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Monday Moon Shot

Attention all bearish analysts – we have now left the orbit of your knowledge of the markets!

That sinking feeling you have in your virtual portfolio is a perfectly normal reaction to the stock market slipping away from the pull of all earthly concerns as we head out into deep space.  I urge my passengers to remain seated though, as it is very easy to get disoriented or giddy until the captain is able to turn on our VIX drive once we have firmly set our market direction.

Captain Buffet and his crew of the world’s top investors is aligning the ship for a jump into hyperspace and we can keep an eye on the screens here:

 

 

 

 

 

 

Berkshire Hathaway has always outperformed the Dow but it has also always been a great leading indicator of direction but, not only has it outperformed the Dow by over 10% in the past 3 months, but our man Warren just told us we were undervaluing his company!

Does that mean we are also undervaluing the rest of the market?  Do you really think the answer could be no?  Berkshire Hathaway is the market – Acme Bricks, Benjamin Moore Paint, Borsheim’s Jewelry, Business Wire, Clayton Homes, Dairy Queen, Fruit of the Loom, Geico Car Insurance, General Re, HH Brown Shoe, Iscar Metal, Jordan’s Funiture, Mid-America Energy, Net Jets…  They are a diversified basket of what Mr. Buffett considers the best quality (not always the biggest or the fastest growing) companies in each sector and they generate almost $100Bn in sales with a 10% net income.

Additionally Berkshire holds significant amounts of stock in major companies like AXP, BUD, KO, COP, GE, HD, LOW, NKE, TYC, UPS, WMT, WPO and WFC (to name a few I agree with) and all year long he has been buying more.  So do we relax and have faith in our captain (who has returned 1,400% to investors since just 1993) or do we jump ship because the bears are screaming?  Just remember that you’d be screaming too if you were bearish this year!

=================================================

Over in Asia we need to get ready to put on our Hang Seng 20,000 caps!

After lagging the Dow from 1987 to 2003, the Hong Kong market broke out in April of ’03 and has outperformed the Dow by 45% in the past 3 years.  In the past 30 days, the Dow finally crossed over and began outperfroming the Hang Seng (by a whopping 1.5%) but the Asian markets have come out of their mini-slump and the Dow needs to get going – more so than it is now – or get left firmly in the dust!  The Nikkei jumped ahead of us on 12/1 and is 3% ahead over the past 2 weeks, on its way to challenge the April high of 17,500.  The Nikkei is another index that used to perennially lag the Dow!

A huge contract to build nuclear plants in China was awared to Westinghouse, who was bought by Toshiba, which is truly amazing to those of us old enough to appreciate the irony of American and Japanese companies working together to bring nuclear power to China.  SGR, a $2.5Bn engineering firm will handle much of the construction work on this $4bn project and I like the Apr $35s for $1.20.

 The Asian markets are being driven by gains in exporters meaning the dollar is percieved to be safe for another quarter which bodes ill for gold and the dollar which we will get to later.  CHL (12/12 pick) is back in vogue as Beijing (once again) may soon issue 3G licenses.

Europe is taking the morning off so far and has gone nowhere as the bears over there are shouting "too far, too high, too fast" at the markets.  While Europe may also be way behind the Asian markets, they are also kicking our butts!  The SI scandal continues to steamroll and there now appears to be over $500M in "suspicious transactions."  This is just about the point where I want to step in and start buying!

In a move to put a stop to the competitive flow of natural gas into Europe (which got so bad over the summer that companies had to give it away to bleed off some excess), STO and NHY will be merging their offshore oil and natural gas units NHY gained 23% on the news since this will give them the ability to price gouge Exxon-like levels!

Back home, the US current account deficit jumped to $225Bn, 6.8% of our GDP for Q3 – if the air wasn’t so thin up here I’d be seriously concerned but – wheeeee!

As I mentioned earlier, we need to remain strapped in until the captain has given the all-clear and let’s make sure we can take out our new levels as we set our sites firmly on 13,000:

  • The Dow needs to pop right through 12,500 without looking back
    • Transports remain critical between the 200 dma at 2,581 and the 50 dma at 2,620 and it will be up to FDX (Wed) to give us the thrust we need for deep space.
  • The S&P should fly by 1,430 but will likely pause at 1,440
  • The NYSE needs to top 9,200 for us to feel secure
  • The Nasdaq is 2,475 or bust!  You really don’t want a bust when you’re in space.
    • The SOX are the leaky seal in the airlock and we can’t take off our helmets until we see this gauge firmly above 490.
  • The Russell CAN"T have anymore troulbe with 800 or we may have to recalculate our whole orbit again!

Oil is a serious problem up here and any positive move may still damage the economy but a nice downward spike will let us throw out last week’s data set as a "confirmed pump" in which case the charts go back to looking very weak.  Don’t forget they are printing the new February contract so the $63 print we’re seeing is just .30 above our $61.69 danger zone on the January contract.

I’ll run adjusted numbers this evening for the new contract but let’s see if they can hold $63 for the day.

Gold will have to test $620 (as predicted) but could be in BIG TROUBLE if the dollar keeps rising and pressuring it below the 200 dma at $615.

The dollar shorts are feeling the pain (also as predicted) as Super Banker and Chair Man (of the Fed) fly back from China with concessions in hand that keep the 10-year note below 4.5% for the 4th consecutive year!

As exciting as all this is, we have so many successful positions that I’m not looking to jump on too many bandwagons until our Warp Drive is ready to go on-line (and, as you know, we need to be well clear of the Earth to do that!). 

Until then we will manage our existing positions and pare them down to the ones that will give us the best maneuvering room for the long voyage ahead.

========================================================

I haven’t finished with Google yet as the options prices are highly inflated at the moment and we may have to let go of the idea of making any plays other than spreads as straight calls are so out of control that the Jan $500s are $7.  Luckily, the WSJ just warned on Google’s earnings so perhaps we will get a chance at a lower entry on the March calls (as I want to be in through earnings).

BMET is being taken out for a small premium (about $44) and will give us another great opportunity to by a leap and sell calls as this deal is unlikely to close sooner than next fall!  We’ll touch base in comments on this one as I love these plays.

WMT has officially joined the Communist Party as Chinese employees were allowed to set up a branch in the company’s China HQ.  Poor Senator McCarthy must be rolling over in his grave!  "The establishment of the party branches and trade unions are "part of Wal-Mart’s efforts to integrate with China," and follow the rules of the country", said company spokesman John Dong.  I cannot begin to comment on the massive hypocrisy of this situation…

As we heard over the weekend, the IPhone was announced today – By Cisco!  [cue dramatic music]  OMG what a mess!   It seems CSCO patented the IPhone (for Internet Phone) long ago and has rushed into production with a line of consumer handset products to secure a superior usage position to Apple (and that other little company that has the name, I forget who).

Who cares about all this name silliness though, lost in that article is the concept that CSCO is making phones for EBAY’s Skype division!  That’s huge!!!  Our EBAY Jan $32.50s are already at $1.60 (up 39%) from our 12/6 and 12/12 pick.  I think it’s time to pre-roll into the Apr $35s for $2.20 with a tight .20 stop on a small position we can build into (assuming it keeps going up!).

 


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  1. arnie

    test

  2. digger

    CNBC – Yes oil is ” slightly” lower today, but there is pressure to send it higher. The cheer leading never ends.

    Oil will do what it will do, but man, CNBC is the poster-child for oil bulls.

  3. Phil

    $80 Bn in M&A today!

    There is simply no better way to goose the markets than that!

  4. jack_of_hearts

    IMAX – time to cut it?

  5. Phil

    Multiple Nigerian Rebal attacks with “another planned” boy do they need to keep this price up!

