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  • Fake News Friday – What A Fool Believes  10 comments
    Mar 2, 2012 9:23 AM | about stocks: AA, AAPL, BAC, DXD, FTR, HCBK, HOV, PEG, SCO, SKX, SQQQ, SU, USO, X, XOM

    Oil shot up to $110.55 yesterday.

    The news was that a pipeline in Saudi Arabia had been attacked and oil had been running up all day into this "news," which, funnily enough, turned out to be fake. We caught the news at 3:05 in Member Chat (thanks Kustomz) and we had been waiting for oil to stop going up so we could short it. The turn came at the $110.50 in the Futures (/CL) and we caught a nice run down to $109 and I reiterated, at 3:36, with oil still at $109.88 my love for the USO April $40 puts, which were $1.08 at the time and finished the day at $1.15.

    As Malsg pointed out in Member Chat: "The pictures of the fire are taken in daylight … but Saudi sunset was several hours ago … the oil market only stared going nuts after the close." A very good observation that gave us the resolve to stay short on oil - which is working out fantastically this morning as well.

    We also grabbed an aggressive short spread on BNO, as it seemed the whole day's run had been BS, with traders in the know stocking up ahead of the fake news so they could unload barrels into the retail suckers who bought into the spike. Don't worry though - no one who bought oil up from $105 on Thursday to $109 ahead of the news will be arrested or even questioned - we'll just keep pretending the total farce of oil trading is a legitimate pricing mechanism, even though it costs people around the world hundreds of Billions of Dollars each year in excess charges (see "Goldman's Global Oil Scam Passes the 50 Madoff Mark").

    SPY DAILY Now, this is the part where I would usually point out how the economy is weaker than we think etc. but I'm not going to do that this morning because the S&P still over 1,360 and, if a stronger Dollar isn't going to stop this rally - nothing will. Even yesterday, I joked to Members that I wasn't going to highlight negative news items in red anymore as there was no such thing as bad news in this market.

    As you can see from David Fry's SPY chart, we''re back testing the bottom of that channel today and, if we don't break down here, then we can…
    continue reading

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    Tags: AA, AAPL, BAC, DXD, FTR, HCBK, HOV, peg, SCO, SKX, SQQQ, SU, USO, X, XOM

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    Themes: Hedging, Option Strategies Stocks: AA, AAPL, BAC, DXD, FTR, HCBK, HOV, PEG, SCO, SKX, SQQQ, SU, USO, X, XOM
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Comments (10)
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  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    Much better today. SA is all about markets...

     

    Disclosure: It's just my opinion. What's good for me might not be good for you...
    2 Mar 2012, 12:06 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » I know that Alex - I'm just messin' with you. If you weren't too cheap to buy a Report Membership ($99/month, $499/year) you would have seen today was the day we got down to business with a couple of excellent hedges and 10 long-term trade ideas!

     

    We also picked USO April $40 puts for the day, which made 15% and the short play on the oil futures at $108.50, which made $2,000 per contract today and it all connects to all the other geo-political BS you think is a waste of time but actually forms the basis for our investing decisions.

     

    Have a good weekend,

     

    - Phil
    2 Mar 2012, 03:57 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    > If you weren't too cheap

     

    Here, in Minnesota, it's a compliment...

     

    Honestly, I don't have enough money invested to justify this expense. If I had millions... Besides, I also have a daytime job, can't trade full time.
    2 Mar 2012, 04:33 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » Well, unfortunately, SA will not pay me the penny per viewer they pay their "Premium" writers because my content is "not exclusive to them" (it's also on my Members Only site). And not enough of you guys complain to SA when good writers leave, so they just figure you'll read whatever crap they can get for free and be happy.
    2 Mar 2012, 04:49 PM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    I complained. I got spin in response. And an "all you can eat" buffet of articles written by undergraduate Business Administration students. Some of them are... entertaining.

     

    I think the quality of SA went down tremendously when they adopted that policy, but from what I know the business is bigger than ever, so who I am to say it was the wrong call. It's all about quantity on the web.
    4 Mar 2012, 06:38 PM Reply Like
  • richardcavessa
    , contributor
    Comments (260) | Send Message
     
    Phil, LOL obviously SA is worried you would break the bank with that kind of payout...
    5 Mar 2012, 11:43 AM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » By the way - you leave Russia and go to Minnesota? That's like the Siberia of America!
    2 Mar 2012, 04:51 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    > By the way - you leave Russia and go to Minnesota? That's like the Siberia of America!

     

    Still better climate than in Moscow. As for people here, they are the best I've seen. And I traveled a lot.
    2 Mar 2012, 05:12 PM Reply Like
  • conom20
    , contributor
    Comments (392) | Send Message
     
    Hi Phil,
    I like your articles.Do you have any short strategy on Exxon?I think the company has developed some intrinsic weaknesses related to rrr,cash-flow and the capex structure.There is room for disappointment if they quit buybacks or any other "prudent" capital allocation decision(that they will,sooner or later,implement).Problem is...the stock is apparently discounting a 90-95$ oil price and even if china,lies....a positive surprise on the price front(geopolitics) would still be possible and dangerous....And I see the same kind of risk in your trades plus you've already said the market is in risk-on mode so...
    6 Mar 2012, 12:47 AM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » There's an SCO short play in my BNN interview (see this morning's post) that pays 400% in 40 days if it works. That's better than XOM, who we actually like (but not at this level so I do agree they pull back with oil).
    6 Mar 2012, 09:27 AM Reply Like
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