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Wednesday – Stimulus Rumors Trump the APPLocalypse – For Now

AAPL missed!

Fortunately, we were well-prepared for this eventuality as I had said way back on July 10th, in Member Chat, that AAPL was "too big to succeed" (commentary also featured in Stock World Weekly on the 15th).  I also said, at the time regarding AAPL: "Where was my buy point – $555? That's a long way down to support if they fail $600."  We had called for taking the bullish AAPL money and running the previous Thursday (July 5th) in my morning Alert to Members, as they topped out that morning at about $610.  We were a bit early with that call (AAPL hit $619.87 the next week) but, on the whole, our bearish flip on AAPL (and the broader market) has served us well.  

In yesterday's Member Chat, we had one bearish earnings spread on AAPL as well as an aggressive play on SQQQ, the Nasdaq ultra-short, because we expected the Nasdaq to fail along with AAPL (and AMZN is next!) on their earnings.  Our SQQQ trade grabbed the Sept $50/60 bull call spread, offset by short puts on some stocks we are accumulating for our Income Portfolio for a net free trade but our dreams of a big pay-off on the spread will be put on hold today as a sudden burst of stimulus talk has turned the indexes back up, with the Dow now 200 points off the bottom in the Futures (7:50) at 12,660.  

SPY 5 MINUTEI already sent out an Alert to our Members this morning, pointing out what manipulated BS this was as the WSJ's Jon Hilsenrath issued what amounted to nothing more than some well-timed speculation on imminent Fed action into yesterday's close that has been picked up by the MSM as a fact and popped the Dow a full 100 points into yesterday's close – erasing 1/2 of a disastrous day in minutes (see Dave Fry's SPY chart).  At the moment (7:54), the Dow Futures (/YM) make an excellent short below the 12,650 line so excuse me while I hit "publish" on this partial post so our Members can see it.

Anyway, so where was I?  Oh yes, market manipulation by Uncle Rupert and the WSJ is not unexpected with NWS reorganizing and looking for good valuations on the company split.  I pointed out to Members seven other articles in which Hilsenrath has cried "Wolf" or, in this case "QE3" in the past two months – each time, coincidentally, I'm sure, right when the market needed a little push.  

That was followed by an IMF release that urged China to "boost consumption," a statement from Japan's Finance Ministry that Yentervention has been effective and they're ready to do it again and ECB Council Member Ewald Nowotny telling Bloomberg (in case they didn't run the WSJ opinion as a fact) that "there are "pro arguments" for giving the eurozone's ESM permanent rescue fund a banking license," which would essentially allow the ESM to lever up their $1Tn 8-10 times – how's that for a stimulus rumor?  

$INDU WEEKLYOf course this all sent the markets flying and no arrests will be made but I warned our Members to take this with a Lot's wife-sized grain of salt, saying: 

What complete BS.  What's really scary is how coordinated this is.  There are men who meet in back rooms and make the phone calls that pull the strings that jerk the Global economy back and forth.  

Once again, just talk from the G20 – no concrete action so it's a sugar rush and nothing more – we'll just crash again as soon as the buzz wears off if no actual action is taken but a good example of how you can't ever have all your eggs in one basket in this market and why I like to have just a couple of eggs in play with the other 10 eggs safely in the container – where we can always get them if we need them but first – let's just try to master juggling two in this market chop!  

So the game here is to get you to believe that the Dow's rising 200 dma is strong support and you should ignore the fact that the 50 dma is about to crash right through it in what many TA people consider a pretty bearish signal.  Note the stronger volume on the sell-off, with our best days of the month coming to the downside and now we'll see (assuming it sticks) what kind of volume conviction an up move might have today.

EWP WEEKLYI say IF it sticks because, so far (8:15), I'm not too impressed with the very small bump in the Futures (0.5-1% with the Nas still down 0.5%) we're getting from such a massively coordinated set of stimulus rumors (no actual stimulus, just rumors).  That's just not a good sign if we can only fool some of the people all of the time because we've been fooling all of the people some of the time for ages and most of them are sick of it and now we're just left with some fools who can be suckered in all of the time but – what happens when they run out of money – or patience?

Note on Dave's EWP chart for Spain that we just failed long-term support at $20 (the 2009 spike lows!) with a big 5.45% dip yesterday.  Italy is no better (EWI) and the BRICs are failing too with commodity prices back in the toilet as Global demand slows.  

While the MSM in America celebrates our housing recovery (down 80% to 20% and now up 2% to 20.4% – woo hoo!), France is falling off a cliff with first-half mortgage lending dropping 33% from last year, which wasn't so hot either.  The decline can be attributed to a collapse in demand, a lack of government aid, and a reduction in lending as a result of refinancing difficulties at banks – none of which are likely to get better in the second half.  

Meanwhile, the IMF, in the above-mentioned report, said China’s slowing economy faces significant downside risks and relies too much on investment.  China is currently flooding the steel market by exporting it at at the highest level in two years, exacerbating a global glut that may hurt competitors.  Monthly shipments abroad rose to 8.7 percent of domestic output last month, the highest proportion since July 2010. Chinese steel mills, set for a record production in 2012, are ramping up overseas sales to avoid a softer domestic market, where prices for the commodity have dropped to a two-year low.  Steel is a relatively minor issue compared to the unused copper that is stockpiled in China – God help us all if they begin to release that!  

RSX WEEKLYTypical of the BRICs (who we are short on), Russia's economy is more vulnerable to the effects of the euro zone's fiscal and banking crises as commodity prices fall, according to the European Bank for Reconstruction and Development. Starting in October, the EBRD slashed growth forecasts for eight economies in Central Europe, or CEB, and the Baltics and seven economies in Southeastern Europe, or SEE, citing their close trade and financial links to the euro zone.

The Global slowdown is blowing back to Japan, who had a 2.3% annual decline in exports and, with an export-driven GDP – well, you do the math…  Ambrose Pritchard warns "Europe is sleepwalking towards imminent disaster" echoing Hugh Hendry's comments we discussed last Wednesday that " Bad things are going to happen."  Pritchard and Hendry are not Nouriel Roubini – people who see doom and gloom around every corner.  Neither am I for that matter but when I look around a corner and I do see DOOM – what do you expect me to tell you?

Einstein said "If you are out to describe the truth, leave elegance to the tailor" and Buddha said "There are only two mistakes one can make along the road to truth; not going all the way, and not starting."  Let's not ignore what's going on in the World just because it is unpleasant and uncomfortable.  I see my reader numbers dropping off every day I fail to come up with something bullish to say but, fortunately, I have set up my business where I don't have to be a whore for ratings – but that is the entire business model of the MSM.

Be very careful out there!

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  1. Oil Lines

    R3 – 90.81
    R2 – 89.95
    R1 – 89.15
    PP – 88.29
    S1 – 87.49
    S2 – 86.63
    S3 – 85.83

  2. APPL / Phil
    Just trying to learn.  You call the +4 Aug 610 Calls and -5 July4 610 Calls ……  "a bearish earnings spread" ?  Apple went down 5% and I'm losing money on this trade.   It seems this was bullish playing a IV crush.  TIA for the explain.

  3. Phil:
    Seems like another good opp. to take a small poke at shorting USO after inventories? They keep driving the dollar down with stimulus talk we may be back over $90(crude) again.

  4. Over the last few days I have been having problems with keeping Phil's page stable on my I pad. It keeps bouncing up or down.  Not having the same problem w OPTs  page.  Any solution for this problem?

  5. Reporting tonight are the following big movers:


    CROX and WDC seem to be the only ones really mispriced with options right now as they anticipate larger than average moves. Options are predicting over 13% move for CROX when they usually move about 6.5% while they predict a 9.5% move for WDC against a 5.84 average.

  6. Good Morning!

  7. ipad / dent123
    Same with my ipad.  It seems to come and go over the past month.

  8. AAPL,
    Great call on it yesterday Phil. I took the 1st 590 trade before you changed to 610 and actually worked out better for me – best trade of the year I think. Sold 3 590 weekly calls and bought 2 Aug 590 calls.
     I imagine I just let premium crush out right? Or cover 1 or 2?  Khap Kuhn Krap (thanks alot)
    ps, Iflan, mocha, sj, or anyone else comments welcome also

  9. Dent123. I have been having the same problem off and on for several days. 

  10. Ipad – I have the issue whenever Phil puts a video in the main post.

  11. I'm transferring my trading account. The most efficient way to do it is to go flat and just move funds, which only involves 1-2 days of down time. I only have one position at the moment (AMZN puts) and I'm thinking if I have an opportunity to exit those Thursday or early Friday, then I would submit the transfer form and should be good to go on Monday, Tuesday at the latest if Murphy shows up. Good timing? Or wait until the August dog days?

  12. AAPL / Phil
    Sorry.  Calculated the drop in the long leg wrong.  Will be ok.  Thanks.

  13. FYI – and enjoy….for now. a confirmed Hindenburg Omen Stock Market Crash signal was generated Tuesday. We now have a cluster of two Hindenburg Omen observations within a 36 day period, which means there is a "confirmed" Hindenburg Omen on the clock.

  14. xfer / Bird
    I've transferred accounts a few times.  Just FYI, all equities and options move very clean.  You just have to re enter your cost basis details for each in your new account.  That alone was the biggest pain, but better than possibly having to take cap gains when you are not ready or want it.

  15. Marketwatch: Olympic websites, tweets, and blogs may hack your computer:

  16. Is anyone gonna play the long bounce on NFLX after a $17 drop pre market?

  17. Yawn – that was a sleepy open on the bell. i was expecting fireworks.

  18. AAPL Put – Well, lost about what I would in poker on that put.  Bought for 1.85, sold for 1.  Vol crush, theta decay is amazing on those things.  

  19. You gotta admit, this is a heck of a prop job.

  20. Is anyone going long on NFLX post earnings release?

  21. Are we doing anything with F?  Jan 14 puts $8 @ 1.25 and Jan 14 $10 Puts @ $2.25.
    Also Visa President sold 115,000 share on 7/1612 and CEO 265,000 shares on 7/9/12. Looks like they are distributing to the 99%.

  22. Good morning!  

    Dollar down at 83.70 with 83.65 the low that's holding so far (down from 84.25) so that's most of the "rally" right there.  

    "You have been warned," writes Nomura's Bob "the bear" Janjuah, expecting a 20-25% decline in the S&P over the next quarter. Agreeing with consensus about deteriorating economic growth seemingly everywhere, Janjuah believes the market is too optimistic about the timing, size, and efficacy of any government policy moves.

    I couldn't not have said it better myself.  YOU HAVE BEEN WARNED – this is an ugly, scary market and what we are doing is GAMBLING, not investing.  Investing would be 95% cash on the side and 5% MAYBE for messing around with the market. 

    Fortunately, this should time out very well with the BBBW fund launch in September as that should be an excellent time to deploy some cash.  August – not so much… 

    AAPL buyers are coming in already and the Nas isn't even down!  That should give us highs for the day until AAPL runs out of gas and then we can add some short plays.  

    CAT and BA had good numbers.  BA we expected but CAT is a bit of a surprise.  