    CNBC girl “looking for $70 a barrel” while oil drops .50 as she speaks.

    AMD got a slamming downgrade but the SOX are up so far but transports continue to look sad, giving up half of the morning’s nice open already

  6. Phil

    IMAX – I DD’s on the 7th so I’m carrying a .23 basis and I’m asking .15 – I think .10 will be available for a while if it holds $3.50 so I’m not rushing to take that much of a loss. But I may regret it….

  7. walter

    Congratulations on your new site Phil. Looking good!

  8. rmyadsk

    Ouch, COP January puts are getting killed on a Barron’s report. Is this a dead play or is it time to DD?

  9. Phil

    The CEO of UA just about said that this is not a 12 month play on the stock, but a long-term play (in other words – stop buying like maniacs!).

    Meanwhile Cramer is literally standing over his shoulder stepping on his lines with BUYBUYBUY statements every time the guy takes a breath…

    So when the SEC comes knocking he can say “Here’s the transcript, I urged caution – it was that exempt from regulation Cramer guy giving his unsolicited opinion next to me that caused the stock to jump.”

    I seriously have never seen such a blatant move to circumvent the process…. Oh wait, I forgot about T Boone – forgive me Master!

  10. kustomz

    TomTom reportedly to also source GPS chips from Global Locate

    Ruby Huang, Taipei; Adam Hwang, DigiTimes.com [Monday 18 December 2006]

    Netherlands-based TomTom International BV reportedly has selected California-based Global Locate as another supplier in 2007 for GPS chip solutions in addition to SiRF Technology, the company’s existing supplier of GPS (global positioning system) solution ICs used in TomTom’s in-car PNDs (portal navigation devices), according to industry sources in Taiwan.

    TomTom, in order to secure a steady supply of main components for in-car PNDs and minimize production costs, announced in the second quarter of this year that it would use multiple sources for such components, the sources indicated. TomTom’s decision raised concerns about the company’s existing cooperation with SiRF and a rumor followed that TomTom spoke with Global Locate, Texas Instruments and others for alternative sources of GPS solutions, the sources noted.

    Global Locate and California-based Atmel were the two candidate suppliers for GPS chip solutions, with TomTom eventually deciding on Global Locate, the sources pointed out.

    As SiRF Star III is currently the global mainstream GPS chip solution, whether SiRF will develop less expensive entry-level GPS chips to maintain its market lead is being closely watched by the industry, the sources pointed out.

  11. jack_of_hearts

    Wow those SGR’s jumped – presume nobody got the APR 35′s for 1.20?!!! They’re 3.00/3.50 now!

  12. kustomz

    TXN looking particularly strong this morning

  13. bmb

    Somebody knew something about SGR. Note the Open interest in Jan call’s compared to the rest of the months.

  14. Phil

    COP, deat until revived – no way do we throw more money into that mess! Remember these are meant to balance the portfolio – not be the portfolio and I’m not feeling the need for a bigger net just yet (and when we do, these guys may be the last to fall anyway).

    Also, Berkshire is doubling down on COP (18M) shares to the upside so I think we may be lucky to get out on a dip with them!

    Did you know that COP was spun out of DD in 1998? That’s $120Bn of missing market cap from that index!

    http://energy.seekingalpha.com/article/22553

    What’s funny about COP is that the things people like about them (oil sands deals and Mulva’s claim that their reserves are much more recoverable than estimated) are both factors that fly in the face of the scarce oil theories that are jacking up the prices…

  15. Phil

    SGR – woops, I guess I’m not the only one who figured that out!

  16. Phil

    Those DIA calls should do well, here comes the TRANQ! No reason to sell against it until we hit some sort of resistance (and, of course, madness to short it until things turn down).

  17. BillBigD

    Did Cramer read your blog? Talking about China nuclear plays

  18. Phil

    GE up on nuke news (one of the reasons I like them) and the roll to the Jun $37.50 is already up .50 to $2.20 and I am selling the Jun $35s on a .30 drop (trailing 15%) as it is over a double.

  19. kustomz

    WSJ bearish on GOOG this morning, but…

    JP Morgan is raising their 4Q’06 revenue estimate on Google (NASDAQ:GOOG) by $40M based on belief that the co is experiencing strong query volume growth and a noticeable pickup in keyword coverage. Firm’s revised 4Q revenue, EBITDA, and EPS estimates are $2.23B, $1.39B, and $2.91. (Prev EPS was 2.86, cosensus $2.88)

    According to firm’s estimates, Google is on track to grow its global query volumes by 14% in 4Q, vs. the market which the firm believes is tracking up 10%. JPM is consequently increasing their Q/Q volume growth assumption to 14% from 13%, contributing ~$20M of incremental revenue.

    Google continued to grow its advertising coverage at a steady pace in 4Q, dispelling some investors’ concerns that Google’s monetization upside may be tapped out. In 4Q, firm’s 50K
    keyword survey identified a 4.4% Q/Q increase in coverage to 77.9%.

  20. Phil

    I hope they are getting tapped out – it will make my idea for them much more vaulable!

  21. BillBigD

    GOOG down 6 and change!

  22. Phil

    So glad we got out of the closer LVS puts!

    AFL, AIG, ALL, GNW & PGR, up nicely. The two we didn’t take, CB and TWG are so so and I’m done with just the ones we have.

    AXP still looks good but I’m going to talk half off at 173%!

    (my goal is to be up to 75% cash, at least going into new year’s.)

    CHL went nuts! Mar $45s going pretty slow at $1.50 (up 15%).

    EBAY very disappointing.

    INTC made a strange downturn I don’t like…

  23. Phil

    Adding to LVS Mar $85 puts for $4

    Selling MGM!

  24. walter

    Any thoughts on OIH today?

  25. Phil

    Out of PFE at $1.20

    Buying out my putter on RIMM Jan $130s for $5.25

    I’m not too worried, I think oil is dragging down the markets but I’m not taking too many chances either!

  26. BillBigD

    Thoughts on HET? I am surprised it isn’t higher

  27. Phil

    My thoughts on OIH – Yipee!

    I’ll let it play out but I just got back .70 I was out on the Apr $140 puts but I’m still way out on the Jans and I’m just going to gut that one out (but taking half off the second I am even!)

  28. Phil

    HET – they took the lower deal (so far). I’m so mad about this as they were my favorite casino stock to trade.

  29. Edgar

    Phil:

    What do you mean by “HET – they took the lower deal (so far)”?
    Isn’t the latest rumor $90/share?

    Thx, Edgar

  30. BillBigD

    Yes WSJ says $90

  31. zmann

    Hey Phill,

    With coal and gas getting popped of late, the PBW etf for clean energy is starting trade off. This thing ran up a bit after the dems took congress and now that that’s in question. Well you know, clean stuff may get less time and attention. Option spreads are surprisingly tight too.

  32. Phil

    Ah well PENN put in a slightly better bid but not good enough to get the deal, which is good for PENNs stock as that deal was going to kill them.

    The bottom line is Harrahs will take the $16.7B, still a nice premium but that’s up 30% pre-deal already and the regulators haven’t weighed in yet. The advantage of PENN is they already have a license.

    This is all making WYNN look very good but I’m getting out of this space until things settle down.

  33. Phil

    PBW – Normally I’m not a big fan of ETFs and this is normally in this case. I don’t agree with the holding mixture and with almost everything being under 3%, I haven’t even got a tracking stock(s) to look at to see what’s up.

    http://www.powershares.com/holdings.aspx?ticker=PBW

    Unlike a biotech basket, none of these companies are likely to pop 400% but almost as many are as likely to die off as biotechs – not for me!

