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Testy Tuesday – That’s What The 50 DMA Is There For

"Virtue untested is no virtue at all" – Milton

The same can be said for support lines and yesterday we tested two of them as both the Nasdaq and the NYSE tumbled down to EXACTLY the levels we predicted they would hit last Thursday.  See that post for the full explanation of what happened yesterday (even though I actually wrote it last Thursday morning) but the key note, which is our action item for the day, was in the 3rd paragraph, where I said:

We are NOT expecting to test 13,600 though, that's just the worst-case, where we would be BUYBUYBUYing on the dip but we HOPE to see 13,800 tested so we can get over it and consolidate for a real move (not a spike) over 14,000.

So let's not call it a shocker when I put out our morning Alert to Members and included this quick cover note for our portfolios at 10:34 yesterday:

Dollar coming back now – 81.43 so good time to cover.  SQQQ March $34 calls at $2.20 are just .50 of premium with SQQQ at $35.70 and that's very fair.  Good ones to keep an eye on if AAPL fails $450 or the Nas can't hold 3,175 (right on the line now).  NYSE 8,900 is a good confirmation spot too.  

As it was urgent and a very important note, I also tweeted it out, so everyone could be properly protected from the drop we predicted but, of course, our Members had other downside hedges like our TLT longs in the $25,000 Portfolios, which gained a very nice 92% from our entry on the 13th but the SQQQ trade was a real winner, finishing the day at $4 – up 82% in a single day!  

SPY 5 MINUTE This is something I was just talking about with Dereck (Opesbridge Trader) last week – you should ALWAYS have a position in mind that you will use if the market either runs up or runs down on you.  Just a simple momentum trade you are mentally prepared to jump on if key technicals break so you can either take additional advantage of a run or just to put the brakes on your losses while you re-group.  Our SQQQ trade fell into the latter category as we were still pretty bullish over the weekend so a nice 82% gain on a hedge certainly took the sting out of a 1.5% drop in the indexes.  

Although the selling was relentless into the close – it was only to the levels we predicted so we cashed in our very quick short profits and even picked up some Silver and Copper Futures longs very early this morning in our Member Chat but, as the morning is moving on, we are less enamored with the market – especially as the Dollar is once again rising over 81.85 – a big danger signal for the bulls.  

To that end, we have decided to take the virtual money and run on our Income Portfolio, which is so ridiculously ahead of schedule (goal of making $48,000 a year on $500,000) that it's embarrassing (up $110,000 in just 8 months) and also, with so many positions deep in the money, it's not very helpful to new Members coming in.  So we're going to start a brand new Income Portfolio this week and I'm sure we will have some of the old, familiar names but with new positions and, of course, new opportunities as they come along (and they always do, which is why we love cash!):

As you can see, that's just our first 6 months worth of trades (that are still open – some have closed) and the portfolio got bigger than we like it to be simply because – there were no losing trades left to close!  Of course there were losing trades (we made some mistakes early on) but we cut our losses and re-focused and were in a fantastic position to take advantage of the rally.  Now, rather than sit on our laurels like most trading sites do – we would rather start from scratch because we are not here to post pretty numbers (as our AAPL Money Portfolio can attest!), we are here to TEACH TRADING!  

money and runFirst thing to learn about trading is "Cut Your Losses" second thing to learn about trading (and it's harder to teach than the first) is "Take Your Profits".  Of course we will continue to keep tabs on our old Income Portfolio positions but most of them involve waiting for 2015 to come around so we can collect our full boat as positions mature – very dull stuff so we're doing a virtual cash-out now, we'll use $96,000 of the profits to pay our expenses for the next two years and we'll take the leftover $14,000 and go on a virtual cruise or whatever it is retired people like to do with windfall profits.  

Speaking of windfall profits – CZR had terrible earnings but mainly due to a $450M hurricane-related write-off at their Atlantic City properties and that's dropping them another 10% pre-market but still well-above our target on a trade idea that pays for our Members to come to our PSW Investment Conference in AC at Harrah's, which happens to be a CZR property.  Back on 2/12, RPeri had asked if there was a trade that would make $625 by April to cover the costs of attending and I suggested:

PSW Conference play/Rperi – You can sell 15 CZR March $10 puts for .40 ($600) and risk owning $15,000 worth of CZR stock, which can at least give you bragging rights while you're there.  The Sept $7.50 puts are .80 so pretty easy to roll if CZR can't hold their recent run to $12.50.  

As long as CZR holds up over $10, the short puts expire worthless and the conference is paid for, which will make anything we learn there pure profit!  Not only was that a great trade but, now that CZR has had the dip we expected on earnings, it's time to get bullish at around $10.50.  Thank goodness we now have plenty of cash to allocate in our new Income Portfolio, right?  We'll have to wait and see where things settle but on-line gambling should be great for CZR, who own the World Series of Poker franchise, which is exactly the brand-name draw that will pull in on-line gamblers in droves.  

There's lots of news and earnings and Global stuff but we went over most of it in Member Chat this morning and not much of it matters as we have two days of Bernanke speaking to Congress ahead of us so let's hope we were right with our metal longs and our bullish stance as we go with the flow – ready to flip flop if our lines don't hold but they'll hold….  at least I THINK they will

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  1. St j /oil lines
    Do you use numbers for pit sesion or all day with close at 5:15  Open at 6:00

  2. Oil Lines / Bertl – I use the prices for the 24 hour session. Once again, it's done automatically by my charting software using the price feed I have for futures.

  3. Oil Lines

    R3 – 96.55
    R2 – 95.50
    R1 – 94.01
    PP – 92.96
    S1 – 91.47
    S2 – 90.42
    S3 – 88.93

    Yesterday's high and low – 94.46 / 91.92

  4. Income Portfolio / Phil – OK, I'll update the old Income portfolio sometimes today and post the latest status. Then I'll rename the sheet in the spreadsheet and start a new portfolio. How about we start with the TASR play from yesterday.

    For anyone interested I can export an Excel spreadsheet of all the portfolio. I might upload it to my Google Drive and Share it so that anyone who wants it can download it. It will be based on the day's prices and will not be updated.

  5. Good Morning!

  6. stjeanluc
    /Google Drive and Share
    That would be great.
    Thanks for your willingness to keep us all up to date daily!

  7. stjeanluc / google drive – i would be interested in the portfolio spreadsheet.  good idea.  

  8. ST j /charting software
    What charting software do you use and if you get futures feeds what platform are you trading from?

  9. Phil / IncomePort
    I'd be fine with starting a new one with the initial intention of "cherry picking" positions from the old one to enter as "new" trades.  Could I make one request this time?  When you pick a trade, could you use the MARK field (mid price) of the options rather than the LAST price?  It's more representive of the fills that are achievable.
    Some of the current trades I like in the old one are WMT, CHL, TUMI, IRBT, WFR, INTC.  Most of the recent ones that aren't profitable yet.

  10. UUP WEEKLY Good morning! 

    Futures up nicely and the indexes will seem nicer because they were jammed down hard into the close so they gave an exaggerated picture of the sell-off.  That's another good reason to learn Futures trading – you get a better picture of what the market is really doing.  

    Still no one mentions the Dollar, which is STILL the main driving force behind each twitch in the market.  Dollar is at 81.83 and the Euro is at $1.308, which is not good as it was rejected at $1.31 just a few minutes ago.  The Pound was also rejected at $1.52 and now $1.516 and the Yen is drifting along just under 92 and, assuming they have given up on the Euro for now – we can expect them to be buying Dollars today so it's going to be tough for us to go down but I still don't think we go over 82 and no effect from the Dollar is still good for the markets – assuming I'm not wrong and the underlying Fundies are still bullish.  

    Also interesting, Bernanke speaks today and tomorrow and tomorrow is the biggest POMO day of the month, with about $5Bn added to the mix by the Fed:


    February 25, 2013 February 26, 2013 Outright Treasury Coupon Purchases 05/15/2020 – 02/15/2023 $2.75 – $3.50 billion
    February 26, 2013 February 27, 2013 Outright Treasury Coupon Purchases 02/15/2036 – 02/15/2043 $1.25 – $1.75 billion
    February 27, 2013 February 28, 2013 Outright Treasury Coupon Purchases 02/28/2017 – 11/15/2017 $4.25 – $5.25 billion
    February 28, 2013 March 1, 2013 Outright Treasury Coupon Purchases 02/15/2036 – 02/15/2043 $1.25 – $1.75 billion

    So the game is afoot and let's stay on our toes! 

    Silver (/SI) flew up to $29 and has been rejected, copper (/HG) is still going at $3.5655 but just greed if you didn't take the rejection at $3.57 seriously – especially at $320 per penny, per contract!  

    Oil popped to $93 but rejected there (too tricky to play at the moment), gold failed $1,600 again and now $1,594, nat gas at $3.549 and gasoline came off the $3.20 bottom and now $3.226.  

    The FAS $149 calls from FAS Money are $3.20 and let's buy them back and hopefully there's a bounce and we can sell something else for more than $1,200 between now and March expiration (see – put like that it seems pretty obvious we can, right?).  

    AAPL $470s we sold short in the $25KP are just .40 and we buy those back and roll our $460s ($1.20) to the next week $460s ($3.50) and hopefully we get a pop to re-cover into.  

  11. TASR/StJ – Great idea, thanks!  Cool thing to do with the spreadsheet.  Remind me on the weekend that I'd like to run through the "old" Income Portfolio and sort of set up 3-6 month covers where appropriate.   Then we can check on it again in May. 

    Marks/Burr – I use either, it depends on what I think is going to be a realistic fill, not whatever is printed there.  Part of using the portfolio is learning to get your price for entries.  If you can't get a fill, then I'll take the feedback but, as I often repeat here – I'd rather walk away from a trade than not get my price.  +/-5% is usually as far as I'll go on an option.  Recent trades that have better entries than we started with is a good place to start but – as it's now $500K of "new" money and our goal is to make $4,000 a month without touching the principal (something that did not work last time as we hit a drop early on), we will be focusing on short puts and dividend-payers early on.  

    As the market is still iffy and as some people may want to get set up – we're not diving into the new income portfolio quickly.  The premise is we are retired, this is our nest-egg and we are looking to make $4,000 a month to cover our living expenses without dipping into the principal if possible.  Over time, we hope to build up a strong portfolio against which we can keep selling calls and collecting dividends on a regular basis but, early on, SCALING IN CAREFULLY is key.  Many of our most successful positions in the Income Portfolio were positions that originally went against us so we simply doubled down or rolled – but you can't do that if you over-extend yourself early on!  

    CZR at $11.25 – what happened to the drop?  Damn, maybe that was my fault for mentioning them in the post – sorry.  You can still sell the September $10 puts for a whopping $2 so let's sell 20 of those in the Income Portfolio for our first $4,000.  See how easy that is?!?

  12. Phil
    I like the idea of a new income port
    Is JPM a good one to add or wait for a pull back?

  13. Dow up 100, AAPL down… Not helping!

  14. Hey Phil,
    Why did CZR tank so much last year to $4.50ish?

  15. Charting / Bertl – I use Amibroker and Neuroshell Trader for charting. I get my feeds from IQ Feed. But trade on TOS. TOS has some good charting but my problem is that they don't show enough history for some of my charts. For example, their 5 minute charts goes back 20 days only when I can chart all the way back to 2011!

  16. Portfolio – OK, I'll update the old Income Portfolio after close today and export the entire spreadsheet to Excel and post it on my Google Drive and share it for anyone to download.

    Phil – I'll make a list of the positions to watch until May and post that as well to make it easier.

  17. BTU weak today

  18. Phil / Candidates
    I'd like to nominate a few of the div payers;
    AGNC 15.39%, CIM 12.33%, ECA 4.45% (and down to $18 + yodi and I play it), MT 4.25% (and down to $15), T 5.06%, RRD 10.66% (and still $15) and my favorite TWO 17.81% still at 12.35.

