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Thursday Fizzle – Drifting into Expiration Day

Time to zoom out to a bigger perspective, I think.  

We have our ever-reliable Big Chart and our 5% levels and, as I had noted Tuesday morning, we're not very impressed until and unless we retake our strong bounce levels and, so far, we're rejected at our WEAK bounce levels across the board.  As I said on Tuesday "Anything less than strong bounces on the day will keep us on the bearish side" and we did get nice bounces on Tuesday – but they didn't last 24-hours.  

  • Dow 14,660 (weak), 14,700 (strong)
  • S&P 1,560 & 1,570
  • Nasdaq 3,220 & 3,240 
  • NYSE 9,010 & 9,070
  • Russell 915 & 930
  • Transports 5,960 & 6,120
  • SOX 425 & 428

That's keeping us nervous and the VIX is nervous too, at 16.51 but that's nothing compared to real panic (mid-20s) and TLT is "only" 122.79 – not too many people panicking into 1.8% bonds either – although in Germany they're getting 1.3% and Japan is still under 1%, even with the Yen devalued by 20% since November.  The BOJ plan is to PUNISH savings while the US policy is more like actively discouraging it and, in Europe – they just take it from you.  All achieve the same ends – it's just the means we quibble over.  Speaking of the rest of the World, let's check out the Multi-Chart:

The blue lines are our Big Chart's 5% lines extrapolated for the other indexes and those would be our "Must Hold" lines if we are to remain in bull mode.  We haven't officially moved our lines yet because we haven't yet been convinced that we should.  Had we broken up instead of pulling back this month – we'd be using the 10% lines for our Must Holds but those lines aren't predictions – merely indicators of where we should flip bearish if they fail.  As it was, the 10% lines failed to hold and we flipped bearish before a chart adjustment was triggered.  That's good because it makes us look very clever

USO WEEKLYAs I noted in Member Chat yesterday, please do not confuse the 5% Rule with TA – it's just math.  It's math based on theories of market behavior I developed when consulting on early versions of TradeBot systems and I began to notice that, no matter how differently people attempted to make their systems from their competitors, laws of human behavior, corporate behavior and coding led to certain convergences we could take advantage of.  If you look at the way the indexes behave around Big Chart lines that were predicted back in the crash of 2009 – you can see how effective this system is.  

We were brilliantly able to call the top on oil (USO $40, WTIC $96) but, as usual, we can't control spikes and oil hit $98.24 before finally falling back to our predicted top and now all the way down to $85.90 yesterday, where I tweeted out an end to our public call to hold oil Futures short from $96.50 and, in fact, we added a bullish play on USO to Member Chat:

USO/Lol – Not a bad idea from the historical context.  June $29.50/31.50 bull call spread is $1.20 with USO currently at $31 and oil at $96.75.  I'd go for that and sell puts perhaps if they go lower but, otherwise, it pays 66% if you collect the $2 – that's not bad for 2 months.

We also played Gasoline Futures (/RB) long this morning at $2.7350 and that one has given us no trouble so far and is currently $2.7698, which may not sound like much but Gasoline Futures pay $4.20 per 0.0001 and that move is 348 of those .0001s and that's good for $1,461.60 per contract – makes it worth getting up early, doesn't it?

Don't forget, we'll be doing a workshop on Futures trading at our PSW East Coast Meeting in Atlantic City in just 10 days (Sunday and Monday) – of course we have plenty of topics to cover but we did a Futures workshop in Vegas and now some of those people have become very happy quick traders – don't you think it's worth at least taking a look?  

XLB WEEKLYSo where were we?  Oh yes, the markets…  Has the Fed stopped printing money?  No.  Has the BOJ stopped printing money?  No.  Is Europe in the crapper?  Yes.  Does China seem like it could blow any minute?  Yes.  Are earnings a little disappointing – especially from companies who do business with Europe and China?  Yes.  Well, then nothing has changed, has it?

We are fretting over raw materials crashing but look at Dave Fry's weekly chart of XLB, which features MON, DD, DOW, PX, FCX and ECL as  50% of it's holdings.  These companies actually sell materials and they are only in a mild correction.  Someone is wrong and, so far, we're betting it's the miners that are oversold but we'll watch these components carefully to see if maybe we're wrong as they're still up 20% from last year's lows.  Hardly seems like the Global economy is crashing if this ETF is humming along.  

Don't get me wrong, there's tons of bad news out there but we had tons of bad news in 2009 and 2010 and Central Banks responded with HALF the money printing that is going on today.  Clearly the money printing is less effective now than it was then but it's still printing, nonetheless and, EVENTUALLY, if you keep filling the 1% bathtub with water, you will (in theory) finally reach a point at which a little bit does spill over the side and trickle down on the little people. 

Meanwhile, the top 1% (including our great Corporate Persons) are literally swimming in money with companies like AAPL carrying 1/3 of their market cap in cash.  Eventually, one would think, AAPL and others will spend some of that cash.  

It is thought that the S&P companies have $2Tn in cash overall sitting on the books and, one day, they may hire someone from the bottom 99% or they may spend some money in the local economy or they may even buy back some of their stock or pay a dividend and maybe some small percentage of their shareholders are in the bottom 99%.  See – TRICKLING!

Unfortunately it's a very slow trickle but a trickle nonetheless and how many Trillion more dollars will the Fed and the BOJ have to pour in before that trickle becomes a stream or even a flood if the walls break down (from holding all those Trillions in wealth) and the money finally makes it's way back into circulation?  

That's the crux of our bullish premise on the economy and, like the trickle, it's pretty thin but it is there and anyone who's been to the Grand Canyon can attest to the power of a trickle over time.  We're just going to have to give it time – unless the Government does something crazy like spending money on infrastructure to directly create jobs or if the EU wakes up and begins LENDING money to nations with struggling economies instead of telling them to tighten their belts.  

It could happen…

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  1. Oil Lines

    R3 – 91.63
    R2 – 90.24
    R1 – 88.67
    PP – 87.28
    S1 – 85.71
    S2 – 84.32
    S3 – 82.75

    Yesterday's high and low – 88.86 / 85.9

  2. Good Morning!

  3. Income portfolio / Wombat and Phil – I went back and checked and on 4/10 we did roll from 141 to 144 on the DIA puts. Phil only mentioned the 25KPs but I assumed that he also meant the Income Portfolio and AAPL Money. And we did DD in the 25KP and AAPL Money but I didn't in the Income portfolio. So if you followed through with the logic, you should have 200 DIA puts in the IP now. I guess taking some profits now would be a good idea!

  4. But we closed the TZA spread yesterday…

  5. CZR.
    Still looks like a disaster. What are you guys doing with those short puts?

  6. 25K VIX – for tracking purposes – VIX 15 callers didn't expire worthless as hoped. Settlement Value was 15.46.

  7. Stephen Colbert on smoking pot: 
    "If kids want to grow up, break the law, and not suffer any consequences … they should go into banking!" :-)

  8. Hi, good morning everyone! I am new to this great community and would like to give a brief introduction. I'm an Investwizard :) and that would be my ultimate goal. I'd consider myself as maybe a rookie Investwizard, because Phil and other members have many years of very sophisticated trading experience that I need to learn from. I'm working as an engineer. Besides playing numbers in my job, I also appreciate art and music. Anyways, I developed passions for option trading and investing.  I've been teaching myself trading for a few years. I'm exciting of joining PSW and hoping we are going to have a fantastic times working together!

  9. Good morning!

    Futures kind of flattish, as expected.  gasoline topped out right at $2.77 and back to $2.74 now that real trading has begun.  Gotta love those Futures pumps.  

    Before anything else, it was my intention to REPLACE the old TZA bull call spread with the May $42/47 bull call spread at $1.35 so let's make sure we have the same amount of those as we had with the old ones.  Also, in all portfolios (and pretty much all the time) if we DD on a position like DIA because it goes against us and then when it goes our way – we ABSOLUTELY stop out even on any retrace – that's the whole point to doubling down, to lower our basis, but it defeats the purpose if we then simply ride out double the risk if it goes against us again.  

  10. Phil--Hi I'm thinking to initial a new position for Cree. Do you think your last Friday post's trade idea still good-->  "sell 5 May $55 calls for $2.89 ($1,445) and buy 5 Sept $57.50/62.50 ($875) for 570 Credit"?

    I'm also looking a new position in ABX --"selling 2015 $15 puts for 2.64 and buy the 18/28 bull call spread for 2.2 for a net .44 credit. According to TOS, the 20 year low of ABX is 12.31. My worst scenario is to get assigned and to buy it for 14.56." If ABS keeps falling, I guess I can also roll them lower with lower cost. My question is shall I just need to wait to see till ABX lands on the floor before I initiate a position?

    I also like your CLF investment idea, but shall I also need to wait and see till it land on the floor?


  11. Some quick notes:

    IBM reports tonight so maybe we close the short Apr calls
    NKE – Might need to roll the short calls tomorrow
    AMZN – Close to even on with the second set so maybe we close that?
    ABX – That May put needs to be addressed.

  12. Welcome Wizard!   :)

  13. (CHART) Ticker Alert for In Play
    18-Apr-13 09:39 ET

    ChartTrader: Note yesterday's action showed signs of significant institutional interest in CLF in this 17.10-17.30 area (17.24

  14. Wizard – There's no self-glossing or grandstanding allowed around here….other than Phil, of course…. ;)

  15. Anyone notice this message on Fidelity…..
    A good to cancel order may be filled over several days, and separate additional commission charges apply…WTF CRAP is THAT? That means they can fill your GTC for 5 contracts over 5 separate days and charge you 5 separate commissions?

  16. OH great now my comment is in moderation

  17. OK, what else?  

    Dollar won't fail 82.50 and that's making it tough as we're still not used to it this high.  Euro still barely over $1.30 ($1.305) but Pound improving at $1.528, probably benefiting from NOT being in the EU proper.  Yen jacked up to $98 again (98.14) but Nikkei not fooled and rejected at 13,400 (as usual) and now 13,350.  

    Oil $87.35, gold $1,383 ($1,350 must hold), silver $23.11 ($23 must hold), copper $3.15, nat gas $4.18 and gasoline now back to $2.73 – so that whole .05 run was fake (but we'll take it every time).  

    Dow was miscalculated above (does no one check the math?) – let's just say the 2.5% line at 14,600 is a big deal and it's struggling to get that back at the moment.  Hopefully the morning action is a blow-off bottom into expirations tomorrow – especially for AAPL – back to $400 again.  

    At the open: Dow +0.18% to 14645. S&P +0.02% to 1552. Nasdaq +0.06% to 3207.
    Treasurys: 30-year +0.01%. 10-yr +0.01%.
    Commodities: Crude +0.81% to $87.24. Gold +0.25% to $1386.00.
    Currencies: Euro +0.18% vs. dollar. Yen +0.14%. Pound +0.33%.

    Market preview: U.S. stock futures maintain their gains after slightly better-than-expected weekly jobless data, with the S&P Mini +0.3%. European shares are also higher and are on course to break a four-day losing streak. Earnings season is starting to ramp up, and Nokia (-8.1%) is the big loser after revenues fall 20%, while eBay is -4%Later: Philly Fed Business Outlook; Google, Microsoft and IBM earnings

    Italian shares and the euro give up some of their session gains on news Italy's parliament has failed to elect a president on the first ballot. Up 0.9% at the moment, the MIB had been up nearly 1.5%.EWI +1.1% premarket. Buying $1.3045, the euro (FXE+0.1%.

    After dropping to the lowest level since March 2009 last week, bulls gain 7.5 points to 26.8% in the AAII Investor Sentiment Survey. The long-term average of bulls is 39%. Those bearish drop 6.3 points to 48.2% – still well above the long-term average of 30.5%. From Bespoke is this chart of the SPY vs. the AAII bulls since 2009.

    More on Blackstone (BX) Q1 earnings: Economic net income of $0.55, up 25% Y/Y. Fee revenue +3% Y/Y, performance fees +57% Y/Y, investment income +62% Y/Y. Advisory fees off 12% Y/Y – slower M&A and fewer P-E fund closings. Fee-earning AUM up 9% Y/Y to $171B. Just $325M put to work in P-E in Q1. "Dry powder" of $35.8B. Shares +3% premarket. (PR) 

    Barrick Gold (ABX+1.9% premarket despite news Moody’s has placed the company on review for a possible downgrade of its senior unsecured debt rating after work was halted on its $8.5B Pascua-Lama mine. Several mining/metals stocks are higher premarket after gold prices rebound: IAG +3.8%KGC +3.6%GOLD+3.1%GG +2.2%HMY +2.1%RIO +1.9%.

    More on Freeport McMoRan's (FCXQ1 results: Copper production rose 18% while copper prices fell 8.1%. Costs and expenses rose 12% to $3.2B. Lowers 2013 operating cash flow guidance to $5.5B, down from $7B, based on current sales volume and cost estimates and assuming average prices of $3.25/lb. for copper, $1,400/oz. for gold and $11/lb. for molybdenum for the rest of 2013. FCX +0.8% premarket.

    Vale (VALE+2.2% premarket after Q1 iron ore output fell 3.5% Y/Y but nickel and coal output rose and production of copper and cobalt hit record levels. The impact of falling iron ore output was eased by rising production at new and much-delayed projects in Brazil, Canada, Australia and New Caledonia. Q1 is typically the year's weakest as operations are affected by the Southern Hemisphere rainy season. 

    More on Peabody Energy's (BTUQ1 results: Projects 2013 U.S. coal consumption for electricity generation will grow by 60M-80M tons Y/Y based on strong Q1 demand, which rose 8% and accounted for ~40% of total electricity generation. Issues downside guidance for Q2, seeing EPS of ($0.25)-$0.01 vs. $0.01 consensus. Shares +1.2%premarket.

    General Motors (GM) says the 2015 Chevrolet Cruze Turbo Diesel will deliver 46 miles per gallon, a rating higher than previous estimates from the automaker. What to watch: The era of Detroit gas guzzlers appears to be long gone as the Big Three (GMFFIATY.PK) continue to deliver vehicles (diesel and non-diesel) which meet or exceed mileage ratings from Japanese automakers (TMHMC) for comparable models. The trend from Detroit could also have some impact on EV sales (NSANY.OBTSLA) if consumers decide catching +40 mpg fuel economy is "green" enough.

