CNBC Alert: Trade 247 First!

In the earlier years, RF was addicted to video games and one of the classic favs from the early 1990's was Street Fighter. I always played it with a buddy of mine, Mike, and he of course beat me with the famous Chin Li and that ridicolus spinning kick. However, it came no where close to the Ehonda "smack". Now, in honor of Ehonda, I have established a "Ehonda Bitch Smack of the Month Award" which will come at the end of every month - and the this month's winner goes to CNBC's and NYSE Floor Director Art Cashin.

Art, Art....Art, I don't see how he gets airtime for being wrong ALL of the time. Since April he has been saying "This is a sucker's rally" "This is a very dangerous time" "Take profits" "This is only a bear market rally" "Triple AAA rating loss will cause a massive selloff" and my personal favorite of all time - "Stock speculators can lose 100%! " (said on May 28)

So Art, you are telling me that market is going to 0? In a day? IBM is worth nothing? AAPL is bankrupt? Oil has no value? I mean I have heard alot of crap in my trading career but that might have taken the cake. Does anyone who has been wrong this many times deserve airtime?

Yeah, we might get a pullback but it will be after the DOW hits 10,000 or something crazy but I don't know if people tip this guy on the floor to try and help their net short positions but regardless, I am glad to present Art Cashin with the new "Ehonda bitch smack of the month award"

RF's S&P Call Revisted

Back in April I said that the S&P should develop a sawtooth pattern of consolidation and then we would go higher. So far objective #1 has been met and is highlighted above with the blue bars. Now comes the second objective, "the next leg higher". From the people I talked to, I would have there are about 6 bears out of every 10 traders and many believe that there will be no good news that will take us higher. I agree somewhat with that but I will monitor the RSI. The SPY must hold 50 on the RSI in order for the second objective to fulfill. Secondly, I believe my price target on the S&P will be done by Labor Day; however, it may come sooner, by the end of June if mutual funds are forced in to keep their jobs. I believe there are many mangers that are not putting money to work and are waiting on the last minute, in hopes of a pullback. If that doesn't happen, they will put BIG cash to work, which will drive stocks higher. As a trader, the new area everyone is looking at is the bond market. The 7 year auction went well Thursday, which drove us higher in the afternoon; however, as yields creep higher, the equity market could be in serious trouble. Rising yields are immient; however, the key remains how long this can be forestalled. Mortgage rates have gone up alot in the past few weeks from about 4.5% to now about 5.4% for a 30-year mortgage. I hear the top "bigboy" hedge fund for 1Q was up 12% which was a hell of a quarter. I believe some hedge funds went all in March and their years are made; however, mutual funds did not. If things get crazy again and fear comes back, I will cash out and go into a money market account because I am perserving my monster year. There are a lot of people that believe FAZ will go back to $20, SRS back to $50, and SDS back to $100...just look at some of the call buying. Regardless, the market rally will end soon but I still think we got legs.

RF S&P Position Disclosure: Long Sept $30 calls (cost $.85), Long SSO (cost $25.20), Short SSO June $24 Puts (hedged SSO bet)

Position Update: YHOO

Company fundamentals improving? JP Morgan thinks so, $19 PT,

http://blogs.barrons.com/techtraderdaily/2009/05/29/yahoo-are-fundamentals-improving/

Position Update: RFMD

Highlights from the Upgrade to Buy from Charter Equity Research

http://blogs.barrons.com/techtraderdaily/2009/05/27/rf-micro-soars-on-pre-announce-charter-upgrade/

Position Update: GNK and EXM

Still own both but didn't I call this 6 weeks ago? Smart $$ vs. Normal $$

http://www.mysmartrend.com/briefs.asp?nwdate=20090529&story=43

RF Sells

Sold 500 SSO at $26.50 for +.85 per share gain
Sold 4,000 CROX at $2.88 for +.04 per share gain

Market Wrapup (Delayed - it's Friday people)

"RF is a high flying, limo riding, styling, profiling, 23% for the month of May striving, four horseman! WOOOOOOOOOOOOOOOOOOOOOOOOOOOO!"