  19. Phil / country tour
    I scan the portfolio holdings lists of Templeton Developing Markets and Templeton Frontier Markets, managed by  Mark Mobius, and of single country mutual funds and ETFs, looking for potentially interesting companies.  I look for dividend paying companies; I cross out banks and cell phone companies; and I try to stay away from low-margin businesses that can be hurt by multi-national entrants (for example, I would stay away from a local fast-food chicken company since KFC is opening stores everywhere).
    My investment process with these companies has very little analysis behind it:  if a company looks interesting I buy a little; if I receive my expected dividend and the stock goes up, I buy more.  If the stock goes down, I stop out.  (My Mongolian coal company when straight down after I bought it.)
    This process has led me to NagaCorp (3918:HK), a Cambodian resort and casino complex that was paying a 6% dividend when I first bought it; CPFL Energia (CPL), a large Brazilian electric utility company; Orascom Construction (OCI:NL), an Egyptian construction company and fertilizer producer; Turk Traktor (TTRAK:TI), a Turkish tractor manufacturer; AKR Corporindo (AKRA:IJ), an Indonesian logistics company opening ports in China; Charoen Pokphand (CPF:TH), a Thai agricultural and food distribution business which is expanding into Vietnam; MTN Group (MTN:ZA), a South African cell phone company (my one exception to my general aversion to cell phone companies) which is the cell provider most focused on undeveloped African countries; KGHM Polska Miedz (KGH:PL), a Polish mining company (right behind Southern Copper in copper production and one of the largest silver miners in the world, yielding above 10% with a p/e of 4.
    The only companies in my frontier markets basket which do not pay a big dividend are SuperGroup (S10:SG), a convenience food and beverage company doing a lot of business in Myanmar, and Yoma Strategic Holdings (Z59:SG), a crazy p/e property developer in Myanmar.  I bought these two as soon as the U.S. prohibition on Americans investing in Myanmar was lifted last year.
    It is just kind of fun to look for these things, some of which are big, real, serious companies Wall Street knows nothing about, receive some big dividends and trade on exotic markets.  (I opened up a brokerage account in Zimbabwe last week since I think that will be a good place to invest when Mugabe dies.)  And the price action of these stocks can be pretty exciting.  Yoma routinely swings a few percent a day.  Nagacorp was up around 100% last year; Yoma is up around 600% over the last few years.

  20. AAPL / Feel free to admonish me…
    I don't know how to fix this position, I'm frozen.
    Short the Jan15 400Put, Long the Jan15 400-550 Bull Call for net $74.80.  It's now trading at a net credit of -$5.85.  So it's down over 107%.  
    My thoughts were to roll the put lower, and roll the long call lower, and leave the short call, but I don't know…. 

  21. ron/opes,
    great post and tks for the info……do you find one broker better than another for the overseas trading…………….

  22. Opes: This is great= My investment process with these companies has very little analysis behind it:  if a company looks interesting I buy a little; if I receive my expected dividend and the stock goes up, I buy more.  If the stock goes down, I stop out.

  23. Burrben
    AAPL we are writing the year 2013 leave it alone if you look at this every day you will get a heart attack!!!!

  24. Phil,
      I see this all the time: you post the new Income Portfolio CZR Sept $10 put play for $2 at 9:53, and by the time I see it at 10:10, it's $1.75-1.85 bid/ask in TOS. Since you just mentioned again that you would rather walk than deviate more than +/- 5%, what would be your advice? Put in an order at $2? Keep watching? Sell some puts now as a beginning scale in? Walk?
      BTW, this is how I got the USO price differential recently that you advised I was probably doing something wrong. I basically have accepted that by the time I'm able to access your picks, plus the effect your picks have on the prices, that I'm going to get prices inferior to those specified, but that as long as they are not wildly lower, I can still make a more than reasonable profit, at least by my standards.Am I wrong in this view?

  25. FU AAPL!!!!!

  26. Yodi / AAPL
    I'm 100% sure that Phil could suggest a better position to be in than my current trade.  I believe in AAPL long term, so I don't want to just sit on my hands when something is down 100%.  Plus it's a learning experience for everyone here…. (and that's what we pay for)

  27. kevinb63 / CZR
    The high on the day is 1.85, it never reached $2.  Just put a GTC order out there for 1 contract at $2.  When it fills, you can choose to add more, or put another GTC order out.
    I only throw 1 contract out, in case there is news and the put price increases a ton.  Then you could sell for a higher price.

  28. Opesbridge
    Do you have any investments in the Philippines?
    Are you going to the Atlantic City Conference?

  29. FAS Money – Just let's not that we're out of the short calls at XLF $17.35 

    AAPL Money – That $440 line is holding but brutal on the net!  Nothing to do but stick with the plan of letting AAPL stick it to us until one of us breaks.  

    $25KPM – Profits???  I'm so confused by this…  IBM right on track and QQQ too low to sell so I guess we need to find some new trades before we get bored.  

    $25KPA – AAPL blah, SQQQ not afraid, GOOG is at $790 so getting "on track" and good protection for a dip, IBM on track, FFIV fell off but coming back and, don't forget, it's leftovers, not a position so we have no reason to DD.  VMW there is no reason to leave the $80 short calls up so we can buy them back for .90 and see how the naked calls work out. FB not doing well at all but good bottom here so we pre-sell the probable roll of 10 April $27 puts for $1.50 and put a stop on our 5 short March $30 puts at $3.50 and, if we are lucky, it never triggers.  The April $31 calls (.30) can be rolled down to the $27 calls ($1.50) and doubled down to 10 so we end up with 10 at net $2.77 and we'll need $30 to break even (also leftovers) rather than $33.84.  EXPE about to get whacked by PCLN earnings so let's sell our calls ($4.30) and leave the naked short calls with a stop at $3.  AKAM is leftovers but I like them down here so let's roll the May $43s (.80) to the April $36s ($2.15) and double those down.  PCLN is tonight!

    JPM/QC – I like them but I'm looking for bargains – even in stocks I love.  Patience is another thing I need to teach you guys…

    Dollar snapped up to 82 again but so far, no sale over that line.  

    This sequester nonsense is not going to die down.  

    At the open: Dow +0.58% to 13865. S&P +0.53% to 1496. Nasdaq +0.65% to 3182.

    Treasurys: 30-year -0.16%. 10-yr -0.08%. 5-yr 0%.

    Commodities: Crude -0.15% to $92.97. Gold +0.48% to $1594.2.

    Currencies: Euro +0.21% vs. dollar. Yen +0.2%. Pound -0.07%.

    Market preview: EU markets are having a panic attack after those recalcitrant Italians express their disapproval with the EU-imposed austerity, but all's calm on this side of the water as U.S. stock futures point to gains when the market opens. The S&P mini is +0.2%and the Dow is +0.3%. Home Depot's results (+2.85%) are helping tosupport sentiment, while better-than-expected housing data (III) could also be a factor. Later: Investor confidence, Richmond Fed Mfg, Ben Bernanke testimony to Congress.

    Wow, 10% over estimates:  Jan. New Home Sales: 437K vs. 381K expected, 393K prior (revised from 369K).

    Dec. S&P Case-Shiller Home Price Index: +0.9% M/M vs. +0.8% expected, +0.6% prior

    Dec. FHFA Housing Price Index: +1.4% M/M vs. consensus of +0.7% and +0.6% (revised) in Nov.

    More on Case-Shiller: Home prices (the 20-city composite) gained 6.8% for all of 2012, the best performance since 2006. However, with prices on the upswing for nearly a full year now, the days of easy comparisons are over. "The strongest numbers may have already been seen," says S&P's David Blitzer. SPY +0.5%,QQQ +0.3% premarket. (full report)

    Wow, 13% over estimates:  Feb. Consumer Confidence69.6 vs. 61.0 expected, 58.4 in Jan. (revised)

    Wow, 250% over estimates: Feb. Richmond Fed Mfg. Survey: +6 vs. -4 expected, -12 previous. 

    Bernanke Semiannual Monetary Policy Report: The benefits of easing continue to outweigh the costs and risks, says Bernanke in his prepared testimony. Maybe putting to rest the kerfuffle from last week's FOMC minutes, he says QE will continue until there are substantial labor market gains. Watch live here. 

    More Bernanke: A very dovish speech, he says for every asset manager potentially moving too far out the risk curve because of Fed policy, there's an entrepreneur taking out a relatively low-cost loan to start or expand an operation, and there's a business opting to rely on more stable longer-term funding than otherwise. Throwing a bone to consumers, he at least acknowledges the hit to family budgets from higher energy prices. Senators are making introductory statements now. Bernanke is up soon. 

    Saying a second election wouldn't be helpful, Berlusconi is open to a broad alliance with Pier Luigi Bersani. The two are clearly worried another vote might favor populist challenger Beppe Grillo whose movement was the top vote-getter yesterday. Italy's off the lows, -3.5%. The Italy ETF (EWI) had its big decline yesterday, and is+1.9% premarket.

    Three breakfast reads:

    1) Europe: Was (Is) It Worth The Trouble? 

    2) Don't Invest In Oil & Gas Before You Read This 

    3) AbbVie: Don't Fear The Humira Patent Expiration

  30. millcreek / brokers
    I have not conducted a survey of brokers and their international trading capabilities, but I have had good luck with Fidelity.  You can trade on their website about 20 countries, and their international desk can route orders to another 30 or so countries.  That desk routed my orders directly to Jakarta, Istanbul, etc.
    Some of these companies have their primary listing in London or Singapore, and so they can be traded on the Fidelity website.  Many of these companies are listed on multiple exchanges.  I buy only on the exchange with the greatest volume, which, usually, is the local market where the company is based.   Stay away from the very thinly traded ADRs and ordinary shares listed in the U.S.

  31. Keep in mind that we're down on Italian elections, which seem to be resolved, and China trying to stop their own runaway home price bubble – that's an artificial slowdown in China, not a real one but then the IBanks feed the bears with crap like this:

    UBS sees iron ore prices slumping at least 50% by Q3 to their lowest level since 2009, as China boosts production and global supply climbs. Australia is set to deliver ~80% of total new seaborne supply this year, most of it in H2 as China has “sufficient” ore and steel production declines. But first, rates may jump as a severe cyclone nears Port Hedland, the world’s largest bulk export facility.

    Goldman slashes its 2013 gold price target to $1,600 from $1,810 citing … recent price declines. What wonderful value-added. Searching for a better reason to justify its fancy pay, the team notes a small increase in U.S. real interest rates as well as the perceived hawkish FOMC minutes (refuted by a half dozen Fed speakers over the past few days). GLD -0.3% premarket.

     The WSJ shines a light on the significant gap in corporate pension plans, with the deficit among Russell 3000 companies rising to $441B in 2012 from $392B in 2009 despite the funds adding $1T in assets. The causes of the problems include the Fed's record low interest rates, Moody's downgrade of several major banks last summer, and increasing life expectancy.

    Low interest rates may be hurting corporate pension funds, but companies continue to exploit the opportunity to issue debt on the cheap, with eight yesterday selling $9.9B in bonds. Pepsi (PEP) led the way by raising $2.5B, followed by UnitedHealth (UNH) with $2.25B and Caterpillar Financial Services (CAT) with $1.1B. 

    Dollar over 82 as Bernanke speaks and over 81.85 is a win for the bears but, overall, Bernanke could not be more doveish so let him finish talking before throwing in the towel, I think…

  32. qcmike / Philippines
    I do not have any investments in the Philippines.
    Presently I am not planning to go to the Atlantic City conference.

  33.  i just want to make the point again how insanely inefficient this market is…price means nothing….very little gets priced in until it does….there were all sorts of notes out last week about the odds of a bad outcome in italy being greater than 50%…yet italian stocks are plunging and the cds is skyrocketing the last 2 days like its a complete shocker.
    uh oh….bernanke talking about risks of pushing investors too far out on risk spectrum….hahahaha…little late for that
    he is basically saying they are going to keep doing what they are doing but that risks of eventual failure are high…ha

  34. Timing/Kevinb – what you're saying is correct, that we basic members, or premium types who cannot monitor things continuously, will find prices to have changed. You're incorrect in a fundamental assumption, though, that Phil is giving us trading tips on an hourly or minutely (that should be a word) basis. Further, even if things go the wrong way for an hour or two after Phil or another of the gurus mention them, wait a bit longer and you can usually get a good entry. And if not, it's a wide wonderful world, and other things are out there.

  35. Phil,
    What do we expect from Appl's News day on Feb 27th; More blood on the floor, or some semblance of a floor? Thanks….also looking to sell MT 2015 13puts and X 2015 15P…..for income….Thanks

  36. pcln question;
    i love the short 700 , long 710-750 trade idea.
    Is it being a pig to hold this into earnings or do you take the money and run now?

