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TGIF – Hail to the Cash!

SPY DAILYWheeeeee – that was fun!

A bit more violent than we expected but now you can see why we went to cash on Wednesday.  We even took a bullish bet on the Qs at the end of the day as we were hoping for a bounce this morning and we had really cleaned up with DIA July $124 puts from the morning Alert to Members, which came in at .95 and ran all the way to $1.85 but we took the money and ran at $1.40 for a nice 47% gain on the day

We also picked up AAPL weekly $570 puts for .50 and those made a quick 40% as well, closing at .70 at the day's end.  

In the afternoon, we took our winnings and played the QQQ next weekly $63s for .75 and they dropped a dime to .65 but we're playing with house money and a stop at .50 on the hopes there will be a rumor of stimulus that spikes the market back up.  

We were too scared to play the Financials bullish with the Moody's downgrade looming but we will be restarting our FAS Money Portfolio today in the hopes that this will be a bottom for the Financials (about $14 on XLF) that we can begin to makes some bets on.  Fas Money was, by far, our most profitable portfolio in the first half of the year, cashing in Wednesday with a virtual $12,175 profit with almost no cash in play (but using margin to sell FAS puts and calls on a regular basis).  

There are still rumors that MS will suffer heavy margin calls.  I say rumors because The Street reports $6.8Bn as a fact but, since Cramer is behind it, I don't believe a word they say.  

Moody's lowered its long-term senior unsecured debt rating for Morgan Stanley to Baa1 from A2, with a negative outlook, while cutting its short-term rating for the firm to P-2 from P-1 but this move was a long time coming and MS stock has already plunged from $21.13 in March to $12.26 in early June and that's very close to the $10 line they hit in 2009 – which they tripled off by June.  

We don't trust MS enough to bet on them directly but, if they DON'T blow up, XLF should do quite well and, even if they do fall apart, we think XLF has enough strong players to weather the storm.   Our previous favorite, JPM, seems to be doing just fun and, with an A2 rating – is still the star of the group!  If you want to be aggressive, MS can be played to hold $12.50 by selling the 2014 $13 puts for $3.15 and buying the $10/15 bull call spread for $2.50 for a net .65 credit on the $5 spread that's $4 in the money to start.  

Your worst case is you own MS at net $12.35 and Think or Swim tells me that you hold aside just $1.80 of net margin on this trade and that margin requirement will reduce if MS takes off and, if it doesn't, then your premise is blown and you should probably get out.  If all goes well, this trade will return $5.65 against the .65 credit an over 8x return on cash and a 3x return on margin if MS is at $15 come the Jan 2014 expirations.  

See how much fun we can have with our cash!   There are tons of great opportunities out there – so no hurry, we're not rushing into these trades because, with 800% returns, we don't mind missing the first 200% if they "fix" Europe next week because THEN we will feel nice and confident playing for that next 600% of upside.  Still, deploying a little bit of cash on a greed play is fun, right?

Speaking of fun plays.  Some of our Members had trouble filling LQMT on Tuesday and BNN rushed me off the air before I could mention them as my fun trade of the month.  Today they are back to .30 and we still like them.  AAPL just extended their licensing deal with the company for 2 more years and we're just looking for another rumor that LQMT's alloys will be used in the IPhone 5 to spike them up again (we caught a ride from .15 to .55 in April) but it's a craps roll kind of bet, so we're thrilled to take a dime and run when it comes.  

We'll be going back to the well on our Twice in a Lifetime List (Members Only) as we begin to re-establish some of our long positions but only tentatively ahead of the weekend.  We HOPE (not a valid investing strategy) that the EU gets it together and drops another Trillion on the PIGGS – that should be enough to take us to the end of the year at S&P 1,350 or higher but, until we get the ACTUAL stimulus – Cash remains KING!  

Have a great weekend, 

- Phil

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  1. Pharm

    What's you opinion on PLX in light of today's announcement?

  2. Economic Numbers

    Germany IFO Business Climate / 105.3 (105.6 expected)
    Germany IFO Current Assessment / 113.9 (112 expected)
    Germany IFO Expectations / 97.3 (99.8 expected)
    Italy Consumer Confidence / 85.3 (86 expected)
    Canada CPI Core (YoY) / 1.8% (1.9% expected)
    Canada CPI (YoY) / 1.2% (1.5% expected)

    For the Germany IFO numbers, anything below 100 is a negative outlook. Still no inflation on the horizon!

    At 10:00 AM we have the American Petroleum Institute Monthly Report – this could affect oil prices.

  3. Good Morning!

  4. PLX/lol – well, whomever bought those 100 $6 Ps is in the know…..that's what I think.  As for the EMU's ruling, that is complete crap.  Sanofi/Genzyme were there first, and desingating Shire (an EU company no doubt – well English, but close enough) is utterly irresponsible.  Regardless, PLX/PFE have the world, they can still undercut the others on price, AND PLX owns Israel themselves, which is where the highest group of patients are.  I would buy more.  Selling the Nov $5 or 6 puts.  Oy vey….

  5. Friday afternoon expiration trading – My new schedule gives me Fridays off, so I am looking at trading weekly expiring options in the afternoon.  I'm going to be looking for pinning stocks, and selling credit spreads at the strike to take advantage of time decay.  Much like trading futures, the idea is to keep losses small with tight stops.  If anyone has good systems for selecting pinning strike prices I'm all ears.  I'm going to watch just a few big names like AAPL, GOOG, AMZN, and PCLN, since I want enough premium to make the spreads worthwhile as well as strong volume to get in and out of the trade.  Let me know if you are interested and we can chat as we go.

  6. revtodd – Iflan does something similar by selling strangles (momo  portfolio) on Thursday/Friday expiring next week. In the past he has done this with PCLN.

  7. IFLAN- Any MoMo plays for this morning?

  8. Hi Phil

    I'm glad to hear you're doing well with your picks.  Have you done anything with DMND lately?
    I sold some Sep 19 puts for $3.50 a week or so ago and wondered what your take on the position is.

  9. Pretty cool charts – not useful for day trading though:

  10. Not sure how we are up on this crap news out of Europe - 

  11. FAS Money and the MoMo portfolio are in cash now.

    I'll update the Income portfolio and the Peter's Strangle portfolio after the close today.

  12. Good morning.

  13. wappler/tradestation — thanks for the write-up early this am…very helpful…will move to TOS instead!

  14. ecb collaterol rules going from liberal to including the kitchen sink

  15. that trumps crap news

  16. J&J's Xarelto could miss out on $1B market after FDA decision. The FDA has blocked Johnson & Johnson's (JNJ) application to widen the use of its Xarelto blood thinner to prevent heart attacks and strokes in people with acute coronary syndrome, a market estimated at $1B. J&J said it will work with the FDA to address its questions, indicating that the company hasn't given up hope of eventually getting the authorization.  BMY  – buy buy buy….they will own this market.

  17. Pharm – I had a decent amount of PLX $5 Nov calls. What do you recommend? Hold, roll to a later date? You mentioned earlier you can see them getting bought out b/c of the technology, has anything changed that premise?

  18. Thanks Nicha – I'm a dedicated fan of lflan's posts.  I often play his recommendations, especially for late Friday strike pins.

  19. PLX sold 12-Nov puts for $.60

  20. dollar seems to be active, japan?

  21. SWW – CELG Jan 13 $50/55 BCS, selling $50 Ps for 1.40 debit.  Not a bad way for making >200% on a spread that is 100% ITM and 10% down from here.

  22. credit gauges better today, but germany/france/UK equities weak

  23. Seems like not that much reflexive short-covering this morning after yesterday's big drop.   Are the big boys waiting to cover this afternoon, or hold short into next week?

  24. Good morning!  

    Let's keep in mind that a 0.5% bounce it textbook 5% Rule off a 2.5% drop and is only a WEAK BOUNCE so this morning's "relief rally" may be nothing but normal bot trading on the way back down.  

    That being said, I still want to look over the Twice in a Lifetime List, so we can begin thinking of things to do with our cash:  


    • AA (original entry $8.50) 2014 $8 puts can be sold for $1.50, now $1.42
    • ABX ($35.91) 2014 $30 puts can be sold for $4.50, now $3.60
    • ALU ($1.45) 2014 $2 puts can be sold for $1, now .85 
    • BAC ($6.97) 2014 $7 puts can be sold for $1.75, $1.47 
    • BTU ($25) 2014 $20 puts can be sold for $4.10, now $4.40 
    • CCJ ($19.37) 2014 $17 puts can be sold for $3.30, now $2.60 
    • CHK ($13.83) 2014 $13 puts can be sold for $5, now $2.85 
    • CSCO ($16.70) 2014 $15 puts can be sold for $2.05, still $1.93 
    • FTR ($3.20) 2014 $3.50 puts can be sold for $1.30, now .90
    • GLW 2014 $15 puts at $3.90, now $3.85
    • GNW ($5.02) 2014 $5 puts at $1.75, now $1.54
    • HMY ($8.88) 2014 $8 puts can be sold for $1.40, now $1.15 
    • HOV ($1.83) 2014 $2 puts can be sold for $1, now .70
    • HPQ ($22.04) 2014 $23 puts can be sold for $5, now $5.72
    • MT ($14.30) 2014 $15 puts can be sold for $5, now $4.05
    • JPM ($34.59) 2014 $30 puts can be sold for $5, now $4.45 
    • OIH ($35.90) 2014 $30 puts can be sold for $4, now $4.20 
    • SVU ($5.15) 2014 $5 puts can be sold for $1.85, now $2.15 
    • WFR ($2.05) 204 $3 puts can be sold for $1.40, now $1.45
    • X ($22.25) 2014 $20 puts can be sold for $5.10, now $5.90 

    OK, so plenty still playable (bold) and that means this sell-off has been no big deal so far (or they'd all be playable again).  Notice MT is up but X is still down – that makes X a very nice play so let's sell 10 of those in the Income Portfolio for $5,900 and 10 HPQ puts for another $5,720 and we'll see how those go before going crazy.  

    I like this chart from Barry on Market Caps as a % of GDP – the real problem is we labor under the false assumption that GDP will grow – that has not been the case for quite a while and the austerity crowd will ensure it never happens again:  

    The bull plays are a bit more fun than the bear plays at the moment but we could very much go either was so I'm still looking at the bull plays as a way to prevent regretting being in cash if the market takes off.  

