Birchtree's Account Talk

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ok, with triple witching next friday, where would I find put/call data?

100313iotw1.gif


"When bearish puts cost 50 percent more than bullish calls, the S&P 500 rallied 28 times during the next six months and declined 6 times, according to OptionMetrics data going back to 1996 compiled by Bloomberg. The biggest gain started in November 1997, when the index rose 18 percent and the premium increased to 54.1 percent, data show."
 
crws said:
ok, with triple witching next friday, where would I find put/call data?

100313iotw1.gif


"When bearish puts cost 50 percent more than bullish calls, the S&P 500 rallied 28 times during the next six months and declined 6 times, according to OptionMetrics data going back to 1996 compiled by Bloomberg. The biggest gain started in November 1997, when the index rose 18 percent and the premium increased to 54.1 percent, data show."
Click to expand...

I'm not sure what that quote refers to since I've never seen that kind of discrepancy between the premiums on prices of puts and calls. Take the QQQQ June 44's right now for example. QQQQ closed at 44.19, so the $44 calls should cost more than the puts since they're in the money by 19 cents...and right at 4 pm the $44 calls were at $1.04 while the $44 puts were at 94 cents, sounds about right (it would be best to check it right as QQQQ crossed $44 even, but I bet they were close at that point).
http://finance.yahoo.com/q?s=QQQQ100619C00044000
http://finance.yahoo.com/q?s=QQQQ100619P00044000

Tomorrow's an important day for the bears/bulls battle. That late surge completed what can be counted as a small wave 2, leaving the next fall to be wave 3 of wave 3 of wave 3 down, the "point of recognition"....or it could be ready to blast off in some other bullish count.
 
I'm suspicious- Beige Book numbers out tomorrow. I've been googling, but found no whisper #'s as of yet.
Last week's ride reminded me of the dot com era of buy on the rumor, sell on the news.
This weeks schedule:

Economic Reports:
Monday: April Consumer Credit
Wednesday: April Wholesale Inventories, June Fed Beige Book
Thursday: Initial Unemployment Claims, Continuing Unemployment Claims
Friday: May Retail Sales, June Michigan Sentiment Survey, April Business Inventories

These 2 articles caught my interest:

Today’s Late Move Takes Stocks Higher

Posted by Paul Vigna on June 08, 2010
Dow Jones Industrials, Markets, S&P 500 / No Comments
US stocks rally, as the late-session break today is a break higher, as equities resisted a strong pull to the downside, although tech stocks hold the Nasdaq Comp down. These late moves have, lately, been the sum total of the market, like the last two minutes of a basketball game. What seems like a strong session can disappear without a trace in an instant, and what seems like a sure selloff can turn into a rally at the drop of a hat. It’s that kind of market these days.
DJIA rises 123 (1.3%) to 9940, S&P 500 gains 12 (1.1%) to 1062, with all of those gains coming in the final hour. Nasdaq eases 3 points to 2171. S&P falls as low as 1042, but holds above hotly watched 1040 line.
Euro holds in the 1.19 area. NYSE volume is pretty strong above 6.1B shares traded. Every sector turns green by the end; even tech scratched out a gain.
There was a big firefight in the 1040-1045 arena, and for today — at least — the region provided support for the bulls. This fight was at its most fierce last in the morning, when the S&P hit its session low 0f 1042, and around 2 p.m., when it came within hailing distance of it again. But the line held, the bulls took over, and managed to get the Dow and S&P onto higher ground.
But it’s hard to believe the test of 1040, which Minyanville’s Todd Harrison called the “mother of all levels,” could be over that easily, so expect some more selling ahead.
 