    The Euro is topping out at $1.215 so let's watch that line and the Pound needs to get back over $1.55 ($1.5485) to show us something real.  It's 78.22 Yen to the Dollar and the BOJ just indicated they'll be defending 78 so that puts a tight floor on the Dollar around 83.50, which means these rallies are not likely to have a lot of legs and again – our logic takes us back to this being a good shorting opportunity.  

    In our $25KPs, I'd like to add 20 DIA Aug $124 puts at $1.12 with a stop at .92.

    Of course, I still like the Dow short (/YM) at 12,650.

    At the open: Dow +0.6% to 12693. S&P +0.45% to 1335. Nasdaq -0.29% to 2855.
    Treasurys: 30-year -0.18%. 10-yr -0.08%. 5-yr -0.02%.
    Commodities: Crude +0.23% to $88.70. Gold +1.53% to $1600.45.
    Currencies: Euro +0.77% vs. dollar. Yen +0.01%. Pound +0.09%.

    Market preview: Stock futures are mixed as earnings pull the indexes in different directions. Apple's (-4.6% miss is dragging down the Nasdaq Benchmark (-0.3%), while Caterpillar (+4.5%) and Boeing (+2.9%) are providing support for the Dow and S&P, which is+0.5%. Europe is higher after the ECB's says there are "pro arguments" for giving the ESM a banking license. Later: New Home Sales

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    10:00 New Home Sales

    10:30 EIA Petroleum Inventories

    1:00 PM Results of $35B, 5-Year Note Auction

  23. Iflan, what are you thoughts on PCLN decline of $22 this morning – buying opp?

  24. Readership/Phil -  "I see my reader numbers dropping off every day I fail to come up with something bullish to say…"
    There's such an innate bullish bias in human beings, kind of innocent and sweet actually. It took me many years to get over it, but I was motivated as it's just so much easier to make money on the short side. I'll reserve sweetness for my family – I'm a guerrilla warrior in the markets. Nimble & opportunistic.
    Just keep on keeping on Phil. F 'em if they can't take the truth.

  25. DIA puts moved away, 1.26 at 1.27, before I could fill. Sit tight I assume? (I hate to chase in this market – well, any market).

  26. That PCLN short put will need some help….

  27. Good Morning Phil, I need your smart brain to help my TLT position, I got assigned 8K shares of TLT today(for old TBT trades, 2X, 4X…., I was short 80 contracts of Jan. 13 $112 Puts).  Now, the Jan 13, $112 has 0 open interest and the bid is very low.  What is your idea(s) to deal with this?  TIA.

  28. Phil good point earlier. without the help of apple to prop up the markets, who would be the next likely canidate?

  29. HCBK with $0.15 earnings beating estimates of $0.14.  Stock is up around 1.5%.

  30. Phil/TLT, sorry, I was shorting the Jan. 13 $112 Calls.

  31. AAPL/CCS – I don't know how you can come up with that at 8:30 but currently, the weekly $610s are .20 so buy those back, of course and now you have 4 Aug $610s, now $3.35 ($1,340) and I believe you had a $1,175 purchase so up $135 is more than 10% despite AAPL falling a lot more than we thought.  Now, you could stick it out and hope AAPL recovers in the next 23 days but I'm not terribly confident or you could sell 3 of the Aug $605s for $4 ($1,200) and spend $1.40 to roll to the Sept $635s at $4.75 but that's a lot riskier than just getting out of course, or even letting it ride and hoping AAPL has some good news next week.  

    And what you said! 

    USO/DC – I'd wait to see how today goes.  As usual, we often get that run-up right into 10:30 tomorrow and, just as usually, we don't get a real drop until after the nat gas inventories.  

    Stability/Dent – That's a new one.  We don't have an IPad version of the site so it's some rendering thing with AAPL – hopefully one of our fine programming experts can tell us what's happening.  

    CROX/StJ – I like it.  5 Aug $15s can be sold for .60 ($300) against 3 Dec $17s at .80 ($240) for a fun earnings play.  You can also sell a Dec $13 put for $1.50 to fund most of the calls.  

    AAPL/Jomp – You are very welcome.  As above, you might want to work it a bit as AAPL is not going to go below $555 until I run out of money.   8)  

    Video/JJ – Maybe that's it but I don't get it on my "New" IPad 4G.

    AMZN/Bird – As noted above, I don't think you'll miss much if you take Aug off unless you like to be short.  

    NFLX/Ging – No thanks. 

    10 am Dow volume 22M – not too exciting.  

    Home sales failure!   Prices down 3.2% too…

     June New Home Sales: 350K vs. 370K expected, 382K (revised) prior.

    Not to mention 350K is down from 1.5M at the peak so the whole thing is nonsense with 1M (1% replacement of 110M US homes not even accounting for population growth) being "normal".  

    And wheeeee!  

  32. Anybody know when AMZN reports? Are we still looking at the Oct. 180 Puts? 

  33. Hi – i was late to the table on the SQQQs yesterday and have no hedge at the moment. Do you have a fresh horse?
    Thank you

  34. stjean / Are you bullish CROX and WDC into earnings?

  35. AAPL / Burr – The lesson here is to sell premium for the weeklies on earnings or buy longer dated puts. The August 550 puts are up from yesterday for example. The IV crush combined with the normal weekly decay is really brutal!

  36. Anyone having refresh problems today (aside from the iPad thing)?  Seems like the site is really bogged down.

  37. Nevermind. That post when through fast and a couple refreshes did too.  Uh oh, fart.

  38. CROX & WDC / Amalfi – I am neutral… CROX doesn't have weeklies so I don't want to play them but with WDC I will try a double calendar (very small position). I am not crazy about it, just for fun.

  39. Phil/LL – any thoughts on LL. They have had quite a run . Good earnings but up 90% in 12 months. 

  40. BWLD/ 25k: any changes in this strategy- down 11% this AM--

  41. gotta love the vix heading down when the true volitility this AM has been rather tumultuous. guess it just is not volitility…F has been a dime up and down already!

  42. I love Love LOVE selling premium on momo's!!! :-)

  43. Phil/CROX,
    Could you please elaborate on the CROX trade?  What's the deal with sell 5 calls vs. buying 3?  Also, with CROX at $14 isn't the $15 strike a little close for comfort?

  44. Deck making year's lows.  Remember when they were one of the frustrating shorts on our last Long Put List?  That was over $100 (now $41.50)!   Don't you just love Fundamentals – they aren't always quick but they are always there….

    AAPL/Burr – What was that, an Aug put or a weekly?  That's why I like those 3-month out puts – worth sacrificing some leverage to avoid the premium crush.  

    Speaking of premium – VIX 20.19 – no one seems very worried.  TLT at $132.13 – those guys are worried, at least.  

    Prop/Bird – Epic prop job. 

    F/Den – I like them long-term but it's going to be a rough ride with Europe and Asia shutting down.  V and MA are still tops on the Long Put List for me – consumers are dead, walking but dead.  

    PCLN/Ging – Reaction to TZOO bad earnings (and PCLN's general overpricedness).  

    Truth/Bird – I agree but having a web site like this makes me much more aware of the pressure these MSM guys are under (as well as my fellow bloggers and newsletter writers).  No one wants to be told bad news – amazingly, people would rather lose money on bullish bets than make money on the bear side.  That's why it's 90% of the market.   I'm in no way a pessimist but 2008 taught me you have to be very forceful when you see bad things happening or people tend to ignore it and that's a disservice to our Members so I now tend to hammer these unpleasantries home and yes, F the ratings!  

    $25KPA – Tricky.  Don't like so many positions so I want to clear some out but nothing I don't like.  I guess we're done with the BWLD Sept $85 calls and we can hang on to the March $95s for now and see if they bounce but a stop at $2 on those.  On AAPL, I want to leave the weeklies, may as well get that last $135 on those and we'll see what happens next week on the rest (we have the SQQQ hedge anyway).  That's it.  

    DIA/Bird – Coming back again. 

    TLT/Bob – You were forced to ?buy? TLT at $112?  It's $132 – sell!  Am I missing something?  

    Next/Mackey – Then it falls to Dow components.  Also easy to manipulate.  

    HCBK/Kinki – That's a relief. 

  45. Speaking of DECK, they report tomorrow and options are implying a 14% move! They usually move about 10%.

  46. Lflan,
    Thanks for the reminder to buy back the NFLX 67.5 puts!  When I saw your post yesterday, I thought "No way NFLX will go down that much!", but since discipline is discipline I still covered the puts.  And today NFLX is at $63!  LOL & thanks again!

  47. Phil, I bought some Jan 13 $12.50 GLW calls for $1.67 (currently at $0.53) and sold the Jan 14 $12 puts for $1.84 (currently at $2.43). GLW has been falling and is trading around $11.50. Would you adjust this position yet or is it too early?

  48. Long list of glamors that have had steep declines on misses. What's next? How about WFM? Pure gamble?

  49. PCLN/ Long Put list:  Great thx!

  50. Stjeanluc,
    What strikes are you using for the WDC trade?  28C/35P?

  51. WDC / Wappler – 29/34

  52. Phil,
    The AAPL Sept 480 / 530 bull call spread is 44.50.  Margin is $4,500 so 10% on margin for 7 weeks.  If we are confident in a $550 value for AAPL, does this make sense?

  53. Truth/Phil – yeah, but I don't understand it. I'm sitting here happily making bucks on the long put list; what's not to like?

  54. When it comes to rallies, this market is NoMoNoMo.

  55. Phil,
    As things continue to deteriorate – I wonder if it is worth keeping an eye on tobacco for an eventual long-term entry?
    LO is down 4.5% on a another profit miss today. 
    Is it worth a shot now – or continue to wait?  Thx.

  56. Phil
    First, hard to imagine many members here being surprised or turned away by bearish sentiments.  We just want to know WHEN its going down. I for one will have more confidence in being bullish when I see anything on the fundamental side driving the market more than Fed BS. But having just read "Dark Pools" I might be afraid to ever be net long again.  
    You seem pretty sure of a bottom for AAPL at around 550, and I agree.  I am looking at selling some puts at that level, which are fairly juicy now.  Do you have advice?

  57. Truth/Snow – I used to have clients that didn't like selling premium because it's a zero sum game. That's so nice – and so muppetty.

  58. BTU sucking today.  That China steel dumping thing bad for coal as well as the obvious X and MT.  

    Oil diving on huge inventory build – not even a head-fake:

     EIA Petroleum Inventories: Crude +2.7M barrels vs. consensus of -0.2M. Gasoline +4.1M vs. consensus of +0.1M. Distillates +1.7M vs. consensus of +0.6M. 

    TLT/Bob – Ah, that's very different then.  You let them go miles too far in the money ages ago.    We sell PREMIUM, not POSITION.  Now you are short 8,000 shares, right?  Well, you can sell the Jan $132 puts for $7.20 and that raises your basis to $119.20 plus whatever you collected on that sale.  You can also sell the Jan $135 calls for $4 but I'd keep a stop on those at $5 as you REALLY don't want to be assigned more.  That would run your basis up to $123.20 plus your original sale and that's about the best I can see if you want to try to get even with $1M worth of TLT.  Or, you can take the loss and Just pick up 80 Jan $136/126 bear put spreads at $5.50 and those get $36,000 back if TLT calms down and you can put the other $950,000 to work on a more diversified set.  

