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Flip-Flopping Thursday – $267Bn from the Fed Not Enough!

SPY DAILYAnd we're out!

It might be a little early because we did get another $267Bn from the Fed yesterday but that plus $125Bn given to Spain and $100Bn to the IMF this month is "just" $492Bn and that, according to our calculations, should be good for 1,350 on the S&P, tops.  If they want to get to 1,400 – they'll need another $500Bn from Europe and, while it is widely expected to come – the Fed came up short and if the EU comes up short as well, we could be talking flash crash so we took advantage of the pre-Fed run-up (as planned in yesterday's post) to get back to cash.    

My morning Alert to Members was short and sweet:

Good morning!

I don't know if you guys usually click on my little links but this one was the most important of the day – Don't be white people – GET OUT!!!!

This one was so important that I tweeted it (you can follow me here) and Facebooked it (you can follow us here) and I even put it out on Seeking Alpha's Stock Talks (you can follow me here) so don't say I didn't warn you.  Sure the market may go up as funds dress windows into the end of the Quarter/Half next week but we caught the run off the bottom this month so why push it when the upside looks limited and the downside does not?  

Other than 2014 spreads in our new Income Portfolio – all of our virtual portfolios went to cash rather than risking very nice first half gains.  As of yesterday morning they were:  

Much thanks to StJ for keeping these tracking portfolios – all back to cash now and hopefully we can match that performance in the second half of the year although I think we're going to ditch the very boring $5,000 Portfolio in favor of a $25,000 Portfolio with only ordinary margin (not a part of a larger portfolio like our Income Portfolio with that margin to draw on).  So it will be more a bit more conservative than the aggressive $25KP but able to day-trade – unlike the $5KP and able to use ordinary margin – so better for learning basic option strategies.  

Hopefully JP Morgan will sign up some of their traders as it seems the trading losses from the London Whale could hit $6Bn, according to the Post (not that you can believe them) and their unnamed sources.  It is expected, however, that accounting tricks (depreciation of credit values, for example) will allow them to paper over the loss with Billions of adjusted "gains" so I wouldn't go betting against JPM but we WERE long and now we cashed out and we'll wait on earnings to decide what to do with the Financials.  

Our own market thesis was for massive QE from the EU and the Fed and, since the Fed has hemmed and hawed once again and, so far, we really have nothing concrete from the EU to hang our hats on so why then should we hang out money out to dry on the HOPES (not a valid investing strategy) that we get more stimulus – which we know is not a real fix anyway?  

NYMODo you want to know what the scariest thing is?  The chart on the left.   That's the NYSE McClellan Oscillator (thanks David Fry), which is a breadth indicator derived from Net Advances, the number of advancing issues less the number of declining issues.  The McClellan Oscillator is a momentum indicator that works similar to MACD.  

Note how fast we went from oversold to overbought.  Do you feel like we just had an epic rally to rival the 1,500-point run in the Dow last Summer?  No?  That's because we didn't.  What we had was a 500-point run in the Dow that has pushed us to as overbought a condition as we had last October, when the Dow was at 12,284 and dropped 1,050 points over the next month. 

The main takeaway from this chart is how QUICKLY we hit oversold.  That indicates the "rally" has a very poor base and can just as quickly collapse with volume selling.  In other words – it's pure window dressing.  As David Fry notes:  "Markets want to go higher because, cynically, it’s bonus time for portfolio managers and report card time for clients. After all Europe is not fixed and neither is the U.S.  All we really have now globally is money printing and talk to buy time." 

SPY WEEKLYBy the way, for those keeping score, note the spectacular run-up we had last June into the end of quarter – followed by a whole lot of nothing and then a 3-week, 24-point (18%) drop that caught everyone by surprise.  Well, not everyone – we cashed in our Income Portfolio last year into the July 4th weekend for a lot of the same reasons that we're doing it now (we were way ahead and worried about a big dip).  

On the 2nd we had cashed in our $25,000 Portfolio as well as we hit our goal of a 6-month double and we TOOK THE MONEY AND RAN – something a lot of very successful traders forget to do – leading them to become less successful traders when the cycle inevitably turns back on them.  

July 1st's post was titled "Stop the Rally, We Want to Get Off!" and I laid out my case for cashing out, despite the very impressive rally that took us back almost 5% off the June lows.  We were confident in June to ride it out through the end of the month last year but, this year – due to the Fed and the EU/ECB dithering – we just don't think it's worth risking the weekend.  

Giving Greece $229Bn provided us with a brief lift in July but it was all downhill from there and where were we shorting the Futures on the Greek news?  It was S&P (/ES) 1,346 (now 1,351), Nas (/NQ) 2,415 (now 2,615), Dow (/YM) 12,720 (now 12,773) and RUT (/TF) 842.6 (now 779) so a big divergence of the Nas and the Rut since last Summer, which is why we like the RUT as an upside bull hedge – in case you really hate being in cash.  Of course – for our non-futures players "Hedging for Disaster – 5 Plays that Make 500% if the Market Falls" was an across the board winner as well – something we'll be looking at AFTER we're sure we're breaking down (we waited until Aug 11th last year to get aggressively short and it worked out just fine). 

That's right, we're in cash and we're expecting the market to sell off, which will make our cash more valuable as the Dollar rises and the market falls so we hedge our cash with BULLISH trades like UCO (ultra-long oil) at just $25.40 with oil at $81 this morning. UCO was at $45 at the beginning of May so lots of room to run and you can pick up the Aug $29 calls for $1.10 as a straight play on oil getting higher or you can bet oil won't drop below $75 and sell the USO (now $30.40) Oct $28 puts for $1.45 and buy the UCO Aug $22/25 bull call spread for $1.90 for net .45 on the $3 spread that's 100% in the money to start so we just need oil to hold $80 and the return on cash is 566% while the worst case is you end up long on USO at net $28.45, which is 6% below the current price or oil at $75.90.  

So very easy to lever bullish if you are worried that a rally will make you feel left out.  We'll also add bullish trade ideas for the Financials and the Russell but they won't be going in our virtual portfolios because what I really like – in case you have not gotten the message yet – is CASH!  Cash is King and we can take some of that lovely, lovely cash and take a nice day off or even a long weekend off with the holiday coming up and, when we've had some time to relax – THEN we can see what kind of mess the markets are in and place some bets accordingly.  

For the moment though – we can just relax, sit back and enjoy the show!  


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  1. Phil – In San Diego, Hotel Del Coronado is nice.  Lots of kids activities there http://www.hoteldel.com/


  2. Good Morning!


  3. Phil – Shutters in Santa Monica and Hotel Del on Coronado.
     
    I could not have said it better myself….. :)


  4. San Diego: Hotel del Corinado on the island. Great beach, easy into Comicon, military training and aircraft shows….



  5. Larry Ellison bought the Lanai Island. Talk about Big Pimpin..


  6. Portfolios / Phil – I went back and check the differences between the FAS Money and IWM Money portfolios and actually, TNA and FAS are equally volatile (about 8% on a weekly basis and around 15% on a monthly basis). The difference was that we sold only 1/2 as many TNA contracts as we did FAS contracts. Had we been as aggressive with TNA, we would have been very close to match the FAS Money results. Something to keep in mind.


  7. Phil - How about a replay of last year's move up thru July with a dive by August?  Thanks.


  8. I would be surprised if hit S3 on oil today!


  9. I posted the big chart early this morning, so just in case…


  10. Phil – Hate to be a buzzkill, but I had heard Comicon sold out in 90 minutes…..
     
    http://sciencefiction.com/2012/03/03/2012-san-diego-comic-con-badges-sell-out-in-90-minutes/
     
    Then again…..
     
    http://www.youtube.com/watch?v=VqomZQMZQCQ


  11. CIGX/jerconn – well, they are a nutraceutical company that could not make it in the pharma world.  Anatabloc is basically vit A, vit D and a plant alkaloid for supporting the immune system.  There have been no clinical trials done, so their claims are anecdotal and peer reviewed journals (maybe). 

    Their other products were derived from tobacco products and was supposed to be their stars (hence their name), but taking dissolving tablets for snuff or smoking does not fit the bill for a majority of the people who use these products…..Overall, these are not things that I invest in, as all it takes is 1, and I mean one, person to have an issue (cancer, toxic event, etc), and things go down the tube real fast. 

    I take that back, I did invest in one company a few years ago that were flying high and then the company was sued….the maker of Zicam, Matrixx (MTXX).  We bought them a the bottom after the event, rode them down more, then back up.  Made a little, very little, then got out.  I knew how Zinc worked, so we made it a play. As for CIGX, don't know how it works, so I cannot recommend them at this time.


  12. Economic Numbers:

    New Zealand GDP (YoY) / 2.4% (1.3% expected)
    China HSBC Flash Manufacturing PMI / 48.1
    Switzerland Trade Balance / CHF2.48B
    France PMI Manufacturing / 45.3 (44.5 expected)
    France PMI Services / 47.3 (45.1 expected)
    Germany PMI Manufacturing / 44.7 (45.2 expected)
    Germany PMI Services / 50.3 (51.5 expected)
    Euro-Zone PMI Composite / 46.0 (45.5 expected)
    Euro-Zone PMI  Manufacturing / 44.8 (44.8 expected)
    Euro-Zone PMI Services / 46.8 (46.4 expected)
    Great Britain Retail Sales (YoY) / 3.0% (2.7% expected)
    Canada Retail Sales / -0.5% (0.2% expected)
    US Initial Jobless Claim / 387K (383K expected)

    Not a pretty set of numbers… Even the ones that beat indicate a contraction. The PMI numbers from China and Europe are really worrisome. Even Germany seems to be contracting now. The China HSBC PMI was 48.4 last time so going in the wrong direction there as well. And these numbers are more reliable than the official numbers!

    At 10:00 AM we get the Euro-Zone Consumer Confidence numbers (-20 is expected). We also get the US Leading Indicators, the Philadelphia Fed and Existing Home Sales!


  13. Ellison – now he can file for his own country…and dare them to pay taxes.

     

    OOOOO, CELG….sell some puts on them folks….quickly.  Depending upon risk tolerance, I am looking at Oct $40s.


  14. ONXX rockin!!


  15. Manufacturing woe continues from Europe to China. Factory activity in the eurozone and China continued to shrink in June, with the flash eurozone manufacturing PMI falling to 44.8 from 45.1 in May. Germany's print dropped to 44.7 from 45.2 while China's declined to 48.1 from 48.4, marking the 8th consecutive month of contraction.

     

    Well, I guess the market will go UP on those numbers, no?


  16. BBBY hits highs on Tuesday b'f earnings…and now the shares are trounced.  That is how to work, er rig, the system.

     

    Bed Bath & Beyond falls on weak outlook. Bed Bath & Beyond's (BBBY) FQ1 EPS rose 24% to $0.89 and beat expectations, while revenue climbed 5% to $2.22B, which was in line. However, shares were hammered 10.6% in post-market trading due to FQ2 guidance that was below consensus. The decline came after the stock hit an all-time high on Tuesday.


