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Whipsaw Wednesday – You’re Lucky They Don’t Charge You to Take Your Money!

Germany sold $6Bn worth of 2-year notes at 0% this morning

That's right, if you give Germany $6Bn for 2 years, they promise to give it back – AND THERE WAS STRONG DEMAND!  How low can we go?  Well, the yield in Swiss 2-year paper is actually -0.10%.  That's right, you pay them 0.1% to hold your money for two years.  Don't like it?  Shut up – you're lucky they don't take it all!  

Of course the markets are crashing this week – the G8 has bonds to sell!  If the markets are flying you're not likely to be so anxious to give your government free money to hold for a couple of years, are you?  So this is a great week to take the markets down and the US sold $35Bn worth of 2-year notes at Depression-level lows (1.78%) yesterday and today we sell $35Bn worth of 5-year notes and Thursday we sell $29Bn worth of 7-year notes and THEN we have most of what we need to borrow to take us through the end of May.

People have to be terrified to take the money out of a bank that pays them 2% or out of a dividend-paying stock that pays them 4% to give it to a Government that pays them 0%.  While the World Governments make a big showing of hunting for terrorists, it is actually they who are terrorizing their own people – causing them to endure lives of non-stop fear and desperation as their Government plunges them further and further into debt in order to make sure that the BONDHOLDERS (hallowed be their names) take no losses.   

To do that, YOU (the not rich enough to have a lot of money in bonds) must be made to suffer the slings and arrows of outrageous misfortune – to be alarmed by Global seas of troubles, to worry, perchance to panic – and in your panic, perchance to hand your money over at zero percent interest rates where you money will be or not to be returned – depending on whether the EU or the rest of the Global economy survives 24 more months

Come on folks, wise up to the game!  You are lending money at 0% so your Government can make whole the people who lent them money for 30 years at 15% back in 1982.  You are buying low to subsidize your Government that sold high to the top 1% of the Reagan Revolution, who took full advantage of the insane Government policies of the time (to borrow record amounts of money at record-high rates in order to subsidize tax breaks for the rich) to stick it to future generations, who would have to then subsidize their outrageous coupon rates.  

It's a cycle people – do you think the top 1% is lending the Government money at 0%?  No, they are buying the dividend-paying stocks you are panicking out of at decade-low prices and they are buying up those homes you were foreclosed out of for CASH and they are putting their money into credit card companies and pay-day lenders and by jacking up commodity prices that the poor are forced to pay – even water is now being positioned as the next resource the top 1% can take control of as California, for example, who are desperate for cash, allow Billionaire Stewart Resnick to privatize the Kern Water Bank!  

Private water folks – it's the next thing you'll be bending over for when they jack up the prices and create artificial shortages.  One of the main reasons the oil Barons love fracking so much is that they are essentially the same guys that are buying up the water supply and fracking has the great side-effect of destroying their competition by poisoning the non-private water tables.  Don't believe it?  I challenge you to find any fracking operation anywhere in America that is going on near privately-held water banks.  These guys are just one big "oops" away from holding a very scarce commodity – fresh water!

How did we get on this topic?  Oh yes, all the ways the top 1% are Fracking you over!  

House Republicans have killed the previously agreed upon debt ceiling deal they struck with Democrats last August, when President Obama signed the Budget Control Act.  White House officials have been adamant that the administration’s not going to countenance a repeat of last August.

"We’re not going to recreate the debt ceiling debacle of last August,” White House Press Secretary Jay Carney insisted from the podium last week. “It is simply not acceptable to hold the American and global economy hostage to one party’s political ideology. It is the responsibility of Congress to ensure that the United States of America pays its bills, that it maintains its creditworthiness, that it fulfills its obligation and maintains the full faith and credit that it has long enjoyed.”

For those of you with short memories – at the end of last July, the S&P was at 1,350 when Boehner first pulled this crap and, just 3 weeks later, we were down to 1,100 – an 18.5% drop while these wankers huffed and puffed in front of the cameras, driving this country to the brink.  Last summer was a test run to see how much damage they can do to the economy into the current election season and, apparently, it went to well that Boehner and company can't wait to do it to us again in 2012.  Maybe this time they won't back down at all and the entire country can do a Thelma and Louise off that fiscal cliff we've been warned about.  

SPY DAILYHere we are, a year later, with the S&P barely hanging on to 1,300, after being rejected – along with our other indices – at the bounce levels I laid out in yesterday's post.  

  • The Dow tapped it's weak bounce (12,540) and was rejected there, dropping all the way back to our "Must Hold" line in the Futures (/YM) at 12,400.
  • The S&P tested our 1,320 line 3 times after breaking over it in the morning and the 3rd time was not charming as they failed and dropped back to our Must Hold line in the Futures at (1,300), where we went bullish in Member Chat this morning as it's low enough (goes for all our Futures index lines).  
  • The Nasdaq similarly held 2,850 for two of three tests but you only have to fail once to be a loser.  This morning we hit 2,500 in the Futures (/NQ – different scale!) where we're holding so far.  
  • The NYSE also tested their weak bounce level at 7,560 3 times before failing on the third and they bottomed out at 7,500 in the afternoon drop which lines up with our 750 Must Hold on the Russell but no NYSE Futures to check there.  
  • The Russell gave us an early weakness signal, failing 765 (weak bounce) at noon and never really taking it back.  In the Futures (/TF), they failed all the way back to 750, but we do like them to bounce there.  

I missed all the fun as I had to be on TV in the afternoon (where we discussed some of my bullish picks) but we were already prepared for failure as my morning Alert to Members suggested the short SQQQ June $56 puts at $5.80 to play the failure of 2,850 on the Nasdaq and those should be in great shape this morning if the weakness we're seeing in the Futures (down 0.75%) holds up.  

If not, then they've done their job as overnight protection and we won't be needing them after all.  My comment on the trade was looking for a 0.7% drop to make 10% on the trade so we're exactly on target if we open here – but now we've also had an opportunity to go long in the Futures, knowing we have coverage if they drop further as well – isn't hedging fun?  

We didn't get sucked into removing our bearish hedges yesterday but TODAY, if we hold our lines and get back over our weak bounce levels – I'll be excited about getting a bit more bullish as Boehner is hopefully the last Bogey Man that was left hiding in our economic closet and NOW all of the bad news is finally baked in and the US is STILL the best place to park your money – which is more of a sad commentary on how screwed up the rest of the World is than an actual endorsement of this three-ring circus of a country.  

As they mentioned yesterday in my interview, I called for a 10% correction to Russell 750 etc. back in March and that was based on factoring in all the stuff that is finally being factored in by the MSM.  I have always said, all through the rally, what bothered me was the unrealistic LACK OF FEAR that was causing great mispricings of equities but NOW we are into a market I can love, where we can go long on BBY ($50Bn in sales, $1.2Bn in profits, market cap $6Bn) and short on AMZN ($50Bn in sales $600M in profits, market cap $97Bn) along with dozens of other trades that will make us great money no matter which way the market breaks.  

We're not BUYBUYBUYing everything but we have identified enough stocks in our "Twice in a Lifetime" list that are too cheap to ignore that we really don't care what the broader indexes do or don't do – we're going to be in very good shape just accumulating these positions for the next few years or until we do get a proper turn-around to play with.  

At the moment – it's still $1.5 Trillion or bust for the the Global economy as that's about how much stimulus we'll need to get over the current hump.  Whether it comes from the BOJ, the PBOC, the IMF, the ECB or the Fed doesn't matter but SOMEBODY, SOMEWHERE better come up with some money because there's a Trillion Dollar hole in the Global economy and we're taking on water very fast!  

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  1. Phil / Intrade:  Just to comment a bit more on the S&P500 vs. Obama-to-win Intrade chart.  Sure, stimulus might be off the table due to congress. But congress doesn't vote on QE3. That is the Fed, which has to be seen as influenced by the White House, given it is an appointed post. And as we know, even Bernank coming out and saying "QE3 is assured", even waiting on the details, would be enough to run the S&P up 100 points (just like Jackson Hole speech in 2010).  We know that stimulus is the better way to actually influence unemployment and GDP, but in the absence of that option, if you were President, wouldn't you try to goose the S&P to 1500 just ahead of the election?  This thinking is not enough to get me bullish, but is keeping me from putting on long-dated or overly aggressive bearish bets.
    I've been bearish along with you. I just think that QE3 is going to play out into the guts of the election campaign schedule.

  2. Phil

    Honestly….how can you believe anything they say anymore.  It's a joke.
    It's not what they say that you have to pay attention to….it's what they do…….do disregard what you hear…….because as you can see in this video….what you hear is not always reality.

  3. PHIL, Good morning!  Saw the BNN VID. Thanks for posting the LINK. Keep up the great work!

  4. Phil, Good am from MD.  I know you are an avid reader so I wonder if the book "A Bubble That Broke The World" written in 1932 by Garet Garrett is in your library.  I am only on page 60 and it reads like the headlines of today.  Here's an interesting quote about CREDIT created by WS and the banks from page ONE "the folly of the lender has exceeded the extravagance of the borrower" or from Chapter 2 Cosmology of the Bubble, a Senate Committee was speaking to WS bankers about the wild use of American credit before the collapse and they replied "Speculation was in the air, the speculators wated to buy, buy, buy and the bankers and brokers dealing in securities supplied that demand… In other words I do not think you would be justified in holding the bankers responsible for the wide speculation craze that worked through the country.  I think they were trying to supply what customers wanted.. The think the banker is like a grocer.  He supplies what the customer wants."  It's like a play book and I will have it read by the end of the week.  If you do not have it I am happy to send it to you.  Hope this finds you well.

  5. Good Morning – I am used to seeing stj and Pharm’s comments in the AM. Board feels empty today!

  6. Well, you'll have to make due with me…  8)  

  7. CHK- I haven't been able stop thinking about what was posted and then reiterated on BNN about the 2014 $5 puts at $1.25…. The greedy me thinks- WOW! This could be one of those stories your grandkids get to hear about…. I am nuts? Is there a risk that I am not thinking about?  HOw can this be part of a strategy to CYA?