    AMZN/Amalfi – Tomorrow.  

    Hedge/Morx – Well the RUT popped nicely so how about selling TZA Sept $18 puts for $1.25 and buying the Sept $15/20 bull call spread for $3 for net $1.75 on the $5 spread that's 100% in the money at RUT 770 so anything other than the RUT going up gives you a 185% gain.  You can be more aggressive with the $20/26 bull call spread at $1.25 for a free shot at $6 but then you only get paid if the RUT goes down.  

    LL/Ksone – Good business but a bit pricey.  Growth is tremendous and I wouldn't bet against them but late to the party for my tastes at $39.  Catch another dip like the one they had last summer and THEN we may have a nice entry.  

    BWLD/Newt – Noted above.Hopefully $70 holds and they come back to $75.

    VIX/Sage – The VIX is more a measure of how many puts are being bought than anything else.  Not a real indicator of volatility.  

    Love is all you need Diamond. 

    CROX/Wappler – That's what I call a ratio backspread and there's no rule to them other than where I think the stock will be after earnings.  We play for the most premium selling we can be comfortable with and the long position is simply the least insurance we can bear having in case we're wrong.  

    DECK/StJ – Interesting on them.  I think it's worthwhile to sell the Sept $35 puts at $2.   Net $33 is 20% down from here and they've already been pre-beaten.  

    GLW/Real – I love them but I'd wait until next week before committing more cash as this market could go down much further (which will only make your adjustment cheaper if you look at it that way).  GLW of course heading lower on lower Phone sales but pad sales have more glass and they are up and new IPhone out one day so I still like them.  

    WFM/Bird – Interesting choice.  I would love it but they are already down 15% in past 10 days.  

    You're welcome Newt.  

    AAPL/Pete- Yes, I like it (if you are into those, which I'm not) but also I'd wait and see where we are when the music stops on this sell-off.  

    What's not to like/Snow – People are just too emotional about the markets.  They spend a lot of time finding stocks to "like" and then they nurture them with money and form attachments.  It's the same way gamblers fixate on certain numbers – just human nature overriding logic.

    Tobacco/Gbase – Yes, MO held up really well but those stocks aren't very cheap.   If you remind me after hours, I can look into LO as I don't really know why they sold off and I'd want to see where the problems are.  

    Die AMZN, DIE!!!!   Actually, if they keep dropping like this we won't be able to hold them through earnings as the risk/reward will get skewed. 

  59. Phil/TLT,
    remember when TLT "never" stayed above 120-125 range for very long? I still don't feel panic here.  Pharm once said that he thought TLT could see $135 – 140, which seemed nuts at the time but I think it could happen.

  60. phil/AMZN, any plays you recommend on AMZN at this time? TIA

  61. If you missed the SVU roll yesterday, there is still time today!

  62. SVU  trading like it's about to file a BK.  Any new bad news?

  63. Phil – on AMZN, this is a good conceptual situation that happens a lot.  The puts are up nicely, so we don't want to be greedy, but we risk losing everything if they surprise to the upside.  On the other hand, if we still believe in the original premise that they're going to fail spectacularly, does it make sense to reorient the risk-reward relationship by taking some money off the table by selling the 190 or 195 puts?  We can pull our cost out and eliminate our risk.  That seems close to the "when in doubt sell half" sub rule of rule #1

  64. 10:00 AM On the hour: Dow +0.52%. 10-yr -0.04%. Euro +0.53%vs. dollar. Crude -0.14% to $88.40. Gold +1.49% to $1599.75.

    Bridgewater Sees ‘Dangerous Dynamic’ as Largest Economies Slow (Bloomberg)

    Blue-chips raise recession fears (

    Bubbles without Markets (Project Syndicate)

    The U.S. Economic Policy Debate Is a Sham (Bloomberg)

    Yes, Virginia, the Government Invented the Internet (PC Mag)

    More on the New Home Sales miss: Sales fell 8.4% from May and gained 15.1% from June 2011. Median sales price of $232.6K (lowest since January), -3.2% Y/Y, market had been expecting a gain. Months supply rises to 4.9 from 4.5 in May (6.6 one year ago). (report)

    WTI crude tumbles 1.1% to $87.56 after the EIA reports an unexpected rise in oil inventory and greater-than-expected bumps in product inventories. USO -1.3%. Gasoline ETF: UGA -2.1%.

    Gold's performance over the past year (flat) actually isn't so bad given the dollar has risen 12%, according to JPMorgan's gold team. Still the group remains cautious on the metal and miners (especially amidst reporting season) as declining inflation rates suggest monetary stimulus isn't as forceful as commonly believed.

    I warned you, but did you listen to me? Oh nooooo:   Water is the new gold, a big commodity bet (Market Watch)

    The CBI quarterly survey continues to show U.K. growth in the 3 months ending in June, a contrast to earlier government GDP figures showing contraction. Commenting on the GDP print, CBI Director-General John Cridland says, "When I talk to businesses on the ground … the overwhelming view is that right now the economy is flat rather than negative."

    Repeating his call for a sharply lower euro to help save EMU, Martin Feldstein notices EU officials he speaks with are starting to nod their heads in agreement (whereas they used to wave him off as a "eurosceptic"). The euro's recent decline should not be seen as pointing to EMU collapse, but as realization of the necessity for a weaker currency.

    Banks' non-performing loans in the Chinese enterprise hub of Wenzhou jump in June to 2.69% from 1.33% at the year's start and 0.37% in June 2011. A municipal honcho says an ongoing credit crunch is behind the surge and the government is on the case. (moreon Wenzhou)

    The San Bernardino City Council approves the suspensionof debt payments and freezing of filling vacancies – saving $5.4M in July alone. It's money the city will need to get through to filing for bankruptcy. The moves are just a start as the city needs to cut 30% of the budget to survive without debt financing

    USA: State & County QuickFacts (United States Census)

    A Closer Look at Middle-Class Decline (Economix)

    Investors starved for income should be wary of overpaying for yield, particularly when it comes to utilities, Russ Koesterich of iShares warns. Utilities trade at a discount of ~25% on average to the S&P 500, but they're now trading at a premium of more than 8%. 

    Shareholder Buybacks Aren’t Effective (Crossing Wall Street)

    Polycom (PLCM -15.1%) crumbles to levels last seen in '09following its Q2 report. While results beat estimates, the company guided on its earnings call for revenue of $325M-$335M and EPS of $0.06-$0.09, below a consensus of $364.7M and $0.21. Polycom issued a Q1 warning and weak Q2 guidance in April; the company is struggling with soft Euro demand and share losses to Cisco. Wells Fargo is downgrading to Underperform, and is worried aboutcompetition from software-centric videoconferencing solutions.

    Online travel names sell off in response to TripAdvisor's (TRIP -16.5%Q2 revenue missPCLN -3.9%EXPE -3.9%OWW-1.2%. During its earnings call, TripAdvisor noted international ad rates fell, and that efforts to improve "traffic quality" also took a toll. The company reiterated guidance for "high teens" 2012 revenue growth, but that's below a 21% consensus. Benchmark is worried aggressive search ad spending by travel agencies could be hurting TripAdvisor's search ad returns.

    No mercy is shown to Netflix (NFLX -21.5%) after the company's Q2 DVD sub losses exceed its domestic streaming gains, and its guidance for a 1M-1.8M Q3 increase in domestic streaming subs makes full-year guidance for 7M adds look dubious. Netflix's guidance for another 600K-900K DVD subscriber losses was also uninspiring. Nonetheless, the company says it's driven to expand into continental Europe, even if it wipes out near-term profits. (transcript) - Can you believe I used to have to argue that they weren't worth $250?  That was just 12 months ago!   

    Sell-side reports pour in on Apple (AAPL -4.9%): most defend the company, and suggest investors look ahead to the next-gen iPhone and iPad Mini. William Blair notes Apple trades at just 9x its FY13 EPS estimate (exc. cash). Sterne Agee maintains a $780 PT, but is worried the new iPad's retina display is affecting margins. JMP, which maintains a rare Neutral rating, thinks "compelling Android alternatives" are as much of a problem as next-gen iPhone anticipation. (more) (transcript

    Study: Awe-Inspiring Experiences Change Our Perception of Time (The Atlantic)

  65. no question we are in the twilight zone, but i tend to think lower into close….msb not having normal impact in xlf…big sloppy block buying and barely higher…not sure though…more stocks rising on volume today than in awhile

  66. phil isaw this too late is it too late to chase now at $1.31 ?  :
    In our $25KPs, I'd like to add 20 DIA Aug $124 puts at $1.12 with a stop at .92.
    Of course, I still like the Dow short (/YM) at 12,650.

  67. Mid-week update on the income portfolio as we have hedges that might  need to be adjusted:

  68. Buying the weekly V 120 puts around $ 1.20, expect earnings to disappoint tonight.

  69. See how ridiculous it is to talk about a housing turnaround?  We're a good 50% (and that chart includes condo units, which employ far less builders, etc) away from just getting back to the bottom of the 50-year range!  

    Bearish/Mike – Not our Members!  Hopefully I teach you all better than that.  I'm talking about free readers who only see my morning posts – it's amazing how fickle they are.  

    AAPL/Mike – I was hoping for more of a drop but I love selling the 2014 $450 puts, now $46.50 for a net $403.50 entry.  How can you not want AAPL for $403.50?  TOS says net margin is only $45 so is a 100% return on margin in 18 months if AAPL holds $450.   The $400 puts are not bad either at $31 (net $369) but the net margin on those it $40 so I'd rather collect the extra $15 for $5 more margin.  

    TLT/Canuck – People can panic into all sorts of things but can TLT sustain a negative rate of return for 2-year notes when we sell $50Bn of them a month?  You have to find $50Bn worth of investors, $600Bn a year, who are willing to LOSE about $3Bn in return for you giving back $597Bn in 24 months.  That's nuts – it's not sustainable.  

    AMZN/Lunar – Not now as we're down $10 from our entry.  I still think they blow earnings and the Sept $175 puts aren't so bad at $2.05 but they were $1.50 yesterday so not a nice entry.  

    SVU/Rkyrom – Motley Fool does yet another hatchet job on them.  I love their premise – "Sure it looks great on paper but – UNSPECIFIED FEARS – SELLSELLSELL!!!"  

    AMZN/Rdn – Yes, on the $25KP, I think we can kill the weekly $195 put, now $1.80, as that's a nice double and pays for 1/2 of our Oct puts, which we can leave on.  

    DMND getting crushed again.  

    Dow volume 52M coming into lunch.  

    DIA/Micro – Miles too late, I'm thinking of getting out.  In fact, in $25KP, let's raise those stops to $1.25 (now $1.32) on the DIA $124 puts.  We have other bear plays, this was just a stab in case we got a big sell-off.  

  70. Out of the AMZN OCT 180P at $4.00. Probably left a lot on the table, but I'm going to get this account transfer moving. Thanks for the rec Phil. Flat probably until Monday. Don't let this thing rally without me. :)

  71. Income Portfolio – No point in not buying back the TZA Aug $16 puts for .07.  While extremely unlikely it would be put to us – it leaves us open to sell more if we get a pop and better prices.  There's nothing else I feel like changing there (which is as it should be).  Thanks for update StJ – It's good to get some mid-week status.  