  17. Chesapeake (CHK) names Archie Dunham, former ConocoPhillips chairman and CEO, as its new independent non-executive chairman. The board also appoints four other new independent directors, three proposed by Southeastern Asset Management and one by Carl Icahn. Aubrey McClendon is no longer chairman but remains a director and will continue as CHK's CEO and President


  18. Pharm – sometime ago I made good money on CELG calendars in my IRA. Would you consider buying a long dated leap to the same now? If so which one do u suggest?


  19. PCYC / Pharm – Hi, i see this getting a lot of attention lately and showing some strenght. Are you familiar, do you have a POV? Cheers!


  20. CELG/Pharm – oct 40′s are 15 cents. Higher strike?


  21. CITI Puts?
     
    Citigroup Inc. (C)’s book value could take a $3 billion to $5 billion “hit” this quarter as currencies in some of its biggest markets decline against the U.S. dollar, said Charles Peabody of Portales Partners LLC.
    http://www.bloomberg.com/news/2012-06-20/citigroup-may-take-5-billion-hit-on-forex-peabody-says.html


  22. Pharm – sorry, I was looking at last nights prices. Will see what we get after market opens.


  23. Nicha – sure, buy a DITM call and sell others against it.  Oct 40s won't be 15c after this move, no?

    PCYC/dpast – they have taken off like a rocket.  We bought them a bout a year ago in the 10 area.  I did not see them moving this high, but their pipeline is very interesting, and they are in a sweet spot of 2-10B for takeover bait.  They are very expensive though….I would play them with DITM calls and sell premium, although not sure how you do that when it is going parabolic.


  24. SGEN appears like it is going to roll over, so we will reload on selling puts when we can pseudo pick a bottom area.


  25. CELG Oct 50 P are 1.10.  Sold a few of those…..


  26. Pharm/ CELG: whats happening with them?


  27. EDZ moving nicely so far.


  28. The only active portfolios now are the MoMo portfolio (in cash now with over $8K of profits), a reduced Income Portfolio (we close 1/2 the positions yesterday) and Peter's Strangle Portfolio. The last 2 will be updated tomorrow AH. I'll do a recap of the closed portfolios next week with some stats.


  29. newt – EU did not like their filing for Revilmid.  Over reaction but don't catch the knife with Calls, sell puts in small amounts to see where they take it.  These guys mint cash on Thalidomide….remember that one?


  30. Pharm- Thanks


  31. Long gold here?


  32. It's the same story every time, earnings forecasts are being lowered:

    http://blog.yardeni.com/2012/06/s-500-earnings.html

     

    Another earnings season is starting, and industry analysts are preparing for it by once again lowering their estimates. And once again, this may set the stage for lots of positive earnings surprises. However, this time their downward revisions may reflect fundamental weakness in business for companies with exposure to Europe. In this case, there might be fewer positive and more negative surprises.
    The consensus forecast for S&P 500 operating earnings during Q2 fell to $25.45 per share during the week of June 14. That’s down $0.70 from the end of the previous earnings season at the end of April. The estimates for Q3 and Q4 have also been revised down over this period by $0.51 and $0.40, respectively.
    As a result, the estimate for all of 2012 is now down $1.24 since the end of April to a new low of $105.31. The 2013 estimate is also down to a new low of $118.18. That’s still above the $110 number that Joe and I are using for next year. Since rising to a new record high during the week of June 1, S&P 500 forward earnings has stalled around $110.

  33. AC (Asswipe Cramer) was talking about how amazing it is how people step in and buy stocks at the end of the day.  Shows how strong their resolve is and how solid the market is.  Is anyone that stupid to think he doesn't know the actual guys who have the trading programs that whipsaw the market?  Phil, when their viewership hits under $10,000 will we they finally take them off the air and show reruns of Family Guy or something?


  34. rustle, Phil – can please post the link for viewership numbers for Mad Money. My friends don’t believe Cramer is an idiot and his show sucks. They routinely follow his show and follow his advice.


  35. Cramer/Nicha
     
    Are they broke?


  36. rustle – they don’t share that info with me. But I know some of them got into NFLX at $250 based on his advice and they are still holding it.

    When it reached $275 they were talking abt how it wud go higher. I used my post PSW brain and detailed why it wouldn’t and why they should sell when they have a 10% profit in a week. Needless to say we don’t talk abt it anymore ????


  37. Chinese PMI Charts:

    http://www.alsosprachanalyst.com/economy/hsbcmarkit-flash-china-manufacturing-pmi-signals-further-contraction-in-june.html

    The chart below shows the HSBC/Markit China PMI vs. the official PMI.  Earlier this year, there has been a significant divergence between the two, and it appeared that HSBC/Markit PMI was closer to the reality than the official one.  It will be interesting to see if the official PMI would come down further in June.

    image


  38. Are we getting close to Warren Buffett buy zone:

    http://pragcap.com/buffetts-favorite-valuation-metric-says

    The most recent update to Warren Buffett’s favorite valuation metric is showing some fairly encouraging signs.   For those who aren’t aware, Buffett is quoted saying that the total market cap vs GNP is one of his preferred valuation metrics.  The current reading of 89% is still above his preferred buyingrange (70-80%), but well off the highs we’ve seen in the last 15 years.

    Here is Buffett's explanation:

    “For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocksis likely to work very well for you. If the ratio approaches 200%–as it did in 1999 and a part of 2000– you are playing with fire.”


  39. Good morning! 

    Not much to add to the post.  As long as we hold those 50 dma's – we're technically bullish but I'm sure not feeling it and, if this is all another $267Bn from our own Fed buys us – it's pretty lame.   It's all about the 50s – no reason to get too bearish as long as they are holding and no reason to get too bullish until we take back 3 of those "Must Hold" lines (2.5% up from here for Nas, NYSE and RUT) – so very easy goals to keep an eye on if you want to ride the bull again.  

    50 Dmas:  Dow(12,746), S&P (1,347), Nasdaq (2,920), NYSE(7,756) and the Russell (781)

    Wow, 3 of 5 right on the lines with the NYSE just under and the S&P doing the best, 7 whole points over.  

    Oil is pathetic at $80.50 and copper is $3.33 when $3.85 is "healthy" and gasoline can't get over $2.60 and Nat gas is barely holding $2.50 despite a heat wave that SHOULD drive demand up pretty sharply.  Weak, Weak, WEAK!!!  

    Now we have the Philly Fed at DOWN 16.6 – the WEAKEST since last August!!!  Hmm, last August – when have I heard someone talking about that recently?   Damn I'm good!  8)  

    June Philly Fed Business Outlook: -16.6 vs. an expected 0 (consensus range -3.0 to 4.0) and May's -5.8.

    We have leading indicators that look OK but they are from May – we've gotten way weaker since May thanks to Europe and Asia shutting down:

    May. Leading Indicators: Leading Index +0.3% to 95.8vs. 0.0% expected, -0.1% prior. Coincident Index +0.2% vs. +0.2% prior. Lagging Index +0.3% vs. +0.5% prior.

    So crappy data and I like the same DIA $124 puts I liked yesterday (now .90) so 20 of them in the $25KP and 10 in the $5KP and this time we'll ride them out rather than stop.

    What I like best though, is CASH!!!  

     


  40. Phil still have a CHK July 15/17 BCS
    where I have about 50% of my max gain would you pull it and take the profit. Really don't have much else going on.


  41. Cramer/Nicha
     
    So now they watch him for pure entertainment since they lost everything because of him.  Well he does have an amusing f/x machine in his studio for his crazy sounds.


  42. SPX vs. 10 Yr Yield vs. Oil 

     
    Look at that gap.


  43. rustle – they still watch him for trade ideas! Thats the problem wih buy and hold. You hold forever.


  44. Phil/SODA- any thoughts on a play. Seems that they have run up a bit. The product does not make sense to me and I don't see anyone buying or talking about it. I've done well shorting it and have some puts.


  45. bbby HEY! i thought housing was rebounding!
     i wonder why nobody talks about the commodities bear
     if stocks were down 27%…people would be screaming from the rooftops about the bear market…
    simon on cnbc now screaming about how oil shouldn't be dropping much….ahahahaha..pathetic


  46. Simon has me confused…… ;)


  47. HAL Help-- I am into this stock at $35/ Share. I can't figure out a good strategy.  Any suggestions?


  48.  i wonder if there is a stat for the longest period the biggest company in the world has outperformed the broad market.
    .aapl +45% ytd
    +80% last 12 months
    it pulling entire market up again today

    pretty sure its likely that some global govt entities are buying it to help prop things up


  49. Phil:

    So crappy data and I like the same DIA $124 puts I liked yesterday (now .90) so 20 of them in the $25KP and 10 in the $5KP and this time we'll ride them out rather than stop.

    Are these new trades?


  50. Anomaly:  The Euro is up, and FXE….is down.  Meaning my short FXE's are also up.  WTF?  I'm good with it, of course, but rather suspicious — it may be logical [time frame differential] but it ain't normal.


  51. pstas/hedging,
    Cash is also a hedge.  With the virtual short strangle portfolio, we have more than 65% cash even in a scenario where the market crashes 10%.  The RUT position is a modified iron condor that has defined downside and upside risk, while the SPX has a long vertical, which is only a small hedge.  So we rely on the 65% cash as a hedge.  In my other portfolios, I have Back Spreads where there are more long puts at lower strikes than short put and those long puts are good hedge.


  52. I've got FXE September puts, BTW.


  53. Ah, I think we have a MF here — serves me right for not making coffee this AM.


  54. zero what is a MF? As I was looking at FXE and wondering the same



  55. Coronado/Rkyro, 1020, Newt – Looks nice, thanks.  

    IWM/StJ – Good point, they are essentially redundant so why have 2?  

    Replay/1020 – Ah, you read my mind…  

    Comicon/1020 – That's OK, I have influential friends….

    Manufacturing/Pharm – News so bad, it's good?  

    BBBY/Pharm – I told you people were just confusing them for BBY!  

    CHK/Burr – You would think that would get a better response.  

    C/Burr – Bank earnings are such a black box – they'll take a hit there but use the same exchange to revalue something else and wash it out.  Keep in mind they have $2Tn in assets, $3-5Bn is a rounding error.  

    Dollar flying to 82.15 so cash is paying off already, up almost 1% since yesterday.  Market holding up well considering.  

    Lower/StJ – It's like when they do limbo for kids and make the bar so low the kids can just walk over it.  

    LOL Rustle – One can only hope.  

    Ratings/Nicha – That's been over for ages.  The only channel that gets lower ratings than CNBC is the totally pointless Fox Business Channel although Cramer's pal, Erin Burnett is now on CNN and has dropped their rating opposite Mad Money into the same toilet Jim swims in at 11 and John King (I know, who) is no better at 6pm on CNN:

     

    Net 6PM P2+ (000s) 25-54 (000s) 35-64 (000s)
    FNC SPECIAL RPT W/BRET BAIER    1,970        329         797
    CNN John King USA      358         70         119
    MSNBC POLITICS NATION      621        140         212
    CNBC Mad Money      200         67         118
    HLN EVENING EXPRESS      134         69           69

    That's 67,000 total people in the entire United States in the 25-54 group that watch his show with just 200,000 people (including 3-year olds) seeing any part of it at all.  Even worse is Squawk Box!  More important, your friend should be aware of this:  

    And wheeee – here we go!  

