21.3 C
New York
Saturday, September 24, 2022


Frustrating Thursday – From .EUphoria to .DEspair

SPY 5 MINUTE.DE is Germany's web domain.

So I'm trademarking .DEspair to consolidate all the anti-EU statements coming out of Germany this week as the rhetoric reaches a crescendo and goes up from there.  .EU is, of course the EU domain and .EUphoria is where we will store all the glowing pro-EU rhetoric that makes the market rise (until someone in Germany says something).  

It's a typical case of .DE said, SH.Eu said and all the kiddies can do is hide in their room until Mommy and Daddy stop fighting.   

Things were getting silly enough on the plus side as we rallied for no reason at all that we added a very aggressive short position on the Russell using TZA.  My 3:07 comment in Member Chat was:  

Big RUT move makes TZA fairly cheap at $20 and the July $20/24 bull call spread is $1, which makes for a nice hedge and if the RUT pops, you can offset it with the July $18 puts, now .45, for $1 or better or, of course, there's always the TWIL List

We had no long plays to make yesterday as we added them all when the market was much lower (told you so!) and now it has moved to the top of the bottom of our range and we pick up a short – this is not rocket science, folks.  It's going to be a choppy, terrible market until either the EU saves us by tomorrow or we crash and burn horribly and my comment to Members in the Morning Alert at 10:24 was: 

We still need the Dollar to go lower and this morning it's zooming higher (82.80) and keeping us from a better move up on the indexes.  This will go on for the next few days with each syllable uttered by anyone of presumed authority in the EU so – if you can't stand the heat – stay in cash!  

FXE WEEKLYThe Dollar had worked it's way down to 82.50 into the close but now (8am) it's been jammed back to 82.90 as the Euro plunges back to $1.2426 on whatever silly thing someone just said.  Financials are dragging everyone down as they are DOOMED if the EU can't pull things together.

Financials are also hurting as the NY Times Dealbook Blog is reporting that JPM's Trading losses "may reach $9Bn."  I'm a little skeptical of this as it didn't pass fact-checking muster to make the main paper (and it would be a huge story if it did) and the woman who wrote it came from the WSJ, which also often fails to pass fact-checking muster – that is, if they did actually check any facts. 

This new allegation against JPM comes from "people who have been briefed on the situation" so you know it's good stuff, right?  Let's forget that Jamie Dimon JUST testified to Congress that the losses were $2Bn and that just last week, the positions were supposed to be unwound and under control.  

As the article says "In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report."  A person who reviewed the report?  I love that guy!  That guy makes us a fortune when he panics the sheeple out of positions ahead of big moves up.    

XLF WEEKLYThat's jamming our Futures (8:24) all the way back to where they were yesterday morning, down about 0.6% and led down, as we expected, by the Russell. which is already down 0.8% but we're not buying it (or selling it in this case), as oil is still at $80.50 – so we're not talking about economic retreat here – merely rumors ahead of the facts and shame on the NY Times if this turns out to be nonsense – we'll find out for sure on July 13th, when JPM puts out earnings but maybe sooner now as JPM is already down 3% pre-market and maybe will hit the 5% line around $34.75 and maybe we'll take a long flyer on them around there – or just go with the XLF longs if they re-test $14.  

BCS is down 8.6% as British Politicians are talking jail time for those found guilty of manipulating LIBOR (you know who you are!) and BAC is down 1.5%, MS down 1.2%, C down 1%, WFC down 1%…  U.K. Chancellor Osborne tells Parliament that RBS and HSBC (HBC), as well as foreign banks (apparently UBS and C) are also under investigation in regards to Libor.   Court documents in an unrelated case say hedge fund Brevan Howard asked RBS to alter Libor and the bank "received this request without objection."

As part of our review into Libor and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this government and we will take the necessary steps to address that. 

The FSA report is a shocking indictment of the culture at banks like Barclays in the run up to the financial crisis. The email exchanges between derivative traders and the Libor submitters working read like an epitaph to an age of irresponsibility.

Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew what they were doing wrong… – Osborne

To top it all off – it's Health Care Day as the Supremes decide whether or not 54M uninsured Americans should be treated like human beings are in other countries or if they are just poor and therefore should burn in Hell, but not before suffering all the ills of the flesh that shall be vested upon them in the land of nothing is free and there is no hope – unless you have the money to buy it, of course.  

Mitt Romney said that even if the Supreme Court does uphold a law that passed through years of debates in Congress and was approved by both houses and the President – that his first goal in office, "on day one" will be to strike it down anyway – so this thing ain't gonna be over until it's over.  

Nouriel Roubini compares this moment to where we were in 1931 – right before the whole Global Economy went into free-fall, calling this a "perfect storm."  If so, our little TZA spread will make a nice 300% so it's hard to know who to root for.  We're still mainly in cash and our bullish plays are more of an upside hedge against the possibility that stocks become more valuable than our cash but, as I said to Members yesterday – it's going to be a very stressful couple of days and there's no reason to play if you don't thrive on the chaos.  

Speaking of chaos – we're still wondering if Obama's 4th Watergate will finally be the one that brings down the administration – check out the latest on the "Fast and Furious" scandal – it's a great distraction while they cancel your health insurance…


Notify of
Inline Feedbacks
View all comments

savi- there is an ignore this user box you can check0 LOL!

Any trade you recommend in TNA?

dpastramas  / CMG – and about $5 below the 200 is the multi-year uptrend line, so will be interesting to see what happens if it gets below the 200 and hits that.

Phil, what do you think about CROX at $15.30? thanks

QQQ – MSFT seems to have found a resting place, AAPL and AMZN maybe still a bit to go? looking for these guys to stop moving down so the Nas can make my QQQs mo'betta!

Lflan,  Are you contemplating a DD on the 580's at some point?

Savi: There is some truth to be found almost everywhere.  Unpopular opinions need to be heard.  Jww spoke of cheap health insurance in the Dominican Republic.  It's true, but I spoke to a friend who lives there last week with no insurance, and he told me that when he showed up at a hospital, there was a 7 hour wait for a doctor — but those who paid cash were ushered in immediately.  Surprised? Is there now a free lunch?  Consider that almost 70% of U.S. health care expenses are occasioned by tobacco, alcohol and obesity. That means that those who live clean are forced to subsidize those who aren't, and it appears this will now be amplified by the new law.  One can argue these points from a moral, economic or behavioral standpoint, but one should not suppress or demonize disagreement.  As has been [mis]attributed to Voltaire: " "I disapprove of what you say, but I will defend to the death your right to say it." 

i am all for flip or anyone else  commenting so long as its not a profanity laced diatribe (with me as its object)..after all we cannot be lefties with out a high and abiding commitment to free speech..and i am being somewhat serious here..back to you PHIL

Phil – I bet you could negotiate a great Health insurance package for all of us at PSW, if there is one to be had.  I bet a lot of us are self-employed.  Or we could all chip in and buy an island / start our own country.  First priority would be good internet so we could keep trading.

Yeah, I noticed that dpast and have been checking different sources.  My supposedly reliable source said 27th, but my dyslexic brain/eyes deceived me and it was June 27 (arna) and July 17 VVUS.  So, we will have to ride the storm until the Friday b'f expiration (13th) and then make a decision.  The time decay will work in or favor, and selling the puts for a few days to a week would be advisable.  Maybe even the OTM calls until after the 4th, but the volatility should also increase so these better be way OTM. Will be an interesting time non-the-less.

ZZ–no way was  I trying to suppress or demonize a disagreement–where do you see that—just stating an observation and a question—I do not have anyone on ignore  —I read all comments

It's 3 o'clock..U know what that means!

Correct me Savi, but maybe you were reflecting on a time not too long ago when some members just dumped raw invective on the board without regard for anything but their free speech right (which, as it happened to a few, Phil took away).   I think we lost a lot of quality members and intelligent stock commentary due to a vocal few when PSW degraded to a political war zone.   I sure hope that doesn't happen again…

savi i think someone must be designated to demonize and suppress..we need a diverse cross section..i think we should have a colored box for this..(no i am not volunteering)

Can someone send me BBBW info to cdel360@yahoo.com?

lvmoda…here here.