  8. Good Morning!
    Doing all I can to stay positive after reading today's writeup…..:(
    Good work Phil.

  9. Have no fear Nicha. stj is here….

  10. Thanks for coming in, stj! Phil scared me :)

  11. Would not want to miss all the fun Nicha…

  12. We are exceptionally well positioned for a 200 point rally in the RUT in this portfolio   ;-)

  13. Phil, my 3 ACI Jan 13 $7/9 Bull Call Spreads are at 50% of it's value at $.67.  Would it be advisable to roll out to the Jan 14 $5/8 Bull Call Spread for net $.59, rolling the July $11 short puts to Jan 13 for a credit of $.47 to partially pay for the roll which would give me a wider spread with a lower strike and 12 more months to be right?
    I'm in 200 shares of ACI at net $8.43 after buying my initial 1/4 position at $15.13 so I feel like I am on the right track in lowering my net.  I bought the spread as protection when the price dropped to $8.50 rather than buying more stock.

    TIA. I think the rolls are finally starting to click in my mind so I am hoping I am at least partially grasping what I need to do.

  14. Phil n St Jean, I have not obtained anything in the 5K, any thoughts to different Strikes or months on TNA. Just thinking how fast the $25K moved, when I had no positions, then BAM it took off. Yes I know CASH IS KING , LOL

  15. lflan – What is your timeline for these trades? Are you going to mix it up with weeklies and longer term trades. For example, we had a 15% profit yesterday morning (about $5K on $30K invested) and maybe we could have closed some trades then and taken the money. You might have noticed in previous posts, but I am very conservative in my choices… except politically I guess!

  16. Uh, should we be shorting Morgan Stanley about now?  Always looking for a downside hedge, and MS is looking like the designated fall guy for billions in FB losses……I just shorted it, full disclosure, you know.

  17. Portfolios / Emunster – I would refer you to Phil's comments last week that if it was not for the educational value of these virtual portfolios, cash would be his preferred option… These are really aggressive setups!

  18. MS / Zero – You are not alone… From what I read, lots of well informed people are short MS expecting these guys to implode! 

  19. Good morning! 

    Same comments as yesterday morning, wash rinse, repeat.  

    SQQQ short $56 puts made goal at $5 so that's that, if we break lower than 2,500 in the Nas Futures we can move to more aggressive bull call spreads but 10% should offset a 1% drop in the Nas very nicely.  As I said yesterday morning:  


    It's all about clearing those bounce hurdles and taking back the Must Hold lines – if we can't do that, then we're technically bearish again – no matter how cheap things may LOOK.  Our bounce lines are:  


    • Dow – 12,750 (12,540 is 20% retrace/weak bounce)
    • S&P – 1,343 (1,319)
    • Nas – 2,900 (2,840
    • NYSE – 7,720 (7,560)
    • RUT – 780, (765)

    Gotta clear the RUT, they stopped dead at the weak bounce and are just over at the open so now we look for the S&P to join at 1,319 but we really want to see 1,320 taken and held and all that is just a WEAK bounce that we expected for the week – not really a reason to get too bullish.  

    Now we're all red of course but we don't lower our expectations every time the market gets weaker.  Let's think about the pattern.  Last time, about 5% higher than here, we bounced after a 5% drop and we hit our STRONG BOUNCE levels.  They failed and we fell another 5% and now we're failing our WEAK BOUNCE levels and that, in physics is EXACTLY how it works as you lose kinetic energy (see "Stock Market Physics"):

    With our market bleeding kinetic energy (the energy that drove it's upward momentum) we need an outside force to act upon it in order to give it the energy to go higher again.  That energy is MONEY in the markets and it can come in the form of data or news that improves sentiment – driving money in from the sidelines, as M&A activity the puts sidelined corporate or investor cash to work or it can come from stimulus, which artificially drives the other two.  

    Unlike regular physics, we can also rise on a reduction in gravity, which at the moment can be measured by the strength of the US Dollar, which is NOT constant but it's PRICE determines the VALUE of everything else.  The Dollar is very strong today, at 81.85 and that's dragging US Equities and Dollar-based commodities down into a gravity well of lower relative prices.  TA charts do not account for this but we need to consider that a 1% rise in the Dollar followed by a less than 1% drop in the Futures which holds the same floor (12,500, 1,300, 2,500, 750) in the Futures that we held on a weaker Dollar is PROGRESS – it's a sign of strength – albeit a small one.  

    So I'm certainly not saying to throw caution to the wind and we need to get more bearish if our Futures levels fail us because we could easily drop another 10% below this floor, maybe on the way to 20% further down.  But, for now – at this point – we can play for the bounce as the Dollar tests 82 and the Euro tests $1.26 and the Pound tests $1.57 and the Yen tests 79 – all levels they really don't want to give up.  

    If the Dollar does go over 82, we're almost certain to lose our levels so keep and eye on that and let's look at these hedges for that downside:  

    • SQQQ June $55/70 bull call spread at $3 (same as $25KP) 
    • QQQ June $60 puts at .90 (just $2 out of the money (3%). 
    • TZA July $20/26 bull call spread at $2 ($2.63 in the money).  

    Hopefully we don't need them and it's more of an opportunity to get long off our Twice in a Lifetime List - if you can't find a few trade ideas there that you like – you REALLY are not bullish at all!  

    Europe is meeting today and nothing is expected so an upside surprise is possible.   I just can't see the rationale for our leaders to risk another collapse and they're risking it right now through inaction.  On the whole, I have to stick with the idea that this is the correction we expected and – as I often say (almost daily lately) – if you're not going to buy low, when are you going to buy?  

  20. PCLN 666--hmmm….

  21. Jabo….Mark of the beast!!!

  22. CHK/Newt – the catch is that IF you get CHK put to you at $5…it will be because it is crashing to nothing (think enron) and can happen next to overnight. so.. don't buy more than you the number of $500 bill you are willing to tear up, in a worst case (but not impossible) event. have a stop perhaps that exits the puts (at market?) if the stock fails $10…
    phil – what would you suggest for this? IF CHK fell by 1/2 from here.. i really may NOT want to own it at $5 because things may have changed…

  23. Long AAPL short FXE working today.  Not that I could tell you why, exactly.

  24. BTU – TWIL List – Short Put (Jan 2014) now 10% better than Phil's suggested entry.  I filled a few minutes ago.  Thanks to Phil for the concept of planting trees!

  25. Stjeanluc. Agreed, thanks! Appreciate all you do for the board!

  26. TWIL – Here is a current snapshot of the TWIL list vs the Mid

  27. CHK/ Scottmi:  Thanks.  Greed is evil….

  28. Hi folks
    Anyone planning another get together this year?
    Vegas again?

  29. Phil/same comments   I guess that explains why I'm feeling down… Better now.
    Thanks Dr. Phil…… ;)

  30. Dollar moving. Not good.

  31. QE3/Never – I agree with you but let's make sure we have a plan for what to do if they DON'T pony up some more cash.   Gold heading lower indicates that US QE may not be as close as you think.

    Joke/Exec – Too bad it's on us….

    Thanks EM.  


    Bubble/Jacalyn – I don't remember that one but I have read many, many books about the Great Depression.  I was always interested because my Grandpa Max was born in 1903 and part of his educational training to make me a better investor was to tell me stories of the follies of man before, during and after the Great Depression.  I never blame people for being people – when you go to get a mortgage, who is the sophisticated party?  A person buying a home buys 3 or 4 their entire lives for the most part while the Realtor and the Mortgage Broker have each put in their 10,000 hours, along with the Banksters they are agents for.  THEY KNOW BETTER!  The home buyer/borrower relies on their EXPERTISE, which they sell AND CHARGE FOR, to guide them through the home-buying process.  

    If a Reator says to the inexperienced home buyer "It's a toppy market and I don't think you should over-extend yourself, just in case", that would probably save a lot of people some grief – but it costs the Realtor commissions so it never happens.  If the Mortgage Broker said "Based on your income and debts, I think you should consider scaling back your expectations at this stage of your life," as a proper financial adviser should do – how many families' lives could have been saved from ruin?  We don't blame the victims of a con game – they are preyed upon by experts but those same experts have lobbyists and PR firms that fund the publication of books and articles that blame the victims – don't fall for it….

    82.11 – here we go!  Euro $1.2599, Pound $1.5698, 79.39 Yen….  Silver $27.25, gold $1,542, oil $90.77 with inventories in 10 minutes.  Copper $3.39…  Nat gas holding up at $2.68 but even gasoline down to $2.915.  Hopefully this is a little blow-off move and our indexes hold (Dow Futures already blew it at 12,360) but let's not count on it!  

    Oh yeah, and XLF blew $14 too. 

  32. Is anyone else getting partially delayed Market Data on TOS?  Stocks and options delayed 20 minutes. Forex, futures are in real-time

  33. Phil / Levels
    Apologies for being dense, but I've read you're post 3 times now, and I'm a little unclear.  From my interpretation, we are still below our Weak bounce levels, and this is Bearish.  Unless we are above those Weak bounce lines, and even better, the Strong bounce lines, we are Bearish.
    But, since the dollar rising, isn't taking the markets down, then you see a reason to get a little bullish.  If DX is above 82, then you'd enter some of the posted hedges.  If it stay's below 82, then tip-toe into some bullish positions with the expectation that a bottom has been put in, and we might get stimulus.

  34. HPQ down another 4.5% today and they have earnings later.  Gonna be fun for a bullish play, I think.  At this point, all they have to do is not suck as much as DELL did.  

    HPQ June $20/21 bull call spread is .55 and IF they have bad earnings, THEN we can sell July puts for .55 to cover them but, for now, there's 81% of upside and HPQ is at $20.80 despite the sell-off and the June $20 calls are $1.30 so they have to lose more than 50% of their value before you can't pull .55 back off the table anyway (leaving naked long calls on presumed bad earnings or general market collapse).  

  35.  the SP falls below 1295 then it will do so with massive positive divergence….don't think that'll happen – but, if it does then we'll be set up for one heck of a summer rally….. far more likely stocks will form a higher low – near the 1300 level… then bounce from there in a decent move back up to 1345..or possibly as high as 1370ish.

  36. Geez, as I was writing that /DX over 82.  Time for a hedge….

  37. Jerconn – any word on the Andy Zaky forum?

  38. I still have a few green stocks on my screen. Watching /ES 1303.50 important line along with /YM 12,345


  39. EGLE announcing a 1:4 split.

  40. CHK holding up fairly well in this turmoil.

  41. CHK/Newt – The downside is CHK goes BK and you're stuck with them at net $3.75.  Nothing is risk-free but holy crap, right?  

    EXPE making new highs, up 6% for some reason.  That was another great pair we did – long EXPE, short PCLN.  Kind of like long BBY and short AMZN except this one has played out while we're waiting for BBY/AMZN to do the same.  

    Dow volume 34M at 10:30 – not exactly capitulation volumes.  

    Staying positive/1020 – It's VERY HARD!  