  37. Gold over $1607 and silver up too, even with dollar at 81.87..

  38. CZR/Ging – They had to restructure their debt.  If it wasn't for the constant cash coming in from the casinos, this would be a defunct real-estate company as they are terrible at managing properties and they missed the boat to Macau (but are negotiating in SoKo now) but, on the whole, I see CZR as a Las Vegas REIT with a rich uncle that keeps dropping money in to keep it running while we wait for the real estate market to turn back up – the on-line poker thing is just a bonus.  CZR has $19Bn in debt, mostly priced as junk and they spent $2Bn in interest payments last year (off $8Bn in revenues).  While that should make you want to throw up if you have your life savings in them – as a speculation, imagine how fast their bottom line improves if they refinance.  That's the real hidden bonus in this thing – they have not yet been able to take advantage of low rates but, frankly, as long as they are knocking off $1Bn of debt per year while breaking even, then that unlocks $200M in new profits (from lack of interest payments) and I have no doubt they are presenting this scenario to bankers this year.   

    Thanks StJ.  

    BTU/Scott – Good one to watch for a put sale.  VIX at 18 makes lots of put selling tempting.  

    Good list Burr.  RRD I was just looking at, in fact but they popped way up after a quick dip on what I thought were good earnings.  That can be our next $4,000 as we sell 20 of the Jan $10 puts for $2 on RRD as well for the Income Portfolio.  If they go lower, we'll be happy to buy the stock and sell some calls but, for now, that position pays 2x the dividend and we don't even have to bother owning the stock.  

    Global investing/Ron – I think it's great.  A perfectly valid hobby, collecting exotic investments and, as I said, I will be happy to go visit and report back to you as long as their is a good hotel nearby.  I'm too much of a fundamentalist to put money into things I can't thoroughly investigate but there are PLENTY of great companies in this world that simply run a nice business and make good money but couldn't possibly comply with SEC regs – nor would they want to start.  As you say, that leaves a wide-open field for individual investors to go after.  Buffett does it too, but he always visits to make sure at least they have some real people working at each place.  

    AAPL/Burr – AAPL is over $400, nothing to fix on the put except your intermediate expectations.  I don't understand why your net is so high but I imagine you rolled into that from a worse position, right?  Forget the %,  AAPL is at $440 so you are down $35 and the question is whether or not you believe AAPL can gain $110 (25%) between now and Jan 2015 so you can collect $150?  If so, there is nothing to "fix" and, if you are right, then it's all good as you are only $35 (less than 10%) from break-even.  If not, then you will get much cheaper opportunities to roll and DD and, since there is no pressure for you to do anything at the moment – waiting is fulfillment.    At $33 though, you may want to consider buying back the $550 calls and the plan would be – if AAPL goes up $40, you re-cover for a better price and, if AAPL goes down $40, you sell the $500 calls for about $35 (now $45) and use that money plus another $10 (probably) to roll yourself down to the $300s (now $148 and +$63), which would net you into the $300/500 bull call spread for maybe net $45 more.  So, now that there is a plan – do you feel better? 

    And what Yodi said.  

    CZR/Kevin – I'd certainly wait.  We don't have any compelling reason to believe CZR should have leaped 10% off the bottom this morning (and even further pre-market).  As noted above – they have plenty of issue but I feel they are all surmountable over time.  The broad market is weak and someone can downgrade them tomorrow so chasing them is out of the question but keep in mind January's will open up at some point and then you can get your $2 so it pays to wait either way.  Another way to go is sell 10 of the $12.50 puts for $3 and collect $3,000 and, if the stock does drop and the $10 puts go back to $2, then you can do a 2x roll and likely pick up at least $500 more but, if it never goes down, then you captured $3,000 at least.  But, as I said, it's only day one of a 206-day trade so I think I'd give it a few more before giving up on that very attractive strike and price. 

    As to the 2nd part – yes, you are wrong.  If you pay 10% more to enter every trade, that's a hell of a handicap to overcome.  Yes, sometimes we get very big wins but sometimes – like the ones we adjusted in the $25KP today, things go against us and we have to go into recovery mode.  If you are going to chase things – getting into the trades that already went against us is probably a better strategy than chasing trades that already went our way.  Keep in mind, we're generally only looking for 20% so, by the time you pay 10% over – you may be selling to the same people who got in ahead of you as they begin to cash out.  

    Gold $1,609 – Ye-haw!!!  Silver $29.25 for a MASSIVE gain on /SI.  Copper $3.5705 but we gave up on them (/HG).  I'm all for taking the money and running on Silver now, or at least stopping under $29.20.    Oil can't get anywhere at $92.85 with the Dollar at 81.91. 

  39. BAC – I did your initial play on them at 1x entry. Buying 12.15 selling the Jan 15 $10 C & Ps. Happy to hold it but am considering adding more $10 Ps on this dip. However it could break through support here and next support is around 9. What are your thoughts?

  40. Rustle, as long as we are talking commercials, this is the best one I've ever seen. Maybe it's due to the fact I was in Afghanistan so long and had only public service commercials on AFN (don't drink and drive, don't shake babies, etc)……. I dont like red bull as it's a very unhealthy drink but this ad is inspiring….  

  41. OT; I was watching a show called the Aviators, and they profiled the MIG15.  It burns 460 gallons/hour of fuel! Holy Crap.  The single engine planes I fly burn about 10-15….wow.
    At $5 for JetA, 1 hour in that bird will cost you $2300!

  42. Shocker/Angel – I know.  In this day and age, how can people not know things like this are coming?  Risk specutrum is Bernankespeak for "irrational exuberance" but, then again, Greenspan said that in 1996, about 100% before the market topped out.  

    Good point Snow.  Also important point is that the idea is for people to learn to spot their own trades and make them – not just wait for fish to fall from the sky. 

    AAPL/Jasu – Not much.  I can't see that they would be ready to announce anything major so soon.  MT is a good choice but several years wait for Europe to turn around most likely.  

    PCLN/Jabob – I'm agonizing over that myself as the weekly $700s are $11 and the April $710/750 bull call spread is $10 so we pay $1,000 to get out and keep $5,000 with no drama at all vs MAYBE making $7,000-8,000 if PCLN stays around $675-$700 for us.  I think, going by the rule that a bird in the hand is certainly worth more than 1.5 in the bush – we should cash this in in the $25KP and not even risk the earnings

    KO/Rustle – That's nasty.  

    BAC/Tx – Oh we lost interest in them a while ago.  I still think they are solid, long-term but nothing exciting likely to happen in either direction.  I wouldn't rush to buy more at $11.  If they dive to $9.50 (200 dma), then maybe but this is limbo for them and could go either way – especially with Europe uncertainty.  

    MIG/Burr – That's another reason oil is going down.  Without our troops at full strength overseas, that's a lot of unsold gas for tanks, boats and warbirds.  Under Bush, our military was burning 1mbd – about 5% of total US consumption.  

  43. PCLN / Phil – Out of the position then. We had only 5 of these BCS / Put combination so net $2,000 on the play. Not bad for a day's work though…

  44. Elizabeth Warren is by far the smartest person in Congress.  She is the only one who gets it and the only one who genuinely wants to do something without playing politics on either side.

  45. StJ / Port 2cents
    Thanks again for doing all this work and making it clearer. I left some comments, but I noticed they were on the previous days thread. ( which begs the question – why does Phil always start on the previous days board )
    In short – I think the move to new port is great. All my positions when I joined start at the new year. A very easy precedent to establish – archiving on the new year.
    As a new joiner, to Burrs point, I think the "flow" can be difficult for new people to grasp.  Updating the GoogleDocs frequently would be grand, ( as these are what I'm constantly referring to for so many portfolios )

    I think if there was one thing I could suggest, it would be clarity 'action items'. Now, before Phil jumps all over me – I don't mean that we're following his every move and certainly not curtail riffs and ideas. Presently, I have to read through the entire thread of the day to glean moves on any portfolio. This is how I learn, by doing – however, I have missed many a cover or roll simply because I missed the posts ( which are going to be inherent in WP platform as members are constantly posting 'over' people ) 
    What I am suggesting is literally a separate sheet or daily that encapsulates the moves of the day. Perhaps this is something as simple as bolding dailies on the Google docs. I don't know – what are your thoughts ?

    That, or the go-go girls. ; > 


  46. Hi phil
    I sold a couple of 2015 18 dollar puts on nuan for 2.55 each when it was at 20 dollars.
    with nuan now at 18.15 and puts at about 3.20 should i sit tight and see if it goes lower
    or possibly buy stock and sell 20 or 23 calls at this level

  47. Phil, Burr, Snow,
    Thanks for the tips regarding timing. Much appreciated.

  48. PCLN/StJ – Well, same concept.  Taking the money and running with no risk is always nice ahead of earnings. 

    Warren/Rustle – I know.  So nice to finally have an adult in the room.  

    Why/Wombat – Because I wake up and like to read comments before starting a new post and I read the news and take notes but, at some point, I decided you guys would like to see the notes so I drop my news items in comments too and THEN – after thinking about the markets and chatting for a few hours – I am ready to write a new post.  

    As to go-go girls or other tricks for people who like to take their trades completely out of context of the chat discussions in which they develop – I'm not too interested.  We have had plenty of people over the years who want "just the summary" or Emailed trades etc, which many sites are happy to do but those people don't last because they don't learn, and don't want to learn, how to be good traders – they just want to be fed fish all day and usually have nothing to contribute and we only have 500 spots in chat and the last thing I want to do is fill them up with people who just follow trades and aren't even willing to read the commentary that forms the logic on which the trade ideas are based.

    OK Wombat – now look away – we're going to start talking about what's going on in the Economy before we decide what to trade!   

    Oops, that's it for Bernanke on day one.  No major damage done and Europe is done with 2.5% drops in France and Germany, 1.25% in UK and Italy went for the full 5% move down to close the day with Spain splitting the baby at -3.25%.  

    11:14 AM Stocks give up sizable early gains following Bernanke's dovish testimony, with the S&P and Nasdaq now in the red. Hurting is Europe sliding back to session lows after an attempted late-day bounce. Stoxx 50 -2.6%, led by Italy -4.4%. Performing best across the pond is the U.K., -1.2%. The euro is flat at $1.3065.

    More on New Home Sales: Sales nationally are up 28.9% Y/Y, up 54% in the northeast, up 60% in the west, up in the teens in the south and midwest. There's a 4.1 month supply of new homes for sale, down from 4.8 in December and 5.3 a year ago. XHB +1.4%. (full report)

    Feb. State Street Investor Confidence Index: 94.8 vs. 86.8 in Jan. 

    Bernanke: Monetary and fiscal policies are working at cross purposes, he says, responding to a question. Tighter fiscal policy is dragging growth by 1.5% this year and monetary policy cannot make up for that, he contends. "Fiscal policy decisions being made are mismatched with timing," i.e., no spending cuts this year, please

    Bernanke: Economist or politician? The chairman goes near purple with rage as a Senator suggests he's a dove. I've got the best inflation record of any post-war Fed chairman says Bernanke, pointing to a 2% average. So that's how we're ranking things? By that spurious reasoning, Paul Volcker has the worst inflation record of any Fed chief ever.

    Bernanke: "I don't see much evidence of an equity bubble," he says. "Earnings are high." The remark reminds of Greenspan's Congressional testimony at the market top in 2000. He told lawmakers the high stock prices of that day made perfect sense given analysts' earnings estimates.

    $4 gasoline is just around the corner – actually, it's already here in 23 states, according to AAA, whose Daily Fuel Gauge shows the nationwide average for regular gas hit $3.782, vs. $3.777 the day before and $3.347 a month ago. Blame it on widening crack spreadsdue to planned and unplanned refinery outages, higher global demand for petroleum products, and especially low crack spreads late last year.

    Dow volume just 54M at 12:15 so 2/3 more to get to yesterday's level.  

    I cannot imagine what horrors people think will come out of the AAPL meeting tomorrow but sometimes you just have to take a stand…

  49. Wombat- Phil highlights or bolds his moves, I have no trouble following it. Not trying to be a smarta$$ but might suggest the issue is you're managing a gazillion accts for your family members and not how Phil posts?