    FAS Money – Not a very exciting drop in XLF but let's grab 10 of the 2014 $14 calls for 2 and sell 2 FAS July $70 puts for $1.80.  That's a good start and we won't cry if it goes lower as we'll just grab more calls and sell more puts!  

    Generally, as long as we hold the top of those V's on the Big Chart – we're still "constructively bullish" and that means the Nas, RUT and NYSE need to stay green today but none of that matters until we see what happens next week so be careful out there!  

  25. PLX/jro – my premise does not change.  I hope you have been selling premium against those calls.   Nice pstas.

  26. MoMo Buy to Open 10  July 580  AAPL calls at 15.44

  27. AAPL Volatility / Iflan
    Great move on the July 580 Call.  Except for Jan 25-Feb1, AAPL volatility is nearly at its 1 year low.  Plot VXAPL in TOS.  Great chance of vol expansion into earnings to further goose the 580 Call as pre news excites the stock.  I even did 1/2 position on the 580 Put.

  28. IFLAN- i have to leave for the day and can't watch the mkt- you plan on holding this position through Monday?

  29. ccs aapl vol
    how do you get vol in a comparison chrt in TOS?

  30. CMG up, NFLX up, buying a few PCLN 660/665 spreads here for just over a buck for fun!

  31. Weeklies/Rev – That's one of those strategies that works until it doesn't so be careful.  You can go 10 weeks in a row comfortably selling and then you get one week with a massive stick into the close that blows you out – especially if you are going to play Momos that way.   

    DMND/Exec – Actually, I was glad to be done with them – very frustrating but I do like selling Sept puts, like the $17.50 puts for $2 as I think their issues will be done by the time they release their updated financials in July.  The $19 puts are a good sale too (now $3) – just a bit more aggressive.  

    GDP/StJ – Very nice.  Certainly it's China's century now and it shows you how much India can improve if they ever get it back in gear.  

    LOL Angel – Yes, I think the ECB now accepts notes from your Mommy as collateral.  

    BMY/Pharm – You don't think that's already priced in?  

    Oil topped out at $79 but rejected there so far.  Nice little pop for the Futures.   Copper (/HG) also made a penny and gasoline is laying there at $2.46 but that's going to be a great play next week into the holiday.  

  32. MoMo AAPL July 580 calls …..I plan to hold unless I make more than 20% on the position today.  

  33. Flan- Thanks.

  34. monti is setting up markets for huge disappointment next week i think…i dont hear germany talking like they are about to cave on everything…and that is what he is saying is necessary or eurozone collapses.

  35. Someone asked " How do we know where AAPL will pin?".   We don't, but I look at the call volume on Friday for this weeklies, to get an idea.  The 580s are by far the most active right now.  So 580 most likely, but it's never a fail-safe prediction.  

  36. MoMo trade:   BTO  10  AMZN July 230 puts @ 12.60 for balance.

  37. bullard saying qe3 faces 'high hurdle'

  38. Phil – I did not get fills on the FAS money trades at the pricing you posed.  Should I leave the limit orders in, or chase a little to get in?  ie- when you post the trades, is that current pricing at time of post, or what we set orders at?

  39. Watch that Dollar 82.50 line – above that is going to be bearish.  

    Euro falling off with an hour to close – back at $1.255 and Pound down to $1.555 with EUR/CHF barely holding 1.2008 so a lot of pressure down on the Euro means very little confidence that they are fixing anything this weekend.  Gold just $1,562, silver $26.65 and oil $78.85 is all lame and copper just failed $3.30 so weak, Weak, WEAK!!!

  40. FAS Money/Rkyro – I'd wait.  Might be much better prices next week if they don't fill today and, if not, THEN we can adjust.  

  41. Short Strangle virtual portfolio,
    This little bounce is dropping VIX and thus dropping the OTM Put value for both July and August, and I'm getting on a plane in a couple of hours, so there no new August spread today.  Meanwhile, we are still milking the July spread, and for some excitement in this portfolio, let's roll 4 (out of 7) SPX July 1125 short Put to 1170 short Put for $1.15 credit or more, getting and additional $460 credit.  1170 is still 12% down, and we still have plenty of margin for additional adjustments.  We are leaving the long put vertical alone for now.

  42. BMY – no, I don't.  There is no one else in the space now, and BMY has the best in class.  If the drug can take over Plavixx (also BMYs drug), then they will be raking in the money.  BMY/PFE are co-marketing the drug, and remember, PFE needs it VERY badly, so you can be that sales will be good.  Drug is Eloquis.

  43. Sage/Compare
    In Studies, add the "Comparison" study, change the ticker, example VXAPL, and apply.  Uncheck "On upper subgraph" so that it goes to the lower studies and gets its own y-axis scale.  I wish TOS would allow a comparison graph on the upper to have its own scale on the left.  But because not, I move it to the lower section.

  44. AAPL dropping…
    where will they pin it?  575?

  45. Thanks for the update Peter! I'll post a recap after hours today!

  46. CCS thanks but no comparison study on mine??

  47. Thank you stjeanluc for the spreadsheet update. 
    I'm excited about the possibility for this portfolio.  If there is a big crash (10%), we should be able to grab a bundle of premium as we have lots of margin available.  If there is a gigantic crash (20% in a month), people will be glued to PSW for adjustments!  In other market conditions, we just go slow with collecting small premium every month.

  48. TOS:  $1/contract no ticket fees,  & $5/stock order was an offer when I told them IB was offering $0.7/contract.  They looked at my account and agreed to this new rate.

  49. At the open: Dow +0.59% to 12648. S&P +0.56% to 1333. Nasdaq +0.5% to 2873.

    Treasurys: 30-year -0.56%. 10-yr -0.29%. 5-yr -0.1%.

    Commodities: Crude +0.81% to $78.83. Gold +0.1% to $1567.05.

    Currencies: Euro +0.35% vs. dollar. Yen +0.12%. Pound -0.07%.

    Market preview: Stocks could be headed for a bounceback day after yesterday's sharp losses, with S&P futures +0.5%. Bank stocks are actually getting a lift from the Moody's downgradeMS+2.8%BAC +1.7%JPM +1.2%. European bourses are mostly lower after Germany's business confidence falls to a two-year low. No economic data expected today. 

    9:23 AM Session highs across the board following the easing of ECB collateral rules: Stoxx 50 +0.3%, Germany -0.5%, Spain +2.5%, Italy+1.2%. The euro +0.3% to $1.2574. S&P 500 futures +0.6%

    10:00 AM On the hour: Dow +0.52%. 10-yr -0.22%. Euro +0.23%vs. dollar. Crude +1.03% to $79. Gold +0.19% to $1568.55.

    QE is viewed with the Fed as still having a pretty "high hurdle," St. Louis Fed chief James Bullard tells Bloomberg. Translation: It's going to take more than a 2% market decline for action. See here

    Markets are killing the chance for QE3 by frontrunning the action (continually bouncing on hope of Fed action). The "liquidity put" will only get triggered at substantially lower levels, says Citi's Mohammed Apabhai. He sees 1,285 in the S&P as a key technical level (S&P is currently 1,325) and additional QE coming only if the market were to decline 12% from here. 

    "I do not believe that further monetary stimulus would make a substantial difference for economic growth and employment without increasing inflation by more than would be desirable," says the Richmond Fed's Jeff Lacker, explaining his dissent over the $267B extension of Operation Twist. 

    Bernanke Paves the Way for QE3 on August 1st (Calculated Risk)

    The Fed In 3 Phrases: Decoding Bernanke & Co (NPR)

    Limits of the unconventional (Economist)

    "This type of environment  makes my job quite easy," says fund manager David Herro, who is "significantly adding" to his stock positions as 580 companies in the MSCI indexes trade for less than the value of their net assets. On the other hand, "safe" health-care and consumer products firms are trading at their highest level in more than 10 years, according to the same gauge.

    The Scam Wall Street Learned From the Mafia (Rolling Stone)

    The ECRI Weekly Leading Index slides to 121.3 from a revised 121.8. The annualized growth rate slips to -3.5%, a 4-month low.

    Canada May inflation slides to 1.2% Y/Y vs. expectations for 1.5% and from 2% the previous month. It was led by a fall in gasoline prices, off 2.3% Y/Y, the first Y/Y decline in about 2 years. Excluding energy, the CPI rose 1.7% vs. 2.1% in April.

    With the continent nearly drained of eligible collateral the ECB cuts the ratings threshold for certain ABS, including those backed by commercial mortgages and auto and consumer finance loans.

    A press conference is underway following a meeting of Merkel, Hollande, Monti, and Rajoy: Direct bailout funding of banks violates treaties, says Merkel

    Multi-trillion plan to save the eurozone being prepared (Telegraph)

    Spain will formally send a letter requesting a bank rescue on Monday, says finmin De Guindos, with a memorandum of understanding (which will contain the key provisions) set for July 9. In another headline, it's said the country is considering imposing losses on junior bank bondholders. Spanish shares momentarily dove lower, but have since regained their composure. 

    Fitch pours cold water on yesterday's audit firm assessment(somehow spun as good news) that Spain's banks could need €51-€62B in additional capital, saying the stress test's assumption of just a 6% capital level appears low. Fitch's base-case estimate of losses is €230B vs. just €170-€190B by Wyman and Berger.

    Housing, Like Generalissimo Francisco Franco, Is Still Dead (WSJ)

    The global oil market is more balanced now than in 2011, but the short-term outlook mostly depends on OPEC production decisionsBP's head of energy economics says, describing a combination of higher OPEC production, oil inventory levels getting back to normal and relatively weak consumption growth that has weakened the market and caused prices to fall. 

    Railroad stocks open weak across the board after a price fixing case places the spotlight back on regulation and antitrust issues in the industry. Decliners: NSC -1.2%CSX -2.6%KSU -1.8%UNP-1.3%GWR -0.8%CNI -0.7%.

