Philip Davis

Options Trader: Thursday Outlook

Tradeflow - Greg will be in touch with your shortly.

Options Trader: Thursday Outlook

I'm sorry that you had trouble. If you like that kind of trading I'd be happy to give you a pass for our new Swing Trading portfolio, run by Optrader, I think it might be more what you were looking for as they are mainly momentum trades with a constantly updated live spreadsheet with all the entries and exits laid out.

Let me know if you'd like to take a look.

- Phil

Options Trader: Thursday Outlook

No I'm not happy, are you? The market sure isn't and oil going up was our signal to go negative and cover longs yesterday. Am I not allowed to have a market premise on which we take action now?

Tradeflow, I see you were a member from 11/30/07 - 12/29/07 on my site and from 9/7-12/7 on Wangs. I can't speak for Andy but obviously Dec was a rough month with the Dow dropping 500 points but I'm very curious as to what it was that you lost $30,000 on in one month.

Options Trader: Thursday Outlook

Al - discussed in previous post. What exactly is your problem?

Trade flow - what was your member name?

The After Hours Oil Scam

I would urge anyone who wonders if the NYMEX is fixed or not to look at the action on USO, which mirrors what happened at the NYMEX today. Oil was up slightly for the day at $138 ($111 on USO) until 1:50 when it went up another $1 in the next 20 mins. Then at 2:24, just 10 mins before trading halted at the NYMEX, MASSIVE buying kicked in, driving crude up $2 in 2 minutes. In the end the front-month contracts finished the day up $5.60 while 2011 and longer contracts gained just $3 or less.

They popped oil up so fast at the close that it doesn't even register on the NYMEX chart: futures.tradingcharts....

Not only that but the open interest level of contracts actually decreased today to just 223,504 and I will guarantee you right now that at least 180,000 of those contracts will be rolled forward into Sept (229K), Oct (93K), Nov (62K), Dec (178K) or Jan (32K).

futures.tradingcharts....

Also you'll notice in the above chart that in Feb-Nov 2012 with the exception of June, NOT ONE barrel of oil has been traded since oil was $70. That's a whole year where none of these "legitimate hedgers" thinks they are going to need oil I guess...

Options Trader: Wednesday Outlook

By the way Al and C, last year we ran a "Free Picks" portfolio where every single trade was published in the main post before the markets even opened. That portfolio gained 350% and you can go over each and every one of those trades (there's even a review when we closed it) and verify those without even being a member.

Options Trader: Wednesday Outlook

Wow such anger from contender and Al... I'm not going to sit here and defend myself and every single trade we make in the member portfolios ($10KP, $25KP, DTP) is printed in chat BEFORE the trade is made. That has been our system for over a year. Nobody claims to make 300% a month so if you are going to attempt to disparage someone elses work perhaps you should "get real" - whatever your problem is with me, you can resolve it simply by just not reading what I write. If it's not helpful to you, why waste your time - surely you don't have that much of it???


I'd personally rather spend mine answering legitimate questions like Blue Dogs.

On BAC - We already had the 2010 $35s back on 4/14 and we've been scaling into it over time following the gameplan from this article: www.philstockworld.com.../

We thought the financials were cheap then and we really think they are cheap now but it is key to take a long position, sell calls against it and roll the position to a lower strike as it falls, selling more calls along the way. This helps mitigate some, but not all of the losses and BAC is currently down 50% on us despite the scaling in but we are now in the 2010 $25 calls for a net of about $6.

The banks have been a real disaster and the financials make up close to 20% of our Long-Term Portfolio, which got killed the past two days.

As Al points out, these are just my trades and I'm not a financial advisor and you should ALWAYS consult a financial advisor before making any trade.

If I were still sitting on the BAC 2010 $35s at $1.20 I would be looking just to get even and I would roll the calls to the Jan '09 $22.50s at $3.10 (+$1.90) and sell 1/2 covers of the current $22.50s for $1.15 with a plan on rolling those to a full cover of the Aug $25s, which now sell for $1.08 so my expectation is to get $1.15 premium on 1/2 of my calls (.77) plus hopefully another $1 for the $25s so that's $1.77 of my $1.90 roll paid for.

My game plan going forward would be to get at least $1 of premium per month selling calls and if I do that for Sept, Oct, Nov and Dec that's $4 per contract made up plus whatever residual value I have left in the Jan position. Realistically, I'd probably double up the position on the roll as that way I only need to sell $2.50 worth of calls and retain my $3 value to get even, which is a much more obtainable goal.

