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Monday Market Momentum – Use It Or Lose It

SPY 5 MINUTENow we need follow-through.

I think we've already blown the opportunity.  In Stock World Weekly we discussed the stealth bailouts jammed into the Transportation bill on Friday which rightly sent the markets flying higher into the close of the quarter (I know quelle suprise!).  As noted by David Fry, GS was working hard behind the scenes to make sure that, in the end, Germany toe'd the line.

For the year so far, the Dow is up 3.89%, S&P is up 6.66% (so you KNOW Goldman is involved), the Nasdaq is up 10.81%, NYSE 2.33% (all of it gained on Friday) and the Russell 6.15%.  See how great everything is?

We took the money and ran, again, as we hit some clear resistance lines (see SWW) on our Big Chart and there was no sense risking a 10% gain in our first week in our new $25,000 Portfolio with the July 4th holiday coming up (we have a half-day tomorrow and we're closed on Wednesday).  

The only trades we left active in the $25KP was 5 OIH July $35 calls at $1.25 (still $1.25), 10 DIA July $129 calls at $1.10 (now $1.35) and 10 SQQQ July $49/53 bull call spreads at $1 (now .75) we added later in the day to protect them in case we had a big dip this week.  If we make it through Friday above the lines on our Big Chart – then we will continue to be "constructively bullish" and we'll be happy to deploy more cash but, into 2 days off – NO THANKS!  

In fact, as we're already up 22% on the DIA calls – if we get another pop this morning, those are likely to come off the table as well.  After all, how much money should you expect to make in 48 hours?  This is a very unnatural and manipulated market and it's great to play it – as long as you keep that in mind!  The danger comes when you delude yourself that this is some kind of "investing" environment when it's actually just gambling ahead of Q2 earnings reports – that could send us right back into a tail-spin.  

Or, maybe not – as a key amendment to the Transportation Bill will add Billions of Dollars in profits to the S&P 500 by allowing Corporate Pension Plans to use the average interest rate over the past 25 years (high) as opposed to the last 2 years (low) towards calculating future returns.  This not only boosts Corporate profits and distorts the reality of earnings but also distorts our picture of how underfunded these pension plans are like GM ($25Bn under-funded) or  F ($15.4Bn under-funded).  Not only does it change the reporting, but it allows our Corporate Citizens to LOWER their forward contributions to the plans – after all, it doesn't look like they'll need the money according to these new figures!

Goldman Sachs economist Alec Phillips writes in a research report that pension fund contribution requirements could be reduced by $35 billion in 2012 and between $60 billion and $70 billion in 2013 and 2014, according to estimates by the Society of Actuaries.  And you thought they couldn't possibly screw the workers over any more than they already have?  Don't be silly – remember what President Bush said about being 'innovative and resourceful" – what could be more forward-thinking than wiping out what's left of pension plans today in order to create the indentured servants of tomorrow?  

Here's how it would work: Corporate defined-benefit plans — the traditional pension plans that provide an assured retirement payment --have to calculate the present value of their future liabilities to retirees.

The present value is calculated by applying a "discount rate," which reflects what prevailing interest rates. Back in the 1980s, when government bonds yielded in the double-digits, the discount rate would be high, which would reduce the present value of those liabilities. Sounds complicated, but it makes intuitive sense to anybody saving for retirement. If you can earn a lot on your investments, you can sock away less today to provide for your retirement.

Conversely, today's ultra-low interest rates mean you have to save a lot more to meet your retirement goals. Similarly, the present values of corporations' pension funds' future liabilities are higher at today's record-low bond rates. So, companies have to contribute more to their pension plans, since those contributions reduce earnings, and thus their tax liabilities.But if companies contribute less, their profits and thus taxes would be higher, which would increase the federal government's revenues to pay for these goodies.

It's a "win-win" for Big Business and Big Government and the only person who gets screwed is you, when you retire –  but only if you are in the bottom 90% – and those people don't read stock newsletters anyway so f*ck them and let's look at the list above for some cool investing opportunities:

We already have AA, GT, SVU and X on our "Twice in a Lifetime" list (with GT added the day of my BNN interview).  WHR is interesting and F we like to play when they are low.  TXT is nice and we just picked up BA last week and DOW and ED are both stalwarts that are worth a look in any long-term portfolio.  That's plenty of good ideas and we'll take a closer look at each one in Member Chat to see if they are good enough to officially add to our Income Portfolio – which is also 90% in cash at the moment and looking for some nice opportunities.  

Overall, the markets are still very weak – as evidenced by this morning's quick pullback in oil to $83.50.  Copper is also lame at $3.47 and natural gas isn't very exciting at $2.76 and gasoline has, so far, failed to hold $2.60 into the busiest driving week of the year.

Korea's Manufacturing PMI fell into contraction this morning at 49.4, down from 51 in May.  Finland says they will block any effort to have the ESM buy sovereign debt on the open market (what, no GS employees in the Finnish Government?) and the vote does have to be unanimous to be approved but, so far, Europe doesn't care too much and is up 1% for the morning despite EuroZone unemployment rising to a record 11.1%, including Spain's astonishing 24.6%.  

Speaking of rapid contraction – EuroZone PMI for June came in at 45.1 – almost 5 points into contraction with Ireland and Austria the only nations showing any growth at all.  This is the worst quarter since 2009, when the market collapsed and was about 50% lower than it is now but why should that lead anyone on TV to be concerned about earnings – that would be way too logical for the MSM…

BCS Chairman and Roman Emperor-sounding Margus Agius resigned saying "the buck stops with me."  It was, in fact, $350 TRILLION bucks worth of instruments that BCS and other banks were manipulating – making a total joke out of the Global Financial Markets as well as Bank regulation in general.  It will be interesting to hear what our own Fed's Williams has to say this afternoon as he gives a speech on "Monetary Policy Since the Financial Crisis."

Please hold your jeers until the end of the speech.  .


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  1. Maybe I'm getting old, but I don't recall the markets closing early on the 3rd.  Is this new?  Has Wall St rung as much out of the retail investor as they can and now find it pointless to be open?



  2. Good Morning!  I'll be hanging out here most of the day.  I have an observation to start the day, something I've not posted up till now.   Last week on Friday I bought back some FB puts which had been sold to open a few days prior. My intent was to roll these puts for profitability.    But here's the point…….when I say I'm going to 'roll' something, that means (to me) that I'm going to 'roll' that trade to a better opportunity.  The 'roll' may or may not involve the equity that was closed beforehand.   The cash could be rolled to another trade which might provide more opportunity, or even 'rolled' to cash.   It's just a clarification about how I think about these things.   It's not the classic definition of 'rolling' a trade, but then I don't think or trade in classical ways.   But I think it's important, because when you close a losing trade you have to think clearly about where that money is going next.  It does not HAVE to go back into the trade that just lost you money.  You can 'roll' it into another trade, a better one.  



  3. Phil:
    Is USO an obvious short, or is it better to wait through the holiday? I read several articles this weekend that showed how little support there is for prices in the mid-80's.
    http://www.philstockworld.com/2012/07/01/email-from-lead-analyst-at-eia-on-petroleum-usage/
    http://www.philstockworld.com/2012/07/01/crude-oil-market-a-perfect-bear-storm-despite-the-euro-pop-1/


  4. Phil, regarding the Cheniere Energy post a little more research on the cost of natural gas:
     Exploration & Production
    $0.60-1.20/MMBtu
    Liquefaction
    $0.90-1.30/MMBtu
    The cost of LNG would include the cost of liquifaction, so that would essentially double the cost.
    Other costs, probably not applicable to the export of LNG:
    Shipping
    $0.50-1.80/MMBtu
    Storage & Regasification
    $0.40-0.60/MMBtu
    Total Cost = $2.40-4.90/MMBtu
    Natural Gas market prices are around $2.25/mmBTU
    Cargoes of LNG spot prices in Asia were as high 18MM$/BTU last month!
    EM CEO Tillerson complains that with current natural gas prices there is not money to be made.  No wonder they want to export. 
    Source: http://www.beg.utexas.edu/energyecon/INTRODUCTION%20TO%20LNG%20Update%202012.pdf


  5. Monday – 7-2-2012
     
    Dr. John L. Faessel
    ON THE MARKET
    Commentary and Insights
     
    Quote of the Day
    "The effect of the divergent cultures in the Eurozone has been grossly underestimated. The only way to have several currencies from divergent nations lumped together is if they are culturally close, such as Germany, the Netherlands and Austria. If they aren’t, it simply can’t continue to work."
    ~ Alan Greenspan ~
    ~~~
    McClellan OVERBOUGHT at a Plus 236
     
    Red Hot Short Covering Rally Should Fizzle
     
    Reality to Set In as the Global Slowdown takes hold: Read it and weep…
     
    1.     Eurozone unemployment rose in May to hit another record of 11.1%, up from April's 11% with Spain's unemployment rate at 24.6% and Greece's 21.9%.
     
    2.     Eurozone Manufacturing PMI came in at 45.1 in June, the weakest quarter in three years. Only Ireland and Austria enjoyed growth. China’s PMI slowed to 50.2 the lowest in a year.
     
    3.     Companies in the S&P 500 (SPX) just posted their worst pre-announcement period since the third quarter of 2001. Nine of the ten S&P 500 sectors have recorded a decrease in earnings growth rates since March 31 (telecom being the only slight exception). S&P 500 earnings (12-month trailing) for 2Q 2012 now projected at $98.52. Compare to the current consensus EPS expectation of $111 for 2Q 2012.
     
    Re “the” Bailout: It’s another, “Please share our debt gambit” we screwed up and can’t pay, so will you Germans continue to pay for our flighty ways? True, this time though there will be some YET TO BE CREATED central European bureaucratic oversight committee. (HA!) Unless the structure and composition of the newly created regulatory body is to the complete satisfaction of the Germans, the European Stability Mechanism [ESM] cannot assume a single penny of the Spanish bank bailout debt. So, maybe? You never know… Expect Spaniards to flip out (go to the streets) when they hear that Germany has the final say. Merkel "conceded" that ESM funds will be guaranteed by bank assets rather than by sovereign states. Again, contrary to popular belief, that is in fact a victory for Merkel and the German state as ‘they can now’ seize private assets in a bankruptcy. Key is that; Germany, under the ESM charter, has absolute veto power over every penny of ESM money that is disbursed.
     
