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Monday Market Miracle – Everything is Awesome Again

You can't argue with a good chart.

All of our indices are ripping up to new highs and don't let the lack of volume bother you – as it doesn't seem to bother anyone else in the media these days.  Volume in the first half of Q1, so far, has been about half the rate we had in Q1 of last year and Q4 was no better so maybe this is just the new normal – a rally with nobody actually trading.

Just because no one is buying – it doesn't mean you can't mark up the prices, does it?  The only time there is price pressure to the downside is when there is a lot of selling and, so far, no one is selling either – they're just not buying or selling – it's a dead market.  

Corporations are, in fact, the largest purchasers of stock – accounting for 200% (not a misprint) of the net inflows into equities.  Without companies buying back their own stock at record paces, this market would be dropping like a rock attached to an even bigger rock:

Despit buying back incredible amounts of their own stocks, actual Corporate Earnings have dropped 10% since Q3 from a high of $29.84 on the S&P down to less than $27 per share so far for Q4s reports.  4 x $27 divided by 2,100 = 20.20 – that would be an insanely high p/e for the S&P, where 15 is more common ground.  Having a major index that is possibly 33% overvalued is, as they say in Stockholm - not good.  


Of course, it's no surprise that earnings are turning down because data is turning down as well, per the Economic Surprise Index we discussed on Thursday as well as the actual US Macro Index, which also SUCKS!  This is really not the sort of thing you should be sticking your head in the sand over.  If you were driving a car, you would step on the brakes or at least swerve to avoid an obstacle that's clearly in your path – why would you not do the same thing with your portfolio?  

We've already take steps to prevent a disaster in our Short-Term Portfolio, which we steered much more bearish last week by adjusting our hedges.  That, unfortunately, led us to our first loss in many weeks as we dropped back to $192,205 – losing almost $10,000 on the week (up 92% overall) which cancelled out the gains on our Long-Term Portfolio, which jumped to $661,417 (up 32.3%).   

So we "missed" last week's low-volume rally and didn't benefit from the rising prices – unless you count getting really cheap entries on our index hedges as benefitting, of course.  This is what's meant to happen as our Short-Term Portfolio's primary purpose is to hedge the much larger, and much more bullish, Long-Term Portfolio.  The paired portfolios are up a combined 42.3% in just over a year – those are not gains you want to let slip away from you!  

One of the great mistakes traders make is not knowing when to quit.  If we made 42% every year, even for just 10 consecutive years, we'd turn $600,000 into $20M.  Obviously, that's NOT normal, so the logical thing to do is treat our 42% gain as an outlier and PROTECT IT – especially when we're less than fully confident in the market/economy.  

1990 2014Don't forget, the Fed WILL TIGHTEN at some point.  We're at 0.25 now and not likely to go to 0 or negative (though some Central Banksters already have) and, as you can see from this St. Louis Fed chart, the last two times and the other 8 times before that (except 2005), Fed tightening has led to substantial market corrections.  

When you can see an obstacle up ahead in the road do you step on the gas and only swerve at the last possible second or do you perhaps apply the brakes, as we are doing with our portfolios, and get ready to take evasive action.  Maybe the obstacle is nothing, maybe it will turn out to be a mirage but, when you have your wife, your kis, your retirement riding in that car – perhaps it pays to play it just a bit safer…

Be careful out there!  


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  1. Good morning!  

    Oil did not hold $50 and didn't hold $49 either!  Now just $48.75 is too scary to play.  That's down 4% from the open and Brent just failed $22 (down 2.7%) so we'll see which one plays catch-up but, once again, we're certainly not getting the kind of economic signals that would confirm economic strength here.  

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    The Dollar is up at 94.90 with the Euro at $1.13 and Pound $1.53, which is better than the Euro so seems like there must be some kind of negative rumor out of Greece driving this.  

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    Investment bank Goldman Sachs has disclosed that US officials in California are investigating its sale of mortgage-backed bonds.

    In an annual filing with the Securities and Exchange Commission, Goldman said:

    In December 2014, as part of the RMBS Working Group investigation, the firm received a letter from the US Attorney for the Eastern District of California stating in connection with potentially bringing a civil action that it had preliminarily concluded that the firm had violated federal law in connection with its underwriting, securitisation and sale of residential mortgage-backed securities and offering the firm an opportunity to respond. The firm is cooperating with these regulators.

    The White House set up the RMBS group in early 2012 to examine practices on Wall Street in the run up to the financial crisis. Benjamin Wagner is currently the US attorney for the eastern district of California.

  2. Looks like I am in for a long day unless things turn around at some point. Went long at 50 and again at 49.50, 49 and hoping for a recovery during the day, but who knows. So while I wait I will go about the business of rebalancing my equity portfolios and writing and calling Thinkorswim to negotiate reduced fees.  Lest anyone think I only post when I am winning here is proof that I do have a losing day or hopefully half day on occasion. I am a bit worried about this one, with the dollar flying and weakness all around this morning, but still hopeful that things will look better later when they try to pump it up and hopefully succeed long enough to pull me up with them. We shall see,

  3. Oil Lines

    R3 – 53.67
    R2 – 53.07
    R1 – 51.91
    PP – 51.31
    S1 – 50.15
    S2 – 49.55
    S3 – 48.39

    Lower volatility on Friday is followed by a bigger move today.

  4. From Bloomberg, Feb 23, 2015, 8:30:20 AM


    From Willie Nelson to Wesley Snipes, celebrities have a long history of tax trouble. In just the last year, comedian Chris Tucker, supermodel Gisele Bundchen, the lead singer of Creed and at least one of the Real Housewives have had reported run-ins with the IRS. What’s going on? 

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  5. From Bloomberg, Feb 23, 2015, 8:30:02 AM

      Janet Yellen, chair of the U.S. Federal Reserve, speaks during a Senate Banking Committee hearing in Washington, D.C., U.S., on Tuesday, July 15, 2014. Yellen told lawmakers the central bank must press on with monetary stimulus as “significant slack” remains in labor markets and inflation is still below the Fed’s goal. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Janet Yellen

    Here’s Federal Reserve Chair Janet Yellen’s biggest challenge this week: To communicate the need to tread lightly in an economy where almost everything looks better than it did a year ago.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  6. From Bloomberg, Feb 23, 2015, 7:23:05 AM

    (Bloomberg) — Greece’s government bonds led a rally in the euro-area’s peripheral securities as finance ministers agreed to extend the nation’s bailout funds, avoiding a cash crunch that threatened to push it out of the currency bloc.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  7. From Bloomberg, Feb 23, 2015, 6:58:58 AM

    (Bloomberg) — U.K. government bonds declined for the first time in three days after euro-area finance ministers agreed to extend bailout funds to Greece, damping demand for haven assets.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  8. From Bloomberg, Feb 23, 2015, 6:50:05 AM

    (Bloomberg) — Brazil economists cut their 2015 economic growth outlook for the eighth straight week, as the government tightens both monetary and fiscal policy amid above-target inflation and budget shortfalls.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  9. From Bloomberg, Feb 23, 2015, 6:46:45 AM

    (Bloomberg) — Ukraine’s central bank unveiled a package of measures to help relieve pressure on the hryvnia, which has been battered by a recession and a pro-Russian insurgency in the nation’s eastern industrial base.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  10. From Bloomberg, Feb 23, 2015, 6:45:25 AM

      U.S. Homeland Security Secretary Jeh Johnson said Sunday that visitors to the Mall of America must be “particularly careful” after a terror group threatened the Minneapolis-area tourist attraction. Photographer: Andrew Harrer/Bloomberg

    (Bloomberg) — Heavily armed police and security forces were deployed in Paris at shopping malls and throughout London after a video by a terror group in Somalia threatened attacks.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  11. From Bloomberg, Feb 23, 2015, 6:24:55 AM

    Feb. 23 — Greek Prime Minister Alexis Tsipras walks another high wire over the next 24 hours as he tries to come up with financial measures that satisfy both the demands of euro-region creditors and his anti-austerity party. Bloomberg’s Erik Schatzker reports on “Bloomberg Surveillance.”