    AMZN/Bird – You're welcome.  Enjoy the time off.  

  72. IRA Portfolio update!

    We currently have CHK, ACI, MT, and CLF stock which not covered by any option sales.  So,

    SELL 4 CHK SEP 18 CALL for $1.31

    SELL 5 ACI AUG 6 CALL for $0.27

    SELL 2 MT AUG 15 CALL for $0.41

    SELL 1 CLF AUG 41 CALL for $1.93

  73. Sheila Bair is "flabbergasted" at Sandy Weill's comments on CNBS this morning on "breaking up the big banks"…..
    So was I, thankfully, I've learned not mutter WTF with a mouthful of coffee….. :)

  74. Yeah…first Sandy Weill and then we'll have Greenspan saying easy money was a mistake….lol.

  75. TLT  has anyone looked at a diagonal – buying  a, say Jan 14 ITM put, and selling shorter term against it?
    SVU – Phil – I like the way he says that SVU is going under because they don't have the Cache of a Whole Foods.  Last time I checked, I didn't see much Cache at Walmart.

  76. Can anyone help me find a current snapshot of the Income Portfolio? 

  77. jacalynm / Income Portfolio: look up (scroll up) and yee shall find thie answer :)

  78. Crappy quote feed today. I've reset my hardware/software with no change. You guys notice slower updates today?


  80.  shooter sent a psychiatrist notebook detailing plans to kill…what a mother fucker for not reporting that

  81. AAPL didn't drop far enough on such a huge miss!!!!!  Sound the alarm CALLS CALLS CALLS CALLS CALLS CALLS CALLS CALLS!!!!


  83. Phil, "We sell PREMIUM, not POSITION".  THANK YOU VERY MUCH.

  84. Phil/TLT puts:
    I bought 10 Sept. $126 p at $1.50,now $1.28 per your comment last week,but I've been thinking that  If the market drops like you are advocating, won't TLT  go up because investors outside of USA  will want safety and drive  up price on TLT?
    Also, what's going on with the drop in SVU?

  85. Microflux/ DUH!  K.I.S.S right.. Thanks.  At Least Phil didn't SPANK me for another stupid question :)

  86. FU NFLX!!!!!!!!!!!!!!!

  87. Decisions, decisions, trying to guess which momo is going to stick today.  AMZN, CMG, and NFLX not looking healthy, so going with a little AAPL and PCLN, out at EOD.

  88. For CROX I did 2 PUT calendars Aug/Sep for strike 13 and 15. I paied 25c each and my B/E points are 11.69 and 17.03. and I make money in between with peaks at strike prices.

  89. Crazy Plays - decided to pick up some AAPL weekly 580 calls at 2.50 and some PCLN weekly 650 calls at 3.80.  I bought the OTM lower delta calls to get a lower basis so that I risk less if I decide to hold overnight since QQQ is trending up and VIX down, if we bounce nicely out of this I may hold some overnight after all.

  90. TLT/Rkyro – The problem with TLT is it's very volatile so it's almost a matter of luck where your front-month ends up.  Also, generally we like to sell the calls, not the puts.  Right on cache – this is why I hate most analysts…

    Quote feed/Kustomz – On what platform? 

    12:00 PM On the hour: Dow +0.28%. 10-yr -0.05%. Euro +0.58%vs. dollar. Crude -1.49% to $87.18. Gold +1.58% to $1601.15.

    12:00 PM European shares put in a meek rally after 3 days of big declines. Stoxx 50 +0.3%, Germany +0.2%, France +0.3%, Italy +1%, Spain +0.8%, U.K. flat. The euro +0.6% to $1.2131.

    1:00 PM On the hour: Dow +0.25%. 10-yr -0.07%. Euro +0.51% vs. dollar. Crude -1.6% to $87.08. Gold +1.7% to $1602.95

    1:04 PM The Treasury sells $35B in five-year notes at 0.584% - yet another in a series of record auction low yields. Bid-to-cover ratio of 2.71, vs. a recent average of 2.89; indirect bidders take 42.6%, vs. a recent 41.8%. Direct bidders take 5.2%, vs. a recent 9.5%.

    Stable or shrinking yield premiums to Treasurys suggest some emerging market sovereign debt is emerging as a safe-haven play. Of note are Mexico, Brazil, and Colombia, but the Philippines and Indonesia are also on the list of those not necessarily selling off every time markets go into "risk off" mode.

    Mid-sized companies are holding onto cash and pulling back on investments in response to rising fears of a global slowdown, according to a survey of 1,000 CEOs of firms with annual revenues of $10M-$1B. Only 12% of execs are “confident” about the state of the U.S. economy; just 5% are “confident” in the global economy.

    The PBOC continues to let the yuan slide, the currency hitting its weakest level YTD against the greenback today. The drop suggests Beijing is less worried about U.S. political pressure and more concerned with helping the country's exporters, currently reeling from sliding European demand (the yuan is on the rise vs. the euro).

    Goldman's bullish call on China may be premature, writes Sober Look. The economically sensitive Shibor continues to fall, as do stocks and the yuan. Also, an ISI survey of company sales in China shows no sign of bottoming, and CAT today nixed thoughts of a share buyback, in part over concern about Chinese growth. 

    Health insurers take a pummeling after Wellpoint's (WLP-12%miserable Q2 report, even though some analysts say that the company has specific challenges. Citigroup's Carl McDonald reckons management could come under pressure. Still, HealthNet (HNT-10%, UnitedHealth (UNH-5.6%, Coventry (CVH-4.9%, Humana (HUM)-3%, Cigna (CI-3.9% and Aetna (AET-4.9%.

    Caterpillar (CAT +0.9%) loses altitude as its earnings callprogresses. Management attitude can best be described as one of hope – hope economies will turn, hope governments will do the right thing, hope central banks will stimulate more. Nice summary here. (earnings earlier

    Deckers (DECK -4.1%) makes new 52-week lows after Lazard joins Sterne Agee in downgrading the maker of UGG boots ahead of tomorrow's Q2 report. With pessimism about Deckers' future running high, many shorts have held off on covering: 24.2% of Deckers' float was shorted as of June 29. 

    Broadcom (BRCM +8.8%) surges after analysts praise itsQ2 beat and in-line Q3 guidance. Canaccord expects strong sales of baseband and Wi-Fi/Bluetooth combo chips, and says checks indicate Broadcom is one of the few chipmakers to boost its orders heading into Q2. Along with its report, Broadcom announced its first combo chip to support the 802.11ac Wi-Fi standard – 802.11ac chips could be crucial to holding onto some of Samsung's business, in light of Samsung's acquisitions. (transcript)

    Amazon (AMZN -1.9%), which has strongly outperformedthe Nasdaq in 2012, is selling off ahead of tomorrow's Q2 report. Amazon's euro exposure is on the minds of many, as are Kindle sales and the impact of U.S. sales tax collections. Citi (Buy) thinks investors should focus on Amazon's potential to double its share of U.S. online retail over the next decade. Nomura expects Amazon to report another quarter of margin improvements, as it reaps the benefits of huge warehouse investments. 

    Three lunchtime reads:

    1) Big banks' glory days feared to be gone for good

    2) Billionaire Paul Tudor Jones' top 5 dividend picks

    3) Is peak oil dead?

  91. crazy earnings season with CMG down huge (100 pts after three bloody days), BWLD following suit and then PNRA was UP (?!?). AAPL's miss not enough to impress the bears and now SBUX / WFM tonight (puts on both) and looking to see PCLN get crushed back to a P/E of 22 (per share of 485) where it belongs. And before you call me crazy keep in mind it hit 445 as recently as last December, so it is not exactly a stretch that it retraces all of 2.5 quarters of "growth." 

  92. AAPL going parabolic. Wow.

  93. Psychologist/Angel – That's just sad.  

    You're welcome Bob. 

    TLT/Dflam – Yes, it will go up for a while and the plan is to roll the puts higher and then catch the pullback.  On both TLT and SVU, see above earlier discussions. 

    Spanking/Jacalyn – Actually I was going to say "read first, then ask" but someone had already pointed you in the right direction.  

    AAPL $578!  

    Oil/StJ – Is that including today's build?  That's out of control either way.  End of summer could be a big problem for these guys.  

    Momos/BDC – All sounds perfectly reasonable to me. 

    Frontier Communications (FTR) declares $0.10/share quarterly dividend, in line with previous. Forward yield 11.1%. For shareholders of record Sep 07. Payable Sep 28. Ex-div date Sep 05. (PR)

    Dollar back down to 83.73 with Euro once again testing $1.25 and Pound back at $1.5499.  78.18 Yen and gold is $1,606 with silver way behind at $27.45.  

    Gasoline just bottomed out at $2.75 on that big build and now $2.766.  Good to watch for possible bullish play on /RB.  

  94. QQQ - on the one year chart it is forming one of those perfect left-facing triangle magaphone thingies.  Presumably whichever way it breaks out of this between now and end of month will show the future market direction…

  95. Wow, big move up.  Glad we stopped out of those DIA puts.  

    Euro and Pound broke over with Dollar now 83.68.  /RB taking off at $2.7735.  Nat gas still laying there at $3.067 but inventories tomorrow.  Oil back to $88.20 after bottoming at $87.

    Gotta short the Dow again.  Aug $124 puts now $1.05 so let's just do 10 in the $25KPs (both) and look to DD at .85 if they go crazier into close.  

  96. And this is why we leg out of those backspreads – go AAPL!  

    QQQ/Mr. M – I believe the correct technical term is "triangle squeezy thingy".   Just FYI – you've got to know these technical terms if you're going to be a professional trader…  ;) 

    I think we're rallying because Bernanke switched the Fed to Geico and saved 15% on their car insurance.  

  97. Big Ben ready to prop up markets (is the Fed simply a market proxy tool now), but [un]fortunately with no dry powder left, no one cares. 
    These violent delights have violent ends
    And in their triumph die, like fire and powder,
    Which, as they kiss, consume. 
    - WM Shakespeare

  98. TOS – No commissions for three months! That could be dangerous.

  99. Phil / triangle squeezy - thanks, I couldn't recall the PSW designation for those, I'll note it for future postings 8)

  100. AAPL Crazy Play - up 60% rather quickly, take off a few here to be safe…

  101. PCLN Crazy Play - not feeling the love here, I closed out at 3.50 for a small loss, luckily covered by AAPL; if you are in this one watch closely…

  102. The interesting thing is that TLT is also moving up a bit… Something is not adding up!

    PCLN on the other hand is looking like a wounded animal.

  103. Biodiesel/ Which puts are you long for WFM?

  104. TOS – Check that, two months. Still dangerous. They really want to get that needle into your arm.

  105. SLW going ballistic, thank you Ben!

  106. NFLX up 3% in a few minutes, perhaps the PCLN bots have been re-coded.  Keep an eye on this one as today's stick candidate.  I nibbled at the weekly 60 calls with very tight stops…

  107. Don't trust this upside! Never seen prices rise when money flow is out at this level. And gas is going to be $4.00 a gallon no mater what it does to the world economy or how little they sell.

  108. Here come the BOTS playing with V.  Trying to shake some people loose.

  109. Phil, I keep reading about a coming beef shortage, herds are dropping for a variety of reasons. What is the best way to play this?