    Getting interesting: More on Carnival's (CCL) FQ2: Stronger onboard revenue and stable cruise prices boosted results. Fuel prices up 12% Y/Y. Booking volumes rose 8% over the last seven weeks compared to a year ago. Forecasts in-line revenue for the rest of the year. Sees FY12 EPS of $1.80-$1.90 vs. $1.40-$1.70 prior and $1.67 consensus. Shares -0.5%. (PR)

    Supervalu (SVU +5.5%) stands as the biggest gainer of the S&P MidCap 400 Index with talk about a leveraged buyout still percolating. An enticing feature for SVU investors waiting for a LBO is the lush dividend yield of 7.3%, which stands a chance of staying elevated with the company flush with cash.

    The ARM-based version of Microsoft Surface (features anNVDA chip) will cost more than $599, and the Intel (INTC) version more than $799, according to sometimes-accurate Digitimes. The reported price for the ARM-based version would make challenging the iPad's dominance, not an easy thing to begin with, difficult. Separately, Computerworld's analysis of the battery info provided by Microsoft (MSFT) leads it to speculate Surface's battery life will be worse than the iPad's.

    Though analyst expectations for Research In Motion's (RIMM -1.8%) are generally quite low, Credit Suisse might take the cake. Analyst Kulbinder Garcha, who rates RIM a Neutral, expects the company to report revenue of $2.68B during next Thursday's FQ1 report, well below a consensus of $3.12B. Moreover, he sees RIM's global smartphone share falling to 4% in 2012 from 11% in 2011, and forecasts hardware losses of $2.5B and $1.9B for FY13 and FY14, respectively.

    The Koch Brothers, The Cato Institute, And Why Nations Fail (Baseline Scenario)

    And after reading about those scumbags, you'll need this:  21 Pictures That Will Restore Your Faith In Humanity (BuzzFeed)

  50. stjeanluc,
    The SPX Jul 1125 Put virtual pricing was $0.8 and July 1170 Put was $1.95.  Actual execution may be different.

  51. Choose Your Rationalization . . .

    By Barry Ritholtz – June 22nd, 2012, 7:53AM

    Yesterday’s ugliness has the pundits looking at numerous explanations, correlations and motivations for what was the causation of the 2+% market sublimation.

    All those “-ations” leave out the most important one: Rationalization. For that is what all of these tales actually were.

    Consider the following “causes” trotted out for the move:

    -Federal Reserve failed to deliver QE3
    -Global economic slowdown
    -Moodys downgrade of banks
    -Spain/Greece/Italy (choose up to 3)
    -Commodity bear markets
    -Euro currency concerns
    -Middle Eastern unrest
    -US Election jitters
    -All of the above

    I have a different view:

    The day-to-day action is nearly all noise. It contains a surprising degree of randomness, but its not as totally random as some academics would have you believe.

    Why? Sometimes we see price continuation, leading to distinct trends. This is often acted on, reflected in the trading behavior of both Momentum traders and Trend followers. Occasionally, a move in either direction gets over-extended. Hence, Contrarians and Sentiment watchers try to anticipate the counter-trend reaction move. Third, the market internals can shift, become aberrational. Technicians try to discern what this is telegraphing behind the scenes in the activities of the biggest institutions as they impact the stock supply demand battle.

    Or not.

    All of these cross currents described above are hardly reliable guide posts. They occasionally provide a modicum of insight, but just as often lead to confusion. Typically, they make day-to-day trading exceedingly challenging. The shorter your timeline, and the greater your assumptions, the far less reliable your investment strategies become.

    The exception, ironically, are those folks who measure their holding periods in fractions of a second. High Frequency Traders (HFT) — a/k/a “cheaters” — mostly know the outcome of their trades in advance, courtesy of the information provided to them by the exchanges. Their high probability front-running is not available to ordinary investors, from  whom their profits are derived.


    What investment decision have you rationalized today?

  52. We might be getting somewhere with solar eventually:

    What's this orange-like patch, you ask? It's a layer of carbon nanotubes on silicon, and it might just be instrumental to getting a lot more power out of solar cells than we're used to. Current solar power largely ignores near-infrared light and wastes about 40 percent of the potential energy it could harness. A mix ofcarbon nanotubes and buckyballs developed by MIT, however, can catch that near-infrared light without degrading like earlier composites. The all-carbon formula doesn't need to be thickly spread to do its work, and it simply lets visible light through — it could layer on top of a traditional solar cell to catch many more of the sun's rays. Most of the challenge, as we often see for solar cells, is just a matter of improving the energy conversion rate. Provided the researchers can keep refining the project, we could be looking at a big leap in solar power efficiency with very little extra footprint.

  53. Thanks Peter – I do enter Mark prices usually as I can't guess what everybody is getting. That close enough for PSW work!

  54. MoMo   BTO 5 more  of the AAPL 580s  at 14.20

  55. Today should be interesting at the Euro 2012 – it's the 1/4 final between Greece and Germany. More than soccer pride is riding on this game!

  56. iTrade/TOS commission,
    How much volume do you have to get $1 commission?  TIA.

  57. My PCLN spread from 10:16 is a quick double so if you're in it get out or put tight stops.

  58. Euro / StJ – Hell yeah!! We are going to give those germans a run for their money (sic).  I hope you are supporting the underdogs today :-) (although to be fair i dont have high hopes). Go PIGS!!! 

  59. wappler / volume — The threat of moving your money to someone with cheaper commissions can be just as good of  bargaining chip as volume.  Especially if you can point to publicly stated cheaper comission.  Just sayin'.

  60. Markets not moving much tlt getting hammered as is vix??

  61. Phil/faith  Thanks, I appreciate the reminders. Random acts of kindness is my favorite thing to do….. :)

  62. is the dollar the manipulation du jour?

  63. LOL Dpas… their money indeed! 

  64. stj/  here is Monty Python's classic version of Greece v Germany

  65. mrmocha…I didn't play the PCLN spread but thanks for the heads up.

  66. mrmocha/PCLN, great call.

  67. ….on another note, we have a "scumbag" alert here in San Diego….

    ….I can already smell the stench of an oil spill….

  68. Wappler, I have a 25K account (probably in the bottom 5% on this website) and pay a flat .85 per option commission on TOS. Everytime they and/or their system screws up I called and got .25 cents knocked off my futures bill or 5-20 cents knocked off my options bill. In the 3 years I have been with TOS Ive got my options down from 1.50 to .85 and futures down from $5+ to $3.5. 

  69. LOL Rexx….

  70. wappler – They told me it 2500 contracts / month was the benchmark for $1 commissions.

  71. rainman/volume,
    Good idea, I'll give it a try!

  72. Went long UCO earlier at 24, I expect some BS to jack up oil to 80 or a little over.  Also RSI very weak.

  73. jromeha, rkyoma,
    Thanks for the info, very helpful!

  74. BBBY putting in a second low of the day.  seems like done going down.  might see a run to the declining 5 dy ma.

  75. stjeanluc…..typo on the last MoMo trade…..I got those last 5 AAPL July 580 calls for 14.05  (not 14.20)

  76. Is it me, or has AAPL behaving somewhat atypically, relative to the rest of the market, over the last month?  Nothing seems to move it much — neither bullish nor bearish sentiment seems to have much of an effect.  Am I missing something?

  77. OK, thanks lflan! I'll update the portfolios later today!

  78. Rails are dragging down the Transports but it's not an economic issue (lawsuit) and, since that's holding back the whole market, things are a bit better than they seem.  

    Financials still weak with the downgraded stocks doing best (maybe fear of future downgrades hitting the others):  

    A check of the TBTFs on the day after the Moody's downgrades: C +1.3%BAC +0.6%JPM +2.3%GS +0.3%MS(which escaped a 3-notch downgrade) +2.2%. In Europe: RBS +1.7%,LYG +2.9%CS +1%UBS +1.9%DB +1.3%BCS +0.6%SAN+3.1%

    Europe finished at lows and I think that was dragging us down too.  Don't forget they were catching up to our fall after having a bullish week so only a retrace of rally for them and we're below Monday's open by about 10 points on the S&P (1,340) so less than that will be disappointing but, because of options expirations, we may flatline today and pop on Monday and super-pop on Monday if there is an early announcement but the big EU meeting is Thursday – so possibly nothing concrete until then (if then).  

    Oil $79.38 now, Copper back over $3.30 (/HG still bullish over the line).

  79. Speaking of MoMo, that 650/700 PCLN weekly strangle is looking very good today. The volatility prediction worked out well.

  80. Friday, June 22, 11:45 AM Yum Brands' (YUM +2.1%) Taco Bell continues to draw positive reviews for its new Cantine Bell menu. With words such as fresh, light, and crisp getting bandied around, the new initiative from the chain stands a chance to impact sales at Chipotle (CMG +0.8%) – which up to now has had a field day redefining the fast-food gourmet Mexican niche. Yum Brands plans to spend $20M in TV and digital marketing to spread the word that there's a new player in the game with its July 5 Cantina Bell launch just around the corner.

  81. zero….AAPL doing about what I expect.   It might go to 570 (might, or might not) before zooooom!   
    stjeanluc….yes, the weekly strangle for PCLN was right on wasn't it.  

  82. EFA yielding 4.77%, monster option volume.

  83. Iflan / StJ – Any short weekly strangles you can propose for next week? Cheers!

  84. PCLN / lflan – Based on current volatility and last price, I would expect PCLN between 635 and 685 next week but I would be leery to enter a trade today based on the current environment!

  85. zero/EFA, looks like a h&s formation though

  86. That sounds like a good investment plan:

    The primary principle underlying Persaud’s trading strategy was that the gravitational pull between the moon and Earth affects mass human behavior, which in tum affects the stock markets. For example, Persaud believed that when the moon is positioned so there is a greater gravitational pull on humans, they feel down and are therefore more inclined to sell securities in the markets.

    Apparently the guy had a ponzi scheme based on that strategy. What could go wrong!

  87. Non Sequitur: Gambling

  88. lol, diamond.

  89. Solar/StJ – Gotta love those Buckyballs!  

    Greece should throw that match to Germany if they want any money – Germans will be really, really pissed if Greece beats them in soccer.  

    PCLN/Mr. M – Great call!  

    Random acts/1020 – Me too.  

    LOL Rexx – Classic.  