    (Bloomberg) — “Complete” surrender by the Greeks. “Major victory” for the eurocrats.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  12. Taking a poke long on /cl at 49, seems to be support in 49-54 channel. Tight stops

  13. The dollar has weakened just a tiny bit and oil has recovered just a tiny bit so still waiting and watching for now.

  14. CRS- I think you will do well with your poke long here if you stick with it. Of course I have been wrong today so far, so not worth much from me, but dollar has stopped rising for now and is even dropping a bit,so…

    Taxes- This was sent to me by my brother who knows I trade futures a bit. I am not quite sure what to make of it yet, but thought it might be worth passing along and if any of you understand it enough to explain, great. I will slog through the IRS publications in the next couple of week as I prepare for this year and next year to do tax planning.


  15. dt150223

  16. ARIA- Does anyone have any news on this company explaining whether the recent move up is sustainable? It looks to me like it is moving because an activist investor is making noise and this is a hopeful move rather than based on any new drugs or therapies being introduced. Is their pipeline producing anything soon or is there anything going on here in addition to efforts to oust the CEO and a smaller than expected loss last quarter?

  17. Good Morning!

  18. I got a fill on the CIM $2.5 calls this morning @ $0.70.

  19. Wow, nice pop back to $49.50 on /CL!  Looks like it's going to be one of those weeks. 

    Dollar back to 94.78, gold back over $1,200.  /NKD touching 18,500 again. 

    Long/Craigs – I certainly hope you remembered the part where you get the hell back out at $49.50!   Good job sticking with it (and recognizing the flaw in that plan!).   Also, for next year on taxes – look into electing Trader Status for your returns.  Way less complex.  If that doesn't apply, you can also form a trading fund for tax purposes.  

    LOL StJ!  

    Oil/StJ – Still growth in demand, just slower.  

    ARIA/Craigs – Well, revenues were up 700%.  Still a net loss ($6M) but $67M vs $8M last year Q4 and the company has $250M in the bank so plenty of time to grow and turn losses to gains.  Activists just want company to move differently and unlock values that seem to actually be there.  It's more like a fight on how to handle rapid growth with the current team pushing for more R&D and the agitators looking to cash in on what's already there.  

    CIM/Sibe – Great job sticking with those!  

  20. Sibe14 Well the stock is trading for 3,22 you did not make a penny?????

  21. USO / Phil – is there worth a roll lower on our USO positions we added last week?

  22. LQMT/Savi – As far as I know, they can't even make enough of the stuff to bang out an iPhone, let alone an iCar!  Of course, AAPL has been working on it for 5 years now and (very speculative) IF they made some amazing breakthrough in mass production of liquid metal THEN it would make sense for them to drop everything and make a car out of it because it would be a massive game-changer.  Of course IF APPL invented cold fusion THEN they should get into the power game – kind of the same level of likelihood.  

    metal animated GIF

    Wow, oil is flying up and down.  Fun trading but too quick to call.  Generally, I'm for taking bullish pokes, of course, now back to $49.50. 

    CIM/Yodi – Actually, when we initiated the trade (2/4), CIM was $3.10 – we're just locking in the gains.

    USO/Pfehl – We just added to them, I don't want to throw more money in unless we get a significant move down.  

  23. Wow, markets are lame today – of course relative to wild Friday!

  24. Yodi, Actually my cost basis is way down, well below $2 at this point.  With dividends coming in March and June even better.  Then a likely sale in September  to meet the call obligation, but I am hoping between now and then to also sell the $3.5 puts for the same amount which will likely put me back into the stock at a discount.  If over $3.5 I'll use that profit to buy back in when the price drops.

  25. Phil--I know some of us had positions in LQMT as a long shot—just took off some on this spike

  26. LOL, Gold hit $1,210, now $1,206 after bottoming at $1,190 – money is just flying in and out of stuff today.  

    • Bank of America Merrill Lynch thinks Tesla Motors (NASDAQ:TSLA) won't be able to divert the attention of investors away from quarterly numbers to focus on long-term potential for much longer.
    • In a biting note, analyst John Lovallo calls into question the thesis that Tesla is a production-constrained company without any demand worries.
    • The investment firm and Lovallo have rode an Underperform rating on Tesla since 2013 when shares traded in the $30s.
    • Lovallo and Morgan Stanley's Adam Jonas are at polar opposites in the Tesla debate.(See: Tesla Motors: Model X out in the wild, another bull call from MS)
    • BAML chiseled its price target on the EV automaker down to $65 from $70.
    • Shares of Tesla are -1.35% to $214.39 on strong volume in early trading.

    Wall Street uneasy over Greece deal, lower crude prices

    • Stock futures point to a slightly lower open amid uncertainty over Greece's deal with its euro zone creditors to extend its bailout and as energy companies come under pressure following a slide in oil prices; Dow -0.2%, S&P -0.1%, Nasdaq flat.
    • On Friday, Greece reportedly agreed to a four-month loan extension, but the deal is contingent on the approval of a new set of reforms, which Greek officials are expected to present at some point today.
    • Major European indexes trade mostly higher; the Chinese stock market remains closed for the Lunar New Year, but Japan's Nikkei scored its fourth consecutive gain.
    • Nymex crude -3% at $49.30/bbl after marking a session low near $48.75/bbl, which is weighing on the energy sector; Exxon -1%, Halliburton -1.5% premarket.
    • In M&A news, Valeant Pharmaceuticals +10% after agreeing to acquire Salix Pharma for $158/share.
    • Treasury prices are modestly higher, with the benchmark 10-year yield down 2 bps at 2.09%.
    • Still ahead: PMI services index flash, existing home sales, Dallas Fed outlook


    • Although it will likely take months for the backlog to clear, West Coast ports are working at full speed again after operations resumed Saturday evening.
    • "Just based on the mathematics, it will be about three months before we return to a sense of normalcy," said Gene Seroka, executive director of the Port of Los Angeles.
    • The International Longshore and Warehouse Union and the Pacific Maritime Association, which represents employers, came to a tentative agreement on a new five-year labor contract late on Friday, but the contract still must be ratified by members.
    • Port problems have been causing extensive pain for shippers, retailers, meat and poultry companies and manufacturers across the country.
    • Previously: Sources: Labor deal reached to normalize West Coast ports (Feb. 20 2015)
    • JPMorgan figures around €3B exited Greek banks last week, about a 50% increase from the previous week. The new pace of outflows means Greek banks are on track to run out of collateral for new loans in eight weeks as opposed to 14 weeks previously, says JPMorgan.
    • Outflows accelerated last week amid the back-and-forth of whether the country was going to get its bailout extension. A deal was apparently reached on Friday and Greek PM Tsipras has declared victory and retreated. Theoretically, the money exit should slow appreciably this week.
    • NBG +6% premarket, no trades yet for GREK
    • Previously: Eurogroup heard from, Greeks awaited (Feb. 20)
    This is 20% of US Oil Demand – Causing Craziness:  Steelworkers strike expands to Motiva refineries
    • The United Steelworkers union expanded its strike over the weekend to the Motiva Enterprises refinery in Port Arthur, Tex., a 50-50 joint venture between Royal Dutch Shell (RDS.ARDS.B) and Saudi Aramco which produces more than 600K bbl/day, as well as a Shell chemical plant in Louisiana.
    • The union and Shell, the lead negotiator for the refinery companies, reportedly will meet on Wednesday for the first time since negotiations broke up on Feb. 20 without a deal.
    • The union says it is seeking protections for worker safety and fatigue; Shell is now sayingthe strike is all about the desire of national union leaders to replace routine maintenance contractors with union-represented workers.
    • The strike already has affected refineries and chemical plants owned by LyondellBasell (NYSE:LYB), Marathon Petroleum (NYSE:MPC), Tesoro (NYSE:TSO) and BP.


    • Over 2,000 union workers at the Lumwana copper mine owned by Barrick Gold (NYSE:ABX) downed tools on Monday demanding an explanation of their fate when the company closes the operation.
    • "They are demanding to know their future when the mine is closed," said Amos Malupenga, the top civil servant in North-Western province.
    • ABX -1.1% premarket
    • Ballard (NASDAQ:BLDP) is up 15.4% premarket after announcing two new technology solutions contracts, one with Ardica Technologies and one with an unnamed global automotive OEM.
    • Under each contract Ballard will provide expertise in proton exchange membrane fuel cell technology in order to advance customer programs through development stages.