    Dollar zooming to 80.25 as Euro plunges under $1.26 again (Pound $1.56).  Yen shot up to 80.29 too so people bailing on Europe again.


  56. @Felipe
    Would like to see this cartoon by Piraro used in one of your daily posts of them.
    I think the meaning—- in a different but even more appropriate context—--is plain, more so than the original.  All you have to do is label the carcass.
     
    http://www.thecomicstrips.com/properties/bizarro/art_images/tn_cg4fcf6be76ee0a.jpg


  57. Peter- thanks for the explanation. Yes, plenty of cash & margin is a good hedge with a little help from put verticals.
    I am almost all out of the RUT July Iron Condors- just have a few of the put spreads remaining with order in to close at $.10.  I am going away next week and just will feel better not having these to watch. No worries on the SPX side- plenty of leeway. Nice profits so let's do it again when you think the time is right.


  58. I'm a Daily News instead of NY Post guy (hate Murdoch Publications) and they had a nice article against Jim Cramer today, they quote him on urging people to buy FB IPO and of course he comes out looking like a shill for companies again:
     
    http://www.nydailynews.com/gossip/morgan-stanley-staffers-cnbc-facebook-blame-game-article-1.1099483


  59. Sage:  that would be a "mind fart."


  60. PCLN back to 666 again… 
     
    hmm…


  61. Pharm- this from SA:
    11:14 AM DepoMed (DEPO +1.6%) gains after being added to the Focus List at Roth Capital this morning. Roth says the stock's risk/reward is favorable given its present valuation and a number of catalysts including: its update on Gralise's orphan drug status, Janumet XR royalties, Glumetza numbers and Serada news flow
    Comment?


  62. When things pick up, I am liking the SGEN 20/25 BCS (we have those from a long time ago) and selling the 22.5 Ps for a $1 on the $5 spread. Don't go crazy, but a few for accounts should do well.  I also like the stock in here and selling the  Sept $25/20 C/P for roughly the same entry price as the bull call spread.  Less cash used in the BCS, hence my preference for that, but for long term, I like the stock.


  63. FCC strikes down nudity and profanity rules for broadcast tv…primetime porn baby! yeah!
    gs put out email saying short spx for 5% downside…supposedly that is why market tanked


  64. pstas,
    Cool! Another down day or two and a spike in VIX, then we're ready to sell more, probably August options.  Today's drop, so far, is not large enough to get those way out of the money Puts to jump big. August expiration is 8 weeks away and hopefully we get our a few chances to get in.  We could also milk July's a bit more if we get a down day tomorrow.


  65. CHTP – buying a few hundred shares to see where they go. 


  66. I've seen cramers show a couple of times.  Thought it was a bunch of (&)(&)(*^%$$ ….. no one can have an opinion on every stock or to put it another way any one who has an opinion on every stock (without research) is only going to be wrong more often then right. 
     
    What constitutes a cramer pick?  If the graph is his results then option selling on his picks is worth while.


  67. ONTY…lookie there…our Nov 5 call/4 put sold are both, um, positive.  Nicey nice.

    PLX just milking the 7.5/6 options up and down.  The stock (if it is still in the account is almost free by my record.  That is how you plant trees, capiche?

    Opt Traders GLUU is a little money maker as well.


  68. OK, TLT over 127, oil below 80, VIX only at 18…. AAPL is holding well at 585 and it's probably good news for the markets as it could be worse!


  69. The CAC40 and DAX just took a concerted dive with our markets!


  70. PeterD – Excellent start, and a real learning opportunity for the PSW Community.  I only paper traded the current setup, but now that I understand it much more, I'm going to go live with a small live trade.  I'm sure the devil is in the details, and learning the adjustment's when we have spikes up or down is the true test.  
     
    Can I ask, in real life, what brokerage are you using to run these strat's, and are you using Reg-T or Port margin?  Also, do you seperate this in it's own account, so it wouldn't trigger a margin call on other positions on a Flash Crash day?
    Thanks again! 


  71. Just got a sales call from an electric company (they compete here) – I told them we were a solar home and wanted to know how much they paid for our excess electricity and suddenly the guy had to go….

    Buy zone/StJ – Isn't it about 25% below where we are now?  Buffett wasn't buying in '05, only in the '08 crash did he start whipping out his checkbook and that's the 60% line – way down from here.  

    CHK/Sage – If the 50s don't hold, you are playing with fire.  You can get $3.90 for the $15s now so why not move to a Jan $17.50/21 bull call spread at $1.80 and take $2.10 off the table (which is more than your max payout on the July spread and then you can roll the caller (now $2.15) to something like the Aug $18s ($2.05) until they expire – at which point whatever value is left in the bull call spread is excess profits.  

    SODA/Ksone – I think they are just a fad with very little real value but, then again, they are only valued at $750M and that's only about 14x forward projections so surely there are better things to short.   If they get back to $80, then I'll like the shorts again but, at $39 – I can't see the point.  We nailed them short last July with an $80/75 bear puts spread for net .50 against the short $75 calls.  There's no way I'd be comfortable with the same trade at half that price.  

    Simon/1020 – It's that damned English accent – makes it hard to think he's just an idiot with a microphone so your brain keeps trying to make sense of what he's saying but it's nonsense but, then again, he speaks so well – he must know what he's talking about but what he's talking about makes no sense….


  72. Buy zone / Phil – The guy mentions 70-80% and we are now at 89% so another 10% down and Warren might start looking!


  73. It's so nice to be loaded with DIA puts, TZA, EDZ and open TNA calls on days like this.


  74. Worse than squawk box is Larry the Krudlow.
     
    Time to put that one out of it's misery…..


  75. Interesting comparison and perspective on Wall Street – what we could learn from beehives:

    http://blogs.hbr.org/cs/2012/06/a_beekeepers_perspective_on_ri.html

     

    Take, for example, their approach toward the "too-big-to-fail" risk our financial sector famously took on. Honeybees have a failsafe preventive for that. It's: "Don't get too big." Hives grow through successive divestures or spin-offs: They swarm. When a colony gets too large, it becomes operationally unwieldy and grossly inefficient and the hive splits. Eventually, risk is spread across many hives and revenue sources in contrast to relying on one big, vulnerable "super-hive" for sustenance.

    Here's another lesson by analogy: No queen bee is under pressure for quarterly pollen and nectar targets. The hive is only beholden to the long term. Indeed, beehives appear to underperform at times because they could collect more. But they are not designed to maximize current returns; they are designed to prevent cycles of feast and famine (a death sentence in the natural world). They concentrate their foraging on the most lucrative patches but keep an exploratory force in the field that will ensure future revenue sources when the current ones run dry. This exploratory force (call it an R&D expenditure) increases as conditions worsen.


  76. HAL/Newt – I never liked those guys as much as SLB or OIH.  Not a whole lot you can do down 20% if you never hedged it other than (if you want to make a long-term commitment), perhaps killing the stock and selling the 2014 $25 puts for $3.10 (so your worst case is owning them again for $25) and buying the $25/35 bull call spread for $4.35 so net $1.25 on the $10 spread and a chance to make $8.75 back (a little more than you lost) if they get back to $35 but you're getting another 10% downside cushion for free and should be less overall margin this way.  

    Props/Angel – With what money?  

    New trades/StJ – Of course new ones.  I hope you got them – already $1.25.  

    Cartoon/Flips – Very small!  

    FB/Rustle – One of the few greens today.  

    SGEN/Pharm – I like that one, very cheap right now.  

    GS/Angel – Better late than never I guess.  I think they have the same $10Bn per point formula I do.  

    Pick/Willie – For me, if I see Cramer talking about a stock AND it pops AND I think it's overdone, then I like it as a short.  The problem is I really can't stand watching his show anymore so I don't know what he's shilling.  

    Buy Zone/StJ – I say watch what Buffett does, not what he says.  He may start looking at 80% but he's looking for things that are 20% off from that level (like we do) but, at 60% – he's writing $5Bn checks to BAC and GS and making $5Bn bets that the S&P has hit bottom by selling puts – THAT'S what I call buying in!

    Days like this/Rustle – Strange days indeed:  


  77. Phil/CHK suggestion
     
    Alright now I feel stupid as it is uncommon that I do not understand a trade, or maybe I am having an MF per ZZ. You suggest taking a BCS to another longer dated wider BCS and selling a naked call against it, is this right or am I missing something? Sorry for what is I am sure a very dumb question. Does it also leave me to much more risk?


  78. Trades / Phil – OK, I'll get new spreadsheet going then. And the $5KP will now be a standard margin $25K portfolio.


  79. Phil/Cramer  At times, I'll watch the first segment of his show because he tends to discuss the macros of the market, which can be pretty good – then turn off the tube because there's nothing worth viewing from 3 to 5 pst…..


  80. ONTY / Pharm - another good call, I have quite a bit of that one, yippee!


  81. Phil/ HAL: I hear you.  I was hoping I would not have to sell— I know it makes the most sense…. FU HAL. or is that me???


  82. OK, I have started 2 new spreadsheet for the 2 "Aggressive" portfolio:

    1. The old $25KP (I call it PM) where we take more risk and use way more margin.

    2. The old $5KP now a $25KP but restricted to $25K of Reg-T margin.

    The names can change, but they should reflect the either the investment objectives or the constraints.


  83. AAPL still holding well, down only 0.3% while the NASDAQ is now down over 1%.


  84. Kudlow/1020 – Yet another Conservative that loves to get high and then tells other people how to live their lives…

    Beehavior/StJ – Animals are so much more rational than people. 

    CHK/Sage – I'm suggesting taking the money on the $15s and using that to buy a BCS that protects the remaining short calls.  Your best case on the spread is $2, this pulls double that from the $15s and then you put 1/2 back (but the full $2 in your pocket) to make a spread to cover the short calls up to $21.  If you are lucky – at some point between here and $21, CHK will pull back enough to make your caller worthless and then you still have your long spread PLUS the $2 in your pocket.  

    $25KPs/StJ – Let's go for "$25,000 Portfolio (ordinary margin)"  and "$25,000 Portfolio (aggressive, margin intensive)" and I'll call them the $25KP and the $25KPA.  

    Damn, seeing $540 profit in print after two hours really makes me fell like we should take the money and run!  

    AAPL/StJ – The problem is that, if AAPL breaks – things can turn super-ugly now.  


  85. DIA Puts – up 30% today! how tight a trailstop?


  86. Bees have been around about 120 million years.  Evolution has done it's work.  Smart humans are a very recent experiment, and it's not obvious that it will be a successful one.


  87. Pharm / CELG – what is your opinion of the significance of this Revlimid news?  The impact appears limited to reducing forecasts for incremental revenue growth in this one drug, but, in the big picture, how much of CELG's overall revenue growth was hinging on it?
     
    On another note, I remain short the July $60 puts, so this is a bit of a setback, but if CELG doesn't fall any further, I'll be fine.  That said I think "if" is probably filed just behind Phil's "hope" as a valid investment strategy.  So, if you were me, would you roll to another strike and/or date?  Something else?


  88. Phil / DIA puts – do you see market going back to June 6th lows in which case we should hold onto DIA puts?  or take profit and then reload on a bounce?