    AAPL/ZZ – Flatlining into earnings.  Expectations seem stupidly low at $10.35 when they made $12.30 last Q and full-year expectations then, of $46.88, which are up from $43.90 last Q also seem kind of silly  when they've bagged $26.17 in Dec and March (funny year) already.  Based on that estimate, they have a current p/e of 14, which is why I'm all BUYBUYBUY at $555 as that's just silly with a sub-14 p/e but I think a nice earnings play can be constructed with the Sept $525/575 bull call spread at $31.50, selling the Jan $450 puts for $15.50 for net $16 on the $50 spread that's in the money for a 200% gain if AAPL holds $575 through Sept and $450 through Jan.   TOS wants net $45 for the sale of the $450s, which is not a bad use of margin to make $34 (75%) in 6 months.  

    If we assume AAPL should be over $600 and will prove it in July, then the Sept $575/600 bull call spread at $10.25 is very attractive and I like having 5 of those ($5,125)  and selling 3 of the July $600s for $6.65 ($1,995) for net $3,130 on the potential $12,500 spread. 

    Oh yeah, and AAPL may possibly be being held down as a reserve for a massive rally-maker, probably not as a stick today but to push us over resistance when they need it.   It's a wonderful thing – all you have to do is buy AAPL (which any market manipulator is happy to own anyway) and you get a 20% return on the entire Nasdaq and 3.5% on the S&P for every Dollar you push it up.  Daily volume in AAPL is 20M ($11.5Bn) so figure for $2Bn you can jam it up 5% no problem and pop the entire Nas 1% and add about 0.2% to the entire S&P 500 – that's a lot of bang for your manipulative buck and all you have to do is buy AAPL up from $577 to $605 – averaging into 3M shares at about $590 and most likely you can get out of most over $600 as the break over the line sparks a buying frenzy.  Hell, pair that with a rumor of the IPhone 5 being released and you can make a nice day out if it…

    Lunatic investing/StJ – Sounds like as good a theory as any.  

  90. Itrade or anyone:  IB rates
    I've been trying to figure total costs of trades and I see their commision rate is lowest but not sure I follow the other fee per trade. And I am wary of the PM calculations they do.  Any thoughts on switching from Fidelity?  I currently pay fidelity $6.95 ticket plus .695 per contract so trading less than 17 contracts costs more than a buck, but larger quantities brings my costs down below that.  The execution is always excellent and the margin rules very clear and fair.  TIA

  91. I don't really get why the TBTF's are up on the downgrades. What, the downgrades weren't as bad as they were expecting?!!

  92. Dollar at 82.53 not helping.  Swiss still cranking the presses to float the Euro but seems like they are the only buyers.  Also no helping is move in Yen to 80.50 (weaker) – also supporting Dollar and maybe some Yentervention there to prop up the Nikkei, which opened at 8,725 last night but made it back over 8,800 as they jammed the Yen lower.  

    Dow volume just 42M at 12:23. 

    Keep in mind, if we can't get over 0.5% gains – it's a weak bounce and that's not a bullish sign at all.  

  93. Thanks, Jomptien:  I've learned [with lots of blood and failure] to wait for the fat pitch, as PSW counsels.  EFA ain't it.
    And thank you, Phil, for the AAPL dissertation, very persuasive.  It's behavior just seems anomalous, going from the hottest of stocks in 1Q to a dullard & laggard, as if Ballmer's inspired products were about to eat its lunch.

  94. MoMo….order placed to sell the  10 AMZN puts bought this morning, for 14.00.   I'm going swimming.       Later.

  95. Jbur – That's correct.  According to CNBC ( sorry, but at least I can listen to it while I'm driving around.. ), The Market was expecting 3 notch downgrade on MS, and only got 2.  Thus, it's up slightly.  

  96. zero / AAPL — I about covered my monitor with coffee when I read the phrase "Ballmer's inspired" :o

  97. Buffett buys another newspaper, the Waco Tribune-Herald

  98. Phil I have an EDZ July $18/22 Bull Call Spread I am using as a hedge, bought for $1.15, offset by the $16 puts for $1.05 so net $.10.  With EDZ currently at $.62, I can roll the $18's to the Aug $16's for $1.40 and the $22 caller to the Aug $20 for $.90 in credit so investing $.50 to gain $2 in position and giving myself another month of coverage.  With the puts at about even, should I wait to roll them to the Aug puts for $.65 or wait until some premium burns off?  If I roll now the original hedge of net $.10 turns into a hedge with a $.05 credit.  TIA!

  99. Phil: I bought 1200 share of SVU at $$7.73,now $4.81,sold 2 Jan. $5 P& C for $4.16 for net $3.61/$4.31.Call are at $.65.With all rumors of buyout,close out calls? Thanks

  100. Whoa – AAPL overload today.  Between Phil's ideas and our man LF, I feel like I'm in a orchard!

  101. CELG / Pharm:  Those Oct $50 putters already showing 30% profit from yesterday. I have not been in CELG for a while and wouldn't have seen that if you hadn't mentioned them early yesterday.  Nice job & thanks!

  102. Shades of HMC and Asimo? Looks like F (Ford) is getting into the App business:
    Logging into websites may soon get easier, thanks to Ford KeyFree

    "Not content with just the automotive industry, Ford may be moving into the password storage business.

    According to a promotional video created by French ad company Ogilvy Paris (spotted by Fast Co Design earlier today), Ford is working on a way for users to more easily log in to websites like Facebook and Twitter."

  103. RevTodd - if you're going to play one day a week, Friday is certainly the one.  In addition to my PCLN trade above I made a bundle on the NFLX surge today.  Pharm and I (and likely others) are big proponents of Opex Crazy Plays – buying ITM spreads to play time decay and picking up OTM nickle and dime options to play surprise swings.  It can be a blast, but start small!

  104.  Another note on Crazy Plays – don't start with Momos, the bid/ask is too wide, cut your teeth on options that trade tight with penny increments.  For example, I practiced on MSFT for awhile, that's a great one; a .10 option on that one just two hours ago is worth .40 now, that's why we call these plays crazy! 

  105. Thanks Mr. Mocha, I will watch your posts.  I have a staff person going out on maternity and we have a party today, so I don't know if I will be done in time to play today.  

  106. revtodd- please send us all an invitation when Phil enters the pulpit- it will be quite different than his seating himself at the poker table in Vegas. He practiced the other day in his interview with a collarless shirt- all he needed was the clerical collar- :which you may have to lend him- :)

  107. Downgrades/Jbur – Buy on the news in this case.  Was already baked in and not so bad in the end.  

    EDZ/Rperi – I'd take it and run, could be huge turn-around next week.  If not, you have .52 free to buy a new spread next week.  If you are looking at it as pure insurance – then sure, the rolls to extend it make sense but I don't think it's a good time to spend money taking more risk on EEM going down.  

    SVU/Dflam – I think so as you might get lucky and you raise your net in to $4.26/4.63 but you do need a 20% premium paid in a buyout to make that extra .65 so a little risky vs. leaving it alone and making $1.39 at just $5.  Birds in the hand and all that…  I think, on the whole, I'd rather sell 12 2014 $3 puts for .75 and leave the rest alone.  Then, if they get bought out, you get your .75 on top of the $1.39 and, if they don't, your worst case is 3x at net $3.87.  

    Dollar holding 82.40 so far with Euro at $1.256 and Pound at $1.558 but EUR/CHF is down to 1.2007 (weaker Franc) which means they are working REALLY HARD to get the Euro higher and are making very little progress.  

    Pulpit/Jthom – I'm thinking of doing "The Wages of Sin" and taking the Pro stance.  :)

  108. mrmocha/Opex Crazy Plays, is this a new kind of trade?  How come I didn't know :-( .  Do you have link for examples?  TIA.

  109. Bob, several of us on this site were posting Opex Crazy Plays over the last few years, but I've not posted much about it this year, sorry.  My examples above of MSFT at .10 and the PCLN spread should give you a hint at how it works.  I'll try to post more on upcoming Fridays.  I spend a lot of time in meetings so for me it's a pleasant weekly diversion at the gaming table…

  110. Jthom – I don't do the collar thing.  It frightens the New England Congregationalists.  I go for the pastoral navy blazer look, but keep the somber black robe on Sundays.  I could probably get Phil into very stylish alb.  Phil, I would always expect you to take a pro-wages point of view ;)

  111. mrmocha, Thanks a lot, looking forward for it.

  112. Jthoma: Phil has been preaching to his choir all along, no practice needed!!

  113. Rev:  Wages of sin?

  114. AMZN $220 seems like a good pin today. Selling  $215/$220 spread for .26.  Just some pocket change to reinforce the pulpit prior to Phil.


  116. CELG/never – ur welcome.  The spread has widened on the morning pick, so I may have to adjust that one out in time.

    ON that note, the Oct 65/July 65 CELG calendar is 1.81.  Good upside protection, and reduces the whipsaw action.  I am doing 10 for 1.81 or better.

  117. PhiL ACI $5 p at $1.37 = net $3.63 . Book value = $14 /share . I nkow you like BTY,but is there a potential buy out of coal assets here

    Women worry about what men forget;
    Men worry about what women remember

  119. Pharm, What months/strikes do you like for BMY?  Did some research after your post, and I like the story, but I'd like to defer to your experience for timing and price.  Thank you VM!

  120. PCLN - closed the rest of the 660/665 spreads for 4.80, entry price 1.20, that was too fun!

  121. Wages of Sin….Lord knows I need help

  122. revtodd –  It took me more than 30 minutes to figure out you weren't talking about a options collar, you meant a real one.  Damn, my head is too caught up in this bidness!

  123. Good job MrM…. Looking forward to more picks!

  124. Jabo, please don't hate me for switching from PCLN short plays to long plays.  I feel so dirty over here on the 'dark side'.

  125. StJ - too much work this year, but when I retire you and I can run a Crazy Plays Portfolio together 8) .

  126. BMY/Burr – How about the 32 Jan 14 straddle for 7.40 paired with the stock.  When I originally noted them a long time ago, they were 18, then 23, then 26….now at 35, the prices are getting a bit rich, so protecting the capital is the way to go.  Otherwise, wait for a VIX spike and then do that one.