  27. Here's one way to play oil long:  UCO is back at $7.92 and you can buy the July $7/10 bull call spread for $1.10 so just 0.18 in premium on this 2x ultra.  You need a $2 move or 25% which is 12.5% on oil to $55.70 to be 100% in the money on this one, which would be up 172% if it sticks.  Over the last year, UCO is only down 77% with oil down 50% so I think it's worth the risk of also selling the July $6 puts for 0.80 to net into the trade for just 0.30 with a max return of $3 (1,000% return on cash).  Since I have no problem being long $30,000 on oil at $45, let's do 50 of these in the LTP.  It costs $1,500 and pays $15,000 if all goes well.  

  28. ~~RIG downgraded to Negative from Neutral at Susquehanna.

    Timely, huh ?  They must have spotted something they don't like over the weekend.

  29. AAPLtastic – but challenging none the less. Well, it seems that every AAPL doubter must have been taken out and dealt with behind the woodshed. Oh how one looks at those balmy days when AAPL was $400 in old money and very few could see the light, and wishes that they had backed up the truck. I certainly thought the sell off was over done (was that 2013 or 2014 – seems a life time ago) – but I absolutely did not believe that the AAPL 2017 90/120 BCS would be so deep ITM as of today.I started layering those trades on in mid-Oct 2015 at a cost of $14 when AAPL was just under $100. 

    My cashy and cautious approach urged me to be prudent so I decided to hedge with a sale of the Jan 16 $110 calls at $14.50, now at $23.35. For every 8 of the 90/120 BCS I added 3 of the $110 short calls. Of course there is still some premium, but the Gods of margin are calling and I really would like to roll, adjust. There are so many possibilities that I ask for those more analytical than me for some advice. The adjustments have to be margin enhancing. Cash is not so much of an issue. TIA.

  30. CIM OK I see what you guys are doing wanting the cake and eat it ;(

  31. RIG - let's see, this story never changes: Stock goes from 45 to 16 in 6 months. All the analysts (none of which had a sell target previously) re-adjust their previously incorrect targets downward. Stock goes up. Rinse. Repeat.

  32. exited AAPL stock today. A nice 14 month run (from 81) plus a few divs, that's good enough for now.

  33. Healthcare stocks up big – ANTM, UNH, AET, HUM, etc.

  34. GOP meets reality:

     — Republican governors meeting in Washington this weekend said financial conditions in their states have deteriorated so much that they must raise taxes, even if it means crossing their own party.

    In the face of a historical antipathy deepened by the tea party movement, chief executives in Alabama, Nevada and Michigan among other states are proposing increases this year to address shortfalls or to spend more on faltering schools and infrastructure. They advocate higher levies on businesses, tobacco, alcohol and gasoline, in some cases casting the increases as user fees.

    The governors are at a crossroads. They are choosing between the path of Gov. Sam Brownback in Kansas, who has refused to change course even after tax cuts provoked furious opposition, and that of Alabama’s Robert Bentley, who has said the state’s perennially precarious budget has reached the breaking point.

    RIG/Albo – Hmm, sounds familiar to me:

    Susquehanna Cuts Transocean LTD Price Target to $34.00 … Aug 25, 2014

    Transocean & Diamond Offshore: Careful With Those … A tough year is about to get tougher for Transocean (RIG) and …Susquehanna's Charles Minervino  - Feb 2, 2015

    Their first warning didn't stick so they're taking another crack at it.  

    AAPL/Winston – So the problem is about 40% short the Jan $110s and you are burned for $9 (so far)?  You can see why we didn't sell any short AAPL calls in the LTP or STP – way too scary, though getting tempting now.  I think I'd just sell 3 (40%) 2017 $100 puts for $8 and use that $8 to roll the Jan $110 calls ($25.50) to the $130s ($13.50) for a net cost of $4 and that should cut down your margin considerably as you can't lose on both sides (make sure with margin specialist first) and then you can see how the range plays out but, of course, this time, if your short caller goes 2/3 in the money – ROLL IT!!! 

    Another option, by the way, is simply buying more $90s ($45) and rolling the short Jan $110s ($25.50) to the short 2017 $120s ($25.50) and then you just have 3 more (per unit) bull call spreads with no margin at all.  I know that "only" has a 50% upside at $110 – but these are the sacrifices we have to make…

    Cake/Yodi – Yummmmm.  

    RIG/BDC – It's a hyena attack, where the funds get their analyst and media attack dogs to chase all the retailers out of a stock so they can buy it all up before letting it turn around.  

    Took the money and ran on /CL at $49.70.  Hopefully another sell-off for another entry…

  35. Just in time for my birthday – they are auctioning off a Nobel Prize in Economics!  

  36. Phil – You often mention rolling your options when 2/3 in the money. Can you give some concrete examples (calls/puts) in which scenario's one would do that. 

  37. Dallas Fed, not good (oil layoffs):

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    How ‘spoofing’ traders profit by duping markets 

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    Oil-patch jitters are starting to hit Calgary's housing market 

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  38. Rolling/Verr – I'm not sure what that means.  If you have a short, uncovered call or put that is 2/3 in the money, you need to strongly consider rolling it because if you wait for it to be 100% in the money – then you will have a very hard time finding a good place to roll it to (ie. a place with 50% or more premium).  

    Nice pop into EU close – Greece fixed yet again.  Europe didn't have a very exciting day, but it was green:

    AAPL testing $132! 

  39. In other News.  Apple agreed to purchase Greece using last week share price gains and a couple of I-Pad pros.

  40. malsg – In your news report… Is the generalissimo still dead?

  41. Can't resist poking at oil at $49.14.  I'll add one at $49.04 and maybe another right around the $49 line and see if it bounces again.  

    AAPL/Malsg – LOL, I think they could just trade for a few Newtons.  cheeky

  42. I guess I haveto learn that we can't ever have a perfect exit, as I did follow through on lightening my Apple stock holdings as well as my Opko which had both run up so far that they were disproportionately large parts of my portfolio. So I got out of 80% of my Apple shares at 130.50 thinking I had done very well and 50% of my Opko shares. Apple is up over a buck since my exit and Opko .40 which is a lot on a $14 stock. I did try to get spreads to replace the shares, but couldn't get filled at my price with the stocks running up. So, now patience is the name of the game as what goes up must come down, right? Maybe at some point, for a breather? Maybe? Ha Ha. I filled the short caller on Opko and will simply wait to see if I can get my price on the long call. Who knows if the damn thing collapses before I get filled, I have lots of downside protection.

  43. TLT/Phil – time to get long again?

  44. /CL – Nice call on oil Phil, I jumped in long again at 49.10. So, my long day is turning into a pretty good day. I wasn't overly confident this morning that we would rebound so fast, but I was willing to bet that we would. 

  45. Global Innovation Report:

    Greece is only #7:

    Embedded image permalink

  46. Phil, 

    I hold a large position in AAPL and i'd like to generate some cash by selling some near term calls.  With the recent run-up in share price, i'm looking at the '15  June 160 calls at .90, or possibly the 150 calls at 2.00.  My reasoning is that June is a historically weak month for Apple stock,  The risk is that the upcoming raise in  div / buyback coupled w/ watch announce may drive stock higher.  Any advice or alternate recommendation on this?  thanks

  47. Debt / Phil – My guess is that China is much further up that list when you add up all the phantom loans!

    All that debt adds up to more than 200% of the global GDP! Are we going to borrow from Alpha Centauri next?

  48. Spreads/Craigs – Well, if you own the stock, one trick is selling calls into the excitement first as you are covered with the stock so no possible harm if it doesn't pull back.  Then you just keep raising the stop on the stock until you do get called away and THEN you cover with long calls.  

    TLT/Scott – We were short, not long.   I'd love to see them pop back to $135 on whatever BS Yellen has for Congress this week so we can short them again but I have no desire to go long (betting idiots will continue to lend our Government money for 10 years at less than 2%):

    Oil/Craigs – Very nice.  I've been nickel and diming my way to $1,000+ so far so can't complain.  Very good for a Monday, actually.

    Holy hand grenade Batman!  Do you really want to bet AAPL won't go up $30 in 116 days (including April earnings) after it's gone up $35 in the last 45 days?  