  50. Oops, Pdiddy already responded….

  51. NUAN/Tommy – No real change from my 2/8 comment on them:

    NUAN/1020 – They got clobbered on not so terrible earnings and probably make a nice long-term buy down here.  They are not going to be exciting but should hold up so I like them on the condition of it being an income play – not just as a stock to sit on.  I think selling the 2015 $18 puts for $2.40 and picking up the $18/25 bull call spread at $3 is a nice net .60 entry on a $7 spread that's $2 in the money to start.  You can sell 1/3 March $20s for .75 to start and, if they come back quick, you have a $6 advantage to the caller (3 x $2) so not likely to get you in too much trouble with 21 months to roll and .25 per long collected is paying yourself a 41% dividend for the first 35 days – not a bad start.  

    I take it you just did the short puts but I still don't see the point of buying the stock vs. the spread as I just don't see them doing much for a long time with guidance matching earnings (disappointing).  

    You're welcome Kevin. 

    Managing accounts/Wombat – Rustle is a pro trader and he has a master account and other accounts link in and trade in proportion to their allocation so he only has to manage the one account himself.  I'd say you should offer to treat him to a very nice weekend in SF and maybe he can show you how to stop driving yourself crazy.  

  52. CZR/SoKo – I did not know about this. I'll keep an eye on it. Gambling is not as big in South Korea as in many places, but the tourist mix is shifting very heavily towards China and away from Japan. The stereotype of the Chinese is that they're the big gamblers amongst East Asians.

  53. Phil:  Homebuiders:  I realize how irritating it must be for a member to ask the same question every 48 hours as I have, but the good news on real estate keeps on coming.    
    And further [

    ”The inventory of unsold homes in the US dropped to a 13-year low in January as buyers returned to the market, pushing sales of previously owned homes slightly higher.
    The number of existing homes available for sale dropped 4.9 per cent from December to 1.74m in January – the lowest level since December 1999, the National Association of Realtors said. That represented 4.2 months of inventory at the current sales rate, the lowest since April 2005. Inventory had previously hit an 11-year low in December.
    Even with fewer properties available, sales rose 0.4 per cent last month to a seasonally adjusted annual rate of 4.92m, above a forecast 4.9m. Sales were 9.1 per cent higher than the 4.51m pace reached in January 2012.
    “Buyer traffic is 40 per cent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country,” said Lawrence Yun, NAR chief economist.”

  54. Anyone following P?  I think I'm looking for a reason to like them, but am having a hard time warming up.  They certainly have established a brand, but in a market where I'm not sure that means a whole lot.  Still, there premiums are attractive while they seem to continuously loose money.  Still, I doubt they will be out of business this year or next.    

  55. Thank you for the member who recommended short puts on FCX.  Got in at 1.42 which is a fair price even if assigned as the yearly lows 2012, 2011 right there as support (2012 not so fresh but we shall see).

    Separately I bailed on HPQ at breakeven as it continues to diddle-fart around…not worth my opportunity cost watching it!
    Phil, where do you recommend a BULL HPQ entry at this point?

  56. New topic – Wiley want Sage and I to write a book and I never have time as I'm always writing here and then, on the weekend, the last think I feel like doing is writing a basic options book.  BUT, we have Sages book as a base so how about I put up a chapter each day or so here in chat and we all re-write it to make a a really good options book?  I want to stress the "Be the House" aspect a bit more and tie the book together with that theme, as well as stuff we already use like scaling in and rolling, etc that most traders simply don't understand.  

    I think it would be a good exercise for everyone and it can be the first book written by an entire trading group – that would be cool in and of itself.  

  57. Moody's Raises Outlook on Cliffs to Stable From Negative 

  58. jro // fair point, i do have a lot on my plate, but my comments were more from user experience. i think the moves can be much clearer.
    phil // ya, thats the take-away i was afraid you'd respond with.  
    I just don't think its that black and white. I'm surprised a little because you have kids - sometimes you just need the logic, not the whole macro thread attached to it. 
    for people who like to take their trades completely out of context" 

    I think this comment was pretty unfair – I work damn hard trying to follow you – one could argue TOO hard. It's a common fact that about 5-7% of member chat actually participate, so yes, I am your gadfly – and that takes a little courage quite frankly.

    Step back from your schema of me and look at what I do for a living. I'm simply giving advice but by no means does that mean that you have to take it. It's not a comment on 'context' of 'learning styles' etc. but how people interact with you visually.
    But, in terms of trade sheets I thought I pre-empted that – I enjoy the threads and context, if at least at the end of the day to double check your moves and logic. One mans professional opinion.
    But it's your house. 
    I think the co-op book is a brilliant idea. If I can help let me know. The major points of learning that I see you focusing on are scaling, hedging and rolling – and of course PATIENCE ( masqueraded as faith and/or conviction ; > )

    Rustle  //  would love to talk – I have all 12 of my accounts all presently linking under a main account inTOS ( or should by the end of week ) If there is a way to make them more managable, I'm all ears. 

  59. TOS help- im new to the platform- is there a way to take a position from the Activity and Positions tab and sell it by clicking etc? Thanks god its only papermoney at this point….

  60. Newt, right click on solid circle before position or on arrow to left of ticker symbol and choose between "create closing order" or "create rolling order"

  61. STJ are we out of the SCO MAR13 36c I must have missed it TIA

  62. rperi- Groovy.

  63. newt
    TOS you need to go to the TRADE tap enter you stock and than you can trade

  64. PSW Investment Conference in AC at Harrah’s

    April 27-29

    - With Rexx on board we now have 11 members signed up (listed below). The
    conference link is in Phil’s main post today. Email me with any












  65. CSTR- I have some left over long calls- April 55- from an earnings play- looking at the chart and trying to hone my skills with the weirding way of reading the channel- it looks low – can anyone verify?  I am looking to sell march calls and….

  66. Phil / BA
    Wondering if we should add it to the new port?  Back on 1/8 you wanted to add the -5 BA Jan15 70P for $9.  
    I don't think it got added since we already had a position.  That put is 8.80×9.00 right now, so about the same price.  Want to add it?

  67. TOS- super cool- Thanks folks.

  68. With FCX at $31.65 you can buy the stock and sell the 2015 $30 calls and puts for $12.15 for net $19.50/$24.75 which makes the dividend 6.4%, so if I'm not mistaken a 2 year return of 47% with dividends, assuming no reduction?

  69. CSCO trade, but cheaper.  
    Might be a good one to add.  A few weeks back, you said
    "Longer-term on CSCO, this may be the last time you see them this close to $20 – ever. The 2015 $20 puts can be sold for $2.75 and you can use that to buy the $22 calls for $2 for a net .75 credit so $19.25 is your worst case with an unlimited upside. You can be more conservative and sell the April $21 calls for .75 and now you have a $1.50 credit and all the time in the world to roll the calls if CSCO goes up fast but they've hit all 4 of their last earnings and last Jan was a 10% beat and this year they are only looking to go +.01 (.48) despite very steady 5%+ growth all year, which should be .49 or .50."
    We can get into the trade for a $1.16 credit right now, without selling the Apr 21calls.  Just an idea…..

  70. Following Trades/Wombat
    If you have only a Basic Membership, then Premium Content will be delayed (48 hrs, I think) so that problem can only be fixed by upgrading.  HOWEVER, if you have a Premium Membership, each of the "official" portfolios has a string of data associated with it, for eg:
    "FAS money"
    Not sure what the others are, but once you know them, using a simple Find Command in Chrome (hold down control key, click "f", type string you are searching for in box which appears in upper right-hand corner of screen, then click enter) will enable you to find all of the mentions for that day.
    Hope this helps.

  71. Terrapin—thanks for setting it up—I am looking forward to the meeting especially the live futures trading—just in the last few days one could have made some serious money trading the futures calls  made by Phil
    East coast members you really should sign up--LV meeting can be  difficult with the flight and time change etc but NJ what's not to like ;-0
    Having done the LV meeting I can vouch you will not be disappointed—-and you get to meet the members which is quite splendid

  72. Kustomz – Thanks, very glad to read the other side of it.  Ironically, as we were speaking, I got a call from a friend saying that there appear to be a group of Europeans doing an informal survey of some [Caribbean] land I own in a partnership, he's coming now to pick me up so we can check it out.  I wonder to what extent European flight of capital might provide a boost to U.S. housing.  Faint hope, probably, but I am seeing lots of capital flight, both financial and human, since Europe is clearly in a longer-term downturn than the rest of the world — at least until they jettison that Euro strait jacket.  Prediction's always  a waste, better to feel the wind blowing, I reckon.

  73. Phil,
    Are you recommending the above NUAN trade for any of your portfolios? You can do it much better now but it looks like a low volume trader and you might have difficulty getting it done.

  74. CZR/Snow – Here's recent news.  

    Homes/ZZ – What's the question?  I think the evidence if fairly indisputable that housing is recovering and the next step is hiring guys to build more homes and then we'll see some real economic action.  Maybe end of March things pick up for Spring/Summer projects.  

    P/Mjj – I don't like them as they have nothing exclusive.  You are essentially betting on an App not to be replaced tomorrow by another App that's better.  There's too little switching cost for consumers – especially when they are asking $2Bn for a company with just $200M in sales and no profits at all.  

    Housing/Kustomz – So ZH says the if the Fed is pushing housing, we should avoid it?  Talk about fighting the Fed!  I think this chart is pretty damned clear (and even better-looking after today's report at 6.8%):   

    Will ZH be keeping people out of hosing at 8%?  10%?  12%? 15?  When will they stop as they've been wrong for the last 26.8% of the recovery.  I just told my Mom to stay in her Florida house rather than get a cheaper apartment because she'd save maybe $1,000 a month rather than paying off a $300K mortgage on a $400,000 house that can be worth $600,000 in 7 years so her extra $84,000 paid in over 7 years (assuming the rent didn't go up) can return $200,0000+ when she does finally sell – almost a triple.  The house is a natural hedge against inflation and forces her to save money – in case she accidentally lives into her 90s like her mother did.  Why would people not want to do that?  

    HPQ/Dawn – Oh that one got away at this point.  Still consolidating under $20 and could be good for another $5 if they break over but so hard for us to buy something for $20 that we only just bought at $14.  The option prices are not too exciting either (2015 $17 puts are only fetching $2.85) so I'd rather have them prove they can hold $20 before taking a chance  at $19.40.  

    FCX I really like down here, in that case, the 2015 $25 puts can be sold for $3.70 to net $21.30 and that's 33% off current if assigned.  Good for 5 short ones in the Income Portfolio for another $1,850.  

    That's $9,850 collected in day one of our new Income Portfolio – quite painless, right?  Remember, we only need to collect $4,000 a month so our goal is to have about $96,000 worth of premium expiring over the next two years.  At this stage of the game, most of the longs we will take are going to be short puts that go against us – so we end up with only cheap entries for long-term plays – like 500 FCX at net $10,650.  

    We'd be THRILLED if FCX dropped 40% to $19 as we could just DD for a net $20ish average and then we could drop our basis another $7 (ish) by selling $20 puts and calls for a net $13/16.50 entry on 4x so we'd end up owning 2,000 shares of FCX for $33,000, which is as much as 1,000 shares cost now.  

    So, as I often say, if you don't REALLY want to own 2,000 shares of FCX for $16.50 – why on earth would you commit to selling 5 $25 puts for $3.70 but – if you do REALLY want to own FCX long-term, then you'll probably be disappointed to "only" get $1,850 of pure profit on the initial entry – even though $1,850 is 18% of your initial $10,650 allocation and over 100% of the net margin requirement.

    Learn to buy stocks that way and you will have a much more relaxing life!   

    CLF/Jabob – Damn, now we have to buy them too!  OK, the Jan $23 puts can be sold for $3.20 and those can roll to the 2015 $20 puts, which would be net $17 so let's sell 10 of those in the Income Portfolio for another $3,200.  Too many good deals out there – this thing is filling up fast!   I'm worried the VIX will go back down and we'll regret missing these things. 

    Thanks for offer to help Wombat – it should be a fun group project.  Other than that, I'm just busting on you.  If you want to compile a trading list at the end of each day – have at it and I'll try to look it over or something but don't go volunteering others to do special projects for you.  Of course, I am just throwing out ideas for trades and we already do track trades in various virtual portfolios and it is madness just to track all those.   If you want to add the other 500 or 600 trade ideas I have during the year to some other list – it's all yours but, generally, we encourage people to pick up trades (from the many) that THEY believe in and understand and then, if they have an adjustment question down the road – I'm always here to help.  I don't think it's a bad system.  