  127. burrben – LOL!  Made my day.  Jthom suggested I loan Phil a collar, so I was responding to that.

  128. CRM…what a farce.  Starting to roll into more puts and selling the June5 29 $125 puts for 1/2 cover. POS.

  129. mrmocha I only hate hate ;-)
    I hope everyone makes money at PSW…
    I still think PCLN gets hurt with the weak Euro (Phil do you agree)?
    I guess I shouldn't be surprised anymore by the mystical rise by PCLN and CMG that follows every drop post earnings…

  130. revtodd – 11 year old minister.

  131. CRIS over $5 finally.  Starting to sell more puts…they just might start to move this one up.  For a mrm crazy play, sell the Dec $5 puts and buy the calls for a nickle credit…. I will try a few.

  132. MrM – My problem right now… Taking on too much between work and this place! Another 20 years and I'll have more time.

  133. Now oil stuck at $80.

    First TSLA sedan being delivered today.  First TSLA sedan breaks down over the weekend.  Aug $27 puts are $1.05.  

    Though Tesla Motors (TSLA +4.4%) has never turned a profit, shares have confounded shorts and doubled in the two years since the firm's IPO. This weekend the unbridled enthusiasm over Tesla's ability to target the mass market with its EVs will be tested as drivers and critics get behind the wheel of Model S cars at Tesla retail stores across the country. For enamored buyers, Wells Fargo will provide financing through a special arrangement.

    11:49 AM Europe closes mostly lower after the pop from the ECB loosening collateral requirements is erased by Merkel's "Nein."Stoxx 50 -0.5%, Germany -1.2%, France -0.7%, Italy -0.7%, Spain+1.5%, U.K. -1%. Germany is the big loser for the weekEWG -3.7%.

    12:00 PM On the hour: Dow +0.54%. 10-yr -0.22%. Euro +0.05%vs. dollar. Crude +1.52% to $79.39. Gold -0.05% to $1564.65.

    1:00 PM On the hour: Dow +0.37%. 10-yr -0.21%. Euro +0.20% vs. dollar. Crude +2.04% to $79.8. Gold +0.11% to $1567.15. 

    2:00 PM On the hour: Dow +0.49%. 10-yr -0.23%. Euro +0.19% vs. dollar. Crude +2.53% to $80.17. Gold +0.22% to $1568.95.

    Illinois' deficit grew 16.8% to $43.8B in the year ending June 2011, says the state auditor general. As comparison, New Jersey was $10B less and California $33B less. Illinois ended the year with $4.7B in unpaid bills. Just a suggestion, but perhaps more up-to-date accounting would help.

    Like I said, a rounding error:  Trying to get ahead of the ratings downgrade, Morgan Stanley (MS) spent Q1 shifting $1T (notional) in derivatives into its U.S. bank unit. The bank unit has a rating one notch higher than the holding company, so the derivatives residing there will require lower collateral posting. The company has about $50T in notional derivative exposure.

    handy chart to keep bookmarked of Moody's ratings on recently downgraded banks. Moving from "Low risk" to "Moderate risk" are Morgan Stanley (MS), RBS, and Citigroup (C). Moving from "Minimal risk" to "Low risk" are Credit Suisse (CS), JPMorgan (JPM), and UBS.

    check of CDS prices for the TBTF U.S. banks shows Moody's roughly 9 months behind with its downgrades. The cost of insuring against default for the major lenders peaked last fall and are down again today in the immediate wake of the negative ratings action.

    The Credit Suisse (CS) board takes the unusual step of releasing a statement of confidence in management and the steps it is taking towards bolstering the bank's capital. Pressure on CEO Brady Dougan is likely building thanks to a warning from the SNB and last night's 3-notch downgrade from Moody's. Shares -52% Y/Y. (PR)

    As demand for commodities sinks, the global farm sector presents an investment opportunity, Jefferies says. Initial USDA yield estimates probably are overstated given warmer weather and deteriorating crop conditions, the firm says, and crop prices likely will remain above long-term averages and well above cash breakeven. Favorite stocks: AGCOSYTGPRE.

    Europe is a "big question mark" for commodity markets butoverall demand for aluminum is strong, particularly for full-body lightweight cars and planes, Alcoa (AA -0.5%) CEO Klaus Kleinfeld tells CNBC. "The demand structure is very strong," Kleinfeld says, adding that demand increased by 10% last year and this year it's up 7% so far. (also

    Some solar names are rallying after Citi's Timothy Arcuri provides another bullish note. Arcuri, who in early May suggested Euro solar demand was improving (a delayed plant closing from First Solar seems to back this up) writes today that renewable energy demand may be bottoming, even as oversupply remains a problem. U.S. demand and Japanese subsidies are seen as positive catalysts.SPWR +6.3%GTAT +6.1%CSIQ +6.2%STP +3.1%. (First Solar)

    The selling pressure seen by Arena Pharmaceuticals (ARNA -16.4%) remains intense, as shares give back a healthy chunk of their recent gains. Possibly hurting Arena's cause is an article from SA's Shane Blackmon, who notes Arena's rally has been fueled by short-covering (22% of the float was shorted as of May 31), and argues "a bear raid seems inevitable" ahead of the FDA's expected June 27 decision on the company's Locaserin weight-loss drug.

    Old favorite:  Benchmark analyst Robert Samuels says that Crocs (CROX+2.3%) has moved past its trademark colored clogs and has adiverse business model that should present upside potential for investors. His main point of contention with the company is that it needs to fire up new marketing efforts and educate consumers about its portfolio of products.

    Speaking of recalls:  General Motors (GM -0.5%recalls over 413K Chevrolet Cruzes due to an issue with under-engine shields which might not properly protect against flammable liquids being trapped in the engine compartment. The recall covers model years 2011 and 2012.

    FU CMG!!!  Yum Brands' (YUM +2.1%) Taco Bell continues to draw positive reviews for its new Cantine Bell menu. With words such as fresh, light, and crisp getting bandied around, the new initiative from the chain stands a chance to impact sales at Chipotle (CMG +0.8%) – which up to now has had a field day redefining the fast-food gourmet Mexican niche. Yum Brands plans to spend $20M in TV and digital marketing to spread the word that there's a new player in the game with its July 5 Cantina Bell launch just around the corner.

    Corning (GLW -0.2%) isn't getting a lift from an upgrade to Neutral from JPMorgan. The firm is encouraged by recent increases in LCD panel pricing, particularly for TV panels, and thinks customer inventories of LCD glass are likely to stabilize after recent reductions. Also, while admitting the demand environment for Corning's glass is bleak, JPMorgan notes shares are trading at a price/book multiple last seen during the '08 financial crisis

    More on Google: Citi's Mark Mahaney provides more upbeat commentary, estimating YouTube will generate net revenue of $2.4B in 2012. That's up from a prior estimate of $1.7B, an increase Mahaney attributes to surging traffic and improved ad monetization. Definitely helping matters is the fact much of YouTube's recent traffic growth has come from professional content, which is proving easier to monetize than the amateur content that drove much of the site's early growth.

    Hey, it worked for AAPL:  Is Larry Page's health something for Google (GOOG) investors to be worried about? Page missed yesterday's shareholder meeting, where a "stock split" that strengthens his voting power was rubber-stamped, and he also will miss next week's Google I/O developer's conference and the company's Q2 earnings call – the latter is roughly a month away. JPMorgan's Doug Anmuth also notes Page hasn't posted on his Google+ page since May 25.

    So funny, they found a whole country that hasn't been turned off to FB yet:  Facebook (FB +4.1%) continues its big rally with the help of Nomura's coverage launch. Some recent news: 1) Facebook has hired Apple's UI design manager to handle its product design. 2) The company's Sponsored Stories ads are now appearing on (ZNGA). That's possible evidence Facebook wants to create a display ad network, though the company says it won't show ads on other sites at this time. 3) UK regulators are joining the FTC in probing the Instagram deal.

    With Microsoft Surface having sent the Windows 8 hype cycle into overdrive, some blowback was probably inevitable. Time's Harry McCracken thinks Surface amounts to vaporware, and notes Microsoft's (MSFT) long history of providing "extremely rough drafts" of products that weren't close to finished (ed: some journalists did receive a small amount of hands-on time with Surface). ABI Research, meanwhile, predicts Windows tablets will only account for 1.3% of 2012 shipments. (earlier)

    Three lunchtime reads:

    1) Fourteen reasons to worry about Italy

    2) Are falling commodity prices a problem?

    3) The end of the euro is not about austerity

  134. Speaking of farce: "Cairo (CNN) — Ahmed Shafik, the last prime minister under former Egyptian leader Hosni Mubarak, will be named the country's new president on Sunday, the semi-official Ahram Online news site reported Friday, citing several unnamed government sources."  There's no way he won; the Muslim Brotherhood won, and Egyptians all know it — many of the votes didn't come from "Islamists", but from people voting against control of the country by Mubarak's military.  Not good; the protests are not going to go away, and probably worse.

  135. stj – you DO have a lot of work here!! You need an assistant.

  136. AMZN  MoMo…..  The 10  July 230 puts sold for 11.50.   Reason……1. .Clear that both AAPL and AMZN are going to go up.   2.  Exit losing trades  quickly.  

  137. MoMo:  AAPL/   BTO  5 more of the July 575s at 15.00

  138. Iflan – you mean the July 580's, correct?

  139. PLX recovering nicely.  Down still, but much better.  Those sold puts are looking good.


    Take it up boyz…Volume is horrid, and they are going to drop this think like a rock next week for EOQ.  SPY P/C ratio is 2.0

  140. ACI/Dflam – They are just a bad news machine.  Just because a company has a low p/e does not mean it's a good deal.  They have $170M in cash and $4Bn in debt – that's what you're buying and their total cash flow for 3 years has been $67M with last year at $142M net profit and this year just $1.2M in Q1.  To some extent, it's the same argument you'd have for CHK – getting a bargain at the bottom of the coal cycle but NAT GAS IS BETTER THAN COAL!!!  That's why I like CHK – they are the best of the best in that sector AND nat gas is at the bottom of a cycle.  Coal will never recover if nat gas is cheap so CHK wins first and maybe only in that race.  BTU, on the other hand, makes $1Bn a year and generally adds $500M to cash flow but spent $2Bn buying back their own stock last year and that reduced them down to a p/e of 6 – less than 1/2 of ACI.  Why on Earth would I want ACI when BTU is cheap?   