    Same-store sales at department stores in Japan rose 3.9% Y/Y in March, according to the Japan Department Stores Association. The increase was the third month in a row of improving sales and could give a lift to high-end sellers such as Tiffany (TIF) and Ralph Lauren (RL) looking to gain traction in the nation.

    Heard during PepsiCo's (PEP) earnings call: 1) Execs make it clear they held the line on beverage pricing which contributed to volume declines but improved profitability. 2) Profits took a hit from the devaluation of the Venezuelan currency. 3) CEO Indra Nooyi says the company will explore "structural" options for the N.A. beverage business, but nothing specific will be announced 2014. 4) The company sees emerging markets helping drive profits higher with Russia a particular focus. 5) On juices: Tropicana gaining market share and new innovation on tap for Naked. PEP +1.9% premarket. (webcast) 

    Shares of PepsiCo (PEP +4.9%) rally a bit more at the open after a spirited premarket session with comments from execs seeming to be helping to tip sentiment. The company's CFO told CNBC the snack portfolio is doing very well in China and CEO Indra Nooyi tipped off during an earnings call that a structural change for the North American beverage business could be launched in 2014.

    More on UnitedHealth (UNH -3.3%Q1: net profit -14% to $1.19B, partly because of lower government payments. Medical costs +13% to $22.57B. Reiterates 2013 EPS forecast of $5.25-5.50 vs consensus of $5.51, but says that the impact of sequestration will affect the upper end. Cuts revenue outlook to $122B from a prior forecast of $123-124B and vs consensus of $123.76B, due to a major client switching its insurance to a self-funded approach. (PR)

    AdCare Health Systems (ADKshoots up 49% before the bell after Georgia-based LLC Brogdon Family says it will commence a tender offer for 43% of the company at $8 per share. Brogdon is partially owned by ADK Director Christopher Brogdon who already owns 12% of the company.

    Shares of Travelzoo (TZOO) move up 7.8% premarket after the company beats estimates with its Q1 report. Results were boosted by gains in Travelzoo's business segment revenue in both North America and Europe. 

    Disney (DIS) CEO Alan Horn promised the audience atCinemaCon yesterday that the company will deliver Star Wars films in 2015, 2017, and 2019 with spinoff movies derived from the franchise set for 2016 and 2018. While good news for Star Wars fans, investors may also be rejoicing if the company can successfully integrate Star Wars themes into its other segments to drive revenue gains.

    More on Verizon's (VZ) Q1: Wireless revenue was up 6.8% Y/Y to $19.5B with both retail and service sales strong. The company says it had 98.9M retail connections, up 6.4% from a year ago. A mark of 4M iPhone activations topped estimates. On the wireline side, Verizon reports 188K FiOS Internet and 169K FiOS Video net additions as FiOS revenue rose 15.1% to $2.6B. VZ +1.9% premarket. (PR)

    It's set to be a heavyweight late afternoon for the tech sector, with Google (GOOG), IBM (IBM) and Microsoft (MSFT) due to release quarterly results. Google's Q1 EPS is expected to have risen to $10.69 from $10.08 while revenue is seen surging 72.5% to $14.04B. IBM's Q1 EPS is estimated to have increased to $3.05 from $2.78 as revenue edged up 0.1% to $24.69B. Microsoft's FQ3 EPS is seen growing to $0.68 from $0.60 and its revenue 18.1% to $20.56B.

    "We think that Apple could be on the brink of driving a major leveraging up," writes JPMorgan's Mark Moskowitz in a voluminous note defending the stock. He believes the company will take on $15B-$20B in debt and bump the dividend yield to 4%. As far as operations, Moskowitz expects an earnings beat this quarter and upward pressure on estimates for 2013. AAPL +0.9% premarket. 

  18. Some additional notes – see above in the 25KPM for others:

    AAPL – The Apr 430 puts are gone as we stopped out at $30 (or below 400 and we have both now)
    VIX – Good profits there
    GOOG – We need to take care of the Apr strangle

  19. 1020, you are definitely right :) I came here to learn the real investing tricks from Phil and others!

  20. phil, yodi, stj etc.
    at present from an old inc port trade im short the jan14 SVU 5 calls and the 3 puts (40x). 
    the puts look good  the calls are at 70-75 cents..almost all prem…
    from  what i have read it makes all the sense in the world for me to short at least 20x of the may 5 puts as i have the .70 of calls to go down vs the may short puts…maybe even 40 x of the may…?
    im prob missing something and im not betting either way ……it just seems like from reading yodis stuff ……its the right thing to do………to hedge the move…….

  21. BTW, the AAPL P&L on the 25 KPA is now -$120K. So the rest of the picks are up about $35K. The same is true for the 25KPM – we are up about $25K without AAPL.

  22. I can't believe that at one time they wanted to have AAPL in the Dow…. We would be lower by about 2500 points today. It's bad enough in the NASDAQ!

  23. But ABX is up now…

  24. Dan Niles on CNBC dissing AAPL.

  25. Phil
    Those AMZN puts are now $2.60. At least half out? or a stop at $2.50?

  26. albo
    How easy is that! :)

  27. PSW Investment Conference at Harrah's Resort in Atlantic City April 27-29.  It's not too late to sign up.  Email me with any questions.

  28. albo – I'm not sure what Niles said, but he is a straight shooter who's pretty accurate – unlike Gene Munster…..

  29. "We think that Apple could be on the brink of driving a major leveraging up," writes JPMorgan's Mark Moskowitz in a voluminous note defending the stock. He believes the company will take on $15B-$20B in debt and bump the dividend yield to 4%. As far as operations, Moskowitz expects an earnings beat this quarter and upward pressure on estimates for 2013. AAPL +0.9% premarket.
    Just wanted to re-post this.  DREAM ON !  4% would do the job.

  30. 1020 – I agree that Dan Niles is very knowledgeable altho quite a few of his recent picks have done poorly. i.e. PAY.

  31. Of course, if the stock keeps falling like it is, it'll have a 4% yield without having to raise the dividend. 
    (facetious comment).

  32. CZR/Stock – If somewhere along the way from .46 last week to $2.50 today (assuming the April $15 puts) you did not stop out those puts, then you must really love CZR and I'd roll the April puts out to either the Sept $12.50 puts ($2.60) or the Jan $10 puts ($2) but, since the Sept $12.50s are way out of the money and CZR is down over a Moody's rating downgrade and not on anything new – I'd just do the Septembers for now.  

    VIX/Lol – Thanks, same strategy though and we'll be looking for a new May position to sell and cover once we feel the VIX is toppy.  

    AAPL $397!   Despite 4M iPhone activations by VZ well above estimates (3.2M)

    FAS Money – Damn, we could have killed those old callers.  Oh well, much more relaxing to be back to a comfortable ratio.  

    Welcome Investwizard!  Good time to paper-trade while catching up on the last month's worth of posts and comments.  After working through that, I'm sure any remaining questions you have left will be excellent ones!  

    CREE/Invest – We actually have a play on them in our $25KPA, a spread on earnings that is similar to where we are now on price.  If you go to the Wiki (link on top of any PSW page) and look under "Comment Search" and then CREE, you'll see the latest comment on them, which is where that trade idea came from.  As to ABX – "it's a death trap, it's a suicide rap" but, "someday girl, I don't know when, we're gonna get to that place where we really want to go" but, until then, I'd scale in carefully, maybe just selling some 2015 $18 puts for $4.50 that you would be comfortable rolling to 2x the $13 puts (now $1.80) and accepting the assignment at net $11.65.  Same with CLF – we THINK miners can't go any lower unless they begin to decrease the Global population but maybe this time is finally different and 10,000 years of economic study are out the window.  (I'm a bit of a Fundamentalist, by the way).  

    Fidelity/Jasu – You really need to check out TOS.  Fixed comment.  We get so much spam from brokers that it's hard to mention one without getting caught in the filter.  

    Tricks/Invest – Trick #1 – there are no tricks but a lot of hard work over time can yield excellent results.  

    SVU/Mill – If you roll up the puts you are being more aggressive and .25 is still a lot of premium on the very safe-looking short $3s.  I agree with the logic that the $5 puts pay .95 so, much better and you are well in the money but it still comes back to how much you REALLY want to pay for SVU if it drops 40% (back to $3). You went into the position with a fairly conservative entry (and I assume you have the stock) and your goal was $5 – well we're at $5 so congratulations but do you think they're no possible way it could drop now?  If you are really gung-ho to take on more risk, I prefer the 2015 $4 puts at .90 as that's +.65 to your current short puts and so you only risk .35 more on the assigned side.  That money then, can go towards rolling up the $5 callers – assuming it comes to that, in January.  

    AAPL/StJ – Massive portfolio killer – Income Portfolio too (not to mention AAPL money).  Unfortunately, this is not the Q I expected to save us – our plan was for a pop in July but people have already run out of patience. 

    AMZN/$25KP, DC – Absolutely, let's take 1/2 off the table.  This is ALWAYS true when we DD unless we specifically don't want to.  As soon as we cross over break-even, that becomes the stop and we look to take profits on a change in momentum – good call.

  33. albo - Yeah, when it comes to AAPL, I pay attention to Niles and tune Munster out……

  34. Phil,
      Having noted AAPL comments indicating both PATIENCE and rolling JAN 2015 $400 sold puts to the $350s for $25, which of the two would you suggest regarding the 2 puts I have sold: 1 net $350.98 and the other net $342.85?

  35. Fidelity/jasu – yes i saw that too and yes, that is what it means. CR#P is right.  TOS is such a better platform….

  36. AAPL / Phil – There is just so much going on about earnings now and mostly negative though. I just checked and Earnings Whispers has lowered their estimate and even the whisper number. WSJ now has their estimate at $10.07 for this quarter which would be an 18% drop from last year. And their estimate for Q3 (July) is $9.16 which is also lower than last year (although only by 1.5%). These numbers are not conducive to people shoving money into AAPL right this minute.

    Like I said yesterday, you can argue that given the money they make and the cash they have, AAPL is undervalued, but the overall sentiment is rather negative right now and that's what drives the price on the short term. Maybe you were right yesterday, they are just tanking the stock so that they can buy it back cheaper! A little Machiavellian and not shareholder friendly!

  37. And gold touched 1400 this morning!

  38. Phil, Scottmi
    Have an account with TOS also….Just annoying that the other guys build in such nitpicking crap into their system….I guess picking up pennies from flysh$t pays bonuses at yearend.
    Thanks for allowing the rant…I'll shut the hell up!!

  39. SLW – time to sell SLW puts again.

  40. Phil,
     I have 3 short ABX Jan 2014 $30 puts from last July, net $25.50. Would you suggest rolling? If not, would you suggest some call selling to lower the net?

  41. Thanks Terra.  I'll be there Thursday night – how about you? 

    LOL Albo!  

    FAS Money – Back to $17.90 is right in range (FAS $51.88).  We're looking for XLF $17.75 to $18.50.  

    AAPL Money – Loss of Money more like it!   At $400 in Jan 2015, we make up about $100,00 in paper losses but that still leaves us down $44,000 at AAPL $400 so $444 is our break-even in 2015.  We do, however, have 20 months left to sell calls so we have to make very sure we sell at least $2,000 a month to drop our break-even to $400 and, of course, after two years – anything less than a $50,000 profit would be very sad or more like $60,000 with this amount of margin committed.  Still – it's certainly not unwinnable – just a huge pain in the ass!

    $25KPM – Another one we regret not riding out short calls with.  Still, better safe than sorry.  

    • QQQ – $70 was the tippy top and we really don't think we're going to do better than that and the May $69s only pay .65 so we're back to wanting to sell the $68s but crazy risky ahead of AAPL and GOOG earnings but also risky to have naked $65s so – the logical thing to do is cover the $65s and not sell short calls until we get more information.  2015 $70 calls can be sold for $5 and that takes all but $1 of our investment off the table and, if the Nas rallies, we can spend that $5 again to roll ourselves out to the 2015 $61s ($10) and then we're in a very nice $9 spread that's 100% in the money for net $6 and we resume selling short calls.  If the Nas falls, then we can still use the extra money to roll down and let our short caller twist in the wind.  
    • IBM – We have more longs than the short and I'm pretty sure they're a bit too high and we have time to roll to 2x whatever so no point in paying $2 premium to chicken out ahead of earnings.  
    • XOM – So annoying.  Do we want to wait until 4/25 for earnings?  I guess so, that's why we bought July puts.  
    • JNJ – Dreck!  Next week we're done.  
    • NKE – Already had earnings and, at $2.80, we're up on the short calls (barely) and the spread is also a bit better than even so let's clear the deck on this one and look for a more interesting earnings play
    • DIA – 20 is the right amount going into the weekend.  
    • AMZN – We should have 5 of those left.
    • ABX – Well, that didn't work at all, did it?  We only lost $390 on the bull spread but the short puts are down $2,700.  I'm showing the margin on selling 20 of the May $19 puts for $1.85 is $7,286 vs $5,000 on the current short puts so that is the correct play – even in a margin-sensitive account.  If ABX fails to hold $17.50, we'll have to stop out 1/2 (back to 10 short puts) as a failed experiment but this puts our short puts from no premium to $3,600 in premium and, of course, a much lower strike to get us out of there.  
    • AAPL – Let's buy back the $410 calls for $9.80, a nice one-day gain and we do want to cover again on a bounce.  

  42. CRM – 4:1 split today

  43. ABX:  Wait! Is that  pulse I detect?

  44. Phil—any thought on ABX earnings next week (what to expect)?
    Thanks for the spanking this morning ;-)

  45. It is nice to see Bitcoin is boring again and out of the news. Funny how large of a percent of the people only have an appetite for something that goes up 100% a week (and then it seems, everyone is an expert with an opinion). Longer term 'investors' will still note that the price is up 600% from Jan 1. (13.50 to 95). Now folks can get back to the real slow (relatively), methodical, core business and development around the disruptive pathologies of the technology.

