX). They didn't bring their prices down, and then competitors made things nearly as good and much cheaper. In the short term, Apple's stock does well. But the stock is dangerous. Ten years from now, Procter & Gamble will sell you Tide, Clorox (CLX) will sell you bleach, but what will happen with the iPhone, iPad, and iPod?

    Warren Buffet made a similar comment regarding AAPL at the annual meeting saying he could not envision  the competitive situation  down the road so he would not be a buyer- also said he would not short it either.