Reminder: David is available to chat with Members, comments are found below each post.

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http://www.philstockworld.com/2012/02/04/midday-update-16/

Nothing!

Not one move since expiration day and that's the way uh-huh, uh-huh we like it in our virtual retirement portfolio because, when we actually retire – who the hell wants to have to work – even when that job is simply pushing a couple of buttons on a computer screen once in a while?  Our long-term outlook has been bullish since we began this portfolio last April and we did nothing when the S&P fell 300 points and we did nothing now that ...]]> Income Portfolio Feb Update – The Joy of Nothing

Nothing!

Not one move since expiration day and that's the way uh-huh, uh-huh we like it in our virtual retirement portfolio because, when we actually retire – who the hell wants to have to work – even when that job is simply pushing a couple of buttons on a computer screen once in a while?  Our long-term outlook has been bullish since we began this portfolio last April and we did nothing when the S&P fell 300 points and we did nothing now that it's back up 300 points – to about where it was when we started. 

Our goal here is to simply generate a monthly income of $4,000 using $500,000 invested without depleting the principal – the kind of thing that my Mom and many of her friends need to do to supplement their not very generous Social Security checks.  Please see previous posts in our Virtual Portfolio section for our main strategy discussions – this is just an update. 

Our last update was on January 12th and we finally had some work to do after taking 4 consecutive months off as we just laid back and collected our Q4 dividends but January had a lot of our short sold January positions coming due or paying off.  We knew this was going to be our time for action as there really is no such thing as a free lunch – even the investing class has to roll out of bed and sit at a desk a couple of times a year!  

Prior to making our moves, we had $80,617 of realized gains (positions we had cashed in) against $39,965 for a $40,652 net gain in our 8th month so averaging a bit better than $5,000 a month and well a head of schedule but this is the month we EXPECTED to do well in so we'll see how we made out.  The following positions were closed:

• 1,000 shares of RRD paid a .26 dividend on 1/25 – up $260 
• 1,500 shares of NYB paid a .25 dividend on 2/3 – up $375
• 4,000 shares of AA paid a .03 dividend on 2/1 – up $120 
• 2,000 shares of F paid a .05 dividend on 1/27 – up $100
• 10 KFT Jan $30 puts sold for $1.60, expired worthless – up $1,600 
• 10 EXC Jan $37.50 puts sold for $2.20, expired worthless

…

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http://www.philstockworld.com/2012/02/04/income-portfolio-feb-update-the-joy-of-nothing/

Today’s tickers: F, GM, MAS & GILD

Options commentary to resume on Tuesday February 7th.

F - Ford Motor Co. – The better-than-expected jobs number out this morning revved up investor appetite for automobile stocks, driving shares in Ford Motor Co. up 4.0% to $12.75. Call options on the U.S. automaker are flying off the shelves, with nearly 5 calls in play on the stock for each single put option traded. The single-largest transaction in Ford options appears to be a bull call spread ...]]> Jobs Report Drives Heavy Trading Traffic In Ford, General Motors Options

Today’s tickers: F, GM, MAS & GILD

Options commentary to resume on Tuesday February 7th.

F - Ford Motor Co. – The better-than-expected jobs number out this morning revved up investor appetite for automobile stocks, driving shares in Ford Motor Co. up 4.0% to $12.75. Call options on the U.S. automaker are flying off the shelves, with nearly 5 calls in play on the stock for each single put option traded. The single-largest transaction in Ford options appears to be a bull call spread that yields maximum possible profits if the price of the underlying rallies nearly 20.0% during the next few months to expiration. It looks like one trader purchased a 30,000-lot April $14/$15 call spread for a net premium of $0.15 per contract. The position may be profitable at expiration if shares in Ford Motor Co. climb 11.0% to surpass the effective breakeven price of $14.15. Maximum potential profits of $0.85 per contract are available on the spread should shares in the auto manufacturer surge 17.6% to exceed $15.00 by expiration. Overall options volume on Ford is up above 175,000 contracts just before 1:00 p.m. ET.

GM - General Motors Co. – GM’s shares are outperforming fellow U.S. automaker, Ford Motor Co., this afternoon, with the stock trading 8.4% higher on the session at $26.35 as of 12:55 p.m. in New York. Optimism spurred by this morning’s stronger-than-expected jobs report was followed by greater-than-usual options action in the name. A debit put spread in the March expiry, which may be an outright bearish…

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http://www.philstockworld.com/2012/02/03/jobs-report-drives-heavy-trading-traffic-in-ford-general-motors-options/

Distractions.  