    TOS/Newt – You can usually right click on anything and execute it. 

    And what RPeri said. 

    SCO/Yodi – We got out of that with USO when oil tanked (not much higher now at $92.39 but the thrill is gone).  

    CSTR/Newt – Too much competition and too little barrier to entry.  If you sell March calls without adjusting, you back yourself into a corner with no room to roll.  I'd assume they don't break $50 and sell the March $50 calls for $1.95 and take the $1.60 you have left in the April $55s and roll out to the July $50/55 bull call spread at $1.90 so you essentially pull your $1.60 off the table and leave yourself with the possibility of a nice bonus if CSTR stays under $55.  

    BA/Burr – Not cheap enough now.  Just have to hope for a set-back to give a re-entry opportunity.   Price is pretty good for the short $70s but less certain now than we we were then due to battery issue.  

    FCX/Rperi – That's one way to play.

    CSCO/Burr – Also high in the channel at the moment in a weak market so no for that reason alone.  A few weeks back the rally clearly had legs, now we're guessing.  Do I like that trade?  Absolutely.  Is it good enough for my Mom's account?  Not at the moment.  

    Thanks Savi.  I'm sure it will be nice for you to attend a conference without the hassle of organizing it.  

  75. SBUX is another one that is about 10% cheaper than when we made a play on them.
    Selling the SBUX Jan15 45P for $4.40, can now be sold for $4.80

  76. Ospbridge,
    I saw your Cambodian NAGA trade. I go to Cambodia frequently and visit their casino in Phnom Penh when I do and it is always packed. There is no gambling (ligit) in Thailand so packed busses go daily to the Cambodian border towns to gamble especially in Popet where there are 8 casinos in a town with maybe 100,000 people (just a guess). So looks like a good pick.

  77. SCO / Yodi – We bailed out last Thursday after the inventories. Prices is relatively the same as it was so you can still bail out now.

  78. Not to kick a gift horse in the mouth, but it looks like I could roll the 15 March $10 CZR short puts (net $9.55) to 20 Sep $7.50 puts for a $1,300 credit, lowering my net entry to $6.55 and putting a decent amount in my pocket, while reducing my worst-case total outlay from $14,325 (1500 shares at $9.55) to $13,100 (2000 at $6.55).  Would this be an inadvisable way to go long?

  79. NUAN/Sgh – Well, I like it but that was an OLD pick (see link) and I was discussing it with Tommy, who asked me a question about them.  As I noted, I am not very enthusiastic about them but they are not so terrible to have as long as you are going to use them to generate an income (because that may be the only way you get paid). 

    SBUX/Burr – Another good one but I think we got plenty for one day or we'll have to buy a hedge and I'd rather not waste that money at the moment.  

    NAGA/Jomp – I imagine that's a rough crowd. 

  80. TSLA
    Ok Phil, you can't deny us this one! (or at least some version of it)  Tesla's our baby…..
    Selling the Jan15 23P, buying the 30-42 Bull Call for net 0.00 on the trade.  
    I'm in it at 2.45, but only small.  I'd actually like to add here!

  81. CZR/Rperi – No reason not to do that.  

  82. Newt, you can also right click Ticker symbol line or a specific individual option or equity in this tab and close, roll, analyze etc. 

  83. Right click is amazing.

  84. rperi—CZR I just did the same thing

  85. CSTR/ Phil; Thanks. but did i see the channel right?

  86. I wish I could attend the AC conference…. busy weekend for me--bummer.

  87. FOR YOU AAPL Lovers
    AAPL may likely bottom tomorrow/ this week (I hope it closes the open chart gap to 425 though! –  which is actlng like a magnet where a lot of AAPL bulls lost their shirt) setting the scene for finally being LONG AAPL to the ride up to Phil's fair valuation target of $555 by April-June.  I recommend getting into Phil's 350-450 bull call spread by selling the 350s or 400s puts (can't remember).  For those who are feeling ballsy, I know I am! could go for straight-up $555 call (July / Oct or even Jan, depending up on how ballsy you feel and ONLY IF AAPL shows 425 or lower on the TICKER!).  I am hoping (not a valid investment strategy!) that these will triple at a minimum.  
    My post on 15th Jan is below
    My current thinking is
    1.   AAPL no longer has the best smartphone in the market, Samsung SIII is…..the worrying thing is others like Nexus (Google) and HTC have also caught up….
    2.   AAPL still remains an amazing value play and is the best company in the world, but the long AAPL trade is a very crowded one and just as long AMZN is the flavour, short AAPL will continue to rule.
    3.  AAPL will likely go back to the 520-555 range prior to results.
    3.  AAPL results will likely be fantastic (upside from iphone 4/ 4S will also be good – who says you need a cheaper iphone?), but smart money will find something in the guidance to rein in any big moves beyond 575-600 and then the selling resumes; any confirmed news on innovation incl date of AAPL TV launch will send the bears for cover and may set the stock back to 700.  News on deal with China mobile will possibly not fire it up.
    4.  If the guidance and associated news is not great, AAPL will close the open chart gap @425 before coming back.
    And no I didn't put my money where my mouth was to SHORT AAPL @ 690 in SEPT, Wish I had!!  

  88. FCX-for Roth I do like the 2015 idea selling premium and do like copper long term.  I am pretty conservative in my trading account so being able to be exposed only until April for little less than half of premium I can do over and over!

  89. Well done, Savi….  No additional margin either.  Did you get your order to fill yet?

  90. AAPL shares reversing higher!

  91. Terrapin- I am going to do my best to come for part of Saturday and Sunday(mainly just to hang out and beat Phil down at poker) I'll get with ya offline.

  92. run forest, run!

  93. rperi--I am doing it in two separate  trades i got the short 7.50 filled as of now

  94. more on AAPl from Mr. Kass --  he and his Gnome's see a split coming —- hope he's right  this time.


    Filter by date:



    Apple Is a Touchy Subject

    Feb 26, 2013 | 1:53 PM EST

    Stock quotes in this article:

    A sell call last September and a buy call this month both rile the readers.

    It is testimony to how far the pendelum of investor sentiment goes to extremes – with regard to how controversial my sell call on Apple (AAPL) was in late September 2012 and how controversial my buy call was that I made this week (in late February 2013)!
    Speaking of Apple, high above the Alps, my Gnome is hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting.

    Position: Long AAPL

  95. Phil – just checking back about ALU. I managed to sell the 2015 $2 puts for .80 but didn't sell the 2015$2 calls for .50 or buy the stock.  I'm happy with the Put but just wondering – do I still try to sell the call at .50 if the share price rises – and then buy the stock – or just stick with the put? TIA

  96. jromeha – sounds good.  
    Jabo – could you come sunday night and monday?

  97. terrapin--I wish I could.
    I am tied up on Sunday so it seems pretty impossible to get out there.
    I hope to get to one of the PSW conferences in the future (either in Vegas or someone mentioned Tunica--I would love to visit Memphis)..

  98. CZR/SoKo – thanks, Phil. Incheon, eh/ So they're proposing a foreigners-only (didn't know they were still doing those) casino right at the biggest international airport. Could work. I'll keep my ear to the ground. Wonder who that third investor is….

  99. Phil – Looking from a seasonal perspective, what are your thoughts on DVN?  Thanks!

  100. Phil – I would love to see a book on options co-authored by you and Sage.  I think it would have appeal just based upon your income generating strategies.  It could provide a real service to people looking to generate additional income from their portfolios.  Of course the more advanced strategies would also be of interest, but think it could stand alone on just the income producing basis.  Don't think I could contribute much, but woud be happy to be a sounding board.  Go For It ! ! !

  101. CZR/ SoKo – now it comes back to me – there's a mega-mall thing being planned at the Incheon airport, I guess CZR likes the idea.

  102. snow / Incheon – I luv that airport.  one of the best in the world imho.  

  103. NagaCorp / jomptien
    Thank you for that very interesting report!  (To be clear, I do those frontier market company investments personally, only;  they are not Opesbridge LP investments.)

  104. TSLA/Burr – Very nice, of course and good candidate to start off tomorrow. 

    Congrats' to Jbur on discovering what the other mouse button is for!

    AAPL with a nice recovery.

    CSTR/Newt – To me the channel is between $45 and $65 with a slight rise to it.  That's going back to 2010 with many, many tests along $40 and a very jagged top that has to be estimated. If we consider that last fall, they were only dragged down to $40.50 by the overall market, then we can call $45 the last year bottom and raise the top a bit to account for the excitement last spring as well as the general rise in the 200 dma of about $5.

    Good rundown Checho, thanks. 

    FCX/Dawn – Nothing wrong with short-term money but what happens if FCX goes up 20% and you are never able to sell puts that low for that much again?  That's why I like to sell those long puts when I can – as long as it's reasonable.  

    Kass/Ban – Now would be a good time for him to start being right.  

    ALU/Julianz – Sure, look at how fast they died.  You should be THRILLED to sell calls for a net $2.50 exit – that's a no-brainer.  Nothing wrong with just the puts either but, point is I would not own the stock and pass up chance to sell those calls if they hit .50.

    Tunica/Jabob – Not happening.  I think AC and Vegas are plenty to spread it around for now.  Maybe we'll go with a pro conference thing and have hundreds of people and then we can do it somewhere else every month but that in itself is such a bother – it would have to be done by conference pros and then it would be all about the money and the conference would become a product to be packaged and sold – nope, talked myself out of it…

    3rd Investor/Snow – Hmmm, Park is too new to be involved in something like that so maybe one of the Shin's or Chungs who have all that money.  Not going to be Lee Kun-Hee (Samsung) or Chung Mong-Koo (Hyundai) but Kim Jung Ju is a good candidate with multi-billions and no mega-corrp ties.  Good info on the mall – puzzle begins to fit.  

    DVN/1020 – From this morning's news:   Don't Invest In Oil & Gas Before You Read This - also, as you requested seasonal perspective – how about a Haiku?:  Devon's chart suggests/Recurrent weakness in spring/Cash flow seals their fate.

    Sounding board/Albo – That's fine and dandy.  I want to make something that is very readable. 

  105. Barry's quote of the day:

    “The activist-hedge-fund attack on Apple — in which one of the most successful, long-term-visionary companies of all time is being told by a money manager that Apple is doing things all wrong and should focus on short-term return of cash — is a clarion call for effective action to deal with the misuse of shareholder power.”

    -Marty Lipton, author of “Bite the Apple; Poison the Apple; Paralyze the Company; Wreck the Economy” from NYT

  106. Phil – Happy to help on the book any way I can.

  107. Hail CZR by the way – I should have sold more puts

  108. Phil—short puts FCX…you are absolutely correct…that is why I run my Roth with the 2015 short puts and my trading book (which keeps me up at night if my risk out there too long) on shortest maturity with attractive premium…

    seems I am the sole female here…if so, don't worry about offending me with language, etc.  grew up on wall street nothing surprises me ;-)  

  109. CZR/SoKo – yeah, interesting. I'll keep my ear to the ground. I think the first thing to check on is whether Chinese tourists use only or at least mainly Incheon airport to enter the country.

  110. AAPL move due to rumors on a stock split…

  111. Phil // Bustin Chops.
    Don't make me get all Jersey on your ass ; > I guess that's what I'm here for ( or maybe its just a Cali-New York thing ). I'm transparent and outspoken – sorry – thats my style. 
    I do think you misunderstood my comment – wasn't talking about collecting all of the ideas thrown around in a day – that would truly be a challenge – just adjustments to existing portfolios.  My emphasis is on LEARNING and people NOT missing ideas / adjustments - not sheeple trading.  ( just re-read todays thread about people 'missing' trades in motion )
    I know you're 'used to' your system and think its pretty good. To be a beginner – its a fragmented nightmare, but I think your commentary / knowledge of the larger markets and our compatible trading styles are worth the effort. I just think it could be much much easier – trading should be fun.
    I think this has had enough air-time – If you want to discuss more, you know where to find me off-line.
    Ladoo // Thanks – I was aware – thanks. I was talking about something more deliberate. Do you have kids ? If so this is my daughters favorite book of the year
    Burr// TSLA After researching this and passing, I'm wondering what changed your mind

  112. Phil/haiku  Very clever.   Waiting for low price/technicals as my trigger/profits for summer….. :)

  113. Phil oil truth
    It may be dangerous to your health to point out how bad an investment oil has been but Bravo!! Actually your safe, you didn't write it, links are OK.