And from Seeking Alpha, (but has his own blog)
http://seekingalpha.com/article/208678-get-ready-for-a-double-dip#comments_header

Get Ready for a Double Dip

In my view, it’s becoming increasingly likely that we’re rapidly heading towards a double dip recession. It won’t be tomorrow or this week or even next month, but many warning flags point towards significant deterioration in the U.S. and global economy going forward and so I think that by the end of the year or early 2011, we could very well be facing a new leg down in the world’s economic situation.
We’ll take a look at some of the factors at work but first let’s take a look at the past week and where we stand at Wall Street Sector Selector.
Looking at My Screens
Obviously the volatility that has come back into the markets in recent weeks was in play last week as the Dow experienced its third worst drop of the year on Friday, fast on the heels of Wednesday’s rocket ride up.
This week’s action took our Standard, 2X and Option Master Portfolios to 100% cash as we took profits and cut losses during the week.
Currently our portfolios look like this year to date:
Sector Selector Standard: +7.5%
Sector Selector 2X: -17.8%
Sector Selector Option Master: +47.1%
This week’s positions were closed for the following gains/losses:
VXX: +50.3%
EFZ: +2.8%
YXI: -8.5%
PSQ: -5.3%
EEV: +5.9%
SKF: -12.9%
December S&P Put Option: +29.7%
We remain in the “Red Flag Flying” mode, expecting lower prices ahead. However, almost incredibly, our indicators are moving towards a new “buy” signal that we might see confirmed within the next days or weeks.
A quite likely scenario is a relief, short term rally through August-September, followed by further declines into 4th Quarter and next year.
Whatever happens, we will continue working both the “long” and “short” side of this market that remains unbelievably volatile and challenging.
The View from 35,000 Feet
This week’s action was driven by conflicting forces but ended largely negative, with the S&P 500 unable to break through its 200 Day Moving Average. As we’ve said before, this average is widely viewed as the demarcation line between bull and bear markets, and until or if the major indexes are able to sustain positive momentum above this line, we can consider that we are in a bear market, at least for the short term.
The big catalyst for Friday’s sell off, of course, was the Non Farm Payrolls report that came in far weaker than expected at 431,000 versus a whisper number of 500,000. Adding to the worries was the fact that only 41,000 of these new jobs were “real” private sector jobs, with most of the rest coming from temporary census workers.
Further worries were the Euro hitting a four year low, Hungary saying that their situation was “very grave,” and less than robust reports in consumer spending, pending home sales and factory orders.
More troubling in my opinion was the ECRI (Economic Cycle Research Institute) report of its weekly index hitting a 43 week low and its annualized index hitting a 50 week low. This is a highly accurate leading indicator of U.S. economic activity and points ominously towards the double dip recession that we’ve been considering.
Also at this week’s G-20 meeting, Treasury Secretary Geithner called on the Europeans to adopt the “American fix” to current problems by increasing government spending and quantitative easing to stimulate growth but he was firmly rebuffed by European leaders who are going instead for deficit reduction and austerity programs over fiscal stimulus.
What It All Means
Looking over the past year’s growth and stock market rally, we see a liquidity rally fueled by stimulus and various bailouts, and as those draw to a close, the question of the hour is whether or not this economic growth has become self sustaining or not.
Many experts expect a natural slowing as these programs are removed from the system and the situation in Europe can only be a tremendous drag on the global economy as the Eurozone retrenches and cuts their spending and consumption.
It seems that, unlike us, the Europeans are willing to take their medicine now and resolve their problems rather than “kicking the can down the road” as we’ve done in America. Of course kicking the can sidesteps current pain but will only serve to make the “day of reckoning” worse because the piper will still demand to be paid.

About the author: John Nyaradi


Company: Wall Street Sector Selector

CautiousInvestor
Comments (1846)
Looking over the past year’s growth and stock market rally, we see a liquidity rally fueled by stimulus and various bailouts, and as those draw to a close, the question of the hour is whether or not this economic growth has become self sustaining or not.The recent jobs report, the decline in LEI and the collapse in the ECRI all suggest that the stimulus package, ZIRP, QE and all of the other efforts will not lead to a durable economic recovery. We have not cleaned up bank balance sheets and the Recovery Act is a faarago of waste and pet projects. Until we realize that recoveries are led my small businesses, start-ups and technology, we are doomed. As I have post earlier today we need an investment led recovery, not a transfer payment led recovery. Jun 06 09:04 AM

muoio
Comments (298)
You are correct----look for 740 on the S&P......it will be ugly ! Jun 06 10:36 AM

Lawrence J. Kramer
Comments (58)
Recoveries are led by SOMEONE spending. Often, it's been small business, but in the Great Depression it was Uncle Sam, first on public works and then on the unpleasantness in Europe and the Pacific. I think we are now in one of those situations where only Uncle Sam can spend us out of depression.