    Meat ticks/Nicha – Don't let PITA see that!   They'll start tossing tics at people…

    PCLN/Jabob – I tried to use them to book a hotel for my trip – ridiculous system they have, I still don't get them.  Weak Euro SHOULD impact their sales unless sales went up so much they covered it but how likely is that with a recession?  Still, I consider them a stay-away under $700, where the puts become attractive again.  

    Still 82.40 – what will it take to break the buck?  

    QQQ/$25KP –  Next Weekly $63s back to .75.  The higher they go today the more it makes sense not to risk them over the weekend as they can drop 50% at the open (or go up 50%) on Monday.  I think over .90 we take the money and run – under .90, I'm thinking it's a fun gamble.  

  141. Pharm – do u sell covers for GLUU? I have stock at $4.46, thinking about selling July 5's.

  142. "PITA" being the Greek version of People for the Ethical Treatment of Animals?  Wow, that Greek crisis just gets worse and worse!

  143. MoMo trade:    AAPL…..Sell to open 20 July 605 calls for 5.60.    This is now a bull call spread.

  144. And WFM makes new highs – yawn….  

    LOL ZZ!  

  145. Another no volume day Dow vol 61M with a bit more than an hour to go
    I am enjoying my long Oil position early this morning up $2.1 on CLQ2 :)
    Let s see if we can touch R1 today $80.50 … only Mr Stick could take us up there!

  146. Hi Phil,
    Something I don't understand with the APPL play — the Sept $575/600 bull call spread.
    You say "we assume AAPL should be over $600 and will prove it in July" but then use the short July calls as the offset — "selling 3 of the July $600s for $6.65 ($1,995)."
    Why sell calls that might get assigned? Wouldn't it be better to sell puts?

  147. And here's the proof!  "New Greek finance minister in hospital; Vassilios Rapanos undergoes tests after fainting."   Or maybe he just got a look at the real budget numbers.

  148. Pharm- Hey, look at DEPO. Screwed up my master plan to sell boatloads of puts as it fell.

  149. Zero/Greece – I saw a comment earlier somewhere that I thought was funny – "Greek PM sees country's debt figure, eyes pop out….Greek FinMin faints."

  150. DEPO – good little company….Diclofenac, blah blah…

  151. EU and Asia were both down…we are up almost 1%.  What a bunch of BS.  VIX gives up almost all of yesterday.  Buying more Sept 120 and 125 Ps.

  152. Pharm, thanks for the BMY trade.  I'm going to wait a little until a pullback or increased vol, but it's now on my watchlist!

  153. $TRIN is rising above 1…which means that the selling has started…FWIW.

  154. StJ – Wondering if you ever heard of Google Cloud Connect?  It allows you to use Excel to upload spreadsheets to Google Cloud.  I'm researching this for another project, but it could help you update prices of the spreadsheets.  For example if you use TOS or IB, both have a RTD into excel.  Then all you would have to do is update the trade price, and all other prices would update from the market.  

  155. MoMo AAPL play summary:  In 20 contracts BCS for 14.98(ave.)/5.60    or 9.38.   This should yield 15.62 if AAPL is over 605 at July expiration.  I believe this is very likely.    

  156. Geez Pharm, how many did you buy???  Look at that drop right after your post.

  157. CELG – ok, how about the Jan14 $50/55 BCS and selling the 45 P for a net credit of 35c…. or just sell the 45 ps for 3.95 for (480) in margin in a regular account.  IF CELG gets to 45, we would be backing up the truck on them.


    StJ – this is for SWW as well, so you need not read my section this week!  Have a nice weekend all!

  158. ryk – not enough!  Trying to break that PP at 133.53 and not wanting to be long the weekend….I bet a selloff unless someone pushes the HFT button.

  159. MoMo/   STO  LNKD   June 29  105 puts   5 @ 2.00  

  160. ROFL, jabo

  161. Hi Fellows Greetings from Germany and enjoying football Germany 1 Greece 0 half time. Until next week have a nice weekend. Yodi

  162. Thanks Burrben, I'll look into it. It's not too crazy as is for now though so manageable! But being to use TOS as a feed for my prices would help keep it updated in real-time!

  163. MoMo    STO   FB   June  29  32      10    @  .55

  164. Those are FB puts,  June 29     32s

  165. TVIX down 14%, man is that ETN broken!

  166. Very nice Lionel!  

    AAPL/Zip – Good question.  2 issues:  1) What if I'm wrong?  This is what a hedge is for – I like to assume I'm wrong and have an out if I am, in this case the out is that the $600s expire worthless and the spreads hold some value.  2) A spread is not a static win/lose proposition.  If I am right – AAPL has to go up 5% before I even owe my callers their money back.  If I do owe them their money back, then 5 long spreads will be worth $12,500 and all I have to do is pay back the $2,000 they loaned me to buy it.  In order for those 3 longs to cost me the net $9,000 I'm gaining on a bull run, AAPL has to be over $630 – that's higher than I expect and anything less than that is a winner PLUS, I will of course roll the calls if that happens and the July $600s, now $6.75, can be rolled to the Aug $640s ($6.55) and those can be rolled to the Sept $670s ($6.20) so what I'm really betting is that AAPL will go up but not higher than $670 (+$100 or about 20%) and, of course, if they go that high, I can always roll the callers to 2x something else and establish another bull call spread that pays me a double if AAPL at least stays flat.  

    This is why starting at option calculators is bad for you – you need to think about positions as STARTING POINTS – not something you are locked into.  As the stock moves, you can move too – you are not trapped unless you allow yourself to be by not thinking 3 moves ahead (like chess).  In any position you should KNOW what you will do if the stock goes up 20%, down 20% or stays flat and from each of those possibilities you should KNOW what you will then do if the stock goes up 20%, down 20% or stays flat and only if you are comfortable with your ability to handle all 9 3rd-level possibilities should you be committing anything more than an exploratory amount to a trade.  

    Very possible ZZ – that's what happened to the first Government that discovered the real numbers.  

    Kimmel/Jabob – Very funny.  

    Have fun Yodi!  Good move by Greece throwing the game, maybe Germans will feel generous.  

    Here sticky, sticky! 

  167. Bailing out on QQQ 63 weekly calls for 80c
    Just leaving some for a fun gamble on Monday open

  168. Let's offer to accept .90 for 15 of the QQQ $63 calls in the $25KPA and 5 (half) in the $25KP – that gives us som cushion into Monday (if it triggers).  

  169. MoMo trades are done for the day.  AAPL longs overtook the AMZN short losses.  MoMo trades are set up to make about 2k or more over the next seven days.   We have enough margin left in the portfolio to roll LNKD and FB if we have to.   Monday looks up to me.    Thanks and I'll check in later tonight and this weekend.  

  170. Look at AAPL go!  Push that Nasdaq baby…

  171. Oh well, didn't make it – topped out a .85 but very exciting nonetheless!  

    Big selling block right at the close took advantage of the stick (150M on the Dow now) but didn't break it so still:  CONSTRUCTIVELY BULLISH!

    Have a great weekend everyone – I'll be around.  

  172. phil
    very early to throw the game.1-1 already !

  173. I'm telling you, if Greece beats Germany they won't get a dime next week.  

  174. Tied 1-1 between Greece and Germany…. Merkel looked unhappy! Still 30 minutes to go.

  175. And France-Spain tomorrow… capped by England-Italy on Sunday. They are keeping the economic superpowers for the weekend.

  176. Holy cow… Dow volume 146 at the close or 85M in the last hour!
    That is a serious vote of confidence that Europe will pull out something over the weekend or Monday before US open.
    Have a great weekend everyone – I am off trout fishing.

  177. VIX futures just jumped 7%, any negative news out there? 

  178. Fishing sounds good. Off to the North Woods of MN for a week of Walleye and Musky fishing. Mostly cash with some SPY puts for insurance. 
    Phil, your earlier call to exit was right on but for once, I was a few days ahead of you. I unloaded longs on the move up and trimmed shorts on the way down. Closed the week with a little extra gas money courtesy of Iflan/AAPL.
    Will be watching from the sidelines next week but may take a few pokes if things look interesting. WIFI in the woods nowadays.
    Have a good weekend all.

  179. Have a good weekend all…. Leaving for Quebec tomorrow for a week! Always fun there.

  180. STJ, have a great time in Quebec.  My inlaws are from up by Quebec City.  They are a lot of fun.  Lots of good food and good wine!

  181. Stj:  Have fun.  I hope you can understand their French.  Forget trying to speak English to them.  Montreal is cool, even if they do make French sound like it's being run through a wood shredder.

  182. Pstas/MN,
    will be driving through your neck of the woods next week, vanc – NW ontario via yellowstone, badlands, then crossing back in at Int;l falls… enjoy the pan fried walleye fillets.

  183. Quebec / Robert and Zero – I have been going there every year for the last 10 years (Mt St Anne next to Quebec City). And I love Montreal as well. In the cities, my continental French works well but once you are in the countryside, it's a different language. I really have to pay attention then to understand everything. It's actually funny that on TV5 (the international French channel) they have French subtitles for Canadian shows!

  184. Interesting figures:

    After bottoming out in early 2009, commodities once again began an upward climb, but this time the increase was much more gradual in nature.  In the span of more than two years, the entire benefit (and then some) of lower commodity prices had been erased.   Since that peak back in early 2011, lower commodity prices have once again been providing a tailwind for the consumer.  In fact, as of yesterday's close, the average American was seeing a $2.17 daily windfall due to the change in commodity prices since the start of 2008.  Two dollars may not sound like much, but on an annualized basis it works out to about $795 per person per year, or $3,175 per year for a family of four.  With a median household income for families in the United States in 2010 of $61,544, this works out to more than 5% of the 'median' family's income.

  185. That about sums it up:

    Corporate profit margins just hit an all-time high. Companies are making more per dollar of sales than they ever have before. (And some people are still saying that companies are suffering from "too much regulation" and "too many taxes." Maybe little companies are, but big ones certainly aren't).