    ROFL on $5KP comment StJ!  

    ACI/Rperi – The Jan $7s are still $1.70 which, I take it, is more than you paid for the spread, right?  So now you can INVEST $1.50 to roll down to the 2014 $5 calls ($3.20) and you're buying 12 months of time and $2 in strike for $1.50 – sounds like a bargain to me.  While you COULD get back .70 of that money by rolling the Jan $9 caller to the Jan $7 caller (I'd keep the year advantage), I wouldn't rush to do it as long as ACI is holding $7 (now $7.22) – you might get lucky and they come back and then you have a $4 spread with an extra year to roll.  

    Patriot Coal (PCX +6.4%) shares enjoy a decent rebound after yesterday's disaster, and the company sends a letter to employees saying "operations are performing well." A bit late after yesterday's 28% drubbing, Deutsche Bank downgrades PCX to Hold from Buy, citing the uncertainty of the company's financing arrangements.

    82.25!  Europe clearly panicking – hopefully they are causing our sell-off and it will subside at 11:30 but that has not been a profitable bet lately.  EU indexes down around 2.5% and we KNOW that's a bad sign.  

    10:32 AM Europe rapidly deteriorates, the Stoxx 50 -3%, led by Italy,-3.8%, and Spain, -3.2%. The euro goes bidless, sliding under $1.26 for the first time since August 2010. S&P 500 -1.1%.

    German bond yields continue to fall to astonishing lows, the 30-year off 11 bps to 1.99% – the first-ever time with a one handle (Japan's is 1.82%). The 10-year is off 9 bps to 1.38% (Japan 0.87%). The 2-year yields all of 5 basis points, towering over Japan at 11 bps.

  42. lolobear, if you email admin at bullish cross they will put you on list to be opened next week

  43. MoMos seem to be hanging tough.  Thats quite strange. Maybe AAPL is keeping them up

  44. NDR: More likely the market is near the end of the correction than beginning of a major downtrend

  45. Mike Luckovich: Blame both

  46. b56 – thanks

  47. WTF, NFLX up $2 to $70. Are people already canceling vacation and planning more movie nights?

  48. Lincoln / portfolio — Nice to hear that you've reached a level of comfort with your portfolio. Congrats!

  49. AMZN looking interesting to the down side if we can't retake levels.

  50. I have done my part how about you?
    I talked to John Barrasso at a town hall meeting last night. I asked him what he was going to do about the budjet deal bust bill? His answer in front of the state was, " Obama hasn't given us a budget!" repeated congresses job, same answer. Listened to him blow off three more following my lead with non answers, on and on till the end. I was not allowed to follow up about JPM, MS, and facebook. Called his office and left a very long message of all that and medical issues, he was a doctor.
    Just got off the phone with one of his assistants who called, she got the point and promised to get it to John.
    My point is I think I may be the first person to do anything based on the follow up and I sure got their attention. We should all do this!

  51. Jeff Danziger

  52. $5KP/EM – TNA now $45 and $52 is up 15%, which would be a 5% move up in the RUT back to 788 and that's getting outside the realm of likelihood for 3 weeks and 2 days.  The July $43/52 bull call spread is $3 and I like that better than spending money on a naked call with such a high VIX (24.50).  

    And what StJ said – These are hyper-aggressive portfolios in a very bad market that I WOULD NOT BE PLAYING except that they are there to go over exactly this kind of strategy (adjusting trades when the market moves against you).  Don't forget, we came back from being down an unrealized $25K earlier this year in the $25KP, ran it back to $50K but now back to $25K and that means we have $25K more to lose before the rubber band is stretched the other way.  THEN would be a great time to go long!  

    MS/ZZ – Not a bad idea but they are already so beaten up, it's hard to get excited about shorting them.  

    TLT back to $124.30, Sept $110 puts back to the bargain price of $1 and that's what 0% interest buys you these days so, logically, to sustain this price ($124.30), people have to start paying the US to take their money on the shorter paper.   That's what I tend to think is unsustainable and makes for a good thing to bet against.

    CHK/Scott – I'd risk $12,500 to make $12,500 on that trade – selling 100 puts and assuming you would be able to get out before they double up on you to $2.50 for the 2014 $5 put.  The delta is about .10 so that's, in theory, a $12 drop in CHK although the Delta would increase but still, CHK would literally have to drop more than 30% in a day to blow past that stop and I don't mind an even risk/reward proposition on an event I consider highly unlikely (CHK falling below $10).   Even at -$12,500, I'm obligated to buy 10,000 shares of CHK for $5 with CHK trading at maybe $8 so I can't even say then that I'd REALLY want to quit unless I was pretty damned sure they were going BK.  If it's happening just because nat gas goes to zero over the summer – I'd be more likely to DD as I don't mind betting that won't last 3 years.  

    Ah, there goes AMZN!   BBY holding $18.  

    AAPL holding the magic $555.  

    BTU/Jfaw – You're welcome.  PCX sent them all flying down.  

  53. 12.99 print on MS, expect the cavalry to come riding in to save the markets before it really gets out of hand.

  54. TWIL/Burr – Can you please add CSCO, GLW and GNN?  We added those the other day.  

    Vegas Baby/Maya – I hope so, I think it was being worked on again.  

    82.29 was the top for the Dollar.  Euro bounced at $1.2563, Pound $1.5675 with 79.27 Yen to the Dollar and NO MOVEMENT on EUR/CHF – I don't know why they even bother to have a ticker anymore – they should just rename it EUR/CHF1.2009 and leave it as a static symbol.  

    $25KP – I am very, very proud of the Nasdaq (/NQ) for holding 2,500 and the RUT barely broke 750 and the S&P barely broke 1,300 so let's ditch our protection in the $25KP on the QQQ $57 puts at .35 and ditch the SQQQ spread at $3 because we can always buy that back if we want to – it's been a very slow mover. 

  55. The RUT has toes over the edge of the cliff with 2 strikes. Balance is key. Up or down?

  56. Shadow – Just one way I choose to be involved…..

    Check out the Town Halls for Thursday.

  57. Pcln — weekly strangle — 615/695 for 1.7 delta of 0.07 each — momo — would anyone recomemnd this or too risky for PM account

  58. Phil,
    What do you think about going long oil here off the $90.50 line?  That has been a remarkable drop over the past few weeks even though gas has dropped ZERO!!  What a screw job. I would have to think they want to protect these lofty levels with higher crude prices.

  59. Phil, as always, thank you ! I am mostly CASH, as someone told me cash is KING ! (LOL) Allthough, I did some Puts, when we had a list. I appreciate your insight into TNA, and all of the Ports. Understood those PORTS are very aggressive. Dont have any of those trades, and mostly been paper trading for two months. Looking forward to the New Inc Port. Great info here. THANKS!

  60. rainman: thanks
    I think I recall from our cab ride in Vegas we have similar "styles"

  61. TWIL List  - Here it is with GLW and GNW added.  CSCO was there.

  62. Forexlive posted the close..

    UK FTSE -2.3%
    French CAC -2.6%
    German DAX -2.4%
    Spanish IBEX -3.2%
    Italy MIB -3.7%

  63. 1020
    Barrasso said he co sponcered that bill, did a poll 98% approved. That is the senate, house is full of nut jobs with a disturbed leader.

  64. They are either trying to force a short term bottom in the EUR or all hell is about to break loose.

  65. To be bullish or not to be… i hope it is a sign of a maturing trader sense that i am not feeling any need at all to "jump" on any trades.. just at the moment.. not anxious..not bored..  interested and a bit of pleasant anticipation;-)

  66. kustomz – I know all hell will need to break loose before solutions become reality…..

  67. Delay/Dave – Call them.  Sometimes they do an update and reclassify your account to one that gets delayed quotes.  They are real assholes about interpreting the regs for who they "have" to charge a fee to.  

    Bearish/Burr – You can be bearish and still play for a bounce you know.  I notice you tend to see things as absolutes – there's a lot of gray in trading…  Yes, the Dollar is a huge mitigating factor as it's up from 81 yesterday morning to 82.30 today and that's over a 1.5% move up and we did NOT have a 1.5% drop in the market and, even if we did, we usually get a 1.5-2 to 1 move in the markets to the Dollar.  Also, at this particular moment, Europe is clearly falling apart in panic that today's EU meeting will accomplish nothing and they are betting on the swift demise of their currency but the CAC is holding 3,000 and the DAX is holding 6,200 and the FTSE is holding 5,250 so they too are still better than they were last week.  So you need to understand that yes, I said that's a place to cover but, as the day went on, I got more information and decided to stay a bit more bullish.  It's still a good and sensible line to cover at but only if you keep in mind it's also a good and sensible line to uncover at when it goes the other way and MOST OF ALL – you can keep in mind this absolute – if you are not an expert day trader with a high tolerance for risk who doesn't mind flipping in and out of positions in a very choppy market – then CASH is KING!  The more cash you have, the less you need to worry about messing around with taking covers on and off every time we break and take back a few levels.  As I said last week – it's just not worth the aggravation.   

    WFR up 2.2% today!   NFLX up 2.5%.  PETM making new highs – that's a good sign if people are taking care of their dogs and not throwing them on the barby… 

    Democracy/Shadow – It's a great thing, enjoy it while it lasts because one day our grandchildren will think it's a cute notion – like when we used to have kings instead of CEOs….

    Good cartoon StJ.  

    Long oil/Button – Inventories were a net draw so a bit supportive but Europe is such a mess and we're barely hanging on – it's a no-play to me at the moment, tempting though it may be.  

    11:39 AM Europe closes sharply lower as the momentum towards a Greek exit builds. Not to be discounted are ideas of EU leaders playing chicken to push Grecians into voting for establishment parties in June. Stoxx 50 -2.7%, Germany -2.3%, France -2.5%, Italy -3.5%, Spain -3.4%, U.K. -2.5%. The euro hits a 2-year low, -0.9% to $1.2565.

    You're very welcome EM – sometimes it is more fun just to watch!  

    Thanks Burr! 

    Blame/1020 – That's a great quote.  I think he nailed it:  

    "I wouldn't say it's all Republicans," said Ornstein, "it's 80-20 at this point."

  68. Phil or any one GNN TOS does not show a stock possible typo??

  69. Lincoln / style — Yes we do.

  70. Yodi – he means GNW

  71. TQQQ – Jun $47.50 $1.75 – ish — getting interesting again.

  72. That 12,300 I'd like to see on the dow is nicely aligned with a -200 point day which is often a bounce point on the day. Maybe the euromoron meeting will spill some blood.