RF sells END

Sold balance of END @$1.64 for 17% gain

RF Sells

1/4 of GNK @ $26.10 for 53% gain

END

Breaking out hard

RF Buy Crox

Bought 4,000 Crox at $2.84....will hold into the bell and dump at 3:59

RF Buy SSO

Bought 500 SSO at $25.65......will ride into the close and sell at 3:59

Will use $25.40 stop

RF Sell DIG

Sold half of shares, +10% gain

CTIC

I told you!

Sold 1/3 of position at $1.52

RF Sell WNR

Sold all north of $14.40 - higher crude hurts margins, +6% gain

GNK

We win again! if you are in at original buy of $13 take off half and play with house money

RF Buys SGY

150 @ $8.25

RF Sell HES

Sold 1/3 of my position at $67 for a quick 7 points!

Market Outlook

Big short squeeze going on in oil this morning. Oil blew through $65 resistance and is at $66.02 as I type. Many of the CNBC "experts" were saying get short "in size" at $58 but the longs like myself are squeezing them hard right now. We should hit the $70 pt soon then I might peel back some of my DXO but until then I will let it continue to ride. Right now it's $4.20 in pre-market.

As for the market, key economic data is due out, specifically the GDP number and Chicago PMI index. The PMI should carry more weight but if both are good, we are gone!

For small caps, I like energy related plays. I will buy back PLLL today and may add GU. Both I will try to snag at the open, unless I change my mind. I got about 25% cash position and I am ready to deploy it.

Position Update: GME

http://online.barrons.com/article/SB124346270140060077.html#mod=BOL_hpp_highlight

CFO buys $500,000 worth of stock.....we win again!

Biotech Lotto

BUYER BEWARE: ANY OF THESE CAN SWING 90% IN EITHER DIRECTION IN A DAY!

TOP FINALISTS:
DSCO
DVAX
BDSI
NEPH

will add more soon......

Position Update: GLW

One of the best longs in the market today, in my view...$GLW

1.http://finance.yahoo.com/news/Corning-raises-2ndquarter-apf-15372866.html?.v=3

2.http://www.digitimes.com/news/a20090527PR200.html

3.http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=217700192

EWZ

Seller's remorse!

Market Wrapup

Oil is running faster than Barry Sanders, ladies and gentlemen. The portfolio was up in spectacular fashion today, up about 8%. Major gains lets by GNK, DIG, DXO, RFMD, WNR, GME, etc. I took some profits in DIG calls, GNK, and took a 4% loss in STEM to free up cash. I took a position in GLW because LCD demand in China is going through the roof (will post articles soon). I believe GLW could go to $13 but I doubt it; however, should print $16+ in time. I cost averaged down in ENTR today and now I'm closer to breakeven in the position. ENTR at $2.03 was a steal in my view today and I will add more if we get below those levels. ENTR is another small cap lotto, with no love and it could hit it big but we shall see. I am hearing good things in AMD, so I bought some shares, as well as speculative calls in the name.

Biotech is the sector with amazing results. I almost bought DVAX today but it ran way too high for me. The rumor is the GSK is in talks to buy them but it's just "rumors" - well unless something leaked. OCLS is perfect proof of what biotechs can do, up 250% in two days. CTIC is my lotto and I am sticking by her. I will search some more soon but if you are a scientist or doctor and know this mess, please comment and give some ideas!

I am outta here to celebrate (not really, go do more work) but have a good night.

RF Sell DIG Calls

Sold half at $3.10 today, + 73% gain (sorry for delayed posting, meetings)

DELL

Fair quarter...not bad at all, nothing spectacular

JCG

Mickey smoked this quarter.......had it on my radar just missed it. Nice Q J Crew

RE Sells GNK

Sold 150@ $23.80, 42% gain

GNK

My biggest position and it ain't done going up! Watch it's "brother" FRO....oil moving FRO will move with it!