  34. Phil

    I guess I won’t have to adjust my oil numbers after all, the February contract is coming right back down to the Jan price!

    ;-)

    Meanwhile, the Dow is doing great with XOM down 2%. AA’s off a point after a nice run and DD is mysteriously down a point but otherwise they are doing great!

    http://finance.yahoo.com/q/cp?s=%5EDJI

  35. zmann

    Right Phil…I was suggesting buying puts on the PBW. Many of it’s components are trading at excessive multiples.

  36. zmann

    BTU is resting on its 50 day. With the way gas and coal are trading I’d say lookout below on that chart! Any TA guys want to take a look at it?

  37. rmyadsk

    Phil, your thoughts on ORCL before earnings this evening? Has tapered off since mid-November but is it worth making a case for another great quarter, or will all of those acquisition costs start to hurt them? S&P loves it for valuation, but several brokers seem concerned about core database revenues falling off…

    Thanks!

  38. Phil

    Oh puts! Sorry, I thought you were saying they’re a bargain!

    50 dma is already inveted and rising at $17.84, I’d want to see it go below $17.60 as you may still be a victim of the Dems in January as people rush to the fund ahead of “pending legislation.”

    ===============================

    BTU is one of the world’s most dangerous shorts, they’ve been called dead many times and come back. If you get below $42 you’re in good shape and ACI is a good leading indicator as they are already breaking below the 50 dma. If they had Februarys I’d be excited about a spread but I’d say the Mar $40 puts for $1.60 paired 2:1 against the $45 calls for $2.60 make a nice spread to enter light and you can increase your ratio if you see a breakdown.

    I’d have to defer to Z as to how hammered coal is likely to get between now and March as it will very much depend on if nat gas gets below $6.50. On the whole, I don’t love this play though as I think there are far worse companies than BTU to short.

  39. zmann

    Hear ya BTU dangerous short. Got my eye on ACI. Coal can get a bit worse but most of damage between now and summer look to be history. I still think gas gets a lot worse by Feb/Mar and that’ll be a drag on the group and their competition. Thanks for the read on BTU, have a little put position but will avoid more.

  40. Phil

    ORCL is this evening! Holy cow I forgot about them…

    Software spending was the only planned expense to go up in the Forrester survey last week so you’ve got to like them up here.

    No question I like the March $18s for $1.20, selling the Jan $17.50s for $1.05 but realize that at $19 you would have to fork over an extra .50 to stay in your $1 calls (which only cost you .15).

    If you are not allowed to do that then I would buy the Mar $17s for $1.75, selling the same Jans.

    There is no way I would play this naked but the June $18s for $1.60 give you the best chance of weathering a catastrophe by doubling down on a $2 drop at the 200 dma at $16 (assuming it’s even appropriate).

  41. Phil

    Transports bounced back down – they cannot get it in gear.

    Builders index comes out in 1/2 hour. TOL $32.50 puts for $1.25 are worth keeping a finger on the trigger of as a possible quick mo play.

    HOV $35 puts are $1.21 out of the money and cost $1.30 while TOL is at $32.20 – so those puts are a bargain (but maybe for a reason so let’s wait for the report!).

    MHO looks like trouble but not optionable.

    SPF $25 puts are expensive at .70 and can be sold against the March $25 puts for $1.55 as I would love to hear their earnings report with cheap puts in my hand!

  42. kustomz

    Lets see how far down the market goes before folks step in.

    SNDK gotta love it, sold my small position from last week, looking forward to reentering.

    If so many believe MSFT will benefit greatly from VISTA in the coming year, than wheres the logic in AMD, INTC, MU trading at these levels?

  43. rockaintdeadyet

    Zman,

    The support beneath BTU includes a trendline, the 50day, and a solid level at the 43. If the support does fail, it looks really bad, but I don’t expect it to fail without a lot of work.
    Depending on how one views the cup and handle that it broke out of on 11/29, BTU has either already negated that formation (if you place the top at 44.60) or is just about to decide whether or not it wants to. But it looks like there are several levels between here and the 40.50 to chop things up -I don’t see it as clear to run until we cross below that level.

    On a fundie note -I was reading through the railroad 10-Qs and they cited increased utility demand for coal as one of the drivers behind their growth in revenues. The utilities were building their stockpiles -so what does this mean if the winter is warm and/or nat. gas is cheap (for railroads and coal? -the other reasons the RR’s cited for double-digit rev. growth were fuel surcharges, better efficiency, and ethanol).

  44. Slackin

    Oh Mama, look at MAMA! Too bad no options on this stanker. People tossing money in here have big brass. Great big brass.

  45. kustomz

    Ahmadinejad opponents leading elections
    Positve news for the world.

  46. Phil

    Now you guys see why I was selling earlier – just because you’re bullish is no reason not to take a profit!

  47. Slackin

    HD is getting a bit heavy at around 40 bucks, and I personally love to hate this stock. Any thoughts on a strategy? Earnings date isn’t tied down yet, so I’m looking at at least Feburary contracts.

  48. BillBigD

    Any thoughts on ISE?

  49. zmann

    Thanks Rock! I saw something similar recently from the EIA on high coal stockpiles at the utility level being part of the reason for the softness in coal prices. Whoa, it just cracked the $43 line so here’s hoping on my puts! I’ll do some work on coal production vs inventories vs demand this week on my site. Thanks again.

  50. Slackin

    BTU Peabody Energy just waved at the 50 Day SMA (42.92 -0.92)

  51. _fab

    About the SPF cheap puts, why the March and not the Feb $25? When are their earnings expected? Or is it simply to give you an additional month with a slightly lower volatility premium than the Feb’s?

  52. Phil

    VIST – you’re right! I said that about Dell last week – where are they? And now HPQ is flatlining – is something wrong in Vistaland or is that idiotic “buy a pc now, get your operating system later” coupon program working out to be the total failure I said it would be 6 months ago?

    ================================

    BTU – good catch rock – they are screwed if coal is already piled up in the utility companies’ stockings. This transport thing has got to be studied – what is happening to all the stuff that everyone seems to be selling?

    ================================

    MAMA – what’s their p/e – like a Billion? If they double sales ($9.5M) and make a 25% (currently -$5M) net they would still have a p/e of 20 but if you knock their current $3M in straight losses off the theoretical $4.5M in profits the p/e would be back at 60.

    I feel like Herb Greenberg looking at this stock, I see danger lurking around every corner – what could be driving them up like this? Has anyone seen “Video Search” or is it just something they threw out there to goose the price?

    =================================

    Iran – Yeah! Go guy who only hates us a lot!!!

  53. _fab

    About MSFT and Vista, given the positively slanted opinions I’ve read on MSFT I have to admit being much more gloomy on the outlook.

    I worked there, left over a year ago and hearing of how things are back there from friends, especially around Vista being not exactly as stable or performing as one would expect from the ‘hype’ (the quote being of the ‘don’t install it’ kind), I’d rather stay away.

    But then, I might be biaised by the fact leaving was the best thing I did in a looong time. The culture is very, very, very political and nothing can really be nimbly done in the big orgs like Windows or Office.

    To me its not a recipe for success, rather a bloated company that needs to shake its funk and find the next thing to be succesful with.

    My 2 cents.

  54. Phil

    HD – as I said before, Warren is upping the Ante so there’s no way I go short on them. He has LOW too, a very rare DD in a sector that proves Mr. Buffet subcribes to my consolation prize theory.

    I’d like to get consensus on this as I am often asked to pick an option on a position/direction I don’t believe in and on the public site I avoided it because I didn’t want people to get the impression I endorsed something but I was just dead wrong about not DD’ing on COP puts this morning so your ideas are every bit as valid as mine!