  110. MarketWatch headline – "Fed hopes raise Dow by triple digits".  

  111. rpme – I have successfully played that by selling COW puts.  Extremely low liquidity and huge spreads, though.  I think selling futures put options would be a good way, but unforunately, TOS does not allow it.  I'm interested in the answer to your question as well.  You can always sell puts on CORN, but a little pullback first would be nice.

  112. RPME – Maybe MOO?

  113. After taking my AAPL hit, I needed a little cheering up, and this did it:
    As an ancient and cultured people, I'm sure the Persians have a well-developed sense of humor:

  114. Good Afternoon!   And how about them AAPLs!!   But that's old  news now.  My only AAPL play remains Jan 600/650 calls,   But I'm thinking now, post-earnings, that this  may be a good time to consider selling strangles on AAPL for a few weeks.  I think it will stay in a channel, more or less, between about 550 and 610.  Below 550 will certainly attract lots of buyers and above 610 should beg for profit taking.   At least from now till October.   But no new AAPL trades today .   Now PCLN.  That's my only other MoMo portfolio open position.  The short puts have moved against us, but we will roll these along on Friday, as per usual.  Earnings are August 7th, so we have another round of weeklies to work with this before we have to decide what to do with it through earnings.   Expedia  (EXPE) reports tomorrow and should offer further guidance as to how to play PCLN.  And have I mentioned how strange this market movement looks to me today?  We thought an AAPL "miss" would tank the markets.  It hasn't happened.  I think the FEDs are thinking….." Wow, if AAPL missed, we may really be in trouble"  …  and some feel this may lead them to further stimulate.   Finally, a cautionary note about AMZN.  I will NOT be holding any positions on this stock through earnings.  Although I expect it to fall post-report, it could surprise everyone with a big UPward move.  It is somewhat unpredictable.  Good trading!

  115. Last hour prop-job for another 100 pts to get us up over 200? 

  116. Here in KC, and let me tell u that things r as dry as a bone. The cicadas cannot make it out of the ground. I can only imagine the impact on the food chain that is happening right now.

    On the charts, this looks like a bear trap. GLTA.

  117. Oh and that BS about the Fed is just that, BS.

  118. Site is incredibly slow loading- Anyone else experiencing technical difficulties????????

  119. Newt – yes.  Maybe Anonymous was long AAPL, and Phil's lack of faith pissed them off.

  120. Site loading- yes, very slow.

  121. Yes, been having problems all day today.

  122. Good Afternoon—missed most of the day could not get on—I pad was intermittent also and would not let me post—anyone else

  123. working great!  :)

  124. Newt:  My PSW is playing AC/DC.

  125. newt: Yes, on on my Dell desktop and was having a lot of trouble this morning with reloads. Had to close the PSW tab several times and had to sign back in. Never had this happen before…..not on this computer.

  126. I too, switched to Geico….. ;)

  127. ZH reporting that Japan will allocate 1T Yen for Economic Revival Plan.

  128. site was slow to dead to me all day.  but works fine in 3g,  i rebooted the pc and now fine.

  129. JBUR- same deal here- multi reloads….shut off / restart……

  130. I am also having issues with reloading in Firefox, but Google Chrome works just fine.

  131. site refused to load in firefox (on mac) which is what i usually use without any issues.  finally tried safari and loaded fine.  curious!

  132. rexx/PSW site, working strangely for me too.  

  133. page reloads are sloooow for me also. 

  134. All IE9, Chrome and safari(on iPad) was working strangely.  It's working fine now. 

  135. Can someone point me to a simple tutorial on how to 'roll' options pls. I understand the idea, but get confused with the order process at TD… buy to open… buy to close… sell to open… blah, blah.
    I usually buy simple naked calls and puts. TIA.

  136. Sounds like the sun is having another bad day!

  137. Holy cow I fell asleep on the couch!  Haven't done that in a long time, sorry.  

    Looks like I didn't miss much other than the silly rally pulling back.  

    DIA $124 puts back to $1.25 but it's not much so let's risk them overnight.

  138. Same here, been having issues all day with reloads and yesterday as I posted, on Firefox.

  139. Phil
    Crude back up, any trade on USO? That report was pretty crappy and the dollar may have trouble getting weaker with talk of overseas intervention-Japan.

  140. Fed/BDC – But the Fed hasn't said a thing.   Just the guy from the WSJ.  This might keep the Fed quiet anyway:  

    Ron Paul's "Audit the Fed" bill overwhelmingly passes a House vote (327-98) a decade after it was first introduced. The bill is considered DOA in the Senate, where Majority Leader Harry Reid has expressed middling support, but also vowed not to put it up for a vote.

    Gold is getting a lift today, +2% on the back of encouraging technicals and more QE3 talk yesterday out of the Fed. The yellow metal has been posting lower lows since setting a bottom mid-May and - from a technical perspective - today's breakout of its pennant formation could be the start of a larger move to the upside.

    Wow, LL with a big move.  Good call by someone. 

    Lumber Liquidators (LL +28%) moves to an all-time high after smashing Q2 expectations and hiking its 2012 forecast. Same-store sales surged 12.4% and increased both traffic and purchase sizes, providing strong boosts to gross and operating margins. The flooring retailer saw continuously strong demand in Q2; "we finished as strong as we started."

    Chipotle (CMG +1.6%), which has fallen over 25% from Thursday's close thanks to its disappointing Q2 report and same-store sales guidance, is finally stabilizing today with the help of an upgrade to Buy from Miller Tabak. The firm declares the burrito chain's growth prospects are still among the best in the industry. Of course, those growth prospects are still accompanied by a forward P/E north of 30.

  141. Having problems with the site all day in IE.

  142. Sushi/Phil – The good sushi restaurant in Bend is Kanpai. Forgot to answer you the other day.

  143. Roll / Amalfi
    Don't have a tutorial for you, but on TOS, you roll with the Calendar or Diagonal pull down.  Calendar is rolling to the same strike.  Diagonal lets you pick a different strike.  Pretty easy.  Just be sure you close the one you own.  That might be a buy, that might be a sell.  Depends on if you are long or short.
     If you are rolling a spread, use the Vertical Roll on the pull down.

  144. Phil: We are in the F Sept 9's, and if I understood correctly the premise was were expecting a favorable move on them IF they incorporated the new pension accounting rules. Is it a broken gamble here? Your thoughts would be appreciated.

  145. So no actual stimulus news – just the sugar rush.  

    Good call on money flow Shadow.  Also, don't forget the way the media is gushing over this rally.  I haven't heard a guest all day who hasn't said BTFD. 

    Speaking of dips, gasoline rejected at $2.80 is a sign to take the /RB money and run!  

    Dollar bounced off 83.60, Euro $1.215, Pound just failed $1.55 again – not good.  Yen tapped 78.1 and that line seems protected by BOJ bur they are not the Swiss, they aim for 80 Yen to the Dollar (weaker) and that's a 1.5% stronger Dollar back to 85 and that's DOOM for the markets if they pull that trigger so – still bearish…

  146. ScottMi / QCOR - I picked up some of this yesterday on your Strong Buy reco, any change in sentiment today or should I ride it out?  TIA.

  147. PSW site – no problems in Chrome.
    Lionel - RE: WFM, I have a boatload of Aug-62.50 puts @ 0.14, so I would obviously caution you as this is an "anti-PSW" position (buying premium versus selling it), however it is part of  a strategy to play far OTM puts on them on each of their next four earnings as the drought catches up with the upper-middle class liber/hippies' ability to pay $6.99 for a box of cereal. I don't think this earnings announcement will be "the one" per se, but I do think it'll be one of the next 4, and $150-300 per try isn't very much to risk for me personally.

  148. FU BBY!!!
    FU GLW!!!
    FU BTU!!!
    FU HPQ!!!
    FU JRCC!!!
    FU SVU!!!
    FU X!!!
    FU FCX!!!
    Bunch of drek!!!

  149. Roll/Amalfi, As ccsincsd wrote, it's pretty easy but still need some learning process.  TOS has good support people to help.  I suggest that next time you need to roll, gave them a call, tell them which option that you need to roll and roll it to which month/week, strike price for a credit or debit.  Have them show you step by step how to do it(write down the steps).  After few times. it should/will be easy for you.  Hope this helps.  Always double check your order before you send them.

  150. Ditto on F question

  151. Jabo:  Glad you got that off my chest. May I add FUAAPL?

  152. Beef/Rpme – Short on MCD is a good one.  CMG was good but MCD serves a lot of it.  Chicken no help either with feed costs exploding – very inefficient to eat meat, gotta feed a chicken about 100 pounds of grain before he's ready for roasting!  I'm sure others have some good ideas – not a sector (ags in general) I pay much attention to.  

    Virus/ZZ – Our new method of warfare.  They should have a sense of humor about it – beats getting a bunker-buster up the ass!

    Tanking the markets/Lflan – I think the fundies were caught flat-footed and today has been a very desperate attempt to let them find the exits before the big drop.  I don't see any reason we should be up at all other than QE Rumors and, really, how many times can they do this?  Maybe they can keep it going until next week's Fed meeting but I doubt it.   Maybe now the Fed is thinking "Wow, AAPL missed and the markets survived – guess they don't need us anymore."  

    Cicadas/Pharm – Do those things actually have a benefit? 

    Site loading – I'm looking into that. 

    $1Tn Yen/Ink – Unfortunately, that's just $120Bn…

    USO/DC – Well, I feel bad we missed it before but now I think they'll hold it through nat gas inventories tomorrow, as that seems to have been their intention before the terrible report.  I'd let them run with it and hopefully they'll test $90, which is a more comfortable shorting place:

    Sushi/Bird – So there is more than one?  

    F/JBur – Yep, now we're shot on them.  Not even the rally saved them today.  

    Damn, now I'm all awake and they're closing the markets?  

    CHK made a nice comeback today.  

  153. WFM making money.  

  154. Good Afternoon,

    Veneta Dimitrova (NDR’s U.S. Economist) put out the attached publication discussing the recent drought (one of the worst U.S. droughts in decades), its effect on farm crops and prices, as well as its contribution to food inflation. Veneta questions whether the impact could be strong enough to deter the Fed from initiating QE3. Below are a few bullets on the publication:

    · According to Veneta’s regression analysis and the increase in grain prices, she expects food prices to increase minimally (0.6%)
    · The U.S. is the largest producer of corn crop in the world and an increase in U.S. prices will have global effects, especially in Emerging Markets
    · Impact on overall U.S. CPI inflation would be negligible, considering food accounts for only 14% of the total consumer expenditures
    · The current projected increase in inflation from food prices will not dissuade the Fed from providing more QE
    o Previous increases in food and commodity inflation during more distressed times, such as 2008, did not affect QE from the Fed

    Please let us know if you have any follow-up or would like to discuss the piece further with Veneta or a member of her team. Have a great week!

  155. NDR

  156. Thanks Phil!
    Trying to decide if I should keep 1/2 TZA till tomorrow. At 20.15 I am out or maybe what do you think?