Oil Names Still Cheap

I own HES but CVX and COP are still cheap. If oil can hang over $60, each got 7-10 pts in them.



I also got the DIG calls, up about 50% but want to hold on longer.... oil names undervalued

Market Update

Interesting day. Market is very mixed but overall the S&P is still in the consolidation mode. The bears want us to break 875 and drive us down harder, where as the bulls want us to break 924. If we break 924, I would be willing to bet it all that fund managers will push all in and we could have a 10% up month in June. Right now they are still sitting on cash, hoping the market pulls back so their benchmark loses don't seem as bad but that is a risky bet.

The bond market is the big problem now. The 5 year auction is at 1pm est and could spur another equity sell off. We need yields to stay lower and if they don't money will move into those since the yields are starting to purk up.

As for oil, it's moving wayyy higher. Now at $64, should go to $70.

Bottom line: Watch the 1pm auction

RF Buys GLW

100 @ $14.08

RF Sells STEM

Sold all @ $1.65

RF Buys

300 AMD @$4.56
250 ENTR @ $2.03
30 contracts AMD Jan.2010 calls @$0.16

DELL

Earnings after the bell.....still own a good chunk and am holding through earnings.

Market Outlook

I will be in a meeting for the first part of the morning until about 11 (hopefully sooner) so I won't be at the desk to see how things turn out. There is a lot of economic data coming out so the market will remain choppy. As for stocks, I am looking at some dips in some banks and will buy them. I am particularly looking at USB and WFC. In addition, I will add to my semiconductor chest via TER or AMD. Lastly, I will make more speculative option best soon, but may or may not post because it will be very risky. I also like the small caps like HGSI, RAD, and AHD.

I covered my ROST short yesterday at $39.50 for a 0.5% loss and don't feel like shorting yet. I will stay patient, with large cash boats and look for small cap day trade to build the cash warchest higher.

TTWO

http://www.streetinsider.com/New+Coverage/Brean+Murray+Starts+Take-Two+(TTWO)+at+Buy,+Sees+As+%22Attractive+M&A+Candidate%22/4686560.html

Upgraded to Buy and citied "An attractive M&A prospect'

They obviously didn't read my first Stocks Under $10 Post on TTWO...

lol but the funny thing is that management turned down $27 a share, they are morons! they will get no where near that now!

Copper is getting hot again!

FCX, PCU, SLT, WIRE, AND TGB are plays. TGB is the cheapo that I bought a long time ago with gold spec RBY. Both are up 50% since then but can go higher.

Position Update: MPEL

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20090526&id=9870254

LVS is gonna have a tough time in Macau with MPEL! Go out today but will be back very soon! City of Dreams opening in two weeks!

CTIC

Breakout coming soon....just about immient in my view.

It's a lotto ticket. Went from a nickel to $1.20 in a month.....and used to be $2,000 a share.

I'm keeping a small position

Position Update: RFMD

http://online.wsj.com/article/BT-CO-20090527-712158.html

good stuff coming from RFMD!

AAPL - Highlights of MS Upgrade

(Source: Morgan Stanley Equity Research)

Feel free to click and enlarge the pictures. Morgan Stanley is very bullish on AAPL and they are right, AAPL will go way higher in my view $150+. I will buy it if we get back to $120. iPhone is going to China, price cuts on iPhone, and rumors of the netbook. Morgan Stanley's price target is $185 and it is achievable.

RF's Long Portfolio Update (not trading account)

http://trade247.blogspot.com/2009/03/potential-long-term-plays.html
(click link for original post, all calls are archived)

In March, I got a few e-mails regarding longer-term buys. Above and the link shows the long portfolio that I constructed to fulfill that task. The portfolio is smoking the benchmarks with ease and should continue to through the rest of the year. The long portfolio was 100% and had gold and silver for commodity/hedging exposure. Many, if not all, of these I still own for an account that I help manage, in addition to some for both my trading account. The portfolio thesis centered around strong companies that had rich balance sheets and a few other metrics that would take me longer to discuss.