  46. Holy crap – Nat gas flew up to $4.40!  

    10:30 AM EIA Natural Gas Inventory:  +31bcf.

    They didn't care what the inventory actually said, they were just going to go for it at 10:30.  I would think that's a shortable line on /NG but they're way too scary to mess with if they can do that (up .20 in almost a straight shot).  

  47. AVEO – May 7.5/10 BCS for $1 or better.  THIS IS A COMPLETE GAMBLE!  I think they will get approval.  I do believe the stock will move to $10, hence my premise on the $10 Apr STO Ps.  I will close those out tomorrow, as they are up from our initial sale at $4.20.  'They' are accumulating stock. 

  48. aapl – 2:1 price split.  Too bad the stock amount stayed the same.  
    Hey Cook, how about a bigger screen and some pizzazz!  

  49. 1020 – no peanut gallery remarks…

  50. …I'm the one on the left…. :)

  51. LOL…thought so!

  52. Good-bye AAPL. 

  53. Welcome, IWiz!! 

  54. 25KPM / Phil – The low of the day for the AAPL May 410 calls is $12.00 as far as I can tell. Did you look at the $420?

  55. If the market gets boring, like today, you can always practice your chops by pretending to be you're GS and manipulate a few stocks.  I use Medical Marijuana [MJNA], which, at less than $0.25 per share, gives you a good idea of how it can be done to you --  In case you believed in efficient markets.

  56. By the way. that's why shifting to nat gas in vehicles is a total joke.  Those guys must think we're all idiots (unfortunately, most of us are) and we forgot how they smacked nat gas up to $16 when Katrina and Rita hit.  How would you like filling up one week for $30 and the next week for $120?  And, of course, if they can goose demand by having us all drive with it, $16 would be nothing…

    AAPL/Kevin – I'd wait for earnings clarity.  If AAPL goes down, the premium will leach out of the 2014s and increase in the 2015s and, if it goes up, you'll be happy to have puts that expire this Jan and pay you in full.  

    AAPL/StJ – Yes but last year AAPL was at $634 in April and 18% less than $634 is $519, not $399!  Last year in Q2 they made $9.32 so the estimate of $9.16 is NOT down 18% and now we're averaging just a 9% drop over two quarters and, by the way, on announcing $9.32 last July – AAPL promptly rocketed up to $697.  I agree, sentiment drives the price and I understand that it's very difficult for your opinion of a stock not to be swayed by price.  That's why there's Buffett and there's me and about a dozen other guys who actually buy for value – you not only have to have your own convictions but you have to stand up to all your panicky investors – it's a very stressful way to go.   So much easier to just follow the squiggly lines and adjust your opinion based on the direction of the line between the last two dots.  

    And by the way, AAPL is very shareHOLDER friendly, they are simply not trader friendly and neither is Berkshire or Google or many well-run companies.  

    TOS/Jasu – And you still use Fidelity?  I could never go back to guys like that. 

    SLW/Scott – Still holding $23 but market pretty iffy. 

    ABX/Kevin – Well, the $30s are now $12.75 and down $8.25 with ABX at $17.99 and your obligation is to buy 300 at $25.50 (7,650).  If you roll down to 6 of the 2015 $20 puts at $5.80, it costs you $1.15 x 300 ($345) on the roll and then you are obligated to buy 600 at net $18.33 ($10,998, which includes the $345 spent on the roll) so 50% more commitment for 100% more shares seems like a good deal. 

    Spanking/Jabob – Any time!  On ABX, it's all about the mine in Chile but all gold miners will have to lower guidance and talk about tight cash etc because they are being squeezed by an epic drop in the price of gold just ahead of when they are due to report and right after GS et al lowered their targets on gold.  What a streak of bad luck for them, right?  This is, IMHO, nothing but a sham in which the Banksters are trashing the value of the miners so they can snap them all up on these "terrible" earnings and outlooks and then, when inflation kicks in and gold is $2,000 an ounce – they'll make Billions and probably run gold up to $3,000 an ounce before they crash it like housing.  Then we'll bail them all out (but they'll keep the bonuses) and they'll switch to nat gas or oil or whatever the next thing they can manipulate is going to be.  

    BitCoin/BDC – If you want it to be taken seriously, spending a year or so out of the news would be a good thing.  

    AAPL/$25KPM, StJ – I thought we did next week.  My bad.  Still $16 to $12 is a nice gain to lock in

  57. Phil // AAPL
    I had an AAPL $370/410 spread. Are you saying close down the shorts and let the longs ride through earnings ?

    Phil // DIA puts
    Gotta be honest with ya, I'm still confused about this in theory, but I'm going to just follow and watch. Did you mean '200' instead of '20' in the previous message to StJ, or did you get all Bull over the last few hours  ; > ?
    DIA – 20 is the right amount going into the weekend.  

  58. Phil, thanks for sharing your thoughts. I'll definitely read 1-month comments and the articles in Education. Thanks for teaching me trick #1. It's very true in real life! 
    Zeroxzero—> Hi! :)

  59. uh oh…bomb sniffing dogs have positive hits on pallet ready to be loaded on royal cruise ship

  60. AAPL Shareholder friendly / Phil – Gee, that was a sarcastic comments based on your joke yesterday that they were tanking the stock….

    Only one week to earnings!

  61. Looks like EUR needs to head home

  62. And your comparison to last July is not entirely fair because they posted $9.32 but that was up from $7.79 the year before so 20% growth on earnings.

    And that has been my point the entire time, AAPL makes a ton of money but people want to pay a premium for growth and right now a lot of people are worried that it's not there now. But once again, more clarity next Thursday….

  63. bomb squad on scene no confirmation the dogs were right yet

  64. angel
    Where do you get your news from?

  65. zero
    I love dogs, Thx!

  66. Phil // Mud ABX
    My brain – ugh. Just to be clear –
    you're saying to ROLL out existing Jan15 $20's to the May $19's, to create more premium. We're paying $1.79 for $1 in premium and betting that ABX will hold ?
    Why not sell our $33 callers and readjust the spread to a $20/25, locking int a little profit and wait for earnings ?
    Peronally, my premium on the $20 puts is $5, so if we're so bullish why not wait it out or even get assigned ?

  67. sorry = poorly worded
    up all night with crying little one
    Why not BUY BACK or ROLL our $33 callers and readjust the spread to a $20/25, locking int a little profit and wait for earnings ?

  68. Seriously!?   The 'Dog Whisperer' has his own magazine?…….

  69. $25KPA – If not for AAPL, eh.  Hopefully we'll be saying the opposite at the end of the year but , for now – very annoying.  

    • AAPL – Jan $390s now  $44.65 and they can be rolled to the $360s for $15 more but let's see what earnings are like, I suppose. Though we're currently down huge on AAPL, at $500 we wipe out -$43,700 from the short puts and add $63,000 on the long calls and suddenly we're up $20,000 in the portfolio.  Since it's not unrealistic – as with AAPL money, we just focus on picking up about $2,000 a month to give ourselves a bit more cushion.  
    • GOOG – $767 now.  Makes it kind of hard to take out the $800 calls with $33 worth of cushion.  Of course, this was our original target on the set-up but everyone was freaking out when GOOG went higher so we adjusted to a less aggressive position.  Still, now those calls are down to $6 and it would be silly to risk it so let's cash those ($7,200) and cash the short puts ($22.60 x 3 = $6,780) and sell 10 May $720 puts for $7 ($7,000) and 5 May $815 calls for $7 ($3,500) as we're still a bit short on the bigger postion.   
    • IBM – Same as above, let it ride.  
    • VMW – Dead money. 
    • EXPE – No worries. 
    • AKAM – Dead money
    • XOM – Waiting
    • JNJ – Waiting for next week (actually not up today!) 
    • COH – Earnings 3/23 and right on tract at $50.63
    • NKE – As with $25KPA – let's kill it as it's wasting space.  
    • DIA – I guess we'll stick with 20 puts. 
    • LULU – Done tomorrow. 
    • VIX – Let's take $3.60 off the table, that's a nice gain.  
    • AMZN – $2.75 now and, in the very least, there should be a stop on 5 at $2.50 for the day and done with 5 no matter what at day's end.  So we're left with 5 for their earnings.  Until we're caught up on AAPL, we need to conservatively rake in profits when we can.  
    • FB – We're in the low end of our range but we have until september and the short puts and calls are making us nice money so too good to close. 
    • CREE – Earnings 4/23 and on target so far.  
    • ABX – "…to the last I grapple with thee; from hell's heart I stab at thee; for hate's sake I spit my last breath at thee."


    Other than AAPL, I'm pretty pleased with this bunch. 

  70. PHIL WHERE ARE WE// I think that's correct in the long run here is the problem with that in my opinion….money printing doesn't make a sustainable rise in stocks unless the real economy is getting better…just 6 weeks ago the common perception was global economy was stable and US was accelerating….both of those beliefs were wrong…i am VERY confident that central bank money printing will accelerate over next few years and global economy will plunge into deep recession anyway….so just following central bank actions is a long-term recipe for disaster i think…the underlying economies have to improve to justify the multiple expansion or all that money flooding into high yld stocks/bonds will flood back to real safety…no deleveraging has occurred so central banks have just created even more excess capacity that will be very ugly to unwind during next downturn the plunge is crtainly not beginning right now and make hay!!…just that i dont have ANY confidence  that longer-term central banks can repeal the business cycle and their current actions will make the next one much worse that the last one

    my twitter feed…just came across no threat
    im seeing stuff 30 minutes to an hour before reported on tv
    that explosion last night was all over twitter more than an hour before it was on ANY network

  72. Phil – This idiot  doesn't agree with your assessment of nat gas in vehicles.  Katrina was 8  years ago.  Its just been in the last few years that fracking and horizontal drilling have resulted in huge nat gas discoveries.  Besides, the guys that would jack up the price are the same guys that are jacking up gasoline.  Nat gas is clearly a much cheaper option.  Off to the woodshed ! ! !

  73. angel
    Which feed from twitter? ….or is that even a proper question? Thanks.

  74. Pharm, when are you going to pick up some long QQQ's?  Or maybe you like some QLD or TQQQ (ultras on the Nasdaq)…? 

  75. Kimble/Phil – interesting chart from Chris Kimble this morning, and he raises the question that traders are positioned differently this time. Do you hold any opinion toward this?

  76. "Gun Dog" is my favorite.  They tipped the vote in the gun control bill vote yesterday — it's constituents were worried about job security.

  77. CB / Angel – Do you think that even the ECB was too aggressive? It actually seems to me that if they had been a bit looser there we might be further ahead on the road to growth. But I am of course no economist!

  78. Phil, any thoughts on CAT and HOV today?

  79. QQQs/jer – I am in next weeks 72s for 4c (2c currently).  IF AAPL and GOOG go, so do those.

  80. Angel:  Wouldn't you think that money printing / inflation would effectively deleverage the middle class?  75% of American families own their own homes, about 2/3s of them have mortgages, mostly fixed rate.  Inflation usually happens in times of expansion.  You are correct in saying that, taking to extremes [Germany 1930s, e.g.] it does in fact bankrupt everyone, but we are rather far from that.  I've argued recently that mortgages are actually quite hard to get these days, low rates notwithstanding, and that the government ought to kick the butts of those terrified bankers they bailed out and get them to actually lend the money they're sitting on.

  81. Yes, CBs and easing….look at Japan.  'Nuff said.

  82. OK, I think I am caught up on chat, but I may have missed the link:  Is Buffet investing in AAPL now? 

  83. jerconn – I take my basis back…it is more like 32c, but I rolled to those for 4c… ;)

    I need a miracle for those, but the putters from the other day more than made up for all the rolls!

  84. I actually made the point in the past – all the CB are now flying blind. We have entered unchartered territory and no one really knows what we are going to find at the end. You could look at Japan and think deflation awaits us or go back and think that inflation will be horrible. But clearly, no one knows…. And I don't think that they have much of a choice because clearly tightening is not a very appealing option either!

  85. Of those iPhones AAPL sold w/ Verizon, what were they?  iPhone3, 4, 4s or 5?  Big difference in profit margin for AAPL.

  86. Nice trading call on CLF by briefing this morning.

  87. I am sorry, but we are Japan, and the CBs will continue to ease.  When you are the issuer of your own currency, then there is no limitation to the money supply.  Velocity is not moving, and it is being sopped up with all the Treasuries (short term) being created.  Risk is now put into this market, and not into leading, thus I do not see inflation as an issue, near or farther out.  Japan has been fighting it for years, and will continue.  It has not hurt them one IOTA.  The US is no different.  The EU on the other hand, is a very different beast, as they have a CB, but each country is constrained by the CB – the country is not an issuer of its own currency!

    Cullen Roche has a very good paper on understanding the Modern Monetary System, and I encourage all to read. 

  88. BRKB
    Any bets on if BRK.B will be up or down tomorrow?  I'm still short the 100's, and glad I waited to roll them.

  89. Thanks Pharm, feeling this may be the bottom that finally kicks AAPL back into normal orbit leading into earnings, but who knows…

  90. VZ iPhones / Pharm – About 1/2 of them iPhone 5. The rest 4 and 4GS.

  91. This is not a good thing for MRK…who relies heavily on Januvia.

    Two months ago, a study published in the Journal of the American Medical Association raised some new questions about cancer risks linked with some big diabetes drugs. One month ago, the FDA said it was reviewing data on the two drugs flagged in that study--Merck's ($MRK) Januvia, and Bristol-Myers Squibb ($BMY) and AstraZeneca's ($AZN) Byetta--as well as other drugs, including Novo Nordisk's ($NVO) blockbuster Victoza. Now, as Pharmalot reports, a safety watchdog group has analyzed the FDA's adverse event data on the entire GLP-1 class, finding more reports of pancreatitis and pancreatic cancer for these drugs compared with older treatments.