Options Trader: Wednesday Outlook

Thanks junk! How about protecting the environment, universal health care, equitable distrubution of wealth and living wages? No one is "immune" to oil lobbying because the system is built around it BUT you will find that about 80% of the money goes to Republicans and one would have to assume they go where they are getting the most bang for their buck which on could deduce means that it's 4x harder to get a Democrat to drop their principles simply because you write them a check but that's just a supposition of course...

Thanks Morgan - looks like that writer is right already! My target is a little more ambitious at $85. Tell your folks I said hi, even though that makes me feel really old!

Contender - You confuse checking the facts with bending over and accepting whatever BS Goldman hands out as gospel. Whoever made that clue doesn't know jack about the airline ordering process and I said as much the day it came out. I predict not only will orders not be cancelled but that there will be a market for trading slots. How soon would you like to start saving 20% of your fuel cost which is over 40% of your entire operating cost as a comany that drops (using CAL as an example) just 5% to the bottom line in a good year? It's not even a choice to switch, airlines cannot compete without upgrading their fleet.

As to our gains. They are simply the results of the tracked member portfolios with every single entry and exit publically traded with 1,000 members on-line trading every day on my site. We have a 98% monthly retention rate vs. an industry average of just over 70% and half the people who we did lose last year cited politics as their reason for leaving, not trading. I made a decision a long time ago that if conservatives can't take a little sermon with their economic salvation then they can damn well go pray for a winner somewhere else. Not surprisingly my board is still 50% Republicans as they don't really care what your politics are as long as your money is green!

Thanks Phin!

The After Hours Oil Scam

NYC - I agree its not the best model but 99% of the audience can see the USO for themselves, if I use the NYMEX volumes (which I'm not clear that I'm allowed to) then only a very select few could see the trades I'm talking about. There is a surprisingly tight correlation between NYMEX and USO volumes, especially in the light trading sessions after hours.

Absolutely there is no point in restricting the NYMEX if you are going to let Dubai and ICE run free, the joke is that ICE was started by the very people that Congress say are "legally" manipulating the NYMEX trading so who knows what they are pulling over there, without any oversight at all.

The fact that you can't track trading activity on the NYMEX the way you do other stocks and futures just goes to show you that it would benefit from having a little light thrown on the process.

In any case, ignoring USO, the price action of oil's opening and closing prices was within 0.25% or less of USO each day and that's the crux of this arguement - in either view, 90% of the upward price action was accomplished in low-volume pre-market trading and, had it not been for the daily surge of buying into the close, we would have had negative intra-day numbers for comparison.


Even this mornign, up until floor trading opened at the NYMEX at 9am, prices were being held up with a clear floor being put in at $142.50 ($115.50 on USO) right up to the bell, were it almost immediately dropped to $141 on volume trading.

We're putting this and other information we have into the hands of the people running the investigations and we'll be putting up other interesting "talking points" on oil this week. If there is no speculation in the oil markets, then they have nothing to fear as it's all talk. This will be a great chance for energy bulls to show us the money and pick up a bargain at $140!

8-)

Critique of Dollar Policy

That's a great link JJ - I'll be using that in this weekend's post, thanks!

Options Trader: Thursday Outlook

Oh I get to them all Donald, it just takes too long on a daily basis!


Saifl - Obviously you are too lazy to do your own research or just like misleading people with your ridiculous comments. Facts are here: in.reuters.com/article...

I would suggest you go and do some research next time before embarrasing yourself again but your "body of work" speaks for itself: seekingalpha.com/user/...

It is interesting to see the same people appear over and over again in rabid defense of certain positions. Nonetheless, you have inspired me to write up a primer for how oil is mainipulated through the buying and selling of relatively few contracts, I think it would be helpful for people to understand and something we can get before Congress when they reconvene next week.

Options Trader: Thursday Outlook

Thanks junk! Yes, who is right, the Japanese did not cause runaway commodity prices by trashing their currency and they were getting paid with what was, at that time, the world's best currrency which they would use to buy steel and such to make more cars and such...

What we are doing, and I wrote an article called "Burn dollars to fight gravity" which you will like, is printing up more and more dollars in order to get ourselves out of debt but the energy speculators siezed on this plan (that was hatched by GS former CEO Paulson and taken advantage of by GS currently) to divert all those extra dollars into commodities, tripling the price of commodities on a 40% decline in the dollar. That still net's out to them as an inflation-adjusted 100% increase in what they get for the commodities.

Also, what's really great is that we get nothing of lasting value for out dollars since this country produces virtually nothing (other than homes, which they crashed first to put a stop to it) so we are spending and spending and spending and accumulating no assets for it and the government goes further and further into debt to keep the whole charade going.

In the end, GS/MS et al hope to be the last men standing when they pull off the deal of the century and broker the restructuring of our $10Tn national debt as our creditors fear we will slip into bankruptcy. They could easlily collect a $250Bn fee for that and eliminating BSC and LEH along the way (and C if they can) means that pot will be split less ways.