  89. Phil/animals   yeah, but some eat their young…..
     
    It's what I've told the kids when they act up….. :)


  90. Evolution / Zero – We might be going in the opposite of evolution actually:

    "Programming today is a race between software engineers striving to build bigger and better idiot- proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning."


  91. So my wife calls up and tells me we gotta buy gold because it’s falling. We, Indians love to buy gold. If you have a daughter (I do) then the mother starts collecting gold for her marriage. My wife gives me this reason to start accumulating. I said gold will keep falling. Her response we will average it out. Buy, buy, buy.


  92. wow, this market turned on a dime.  nice call Phil!!  those DIA puts are doing very well. 


  93. Really?  GS says SELL and we sell….. I'll be looking for an entry way before 1280….


  94. GS – I'm sure they read PSW…. :)


  95. Pharm – What did CHTP do today to deserve a 22% pop (other then listen to your buy recommendation)? 
    Also, I am still new…where do I find Peter's short strangle portfolio? 


  96. Gee, Phil, what was with that "panicky piglet" sell recommendation yesterday?  I dumped all my favorites, and now I have to do all the work of figuring out when to buy them back again. :)


  97. The DIA puts are now up over 50%…. 


  98. gs punishing fed for making them look so stupid on their 2 dozen imminent qe3 calls


  99. Phil / MA and AMZN long puts from yesterday — assuming you still like those plays, will you ride until you call a bottom, or until a certain profit?


  100. MS – either $h1t or get off the pot.  I know it will be the latter and I will flush them down… Come'on boyz, make my year.


  101. PHIL I took the profit on the DIA's  THANKS!


  102. Burrben – when I was in college, I used to think I was so clever going to Vegas, and doubling down on red after each black.  Then black hit 14 times in a row.  I focused more on my studies after that.


  103. Phil
    I have the July TZA $14/$18 BCS. Would you just ride that out to expiration or using the same strategy you gave Sage on CHK, sell the July $14 call for $4.45 and buy the Oct TZA $18/21 BCS for $1.00 and roll the July $18 to August for net credit of $.45 which all total nets a credit of $3.90 and leaves me with the TZA $18/21 BCS. Thanks


  104. roulette/boltdude
     
    The theory is always bet with the color that comes out since you are more likely to hit streaks than back and forth


  105. AMZN barely down and MA not much better….grrrr.


  106. Pharm – What months were you looking at for SGEN?


  107. ECB is talking about relaxed collateral rules for lending, don't get hynotized by the screens, gents!!


  108. Rustle — but the statistical reality is that the exact opposite, alternating black and red with every roll, can — and does — happen just as often.  The house rules.


  109. Burr – Sept and Dec.


  110. DIA/$25KP(s) – Yes, at $1.45 now, we need a stop at $1.35 so a trailing .10 – nothing wrong with being forced back to cash.  

    LOL ZZ – Good point.  

    Puts/Terra – No, I see us taking the money and running because the market can turn on a dime on intervention or even the rumor of intervention so adding $800 (locked in profits) to a $25,000 portfolio in one day (3.2%) is not a bad way to utilize your cash – sure beats TBills.    Meanwhile – I still don't think they're going to let us fall back 5% without stepping in but, then again, I can't believe they've sat on their hands so far.  

    Gold/Nicha – Well the World needs bag-holders.  

    Thanks Terra. 

    Panic/ZZ – It's pretty straightforward.  That's why I jabber on day after day about what I'm thinking.  We had no bullish premise other than stimulus – we didn't get enough stimulus and our premise was blown.  It's like that end game of chess I was talking about and the G20 and the Fed only have a few possible moves left and they both made the wrong one this week.  

    MA & AMZN/Bolt – Those are big disaster plays.  Of course if they go up 50% – it's a good idea to set stops or lighten up (we'll find a fresh horse) but those are the kind of plays that can go 3-4x in a  proper sell-off.  The idea of these is not so much that they will make a lot on a short sell-off but that they are not likely to crush you if we pop the other way.   

    Roulette/Burr – Now that is strange!  Must be broken somehow.  

    Wise move EMunster!  

    LOL Bolt!  

    TZA/Crussell – That won't pay well until closer to expiration or very deep in the money.  I think you're fine for now.  


  111. Yeah, I used to play craps since I read a book that said if you bet the pass line with full odds+come line with full odds, the house advantage was only .05 %.  Lots a few thousand until I realized that still meant over time I only have a 49.95% chance of winning.  Then I decided to bet with the house, until I realized I had to pay a Vig to do that…which lowered my take.  
     
    Stopped playing craps, except with fun $ I don't care if I lose.


  112. Phil,
    Have a USO Jan 13 $32/36 BCS down 50%. what do you recommend? Give it time or do something else? Thanks 


  113. The statistical reality of counting cards in Blackjack works out a lot better.  It's amazingly easy to learn, but pit bosses will notice very quickly, so the occasional hit & run to pay for a good bottle of wine works best.


  114. nicha,
    I am in your boat – 2 daughters.  I last bought gold when it was $650.  After I started on PSW, the request to buy gold has evaporated …


  115. S&P Futures are bouncing off S2 at 1330!


  116. Do we like oil below $80?  Seems like the excess inventory overhang is still hanging around, but we are coming into the "driving season", whatever that might mean.  


  117. Phil………..On SKX what do you think of buying Oct 21p and selling 21c at about even? I think they over priced. Thx


  118. Phil,
    Geat calls especially with the hedges. I am maybe 55% bullish and having one of my best days of the year


  119. Yeah, it's so nice to see the market down and my account value flat.


  120. Craps/Burr – That's how I take a break from poker.  Problem with that 0.5% is it's on every roll so, even if you bet the numbers that stay up, they'll still roll about 10 numbers per hour at least and that's a 5% hourly rake for the house.  

    Speaking of craps – DIA puts in $25KPs hit $1.50 and should have stopped at $1.40 – rules are rules!  

    USO/Crussell – I recommend waiting until January – that's a long way off.  We're down at $29.78 and the  $32s are $2.15, which I bet is as much or more than you paid for the spread so you're not down anything except for paying the premium on the Jan $36s ($1), which would just be plain stupid, right?  Especially if the reason you pay them $1 in premium is because you lost faith in your own position that's $3 closer to the money!  There are 2014s you can invest in but the same $2 you'd pay for a year can drop your Jan calls down to the $28s ($4.10) and then you're $1.80 in the money for $2.  I'd do that and buy back the caller and, if USO fails to hold $29.50, then I'd sell the July $30 calls (now $1.05) for about .90 and I'd look to sell the 2014 $25 puts (now $2.80) for $3.50 or better.  

    Counting/ZZ – That ruined blackjack for me because, if I don't count I feel like I'm being stupid and if I do count – it becomes just a tedious game.  

    Oil/ZZ – I think they could still crash from here but, long-term, they'll be back (see above USO trade).   As to driving season, I'm not hitting any sold out hotels or anything but seems busy enough when I go back and forth on travel plans. 

    SKX/490 – They're not in a spot I find interesting at the moment.  Could go either way.  

    Congrats Jomp – feels good, doesn't it? 


  121. Never thought my USO July 30 puts would be in the money :)


  122. Pharm- looking for you to take CRM sub 130 tomorrow!


  123. Phil,
    Just took profits on some IWM puts from yesterday for + 30%. Thanks again for your continued guidance and expertise.


  124. or even on the close today would be OK


  125. jthom…I am with you.  bought some this morning…thx for the reminder yesterday.


  126. DIA – i closed out half my 124 puts, and rolled the remaining half down to 123s.. this is one of my primary 'balances' to the LT longs i don't expect to be giving up. also, i am trying to improve my ability to follow moves (up or down)..


  127. This could get ugly as support lines are failing…


  128. DIA puts:  I sold half at $1.39 and half at $1.53.  Happy to close out the position.  Thanks!


  129. EEM down 4%???


  130. sorry that was a mistake.. only down 2.8% ;-)


  131. Wow, the market is down double the temperature in NJ, that's hot.


  132. StJ – now if MS and TOL would join the fun…then things could get ugly….All biotechs are holding well.  EXEL is up, SGEN is down a smidge, etc. I love this game!


  133. Pharm – you’re not talking to me anymore? I’m hurt. :)

    (when you get a chance, please see my CELG question from 12:30ish)


  134. RIG doing a swoon


  135. Pharm – Something to give you a warm, fuzzy feeling….You're Welcome.  :)
     
    http://www.businessinsider.com/politics-economics-facts-charts-2012-6?op=1


  136. TWIL – perhaps we'll be calliing it a Thrice in a lifetime list..


  137. CRIS – I have the stock, no options, but I am putting a 1/2 $5 strangle on it (Sept) for 1.05.  Good for smaller accounts.


  138. we should invent a toilet seat that counts the amt of pee per person and produces a score for good shooting and a ticket for a free beer if you win.


  139. This gives me the warm and fuzzies:


  140. Larry's new digs.  I hear he is going to evict EVERYTHING….
     
    http://www.businessinsider.com/big-beautiful-photos-of-the-hawaiin-island-larry-ellison-just-bought-2012-6
     
     
     
    just kidding about the everything, thing…… :)


  141. hello JD….. wife's favorite… :)


  142. Wow, nice head-fake on the Dow – $124 puts up to $1.55 now!  

    $78.50 oil – NASTY!  

    82.42 on the Dollar.  

    11:00 AM On the hour: Dow -0.16%. 10-yr +0.19%. Euro -0.79% vs. dollar. Crude -1.65% to $80.11. Gold -1.84% to $1586.05.

    11:39 AM European shares give up gains and close near session lows as flash PMI reports show gathering momentum to the economic slowdown there (even in Germany). Stoxx 50 -0.4%, Germany -0.8%, France -0.4%, Italy -0.1%, Spain -0.4%, U.K. -1%. The euro takes its steepest fall in awhile, -1.1% to $1.2574.

    12:00 PM On the hour: Dow -0.65%. 10-yr +0.23%. Euro -0.97% vs. dollar. Crude -2.06% to $79.78. Gold -2.52% to $1575.15.

    1:00 PM On the hour: Dow -1.15%. 10-yr +0.27%. Euro -1.12% vs. dollar. Crude -2.52% to $79.39. Gold -2.74% to $1571.45.

    2:00 PM On the hour: Dow -1.37%. 10-yr +0.24%. Euro -1.12% vs. dollar. Crude -3.43% to $78.66. Gold -2.84% to $1569.95.

    Short the S&P with a target about 5% below current levels, says Goldman's Noah Weisberger, whose worries about the economy just got worse with the collapse in the Philly Fed index.

    The extension of Operation Twist until the end of the year and the Fed's failure to explicitly lengthen its low-rate guidance has put the economy on course for a "monetary cliff" as well as a "fiscal cliff," says Goldman Sachs' Jan Hatzius. While he forecasts that Q1 2013 GDP will slow to 1.5%, Hatzius believes the Fed won't sit on its hands.

    The trailing 12-month default rate on high yield paper rose to 2.2% in May, reports Fitch, rising above 2% for the first time since October 2010. The agency blames the "CCC factor," where funding for the weakest companies began to dry up last summer and is showing in defaults now. Fitch expects the rate to rise to the 2.5-3% level by year's end.

