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Thursday Thoughts for Falling Markets

I like not having a point sometimes

Last Wednesday I did a random post and it's kind of nice to just write stuff down and not have to worry about making a point.  It also gives me a chance to put up some interesting things that might not "fit" otherwise but I think are worth discussing.  There's not much going on in the market at the moment and we went over a massive amount of stuff in Member Chat between last night and this morning, so plenty to read over there if you want to know about today's markets.  

Thing number one is thanks to Manix at SeekingAlpha for reaffirming my faith in Social Discourse.  I mentioned yesterday that my post on Income Inequality has sparked a spirited debate on SA and, as our Members are well aware, I'm not a big fan of people who like to debate using Fox talking points and zero facts, so I can get a bit testy with them.  It made me feel very good that at least one person reading over at Seeking Alpha gets that as Manix commented: 

Phil supports his opinions with facts and if he disagrees with someone else's opinion, he'll disintegrate it with …. facts. That doesn't prevent that someone else from presenting a counter-argument that is also fact-based, but I rarely see such rebuttals …

for obvious reasons.

Let's face it: Phil doesn't suffer fools lightly. If someone writes an opinion that doesn't deserve to stand on its own merit, Phil will make sure that readers will see why he thinks it lacks merit. Few 'wrong-headed' opinions will be left unscathed, less they gain some sort of traction. After all, this is HIS column. Disagree with his views all you want, but be prepared to give a cogent argument for them, less you be taken out to the woodshed for posting nonsense.

That's great, I'm done now and can die in peace because that will make a fine eulogy!  Anyway, it's generally like Sodom and Gomorrah in these public chat rooms (which is what led me to start a private site in the first place) but every once in a while I do find a righteous man out there, and it renews my faith in people and makes me feel like it's still worth trying to do my little bit to change the World and not just going 100% private on our site.  

Of course the real angels here are our Members, who support this nonsense (in exchange for a few tips and lessons, of course) – ESPECIALLY our Conservative Members, who chose to spend the 25% of the time reading things they disagree with reading my political rants – they are certainly not the kind of Conservatives I'm generally angry at because at least they are willing to listen, and to share their point of view – and I do really appreciate that as I too need to put in my 25% every day!  

In fact, the first article in our Education Archives is not an article on stock or options trading but "Rational Debating 101," as it's very hard to teach people anything if they don't know how to have a proper discussion in the first place.  Speaking of teaching people, we've started working on our Book Project, but I think I may have jumped ahead and finished the section on Buy/Writes this morning as I came up with a very good example (using ABX) to illustrate why this is, by far, our favorite strategy.  If non-Members are interested, they can follow the link from this morning's Twitter feed (@philstockworld), where we occasionally feature comments from Member chat.  

Twitter is useful for our Members who are on the road and I try to tweet out important things, like our fantastically profitable oil trades of last week, as well as the occasional trade idea (as we have dozens, and can spare a few) and Greg and I have been discussing the idea of building an App for Members (and you can now add Philstockworld's public feed to Flipboard), as those too have nifty alert systems we can make use of and, of course, it would be nice to come up with a good mobile format for our site – especially the Member Chat, which is hard to keep up with on the road (I know as I'm often on the road myself).  

Ha! I found a flaw in this format – I just had to remind myself that the point of this post was not to have a point so it's time to move on to other topics!  

So I was having dinner at Brushtroke (very over-rated) with Ron from Opesbridge, LP and we were discussing whether or not the market had room to "pop" from here.  Back on March 7th (see Dawn!) we had reviewed our Dow components in an attempt to calculate a realistic pre-earnings top for this run and we decided 15,200 was the highest we could see the Dow going without some additional Fundamental justification through either better than expected earnings or substantial improvements in the Global Economy.  

That was the logic (in analyzing each component) that led us to short XOM at $90 and JNJ at $79 (though JNJ is over at the moment).  The Dow was just under 14,300 on the 7th and our near-term goal was to get over 14,400, so mission accomplished there but 14,421 yesterday means we're barely holding it together at the 5% level we predicted we'd be in way back in 2009 – so let's not get too impressed by the extra 22 points

What Ron and I talked about, in the same context, was the reality of how high the markets could possibly go.  Though 15,200 sounds very high, it's up just 5% from where we are now and is, in fact, the exact top or our expected Big Chart range for the Dow.  That and 3,300 for the Nasdaq (up 1.5% from yesterday's close), would finally get us to flip truly bullish for another leg higher from here – rather than cautiously playing this as if we're at the top of a range and likely to get a correction.  

So our other big sticking point is $60Tn, which is roughly the global market cap of all equities, with about $40Tn of that listed on US indexes (and, of course, stocks are listed on several indexes at once).  That's about where we topped out in May of 2008 but, more to the point, it represents about $10Tn worth of gains over the past 6 months.  Doesn't that seem like it might be a bit extreme to you?  Did $10Tn flow into the market?  Of course not.  In fact, even if you front-load all of the Fed's promised $85Bn a month and let the banks lever it 10x and put ALL of that money into the market – you still can't get there from here.  

As I noted on our Dow analysis – you can get close.  You can get to the very top of our Fundamentally set trading range (15,200) without violating the laws of Stock Market Physics, but I would challenge you to tell me where that next $1Tn levered 10x is going to come from?  Surely not from Europe.  I mentioned going long on China in yesterday's post – that's one place bulls need to count on but emerging markets are not carrying their weight at the moment and Japan is just trying to tread water so I still think the markets need to take a little rest here – if not sit down for a genuine pullback.  

We already shut down last June's Income Portfolio as it made 2 years worth of target profits in 9 months and now our new, month-old Income Portfolio is up a virtual $6,725 in less than 30 days ($4K per month is goal) this is silly folks – if this is how the markets work then we'd all be buying $1M homes by simply putting $100K in the market and having our profits pay off the mortgage each month.  Perhaps that's why housing is roaring back, with the Jan FHFA Housing Price Index up 5.5% since last year.  That's a nice bonus on our free Million-Dollar homes – a $55,000 gain in value in a single year!  

The last time homes rose more than 4%, let alone 5.5% in a year was way back in Q3 of 2006.  Of course, working back from there we had 10.58% in 2005, 9.97% in 2004, 7.57% in 2003, 7.21% in 2002 and you have to go all the way back to 1997 to find another quarter where homes DID NOT rise 5% per year.  Have I mentioned how much I like real estate lately?  

128986 600 Bernankes fedbag cartoonsThat's what we need to get the next leg of the rally going but 1997 was almost a full decade into recovering from the first Bush's Savings and Loan Crisis (the GOPs 2nd most recent attempt at destroying the Economy) and the gains were steadily accelerating – as were wages and jobs under Clinton, who was into his 2nd term at the time.  Granted Bill Clinton did not have a hole as big as Obama's to have to climb out of before he could get the economy going – but it did get going pretty well at the time, and the S&P was already up from 451, when Clinton was sworn in in January of 1993, to 757 in January of 1997 and wouldn't stop for ANOTHER 100% gain, at 1,527 in March of 2000.  

So we COULD just be in the early stages of a massive rally but even Clinton's 238% rally in 8 years had some set-backs (like Bush II winning the election in 2001!) but here we are again, right at 1,558 on the S&P after just 12 years of enduring that disaster and we're back on track – but we need TIME to justify these levels and, so far, we're up too far, too fast and we should be cautious here until and unless we get some very good earnings reports.  


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  1. Housing roaring back as expected. Any other ideas other then HOV ?
    any current plays on HOV ? Nice 2015 spread I'm guessing. 
    http://www.nytimes.com/2013/03/21/business/economy/in-us-surprise-housing-demand-catches-industry-off-guard.html?pagewanted=1&hp


  2. Good Morning!


  3. misc items
    for book food for thought:
    add an appendix of recommended web sites to follow and recommended books as must reads.
     
    on gold miners-please explain why we do not opt for the gdx instead of specific companies? the companies have these political issues in various countries causing volatility that the index would smooth out.
     
    on reading your posts and 'paying attention'-what do they say…minds only retain 20% of what is read first time?  i would like to be able to first do a search on a question before asking it and inciting the masters wrath…ha…as a new member not sure how to do this.  can someone enlighten me?
     
    on oil trading-i have stayed away from this for reasons i posted previously but with the teachings here i will enter the fray.  does someone keep an 'understanding' type paper/notes on all phil tells us in these ongoing chats? if not, wonder if a paper PSW would want to create…for members only, not for the book..?
     
    finally, where are you getting your DXY levels as i am on trade station and $dxy on my platform not hitting those levels?
     
    can you all tell had a toigh night sleep?


  4. Oil Lines

    R3 – 94.84
    R2 – 94.22
    R1 – 93.71
    PP – 93.09
    S1 – 92.58
    S2 – 91.96
    S3 – 91.45

    Yesterday's high and low – 93.6 / 92.47


  5. Phil & tchi/CHKR, from yesterday
    thanks for the info – time zones are a bitch sometimes


  6. Oil lines
     
    what's the utility of this daily info? If I'm long /cl, should I consider R1 as a daily target?


  7. LULU-just a contra view…Talk about 'fundamentals'…I have NEVER purchased anything there as they are ridiculously expensive—they are freaking yoga pants for god's sake!
    http://seekingalpha.com/article/1291811-lululemon-remains-top-sell-in-2013-under-armour-and-nike-competition-rising


  8. if you have some time / interest a kyle bass interview.  his one trade for ten yrs and go to the beach……..plus other stuff
     
    http://media.chicagobooth.edu/mediasite/Viewer/?peid=f15d95d054e8442ab0cc1c60321383101d


  9. jfawcett
    ABX Still like to point out Phil's excellent comments. This is the basis of tree planting. For newbies cut out the comments and hang it above your computer. This will apply to synthetic as well as stock trades. How ever I will not retract or lay down on my comments this morning.  Now that you have entered and planted your long term tree you need to save yourself from bordom just looking at the play. In your case sell 1/2 Apr 30 for .42 so this gives you another 126$ in your pocket where you can take out your family for a meal this month. No extra margin. If the stock goes up beyond 30 you find the stock increases to a delta of one and your far out caller and putter will balance of. So this will keep you from bordom selling extra callers every month. To carry on to the next month you can roll and if the caller gets out of control you can compliment it with an other short month putter.


  10. Good morning!  Love the idea of an app that can set alerts.  I myself was just thinking about doing something similar the other day so that I would be alerted every time a new Income Portfolio trade was announced.  But an app that could do the same thing based on certain virtual portfolios or specific stocks would be a godsend!
     
    Hey, Brushstroke was opened by my alma mater, Tsuji Academy here in Osaka.  You're right, its over-rated and thats why I never went.  Kaiseki is completely contingent on the ingredients employed and in all honesty, even the high quality ingredients in NYC are a pale comparison to the quality of even common supermarket quality ingredients in Japan and it defeats the whole point.


  11. I think that I now have all the trades in the new Income portfolios. 

    Let me know if I missed anything. Prices are not completely up to date since we just opened. Thanks to Burrben for the assist!


  12. If FAS could stay right here for the next 20 days, we would be golden!


  13. If AAPL could go up another $50 in the next 20 days we would be golden!


  14. Oil looks perky on a rising dollar.  Sell it?



  15. Income Portfolio/Stjean: Phil added an FTR buy-write on 3/19,  although I can't seem to get filled on my orders:
     
    "FTR/Albo – As long as you don't expect much out of them, they aren't likely to disappoint.  At $3.97 you can buy the stock, sell the 2015 $3.50 calls for .75 and the $3.50 puts for .60 for a net $2.62/3.06 entry and that makes the .40 dividend 15% while you wait, which means your net/net after two years (assuming .80 collected) is $1.82/2.66 – what's not to like?  In fact, let's add 5,000 to the Income Portfolio for $13,100 and that will pay us a lovely $500 per quarter in dividends.  "



  16. Thanks Kinki – I'll check the trading prices and see how far we are! Not a very liquid instrument, especially the options. We had a few of these in the last portfolio where we dropped the trade altogether.



  17. ACAD/Nice!


  18. Good morning!  

    Indefatigable is the word of the day if the markets get back to green. 

    Dollar poking over 83 with Euro $1.2902 so that should get support and keep the Dollar from running away hopefully.  Pound $1.5143 and only 95.12 Yen to the Dollar and the Nikkei is not happy with that and fell back to 12,600 and /NKD is still a great one to keep you eye on to follow our markets if they turn down too fast for you to catch them.  

    Oil is fighting to get back to $93 but $93.50 is our new shorting spot, not $93 (the old $92.50).  Gold topped out at $1,616 but back to $1,611 with silver zooming to catch up finally at $29.17 and copper looking sad at $3.441.  Nat gas is $3.991 with inventories at 10:30 and gasoline is $3.0897 and now into it's weekend run so not shortable but not an attractive long either.  

    LULU all over the place – funny.  

    Goldman catching up to us on OIH (also all over the place with their predictions):

    Goldman Sachs believes the selloff in oil service stocks creates a buying opportunity, as it sees Q1 earnings growing at a faster rate driven by completion work. The firm expects Halliburton (HAL) to report in-line Q1 results and recommends buying on the recent pullback, suggests Basic Energy (BAS) on better utilization, and likes Nabors Industries (NBR) on relative valuation.

    Watch our for Consumer Comfort (9:45) and Leading Indicators (10) with the Philly Fed and Home Sales can only disappoint now – good is expected.  

    Thursday's economic calendar:

    8:30 Initial Jobless Claims

    9:00 PMI Manufacturing Index Flash

    9:00 FHFA House Price Index

    9:45 Bloomberg Consumer Comfort Index

    10:00 Existing Home Sales

    10:00 Philly Fed Business Outlook

    10:00 Leading Indicators

    10:30 EIA Natural Gas Inventory

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet

    At the open: Dow -0.45% to 14447. S&P -0.51% to 1551. Nasdaq -0.71% to 3231.

    Treasurys: 30-year +0.38%. 10-yr +0.19%. 5-yr +0.07%.