    So let me know if this makes life too confusing but IF I were to want to short HD (with a p/e of 13, 7% constant growth on $92Bn in sales..) then I’d take the Feb $37.50s for .5 and I would DD into Dec 30 hoping for a real market plunge in early Jan from which no stock will be immune.

    ===============================

    ISE – all the exchanges got weak all of a sudden, not good – Neither is this pullback in the markets with no one taking any sort of leadership role.

    ================================

    It’s starting to look like the whole energy sector was held UP into expirations!

    BUT – it could be the effect of tens of millions of in the money calls forcing stock on people who are dumping it out today. I’m not saying it is but there were a phenominal amount of in the money calls as of Friday afternoon and even the big boys have margin limits when you convert 2,000 contracts into $70 shares of a company…

    ================================

    SPF – I’m not showing the Feb $25s yet – no other reason!

  55. _fab

    To expand on the ‘find the next thing…’ bit, they certainly are trying and can keep doing so considering the major cash flow the big orgs generated, but it does leave me with a feeling of flailing at many potential targets in the hope of finding the next big thing, while the main cash cows are in dire need of being straightened out.

    I don’t doubt the company can do it, I just wonder when/if it will and this is what makes me feel rather gloomy on the current prospects.

  56. Slackin

    12:20 TECHX Coal Index -DJUSCL- extends decline to three in a row -Update- -Technical-

    The sector is one of the weakest performers today leaving it off for the third session in a row (-6.3% high to low) and down more than 10% off the early Dec highs. Support comes into play in the 257/256.50 area (session low 257.86) which marks congestion and the 38% retrace of the Sep/Dec rally. Individual names near levels of note include: ACI (-3.3% at 32.82) held near 38% retrace of Oct rally at 32.75-- session low 32.65; BTU (-3% at 42.69) congest/38% retrace at 42.50/42.61; MEE (-2.3% at 24.76) congest/38% retrace at 24.55/24.57; BHP (-2.2% at 39.42) nearing its month long range floor/Nov low at 39.23. Given the extent of the recent slide would looks for signs of stabilization near these levels.

  57. City Footcare

    SUN is a laggard in the oil sector over the past 3 months. It’s down > 4% already, still think there’s more downside? What do you think of the Jan 65′s for $2?

  58. Slackin

    Thanks Phil for the HD advise. I need to work on going with what the market gives me to work with I’d guess.

  59. kustomz

    Fab, the PC makers will market Vista to death. I have not personally tried Vista but have had contact with persons that did, and they say most will be blown away. Nothing like the Windows we are used to using. It will have its selling points I’m sure.

    Now MSFT, i agree totally with your sentiment, management has not taken the initiative. In my opinion they have failed miserably and need a new management team with more drive and vision of the future. All that money and no clue what to do with it!! What a waste of a cash cow. Zune is a perfect example.

  60. Phil

    I’m surprised MSFT doesn’t just become the Berkshire of Tech – if they could check their egos at the door (and Balmer was the wrong choice to accomplish that) and they bought good companies to finance and develop them rather than to destroy and bury innovation – they could really have something.

    I remember when they bought FoxPro and we were like – “Wow, Imagine Fox with a budget!” then we found out all they wanted to do was strip out what they could and enforce non-competese on everyone who actuallly knew anything about databases…

    The same with Money – they spend Billions trying to kill Quicken when they could have just admitted it was great and worked on incorporating it into their system (who’s going to say no to the amount of cash they can throw?)

    This is a case of competion not inspiring innovation but stifling it as investors are so scared of Microsoft that it chokes funding from viable start-ups in any sector they claim a stake in.

    =================================

    GNW breaking out of the earlier breakout after the intial breakout last week!

  61. kallerid

    please explain risk/reward of your paired ORCL trade recommend. I am new to options and have been reading your site for a while.

  62. rockaintdeadyet

    Crude is taking a hit here but should bounce off the 50dma short term at least.

  63. _fab

    I can absolutely agree PC makers will market it to death, it does play with their business model since it pretty much requires a new machine (upgrade won’t likely be enough).

    But then, if I were to look into a new machine I might just as well go the Mac way.

    Bottom line, Vista might be marketed as the next coming but I am not sure how many will bite. Many I’m sure, but as much as everyone expects?

    Time will tell, and I will wait to see what MSFT ends up like.

  64. Phil

    SUN was a huge put winner for us from $70 and $65 seems very low, I’m not a big fan of chasing a 4% drop, those puts were just $1 3 hours ago!

    COP has the farthest left to fall as they’ve been immune so far and OII is still 40% over it’s September lows (we took those last week, the Apr $40 puts for $1.60, now $2.65). The Apr $35 puts are $1.10 and I’m going to move to them as a pre roll – which means I take them, set a .25 stop on the $40s to preserve a 50% profit on them and then hold these as long as the stock behaves itself. Since I’m rolling in a profit of no less than .90 into the new puts, I can afford to wait that out very calmly!

    ================================

    Oh yeah, I forgot about Zune!

  65. Phil

    Oil – remember what I said about being able to throw out the data points. You look at the 50 dma but you are under the assumption that the graph was based on real (not manipulated) numbers, but I will tell you that they spent 3 days turning that chart from a negative to a positive just to get people to see a chart that is “turning.”

    I know it sounds paranoid but there is $4T tied up in energy and commodity stocks that are, very possibly, only worth $2T and it only takes one immorral rich jackass to break some very easy to break rules and game the whole system.

    While I use charts to illustrate the oil sector, I really don’t pay too much attention to them over the short-haul as they are way to easy to pin whichever way you desire. Even now, there is a .20 steeper drop in the March contracts you don’t see than the Feb contracts you do and, at last count, only 78K January contracts were left open for delivery while 303K contracts are sheduled to be dropped off in February. Have you ever seen a 55 gallon drum? Where do they think they are going to put 330M of them in Oklahoma?

    It will soon be time to pay the piper – they’ve already pushed it way farther than I thought possible but, like I said, with Trillions on the line, what is possible may be more than I can imagine.

    =================================

    Mac is a no way for business (and I’m a Mac fan). They’re not cheaper and they represent an unknown element in my office even if they do do windows now. I (a typical employer of data entry people) have been waiting a whole extra year to buy new computers and I will be buying new dells as soon as they can ship me with the software installed as there is no way I’m risking down days swtiching systems on top of changing desktops.

    So I think there is a ton of pent up demand and I think it will all have to wait until this initial shipment of VISTA moves its way onto the cheaper boxes that I might actually order for my staff.

  66. Arindam

    Phil,

    Barron’s values COP shares at $95 in last weekend’s issue. Any comments?

    Glad to be in

    Arindam.

  67. Phil

    Oh sorry ORCL – well I’ll work with the new numbers as they are flying up into earnings.

    I don’t want to buy the Jan $17.50s because they cost $1.20 so I’m paying a .60 premium into earnings and they might get wiped out at the bell tomorrow and I’ll have no chance to recover.

    The March $17s are $1.90, a .90 premium and if the stock drops $2 they are likely to retain about half their value.

    By selling the $17.50s against them I’m cutting my basis to .80 on the March $17s and, no matter how high the stock goes, I have a 3 month and .50 advantage over my caller.

    If it goes way down – I am out whatever off the .80 but I still have 2 months to hope for a recovery and now caller to pay off at all.

    ==================================

    December builder sentiment is DELUSIONAL! Although sales were flat and traffic was down they say expectations are improving! Like I said over the weekend, they use these reports to manipulate the markets.