    Corporate profits as Percent of GDP

    Wages as a percent of the economy are at an all-time low. This is both cause and effect. One reason companies are so profitable is that they're paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those "wages" are other companies' revenue.

    Wages to GDP
    More of that with 4 years of Romney!

  186. Oh the irony is killing me.  From Barry Ritholtz: Inflation Ex-Deflation (this time, INCLUDING energy)
    The Fed always uses the Core CPI (prices ex food and energy) to give a inflation number that in recent years has skewed it downward.  But now that food and energy prices are dropping it is skewing the core inflations numbers upward
    In fact the core inflation numbers ex food and energy is at 2.7% on a 3-month annualized basis and way over the Fed's target.  Add in food and energy and the inflation number comes out to only 1.73%. 
    So now that we are running hotter than the Fed's target number, should we be raising rates, or at least stop all easing policies for now?

  187. Good post by Mark Dow, a behavorial macro-economist/hedgie, (in fact all his posts are great) on A Framework for thinking about Gold and Silver.  Many of the factors which contributed to the run-up in precious metals are reversing (fear/inflation/BRICs etc) and should modulate the price and growth. 
    Phil's target of 1100-1400/oz. as a fair value sounds about right according to Mark.

  188. BBBW / hedge fund attorneys

    I have a wide range of contacts at U.S. law firms which specialize in hedge funds. But I want to find out if there are any PSW members in the U.S. who are hedge fund attorneys, or who work at firms with hedge fund practice groups, who could do the work at a steep discount to normal fees.

    Thank you.

    Ron Resnick

  189. Vegas Update——Meeting dates Nov 11th and 12th 2012—--registration fee $200 p/p ( no refunds unless meeting is cancelled—if cancelled refunds will be minus any costs that lvmoda has incurred in setting up)—min participants 25 --maximum 50
    Preliminary Agenda
    Nov 10th—--meet for dinner (not included in registration fee)
    Nov  11th—-meet at Cafe Moda (times to be confirmed) but approx 10am --to 6pm (lunch included)
    Nov  12th—-meet at Cafe Moda approx 6am to 1pm (breakfast included)
    please send $200 p/p to my pay pal acct (same as last year)--e-mail is——-payments should be in by July 30th ( first paid first spot up to max of 50)
    exception to no refund policy— jromeha who is in Kabul —-will reserve a spot for you—no payment needed now
    Hope I have covered all the initial details --otherwise I am sure I will hear from the group

  190. Phil—-could you please let lvmoda know if you need  any changes to the computer set up from last year
    Pharm—do you think you can help with the scheduling of speakers for Sunday—I am only aware of you and ronresnick and of course Phil atm
    we need to figure out how to handle dinner on Saturday once we get a firm count —-anyone willing to handle this—lvmoda will help with suggestions etc

  191. Fixed Vegas Savi, thanks!  

    Dinner is Nobu, $100 a person was the amount last time – hopefully at Caesar's and Hard Rock if not.  You guys can eat somewhere else but I won't…  Poker afterwords we can arrange the same way but it would be nice, if we have enough people to have a tournament (maybe 30) as that's a nice, relaxing way to play.

    As to changes – last time was fine – we just need at least two computers hooked up to two projectors, maybe a third would be nice if it fits.  

    A lot of scoring in the last 30 mins of that soccer game.  Greece did the right thing and rolled over for their German masters.  Puts Merkel in a check-writing mood.  


    No news Robert but we turned down sharp after the close – must have been a big sell imbalance right at the end. 

    Minnesota/Pstas – A little wet up there, isn't it?  You picked a good week to skip, could be very messy – have fun.  

    Have a good trip StJ too!  Wow, should be a signal to all of us with everyone taking off for vacation (and I'm off to Vegas and CA the week after).  

    Vacation vacation/Angel – Now that I like!  I was really sea-sick the first day of my last cruise.  Do I just get the day off or do they book me on another cruise?  8)  

    Commodities/StJ – And it's all disposable income that gets picked up.  Takes a few months for the effect to filter through – like last year where we bottomed out in late Oct (at about this level) and THEN the market took off for 6 months so about 6 months of declines led to 6 months of gains but, unfortunately, the bounce then turns the commodities up and we're back for another negative feedback loop.  

    Great chart of profits and wages but how can this surprise anyone?  Did we just discover that paying workers less allows Capitalists to make more money?  I'm pretty sure 10,000 years of slavery bears that out.  Slavery isn't illegal because it's unprofitable, it's illegal because it's inhuman but somehow we have all been brainwashed to think that paying people unfair shares of the profits is fair.  It's amazing to me – especially how half the people in this country, half of the bottom 99%, half of the bottom 80% who are getting shafted, will fight to maintain this insanity.  

    The great accomplishment of modern capitalism is we have figured out how to make people beg for slavery – to sign Non-Disclosure, Non-Compete agreements and take minimum wages that can't possibly house them and work in doublespeak "right to work" states where they can be fired at will by their employers.  

    No health care, no retirement, no food, no housing, no clothes – I'll bet you can run the numbers and prove the average slave got better salary and benefits than the average US worker.  But what happens next?  How will Corporations boost their bottom lines now?   You have to do better every quarter and how low can they drive wages before they do have to put irons on the workers to stop them from running away?  

    Gold/Kinki – Gold's also going to crash hard if no stimulus.  

    Attorneys/Ron – We had quite a few attorneys on the original BBBW post, do a CTRL-F for legal – I think I categorized everyone at some point.  

  192. New York
    OT –  I'm heading to NYC for a day in the big city on Sunday and Monday.  Looking for any recommendations for off the wall places to eat/see that people love.  Dinners are already planned, but I'm looking for those cool things that only city people know.  Like where are famous donut/cupcake/bagel/pizza,etc.  Something that you would tell someone they NEED to have before they die.  Any sugesstions are appreciated!!!

  193. I was raised in a French Canadian town in Maine…they were wonderful hardworking fun loving people..
    I will actually be in Montreal July 27th for a week. Anyone who is going to be around let me know 
    "I told him for a job he asked me no I said come to hell you son of a bastard"
    (my friend roger arsenault's dad after a job interview)
    'Hey Angie I am on your way to my house"
    (My friend Gas Dumais calling to let me know he was  coming to visit.)
    "fuckshit le ding dong i cut it twice its still too gaddam short!"
    conrad st hilaire realizing he had made a mistake with his band saw calculations

  194. if you know the "haccent" you get the above

  195. Angel:  Maine is in the U.S.  But close enough for government work.

  196. Burrben – I really like Norma’s for brunch. Make sure to book ahead if going. Whilst I’m not a huge cupcake guy, Sweet Revenge is pretty cool as they match your cupcake up with a specialty beer.

  197. NYC/Burrben:
    Pizza – DiFara's in Brooklyn or John's in Greenwich Village
    Bagels – Since H&H went under, Ess-a-Bagel is defacto best.  Dunno if its to die for though…
    My "Go-to" brunch for visitors is always Dim Sum in Chinatown.  Incredibly-good authentic Chinese small-plate foods at super-cheap prices in a raucous, unforgettable environment.  Definitely not for the button-down crowd as Dim sum is the epitome of "slumming it".   I usually hit Jing Fong or Golden Unicorn on the weekends, though there can be a wait and if your group is small you might be seated with other parties.   If its your first time at dim sum, you might want to bring a chinese friend or ask some of the other patrons how the "system" works.

  198. Good Morning!
    Phil, nice rant for the American Worker….. :)

  199. Burrben/NYC/West Village -  Red Farm on Hudson St is local ingredients/Chinese style- unique, really great, large line – call at least an hour before,though now they have brunch which may be more accessible.  Taim on Waverly is awesome falafel. Popbar @6 Ave and Carmine has great popsicles.  And Spunto on Carmine is almost as good as John's on Bleecker., less crowded, no Pete Rose autograph on the wall. (I think the same people run more established Posto on 2nd Ave).

  200. Vegas Payments—-just a reminder that if you check "issue refund" option on pay pal there is a fee of $6.10 taken out--please take that into consideration

  201. Went to a Walgreen's last night.  Since I live outside of the U.S., this is a novelty.  It was huge.  There were, that I could observe, three employees in a half-football field expanse.  No one spoke to me.
     I loaded up a cart and had a very fractured discussion with some kind of check out computer that kept repeating "put the item in the bag" no matter what state of physical reality obtained.  We both got through it, but after leaving the place, an employee ran after me, asking "did you buy razor blades?"  Well, yes.  She reached into one of the bags, took out the blades, which were encased in some kind of plastic box, and extracted the razors, keeping the box.  Federico Fellini would have been amused; I was merely bemused, thinking "this is the kind of future Phil keeps describing."  The employee never cracked a smile or showed any traditional signs of life beyond locomotion; it's not clear she was human, either, although a robot would have been programmed to say "have a nice day", I reckon.

  202. Burrben / NYC
    I normally do not tell this secret even to a girl until I know her pretty well (because she will go there and tell her friends and her friends will go there and tell their friends and soon there will be no chocolate left for me!).
    Go to Li-Lac Chocolate – specializing in chocolate covered marshmallow bars and chocolate covered caramel bars made fresh every day.
    Greenwich Village:
    40 Eighth Avenue (where Eighth Street meets Jane Street)
    Grand Central Station Market
    Enter Market Hall at Lexington and East 43rd Street
    If you like chocolate you need to eat this before you die!

  203. As promised, here is the update of Peter's portfolio including the roll he called on Friday:

  204. Burrben/NYC
    Here's a pleasant and short walk with some payoffs. Start in Madison Square Park and marvel at the Flatiron Building. Depending on the time of day you could drop into a diver bar looking place Live Bait at the bottom of the park on 23St. They do oysters and clams at incredibly low prices. From the park head south on Broadway. Two stores of interest along the way at 19th street. ABC Furnishing & Carpet is worth a visit. Just do the main first floor — unless you're looking for something specific like a lamp — it's a cornucopia of household bits and decorative pieces you'd never thought you'd want until you see them. Great for gifts as it Fish's Eddy across the street that specializes in unusual and novelty ceramic ware. After all that head south again to Union Square. Check out the square as they're always something going on and end up for hot chocolate or coffee and pastries at City Bakery
    Since your time is limited just one other suggestion: Check out Katz's Deli on Houston Street. It's an experience from start to finish. The Pastrami on Rye is what to have — good most times although a bit dry on my last visit. But the real reason to go is that there is the overall atmosphere — the style of service hasn't changed in decades. And don't lost your "ticket" or you'll end up in the seven circles of hell!