YTD the performance is about the same but I just wanted to show the parallels between the blog post and now. As for the people who emailed me, I hope you got long and are still long some of these. Cheers to 2009 and may it continue to be good.

RF Sell SFE

Sold this at $1.08 today I forgot to post, so sorry, 12% gain

Market Wrapup

Well today was interesting. At the beginning of the day, I was invited into a live chatroom to trade "live" and that was interesting. I got in around 9am and told them I was buying RFMD and THQI in size. The rest of 23 were shorting like crazy and at 10:30a they thought I was a genius because RFMD was up 14% in a hour. Those guys are 100% day traders and they go hard. I mean some of those guys bought like 3,000 shares of SDS like it was nothing. Anyways, to make a long story short, they got revenge at the end. It is very interesting how day trading works. These guys just scalp FAZ and other trades and try to get 30 0r 40 cents on a 1,000 or 2,000 share buy, to make a day profit.



As for the market, we are in a consolidation stage that needs to extend out or pullback. Regardless, I remain bullish until I feel this like this rally is over. As for the portfolio, I ended up 1.5%, with strong realized gains in MPEL and AVII. I like the action in RFMD and THQI. I am hearing good things on AMD, so i might get in that soon as well.

RF Sell AVII

Sold all AVII @$1.27 for 16.5% gain

RF Sells LEA

sold all LEA @1.48

RF Sells MPEL

All @$6.53 ; 24% gain

RF Buys THQI and RFMD

400 THQI @ $6.36
1000 RFMD @ $2.54 at open

Housing Numbers

Come out this morning, look for reduction in supply. If we get that, we should get another squeeze today.

Market Outlook

The futures were on fire earlier this AM at 914, now it seems to have dipped a little to 909. The GM bankruptcy is trying to provide some negatively but I remain bullish for the time being. As for today, I will probably make some day trades and post them to build cash flow and might take a few more positions. I really like RFMD here and will probably buy another 500 or 1,000 at these levels. I believe the handset market is turning up and the upside is not reflected in their stock price nor the estimates. I like AAPL and RIMM both on dips. I got the MS report on Apple, I just haven't had time to read it. I will post some highlights later this afternoon or tonight. I wouldn't find this tape, so scale into longs and remain strong. I believe June could be huge, since many fund managers are low on equities and will be forced to go in big to make their 2Q, in order to keep clients and their job.

Position Update II: SFE

Keep in mind guys, the market cap for the firm is only $120 mill (as of now lol!)

Safeguard Sci to recognize an unrealized gain of ~$120 mln upon deconsolidation of its ownership in Clarient (1.00 +0.03) Co announces that it expects to recognize an unrealized gain in income from continuing operations of ~$120 million stemming from a deconsolidation of its holdings in Clarient (CLRT). The gain and corresponding increase in shareholders' equity will be recognized in the current quarter ending June 30, 2009. The deconsolidation is the result of Clarient's recently completed private placement with Oak Investment Partners. The private placement in Clarient reduced Safeguard's ownership position to approximately 47% from approximately 50% at March 31, 2009. There is no cash flow impact from the deconsolidation."