    If you own the stock at $132, how does selling a 0.90 call protect you?  Or $2 for that matter?  If you don't want to lose the stock, don't sell calls BUT, that's not how I'd play it.  

    Let's say you have 1,000 shares of AAPL ($132,000) and you want to protect it.  First of all, we only have 2 rules at PSW and, since you are new, you get one chance to hear them without being scolded:

    Rule #1:  ALWAYS sell into the initial excitement.

    Rule #2:  When in doubt, SELL HALF!

    There is no Rule #3 because, if you didn't follow Rule #1 or #2 and you still haven't taken profits – you are just hopeless and we can't help you.  Anyway, so you like AAPL so much you refuse to take $132 – even though that's up about 50% since October.  Will you EVER take profits?  Under ANY circumstances?  

    What I would do if I were in doubt about AAPL going to $160 is I would SELL HALF (see how easy these rules are to follow) and that would leave me with 500 shares and $66,000 in cash.  Now I would sell 5 2017 $120 calls for $26.50 ($13,250) and 5 2017 $100 puts for $10 ($5,000) and now I have 500 shares of APPL that will either get called away at $120 ($60,000) + the $66,000 I already cashed plus the $18,250 from the option sales = $144,250 (the same as selling all 1,000 shares at $144.25).

    On the downside, if AAPL falls back below $100 (and I change nothing along the way), I get re-assigned 500 more at $100 ($50,000) but I still have my $66,000 from the other 500 and the $18,250 from the option sales = $84,250 in cash and then I'd have 1,000 shares of AAPL again + $34,250 in cash – effectively reducing more than 100% of the damage from the 25% fall in the stock.  

    That same sideline cash can be used down the road to get more bullish if AAPL pops over $150 and still looks strong but, meanwhile, you can sleep a lot better.  

    Of course, since AAPL pays a crap 1.5% dividend, we tend not to own it at all because you can cash out entirely ($130,000) and sell 10 of those $100 puts ($10,000) and buy 10 of the 2017 $110/140 bull call spreads for $14.10 ($14,100) and then you have a net of just $4,100 of cash at work and an obligation to buy 1,000 shares of AAPL back for $100 if it's below that in 2017 and a potential upside of $25,900 if AAPL is over $140 in Jan 2017.  

    That sure beats sitting on the stock just to collect $3 of dividends over 2 years.  

    China/StJ – I agree, they are probably a complete (and hidden) disaster.  That's why Musk wants to go to Mars – Earth is running out of suckers.  

    And Jesus, he wants to go to Venus
    Leaving Levon far behind
    Take a balloon and go sailing
    While Levon, Levon slowly dies

  49. $49.50!  That was 

  50. Phil….Woohoo on /CL  Thanks a bunch for the guidance!

  51. Phil – AAPL extraction. Thanks mucho – good ideas – suppressed fear and greed to position myself in a more balanced way.

  52. You're welcome Willsons, both times!  

    See how nice those non-greedy exits are on oil?  We made a quick $400 on a few contracts and WE TAKE IT AND RUN!  If it goes over $49.50 – so what?  We'll find another range to bet later but, meanwhile, we take our money at the point of resistance because $400 per contract is A LOT OF MONEY TO MAKE IN 45 minutes!  

  53. Phi;  Still holding short /NKD from the weekend?  It keeps bouncing off 18500. 

  54. AAPL

    I've been reducing my overweight  position in AAPL closing the  Jan 16 80/100 BCS  by buying back the 80 and selling the 100s on the rise. So far getting the full $ 20. A closing order on the spread  is around 18.20. But by accepting that with 51 of those I'd leave $9180 on the table. I'd certainly be in for some scolding from YODI  :)  BTW in an IRA has to be on a rise I can't do the reverse.

  55. In the meantime, /NG is down $0.14 for the day! I guess it's warmer in the Northeast now.

  56. wow what got into oil?

  57. /NKD/Options – Still can't find a reason to let them go. 

    Good job wriggling out, Gerry.  That's exactly how you do it.  

    /NG/StJ – Not warmer today but it's coming eventually.  Actually, next two weeks will still be cold but $3+ was very hard to sustain without building a base:

    Oh, and in case anyone's wondering about /CL – almost 800,000 open, FAKE!!!, contracts in the front 3 months is unusually larger – there will still be selling pressure, especially as we move towards expiration on 3/20:

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Apr'15 52.14 52.49 50.71 50.75 17:28
    Feb 20

    -1.02 351354 51.83 385773 Call Put
    May'15 53.32 53.63 51.97 52.03 17:28
    Feb 20

    -0.91 82851 53.00 190533 Call Put
    Jun'15 54.29 54.84 53.29 53.37 17:28
    Feb 20

    -0.77 69931 54.22 195197 Call Put
    Jul'15 55.69 55.94 54.65 54.75 17:28
    Feb 20

    -0.62 35007 55.46 71089 Call Put
    Aug'15 56.81 56.96 55.84 55.93 17:28
    Feb 20

    -0.46 22402 56.53 52918 Call Put
    Sep'15 57.38 57.73 56.74 56.83 17:28
    Feb 20

    -0.34 22411 57.34 88090 Call Put
    Oct'15 58.24 58.32 57.39 57.73 17:28
    Feb 20

    -0.25 8741 57.95 47613 Call Put
    Nov'15 58.69 58.70 58.11 58.17 17:28
    Feb 20

    -0.19 5570 58.48 36177 Call Put
    Dec'15 59.07 59.50 58.44 58.71 17:28
    Feb 20

    -0.16 40346 58.98 205837 Call Put

    Oil/Pwright – I don't see anything but it's been jumpy all day in both directions.  

  58. FT Reports Nigeria's OPEC Minister calls for Emergency Meeting on Oil Prices!  

  59. /CL- Sometimes it better to be lucky than smart. I had been holding a few longs all morning as I kept buying more on drops and selling some on spikes as I waited for it to go up to 49.75. Well apparently Nigeria just made some sort of announcement about an emergency OPEC meeting and you can see what that did.  am now out completely on the longs at 50.50 or so. Yay for a nice $5.5k or so. I wish I wasn't happy about oil rising because I hate paying $3-4 for gas!

  60. to send reform list to Eurogroup Tuesday, misses Monday deadline.

    Embedded image permalink

    Millennials hold 52% of their assets in cash, compared to 23% for older cohorts

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    Embedded image permalink?

  61. $5,500 buys a nice amount of gas, Craigs.  wink

    I'm actually now hoping for a short opportunity on /CL at $50.50 when some Saudi minister points out that Nigeria doesn't have the ability to call an emergency OPEC meeting.  

  62. LOL, that was a very quick turnaround on /CL!  $49.50 already.  You gotta love the rumor mill…

  63. gerryf

    If you cut the trees before the mature, just send them over to me I take 9K any time:)

  64. AAPL- Thanks for that advice on selling the calls ahead of selling the stock. It seems so obvious I don't know why I wasn't already doing that. I think though that I looked at a lot of red on indices this morning and thought Apple was going to have a rare down day, so I wanted to get out especially when I saw it cross $130 early on. Wrong on that too! Oh well, I really can't complain with all the gains Apple has given me. Same with Opko. I sold half of that one into a rally day that I didn't see coming, but I did get my fills on that one a little while ago, so that's ok.

    Just made a nice profit on the spike in /NG from 2.90 to 2.93! Like I said, just lucky there because it looked like it was ready to bounce back a little.

    /CL – Can Nigeria really get OPEC to meet? I thought the Saudis were in control and that they don't want to do anything right now. I guess we'll see. That is why I like being long mostly right now though as a spike up is much more likely than a spike down regardless of the last few trading days action.

  65. Hey everyone, I am calling for an emergency OPEC meeting. Quick call FT and tell them so we can all bet long before the call!

  66. Embedded image permalink

    Nigeria/Craigs – Well it's like if one of 9 Directors calls for a board meeting – he can't call a meeting but it indicates, possibly, mounting discontent among the board at the CEO's decision and, if enough other board members feel the same way, then there could be a meeting – and a vote – and a change of direction — but that's a lot of ifs between one guy saying something (if that's even true) and an actual change in policy.  

    LOL – See, you get the idea!  