    Net, Net is that while this bailout deal is new ground ‘with German teeth’ the EuroLand is in recession and with China’s slowdown underway and even tho US stock markets are cheap – I believe they will get cheaper yet… Prepare for more selling as the market looks weak both long term and short term.
     
    EuroLand Bond Yields have reversed off highs on Friday’s Euro Bailout Plan
    Greek 10-year yields 24.73%
    Italy 10-year (gross) bond yield – 5.70% – off from highs of 7.29% on 11-24.
    Spanish 10-year (generic) bond yield – 6.21%
     
    Bullish sentiment continues to remain gloomy and is just off the lows of the cycle. (See below)
     
    The McClellan Oscillator (my favorite measure of overboughtness or oversoldness) is OVERBOUGHT at plus 236. Interesting is that the two prior McClellan’s were plus 145 and 148 within the parameters of a “narrow range day” that historically has predicted major moves’ of 2 and 3% usually in the direction of the recent trend…
     
    Bummer deal of all time: Bank of America (BAC) paid only $2.5 billion to buy Countrywide Credit four years ago, the deal has since cost the bank over $40 billion in real-estate losses, legal expenses and settlements with state and federal agencies. Worse yet is that they could face further legal liabilities of another $5 billion as new lawsuits increase across the country.
     
    Greatest deal of all time: Angelo Mozilo former Chairman, CEO and founder of Countrywide Credit more than any single individual, has come to symbolize, and bear the blame for, the subprime mortgage crisis. He agreed to pay $67.5 million (a tiny fraction of his estimated net worth of $600 million) in fines and accepted a lifetime ban from serving as an officer or director of any public company. (Also; Countrywide paid $20 million of the $67.5 million penalty)
    B of A must rue the day that they bit into this deal….
     
    Of note; Mozilo gave below market rate ‘VIP’ loans to Senate Banking Committee Chairman Christopher Dodd, Speaker of the House Nancy Pelosi's son, Paul Pelosi, Jr., Barbara Boxer, Richard C. Holbrooke, and Donna Shalala are also among those who received VIP  mortgages from Countrywide. Also about 30 Fannie Mae employees got the below market VIP loans with Countrywide.
     
    —————————————
     
    The S&P 500 (SPX) closed Friday at 1362.16
    Price resistance at the ‘top’ of the recent rally is at 1363
     
    Short term price support is at 1355 / 1353 / 1352
    50-day moving average support is at 1340
    Longer out term price support is at 1313 /1320 / 1306
    The 200-day moving average support is at (SPX) 1299
    Stronger ‘Price’ support (the lows last Monday) in the (SPX) is at 1266 and will be the battleground zone as the market tests its lows.
     
    _____________________________
     
    Friday’s key indicators and metrics:
     
    Cycle highs or lows are in red
         
    ·     McClellan Oscillator is OVERBOUGHT at plus 236






  6. MOMO AAPL  - Wow, I wish I didn't sell that 605 call.  The 580's are blowing up!  


  7. WFR – up strong!



  8. Looking good Peter… Let me know if I missed something.


  9. Only the Jan 14 positions are left open.


  10. UPDATE:  ISM Disaster – Gotta kill the DIA longs in $25KP if you didn't sell into the excitement and then we'll see how the SQQQ's do.

    10:01 AM June ISM Manufacturing Index:49.7 vs. 52.0 consensus and 53.5 prior.

    Good morning!  

    Our job is easy this week – just watch those lines and we need to hold them at Dow 12,800, S&P 1,360, Nas 2,925, NYSE 7,800 while RUT 780 looks "safe" so it's RUT 800 we NEED to see to get comfortable with the rest.  

    As I mentioned in the morning post, we had strong upward momentum into Friday's close and 804.30 would be a 5% move up from the RUT's last consolidation at 766 so anything less than that would be a disappointment.  

    Like the RUT, most of our indexes are completing 5% moves ups from the low of Thursday's open and that means a 1% pullback would only be health consolidation of the move up while any move higher than 1% over will be a pretty good sign that this rally has further to go.  

    Remember – we DID get stimulus from the EU and we DID get a lot of stealth stimulus in our Transportation Bill so no reason for the market to fall apart too quickly.  I'm simply nervous into the holidays and the trading is very thin so why not just stay mainly in cash and we'll see what happens?  

    We're certainly going to have very low volume with the NYSE shutting down tomorrow at 1pm.  Had I known that earlier, I certainly would have planned my trip a weak earlier because this whole week is likely to be dead slow and I'm sure my fellow Financial Professionals will feel the same way and nobody wants to be in downtown Manhattan when it's 100 degrees out anyway so maybe a low-volume pop this morning and that should be it for any excitement this week (barring serious news).  

    Our game plan for the small portfolios will be to cash out the DIA calls on a nice run while we end up bearish with the SQQQs (which we will adjust) plus the small offset on OIH and I think that's good through Thursday so good night everybody….

    Yeah, I wish – well, next year I'll certainly take this week off!  

    At the open: Dow -0.02% to 12878. S&P +0.18% to 1365. Nasdaq -0.11% to 2932.

    Treasurys: 30-year +0.28%. 10-yr +0.19%. 5-yr +0.1%.

    Commodities: Crude -1.61% to $83.59. Gold -0.66% to $1593.55.

    Currencies: Euro -0.5% vs. dollar. Yen -0.07%. Pound -0.04%.

    Market preview: Stock futures remain flat after PMI Manufacturing falls to its weakest since December 2010, with the S&B benchmark slightly in the green. EU shares are mainly higher despite Finland and Holland threatening to put a spoke in the wheel of eurobonds. In corporate news, Amylin +8.9% on news it's being bought by Bristol-Myers and AstraZeneca. Later: ISM Manufacturing Index, Construction Spending Fed's Williams

    US June PMI Manufacturing falls to 52.5 vs 54.0 in May. Output 53.4 vs. 54.5 in May. New Orders 53.7 vs. 54.6 in May. Employment 52.8 vs. 54.3 in May. It is the weakest improvement in business conditions in 18 months. (PR

    More on the Markit PMI: It's a slight miss for the read (52.5 vs. 52.9 expected), as the U.S. continues to see better manufacturing sector performance than just about any other country. Markit's Chris Williamson notes the sharp easing of price pressures as lightening the squeeze on households and opening the door for the Fed. S&P futures remain +0.1%.

    Japan's quarterly Tankan survey of large manufacturing comes in at -1 vs. an expected -4, and against the first quarter's -3. The yen ticks up on the upside surprise, now ¥79.84 to the dollar.

    Not participating in the worldwide rally overnight was Japan, the Nikkei closing flat after opening sharply higher. Possibly hurting isthe defection of heavyweight Ichiro Ozawa from the ruling DPJ party, along with 49 others (possibly over the doubling of the sales tax). The move leaves PM Noda's government teetering

    German legislators and a democracy group file lawsuits in a constitutional court seeking to challenge the country participation in the eurozone's ESM bailout fund and the fiscal compact, laws for which were approved on Friday (III). President Joachim Gauck has said he would delay passage of the measure pending any lawsuits.

    German Manufacturing PMI (final) comes in at 45.0 in June, better than a prior estimate of 44.7 but down from May's 45.2. It's the lowest reading in three years. (PR)

    France June Manufacturing PMI (final) comes in at 45.2 vs. prior estimate of 45.3. It's up from May's three-year low of 44.7 but jobs were cut at the fastest pace since Sept. 2009. (PR)

    Spain June PMI Manufacturing falls to 41.1 vs 42.0 in May. This is the fifth month of acceleration in the rate of output decline. The sharp reduction in employment continues. (PR

    Italy June Manufacturing PMI at 44.6, down slightly from 44.8 in May. New orders drop sharply. Input prices decrease at fastest rate since July 2009. (PR)

    Greece June Manufacturing PMI shows accelerated contraction, coming in at 40.1 in June vs. 43.1 in May. Election uncertainty and the ongoing financial crisis are undermining demand. (PR)

    China's official PMI falls to 50.2 in June – the slowest growth this year – from 50.4 in May vs. consensus of 49.9 and the HSBC flash reading of 48.1. The output sub-index 52 vs. 52.9, while new orders contract for a second month and a measure of input prices drops to its lowest reading since Dec. 2008. "Further monetary easing is warranted," says Mizuho economist Shen Jianguang. 

    Australia's June PMI bounces 4.8 points from May, but still points to contraction at 47.2. Not a great combination, wages and input costs continue a solid rise (59.4) as output costs continue a sharp decline (41.8).  The aussie rose on the print, but has since given back gains, +0.1% to $1.0247. Sydney puts in a middling (considering Friday's fireworks) rally, +0.9%.

    Feeling the slowdown in the world around it is Korea, it'smanufacturing PMI slumping to 49.4 in June from 51 previously. It's the first sub-50 read in 5 months. "Should the slowdown in demand for Korean goods be sustained, manufacturing employment may start to contract," says HSBC. The Kospi fails to benefit from the big Friday rally, finishing flat. 

    Brazil's June PMI falls to 48.5 from 49.3 previously, the lowest read since October. The Q2 average of 49 is below Q1 of 51 and 2011 Q2 of 50.1, notes HSBC. "This also reinforces the perception that the manufacturing sector kept struggling with competitiveness issues," i.e., the real is too strong.

    Investors are watching closely to see if Stockton will become the first municipality,  possibly since the Great Depression, to impose haircuts on bondholders. Before filing for Chapter 9, officials said they would try to impose cuts on all creditors, although such a move would make raising money in the future even harder and more expensive. (previous)

    California's legislature is due to vote today on new foreclosure requirements, with the state one of 25 considering new repossession rules. It's a trend the banks are strongly against, saying that the need to deal with different laws will increase costs for borrowers, introduce bottlenecks and hurt the fragile housing recovery.

    The U.K.'s Serious Fraud Office (SFO) hopes to reveal soon whether it will bring any criminal prosecutions in relation to the Libor-rigging scandal. The SFO also apparently killed its original investigation into this issue a year ago due to funding issues. Barclays (BCS+3.2%

    The BoE could get sucked into the Libor scandal as Barclays (BCS) managers believed they were making false submissions under the instruction of BoE deputy governor Paul Tucker, writes Robert Preston. A phone call in autumn 2008 between Tucker and Bob Diamond (not yet CEO) wound up being interpreted as the central bank giving the green light to report a lower borrowing rate in order to give the appearance of financial strength. Diamond testifies on Wednesday.