    The Institute for Safe Medication Practices (ISMP) analysis found that reports of these maladies were about 25 times higher for the GLP-1 drugs. Januvia, Byetta and Victoza were found to have the greatest odds of pancreatitis reports. The odds were lower, but still above those for older treatments, for Eli Lilly ($LLY) and Boehringer Ingelheim's Tradjenta/Trajenta; and Bristol-Myers Squibb and AstraZeneca's Onglyza.

    These numbers don't necessarily mean that there's a causal relationship between the drugs and the adverse event reports. The FDA database depends on reports from doctors, patients and companies. Some cases never make it into the database because they go unreported. And reports themselves can be misleading, because there's no way of knowing whether a particular case actually stemmed from drug treatment or simply coincided with it. In the case of the GLP-1 drugs, they're often added to metformin as patients' blood-sugar control flags, so the people who use them may already be at higher risk of pancreatitis.

    Plus, because the reports are voluntary, one can't lean too much on them in comparisons among different drug brands. Still, higher numbers are cause for concern, and the FDA often investigates drugs based on them.

    But as Pharmalot reports, the ISMP is sufficiently concerned to call for follow-up study. "I think the future of the whole class is in question," the ISMP's Thomas Moore told the blog. "[I]f results are confirmed in a broader patient population, it raises questions about the entire class of drugs."

    Meanwhile, since the JAMA study hit, drugmakers and doctors poked holes in the data. Bristol-Myers and Merck have both defended their drugs. Both already carry label warnings about pancreatitis cases. We'll have to wait and see what the FDA says when its review is complete.

  92. New people AAPL
    I have greatly suffered popularity for close to 2 years because of what I think and somewhat know. This is a good company and a great idea came up in the 90s, forget the year, the future was portable. Apple had a heck of a run and outdid everyone. Now all that remains is updates to a mature industry. I believe Apple will outdo compitition, are worth considerably more than present pricing, and now is the best buy long term ever or at least the last few years. Even $10 earnings shoud pop them $100 or more someday. As big as they are there are entities that together can push the price where ever they want, hopfully they get caught and maybe then investing will go back to fair.

  93. phil,
    any earnings play on cmg and goog releasing earnings after close

  94. Correction or blip?

  95. For TSLA enthusiasts: Battery breakthrough?

  96. I still shake! I do mainly watch 3 ETFs, USO, QQQ, and IWM that I have mutiple charts from 1 minute to 20 days and all I see is a blow out top a week ago and we are where we were the week before that. I still have some IWM puts but today looks like a good day to go cash because this is not a proper correction except AAPL stock world.
    Any thoughts?

  97. Pharm – Good synopsis.  Thanks.

  98. shadow
    appreciate your conviction. just bought more $350 puts.
    deep breath 

  99. i did it again.
    SOLD $350 puts.
    sleep is good.

  100. That should be some weeks before that more od QQQ last week, same point a top with the usual up slow down fast.

  101. pharm
    any thoughts on AFFY ?

  102. Seeking Alpha/cdt – yes.  Many times, not always, they are behind the 8-ball.  Ohad Hammer is much better at spotting things, and I like his blog a ton.  He is much more clinical, I am much more basic science.  Most of SAs people are trolls, and have no idea what they are talking about.  (Gulp, nor do I).

    And I see Ohad is doing it as well….

  103. Phil / AC – I am driving down from NYC on Sat afternoon with another member.  Look fwd to it!  I will look into dinner resv at the Old Homestead.  

  104. Interesting if they can get through the safety issues Zero!

  105. Pharmboy,
    Any thoughts on DRIO.OB?  Its a pretty amazing idea if it flys.

  106. MJNA/ZZ – That was you?  LOL.  

    AAPL/Wombat – Not at all, I'm saying we'll re-cover ahead of earnings but hopefully we get a little bounce either in the afternoon or off GOOG earnings.  On DIA – I meant the amount of puts we have open in our $25KPs.  

    No problem Wizard – you picked a very exciting time to get started, that's for sure.  

    Bombs/Angel – Wow, this is nuts.  Imagine what it must be like to live in Israel and have this be your daily life…  Actually I was in England one summer when I was young and the IRA was blowing stuff up almost every day – it's amazing how jaded people get.  There was a bombing at Harrod's in the morning and I headed over at lunchtime to see what was up and it was open for business and people were going in and out like nothing happened (but there was a glass-man working on the door).  I've never been to Israel but I imagine they have the same attitude – it just becomes a fact of life…

    Shareholders/StJ – Just making a point people should understand.  

    AAPL/StJ – Yes and that July they were at $400 (with $7.79 earnings) so $9.20 this Q is still up 18% in two years which is generally considered pretty good and certainly not deserving of a flat-line, especially when you take into account that it's a bit off-cyclical with intermittent product releases that affect Q to Q earnings.  Even with ALL of the downgraded expectations, AAPL is still on track to make $44 this year – same as last year – yet we're trading down 30% from last year.  It's simply wrongly priced.   I agree that they don't deserve a "premium for growth" like AMZN (p/e 118) or CMG (p/e 37) or MCD (p/e 19) but $40 a share is a p/e of 10 – growth is not factored into this by a mile, nor is inflation for that matter.  

    ABX/Wombat – In the $25KPM (M) M, we are short 5 May $24 puts. Those I want to roll to 20 May $19 puts.  I have not got a clue what 2015 $20 puts you are talking about but why would we roll those?  In the $25KPA, they are June puts, so I'm punting for now as we have time and it's not out of the question that they recover.  How about, instead of starting in the middle of a random piece of a trade – you tell me what position YOU have and we talk about what might be adjusted?   

    BTU up 9% now.  ROFL – Analysts are such morons.   My comment just yesterday was:  "BTU $18.65.  Did the World end and they are hiding it from us?"

    Where/Angel – Still there is the elephant in the room or, in this case, about $11Tn worth of elephants in the form of a doubled supply of money since 2009.  It still goes back to basic fundamentals – the true nature of the global collapse has been papered over by adding $11Tn to the global money supply.  So before we had $11Tn in circulation with a velocity of 5 and our global GDP was about $55Tn and now we have $22Tn in circulation with a velocity of 2.5 for a GDP of about $55Tn.  

    There is a fundamental bottom to the level of human activity on this planet (see "The Worst-Case Scenario: Getting Real With Global GDP!") and we're down about there at 2.5 and now IF the banks begin to lend OR business begin to hire OR Governments begin to spend OR people begin to borrow (especially for housing) OR we just have a big war (still Government spending) – then we increase the velocity of money and just 3 x $22Tn is $66Tn – a 20% jump in Global GDP.  That's where the market can justify the prices – yes it will be inflationary but so what – do you want your money in TBills or under a mattress when that happens?  

    Nat gas/Albo – Valid points, supply is definitely much better than it was but this LNG nonsense will take care of that.  Natural gas is currently 60% the size of the oil market and, in a truly free market, I'd be thrilled to add more to the mix as it should, in theory, make everything cheaper.  But you know that's not the case.  They will compress that gas 100:1 and stick a 3 year's supply in the ground at terminals and on tankers and there will be "shortages" for years until the market stabilizes and only when you get used to paying $8 for nat gas again will they finally stabilize the pricing but, by then, home users are screwed and transportation users are no better off than when they were using oil.  Unfortunately, this in only one of those things I get to say "I told you so" about 10 years from now – when we're already being clearly screwed over.  Seriously, think about it – are they investing hundreds of Billions of dollars in LNG to sell you $3-4 natural gas?   

    Different/Scott – Yes, very different because oil has been artificially pumped up for years and all it's doing is finding it's true level.  This doesn't hurt anyone except the pumpers (and, of course, the oil producers) but they are not a very big part of the economy and the benefits of lower fuel prices for manufacturers and consumers far outweighs the "horror" of cheap oil (see the Clinton years, when we averaged $20/barrel).  

    Of course, if the economy is humming along and per my note to Angel above, oil can sustain a much higher price now (maybe $85) that would still be "fair" in an inflationary environment so we could hum along that bottom of that line, supported by inflation, while the S&P parties on.  

    CAT/Mjj – We need to see some earnings but they are getting attractive.  Same for HOV under $5.  CAT has Asia issues, of course, but not HOV.  20% increase in building contracts is nice but not so much single-family but inventory is burning off and that's going to benefit the builders at some point. 

    Lending/ZZ – That's exactly the problem.  What's the point in giving banks 0.25% loans if they do not, in turn, loan it out to actual people?

    Buffett/Pharm – If he is you won't know it until next year as he doesn't have to report until he's up to $40Bn (10%).  

    AAPL/Terra – Makes perfect sense to me.  

    Japan/StJ – I think that's a unique situation in that they were the only ones doing it for 20 years and of course no one put the money to work in Japan when Australia was paying 10% on notes and 7% in savings accounts (as one of many examples).  Unfortunately, they were leveraged up the ass in 2008 and the crisis walloped their Banks and Corporations but they circled the wagons and printed their way out of that one too.  Now they are doubling down because everyone else (except Europe) is printing and their usual massive printing isn't enough anymore.  

    Meanwhile, you think Japan has no inflation?  Oil was 20% lower in November than it is now for them.  Food too.  Whatever statistic their Government uses to say they're not at 2% inflation yet is pure nonsense.  

    IPhones/Pharm – Are they still selling 3s?  I know I was in a T store and they only had 5s but I have seen ads for $99 4s with a plan.  

    Nice Roche article, Pharm.  

    BRK.B/Burr – I think they're a bit too high and, if they aren't, then we're way too bearish (on the entire market).  

  107. AFFY/wombat….in a little bag, and hoping one day to look into that bag and hope that the pile growing in it has multiplied.  I will let you imagination do the rest.

  108. How the hell is it 1:40 already?  This day is flying…

  109. CMG Earnings – The average move on earnings is 8.8%. The options are now pricing a 7.2% move. They are expected to report $2.14 a share with the whisper number at $2.17. They reported $1.97 last April.

  110. Relatively strong volume day today on the indexes.  Not a blow-off day, though.

  111. dawnr / DOW
    would love your squiggly opinion. i basically use long term-ish indicators and pair them with Phil's spidy sense. 
    i have a 50 & 200 SMA, Full Stoch, Williams %R, MACD, CMF, RSi and ROC.
    There was pretty big relative volume on the past dip that hasnt been checked, and I'm not seeing anything to take down our hedges. I also go that uneasy feelin : >
    StJ // AAPL
    $350 puts filled at $54

  112. DRIO – very interesting concept.  Not sure how well it will do.  There are companies out there working on implants that will monitor and release insulin as needed.  No 'lancets' needed.  So, while it is a  good concept, it is a bit behind in my small mind.

  113. U all playing AAPL are f'in crazy.

  114. Premium / Phil – AAPL should definitely hire the AMZN PR guys to help them gain some of that P/E premium …

  115. It's like 2012 never happened for AAPL… You have to go back to 2011 for support levels now!

  116. Phil // Har Har
    I don't know how you keep all this shite straight in your head either. Sorry, it must be confusing because I blend the ICP and 25K at my leisure. I will try to be obscenely accurate going forward.
    ABX 2015 $20 puts you are talking about but why would we roll those?
    well, that's exactly what I thought. Monkey say – that not banana. Apparently we have positions on both ICP and 25K and the ( loss ) you mentioned ironically matched both positions.

    now that I know you're not on crack, we can move on.
    Phil // DIA
    Skipped over the number of puts – I assume that StJ is correct for the ICP and we're sticking with our 200 – not 20

    Phil // Angel
    Interesting take on support. I do however cringe when I look at that chart you posted – it's a classic breakout wedge. gives me the shivers just lookin at it
    Pharm // AFFY
    What's you CB on this – I think it's an interesting company.

  117. Gee, I guess I won't be taking the family to Texas for summer vacation anytime soon…… ;)

  118. Speaking of the DIA puts, they are now at $3.15. Does it make sense to take 1/2 off? 200 of them in the Income Portfolio is nice $21K win. 

  119. OMG 1020…..Maybe we should give Texas back…. :)

  120. APPL so annoying have wanted to short in the morning to protect my long positions – could not pull the trigger Wed. AM – big mistake.

  121. APPL = AAPL

  122. What if AAPL closes below $400? When do they report, must be soon?

  123. Good thinking by Rep. Louie Gohmer (R-TX) — build an Israel-style wall around the U.S. to protect it from Islamists pretending to be Mexicans. It's about time the U.S. government gave its citizens an infrastructure building project we can all get behind!! Highways, electrical infrastructure, dam, water distribution systems, airports, national parks — meh!! They're all in good shape, and what's all this "smart grid" nonsense?  Americans don't want any smart-alecky government-sponsored "smart grids" poking into their homes to spy on their electrical use!!  Live free or die, folks.

  124. AAPL // $392   wow.
    23rd, shadow

  125. MRK/Pharm – Never a favorite (as a Jersey boy, I hear all the horror stories) but kind of scary to short.  Earnings are 5/1 though and, at $46.78, we can buy 10 July $47/49 bull call spreads for .75 and sell 10 next week $46.50s for .65 and then, whatever we can sell May calls for into earnings is gravy.  Let's do those spreads in both $25KPs.  

    AAPL/Shadow – I agree, as with HPQ or BBY last year (or HOV or WFR or SVU or BAC…), you just have to wait for people to finally say "gosh that's cheap" and then, "suddenly" they rally for "no reason."   Oddly enough, when HOV falls from $2.50 to $1.50 (40%) people are happy to DD and be patient (and ended up at $7.50) but when AAPL falls from $600 to $400 (33%) everyone FREAKS OUT! 

    CMG/Strin – They are too in between their range ($300-400) to bet on.  I would assume a miss and maybe down to test $300 and then we'll like selling puts but betting against CMG is a very dangerous game.  I will say in advance that notice, now 3 years later, that nothing ever came of their Shop House Chinese spin-off.  I said that was all BS from the beginning.  Didn't stop them from getting and keeping an insane multiple though (37).   The pricing on puts is too high to make it fun – I'd rather just wait and see and GOOG we have the above play on so I guess I don't think they take out $810 but I don't think they tank either.

    Batteries/ZZ – Now we're talkin'!  

    "You could replace your car battery with one of our batteries and it would be 10 times smaller, or 10 times more powerful. With that in mind you could jumpstart a car with the battery in your cell phone."