    Another week brings another round of record low mortgage rates, as Freddie Mac reports the average 30-year fixed rate fell to 3.66% in the week ending June 21, down from 3.71% in the prior week and 4.5% a year earlier. The average 15-year fixed rate dropped to 2.95% vs. 2.98% in the prior week and 3.69% a year ago

    The long-awaited downgrades of big U.S. and U.K. banks from Moody's could come after the U.S. close tonight, reports Sky News' Mark Kleinman. Morgan Stanley (MS) is an especially interested party (III)

    The ECB is discussing medium-term plans to make its own assessment of sovereign bonds, rather than relying on ratings agencies, according to sources, reports Reuters. The move would amount to an easing of collateral requirements for the EU's banks as they borrow from the ECB. Europe adds to its rally. Next: ECB upgrades Spain to AAA! 

    The contraction in European economic activity in a picture – U.S. exports to Europe dove $4B in April, the biggest drop dating back to at least January 2005, notes Stone McCarthy. Exports to the continent are down 2.7% Y/Y, the first annual decline since February 2010, and not boding well for the U.S. economy.

    Next!  Bank of Canada Governor warns much of the relative health of his country's economy is the result of "debt-fuelled household expenditures," as he praises this morning's tightening of mortgage lending rules. He again  says higher rates are coming, the timing not yet set. Toronto, -2%, leads to the downside today, maybe on the new mortgage rules, or maybe because commodities are getting beat up.

    Canada April retail sales fell 0.5% vs. an expected increase of 0.3%. Stripping out a big decline in autos, core sales declined 0.3% vs. +0.3% expected. The loonie (FXC) quickly adds to losses,-0.3% to $0.9792.

    Spanish banks need €51B-€62B in extra capital to survive a serious economic downturn, independent audits from consultancies Roland Berger and Oliver Wyman show. The government will now use the assessments to determine how much it will ask for out of the €100B that the EU has made available to rescue the sector. The Bank of Spain says the country's three largest banks don't need extra capital.

    Greece remains unable to comply with its rescue conditions, meaning the Troika must pull the plug, possibly in December, writes Willem Buiter. Only treating Greece so harshly will convince core EU members to save Spain and Italy. "The greatest fear of the (core) is not the collapse (of EMU), but the creation of an open-ended, uncapped transfer union," without a surrender of sovereignty to Brussels.

    ROFL!  China's 2nd largest property developer by sales – Evergrande – plummeted overnight after Citron accused the company of more or less running a Ponzi scheme in which it has funded massive negative cash flow for years by running up an equally large amount of debt. Evergrande denies the allegations.

    Indian equities are upgraded to Overweight by JPMorgan as low valuations and expected H2 policy actions outweigh the current "clearly poor" environment of slow growth and high inflation. Theslumping rupee? It's good news as it should help to boost trade. EPIflat YTD. 

    "I was against it until I was for it":  Senator McCain steps up to say that he's open to tax increases as a way to boost revenue as part of the deficit reduction plan. The Senator has long been a staunch advocate of a strong defense policy, and has been a vocal proponent of rescinding the sequester that would cause defense spending to be significantly reduced starting in 2013

    International airlines have begun to auction off through their websites unreserved first class seats in a growing trend that has at least some characteristics of a win-win proposition. While carriers can increase their revenue by selling unused luxury seats, coach passengers who prefer choice seats can avoid paying excessive fares or cashing in upgrades. Waiting to step in stateside: UALLUV,DALLCCJBLUALKHASAVEALGT

    Tesla Motors (TSLA) trades a bit lower, 0.5% premarket, asconcerns over production problems for the automaker are raised by Capstone. The firm sees a short-term rise in shares as euphoria takes hold over the highly-publicized EV launch, but warns that as glitches and problems crop up investors will want to have exited their long positions. 

    Tire stocks trade lower after Bridgestone (BRDCF.PK)warns that it may reduce its H2 production, with the usual suspects – Europe and China – the rationale behind the cuts. Decliners: CTB-2.6%GT -3.6%AMTY -6.9%MGDDF.PK -6.9% in Paris trading.

    Shares of Eagle Bulk Shipping (EGLE) are now up 45.1%on heavy volume after the company hashes out a deal with lenders to avoid defaults. Despite the gain, the stock is still over 50% off its 2012 high of $9.

    Shares of Sonic (SONC) move up 3.3% after the firm's FQ3 report shows sustained momentum after the company raised prices. On an earnings CC, execs say that its TV commercials featuring "two guys" have been recycled after testing showed the ads helped the Sonic brand.

    Another blue-chip hit by currency issues:  Philip Morris (PM -1.5%) warns at its annual meeting that forex fluctuations could cut 2012 EPS by $0.25, and it revises its guidance to $5.20-$5.30 vs. $4.85 in 2011. Excluding the forex effect, Philip Morris forecasts that profit will rise by 10%-12%. (PR)

    Hard drive kingpins Seagate (STX -3.8%) and Western Digital (WDC -3.2%) see their low valuations fall some more after Morgan Stanley's Katy Huberty slashes her estimates on concerns about PC demand and channel inventories. Huberty expects Q3 price negotiations to be tough for the companies, which have seenfavorable pricing thanks to the impact of Thai flooding on industry capacity, and is cutting her Q2 hard drive demand forecast to 156M units from a prior 161M. (Barclays)

    Topeka's Brian White is providing more Apple TVspeculation. White notes an article on a Chinese site suggests Foxconn parent Hon Hai (HNHAF.PK), which just said it would boost its stake in Sharp (SHCAY.PK), plans to take delivery of Sharp LCD panels in Q3, a quarter ahead of schedule. The site believes the order is for panels for Apple TV (AAPL) sets that could arrive this holiday season. (earlier

    Facebook's (FB +0.6%) saw its U.S. unique visitors fall by roughly 700K M/M in May to 158M, comScore estimates. The decline, which follows a modest drop in April, is the latest evidence Facebook's domestic usage is near a saturation point, though international usage (less valuable on average) continues to grow rapidly. Separately, Argus is joining Evercore in starting coverage with a Hold, and expressing concerns about mobile monetization. 

    Three lunchtime reads:

    1) Get ready for the last-gasp rally

    2) The intangible costs of ETF ownership

    3) New dangers lurk for rudderless Spain


  143. Burrben,
    I'm using TOS as the main brokerage with PM accounts.  I also have OptionXpress and IB (InteractiveBrokers).  OpXpress's PM margin is a lot closer to Reg-T, and IB PM margin is terrible for short strangles with their 5 standard deviation stress test, so I stick with Reg-T for IB.


  144. AAPL absolutely refuses to go lower, down only .5% on a day where the Q's are down 1.9% down and SPX is down 1.7%


  145. Anyone know a good investigative reporter in Florida…Ocala or Orlando area?


  146. Phil – Did Sen. McCain provide an opening for the dems with his "taxes for defense idea"?
     
    This is all it could take to change a tee parti mindset……


  147. You're welcome Dog!  

    DIA//Scott – Good plan.  It's different as a hedge vs. a bet.  

    You're welcome CJ.  Now we'll need something else if we cna't hold 12,600 and 1,330 on S&P.  

    Business Insider/1020 – I like their stuff.  Larry must have a casino in the bag or the buy doesn't make sense – although I guess he can afford it just to say he owns a whole island (and the hotel is worth something).  

    Thrice/Scott – That would be sad.  

    We know about empty cities in China but did you know they also have an empty theme park?  

    Interesting that TLT doesn't pop $127.  VIX still not 20 so this is not panic people… 


  148. Pharm/Florida   family issues?  
     
    ;)


  149. No, corruptions issues, and there is a very good story to be told…..


  150. Now we're getting interesting with the 200 pt violation.  250 anyone?  It is lagging the others.


  151. Pharm / Corruption — Something above and beyond the typical southern corruption?  If you want corruption, try New Orleans.


  152. Out of Dia put bad thing is I only had 5


  153. Hey barf,

    A big drop on Thursday means you are a very happy camper to sell the weeklys today.  It's so tempting that I'll look at the weeklys near the close.


  154. rain, actually has to do with land and other govt agencies in Marion County, title companies and pseudo corporations buying/selling land. 


  155. VIX is not at 20, but it's up almost 13% today, that's a decent size move…


  156. Out of TZA sped 17/22  for a quick 50%


  157. AAPL tomorrow $570 puts at .50 are a fun way to gamble on a crash tomorrow.  


  158. StJ / VIX and the VXX is only up 7.7%


  159. On the bull side – Volume just 72M on Dow at 2:30 so still possible stick and I like the QQQ Next week $63s at .75 – 10 in the $25KP and 25 in the $25KPA with stops at .50.  


  160. phil,
    have to give you major props on the call. not only did i get out of the income port puts but had also free lanced with some nflx, dvn  oxy and some gld puts that i also bid adieu.
    tks


  161. BTU – landed on a snake today.


  162. VIX / Rainman – As I have said many, many times, VXX is a broken instrument…. Just about only good to sell calls against!


  163. AAPL S1 is at 581 and they are making a stand there…


  164. Quote of the day for me:

    http://tpmdc.talkingpointsmemo.com/2012/06/hoyer-republicans-will-sink-america-to-drown-obama.php

    “There’s no intention on behalf of the Republicans in the House of Representatives to try to help the president move this country forward,” Hoyer told a small group of reporters in his Capitol office on Thursday morning. “I quote Jesse Jackson, who I thought said it best, there are a lot people in Washington who want to drown the captain and are prepared to sink the ship in order to do so.”


  165. What do you do when your falling,
    You've got 30 degrees and you're stalling out?
    And it's 24 miles to your beacon;
    There's a crack in the sky and the warning's out.


  166. stjeanluc – I'm sorry but, why would they?……  :(


  167. Phil, thanks for the DIA puts! Made my week!   The QQQ's:   I assume for clarity sake you mean the calls?


  168. Pharm – You're scaring me……
     
    :)


  169. 1020…I am scaring myself, esp. when reading the article you and StJ posted….couple that with the NSA article yesterday, and that perfect storm has been brewing for years.


  170. Pharm – I was kidding, but now seriously — have I done something to piss you off?  I assume you guys can see my posts, yes?


  171. Pharm, could you pls clarify what 1 1/2 strangle is?  Also do you have suggestions for plays with PLX? I have the stock but no options at present.  Thanks very much.  Cheers.


  172. Pharm, sorry I meant a 1/2 strangle.


  173. CNBC showing mansions that rent for $150k a month.  Saying deman is high and there is a shortage of high net worth housing in the US.  They need to get Maria B. on there to continue rambling about how much tax cuts for the ultra-rich are needed.


  174. Why is it so much more fun to make money when the market goes down instead of making money when the market goes up?  Is it because it comes quicker or is it you feel you're outsmarting the rest of the crowd?  I think I like it because it's a faster move.


  175. 1020 – We are not even talking about help right now, but sabotage! Remember, in 2008, Paulson had to ask the Dems (on his knees) for help and they did because the alternative as a catastrophe! They could have told him to go jump in a lake and where would we be today? And the worst part is that they get blamed anyway!