  73. Thanks Jomp

  74. Phil / PETM — Maybe THEY'RE eating the dog food?!? 8)

  75. Phil/TNA,
    the July TNA 43/52 BCS is now around 4.05. Is it good to chase it now?

  76. MT breaking down at 8 year low.

  77. Rain/MT
    They just had x-dividend day

  78. Bye bye 1,300 and 2800, maybe today afterall. 50M with 2.5 hours in seems low though.

  79. jompt / MT — well that would acount for 1.25% and add another 1.5% for the markets and we're at 2.75 so they're underperforming by 1.25% but that should be expected after breaking long term support @ 14.

  80. Phil/ultras
    how do you account when planning a trade in the ultras? I have used them in the past and inevitably when I want or need to get out I end up losing more or giving back a good amount of my gains, any suggestions other than staying away?

  81. account for the huge spreads that is:)

  82. sagemm- I do not trade the ones with sill spreds- self defeating- worse than your bookie!

  83. Greed/Newt – Just trying to understand. Why would CHK 2014 $5 puts at $1.25 (now $1.20) be greedy ?

  84. silly spreads

  85. DPK is a 3X ETF Bear Fund tracking EAFE pretty well, albeit with low volumes.  Up 7% today which is pretty close to triple the euro index moves.  Bought Jul 26 Calls today at 9.20, as a speculative bet on more fireworks to come before the greek election.  Almost no option volume in this issue so the spreads are terrible, but I'm counting on selling at the bid which should be significantly higher in the weeks to come.

  86. TNA/ 25k and 5K: What are doing with the long calls--52 and 64 strikes?

  87. Oil touched $90 – Now THAT'S playable for a bounce (with tight stops) on /CL!  

    At the open: Dow -0.67% to 12420. S&P -0.67% to 1308. Nasdaq -0.86% to 2815.

    Treasurys: 30-year +0.54%. 10-yr +0.19%. 5-yr +0.09%.

    Commodities: Crude -0.65% to $91.25. Gold -1.13% to $1558.75.

    Currencies: Euro -0.16% vs. dollar. Yen -0.7%. Pound +0.2%.

    10:00 AM On the hour: Dow -0.59%. 10-yr +0.22%. Euro -0.30% vs. dollar. Crude -0.68% to $91.22. Gold -1.53% to $1552.55.

    11:00 AM On the hour: Dow -1.29%. 10-yr +0.31%. Euro -0.78% vs. dollar. Crude -1.53% to $90.44. Gold -2.26% to $1540.95.

    11:39 AM Europe closes sharply lower as the momentum towards a Greek exit builds. Not to be discounted are ideas of EU leaders playing chicken to push Grecians into voting for establishment parties in June. Stoxx 50 -2.7%, Germany -2.3%, France -2.5%, Italy -3.5%, Spain -3.4%, U.K. -2.5%. The euro hits a 2-year low, -0.9% to $1.2565.

    12:00 PM On the hour: Dow -1.34%. 10-yr +0.28%. Euro -0.91% vs. dollar. Crude -1.85% to $90.16. Gold -2.55% to $1536.35

    Market preview: U.S. stock futures track EU shares lower as fears of a Greek euro exit flare up again ahead of an EU summit in Brussels, with the S&P benchmark -0.8%. Dell (-13.4%) is taking a battering following a fairly woeful earnings report, while Big Lots is-6.1% for a similar reason, although Facebook (+2.6%) gets a bit of light relief following its IPO carnage. Later: New Home Sales, H-P earnings

    You would think this is good news:  Mar. FHFA Housing Price Index: +1.8% month-on-month, vs. +0.3% in Feb.

    April New Home Sales: +3.3% to 343K vs. 335K expected, 328K (revised) prior. Median prices +0.7% to $235,700.

    MBA Mortgage Applications: +3.8% vs. +9.2% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased to 3.93% from 3.96%.

    Horrible retail figures out of the U.K.: Sales fell 2.3% M/M in April, far exceeding the expected 0.8% drop. Sales -1.1% Y/Y vs. expectations of +1%.

    The euro hits a new low for 2012 and the lowest level since the summer of 2010 as panic once again hits the continent. The common currency touched $1.2563 earlier, now buying $1.2575, -0.8% for the session. The euro bottomed at about $1.25 during the financial crisis and $1.19 in the summer 2010 bear market. 

    Today's decline puts the S&P red on a Y/Y basis-1.1% vs.+29.6% for everyone's favorite hated asset class (TLT). SPY is +4%YTD, but being threatened by Treasurys, +2.4%. On this day in 2000, the S&P opened 7% higher than its current level, notes Pattern Traders.

    The American Trucking Association's seasonally adjusted Truck Tonnage Index fell 1.1% in April after increasing a revised 0.6% in March. April’s decrease "matches with an economy that is likely to grow slightly slower in the second quarter than in the first quarter," ATA chief economist Bob Costello says.

    Constant chants of "catastrophe" should Greece exit EMU "borders on political blackmail," writes Ambrose Evans-Pritchard. It will only be so if the EU and IMF choose that path, thus making catastrophe not a fait accompli, but a political decision. The catastrophe, he says, comes from those clinging to failed ideology (fixed exchange rate).

    Some blunt eurozone truths from Jin Liqun, chairman of CIC's supervisory board: Eurozone leaders have demonstrated a "lack of leadership" on the region's debt crisis, "too much time has been wasted on endless bargaining… for piecemail bailouts," and the core eurozone nations will have to "keep an eye out for possible copycats should the Greeks be allowed to escape from the crisis unscathed."

    EU leaders are due to meet in Brussels today as Germany comes under increasing pressure to agree to a softening of austerity and to eurobonds, ideas favored by Francois Hollande. However, as an EU diplomat says: eurobonds are "the equivalent of ringing the bell for a happy hour so the inebriated can postpone their hangover indefinitely."

    46 hours. That's the amount of time from a Friday NYC close to Monday's Wellington, NZ open – the amount of time Greece's (and Europe's) leaders will have to handle the issues surrounding a Greek exit from EMU. From calming civil unrest to recapitalizing the banks to getting a new currency going, "leaving is messy," says a former ECB member. 

    Italian May consumer confidence falls to 86.5 from 88.8 previously, and against expectations for a rise to 90. It's the worst print since 1996. A gauge of unemployment expectations rises to 113 from 106. Milan -3%

    The Gallup Economic Confidence Index rises to -16, the highest-ever level in the 4+ year history of the survey. The index has two components – current conditions and economic outlook, and the economic outlook – though still negative – is the highest since January 2008 despite a brutal few weeks for the stock averages. - And it's all the Republican'ts who are SELLSELLSELLing!  I would too after listening to Fox for days on end…

    Economic Confidence Index, by Political Party, Weekly Averages, January-May 2012

    The SPDR Gold Trust (GLD) recorded $897M in outflows yesterday, the largest decline since August 2011. Commerzbank wants to see more days of outflows, but says it's surely a negative if even ETF investors are caught up "in the selling pull." More: Central GoldTrust (CTU) now trades at a discount to NAV vs. an average 3.4% premium over the past year.

    India hikes gasoline prices 11.4%, effective tomorrow as the rupee at all-time lows just adds to cost pressures for the nation's refiners. The price of crude is off 15% this month alone, but a weaken

  88. India hikes gasoline prices 11.4%, effective tomorrow as the rupee at all-time lows just adds to cost pressures for the nation's refiners. The price of crude is off 15% this month alone, but a weakened currency may be negating much of the salutary effects.

    Iran expects "good news" from the latest talks with the P5+1 group of World Powers – which are due to take place today in Baghdad – although the U.S. says Iran won't receive relief from sanctions. News yesterday of an agreement between the IAEA and Iran over the inspection of nuclear sites sent oil prices lower.

    Shocker from Ernst & Young's new Global Fraud Survey: 15% of CFOs worldwide are willing to make cash payments to win or retain business. E&Y says companies are talking the talk but not walking the walk: “Even if management is strongly communicating that bribery and corruption isn’t OK, they don’t ever see anyone being punished for that.”

    For whom the Dell tolls: As the IT giant's FQ1 miss andcommentary lead to a tech selloff, PC-related names get hit harder than most, no doubt thanks to the 10% drop seen in Dell's (DELL-15.8%) notebook sales. Rival H-P (HPQ -4.4%), due to report this afternoon, is among the biggest losers. Also selling off: INTC -3.1%.MSFT -3.2%AMD -3.1%LOGI -3.3%. (more on DELL)

    Maybe DELL just sucks:  While Dell (DELL -17.5%) crashes in part due to the weak PC sales mentioned in its FQ1 report, Chinese rival Lenovo (LNVGY.PK) has reported another strong quarter. FQ4 sales rose 54% Y/Y to $7.5B, and PC shipments grew 44%. Moreover, Lenovo's PC sales within developed markets surged 85% to $3.4B, the result of both an acquisition and share gains. Dell admitted on its earnings call that in addition to tablet cannibalization, price competition was hurting its PC sales.

    Dow Chemical (DOW -2.3%) issues some cautious comments out of Goldman's Basic Materials Conference this morning, warning that it sees a turbulent operating environment through the second half of this yearWhile demand in the U.S. shows signs of improvement, especially in its building, electronics and transport sectorsgrowth in Europe remains weak and China has stalled.

    Siemens (SI -2.3%expects sales in Germany to grow more slowly in FY H2 than in H1, with Chinese demand continuing to be sluggish but business in the U.S. doing better than expectedSiemens confirms its FY 2012 outlook, saying it expects "a good year." (See also)

     In the wake of the PCX disaster, is there any bottom in sight for trashed coal stocks (KOL -1.8%)? Not yet, chartist Robert Sinn writes. "A stock like ANR at $11/share has almost turned into a call option on the Chinese economy and thermal coal prices," Sinn says, but "just like a call option, it will bleed time premium if China continues to deteriorate and thermal prices continue lower."

    Siemens (SI) is testing in Germany an "eHighway of the Future" in which hybrid disel-electric trucks are fitted with pantographs so that they can be powered by overhead power cables, similar to trams and railway trains. 

    Diamond Foods (DMND +2.4%) back on the rise afterlocking in a $225M recapitalization investment from Oaktree that hadbuzzed on Monday. The deal has new senior notes and warrants for 4.4M shares that could be canceled depending on walnut crops.

    Share of Coinstar (CSTR +4.5%) spike higher against a weak tape after the company announces that it signed a deal with Wal-Mart Canada to bring its movie rental kiosks to stores in the country. 