    Dinner/Terra – Better hurry, it's a popular place. 

    DIA/Income Portfolio, Wombat – Yes, in the income portfolio we should be cashing in 1/2 of the 200 as I'm fairly positive it was a DD or a roll and our basis is $2.08 and now $3.25 so we're up $11,700 on 100 and who doesn't like cash (other than that girl in the COF commercial)?  So we should be out of 1/2 of the DIA puts in the Income Portfolio at no less than $3.10 or by end of day if we keep going lower but I think $3.25 is just fine.

    LOL 1020 – I wonder when they'll issue hunting licenses to the good old boys so they can "think the herd"?

    DIA/StJ – Absolutely, of course.  

    If you want to gamble on GOOG, IBM, CMG, ISRG, MSTF, COF… earnings this evening getting us out of this RUT, then you can bet the RUT with TNA tomorrow $38.50 calls, now .30 and $1 out of the money but $1 is a 0.7% move in the RUT so 1% puts you in the money and 1.5% should be a .50 gain and 2% would be at least $1 so kind of a fun gamble.  

  126. IWM has not been below my 89.27 line spare seconds yesterday and this is the third visit, all cash.
    Last Friday Phil said we would be flat unti OEX. Would that be fun tomorrow if it happened?
    Looking for a something, ideas? Phil

  127. The price curve on FXE is more or less an inverse track of the S&P today, at least, about an hour ahead.  That might mean the market sells off in the final hour.

  128. Pharm/Maybe  No doubt – though I'd like to keep Austin….

  129. For some time now Todd Harrison has been calling for $360 as support for Apple….we shall see shortly.

  130. StJ
    I think it may close under 14,5
    Dow 14,660 (weak), 14,700 (strong)
    ( we started the week at 14,8 )

  131. zeroxzero
    Have you tracked that indicator long? I had a buy signal about 14:23 ans since an smalllll infow of money.

  132. Rothchild/Rain – It's not a big deal, they are just cutting off their trading operations, not making a bear call on gold.  This is very interesting:

    While the gold price has surged, mining companies have become less interested in hedging and trading volumes have fallen. Observers also said rival banks tended to have better links with the hedge which now make up a sizeable proportion of the market.

    That goes in line with my theory that there is massive manipulation in the market by the Banksters and it's very possible Rothschild just decided it's too sleazy for their tastes (when you're that rich, you can afford to have principles).  Of course it's also possible that they're going to jump in and start buying and they don't want to be accused of fixing prices while cornering the market.  

    Wall/ZZ – I say we need a dome, like in the Simpsons movie!

    Flat/Shadow – Well,, we're down 45 points on the S&P since then (3%) so not very flat.  I was closer to the truth on the 11th when I said "Is BitCoin a Preview of the Market's Next 60 Days?

    2013 04 10 14h44 23 730x491 The only two Bitcoin charts that you need

    As to ideas, my idea was to go to cash last week and I think that was a fine idea for now.  

    FXE/ZZ – Selling pressure certainly picking up.  

  133. rpme // AAPL
    Per StJ comment before – everyone is so freaked out they're looking at 2011 support.
    I'm sellin puts
    StJ // Just broke 14,5 – giddy up.

  134. Good chart:

    This is why I love shorting the Nikkei – if we begin to go down, they have miles to drop.  

  135. AAPL 360 / Rpme – That was an area of support in the second 1/2 of 2011 but I hope we don't get there now!

  136. aapl 360 / stj: also near 200 weekly SMA  Let's see if it holds.

  137. Phil
    Sure did cash out today except bougt 25 contracts IWM 90.50 @.15 tomorrow and now looks like ZXZ was right broke my line, can it hold below 20 minutes?

  138. On the daily, QQQ is now touching the 200d MA.

  139. No 3 minutes back above with another buy signal.

  140. QQQ May2 13 70 Cs for 19c.  That is my bet for a bounce and an AAPL/GOOG/whatever bounce.  10 cheap ones.

  141. Pharm thanks for that seems I wanted a small recovery but why, made more going down just like the last time.

  142. Shadow….always on the way down.  But 'bots' keep things interesting, and volume on QQQ is 1/2 yesterday, so to it is my belief that this is a flush, and they move it up tomorrow, or flatline (as you or someone noted above about tomorrow). 

  143. Oil moving back up.  this is near where it bottomed in Nov/Dec.  

  144. Pharm
    The buck has gone up since 12, if over .17 by close I will sell, expire day is the worst day of every month since 1980.

  145. SGEN 40 C and 30 Ps are back to parity.  I am doing more.

  146. TRIN is falling fast Shadow.  They are buying.


    How's everyone else doing?

  147. AAPL losing 9% of it's value in 2 days is a little excessive. It';s funny how you can go from the most loved stock to the most hated stock on the planet in 6 months.

  148. Wow, GOOG in panic mode.  

    The average rate on 30-year fixed mortgages dipped to 3.41% from 3.43% in the prior week as consumer spending shows signs of weakness, Freddie Mac says in its weekly report. The 15-year fixed mortgage declined to 2.64% from 2.65% a week earlier. A year ago, the 30- and 15-year rates averaged 3.9% and 3.13%, respectively.

    April Philly Fed Business Outlook: +1.3 vs. +3.0 expected, 2.0 previous. New Orders -1.0 vs. 0.5 previous. Shipments 9.1 vs. 3.5. Unfilled Orders -8.7 vs. -6.4. Prices paid 3.1 vs. 8.5. Employment -6.8 vs. 2.7.

    Mar. Leading Indicators: Leading Index -0.1% to 94.7 vs. +0.2% expected, +0.5% prior. Coincident Index -0.1% vs. +0.2% prior. Lagging Index +0.3% vs. +0.1% prior .

    American Express (AXP +2.2%) is reiterated a Buy with $73 price target following earnings last night. "Core" EPS of $1.08 missed analyst's Bill Carcache's estimate by $0.06, but billed business was about inline. He's lifting his FY2013 EPS forecast to $4.92 from $4.76 and 2014 to $5.59 from $5.34. 

    Blackstone (BX -0.8%) reverses a big premarket move higher, perhaps as COO Tony James tells reporters in a pre-CC interview he sees a "spring swoon" for the economy and growth "not exactly around the corner." He sees "vast potential" as high net worth individuals – whose assets exceed those of institutions – are "way underrepresented" in the P-E space, and applauds retail offerings byCG and KKR.

    Can the Greek banking sector deteriorate further? Yes, says Moody's in a new report: declining domestic purchasing power and liquidity" will be exacerbated by government spending cuts and rising joblessness, crippling consumer's "repayment capacity" and ultimately leading to non-performing loans above 30%. Furthermore, Moody's warns risky Greek government bonds comprise 87% of the sector's Tier 1 capital and "estimates €8B of further capital" will be needed to cover loan book loses.

    One would expect lower crude inventories to result in higher prices, but that didn't happen yesterday as WTI slid below $87. Walter Kurtz's four possible reasons to explain crude's downside moves: weaker than expected growth in China has sparked a negative sentiment in commodity markets; hedge funds unwinding positions; lower U.S. demand for gasoline; North American production continues to surprise. 

    Peabody (BTU +8%) posted a 13.5% Y/Y decline in revenues, attributable to a 12% drop in U.S. coal revenue and 6% fewer shipments; also, Australian revenue fell 13.6% on a 32% drop in realized pricing per ton. But the lack of further negative news is a positive, Cowen says. As the first (and largest) U.S. coal miner to report, BTU’s results offer a sneak peek at others: ACI +10.5%ANR+7.7%CNX +6%.

    FuelCell Energy (FCEL +6.5%projects FQ2 revenue of $38M-$40M, above analyst consensus of $36.6M, as the maker of fuel cells for electric power generation reports progress on plans to increase its production rate by 25% thanks to demand in Connecticut and abroad. Says the ramp to a 70 MW annualized run-rate is on track for a May 1 completion.

    MEMC (WFR +2.2%) outperforms after announcing its SunEdison unit has struck a deal with Brazilian energy giant Petrobras (PBR) to build a plant with 1.1MW of installed capacity. Construction will start at the end of this year, and SunEdison's Renewable Operations Center will manage the plant following completion. The deal isn't especially large, but could pave the way for larger contracts with Petrobras down the line. (PR) 

    Despite $2T invested over the past 20 years in renewable energy projects, carbon dioxide emissions per unit of energy consumed have fallen by less than 1%, the IEA reports. A main reason is the continued success of coal, the fuel of choice for much of the world despite being in retreat in the U.S. and perhaps even in China. Until low-carbon alternatives get cheaper, coal will continue to be favored.

    The bear market in a gold is a signal China, emerging markets, and commodities (DBC) in general are through leading the markets, argues BAML, which reminds the peak for the metal occurred nearly 2 years ago. "In all scenarios, it's good for the U.S. dollar (UUP)."  Looking back at 9 other sharp declines in gold since 1975, the team finds equities rally, led by consumer (XLPXLY) and energy stocks (XLE) once the metal stabilizes.

    At current prices, 15% of global gold miners probably are now underwater, according to Nomura's Tyler Broda, who also predicts gold could fall to as low as $1,000/oz. this year. Companies relying on a single asset and those in Africa, already struggling with deteriorating geopolitical risk, will find it more difficult to convince banks to fund projects, Broda says.

    Brazilian steel maker Gerdau (GGB +3.3%) posts strong gains as Citi takes the shares to Buy from Neutral citing projected increases in steel prices and higher sales in the U.S. The bank also expressed a positive forward looking outlook on profits.

    Shares of AutoNation (AN +5.1%) rev higher after the company beat estimates on both lines with its Q1 report. AutoNation reported broad gains across segments with demand for new cars in the U.S. strong. 

    The FAA says it will cut staffing by 10% at airports in Atlanta, Chicago, and Los Angeles this Sunday in one of its first rounds of cuts tied to mandatory budget reductions under the sequester. Though the prospect of fewer air traffic controllers sounds daunting, carriers haven't announced just yet that the development will impact the number of flights flown or revenue booked this quarter.

    Details on Boeing (BA -0.7%), the 787, and the Project Statement of Compliance: statement is the first in a series of steps to getting the Dreamliner back in the sky. Should BA submit the document and get it approved, it would next issue a "Service Bulletin" ordering airlines to install the new batteries. Lastly, the FAA would issue and "Airworthiness Directive" which would end the grounding. So close, yet so far away.

    Department store chains are trading weak with weak economic indicators and chatter on weak sales trends at Wal-Mart (WMT -1.5%) swaying sentiment. The sector is already a bit jitterish with Target's (TGT -0.9%) Q1 sales warnings from earlier in the week still resonating. Decliners include Sears Holdings (SHLD -2.5%), Nordstrom (JWN -1.4%), Saks (SKS -1.6%), and Macy's (M -1.2%) – while Fred's (FRED +0.1%) and J.C. Penney (JCP +1.6%) are bucking the trend.

    Glad we're out today!  Lululemon (LULU -3.5%) trades moderately lower after issues a negative report on the retailer. The bearish take from the firm is hinged on anecdotal evidence of increased promotional activity at stores that is deemed an uncontrollable spiral.

    Wedbush takes its price target on Outperform-rated Buffalo Wild Wings (BWLD +0.5%to $120 from $95 citing (somewhat amusingly) a "precipitous decline in wing cost … the magnitude of which renders near-term same store sales an afterthought." Analyst Nick Setyan also says even hiked EPS expectations "could prove conservative." 

    Shares of Fairway Market (FWM +2.9%) stay elevated on day two of public trading as investors bet on the grocery store's potential to expand rapidly with its flush with IPO cash. Analysts think the road is long but the company's broad appeal to younger shoppers in the NYC area gives it a fighting chance to take on Whole Foods Market (WFM -0.6%) and Trader Joes's in select markets.

    Highlights from CinemaCon: 1) The debate over shortening theater release windows picks up with the displeasure of move theater operators (CNKCKECIMAXRGCMCSRDI) over the practice losing steam as the appeal of boosting VOD revenue entices studios. 2) Disney's (DIS) presentation was a hit with screening of bothMonsters University and The Lone Ranger being well-received on top of the company's dramatic Star Wars news . 3) What's next for theaters? The success of both IMAX in international markets and new premium theaters popping up in the U.S. has operators exploring upgrades to theater complexes to add features such as bars, lounges, and restaurants. Naturally, ticket prices would be boosted to pay for it all. 

    The trend that isn't going away. A study by Harris Interactiveindicates 62% of overall viewers who watch TV shows on their own time exercise "binge-viewing" habits, while the percentages jumps to as high as 78% for younger audiences. As followers of Reed Hastings' Facebook page already know, binge-viewing continues to help Netflix (NFLX -1.3%boost viewer hours and strengthen the stickiness of the streaming service. - I know I usually wait until there are at least 2 of something on my Tivo to watch it.  

    Rentrak reports cable subscribers spend 40% more time watching free VOD content than they did a year ago. The development has big implications on ad dollars with media companies (CBS,CMCSANWSNWSADIS) battling with advertisers on how to count viewers.

    In it's conference call earlier, UnitedHealth (UNH -3.5%) CEO Stephen Hemsley reiterates its cautious stance on stated-based insurance exchanges, saying the company hasn't changed its view about selling insurance over exchanges set to open later this year under the health-care overhaul law. "We will be very selective in where we participate and do not believe the exchanges will be a significant factor for us," Hemsley noted. (Webcast).

    Cypress Semi (CY -9.3%) dives after guiding on its Q1 call for Q2 revenue of $176M-$178M and EPS of $0.06-$0.08, below a consensus of $182.9M and $0.09. Rival Synaptics (SYNA -1.9%) is off moderately. (Q1 beat) 

  149. Thanks again pharm, I have not paid attention to QQQ volume but 1/2 should mean something and  after 90+% wrong on expireation? Hell we were 91 yesterday but your in QQQ instead of IWM and I have not been watching volume on them either, the ticker shows more than the last month of up days.