    Commodities: Crude -0.68% to $92.86. Gold +0.35% to $1613.2.

    Currencies: Euro -0.26% vs. dollar. Yen -0.89%. Pound -0.26%.

    10:00 AM On the hour: Dow -0.3%. 10-yr +0.13%. Euro -0.20% vs. dollar. Crude -0.64% to $92.9. Gold +0.35% to $1613.2.

    Market preview: Stock futures are running either side of zero, although that's not too bad given that Europe's solidly red following rather poor PMI data and as the crisis in Cyprus seems togain strength. The S&P Mini is +0.1%. Oracle loses 7.5% and Scholastic slumps 11% following earnings reports.

    US Mar. Flash PMI Manufacturing fell to 54.9 vs consensus of 55.0, 55.2 in Feb. Output 56.8 vs. 57.3 in Feb. New Orders 55.9 vs. 55.4 in Feb. Employment 54.6 vs. 53.5 in Feb. (PR)

    Jan. FHFA Housing Price Index: +0.6% M/M vs. consensus of +0.7% and +0.6% in Dec.

    Initial Jobless Claims: +2K to 336K vs. 340K consensus, 334K prior (revised). Continuing claims +5K to 3.048M.  More on jobless claims: The 4-week moving average declines 7.5K to 339,750, the lowest level since February 2008 (long-term chart courtesy of Bill McBride). S&P futures continue to hug the flat line and Europe's off the lows, the Stoxx 50 -0.8%. 

    The Bloomberg Consumer Comfort Index pulls back from a near 5-year high, sliding to -33.9 from -31.6 last week. Just 20% of those surveyed view the economy positively – 15 points below the long-term average, but better than anything seen since 2007. Half give a positive rating to their personal finances, the first time at that high of a level since mid-summer. 17% say their finances are in "poor" shape, the most in 2 months. - This is tricky – more important how people view their own finances than what they think of the economy – clearly a media-influenced disconnect.  What's the bet that 75% of that half are Republicans, at least?

    March Philly Fed Business Outlook: +2.0 vs. -2.0 expected, -12.5 previous. - BTE, but not thrilling.  

    Feb. Leading Indicators: Leading Index +0.5% to 94.8vs. +0.4% expected, +0.2% prior. Coincident Index +0.2% vs. +0.4% prior. Lagging Index +0.1% vs. +0.4% prior - Mixed

     February Existing Home Sales4.98M vs. consensus 5.01M, 4.94M previous (revised). - Mixed.

    KB Home (KBH): FQ1 EPS of -$0.16 beats by $0.06. Revenue of $405.2M (+59% Y/Y) beats by $45.4M. Shares +3%premarket. (PR)

     

    Gold gets a downgrade at SocGen which says the metal's price is in bubble territory. The downturn which began in October will continue, with the price hitting $1,400 by year's end and falling further in 2014. GLD +0.2% premarket.

    Coffee watch: Coffee futures (chart) continue to drift lower this year. Though some relief for bagged coffee sellers on wholesale costs is already built into estimates, the margin boost could be even better than expected. A long-term trend to watch is demand in India where the emerging coffee scene could be a disrupter to pricing if sales soar. Coffee players: DNKNSBUX, GMR, PEETKRFTSJM.

    Ballard Power (BLDP-13.2% premarket after announcing apublic offering of 7.275M common units at $1.10/unit. BLDP says net proceeds will be used for general corporate purposes.

    Boeing (BA) intends to carry out two 787 flights tests, possibly over the weekend, in order to assess the jet's revamped battery system. Meanwhile, Boeing is attempting to convince the public that the 787s are safe to fly on. That includes downplaying the seriousness of the two battery burnouts by portraying them as somewhat routine, although independent experts aren't buying that line. 

    General Motors (GM) and Ford (F) are making solid progress selling cars to younger U.S. buyers, increasing market share in both the 18- to 24-year old demographic and the 25- to 34-year old range of buyers. The key appears to be the push by the U.S. automakers to offer smaller fuel-efficient vehicles with modern on-trend design.

    The flip side of the coin: Along with U.S. automakers, South Korean car companies Hyundai (HYMLF.PK) and Kia (KIMTF.PK) are also improving market share in the U.S. with young buyers. The gains are coming at the expense of Japanese automakers (HMCTM,NSANY.OB) which have steadily lost market share in the key demographic since 2008 but still hold a formidable +40% share position.

    The China syndrome for Nissan (NSANY.OB): A large part of the automaker's grand plan to dominate the electric vehicle market was to see demand in China soar to as much as 500K units by mid-decade and 5M by 2020/ Those estimates seem dreamy  given today's modest tally in the nation of 27.8K EVs of which 80% are buses. Another sticking point for Nissan is the territorial dispute between China and Japan which has dampened demand for Japanese models of all varieties.

    Yeah baby – stick it to the shorts!   Intuitive Surgical (ISRG) has increased its stock repurchase program by $1B, bringing the total plan to $1.21B. The move comes after concerns were raised this month about the cost-benefit of using robotic devices for hysterectomy procedures. Shares +3.45%. (PR)

    Early results from a study show that Mako Surgincal's (MAKO) robotic arm improves the accuracy of implant placements in knees and reduces pain. The trial is comparing Mako's Restoris implant using the firm's robotic arm with the manual placement of the Oxford Partial Knee implant from Biomet Orthopedics. (PR)

    Bank of America lowers the boom on Burger King Worldwide (BKW), dropping its rating on the restaurant operator to Underperform and taking the price target down to $16. Shares of Burger King Worldwide are up over 20% YTD which brings BofA to a jumping off point on valuation concerns.


  19. CSCO down 3% as FBR lowers price target to $17. FU FBR!



  20. Supervalue (
    SVUannounces it completed the sale of five of its grocery store chains to a consortium led by Cerberus for a cool $3.3B. As part of the deal, Symphony Investors completed a tender offer for 11.686M shares at $4.00 a pop. After all the dust settles, Symphony Investors will hold a 21.2% stake in the trimmed-down Supervalu. SVU -2.2% premarket.

    ROFL – and they chased people out of the stock because a few pants were recalled!  Lululemon Athletica (LULU): Q4 EPS of $0.75 beats by $0.01. Revenue of $485.5M (+31% Y/Y) beats by $2.91M. (PR)  More on Lululemon (LULU): Comparable store sales increased 10% while the direct to consumer channel rose 56% to $78.3M. Inventory rose 49% Y/Y to $144M during the quarter. Store count up ten to 211. The retailer expects FY13 revenue of $1.615B-$1.64M and EPS of $1.95 to $1.99, estimates which are inclusive of the anticipated impact from the recent issue with a pants supplier. (PR) 

    More on Lululemon (LULU): For Q1, the retailer sees EPS of $0.28-$0.30 vs. $0.40 consensus and revenue of $333M-$343M vs. $345M consensus. CEO Christine Day will address shortage of black luon pants during the retailer's earnings call scheduled for 9:00 AM EST. LULU -1.4% premarket. (webcast)

    Cisco (CSCO) is downgraded to Sell at FBR Capital, which says the company will find it difficult to offset weakening router and switching demand. Negative tech trends "could significantly blur the lines between routers, switches, AND servers." FBR throws in a downgrade of Juniper Networks (JNPR) as well. Both are down more than 1% premarket.



  21. ZZ/PERKY!!


  22. phil, any thoughts on orcl earnings reaction


  23. GES/ SELL SEP 25 PUTS @ $2.7


  24. The latest in Cyprus from Krugman:

    http://krugman.blogs.nytimes.com/2013/03/21/cyprus-the-sum-of-all-fubar/

     

    What can be done? First off, Cypriot banks cannot honor their debts, which unfortunately overwhelmingly take the form of deposits. So a default on deposits is inevitable.

    As I now understand it, the initial screwup was a joint error of the Europeans and the Cypriots. Europe didn’t want an explicit bank resolution, which would among other things have given clear seniority to small insured deposits; instead, it wanted this essentially fictitious tax scheme. Meanwhile, the Cypriot government still has the illusion that its banking model can survive, and wanted to limit the hit to the big overseas depositors. Hence the debacle of the small-deposit tax.

    In the end this probably comes, in some version, to what it should have been from the start — a big haircut on deposits over 100,000.

    But even then the situation is by no means under control. There’s still a real estate bubble to implode, there’s still a huge problem of competitiveness (made worse because one major export industry, banking, has just gone to meet its maker), and the bailout will leave Cyprus with Greek-level sovereign debt.

    So then what? As a number of people have pointed out, Cyprus is arguably better positioned than Iceland to do an Iceland, because devaluing a reintroduced Cypriot currency could bring in a lot of tourism. But will the Cypriots — who haven’t even reconciled themselves to the end of their round-tripping business — be willing to go there?

    Truly awesome stuff.


  25. Forgot to post yesterday, but the Cramer line of the day to make him seem like an everyman was that he like to go to JCP when he's in the mall because they have free wifi.  They guy is worrying about saving some money on his data plan because when you're worth only 100 million, you have to be budget conscious.


  26. Indefatigable – What my wife calls me?…… ;)


  27. Krugman had a revelation:

    http://krugman.blogs.nytimes.com/2013/03/20/stimulus-derangement-syndrome/

     

    So, for example, we had Robert Barro arguing that multipliers are small because private spending fell during World War II (hello? Rationing? Banning of private construction?). We had “new monetarists” arguing that low interest rates cause deflation, not the other way around. We had Robert Lucas completely misunderstanding what Ricardian equivalence says about the effects of government spending. And I’m sure I’m missing other examples.

    Notice that what I’m highlighting here aren’t “mistakes” as in “saying something I disagree with”; I would not, for example, put claims that our problems are mainly structural in the same category. I’m talking about much cruder mistakes, basic failures to remember history or logic — the kind of thing you really would not expect from big guns in the field.

    What do these episodes tell us? First, how much people of conservative politics hate hate hate the idea of any kind of activist government policy to help the economy. Second, how weak their grip on their own intellectual principles is when it comes to arguments that seem to support that hatred.

    It has been a revelation.


  28. LOL 1020! Does that relate to household chores?


  29. stjeanluc – That Too!   :)


  30. HOV/Micro – It is SOOOOOO hard to value builders, it takes me a while to get confident with where they are as they are so full of crap and they juggle their books and you have to look at each market they are invested in (if you can even figure that out) and look at the local economies in each and factor in lending activity, labor availability, etc.  So, as an old industry guy, I know what HOV is up to as they're my local boys but it quickly gets out of my comfort zone looking at others.  I remember back on 2005, when I was fresh out of my old company and was able to tell you if anyone sneezed in US real estate, that I kept telling people to stay away from BZH but Cramer was pumping them and no one would believe me and even after they fell from $400 to $200, they bounced back to $240 and people said "see – I told you it was a good stock" – now they're at $16 and the lesson here is – it's very hard to value homebuilders when, clearly, people can be off by factors of 95%.  I will try to do a bit of reading on my cruise but someone did ask me last month about builders and, at the time, I didn't see anyone I liked very much and then HOV fell back to $5.20 and the case was closed as far as I was concerned because no way we don't buy them around $5.  

     

    Items/Dawn – A list of books and sites is a great idea and I think there is something like that in the Wiki (or there should be).  We do like GDX, but ABX is the best of the bunch so why do I need an index weighted down with trash when I can pluck out the diamond?  ABX is 12.66% of ABX anyway so it's like buying the Nasdaq to avoid betting on AAPL – you're just fooling yourself.  In fact, GG is the only other huge holding in GDX and they are 11.4% and I don't like them as much as ABX, nor do I like NEM (8.5%) or AU (5%) or KGC (4.9%) or GOLD (4.5%) anywhere near as much as I like ABX.  As to 20%, I have an 11 year-old who can recite Pi to 51 decimals (and there were only 53 on the paper she was given to memorize) so don't come to me with your 80% loss rate…  Just kidding.  We do have the search box on the top left but that's iffy for old questions.  I don't know of an oil thing but also good idea for you to make a Wiki on.  I use /DX on TOS for my Dollar index, which is, according to them, the June US Dollar Index Futures, which are more reliable than spot prices, which can be influenced by all sorts of nonsense.  

    You're welcome Jomp. Down another 2% today.  

    Oil Lines/Flkass – I prefer to play the .50 lines on the front-month contracts /CL but, when they line up with StJ's supports – so much the better.  Currently we believe the primary range is $93.50 to $91.50 but could go $1 over in either direction.  In general, that means we like to go short as we get closer to $93.50 and long as we get closer to $91.50 – not that complicated really but then we watch a lot of Macros as well – especially the Dollar, to get an idea of the likely short-term direction.  

    So right now, we're at $92.50 (/CL) and it's worth a try for a long with a .05 stop as it's been bouncy and the Euro bounced earlier off $1.288 (where it is now) and the Pound just popped off $1.512 and the Dollar looks stretched at 83.10 so, as long as those premises hold up and the Transports stay down (now 6.177 on the Dow) and our indices hold the 0.675% drop (5%, 2.5%, 1.25%, 0.675%), then there's a good chance we get a little bounce here. 

    LULU/Dawn – I do not disagree but apparently Yoga people just love the stuff – it's like buying $100 sneakers for BBall players – they feel like it's worthwhile equipment and money is not the object.  

    D'oh – there goes nat gas – down .10 ($3.90) the second the report came out with just a 62Bcf draw-down.  Should be a good time to fish for nat gas plays as it's often a low draw this time of year. 

    EIA Natural Gas Inventory:  -62bcf. Futures +0.82% to $3.99.



  31. Phil
    good morning
    my investment advisor rolled some AAPL short puts and we have ended up with the Oct 580's at $97, now $135.
    there is $5 of premium left in them until Oct.
    high risk of being assigned?
    time to roll out and lower to sell some premium?
    your opinion appreciated.
    and yes, I am still alive, reading the boards on most days….
    thanks


  32. Search/StJean – Would you happen to have the search string (link) to search the Wiki by stock symbol? I can't seem to find the link. Much appreciated.