The infrastructure is a shambles, and there are some really major projects that need to be done. Meanwhile our huge trade deficit provides an endless supply of credit to the only AAA-rated borrower who can be counted on to repay its debts. (Our vendors,especially China, don't really care what the dollar will be worth tomorrow - they only care about the jobs it buys them today.)

Government spending generates private employment. It's private contractors (including small businesses), not government employees, who build the stuff that the government orders. That's really the intellectual error that opponent of government spending make: they think that government spending crowds out private employment. But it doesn't. Government can be an excellent customer of private industry.

Nor is the debt associated with bridges to somewhere and other good infrastructure work a problem. We're not talking about transfer payments; we're talking about purchase of valuable assets. Yes, the purchase is financed by borrowing, but the government could probably borrow a couple of trillion dollars tomorrow morning for thirty years at excellent rates, and the interest cost will more than be recouped by the value added to the economy, not to mention the tax-revenues generated by the projects themselves.

We have to face the fact that Asia has developed massive productive capacity such that the prospect of "too much money chasing too few goods" is simply not what it once was. At the same time, we cannot expect manufacturing jobs to return to the US unless we impose significant tariffs. I'd be all for that if I didn't think the infrastructure approach made more sense for now.

Eventually, of course, the law of diminishing returns will catch up with infrastructure spending, and the better use of the resources will be in private endeavor. But the world will be a very different place by the time that happens, and we ought not to speculate now on what we will need to do then. Jun 06 01:11
 
US tariffs on other countries only cause more tariffs on the US. Last thing the recovery or even the long term world economy needs are price wars.
 
poolman said:
Your not in the tracker OBGibby ?
Click to expand...


Nope. I post my current allocations/positions in my "OBGibby's Account Talk," as well as my PIP. I'm not a market timer - at this point I'm comfortable with DCAing/B&Hing and only make a few IFTs a year. The tracker doesn't do much for me.
 
Decided to sacrifice some PVH at $52.33 for a small profit that won't hurt too much. I just couldn't stanz it no more - so I bought BP @ $31.66, MEE @ $29.67, and ACI @ $21.30. I'm saving a few bucks incase BP drops even lower at a later date - but a 10% payout is sweet.
 
They're talking about ways to cut the budget today. My solution is to stop paying teenage girls from the minority at risk population to intentionally get pregnant to get on welfare. That would do a lot to save this country from ruin.
 
Mindylou and I will take our afternoon nap and not worry about this silly market today. It's the best I can do until reasonable expectations return to the bullish side.
 
what about RDShell @ 6% div?
just curious...
They just bought a Nat Gas co and don't have the threat of going bankrupt...
I know everybody says BP won't, but it might end up a legal avenue... know what I mean?
Check this... From what I hear & read they are extremely concerned about a bedrock fracture at the base of the BOP that would prove uncontainable.

http://uk.reuters.com/article/idUKT...feedName=everything&virtualBrandChannel=11708

Special Report - Civil fine in Gulf spill could be $4,300 barrel

(Reuters) - Just how many barrels of oil are gushing into the Gulf of Mexico from the Deepwater Horizon spill is a billion dollar question with implications that go beyond the environment. It could also help determine how much BP and others end up paying for the disaster.
World
A clause buried deep in the U.S. Clean Water Act may expose BP and others to civil fines that aren't limited to any finite cap -- unlike a $75 million (52 million pound) limit on compensation for economic damages. The Act allows the government to seek civil penalties in court for every drop of oil that spills into U.S. navigable waters, including the area of BP's leaking well.
As a result, the U.S. government could seek to fine BP or others up to $4,300 for every barrel leaked into the U.S. Gulf, according to legal experts and official documents.
So far, analysts and experts calculating potential oil spill liabilities have mostly concentrated on the cost of the clean-up and compensation for economic damages to affected parties. Some have also discussed criminal liabilities.
But the potential for civil fines has received scant attention -- and they could add up very quickly, depending on how aggressive the U.S. government is in pursuing them.
The threat of hefty fines underscores the importance of quantifying how much oil is pouring into the Gulf. As BP seeks to staunch the leak that has now been gushing for at least 33 days, it has estimated a spill rate of 5,000 barrels per day. But some experts say the volume -- and hence the fines -- could be more than 10 times higher.
The little-known, seldom applied clause in the Clean Water Act was added in 1990 after the Exxon Valdez disaster in Alaska, and was intended to beef up the arsenal of penalties the government can apply to oil spillers to deter future disasters.
"These civil penalties could be staggeringly high, possibly running into the billions," said Professor David Uhlmann, director of the Environmental Law program at University of Michigan.
Total liability -- including civil fines as well as the cost of clean-up, economic damages and potential criminal liability -- "will run into the billions and may be in the tens of billions," Uhlmann said.