  114. CSTR chart/ Phil: Thanks- soooo much to learn there is.

  115. Case-Shiller lookin' good for Mommy's house!  $400,000 at 8% a year for 7 years is $685,000.  The same math could be used to realize how silly it would be to worry about 2015 short AAPL $400 puts…

    And no arrests will be made:  1:54 PM "High above the Alps my Gnome is hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting," tweets Doug Kass. The rumor has led Apple (AAPL +1%) shares to spike higher. Update (2:24 PM): Kass is using the post-rumor spike to sell part of his trading position in Apple.

    The recent setback in Chinese stock prices is just temporary, says David Lai of the country's largest fund manager. "Gains this year … don't fully reflect the gradual economic recovery," he says. He expects a number of fiscal stimulus measures to be rolled out soon. ETF selection matters. CAF - tracking China A shares – has sharply outperformed the more popular FXI during the recent rally.

    Investors Rediscover Risk-Taking Abroad (NYT)

    Woops, another buy-out stuns da bears:  CommonWealth REIT (CWH +47%) continues adding to opening gains after two investors disclosed a near-10% stake and said they were prepared to buy the whole company. The investors have asked the company to refrain from a planned repurchase of shares and debt while they enter into discussions.

    The Case against Commodities and Emerging Markets (Behavioral Macro)

    Comex gold scores its biggest one-day gain of the year, jumping $28.90 (+1.8%) to settle at $1,615.50, as Bernanke’s comments were "music” to the ears of precious metals bulls, Real Assets' Jan Skoyles says, "and strong economic data is just not enough anymore to convince markets that all is well." Silver +0.9% to $29.32.

    Gold: Hot at the Oscars, Not on Wall Street (The Fiscal Times

    Gold’s Cycle Seen Turned by Goldman Sachs as ETP Holdings Drop (Bloomberg)

    Consumer spending will be in focus tomorrow with retail stalwarts Target (TGT +1.4%), TJX Companies (TJX +0.2%), and Dollar Tree (DLTR +0.9%) all reporting Q4 earnings before the market opens. While beats and misses will still sway the needle, it will be the guidance for 2013 which will really take hold with investors anxious to see if Wal-Mart's weak February sales are contagious. The drama with J.C. Penney's (JCP -3.7%) earnings day will be on its cash flow situation and if Ron Johnson tips off any meaningful change in strategy. 

    The state legislature in New Jersey approves Governor Chris Christie's changes to an online gambling bill, ensuring the state will allow some forms of Internet gambling.

    Best Buy (BBY -2.5%cuts 400 jobs at its Minneapolis headquarters in a move which is part of a sweeping plan to lop off $150M in expenses. An exec with the retailer says the cuts are company-wide, but won't include the "Blue Shirt" floor workers.

    Goldman makes Applied Materials (AMAT +2.3%) a Conviction Buy on news of Bob Halliday's promotion to CFO. Halliday and (AMAT president/former Varian CEO) Gary Dickerson were crucial to more than doubling Varian's share of the implantationequipment market in the 7 years prior to its purchase by AMAT, Goldman observes. It thinks Halliday's track record "bodes well for Applied's ability to execute on a more streamlined cost structure," and to gain chip equipment share. 

    Owning what's probably the world's biggest database of professional rolodexes, LinkedIn (LNKD +1.4%) is thinking of dipping its toes into the enterprise social networking space, says CEO Jeff Weiner. Private-sharing tools meant to work behind corporate firewalls are being internally tested, he adds. If LinkedIn enters this market, its user base and data could make it a formidable rival to incumbents such as Jive Software (JIVE), IBM, Microsoft (Yammer), and (Chatter).

    More on the pay TV landscape (previous): Any change away from the model of forcing consumes to buy TV packages with hundreds of channels in favor of picking their options a la carte could help Dish Network (DISH +0.7%) and DirecTV (DTV -0.2%) – while pinching carriage fees for providers such as Scripps Networks Interactive (SNI -0.7%), AMC Networks (AMCX -4.3%) and even Disney (DIS +0.6%) with ESPN a major profit driver for the media giant. Though high-profile blackouts have hurt both sides, analysts think its the media companies that are starting to lose the PR battle with consumers.

    Viacom (VIA) could feel the heat from the disruptive lawsuitfiled by Cablevision (CVC +0.7%) over how it offers financial incentives to bundle networks together. Time Warner Cable (TWC-0.1%) has already issued a statement of solidarity with its cable peer and  the proliferation of consumer viewing options available to consumers could make the time ripe for a la carte cable pricing to finally break through.

    Content economics, part 1: advertising (Felix Salmon)

    Google (GOOG -0.3%doesn't need to build retail stores, says Android boss Andy Rubin, addressing rumors on the subject. "[Consumers] don’t have to go in the store and feel [a device] anymore," he asserts – Tim Cook would probably disagree. Rubin alsotries to downplay a WSJ report about Google's Samsung angst. Separately, Google has rolled out a Facebook-like "sign in with Google Plus" feature for 3rd-party sites/apps; Google is likely counting on the service to increase content sharing, and thereby improve ad targeting.

    The DoD will open its networks to iOS (AAPL) and Android (GOOG) devices in Feb. 2014, as part of an effort to develop a "platform agnostic" device policy. That's a negative for BlackBerry (BBRY -3.7%), which currently accounts for 470K of the 600K mobile devices deployed by the DoD, and could be contributing to today's weakness. The DoD, which issued security guidelines for iOS/Android gear last year, adds it's looking to support BB10. (Home Depot)

    Spot the Correlation: Wealth vs. Immigration (Mangan’s)

    Three lunchtime reads:
    1) 10 stocks to buy on a sell-off
    2) Does the increase in the Yotai gap again presage a stock market sell-off?
    3) What you get for '2 and 20'

    Speaking of perspective – here's a Hubble of M101 – just one of a Billion Galaxies we can see in our local sector of the Universe.  This one is twice as big as the Milky way and contains 1,000,000,000,000 stars on 1/1,000th of them (1Bn) are similar enough to our sun to have planets capable of supporting life.  


  116. Phil // NYT / PM
    Beautiful quote by Lipton. Reality hurts.

    BTW – One thing that I'm learning in the TOS transfer process is how much RM is killing me at Fidelity. We have similar portfolios, but I cant even participate in new trades because of margin issues on RM. 
    Might be worth pointing out to newbies.
    mjj / P
    Pandora – yes, the best performers in my port – 58% on the stock and the recent dip assured my March covered calls (.68 ). I know the company pretty well. What do you want to know ? In short – I believe they are prime buy-out material from either Google or Apple.

  117. Phil, i am in CRUS at net 27.30 and want to hang with it long term, what do you like for a DD?

  118. Shadow…..Good luck tomorrow, hope all goes well

  119. NUVA having a nice day!

  120. SGEN June 30/35 BCS with the 22.5 puts STO can be had for 0 or a small credit…..!!

  121. Shadow
    Just think about how good you are going to feel, best wishes

  122. Wombat:
    Amata alert!  :)
    Many of us have learned to adopt to Phil's style. I, for one,  appreciate the effort he puts forth to share his ideas, and trading style.  I would hate for him to spend less time on that and more time adapting his style to meet the needs of every person here.
    After three years I have grown accustomed to the fast pace and variety of subjects being thrown our way. It takes some getting use, but if you don't try to do everything (most valuable lesson learned!) you can and will learn to appreciate it as I do.

  123. Jamie Dimon – "If I could borrow at 4% after-tax, I'd be buying up huge chunks of corporate America right now." It might be sage advice from the man who called JPMorgan (JPM) shares a "no-brainer" as they sank to the low $30s in wake of the London Whale affair last year.
    With Phil on a shopping spree today looks like he has a direct line to Dimon!

  124. MoMo trade:   BTO  10  April  KORS  @ 3.10

  125. That's   KORS  calls, strike 60…

  126. Shadow
    Best wishes for a successful surgery and speedy recovery.

  127. Phil your top takeover candidates?  

  128. dclark
    I second the "most valuable lesson learned".

  129. Even though mkt recovered nicely today (altho vol still heavier on dn >up days during past 2 wks) anyone else concerned about impending sequestration and related sell-off/ lower numbers ? .

  130. I hope PCLN misses….

  131. Wombat
    You weren't here when there were NO portfolios being kept up to date by StJ.  THAT was a beginner's nightmare.
    Trust me, this site is 200% better than it used to be, even with Phil just using quotes and using words like INCOME, 25K, etc.
    Shadow / Good Luck!  Even though I can understand you're writing most of the time, I hope you come out of this 100% and lead us in the JRW trading style again.

  132. 8800
    It's too easy for hedge funds to use the sequester as an excuse to push markets lower for better entries. Next week they will have until the end of March to drive the market higher before Congress opens for Act Deux.

  133. Language/Dawn – Not me, I was raises proper.  8)

    Haiku/1020 – Ow my inner ear!  That's truly terrible Haiku – you can't just break up a sentence at 5/7/5 and call it poetry!  Offense to the ear – as painful as the sun – burning through my eyes.  See – there needs to be some imagery to the thing…

    Oil/Shadow – But it's been great for us betting against it.  I guess in the future we'll have to bet against water.  

    Learning/Newt – It's a big world.  

    Wow, CNBC still trying to beat that Italy drum.  

    P/Wombat – I think that rumor is keeping them up but I'm not sure it's enough to justify their price.  I sure wouldn't bet against them but I'm not interested in them as a long for $2Bn. 

    CRUS/Rpme – Fabless semis are a very tough thing to value.  You have to keep up with all their contracts and terms so I usually just don't bother.  CRUS seems to be in a rough cycle with slowing growth but the growth so far has been spectacular so nothing wrong with accumulating over the long run if it's a management team you want to stick with (the only real asset of fabless producers) but a drop from $27.30 to $34 is 10% so if you DD you get 2x for a whole 5% less than you originally wanted it – don't you think that's jumping the gun a bit?  If you want to DD and reduce your basis, why not sell the Jan $25 puts and calls for $10 and then you're in your first 1x for net $17.30 with a call away at $25 (up 50%) and worst case is you own 1x more and average in at a much nicer $21.25 average.  Isn't that much nicer than paying $24 now?  

    War/ZZ – Not going to happen.  

    Yes, good luck Shadow!  

    Thanks DC, RJ. 

    Dimon/Checho – He's a bright guy.  

    Takeover/Checho – CIM but maybe BBY goes by Thursday.

    Sequestration/8800 – I published a perspective chart on Sequestration last night: 

    Which one scares you the most?  

    PCLN/Jabob – You know we got out of that, right?

    OK – gotta go to the dentist.  Looks like PCLN did good – I'll catch up later (with cleaner teeth).  

  134. Shadow: Having known you thru this site for the past several years, I have some sense of the immense burden you have had to carry. I pray these medical procedures give you the relief that you need and deserve.

  135. Fingers crossed, Shadow!

  136. Good thing we bailed out of PCLN – I didn't want to roll another 5 calls at a 700 strike!

  137. Phil/Haiku  So much to learn….. ;)

  138. Good luck Shadow, Hope we hear from you soon.

  139. M101 math – you mean there could be 1000s more Kardashians?

  140. CZR/SoKo – so here's what a quick bit of research gleaned. There are 3 international airports in South Korea, Incheon, Busan, and Jeju – Chinese tourists will not go to Busan because there are no accommodations for them there to speak of. They love Jeju Island and shopping in Seoul, and Incheon is where the historic first Chinatown in Korea started, over 100 years ago. There are ferries from China to SoKo as well, but those dock in Incheon.

  141. ….Ok, Hows this?  Learning to plant trees/poetry never a must/married thirty years…… :)

  142. PCLN flying high…

  143. Yes--I got out of that one PCLN trade-- remember I asked this morning your opinion.
    Took the $$ and ran.
    Still wanted them to miss..
    They are one strong &^*)^

  144. Godspeed Shadow!

  145. Phil--can't wait for your shiny teeth opinion on their earnings.
    Wondering how that trade will turn out if we didn't take the $$$ and run… I loved the idea.