  205. Euro/Germany inaction/action
    Here's an interesting comment I came across on an Irish economics blog from a poster called Rapid Eddy:
    Will Germany backstop the euro and is it paying for others’ profligacy? Well, it all depends (a) how much the euro is worth to Germany and (b) where the money eventually, finally ends up.
    The euro has been guided – you might say controlled – by German interests. The interest rate has followed German domestic interests. It was low when the German economy needed boosting at the same time as a higher interest rate might have helped cool down the overheating Irish economy and property bubble.
    The eurozone – enthusiastically enlarged by Germany – enabled Germany, as a huge exporter to sell into a 400m strong quasi-domestic market, unhampered by a soaring Deutschmark making their exports prohibitively expensive. Outside the eurozone, the euro traded at a value way below where the Deutschmark would have been.
    Long story short: the euro made German exports much, much more competitive both within the eurozone and outside the eurozone. So the question is: how much has the euro been worth to Germany in the last ten years in terms of additional exports? Tens of billions? Hundreds of billions? Trillion plus?
    And what about the German banks? On average, German depositors squirrel away about a quarter of a trillion euro each year. Banks don’t like money unused and with the eurozone, they could lend freely unhindered by exchange controls and fluctuating exchange rates. Obviously, the Irish, Greek banks, etc., borrowed like there was no tomorrow and in the case of Greece and Ireland there barely is. Once again, how much was that additional banking activity worth to Germany?
    People seemed astonished that Germans don’t seem to (a) follow or appreciate the gravity of the situation or (b) understand that their policies are ultimately counterproductive in that austerity is exactly the wrong thing to do in a recession and it will contract the economies it is extracting money from.
    But Germany understands it all very well. What Germany is currently doing is not a failure to react to the circumstances but a calm, medium-to-long-term game plan. They (and their banks) are owed money – rather a lot of it. What they are doing is extracting the maximum possible amount of payback until payback is no longer possible. So if they can get Ireland to pay back all those pesky bonds/promissory notes, then they might ease up thereafter. The Irish government knows this, which is why they’re playing good boy in the class. In the case of Greece, they will keep the austerity and ‘fiscal discipline’ for as long as possible, until the Greeks cannot or will not pay any more. But it’s a rational, if cold, German tactic. Keeping squeezing until the pips squeak and the juice runs out.
    The Germans will backstop the euro because it benefits them to a far, far greater extent than any other national economy. In the meantime, they’ll take the maximum benefit from the plunging euro rate, extract the maximum payback from the debtor states and do as little as possible, as late as possible. Germany and Merkel are quite happy for people to characterize what they’re doing as a muddle, inaction or too little, too late. Too little, too late is the strategy that benefits them most."

  206. And here is an update of the income portfolio. The first 5 positions were closed on Wednesday.

  207. And here is an update of the MoMo portfolio after a big trade day on Friday:

    Lflan – At the end of the day you mentioned Jul 575 Calls for AAPL, but we already had the 580 and the prices didn't match the 575 so we have 20 575 long. Let me know if I missed anything.

  208. Crazy $hit happening here in Colorado Springs. Wild fire started two days in Waldo Canyon off Highway 24 at the base of Pikes Peak. It's burned close to 3000 acres with no containment. Temperature is 99 degrees, extremely dry and windy.
    We can see the glow of the 100 ft. high flames from my house as the fire is about 2.5 miles away. We are about 1 mile from the evacuation zone.
    11,000 people have been evacuated, including the town of Manitou Springs soon after midnight last night.
    Last night the smoke was so thick I couldn't stay out with the dog for more than two minutes without getting a headache and lungs hurting.

    Needless to say, we have been busy packing all personal, valuables, and ready to unplug computers etc and get the H out if necessary.
    Hard to think straight with all this going on. Seems almost surreal.  Check out some of the photos if you get a chance.

  209. Seems like the whole state is on fire with 7 different wild fires going on at one time. I guess all the years of drought, and Pine Beetle destruction of whole pine forests if finally catching up with us.  It may be time to relocate.

  210. Hi All,
    Which are good websites/blogs to get a good read of the current market news? SeekingAlpha/Finviz/Bloomberg/Yahoo???

  211. Good luck Jbur…

  212. Good luck, Jbur

  213. Stj: Thanks much.

  214. Good stuff from Barry's site:

    Arthur Laffer and Stephen Moore wrote an op-ed in the WSJ titled Obama’s Real Spending Record. In it, they used the following chart to demonstrate what a big spender Obama is. Seriously, they did. The beauty of it was the mental gymnastics they went through to convince their readership to ignore the actual decline in spending we’ve seen for the past 2+ years. See that (very inconvenient) red line moving down and to the right? And they used that chart anyway. Mind bending – I actually could have used their chart in my May piece demonstrating Obama’s relative frugality. To their credit, though, they do get one thing right: “Sadly for fiscal conservatives, the biggest surge in government spending came during the last two years of President George W. Bush’s eight years in office (2007-2008).”

    Barry concurs:

    This is not politics, but simple numbers. Sorry if it conflicts with your previously assumed narrative . . .


    Here is the WSJ:

    One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought.

    The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.

  215. Jbur – Where in Colorado are  you? I'm in Denver and it's hot as hell, but no fires in the immediate vicinity (that I'm aware of anyway). Anyone else in Colorado? I hope I don't have to relocate anytime soon. Though living in the foothills would be a little disconcerting. 

  216. kurtww: I live in North West Colorado Springs about a mile from the southern border of the USAFA. Been here for 26 years. It's been a great place to live… but I have to wonder…

  217. Jbur
    Sounds intense.  Best to you and yours and your community.

  218. Best of luck, Jbur, keep us posted.

  219. Good morning,
    Oil bounced on PP at 79.20
    I will play a retrace to R1 (80.50)
    This weekend news are plentiful
    - Germany Finmin tells Obama to mind his own garden
    - Merkel tells Greece to stop whingeing and to get to work
    - Greece caught red handed for replacing retiring civil servants in breach of its bailout agreement
    - A Turkish aircraft gunned down at the Syrian border
    We should have a fun week ahead of us :)

  220. Oops and I forgot about Debby…
    Long oil

  221. Another try off $79

  222. I'm with you off 79 but only looking for .25 before I have to go to work

  223. Good morning! 

    Hope all is well JBur.  Unfortunately, this is one of the reasons I confined my retirement search to island nations – global warming is going to screw up a lot of places and, of course, it's not just the affected areas that will suffer, the whole country ultimately pays the cost if we have massive droughts, etc in some parts…  

    Wow, more nothing out of Europe this weekend.  What can we expect I guess from the people who invented fiddling while Rome burns?   

    Dollar back to 82.74, Euro $1.249, Pound $1.55, 79,88 Yeb – oil back to $79, gold $1,570 (no stimulus expected).

    The Shanghai fell off a cliff into the close – down 2.5% in last hour and down 1.6% for the day.  Hang Seng off 0.5%, Nikkei down 0.7% and India off half a point.  We can thank Citi for this one:  

    Citigroup cuts China's growth forecast on concerns the eurozone mess will reduce demand for exports, forecasting GDP growth of 7.8% vs. an 8.1% previous estimate. Citigroup also pointed to "anemic" domestic activity.

    Asian stock markets and the euro drifted lower Monday as doubts grow about whether there will be a major breakthrough at a European Union summit later this week addressing the debt crisis and the region's weak economy.

    UK off "just" 0.7% but France and Germany down 1.6% this morning and our futures down about 0.7% with the UK so I suppose that's the view from the sidelines so far.  

    Equity markets are expected to remain fairly range-bound in the run-up to the summit, which takes place Thursday and Friday. Various issues are on the agenda such as a potential renegotiation of Greece's bailout terms, and proposals to a create fiscal and banking union. Some form of growth stimulus is also expected to be announced. At pre-summit talks in Rome, German, French, Italian and Spanish leaders agreed that the EU should implement a series of growth measures worth around 1% of the euro area's gross domestic product, or €130 billion ($163 billion).

    $163Bn is, of course, nowhere near enough.  

    Spain is officially asking for a bailout and pushing austerity while unemployment hits 25% – that's real smart!  

    Muslim Brotherhood took over Egypt – that will be exciting!  

    Big storm by my house, have to save early and often. 

  224. NYC/Burr – I had a great brunch at The Boathouse in Central Park yesterday.  Took my aunt, who's leaving for California and that was one of the great NY experiences she will miss.  I like to have steak on terrace of Michael Jordan's – overlooking Grand Central Station and watching the people run around for a power lunch.  I see you like dough – how about the Creperie down in the Village (Washington and 12th) on the roof of the Standard Hotel?  The crepes are great and you can't beat the view…

    Taibbi/Jomp – Good interview!  A couple of time, Moyers makes a "holy crap" face that is priceless.  

    Dim Sum/Kinki – Good stuff.  

    WAG/ZZ – At night you were lucky there were 3 people!  

    Germany/Zip – That's the problem I suppose, the gains (Trillions) accrued to Germany over time and now they need to kick back a Trillion over a short period and they're in no mood at all because the payback will only come over time again (and who knows if another Trillion won't be needed first?). 

    Income Portfolio – See, we don't miss much by being 80% cash – other than the aggravation…

    News/Pat – I like SA's Market Currents, Bloomberg and the WSJ but the NYTimes is the only one I trust to get the facts right before they run the article.  For my purposes – the news doesn't matter much until it's widely distributed so I'm more concerned with tone and placement in the Journal and on Bloomberg – to get an idea of what's driving the sheeple.  

    Good spending article, StJ – too bad only half the country will believe the evidence. 

    Huricane not too helpful for oil prices unless it does real damage.   We are massively over-supplied at the moment.  

  225. Alot fo RAIN here in FL thanks TO DEBBY, Nice leak in the room w water dripping onto the 40 TV, NO FUN