That's all we have lately.  Greece's silly $171Bn loan is meant to distract us from Europe's $17Tn debt hole and the US continues to borrow $171Bn PER MONTH to cover it's deficit and we don't even talk about Japan as the debt climbs over 220% of their rapidly declining GDP and who knows what's going on in China but, generally, when you have double-digit declines in home prices on a monthly basis – there's going to be a problem down ...]]> Friday Follies – No Jobs but Hey, Look at Facebook!

Distractions.  

That's all we have lately.  Greece's silly $171Bn loan is meant to distract us from Europe's $17Tn debt hole and the US continues to borrow $171Bn PER MONTH to cover it's deficit and we don't even talk about Japan as the debt climbs over 220% of their rapidly declining GDP and who knows what's going on in China but, generally, when you have double-digit declines in home prices on a monthly basis – there's going to be a problem down the road.  

This may be my last bearish post before drinking the technical Kool-Aid this weekend and we've already selected 5 trades for our Members that will make 200-500% if the market keeps moving forward and there are still plenty of stocks we can make a lovely Buy List out of if this rally has legs – especially the way we like to bet, since our hedges allow us to make very nice returns, as long as we simply hold our current levels.   

There's the rub though – are the current levels sustainable?  The nice thing about consolidations like the one we've been having this year is that they firm up a floor and give us a very obvious exit point on the way down so we can move some of that sideline cash into play – as long as we hold 12,500 on the Dow and 1,300 on the S&P and 2,800 on the Nasdaq – pretty simple strategy, right?  

Notice the 2nd row has our major indices priced in Euros and our third priced in Yen.  My main issue has been that we've been much weaker than it seemed as the Dollar's relentless decline masked a downturn in the inflation-adjusted price of our stocks (and the weak Dollar also serves to inflate revenues reported by multinational companies) but, at the moment, we're at our breakout levels by any measure so we may as well go with the flow until we see a proper reversal.  

First we need to get past our NFP report at 8:30 of course.  I'm expecting a miss but will the market even care or will that just mean Uncle Ben has an excuse to pump up the QE according to their new "formula"?  

Keep in mind that what Bernanke said last week regarding the Fed's system for determining policy boils down to – As long…

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http://www.philstockworld.com/2012/02/03/friday-follies-no-jobs-but-hey-look-at-facebook/

Today’s tickers: ZNGA, UPS & SXC

ZNGA - Zynga Inc. – Options on the social game developer behind wildly popular games such as Words with Friends and FarmVille continue to trade at a Facebook-IPO-induced fever pitch today. Investors exchanged roughly 45,000 option contracts on Zynga by 12:30 p.m. in New York, while the price of the shares reached new heights one day after the highly-anticipated Facebook filing became a reality. Shares in ZNGA rallied as much as 21.8% in the first half of ...]]> Heavy Action In BP Call Options With Earnings On The Horizon

Today’s tickers: ZNGA, UPS & SXC

ZNGA - Zynga Inc. – Options on the social game developer behind wildly popular games such as Words with Friends and FarmVille continue to trade at a Facebook-IPO-induced fever pitch today. Investors exchanged roughly 45,000 option contracts on Zynga by 12:30 p.m. in New York, while the price of the shares reached new heights one day after the highly-anticipated Facebook filing became a reality. Shares in ZNGA rallied as much as 21.8% in the first half of the trading session to an all-time high of $12.91. Out-of-the-money call buying in the front month suggests some traders are positioning for the price of the underlying to extend gains in the near term. February $13 strike call options that cost around $0.15 apiece at the beginning of the week, are now more than five times as expensive given the current asking price of $0.80 per contract. Traders looked to the Feb. $14 and $15 strikes, buying calls this morning at average premiums of $0.35 and $0.22 each, respectively. Call buyers may profit at expiration if Zynga’s shares continue to post strong gains in the next few weeks, but only risk losing the premium paid for the options should the stock’s run-up reverse course. Meanwhile, buyers of some 5,000 puts at the Feb. $12 strike stand to profit in the event that Zynga’s shares pull back off their highs ahead of expiration. Investors that bought into Zynga call options weeks ago when shares in the game developer were down sharply off their December-IPO price of $10.00 saw, in some cases, the value of their positions sky-rocket this week. Traders that paid an average premium of $0.85 apiece for Feb. $8.0 strike calls back on January 9 now find those call options cost $4.30 each as of 1:00 p.m. in afternoon trade.…

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http://www.philstockworld.com/2012/02/02/heavy-action-in-bp-call-options-with-earnings-on-the-horizon-2/

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene

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http://www.philstockworld.com/2012/02/02/midday-update-15/

I am trying!

I watched Fox news for hours last night and I did learn that Warren Buffett is an evil, criminal mastermind who must be stopped and that Obama is soft on the Taliban so following through on his pledge to end the war is nothing more than an insidious plot to garner votes by…. uh…. doing what he was elected to do – THE FIEND!!! 