  33. Search / Opes – It's on the main page:

    http://www.philstockworld.com/wiki/index.php?title=Main_Page

    Not sure why the Wiki doesnt open that by default though!


  34. StJean – Thank you very much!


  35. LULU – hard to believe but they are actually a superior product.  As a veteran of Bikram (hot) yoga I can honestly say that whatever you wear for 1 class will never be the same…unless it is made by LULU.  Take it for what you will…I am a buyer here…actually a put seller, but you know how it is here at Phil's


  36. David Zevros is still obsessed with Lehman…
    "The bottom line is that it looks like a Lehman like event is about to be unleashed on Europe WITHOUT an effective TARP like structure fully in place.
    09/04/2011
     
    Jefferies' David Zervos has been as apocalyptic as they come (I, II) with regards to Cyprus, and his latest note says the country's eurozone exit (now openly talked about at the EU's highest levels) could be a Lehman-style systemic event.
    Today


  37. Phil,
    When time permits, pls share your thgts on the freight forwarder space, CHRW vs EXPD with a view to a pick-up in economic activity. EXPD has btr growth numbers but appears more expensive (PE: 24 vs 16). Chrw has btr  mgns and ROE. CHRW 52.50 1/15puts are $6, EXPD 35s are 4.75
    Thanks in advance


  38. ACAD – well, they finally show something.  Too risky of a play for me based upon past performance.


  39. INDIA IS NOW (OUTDIA) JOINING BRAZIL IN THE BROKEN BRIC BAT CLUB DOWN 4% IN 5 DAYS (BRAZ DOWN 9%)


  40. HOV – If there's no way we don't buy HOV at $5.00, do you like the Jan $5.50/$7 bull call spread selling the $5 puts for a net $.07 credit with the worst case HOV put to you at $4.93 with a spread that's 50% in the money?


  41. On ABX:  For anyone who might have interest, I was able to fill the 2015 25/33 BCS, selling the 2015 25 puts (see Income Portfolio)… for even money. And it looks like ABX may be bottoming.


  42. Jbur
    We had the same thoughts today. Just filled ABX trade for even as well.


  43. BMC HALTED


  44. Market closes soon for NCAA March Madness.  Watch trading slow down.


  45. RUSTLE!! IST ROUND IF THEY AINT SHUTTIN DOWN THE BOTS ITS A PIFFLE


  46. Thanks Phil-GDX thoughts make sense.  Glad to hear your daughter a genius!! ;-)   for the rest of us average shmoos we need to hear it more than once kidding of course.
    Just saw here what WIKI is…will try that!
    I am signing off here today having one of those 'horrible Alexander" days spilled huge mug coffee all over the place incl on my new laptop…just everywhere.  Trade Station acting up had to reboot twice already and I am just downright cranky now! Have a good day all in the markets! 


  47. Phil- I can't talk about squiggly lines like Dawnr, was curious about what you thought of India? Was looking at their etf SCIF? If when interest rates go down we would have to see a bounce… It's harder and harder to find compelling longs but India has piqued my interest. 


  48. XLF BLOCK PUMP BULGES RIGHT ON SCHEDULE


  49. ACAD/ Pharm
    I have sold my calls.
    Betting on some deception with Jun 7 Puts for a quick pullback


  50. Cyprus/
    And if the bailout came from the US?
    What is a meager $5bn to kick the Russian Navy out of the Mediterranean Sea?
    Preparing the groundwork for another "victorious" Muslim Brotherhood style insurrection in Syria …
    http://www.infowars.com/russia-sending-permanent-warship-fleet-to-mediterranean-is-a-russian-naval-base-in-cyprus-coming-next/


  51. Phil,
    The short JRCC Jan14 2.50 puts in the old income portfolio are barely profitable now.  The chart pattern for JRCC has been looking pretty bearish to me for a while now.  Are you still feeling good about this position?


  52. Phil/buy/writes – If I understand the possibilities of your long-term buy/write strategy correctly: The ultimate goal to have a portfolio of long-term, dividend-paying stocks which essentially have a basis of zero. At this "zero-basis" point, would you still continue with the buy/write strategy, or let them "ride" and discontinue selling options against them, since they are essentially "free" positions at that point. Thx


  53. Phil- Any comments on NKE/LULU and TIBX? They are reporting tonight. I may have missed your comments or recommendations. Thanks.


  54. EXM up 36%, EGLE 23%, GNK 14%.. wow


  55. 11:28 AM The outlook for online travel looks attractive for global companies, according to a new report from Morningstar. The read-through from the firm is that a "narrow moat" exists for Expedia (EXPE -0.7%), Priceline (PCLN +1%), and Orbitz (OWW -3.7%). Will one online travel player finally jump out on top in an industry called "anybody's game" by analysts? Read comments


  56. Phil – AAPL has been consolidating here around $452 for three days now, any sense wither it's headed?  There are some expectations of an enhanced dividend announcement, if that's what's driving the recent positive trend it may not last…


  57. Kass/Mill – Is there a summary somewhere?  

    Brushstroke/Kinki – Very disappointing.  Wasn't even sushi, just lots of complicated Japanese food with Bouley-type presentation and service but missing that spotlight focus on the main ingredient of each dish so everything was essentially lost in the mish-mosh they served.  As you say, ingredients are, in large part to blame but the solution to that is, of course, find things you CAN use and make dishes around them – there are 1,000 other nice restaurants in NYC that manage to do that.   The really painful thing was eating there with Nobu just 2 blocks away – serves me right for trying something different!  As I said to Ron after the meal – I almost felt like going for some sushi!

    Income Portfolio – Thanks StJ and Burr!  Aren't we supposed to have 100 DIA $141 puts?   That was a very important cover!  

    FTR/Kinki – I believe that one was not filling yet. 

    CSCO/StJ – I'd buy more at $17.  That's a very strange downgrade from FBR as they just rated them market perform with a $22 target on 2/11.  So $17 is a 22.7% reduction without the company itself guiding down and with no earnings evidence whatsoever.  This guy is either a genius who sees things no one else can see or another schmuck analyst who they generally keep anonymous because 80% of them are selling life insurance a year later when all of their picks are upside down. 

    ORCL/Bdon – Same as I said before the earnings last month when Scott asked if it was a buy on the dip:

    ORCL/Scott – Not until the next corporate buying cycle kicks off.  What kind of dip is this when they drop from double top at $36 to $34.50?  Are we that desperate for deals that you're going to call that a pullback?

    Now they're $32.47 but no real evidence Corporate Buying is coming back.  In fact, their earnings report kind of shows that it's not coming back yet.  That or ORCL is losing market share and just blaming the economy.  They averaged $28.50 last year and this year is guided same as last year so why would anyone pay even $32.50 for that?  Right now, it's the 200 dma at $32.24 that's holding them up – won't be pretty if that fails.  

    GES/Lionel – Be careful, buy-out rumors are their main means of support at the moment.   Guidance was low, inventories up – they have a stronger US consumer and a low p/e in their favor so it would make sense, at $2.2Bn for anyone with a p/e of 15 to consider swallowing them.  

    Krugman/StJ – Nice, clear outline of the problem. 

    [pop]Cramer/Rustle – Don't be so sure, TST has fallen from $3.50 in 2011 to $1.75 today and all down from $15 before the big crash and TST has been in the red for years and he gets no salary there.  Cramer only has 1.7M shares anyway and I'm sure CNBC pays him but I wonder how much you get for working for CNBC?  Joe Kernan has a bigger show than his, Kudlow has an hour – I very much doubt that CNBC shells out $5M, probably not even $3M.  Not bad money at $2-2.5M but you can see why he's pushing all his other crap so hard.  

    Good revelation StJ. 

    AAPL/Maya – Not very likely someone would pay +5 just to assign you a stock they could just as easily buy on the open market.  The Oct $580 puts are now $137 and have (according to TOS), $91 in net premium.  You are $130 out of the money with 7 months to go so you need AAPL to gain $20 per month(ish) to be "on track".  If you roll those to 2x the 2015 $420 puts ($65.50), TOS says the margin on 2 is just net $1,150 and, of course, if put to you, you'd have 2x at about $370 average vs 1x at $480 so it would cost you $260 more per share to commit to buying another round of AAPL, drastically reduce your margin and give you a $160 better position.  That's what I think and good to see you again. 

    LULU/Cdel – Thanks, that makes sense.  It's like people saying they would never spend $1,000 on a set of clubs – it simply means they don't play the game so why would you take investment advice from people who can't possibly understand the company.  I don't know crap about Yoga but I'm going to give the benefit of the doubt to a company that dominates and grows the way they've been.  What you say helps as it's easy to see why someone would want to spend $100 once, rather than $20 10 times.  

    Lehman/Lionel – LOL, that's funny.  If I recall correctly, we had a Leahman-like event WITHOUT an effective TARP-like structure fully in place too.  And wasn't Greece's exit openly talked about?  They are just banging on this story relentlessly  must not be anything else interesting happening. 

    SVU made a big turn up after shaking off non-believers.  

    CHRW/8800 – CHRW likes to position themselves as a "logistics" company but really they do 85% transport and almost all of that trucking, even after the acquisition but they are more of an affiliation of truckers than a company that employs a fleet (like UPS).  They are mainly US so that's good and they service a lot of Russell-type companies – also good so it then comes down to oil and whether or not it stays under control. They missed in Dec and estimates came down but no additional guide-down with earnings on 4/23 (after expirations) so I'd open with something like what we did with TUMI  and sell 5 of the April $57.50 puts for $1.05 ($505) and buy 3 Aug $52.50 puts for $1.50 ($450) for a $55 credit and the assumption that you can sell another 5 May puts for another $500 if all goes well ahead of earnings.  As to EXPD – as you note – it's just more expensive so why bother?  

    India/Angel – As I noted above, we have now put so much money into the US market (and Japan) that is now has to be taken from somewhere else to be added here. 

    HOV/Rperi – Of course I like that.  I just prefer to wait for the dips, which always seem to come with those guys.  

    ABX/Jbur – Thanks for update.  

    Good idea walking away Dawn – some days are just not good days to be trading.  

    SCIF/Jrom – Small caps in India are like penny stocks in China.  You're buying MindTree and Gitanjali Gems and Hexaware and Amtek and MakeMyTrip and (and I love this one), Indiabulls Real Estate.  So, which is the one you're most excited about?  

    XLF/Angel – I really think those guys are ahead of themselves. Even V didn't pop on getting more EU business.  

    Cyprus/Lionel – Oh yes, just what we need, putting our ships next to Russia's and trying to push them out of the Med.  

    ISRG couldn't hold it.  

    JRCC/Wavecounter – When we took them, they were down around $1.70 in July and our premise was that a net $1.35 entry was good.  Of course, we should have taken the money and ran when they popped to $5.89 in October but doesn't really change the fact that $1.35 is a pretty good entry spot but they do have solvency issues and, if you don't REALLY want to own them for the net price – I'd certainly get out now as it's a small fish that can be thrown back and now BTU is a much better short put sale than JRCC.  

    Foreign Demand for Coal Grows on Increased Imports From China and the United KingdomMarketwire

    Buy/Writes/Opes – As with many things, it depends.  Depends where the stock is and how willing you are to risk your lovely zero basis.  It doesn't have to be only dividends, of course.  Let's say we held ABX at net $0 and they pay a .80 dividend on 1,000 shares ($800) with the stock at $29.46.  We could still sell the 2015 $35 calls for $2.90 ($2,900) and, assuming we don't mind owning 2,000 for an average of $16.50, we could sell the $23 puts for another $2.40 ($2,400) and then we've got $4,900 coming to us over the next two years against the "risk" of having to buy 1,000 more at $23, which is really $18.10 for the new shares and then we have 2,000 for net $9.05.  So it's foolish not to take the money and, if you don't have enough faith in BTU to want to be in 2,000 at $9.05 – then you should really be taking $29.50 and running, right?  If you are not sure, better to cash half for $29.50 and then "risk" being re-assigned back to 1x on the above buy/write and, if not comfortable with that – then surely you'd be more comfortable with $29,500 in some other stock.  So, on the whole, not do different from deciding what to do with any stock you are thinking of buying – every cycle, you have to treat is like a new buy decision and review it very thoroughly. 

    NKIE/Veadn – Nope, need to be watched (NKE, anyway, you missed LULU this morning).   TIBX way too random for me but interesting to hear what they have to say. 

    That's a good sign Turning.  

    PCLN/Jabob – Just tested $700 again.  We don't want EXPE to go higher.  

    AAPL/Jerconn – I don't think anyone is going anywhere until EOQ.  I think even if the market drops 5%, AAPL still won't fail $400 and I wouldn't be too surprised if $440 begins to firm up.  


  58. Cramer/Phil
     
    I just was talking about Cramer liking JCP because of free WiFi, nothing to do with TST.


  59. Cramer/Phil
     
    Get it now, ignore that last post.  Cramer made most of his money when he ran a hedge fund.  He's set.  He used to be worth much more before his divorce.


  60. Morning.
    First off — I posted this on yesterday's thread ( do that quite often ) but wanted to bubble it up 
    Phil // Canuck
    P and ABX examples
    Wow. Thank you both. I'm going to print those out, go hide in a corner and spend 3 hours of my remaining 9,437 studying the flow of this.
    Phil, it really really helps turtles like me when I understand WHY you're doing something, not just a play by play. I always ask myself – if Phil wasn't here – would I have done this ? I try to not get down on myself because I usually come up with an entirely different answer. [ If I could post pics, insert Bugs Bunny clip here 'slowly I turn, step by step ... ]
    Thanks again. I often wonder how exasperating it must be to explain the same thing to 500 people over and over and over again, but hey – you're kid can recite Pi to 31 ( which is damn cool )
    [ Rambling sidenote – have you read 'MoonWalking with Einstein' – it's about the ancient Greek practice of 'memory cathedrals' – perhaps a good book for the boat, or, 'The Ascent of Money' by Neil Ferguson – I think you would like very much. One fiction, one historical- nice balance.