  157. Phil:
    Sorry to mention USO so much. Just hoping one day to see the set-ups you see!

  158. From Rcro at SA:  

    If you were to talk to a farmer, you would find out in a hurry that we are having more than a little “…bad weather.” For most farmer, this is the most serious financial crisis they have ever faced. . If you live in Manhattan, you may think all of your needs can be met at the shop around the corner. If you drink water, wine, beer whiskey, juice soda, or any liquid you need to know that it all originated in rainfall. Also try bathing without water. You may not like corn on the cob, but you need to you consider that beef, pork poultry, milk, farm fed fish such as salmon, trout, shrimp, are all fed grasses, corn or other grain products. Likewise ethanol is produced from corn. Maybe you eat bread. Bread is made from wheat. Wheat is grown on farms. Maybe you would like the cost of gasoline go up? That would really be good for the economy, wouldn't’ it? Or maybe you sell gasoline in which case your sales and commissions would go down if farmers decide their crops are not worth the cost of harvesting.. Or maybe you are a banker that makes his living making loans to farmers or the industries dependent on farming.. There is more than at stake here than the loss of crops. Do you have any idea how much it costs to put in a crop, e.g prepare the soil, buy seed apply fertilizer, wear and tear on machinery, etc.

    Believe me, it is too late for most farmers. Many will not have any income this year. They will have a huge loss from putting in their crops. The little rainfall that has been received is not enough to do much good. You are going to pay for this. The price of food is going to skyrocket. Better not plan on having fillet of beef every Sunday.

    Incidentally, you wall street people would look pretty damn foolish walking around naked. Or maybe you didn’t know that cotton and wool are raised on the farm.

    I could go on, but if you are completely ignorant of the importance of agriculture not only in the US, but in the world, you may want to have your research assistant obtain the facts for you. On the Agriculture building at the University of Illinois the following is cast in stone “The wealth of the nation is in its soils”

  159. Cicada - Watch this before dinner…..
    sorry…. :)

  160. Phil
    Right here the barley is looking green and best in a few years, I'm sure the price is up but also bet the farmer will say he is loosing his rear end on my land. Water is for the sprinkeling and the source is high! BTW the mountains are GREEN!!!

  161. 1020/Cicada, why before dinner? It's quite nice, I can watch it with dinner.  :-).

  162. Not much of a bounce!

  163. Veneta/Angel – I think a lot of people are underestimating this drought.  After all, we haven't lived through a big one so we believe there is rain at the end of the tunnel but, as noted by Rcro above – too little, too late – even if we get back to normal now.  They should be sending in the National Guard with baskets of cash right now to help the farmers salvage what they can and to do what they can to salvage the fields so the next crops won't come in sub-par as well.  Obviously, nothing of the sort will happen as food security is not a priority in this country.  We may "muddle through" with a bit of luck but I think NDR is painting a best-case scenario, as if this drought is over because there was a little rain this week.  

    TZA/Shadow – Well I kept the DIAs open so the same logic for SOME TZA.  If the Dow does pop, I'm more likely to DD than bail.  

    USO/DC – No, that's fine.  I just didn't like the set-up because it looked to me (and you) that they were going for $90.  They didn't get there and then the inventories were TERRIBLE for the bulls but it's too early in the monthly cycle to chase a drop as the trades have no pressure to sell and they KNOW that they can pump oil back to $90 over 30 days so they're not going to panic out of positions just because there's no demand – what does demand have to do with the price of oil?  I was surprised we got to $87 but not at all surprised to see $89 again at the close so now we have a range to play negative off $90 and hopefully we get a chance tomorrow.  

    Yummy 1020, thanks!  

    Green Shadow – That's like saying there's no global warming because it's cold at your house.  You are lucky but 70% of the country is not…

  164. fb???

  165. Hell,bobhu, you don't have to just watch it for dinner!   "High-protein, low-carb dieters take note: The billions of cicadas emerging from the ground this month in the midwestern U.S. are a healthy alternative to that bacon double-cheeseburger without the bun."They're high in protein, low in fat, no carbs," said Gene Kritsky, a biologist and cicada expert at the College of Mount St. Joseph in Cincinnati, Ohio, speaking to National Geographic News during the last major cicada outbreak, in 2004. ""They're quite nutritious, a good set of vitamins."

  166. ZNGA/ From twitter: 
    $ZNGA management blames Farmville results on virtual drought  :-)

  167. Looks like I was wrong with V, Onto FB, many others. Earnings plays are binary,
    Playing more to miss these days..

  168. V did well.  Need a bad CC now. 

    Visa (V): FQ3 EPS of $1.56 beats by $0.11. Revenue of $2.6B (+10% Y/Y) beats by $80M. The board authorizes a $1B share repurchase program. Shares +3.9% AH. (PR)

    More on Visa (V): Adjusted net income +25% Y/Y. Payment volume growth +6% on a 1% increase in transactions. Operating expenses (excluding litigation) +10%. Litigation provision of $4.1B (against the Q's earnings of $1.1B) The company repurchased $461M of stock at an average price of $115.51/share. Shares +1.1% AH. (PR)

    Dow volume finished at very lame 127M. 

    At the close: Dow +0.53% to 12684. S&P +0.05% to 1339. Nasdaq -0.31% to 2854.

    Treasurys: 30-year 0%. 10-yr 0%. 5-yr +0.02%.

    Commodities: Crude +0.45% to $88.9. Gold +1.74% to $1603.55.

    Currencies: Euro +0.77% vs. dollar. Yen 0.%. Pound +0.05%.

    Market recap: Stocks ended mixed, as Apple weighed on the Nasdaq following a rare earnings miss while solid earnings fromBoeing and Caterpillar helped prop up the Dow. While the industrial side of the economy looks good, new home sales fell more than expected, dampening market sentiment. Spain's 10-year yield hit a new record high of 7.75%. NYSE advancers led decliners seven to five. 

    Goldman's Jim O'Neill throws in the towel on his prediction the SNB will raise its CHF 1.20 peg to the euro to CHF 1.25. Having gotten that one wrong, he moves on to the yen, predicting a significant drop in Japanese currency in H2. The euro/franc cross continues to flatline at 1.2010.

    About Those Excess Reserves At the Fed (Jesse’s Café Américain)

    Feel the love:  "Well done Sandy – 'C' trades at 10 cents on your 1998 merger dollar," tweets Pimco's Bill Gross, responding to Sandy Weill'searlier call to break up the TBTFs and restore Glass-Steagall.

    "Do two recessions equal one depression," asks Paul Vignaas the U.K. slips firmly back into contraction and we'll find out how close the U.S. is on Friday. More QE is definitely coming, says Stephen Roach, but it won't be effective as consumers are interested in paying down debt. Does that mean the money will go into financial assets and commodities again?

    The idea that inflation might be our friend is gaining traction (LA Times)

    Have IBM's well-honed instincts for tapping the bond markets struck again? The company has reportedly issued $1B of 10-year notes with a record-low coupon of 1.875%. "So lemme get this straight," writes Conor Sen, "I can lend money to IBM for 10 years at 1.875% or buy the stock yielding 1.78%?"

    Municipal bond prices continue to push higher despite what may be a trend of cities realizing it may be a better idea not to pay what they owe. As with preferred shares, mREITs, MLPs, and anything else with a reasonable yield, strong demand vs. limited supply rules the action. MUB +7.4% Y/Y, while yielding more than 3%.

    U.S. Cities With Bigger Economies Than Entire Countries (WSJ)

    The rotten heart of finance (Economist)

    Regret, Remorse, Reprieve: Weill Calls for Splitting Up Big Banks (DealBook)

    Suncor (SU +3.9%could delay billions of dollars in projectsas ways are studied to enhance their profitability, new CEO Steve Williams signals. SU has the ability under JV agreements to completely withdraw from its Alberta-based projects estimated to cost more than $20B, he says. "Indications are that some of these projects are moving backwards, not forward." (earnings

    Boeing (BA +2.7%) shares are strong after BA beat earnings expectations and raised full-year guidance. Even as the defense business showed growth in a tough environment, BA is already preparing for defense-related sales to fall. It's boosting employment in its commercial division and reducing it in defense, and investors and analysts seem to be warming to the trade-off.

    C.H. Robinson (CHRW -7.6%) skids to a three-year low after reporting core trucking operations continue to struggle. Transportation margin fell to its lowest level in at least a decade amid rising rates CHRW is paying carriers to ship product for its customers. Sterne Agee says Q2 EPS would've missed consensus if not for lower incentive payments for employees and reduced bad-debt costs. 

    Crocs (CROX): Q2 EPS of $0.68 beats by $0.05. Revenue of $330.9m (+12% Y/Y) misses by $8.6m. Shares +2.42% premarket. (PR)

    Race to the bottom for Social Networking:  Facebook (FB-7.6% due to Zynga's giant Q2 miss and weak guidance. GRPN -4.7%P -1.5%.

    KBR (KBR): Q2 EPS of $0.7 beats by $0.13. Revenue of $2.1B (-16.1% Y/Y) misses by $0.12B. (PR)

    Oh no, Romney's piggy bank is broken!  Las Vegas Sands (LVS): Q2 EPS of $0.44 misses by $0.16 . Revenue of $2.58B (+10.1% Y/Y) misses by $200M. Shares-4% AH. (PR)

    More on Las Vegas Sands (LVS): Q2 misses across the board as lower hold on table games play and higher operational and legal expenses dragged down profit in the quarter. The only bright spot was Macau, the world's largest gambling center, where profits were up 9.6% Y/Y. Shares 6.7% AH. 

    In tandem with its Q2 report, Telefonica (TEF -0.2%) announces it's cancelling plans (.pdf) to issue €1.50/share in dividend payments in 2012, and a similar amount in 2013. The Spanish/Latin American carrier expects to make €0.375/share payments in Q4 2013 and Q2 2014. A look at the Q2 report helps explain the move: While Latin revenue rose 7% Y/Y, European revenue fell 6.1%. Spanish revenue declined 13%, as macro conditions and subsidy cuts lead to subscriber losses.

    Tesla Motors (TSLA): Q2 EPS of -$0.89 beats by $0.04. Revenue of $27M (+15% Q/Q) misses by $3.6M. Shares +3.8% AH. (PR )

    Tractor Supply (TSCO): Q2 EPS of $1.45 beats by $0.06. Revenue of $1.29B (+9.3% Y/Y) in-line. Shares +7% premarket. (PR)

    Western Digital (WDC): Q2 EPS of $2.87 beats by $0.39. Revenue of $4.75B (+97.8% Y/Y) beats by $0.5B. Shares +5.6%premarket. (PR)

    Whole Foods Markets (WFM): FQ3 EPS of $0.63 beats by $0.02. Revenue of $2.73B (+14% Y/Y) in-line. Guides FY12 EPS higher. Shares +8% AH. (PR)

    Woops!  Zynga (ZNGA): Q2 EPS of $0.01 misses by $0.05. Revenue of $332.5M (+ Y/Y) misses by $11.6M. Expects 2012 bookings of $1.15B-$1.225B, below prior guidance of $1.425B-$1.5B. Expects 2012 EPS of $0.04-$0.09, below $0.27 consensus. Shares -35% AH. (PR

    Spot the Socialist (Economist)


  169. zeroxzero/cicadas, I went to Vietnam few years ago, those are very popular for Vietnamese.  I was too scare to try them.  For the food price going up and poor people getting worse.  I am not surprised that mor people will start to eat them.