  150. IBM (
    IBM -0.8%) is in "active negotiations" to sell its x86 server business, and Lenovo (LNVGY.PK) is the frontrunner to buy it, "multiple sources" tell CRN. An industry exec claims IBM wants $5B-$6B, and likes the idea of selling to PC division buyer Lenovo, since it doesn't compete much with IBM elsewhere. A purchase of that size wouldn't be easy for Lenovo, give its market cap is only $8.6B. IBM, which reports after the close, saw its x86 sales fall 2% Y/Y in Q4, as white-label sales to Internet firms account for a growing share of industry revenue. Also: trade union reps claim IBM is thinking of cutting 1.2K-1.4K jobs in France over the next 2 years.

    Continuing its mobile push, Yahoo (YHOO -1.8%) is rolling out Mail apps for the iPad and Android tablets, and a branded Weather app for the iPhone – the pre-installed iPhone Weather app uses Yahoo's data, but is unbranded and features no ads. Yahoo is hoping a photo-centric UI for the weather app, and a strong emphasis on the reading experience for the mail apps, will attract users. The updates come shortly after Yahoo announced major DAU increasesfor its revamped smartphone mail apps. Yahoo Mail has been steadily bleeding share, but still claimed 281.7M users at the end of 2012 (per comScore). (Yahoo/Apple)

    Overstock (OSTK +23.5%) skyrockets after reporting Q1 revenue of $312M (+19% Y/Y) and EPS of $0.32; that soundly beats estimates of $282.3M and $0.15 from the one analyst covering the company. Gross margin rose 80 bps Y/Y to 18.9%, sales/marketing spend 29% to $18.7M, and G&A/technology spend 9% to $33.2M. CC at 11:30AM ET (webcast). 31.3% of the float was shorted as of March 28; it looks like a lot of those shorts are covering today.

    eBay's revenue miss and light Q2 guidance are taking a toll on Amazon (AMZN -3.6%), which delivers its own Q2 report in 7 days. eBay's earnings call remarks about European weakness probably aren't going over well either, given Amazon's strong exposure to the continent. Yesterday, Nomura raised its PT on Amazon to $315 from $300, albeit while respectively cutting its 2013 and 2014 EPS estimates to $1.67 and $3.44. The firm is now modeling higher D&A (heavily tied to AWS capex) and fulfillment expenses, but also higher revenue and gross margin.

    revenue miss, light Q2 guidance, and a downgrade to Neutral from Macquarie are leading eBay (EBAY -5.4%) to take a post-earnings breather. During the earnings call, eBay mentioned "a weaker Europe and British pound" are weighing on results, and that new users (of which eBay has been adding plenty) "have a tendency to be less engaged at the early stages of their lifecycle." Needham is staying positive, arguing the user growth will drive a 2H revenue pickup. Touting mobile's potential, eBay claims "multiscreen users buy twice as much as non-multiscreen." 

    Verizon's (VZ +3.4%4M iPhone activations represented a 25% Y/Y increase, and 56% of total smartphone activations. For the second quarter in a row, the iPhone 5 made up about half of activations. But in spite of Verizon's numbers and a bullish JPMorgan note, Apple (AAPL -1.7%) has fallen below $400. With a major divergence having opened up between the iPhone's U.S. and international performance, the Street may have begun discounting the implications of Verizon/AT&T/Sprint sales for global results. 

    Apple (AAPL -2.1%) roundup: 1) As Verizon's Q1 iPhone sales get dissected, critics are noting the 35% Q/Q drop in sales from Q4 is bigger than the 24% drop seen last year. Others think Verizon's remarks about wanting to lower subsidies bodes poorly, though Apple has more leverage here than most Android OEMs. 2) Digitimes reports Apple recently stopped placing Mac component orders to digest inventories, and (in a break from convention) hasn't provided a Q2 shipment forecast. 3) The latest from the iRumor mill: A picture said to show the low-cost iPhone's plastic case, and a report the 5th-gen iPad will be 25% lighter and 15% thinner. 

  151. 98M on the Dow at 3:23 is a pretty strong day – all down so far. 

    Oil zipping up to $88.64, Nat gas over the top at $4.424 and gasoline flying too at $2.76.  

    Don't blame the Dollar (82.65) – it's just laying there all day.  

  152. 3:30 someone is buying!

  153. OIH up today – that's a bottomish signal.  UNG up 5% is helping. 

    X up today but pathetic at $16.32.

    XOM goes green as oil goes up but barely went down when it dropped.  

    CHK having a good day, back near $19.  

    AA back over $8.

    VIX 17.73, TLT 123.08.

    Serious idiot on CNBC says about AAPL "digital watches and televisions, what is this – 1983?"  That's his actual premise for calling AAPL a dead stock – his own lack of imagination…

    Now CNBC is talking up a piece where if we don't get our debt under control, we'll need to implement harsh austerity measures like Europe.  Yes – because it's working so well over there…  I'm telling you – the Conservative think tanks and lobbyist are in a full-court press to stuff this negative R&R study news (the fact that it was completely bogus) under the table.  Typical conservative tactics: "What, the primary study on Austerity is baseless.  Why then I've changed my mind and I'm willing to compromise with MUCH MORE AUSTERITY!"  "Muhahaha" is optional…

  154. For a really fun gamble.  May1 71 QQQ Calls for 6/7c.  They are flying…and I am one buying.

  155. Phil // AAPL
    Last week we put on a AAPL BLCS $370/410. I never thought AAPL would break under $400, particularly before earnings. Would you back back the callers and let the longs ride ?

    I also have +4 Jan14 $300 longs ( -35% ) – can you suggest something to sell against it ?
    thanks //

  156. arghhh – what is it with my typing today //
    Would you BUY back the callers and let the longs ride ?

  157. Insuring a buy/write/PHIL,
    what cost basis should we use when determining how much insurance to purchase?  do we use the acb after the buy/write, or do we use the acb after the 2x if the put gets excersised?  the

  158. Pharm // QQQ
    Ha. Just filled those about 5 min ago ; > Thanks 

  159. Days Like These

  160. shadowfax
    buying what??

  161. CNBC/Phil
    I wouldn't get too worked up from the 100 people who are probably tuned into CNBC or the hidden agendas analysts and fund managers are promoting while talking about a stock or the market.  Anybody who has followed CNBC has already lost all their money and can no longer play in the market. 
    If the SEC really wants to put the market on fair ground they should investigate when analysts put buys or sell on stock if their trading desks and firm owned funds are doing the opposite on those recommendations as they most certainly are.  It's nothing but a pump and dump on a much much larger scale.

  162. wombat
    Try this: I keep telling myself that good typists and spellers are no good at math and making money!

  163. Phil / ABX – I am short 2 Jan '15 33 puts at around $5, so down about $10.  how about rolling down to 23 strike and sell 4 of them?

  164. Shadow:  No history on my FXE tracking, just an off the cuff note on its movement.  Sorry if I wrong-footed you with it.

  165. RRD coming down a bit

  166. yodi
    Someone is buying IWM and QQQ, also 80.50 triggers a sell program for IWM and the seller may have more ammo.

  167. IBM projected to earn $3.05, 1/3 of AAPL, at $207.  The madness continues…

    105M on the Dow at 3:45. 

    Qs/Pharm – Good call.  

    AAPL/Wombat – That was the call from earlier but we intend to re-cover into earnings as the risk would be too great otherwise.  There's really nothing to sell against the longs unless it's more of the same to create a vertical.  If you are going to stay bullish on AAPL then you don't want to cap a desperately needed move up.  If you don't believe they are ridiculously oversold then you should get to cash ahead of earnings or get out of the $300s (so deep in the money bad earnings will destroy them) or turn them into a vertical but what call would you sell – the May $400s for $15?  Is that where you want to cap your AAPL upside?  

    Basis/Canuck – It's not really that simple.  As a rule of thumb, you should know how much a 1% drop in the S&P will affect you and you should cover at least 50% of what you expect to lose if the S&P drops 20%.  So a buy/write is pretty well self-hedged and doesn't require a lot of cover and a naked AAPL Jan $300 would get crushed (you should also be aware of special risks you may be taking), etc.  Then you find a hedge that is going to do a reasonable job of mitigating the damage.  

    If you are worried about losing 20% on a 20% S&P drop and you want to hedge 10% of it and you pick a hedge that pays 3:1, then you only need to put around 3% into the hedge – see how that works?  Of course we don't really expect to lose 20% overnight so if the market goes down 10% and you think it could fall further – you simply add another hedge and then you have 10% coverage on the next 10% (5% from the first hedge and 5% from your new one) and 5% coverage for the next 10% below that (at which point hopefully you'd have time to add more hedges or reduce long exposure.  

    Days like these/Pharm – Blasphemy!  

    CNBC/Rustle – Yes but the scam is deeper than that as CNBC's "news" is on every major feed and then is rehashed by other outlets, etc.  It's just propaganda – why else would they keep running it with tens of millions of annual losses? 

  168. SPX 1540 is also important, and we have tagged it and bounced.

  169. French Finance Minister Moscovici says the nation is prepared to break its deficit target in order to avoid a recession.

    EUR neg

  170. CNBC is the grassy knoll of financial reporting.

  171. ZXZ never wrong footed! The buyer won at the finish line today and my $375 bet is tiny considering how much I made on stocks going down

  172. CNBC is as low as America can go, or so I hope. So far listened 1 day, the shrink bill alone is way too much!

  173. There's the bell – now comes the fun!  

    Dow looks like 145M in the end.  

    Transports interestingly worked back to flat but the rest is kind of a disaster (again).  

    ABX/Terra – Sure, I'm all for that roll, same logic as above. 

    RRD/Scott – People are worried they'll mess up another earnings release.  

    Go France!  

    I'm telling you – if they want to save the Euro, they should kick Germany out and start printing money.  Pay the German bankers back with Euros that are worth .90 and let's see them sell all their manufactured crap to people who don't have artificially inflated currencies.  

    LOL ZZ. 

    IBM misses – $200 on the button – thank you very much! 


  175. 157M printing on Dow volume – a lot of stuff after the bell.  

    GOOG flies up to $790 again.  ROFL – silly markets.  Not good enough to pop $800 though.  MOT is killing them.  

  176. CMG with the big pop – back over $350.  

    Hit it Palpatine!  

  177. Phil, great John Lennon. My daughter has been singing lots of Beatles songs in choir, her teacher is an old hippy. She just asked me the other day why someone shot John, hard to explain.

  178. Better Buy tacos than I pads

  179. IBM still targets $16.70 for the full year… They earned $14.53 last year. That would be a 13% increase in earnings. They have $8.39 already in the bank from Q1 and Q2. So more of the same the entire year. But at 198, that's a P/E of 11.88! Certainly cheaper than AMZN.

  180. CMG crushed the estimates…

  181. But more expensive than AAPL, StJ. ;)

  182. IBM has the Dow futures at 14,400.  So, of course, if you are around to watch them – I'm certainly in favor of playing a long on /YM off that line (5% support level).  Won't be a good sign if it fails but the Dow index is much higher than the Futures (about 50 points) so not a real negative cross until 14,350 in futures.  

  183. AC Conference — Anyone — What is the best/easiest way to get from the Philly Airport to AC?  Arriving Friday at about 6:30 pm. Thanks!

  184. Phil- Just wanted to run a possible play by you and receive feedback on AAPL- Short term I expect weakness after the release but move up by the end of the year. The thought was to buy an  ATM  Call Calendar which will be Delta neutral to slightly – ve before earnings. I was thinking for instance to take the close of Monday ATM as the basis and buy a December Long / April 4th Week Short. If the assumption of it tanking by $20 works out, I may have a Dec call to hold on to that I could write against every week as it hopefully moves higher over the next two releases. The April4th week volatility crush would help as well.
    If it moves against me, there could be a loss based on the delta and the move but I could still get out alive. What are your thoughts. 

  185. Um.  VRTX….

  186. Pharm – What do you think of NAVB? Thanks

  187. These 2 guys that dropped the bombs in Boston look so casual walking around with a 6 pound bomb in their backpack. I guess I would make a bad bomber….

  188. In that all AAPL day we forgot that MSFT was also reporting today – profits up 19% and revenues up 18%. Up AH now. We'll see about guidance now for the rest of the year.

  189. escohen5:  I won't be going to AC unfortunately, but I looked up some transportation options from Phil when I was researching the trip.  The best is to hitch a ride with another PSW'r of course.  I don't know any of these folks.  I chatted with one of them and it all seemed good.  Have a great time with Spanky and the Gang in AC.
    Shuttle Services:  I finally found a Philadelphia shuttle service.  Nada for NY.  The cost is $55 + Tip = $65 each way (Tropiano) for shared transportation.  That is fine with me.  Here is the list of providers I stumbled on:

    AAA Airport One Direct, (215) 677-3544 
    American Limo, (484) 368-7041 
    Atlantic Sedan Service, (610) 659-8513 
    Pennywise Sedan Service, (866) 255-7686  
    Rapid Rover, (856) 428-1500 
    Tropiano, (800)-559-2040

  190. IBM/Phil:  Tomorrow let's look at re-selling some IBM puts on our existing trade placed Jan 22nd. I still have the July 190/200 Bull Call.   My records show that we bought back our July 180 putters ($5.40) for $1.30 on 3/22/13.
    Have a great evening everyone!

  191. Two non-market comments on today's posts:
    Phil /  How odd that I, too, was in front of Harrods the day after the bombing as well, glass shards everywhere. My parents lived there then,  We might have been within yards of each other.
    rpme / I saw John & Yoko in the entrance to the Dakota the night before he was shot there.  They were recording in Manhattan.  I took someone home from a date who lived there, we were waiting in the outside vestibule for the doorman, and a limousine pulled up and John & Yoko got out and stood with us until we were all let in.  It was 11PM.  The next night I was watching Monday Night Football in my apartment two blocks away and heard the shots — but there are always shots in Manhattan.  Then a headline flashed across the TV, I looked at my watch, it was 11PM, and I knew what had happened — Chapman was waiting for them in the vestibule.  It was a very sad time, and I always felt very badly for Yoko..