    Ford (F +1.8%) trades higher after making its celebrated return to investment grade with a boost from Moody's. The action is more than symbolic, as the company now reclaims its iconic blue oval logo, Mustang trademarks, and plant and machinery assets pledged against a $23.5B loan taken out during the recession.

    Uranium giant Cameco's (CCJ) planned effort to raise as much as $1B through a combination of securities may signal an upcoming acquisition, BMO Capital suggests, citing falling uranium equity valuations in recent weeks and CCJ's ample funding capability. Potential targets: Paladin Energy (PALAF.PK), Denison Mines (DNN), UEX Corp. (UEXCF.PK

    Told you so on both of these guys:  More on Cree: Wunderlich's Theodore O'Neill suggests the company is the First Solar (FSLR) of the LED world. He notes both Cree and First Solar rely on exotic materials few others in in their respective industries use, and argues each company's competitive edge is withering as the materials typically used by rivals – polysilicon for First Solar's competitors, sapphire for Cree's – get cheaper. Meanwhile, Digitimes reports LED prices have stabilized in Q2 thanks to strong demand. (also)

    More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit previously won $7B from Enron. Its complaint alleges remarks made in Facebook's S-1 about its ad outlook were "untrue statements" in light of reports an exec told analysts to lower their forecasts. Particularly incriminating, if true, are reports institutional demand fell due to the disclosure. That would make Facebook's situation the polar opposite of what may have recently happened with Groupon.

  89. Apple (AAPL) single-handedly bought $23B worth of chips last year, estimates IHS' Dale Ford, and he sees its purchases growing to $27B in 2012 and $29B in 2013 (ed: those figures might be conservative, given revenue growth forecasts). That helps put into numbers the huge impact Apple's earnings reports have on chip stocks. Rival/top component supplier Samsung (SSNLF.PK) bought $15B in chips last year, and H-P (HPQ) bought slightly less.

    "What we’re working on now feels like the most important and the best work we’ve done," Apple (AAPL) design chief Jony Ivecryptically tells The Telegraph. Rumors abound regarding a bigger iPhonesmaller iPad, and Apple TV set. Ive also evangelizes about Apple's philosophy: "What preoccupies us is that sense of care … what our products will not speak to is trying to respond to some corporate or competitive agenda." (previous

  90. I would take a back seat here, markets and currencies are making violent moves. $ on the verge of breaking out. It looks like a perfect setup to short but fear of intervention makes me say hold for now.

  91. Fidelity stating that "NASDAQ working with regulators to determine what, if any, accommodation might be made" WRT FB trading on Friday. Ouch.

  92. Note our lows of last Friday – Those are the lines we need to give up at if we fail them!  


  93. Oil just touched S2
    Going long

  94. Newt, Phil – re TNA – i'm thinking if the 52's are impossible then the 64s would be worser. (in my case they are 60's but just as bad) True?

  95. All you south and east people
    70s to 90s, I had summer till Monday, 35 degrees and light rain, 40 when I got up and looks like snow soon. I hate mud and snow!

  96. Oil below $90… who would have thought that a month ago!

    Funny we don't hear much about gas prices anymore…

  97. STJ unless you are filling up your car and they say that will be $75, gas prices have been frozen high up here in the pacific NW!

  98. Prices have gone up in CA too the last few weeks. 

  99. shadow / snow — Our snow levels in the SW Washington cascades have dropped to to 4500'.

  100. TQQQ/Canuck – Worth a stab, they are a good mover.  

    PETM/Rain – LOL – good point!  

    TNA/Pat – It's good but we can go much lower so keep in mind the upsides are very speculative at the moment.  

    Volume/Rain – Yes, I wish it were bigger so we'd feel like we're holding something but no buyers on weak volume is not much to base a buying premise on.  Here we are again – sitting around waiting for more QE to save us as the ONLY reason to be bullish – so sad…

    Ultras/Sage – They are very tricky, which is why I tend to stick to a few I am comfortable with.  If you watch them long enough – you kind of know when they are cheap and when they are not but you do have to pick your spots carefully.  Most of the ultras – I watch for months before making a first trade.   Before we started trading QID, there was no market for them at all – now it's popular but we moved on to SQQQ and TQQQ and they are becoming more liquid over time.  

    TNA/$25KP, Newt – We're waiting to see if we have a major or minor disaster.  

    Back seat/Kustomz – Good positioning.  

    Wow, $89.55 – that's NASTY!  XOM and CVX costing the Dow 30 points, IBM costing 25 – AXP, BA, CAT, MMM, MSFT, PG, UTX about 10 each – There's 125 out of 175 right there.  

    Worser/Morx – Yep, I'm afraid so.  That's when you need to roll, when you can't realistically see the recovery in time to put you green.  

    VIX (24.2) and TLT (124.2) not all that panicky.  VIX was 25 on Friday, TLT was 124.50.  

  101. Gas / Sagem – Maybe but /RBOB was at $3.42 on 4/3 and it's now at $2.87… That's a 16% decline. Better than the opposite. 

  102. GLW bouncing on long term support at 12.50.

  103. past experience tells me this selling will not end without some panic- all is too orderly thus far.

  104. Robert Moog's 78th Birthday honored @! :-)
    Adjust the knobs … record it on right … play back!!!
    Google Crafts Playable Bob Moog Synthesizer Doodle

  105. Oil S2 / Lionel – Doesn't look like a strong bounce off S2 yet… The trend is down now so maybe scalp dimes and quarters!

  106. Oil/ St Jean
    With calls from Saudi Arabia's oil minister to bring Brent price below $100, Crude could go back to $85 in the near future
    A blessing for Asian economies and more especially Japan.
    On another front we could be heading rapidly into a global deflationary environment.
    In that is the case US Treasuries are too cheap!

  107. Phil/EDZ,
    What do you think of a June 18/19 BCS, selling the 17 puts for a credit of .17? Thanks

  108. XOM violated 200 SMA but regaining. 
    Lots of ugly technicals in general that could bring the sell bots in if we breakdown here.

  109. Phil – Ornstein was being generous…..

  110. Oil / Lionel – And with the Iran premium deflating, you are right, we could see $85 before we $100 again. Overall it would be good news all around (except for Putin and Chavez though… )

  111. TLT July 120's at 1.95 is the trade of the century.
    Or at least, I hope it is …  8)

  112. stjean- we have had 2 members mention the D word now ( deflation) who knows- maybe we build a consensus?

  113. Deflation / Jthoma – I think that we posted about that yesterday…  It does validate what I was saying yesterday – CBs don't have a grasp on what is happening right now (and it does reflect on their responses to the problems) since it doesn't fit in any of their models. With all the free money swirling around we should be faced with much higher inflation (or at least the risk) and yet deflation seems as much of a risk it seems. Very strange times!

  114. rainman
    Now I am really depressed, you get it first, and my house is at 7,000 feet!

  115. Phil / SONC – I'm in the June 7.5 call from Jan. 3rd which I have a small profit on.  I took out the caller a while ago.  stock has had a good run here but could breakout higher if given time.  maybe sell it and wait for better reentry is best move.  big candle today. 

  116. .748% yield on 5 year treasuries.
    So if I give $100 to Uncle Sam, I will be given back $103.80 in 5 years from now.
    Let s think of another way to make $3.80 in 5 years with $100…???

  117. screwflation/jthoma, stj: We've been having this debate for 3 years now. I think Japans been having this debate for going on 20+ years now.

  118. Looks like there are a lot of people on the board from the Northwest. How many are in Seattle area? I live in Bellevue.

  119. UST auction cleared.
    Unleash the Buy Bots!!!
    IWM june call  (end of month) 78 for 1.21
    They expire the week after election weekend.

  120. Et/ NW
    I am a Chicago transplant in Portland

  121. Phil / SVU – I have short Oct. 5 puts from 4/9/12 which i will hold onto and see what happens.  I also have short Jan '13 7.5 puts from 1/18/12 which i prob should roll out.  how about the 2014 7 puts for .25 credit?

  122. Go CHK!!

  123. Kirkland, Washington

  124. Vanc, BC

  125. StJ / Lflan – Momo –  LULU puts from the MoMo are up 77%.  I'd think it makes sense to cash?

  126. quite ironic that the MOMO's which have little value are not hurting anyone today and the more solid stocks whic are what " everyone should own" are hitting below the belt- setting up to be a memorable Memorial Day but not necessarily for the right reasons.

  127. This is where the bears want to see a big rejection..

  128. stjeanluc….Good afternoon!   To answer your 9:51 a.m. question……..My timeline for trades is highly variable, and depends on a number of things…….the equity, the market, type of trade, and so on.    In  general, I will hold a trade until I've maximized profitabiliy, or until I'm relatively sure the trade is a losing proposition.  None of the holdings in the portfolio fit this description presently.   The AAPL October bull call spreads have both legs profitable, with more to come.  The AAPL June calls are pushing upward today against the market, and the  LULU trade is 78% profitable and moving in  the proper direction.   Should we have taken our 15% yesterday and repurchased positions at a lower price today?  Of course!!   And I will definately concede that to you, because I generally take a portfolio to cash whenever I go up greater than 10% in one day.  So my bad on that.  So next time the 50k goes up 10%+ in a single day we can discuss what we should cash in.   But I think we are OK.   And no, I am not a convservative trader.   So I don't mind some profitable conservatism being pushed my way.    :)

  129. And I just now saw Burrben's suggestion to cash in the LULU trade for 80% +.    I agree.  I've just placed a buy to close order at 20 cents. 

  130. Very west Wyoming, not really the northwest but I am 1/2 mile from Idaho.

  131. Let see if oil can regain S1 or I will bail out
    Good work Iflan!

  132. Taking our levels back but the Dow has a long way to go.

    Oil/StJ – I believe $85 was our target but I certainly didn't think we'd hit it this week!  

    Panic/Jthom – But what does a low-volume 90% bot market panic look like?  We are at record low-levels of human participation and most of those humans are fund managers, who are told what to do by computers anyway.  I think that's why our 5% lines are working so well – that system is based on my observations of the behavior of Trade Bots so less humans means less deviation from our expectations. 

    EDZ/Jomp – It's a good hedge but I'm off the bear stuff at the moment.  

    TLT/BDC – Puts you mean….

    Deflation/Jthom – Can't happen.  US owes $16Tn – that doesn't deflate.  Drop GDP from $16Tn to $12Tn and debt to GDP ratio climbs from 100% to 130% while tax revenues fall off and we're unable to service existing debt.  Nope, it's the path to doom and they'll start printing easy to counterfeit $1,000 bills before they let that happen.  I put up that deflation chart this morning more to make the point of the urgency for QE3 because THAT is what the Government fears – far worse than inflation.  