    U.K.'s Osbourne plans to make a statement on banks this morning amid the widening fallout from the Libor scandal.

    Bubble, bubble, we're in big trouble:  Chinese banks accounted for almost a third of global bank profit last year, up from just 4% in 2007. Much of the gains came at the expense of European peers who bled marketshare. Leading the profit tables: ICBC with pretax earnings of $43.2B, China Construction Bank with $34.8B, and Bank of China with $26.8B. JPMorgan (JPM) and HSBC (HBC) took fourth and fifth place.

    The gold ETF (GLD) saw an outflow in Q2 of 5 metric tons, the first quarterly decline in a year and against a 32-ton inflow in Q1. Shares in the ETF were off 4.3% during the period as money instead flowed into the dollar, UUP +2.6% during the same time frame.

    JPMorgan tips railroad companies to beat estimates with their Q2 report as lower fuel prices kick in to improve profits. The rosy outlook on the industry comes against the larger backdrop of a sputtering economy and a price-fixing case that could pester companies for years as it works through the courts. On watch: CSX,NSC], CNIUNP

    Gambling revenue in Macau increased slower than expectedin June, tracking up 12.2% Y/Y to $23.3B after analysts forecast a 15% gain. Demand is expected to be subdued in both July and August with credit pressures cropping up in China, before a new property opening and a national holiday turns momentum back around in September. On watch: LVSMGMMPEL.

    JPMorgan initiates IMAX with an Outperform rating. The company has been generating interest of late with a host of movies shot in the IMAX format trending strong this summer and the biggest of the lot, The Dark Knight Rises, set for release later this month. Shares +19.6% over the last 30 days.

    Masking Nasdaq and S&P weakness this morning:  Apple (AAPL) will pay $60M to settle a trademark disputewith Hong Kong computer monitor maker Proview over the iPad name. The lawsuit had hampered sales and delayed the launch of the new iPad in China, and the court-mediated settlement now will allow AAPL to get on with selling its popular tablet PC in one of its most important markets.


  11. Phil
    I hold 600 July $7 sold puts on WFR. Where would you roll? I will add to my WFR holdings if that is the best play, but I am pretty much at my limit for what I had planned. Being the case, should I just stay with the $7's and roll for time, or does it just make more sense to add a few more sold puts (not a huge commitment to do this) and move down to the $6's. TIA.


  12. Well, so much for that rally.  ISM, er, um…sucked wind.


  13. what the Fu


  14. Oil just went crazy. anyone know what the news is?


  15. Where we are mid-way through the year:

    http://www.bespokeinvest.com/thinkbig/2012/7/2/first-half-asset-class-performance.html

    Europe, BRIC (except India) and commodities – not so good!


  16.   after numerous poor regional reports…market shocked by weak ism…ha!


  17. 2can/Oil – I believe there was a report that Iranians are proposing some law to stop some oil tankers from passing through the strait of Hormuz.


  18. Ink/  Thanks.  Where did you get that news?  9,000 shares and a $1.45 move in a minute has got to come from something.


  19. @Felipe
     
    Thanks for the AAPL BCS and put sell combo, trade of last week which has gone very green today.   Would you TTMAR, or hold?


  20. 2can – You're welcome.  Zerohedge.


  21. And I was just thinking 83 might be a good support line to buy an oil contract.  If I'd  pulled the trigger, I could have made a grand in one minute.   Oh well, 


  22. Early close/Rain – Depends what day the holiday is.  We close early on the 3rd and then on Nov 23rd (a Friday) and Dec 24th (a Monday).  

    USO/DC – Not at all obvious below $85 and over $78.50 – could bounce around anywhere in this range.  I think $80 is a safe enough floor to play off but not inviolate and, as you may have noticed, I'd kind of lose interest in oil bets as I prefer to play when it's "obvious."  Then, hopefully, I'm only wrong 4 out of 10 times!  8)  

    LNG/Hemas – Thanks for great info!  Yes, that is the whole game – exporting the gas to places with higher prices, which is why I have long-term comfort being long CHK and nat gas in general in the US.  There will be exports one day but it won't be at $18.  I think prices will eventually equalize around $5 but that's double where we are now and, for US companies – it's a LOT more gas to be produced than is needed locally now.  I don't see LNG making the big profits compared to actual producers like CHK though.  If LNG makes too much money, then XOM and CHK will simply build their own terminals and cut out the middle-man.  The technology is not complicated and there's no particular barrier to entry – LNG is a first-mover but haven't gone anywhere in 30 years so far although, to be fair, Cheniere hasn't been mucking around with LNG the whole time.

    WFR/Scott – Something about China quadrupling their program for solar this year (their companies have a terrible glut).  

    WFR/DC – Those are short puts, I take it and I'll guess you sold them for $1 so you have a $6 net on the now $4.40 puts.  The 2014 $3.50  puts are $1.60 and you can roll your Julys to 2x of those and it won't make any difference vs getting 1x put to you at $7.  I'd sell 3x for a better than even roll and risk 1x more (0.5x of $7) but that's me…

    Oil/2Can – Blockade BS – ignore.  Iran and other countries getting desperate to get prices back up – expect lots of crazy talk from OPEC nations as they really can't afford for oil to be below $90 on Brent.  

    Bespoke/StJ – I wonder why those percentages don't match what Yahoo reports for 6 months?  

    Tiny type/Angel – Aw, so cute!  Yeah, I would think weak ISM would be obvious after a dozen weak reports from Regional Fed districts.  Do people really not understand the relationship?  

    AAPL/Flips – Congrats!  I'd take it and run as AAPL is holding up the market at the moment.  


  23. VIX up 4.3%, VXX down 2.4%


  24. MoMo:    I have closed the AAPL trades in the MoMo.    All of them.  We are CASH


  25. The numbers on the MoMo trades stjeanluc:   Bought to close the the July 605 calls at 7.25 and sold to close the July 580 calls for 19.60.    Reasoning is that we've made significant gains here today on this trade, and the market looks weak.   We will, of course, get back into AAPL pretty quickly, but I'm more comfortable right now taking the cash off the table and observing for awhile.  


  26. Phil: Any thoughts for a play on NKE.  Although it's not really close to the 3/9/09 low of $36.50, selling Jan14 70 puts for $6.10 would give us a $63.90 entry , which is 27.5% off the current price.


  27. BBY flying – up to $23!  

    WFR $2.50, SVU $5.21 – I guess SWW is more influential than I thought….

    TLT looking as crazy as the VIX.  Dollar popped over 82, gold over $1,600 and silver $27.50 so still a lot of nervousness out there but we held up pretty well so far on bad ISM news.  

    EXP making new highs.  RIMM making new lows.  

    Euro $1.2578, Pound $1.57, 79.38 Yen to the Dollar is a big drop from 80 at the Nikkei open and EUR/CHF looking strange at 1.2013 – we'll see how long that lasts…

    NKE/Jbur – I don't like them this high.  We discussed them on Friday – they have serious problems.  That entry is right around my $65 bottom target so it's OK if you don't mind the ride but I'd rather just wait and see if bad news does send them down there and THEN I will be gung-ho bullish to sell puts below that line.  If not – then there will just be 8,999 other stocks to trade.  


  28. Lflantheman / AAPL –  Thank you again!  I sold out the 15 580's and I was thinking of keeping the short 605's to see if AAPL breaks down.  Until I looked at my MarginReq!  Having those 15 short 605's uncovered was close to 220K of margin req.  No thanks :)    
    Again, mucho gracis senior!


  29. Phil – greats picks - hats off to you sir! 


  30. Some thoughts about Europe from a very astute, but non-financial friend of mine who lives on Lake Geneva. Interesting social commentary from an alert observer:

    "Hi John,
    Sorry to only answer your mail today, had to have a closer look on the events, I am not at all good in economy and the consequences of decisions taken. I also took the time to read readers reactions on various German newspapers. Generally speaking, German people are upset as they feel betrayed and know that they will have to pay for all those decisions taken by their Chancellor. Gosh, I wouldn't want to be in her shoes, she is a remarkable person but I think the pressures coming from all sides, not only from foreign governments, but also from adverse political people inland, must have been tremendous. Basically, I think she was right, not willing to subsidize countries where working is almost an insult and where social dependance is leveled up to a national sport.
    However, and even after 60 years, the Germans still have a sense of guilt dating back from the war and that led them probably to agree to be so much involved in the salvage of ruined economies in Europe. The Germans did pretty well compared to other countries but already paid a high price for that, paying high taxes, working sometimes for extremely low salaries etc. Thus there is an ambivalent feeling in Germany, on one side why should they have accepted sacrifices to have a sane economy and now accept to pay for those who are considered lazy and only willing to take advantages but not responsibility and cut expenses, and on the other side, – not openly expressed but you feel it – we are sort of in a similar situation as before WW2, where the German economy was flamboyant versus other countries, and that let to what we know happened. Thus, I think that Germany feels obliged to show that they are "good" people, accepting that their dominance is a factor which leads to help others and not to create conflicts.
    Now to the question if those decisions will be implemented as sketched out at the meeting, well the German Constitutional Committee has to check if this is in accordance with the Constitution … In the end, every country head politician just wanting to save its own head and face versus their people. But more sacrifices will be asked from everybody and that could well lead to social troubles.
    If I understood well how we got in those troubles, we owe it to the banks and bankers who do only see immediate returns and have no long term plans. Sign of the times, nobody, politicians included, works for a long time future but only for immediate returns. Hard times coming …
    Cheers, Viviane"
    ———--
    Guilt is a powerful motivator.


  31. My problem with reading all the market pundits is when there is a bad print, the first thing they say is….more QE.  ISM misses, QE; jobs down, more QE; corporate profits down to negative territory and EPS for SPX is less than forcasted, hell, let's throw in QE.  The Feds will be very hard pressed to do more until after the elections.  So, stop with the QE talk….