  170. $1.215 and $1.55 not holding now that our markets are closed.  Dollar at 83.70 at the moment, Yen at 78.15 and /NKD at 8,425, off lows of 8,330 last night, before BOJ pledged to do more.  Japan is more of a put up or shut up country than we are so we're set up for disaster if the BOJ follows through to pump up the Dollar off our weak market recovery today but they can't afford to lose 78 now – not after just pledging to "fix" the Yen.  

  171. More on Zynga's brutal Q2: While revenue rose 4% Q/Q, bookings fell 8% to $301.6M. Daily active users (boosted by acquisitions) totaled 72M, +16% Q/Q and +23% Y/Y. Monthly unique payers +16% Q/Q to 4.1M. But average daily bookings/user fell 16% Q/Q and 10% Y/Y to $0.046, a clear sign Zynga is struggling with monetizing mobile games and new Facebook titles. Ad revenue +169% Y/Y, but only 12% of total. R&D expenses +79% Y/Y and 52% of revenue. ZNGA -40.3% AH. (PR)

    More on Whole Foods Market (WFM): FQ3 beats on the bottom line and raises FY12 guidance as net profit jumped 32% Y/Y. Sales +14% to $2.7B, while comp store sales +8.2%. Overall same-store sales are running at a growth rate of 9.7%. The uptick in sales is being taken by investors as a positive sign that the company may be taking market share from traditional grocery competitors like Safeway (SWY) and Supervalu (SVU), who've been struggling with declines in sales volume. Shares +11.4% AH.

    Angie's List (ANGI): Q2 EPS of -$0.41 misses by $0.02. Revenue of $36.5M (+74.2% Y/Y) beats by $1.15M. (PR

    Cheesecake Factory (CAKE): Q2 EPS of $0.51 beats by $0.02. Revenue of $454.7M (+5.6% Y/Y) misses by $2.69M. Shares+5.3% premarket. (PR)

  172. Socialists / Phil – We had a similar chart in the past and I hope that Obama uses it in the campaign. Compared to GW Bush at the same time, there is a deficit of 1.4 M jobs! I have to think that they would make a difference in the job picture as well as the economy! Funny that the same people who argue that government can't create jobs added 900,000 public jobs in 3 years last time. Once again the hypocrisy is just so frustrating!

  173. Phil
    V/Need a bad CC now.   I don't understand your reference – what is "CC"

  174. Bugeaters – well, the thrifty Koreans of 40 years ago, when I was in Peace Corps there, would take silkworm pupae after shucking the cocoons off them, and roast them with some oil and salt. You could get a paper cone from a street vendor, hot, for like 50 cents, and they were pretty good with beer or the local beer equivalent, mokoli. Had a bit of a smell on them, though, and my wife's allergic. You don't see them much at all anymore, though, even out in the boonies. Don't know what they do with them; I should ask next time I'm over there.

  175. WD up big time after hours… not expected!

  176. denlundy/CC, Conference Call.  Phil hope Visa has a bad Conference Call to take the stock down(he was bearish on Visa).

  177. WFM miss makes me 3/6 on earnings. A good batting average, but not a good options-average!

  178. biodieselchris/WFM miss?? 
    "Whole Foods Markets (WFM): FQ3 EPS of $0.63 beats by $0.02. Revenue of $2.73B (+14% Y/Y) in-line. Guides FY12 EPS higher. Shares +8% AH. (PR)"

  179. anglecur, what is NDR?
    Funny, I've liked NDRO for a while now, got in at 16.30 in a cash account, for the speculative 10% dividend yield. But if I can make some capital gains over the top, why not!?!

  180. FU ZNGA!!!!
    The two stock plays I had through earnings: ZNGA and NFLX = total disasters! Shoulda gone with puts here and held WFM! Live and learn!!! :(

  181. Let's hear it for Hollande and the French Socialists! Here's a test of the policies Obama and his cronies would like to perpetrate on the US. Any bets on how that plays out?
    Phil, I joined PSW BECAUSE you were saying things that I didn't hear elsewhere. It's only worth saying if it is different. What's the point of "chiming in"? I was already "out there" doing my thing, which was selling premium, but this site has given me a keel. I have never been more comfortable running my life savings than I am today, thanks to this site, and Phil.
    The secret (to me) is that selling premium need not pick a direction. I am a strangler by instinct, and these times have been fabulously rewarding. I think Phil said a while back that if you are always selling premium, you can be 60/40 long, and that's "bullish". I think I understand that now. I am presently somewhat bullish but fully hedged, another thing I learned here.
    I wish that my friends would be so bold as to fire their (worthless) advisers, and go on their own. There's a large amount of suffering among moderately successful people who lost the ability to coast to the finish line due to ZIRP.

  182. jeanluc: do you live in France at the moment? In any event, you are pleased with developments there, non?

  183. DECK – I like the earnings play on Deckers posted today.  Some notes from quick research:
    + Sheepskin prices were one of the issues from prev. earnings.  Looks like they have tanked since then:

    + Brand they bought, Sanuk, looks cool.  Appears they are in just about every surf shop.  But not many Nordstroms, etc.
    + Already beaten up stock price and already lowered expectations.
    +/= Teva and Sanuk are in the top sellers list on Amazon ( sandals ), but womens is dominated by FitFlops ( fugly in my opinion ).
    + Insiders were selling in the $80-$100 range, but are buying now.  Not much volume, but only buys.  10,000 share buy in early July.
    + Cramer said pullback to $108 was a buying opportunity.  Oh wait, that's a minus… But he doesn't like them now, so neutral.
    + My wife says UGGS are still popular…
    = AUD/USD fluctuations.  Looks like a wash.
    - Rising inventories usually not a good sign.
    - High short interest – they may be correct.
    Well that's all I have.  Feel free to add.  Obviously I don't know enough to bet the farm here, but I'm in for a small position.

  184. Phil – what's your best guess on /NG response to inventories tomorrow?

  185. DECK – I left off Europe as a potential huge minus on that list.

  186. for clarity, I  missed on WFM (hoping they'd be down), obviously they did not "miss". Thought that was clear from my post.

  187. France / Barf – Nope, I don't live in France. In NJ for the last 25 years!

  188. Wow, the Senate actually took a simple majority vote the way it was intended:

    And it didn't work out for the GOP. Go figure!

  189. Nice graph on "socialism" Phil. Obama is the new Reagan!! He actually cuts govt' jobs and his policies are a disaster for the bottom 99%. Cut out of the same cloth …

  190. biodieselchris/WFM, Sorry, I saw that post but forgot it when I saw your "miss" post.

  191. no worries Bob. I do try to to be clear when writing posts, sorry for any confusion.
    Stjeanluc – the sub-250k tax cut extension is toast in the House. Having 99% of the country get a tax break so they can buy stuff that makes the top 1% rich in the first place just ain't palatable to Boehner et. al. Makes you wonder, how do people representing the financial interests of 1% of the country get 50% of the vote?  

  192. JeanLuc: oh, well, you are affiliated with France, right? Do you have any comment on what is happening there?


  193. I'm flat while my account is being transferred (and I while learn TOS!!). So I'm a bit more detached than usual. Looking at my tea leaves makes me think that we might in for a decent bounce here. A relaxing change of pace to watch while cashy.

  194. France / Barf – I am not that involved with French politics anymore – I actually left France when I was 20 and never got a chance to vote there. I can't say that I was not happy to see Sarkozy go as he had many unlikable character flaws and some of his advisers were courting the extreme right or their policies. But I don't agree with all the policies that are planned by Hollande either. I don't think anyone has all the solutions to the incoming problems!

  195. Phil / TZA – I was in the Aug 17/21 BCS and Aug 16 Short Puts (Income Port Hedge).  TZA is becoming my favorite hedge/short.  I closed the trade yesterday at the end of the day since the Long Call (86%), Short Call (-22%), Short Put (75%) for $1700 in a week (10 contracts) (Don't be a greedy Ba####RD).  Thanks for the trade setup.  Do you recommend another TZA spread similar to the one closed as another hedge or something else.  I did not see a another Aug. TZA that had an entry like the one closed out. TIA

  196. Phil – any AMZN earnings back spread or do you think its too volatile & the just puts should suffice ?

  197. TZA / jfaw
    Did you see the new TZA play for Sept?  Same strategy.  ref Phil at 11:03am.

  198. QCOR/Mrm – umm. no recommendation on them from me… i've never even looked at them before. sorry.

  199. The European debt situation must, I would think, simply reach the point of it-doesn't-matter-what-Germany-agrees-to insolubility soon.  Even a joint Eurobond would be priced badly, from the standpoint of realistically amortizing the aggregate joint indebtedness.
     I do not have the ablity or information to quantify this, but I did receive an anecdotally disturbing letter from my Spanish bank today.  They are offering 4.25% for a one-year CD, and 4% for a one-year CD that can be prepaid without penalty at the end of every quarter.  Such a deal.    Germany is now paying .0001% on the 2 year, 1.265% on the 10 year, with the U.S. at 1.4% on the 10 year, with  France now paying 2.8% on it's 10 year,  twice the U.S. rate.
    A joint Eurobond guaranteed by Germany and would  increase German sovereign debt costs to a level Germany would probably not stomach, given the recent decline in the Ifo to a two-year low [business confidence].  German banks are now reporting higher funding costs and weaker credit demand — and they are tightening credit standards further.  I would guess that all of the "austerity" promises that could be realistically made, and enforced, as part of a Eurobond package would not reverse that trend.
     The tunnel is getting longer, and there's no light in sight.  What would the Apocalypse at the other end look like, I wonder?

  200. Crops – David Lindley sings a great song about The Poor Old Dirt Farmer.

  201. DECK/rkyromna – major downtrending weekly chart, weak and downtrending RSI, caught under ALL MA's, failed it's last rally effort and now making new lows, lots and lots of overhang…

  202. PHil – in your opinion, does the Visa beat make them a better short candidate or worse?  Does it make more sense to short them now since they are up more, or less sense to short them if they are indeed in a upward trend?

  203. Phil/VZ
    How do you like selling those VZ Jan 14 $42's for $4.70?

  204. Now Sandy Weill (C) says it is a good idea to break up the big banks.  But as the NY Times reported:

    The New York Times has reported that as recently as 2010, Weill had a 4-foot wide portrait of himself hanging in his office that was etched with the words "The Shatterer of Glass-Steagall."
    I don't know if I am more hopeful or more disgusted.

  205. Somebody just spiked the /DX from 83.8 to 82.8….oil up almost 1$…..WTF

  206. Phil / ccsincsd – TZA – Thanks.  Now see the TZA comemnt.  I expect to be raped over the coals from Phil (deserved) since I took off a hedge (expect to lose, it is ahedge).  My pea brain was on trade mode not invest mode.  Many lessons to learn.  The only play was the one Phil mentioned (I took independent action) was to close the short put when the contract was under .10c.  Hedge being put back on.