  146. Good luck Shadow

  147. Wow, check this out.  A 3D mouse called Mycestro.  I would totally use this!
    I love kickstarter, such an enabling revolution

  148. Thanks all!
    Some fear but every surgery has made a difference. Hope I can avoid ICU at the big medical center for 3 states this time. It was not fun listening to the worst things that happen to people, once is enough.

  149. dclark
    point made.
    are you referring to the Greek legend or the video game ?
    I think after market if you go back and re-read my posts I think you'll find that I'm not critiquing Phils style or effort. I actually applaud both.
    I sometimes fall into the trap ( because I do it for a living ) of making things user-friendly.
    that's it.

  150. Phil // P
    66% of their revenue is already coming from mobile ( where everybody wants to be )
    They own a ton of patents ( not even counting Music Genome Project )
    With the top 5 mob ad revenue generators, P is the only non-behemoth.
    Have faith ; >

  151. dc/Phil,
    Yep, sequestration in point of fact may not have all that much of an economic impact, but psychologically – really emotionally – it could still create a bit of a waterfall drop whether engineered by the hedgies or not.
    Just testing  the sentiment here on PSW. Personally will wait for next week before selling puts or taking new long positions, FWIW.

  152. Hello,
    I'm a new sub here (Basic Level), and just learning my way around the site. Reading users comments and Phil's responses is the great shortcut to different parts of PSW.  Can't help not to ask though, Is there any plan to organize  daily comments by thread so that  the posts can be navigated both chronologically  and within the theme?

  153. Shadow. Good luck. 

  154. These guys are going to discover warp technology :)
    (or destroy the atmosphere)

  155. Sequestration not going to happen- it's 2M voters the repubs would be pissing off. 
    Shadow- best of luck my friend!!! You're one of the few people left who was on the board when I first signed up.

  156. Phil, CRUS, the CEO went to San Diego State, I went to SDSU, isn't that reason enough to invest :)

  157. Anyone
    Get a fill on any of the 4 new Income Port  plays today. i have all four up on TD Ameritrade  GTC no fills. 

  158. gerryf – Just one fill.  RRD at 2.00  (OptionXpress)

  159. Shadow- go for it!   You will be in my thoughts. Take your time on the recovery and before you know it, you will be dusting off "the JRW TNA Trading  method" again.

  160. Haiku: You're a sensitive soul, Phil!




    /* Style Definitions */
    {mso-style-name:”Table Normal”;
    mso-padding-alt:0in 5.4pt 0in 5.4pt;

    A gai-jin rambles
    Neither through woods nor brambles
    Yet thorns pierce inner ears.

  161. jromeha
    Thanks for the though! I also keep saying the republicants can't let this go on but it sure looks like they will. They gutted the cliff deal with secret spending more. Guess they think everyone is stupid and or doesn't pay attention. Also kind of shows they fear those power players, spinless, sell outs.

  162. 8800/sequester:
    Phil says its priced in. And he usually is right, but something tells me we will have another opportunity to sell puts by Friday. Regardless, I think you should, as Phil said, grab premium while it's available on stocks you want to own this week. Next week may be too late as the end of the sequester nonsense should make clear that it was all about nothing and hardly the end of the world.
    On that note, I have been placing bids (selling puts) at the ask for a few of the trades that Phil talked about today (CZAR, FCX) without success (still have three more days). And I did scalp a double on AAPL day trade today. I guess I should thank Mr. Cass for that!

  163.  @dcclark41, re: Amata
    I was going to say the same thing but thought I was the only one that saw a resemblence.  I hope history doesn't repeat.. 

  164. silentstorm
    I hope to dust that off, have not even updated lines in 6 months on my best money maker. My doctor thinks I will regain 75% of motion, I think most or all the pain will go away, sure has every other time, 25 times except my foot and it only hurts when I put on a shoe. GO BAREFOOT!!

  165. Womb
    No worries. Just having fun with your discourse with Phil. We had a member (Amata) a while back that had a terrible time understanding Phil.  That didn't end well. Just wanted you to hear from someone that enjoys Phil the way he is. Besides, I never really liked the trader in me before I came here! :) Peace.

  166. jr_mints
    Let's hope not! :)

  167. shadow
    Where is your operation being performed?

  168. dc/Sequestration,
    Thats what I'm anticipating – a chance to sell puts (AGNC, ABX, WMT) down 100+ SPY points or so this week in fear of seq. I'm inclined to hedge my entries by selling half this week on a dip and wait (gamble) to sell the other half for further weakness if sequestration actually comes to pass on 3/1- albeit for 10 minutes or so – before getting kicked forward in time. We shall see.

  169. jromeha – I'm still here, and no haiku – but let's get that beer when you can

  170. shadow – not sure exactly what's going on, but you're in my thoughts & prayers

  171. dclark – thanks man – its hard bein the new guy – i appreciate the nod.
    shadow – i dont know you yet, but i send you good vibes. see you in a few.
    BTW – had a very interesting discussion with a TOS guy today ( they came to my house ! ) We are trying to set up the workspace so its workable, and, like everything else at TDA, it's initially a real PITA. But you do it once and then it just keeps getting easier.
    At one point, I asked him if I could import workspaces – ' Well, I don't see why not … " Long story short – we tracked down the file and it is possible.
    Is there any veterans on a MAC using TOS that would be willing to share their workspaces ? I think it woiuld be really cool see how other people visualize and use their spaces. In TOS you can have up to 32 I think.

  172. Shadow – good luck!  Hope surgery goes well and a quick recovery.

  173. Hi Shadow, My thoughts are with you tomorrow, and you wake up with a great smile on your face !!!!

  174. MCD Option Volume today
    So, I've been doing research tonight on option scanning tools.  I looked at TOS, IB, and LiveVol.  Shockingly ALL of them of different reports for total options volume.
    LiveVol shows : 325,779K
    IB shows : 138K
    TOS shows : 344,697K
    Anyone else have a data service they could check?  

  175. 8800
    I too think the sequester is going to happen and I think the sequester not happening is priced in. The problem is that I am usually wrong. So, I am hedging my repetitive incorrectness. On  the Income Trades Phil put up today that I am interested in (already loaded up on RRD at $9), I put in GTC orders on the puts at ask on some (as you did) and went above ask on some of the others. If I don't get fills, I will add them to the list of trades never filled. If we spike lower then I will get some good fills. I believe this is the last chance for Republicans to stand their ground and get some spending cuts. Unfortunately for them, I think this will backfire politically. Anyway, I am hoping to get good entries on some trades that I think are good, but that I think I may be able to get at better prices. Long term, I believe everyone has to come to the realization that things are getting better and that Bernanke may be smarter than we all thought. 
    I don't like saying "good luck", but I will say that everything will work out great for you and I will be glad to see you posting soon.

  176. From my buddy Bill at Vix and More
    Record VIX Options Volume and Large Purchases of VIX Calls
    Posted: 26 Feb 2013 01:04 PM PST

    With about a half hour left in today’s trading session, purchases of VIX options are unusually high – much higher than yesterday. As I type this, over 855,000 VIX calls have been traded, with today likely to see the highest VIX call volume since the August 2011 market panic. Data from LivevolPro indicate that 28% of VIX call transactions are being bought on the bid, versus 16% sold at the ask, reflecting a lack of price sensitivity on the part of the buyers of VIX calls, who are the driving force behind these transactions. All told, a record 1.3 million VIX options contracts have been traded, breaking the old record of 1.22 million from September 11, 2012.
    Note also that while the VIX’s implied volatility has been on the rise as of late, at its current level it is in the middle of its 2012 range.
    The equities market may feel more orderly and composed today, but in the options market, there are signs of increasing anxiety and concern.

  177. rj_jarboe,
    I agree in the longer term things economic will improve so being absolutely precise with one's entries is not of paramount importance – may be more of an ego issue, at least with me. I think that Bernacke is doing the best he can with monetary policy given the country's dysfunctional fiscal policy.
    On being repetitively incorrect, that's what Phil's 20k hours improves (but I suspect doesn't eradicate). Somethings are simply consistently unknowable in advance – Einstein's theory of reality.  Given the above, plus my limited time and inclination to use my waking hours doing research, I use Morningstar to check their historically conservative assessment of fundamentals. Gives one another perspective and occasionally pause on some of the stocks in a pronounced downtrend,i.e., FCX, CLF, RRD. None of this is meant to dissuade you from taking a position esp since what analysts write, even in good conscience, is often wrong but it does provide concise fundy data and analysis thereof. Phil's accumulated judgment and  intuitive sense are over-weighted in my selection/decision process.


  179. Phil / Morning Post – Income portfolio — Great learning tool.  Can you comment on the HPQ trade in the context of "Cut your losses".  If you recall, that trade was was a disaster (win some lose some) where we rolled and booked a 4K paper loss which the current HPQ got 1/2 back.  Where should we have dumped that early on if at all other roll like we did?  What would be the …. general rule … for cutting the loss?  I know it is hard to answer but looking for guidance.

  180. CZR / Income Portfolio – Already 17% gain, great call Phil.  Just wish I could have played along.  Too late for me but congrats to the players who jumped on it.

  181. We got the bounces we were looking for especially for NASDAQ and NYSE that are smack on their DMA. But we need to show some more strength as we are starting to look a lower lows and lower highs…

  182. zero - Great Haiku!……. A gai-jin rambles
                                          Neither through woods nor brambles
                                          Yet thorns pierce inner ears……. (though I resemble that remark!)…. :)

  183. phil, i am not on twitter…is this the fastest way to get updates and do i need to set up an account?
    finding it cumbersome with the long threads thru day and trying to keep  with info relevant to me…. in some form of real time. maybe just learning pains…

  184. Hitting singles….  Sold BTU Apr 19 for 1.20.  If put to me, that is OK, sell calls..

  185. A newbie question:
    Selling naked calls requires margin. How do you account for carry-on interest on the cash parked till Jan 2015?

  186. Haiku - A Net of Fireflies is a great addition (or gift) for any library.
    Shadow – get back soon!

  187. Here is the latest update for the June 2012 Income Portfolio:

    We started  a new one this week – no spreadsheet yet! I'll update this one next at the March expiration since we have options expiring then: TSLA, GE, INTC, TUMI, CMG. Then WMT in April and BBY in May. We might need to recover our positions then. 

    Also, Phil – last chance for BBY. Rolling the dice on earnings Thursday!

  188. Also, you should be able to download the Excel spreadsheet from my Google Drive:

    I have authorized downloading the file. You can also download a PDF version of the Income Portfolio:

  189. flkass – internet
    Well, that used to be a factor when the risk free rate wasn't close to 0%, but since it is, most firms will eliminate that in the calculation, unless the stock is hard to borrow and they are short shares.
    With TOS I used to be able to lock up money in a 1yr TBILL that payed 3-4%, and margin 90% of the locked up funds….but that doesn't really work anymore.

  190. Phil / Toll Brothers – Housing looks great with the numbers being posted and MSM all over it.  Tol looks pretty good moving up to the 50dma.  The Jan15 20 Strike are 4.50.  I am thinking of adding those to my IRA port.

  191. 8800/Jarboe -  I have been trading options for almost two years, and remain embarassed by how little I still seem to know. 
    While thinking about this, I was coincidentally reading a book last night on Zen and swordsmanship [The Life-Giving Sword, Heiho Kadensho] by Munemori @ 1632, which speaks of practice and training with an intensity and discipline to internalize it such that "technique" itself is transcended, becomes totally natural and without interference from the mind [& its emotions], a realm called "muga" or "No Self,"  It was hard not to reflect on Phil's "10,000 hours."
    The ideal is to keep the mind free of attachment or fixation — in terms of combat, to keep the mind from "stopping" or "abiding" anywhere – whether the stance, technique, the opponent's sword, or anything that would prevent the mind from moving freely.  It has been symbolized in the avatar Fudo-Myo-o, often depicted holding a sword in one hand to cut through our ignorance and a rope in the other to tie up our passions.  Needless to say, I still have some distance to cover.

  192. Phil Book Project – Just way too cool.  I would help after hours.  I cannot think of a better educational experience.

  193. Thanks, 1020, I've been "Turning Japanese-a" these days!!

  194. wombat…  You may try having a word document open and cut/paste Phils suggestions on it for reference. Keep the daily diary to refer back to.  My setup has 2 27inch monitors.  TOS on one, WEB site on the other.  The word document minimized.  My ;aptop is also on for other feeds.  I only trade during market hours infrequently.  FWIW!