  32. Burrben……Do NOT hold any naked short calls on AAPL right now…….unless……you want to get your pants burnt off.


  33. Earthquakes – fascinating world equake map


  34. Hoping for July 4th we see the stock market explode to the downside.  As is the constant motto on this site, "I love it when a plan comes together"


  35. Just checking in, I'm dead flat but for Apple, purt near everything's down, Apple up, should I be selling?


  36. There goes SGEN.  Thanks BMY for buying AMLN….putting that company out of its misery.  Don't know financially why it was done, but it is water under the bridge.  Come on in and buy a real company, SGEN.  I am buying a few speculative Dec 30 calls.  Not a PSW way to do things, but just a few for a JIC something comes along….


  37. And just saw Iflan.  OK, selling.


  38. Thank you, stjeanluc.  Looking good indeed. 
    Everyone, let's continue to squeeze the July premium by rolling another 10 RUT July 610 short puts ($0.1) to 6 RUT July 710 short puts ($0.8) for another $380. 
     
    The SPX spread is also running out of premium, so let's roll 3 SPX Jul 1190 short puts ($0.375) to 3 SPX Jul 1250 short puts ($1.325) for $285 credit.  These are happy July 4th rolls!


  39. Thanks Checho!  

    Guilt/Bird – Here's something I wrote last Wednesday, re. a comment that Germany is the one that should walk away from the Euro.  As the question was put to me: "On a micro scale, if you next door neighbor is $200K in credit card debt, has a 90/10 neg am loan on their home, has a nice new S550 and a Porsche 911 in the driveway, yet they are ready for bankruptcy, should you bail them out?"  My response was:  

    Yes but your next door neighbor doesn't already owe you $800Bn, does he? You have to look at the bigger picture – Germany got rich selling goods and services to EU nations who borrowed the money from Germany (and each other).



    If you run a business, like a TV store, and you put up a sign that says $2,000 Plasma TVs for $200 down on EZ lay-away – all get credit, no questions asked and you lent the money to 1,000 people in your town, you'd get $2M and they'd pay you $200,000 and all of your salespeople would get paid and you'd book a huge profit. 



    Maybe next year they pay you the next $200,000 installment but you want more sales so now you produce $5,000 couches and do the same terms and collect $5M and now they pay you $700,000 in interest for the year but now your neighbors are $7M in debt while you made $7M in sales. 



    Your GDP is growing like gangbusters and so is theirs as they are booking asset value and "only" pledging 20% of their GDP (salaries) to massively increase their lifestyle with all your fine goods. 



    You do this for 5 years with washers and dryers and refrigerators and coffee machines and cars and everyone is happy, happy, happy until the TVs from year one begin to wear out. Now the people who borrowed money to buy the TVs realize they still owe all the money (because they've only paid the interest) and those TVs are no longer an asset so now it starts looking like pure debt on the books and, even worse – they need new TVs. 



    So you're Germany and it's game over for your customers – they are 100% of their GDP in debt and can't buy your stuff anymore. You can either help them out or go into one MoFo of a recession yourself because you benefited from this little Ponzi scheme just as much as they did but, even worse – if they all default – it's you who lent most of that money and declared their debts an asset on your books. 



    Still want to tell the PIIGS to shove it? 



    They'll be happy to default, go back to work and dial back their lifestyle. Either some other sucker will sell them things on credit (think Iceland was cut off for more than a day or two?) and the cycle will start again or they will simply learn to live without but, meanwhile, someone will be knocking on your door asking what happened to the $2.5Tn you lent to your customers over the past decade while you claimed your business was so strong. 



    None of this is cut and dried and every move has consequences.

    The people who benefit from Germany's "strength" are benefiting as well from the debts incurred by the PIIGS.  Just like in the US – perhaps the profiteers should stop to consider that maybe the bottom 80% CAN'T AFFORD to live on the wages they are being paid and, at a certain point – you simply run out of people to exploit and now you are exploiting your own customers and your own neighbors and, finally, it gets to a point that when the people you have screwed over begin to wail and complain – the din finally reaches your ears and you can no longer shut them out and when you have a Babeque Party and invite all your top 10% friends – the bottom 90% are now close enough to smell the cooking and see all the fancy cars lining the block and, when it's your own neighbors you are driving into poverty – perhaps they also got a good enough look at you to realize you are actually no better than they are – and they get jealous – and angry…   THAT's what Germany is feeling now – the same thing Wall Street is feeling and ignoring it won't make it go away.   Merkel understands that because she's been on both sides of the fence – many of her fellow politicians have not.  

    QE Talk/Pharm – Oh come one – it's all they have!  

    Earthquakes/Scott – You can see why they call it the ring of fire. 

    Hoping/Rustle – Well, I kind of hope we manage to muddle through.  Another big drop in the markets and we may be heading into 7 very lean years.  


  40. Peter D…..Excellent job!   But now that your portfolio is up it makes more work for me because I have to start studying your methodology more closely.     :)   


  41. Iflan:  Getting some sweet fills on Apple Oct. 650s!


  42. BBY – woowoowoo!! Buy more?
    From 24/7:
    "Shares of Best Buy (NYSE: BBY) are up 8.87% to $22.82 based on trading volume of 7.8 million shares. The Minneapolis Star Tribune reported Monday that founder and largest shareholder Richard Schulze plans to present an offer to the board to take the company private. The 52-week high of the stock is $32.65."

    Read more: Today’s Market Winners – 24/7 Wall St. http://247wallst.com/2012/07/02/todays-market-winners/#ixzz1zTqCMTut


  43. Dollar up…bonds moving….oil falling quickly…..rally was for the suckers. 


  44. lflantheman/aapl.  Long the Oct./12 550's and 600's. Any thoughts, hold  close or cover ? Tks.


  45. Pharm/SGEN – what wud u pay for those Dec 30's? Will you cover any or leave them naked?


  46.  

    Pharmboy
    SGEN   You think the Dec. 30/35 BCS for 1.35 is ok,rather  than the Dec. 30 calls?
     thanks


  47. cslanson2…..I think those Oct AAPL longs are good holds.  But ask me again on July 16th.   


  48. SGEN – I have my order in for $1.70…so someone is above me right now.  For the extra 40c qcmike, I would go naked and sell some puts to reduce the premium.  I will consider that IF the market falls and I can DD on those calls for a net credit.  Just have to be patient.


  49. Pharm/SGEN – must be me above you. I placed an order in for 1.75. 


  50. Thanks Phil. Great financial POV. That, combined with Viviane's cultural POV, makes one realize just how big the Rock and the Hard Place are for Germany. Emotionally (which I strive to leave out of my trading) I have to confess to feeling a bit a schadenfreude as I'm a dues paying member of the 90%.


  51. Flan/ AAPL: what are you doing with the long  580 calls and the short 605's? I am tempted to sell the 580's but don't want to get screwed on 605's….


  52. BBY/Rexx – Chasey looking for most of us as we were buying at $18 and this is the win we were looking for.  I doubt the offer (if any) will be more than $25, maybe just $23. 

    11:00 AM On the hour: Dow -0.52%. 10-yr +0.48%. Euro -0.62% vs. dollar. Crude -1.95% to $83.3. Gold -0.27% to $1599.85.

    11:46 AM European shares follow up Friday's huge gains with another solid day. Stoxx 50 +1.2%, Germany +1.2%, France +1.3%, Italy +0.3%, Spain +0.4%, U.K. +1.3%. The euro -0.6% to $1.2583.

    12:00 PM On the hour: Dow -0.48%. 10-yr +0.52%. Euro -0.61% vs. dollar. Crude -2.59% to $82.76. Gold -0.32% to $1599.05.

    Treasury yields react sharply to news of the U.S. manufacturing sector slipping into contraction for the first time in 3 years, the 10-year off 6 basis points to 1.58%. The Dow has its eyes set on 13K and things in Europe may have calmed down for an hour or a week, but long-term Treasury yields continue at historically low levels.

    JPMorgan's Global Manufacturing PMI for June summarizes what anyone following the weak individual reads knows, falling to a 3-year low of 48.9. It's the first time in contraction territory since June 2009. "Inventory adjustments appear to be driving the contraction … the rate of stockbuilding remains quite elevated amid sluggish gains in final expenditures." 

    May Construction Spending: +0.9% to $830B/year, vs. an expected +0.2% and a prior +0.6% (revised); up 7% from May 2011.

    When the going gets tough, the tough form a committee, U.K. PM Cameron announcing a joint parliamentary investigation into the banking industry to uncover the truth behind the Libor scandal.

    "We must help our customers and clients recognize that on the majority of days, no requests were made at all," says Barclays (BCS) CEO Bob Diamond in a memo to employees. He's referring to requests for borrowing costs which determined Libor. Even when accepted, he says, the adjustments were "on average" small, usually less than a basis point.

    Crude oil prices resume losses after a brief spike on headlines that Iranian lawmakers are drafting a bill to propose blocking the Strait of Hormuz for oil tankers. WTI -2.1% to $83.16. Worth noting: There was no spike in volume to match Friday's price surge - blow-out moves typically are associated with a volume spike – and there was no shift in the time structure. 

    Iran is working to offset the effects of a European Union embargo on imports of its crude by bartering with China and selling refined products like gasoline to its neighbors, according to a WSJreport which cites the head of National Iranian Oil as saying the EU embargo will cause a 20%-30% reduction in crude exports for the second half of the year. (earlier)

    Global Hunter downgrades four natural gas gathering and processing MLPs based on its belief that the market for nat gas liquids will favor lower ethane and propane prices going forward. The firm cuts ratings for CPNODPMOKS and XTEX. It favors fee-based, diversified MLPs with low exposure to unhedged NGLs: EEP,TLLPPAAWES.

    Chesapeake (CHK) has earned $5.5B pretax since its founding 23 years ago, and has paid income taxes on less than 1% of it. CHK and other U.S. oil and gas producers can thank a century-old rule that allows them to postpone income taxes in recognition of the risk of drilling wells that may turn out to be dry – a break that may be outdated, as oil or gas was struck in 99.6% of wells last year.

    Food companies stand in line to see higher commodity costs as a harsh summer drought shows little signs of easing in time to bring down prices. To make matters worse for the group, strapped U.S. consumers are viewed as more likely to trade down to value products before accepting higher food prices on common items. At risk: CAGKFTKTSNSFDGISHNZPOST.