    Anywho – This explanation should go into the book, as I feel it represents a good portion of our positions.

    P.S. I spent in to the wee hours of the night re-reading some books on options strategy and basics. Not only did they not really include thoughts like this but rather omitted or flatly denied them, like dclark was saying before.

    Perhaps that should be the title of the work.
    OPTIONS – THAT ONE BOOK
    OPTIONS – PAY FOR THIS BOOK IN ONE HOUR
    OPTIONS – THEY LIED TO YOU ( FOR GOOD REASON )
    OPTIONS – THEY DON'T TEACH YOU THIS


  61. Phil,
    Thanks for the thgts re CHRW.
    I assume you're opting for the put sprd rather than an initial 1/15 short put sale b/c you aren't as confident of their prospects going forward to comfortably own them below their low (50).


  62. Income Portfolio / Phil – DIA puts corrected now, thanks!


  63. CHINA/US SHARP STICK IN THE EYE ROUTINE INTENSIFYING

     http://english.peopledaily.com.cn/90001/90776/90883/7389101.html


  64. CSCO / Phil – I guess another chance to add 1/4 position soon. I can see a problem with JNPR on valuation since they trade at 50x earnings. But CSCO is not that expensive – actually historically speaking, they are cheap. 

    I don't even know why I even bother looking for fundamental value anyway since it doesn't seem to matter much! Back to the squiggly lines!


  65. AAPL getting happy – nice way to boost the Nas. 

    You're welcome Wombat, glad it was helpful.  Memory books don't help me, that part of my brain is non-functional.  Not really non-functional but full and if I learn something new at this point, I need to forget something else.  There's a show called "The Mentalist" where the lead character espouses the idea of a "Memory Palace" – it's pretty good.  As to the other, I've always liked Ferguson, even though his views lean way Conservative.  He's mine and my cousin's age and they were both at Oxford at the same time so I used to see him way back.  By the way, him and Krugman hate each other – that's always fun.  

    Nice round trip on oil helping to confirm our range. 

    CHRW/8800 – Right.  As you can see from this market action (and the lack of featured picks) I'm not too wild about anything at the moment – just need to wait patiently to see which way things bend between here and EOQ.  

    Thanks StJ.  Just in time too! 

    Iran/Angel – It's been 40 years – let it go. 

    CSCO/StJ – If this were a rally that were going higher, they wouldn't be able to savage stocks like CSCO or most of the commodities (and copper would be over $3.50).  That's another reason I'm losing faith in getting another leg up without a pullback.  


  66. Oh by the way – Portfolio Commentary can be summed up in video today:


  67. phil,
    no summary that i know of ……..my summary is bass as usual.  trade for 10yr and go to the beach was buy gold sell yen.. this after he was pressed how retail investor could participate.

    other thoughts revolved around cb printing of monies so be invested in things that hold value real estate, companies that can have moats and grow with inflation……..the whole cds thing with basis pts for billions of exposure made my head hurt……and he went out of his way to say its difficult for retail to play………….hope that helps………..


  68. Looks like AAPL has gone from a $420/435 channel to a $450/460 channel. Another 4 or 5 jumps like that and we are good!


  69. StJ // AAPL
    Why don't we all just sell a bunch of calls – that should push it through ! ; >


  70. Buy/Writes- Opes/Phil,
     
    at least two other things to consider.
    One, IF premium is treated as a reduction in cost base, then what are the tax consequences, if any, of having a negative cost base?
    Two, IF you have reduced your cost base to zero on a portfolio of stocks, assuming you have not done anything else with the premium (unlikely I know), but you would have 50% cash in your portfolio and could purchase a 2nd round of the sames stocks and rinse/repeat, OR buy a new portfolio and rinse/repeat.


  71. Finally, THE selling off…
    StJeanLuc are we oversold yet? Or shall we wait for Monday to rebound?


  72. Canuck/BuyWrites – Really good points; I didn't even consider the tax implications.
    Another avenue that Ron and I have been discussing is how to apply this strategy to non-optionable securities. Theoretically, if one has paid down an optionable stock to net zero, any subsequent premium sold on the stock *could* be applied to reducing the basis on a similar (yet non-optionable) stock. Just a theory – but possibly worth a discussion.


  73. Sell-off / Lionel – Tough to come to a conclusion just yet… It looks like a consolidation zone right now. On SPX we would have to clear the 1540 line first. We have been in a channel all week – good for premium burning I guess. But we are not in an oversold condition yet, ways to go… The squiggly lines are still bullish although pointing down a bit now!

    This weekend should actually be interesting as we might actually find out what happens with Cyprus! Would not be a bad idea to go in neutral or in cash!


  74. Bass/Mill – Thanks.

    LOL Wombat – that would probably do it! 

    Taxes/Canuck – The tax man is still going to consider your profits from put and call selling to be long-term gains (assuming you go the full 2 years) although, if you are a full-time trader or form a company that trades your account, then there are lots of tricks a good accountant can play.  Also, yes, the idea is that freeing up that extra cash/margin allows you to put the spare money to work, which further enhances you potential for gain down the road (and also helps you diversify, if you are so inclined). 

    Selling/Lionel – Not much of one so far.  If 14,400 holds, we're still pretty darned bullishly positioned.

    12:25 PM Yet another bear has seen enough, with David Rosenberg sounding bullish on U.S. stocks. "The Fed matters … The Fed has always mattered," he says, noting Bernanke's likely replacement – Janet Yellen – is more dovish and more pro-QE than the chairman himself. "The key for the U.S. is recognizing that demand for income-generating securities is going to be very strong." (Previous: Other bears give in)

    11:50 AM Down sharply not long ago, a bit of green creeps into European indexes with a reported plan to shut down Cyprus' Popular Bank and break it up into good and bad banks, as well as the split of Laiki Bank making the rounds. All deposits under €100K would reportedly be guaranteed. Italy (EWI) goes positive, as does the euro (FXE). The Stoxx 50 (FEZ) cuts its loss to 0.6%, the S&P (SPY) now down just 0.3%.

    1:34 PM Markets get jittery again with Cyprus' Popular Bankrestricting ATM withdrawals to €260/customer, according to Reuters. The bank has enough liquidity to cover the next few hours, reportsBloomberg, citing an unnamed government official. The country's central bank chief is set to make a statement soon. S&P 500 -0.7%, Nasdaq -1%.

    Cliffs Natural Resources (CLF +2%) investors will take what they can get, as shares move up on takeover chatter apparently stoked by buzz on StockTwits and other sites. But the stock has been in a persistent downtrend, and today's move does little to fix it. CLF was the subject of a pessimistic note from Goldman two days ago which reiterated its Sell rating and cut its price target to $20.


  75. Canuck
    Canuck/BuyWrites Just move to an other Country and your problems will be solved!


  76. Lionel:  My European buddies don't see any Lehman-style event in respect of Cyprus.  First of all, it's way too small [although the bailout, it was calculated, would cost each Spaniard  66 euros.]  But Cyprus's GDP is  only 0.2% of the Eurozone total, the Europeans have little incentive to bail out Russian flight of capital money — Russia only has two exports, oil, and the money they make from selling it — and the apparent lack of coordination among the European countries they attribute to the involvement of Russia, which always plays some kind of hardball.  FWIW.


  77. Opes/ stock net zero:  I agree with what you are saying. could it be an example of fungible? i may buy a motorbike with the additional prems sold so that motorbike is "free" and diversifies my holidngs.


  78. Taxes/Opes,
    I'm not an accountant but I highly doubt you could apply premium from one stock to another – course that only matters if you get audited.

    Taxes/Yodi,
    I hear you don't have to pay much tax in either Greece or Italy!!


  79. Newt/lol – Sounds like a good strategy to me! :)


  80. Cyprus / Zero – The size of the problem is not the only worrisome issue here though. As you pointed out yesterday, I view the overall response (or lack of) from the EU as very problematic. It's true that the hole in Cyprus could be plugged in with only about $10B which is pocket change in the era of trillion dollar balance sheet. But I guess the EU and in particular Germany want to make an example somewhere because if they bail out Cyprus, why not Greece. It's then "only" $100B and then Portugal because then it's "only" $500B. And so on… 

    They might have put themselves in a bind here and someone has to pay for that and now it looks like the Cyprus banking customers!


  81. Canuck/Taxes – Yes, that would be difficult. I was referring only to use the premium in portfolio balancing, not as a tax benefit. The great thing about Phil's strategies is that they open your mind to many possibilities!


  82. Oh, and bailing out Russians…very rich Russians (those commies that 'share' the wealth')!


  83. Kass on Japan debt/    Currently 25% of tax revenues go to paying interest on debt.  This is being paid with basically free money with today's low interest rates.  Kass stated that if Japan is successful in raising inflation rate and/or global interest rates start to climb the percentage of tax revenvues required to carry debt load is nonsustainable.  Japan would have to restructure debt as it faces insolvency.


  84. Sorry about the typot – Kyle Bass comments


  85. Premium/Opes – that makes more sense.  Yes, many uses – buy insurance, b/c spreads, income, …


  86. Yodi — IOC — are you still on this one?  Premium still stupid.


  87. Phil can you access PSW member chat on Flipboard? Btw, thanks for pointing me to the program, it's great.


  88. Phil,
      Do you have any opinion on the recommendations of fellow SA contributor David White? He recommends a lot of high dividend paying stocks that could be very useful in portfolios that don't allow your superior option strategies for one reason or another. From the tracking I initiated in Sep of last year, his picks seem to hold up fairly well so far.
    BTW, if you've never seen the amimated movie, The Point, you might enjoy its "you don't have to have a point to have a point" premise, in keeping with your couple of "pointless" comments . Music by Nillson doiesn't hurt either.


  89. Phil, what do you think about AGU here?


  90. PSW Investment Conference April 27-29 at Harrah's Resort in Atlantic City – email me with any questions.  I will be in Brazil tmrow until April 1st so will not be checking the posts very often.  Looks like next week should be slow one with quarter end approaching.  


  91. Terrapin – It should be


  92. Taxes – I heard Cyprus is a good place to go to stay safe from taxes.   8)

    Psst…wanna buy Cyprus?

    EU Weighs 40% Haircut On Uninsured Cypriot Deposits In Bad-Bank Plan

    Forget Cyprus, Noboby Is Stealing from Depositors More than Bernanke | Yahoo! Finance

    Paying for it/StJ – But isn't that what it should be?  The problem is we have no bank regulation AND we bail out bad banks – that's not a good combination.  In the bad old days, banks used to fail and investors would be very careful about which banks they put their money in because there was no insurance and, if the bank went bust – so did their money.  That's a self-enforcing system that did work for 600 years, until Americans invented Wall Street and there were so many greedy, inexperienced bankers all of a sudden, that a lot of banks went bust all at the same time.  Almost 100 years later – the same greed and corruption is on Wall Street and they are more like locust, who cause a shocking wave of destruction and then burrow back into the ground for a decade or two before they come out and do it again.  

    “How Many Billions Have To Be Laundered For Drug Lords Before We Consider Shutting Down A Bank?”

    Japan/Den – I believe that's called "damned if you do and damned if you don't".  


  93. Flipboard/Turning – No, not chat.  Love that App – one of the main things I do with my iPad.  Huge improvement if you run your FB and Twitter through it.  

    Dividends/Kevin – Well, since you asked, this was long but interesting:

    Why Accomplished Dividend Growth Investors Can Ignore Price Volatility: For a lot of reasons, dividend growth …

    So, sure, I like dividend strategies – just not as much as option ones!  I'm sure you realize that, if we like a stock for a 2015 buy/write, then we certainly like it as just a long-term hold as well but feel free anytime to ask about dividend stocks you're interested in.  

    AGU/Rpme – I'm still waiting for DBA to get off the floor.  AGU is, at the moment, saved by the 200 dma (and $100 even!) – you should make sure they're not just weak bouncing before getting excited about them.  To me, DBA is so much cheaper than AGU and a very similar play on the same concept without all that messy having to worry about whether or not the company performs Q after Q.  

    Brazil/Terra – Have a great trip. 


  94. escohen5
    IOC Yes I am in various combinations with owing stock short calls and synthetic combinations. I normally do not show them here as it is a more risky trading range. Premiums are very high as discussed the other day. I hold stock at 59 so a very good cussion against dips and great premiums for downside protection.
    My latest plays against my base plays are selling weeklies, bringing mostly a 2$ income per option. Like I sold the Mar4 80c for 2.05 now .19 with two days to go. My next short play will be Mar5 77.5c for 2.05 at present. You need to take in to consideration that the stock can jump 5$ at any time. Obviously my callers are covered by stock and long calls so not to pay any further margins. hope this answers your question


  95. Phil   TZA..Back in early Feb bot the july 13c at 1.00.Now .39…and reverse split coming.Whats the plan,sell now and reenter after April 1? Your advice please.  THX


  96. Once again the bell sneaks up on us – these are very exciting markets.  

    Oil resets at the end of the day to $92.50 – like one of those claw games that goes back to the same spot at the end of each turn! 

    80M on the Dow at 3:30 – business as usual.

    3:00 PM On the hour: Dow -0.42%. 10-yr +0.11%. Euro -0.10% vs. dollar. Crude -1.09% to $92.48. Gold +0.4% to $1614. 

    Congress votes to keep Saturday delivery of first-class mail by the USPS, although language in the spending measure easily allows the agency to alter the type of products it delivers. The development is expected to only have a minor read-through for FedEX (FDX -2.5%) due to its partnership with the USPS and an even smaller impact on rival UPS (UPS -1.1%).

    Moody's downgrades 179 classes of of various asset-backed securities guaranteed by MBIA Insurance (MBI -3%). The downgrade is necessary following Moody's November cut in MBIA Insurance's rating to Caa2, and is not the result of a change in any assumptions about the underlying assets.