  67. Phil-  Does this trade make sense, if not what is the down side verses the July trade?

    The UCO Jan17 $5/12 BCS with a sale of $6 puts for .35 net credit and $27,750 profit at >$12 on UCO. It uses $6,759 margin.  Thanks.

  68. US Silca earnings tomorrow after the market closes. 

  69. Phil- The qty is 50 UCO.

  70. Could someone please post the adjustment that Phil did with VLO in the butterfly please.


  71. Phil

    Where does the weather chart come from?


  72. How the rich get richer:

    Embedded image permalink

    Embedded image permalink

    Embedded image permalink

    UCO/Rvn – The only problem is the assumption that the ultra-ETF will decay over time and, if oil is still under $60 for two years, it's likely UCO will decay below $5 but it's a nice trade if oil heads up and keeps going.  Also, I see probably $4.80/$2.40 less $1.90 for the puts so net 0.50, not a net credit though you may be able to work your way into that.  

    VLO/DM – Sure (for the Butterfly Portfolio):

    Submitted on 2015/02/19 at 1:09 pm

    VLO – Another one that went flying.  We sold March $45 calls for $3 and the $45 puts for $3.90 so $6.90 and now we owe the caller $15.75 at $60.35, which is fair.  Fortunately, the June $57.50 calls are $5.40 so we can sell 2x of those and 1x of the June $52.50 puts ($1.40) to get back $12.20 of it and we can cash in our 2016 $55 calls for $9.40 ($9,400) and buy 20 of the 2017 $55/70 bull call spreads at $6 ($12,000) and we can roll our long 2016 $35 puts (0.50) to the 2017 $50 puts ($6) as we'll clearly get that money back selling short puts for 2 years

    Weather/QC – Here.  

  73. Thanks Phil.


  74. Phil, when is your birthday?

  75. Deleveraging / Phil – How many of these $57T are on Central Banks balance sheets now? 

    That's $12T as of 2012.  Probably another $5T since then… Relatively speaking that's probably where most the leveraging has happened! Using the figures in the graphics, you can calculate that the global GDP went from $57T to $69T in the 7 years. If leveraging had stayed the same as 2007, we would have a debt of $185T. And we have $199T so it looks like the difference is the central banks. Not good news, just looking to see where that money came from.

  76. CL – I was out most of the day. Auto trader made $550 for me today

    Craigs – I'll buy one of your horseshoes  (you have great intuition and a little luck)

    Phil – rolling when you say 2/3 – is it 2/3 of premium left or 2/3 between strike and current price when short?

  77. You're welcome, DM.  

    Birthday/Rustle – 3/29.

    Leverage/StJ – It just blows my mind how people act like this isn't a big deal when every man, woman and child on Earth would have to come up with $8,000 just to pay off the extra debt.  

    2/3/Verr – 2/3 means a $6 option is $4 in the money and has $2 in premium.  Just look at a bunch of option chains and you'll see that you can generally roll an option that's 1/4-2/3 out of the money to something at a higher strike for even or better in a longer month but, once a contract goes 100% in the money and has no more premium – the rolls are almost impossible to get improvement on.  

  78. Verr- I have good intuition apparently and a ton of luck lately! Today I missed a couple of times when I surely would have exited if I had been planted in front of my screen, but I had promised to help my wife rearrange my son's room for his birthday today while he was at school. Then I was taking a break when the Nigeria news hit and was there for that spike up to 50.50 by chance. Of course it was foolish to be playing when I was doing something else ( I did have my Ipad in sight to keep an eye on things) but sometimes my best gains have come when I had an intuition and placed a trade and then stepped away for just long enough to let the trade play out without seeing the move against me that happens first.

  79. Debt / Phil – On the other hand, global warming might just take care of all that debt eventually by removing the debtors!

    I was actually reading an article one day where a religious conservative said he didn't care about the deficit because the rapture was imminent. So maybe we should not worry about it

  80. Debt/Stj – or maybe we will have to worry about the debt after all..

  81. I guess we'll see soon enough Scott! Unfortunately I am afraid….

  82. Scottmi- are you a resident of Orange Cty?

  83. Law enforcement sees right-wing extremism as the top terrorism threat to the United States. The Department of Homeland Security (DHS) sees right-wing extremism as the top terrorism threat. The FBI sees right-wing extremism as the top terrorism threat.

    Top Terrorism Threat In US Is Right-Wing Extremists, GOP’s Answer Is Defund Homeland Security

    So what does the GOP do? They threaten to cut off funding for the Department of Homeland Security.

    ISIS may be grabbing all the headlines with their dramatic displays of barbarity, but it’s the ‘sovereign citizens’ in this country that Americans need to be worried about. CNN just covered a new analysis by the DHS that warns of attacks on the police, the government, and government buildings. Since 2010, there have been 24 violent attacks at the hands of sovereign citizens — people who reject governmental authority. Something as minor as a traffic stop can trigger an attack.

    The hosts of Fox & Friends and Fox News contributor Stacy Dash on Monday slammed the Academy Awards for focusing on wage inequality, immigration, and…


    Meanwhile, in Boston:

    You can't make this stuff up: "North Carolina government officials who are having secret sex with lobbyists need fear no more: The state’s ethics commission has decided such illicit relationships are completely fine."


  84. Not a lot of red so far this year:

    Based on the first 2 months I am extrapolating a 100% return in Russia and a 50% decline in oil prices! Sounds logical.

  85. Isn't Venezuela's turn to call for an Emergency Meeting of OPEC. That Nigeria one worked only for 30 minutes!

  86. Phil / AAPL

    I like Apple long term, and have long directional positions  (  2017 90 calls, and  '17 85 puts) in addition to holding the stock. I like the the put  BCS you detailed.  I'm going to look execute this.

    thank you!

  87. Pstas – no.. in the PNW where it is a sunny 50 deg.  very bad year for local skiing, as in bare runs.

  88. Moves against/Craigs – I had those short /NKDs over the weekend and they spiked up against me and I decided to walk away and let the weekend take care of itself.  That's fine to do if you can REALLY afford the loss because, surprisingly, sometimes you do lose those.  

    Rapture/StJ – That's a brilliant exit strategy!  That's why they call them Conservative Think Tanks…

    Everything looks awesome, StJ!  

    Speaking of awesome, $49.15 on /CL again.  Nothing actually changed, so it's still my entry.  

    You're welcome, Batman.  I don't like uncovered calls as you are the one with the eroding premium, spreads are better – you can always add more.  

  89. Morning all!  I missed some fun.  Congrats on a good day.

    verreaul , What have you been using as Auto (Scale) Trader settings for /CL at IB?  I should have also done the same when I got a alert that /CL hit 49.  Anyway, just wondering.

    I got long some /CL at 49.10.  Probably will hold overnight.

  90. OA – fyi,  ATK divested VSTO and merged with Orbital Systems

  91. The real rapture (blame her for legitimizing the whole thing):

  92. /burrben – CL I did one manually early in the morning and  Scaletraded  2 contracts 49.05 buy 1 every .50 down sell .24 up (I wish it had the capability to trail when it spiked over 50… I asked IB for a feature update)

  93. Don't worry, Burr, plenty of fun ahead this week.

    BREAKING: Oil slide could trigger OPEC emergency meeting, the Financial Times reports.

    Nigeria’s oil minister opens door to an energy Bretton Woods, and more


    Following the immediate spike in oil prices the OPEC meeting has been canceled, over-production to resume

  94. Phil/SDS

    Would you DD on the March SDS $23 calls or roll out?  Now at $.14.

    "Gotta love the potential in those huge spikes, right?  SDS March $23 calls are just 0.35 so let's grab 10 for the $25KP ($350) and 50 for the STP ($1,750).  At $30, they pay $700 per contract – up 1,900%, that's worth a gamble!"

  95. SDS/DC – Still a long time until March and SDS has fallen 0.50 in a week and we have 4 weeks to go.  I assume you mean the 10 SDS we bought in the $25KP for 0.35 on the 12th for $350 or 50 in the STP for $1,750?  Either way, it was a small gamble and we have plenty of other bets so it doesn't make sense (in that context) to turn it into a bigger bet just because it's not working out.  As I said at the time – it was worth a gamble because, if the S&P did fall – it had a huge reward but, as it turns out, the gamble didn't pay.  You can't double down on every bet that doesn't work – you need a good reason to stick with it.  