RF Trading Portfolio as of 5/26

Below is my portfolio w/ cost avg next to it:

Stocks:
AVII ($1.09), ATHR ($16.76), CTIC ($1.25), DELL ($10.50), DIG ($28.10), DXO ($3.55), END ($1.3955), F ($4.915), FTK ($2.375 - cost avg w/ today's buy), GIGM ($6.45), GME ($22.20), GNK ($17.20), HL ($3.37), LEA ($1.63), LUV ($6.70), RFMD ($2.40), SFE ($.95), STEM ($1.74), WNR ($13.60), YHOO ($14.68), FCS ($5.18), LOW ($19.08), HES($60.20), FRO ($22), ENTR ($2.48), MPEL ($5.25), SSO ($25.20), EXM ($6.60)

Options:
DIG June $27 Calls, LUV JUNE $10 CALLS, UYG JAN 2011 $3 CALLS, UYG JAN 2011 $4 CALLS, SSO SEPT $30 CALLS, CAL $17.50 JUNE CALLS (note: probably will be wortless).

Shorts:
ROST ($39.20)

Market Wrapup

Great day! The S&P looks like it is on a mission to blow through some headwinds and go way higher. I play both ways, long and short, and I tell you, this is not the market to short. Many bears believe we have a double top at 924 but my gut tells me we are going to blow through that, as money managers are waiting for a pullback, that is just not going to happen (it could but I doubt it). The futures this morning bounced off 875 once again, which shows amazing strength. For the day, the account was up about 4% and I am very bullish. SFE crushed numbers after the bell, so that should go higher. I added some small caps to the portfolio because I believe the small cap lotto will continue for a little longer (however, not too much longer). I also bought some SSO calls and shares, to put money on the line, with the RF prediction. Lastly, I will say that coffee is on some sort of drug, related to speed. Look at ddrx. I think it is safe to say that coffee will continue to run and investors will seek to find the next one. Get the research on and make some $$. I will try to be back later, see ya.

Position Update: SFE

We win again, shares up 12% in AH!

The surprise is that I am still long since $.95, wow, that's a new change. I think it goes to $1.40-$1.50.

http://www.reuters.com/article/mergersNews/idUSBNG35086820090526

RF Sells

Sold 700 END @$1.54 9.5% gain

RF Buys SIFY

350 @ $2.08

RF Buys LEA

500 @ $1.64

FEED

Memories.....monster stock!

http://trade247.blogspot.com/2009/04/stocks-under-10-feed-3rd-edition.html

I should have listened to the myself instead of cutting out so early!

RF Buy SSO

Bought 500 at $25.45 and sold June $24 puts against them at $.85 - in reality, the most I can lose it 3% but we are going way higher!

I am also writing naked puts on the SSO - but I don't advise this

AAPL

Morgan Stanley upgraded this to Buy with $185 price target......

I like AAPL and RIMM both on dips

Rf Buys

Bought 400 more FTK at $2.12

Bought 350 AVII at $1.09

Bought 100 more BDSI at $5.49

RF Buys

RF Buys

Sept. $30 calls on SSO- 10 contracts @$0.85

Market Outlook

It looks like we will get hit a little bit today but the question is how much. The main market selloff buzz is due to the North Korea missle launch, the US credit rating downgrade, and terrible economic data in Germany. 875 is key support on the S&P, so it is a great entry to scale into longs. If we break, the next support level is 830. I will need to see how rough the selloff seems before I can determine how bad things seem to be. As for building longs, I like steel, technology, dry bulk shippers, oils, semiconductors, and plays tied to mobile technology.

As for the market, we are at pivotal levels. If we can hold these levels and show a strong bounce, we should go way higher. June is almost here and that is the last quarter of the month. Many institutions are underowned and if they see the benchmarks continue to move well and hold, they will be forced to go "all in" in June, which will drive up the indices. There is more of a bearish sentiment coming in since earnings season is gone but I don't want to be net short.

So, we shall see, if this another classic "Sell in May and go way?"

RF Watchlist (a few names): AAPL, RIMM, STAR, ATML, USD, MCHP, PBR, WFC, LUV, CAL, etc...

These markets make people crazy!

As mentioned before this market is probably the second toughest market I have ever traded, mainly due to the politics. I love this guy and his views lolllllll although he should have caught the BIDU short with us at $245, fun quick points.