    Airbus (EADSY.PK) confirms reports that it will construct its first assembly plant in the U.S. as it seeks to strengthen its efforts to take on Boeing (BA) in the latter's own back yard. The Alabama factory will build short-haul jets when it opens in 2015 and provide 1,000 jobs. (PR)

    Shares of Wal-Mart (WMT +0.4%) trade just a hair below $70 as they continues to shrug off the company's scandal in Mexico and etch out new 52-week highs right and left. The prevailing sentiment is that a sluggish, but growing, economy could be sitting in the company's sweet spot for maximizing sales as bargain shoppers continue to flock to its stores with nary a thought about bribery allegations. 

    Shares of Best Buy (BBY) run up a 8.9% gain to hit their highest level in close to two months. The latest chatter is that Richard Schulze is prepping to take his buyout offer to the board.

    Coffee names fall out of favor with investors as Green Mountain Coffee Roasters (GMCR -1.6%), Starbucks (SBUX -1.4%), Peet's (PEET -2.9%), and Coffee Holding (JVA -1.5%) all rack up losses for the day. It's the demand side of the supply and demand matrix that draws concern, with the conventional wisdom that says consumers will pay premium prices for coffee through thick and thin starting to get turned on its head. 

    Yum Brands (BUM -1.1%) should be able to ride outslowing growth in China because, unlike in the U.S., dining out at chains such as Kentucky Fried Chicken, Pizza Hut, and Taco Bell is a luxury only affordable to the most affluent consumers in the nation. The company plans to continue growing in China at a 10% clip, which should add to its bottom line as it books on average an impressive $200K profit at each restaurant, more than 6X the average U.S. restaurant take.

    MEMC (WFR +19.6%), which had 12.3% of its float shorted as of June 15, skyrockets after announcing it executed contracts in Q2 for 4 European solar projects representing 98MW of installed capacity (60MW in Bulgaria, 38MW in Italy). The deals should help shore up MEMC's weak balance sheet. On Friday, MEMC announced the sale of a 20MW Nevada solar project. 

    Sony (SNE -1.1%reports that The Amazing Spider-Manknocked out a $50.2M global debut and set weekend records in several nations. The launch in North America set for tomorrow isexpected to dominate the holiday week box office tally and could provide positive exposure for IMAX (IMAX +0.6%), with 307 theaters showing the movie in the IMAX format.

    OpenTable (OPEN -8.9%) falls hard thanks to a downgrade to Equalweight from Barclays, which is setting a PT of $43. Shares had rallied over 20% since early May, after getting crushed by a weak Q1 report.

    Groupon (GRPN -6.8%) dives below $10 once again afterSusquehannna (Neutral) lowers its PT to $12 from $15, citing worries about higher marketing expenses (ed: their decline in Q1 helped fuel Groupon's post-earnings rally) and Groupon's "take rate" (its daily deals revenue split with merchants). 

    Nokia (NOK +1.7%) chairman Risto Siilasmaa says his company has a "contingency plan" if sales of Windows Phone 8hardware disappoint. Siilasmaa doesn't elaborate, though many think he's talking about Android. The remarks come as top Finnish carrier Elisa claims Windows Phone devices (i.e. Nokia's Lumia line) made up 1/3 of June phone sales. Some hometown favoritism must have helped, but this still marks a reversal from recent trends. (previous)


  53. Newt – Really?  Just read the comments or search for his name.  All trades are closed.


  54. Thank you, lflan!  Your portfolio is much more exciting and much suited to sharp traders.  Mine is moving like a slow boat, but people can use both at the same time.


  55. Lflan /  Thanks for that AAPL play.  helped my bottom line mucho


  56. newt….I closed both, but if you must get rid of one or the other then re-purchase the 605s and keep the 580s.   If you hold AAPL shorts you will lose same (your shorts).   


  57. I guess this week is as good as any to with my listening to a little bit of this.


  58. MoMo:   Sell to open 10 this weekly LULU  57.50 puts for 1.05


  59. An increase in the capital gains tax from 15% to 18.8% is being proposed.  After hours, I'd be interested in any comments in respect of how this increase might change the structure of equity and bond prices.
     
     In Spain [possibly elsewhere, I wouldn't know] there is a 2% annual net worth tax, which would eventually confiscate all wealth [almost -- Zeno's paradox applies] and prompts a lot of structural maneuvering, since the tax doesn't apply to private companies with X number of employees that engage or invest in active trades or businesses.  On the other hand, capital gains rates only tax recognized gains, so one can just compound away indefinitely if you like your portfolio. This may change what companies are favored, I would think — non-dividend paying MOMOs might suffer relative to AT&T, for example. Ideas?


  60. Iflan/LULU,
    What's your premise for entering the LULU weekly STO Puts? Are you looking at the rumor news of Einhorn taking a short position? Or are you looking at the call/put open interest (which looks like the stock will be pinned around 60) Or just trying to take advantage of the premium due to huge drop today?
     
    Thanks.


  61. MoMo   Buy to open 20 AAPL July 580 calls   19.20


  62. LULU/lflan – what is thought for exit on LULU this week 57.50 puts?


  63. pat.swap……the last, compared to other MoMo I'm watching. 


  64. MoMo correction:  I only bought 10 of the AAPL July 580 calls for the MoMo.  


  65. scottmi/LULU….hold till Friday and decide. 


  66. LULU/lflan – thank you..


  67. LFlan / AAPL  -  Since you're here today I'll ping you're brain if you don't mind.  The new 580 call entry, are you thinking a day trade?  Since tomorrow is a half day, then holiday, won't we expect more decay on the options?  Why not sell some 565 puts for say $4.30 to capture decay?  Both bullish way's to play.


  68. LULU/Iflan – thank you!


  69. AAPL trades/Burrben:  Just a thought.  I agree with you about the theta decay. and the market being closed a day and a half.   When I look at the difference between the two trades the short puts are a pure theta trade with limited reward and the risk of owning the stock. The debit trade is a delta/gamma trade with unlimited upside potential.


  70. IMGN/Pharm   This chart is looking very strong


  71. stjeanluc
    Thanks for the updates on the Income Portfolio . What happened to X and HPQ from 6/22 and also EXC.  Am I misreading something?
    per Phil 6/22
    "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." 


  72. IMGN/stock – yes it is.  I like them, but they are in bed with Roche.  Now, they get 5% of revenues (or maybe a little more) for their TM1 drug, but SGEN gets everything for theirs.  Different cancers, same game…I like SGEN better.  Doesn't mean I don't like IMGN, but I am playing SGEN.  How about CLDX? That one is gonna rocket up here soon.


  73. Ratio Butterfly trade/ Burrben:   A couple of weeks ago you asked if anyone had done this trade and had any opinion. The link you sent was:
    https://docs.google.com/open?id=0BzlfETMAwklcQXVCbWVxWTEwX2c

    After reading the slide show I decided to go to the CBOE website so I could see Sheridan's presentation in total. Great presentation, and I think the concept is solid.
    I have been modeling and paper trading the the Ratio Butterfly, but with several modifications. First, I have been using SPXPM because the Bid-Ask Speads are narrower.  Secondly, I have been putting the trade on BOTH sides simultaneously, much like an IC. Doing both sides approximately doubles the premium income, and it does not increase the margin requirement or risk in the trade over doing just one side.
    Thanks for sharing the idea with the board.


  74. CRM – rolling up to the July 130s.  Selling the July weekly 130s to help pay for it.


  75. Income Portfolio/gerryf:  I also still have X and HPQ still on as well as 2014 GT $10 Puts.  Phil suggested we drop EXC after Bernanke failed to imply more QE was coming — although it bounced right back so no damage so far.


  76. /rb is almost back to were it closed in electronic trading on Friday but oil still down about a 1.50


  77. AAPL MoMo:   I couldn't get the pop I wanted out of AAPL.  It may still come this afternoon but I'm not holding the calls .  Sold the 10 July 580 s for 19.50.      


  78. MA/phil – quite a reaction up from it's crash on thursday. Do you still like the Oct puts for crash cover?


  79. Income / Gerry – Must have missed those…. I'll add them.

    As far as EXC is concerned, Phil killed all the Jan 13 plays on Friday and that was one of them.


  80. Pharmboy
    What is the trade on CLDX
     
    Thanks


  81. Jbur….If you want to take advantage of theta decay on AAPL but stay long, then just do a calendar spread……like maybe buy the October 590s and sell the July 590s, or similar.   You can sell puts.  Or bull put spreads.   Many different ways to play AAPL.  Choose your own low-hanging fruit.    Me, I'm sort of a cowboy….on and off the horse a lot.   


  82. AAPL/lflan – what would be the cause for the pop you were/are hoping for? simply a percentage snapback or is there something particular to today?


  83. A Trader Almost Caused Millions in Losses…I have so much confidence anyway.


  84. Cap gains/ZZ – I don't think people will be changing behavior over 3.8% – there's not a cheaper alternative anyway.  I like the net worth tax – use it or lose it!  It's not a big penalty when you can pick up 4-5% for bank notes – they are simply saying if you have a lot of money – lend it out so others can use it as well.  I believe it's against worth over $1M, which is way more than the bottom 90% are worth.  Good way to keep rates down without printing money – puts it all in circulation.  Look at all our Corporations sitting on tens of Billions in cash – what would another $1Tn circulating in our economy do?  More to the point – what does it do to our economy when the wealthy just sit on their piles of cash and drive up the price of borrowing for everyone else?  If you want to find a more popular investment – look for investments where there are short-term write-offs and long-term gains like developers.   People will be interested in gambling on 5-year payouts – hoping there will be a more favorable administration down the road.  

    Closed/JBur, Burr – Well closed doesn't mean your stocks won't gap hard one way or the other on Thursday as they will be trading in other markets – be careful.  

    HPQ and MT/Income Portfolio, Gerry – I see those two and they should be on the list.  Not sure when EXC was from but I don't think that's on anymore:

    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 (2014 $20 puts at $5.90) of those in the Income Portfolio for $5,900 and 10 HPQ (2014 $23 puts at $5.72) puts for another $5,720 and we'll see how those go before going crazy.  

    We did kill the Jan 2013 trades but not the 2014s.  

    GT/Kinki – To make StJ's job easier, what was the entry?  

    BBY/Deano – And that is why we take the money and run on those rumors!  

    /RB/Bert – They should be strong into the holiday but I'd really fear the inventory report on Thursday.  

    MA/Scott – I think the Oct puts are excellent crash coverage as MA could drop 10-20% very quickly in a liquidity crunch but it's real crash protection – not dip protection.  

    We are holding up pretty well so far.  