  176. Pharm – Yeah, I have that fantasy/reality thing going about how a "perfect storm" would look….
     
    There lies the question, to which no one knows the answer……


  177. QQQ/ PHIL: puts or calls?


  178. stjeanluc – yes, but we already know Obama does not want to prosecute those who commit crimes on the American public…..
     
    ….and besides, Sen. McConnell fired a shot across the bow with his "we're gonna get that n_ _ _ _ _ …. I mean, make Obama a "one term president"….. :(


  179. big lot of PLX July 6 puts sold for .20


  180. Stop on the DIA puts should be at $1.60 – are we keeping them overnight?


  181. yshen Dia puts  they stopped out at 1.40 I beleive


  182. USD – look at that bucky go! where it stops nobody knows?


  183. DIA/yshen – close and take the money if you are all cash. if this is hedging longs, consider taking 1/2 and rolling 1/2 down a strike or two to get some money off the table, and still have cover if market goes down more.


  184. sell 1/2 the stock position the calls and puts @ Sept 5.  If you have 1000 shares, sell 5.

     

    Bolt – can't see you…. ;)   Honestly, I have no idea what you are talking about, really!

     

    yshen – I would sell the lower strike for the same amount you bought the ones in for a 'free' disaster hedge.


  185. sagemm1 – I thought it was just the stop was raised – I sold half…


  186. CELG/bolt – I would hold them and see where they go, but be ready to roll out and down for = $.  The news is not horrible, but it does make projections for revenue a bit of a bummer.  They will be fine.


  187. Moody's to unveil bank downgrades at 4pm  -  CNBC


  188. McCain/1020 – I don't think people are too worried about what he has to say.  

    Just watch the RUT to hold 2.5%.  If that breaks (about 764.50) we have serious trouble.  

    TZA/Bert – Very nice.  

    Very nice Mill – you're welcome! 

    This is all about the bank downgrade but that was known in advance – seems silly to react like this.  May be a good reason to go bullish on XLF/FAS again tomorrow.  

    QQQ/Hemas – Yes, that was the calls – not so good at .65 now and falling…

    Mansions/JJ – Those rents need to be tax deductible.  You can't expect job creators to stay in $1,000 a night hotel suites can you?  

    Down/Rustle – As a bargain hunter, I love it when you are making more cash AND the things you want to buy are getting cheaper at the same time! 

    82.56 on the Dollar – up 1.5% since yesterday morning.  

    2.5% held on the RUT – this should be it for today's sell off but Asia and Europe will follow-through down if we close down here and that should at least give us a crap open tomorrow (if no one announce more easing).  

    DIA/Yshen – No, if you still have them then that's it!  We went bullish on the Qs (so far, so wrong).  


  189. Scott:  Yeah — that the buck hasn't stopped yet is a worry, fer sure.  Hard to imagine we're not going to see some panicked govt. intervention in Europe, one reason I've got my finger on the trigger here.


  190. Nice dip on oil/
    I missed all the fun!
    EUR/USD on its way to test 1.2475 again.
    Oil down but regaining S1 in the close after touching S3 yesterday (that is becoming a classic)… we are getting close to where they want it :)
    I like Phil QQQ weeklies idea – a bit today but definitely more tomorrow.
    Still no volume whatsoever. Boring.


  191. Hello All – Does anyone know if any important numbers are being released tomorrow?  TIA


  192. PLX – sell the ones I mentioned (Aug), or move to Nov 7.5/6 straddle for a full cover of the stock.  July $6 Puts on PLX… :)   Not me.


  193. moody's to cut jpm c gs two notches that means 3 for ms


  194. Pharm, Scott Maxwell from the Orlando Sentinel is a good one.


  195. TRIN is at 2.88.  All selling.


  196. NIKKEI probably a great short in the futures as its only indicating down 55 should be much more imo


  197. All of last week and early this week's gains wiped out…gone…whoosh!


  198. Numbers / lnk – Not too much, but some German sentiment reports!


  199. the AAPL calls are already up 50%


  200. We are fast approaching the Down 5% lines in the Big Chart…


  201. ..the AAPL puts that is.


  202. Bolt – I was being funny (probably not to you as you now think I am an arse) as I completely missed your comment at 12:30, until after I searched your name….my apologies!  I was in meetings during that Q&A session.


  203. Pharm/Whoosh   Allow me to help with that….
     
    http://www.youtube.com/watch?v=F1Yzq3ACtb8


  204. I like how Moody's and GS are tag-teaming the rug-pull.


  205. Thanks StJ


  206. If anyone thinks I'm missing the bargain of the century this would be a good time to speak up.


  207. me me me Zero….


  208. Phil – great call to "get out"…..
     
    19 points on the ES.  :)


  209. Cover/phil – any downward plays that look good (i.e. lagging behind the others) to enter end of day?


  210. End of Q is next week, and I bet funds need to report..could be more pain ahead if they decide to take their 5% gain and get out.


  211. PHil – thanks on those DIA puts, out at 1.65 and a cool $1100.  The AAPL tomorrow puts doing nicely as well, up from .50 to .80 already!  What's the prognosis for tomorrow?


  212. Pharm- no they're not- :)


  213. S3 lines have been breached for all the indices now… Bad finish!


  214. So bad it's good — "Frightened governments, in a worldwide coordinated………."     Just making this up, for the avoidance of doubt!!!


  215. VIX is up over 15% – one of the biggest up move in a while! I guess we started with a low number in this panic! We had been very complacent – I don't know how you can have a VIX this low when you know all the external factors in play!


  216. SDRL – big volume (for it) right at close..


  217. Stjeanluc/Broken instrument:
    VXX + 10.8%
    TVIX (2x Vix) + 9.9%


  218. QQQs/Lionel – Yes, I figure either a "surprise" announcement overnight (that would explain lack of VIX and TLT movement) or a big spike down that will be nice to DD on for a bounce anyway.  

    Tomorrow/Ink – Durable Goods, Q2 GDP and Corporate Profits – all at 8:30!  

    FB still green! 

    AAPL puts up 40% already (.70)!   If they double – you can take 1/2 off and have a free ride into the morning.  

    Bargain/ZZ – Not yet, that's for sure.  

    Thanks 1020 – Very glad I went with my gut there.  All hail Mark Cuban as it was his statement that made me think – "Yeah, our premise IS blown – WTF are we doing with bullish bets?"  

    Cover/Scott – The MA, AMZN and AAPL puts are my favorites at the moment because the ultras will burn you too much if they move the other way while those 3 are toppy and not likely to go flying on more stimulus.  

    Tomorrow/Jerconn – Well, we're coming to rest at the 2.5% line on the Nas and the NYSE and the RUT and the S&P and the 5% rule says that's an indication of follow-through once we break those lines – usually at least 50% more downside so 1.25% and if we get there without a bounce – then 0.625% is the next move.  If we pop right through and fall another 2.5% tomorrow – then we're in an accelerating decline that could get incredibly nasty so let's hope it's not that.  


  219. Tks, Pharm.


  220. Oil/
    100 hours ago Oil was at $85 and now $78 that is a big move for one week…on nothing new really.
    USO was $40 at the beginning of the quarter and now $29 down almost 30%
    In the same quarter,
    QQQ was $68 and now $63 down 8%
    DIA was 132 now 125 down 5%
    EUR/USD was 1.33 now 1.25 down 5%
    GLD was 162 now 152 down 6%


  221. Phil – Thanks for the DIA puts – out at $1.70!


  222. Well, 251 is pretty close :)


  223. Phil, RUT watch at 764.5, closes 764.82…..Remind me not to play poker when we are in Vegas….


  224. Phil- we all like your gut- LOL!


  225. Covers/phil – thank you, and for expressing your reasons.


  226. gut/jthoma: Yeah, I always say Phil's gut is the worlds best leading indicator.  "Leading", get it, har har :D
     
    Great call to cash out.  Played the current ranged beeeyooootifully.


  227. Phil:  Please accept my thanks and my vote for the Golden Gut of the Year Award!!!


  228. Great call about CASH!  Thank you.


  229. That's the golden budda belly.  Phil how much to rub the budda belly in Vegas? :p


  230. Non Sequitur: Facebook IPO ;-)


  231. Dear all,
    I would like to announce that I have proudly renewed my membership for a year.
    Thanks Phil for this great trading forum and thanks to all members for actively contributing  to this outstanding trading/politics debating platform. Lots of knowledge, lots of experience and great sense of humor all around.
    I look forward into seeing hopefully most of you in Vegas.


  232. Phil, hope you're sitting back and chucking at all the "gut-level" comments coming your way!  All I ever saw was a "talking head" on BNN so I don't know what they're talking about…


  233. Phil, great call for cash yesterday. Well done!


  234. Look at the amazing spikes in the momos after hours, especially CMG.  Is that generally a predictor of anything or just bots gone wild?


  235. Pharm, re investigative reporter. Just in case,  I know an excellent criminal defense attorney in Florida.


  236. I guess these 50 DMA lines didn't hold much! The NYSE managed to cross both the 50 DMA and the 200 DMA in the same session. Is there a name for that cross? Te Russell is only about 2 points above the 200 DMA. These are not good technical signs!


  237. stock – thx.  Went that route and the attorney representing family dropped the ball, so they settled.  But, other 'things' can be done to the corporation and elected/officials of the county to expose their game.  Money is moving around in tax and other havens, easy to follow, but b'c the amount is less than a few million, the Feds won't get involved.  Not big enough.


  238. Phil is not the only one bullish on CHK…


  239. stjeanluc- I think it is called a double ohshit cross!


  240. Phil
    I'd add my congrats but I don't want that belly swelling any bigger.  It was hard selling out X at 20.10 yesterday afternoon, but felt much better seeing it belw 19 tonight.   On more serious note, Fronteir, Sprint and Verizon have been in their own bull market of late ignoring the carnage around them.  How's the best way to play them? I'm thinking both S and FTR are good for a double or triple.


  241. $1.70/Yshen – Very nice!  

    You're welcome Scott.  

    Thanks Kinki, ZZ – even though you are being mean to my gut..

    Thanks Newt!  

    Belly rubs/Rain – I think they charge $20 in the clubs?  

    LOL Diamond:

    Non Sequitur

    Thanks Lionel!  


  242. Phil – more belly swelling on the way. I missed out on your last 2 calls for cashing last year. Regretted it big time. This time I did follow you. I am feeling like a genius.


  243. TOS: just offered me $1/contract and NO Ticket fee.   I was formerly at $1.25/contract and NO ticket fee.
     
    Does anyone have a better rate?
     
    PHIL: Your ability to stay on the right side of this market is out right impressive! I've been learning tons from you! Any my own performance this year shows it… I'm up 32% YTD which is really good for me. Thank you for all your time and dedication to PhilStockWorld!


  244. Phil – more belly swelling on the way. I missed out on your last 2 calls for cashing last year. Regretted it big time. This time I did follow you. I am feeling like a genius. Thanks


  245. Phil,
    I am holding 500 TNA 35Oct12 puts, sold at $2.60 and 500 UPRO 55Sep12 puts sold at $2.20. What would you recommend as a course of action for tomorrow? Hold, buy back to get out or make an adjustment? I am asking because of your warnings of a possible crash and cash is king.


  246. Guts/Jerconn – Well I do have a lot of them and it is obvious when you look at me…   ;)  

    Thanks JMM!  

