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Thursday, March 28, 2024

Tuesday Morning

In a perfect world, today should be rally day. We had a little pullback and stocks bounced nicely and earnings continue to be very strong but the dollar is still falling and oil doesn’t look like it’s coming down much so we could still go either way.

Asia went either way this morning with mixed results but Europe was generally up so we should at least get a good open. All the indices are comfortably above resistance and we will see if the Dow can break 11,350 today.

Lots of earnings today and all week for that matter and, unless the trend really breaks down, we can look forward to a lot of nice surprises.

Oil inventories are out tomorrow and expectations are now very low so any draw in oil or distillates will be seen as another sign for the bulls to take off. A lot of oil companies report this week as well and we may see another round of record profits but expectations are very very high so we may get a few misses as well.

Gold is back over $630 but anything less than a pullback below $600 is still very long-term bullish for gold stocks.

I posted a link on the right to Weblogs which mails you updates from the site if you sign up, not a bad idea if you follow a blog.

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DD May $45s may have been the deal of the month at .30 as the company missed a by a little due to energy fluctuations but raised prices and is forecasting a better year than expected. We need to keep in perspective that they were .65 yesterday and should be taken off the table if the stock pulls back. I’m already out of these as I don’t ride a double into earnings but I might wish I did…

BP had a 15% miss but they had multiple legitimate (not like Whole Foods) hurricane problems so they will probably go up anyway.

OXY had a nice beat as well but I’m not putting more money into oil at this level other than my XOM (4/27) $65s for $1.20. Exxon is lagging the other majors by a mile and as each one reports and runs up, the rubber band gets tighter:
http://finance.yahoo.com/q/bc?t=1y&s=XOM&l=on&z=m&q=l&c=cop+sun+cvx

If I were going to play oil bull I would take the OIH $175s for $1.20 but stopping out at $1 because any pullback would mean I am wrong. Next week I will really want to take a look at the puts.

We should get some nice movement on the T Oct $27.50s which we picked up last week for .45 as they had great earnings. VZ (5/2) has been going the opposite way so I’m really liking the May $32.50s for .55 but I’m going to ease in very slowly as it still may test the 200 dma at $31.75 before turning back up.

JBLU is a classic example of why I don’t mess with airlines. Tempting as they have been lately they are a fundamentally flawed industry. They are having so much trouble they are delaying new aircraft orders so watch out of this spreads and Boeing catches a cold too!

I’m very mad at myself for not jumping on VOLVY the second CAT announced great earnings. Volvo’s heavy equipment unit posted a 23% rise in profits and the stock will be up about 10% from yesterday morning! I still like the Oct $50s for the $2.10 they were selling for yesterday but I will hope for a bit of a pullback.
http://finance.yahoo.com/q/bc?t=1y&s=VOLVY&l=on&z=m&q=l&c=cat

On the bright side, Scott McNealy is worth an extra $1Bn today but on the dark side, that is because he stepped down as CEO after frustrating investors for years. He will stay on as Chairman which is good and bad as Jonathan Schwartz will take over in name only but hopefully it’s a sign that they are willing to change direction somewhat.

LXK, who make mediocre printers had a big beat (even though earnings are off – just not as off as was expected) and are up 7% pre market already so BUY BUY BUY HPQ where the May $35s are still just .60.

VLO is following the Valero Rule with massively excess profits. Even though they will probably be having to explain it to congress expect them to go up today. This may finally get TSO out of the doghouse after their disappointing miss due to incompetent hedging so I like the Jun $80s for $1.95 but with 100% concentration on the Valero Rule!

BNI beat but not enough to keep people motivated to pay double last year’s price so be very careful with rail stocks.

TRAD had a beat but the stock is off pre-market which I will take as an opportunity if the $15s come down to a less than .30 premium.

HAL may rocket through $80 if SLB keeps going up so I like the $85s for $1.55 with a tight stop.

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