    Deflation/StJ – Plenty of money – no velocity = deflation.  Gotta put people back to work if you want money to move.  

    SONC/Terra – I like them long-term but you're not in a long-term position so, if you're not looking to roll back to a long spread – I'd keep a stop at the $8 line.  

    Treasuries/Lionel – I know, such nonsense but notice it was mission accomplished for the auction and NOW the markets can move back up as we took all that panic money.  What a scam!  

    SVU/Terra – Damn, they just get cheaper and cheaper.  You collected about $1.50 for the short $7.50s and now they are $3.50 so you're down $2ish (funny, she doesn't look twoish…) and you already have Oct $5 puts at $1.10 so why not just roll those and the Jan $7.50 puts ($3.40) to the 2014 $5 puts at $2 and that puts you in the same amount of puts for net about $1 for a $4 entry, worst case, rather than some at $7 and some at $5.  

    Oil rejected trying to get $90 back. 

    Dollar 82.26, 82.36 was the high so not really backing off during this bounce.  

  133. Thanks lflan – I guess I'll play the voice of conservatism for once in my life… 

    At the same time, I also format the portfolio spreadsheet so that people can see what's profitable and what are the levels so it's really up to individual members to make some of the decisions. Everybody has their levels of greed and pain tolerance. For me, $5K in one day is plenty until the next trade!

  134. Anyone / ALU - does anyone know how good their new XRS router is and how much market share they may be able to take from Cisco and Juniper?  may be a good speculative bet at these levels.  turned cash flow positive last year.  Zacks has a $2.50 target on them.

  135. Iflan – I cud not get in the AAPL October trade. The oct $550′s are now $57 (were $54 in the am) as opposed to your net of $51.50. Would you recommend scaling into the long and selling the short call another day?

    Or, just wait till tomorrow?

  136. etrad – orcas, wa

  137. terrapin
    Routers are a cyclical market, one reason CISCO went down. Most were updated since the 2008 crash, need a better market for growth, like the economy to really start growing.

  138. Redmond, WA here

  139. Phil/Super Disaster Insurance,
    IF you want to protect against testing last summers lows, what is the best way – OTM BCS on the usuals suspects TZA, SQQQ, FAZ, or simply OTM puts on DIA, SPY, QQQ?
    Ex:  TZA July 25/35 BCS for $1.20 and sell the July $19p for 1.18 for a $0.02 dr for $10 of insurance

  140. Phil,
      I know I've asked this before, but here it is one last time. I have 300 ERF shares and 5 short Oct 17 puts at $0.88. The stock is getting killed and it seems that they are borrowing to pay their dividend. I am close to bailing on the stock and option position but wanted to ask you one last time because they recently announced that shareholders could opt for shares in lieu of a dividend. I can see how that may help, but does that make it something to DD and stick with or go with my gut and bail (as I have learned from you to cut losses since there are plenty of other places to put your money). Appreciate your reply when you have time. Thx.

  141. stjeanluc….I agree.  5K in a day is enough in a 50k.  Shout it out to me next time!  And, yes, members should NOT follow any virtual portfolio exactly.  It's up to all of us to trade individually in ways that suit us best. 
    nicha.   I think being long AAPL is important right now.  Look at it fighting this market!  If I were buying today I would be buying October or January calls with no covers.   I tend to cover after I've gotten some traction on the long calls (or puts, as the case may be).  Alternatively, the spread can be bought outright.  And tomorrow is OK.  But I wouldn't wait till Tuesday. 

  142. I'm showing FB high $42. My FB NYC guy called but I didn't answer, maybe he bought 100 shares? Were is Phil's sheep picture? FBeople?

  143. SVU – wow! had to add one more nibble with a 2014 $5 buy write… net $1.68 entry after commissions! that gives a 20.8% dividend through jan 2014 whey i expect will be taken away at $5.  i do not expec them to remain down here though all of that. but if so, and i buy more at $5, leaves me with approx $3.38 avg cost basis. 

  144. Anyone but me think we should do a long (but short term) play on NFLX?  

  145. Iflan/ Let us guess June 75 calls?

  146. TQQQ – more than 2,200 contracts traded today of the Jun 47.50

  147. Phil : I haven't been able to read a lot of you lately with my new business,but I'm afraid I let this position get away from me.
    Buy 1200 shares ACI at $13.21,sell 12 Jan.$10 C at $3.55 and sell $10 jan. P at $1.37 for net $8.48/$9.24
    I don't mind having 2400 shares long term at $9.24 ,but I don't want any more since they have a lot of coal assets. any suggestions?Thanks

  148. lionel….I was thinking more about selling June puts on NFLX, maybe near 65

  149. ALU/Terra – Specs are very nice and I put them on the TWIL list back on the 17th for that reason.  That was only .10 ago and I still like them at $1.55 for this cycle. 

    Disaster/Canuck – In a real disaster, a bull call spread on an ultra-short is good.  The OTM puts are more momentum trades than long-term protection – one of the mistakes I made in the Income Portfolio as we let the long hedges cost us too much money on the big rally.  TZA is good or the SQQQ I mentioned yesterday.

    ERF/Japar – They have the same issues as any gas play – this may only be the beginning of pain this summer.  I think I'd sell them and buy CHK instead because you can only sell ERFs Jan $6 puts for .20. 

    FB/Shadow – All those guys have slunk back into the Shadows, including my brother who thinks I ruined the IPO with my negative take on them….

    SVU/Scott – Nice entry.  

    NFLX/Iflan – Still 36% down in last 90 days.  

    ACI/Dflam – Just because you don't mind owning them, doesn't mean you should overpay.  You're in for $8.48/9.24 so not that bad at $7.17 and I'd wait for the chance to roll out to 2014 as long as they can hold $7.  The Jan $10s are still .75 and the $10 pus are $3.65, so that's another .80 in premium so you stand to make $1.55 for not doing anything but letting them expire.  Since $1.55 is 18% of $8.48 – it sure isn't a bad idea to wait a few months unless things do get worse.  

    Not a good rejection off that run back up.  Back to testing the Futures must hold levels..  

  150. NFLX / lflan – Volatility would suggest June 60 to me. They are still 1.40 now or over 20% of margin in 23 days. And again, I am being conservative….

  151. iflantheman
    I looked up NFLX on a 1 year and it is near last years low but it stayed there for a long time. Its't future was always ify prob not.

  152. NFLX……All good points.  We stay out.   

  153. Phil
    What's your opinion of ARR as a buy/write? The company seems sound and I like the dividend.

  154. Anyway, I have a bit of a jabobeast reflex on NFLX.  Very poorly run company.

  155. Phil
    It must be hard being a brother but now I have not answered the phone twice. The guy really PO'd me about FB and it was not his first dumb pick, couldn't understand my take on NFLX either. He was right about PCLN, but I still think the idea is stupid and it will have it's day.

  156. Oil/ Bots fought hard to keep the oil below $90 for the close.
    So Marketwatch could come up with a Breaking News "Oil first close below $90 since October"
    Great comedy act!

  157. Scott Mi – NICE! I went to LaConner and then Mount Vernon Christian High School and used to Play Orcas Island in basketball every year. Lots of WA people on this board…

  158. LULU trade closed ……   @ .20   ….   for about 80+%.  

  159. Phil- good point as to computers and bots- my age makes me more used to the days of the sheeple bolting for the door- trying to get in or trying to get out. I will be the first to admit I do not understand the daily trading of the market anymore. I used to think I had a talent but my mind is too logical, at times, to understand the computers and their manipulation- other than the fact they do it almost at will.

  160. Phil,
    This is old from SNL but sometimes you just need something to smile at!  Enjoy

  161. etradingsignals et al - Mocha is in Redmond WA.  Looks like a PSW night at Taphouse is in order?

  162. Nice phantom bar on GLW to 14.17.

  163. Bellevue, WA on the Redmond fringe. 

  164. Rain or anyone here, is there really any significance to a P bar?

  165. A 150 point turn-around on the Dow…still amazes me at time.

  166.  Are we long oil yet?

  167. well we saw that 1295 level..let's see if we can't rally for a few days..long week end tho.

  168. sagemm1
    I believe there is. On a longer term chart they show buyers or sellers coming in. On short term it is usually the BOTS clearing stop/limit orders before a move in price. Don't bet the bank on it.

  169. CHK Jul20 14put for $1.60?  I sold some for $1, so I'm "down" about 60%.  Time for a DD, or leave it alone?

  170. And there's 12,400 back! 

    Imagine where we'd be if the dollar wasn't 82.25.

    ARR/L4 – They seem to exclusively hold MBS they buy from FRE and FNM with a lot of adjustables so I guess they are betting rates go up over the long haul.  Bad for them if they don't.  I think the company is priced on some unrealistic expectations and they blew through their cash VERY quickly snapping stuff up.  Maybe it was the right call, maybe not but I'd consider this one pretty speculative – as is anything that pays a ridiculous 17% dividend if you stop kidding yourself that money is free and you've discovered a pot of gold.  I guess if you can sell Jan $7.50 puts for $1.50, it's worth a poke and that's more than the dividend so maybe see how that works out before overpaying for the stock.  

    WTF= are we going green now?  

    FB/Shadow – Up 3% today, maybe he'll call back. 

    Manipulation/Jthom – You just have to apply what you know about people and imagine that people took that knowledge and programmed computers to use it to their advantage to drive people in and out of stocks constantly, instead of over long cycles like they used to.  Over time, more and more people quit the market as they realize its fixed leaving just the bots and people like us who can make money off them.  

    SNL/Jacalyn – Didn't we do that yesterday?    Good clip though. 

    Oil/ZZ – Over $90 is a good play, especially now that momentum has shifted but tough for an overnight. 

    Yep, there goes the Nas and the RUT – our leading indexes.  Silly markets…  

    CHK/Burr – Be happy if you come out on the original I think.  You can always roll and DD if it doesn't work out over the next 30 days.  

  171. Got to love this market.

  172. Sell to close the June 570 puts

  173. I got 17.00    I will explain later why I exited these. 

  174. sage / pbar — Sometimes it seems they test the depth of the markets that way as well as the resistance points. Sometimes you'll see smaller p-bars that end up acting like risistance once the limit is hit.  I find it intersting that they happen at all.

  175. Phil / WTF — You had doubts?

  176. lflan, you mean the June 570 calls, right?