  68. Phil

    COP – Barrons makes an excellent point as long as you firmly believe that Nat gas will not collapse. If it does, the money they paid for Burlington will act like a lead weight on the company for years.

  69. blade

    Phil,

    I wonder if you have any thoughts on Wells Fargo (WFC). It’s a bit lagging and hasn’t “broken out” past the 50D MA, however the thought process for this trade though is kind of a Christmas play, where all these immigrants may be sending an increased amount of money back home for the holidays. As well as the BKX still looking like it’s running. More thoughts on the fundamentals behind either this stock or the banking industry would be helpful. Thanks.

  70. Murtaza

    Phil, I just signed up and am trying to catch up on what I missed. I was going over the portfolio section and thinking it might be a good idea to get your programmer (Jared?) to allow us to sort the portfolio by date / alphabetically / biggest winner . . .

    He’ll prob. hate me for suggesting this ;-) . . .

    -M

  71. Jamie

    Phil, re Dell purchase. The best Dell salesperson in the world is:
    Jennifer Head
    Customer Account Manager
    Small and Medium Business Sales and Leasing
    Jennifer_Head@dell.com
    1-800-901-3355 ext. 713-6650
    My Office Hours 7:00am-5:00 pm CST
    Monday through Friday

    The fact that she is my daughter in no way influenced my recommendation!!

  72. Jamie

    Seriously, I commented last week about NTRI puts, did I miss your reply? Chart is looking real ugly and has very high multiples. Any thoughts?

  73. Murtaza

    Jamie, I am not touching NTRI puts right now. The time to do it was last week, and I wish I had . . . I am actually looking @ doing Jan bull puts on NTRI @ strike $60.00 once it stabilizes a bit . . .

    If it doesnt work my way, I’ll buy the stock and starting doing covered calls to turn the trade profitable.

  74. Phil

    LOL – networking is perfectly fine if done in good taste!

    ================================

    WFC – Don’t buy a bank because they are going to have a good month, you have to buy banks on the Macro environment and I’m not sure that WFC has much internal growth left and they are getting (relatively) expensive for a bank.

    WM is my play in that sector as I think they are buyable, and they just started pairing down – possibly in preparation. Wells $120Bn is too big to make a nice buy but WM, with a 20% lower p/e and just a $40Bn price may be just the ticket to put C back at #1.

  75. karmcon

    Jaime, I noted the NTRI post and just sold for 60% gain (for a pleasant change…lol)

  76. karmcon

    btw tyvm

  77. MJ

    According to The Wall Street Journal, Delta Air Lines is expected to announce a bankruptcy reorganization plan valuing the company at $10 to $12 billion. This valuation is far greater than the $8.4 billion offered by U.S. Airways in its hostile-merger attempt. According to the report, LCC would consider increasing its offer for DALRQ, if it can substantiate its case. DALRQ’s plan emphasizes initiatives already underway, including an aggressive expansion of high-yield international flights. The report also notes that DALRQ’s directors are expected to announce their formal rejection of LCC’s bid as soon as it is filed in U.S. Bankruptcy Court in New York.

  78. cran

    Phil, I agree with your comments re: switching to Macs for business. If I owned a company that was a MSFT shop, the transition to Macs would be scary (down time, sw incompatibilty, training,etc). If I started a business, I’d probably start off using Macs :)

    I too am a huge Mac fan. The company where I work is a mainly an NT shop. However, half the NT / UNIX administrators bring their own MacBook Pros to work to use as their main desktop. You can’t beat the stability of Mac though…and virtual no spyware/viruses. I have to reboot my Windows desktop at work at least once a week because of instability, crashes, security patches (almost seems like daily), etc…I think I reboot my Mac maybe once a month or two :)

  79. Phil

    Chart – there should be (and is somewhere) a downloadable version of the chart – that one is just there for a quick reference and is a work in progress – I’ll get a link from Jared later or, if he sees this he can post it up.

    Yeah good call on NTRI, what a mess!

  80. Liam Flanigan

    phil.

    in regards to the builders sentiment, do you think anyone is actually buying the spin anymore? It seems that the reporting was able to affect things but now most reports seem to be seen as the work of fiction that they are. CFC is down for the day, with their position of being the junk mortgage vendor how do you see their prospects?

    I also know that you have a love/hate relationship with AAPL, but with the performance on the year and with the current mild pull back do you have an entry point. Still seems a bit over valued at it’s current position but I like you thought the same thing when it was at 60. Do the rumors of the iphone (or whatever they end up calling it) have a serious effect to the bottom line next year or will it be a cash sink until they manage to grab a reasonable share of the market?

  81. zmann

    Love to hear what the chicks on cnbc are saying about oil being down a buck today. Profit taking I’ll bet TSO touching 5% down on the FBR sector downgrade. MUR got multiple downs today and its been trickling lower. BTU working pretty welll below the 50 dma. LNG (the company) is giving up the ghost as well after it’s deal related investment banker touting has worn off. That one should punch through $25 prior to Thursday.

  82. rockaintdeadyet

    The oil/gas stocks caught the downgrade bug over the weekend. GS downgraded ECA and SLB, Friedman Billings downgraded HES, TSO, even the mighty XOM, and MUR (which CSFB downgraded as well).

    Interesting to see if they hold up through the rest of today and tomorrow. I’m waiting for the final half-hour pump (which was blatant last week) before I look to get back in.

  83. Phil

    TSO cracking the 5% rule as we speak – I don’t think VLO will be far behind!

    =================================

    CFC would be logical to short but it is possible (and this is tough to determine) that their portfolio mix is better and they may benefit from being the “last man standing” in the sector.

    ==================================

    AAPL – it’s always a good time to buy apple for a retirement portfolio (I will be wrtiting about drip stocks for the new year) but I’ve been hoping for SOMETHING that will take them down to $80 so I can just get a little without feeling too stupid.

    If I have to, I’ll wait for the split but I think triple digits just make apple buyers too nervous (for no good reason).

    Look what $500 is doing to Google – had they split a few times they would have flown through this valuation…

  84. dannylee

    Put buying on the CBOE is at it’s highest level today since Thanksgiving. I believe Phil’s idea of paring positions going into year-end is right on the money . I would tread very lightly here and look at really short term opps. only.
    D.

  85. erikj

    the law used to be that no single bank is allowed to hold more than 10% of the total deposits in the united states. i dont think thats changed. one of citi’s probs (so too, bac) is that it bought right up to that limit. perhaps, particularly after wall street bonuses are paid, there will be enough new cash on deposit to allow citi to target larger cap banks. in any case, its a good ruler to use to measure realisticness of various bank combination rumors that might pop up…

  86. Phil

    No one is accepting this oil drop – it’s amazing.

    The XLE $61 puts are just $1.65, a .45 premium

    XOM $75 puts are just $1.35, up .50 for the day

    SUN $65 puts are just $2.10, up $1 for the day and on the money…

  87. Edgar

    Phil:

    HET deal is confirmed @ $90/share. Why is there no excitement on
    stock price at all?

    Thx, Edgar

  88. _fab

    Oh, I wasn’t considering Mac as a business option, merely an end user point of view.

    As to business upgrading, although I can see and accept it I’m not entirely sure I can blindingly accept the argument.

    If most businesses have data entry needs as their bigger computer pool use, unless it is over 4 years old and falling apart, why in the world would they upgrade to computers that require such a high level of performance just to get Vista to run where it will not exactly bring any gain in data input productivity?

    I most likely am missing something, but I work in an industry that absolutely requires high performance PCs for our developments and AFAIK we have no intention to upgrade to Vista any time soon. We don’t see what it would bring us and there’s the risk of seeing our production pipeline break on the transition.