    We said we'd watch this week to decide what to do – so far, things are holding strong at the top of the range but it's really all up to Yellen tomorrow.  

  96. Phil/SDS

    Yeah, I agree.  It's hard to NOT try and pick a TOP in this market.  Seems like we are ripe for a sell-off, yet, as usual, when looking for it, it never comes!  THX.

  97. Well that was more interesting than most Mondays but SPY volume 55M so I think we were actually closed….

    Hopefully something real will happen tomorrow.  

  98. Phil – IB has SPY volume as 94.4M and 134M avg

  99. Batman/AAPL

    Phil thanks for the view on this – I like the idea of pulling the trigger on the stock and position w/ the put / BCS.  protect some while still having some upside potential, and yes i would buy this at 90 to 100 so this makes sense.  

  100. Now that we are closed a general question.  Earlier today someone brought up the accounting issues associated with active trading and since 2014 was my first year actively trading I'm concerned.  I'm thinking I should be consulting with an accountant with a lot of experience working with active traders.  Does anyone have a an accountant that they would recommend.  I'm in Northern NJ but can't see why I would need someone local.  Thanks in advance.  Feel free to email me directly at if you prefer.

  101. Accountants/Options – you might check locally all the same… there are more 'traders' and retired stock brokers (who never die but just trade away..) out there than you might think, and many accts already have experience with this. I found it is not such a big deal and my long time 75-yo accountant knew exactly what I needed and has two other very active 'trader' clients.   

  102. Seems we always get the best politicians money can buy…

  103. accounting/options_alpha:

    I set up my trading entity 5 years ago, and there is no way that I would consider trying to do the returns myself. The Schedule D alone would be a nightmare.

    I used to have my general accountant do my returns for one of my cash accrual account, but I found that since he wasn't really set up to do that kind of work, it took a lot longer, and he charges $250.00/hr for his time.

    There are several specialists in accounting for traders the two that I know a number of people use are: TradersAccounting, whom I use, and

    When it's time to do my returns, they will download all of my trades for the year, for each trading account from TOS, crank it though their nifty, specialty software, and have everything crunched in no time at all.  Really amazing.

    A Schedule D for an entity that they didn't set up for me is only about $550.00, whereas my general accountant would charge upwards of 3 grand.

    Hope this helps.

  104. Well I know it's nowhere near others gains, but I bought /CL at 49.11 and sold out at 49.36 for around +250 on the day, while watching Walking Dead.  

    I'm also selling Mar07 USO 17P's for 0.35.  Not alot, but that would put /CL at 45, which I don't mind owning USO.

  105. verreaul -  Do you check the "Restart Scale Trader" checkbox?  Or fill in the initial position/filled initial position box?  

    I'm confused as to what that does.

    Also, the problem I have with scale trader is that on a one way move, you take a profit too early and don't let it "ride" the wave up or down.  Have you found a work around for that?  It's great on days that are bouncy, like today though.

  106. Burden – Scaletrader almost always takes profit too early because it doesn't have the ability to trail  its profit offset in a fast moving market.

    Sometimes I set up 2 Scale traders one with a smaller profit offset and one with a larger offset (with different starting prices and increments)

    I do not click on restart Scale Trader.  I only tick Create Profit Taking order and enter the profit offset

    I usually use Scaletrader for stocks that are rangebound to generate extra $$$ and recently started using it for futures as well. 

  107. Burrben - I really should take off my autocorrect :)

  108. Burrben – new site for you.  And option expiration means time for a new LCR!

    "Does it seem unreal to you that a cop is being punished? If so, it’s probably because you live in the United States. … You know that in the United States, when victims are compensated with money for crimes committed by cops, it’s stolen from your paycheck — the taxpayer — not the cops individually. So why would a killer cop now be put to death? It’s because we’re talking about China, not the United States…"

  109. SPY/Verr – As of 3:58 on Yahoo (which is probably delayed) it was 56M.  Now it's 74M, so a good bit into the end but not 94M although I don't say Yahoo is more accurate – it's just the one I use and at least it seems to be consistent so, as a reference, 56M (or 74M) is very low.  

    You're welcome Bat.  

    Oregon/Scott – The Conservatives are trying to use Kitzhaber's scandal as proof that all environmental policies are based on greed and corruption (just like Big Oil) but it's a bit more complicated than that.  For one thing, if it was so easy to bribe the Dems, why can't Big Oil bribe them?  Despite Kitzhaber having questionable deals, they are in the $200,000 range – not the $200M range, not much considering the Kochs alone are dropping $950,000,000 into 2016.  Maybe the Dems are bad at math and aim to please the guys with $200K and not the guys with $900M?  

    Icahn/Rookie – Interesting:

    • Liquidmetal (OTCQB:LQMT) rose 13.9% today to $0.164. Volume (24.5M shares) was far above a 3-month daily average of 1.2M.
    • The apparent trigger: Speculation that Samsung's upcoming Galaxy S6 (believed to have a metal body, expected to be revealed on March 1) will make use of liquidmetal, following a teaser video that showed liquid metal animations. Animations, of course, are an imperfect predictor of a metal alloy's use within a smartphone.
    • Last May, Liquidmetal extended its exclusive license to Apple for the use of its IP within consumer electronics products. However, the extension only lasted until Feb. 5, 2015.
    • Google (GOOG -1.4%) has struck deals with Verizon (NYSE:VZ), AT&T (NYSE:T), and T-Mobile (NYSE:TMUS) to have the Google Wallet payments app pre-installed on Android phones sold by the carriers, starting later this year. The Web giant is also "acquiring some exciting technology and intellectual property" from the carriers' Softcard payments JV, which never fully got off the ground.
    • TechCrunch reported of Google's interest in Softcard last month. Thus far, Wallet's adoption has been hurt by limited support from carriers - Sprint was the only major U.S. backer – and retailers, as well as consumer reluctance to embrace NFC-based payments. However, the launch of (NFC-based) Apple Pay, along with the broader rollout of NFC-capable terminals and chip-and-PIN payment systems (they make card swipes a little less convenient) is altering the landscape.
    • The deal comes a few days after top Android OEM Samsung announced it's buying LoopPay, creator of a mobile payments solution that works with standard card-swipe terminals.
    • Mobile payments plays include NFC reader maker On Track Innovations (OTIV -5.7%) and payment-processing/telemetry services provider USA Technologies (USAT -2.7%).

  110. verreaul – I was doing some research tonight and I believe that the next evolution of IB's scaletrader is NinjaTraders Advanced trade management system.  Here is a video.  I'm going to talk to them more about it tomorrow and compare the comissh/fees.  

    It seems like this is what we are looking for, a system to scale in and then profit take with a multi level trailing stop.

  111. Ah, so we only have the two-bit policticos here then… whew! ;-)

  112. I thought Phil was Ninja trader…..

  113. 49.89

  114. 48.89 i mean

  115. Good morning!  

    Huge pop in /NKD overnight – 18,655 at the moment.  My average short entry is now 18,576 so wish me luck but I'll have to stop out and give up if 18.700 breaks.  Greece being "fixed" is the good news, of course but Europe turned red off a good open so we'll see how things play out. 

    Oil is a good long off $49, of course, with tight stops if it doesn't hold. /NG fell back to $2.83 – crazy moves there. 

  116. What month are you playing on /RB and /NG?  Also thoughts on /RB here being too high vs /CL?

  117. Our Futures are flat so far with the Dollar testing 95 again.  I'm hoping the Dollar fails here and that causes a pullback in /NKD, of course. 

    Yen at 119.50 after topping out at 119.56 – another reason I like the short /NKD is I don't see 120 breaking so easily.  Euro $1.13, Pound $1.544.  Gold $1,195.80, Silver $16.225, Copper $2.58, Gasoline $1.628.

    • Greek Reform Proposals ‘Sufficient’

      A list of proposals on how to overhaul Greece’s economy in line with the country’s bailout program appears to comply with the principles set out by eurozone finance ministers, a European Commission official said. 21 min ago


    • Greece sent a list of economic reform plans to the Eurogroup of euro zone finance ministers around midnight, just making a deadline set by its international creditors,Reuters reports.
    • "In the Commission's view, this list is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review," said a source.
    • If the reforms are approved, Greece will secure a four-month extension to euro zone funding, keeping its financial system afloat.
    • ETFs: GREK
    Don't forget, it's all Yellen today.  She speaks to Congress at 10am.  