  177. Jeez, the AAPL long / FXE short I had on has gone off the charts.  Big up to Phil for the lessons on balance and patience.

  178. Going to  have to crack 12,500 to get the Dow green.

  179. aussie…yes, the calls.   

  180. Was there an actual news event that turned the markets or pure bot play?

  181. never mind, just saw news

  182. ARR/L4
    Phil I was just waiting to see your comments on this one. Their interest payments are simular than AGNC and NLY How ever neither call nor put option do have open interest. This was what was disturbing for me.

  183. HFT programs going bananas

  184. Easy peasy!

  185. Rustle — news?

  186. Who says we have a down day today I am sure they are serving caviar in Brussels.

  187. Wow, those AAPL 570 calls spiked.  I got out for even, but they are 18.70 now!

  188. Out of oil at 90.44 for 80c
    sold IWM 78 calls at 1.68 for 38% profit
    How nice to rally on rumors….

  189. Rustle – what's the news?

  190. So I exited the AAPL June 570s in the MoMo port for a small loss….because….my entry yesterday was less than stellar, and I did not want to risk any more on the trade.  If you are in the trade still, you can exit for a profit, or hold, depending upon your appetite for risk.  But the October spread, a more conservative and sensible trade, continues to make us money on AAPL.  

  191. lionel- you have to laugh- my best trade was short oil from yesterday which I covered when we broke 90!

  192. Safe to go back in the water? 

  193. Phil what do you think is the biggest risk going long oil overnight, the trend?

  194. Iflan: I'm in Oct. & Jan., will hold unless you suggest otherwise.

  195. Iflan,Could you please repeat the October AAPL spread. I just came on and cannot find it. Thanks in advance.

  196. NOW AAPL takes back $570 – too funny! 

    Doubts/Rain – Wasn't expecting a 2% comeback in 3 hours.  Europe is going to be whipsawed by this, especially if Asia follows suit.  Gap up at their open and those people won't know what to do.  

    Nicely played ZZ!

    A little green pokes out from the major averages after a panicky morning. The Nasdaq +0.1%. The S&P -0.1% after being down about 1.5%. Chatter about movement towards eurobonds as well as the Fed's Kocherlakota mentioning QE may be helping the mood.

    Taking questions after a speech, the usually hawkish Minneapolis Fed chief Kocherlakota says a fall off the so-called fiscal cliff would argue for additional QE. The "fiscal cliff" refers to the 2013 expiration of tax cuts and other benefits that some argue could throw the U.S. into recession. 

    Italy's Mario Monti has joined France's Hollande and climbed aboard the eurobond train, according to a Dow Jones report. If so, he would join Spain's Rajoy who has also offered guarded support for same and establish a solid bloc to counterbalance German opposition to jointly issued bonds. 

  197. This may be the NEWS!
    3:18 PM Taking questions after a speech, the usually hawkish Minneapolis Fed chief Kocherlakota says a fall off the so-called fiscal cliff would argue for additional QE. The "fiscal cliff" refers to the 2013 expiration of tax cuts and other benefits that some argue could throw the U.S. into recession. [U.S. Econom

  198. News was rumors of Euro Bonds.

  199. Phil
    Was that our blow off top? Fake fake fake whatever definately not investors but maybe for investors. Come on in the water is fine!

  200.  one beeg  turnaround for the market today… have to look at this as bullish….but with the european fuktard dummit going on… no way to know what goofy ideas will come out of it – or how the market will react to such  gallic goofiness…going to trim back some long position picked up during the decline this morning.

  201. After tomorrow's Treasury auction, we should be safely over the $1T deficit mark for FY2012 with over four months to go.  Nothing to see here folks…look, FB is up 3%…

  202. chasw…..for the MoMo we got into the  5 October 550 calls at an average of about 51.00 on May 21, then covered with 5 October 650s for 20.25 yesterday.   stjeanluc has the exact figures in the spreadsheet above.

  203. kocherlakota…US fiscal cliff could prompt more qe…hahaha! yeah! that will really help!

  204. jthoma/
    Great move.
    I was just betting a rebound on s2 intraday using StJean lines.
    Always a pleasure to buy futures off you :)

  205. What fun day! Have a great night people!!

  206. I can't take the credit directly as I was simply long USO puts – maybe indirectly the market maker worked it out with a hedge- congrats to you! :)

  207. Phil – great call earlier that S&P 1300 would hold.  I took off some hedges and added XLF spread, TLT puts and a few more longs. 

  208. HPQ still has people nervous.  I'm hoping DELL simply blew it on their own, won't be the first time…

    Nice on oil Lionel!  Good timing with IWM too. 

    Safe/Ariv – Er, no but it's lots of fun if you don't mind swimming with sharks.  

    Look at that money flying out of bonds – 123.40 already.  Gotta love those Sept puts…

    Oil/Sage – Biggest risks are the reality of low demand, Iran being "fixed" and the EU collapsing.  As I said earlier, it's a no trade for me but couldn't resist the bounce off $90 but no way could I go to sleep with that trade open.  

    Water/Shadow – Sharks with friggin' laser beams I tell ya!  

    Bullish/Angel – 147M at the close so not exciting volume but a very nice turnaround day if it holds up for more than 12 hours.  

    Thanks Terra and nicely played.  

    Well that was a really exciting day – hope everyone had fun!  

  209. Yesssssssssssss!  HPQ shoots and scores – nothing but net!!!!  

  210. All,

      Does anyone have a link to the wiki page? I'd like more info on setting up that LLC that we were talking about yesterday and a list of those books.
      Also, I use TD Ameritrade. Am on the phone now trying to get a flat $0.75 per contract on options trades and $6 on stock trades. What kind of commission are you guys paying?

  211. Thanks Phil/ Nice play on HPQ!! Let s see how it wrks out tomorrow

  212. Fun day indeed.  See you all tomorrow. 

  213. HP/ 27,000 layoffs….That is really a big number. A real tragedy for those made redundant.

  214. Holy crap – NTAP down 24% on outlook.

  215. NTAP, on the other hand, blew guidance and got killed.  

  216. DOW closed down 6.66!!

  217. Entered smallish USO long position, to get a little turbo boost from a potential Euro retrace, in the event Merkel decides that good manners requires some sympathetic noise in Hollande's direction after this week's currency debacle.

  218. Close the market goes down because the buck goes up, funny how it happened @ 4PM!

  219. Good save at the end, but we need to see how long the euphoria will last in Europe. Color me sceptical…

  220. I can’t get too crazy about these HP numbers:

    Looks like rumors of major cost-cutting measures at HP are true: the company along with its fiscal Q2 results has just outlined plans to slash 27,000 jobs by the end of its fiscal 2014. The drop, or about eight percent of its workforce, is being offered an "early retirement" if it doesn't want to wait to be let go involuntarily. The move is intended to streamline HP's operations and save between $3 billion to $3.5 billion a year by the time the cuts are done. As for the results themselves, they explain all too clearly why the cuts are inbound: HP 's profit dropped a massive 31 percent to $1.6 billion, and its revenue dropped three points to $30.7 billion. CEO Meg Whitman touted the results as exceeding an earlier glum outlook, but with the enterprise, printer and services groups all dragging the company down, it's clear that HP is in the same boat as a struggling Dell.

    So the big news is that they will save $3 Bn by cutting 27,000 jobs. Other than, revenues are down, profits are down! Not sure Hewlett or Packard would be thrilled!

  221. Sorry, forgot to update the oil inventories…

    Just in case people would worry we could run out of that stuff!

  222. stjeanluc- I know I have done it before but we can not do it enough- thank you for all the time and effort you put into your postings and keeping things in a readily available form for us to find. I know it takes much time and effort and you go above and beyond the call of duty. Please let me know if there is ever anything I can do to help you- I am usually available unless traveling. We often forget to say thanks but you are very much appreciated!

  223. I know I've written this before… but who in the market is not expecting more QE?  We've known it, and will continue to know it.  Does it ever get priced in?  

  224. Hello All – So, after summit number 10,000, they are saying they want Greece to stay, are discussing Eurobonds, depositor's insurance, etc.  At what point does a responsible adult stand up and just say "enough is enough and we can't keep up this endless bond scheme"?  It is just ridiculous to me to be honest.

  225. Future Technology – K@W article on life After Broadband

  226. Anybody know who is arranging Vegas and when?
    Phil says, ‘yes, Vegas, baby- someone is working on it’.
    I missed it last year as they had me studying for some exam in early Nov…but would love to meet some of the smart people on this site in person

  227. I'll be heading down Chile and Argentina for Oct and some of Nov.  Let's have the meetup in Mendoza!  Lots of great wine!

  228. 401k rollovers – another lesser known opportunity you may have if your 401k includes company stock is the NUA Tax Break.  Worth asking about/looking up.

  229. 401k and NUA – a fair bit more on Net Unrealized Appreciation from Investopedia.

  230. You are welcome Jthoma! This is actually fun for me… I'll be in touch if I need help!

  231. For those on the board that like to crunch numbers, I find this data set fascinating regarding oil, especially the SPR data.

  232. Volume/Phil – I know the "auction action" is something i need to better understand. what do you look for/key on when observing volume?

  233. SVU trivia – hasn't seen this low price since january 1988, one split back and shortly before dividends, when SVU combined it's affiliated stores into the 2nd largest food retailer in the US with more than 3,100 stores in 32 states.  Peaked in june/july 2007 after acquiring Albertson's (that was my local, with the olde cash registers when i was younger) in 2006. Now has 140,000 employees operating 2,394 and supplying 2,700 independent locations across the US (except for Nebraska and Hawaii). In 2010 launched a " holistic business transformation effort that focuses on creating a company that drives sales and efficiencies while positioning the company to become America’s Neighborhood Grocer."  This appears to be still underway. 

  234. Burrben/ Chile…what a great idea!
    Aruba is also quite nice and internet is fast on the island.

  235. QE/peedle:  I think QE is probably priced-in considering the S&P is hovering around 1300 while the entire world enters a slow-growth/recession period.    The Bernanke Put doing its job?

  236. I don't know if China's landing is going to be "soft" or "hard" but one way or another, its landing.  It also sounds like their is a credit crunch happening:
    China's Young, Burly Shipyards Sinking Fast

    'The China Shipbuilding Industry Association said new orders fell 40 percent nationwide in January and February from the same period last year. Sixteen key companies monitored by the association lost money, and 37 saw their profits decline.
    Essence Securities said eight of China's 10 largest shipyards received no new orders between January and April. The exceptions were Shanghai Waigaoqiao Shipping Co. and Guangzhou Shipyard International Co.'
    Ore, coal demand falls

    'Some Chinese steel mills may have deferred shipments agreed to under long-term contracts with foreign traders, but not those under short-time contracts, said Zhang Lin, senior researcher at the Lange Steel Information Research Center.