    This is just a thought to mitigate what I’ve seen as pro-MSFT arguments with no counterpoints. It’s likely Microsoft will do well, they’re just really that big.

  89. Jared Woodard

    Somebody wanted charts. I’ll put them up later, but for now you data hogs can get them at

    September 2006
    October 2006
    November 2006
    December 2006

    Enjoy!

  90. cran

    Phil, an article on DRIPs would be nice!

    I’ve been DRIP’ing several stocks since 2002/2003. Glad XOM was one of them :)

  91. mike_c

    The company I work for just announced that they are switching new computer hardware vendor from Dell to HP after completing a competitive bid for all facilities worldwide. This includes PC’s, printers, and servers.
    The company I work for has over 10k employees worldwide.
    Jamie, please don’t get me wrong, just trying to relay the facts, which may influence our trading strategies.
    Thanks.

  92. zmann

    CNBC reporting 60 tanker back log at Houston Ship Channel. It’s been closed for five days straight over fog. That’ll make for some big but expected draws in crude and products whtis Wednesday. It’s propping up gasoline prices as well. Got to give the rebels credit for trying. CNBC also reporting 2 explosions at worker facilities in southern Nigeria.

  93. kustomz

    BA bounced off 89.75, did the same on the 13th. Would like BA to hold here. Hitting 89 support line would not be a big deal and i would prefer 89 as a better buying opportunity and 86 being a gift if there is a market sell off. Not to spoke anyone.

  94. Phil

    I ran a good sized data company and I consult for otheres. One thing I always do with companies I consult for is I get them to stagger their upgrades so they get on a 3 year rollover cycle and every year we move machines around based on computational needs.

    This takes the pain out of upgrading and lowers your IT issues and keeps you peppered with enough “good” computers that people in the office learn to adjust.

    Most companies who don’t do this seem to have put off buying PCs for 2 years now as Vista has been “coming” for that long and they are painfully aware of the fact that their network could run much faster with newer machines, especially if they make a lot of use of the web.

    Generally they just need more ram and a video card but, since a replacement computer is just $399-$499, it’s not worth getting upgrades and I’d rather get a new warranty anyway (even though they never break anymore).

    The problem PC makers have is the danger of people waiting into a bad economy, then they will put off spending for another year or two and cause a real crisis – if we have a recession, it will be entirely Microsoft’s fault as Vista could have easily given us Nasdaq 2,500 if they had released it on time!

  95. Phil

    This oil pump is not going well!

    ================================

    BA – I would like it to hold 89.99 until the 19th so I can dump my putter!

  96. mrkcrawford

    phil, with your fdx play, are you waiting to do:”July $120s for $7.50, selling the Apr $120s for $5″ until wed? if so then why? or should this be done at the ame time you buy the april 100s puts? forgive me because spreads are new to me.. thx

  97. Edgar

    Phil:

    HET deal is unofficially confirmed @ $90/share. Why is there no excitement on stock price at all? Is it due to it is unofficial or something
    else? I am trying to understand the M&A impacts on stock prices.

    Thx, Edgar

  98. Phil

    FDX, just playing the probability that it will sell off into earnings so I take the April $100 puts right away.

    I can afford to buy the spread no matter which way it goes as my caller will take the bulk of the premium risk but my put is naked so I want to get that in ahead of a drop.

    If the stock starts going the wrong way, I quickly cover with my July (giving me a put and call spread) and wait to sell the Apr $120 when it tops out.

    So I hope it drops like a rock ahead of earnings but it’s holding up pretty well so far….

  99. Slackin

    I second that question. Why the heck is HET 10% below the confirmed bid acceptance?? Is there some possible block I’m missing?

  100. zmann

    Oil pump a failure. It’s too damned hot. Maybe CNBC can conjure up some stories about December cooling load to spike prices. ;->

  101. Soccer_F1

    Phil & co — I’ll be away for several days. Good luck with your trading and see you next week.

  102. kustomz

    For those of you in RIMM, and MOT. If RIMM reports a good number could possibly lift the whole sector. Personally i would sell into any strength.

    “Checks suggest successful launch of Pearl at T-Mobile and upgrade cycle with 8700 handset at Verizon and Cingular could drive results well above expectations,” he wrote in a research note today. “In fact, consensus of 300K sequential unit growth could be achieved just by Pearl sales in US and Western Europe, in our view, with upside from 8700 upgrade cycle.

    Arya is looking for sales of $811 million, profits of 93 cents a share, new subscriber additons of 800,000 and units shipments of 1.76 million. For the fiscal fourth quarter he sees sales of $871 million, EPS of $1 a share, and unit shipments of 1.9 million. On subscriber adds, he is forecasting 816,000 for the fourth quarter, below the Street c0nsensus of 900,000, due to “strong competition to RIM’s Pearl from Samsung’s Blackjack and Palm’s 680 handset, at Cingular.”

  103. Phil

    HET – discussed above, the buyers need to be cleared for a gaming license – could take ages, might never happen so there’s a discount arbitrage.

    Meanwhile I buy the Jan ’08 $85 put for $3.75 and sell the Jan $85 put for $3 as you should or the next month if I have to roll, should at some point expire worthless whil I retain more than .75 of my value.

  104. kustomz

    Soccer, Hope the time taken is for enjoyment. Happy Holidays!

  105. Phil

    Have a happy holiday Soccer!

    =================================

    RIMM – current option investigation still delaying the filing of this p/e 60 company as they conduct “forensic imaging” on 650,000 documents. Even if you send them to India to be certified, that’s .25 per document and they lawyers are not going to let you get away that cheap!

    The approximately 650,000 electronic documents have been reviewed and interviews with witnesses have commenced and are continuing,” the letter to the OSC said, adding the company’s audit committee hoped to finish the interviews by mid January”

    It said (in Jan) the amount of the adjustment would be immaterial, with an expected reduction to earnings of between $25 million and $45 million over the period since its initial public offering in 1997. An additional error was found later, which RIM said would “substantially increase” the estimated amount by which past earnings will have to be reduced.

    RIM wrote in its letter to the OSC that it would be a bad idea for the regulator to suspend all trading in its shares, which are listed on the Toronto Stock Exchange and the Nasdaq market in the United States.

    It said it has provided plenty of information in the absence of the required financials to update investors and allow them to make “informed trading decisions”. Suspending trading would cause existing investors hardship, it wrote.”

    So Thursday’s results will be “preliminary” and I decided to buy out my putter this moring as I think some Rimm buyers are going to flinch into the earnings report (or lack thereof).

  106. Phil

    Well now I have to take up new google positions as I’m stopped out of the old one! Holy cow – run away from this GOAX signal in the making kids!

    I got my wish, today triggered a ton of stops as we gave up 20% of gains – I’ll get a list up soon.

  107. size123

    Have a good one Soccer.

  108. zmann

    Rock or anybody TA,

    Can you look at XOI/XNG/OIH – they all look about the same to me but can you give me some dthoughts on downside here? TIA

  109. kustomz

    Is this smart money heading for the exits, or a simple shake out?

    ORCL needs to beat and raise its next Q estimates.

    Countries selling dollars for the Euro?
    If i were the man or woman holding the dollars i would wait to see where the US economy is headed in the next 6 months. I would like a higher interest rate, nothing wrong with collecting 6% from my savings account. Euro seems like a gamble at these levels. High Interest rates in Europe is like adding gasoline to a raging fire.

    All this private equity is coming from somewhere, how much of it is supported buy the Europeans, cheap dollar expensive Euro certainly makes sense to me. When i get a chance i will looking into FDI flow into the US

  110. MJ

    oh oh!!!! AAPL below 85 now

  111. kustomz

    I say let this unfold, not the end of the world. All the over priced stocks getting hit this is profit taking going into the holidays.