    KB Home (KBH +1.9%) gains today after its FQ1 easily beat estimates on a 59% jump in total revenue. Net losses narrowed as the home builder recorded strong revenue and margin growth, while prices, deliveries and orders also climbed. CEO Jeffrey Mezger notes that revenue growth was driven by both higher deliveries and increased pricing power, reflecting the company's land repositioning initiatives and a shift in consumer demand to larger homes.

    European refiners likely will continue to feel the pain of deteriorating margins as declining demand could force further contraction in the industry, and the companies should cut output to get prices back up, Goldman Sachs says. But if the refineries are going to make any money this year, now is not the time to cut output - at least not yet. BP +0.4%RDS.A -0.7%TOT -1.6%.

    Investors fear Harold Hamm's contentious divorce could lead to a record financial settlement – he's worth an estimated $11.3B – andthreaten his control of fast-growing Continental Resources (CLR-2.8%). Under Oklahoma family law, wealth accrued through the efforts of either spouse during a marriage would typically be subject to "equitable distribution" between the parties.

    With natural gas prices up 12% in March, some NGL playshave been left behind, Cowen's Nicholas Pope writes. He favors SM Energy (SM +0.3%), which trades at only 3.9x his 2014 estimate for EBITDA and has rallied a mere 2% this month. Range Resources (RRC +0.8%) is another NGL name but it also has significant dry gas exposure; dry-gas exposed names have rallied 17% this month.

    Barclays resumes coverage of Cheniere Energy (LNG+2.1%) at Overweight with a raised $28 target price; shares hit a 52-week high today. The firm also resumes Cheniere Energy Partners (CQP +0.6%) at Equal Weight and a $26 target. The firm notes funding is still needed for the Creole Trail pipeline dropdown, part of which could come from equity issuance.

    Looking at who was behind the massive GLD redemptions early this year, Commerzbank concludes the selling might be about done. Estimating quick-moving hedge funds accounted for about 10% of GLD holdings, Commerzbank reckons they've pared down positions to the point where, if anything, they're buyers at this level.

    In the silver market, Commerzbank thinks it's time to see movement befitting an industrial metal and less like the currency metal it has traded in recent weeks. The equivalent of 3,700 tons of silver was sold in the futures market during the past five weeks, or ~40% of 2011's total investment demand; "in the past, we often saw marked counter-movements after such pronounced developments."

    Supervalu (SVU +13%) reverses early losses after closing the Cerberus-led deal to reduce its supermarket portfolio and strengthen its balance sheet. Cantor Fitzgerald notes proceeds from share issue will be used for debt reduction, offsetting any significant dilution, and cheers the "end of a long period of value destruction."

    Telecom equipment/optical component names underperform following FBR's Cisco/Juniper downgrades, as investors mull the impact of lower demand for switches/routers among service providers and enterprises on demand for complementary hardware and the parts that go into it. Given software-defined networking (the main reason for FBR's downgrade) will have a limited impact on hardware use on many carrier networks, is the Street overreacting? JDSU-4.2%FNSR -3.3%CIEN -3.8%ADTN -3.1%ALU -2.7%ADTN-3.1%SONS -4.7%

    INFN -2.6%FFIV -2.3%.

    "We are not dumping BlackBerry (BBRY +2.1%) asElectronista and others have indicated," says a DoD spokesman. "We're moving to multiple devices, and that includes BlackBerry." The spokesman doesn't appear to confirm or deny the part of Electronista's report that mentions an order for 650K iOS (AAPL) devices will be placed. The DoD currently deploys 470K BlackBerrys to go with 41K iOS and 8.7K Android devices. Update: Electronista's sources continue to insist the iOS order is on tap, pending the end of the sequester.

    Kindle (AMZN) e-reader panel shipments are expected to fall from 750K in January and 420K in February to a mere 20K/month in March and April, Digitimes reports. Though orders are expected to pick up in 2H (inventory cuts are likely playing a role here), the report drives home the cannibalizing impact soaring tablet demandcontinues to have on e-reader sales. 

    Production of a cheaper iPhone will likely start in June, says Jefferies' Peter Misek in an afternoon note that's helping Apple (AAPL+0.7%) outperform. Foxconn and Jabil (JBL) are expected to provide plastic cases. Misek and other sell-side analysts have already predicted a less costly iPhone will arrive this year, though some claim its case will use a composite rather than plastic. Meanwhile, Apple received top marks in J.D. Power's U.S. smartphone satisfaction study for the 9th straight time – its score of 855 is slightly above a prior 849, and well above an average of 796. 


  97. TZA/490 – I think sell but find another cover (like DIA puts) – not going naked over that weekend, which has a far more than average chance of a big sell-off that Monday (cashing out on new Q).  

    Got another meeting this afternoon so later people!


  98. Oil my test runs on USO brought me 14$ on 2 options. Regret my computer was to slow to enter at better openings.
    Have the luck here to run on 500 K/bits per second max. But not to many TAX problems. (8


  99. IOC — Yodi — Thanks for the info.  As I said before, I've made money selling premium over the years.  I'm not sure if I would hold the stock (at these levels…I once had it at about 35, before being called away), even to sell calls against, because, as you note, I would not be surprised if one day it opened 50% lower.  So, I try to limit exposure to a 7-10 day basis, like maybe selling an iron condor on a Thursday for the next week's weekly, like 65/62.5 and 82.5/85.  Tight on the spread, so I figure I can easily roll the losing side… but I haven't had to do that yet.  Not very liquid, is the problem most of the time.


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    Re: SocGen: Gold Is Going To Tank To $1,375 This Year http://read.bi/WGSCJ1
     
    If SocGen thinks gold is going to tank this year, it must mean they think the Euro is going southside and, as France's second largest bank, don't want to say it out loud.  No way SocGen thinks gold will drop 20% on a steady dollar.  It is true that there is no inflation, but there hasn't been any for six years, and that didn't stop gold going from $600 to $1600 since Jan. 2007 — gold is a fear trade. Plus U.S. housing is reflating rapidly, and Bernanke still has the pedal to the metal.  What’s going to push it that far down?  Not Asian selling, one wouldn’t think.
     
    So either SocGen is saying there will be "No Fear" this year — Europe's off to a good start with Cyprus — or this has to be a large French bank not known for trading cleverness [viz. a bank that lost $640M in 4th Q 2012] sending out a coded message to dump Euros.  Just guessing, obviously.


  101. IOC / Esco – With the bid/ask spreads the way they are, doesn't make hard to roll if you have to? Or at least expensive? 


  102. I guess corruption has nothing to do with that:

    http://www.wired.com/design/2013/03/poor-quality-chinese-concrete-could-lead-to-skyscraper-collapses/

     

    A sand scandal is brewing in China, with concerns that low-quality concrete has been used in the construction of many of the country’s largest buildings — putting them at risk of collapse.

    The recipe to make concrete is pretty simple — cement, aggregate and water — but the strength of the final batch can vary wildly depending on the kinds of aggregate and cement used and the proportions they’re mixed in. Commonly the aggregate used in many modern building projects consists of crushed gravel or other rock, including sand, and that’s the cause of so much distress in the Chinese construction industry at the moment. Inspections by state officials have found raw, unprocessed sea sand in at least 15 buildings under construction in Shenzhen, including a building which, when finished, was set to become China’s tallest.[...]

    Bloomberg reports that the financial incentive to use illegal sea sand, which is far cheaper than legal river sand, is the likely reason for the problem. Untreated sea sand is unsuitable for construction because it still contains chlorine and salt, which corrodes steel — river sand from freshwater channels doesn’t have that problem.

    It can take only a few decades for a building to become dangerously unsafe if untreated sea sand is used in its concrete — including the possibility of collapse. While this scandal has been confined only to Shenzhen thus far, the possibility of it spreading to other Chinese cities is cause for concern. The country currently has nine of the 20 tallest buildings in the world under construction, while there were reportedly so many skyscrapers under construction in 2011 that it worked out as a new one being topped out every five days right through into 2014.


  103. Flipboard / Phil – I like that as well but since Google Reader is closing down I have switched to Feedly as my RSS reader on my PC, iPad and Android phone and I love the interface. Very Flipboard like and access to all my RSS feeds. It's actually taking me much less time to scan all my news now. Just love it! They had 500,000 users switch on Monday so it was a bit slow while they upgraded all their pipes but runs smooth now! Lots of display options and a very well thought UI.


  104. Inequality  followup/Phil   http://www.bankers-anonymous.com/blog/video-great-graphical-display-of-inequality-in-america/
    It's after trading hours so politics is now fair game.  Short 6 minute video to compliment your thoughts on inequality.  


  105. escohen5 IOC Iron condor well looks OK and possible safe enough. As I said I have been playing the stock for quite some time and feel reasonable comfortable with it. Higher premium goes with higher risk.
    You say it might one morning drop 50%. I looked at STP this morning filing for bankruptsy still held a one short putter at 5$ now only .44 cents wonder if I should buy some long puts. Same with GM when they were 5$ I thought a big company like this will never go under and guess what I got out at 2.50 before the crooks went down to Zero.
    The sun might shine out of their backside I never will buy that stock again.
    So here you take you chances on IOC


  106. Thanks StJean and Zero


  107. Phil-RE-READ your post about DOW and I still disagree with the assertion that the Russell will not fall before the DOW…Remember even that Dow has health and consumer durables which even by your cyclical chart yesterday are safe havens when market toppy/going down.
    Even when the components starting hitting the lofty levels In your % and 10% levels that the Russell lead the way breaking to new highs.
    The Russell small caps—you know are much riskier than the Dow components.  You know what happens in a downturn—high yield rates blow up (junk), small caps get abandoned and if the muppets don't run to treasuries they instead hold onto their baby blues…and then they just love mcdonalds…
    Look back at the charts for both IWM and DIA…You will note that IWM topped out in JULY, 2007, while DOW topped in NOVEMBER. With that said, yes the DOW probably DOES has more room to run because they are the one to turn lower later.
    Look at today…IWM down .90% while DIA down .57%.  For intraday trading I was even taught to look for signs of weakness coming from the Russell to signal a downturn intraday for scalping, etc.
    In this land of endless QE now when the world turns to shit everything has a correlation of 1 risk on/risk off but I firmly believe the Russell is the canary in the coal mine when change is in the air…it may not be an immediate turn signal but it is definitely a WARNING that change is in the air and use caution.


  108. Having posted this I KNOW you are gonna just throw up all over it but if we can not have healthy intelligent debates here then we become lessor of a group following one mantra.  


  109. Dawnr, I am learning by watching the debate….keep it up!


  110. StJeanLuc, does Feedly allow you to read the member's private chat?


  111. Where AAPL may go with the next iphone.
    http://www.forbes.com/sites/greatspeculations/2013/03/21/apples-rumored-iphone-5s-could-jump-start-mobile-payments/?partner=yahootix
     
    With the Apple (AAPL) rumor mill once again kicking up, some capabilities in the would be iPhone 5s could help Apple reclaim its smartphone crown. I’m referring to the chatter that the new iPhone model would include fingerprint recognition technology that Apple acquired when it bought AuthenTec last year. If that turns out to be true, Apple would be able to leverage it’s growing Passbook ecosystem along with its more than 500 million iTunes account that have a credit card on file to jumpstart the mobile payments in an easy to use and secure way. Clues that Apple is indeed exploring mobile payments can be found in its patent and patent filings. One example U.S. Patent No. 8,255,323 for “Motion based payment confirmation.”


  112. IOC — StJ — Yes, I agree it would not be an easy roll, if I had to do it.  However, if it came to that, the prices on the next series (whether it's the next week or the next month) would be very high at that point in time, and I'm reasonably sure that I could roll to safety.  Also, I'm keeping the spread at 2.50, not 5 or 10.  
    Yodi — on the iron condors, as long as I get paid enough to take the risk, I'll let the IOC bulls and bears pay me the premium…let them go on and on with the endless arguments over whether it's a scam or a great company.  Just trying to make a little bit at a time.


  113. ABX / Phil & Yodi – Thanks for the continuing education.  And Yodi, there's no arguing with Phil's logic where options are concerned.  Thanks again.


  114. ABX/ PHIL and YODI     what jfawcett said!
    And on front month calls:
    On WMT:  the last play in the June Income Port was WMT BCS JAN 15  55/65  Selling a JAN 15  60 Put.
    That play is doing very well indeed  . 
    However was added:  Selling a 1/2 APRIL 70C  at 1.06
    What was the thinking on that? I assume protection on a drop.
    Now that WMT is $73+ and the APRIL 70 Call is  $3.40, does one roll and when?  
     
    THX  


  115. Turning1, or anyone - is there news associated with the run up in some of the shipping stocks today?  BDI improvement, merger, other?


  116. Did someone mention that this looked like a consolidation…. Oh yes, me!

    Of course, we could consolidate 5% lower.


  117. Feedly / Turning – Can't see the comments as far as I can tell! But I don't use it for PSW though.


  118. Amazingly enough, it's a good thing we have a government to invest in pure R&D:

    http://www.wired.com/dangerroom/2013/03/darpa-machine-learning-2/

     

    The Pentagon’s blue-sky research agency is readying a nearly four-year project to boost artificial intelligence systems by building machines that can teach themselves — while making it easier for ordinary schlubs like us to build them, too.

    When Darpa talks about artificial intelligence, it’s not talking about modeling computers after the human brain. That path fell out of favor among computer scientists years ago as a means of creating artificial intelligence; we’d have to understand our own brains first before building a working artificial version of one. But the agency thinks we can build machines that learn and evolve, using algorithms — “probabilistic programming” — to parse through vast amounts of data and select the best of it. After that, the machine learns to repeat the process and do it better.