Cash is good Blink, we're mainly cash and giving it to earnings to see if we can break oil and get some good news, otherwise it's off to Vegas to do some real gambling!

Al - Yes, two weeks ago (6/13) I called a bottom. I also shamefully called a top in September at about 13,800 and 3 weeks later we went over 14,000 where I continued to say we were too high and people just like you (was it you) said the same kind of things.

Since we run diversified portfolios on our site, it isn't the sort of thing we shift on a dime from day to day. We have actually committed very little additional cash this month despite my desire to as we look for a proper bottom but if it somehow satisfies you to say "wrong, wrong, wrong"


I don't know what your deal is - clicking on your name shows that in Aug '06 you said "Phil, Thanks for your response. I have been enjoying your posts for almost a year now. You have lots of good ideas and a refreshing take on things. Hope you keep them coming. Aug 20 06:54 PM"

I guess you must have lost your smart ass on Sept 24th when oil was below $70 and I said it would go up (after we had correctly called the sell-off) and you said "Wow, are you finally capitulating on your bearish stance on oil after all this time?... Maybe I should think about shorting it now... "

Oh I see, it must have been Sept 28th, with the Dow at 13,895 when I recommended puts on the DIA and you corrected me by saying "Why puts on the DIA?? It's a mega cap, diversified index that is easy for i-banks to move around? These are huge companies with enough moving parts that they can print any number they want at earnings time (at least for a couple qtrs). " Yeah, I'd be embarrassed too to be that totally wrong trying to call someone else out. Sorry about that...

I also love your May 21st statement: "I think in the long run higher energy prices are the best thing that can happen to this country. I hope it goes to 200.00 a barrell. " So far so good I guess...

May 23rd, still on topic: "Here is a tip Phil. Take everything to do with oil off your screen. It isn't really as important as you think! You need to move on because its getting really pitiful."

Gosh thank goodness you explained to me oil wasn't going to be a big problem for the markets, you are really being borne out by the action since then.

I have no problems with people who wish to engage in an intellectual debate on a topic but when you make comments like "Everyone reading this needs to know that Phil is full of shit and just trying to promote his subscription based website. (June 13th)" then it says a lot more about you than it does about me.


Have a happy 4th everyone (else)!

Options Trader: Tuesday Outlook

I don't know of a proper Dow study. The S&P routinely changes components too and the Russell just rebalanced but with the Dow just having 30 components, you really can't just go pretending it doesn't matter when you trade 2 in, especially with their whacked out weighting system - that in itself could have used an extensive study to figure out what the hell they did.


SC Boeing: www.bloomberg.com/apps...

I would understand the lack of action by the government if the situation was insoluble, but it isn't. It just takes firm action and some vision. Unfortunately, those are things we are very short of in our government.

Options Trader: Monday Outlook

Hardhead - I would love it if you have links to that GS action.

Prudent, I think you may be mixed up (understandable at your age), Hoover was a Republican, Roosevelt was a Democrat who cleaned up the mess. Nixon/Ford sent this country into a financial crisis, Carter tried to reign in the madness and was quickly replaced by even the even greater spending madness of Reagan/Bush the 1st, who were Republicans who oversaw the first major debt expansion and the S&L crisis. Cinton was the Democrat who cut spending and raised the country out of the gutter.

The Republicans haven't been the party of restraint since Lincoln and they shot him and then the "radical republicans of Congress" tried to impeach him for violating an act they passed while he was President. They replaced him with Grant, who was the puppet president who ushered in the age of carpet-bagging and created a financial crisis through greed and exploitation that was so excessive that the Republicans were voted out of power in his second term. Sound familiar?

Also familiar was the "Black Friday" crisis under Grant in his first term where gold speculators wrecked the markets while Grant waited for thier OK to "fix" the markets. Another good one pulled under Grant was the "Whiskey Ring" in which over $3M in taxes were stolen by high government officials. The leader of the gang was pardoned by Grant.

There were MANY other sickening abuses of our democracy under Grant - he was the template for the modern Republican administrations you worship today, a puppet leader controlled from behind the curtain by the powers that be...

Junkyard - I agreee. I wrote an article called "Burn Dollars to Fight Gravity" pretty much on that subject and predicted this would be the policy the administration would pursue under Paulson back when they first picked him. I just never imagined they would push things this far!

Unfortunately, oil is the only "safe-looking" place to put money with everything else melting down.

Don't even get me started on Cheney Rono!

Critique of Dollar Policy

Good point Things!

Thanks Melancholy and Mark. Yes, I am outraged, that Fed move (or lack thereof) has had me angry ever since - I guess it was my last straw...