  192. AC/mjj — Thanks, I'll look those up.

  193. Phil // AAPL
    Thanks for the thinking. I was reading some more articles on SA about houses getting absolutely burned on scaling into AAPL. I do agree with you that buying AAPL shares would have been even more disastrous – hence their solution of protective collars is really their only choice.
    I'm still bullish on AAPL – very much so – but that doesn't change anything in the madness. I just thought there would be a way to protect from the 'company that shall not be mentioned', however illogical. Reading your response for the third time tells me the only option at this point would be index hedging. I will also assume that you would buy SQQQ and equate it to my percentage of AAPL -vs- Overall Portfolio as insurance before earnings ?

  194. zeroxzero / Manhattan
    "[T]here are always shots in Manhattan."
    I lived and worked in Manhattan for 28 years, and the only gunshots I ever heard were at the pistol range of which I was a member.

  195. Philly/Esco – There must be a ton of shuttles from Philly to AC.  In a car it's straight down the Atlantic City Expressway – about an hour drive but, once you're there, the car is pointless so not really worth renting if it's just you.

    AAPL/Vedan – That's kind of a dangerous assumption as your deltas will be mismatched so you can get pretty burned on a big upside move.  As a rule of thumb, if you have to rely on "hopefully" for a trade to work (as opposed to work well), then you may want to rethink the trade.  This is a stock that just fell $40 in 3 days and you want to make a bet it doesn't move $20 on earnings.  If you're not in it – wait until after earnings and hopefully it goes down and the calls you want to buy will be $20 cheaper (or the short puts will be much more expensive).  If it goes up, you can still buy longs and sell short calls – but much higher ones for more money. 

    Bombers/StJ – Sociopaths – no emotion, no empathy….

    MSFT/StJ – See – proof!

    IBM/Jbur – I don't know, if we're close to $9 on the long spread, I might just want to make room for earnings plays at this point.  It was a very good spread, paying nicely on both sides and also on the longs – when you win the trifecta it's not always good to keep betting with your winnings.  

    Harrods/ZZ – Wow, synchronicity for sure.  Your Lennon story remind me of the time I had dinner with JFK Jr. at Nobu the week before his plane went down.  A friend of mine was good friends with Carolyn and we met them there.  They told us they were heading up to the compound that weekend for a wedding.  

    SQQQ/Wombat – Yes but only enough to pay for a roll if AAPL drops 20%, otherwise you can hedge yourself right out of potential profits.  As you can see – GOOG clearly oversold and AAPL probably did too.  Remind me tomorrow and we will look as SQQQ spreads though – just in case.  

    Shootings/Opes – Depends which years you catch:

    Barely over one a day now – way down from 5 or 6 when I used to spend my time there in the 80s and 90s.  Of course, those are just the actual murders – doesn't even count a little friendly neighborhood gunplay where there's only one or two non-lethal holes in people (too numerous to mention).  Of course, as Lennon himself said "Happiness is a Warm Gun."

  196. Phil // AAPL
    Thanks – appreciated. I'll do some research tomorrow morning and ping you. 
    Sidenote – We're pretty down right now, but I remember talking to the wife, justifying the cost of PSW – I've never regretted it for a second. Look long, be patient and 'trust your guys' ( words from my wife : > )

  197. P.S. >> I grew up in Detroit in the 80's – appreciate the graph.  ' A hole is a hole, it was there before – you just didn't know it yet ' ==  JJ's childhood 

  198. S&P futures up some 6 points since the close…

  199. OK, enough for the correction now!

  200. MSFT / Phil – Any of us could grow revenues by 19% there… It's basically inflation and demographics when you have 90% of the PC market.

    But imagine if they had a real CEO!

  201. Phil, futures already up a significant amount. Do you think they will jack the market up through expiration tomorrow? 

  202. At the close: Dow -0.52% to 14542. S&P -0.64% to 1541. Nasdaq -1.20% to 3166.

    Commodities: Crude +1.97% to $88.35. Gold +0.35% to $1387.50.

    Market recap: Stocks extended yesterday's losses, with the S&P slicing through its 50-day moving average, adding to concerns that the week’s choppy action is the start of a real pullback. Tech and healthcare led the drop following lackluster earnings (IIIIII) and economic (IIIIII) reports. Gold inched higher but remained shy of $1400, crude oil rose 1.2%, and nat gas jumped 4% on a smaller than expected rise in U.S. supplies.



    From a technical perspective, at least on the surface, today's close by the S&P 500 below it's 50-day moving average should be cause for concern. Not necessarily, says Bespoke Investment Group. At last check, the index had gone 74 sessions without ending below its 50-day average. Bespoke notes that the index has broken below its 50-day moving average after sustained periods of at least 50 days above the mark 13 times over the past decade, and over the month that followed, it actually gained an average of 2.2%.

    If you made him 'dictator,' says Richmond Fed President Jeffrey Lacker, he would end QE now. To be fair, Mr. Lacker has hawked this same position from his bully pulpit for the past year, that the evidence is "sketchy" as to whether QE has even helped the nation's job picture to begin with. The further the Fed goes down the QE route, Lacker argues, the trickier the exit process gets. "We should taper and stop right now."

    "The rate of increase in consumer prices will climb above 1% within fiscal 2014," says Ryuzo Miyao, a Bank of Japan board member, a welcome sentiment for the country as it seeks to extricate itself from the grip of deflation. The market will be watching closely next week to see if Haruhiko Kuroda and company materially hiketheir inflation forecast at their April 26 policy meeting — a meaningful increase would signal policymakers' confidence in their recently enacted easing program.

    More on E*Trade (ETFC) Q1 earnings: DARTs of 149K off 5% Y/Y. Commissions, fees, service charges of $164M off 5.2%. Net operating interest income of $241M off 7.3% Q/Q – net interest spread of 2.3% down from 2.38%. Loan portfolio of $10B, shrunk about 4.7% in Q1. Loan loss provision of $43M off 42% from Q4, but helped by a $13M settlement. Shares +0.8% AH. Earnings call at 5 ET. (PR)

    More on Capital One (COF) Q1 earnings: Backing out the $809M bargain purchase gain related to ING, EPS of $1.56 missed by $0.06. Revenue of $5.6B, off 1% Y/Y. Noninterest expense of $3B, off 7% Y/Y – marketing expense of $317M, off 19.3%. Provision for credit loss of $885M, off 23% – "better than anticipated credit performance." Domestic card charge-off rate of 4.3%, delinquency rate of 3.4%. Net interest margin of 6.71%, up 19 bps from Q4.Earnings call at 5 ET (slides). Shares +0.6% AH. (PR)

    Despite the weak YTD start in oil service companies Baker Hughes (BHI), Halliburton (HAL), Schlumberger (SLB) and Weatherford (WFT), Barclays analyst James West makes a strong case for all four in the months ahead. The group trades at 13.2x forward earnings, ~20% less than the 10-year average, and shares also are cheap relative to commodity prices, West says. 

    In its monthly fleet status report, Transocean (RIG) says the value of new contracts or extensions since the March 14 update totals ~$1.2B. All RIG's newbuild rigs are under contract. The newbuild Deepwater Asgard was awarded a three-year contract with a major international oil company for work offshore Indonesia at a dayrate of $600K

    The developers of the proposed 120-mile Commonwealth natural gas pipeline in eastern Pennsylvania – Inergy Midstream (NRGM), UGI Corp. and WGL Holdings (WGL) – say the project is being suspended indefinitely; no reason is provided.

    More on MEMCThe Nikkei reports MEMC's SunEdison unit and Toshiba (TOSBF.PKhave landed deals to build Japanese solar plants, with SunEdison selling the power generated by the facilities. Toshiba is said to be in talks to build 4 or 5 "megasolar" plants. The Japanese government launched an aggressive solar subsidy program last year. 

    As analysts debate where gold prices are headed, what's the metal worth as an investment? A Credit Suisse study says 1% a year since 1900 – a bit higher than Treasury bills, lower than Treasury bonds; stocks have averaged 5.4% during the period. To make matters worse, gold’s volatility is 2.5x that of bills, two percentage points higher than bonds and about two-thirds of stocks.

    Union Pacific's (UNP +4.2%) crude oil shipments more than doubled in Q1 as railroads continue to get a lift from the U.S. oil-and-gas drilling boom. UNP's overall volume fell 2%, in line with CSX, as weaker shipments of coal and agriculture products weighed on results. Still, Q1 earnings rose 11% on modest revenue growth, and UNP sees a short-term recovery in coal shipments as utilities rebuild stocks. 

    "If you take airplanes out of the production line today, that will have a great impact on the price," Lieutenant General Christopher Bogdan told Dutch officials Thursday in an attempt to keep the country from cutting its order for Lockheed Martin's (LMT) F-35s from 85 to between 52 and 68 planes. The Dutch are reportedly considering alternative planes made by EADS and Saab AB. (Previously: pilot defends F-35)

    More on Chipotle Mexican Grill (CMG) Q1 earnings: Comparable restaurant sales growth of 1% Y/Y was hurt by fewer trading days this year. Operating margin of 26.3% off 110 bps from a year ago. Food costs at 33% of revenue up 80 bps. Opened 48 restaurants during Q1. Management expects 165-180 new restaurant openings for all 2013 and flat-low single digit comparable sales.Earnings call started at 4:30 ET. Shares +5.7% AH. (PR)

    More on Restoration Hardware (RH): FQ4 beats on all counts as revenue climbed 30% Y/Y. Net profit swung to a loss however, primarily due to charges related to its IPO. The company gave upbeat guidance for the current quarter and full year. For FQ1, the it projects an EPS loss of $0.02 to breakeven on revenue between $280M and $285M. Analysts were looking for a loss of $0.04 on revenue of $254M. For its full year, the company expects to earn $1.29 to $1.37 a share on revenue between $1.42B and $1.45B. The Street is looking for an EPS of $1.28 and $1.37B, respectively. Shares +7.5% AH.

    More on Intuitive Surgical (ISRG): Q1 beats across the board as the company reports a 23% jump in Y/Y revenue despite the headaches surrounding its da Vinci surgical robot. The stock has fallen roughly 15% since February, raising concerns that sales could suffer in FY13. Tune in to the conference call at 4:30 EST here: (Webcast). Shares -0.7% AH.

    Vertex Pharmaceuticals (VRTX) jumps 49% after the bell as the company says data from a Phase 2 study of a combined corrector/potentiator treatment for cystic fibrosis patients with two copies of the F508del gene mutation showed "statistically significant, dose-dependent, improvements in lung function.

    Blackstone (BX) is out of the dealings for DELLWSJreports, killing a deal that would have kept the computer maker partly public. That removes one competitor for the offer from Silver Lake and Michael Dell; meanwhile, there's still Carl Icahn. (previously)

    More on IBM: Hardware was weak, division sales -17% Y/Yin Q1 (was -1% in Q4). On the CC (webcast), IBM partly blames a failure to close deals, while promising Q2 closings. System z (mainframes) +7% Y/Y, boosted by refresh. Power systems -32%. System x (reportedly on the block) -9%, storage -11%, chips -16%. Software was flat, also saw deal push-outs (Oracle can sympathize). Services -4% Y/Y, but backlog rose 1% Y/Y to $141B. Growth markets only +1% (+7% prior). Gross margin +100 bps to 46.7%. Weak yen hurt results. $2.6B in buybacks ($3B in Q4), lifting EPSIBM -4.1%AH. (PR)

    Once again this year, some enterprise IT names are falling in AH trading in response to a weak earnings report. This time, the culprit is IBM, which posted a huge revenue miss thanks in large part to a 17% Y/Y drop in hardware sales. Flat software sales didn't help either. Big Blue tried to put much of the blame on deal-closing/execution issues, but the fact U.S. federal and China were named as weak spots might have some investors an edge. EMC-1.3%HPQ -1.1%

  203. Phil

    Once again this year, some enterprise IT names are falling in AH trading in response to a weak earnings report. This time, the culprit is IBM, which posted a huge revenue miss thanks in large part to a 17% Y/Y drop in hardware sales. Flat software sales didn't help either. Big Blue tried to put much of the blame on deal-closing/execution issues, but the fact U.S. federal and China were named as weak spots might have some investors an edge. EMC-1.3%HPQ -1.1%CSCO -0.7%RHT -1.2%.

    More on IBM's CC: Management stressed execution (particularly related to closing deals), rather than macro, is the main culprit for the Q1 miss. However, U.S. federal sales (a problem for many) fell 13% Y/Y, and China was also weak (leadership transition blamed). Free cash flow was $1.7B, down $200M partly due to tax issues. $1B in "workforce rebalancing charges" are expected this year, mostly outside the U.S. IBM refuses to comment on CRN's x86 server sale report, but does say it's evaluating asset sales. IBM is counting on expanded Linux support to lift slumping Power server sales. Over 4K PureSystems sold thus far.

    More on AMD: Q2 guidance is for -1% to +5% Q/Q revenue growth, above a consensus of  -2%. Q1 CPU division sales -9% Q/Q and -38% Y/Y (-37% in Q4), mostly due to lower units (weak PC sales, share loss). CPU ASPs rose Q/Q and fell Y/Y. GPU division +3% Q/Q and -12% Y/Y (-15% in Q4); ASPs up Q/Q and down Y/Y. Gross margin was 41%, up from Q4's 39%, aided by inventory benefit. Cash balance at $1.2B, boosted by Austin campus sale. R&D spend -15% Y/Y, MG&A -22% (job cuts). Inventory rose by $51M to $613M, another increase seen for Q2. AMD -3.2% AH. (PR) (CFO comments) (slides)

    In blunt testimony to investors' appetite for playing the rebound in consumer spending, SeaWorld Entertainment prices it's IPO at $27, the high end of its range. The company and its private-equity owner, Blackstone Group (BX), are selling 26M shares, not including additional stock allotted to its underwriters, valuing the offering at $702M. The shares will be listed on the NYSE under the symbol "SEAS."