BDSI

I took a small % in this but debated on posting. The ruling coming in two weeks on their big cancer pain drug, Onsolis. It will be do or die and I can bare the risk. Biotech bits hard, so you need to know that things can jump 40%+ either way, if the ruling goes good or bad. My "voices" as well as my "sources" say there is a 75% of it passing.

If passes, I believe the incremental revenue will be incredible and it's not priced in, allowing it to trade between $6 and $10. However, if it passes and they do an immediate share offering like XOMA, it will barely move (but I doubt this will happen).

Bottom line: It's a classic biotech lottery ticket, along with CTIC.

Position Update: GIGM

http://www.fool.com/investing/international/2009/05/12/5-star-stocks-poised-to-pop-gigamedia.aspx

I am still long and haven't sold a share. I am also looking at other chinese games plays, particularly SNDA and NTES.

OPEC Minister Predicts $75 Oil

http://www.dailyfinance.com/2009/05/24/opec-minister-predicts-75-oil/

I know the bears are saying "RF, there is no way oil is fundamentally worth $75!" My answer to them is that there is NO way to determine a "fundamental price" for oil. When the US imports all of the oil from foreign nations and is dependant, the price can be anything, especially if missles or planes fly over Iran and Saudi.

I am long oil in big ways via WNR, DXO, DIG, HES, FRO and FTK.

Buy the dips in Oil and Semis - you won't be denied!

Position Update: GME

(Click to Enlarge - Above Sterne Agee Estimates, Below Goldman Sachs Estimates)

After the big selloff on Thursday, it is clear that many analysts have different views on Gamestop. I have read 3 analyst reports and 2 remain very bullish, both keeping price targets above $30. One of those firms, Sterne Agee, kept the $35 price target and said the selloff was overdone - which I agree with. Goldman Sachs on the other hand, kept their neutral rating and lowered the price target from $27 to $24. Goldman believes the firm should earn $2.73 per share and $2.62 per share next year. Sterne agree believes the firm will earn $2.90 a share this year and possible grow 15% EPS next year (which takes it to about $3.25ish). So what brings the wide seperation?

Sterne Agee: They argue that the guidance is very conservative and reflects extreme (overdone) weakness in Europe and Wii Sales. In addition, they believes that Gross Margins improved dramatically in Q1 (which they did) and even though in Q1 the firm missed revenue targets, they crushed EPS estimates because of strong cost cutting measures. Lastly, they believe used games will remain to perform well, growing strong, and will provide stronger margins (around 50%) which will post EPS growth.

Goldman Sachs: GS has a variant view to say the least. GS believes that is the beginning of a business model flaw because "they believe" that current product cycle continues to taper off, which double-digit declines in same-store sales declines in software will provide headwinds for earnings. Secondly, GS claims that Gamestop continues to "lose share on a same-store basis, by our measure, with Gamestop's SSS tracking light on industry numbers". Well, I flat out disagree with that and it shows that they don't listen to the conference call (or the analyst was playing solatiare). The CEO said (not quote for quote) "our share grew while the industry sales declined, showing the Gamestop stayed reslient in a tough economic climate". The first comment is a fair statement, that I can respect.

So, enough of the gibberish, here is my take. I believe long-term Gamestop is going to face serious headwinds because of the new online model that allows gamers to download content off MS live or whatever portal they choose. Many bears believe Gamestop will end up like Blockbuster but I view it a little differently. I think Gamestop's management is one of the best in the biz, plus Blockbuster never had a true profitable segment, like that of used-games for Gamestop. It is true that Gamestop faces strong challenges with Amazon and new disruptive technologies; however, I am a believer - at least for a trade. Here is why:

1. Hardware sales- The segment that is killing Gamestop, more than any, is hardware. The CEO of Gamestop said on the conference call that the only way Nintendo or Sony will make their hardware sales numbers is to cut prices on the consoles. I totally agree because this seems to be the longest time period, where a manufactuer has not cut prices. Therefore, I am "betting" that Sony and/or Nintendo will cut prices on their consoles, which will boost sales and help Gamestop's numbers. However, note this: GME's 2Q numbers do NOT reflect any hardware prices cuts BUT 3Q/4Q DO reflect hardware price cuts. Therefore, no price cuts, could lower the 2nd half of the year's estimates. I believe we will see price cuts within the next 45 days.