    Shougang Group, one of the largest steelmakers in China, said the company didn't defer any iron ore or coking coal cargos, but it added that steel prices are "really weak".
    The majority of steel mills in Shanxi, Hebei and Shandong provinces have halted production, said Dai Bing, senior analyst at, a coal-trading website.'

    Weak property developers challenged

    '"Property developers in China face tough choices in 2012. Those companies with large maturing debts and refinancing risks on their offshore debt and trust loans are likely to push property sales by cutting prices aggressively or selling assets," Lu said.'

  237. Just thought this was an interesting chart. Its the monthly S&P500.  Notice how during the past two summers we broke under the 10-month MA and broke back up.  This month the 10 and 20-month MA have converged at 1290, we've already tested it once and bounced off.
    Y'all think thats an important level?  ;)

  238. Good morning!  

    Quite the adventure in the Futures this morning – glad I missed it as we were so bullish into close, would have just been annoying.  

    Now we're up nicely with Europe up about a point and Asia was mixed but who knows what will happen in the next three hours, right?

    Dollar still very high at 82.25, Euro still very low at $1.2575, Pound $1.5676, 79.36 Yen to the buck and EUR/CHF on thatcrazy train # 1.2009.  

    Oil back to $91, gold back to $1,587. silver $28.03, copper $3.446 (still weak), Nat gas blazing to $2.71 (almost worth extracting at that price!) and gasoline COLLAPSED to $2.81 – see why I didn't want to play it bullish?  

    So, what's the news?  

    Thursday's economic calendar:

    8:30 Durable Goods

    8:30 Initial Jobless Claims

    10:30 EIA Natural Gas Inventory

    11:00 Kansas City Fed Mfg Survey

    1:00 Fed's Dudley: 'Regional Economy'

    1:00 PM Results of $29B, 7-Year Note Auction

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet

    6:00 AM Overseas: Japan +0.1%. Hong Kong -0.6%. China -0.5%. India +1.9%. London +0.7%. Paris +1.0%. Frankfurt +0.1%.

    Courtesy of corporate insiders, the bull market may have dodged a bullet, based on the historical ratio of the number of shares insiders have sold to the number they've bought. The average level for the ratio over the last four decades is between 2-to-1 and 2.5-to-1; the ratio was just 1.63-to-1 last week after reaching 6.56-to-1 in March.

    It's got to be some sort of bottom (or top depending on point of view) when bond fund managers hit the WSJ en masse to talk about how they've cut exposure to Europe and bulked up their holdings of "safe" Treasurys.

    Mostly a compendium of conventional wisdom, Freddie Mac's May Economic Outlook contains some interesting data about the refinance boom. One in three borrowers took advantage of low rates to reduce the term of their loan from 30 years to either 20 or 15. Four out of five either paid down their balance or kept it roughly the same. A full 95% chose a fixed rate loan.

    Working our way to $1.5Tn in pledges:  BOJ governor Shirakawa says the bank is committed to easing, but won't do so solely to weaken the yen. Shirakawa adds the "biggest factor affecting currency moves now is investors' risk aversion," and there's no evidence that an expanded monetary base will weaken the currency. Currently: USD -0.13% to ¥79.36.

    Tokyo Electric Power (TKECY.PK) become the first utility to hike power rates for its customers in response to Japan's looming power crisis. The utility behemoth plans to raise rates for some heavy users by 12% starting in July, while the average rate increase for typical household customers will come to 6.9%.

    Still sucking:  Eurozone flash PMI composite index comes in at 45.9 in May, a 35-month low, vs. 46.6 expected and 46.7 previous. Manufacturing at 45.0 vs. 45.9 prior. Services at 46.5 vs. 46.9 prior.

    German flash manufacturing PMI at 45.0 in May, down from 46.2 in April. Services unchanged at 52.2. Composite output index at 49.6, down from 50.5 prior and a six-month low.

    German final Q1 GDP comes in at +0.5% Q/Q and +1.7% Y/Y, both in-line with preliminary readings

    So bad – it's GOOD!  HSBC's flash estimate of China's PMI: 48.7, down from last month's 49.3. If the preliminary reading is confirmed on June 1, it will mark seven months of manufacturing contractionbolstering the case for more stimulus.

    More on China's HSBC PMI: Along with a decline in the headline number were falls in both input and output costs, perhaps giving greater scope for easier monetary policy (full report). Remember, this report covers smaller, privately-owned firms as opposed to the official PMI, where the companies have state support and better access to credit. 

    Major brokerage reforms underway in China point to the desire to nurture its own investment banks to compete with the Goldman's and Morgan's of the world. Previously limited to trading and underwriting, brokerages will be allowed to expand into derivatives (CDO squared for Chinese mortgages!), asset management, and private equity.

    German Q1 exports +1.7% Q/Q, a sharp turnaround from -1.5% in Q4. Imports flat Q/Q, up from -0.6% in Q4.

    Confidence in Germany's business sector ticked down in May, with IFO's Current Assessment coming in at 113.3 vs. 117.5 in April. Business Climate comes in at 106.9 vs. 109.9 prior.

    The latest patch for Europe's woes, the Eurobond, may be hailed by some as the "Kentucky do-all" solution for fixing the Greek debt crisis, but don't count on it. The very thought of issuing bonds backed by 17 fiercely nationalistic and independent-minded European nations simply reeks of potential problems. Off the top, issues such as duration, how they're guaranteed and getting them to market without violating euro zone membership requirements – will all prove to be a tough sell.

    Italy's Mario Monti has joined France's Hollande and climbed aboard the eurobond train, according to a Dow Jones report. If so, he would join Spain's Rajoy who has also offered guarded support for same and establish a solid bloc to counterbalance German opposition to jointly issued bonds.

    Goldman doubts a "credible" pan-eurozone deposit schemecan be introduced in short order. Forgetting how unpopular the move would be in Germany, the country's constitutional court has limited the scope for Germany to widen its financial obligations to the EU. Then there's the rest of the eurozone, which would have to accept a substantial loss of sovereignty. (earlier)

    OMG – FINALLY someone is standing up to these jerks!  U.S. manufacturers are opposing JPMorgan's (JPM) plans to launch an ETF backed by physical copper, telling the SEC the fund would "grossly and artificially inflate prices" and "wreak havoc on the US and global economy." JPM's regulatory filings suggest its ETF could hold 61,800 tons, or 27% of the copper held in the London Metal Exchange’s global network of warehouses.

    Now we need to stop these jerks!  Approving the Keystone XL (TRP) pipeline could boost U.S. global warming emissions by as much as 0.3%/year, a CRS reportsays – not exactly "game over" for the climate but still like putting 4M extra passenger cars on the road. But it's not just Keystone XLthere are plans to send 3.1M bbl/day of oil sands from Alberta to export markets, ~5x as much as Keystone XL.

    Are railroads the new way to play the oil sands boom? Rail sports several advantages over pipelines, thus the weekly number of carloads of oil products in North America has been surging since early 2011. But there are disadvantages too: it costs ~2x as much to move oil on rails than through a pipe, and the boom in oil traffic for trains merely replaces part of what’s being lost in coal traffic.

    decision from the EU's second highest court denies an appeal by Mastercard (MA) over excessive interchange fees charged on cross-border card payments. The company failed to convince the court that the fees were fundamental or that a significant number of European banks would stop using Mastercard if they were reduced.

    There's little new in Chesapeake's (CHK) latest letter to shareholders, rehashing "numerous" actions its board has taken to enhance corporate governance – cutting directors' and CEO compensation, et. al. The letter is said to address issues raised by NYC Comptroller John Liu, who is calling for the rejection of two board members in upcoming elections.

  239. Costco (COST):
     FQ3 EPS of $0.88 beats by $0.01. Revenue of $22.3B (+8.2% Y/Y) beats by $0.2B. (PR)

    More on Costco FQ3: Net profit rose to $386M from $324M, comparable sales +5%, with the retailer enjoying increases in the U.S. and abroad. Costco's earnings came a day after Fitch affirmed its AA- rating, citing the company's strong competitive position, operating performance, and cash flow.

    Toronto Dominion Bank (TD): FQ2 EPS of $1.82 beats by $0.04. (PR

    Though shares are down 18.1% AH thanks to the weak FQ1 guidance and lack of FY13 guidance accompanying its FQ4 report, NetApp (NTAP) insisted on staying positive during its earnings call, and only blamed the guidance on macro issues and EMEA/public sector demand. Execs became defensive when asked about share loss, pointing to the limited growth seen by rivals while ignoring the fact FQ1 guidance implies the same for NetApp, in spite of its focus on some faster-growing storage segments. 

    Some positives from H-P's FQ2 earnings call (webcast): The company passed Dell to become the world's #1 enterprise PC vendor; PC ASPs rose; the 3PAR storage unit again saw 100%+ Y/Y growth; Gen 8 server ramp strong; Americas revenue was flat Y/Y (-4% in FQ4). Some negatives: EMEA revenue fell 7% Y/Y (6% in FQ1), Asia-Pac fell 1% (+3% in FQ1); services margins expected to remain relatively weak; both demand and mix issues hurting printer margins. HPQ now +10.4% AH.

    Alcatel-Lucent (ALU +4.7%), down ~40% since February, outperforms with the help of bullish commentary regarding its 7950 XRS core router line, launched yesterday. Deutsche thinks the products offer "meaningful improvements" over rival offerings, and could take 5%-10% of the U.S. core router market simply by leveraging Alcatel's mobile carrier relationships. Goldman thinks the hardware could cause some headaches for Juniper (JNPR -4.8%). (previous)

    My favorite insurer:  Aflac (AFL) is among the names that pop up when DividendChannel screens its top ranked dividend stocks for those which have also seen insider buying over the past 6 months. Insiders sell for a variety of reasons. They buy because they they want to make money. The stock currently yields 3.4%.

  240. I dont see any Phil comments, is it me, or is he sleeping in this morning?

  241. Well, as Roseanna roseanna danna used to say…Nevermind.

  242. Volume Scott – Hopefully we can go over later (if you remind me).  Nice summary on SVU.  

    Good china notes Kinki and I don't like that S&P chart one bit as M's do tend to get formed….  

  243. Phil – why did we switch from QLD that we have played in the past to TQQQ?  At the time, I played QLD successfully, this time TQQQ less so…