    More on Microsoft's FQ3: GAAP EPS beat estimates, revenue missed slightly. Windows division revenue flat Y/Y adjusted for Windows 8 pre-sales, +23% otherwise (was +11% and +24% in FQ2). Office division revenue +5% adjusted for Office 2013 pre-sales, +8% otherwise (+3% and -10% prior). Server & Tools +11% (+9% prior), 26% of op. profit. Online Services +18%, division loss down to $262M.  Entertainment & Devices (Xbox, Skype, mobile) +33% adjusted. FY13 opex guidance lowered to $30.2B-$30.5B from $30.3B-$30.9B. Preliminary FY14 opex guidance of $31.6B-$32.2B.MSFT +1.9% AH. CC at 5:30PM ET (webcast). (PR)

    Microsoft (MSFT) is working with OEMs on "small devices powered by Windows," outgoing CFO Peter Klein confirms - given past reports, that's not too surprising. Microsoft's reasons why Windows division revenue was healthy in spite of PC weakness: Surface sales and volume licenses to enterprises. OEM Windows revenue (+17%) was bolstered by Win. 8 deferred revenue recognition, but that won't last. Server & Tools remains strong: multi-year licensing revenue rose 20%, System Center revenue +16%, and SQL Server +22%. Office division multi-year licensing +16%; Office 365 is on a $1B/year run rate. MSFT +2.7% AH. (FQ3: III) (slides) (prepared remarks)

    More on Google: Revenue ex-TAC was $11.01B. TAC 25% of ad revenue, even with Q4. Google revenue (exc. Motorola) +22% Y/Y, even with Q4. Paid clicks +3% Q/Q and +20% Y/Y (+24% Y/Y in Q4). Cost-per-click (ad prices) -4% Q/Q and Y/Y after rising 2% Q/Q in Q4 (mobile a likely culprit). International 55% of sales (54% prior). Motorola Mobile revenue of $1.02B (-54% Y/Y), unit had a $179M operating loss. Capex of $1.2B. Free cash flow of $2.43B, below net income of $3.9B. Google headcount rose by 1.2K, Motorola Mobile headcount fell by almost as much. Opex 33% of revenue, same as Q4 and a year ago. GOOG now +0.2% AH. (PR)

    More than 1.5M ad campaigns have been upgraded to support Google's (GOOG) "enhanced" AdWords campaigns, sales chief Nikesh Arora states on the CC. By tying together PC and mobile purchases, enhanced campaigns are critical to boosting mobile ad rates. Larry Page reaffirms Google's commitment (previous) to "big bets" on moonshot projects such as Glass and Fiber, confirms Glass runs on Android, and suggests its price (currently $1.5K) will drop in time. Meanwhile, a U.S. district court has handed YouTube another victory over Viacom (VIA) in their long-running infringement dispute.GOOG +1.5% AH. (Q1: III)

  204. Trust/Wombat – But if you really trusted me you would stop all the cowboy trading and stick with the long-term strategies.  Why are you messing around with aggressive stuff like AAPL in the first place – that's for play money – a very small carve-out of an otherwise sensibly invested portfolio – it shouldn't be the focus of what you're doing.  Look in the Income Portfolio – how much AAPL is there?  5 contracts in 2015 – that's it.  And even that is responsible for most of that portfolio's losses!  So, if you want to trust me – learn to be patient and make the slow, boring money first and then, when you're up 40% after a couple of years – THEN you can take 10% of the portfolio and allocate it to gambling. 

    Detroit/Wombat – Nice escape there.  

    Futures/StJ – Looking pretty good – up half a point.  Nikkei back to 13,400 – as usual with Yen back to 98.66.  

    Big Chart – Now it does look like that BitCoin chart from last week!  

    Ballmer/StJ – Oh yes, he's possibly the worst CEO in history.  The guy was handed the World on a plate and he's done NOTHING for 13 years.  Worse than nothing, they've lost so much ground I don't even think they can get it back anymore.  Certainly not with Ballmer.  Since crashing from $60 when Ballmer took over to $20 two years later (and yes, it was the .com crash, so no one blamed Steve – but they should have!) MSFT has pretty much drifted between $22 and $30 since.  Since the last crash, the Nas is up 135% and MSFT is up 80% – that's lagging pretty badly…

    Futures/Bdon – I think my flatline premise was right only we're getting there in a zig-zag.   Lots of earnings in the morning so we'll see but we took the TNAs in the afternoon so of course I'm expecting a move up. 

  205. Opesbridge:  Maybe you lived on the East Side.  I was at 71st & Columbus for ten years, and I [later] bought quite a few guns — pistols, rifles and shotguns, I practiced extensively [in Utah, not Manhattan] and know the sound of a gunshot. The further up towards Riverside Park you went, the worse it was. They shot and killed a girl in a clothing store on 73rd & Columbus minutes before I walked by in 1985.   And I had three guys point a gun at my chest downtown, on West Side Drive and Battery Park.  I talked them out of it, but that's another story.  But, no, I'm no Walter MItty fantasist, there are plenty of guns in Manhattan, laws aside.

  206. Phil:  I never met JFK Jr., but my roommate was and still is a Vineyard pilot who knew John very well. The story of his crash is very sad  – a new hot plane, very few flight hours, night flight, island fog. It was a terribly tragedy, for him and his wife, who accompanied him that night. The Kennedy family story is very hard one.

  207. Phil – did I ever say thanks for being there? Well thanks for being there!! You too StJ, Pharm, Peter, Yodi, ZZ, Iflan & Shadow. Patience and trust…it works and better yet it pays.

  208. Good morning!

    Futures up nicely as they seem to have one of the two bombers (but dead).  This is some serious stuff as they've shut down public transit in Boston and the police are swarming around looking for the other guy.  

    Markets love it though, up 0.7%.  

    Hong Kong gained 500 points (2.3%), Shanghai up 2.14%, Nikkei up 0.7% to 13,520, DAX up 0.5%, FTSE up 0.5%, CAC up 1.1% and Spain up 1.9% – all at day's highs after Asia finished at day's highs.  No particular Financial news, just terror relief I guess (or expiration day).  

    Dollar 82.55, Euro $1.309, Pound $1.535 (both look toppy) and 99.23 Yen to the Dollar up from 98 yesterday. 

    Oil $88.83, gold $1,414, silver $23.59, copper $3.16, nat gas $4.41, gasoline $2.77.

    Looks like 14 died in fertilizer plant but they're not done searching yet. 

    Guns/ZZ – When I was a kid, the rule of thumb was never go above 72nd street to the point that, when I got out of college and I had friends who took places in the 80s – I thought they were nuts.  Then the line moved to 96th and then 114th…  I always imagined they must bulldoze the poor people off the top of the island to make room for more yuppies…  

    JFK/ZZ – Carolyn's sister was on the plane too!  That incident turned me off flying myself.  As you say, he had the best of everything equipment-wise but you can't fake 10,000 hours.  I remember one of my first flying lessons and it was a perfectly nice day and we're chatting away and the instructor told me to look up and damned if someone didn't put a whole planet up there when I wasn't looking!  It's so easy to get disoriented when flying – after Kennedy's crash I decided it just wasn't going to be worth the time it would take me to be confident enough to put other people's lives in my hands like that. 

    Fortunately, for commercial airlines, they require 3,000 hours just to be a co-pilot and then it's 5-15 years of apprenticeship until you get to be a captain – very good rule, I think.  If only traders trained that hard!  

    Thanks Chas, I appreciate that.  

    PSYOPS/Scott – Great article, thanks.


    Following the definition, the PSYOPS war on gold is intended to influence the target audience's value system, belief system, emotions, motives, reasoning and behavior. I would add, especially this last, which is what directly affects the price of gold.

    The latest stage of the war began many weeks ago, with regular takedowns of the price of gold in waterfall fashion, at set times of the day.  More recently, there appeared a series of planned announcements of oncoming doom from individuals prominent in finance and from bank analysts. The scenario painted for gold was one of a sky darkened by approaching thunderstorms.

    The purpose of the 4-12 PSYOPS was to instill fear in the minds of the "target audience" – investors in gold. If you shoot a crow, and hang it up in your field, the crows – your "target audience" – will avoid the field. The same principle applies to investors in gold.

    The identity of the target audience of the PSYOPS War on Gold is clearly revealed in the front-page article of the Financial Times, American edition, on Tuesday April 16, 2013.  Under the main headline, "Investors in rush to dump gold," is a graph of the performance of the gold price from January 3, 2011 to date, showing essentially no gain at all.

    Notice the wording: "Investors… rush… dump gold."

    This is a classic example of PSYOPS.

    It was most certainly not "investors" who caused the huge, historic collapse in the price of gold. It was a very few banks, working in cooperation with each other, in a pre-planned fashion. They sold, in huge amounts of tens of billions of dollars, not physical gold, but futures contracts – the infamous "paper gold." It was the banks who rushed to "dump" the gold and not investors.

    This is exactly what I've been saying – only said much better. 

  209. Wow, check out the first two guys they suspected in Boston.  That must have been Hell for them.  

    Meanwhile the other guys seem very likely to be the ones as they robbed a 7-11, killed a police officer, threw bombs from their car as the police chased them…  Crazy stuff.  Happened around midnight and they haven't found the other guy yet:


    The two shooters, he said, had a large, unwieldy bomb that he said looked “like a pressure cooker.”

    “They lit it, still in the middle of the gunfire, and threw it. But it went 20 yards at most.” It exploded, he said, and one of the two men ran toward the gathered police officers. He was tackled, but it was not clear if he was shot, Mr. Kitzenberg said.

    The explosions, said another resident, Loretta Kehayias, 65, “lit up the whole house. I screamed. I’ve never seen anything like this, never, never, never.”

    Meanwhile, the other young man, said Mr. Kitzenberg, got back into the SUV, turned it toward officers and “put the pedal to the metal.” The car “went right through the cops, broke right through and continued west.”

  210. 6:00 AM Overseas: Japan +0.73%. Hong Kong +2.33%. China+2.14%. India closed. London +0.47%. Paris +1.06%. Frankfurt+0.37%

    Are Earnings Expectations Realistic?

    Canadians Now More Affluent Than Americans (Real Time Economics)

    Britain is a 'crisis economy', says Mark CarneyMark Carney, the incoming Bank of England Governor, has described the UK as a “crisis economy” as he sought to play down hopes that he could ride to the country’s rescue

    Italy Impasse Deepens as Bersani Bowed by Failed Berlusconi Deal. Italy’s political deadlock deepened over the selection of the next president, raising the threat of snap elections after Democratic Party lawmakers refused orders to back a compromise candidate.

    Dutch Recession Woes Haunt Rutte as Deficit Breach Persists. Record unemployment in the Netherlands is compounding Dutch Prime Minister Mark Rutte’s dilemma on how far to push austerity measures needed to curb the country’s deficit. Consumer confidence due today and statistics on house prices, consumer spending and manufacturers’ confidence next week will confirm just how far the slump has damaged sentiment in the euro-area’s fifth largest economy. Data yesterday showed the jobless rate reached an 18-year high of 8.1 percent in March, with 643,000 people out of work.

    McDonalds(MCD) Hikes Japanese Burger Prices By 20%.

    South Korea’s Hyun Says Yen Bigger Issue Than North Korea. South Korean Finance Minister Hyun Oh Seok said Japan’s weakening yen is hurting his country’s economy more than North Korean threats, an example of a “spillover” that merits discussion. “Japan’s economic policies are doing their part to help the world economy recover,” Hyun said yesterday in an interview in Washington before a meeting of Group of 20 finance chiefs. “But if this causes problems, and then the problems cause new responses from partnering nations, for example a currency war, the world economy will have a hard time.”

    The Impact of Higher Capital Requirements for Banks (NYT)

    Natural Gas Bulls in the Driver’s Seat as Market Rallies (WSJ)

    US Mint Sells Record 63,500 Ounces Of Gold In One Day (Zero Hedge)  According to today's data from the US Minta record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone,bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.

    Gold Rises as Jewelry Sales Jump, Investor Demand Climbs (Bloomberg)

    Copper Recedes Near Production Cost (WSJ)

    Rebar Rises to Pare Weekly Loss, Supported by Iron Ore, Demand. Steel reinforcement-bar futures rose for the first time in three days, paring a weekly loss, supported by iron ore prices and as rising demand helped draw down inventory. The contract for October delivery on the Shanghai Futures Exchange gained as much as 1 percent to 3,687 yuan ($597) a metric ton, before trading at 3,666 yuan at 10:23 a.m. local time. Futures have lost 4.5 percent this week.

    FAA Expected to Clear 787Agency Is Likely to End Three-Month Grounding of Boeing's Dreamliner Amid Rising Pressure.

    FAA warns of 3.5 hour flight delays this summerFlight delays of up to 3-1/2 hours are expected at some busy U.S. airports this summer because of furloughs of air-traffic controllers, the top U.S. aviation regulator warned on Thursday. The estimate from the Federal Aviation Administration is the first to detail, in minutes and hours, the potential delays from the agency's decision to furlough 10 percent of its staff, starting Sunday, as it struggles to meet budget cuts required under so-called sequestration.

    Baker Hughes (BHI): Q1 EPS of $0.65 beats by $0.02. Revenue of $5.23B (-2% Y/Y) beats by $0.05B. (PR) 

    General Electric (GE): Q1 EPS of $0.39 beats by $0.04. Revenue of $35.0B beats by $0.3B. (PR)

    SAP AG (SAP): Q1 EPS of $0.58 in-line. Revenue of $3.6Bmisses by $0.2B. (PR)

    Schlumberger (SLB): Q1 EPS of $1.01 beats by $0.02. Revenue of $10.67B misses by $0.08B. (PR)

    SunTrust Banks (STI): Q1 EPS of $0.63 beats by $0.01. (PR) 

    Intuitive Surgical(ISRG) narrows 2013 forecast, shares fallIntuitive Surgical Inc on Thursday narrowed its 2013 forecasts for growth of revenue and procedures using its da Vinci surgical robots rather than raising them as it often does when reporting quarterly results, and its shares fell. 

    Google(GOOG) Internet business solid despite Motorola losses. Google Inc's core Internet business grew net revenue 23 percent in the first quarter, softening the effect of a sharp decline in its Motorola mobile phone division. Shares of Google, which reached an all-time high of $844 in March, were up 1.5 percent to $777.75 in after hours trading on Thursday.