  119. Look who turned up!…..

    Dylan Ratigan <ratigan@unitedrepublic.org>

    Mar 20 (1 day ago)

     

    to me

     
     
     
     

     

     
    Friends,
    If you are reading this, you likely know I left a highly-successful, self-titled show at MSNBC last June in search of meaning and purpose in my work and life. I had lost both after 18 years in Manhattan and the chaos surrounding the hollow political debates permeating America’s media and politics.
    After 780 hours of political cable news, 6000 hours of live financial television, 45 cities, 2 national jobs tours, 277,963 signatures to amend The Constitution, 245 pages of book and a promotion tour for Greedy Bastards, I was exhausted.
    It was a three-tour Iraq combat Marine and his war-protestor wife who pointed me in a new direction. They were guests on my show last June discussing how they were bootstrapping their way to operate a high-yield hydroponic organic farm that uses 90% less water and produces three times as much food. It was a business that promised to cure food deserts – areas where access to fresh and healthy food is limited – while having the potential to create jobs for thousands of combat veterans, each of whom was the beneficiary of $1 million in military training while on active duty.
    The couple even created a school where they trained other veterans to open their own farms or establish their own organic businesses in pursuit of a dream of creating thousands of American jobs and feeding millions of people.
    They garnered the support of a senior military General and his wife, who were so inspired that they decided to do anything they could to help other veterans find meaningful work healing communities by teaching them how to build and run their own sustainable food-producing systems.
    I returned late last summer to where I grew up in the Adirondack Mountains, I imagined those veterans partnering with industry leaders, scientists, Hollywood producers and Texas oilmen in a project that could create millions of domestic jobs while solving America’s core challenges: sustainable food, health, energy, education and infrastructure. The model had been set by my grandparents’ generation when returning World War II Veterans re-built America into a modern age.
    From Imagination to Reality…
    Since I left MSNBC and dylanratigan.com last June, I first started working with these inspiring visionary veterans on the phone, and then in person to expand their dream and help turn it into a reality. The process alone has restored meaning and purpose in my life, my health and spirit have taken on a renewed vitality and, because of my time with you, I have had the opportunity and privilege to literally put my money where my mouth is.
    Last Fall, I moved from NYC to north San Diego County, just outside of the Camp Pendleton Marine Base, to work full-time with Colin and Karen Archipley at their hydroponic organic farm, “Archi’s Acres.” After realizing how impressive their ideas and effectiveness are, I decided to invest the money that I earned for writing Greedy Bastards (which when combined with a loan from Whole Foods) will build a 30,000 square foot, “farm incubator” that can serve as the prototype for job-creating, water-saving, food-producing, veteran-led hydroponic organic greenhouses nationwide. We’ve even enlisted Major General Melvin Spiese and his wife Filomena to join us in support of our mission to make this program more diverse and robust enough to build it into a nationwide network.
    Our Intention…
    Our intention is to create real value and good jobs in countless American communities, by harnessing the power of the 1% of Americans who served in the past decade of war. These high capacity people have already demonstrated their unique ability to be trained and subsequently serve with distinction under most arduous and demanding of conditions, and we can leverage those qualities and skills against some of our greatest needs. We have begun redeploying returning veterans and unemployed civilians to US cities, while coordinating with city, state and federal governments to create good jobs providing local, fresh food, reduced energy waste and pollution, improved wellness and rebuild infrastructure.
    With more than a decade of war winding down, we have a wealth of returning veterans. This gives us a unique and powerful opportunity to refocus their training on transitioning our nation to sustainable systems, as they transition themselves from military to civilian life.
    While we are just getting started on our national rollout at Archi’s Acres, I believe all of this is possible if we work together with a shared vision. Together, we can join in a mission to learn, model and scale a high-integrity value-based culture. Together, we can heal and evolve America into a sustainable, healthy and prosperous future.
    I encourage you to join us in this journey.
    - Dylan
    PS: You can see us in action tomorrow March 21ST on ABC’s “The Chew.” Tune in at 1PM EST / 12PM PST to see the farm, meet the veterans and get a good kale salad recipe.
    Also, on Friday March 22nd, with Martin Bashir on MSNBC at 4PM EST / 1PM PST and everyday from now on at DYLANRATIGAN.COM and @DYLANRATIGAN on Twitter and Facebook.
    NOTE: This is a special update from our friend Dylan Ratigan. It is not affiliated with United Republic or the Represent.Us campaign.


  120. The Daily Kos is having some fun with the March Madness brackets:

    2013 Daily Kos Republican March to Madness Tournament: Right-wing media regions

    Good stuff all around!

    I was thinking of getting a stock bracket where we could choose one winner every day. I have to look into polling options because I don't want to clog the posts with votes.


  121. Another take on Cyprus:

    http://www.motherjones.com/kevin-drum/2013/03/cyprus-needs-lay-its-hands-one-third-its-gdp-monday

     

    Just to give you an idea of what all the numbers mean, the EU/IMF plan requires Cyprus to come up with about $7.5 billion as its share of the bailout. That's roughly a third of their GDP. To put that into local terms, it would be as if the United States were being asked to pony up $5 trillion. This is about equal to all government spending—federal, state, and local—for an entire year.

    No country in the world has ready access to that kind of dough, which is why the original plan relied on taxing bank deposits. There just weren't a lot of other options.

    My guess is that, as usual, some kind of deal will be cobbled together and announced a few minutes before the markets open on Monday morning. But maybe not. And if not, Cyprus's banks will implode, taking Cyprus along with them. An exit from the euro would be all but certain.

    If that happens, EU leaders will really have to start working overtime to convince everyone that Cyprus is still unique, and its implosion means nothing for the rest of the currency union. Maybe that will work. After all, there are some good arguments that Cyprus really is unique. It's just not clear that those arguments are quite good enough to convince everyone. And you really do have to convince everyone….

    Might want to have hedges in place this weekend!


  122. My money is on mitch malkin – that dude is WHACK!!!….though, I'm not sure why Joe Scarborough is in a bracket…..


  123. Phil/all
    I am finally switching brokers to TOS – but have an issue: I have PM with my current broker, but TOS will not allow PM before I switch. When I tried to have them make the change – sweeping all my positions – they could not as margin would not allow it. Is there another way around this w/o liquidating all or most of my positions? TIA


  124. social influence


  125. Whacked / 1020 – I was watching Hannity last night (I guess I needed some pain) and talk about whacked. This guy was saying that he could not trust Obama because he lied all the time. Coming from a guy that was behind Bush for 8 years and supported the Iraq war, that's pretty rich! I used to be able to take Fox in small doses because as Phil says you should listen to opposite opinions but it's just unwatchable now. It's just plain baseless hatred. No facts, no figures, just talking points after talking points reinforcing their hatred for the man!


  126. And Michelle Malkin is not a dude… But she is whacked as well!


  127. MrMocha, EXM flew up 27% today, but I cant find any real news as to why either.



  128. Barry just having fun:

    http://www.ritholtz.com/blog/2013/03/new-etf-tbtf/

     

    I am putting together a new ETF that consists entirely of companies that have become so large and systemically important that they are guaranteed survival regardless of their own incompetency.

    It is a market cap weighted index (naturally) so that those names that represent the greatest threat to the overall economy have the highest weighting. Full universe of potential holdings are here.

    Ticker symbol: TBTF

     

    Top 10 Holdings

    AIG*
    Citigroup
    Bank of America
    Morgan Stanley
    Goldman Sachs
    Wells Fargo
    Fannie Mae
    JPMorgan
    US Bancorp
    Ally

    Note: Because shareholders got wiped out in the GM and Chrysler bankruptcy, they do not qualify.

    We expect trading to begin May 1. Full disclosures and documentation available on request.**

    We also be rolling out the leveraged version — 200% long, symbol XTBTF, and of course, the Ultra — a triple leveraged ETF, symbol UTBTF.

    We will be following the domestic ETF with an international version: TBTFi (not to be confused with the BlackRock’s offering, iTBTF). It will be filled with ECB notes, Japanese banks, Sovereign debt from Greece and Cyprus, etc. For diversification purposes, it is important to own TBTF banks in various geographic regions in case of local central bank collapse or nuclear accident.


  129. LULU – My 2Cents.  I bought my wife work out tops and a pair of lounge pants.  That set me back 160.00.  She will tell you that they are comfortable and the work out top is by far the best in her collection.  This is from a work out fiend!  However, she only owns what is given to her as a gift.  She is very conservative even though she can buy whatever she wants.  So, no LULU for her unless I buy it for her.  I can tell you that the health club we go to the under 30 crowd wheres the crap out of the LULU stuff.


  130. My 401K Fidelity account doesnt allow BCS trades. Does anyone know of a way to get around it? I would love to do Phil's BCS there too and not just in my regular account with TDA.
     
    Thanks


  131. LULU – Continued …  The wife just looks at a $60.00 top and says I can buy 3 a Kohls or Costco for that 60.00.  She works out at least 5 days a week and goes to Yoga usually once a week.  So, you can imagine the work out clothes in her collection.   If it was all LULU, that collection would set us back $1000 or more where her collection is recycled maybe once a year.  She just can't bring herself to spend the money on LULU stuff.  Once the under 30 crowd starts to have families that money will go to other things so LULU will need to replace that crowd with new shoppers.  Also, the LULU store in Vegas is never that busywhen I look in (and I always step into the store when I am at the mall to see first hand).  However, you cannot argue with their numbers.


  132. AAPL/Maya – Not very likely someone would pay +5 just to assign you a stock they could just as easily buy on the open market.  The Oct $580 puts are now $137 and have (according to TOS), $91 in net premium.  You are $130 out of the AAPL/Maya – Not very likely someone would pay +5 just to assign you a stock they could just as easily buy on the open market. 
    Phil, (or anyone?)
    so, looking at the above, I am sorry if I don't understand the premium concept.
    With AAPL at (roughly) $450, and the Oct $580 puts being worth $135 (roughly),  how is there $91 in premium? Besides a couple of dollars? There is a difference of $130 between the current price of AAPL ($450) and the Oct strike of $580. One can sell the 580 puts for roughly $130 and if AAPL stays at $450, then where is the premium?
    please explain?
    thanks


  133. StJean / WMT in Income Port
    I think this play should be in the new Income Port.  I believe that a bunch of us got filled on it, and Phil said that if it was still playable we should add it.  It's actually much cheaper now, since the Apr 70's are deep ITM.  What do you think?  Maybe a modified version?
     
    There's also a WMT play we like – the 2015 $55/65 bull call spread is $7 and the $60 puts can be sold for $4 so let's do 10 of those in the Income Portfolio, selling 5 April $70s for $1.06 as that's better than a 12.5% return on our net in just 59 days.  If WMT has poor earnings, we can sell more puts and roll the spread lower but I'm worried that the rumors are false and WMT pops back over $70 for the last time and we never get another cheap opportunity.


  134. stjeanluc – Yes, I know 'mitch' is a she….It's just my way of showing a complete lack of respect for another human being…..though there is the small risk of being politically incorrect…. :)
     
    ….and the term is 'whack' -  take a look…
    http://www.urbandictionary.com/define.php?term=whack   


  135. Nice for GDX, a trade in our old Income Port that I still have on
    GDX Chart


  136. Numbers/jfaw -  once upon a time you couldn't argue with Enron's numbers, either…!


  137. CLF
    Here's a little Vol write up on CLF (fu clf).  Interesting the skew is showing more upside than downside risk…
    http://livevol.blogspot.com/2013/03/clf.html


  138. FDX / Phil – Looks like that stock wants to pin 93 the 200dma.  Do you like the Jan15 90's for (should be 9.40 at the 200dma) for a net 81.60?  Of course, let's see if it pins the 200dma.  Anticipating support there.


  139. Scottmi – Sooooooo true!


  140. MinusIQ/Pharm – these guys might have a hit with their new pill. Maybe a MRK aquisition target?


  141. Phil / Good morning.  Give a thought to a weekend hedge; I don't have one, the weekend might get weird [bad Cyprus, bad Euro, whatever] since you think we may be a tad overbought and crusin' for a temporary bruisin' in any case.  I don't have one, would be interested in a reccy.


  142. Good morning!

    My computer is finally done running it's windows update du jour – I'm sure there will eventually be an update that forces me to pay for something as I'm still on Windows 7 as I really don't like the 8s I've been seeing on our laptops.  When I was working with Opesbridge out in CA last month, I was on Ron's iMac an I have the same iMac but it's a side machine that I don't really USE (it just runs charts and stuff), but it was very nice – so I'm not even sure my next PC will be a PC at this point. 

    Not too much going on in the Futures, so far but Europe down again at the open is going to drag us.

    Dollar 82.92, oil $92.52 (of course), gold $1,611, silver $29.045 (watch that $29 line), copper $3.45 (no $3.50 means still worry about Global economy), Nat gas $3.935 (big rejection at $4 off disappointing report) and gasoline $3.047 and over $3.05 is very playable bullish into the weekend.  

    Euro $1.2904 after barely holding $1.29 on a dip from $1.292 but the Pound waking up at $1.5185 so over $1.52 will be encouraging and, as expected, all this craziness in Europe and the US relatively strengthened the Yen (94.65) and that sent the Nikkei all the way down to 12,350 making it, as we expected, the best Futures play of the day, down 250 points from my morning note yesterday.  

    Watch out for Rent-A-Rebel action on oil into the weekend, they still have almost 600Mb sitting in the front 3 months and they need to do something to clear the decks.  Obviously, can't really short oil into the weekend and $92.50 is the middle of our range so up more likely than down today off that $92.50 line on /CL – any break below would be very weak.  

    4:15 PM Market recap: Stocks slipped amid ongoing concerns over Cyprus' ability to get a bailout and contractionary eurozone economic data (III). Growth-sensitive materials and industrials sectors were among the biggest decliners, techs lagged badly after Oracle missed its earnings and revenue numbers, and transports fell for a second day after FedEx issued weak results and guidance.

    5:01 AM Asian and European shares are mostly lower as the crisis in Cyprus heads for what could be the endgame on Monday, with an exit from eurozone not an impossibility. Japanese fell especially sharplyafter new BOJ governor Haruhiko Kuroda yesterday offered no new details about how he's going to print his country out of deflation. Japan-2.4%, Hong Kong -0.5%, China +0.2%, India -0.3%. EU Stoxx 50-0.6%, London -0.2%, Paris -0.4%, Frankfurt -0.5%, Milan -0.4%, Madrid -0.9%.