  207. jasu—--Draghi just made a comment about defending the euro

  208. Savi, thanks

  209. Still having major site refresh problems – using Firefox. If it helps any- I am getting a message as follows:" Waiting for"

  210. Same message here too!

  211. Here are three stories from Marketwatch this morning that are all focused on environmental issues.  I think we are going to see more of this as climate change intensifies.  Economists are going to have to become environmentalists as the planet hits  tipping point.  Phil made the connections to Arab Spring and rising food prices.  Given the great Midwestern drought conditions, next year should be a year of political turmoil.

  212. Pstas
    I am expierincing the same delays. :(

  213. Checked out the using Firefox's web console and it does indeed seem like the server is creating monstrous latency issues thats hanging the site.
    Anyway, nice erection the markets got there.

  214. Isn't one of the tenants of having a "job" making sure you do everything in YOUR POWER! to be successful?  Draghi has a flare for the obvious! 

  215. Kinki- can you translate to laymen's terms? Is that a problem at Phil's end or something with Firefox. I am posting from IE which seems to work. Very annoying.

  216. Well, Ill be loading up on shorts today or tomorrow. Of course will be relying on Phil for the recos…Work got in the way of me putting a stop on my short /YM yesterday, that hurt…

  217. FYI—-- I cannot get on thru Firefox or Chrome—then tried internet explorer and was able to get on

  218. Good morning and WTF?  

    I was up at 3am and we were falling.  I watched The Girl With The Dragon Tatoo (pretty good) and went back to sleep around 5 with the markets still in a downtrend and just before 6 I remember looking at the TV and the Dow futures were still around 12,600 – near yesterday's lows.  

    Now I woke back up and we're at 12,779???  That's almost 200 points…

    Apparently Draghi said something about resuming the bond-buying program for the ECB and that's all it took.  

    Oil is goaaaaaaaaaaaaaal at $90, gold $1,619, silver $27.75, copper shot up to $3.41, Nat gas still laying around at $3.08 and gasoline $2.827.   

    Dollar was smashed down to 83 (down 1%) and our futures are up about 1.25%.  Euro $1.227, Pound $1.5635, 78.22 Yen to the Dollar and the /NKD flew up to 8,515 – as we expected, a massive winner!  

    S&P (/ES) Futures right on the 1,350 line so we can watch that but it's RUT (/TF) 780 that I want to short and Dow 12,800 (/YM) and, of course, Oil (/CL) $90 – very tight stops on those lines of course and the Dollar needs to hold 83 but too tempting to pass up on nothing but hot air pushing us 200 points higher (done with /NKD, of course!). 

  219. pstas:  Oops sorry.  Yes, latency meaning it is taking an extremely long time for the server to respond to the browser.  This is only happening in Firefox for me.  I am posting this using Google Chrome and it is working fine.  

  220. Gotta work, feel free to re-ask anything I missed. 

    Even the WSJ caught flat-footed by that crazy move – right on the front page it says:  


    U.S. Stock Futures Fall

    U.S. stock index futures lost ground, with investors unable to shake off worries about the euro-zone debt crisis while also wading through corporate earnings results. 44 min ago

  221. We are having some problems with the server – it's not your browsers or any voodoo you are doing on your end – something is wrong and they are looking into it.  If your browser gets hung up, just stop it, wait a few seconds and then try to reload – that seems to work.  Apparently one of the servers they put on line last week to load balance and make things faster is now making things much slower instead.  

  222. ABX MISSES on earnings. $0.78 vs. $0.95 estimated.  The $3.28B rev. vs. $3.5B expected.   Guess people just don't like the shiny metal stuff anymore!

  223. Check out the earnings reports this morning since 6am:  This is up 200 Dow points?  


    • 7:12 AM Intl Paper (IP): Q2 EPS of $0.46 in-line. Revenue of $7.1B (+6.5% Y/Y) misses by $210M. (PR[Earnings] Comment!
    • 7:11 AM Hershey Foods (HSY): Q2 EPS of $0.66 beats by $0.05. Revenue of $1.41B (+6.7% Y/Y) in line. (PR[EarningsConsumer]Comment!
      7:09 AM Stock index futures zoom to session highs following the Draghi comments. S&P 500 +1.1%, Nasdaq 100 +1.2%. Europe spikes as well, the Stoxx 50 +2.1%, led by Italy +3.7%. The euro soars 1% to $1.2274. 2 Comments
    • 7:06 AM "Believe me, it will be enough," says Mario Draghi,promising to do "whatever it takes to preserve the euro." Yes, but at what level vs. the greenback? [Global & FXTop Stories] 1 Comment
    • 7:05 AM Sprint Nextel (S): Q2 EPS of -$0.46 in-line. Revenue of $8.8B (+6% Y/Y) beats by $70M. (PR[Earnings] Comment!
    • 7:02 AM Colgate-Palmolive (CL): Q2 EPS of $1.3 misses by $0.03. Revenue of $4.27B (+2% Y/Y) in line. (PR[EarningsConsumer]Comment!
    • 7:01 AM Dow Chemical (DOW): Q2 EPS of $0.55 misses by $0.12. Revenue of $14.5B (-10% Y/Y) misses by $1.2B. (PR[Earnings]Comment!
      7:00 AM On the hour: S&P +1.09%. 10-yr -0.22%. Euro +0.84% vs. dollar. Crude +1.04% to $89.89. Gold +0.61% to $1617.85.Comment!
    • 6:58 AM Cabot Microelectronics (CCMP): FQ3 EPS of $0.55beats by $0.01. Revenue of $115.7M (+3.5% Y/Y) in-line. (PR)[EarningsTech] Comment!
    • 6:56 AM Ball (BLL): Q2 EPS of $0.89 beats by $0.02. Revenue of $2.3B (-0.6% Y/Y) misses by $60M. (PR[Earnings] Comment!
    • 6:54 AM ACI Worldwide (ACIW): Q2 EPS of $0.16 misses by $0.15. Revenue of $149.8M (+40.6% Y/Y) misses by $25M. (PR)[Earnings] Comment!
    • 6:50 AM Invacare (IVC): Q2 EPS of $0.30 in-line. Revenue of $454.9M (-2.5% Y/Y) misses by $11M. (PR[EarningsHealthcare]Comment!
    • 6:47 AM World Acceptance (WRLD): Q2 EPS of $1.63 beats by $0.13. Revenue of $132.8M (+7.8% Y/Y) misses by $1M. (PR)[EarningsFinancials] Comment!
    • 6:44 AM Pulte Homes (PHM): Q2 EPS of $0.11 beats by $0.06. Revenue of $1B (+15.3% Y/Y) misses by $110M. (PR[Earnings]Comment!
    • 6:43 AM Bunge (BG): Q2 EPS of $1.20 misses by $0.16. Revenue of $15.1B (+4.2% Y/Y) misses by $700M. (PR[EarningsConsumer]Comment!
    • 6:42 AM Arctic Cat (ACAT): Q2 EPS of $0.14 beats by $0.22. Revenue of $111.3M (+48.6% Y/Y) beats by $13M. (PR[Earnings,Consumer] Comment!

    • 6:40 AM Ashland (ASH): Q2 EPS of $2.04 beats by $0.24. Revenue of $2.1B (+28.4% Y/Y) misses by $100M. (PR[Earnings] Comment!
    • 6:36 AM Patterson-UTI (PTEN): Q2 EPS of $0.6 beats by $0.16. Revenue of $681M (+13.5% Y/Y) beats by $13.39M. (PR[Earnings,Energy] Comment!
    • 6:34 AM Linn Energy (LINE): Q2 EPS of $0.31 misses by $0.09. (PR[EarningsEnergy] Comment!
    • 6:31 AM Starwood Hotels (HOT): Q2 EPS of $0.7 beats by $0.09. Revenue of $1.61B (+13.5% Y/Y) beats by $0.05B. (PR)
      [Earnings] Comment!
    • 6:28 AM Radware (RDWR): Q2 EPS of $0.43 in-line. Revenue of $46.8M (+13.7% Y/Y) in-line. (PR[EarningsTech] Comment!
    • 6:26 AM Moneygram International (MGI): Q2 EPS of $0.23 in-line. Revenue of $330.1M (+6.5% Y/Y) misses by $2M. (PR[Earnings,Financials] Comment!
    • 6:23 AM Evercore Partners (EVR): Q2 EPS of $0.09 misses by $0.40. Revenue of $172.5M (+22.3% Y/Y) beats by $12M. (PR)[EarningsFinancials] Comment!
    • 6:22 AM Dunkin Brands (DNKN): Q2 EPS of $0.33 in-line. Revenue of $172.4M (+9.8% Y/Y) beats by $2.3M. (PR[Earnings]1 Comment
    • 6:18 AM Corporate Office Properties Trust (OFC): Q2 FFO of $0.54 beats by $0.02. Revenue of $133.4M (-2.7% Y/Y). (PR)[Earnings] Comment!
    • 6:18 AM Merck's (MRK) Zolinza drug for a rare form of cancer may also one day be used to help cure AIDS. While existing treatments hold the disease at bay, they don't kill HIV-infected cells, which can remain hidden and then later re-emerge if treatment is stopped. However, Zolinza reactivated those cells in eight patients – the first step to expelling the virus from the body. [Healthcare] Comment!
    • 6:16 AM Cash America International (CSH): Q2 EPS of $0.94misses by $0.03. Revenue of $411.6M (+19% Y/Y) beats by $4M. (PR[EarningsFinancials] Comment!
    • 6:16 AM BlackRock (BLK), Fidelity Investments and Vanguard Group say they're trying to assess how Libor manipulation may have hurt their clients and whether to take legal action over the rate-rigging. The three firms collectively manage over $7T. [Financials] Comment!
    • 6:14 AM Covidien (COV): FQ3 EPS of $1.07 beats by $0.01. Revenue of $3.01B (+2.8% Y/Y) in line. (PR[EarningsHealthcare]Comment!
    • 6:13 AM Iron Mountain (IRM): Q2 EPS of $0.35 beats by $0.04. Revenue of $752M (+0.8% Y/Y) misses by $9.21M. (PR[Earnings]Comment!
    • 6:12 AM MetroPCS (PCS): Q2 EPS of $0.41 beats by $0.19. Revenue of $1.3B (+6% Y/Y) beats by $0.04B. (PR[Earnings]Comment!
    • 6:09 AM Sequans Communications (SQNS): Q2 EPS of -$0.21beats by $0.01. Revenue of $7M (-77.1% Y/Y) beats by $0.6M. (
  224. Phil
      6:07 AM The latest cyber-attack on Iran's nuclear program has apparently taken a musical-turn, with a computer worm not only shutting down the "automation network" at the Natanz and Fordo facilities, but also prompting some of the computers to play the AC/DC song "Thunderstruck" at full volume in the middle of the night.[Global & FXEnergy] 2 Comments
    • 6:05 AM Potash (POT): Q2 EPS of $1.01 misses by $0.01. Revenue of $2.4B (+2% Y/Y) in-line. (PR[Earnings] Comment!
    • 6:02 AM United Community Banks (UCBI): Q2 EPS of $0.06misses by $0.11. (PR[EarningsFinancials] Comment!

  225. PHil – looks like a head fake before the bottom falls out?  Here's a question from before…after V's beat last night, do you still think they are a good short candidate?  They could be even better than before, but they look strong and trending up…

  226. Phil- another good spot to put Sept. TZA on? I missed yesterday.