    Spikes/Mr M – Not moving the Futures so maybe just one fund making some speculative bets (we did too with the Q calls).  

    Big Chart – What a lot of work going to waster but what happens if we hold those 5% lines?   CONSTRUCTIVELY BULLISH!!!

    Thanks Den!   I don't like S but I love FTR long-term.  Still, if you look at a 3-year weekly chart you'll see they are the top of a downtrending channel so best to see if they can really break $4 before spending money up here and then they'll still have to deal with the declining 200 dma at about $4.50.  

    Moody's downgrade is in and, NO BIG DEAL!!   I know it.  It was baked in.  We'll see in the morning as it may play badly with the foreign folk but I'll be setting FAS money back up if we take a big dip.  

    Nice Nicha, congrats!   It's just that "better safe than sorry thing" – worst thing if I was wrong is we'd have to find some new trades.  This way, plenty of bargains to be had.  

    Your welcome Itrade and congrats – not bad for 6 months!    Good time to take a break and remind yourself what the money is for…

    TNA/Chas – They're at $47, $35 is a long way off.  If the RUT fails to hold 760, let's talk about it but I still think we get stimulus – just a question of when.  This is just a market temper tantrum so far because Uncle Ben didn't give them candy.  


  247. 15 downgrades total
    1 firm (Credit Suisse) lowered by 3 notches to A2 from Aa2, outlook stable
    10 firms lowered by 2
    4 firms lowered 1 notch
    Morgan Stanley 2 notches to Baa1 (there was talk of 3 notches)
    Citigroup lowered to Baa2, outlook negative
    UBS lowered 2 notches, there was talk of 3
    RBS lowered 1 notch to Baa1, outlook negative
    Goldman to 2 notches to A3 from A1
    HSBC 1 notch to AA2
    Barclays 2 notches to A3
    BNP Paribas 2 notches to AA3
    Credit Agricole 2 notches to AA3
    RBC to two notches to Aa3
    Soc Gen 1 notch to A2
    Deutsche Bank 2 notches to A2
    Fortis, Lloyds and Bank of America the others.
    No bank was lowered more than Moody’s outlined in Feb, when it foreshadowed the moves


  248. ^^forexlive^^


  249. Pharm / CELG – no worries.  It just got a bit frustrating not getting what a want when I wanted it //pounds desk and stamps feet!
     
    Regarding CELG, they do seem to have a LOT riding on that one drug.  Do you know anything about their pipeline?


  250. MS downgraded, on que, up 5% AH.  Nice.  Gonna short some more.


  251. Belly/Phil:  NEVER! I would kiss it if I could ;)


  252. CELG write up is here Bolt.  I think they have a few things that will keep up the revenue stream in the coming years.


  253. Now the name fits…kinki!  Thx for laugh!


  254. Good day all!  Account value flat since the DIA puts hedged some Jan14's longs.  Thanks to Phil's Gut and all the peeps!


  255. Which tab is the Strangle portfolio under…anyone?



  256. Pharm / CELG - when I click the link for the write up, it takes me to a page that says "membership required". 


  257. Phil—I do not want to add to the belly swelling etc but thank you very much—-I am very glad I found PSW


  258. Vegas Update—-weekend Nov 10,11 and 12—- LVModa is in the process of verifying wifi capabilities food costs etc  and then I can give you the amount of deposit etc—-We are capping the participants  to a maximum of 50  --atm we have 35 interested


  259. Savi/Las Vegas
    Please add me to the list.  Thanks!


  260. There sure is plenty of blame to go around in Europe, but not enough is directed toward Germany it seems:

    http://ftalphaville.ft.com/blog/2012/06/21/1053921/koo-on-german-bubbles/

     

    Germany’s actual fiscal deficits modestly exceeded that threshold on several occasions, but the resulting fiscal stimulus was far from sufficient to prop up the economy. The ECB therefore took its policy rate down from 4.75% in 2001 to a postwar low of 2% in 2003 in a bid to rescue the eurozone’s largest economy.

    But those ultra-low rates still had little impact on Germany, where balance sheet problems were forcing businesses and households to minimize debt. The money supply grew very slowly, and house prices continued to fall. Naturally there was only minimal inflation in wages or prices.

    The countries of southern Europe, which had not participated in the IT bubble, enjoyed strong economies and robust private sector demand for funds at the time. The ECB’s 2% policy rate therefore led to sharp growth in the money supply, which in turn fueled economic expansions and housing bubbles.

    In short, the ECB’s ultra-low policy rate had little impact in Germany, which was suffering from a balance sheet recession, but it was too low for other countries in the eurozone, resulting in widely divergent rates of inflation.

    In other words, there would have been no need for such dramatic easing by the ECB—and hence no reason for the competitiveness gap with the rest of the eurozone to widen to current levels—if Germany had used fiscal stimulus to address its balance sheet recession.

    The creators of the Maastricht Treaty made no provision for balance sheet recessions when drawing up the document, and today’s “competitiveness problem” is solely attributable to the Treaty’s 3% cap on fiscal deficits, which placed unreasonable demands on ECB monetary policy during this type of recessions. The countries of southern Europe are not to blame.

    That is of course one point of view!


  261. RUT, rebalance tomorrow???


  262. iTrade – I am at $1.25 with TOS too. How did you get a buck? Did you have to trade a specific number of contracts? Who did you talk to?


  263. Weak hiring: layoffs continue, jobs posted, but few new hired because  "All of us…learned some good lessons from the 2007, 2008, 2009 downturn." [James Verrier, BorgWarner's president and chief operating officer] http://online.wsj.com/article/SB10001424052702304441404577480771351072052.html?mod=WSJ_hp_LEFTWhatsNewsCollection
     
     So major companies are staying lean — query, does this necessarily translate into higher profits?  Under what circumstance does an excess of caution [the U.S. is, or at least was, slowly recovering] lead to lower profits?  I was in situations where being understaffed would have undoubtedly led to a loss of business and profitability, but I cannot generalize from that.


  264. Phil, Pharm and PSW members- as attention turns soon to Q2 earnings, any thoughts on who will report better and worse than expected numbers?


  265. It looks like Italy is "fixing" itself, and, yes, that's a double-entendre:  "Italy urgently needs to sell assets to reduce its debts. Yet rather than privatize the assets directly, drawing in much-needed private capital and ceding control to new owners who might operate them along purely commercial lines, Rome is resorting to accounting ruses."
     
    "The government is planning to sell three state-owned firms together worth €10 billion ($12.7 billion) to Cassa Depositi e Prestiti, the 70% government-owned postal savings bank. This is a convenient way to keep the asset in state hands without it appearing on the government's balance sheet. More such deals are likely to follow, notably in real estate."
    http://online.wsj.com/article/SB10001424052702304441404577480660567711018.html?mod=djemheard_t


  266. itrade/TOS – Do you have a contact you are talking to for the 1.00 contracts?


  267. Any opinions on Tradestation? $1/c, and they seem to have a very impressive platform, especially for day trading.


  268. bolt – sorry.  Here is the gist….

    CELG has four other compounds in Phase 3 clinical trials which could improved forward looking revenues.  They are noted below:

    • pomalidomide – under license from EntreMed, is developing pomalidomide, an orally available small-molecule analog of thalidomide that inhibits TNF-alpha overproduction, for the potential treatment of solid tumors including prostate cancer, multiple myeloma (MM), small-cell lung cancer (SCLC), and pancreas cancer. It is also being investigated for the potential treatment of graft versus host disease (GVHD), sickle cell anemia, myelofibrosis, polycythemia, and scleroderma.  In several Phase 2 trials, the first in December 2008, pomalidomide combined with low dose dexamethasone in patients with relapsed or refractory MM, were presented at the 50th ASH meeting in San Francisco, CA. The combination of pomalidomide + dexamethasone well tolerated and working well, with an objective response rate of 62%, including a 29% response rate amongst patients with Revlmid-refractory MM. Similar data were reported at the 51st ASH meeting in New Orleans, LA in December 2009.  The Phase 2 portion was ongoing and anticipated to complete in the fourth quarter of 2010.  Further randomized and novel combination studies were also expected and in June 2010, data from the phase II trial were presented at the 46th ASCO meeting in Chicago, IL. The overall response rate was 54%, with 17% of patients achieving a very good partial response, 17% a partial response and 23%a minor response. At the 6-month follow-up, the progression-free survival rate, the overall survival rate and the median progression-free survival period were 58%, 86% and 8 months, respectively.  Like, Revlmid and Thalomid, this drug should garner approval.
    • apremilast – is an oral, small-molecule PDE4 inhibitor that modulates the production of proinflammatory mediators (including PDE 4, TNF alpha, IL-2, IL-6, IL-12, IL-17, IL-23, IFN gamma, and leukotrienes).  CELG is investigating apremilast in three Phase 3 trials for psoriasis (includingpsorisis, psoriatic arthritis and recalcitrant psoriasis), Behcet’s disease, and other chronic inflammatory conditions (e.g., lupus erythematosus, erosive osteoarthritis, uveitis, ankylosing spondylitis, prurigo nodularis, atopic dermatitis, allergic contact dermatitis and sarcoidosis (YES, that is a lot of diseases this could work for)).  There is a ton of competition in this area, including GSK and MRK.  It remains to be seen IF this compound class will work.
    • amrubicin – Sumitomo Pharmaceuticals (now Dainippon Sumitomo) developed and launched (in Japan) amrubicin (doxorubicin prodrug named Calsed), which is an iv anthracycline topoisomerase II inhibitor for the treatment of small- and non-small-cell lung cancers (SCLC and NSCLC). CELG is developing the drug for the treatment of SCLC in the US and EU.  It works, but how well compared to/with the standard of care?
    • sotatercept – with Acceleron, CELG is developing this compound, which is a fusion protein containing a soluble form of the activin IIa receptor that inhibits signalling of the receptor and an Fc fragment of IgG1, for the subcutaneous treatment of chemotherapy-induced anemia, renal anemia and bone loss.  In December 2009, Phase 2 trial data were presented at the 51st ASH meeting in New Orleans, LA. Patients received 0.1, 0.3 and 0.5 mg/kg sotatercept subcutaneous or placebo. After the first dose of sotatercept, there was a dose-dependent increases in hemoglobin. Sotatercept-treated patients demonstrated a greater trend to improvement in osteolytic lesions. Of 22 evaluable patients, complete remission or very good partial remission was seen in 7 patients.