  85. CLDX – buy the stock, sell the Aug $6/5 C/P combo.  Round 1.


  86. Phil / Income Port – X is at 5.05, HPQ filled at 5.70.  What do you think on X??


  87. scottmi….cause for an AAPL pop?   Don't know.  Phil's the expert on sticks, AAPL and market.  I just watch the charts and try to get in when I think I see it coming. 


  88. Phil/Long term Buy/Writes
    Would you be comfortable buying stock and selling farther out calls/puts  for a 401k in this environment? I can sell covered calls and write cash secured puts in my 401k and have been wanting to add high quality dividend stocks such as KO,PM , BA,ABT  etc but many decent companies are at or near their highs and I am a little hesitant to just jump in without regard to price…in this account I can not do option spreads so long term purchases is what I am looking at….Thanks


  89. Income Portfolio – The spreadsheet is up to date now – with prices as listed by Phil as I can't make an average of everybody's entries. Like I said EXC was a Jan 13 play so I closed it with a 25% profit on Friday.


  90. Phil & Co/ What is the best way to track futures data? I use Bloomberg at the moment, but am still a newbie and learning everyday. There was mention of someone coming in and buying up a bunch of S&P futures before the Friday morning pop. Is there any way to see this kind of activity before the market opens? IMHO – that is an indication of free money to be made!!


  91. EXEL and CELG rocking it.  Our calendar spread on CELG is up but still the Julys are 50 OTM.  Let the premium decay in those.


  92. GT/Phil,Stjean: 
    From this comment on the day of the BNN appearance:
    "They are already up 5% but still good at $11.40 and I like the Jan $10/12.50 bull call spread at $1.20, selling the $10 puts for $1 for net .20 on the $2.50 spread.  I also like just selling the 2014 $10 puts for $2.10 – let's do 20 of those in the Income Portfolio."


  93. France is a disaster in the making
     
    France needs as much as 43 billion euros ($54 billion) in savings this year and next, the national auditor said, setting the stage for budget cuts by Socialist President Francois Hollande. The coming year is “a crucial one in which the budgetary calculation will be difficult — more difficult than thought because of slower growth,” Didier Migaud, who heads the audit body, told journalists today in Paris. “It will require an unprecedented brake on spending and higher taxes.”
     
    http://www.bloomberg.com/news/2012-07-01/france-sees-public-investment-bank-by-year-end-parisien-says.html

     
    http://www.bloomberg.com/news/2012-07-02/peugeot-may-lift-job-cuts-target-to-10-000-positions-union-says.html


  94. Angel:  Nice prescription, that ought to work out well for them. :)


  95. Phil, regarding the BBY news, do options get exercised at the buyout price if it happens prior to expiration? I have the Jan 13 $18/21 call spread offset with Jan 13 $14 puts and just wondered what happens to those if something actually happens.


  96. ZERO// EXACTLY like a virulent emetic…generally associated with easing vomitorial corpulence…
    OLLANDE will have a tough time with lowering that retirement age me thinks


  97. Does anyone know a manufacturing ETF that trades options? 


  98. VVUS being bought b'c of its potential….OMG, ROTFLMAO….it hurts so bad…stop.

    Now that Amylin (AMLN) is being sold, Rodman & Renshaw's Michael King says fellow diabetes firms MannKind (MNKD +6.55%) and Vivus (VVUS +0.4%) could be acquisition targets as well. It's worth noting, though, that King's speculation accompanies a mea culpa for being wrong about Amylin, whose assets he described as "mediocre."


  99. XRT Aug/Jul $57 calendar Put spread.  74c or better. 


  100. Oil / Iran:  I have no particular insight here; but I do have a certain geopolitical concern.  Iran is being ridden pretty hard — currency down 50%, prices skyrocketing, salaries unpaid, etc.
     
    etc. http://www.nytimes.com/2012/07/02/world/middleeast/inflation-plagued-iran-prepares-for-worse.html?ref=middleeast
     
    They are also threatening [again] to close the Straits of Hormuz, which is eliciting a giant yawn from the intl. community — oil kept dropping after today's announcement.   I dunno, guys — there's an old saying that "when the going gets tough, the tough do weird things."  We know that Iran is not politically united, having suffered the Ahmadi-nejad / Mullah-Khamenei scrum over the last year — and Ah-J is on his way out.  But can still pull a trigger, presumably;
    http://www.foxnews.com/world/2012/07/02/iran-starts-war-games-after-being-hit-with-sanctions-over-its-nuclear-program/
    http://dailycaller.com/2012/07/02/source-iran-preparing-to-down-american-passenger-planes/   [look at the dates on these!!]
     
    The Revolutionary Guards, who control the Basij, are a kind of socio-politico-military organization of its own, not clearly under the control of either the President or the Mullahs.  They make a lot of money — and are now losing a lot of it, it would seem.  I dunno guys, let's just say I wouldn't echo that "falling oil yawn" today with any oil short positions.  I might actually buy some rather out of the money calls.  Just saying.


  101. Anyone:
    So, I haven't seen any posts from JRW in a long time. Have I missed his postings or is he not present and accounted for.


  102. X/JFaw – X is one of the big pension stocks that should get a positive boost from the accounting change.  Keep in mind it's artificial so, if we get a nice move up on X over adjusted earnings – I'd take that and run.  On the other hand, the auto cycle is on the up and if the G20 puts a couple of Trillion into infrastructure – it may be time to fire up the smelters again so that's why I do like X long-term and selling the 2014 $20 puts for $5 nets you in at a pretty nice $15.  

    Buy-writes/Sun – I'm always comfortable if it's a stock you REALLY want to DD on at the net if it is put to you.  I'm not comfortable with stocks that are high like KO, PM or ABT but BA I love at this price ($72.77) as you can sell the 2014 $67.50 calls for $11.70 and the 2014 $60 puts for $5.60 for net $55.47/52.74 so your worst case is you own 2x at 27% off the current price – otherwise you are in 1x at net $55.47 with a call-away at $67.60 for a potential 22% gain and that makes the $1.76 dividend 3.2% while you wait.  

    Of course, with a small dividend, there's no real need to own BA and you can sell the 2014 $55 puts for $4.25 and buy the $60/77.50 bull call spread for $10 and then you are in the $17.50 spread for net $5.75 with a 200% upside potential at $77.50 and your worst case is you net into 1x of BA at $59.75 so you have the same(ish) $11.75 max gain you have on the buy/write albeit at a $5 higher target strike and a $7 higher net but just the commitment to own 1x – if you don't want to go to heavy on BA right away.  

    Thanks StJ!  Good thing we closed BA it turns out.  Can't emphasize that enough to people – when you make 20% in a day – that's A LOT and it should be taken off the table unless you have a damned good reason not to.  

    Futures/Amalfi – I prefer tea leaves but I also like the multi-charts on TOS.  You can see them with a paper-money account then then play with them until you like the way they look and save your set-up.   I use the view that gives me 9 boxes at a time. S&P Futures were bought into Thursday's close – Bloomberg terminals track that stuff.  You don't need a terminal though – just look at the volume on SPY and what SPY did into the close – do you really need a subscription to BBerg to whack you over the head with it?  

    GT/Kinki – Thanks!  

    France/Angel – Boiling over already?  

    Buyouts/Jrod – They get cancelled but what happens to them depends on the deal.  If it's a merger, you may end up with options on another company.  Generally, shortly before a deal goes down the option premiums get crushed and, unless you are SURE you like the surrender terms – it's a good time to take the money and run.  

    Manufacturing/Cdel – XLI is pretty good and then there's VIS too.  FXR is mostly durable goods so maybe more pure – depends what you are trying to accomplish.  

    Small investors/Pharm – I don't understand how retail traders aren't just totally fed up with the markets at this point.  

    Iran/ZZ – Yawn I say!  They will not close the straight for the same reason they couldn't close it before – because their navy uses outboard motors and ours uses nuclear submarines.   It's all political theater and very exciting but no one is in the mood for them now.  I wouldn't short oil either because they can still fire missiles at passing tankers or other such nonsense but that would be the end of the current regime so well worth $100 oil for a few weeks if they do it.  This is why the UN has resorted to sanctions – you are describing the effects of sanctions but that's not going to lead them to action – much more likely it will lead them to capitulation so I damned well wouldn't be long on oil either.  

    JRW/Jbur – I got a note from him indicating he was ill and taking time off.  That's the last I heard.  


  103. Speaking of dividend stocks – here's a very good post by Barry:  

     

    Top 10 Investor Errors: Reaching for Yield

     
    By Barry Ritholtz – July 1st, 2012, 10:00AM

    To start July, we are introducing a series looking at common investor errors. This is the part two of ten. Yesterday, we looked at the impact of excess fees on performance.

    In the current low rate environment, many investors make the mistake of reaching for yield. That is our #2 investor error after excess fees.

    The first law of economics is there is no free lunch. You would think the mathematics of that would itself be a warning as to the perils of chasing the higher yielding paper, and that it should be self-explanatory. But its not

    History shows us there are few investment mistakes more costly then “chasing yield.” Fixed income is supposed to be your safe money, what you have to have back, what will cushion the ups and downs of the equity markets. Hence, you should be first concerned with return of your money, and second, the returnon your money.

    In other words, safety first for your bonds and preferred.

    Don’t take my work for it, just ask the folks who loaded up on sub-prime mortgage-backed securities for the extra yield how that worked out for them.  Some people have suggested I cut the RMBS investors some slack, as the paper was rated AAA. I don’t because they willingly violated the Free Lunch edict.

    Quick war story: In 2004, I worked at a firm that was occasionally pitched products from other shops. One day, I walked into the conference room to hear Lehman Brothers offer a higher yielding fixed income product. “AAA rated, Safe as Treasuries, yielding 100-300 basis points more. I was subsequently called into my bosses office for saying:

    You guys are either going to win the Nobel prize in economics or go to jail. There is nothing in between.” (Does a firm ending faceplant count as the equivalent of the latter?)

    Regardless, we know the outcome of THAT free lunch.

    There are three common ways to chase yield: 1) Go out on the duration curve, i.e., buy longer dated bonds; 2) Go down the credit scale, i.e., buy junkier, riskier paper;  or 3) use leverage, which amplifies your gains but also amplifies your losses as well.