Phil, please reread your link, as I wrote, Nexus Q is made in the US but it's not a Tablet. Nexus 7 is a Tablet whaich made by Asus… not made in USA.
I maybe wrong but even your link wrote nothing about Nexus 7 tables.

NTE for those of you who have positions in one of my two largest positions mentioned here on the board NTE just announced retaining Cameron Associates as their new IR firm.

Unreal….going right back up to S1, which is R1 now on SPY 132.29.  HFT is so predictable.  It's those AH moves that really do the damage.

Savi:  "Provocation" was the word I noticed.  Disagreement is not provocation, unless delivered as Angel describes.

Pharm – yesterday, you said $8-10 is where you would value ARNA (now around $10).  Was that a fundamental assessment, or just what you think the market will say it's worth in the near term?  Does $8-10 assume VVUS will be denied, or would a denial increase your valuation of ARNA?
Lastly, would you consider a bullish ARNA entry of some kind today?

Pharm / SNTA – great instincts there, buddy!  Recall that last week you told me " SNTA was a good pick, but the risk for me was a bit great as there are several Hsp90 inhibitors out there"

Phil – lol. I know bagram quite well, had to spend 8 days here when they burned the Korans. Ill stick to my daily routine of workout, shower, eat, workout, shower,eat, massage, shower, read your blog, sleep. Wont be able to hit up LA when I get back though, we are planning on doing the disney gig when I get back in Jan.. THanks for the recommendations, I will definitely try a few of those spreads!  

all point taken

ZERO to quote KARL "Slingblade" Childers: I like the way you talk.
I think the president is taking a calculated risk saying this isn't a tax.. thoughts?

JROM I stopped dead at the massage. Who? My nephew was a sniper in iraq for two years..thank you for your service..

CRM – 1/2 out.  Will look at reloading EOD or tomorrow.

Pharm/ HFT
Good points! I watching IWM creep up with little volume, less cash inflows, but up nonetheless! 

ARNA – fundamentals.  They are not going to make $1B on that drug.  Market cap is already 2B, and there is nothing else there in the pipeline.  Now, Esai could buy them which puts the buyout at $20 or so.  Maybe $25.  VVUS has an ED drug they are trying to sell, so they will have cash…and maybe it will keep the stock somewhat erect for a short period of time…pun intended.

SNTA/mrm – parabolic rises in penny/small caps scare me big time.  Ride the wave up, but get out b'f catching the wave down is better cause it is a fast and furious one….case and point.  Now, we can start to look at selling puts in the singe dollar range for entries.

Target reached…..Mother of the Almighty…why does the SEC not look into this crap.

Phil – I've just booked the flight for the PSW Vegas meeting.  What was the name of the hotel again that you recommended a few weeks ago?  Thanks!

 msb…msb…msb…no down triple digits on obamacare ruling day…nononononono!
ACTUALLY: rumor of efsf primary bond buying..just in time to save quarter-end

Well, now I am buying more Aug 125 and Sept 120 puts (SPY).  KMA HFTs…..fundimentals will rule again one day….(maybe?)

37% on the ACN inverse collar mentioned earlier today, hoping not to lose it after the bell!

angel – saw it on Bloomberg.  Nein!

Wappler—I think Phil is staying at Caesars—–a number of members  stayed at Vdara

Don't give up on those QQQ'S YET.

Holy stick, Batman. 

Let's go, QQQ.

now rumor ecb cuts 50 bps next week
 merkel canceled a presser…so everybody assumes something good as usual  60k eminis taken down supposedly

Redonkulous! What a stick! Non of my spreads filled but that TNA call sure wouldve been nice!
Angle – Thanks for the recognition but Im just a desk jockey…I man guard towers sometimes but most of the time Im killing people with my excel and ppt skills 14 hours a day! lol. Nothing as dangerous as your nephew did, that is for sure.

 i think the fact that we rally so hard on these types of rumors show investors dont understand the extent of the problems…massive tax hikes throughout the region haven't even hit yet…so whether or not they get bailed out or germany puts its balance sheet on the line…the real economies will continue to weaken after the enthusiasm wears off.

Stay Connected


Latest Articles

Would love your thoughts, please comment.x