    This is why taking profits quickly instead of taking the most profits is a key trading policy of mine at these levels.

    VIX under 11

  112. Gary

    Phil,

    TSO calls for a bounce?

  113. Phil

    DD tiggered on CC Jan $25s at .40

    EBAYs gone $1.45, buying back but not yet.

    JOSB out at $1.50

    MGM out at $23.90 (including $4.40 adjusted from calls sold)

    Offer in for more MOT at $1 (currently $1.15)

    Out of OIH Apr $140 puts on any turn right now as it puts me in the black on that whole trade (including the Jan $135 puts!)

    DD on RDS.A Jan $70 puts at $1

    Taking half of XOM Jan $70s and $72.50s off the table by close as they were heavy DD positions that are now ahead.

  114. Murtaza

    bye bye COP :-)

  115. Phil

    I love how nobody thinks I can read a chart!

    8-(

    =================================

    I think/hope that it’s just commodities dragging down the market but the Transports are freaking me out! I’m almost glad as my fundamental head said to get out and this gave me a great excuse to cut down on almost everything and eliminate a bunch entirely.

    Don’t forget rising dollar also makes US stocks look like they are going down so our drop is exaggerated to foreign investors.

    ================================

    APPL – come here you beautiful thing! I’ve missed owning you so much!!!

    ================================

    TSO – nope. I couldn’t even bring myself to add to my XOM or CKH cover calls – I see no reason at all to buy these things. If they are going to recover, we will have plenty of time to buy I think but I’m just so glad to be out of those DD puts I’ve been trapped in since November!

  116. rockaintdeadyet

    OIH is quite ugly from a technical perspective, having negated what looked like an upside breakout. Furthermore, it’s come down all the way through the consolidation that preceded that false move. The volume isn’t enough to get excited about but we’ve still got some time left. The 200dma is at 141.57, which coincides with a minor level of support.

    The XLE (whose components are biased towards the majors) also looks quite bad. It broke the 60.00 level on 11/29 (same day BTU broke up), and that level had been resistance. It consolidated above that level, but formed an inverse wedge (bearish). It is now breaking down out of that wedge on decent volume. There are some minor support levels (one of them right here at the 59.30, another at the 59, and another at the 58.50.

    Entry points are difficult, though.

  117. Phil

    Big buy program just hit the transports!!!

  118. rmyadsk

    Yeah, how about that AAPL. Premiums still seem steep but I think I like it here at $85. Any ideas on which strike/month gives the best value here?

  119. cran

    Ouch…goog down 15.80

  120. Phil

    AAPL (1/17) may sell of a lot more into earnings – especailly if GOOG drags down tech. I think you’re on drugs to buy the AAPL $85s for $4.75 but I’d consider the Apr $90s for $5 and selling the Jan $90s for $3 (or any $2 spread) as the Apr $110s ($25 out of the money) are $1.70 so you limit your liablilty (one would hope it won’t go much below $65) while paying just a $2 premium for 4 months and a second look at earnings.

    Even if earnings are great (and you have spare money in your account) you will be able to buy out your caller for a significantly lower premium, even with momentum as he expires 48 hours after earnings

  121. kustomz

    Will be very interesting this evening i will be watching ORCL after hours looking for a quick trade if possible. It will fluctuate from the release of the number to the conference call. Should make for a good trade.

    BA looks like 89 possibility.
    YUM looking tasty, stock not the food they serve!
    AAPL how can you go wrong?
    MET would love to get back in but closer to 57.

  122. kustomz

    Forgot to mention UNH creeping up without anyone taking notice, what a move 6 dollars in less than 2 weeks!!

  123. Phil

    I think it still could be that same thing – hundreds of thousands of shares are being put to call holders who get the Barrons panic over the weekend and freak out today.

    Market volume is pretty good today but Goog volume is average and the sell-off isn’t a crisis yet but that’s not a knife I try to catch.

  124. Phil

    YUM – going to have a bad quarter! I drove by a Taco Bell (empty at dinner time) and my 1st grader said to me – “Oh Dad – If you eat there you will die!” – that is not good for them!

    They are spending mega bucks on a terrible ad with the chairman being very unconvincing (people need to know that they don’t come across well on TV) and telling you how fine everything is…

    Some analysts will knock them down and lower projections and I will love them long time at $52ish.

    ===============================

    MET – a gift today, that was the insurance play we missed! I’ll take the $60s for .60!

  125. zmann

    Phil I absolutely think can read a chart. How about looking at XOI.XNG.OIH and give me your thoughts. As you know I short all energy secotrs except the lowly tankers.

  126. Phil

    No! I’m not reading them now… so there!

  127. kustomz

    When ever i think about buying GOOG, i can hear Buffet saying what are you crazy!! Buy KO you dope! Its something you can put your arms around, and Cola is the only thing you can taste over and over again and never get sick of its flavor, like drinking it for the first time every time.

  128. Gary

    Phil,

    Confirm please, buying met jan 60? Thanks.

  129. reinharden

    ORCL reports $0.22 before charges. Thereby arguably making their EPS number.

    Still waiting for details…oh, look CNBC has it now.

    reinharden

  130. kustomz

    DJ Oracle 2Q Net $967M Vs $798M, +21%>ORCL

    I put an order in AH cheap low number, lets see what happens…what matters is ORCL out look. I know its a little risky seeing how well they did last Q, whats life without a little risk?

  131. reinharden

    Boy, I leave you guys alone for the day and look what you did to my beloved AAPL and GOOG. Jeeze…

    At least I got home in time to buy some more AAPL before the close.

    reinharden

  132. Phil

    XOI – holy crap! Last time I saw something drop like that I was in Mexico watching cliff divers!

    I would hope for a bounce but you might not get one until 1140 – they’ve got some hurting components like SUN and OXY (resting on the 5% rule), HES (violator of 5% rule) CVX, MRO and XOM (all halfway to 5%). If they don’t bounce we could have a whole ‘nother day like today

    COP held them up so watch COP but if you remind me we’ll know BP, and TOTs European results pre open which could make for a good indicator.

    It’s too bad they don’t have actively traded options becuse you could make a killing with Bear call speads – the odds of them getting back to 1,270 (or 1,250 for that matter) are very very slim.

    ===============================

    XNG – Cliff diver heading for rocks! EOG, NBL, SWN, PPP all saved by the bell. If it wasn’t for KMI pinned at $105 – what would they be doing?

    ===============================

    OIH, I’m glad I kept the January $135 puts! They never turned! My basis on those is down to .60!

    ===============================

    ORCL getting hammered on in-line but earnings were just fine.

  133. dilemma25

    Hey Phil, you did well on those OIH puts. What’s the best OIH put or call i can buy tomorrow? Please let me know, thanx.

  134. Richard Bruce

    Market damage today. 2 cannaries feeling ill. rus2k & trannies.

  135. reinharden

    ORCL – I figure nothing matters until the conference call…

    Of potentially vague interest, ORCL is awfully close to 55/45 US/International on their revenues nowadays. Wouldn’t be surprised to see them reverse that ratio over the next year as they’ve definitely bulked the International headcount without, as yet, moving the income ratios in proportion.

    reinharden

  136. Phil

    Yes on Met (I know a bit late!) I was upset I missed those the other day. As a rule of thumb I will type quick statements like the one on Met when I am in the middle of trying to get it.

    When I’m tentative, I almost always have time, and remember, to say it’s a maybe.

    ================================

    Not looking too good for my ORCL caller! Just what you want when you make a trade like that, earnings that are good but disappointing so people will dump it but you’ve got a pre-sold bargain as you take out your caller.