    With the 10 Year Treasury at 1.6%, I see lots of folks trying to capture more income using some combination of the above. Anyone who engages in this sort of ill-advised risky behavior should best understand the risks you are taking, and what that might mean if and when things go awry.

    Simple rule of thumb: Never reach for yield.


  104. By the way, I was going to say before that we would bomb Iran back to the stone age but that's kind of what they want, isn't it?  


  105. That's kind of where they are, Phil.  I bought a cheap lottery ticket, [July 21 $90s, $.07] because I'm flat and bored. I mostly think that the "They" in "they will not close the straight" doesn't exist. There are a number of potentially independent actors, and one might gamble that running a Stone Age economy without the others ain't so bad, because no outside power is actually going to invade Iraq.  It's a long shot, admittedly, but priced like a very long shot, I would aver.


  106. Pharm /  CLDX
     
    Wondering why you would buy the stock and sell the straddle?  Why not just sell a put, buy a bull call sp?  Just curious on how you made the decision to own the stock, rather than the synthetic.


  107. Burr…I just like the stock and don't know when they get bought so the premium won't eat away.  Just a matter of choice.  Plus, i don't have to look for rolls.  Lazy I guess.


  108. I fought the stick and the stick one
    Saw that one coming a mile away actually at 2:00 PM with light volume. Love those little dips before they ram it higher.
    So annoying.


  109. JRW…..I've thought of him many times.   He trades like a superbly programmed unemotional robot.  Very good.  I hope he resurfaces.   


  110. Thanks Phil…..Can't do spreads but the BA Buy Write sounds good……I guess we need a serious correction to think about issues like KO, PM etc


  111. So we never do learn….
    I just read an LA Times article stating that the FHA has rescinded "tough" new credit restricitions that were set to go into effect on Sunday which would've disqualified borrowers "who have one or more collections or disputed-bill accounts on their credit files where the aggregate amounts were more than $1,000".  Some industry "experts" estimate that had the rule gone into effect, 1 in 3 FHA loan applicants woul've had difficulty getting approved for an FHA loan. 


  112. Jbur /  AAPL
     
    -On AAPL I was thinking bullish, but I didn't want the decay to hit me as hard.  Plus, I'm going to be offline on the 3rd, 5th, and 6th most likely flying back to Nica, so I figured it would be better to allow slow decay rather than trying to time selling into excitement
    -On the presentation, thanks.  I really like it as well, but for now I'm following PeterD as his strat has been tested in the real world, and because that pretty graph only really looks like that on Ex day.  But I do think it's a real valid concept.  Thanks!


  113. MoMo goes into tomorrow with only the LULU short puts, remainder cash.   Have a good evening.   Later!   


  114. what is going on with small caps right now.


  115. TZA Jan 13/Question?
     
    Was looking at some TZA puts and noticed that for Jan 13 there are 2 quotes for each. Same for calls, and huge price differences between them.
     
    For instance 
    -TZA130119P20 is 5.05/6.00
    -TZA2130119P20 is 11.95/16.50.
     
    Obviously there's a simple reason why TZA1 is different to TZA2 but I don't know it. Can someone explain it to me?
    Thanks


  116. FU Stick


  117. 12:00 PM On the hour: Dow -0.48%. 10-yr +0.52%. Euro -0.61% vs. dollar. Crude -2.59% to $82.76. Gold -0.32% to $1599.05.

    1:00 PM On the hour: Dow -0.34%. 10-yr +0.5%. Euro -0.56% vs. dollar. Crude -2.66% to $82.7. Gold -0.23% to $1600.55.

    2:00 PM On the hour: Dow -0.38%. 10-yr +0.45%. Euro -0.66% vs. dollar. Crude -1.84% to $83.4. Gold -0.38% to $1598.15.

    3:00 PM On the hour: Dow -0.3%. 10-yr +0.43%. Euro -0.63% vs. dollar. Crude -1.59% to $83.61. Gold -0.4% to $1597.85

    This is what it sounds like when doves cry:  "Fed doves will not be patient," says Pierre Ellis from Decision Economics, noting the wide breadth of weakness in the economy (see today's ISM report). Maybe the only thing preventing a QE3 announcement at the end of July FOMC meeting would be a strong payroll report this Friday.

    Traditional theories of a link between reserves and money supply (and ultimately inflation) no longer hold, says the San Francisco Fed's John Williams. The key is the Fed now pays interest on reserves, making them a substitute for lending. He notes a 200% increase in the monetary base since 2008 has been met with just a 28% bump in the M2 money supply. - Yeah, this time we KNOW Frankenstein is dead because he's not breathing…  

    Heading into this week's rate decisions, swaps are pricing a 36% chance of a rate cut from the ECB (Thursday), a 15% chance for the RBA (Tuesday), and a 8% chance for the BoE (Thursday), notes John Kicklighter. The ECB chance seems low given the rush last week of forecasters expecting a cut. The BoE may not move on rates, but additional QE is very much on the table. 

    The VIX ETN (VXX -6.6%) prints an all-time low, as does a related ETF (VIXY -6.6%), fear evaporating from the stock market even as German and U.S. 10-year yields under 1.6% suggest otherwise. Stocks themselves have rebounded nicely, mostly green a few minutes before the bell.

    An interesting thought concerning equity allocations looked at earlier - Matt Busigin notes a 60/40 mix (chart) of stocks/bonds has outperformed both the S&P and bonds individually over the last 3 years, and with substantially less risk.

    Small investors in June reduced equity allocations 90 bps to 58.8%, according to the AAII, below, but not by much, the long-term average of 60%. The money moved into bonds and also into cash, where allocations are at 20%, below their long-term average of 24%

    Results from Berkshire Hathaway's (BRK.A) furniture rental unit (CORT Business Services) suggests a cutback in project spending from businesses. Calling demand "simmering" (as opposed to robust earlier in the year), CORT CEO Pederson suggests it's not a lack of cash, but instead a loss of confidence behind the slowdown.

    One byproduct of the EU debt crisis is an overworked, overburdened staff at the ECB, finds IPSO, the labor union to about 40% of ECB employees. It makes for "serious potential operational risk for the (central bank)," says IPSO President Marius Mager.

    The Justice Department reportedly is probing Chesapeake (CHK) and Encana (ECA) for possible collusion after a Reutersinvestigation showed top brass at the two rivals plotted to avoid bidding against each other in Michigan land deals. The state's AG office and Department of Natural Resources also are believed to be looking into the allegations.

    Barclays (BCS) was manipulating Libor to make markets think the bank was in better shape than it was and to make a profit for their trading desks around the world, the CFTC's Gary Gensler tells CNBC. Last week's settlement involved not just the U.K.'s FSA, butalso the CFTC.

    And here's someone who needs a course on Quantum Theory:  SA author Inflection Point reckons it might have found a good tool to determine whether growth stocks may have peaked:social interest on Seeking Alpha as measured by the number of readers who subscribe to email alerts on particular tickers. To test its theory, Inflection Point is going to monitor ten stocks over the next few months and the number of subs for each one. - Poor Schrodinger's cat, this sort of nonsense must be killing/not killing him!  

    Sure we're losing money on each sale – but we make it up with VOLUME!  Janney Capital Markets sees retailers reporting June sales slightly below consensus on its outlook that a pickup in promotions will cut into the impact of volume increases. Channel checks by the firm indicate American Eagle Outfitters (AEO +0.6%) and Pacific Sunwear (PSUN -0.5%) are two names that are trending to the less promotional side, while Abercrombie & Fitch (ANF -0.9%) and Bebe Stores (BEBE +0.3%) could deliver results below expectations due to their heavy promotional activity. 

    Fiat (FIATY.PK) wants to increase its exports to the U.S. as overcapacity in Europe leaves it with plenty of cars to offload, with CEO Sergio Marchionne saying it plans as many as 200 dealers in the U.S. over the next year. As opposed to Europe's slumping automobile demand, sales in the U.S have improved this year to the point that a few bullish analysts are calling for June sales numbers to come in north of the 14M mark when automakers report tomorrow.

    Shares of Best Buy (BBY +8.1%) keep trading higher even after a report from Reuters dismisses with an air of confidence theearlier chatter that Richard Schulze is close to pitching the Best Buy board on a buyout plan. With shares of BBY up close to 30% from their monthly lows, more skeptics are coming out of the woodwork with the take that even if a leveraged buyout offer flies, the premium may be slim to none.

    McDonald's (MCD -0.7%) plots a new strategy to highlight chicken items on its menu to appease budget-minded consumers and to take advantage of the perception that it's a healthier option than beef items. Based on USDA forecasts, chicken consumption will be up 2.2% in 2013, while beef intake falls 1.7%.

    Coca-Cola (KO +0.7%) will see its zero-calorie Vitaminwater be sold in Subway restaurants across the U.S. beginning in August. The deal with the world's largest fast food chain, as ranked by number of locations, could add to Vitaminwater's already solid 28% sales growth pace.

    Piper Jaffray looks at other potential takeout candidates in the biotech space post-Amylin, highlighting BioMarin (BMRN +3.8%), Affymax (AFFY +1%), Theravance (THRX +8.3%), and Rigel Pharmaceuticals (RIGL +2.3%) all as potential candidates. Piper notes that BioMarin could fetch as much as $79 per share, and notes that Japanese drug heavyweight Takeda Pharmaceuticals (TKPYY.PK) could be the most likely suitor for Affymax.

    More on Barclays' downgrade of OpenTable (OPEN -11%): analyst Mark May estimates Q2 reservations and restaurant additions will come in at 30M and 622, respectively, below consensus estimates of 30.9M and 740. May expects these shortfalls, attributed to macro and restaurant industry trends, to result in a Q2 miss, but says he remains positive on OpenTable's long-term growth and competitive positioning. 

    Now Anonymous is doing sector research for us!  Qihoo 360 (QIHU -5.4%) dives after hacker group Anonymous becomes the latest to issue a report questioning the company's traffic data for its hao.360.cn portal. Anonymous claims Qihoo recently removed code that was installed several months ago so that comScore could measure its traffic, and did so without ever publishing comScore's results. Citron Research and SA's Richard N. Davis have already questioned Qihoo's traffic stats.