2. Multiple Valuation - One could argue that PE multiples are dumb in an environment that like this and I somewhat agree but would you rather me bust out EV-to-projected EBITDA in relation to market cap numbers? I will save that for another day but the valuation on Gamestop really comes down the the last half of the year and the EPS projection for next year. If they hit numbers and guide higher, the stock should easily see $30. I believe that Gamestop should deserve a 10x multiple, which is conservative compared to the past. In 2007, the stock carried a 12-13 multiple, while last year it had a 9.5x multiple (in a strong bear market). I think 10x is conserative but I rather be conservative than agressive. Regardless, Gamestop has this year's FY estimates of about $2.83-$2.93, which solely rely on a strong second half. If they can hit those numbers, the stock is worth $28+. If not, I will need to see how bad the estimates come out and the guidance for next year but I think worst-case scenario is depicted by Goldman. Goldman has a $24 price target on it.

In conclusion, I like the name for a trade. Over the long-term, it is a risky bet with new technology and new industry trends. I am willing to quadruple my position if the stock dips below $19 and until then, will probably keep what I have or add small.

Obama: "We Are Out of Money"

Fast forward to like 13:20......wow.

RF's Take on the S&P - Watch Implied Volatility

(click to enlarge - SSO Volatility Top, SPY Volatility Bottom)

When determining valuations on option prices (in short-term) it is important to look at the implied volatility (orange line) of the underlying asset. Over the past week, we have seen an increase in implied volatility for the S&P 500 but compared to the past. When valuing options, the higher the implied volatility, the higher the option value. It's rather interesting because I have been looking at certain out-of-the money calls on the SPY and SSO for later months in the year of 2009 and see that I can buy them for the same price today, than I could in early April, when the market was lower. What's even more interesting is that the implied volatility of the S&P today is higher by about 8-10% compared to those time periods. Odd, no? Well not really because I looked further out-of-the money about 45-50 days ago and time decay is part of the equation.

With that being said, it's rather interesting to see the put-to call ratio since early March, as well as the volume decline. To break it down in "easier" terms, when more puts are traded than calls, the ratio will exceed 1. This is also a good indicator of market sentiment. If the ratio is too low, the market may be seen as "overly bullish". The SSO (levered 2x long spy) shows that the ratio is 1. So, one could interpret that people are starting to buy more and buy protective puts on their positions OR speculators are betting on a drop in the S&P 500.

It is amazing how many economists and commentators believe we are going to retest the lows. In my view, I think they are nuts. I thought it March we might get to 650 but no lower and I covered all of my shorts at 740. When I saw the market shoot below 700 I was shocked. I went 70% long at 700 and kept 30% cash in case; hence, my "lucky" year. Frankly, I miss those times. I bought some great deals like AXP at $10 and FAS at $2.50 and the value is just not there. As mentioned earlier in the week, I believe the market will go way higher and soon. The big run will NOT be based on fundamentals but based on supply and demand. I believe many pension/mutual funds will be forced to put money to work because they will be moving out of Fixed Income and the benchmarks are eating their lunch. For the time being, I think this is a market where you can buy "high" and sell "higher". We might pullback on occasion but I believe fund managers will eat up the dip. Regardless, I am going against the concensus and the options markets, so it will make or break me. I think we still have a lot of problems, particularly our nation's debt and unemployment. However, if we hold, supply/demand will drive the market up and I believe that the S&P will hit 1050+ by Labor Day. I've been wrong before, but I will put my money where my mouth is, with my option plays (to be purchased soon).