  195. flkass – welcome!  There is no formal summary of the day's trades, except StJ's portfolio posts sometime during the day (usually morning).  Otherwise, you get to read/scan everyone's threads.

    First watch the man who planted trees, here.  This site is an eduction, not a 'please follow me' site. 

    Please start with the Education tab above and read it.  Also, read about a months worth of posts to get a flavor of what we are doing.  There are some very good traders here, but beware….do not partake in all trades….U will go bonkers.

    Also read the TA book and Options book so that you understand what we are trying to accomplish.

    Ask questions…and always, paper trade for the first month or so, then nibble with small amounts…it will be a fun and exciting ride.

  196. Emotions / Zero – I think it's a common problem among traders – thinking too much and listening to your emotions. Having a mechanical system does make it easier. Look for example at Peter's strangle portfolio. Not entirely mechanical but simple rules. I am backtesting some other simple rules for a different set of portfolios as I think it's the way to go in this algo driven trading world.

  197. jfaw – TOL looks like an island set up right now, with another leg coming to the down side ~31 or so.  Just my 2c.

  198. From Europe [Gavekal];  It may be relevan to the dollar level:
    "The Italian “protest vote” has reverberated far and wide: equities fell, the VIX surged 34%, investors scrambled to safe-haven bonds and Japan’s crusade to weaken its currency suffered a major setback, with the biggest overnight jump in the yen since 2011. Markets seem to fear that Italian voters have stuck a knife into the back of the euro project. But we are not so sure the drama of this election will turn out to be as Shakespearean as all that."

    "Italy’s vote reaffirms a turning away from fiscal sado-masochism, a trend which was already well underway. Provided German Chancellor Angela Merkel is not so stubborn as to demand any further measures from Italy—and that she allows ECB governor Mario Draghi to promise ECB financing without any further preconditions—Italy and Europe should muddle through this situation."

    "After all, an ease-up on austerity is the policy already chosen in the case of France, Spain and Portugal, which are all going to be allowed to miss their fiscal targets. So we cannot see why the treatment of Italy should be any different. Germany and France now have the option of fudging the Fiscal Compact in the same way they fudged the original Stability and Growth Pact. This seems by far the most likely scenario since French President Francois Hollande clearly wants to do it and Merkel cannot afford a crisis before the German election. Once investors work this out, we suspect the markets will calm down."

  199. wombat / workspaces – XML files in program fiels/thinkTDA directory (Windows).  Place you email on the board and I will send you mine.

  200. Phar / Tol – Thanks.  200dma looks like the right entry.

  201. wombat / tracking trades.  I find Evernote works really well for keeping track of trades.  My day job is not conducive  to active trading and I can't keep up with chat during market hours.  If I catch a trade idea during the day I like I just clip it in Evernote and evaluate it later.  I can label it based on the ticker and tag it with one of the portfolios.  Then if I ever need to go back and track trades it's easy to bring up all the clips tagged with that symbol/portfolio.  For my longer term positions (the 2015 buy/writes) I tend to always search the previous days post once all comments are in by the symbol of my positions to make sure I haven't missed any adjustments.  I think everyone finds a way to make the best of the site…..this is just what works for me.

  202. Gold – the floor may be in, with physical sales spiking up. According to APMEX.. "This was the second largest selling day for the APMEX Bullion Center on eBay since inception about five months ago, beating the next highest selling day by more than 30%. As Gold and Silver prices fell, heavily influenced by the reaction of day traders to the minutes from the recent Federal Reserve Open Market Committee meeting, physical sales of both metals skyrocketed…"

  203. Phil…is there an opportunity in the defence sector, associated specifically with the navy. A few months ago, BNN had a specialist in the US defence area, and he thought that the budget would not get cut for navy projects versus the airforce/army. I believe this is based on the idea that the US wants a greater presence in the pacific. If the sequestor takes the wind out of all the defence related stocks, perhaps there is an opportunity with the navy related stocks, whether ship building or ancillary devices for ships. I do not follow that industry closely, so have minimum knowledge of the various players in the industry.
    Thanks for any insights.

  204. MCD / Burrben -  EOD Option Volume on iVolatility 325,779 (matches your liveVol #)

  205. Tercol / Navy – My son in law is contemplating getting out of the Navy in April.  They offered him 80K to stay in (Nuke Plant Guy).  One compelling reason to NOT stay in is the sequester.will cause ship bound deployments to double in time since there is no money to fix the ships.  That is what is being told to the sailors.

  206. FU PCLN!!!!!!!!!!!!

  207. phil— i hope your teeth are ok? ;-)
    any PCLN opinion on their earnings?

  208. 212 comments!  This is why we have to limit the number of Members – I'd never keep up otherwise.  

    Well, futures all flat and Asia mixed so I'll catch up on comments first.  

    Looks like we hit PCLN on the nose actually – $702.  International bookings were up 40% so currency no longer a factor with that kind of growth.  They are now 83% International Revenues – not even a US company anymore!  They do have a deal pending to buy KYAK for $1,8Bn (awaiting approval), so that will swing the % back to the US a bit.  They're making about $30 a share so $700 still healthy but projections are for $37 at year end and $44 next year and then $700 not all that much so our value was right on track at $700 but it was still the right move to take advantage of the pre-earnings dip rather than assume we were right and gamble on the result.   EXPE only made $63.50 on the news.

    Kardashians/Rexx – I'm afraid it's almost a mathematical certainty.  

    Incheon/Snow – Well, if they are adding a mega-shopping complex and a huge casino I imagine the idea is to become a bigger draw for Chinese tourists in the first place.  Also, don't discount the Japanese, who route tons of flights through Incheon every day.  

    Haiku/1020 – Better but your subject matter is all over the place.  It's like changing channels on a TV set from line to line.  Try to focus/On a single theme/that draws a picture – By the way, in case you are interested, it's a misconception that Haiku is 5/7/5 syllables - it's actually sounds, which is a serious distinction in Japanese.  Also, the key to good Haiku is they should convey an experience in a way that the reader can interpret for themselves.  So, what you might have said is: Planting my trees/words fall short of the/roots of my marriage.  See, you can turn that one around in your mind and think of it in many ways – it's actually a good intellectual exercise to learn Haiku.  You're into meditation, right?  You should check it out as that's the essence of Haiku. 

    Mycestro/Burr – I love Kickstarter!  About 1,800 people paying $79 and $99 gives them $150K of pre-orders in just 2 weeks – that's incredible!  

    User-friendly/Wombat – You are confusing beginner-friendly with user-friendly and, what several people have tried to tell you but you refuse to believe is that, if you are willing to put the effort in – then you will come to appreciate what we do here and you would not want it to change.  You are like a new intern joining a surgical team and demanding that they all change their system to accommodate the way you learned things in medical school, rather than accepting the fact that you need to put in some work and get up to their speed so you can enhance the team, rather than drag it down to your level.  We, like any surgical team, are very concerned with successful outcomes – not so much in constantly changing to make every new intern happy.  

    We've been doing this for 7 years and surviving all sorts of market conditions, including the worst market crash in 100 years and the greatest market recovery in the same 100 years and you've been here 7 weeks and you want to tell us how we're doing things all wrong?  As Burrben notes, things do evolve over time because we do try things and, when they work, we stick with them but every quarter there is some new guy who wants things done "like they do it at XXX" and those people don't tend to last because they're not willing to learn.  This is not Options 101 and how much fun would it be for the more experienced traders if we try to make it that way for you? 

    Welcome Flkass!  Ah, another new guy who wants changes – see above.  We do have a Wiki and I would strongly encourage you and Wombat to contribute to it as that's the whole point – to be able to review things by topic.  As to changing chat, the Wiki reorganizes comments by stock symbol (but only works when you lead off comment with the symbol, of course) and, no, I don't like other kinds of formats for chat because this is a reflection of how I best think and interact with people so moving to threads would completely destroy what we have here and I'd end up with a site I would not myself visit and that would be silly, wouldn't it?  

    Thrusters/Burr – "Or destroy the atmosphere" pretty much sums it up but good T-shirts!  Of course, I had the same concern about the supercollider and that seems to be OK so far.  

     Pissing off 2M voters/Jrom – Oh come on, the GOP does that before breakfast on a regular day. 8)

    CRUS/Rpme – As valid a premise as any (of course that would have had me investing in Wang Computers).  

    Gai-jin/ZZ – Watch it!  Actually, I spent a summer in Japan back in college (30 years ago) and that was pretty much my name as, most places I went, I was the only one.  

    Barefoot/Shadow – Try CROX – we need the sales.  

    Thanks DC.

    TOS/Wombat – As It's a performance issue, I run TOS twice.  I have a paper money session with one set of charts,etc. running on the left screen of my main computer and a regular account running on a big HPQ TouchSmart that's on my right as I don't need to touch the mouse to quickly tab between different chart groups.

    MCD/Burr – My guess is IB is only showing their internal volume while the others are showing all exchanges.

    Fills/Income Portfolio – Sometimes it takes days to fill long-term trades and sometimes they don't fill at all.  Generally, we tend to find new trade ideas on a pretty regular basis so we don't fret over the ones that don't fill.  It is VERY helpful to StJ and I to know what does fill for people.  

    Also, remind me to talk about filling strategies later today – that's worth going over.  

    VIX/Burr – Probably people worrying ahead of Sequestration (tomorrow!).

    Losses/Jfaw – I have to write a post and would be happy to discuss later but generally, try to make each 20% a decision point.  So, if you scale in in quarters then a 20% loss costs you EITHER 5% of an allocation or you DD to a 50% allocation and now you are down 10% or you wait (a very wise move) for either a recovery or a 40% drop on 1x (happens all the time with options) where you THEN decide to DD, Roll or Quit with a 10% loss of an allocation.  That's essentially the cycle you use until you are fully committed – at which point you want to avoid being down 20% like the plague.   If you follow that general rule – it forces you to sell and roll to reduce your basis and avoid that wall of that final 20% loss – which is exactly what you should be doing.  

    Of course, that's a guideline but sometimes, something like AAPL comes along and you're happy (if able) to DD when down 100% so you can be down 50% and you may even want to DD again to be down 25% on a massive bet.  Frankly, if your initial allocation was 5% of the portfolio and you go down 50% and you DD then 10% not so terrible and if that drops again and you bump it up to 20% – it's risky but not crazy if you REALLY believe in something but BEFORE you press an investment, you have to have a very, very real idea of what you intend to do if it is wiped out (no matter how unlikely).  Can you live with having 80% left?  Are you comfortable rebuilding from there?  

    So I wouldn't want to be down $100K in AAPL Money or the $25KPA if we weren't up $100K in the Income Portfolio – while it would be extremely sad if we realize that loss – it's something we can certainly recover from (see $25KPM) while, on the positive side, we have a chance to buy a house with our profits if it does work out and that's worth going for as these opportunities don't come around all that often.  

    Big Chart – Nas not going anywhere this time without AAPL.

    Twitter/Dawn – Nothing goes on Twitter that wasn't in chat first but it's useful if you are on the road if you want to keep up.  I only send out one or two tweets a day and usually it's just the morning post link.  To someone who's in chat, it's not that interesting but I do like Twitter to catch up on a few people's thoughts (I believe you can see who I follow by clicking on something).  

    By the way, if you search for Philstockworld on Flipboard – we're available there now but just as easy to add us to your Twitter of Facebook list and use Flipboard on that.  

    Margin/Flkass – Be VERY careful using margin like that.  You have a certain amount of buying power based on cash on hand and your stocks and we generally use less than our full allocation but, if you are borrowing, it also means you are possibly over-extended and taking on a lot of risk so make sure you are aware of the risk and, of course, the cost of what you borrow.   If you have a big account, you should check out portfolio margining – which drastically reduces the margin requirements but also requires advanced risk-management skills.  In fact, I spent time last week arguing with a guy at a brokerage who was calculating the margin wrong on a large trade.  Turned out his computer was wrong and I was right.

    BBY/StJ – Has to be gone for. 

    TOL/JFaw – Remind me later but not very cheap.  

    Great book ZZ!  

    OK, now it's late so gotta work – feel free to re-ask anything I missed.