    Facebook's (FBcreation of .facebook e-mail addresses for its 900M+ users is turning into a PR fiasco. Not only are many users upset the new addresses have become their default e-mail option (including for Facebook contact info on mobile devices), complaints have emerged that e-mails are being lost, failing to appear even in Facebook's messages inbox. Facebook attributes such complaints to user "confusion" over where e-mails end up. [

    I called this years ago:  U.S. consumers spent $3.4B on video games in Q1, per NPD, but $1.38B of that went to "digital games" – downloads, subscriptions, and mobile and social games – and another $525M was spent on used and rental games. Just $1.5B was spent on new retail physical game purchases, as demand continues to slump. Hence the efforts of EA and Activision to diversify into mobile publishingFacebook gamessubscription services, and anything else that might stick. (also)

    Amazon (AMZN) has acquired UpNext, developer of a mapping solution that blends 3D models of cities with extensive point-of-interest data, for an undisclosed sum. UpNext has released iOS and Android apps, and stands to address Amazon's need for built-in mapping software for the Kindle Fire, and perhaps a future smartphone. Consider this another headache for Google Maps (GOOG) and its valuable mobile ad real estate, following the recent loss of Apple's support.

    Google (GOOG) chairman Eric Schmidt has sent the EU a letter offering concessions in order to end its antitrust probe. The concessions center around four "concerns" the EU has about Google's behavior, the thorniest being preferential treatment for Google services within search results. (previous)

    Goldman survey provides more proof of Apple's (AAPL) sky-high customer loyalty. 88% of survey respondents owning at least one iOS device said their next mobile device purchase is "likely" or "highly likely" to be an Apple product. In addition, over half of respondents said they would only abandon Apple if a rival product was at least 50% cheaper, and 21% claimed they wouldn't jump ship at any price. (ChangeWave survey

    Three lunchtime reads:

    1) Bond market volatility and how to fight it

    2) Second quarter 2012: The beginning of an earnings collapse

    3) Krugman: Europe’s great illusion


  118. What's with the RUT?


  119. I had the worse weekend in a year but making on an up that was sure to be down helps!


  120. ECB/ Nice!  I should have realized that financial crises were job creators for crisis management organizations? It's an ill wind that blows no one good.


  121. What a big stick into the close.  Volume finishing at 104M on the Dow made it easy.  

    Long shot/ZZ – Well it's always a possibility, as is $2,000 gold.  Nothing wrong with playing the slots as long as you have a sensible budget and expect to lose.  

    Correction/Sun – Yep, if we get one, we can go shopping and, if we don't get one, we can still find plenty of relative bargains.  

    FHA/Ink – Well that's a little tricky with so many people having had problems the past few years.  That's the problem with any hard and fast rules on who gets credit – there's no replacement for actual people looking at each individual's history and getting to know them like we used to in the bad old days.  

    TZA/Zip – Stay away from the ones that don't have strikes every Dollar.  They were from some kind of split and are very thinly traded and carry cash obligations.  You would have to talk to an options specialist at your brokers to get all the rules but best to just stay away from odd options as a rule.  


  122. Zipla / TZA – Weeklies I believe


  123. TZA – and I stand corrected from our mentor!


  124. Rumor that CHK is under DOJ investigation for colluding with Encana in on a Michigan land auction in 2010.  They just cant seem to leave this company alone for one day!   


  125. Where do I find Peter D's portfolio?


  126. Maya1/Peter D's portfolio, it's in stjeanluc's 9:53am post.


  127. Maya, you can also find a sheet for Peter Strangle portfolio at:

    https://docs.google.com/spreadsheet/ccc?key=0Anwf9je9MizqdGQzN2NZUjNfdjhrbjFwWlc1eDYtWnc


  128. CHK / lnk – I guess they will leave it alone when they stop behaving like they do. What if they did collude with Encana? 


  129. Phil. Savi – Las Vegas in November is a sure thing, correct? I am getting a good price for a direct flight and would like to book now. The dates are 10-12, right. 


  130. As expected, very lame volumes.


  131. Here is the updated Income Portfolio. I hope I have everything now… Thanks for all the help!


  132. MT – looking for a pullback to 14.35ish but very tempting buy/write as current price of 15.39 and selling the jan14 13/15 put/call strangle for $6.22. gives a 9.17 entry yielding 8% dividend. If taken at $15 in 2014, get a 63% LTCG or if put to you at $13, avg goes to $11.08 which is still at 28% discount to today's price.   Heck this is very very tempting as is..!


  133. Thanks for keeping track of all the portfolios StJean.  Income portfolio doing quite well so far.


  134. CHK – The WSJ article on 6/25 made it sound like the collusion w/ Encana was limited to land lease deals in Michigan. Article also stated that CHK spent $400MM on Michigan leases, so in my opinion, the potential "collusion damages" may be minimal compared to other issues.  That said, the "Never just one Cockroach" theory should be considered across other lease deals.  Most municipalities seem to get pretty smart when it comes to negotiating their mineral leases ( at least in TX ), so my guess would be they didn't get too much over on anyone.  Market shrugged off the news today.  Would have been a nice little dip to buy on.


  135. Bobhu/Stj
    thanks!


  136.   Interview on Morningstar with the head of Bestinver and the head of Alken, two of my favorite funds.  FWIW.  http://www.morningstar.es/es/videocenter/videoCenter.aspx?id=557966


  137. P.S. — The interview is in English, although somewhat accented, to be sure.


  138. And since it's late enough not to offend too many people, what is this little "brought to you by" note below the comment box?  It's new, right?  Does it mean "F**cked editor, or is it "F**d Ckeditor"?  I suppose the former, since it's a "plugin."


  139. st.jeanluc:
    I'm not sure the X sold puts were ever priced at $5.90 in the Income Port..
     

    jfawcett
    July 2nd, 2012 at 2:17 pm | PermalinkIgnore this user
    Phil / Income Port – X is at 5.05, HPQ filled at 5.70.  What do you think on X??
    Phil
    July 2nd, 2012 at 3:26 pm | PermalinkIgnore this user

    X/JFaw – X is one of the big pension stocks that should get a positive boost from the accounting change.  Keep in mind it's artificial so, if we get a nice move up on X over adjusted earnings – I'd take that and run.  On the other hand, the auto cycle is on the up and if the G20 puts a couple of Trillion into infrastructure – it may be time to fire up the smelters again so that's why I do like X long-term and selling the 2014 $20 puts for $5 nets you in at a pretty nice $15. 


  140. X/dclark:  my puts filled at $5.90 and was as high as $6.10, I think, at one point last week, but it was only for a day or so before it bounced back. 


  141. zer i totally didn't have the balls to have that question THANKS!


  142. x/dclark My X puts filled at 5.70  a few weeks back and tried to get get a few more last week at 5.90 but they never filled


  143. **cough** **SONY** **hack** **PARAMOUNT** **cough**
    Wang Jianlin of China's Wanda Group upbeat on AMC deal, expansion

    "We welcome large-scale studios and filmmakers to work with Wanda," the entrepreneur said. "We would like to invest in film production, and we'd like to partner with directors, actors and filmmakers from Hollywood. They need to know the Chinese market is growing very fast, and they should come as early as possible."


  144. More protests in China turning violent.  This time in a "Not-In-My-Backyard" protest in Szechuan province against a proposed Copper plant:
    Information Emerges About Yesterday’s Shifang Protest, Plus Videos

     
    My heart goes out to the protestors, but I am glad to see that the common folk are forming an independent movement and fighting back against perceived injustices.  I pray the government has enough scruples to understand that the whole world is watching and judging.


  145. Good morning!

    6:01 AM Overseas: Japan +0.7%. Hong Kong +1.5%. China +0.1%. India +0.1%. London +0.3%. Paris +0.2%. Frankfurt +0.8%.

    Oil is off to the races at $86 with the Dollar right on the 82 line.  Euro at $1.59, Pound $1.568, 79.80 Yen to the buck and EUR/CHF at 1.2011, which is a bit stronger than they want.  

    Our Futures are flat and generally there is a lot of rumors on stimulus globally based on the "news is so bad it must be good" model.  Of course I don't trust the rally but it's hard to bet against it so cash remains king until waiting is fulfilled.

    Gasoline also popping at $2.675 but hardly a shocker as it's going to set prices at the pumps when people head off to the beach so of course a 10% pop since yesterday's lows to screw over 300M Americans.  Don't worry – no arrests will be made. 

    Gold $1,612, silver $28, copper $3.53 and nat gas $2.81 – could have just stayed long on them from $2.20 and called it a year…

    We should get a nice move out of the Dow and S&P as the energy and mining sector cheers up but they are both flat (12,775 on /YM and 1,358 on /ES) and can be played up with very tight stops.  Watch the Dollar at that 82 line – we don't want to see it taking off.  

    Very important to keep in mind that it's all BS and the economy is still pretty weak:  

    The June Discover U.S. Spending Monitor drops to 90.7 from 95.5 previously, led by a drop in the number seeing the economy improving from 33% to 29%. This is translating into spending intentions, with higher percentages of respondents expecting to spend less on discretionary and major purchases. (PR

    Eurozone May PPI comes in at -0.5% M/M and +2.3% Y/Y. Consensus was for +2.5% Y/Y. (PR - .pdf)

    Tuesday's economic calendar:

    Auto sales

    7:45 ICSC Retail Store Sales

    8:55 Redbook Chain Store Sales

    10:00 Factory Orders


  146. FCK Editor/ZZ – Started coming up in the new version of WordPress.  That's the name of the thing that drives the comment box.  Maybe Matt can make it go away.  

    X/Jfaw – That comment was two weeks after a very easy fill on the original trade.  X was much lower on the 25th than our original pick.  That doesn't stop us from still liking the same trade, even at a lower price, a couple of weeks later for people who were tragically late to the game.  

    Wanda/Kinki – I didn't read the article but if Wanda is the name of a Chinese hooker – that quote has a whole different tone.  8)

    Good luck with that scruples in China thing…  


  147. Wanda/Phil: ROFLMAO-TSE-DONG!


  148. Phil / X – I agree on being late, I missed that entry due to working during the day.  If I remember correctly, I placed an advanced order the next day and did not fill so I didn't want to chase the bus.  I probably would have filled better than my 5.05 entry if I would have persisted.  Thanks for the picks, they are spot on even at this price.  BTW…  I am on vacation so I can participate a little this week.


  149. Tragically Late/Phil – LOL! when cash is king and there is always another trade… how can one be tragically late! ;-)