http://www.examiner.com/x-33986-Pol...pping-second-largest-oil-deposit-in-the-world

BP oil leak: Fallen Deepwater Horizon was tapping second largest oil deposit in the world:
If there is a single aspect to the dangers of the BP oil leak, it lies in the question CEO Tony Hayward and other BP executives have been avoiding since the first drop of oil went rogue: How much oil is leaking?
The real answer is - more than anyone wants to admit, because the well holds enough oil to make Saudi Arabian drillers jealous.
The oil field the Deepwater Horizon had tapped is said to be the second largest deposit in the world. Viewzone.com reports, “The site covers an estimated 25,000 square miles, extending from the inlands of Alabama, Florida, Louisiana and Texas. “

The oil deposit is so large, it could produce 500,000 barrels of a day for more than a decade.

Part of the reason the well exploded is because the site also contains large deposits of natural gas.

Speculation as to why BP has tried to hide the amount of oil spilling may be two-fold. There are legal issues and lawsuits in the works. The less said by BP now, the better it may play out for them in the future. The other, more alarming aspect, is the event of total wellhead failure before relief wells are completed in August.

Considering the size of the deposit, if BP loses control of the flow completely, the scope of the disaster would be unfathomable.

The New York Times has reported that scientists suspect the leak is thousands of times larger than what BP has been reporting. Some estimates are as high as one million gallons a day.

Rock particles, gas and oil escaping under pressure are pushing against the capstone on the sea floor that surrounds the actual well. If it collapses, the canyon of oil will escape with a vengeance.
Neither BP nor anyone else wants to say what will happen it the wellhead gives way or the sea floor around it caves in. All anyone is certain of is that the worst case scenario is the one everyone wants to avoid.

Birchtree said:
Decided to sacrifice some PVH at $52.33 for a small profit that won't hurt too much. I just couldn't stanz it no more - so I bought BP @ $31.66, MEE @ $29.67, and ACI @ $21.30. I'm saving a few bucks incase BP drops even lower at a later date - but a 10% payout is sweet.
Click to expand...
 
I rather like what Bob Doll has to say from an article in TWSJ: "Corporate profits could reach a new record high in this year's third quarter. Free cash flow for nonfinancial American companies is also exceptionally high - cash on the ballance sheet is close to 11% of assets, a 60-year high. And high cash levels are already generating dividend increases, share buybacks, capital investments and M&A activity - all extremely shareholder friendly.

According to Citigroup, U.S. unit labor costs are dropping at their fastest pace in 40 years. We last saw a similar surge in U.S. productivity in the late 1990s. Then, U.S. corporations were heavily investing in their own businesses, and foreign investors were increasing their U.S. allocations. This sparked a rise in the dollar. Improving productivity, a strengthening currency, and rising equity markets are linked. We saw that synchronization 15 years ago, and we are seeing it today.

The recovery that took root last summer with the help of government stimulus now seems to be evolving into a self-sustaining expansion. In the first quarter of 2010, nominal GDP reached an all-time high. Real GDP will reach a new high either late in the second quarter or early in the third. Our economic fundamentals are sound: Manufacturing levels are up and interest rates and inflation are low. The broader economy's recovery is also finally translating into meaningful employment improvements - recent employment reports show increases in average hourly earnings and hours worked - and I believe this trend will continue."

Could we take back that 323 loss from last Friday - trapping many short hairs.
 
crws said:
good day to SELL!!:D
Click to expand...

I have an hour to make up my mind.

IF, and that's a big IF, the C and S can stay above 2% I will be just positive YTD in my real account. Friday's have been real scary lately and if I jump to G I still have one IFT for the month to jump back into the pond.
 
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