Damn, see – it's not working.  I'm hardly any dumber (but I am much less tolerant of poor people ...]]> Still Thinking On Thursday – Can’t Get Bullish

I am trying!

I watched Fox news for hours last night and I did learn that Warren Buffett is an evil, criminal mastermind who must be stopped and that Obama is soft on the Taliban so following through on his pledge to end the war is nothing more than an insidious plot to garner votes by…. uh…. doing what he was elected to do – THE FIEND!!! 

Damn, see – it's not working.  I'm hardly any dumber (but I am much less tolerant of poor people and minorities) and I still can't get behind this market rally.  Oh wait, before we get off the Fox topic, I want to point out another "big" news story they featured.  It seems that we're finally cracking down on welfare recipients who spend their money at strip clubs.  The House passed a bill yesterday as bill sponsor Charlie Boustany (R-LA) pointed out that, with all these welfare people spending the Government's money at the strip clubs, he had to wait over a half hour to get a VIP table so he could spend the Government's money at the strip club.  Outraged Congressmen passed the bill 395 to 26 (women) as this was an issue that really hit home for them!  

If we finally hold our chart levels, my mission this weekend is to kill as many brain cells as possible so I can stop understanding the news and just buy the f'ing dips, which will be our game plan until the levels are blown again and it's safe to switch our brains back on.  On the right, we have a Rorschach Test for the day to see if you can be oblivious enough to go bullish at the top of our range.  

If this chart doesn't bother you – you may be ready to rally!  You are also ready to brush off the OWS movement as "squatters" – something else I learned on Fox last night.  That's right, they are not protesting – thousands of people are actually gathering in parks to get "free rent" as they can't possibly have a legitimate complaint against the rampant abuses of Capitalism that are tearing this country apart.  

Well maybe not this country but Japan is sure about to break as Finance Minister Azumi calls out the Fed's "pledge" to keep rates microscopic…

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http://www.philstockworld.com/2012/02/02/still-thinking-on-thursday-cant-get-bullish/

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Scott Martindale, Sabrient Systems and Gradient Analytics

The stock market has continued its bullish ways—thanks to indications of an improving U.S. economy and diminished concerns about Europe’s economic stability. The S&P 500 finished January up +4.4%, while the “riskier” Nasdaq finished the month up 8.0% and the MSCI Emerging Markets Index gained 7.7%. Yes, investors are boldly embracing the “risk on” trade. 

On Wednesday, a successful debt offering from Portugal ...]]> Sector Detector: Stocks reload for run at highs

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Scott Martindale, Sabrient Systems and Gradient Analytics

The stock market has continued its bullish ways—thanks to indications of an improving U.S. economy and diminished concerns about Europe’s economic stability. The S&P 500 finished January up +4.4%, while the “riskier” Nasdaq finished the month up 8.0% and the MSCI Emerging Markets Index gained 7.7%. Yes, investors are boldly embracing the “risk on” trade. 

On Wednesday, a successful debt offering from Portugal was well received, the Institute for Supply Management (ISM) reported mostly improving conditions in the manufacturing sectors, and factory activity increased in China and Germany—although overall activity in the euro-zone continued to shrink. Nevertheless, European stocks have rallied during January while bond rates have fallen.

The bulls still control the action, and sectors with the highest Sabrient Bull scores (indicating relative outperformance during particularly strong market periods) have tended to be the leaders. Among the 10 sector iShares, Basic Materials (IYM), Technology (IYW), Industrial (IYJ), and Financial (IYF) were the leaders in January. Wednesday’s market strength was led by Financials, Materials, and Industrials, which have the highest Bull scores. 

“Don’t fight the Fed” has been the slogan emboldening the bulls, along with improving conditions in the U.S. and emerging markets. But now you might expand it to say, “Don’t fight the central banks,” as they are all putting their best efforts into fighting global recessionary forces emanating from Europe’s bank and sovereign debt crisis. Still, conditions in Greece remain dicey. The biggest stumbling block to a bailout package for Greece is the severity of austerity measures that the EU is demanding before authorizing additional funds. Greek leaders refuse to accept forced wage cuts that they see as draconian but the EU sees as essential. Something’s gotta give.

Even if Greece relents and accepts the austerity measures, such actions (besides fomenting popular unrest) serve to reduce economic activity rather than stimulate it. So, under any scenario that unfolds, we should expect Europe to remain a ball-and-chain on global economic growth. 

In fact, Bloomberg reported that European equity valuations compared with the U.S. have fallen to the lowest levels in eight years as the economic forecast for Europe remains bleak while U.S. projections have brightened. They further note that the Stoxx Europe 600 trades at 1.43x book value compared with the S&P 500…

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http://www.philstockworld.com/2012/02/02/sector-detector-stocks-reload-for-run-at-highs/