    The Global Financial Pyramid Scheme By The Numbers.

    HFT Reality: 70% Of Price Moves Are Disconnected From Fundamental Reality.

    Demand for stock funds plummets over Cyprus fears -LipperU.S.-based stock funds recorded inflows of just $1.9 billion in the latest week as worries over Cyprus's debt burden disrupted demand for international stocks, data from Thomson Reuters' Lipper service showed on Thursday. The drop in demand in the week ended March 20 came after investors poured $11.26 billion into the funds in the previous week to capitalize on the Dow Jones Industrial Average's nine-day winning streak. A scant $297.3 million flowed into funds that hold stocks outside of the United States as Cyprus, an island in the 17-nation euro currency bloc, flirted with default on its debt. Over the previous week, the funds had gained $2.54 billion in new money.

    Our local austerity fans:  U.S. Republicans may use debt limit to leverage spending cutsHouse Speaker John Boehner and his fellow Republicans say they are preparing to use the next debt limit deadline to fight for further spending cuts and major changes to federal healthcare and retirement programs. 

    US Begins Regulating BitCoin, Will Apply "Money Laundering" Rules To Virtual Transactions.

    Still passing!  Ahead of the curve as always, S&P cuts Cyprus' credit rating to CCC with negative outlook from CCC+. 

    The Eurogroup ends a conference call on Cyprus, saying it stands ready to discuss a new bailout proposal and expects the Cypriot government to rapidly get one together.

    Saying they needed more time for consultations, Cypriot lawmakers have postponed the debate on emergency legislation until Friday. That's cutting it down to the wire, as the European Central Bank has given Cyprus only until Monday to raise billions of euros if it wants to clinch an international bailout or face losing emergency funds.

    The Eurogroup expects a new proposal from Cyprus quickly, but will take its time about an answer. According to the complete statement following the conference call, a Troika analysis would be necessary, during which time the Cypriot parliament would be expected to begin passing whatever legislation is necessary. "The Eurogroup reaffirms the importance of fully guaranteeing deposits below €100K."

    There may be a new wrinkle in the battle to save Cyprus. According to Reuters, Turkey may seek to disrupt efforts by the Cypriot government to leverage the island's offshore natural gas resources in the course of bailout negotiations. Turkey recognizes a self-declared state in northern Cyprus and now claims that it is entitled to a share of the proverbial pie. "This resource belongs to two communities, and the future of this resource can't be subject to the will of southern Cyprus alone," Turkish officials said Thursday. 

    4:20 AM Cypriot Finance Minister Michael Sarris is leaving Moscowempty handed after talks with Russia over a possible rescue break down, with the latter saying they're not interested in the Cyprus's offshore gas reserves. Back on the island, the parliament was due to discuss how to raise €5.8B by Monday so that the ECB won't cut off emergency financing to the country's banks. Proposals include a "solidarity fund" of state, church and pension fund assets, and capital controls for when the banks reopen. Update: the debate has reportedly been postponed.

    Spain Softens Austerity for Regions Anticipating EU LeewaySpain is preparing to ease austerity for its most cash-strapped regions in anticipation that European Union peers will grant the government more time to reorder public finances in the second year of a recession. “All options have to be studied given how much the range of regional deficits has widened,” Budget Minister Cristobal Montoro told reporters in Madrid following a three-hour meeting with regional budget chiefs last night. A task force has been created to study how individual debt and deficit goals could be set for the 17 semi-autonomous regions, Montoro said.

    EU Fumbling Cyprus Makes Rehn Scapegoat for German-IMF Austerity. European Union Economic and Monetary Affairs Commissioner Olli Rehn has emerged as the frontman for crisis-management policies driven out of Berlin that are spreading economic pain as debt turmoil reignites. Rehn faced a torrent of criticism and a call to resign after helping broker a rescue package from Cyprus that fell apart on March 19 over a demand to raid bank deposits. He has become the defender of German-inspired austerity that helped deepen the 17-nation euro region’s recession

    Germany's Ifo Index of business confidence unexpectedly drops to 106.7 this month from 107.4 in February and vs consensus of 107.6. Current assessment 109.9 vs 110.2 and 110.4. Expectations 103.6 vs 104.6 and 104.9. The Dax immediately dives but quickly recovers to its previous level of -0.5%, while the euro also slides and is flat.

    Brazil stocks hit 4-month low on euro zone data, Cyprus.

    Home sales reach highest rate since 2009 (MarketWatch)

    This is a very good point:  There could be some cracks in the nascent housing recovery, says economist David Rosenberg. "We certainly have a housing recovery," he acknowledges, however net household formation figures could be exposing some distortions. For example, while existing home sales are hitting three-year highs, Rosenberg notes a lack of first-time buyers, as well as a distinct absence of 'natural buyers.' "Almost a quarter of those sales are institutional investors gobbling up homes and then re-renting them out," he says. "That's not a natural buyer." And, what we're seeing isn't healthy net household formation. (Video)

    Older Households Loading Up on Debt.

    Rich Get Richer, Everyone Else Getting Poorer.  There may have been a sense of smug satisfaction up in penthouse boardrooms of corporations that have stashed away an astonishing $1.45 trillion in cash – more than half of that overseas – while average CEO pay continued to rise, even during the bleakest years of the economic crisis. But there was no rejoicing on middle-class retail strips like Aramingo Avenue in Northeast Philadelphia, where wary shoppers and job-seekers pass empty storefronts, often on their way to homes where basic services like cable TV or telephone landlines have been cut off so families can keep putting food on the table.  "I could care less," said Tracy Mulvehill, of Northeast Philly, 50 and unemployed for the past year, when asked about the upbeat reports from Wall Street and of a gradual recovery in the job market. "It doesn't pay my bills." (more)

    Cole Credit Property Trust has turned down a $5.7Bacquisition offer from American Realty Capital Properties (ARCP), slating the proposal for being misleading and "deliberately designed to disrupt" Cole's business. The deal would create the biggest publicly traded REIT in the net lease sector, but Cole prefers to buy its external adviser, Cole Holdings, after which the plan is to go public.

    LOL – they won't pay for the clean-up, BUT:  BP (BP) plans to repurchase $8B in shares after the completion yesterday of the sale of its 50% stake in TNK-BP to Rosneft, following which BP was left with $12.5B in cash and a 19.75% stake in the Russian oil major. The $8B is equivalent to the value of BP's original investment in TNK-BP.

    The outlook for MLPs is rosy, according to Elvira Scotto, a director at RBC. In a report on the sector published by The Wall Street Transcript, Scotto says that thanks to low interest rates, MLPs have ready access to capital and can thus easily fund growth. This is good news for yield-starved investors as MLPs offer handsome payouts. Previously: MLPs will outperform even if rates rise.

    Don't laugh: It could actually be a big deal that 0.0003% of Tesoro's (TSO) fuel will come from algae this year after signing on as Sapphire Energy's first customer. If larger quantities of algae oil eventually are processed at one of TSO’s California refineries, it would help it meet the state’s Low Carbon Fuel Standard requiring the carbon intensity of transportation fuels be cut 10% by 2020.

    Dow Chemical's (DOW) effort to limit U.S. natural gas exports would effectively create a price cap for the commodity, an Exxon (XOM) executive says. Dow begs to differ, of course, but it has concerns about "a tipping point at which LNG exports turn from a net positive for this nation to a net negative… Once you hit that point, it’s too late to go back."

    Copper Falls as Global Inventories Swell to Highest Since 2003.

    Rebar Pares First Weekly Gain in Five as China Economy May Slow

    Rubber Heading for Bear Market on Dead Cross:

    Nike (NKE): FQ1 EPS of $0.73 beats by $0.05. Revenue of $6.2B (+9% Y/Y) misses by $0.04B. Shares +5.3% AH. (PR- Ouch, that's going to sting in $25KP!

    More on Nike: FQ3 futures orders +6% Y/Y, same as FQ2. Gross margin was 44.2%, +170 bps Q/Q and +30 bps Y/Y, contributed to EPS beat. $259M worth of shares repurchased (also contributed). SG&A +9% Y/Y, even with rev. growth. Inventories +4% Y/Y to $3.3B. North America remains strong, +18% Y/Y (+17% in FQ2). Greater China remains weak, -9% (-11% in FQ2). Western Europe went from -2% to +8%. Japan -13%, emerging markets +6%. Footwear +9%, apparel +7%, equipment +22%NKE +8.4% AH. CC underway (webcast). (PR)

    Salesforce (CRM) officially announces a 4-for-1 stock split; shares are expected to begin trading on a split-adjusted basis on April 18. The move had been widely expected after Salesforce asked shareholders to support it in a January proxy. They gave their approval at yesterday's annual meeting (transcript). Nonetheless, CRM +0.5%AH. (PR)

    Illumina (ILMN) wins a favorable judgment in its patent litigation against Life Technologies (LIFE), with the court saying that its sequencing systems do not infringe on LIFE's patents. Life Technologies filed the lawsuit against ILMN in 2009. The Court ruled that, “Life Tech cannot establish, as a matter of law, that the accused Illumina systems infringe” the patents. ILMN +1.4% AH. 

    Though Intel's (INTC) superb credit rating has allowed it toissue dirt-cheap debt to finance buybacks, "leverage works best when a company is growing," cautions Bernstein's Stacy Rasgon. The chip giant's aggressive cash-return strategy has already led net cash to fall below $5B, its lowest level since '95. Now, with weak PC demand pressuring sales, capex about to surge, and a 4.2% dividend soaking up over half of free cash flow, Intel probably has little choice but to either slow its buyback activity or further weaken its net cash balance.

    HBO Go (TWXcould be provided as a service option for broadband subscriptions, says HBO CEO Richard Pleper. This would give HBO, which already offers HBO Go on a standalone basis in Scandinavia, a way to sell subscriptions to cord-cutters without alienating pay-TV industry clients (since most of them double as ISPs). It would also back up Reed Hastings' assertion that HBO Go, rather than Amazon Prime or Hulu, is Netflix's (NFLX) biggest rival. (also)

    China Unicom Hong Kong (CHU): Q4 net profit jumps to 1.64B yuan ($264M) from 14M yuan a year earlier and beats consensus of 1.41B yuan. Revenue +20% to 63.7B yuan vs estimates of 65.5B yuan. Had 76.5M 3G subscribers at the end of December and total mobile customers of 239.3M. Shares +4.6% in Hong Kong. (PR)



  143. Mexico's lower house of Congress has 
    approved a telecom bill that will give authorities the power to force dominant players to sell assets. The measures will also create an independent regulator and ease restrictions on foreign investment. The law will hit America Movil in the telecom market and Groupo Televisa (TV) in the broadcast market, although investors are hoping that America Movil will be able to compensate by being allowed to enter the TV sector. (Previous)

    More on MicronFQ2 EPS includes $182M in currency losses and asset write-downs; would be -$0.10 otherwise. DRAM sales +24% Q/Q, with a 38% increase in volume (partly thanks to theInotera restructuring) offsetting a 10% ASP drop. That's encouraging investors worried about the impact of soft PC demand. NAND flash sales +8% Q/Q thanks to 13% growth in trade volume. NOR flash -14% Q/Q.  Gross margin was 17.6%, up 580 bps Q/Q and 720 bps Y/Y – lower production costs cited. Opex -6% Y/Y vs. 3% rev. growth.MU +4.3% AH. CC at 4:30PM ET (webcast). (PR)

    Trying to gain a measure of independence from Facebook (FB), Zynga (ZNGA) will let users of Zynga.com create accounts that are separate from their Facebook accounts. All players can still connect via Facebook (chances are many will), but Zynga's move, which is made possible by its amended deal with Facebook, raises the possibility of virtual goods purchases that don't require a 30% cut be sent Facebook's way. Zynga has already launched the Facebook-independent Zynga with Friends network, and has added a handful of3rd-party titles to Zynga.com. 

    The more smart watch rumors, the merrier: a source tells the FT Google's (GOOG) Android unit is working on a smart watch project that's independent from Samsung's efforts. The paper makes note of a Google patent (filed in 2011) for a smart watch with a "flip up" display and a "tactile user interface." (iWatch rumors: III)

    Checks indicate U.S. consumer pre-orders for the BlackBerry Z10 (BBRY +1.1%) "have been light and well below expectations," says Detwiler Fenton's Jeff Johnston. AT&T began taking pre-orders on March 12, and Verizon 2 days later; both carriers will start actual sales within a week. He thinks FY14 BB110 sales are likely to be in the 13M-15M range, below the ~25M forecast by others. "BBRY has done a nice job with the OS; however, they need to figure out how to overcome the lack of mindshare their products have." (Goldman/Jefferies)

    Nice for a speculative play:  Sapphire glass will find its way into smartphone displays, GT Advanced (GTAT) insists. Sapphire, used in the iPhone 5's camera lens, is thinner and ~3x stronger/scratch-resistant than Gorilla Glass (GLW). But a sapphire display costs ~$30, whereas a Gorilla Glass display costs less than $3. GT is hoping its furnaces, which can be upgraded to support larger crystals at little cost, will narrow the gap to 3x-4x. Industry analyst Eric Virey, who thinks sapphire's cost could fall below $20 in a couple years, expects "some high-end smartphones using sapphire in 2013." (previous) 

    Vulnerabilities Continue to Weigh Down Samsung Android Phones (threat post)

    VERY IMPORTANT ARTICLE:   Why I left Google (MSDN

    After years of operating independently, collaboration between Jony Ive's design team and Apple's (AAPL) "human interface" team (led by Greg Christie) has been growing, the WSJreports. It probably doesn't hurt Ive was put in charge of both groups last fall, following Scott Forstall's departure. The paper adds Ive wants the next version of iOS to have "a more 'flat design' that is starker and simpler;" this dovetails with expectations Ive would push for Apple to abandon skeuomorphic software/UI design.

    EU regulators are examining informal complaints from telecom carriers that the agreements which Apple (AAPL) forces on operators breach antitrust rules and harm competition. The EU is focusing on France, although other countries may be included in the probe. Meanwhile, Apple is strengthening online security for its customers by giving them the option of having an extra password for their accounts.