    My quick take is they are a steal at this price, those are great numbers.

    ======================================

    OOPS – EBAY ALERT – they are shutting down main site in CHINA!!!!!!!!

    ================================

  137. Richard Bruce

    Orcl – Another market change signal:

    when bad and good news stops being good news – we are changing.

    Up til now good and bad news has been great news for the market.

  138. reinharden

    Well, on the one hand, AAPL was about 3 million shares short of their 10 day average volume (about 7% light). But on the other hand, GOOG was nearly twice theirs (180% of average). MSFT was 17 million shares short (24% light).

    Circa 2:30 PM was not kind to the tech sector…

    reinharden

  139. Pitch78

    EBay Inc (EBAY.O: Quote, Profile , Research) plans to shut down its main Web site in China and replace it with a new site largely run by Beijing-based Tom Online Inc, said the Wall Street Journal on Monday, citing people familiar with the matter.

  140. kustomz

    RB, reading your post was like taking an IQ test, if you have bad and real bad is worse than good and bad could be good then good and bad must be the better than real bad….try and keep it simple for us simpletons .. LOL…first time i laughed all day thanks RB!

    ORCL holding up well, most wanted and eps of 23, waiting for the cc hope its good.

  141. Phil

    Wow, sounds like bowing to pressure as they shut down their site and take a 49% stake in TOMO (Chinese firm).

    I can’t even imagine what kind of a gift that is to TOMO! They were at 28 in April and June $17.50s may be worth playing (were $1.70 at close). TOMO is a cute little company anyway that actually makes good money but they had a 4% miss in June and everyone ran and didn’t come back when they had a 66% beat in September (go figure).

    They have serious resistance at $17 (the 50% rule from the double bottom) with the 200 dma at $17.31 so we may get an entry opportunity before someone realizes that just 1/2 of 3% of Ebay’s total business (% of China contribution to revenues) is about as much as TOMO was projected to gross next year!

    This is just 3% of Ebay’s listings but more than 20% of their projected growth! I’m glad they looked so bad this afternoon, this will be a great chance to reenter them as this is what you have to do to succeed in China and is the right move for Ebay long-term.

    Wost case impact is they gave up half of their growth but they’ve also locked out competitors and will find themselves more welcomed around China – expect a communist party office to open in their HQ soon!

    ================================

    OIH – you have to understand that I HATE to chase things!

    No, there is no way I would enter a position after a 4% drop with inventories coming up and tankers held up in Texas for 5 days – what I would do is wait for a nice pump and jump on then – remind me anytime but I think just getting a put at the open is a potentially big mistake.

  142. mike_c

    TOMO up > 11% AH

  143. dilemma25

    Damn, i sold PFE way too early. I sold it at .25 but afterhours, they are up again. These guys aren’t slowing down anytime soon.

  144. dilemma25

    Sorry, i sold it at 1.25

  145. MJ

    PFE raises dividend

  146. Phil

    I have Google at just 6.3M shares, under their 3 month avg of 7.9M but you’re right about the 10 day – trading really dried up.

    AAPL – never like to see a 2.5% rule stop like that, likely more pain to come.

    ===============================

    Holy COW – Now the T / BLS deal is in danger!!!

    ===============================

    Sadly RB is dead right about the whole Bad/Good/Good/Bad thing but I’m not ready to call a turn when the energy sector drops 5%, accounting for a full percentage off the S&P (and that’s 14 points for those of you still struggling with the verbal exam!)

    8-)

  147. Phil

    PFE – LOL, I don’t consider taking 118% gainer off the table to be too early! It would have been nice to hit that pop but c’est la vie!

  148. size123

    I understood what RB said, that scares me.

  149. arnie

    phil
    was away for the day… except my cvx 70 puts AFL calls and SNDK everything else took a nasty turn!!
    are you planning on recaping in portofolio the trades of the day?
    Thks

  150. reinharden

    GOOG Volume – Hmm. eTrade shows 8M shares today versus 4.4M 10 day average; Yahoo shows the same 8M versus a 6.4M 3 month average. Google shows 8M versus a 5.26M average volume for an unstated period. Gotta love disagreement in the tools.

    Stockcharts shows increasing volume on the daily chart for the past week and decreasing volume on the weekly chart for the last few months.

    So, in short, flip a coin. ;-)

    That having been said, I like the company. Just can’t say much about the stock.

    reinharden

  151. arnie

    Anyone knows why CC is recovering day loss in AH?

  152. Phil

    I will but I did a recap in comments already.

    Whenever I go away, I set my stops (even though I hate hard stops) as I’d rather get called away with a profit than come home to a loss!

    Today was a rough one but, as I mentioned above, I wanted to lighten up into the holidays anyway as I’m always nervous holding stocks over New Year’s weekend.

  153. Phil

    GOOG – You are correct sir – I mixed up today’s and average volume!

    CC – earnings ahead of the bell! I took a DD today at .40 so I’m in for an average .68 and I sure hope I’m right about them!

    Oh that’s something I meant to clarify – when I DD I’m doubling the amount of shares but not the total price as I am usually doing so on a trade thats going against me so paying another 50% to attempt to salvage the position is plenty. The nice (well not nice but less terrible) thing about that is that if I do it again, like the XOMs – then I am only putting up another 50% of the original purchase price to halve the basis of the whole batch. At that point I am no more than 40% in a posiiton (as the rules dictate I can’t really be in a position that’s going the wrong way for more) with 60% of the shares I intended to purchase originally at 1/2 of the price I intended to pay and “just” 30% off being even.

  154. arnie

    I see the recap now
    Do you still have ESV (I do) -kind of mad as they were doing so fine and now in the red

  155. kustomz

    ORCL said what they had to say, quickly i might add.
    They sounded upbeat on the coming quarter but
    they didn’t give any reason for the need to own the stock RITE NOW. Most analysts seemed to be interested in the database portion of the business. Stock buyback shows signs of possible slow down in acquisitions.

    What i took away from today’s action is that investors think some stocks are expensive but the market overall is still cheap.

    Caution is this weeks word, why lock up buying power without having a clear view of whats ahead.

  156. Phil

    Sure, ESV was a protective call against the oil puts – if it wasn’t for that I wouldn’t have been able to stand holding all those puts through last week’s nonsense!

    I’ve been lightening up on it in proportion to the puts it protects as they come off the table.

    ================================

    ORCL – good, I hope they do take a little time to digest! I’m very please with my very cheap March $18s!

    As to the whole market – we shall see but I’m heading into cash fast at this rate – wake me on Jan 5th….

  157. digger

    BSX – Phil, why do we continue to hold the 17.50 call on this stock? We had our shot to get out Dec. 6th at 17.27 with a tidy profit, but the stock has bleed considerably since.

    Press is nothing but bad, law suites are coming.
    What is there on the horizon that can possibly drive this stock up?

  158. batesum

    anyone have any experience using cybertrader? I just downloaded the platform. Was wondering if anyone has anything good or bad to say. thanks

  159. Phil

    BSX – I’m still waiting for a chance to double down. $2.10 just isn’t cheap enough for me to bother yet but I didn’t take the leap to run out on them after less than a month.

    This stock is 82% held by institutions who have added 9.75M shares in the last reported quarter. A director just bought $300K worth of stock at near retail and the last insider who sold was back on May 31st and that was an option exercise.

    The catalyst for these guys is earnings, earnigns and more earnings which should be very much back on track by June. One year ago this stock was at $26 and before their idiotic purchase of Guidant they were at $45 – I’ll be happy to get back just between $16 and $26!

    If I were worried, I’d sell calls (I’m not).

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