    Fed's Williams says wouldn't rule out June rate hike"I wouldn't want to eliminate the possibility of a rate hike in June," Williams was quoted as saying. Williams is among the voting members this year on the Fed's policy-setting committee and his thinking on monetary policy is considered in the mainstream at the central bank.


    Ex-Plunge Protection Team Whistleblower: "Governments Control Markets; There Is No Price Discovery Anymore"

    Recovery? Central Banks Are Easing Policy For 50% Of The World's Population

    Nasdaq Closes Green For Two Weeks In A Row: AAPL Grows By $100 Billion In February

    Stifel to buy Sterne Agee for $150 mlnInvestment bank Stifel Financial Corp said it will buy privately held Sterne Agee Group Inc for $150 million to expand its wealth management and fixed-income business. The acquisition will add 730 financial advisers, boosting Stifel's headcount of wealth management professionals by 35 percent to more than 2,800.

    JPMorgan to announce deposit fees for big clients

    • JPMorgan (NYSE:JPM) is preparing to charge an array of financial firms, including hedge funds, private-equity firms and foreign banks, for some deposits, citing new rules that make holding money for the clients too costly.
    • Certain deposits are less profitable to handle than they used to be due to new federal rules that can penalize banks for holding deposits viewed as prone to fleeing during a crisis or a stressed environment, sources told WSJ.
    • Specifics are likely to be unveiled today at JPMorgan's annual strategy outlook with investors.

    Spooked by Yuan Drop: China's Top 1%

    The 'Red King of Gambling' owes $160 million, and that says everything about China's problems

    Brazil Experts Fear a Two-Year DownturnEconomists say nation is likely to suffer first back-to-back decline in GDP since 1930s. For all the debt crises, hyperinflation and boom-and-bust cycles Brazil’s economy has suffered in recent decades, the country hasn’t posted two consecutive years of contraction since the Great Depression. ?

    Fuel Prices Are Heating Up - Fuel prices are staging a surprisingly strong winter rally, putting an end to $2-a-gallon gasoline for now.

    Copper Tells Two Stories on Global Economy

    FCC Republicans ask Wheeler to delay net neutrality vote

    • Republicans are increasing pressure on the FCC to delay Thursday's net neutrality vote, saying the public needs time to see and review the plan.
    • The proposal has been subject to heated battle since Chairman Tom Wheeler proposed reclassifying broadband from a lightly regulated information service to a more strictly overseen telecommunications service.
    • Supporters of the approach say that without such rules, broadband companies could charge tolls to websites for their fastest speeds, while critics say the plan would give the agency the authority to regulate pricing.

    Big Barbie Is Watching You: Meet The WiFi-Connected Doll that Talks to Your Kids & Records Them

  118. Month/Burr – I just play whatever is defaulting in TOS when I play (I'm not now) as it's just easier and I certainly don't intend to hold them overnight.  /RB is high because a lot of refineries are off-line so, in theory, there should be less supply than demand this week.  

    That's too tricky to play for me.  At the moment, I have 2 long /CL at $49.08 avg and the last ones stopped out earlier when $49.20 was rejected – so tight stops to say the least!  

  119. verreaul – I actually found a better one than NinjaTrader.  Called Zeroline trader.  It allows a scale in/out system and a trailing stop system.

    I'm still looking around.

  120. From Bloomberg, Feb 23, 2015, 5:24:58 PM


    (Bloomberg) — Greece’s month-old government is about to find out whether a package of new economic measures sketched in recent days is enough to win more funding from the rest of the euro region to keep the country solvent.

    To read the entire article, go to

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  121. From Bloomberg, Feb 24, 2015, 12:00:01 AM

     Portfolio manager Robert D’Alelio said “If the next five years are the same, there won’t be any active managers left.” Source: CL-Media Relations via Bloomberg

    (Bloomberg) — Robert D’Alelio has the kind of long-term record every mutual fund manager aspires to, beating 98 percent of his peers over the past 15 years with the $12.6 billion Neuberger Berman Genesis Fund and crushing his benchmark, the Russell 2000 Index.

    To read the entire article, go to

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  122. From Bloomberg, Feb 24, 2015, 3:00:00 AM


    (Bloomberg) — It’s shaping up as the year of the mega mortgage.

    To read the entire article, go to

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  123. From Bloomberg, Feb 23, 2015, 3:33:27 PM

      Pedestrians carrying umbrellas pass a flower stall in Amsterdam, Netherlands, on Wednesday, Jan.19, 2011. European stocks fell for a second day as accelerating Chinese economic growth fueled concern the government will lift interest rates further to calm inflation. Photographer: Jock Fistick/Bloomberg

    Poor Europe can’t catch a break. The region’s not only trying to keep its currency together, but also struggling to keep up with the fast-moving digital economy.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  124. From Bloomberg, Feb 23, 2015, 11:28:18 PM

      The Toyota Motor Corp. Mirai FCV (fuel cell vehicle) is displayed during a press conference during the 2015 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S. Photographer: David Paul Morris/Bloomberg

    (Bloomberg) — Toyota Motor Corp. chose an unlikely birthday for its Mirai fuel-cell vehicle, the car it pitches as nothing less than “a turning point in automotive history.”

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  125. From Bloomberg, Feb 23, 2015, 4:53:20 PM

      A RadioShack Corp. employee arranges a display at a store in San Francisco, California. RadioShack, with about 4,000 locations, sought protection from creditors Feb. 5, with an agreement to sell 1,500 to 2,400 of its locations to a unit of hedge fund Standard General LP, its biggest shareholder. Photographer: David Paul Morris/Bloomberg

    (Bloomberg) — Bankrupt consumer-electronics chain RadioShack Corp. pushed back against a creditor panel’s criticisms of its proposed auction procedures, saying a drawn-out sales process could diminish the value of the assets and hurt recoveries.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  126. From Bloomberg, Feb 23, 2015, 5:52:37 PM


    It was another down day in the oil market: Crude prices fell more than 2 percent, with WTI finishing Feb. 23 below $50 a barrel for the first time in almost two weeks. 

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  127. From Bloomberg, Feb 23, 2015, 6:40:49 PM

      Mitch McConnell, Senate Minority Leader and a Republican from Kentucky. Photographer: Andrew Harrer/Bloomberg

    (Bloomberg) — The U.S. Senate Republican leader changed strategy in the party’s attempt to block President Barack Obama’s immigration orders and avoid a partial shutdown of the Department of Homeland Security.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  128. From Bloomberg, Feb 23, 2015, 11:01:00 AM

      An elderly woman collects cardboard boxes in Hong Kong. Photographer: Jerome Favre/Bloomberg

    (Bloomberg) — Eighty-six years old and still job hunting.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  129. From Bloomberg, Feb 23, 2015, 9:59:49 AM

    Morgan Stanley’s Daniele Antonucci and Elga Bartsch have an interesting call, in the wake of Friday’s euro group meeting. They think the odds of Greece staying in the euro area haven’t improved, despite a “deal.”