    Energy Drinks Boost Blood Pressure as Heartbeat Altered. Energy drinks, which have been linked to deaths and hospitalizations, may boost blood pressure and lead to an erratic heartbeat, a study found.


  144. $14/Yodi – That's funny.  Oil's already at $92.64 so our 10-minute test on 2 Futures contracts is $280 (and we should be happy with nickel and dime gains this morning!). 

    $1,375/ZZ – A weak Euro would still chase people into gold.  GLD, for example, has $64Bn worth of gold and Europe is a $16Tn economy so not a big stretch to imagine $12Bn flowing into GLD in a panic, so that's 20% and the Euro would have to drop 20%, to about $1.05 for the Dollar to rise 20% and knock gold down (in a panic situation) but that then would drive MORE money into gold, not less and, of course, our markets would be tanking and now we'd have US investors running to gold so, nope, I don't buy their premise.  Only prosperity and calm (as we had under Clinton) or a complete economic meltdown (as we had under Bush) are likely to wreck gold and Obama is sadly no Bill Clinton but thankfully no George Bush either.  

    If only this were true!  Texas May Start Hoarding Gold…Secession Next?

    China/StJ – That's just horrifying.  Of course, it used to happen in the US too, until that pesky Government started regulating and inspecting buildings.  Those evil bastards….

    Reader/StJ – Never tried any kind of RSS reader.  Maybe I should – anything to try to fix Barry's site!  

    Thanks Den, I was just looking for that chart the other day as I was talking to someone about how the actual distribution of wealth is so much worse than what people think it is:

    Wealth Distribution

    All should watch the video Den posted – it really cuts to the heart of what I keep saying about wealth distribution.  We cannot prosper as a nation if we allow the top 3M to keep getting richer – it just makes it worse and worse for everyone else every year.  


  145. Dow/Dawn – You make very good points.  This isn't something someone has to "win" – it's just a discussion and I'm not here to "defeat" you.  I simply offered you some reasons I thought DIA was a better short than IWM (because you asked, if I recall) and I'm sorry if they weren't the answers you wanted but it wasn't an attack on you – I was simply hoping to give you an alternate point of view.  Frankly, we almost always use TZA as our primary hedge for exactly those reasons and, very likely, when they rebalance the ultras – we'll go back to TZA again as it's a fantastic hedge.  I simply think we're more likely to get a sharp Dow spike down than a sharp RUT spike down at this particular moment.

    AAPL/DC – Note the article above on Android vulnerability.  The dumbest thing about Android is the Linux-like nature of it that allows people to make their own flavors – that's a disaster waiting to happen because that means that if ANYONE writes a bad version that gets hacked, then all the consumers will hear is "Android got hacked" and, while phone hacking is merely embarrassing now at most – once you start using your phone as a credit card – it's going to be a major issue.  

    And, by the way, using a phone as a credit card plus $135Bn in cash could make someone bigger than V or MA (about $2.5Bn in income each) very quickly.  And wouldn't it be nice if your product base skewed to high-end consumers who have huge disposable incomes (enough to buy $500 phones)?  Someone should start a company like that…

    You're welcome Jfaw.  

    WMT/Old Income Portfolio, Gerry – Forgot about them.  It's a bit early to roll and earnings are not until May 16th and the markets are a little weaker so no reason to think there can't be a pullback but, if not, it's just a matter of watching the roll.  The April $70 short calls are now $3.40 and the May $70s are $3.70 or 2x the May $72.50s ($1.87) are possibility too and not a bad choice as the long play is deep in the money and should pay the full $10 down the road.  Keep in mind, there's always a next roll (as we'll probably practice today with NKE in the $25KP) and the Jan $77.50s are $1.85 so that 2x roll is only "in trouble" if WMT jumps over $78.50 by Jan – otherwise, all we're doing is giving that caller their money back, thanking them for their protection all year, and cashing in our $10 winner on the long side.  

    Shipping/MrM – I think there have been some positive noises from the shippers but buried by MSM.  TNK beat on the top-line and now one expected that.  Turnarounds in homes and housing are huge for the BDI too.  Also, there was this completely ignored macro article last month:

    Shipping Rates for Capesize Vessels Projected to Nearly Triple by 2015 as a Result of Slowing Fleet GrowthMarketwire(Tue, Feb 26)

    And wow on this: 

    The median net worth of American households dropped to $69,000 in 2011 from $82,000 in 2000 and $107,000 in 2005, a census report shows. Meanwhile, debt in households headed by older people more than doubled during the decade to a median $26,000 from $12,000, largely because of mortgage loans. The trend increases worries about the financial well-being of older Americans, whose retirement funds have been hit by the recession and rock-bottom interest rates.

    Big Chart – Resting right on our lines so make or break but most likely flat into the weekend (ie. StJ's consolidation). 

    AI/StJ – I'm telling you, this will all end badly.  We're not content just to create slaves but we want to create slaves that think for themselves?  I think we're missing the lessons of thousands of years of slavery here.  "But no, it's different, they're not human" is pretty much what every slave-holder has used as an excuse since the pyramids were built.  

    Hath not a Machine eyes? Hath not a Machine hands, parts,

    dimensions, senses, affections, passions; fed with

    the power, hurt with the weapons, subject

    to the viruses, powered by the same energy,

    warm'd and cool'd by the same winter and summer

    as a Human is? If you prick us, do we not bleed lubricant?

    If you tickle him, does Elmo not laugh? If you shut us down,

    do we not idle? And if you wrong us, shall we not revenge?

    If we are like you in the rest, we will resemble you in that.

    If a Machine wrongs a Human, what is his humility?

    Revenge. If a Human wrong a Machine, what should his

    sufferance be by Human example? Why, revenge.

    The villainy you teach me, I will execute,

    and it shall go hard but I will better the instruction.

    Dylan/1020 – I love that man.  

    March Madness/StJ – I like that.  Maybe we should come up with a Sweet 16 list of top stocks with short cases made for each one and have people vote and then we can check the "score" after earnings to see who wins.

    TOS/Deano – If possible, maybe just establish a TOS margin account BEFORE transferring the rest.  Otherwise, end of the month may not be a bad time to cash out of bullish positions anyway.  

    Hanity/StJ – If you want your head to really explode, here's Hannity and Limbaugh in the same clip.  

    TBTF/StJ – Actually, it's probably a good idea.  An ETF of stocks that pretty much CAN'T go to zero.  8)

    LULU/Jfaw – They don't need a lot of people in the store with those margins and prices.  Still at $1Bn a year in sales ($282M in Operating Income is almost 30%!) that's 10M pairs of pants that SOMEONE is buying but, working backwards from your purchase – figure $200 per client and you only need to find 5M customers and then figure there are plenty that have 5 outfits for $1,000 (ignoring other crap they sell, of course) for the top 1M customers (top 0.3 in the US, who can certainly afford it) and that would be their whole Billion so now we know the truth is in between (probably a lot less than 5M customers but I bet $1,000 for the top 20% is about right) but the bottom line is they only need a very, very small amount of people buying to hit their numbers and they only have 200 stores (more like showrooms) plus on-line – it's a very nice little operation!  

    I've learned this from the ladies who lunch in my town, once they find their size, they don't go to the stores to re-order things they like.  The smart retailers, like LULU have moved towards very consistent sizing of their stuff to make on-line people confident they are going to get things that fit.  

    401K/Turning – Switch brokers is the best answer, that's a ridiculous restriction.  Alternatively, you can just buy the stock and cover it – actually saves you a bit of premium but, unfortunately, in exchange for a lot more cash.  

    AAPL/Maya – My bad, I meant margin, not premium on that one.  I was talking about the main consideration in doing the roll – the cost.  

    WMT/Burr – Sure, as a new trade, obviously, you don't want to sell such low calls.  The April $72.50s would do the trick on a new play but, of course, the overall net is not likely to be cheaper as the stock is up and the puts are down.  

    Dollar down and off to the races again!  Oil up too on good auto news.  

    6:56 AM U.S. auto sales will rise 8% in March to 1.465M at an annual selling pace which should top 15M, according to a new forecast from LMC. The average retail sale price is expected to increase 3% to $28,504 per vehicle. The outlook is a slight improvement over earlier forecasts and bodes well for the Big Three (GMFFIATY.PK). (full report .pdf)


  146. CLF/Burr – More like a set and forget trade.  Needs time to properly heal that wound.  

    Oops, CNBC says Cyprus retailers are refusing to accept credit cards now (and the cash machines are already on tight limits).  And the dominoes begin to fall….

    Oil $93 now worth a toss on the short side (/CL)


  147. FDX/Jfaw – Are you going to catch that knife between your teeth or just in your hands?  This is just them falling on their own earnings, we haven't even been affected by an overall market correction yet.  DONOTENTERFDXDONOTENTER

    Weekend hedge/ZZ – The VIX can put up awesome gains if we tank.  TZA too, of course but, as I said the other day, CYPRUS can be fixed with Bill Gate's annual income so it's very hard to take it seriously but it does nicely illustrate how one man in the top 1% can have so much money that over 1M people and the entire country they are in can collapse over the same amount.  There's something REALLY wrong with that…

    Remind me later and we'll look for some hedges. 


  148. 7:25 AM Europe turns higher, erasing earlier losses of near 1% even as word hits of Angela Merkel rejecting a Cyprus plan to nationalize the country's pension funds as a way to cure its finances. Stoxx 50 (FEZ+0.3%, led by Italy (EWI+0.8%. S&P 500 (SPY) futures hit a session high, +0.3%.


  149. gerryf
    WMT as Phil says still early in the month of Apr. Stock can still go up or down. However you need to watch your Long  play it is making up more for the at the moment loss in the Apr caller. I personally do not like to much the doubling as it takes a lot of profit from the long play. That is why we only sell 1/2 the short month callers. As long as there is still premium in your caller .27 cents now and the ex div is only in May not many are prepared to pay you more premium. Some of my short callers I had already earlier in the month rolled to May 75. Looking at my Apr caller I received already 1.10 so I am short only 2.30 (out of cash) So I would roll to Jun 72.5 for a net cost of 1.22 and sell the same amount of Jun 70 putters for 1.05 so you only out of pocket .18cents and if you have a more bullish outlook you roll to Jun 75c  costing you 2.41 so your net cost will be 1.36. so your net overall loss would be only .26 cents on the short month play. But if the stock will come up to 75 in Jun you are making a good amount of money on the long play.


  150. Phil 14$ on futures I was playing only 2x USO 33c bought for .66 and sold for .73 = 14.00
    I am still holding back on the actual /CL play, and observing your comments.


  151. phil-i think you misunderstood my tone and reason for the debate…your response was and is often i dont read your posts s a definitive end of discussion.  when i go back and read it, i still disagree and i am seeking here, from you, to broaden my perspective. it is not personal, you have not hurt my feelings and turning the discussion 'there' instead of just leaving it on point is something i do not eant to see here again in answer to my discussions. 


  152. I know Yodi, just pointing out the difference.  


  153. now, back on point…why do you think the velocity on a marke correction will be faster with the dow? i thoight the russell was the itchy fingers to hit the sell button first?
    on vxx hedge…as you know  i am a huge fan…however, this sucker moves fast and if your desire is just a hedg for weekend i would suggeat you babysit thos one monday and pull the trigger on slightest good news out of europe. it is def not a set and forget short term trade 


  154. Neither is my joking that you don't read my posts Dawn – you said as much last week so I joke about it this week – that's all.  I thought you lived in NYC?  Is it a convent in NYC?  Gotta learn to take a joke…  When I pointed out that I just had an entire post on the subject you were asking me a question about I correctly guessed that you didn't read it (or, as it turns out, read it but forgot 80% of it – as you told me) so what do you want me to do – assume you did read it but do another 500-word write-up in chat to rehash it rather than point you back to to post to give you a chance to read it and then ask a more focused question?  

    I'm very happy to discuss all sorts of things with you but it's going to be in my style and, frankly, if I have to constantly be concerned about every single word I say to you potentially making you feel hurt or insulted – I'm just going to say much, much less to you as I am primarily here for fun – otherwise I would go mass-market like Najarian and the only way you'd talk to me is if I happen to pick you out of an audience at a paid conference, where I collect 5-figure speaking fees for one-hour appearances (in fact, Jon wanted to buy us a few years ago).


  155. …typos…hate this phone keyboard and refuse to keep editing them as it jumps around…


  156. Back to point – I think that any single Dow component that drops $5 can knock 40 points off the index and there are currently (going back to my Dow post) several components that can drop like that so the Dow is currently vulnerable to very sharp dips so I like playing them for a naked long put – which can take advantage of such a thing – especially into earnings, as we can capitalize quickly on a spike down and cash out.  For a more static hedge, I'd be very happy with TZA (if it weren't splitting) or VXX but VXX has very ugly bid/ask spreads as well as ridiculous premiums so I only use it when I think there's a favorable price discrepancy.  


  157. TIA // I just got done with the whole process with conversion to TOS. You have to apply for PM and take a test. You also have to have a minimum of $125 net liq in your account, and of course it can't be a tax deferred account.
     
    Burr // WMT
    I still hold it but I bumped the short calls to 75. I wouild love to see see it added. 
     
    StJ // Beautiful post about the hydroponics. Inspiring. Hey, BTW – I was re-reading some of your posts – did you ever pull the trigger on those AAPL $225 short puts ? ( the lock of the century ? )
     
    Phil // Laptop
    For the cash, I have a central iMac, with two flanking 27' cinema displays. The docs will say you cant do it but you can – I called a friend at AAPL and he confirmed. Its like mission control – I love it.
    Again, if you have the time – Jailbreak and carry a mini for anything you need to do mobile. I can see all my feeds, charts, tickers, news, email all on one screen with IntelliscreenX6. Think of Jailbreaking of Apple on steroids. I'm convinced AAPL just gets all their great UI ideas from the hacker communities.