    Seven others to note that are in Phase 2, but are too early to count on. Many started trials over the last year or two, so data should be slowly trickling in, but larger, Phase 3 trials will be needed to move them forward.  The drugs under development are:

    • CC-223 – an mTOR inhibitor (think ARIA)
    • Docetaxel – a nab-docetaxel, an iv nanoparticle albumin-bound (nab) formulation of the microtubule stabilizer docetaxel, for the potential treatment of solid tumors (think IMGN or Abraxane from above)
    • CC-11006, a small molecule TNF-alpha synthesis inhibitor, an orally available immunomodulatory drug (related to thalidomide) for the treatment of hematological malignancies including myelodysplastic syndrome (nothing new)
    • CC-930 (small molecule, oral delivery) is a lead from a series of inhibitors of cJun N-terminal kinase (JNK), for the treatment of serious inflammatory and fibrotic diseases (WAY to early, and competition galore).
    • Cenplacel-L is one of many human placenta-derived stem cell (HPDSC) or human placental-derived adherant cell (HPDAC) therapies, for the potential iv treatment of malignant hematological diseases and other non-malignant disorders, including Crohn’s disease, ulcerative colitis (UC), rheumatoid arthritis (RA), multiple slerosis (MS) and stroke.
    • CC-11050 is an oral, small-molecule, tumor necrosis factor (TNF)-alpha and PDE4 inhibitor for the treatment of inflammatory disease including cutaneous lupus erythematosus.
    • azacitidine is an oral, small molecule whose mechanism of action is as a hypomethylating agent and DNA methyltransferase inhibitor for the treatment of cancer.

    Celgene has a very robust pipeline, and Revlmid is going to be the main player for them.  IF any one of these other compounds show robust activity across several cancers, then CELG is going to be in a position of handsome returns.  Much like our CEPH play, and knowing the range bound price of the stock, I like playing conservatively, buying the January 2012 $50/55 BCS for $3.35 or better, selling the January 2012 $5 Ps for $3.  That is a $5 spread for $0.35.  Earnings should keep the stock range bound, and any upside beat will make this one a nice winner in time.

     

    And how did it do?  CELG finished at $73….so 35c to make $5.  Not too shabby!


  269. Savi / Las Vegas

    Please add me plus 1.

    Thank you.

    Ron Resnick


  270. Phil / Las Vegas

    Please let’s program into the Las Vegas schedule some time for you to discuss BBBW and for me to give an update on fund structure and progress.


  271. BBBW update

    Please see my BBBW post regarding the search for an executing trader.


  272. lucky1/TradeStation,
    They are great for stocks and futures, but still pretty bad for options.  Even though their new 'OptionStation Pro' in 9.1 is a huge improvement over previous releases, it really don't mean anything at all, because what they had before was just lacking.  Even in the new release, they simply miss some basic operational capabilities, such as:

    a) Ability to change an order for an option position (other than a simple call or put).  Say your vertical spread has hit  your target and you place an order to get out at a price somewhere near the mid.  Nothing happens and it is 5 min before the close and you want to get out – in TOS you would simply right-click on the order and click again on 'cancel/change order' and adjust your asking price.  Not so in TradeStation:  You need to cancel the order and reenter it from scratch!  Same goes for rolling during expiration, lots of fun canceling and reentering orders when you have a dozen positions open and an excellent use of your time!  What's worse, what you gain with $1/contract in commissions, you lose in slippage three times over because of that, because eventually you'll start entering your exit price in 5 or 110 cent increments!
    b)   They don't show how much margin you are consuming when you place an order – only way to do this is to use your own calculator (or simply put the order in and find out after the fact!).
    c)  This should really be part of b) but it is important if you do strangles or iron condor:  They don't properly calculate the  margin you've used up in real time, they show the margin consumed for both the call and the put side.  Only the next day it shows the proper margin, 50% of what it shows right after execution.
    d)  They can't properly calculate margin on 3x ETFs in real-time – you'll only find out the next morning what changes occurred to your margin balance.  Very exiting, as a trader I just love uncertainty!

    I could go on and on, but suffice it to say that I  switched most of my options trading to TOS this year.  Love TradeStation's automated platform and programmable indicators though (but just not for options)! Hope this helps.


  273. Long Oil off $78
    Euro banks downgraded by Grumpy's are all green.
    Some bottom fishing is happening whereas global indices are down to catch up with the US.
    Goldman and Sachs have done their best to scare the weak hands!!


  274. Savi
    add me to the Vegas list plus 1


  275. I'm with you lionel.  Dangerous time to be short anything in the market.  We saw this same set up last year.  The S&P fell from 1365 to 1270 from May up to the last week of June.  Then a big pump job from 1270 to 1340 in the final week of June to close out the quarter.  Of course we then fell off the cliff in July/August.  The set up this year is eerily similar.  Hopefully we have a flush lower today and I'll use it as an opportunity to load up on some cheap aggressive upset plays for next week.


  276. Good morning!  

    Damage not so bad in Asia with China down another 1.4% (2 in a row), Japan down 0.3% and India down 0.4%. 

    Europe opened down about 1.5% but now down 0.5% so big improvements as people realize the banking news was old news.  Our futures are up 0.4% but it's early innings.  

    Dollar at 82.50 but settling down, Euro $1.255 is not good, Pound $1.5607 so barely hanging on and 80.29 Yen to the Dollar with EUR/CHF at $1.2008, which means they are working hard just to support $1.255.

    Oil $78.50 (/CL) is a nice spot to take a long flier, Gold is $1,570, copper at $3.29 (/HG) will be a good play if they pop $3.30 as that should make a good stop/support line, Nat gas is $2.607 and gasoline plunged to $2.46 and is starting to get interesting with July 4th coming up. 

    6:00 AM Overseas: Japan -0.3%. Hong Kong -1.4%. China -1.4%. India -0.3%. London -1.1%. Paris -0.6%. Frankfurt -1.0%.

    Major buy signal already!  With the latest data from the Philly Fed calling the recovery further into question, Goldman analysts are calling to short the market over the summer. The firm adds that without any kind of imminent QE, the market will be forced to trade on economic data, which appears to be deteriorating. Other traders aren't so sure, like Fast Money trader Brian Kelly. Kelly sees plenty of upside catalysts in the near term, and thinks the Fed is ready to unleash some serious firepower. Can you say – inflection point?

    It's time to rotate out of industrial stocks into tech, thinks S&P equity strategist Sam Stovall. While industrial names are likely to be pressured by weak PMI data and other signs of global macro weakness, tech companies are expected to produce above-average 2012 and 2013 EPS growth. Moreover, they sport PEG ratio of just 0.7, the lowest of 10 S&P industry groups. (large-cap valuations)

    Germany's June IFO Business Climate falls to 105.3 from 106.9 in May and vs. forecasts of 105.9. Expectations drop to 97.3 from 100.8, current assessment rises to 113.9 from 113.2. (PR)

    Yawn:  Moody's cuts Morgan Stanley's (MS) rating two notches – to Baa1 from A2; 10 other firms by two notches and four firms by one notch (largely as expected).

    More on the Moody's banking downgrades: A three-notch cut for CS. Two-notch rating cuts for JPMCMSGS; just one notch forBAC. After hours: MS +3.7%JPM +1%BAC +1%C +0.6%. (full statement

    Of the EU-listed banks whose ratings have been cut by Moody's, Credit Suisse (CS) was -1.05% in European trading, UBS-0.3%, HSBC (HBC-0.1%, Barclays (BCS) flat, Deutsche Bank (DB)-0.2%, BNP Paribas (BNOBF.PK) flat, RBS -0.8%, SocGen (SCGLF.PK+0.4%, Credit Agricole (CRARY.PK+0.4%.

    "The reductions by Moody’s are "a mea culpa from 2007 and 2008," says Morningstar analyst James Leonard. "The banks have gotten so much better in the last few years in terms of capital, yet their ratings keep going down. What does that tell you? That the ratings were so wrong before."

    The ECB is expected to decide today to ease its loan collateral rules, the WSJ reports, providing yet further support for Spanish and other ailing banks. The move would help protect them from the effects of a Spanish bailout on debt ratings, but don't expect the Germans to be pleased about what it would do to the ECB's record €3T balance sheet.

    The EU needs "creative" monetary policy to promote growth, says IMF chief Lagarde, emerging from a Eurogroup meeting. She throws her weight behind the idea the EFSF and ESM should be able directly fund banks (as opposed to having the sponsoring country apply for a rescue), and urges a "limited form of common debt" in the euro area. A summit of Merkel, Hollande, Monti, and Rajoy is set for tomorrow. 

    U.S.-targeted M&As plunged 44% on year in H1 to $299B as the economic uncertainty caused companies to stay cautious about expanding despite the piles of cash they've accumulated. Global activity slumped 25% to $1T and bankers don't expect things to get any better in H2.

    While job vacancies have risen since the end of the recession, firms aren't necessarily filling them, and hiring is still way below levels prior to the financial crisis. A study of "recruiting intensity" indicates that company's aren't in a hurry to recruit staff, especially with the recovery so bumpy. 

    The National Association of Manufacturers says the looming cuts in Pentagon spending that would begin in January will lead to theloss of more than a million jobs, including 130K manufacturing jobs, by 2014. It's the latest warning by industry groups and think tanks about the impact of spending cuts put into law last year by the Budget Control Act. 

    See what happens when you put Democrats back in charge?  Once plagued by budget delays, California is set to pass the new FY program on time for the second year in a row after a deal yesterday between Governor Jerry Brown and legislators. The $92B agreement, a mix of spending cuts and a tax hike, plugs a $16B deficit and should improve California's reputation amongst muni-bond investors. 

    Depressed shares of Chesapeake Energy (CHK -4.2%) are worth more than $50 apiece and will eventually top $100, the head of top CHK shareholder Southeastern Asset Management says, adding that the company is on track to sell assets and create a "pristine" balance sheet, he adds.

    Global TV shipments fell nearly 8% Y/Y in Q1, estimates DisplaySearch, as firmer pricing hurt volumes, and consumers directed a greater chunk of their electronics spending at mobile devices. LCD shipments fell 3%, while plasma shipments tumbled 18%. Samsung (SSNLF.PK) claimed a 26% share of the market, and was followed by LG (14.6%) and Sony (SNE - 9.4%). Some key TV industry suppliers: GLWAUOLPLSTMNXPI.

    Backing up a recent Jefferies note, Digitimes reports many top phone vendors (nearly everyone besides Apple) have slashed their orders to Taiwanese suppliers, with the cutbacks expected to continue into Q3. Slowing North American smartphone growth and weak Euro phone demand are seen as the culprits. Some component suppliers saw big losses today - RFMD -6.5%SWKS -5.4%TQNT-6.6%QCOM -3.3% - but then again, so did many other chip stocks (SOXX -4.1%).

    "If you're a start-up, you'd be crazy to build your own infrastructure," says an exec at cloud storage leader Dropbox, whose billions of user files are hosted by Amazon Web Services (AWS). Many other startups also rely on AWS, whose aggressive pricing and rapid deployment times have fueled its stunning growth. Amazon (AMZN) CTO Werner Vogels recently predicted AWS and its peers would both empower upstarts, and cause headaches for IT hardware giants selling high-end gear.

    Though Windows 8 is still months away from shipping, the hype is growing. Microsoft's (MSFT) ability to offer a commondeveloper environment and interface between PCs, mobile devices, and the Xbox leads Bernstein to predict its tablet share will surpass Android's by 2014/15. Gizmodo's Adrian Covert declares Microsoft "the most exciting company in tech," both for its integration efforts, and its willingness to abandon existing products/features if it sees a long-term benefit. (previous)

    Samsung (SSNLF.PK) is investigating an incident in which its Galaxy S3 overheated while mounted in a car, causing a "white flame, sparks and a bang," and melting the phone inside and out. The user conceded that the cause could have been the mount and the car's heating system. See the photographs here.