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  130. From Bloomberg, Feb 23, 2015, 6:34:31 PM

      Greek Prime Minister Alexis Tsipras, right, listens to his Finance Minister Yianis Varoufakis during the vote for the president, at the Greek parliament in Athens, on Feb. 18. Photographer: Louisa Gouliamaki/AFP/Getty Images

    (Bloomberg) — The dollar strengthened and Treasuries fell before Federal Reserve Chair Janet Yellen speaks to lawmakers. Yields on European corporate and government debt dropped to record lows as Greece’s creditors review a list of debt-reduction policies.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  131. From Bloomberg, Feb 23, 2015, 6:01:00 PM

      The headquarters of HSBC Holdings Plc stand in the Canary Wharf business, financial and shopping district in London, U.K., on Wednesday, Feb. 18, 2015. HSBC Chairman Douglas Flint will face fresh questions at a U.K. Parliament hearing on Wednesday over his role as finance director when the bank was found helping customers avoid taxes through its Swiss unit. Photographer: Simon Dawson/Bloomberg

    (Bloomberg) — Swiss prosecutors are scrambling to explain why they took seven years to probe suspicions of money laundering aroused by data stolen from HSBC Holdings Plc’s private bank in Geneva.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  132. From Bloomberg, Feb 23, 2015, 10:50:34 PM

      Passengers sit in a shuttle bus as it drives in front of Galaxy Entertainment Group Ltd.’s Galaxy Macau casino resort in Macau. China introduced the so-called Individual Visit Scheme in 2003 to allow mainland residents to visit Macau and Hong Kong by obtaining entry permits without the need to travel with tour groups. Photographer: Lam Yik Fei/Bloomberg

    (Bloomberg) — Wynn Macau Ltd. fell to the lowest in more than two weeks, leading declines in casino shares after a senior Macau official said the city wants to study restrictions on mainland Chinese tourists to ease overcrowding.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  133. From Bloomberg, Feb 24, 2015, 4:01:03 AM

      Haruhiko Kuroda, governor of the Bank of Japan (BOJ), from left, Mario Draghi, president of the European Central Bank (ECB), and Janet Yellen, chair of the U.S. Federal Reserve, attend the Group-of-20 (G-20) finance ministers and central bank governors group photograph on the sidelines of the International Monetary Fund (IMF) and World Bank Group Spring Meetings in Washington, D.C., U.S., on Friday, April 11, 2014. As the International Monetary Fund declares the strengthening U.S. economy is providing a ‘major impulse’ to the world, economists are questioning just how powerful it will prove to be. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Haruhiko Kuroda; Mario Draghi; Janet Yellen

    An already busy year for interest-rate cuts from central banks is likely to get busier. And you might even see some rate increases, too.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  134. From Bloomberg, Feb 24, 2015, 5:45:55 AM

    (Bloomberg) — Oil prices are unlikely to go back to $100 a barrel because new technology is driving down the cost of production, said Larry Fink, chief executive officer and co-founder of BlackRock Inc.

    To read the entire article, go to

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  135. From Bloomberg, Feb 24, 2015, 5:57:56 AM

    (Bloomberg) — Bank of England Governor Mark Carney said policy makers can look beyond the U.K.’s current bout of weak inflation as he pledged to return price growth to target “within a reasonable horizon.”

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  136. From Bloomberg, Feb 24, 2015, 5:27:13 AM

    (Bloomberg) — Toll Brothers Inc., the largest U.S. luxury-home builder, reported quarterly earnings that beat estimates after the company sold more properties and increased the average price.

    To read the entire article, go to

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  137. From Bloomberg, Feb 24, 2015, 5:19:05 AM

    (Bloomberg) — Indonesia’s rupiah dropped to its lowest level since December before Federal Reserve Chair Janet Yellen testifies to Congress amid speculation U.S. policy makers will raise interest rates this year.

    To read the entire article, go to

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  138. From Bloomberg, Feb 24, 2015, 5:07:55 AM

    (Bloomberg) — Treasuries declined for the first time in three days as investors awaited testimony by Federal Reserve Chair Janet Yellen that may contain signals about when the central bank will start raising interest rates.

    To read the entire article, go to

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  139. From Bloomberg, Feb 24, 2015, 4:52:28 AM

    (Bloomberg) — Russian borrowing costs surged the most in more than a month as the ruble fell with stocks after Moody’s Investors Service became the second ratings company this year to cut the nation to junk.

    To read the entire article, go to

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  140. From Bloomberg, Feb 24, 2015, 5:00:00 AM

    (Bloomberg) — Meteorological spring will start March 1, so this seems as good a time as any to run a few numbers as we head into February’s final week.

    To read the entire article, go to

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  141. From Bloomberg, Feb 24, 2015, 4:45:56 AM

    (Bloomberg) — European natural gas prices climbed after Ukraine’s state-owned gas company said Russia violated a European Union-brokered accord by limiting supplies to less than half the requested level.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  142. From Bloomberg, Feb 24, 2015, 4:30:10 AM

      A Mercedes-Benz AG luxury automobile sits parked beside a hawker selling curios in Soweto. South Africa’s economy grew 1.5 percent for the whole of last year, the slowest pace since a 2009 recession. Photographer: Dean Hutton/Bloomberg

    (Bloomberg) — South Africa’s economy, the continent’s second-largest, grew at a faster pace than economists predicted in the fourth quarter after manufacturing and mining rebounded from a series of strikes.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  143. wheeeeeee on /cl

  144. BHI/Scott – That looks like it will be the easiest money we make all year. 

    Oil/Burr – Wheee indeed.  Makes it worthwhile to get up early.  $49.75 is the stop now.

  145. I'm out.  Made my babydaddy $$.  Until we hit 49 again.

  146. Good exit.  I agree, gotta assume $50 is rejected and, if not, it becomes the bull stop line for the new play.  

  147. Europe bouncing back into lunch – flat overall now.  

  148. I took a on-faith /NKD short with you at 18650.  Do you have a hard stop at 18705?

  149. Good morning. Darn I actually got some sleep last night and missed that nice pop in oil this morning. I saw your note about the Nikkei Phil and since it popped 175 points from there I assume you got out of that one right away. Do you like a short on the Nikkei from here at 18665 though?

  150. /NKD/Burr – I pretty much never have a hard stop.  If a trade goes against me, I go straight to my couch and I read everything I can and then I make a fresh decision based on what I see.  As with the oil spike yesterday and this morning's drop – there's no reason to panic in or out of positions when you can, instead, gather facts and make intelligent decisions that lead to better gains in most circumstances.  

    /NKD/Craigs – No, I was short, got burned this morning and, since nothing has actually changed, I doubled down at 18,650 and now I'm averaged in at 18,575, so I need a nice dip to get even.   There's a massive amount of data coming to Japan on Thursday night, that's why I'm aggressively shorting /NKD but, of course, you knew that or you wouldn't be playing it, right?

    18:30   JPY   Household Spending (MoM) (Jan)   0.4% 0.4%  
    18:30   JPY   Household Spending (YoY) (Jan)   -4.1% -3.4%  
    18:30   JPY   Jobs/applications ratio (Jan)   1.15 1.15  
    18:30   JPY   National Core CPI (YoY) (Jan)   2.3% 2.5%  
    18:30   JPY   National CPI (YoY) (Jan)   2.4% 2.4%  
    18:30   JPY   Tokyo Core CPI (YoY) (Feb)   2.2% 2.2%  
    18:30   JPY   Tokyo CPI (YoY) (Feb)   2.3% 2.3%  
    18:30   JPY   Unemployment Rate (Jan)   3.4% 3.4%  
    18:50   JPY   Industrial Production (MoM) (Jan)     2.7% 0.8%  
    18:50   JPY   Industrial Production forecast 1m ahead (MoM) (Jan)     6.3%  
    18:50   JPY   Industrial Production forecast 2m ahead (MoM) (Jan)     -1.8%  
    18:50   JPY   Retail Sales (YoY) (Jan)   -1.3% 0.2%  

    So that will be Thursday evening for us, which makes Friday do or die but, hopefully, I'm not the only one thinking Japan will have weak numbers and there will be a nice dip ahead of the data (as if data matters these days..).

  151. Those two columns are forecast and previous.  

  152. /NKD- Phil I did not know about the Japan data, which is why I wasn't in that trade, but now that I have that information I am short at 18655, so here's hoping you are on to something.

    /CL- I took a poke short at 49.85 and was out quickly at 49.70 as I am really not comfortable shorting down here below 50 until we see this weeks inventory report or get more data. We saw yesterday what one stupid rumor can do and I don't want to be short when one of those hits. So, I am pretty much waiting for a channel to be established and a good long entry at some point.

  153. Thinking about going long oil then calling Reuters and saying I am the oil minister of Frackedonia and I am calling for an emergency meeting of OPEC. Then every half hour another PSW member should follow up with a call saying they are the oil ministers of some other country and see how far up we can move the market. Genius, right? Of course we use burner phones (watch The Wire for instructions from Stringer Bell) and we are off to the races. We can beat the Goldman Sacks of the world at their own game. ;)

  154. burrben –  I checked out your links. 

    So far I think NinjaTrader is the way to go … seems more up to date and in greater use… also check out the third party apps at

    I have always been fascinated with auto trading. I had tried a product called cool-trade many years ago but I was too much of a newbie to properly understand the concepts.